DEF 14A: Viper Energy, Inc. Announces 2024 Annual Meeting and Proxy Statement

Viper Energy, Inc. releases its proxy statement for the 2024 Annual Meeting of Stockholders, outlining key proposals including director elections, executive compensation, and an amended long-term incentive plan.

Summary

• Viper Energy, Inc. will hold its Annual Meeting of Stockholders on June 4, 2024, in Midland, TX.
• Stockholders will vote on electing eight directors, approving executive compensation, determining the frequency of executive compensation votes, approving the 2024 Amended and Restated Long Term Incentive Plan, and ratifying the appointment of Grant Thornton LLP as independent auditors.
• The company converted from a Delaware limited partnership to a Delaware corporation on November 13, 2023.
• Diamondback Energy, Inc. completed a public offering on March 8, 2024, and now owns approximately 49% of Viper Energy's voting power.
• The board recommends voting for all director nominees, approving executive compensation, holding annual advisory votes on executive compensation, approving the 2024 Amended and Restated Long Term Incentive Plan, and ratifying the appointment of Grant Thornton LLP.
• The 2024 Amended and Restated Long Term Incentive Plan extends the expiration date of the plan to June 4, 2034.
• In 2023, Viper Energy generated a consolidated net income of $501.3 million and adjusted EBITDA of $757.5 million.
• The company repurchased 3.4 million common shares for $95.2 million in 2023.
• At December 31, 2023, Viper's footprint of mineral and royalty interests totaled approximately 34,217 net royalty acres.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, outlining the agenda for the annual meeting and providing necessary disclosures. The financial results are positive, contributing to a moderately positive sentiment.

Positives

• The conversion to a corporation enhanced corporate governance rights for stockholders.
• The board is committed to continuous improvement and will conduct annual performance evaluations.
• The company has a comprehensive executive incentive compensation clawback policy.
• The board emphasizes diversity in director nominations.
• The company generated a consolidated net income of $501.3 million and adjusted EBITDA of $757.5 million in 2023.
• The company repurchased 3.4 million common shares for $95.2 million in 2023.
• Increased proved reserves year over year by 20% from year-end 2022 (increasing oil reserves by 14%), with year-end 2023 proved reserves totaling 179,249 Mboe (80% PDP, 89,903 Mbo).

Negatives

• Diamondback Energy's ownership decreased to approximately 49% on March 8, 2024, resulting in Viper ceasing to be a controlled company.

Risks

• The company faces risks associated with the oil and natural gas industry, including price volatility, production risks, and environmental regulations.
• Extreme weather conditions can affect oil and natural gas operations on Viper's acreage.
• Political instability or armed conflict in oil and natural gas producing regions could pose a risk.
• Cybersecurity threats are a concern, and the company relies on Diamondback's cybersecurity risk management program.

Future Outlook

The proxy statement does not contain specific forward-looking guidance beyond the proposals for the annual meeting.

Management Comments

• Steven E. West, Chairman of the Board, invites stockholders to attend the Annual Meeting and emphasizes the importance of their vote.
• Matt Zmigrosky, Executive Vice President, General Counsel and Secretary, announces the availability of proxy materials and the 2023 Annual Report on Form 10-K.

Industry Context

Viper Energy operates in the oil and natural gas industry, specifically focusing on mineral and royalty interests in the Permian Basin. The company's performance is influenced by factors such as commodity prices, production levels, and regulatory changes affecting the energy sector.

Comparison to Industry Standards

• The document mentions the SPDR S&P Oil & Gas Exploration and Production ETF (XOP) as a peer group for TSR comparison.
• The company's executive compensation policies are influenced by Diamondback Energy's practices, given the shared executive officers.
• The document does not provide enough information to make a detailed comparison to industry standards.

Related Party Transactions

• Payments to Diamondback for services and reimbursements.
• Dividends paid to Diamondback and Diamondback E&P.
• Registration Rights Agreement and Exchange Agreement with Diamondback.
• Tax Sharing Agreement with Diamondback.
• Lease bonus payments from Diamondback.
• Surface use payments from Diamondback.
• Drop Down acquisition of mineral and royalty interests from Diamondback subsidiaries.
• Purchase of common units by Diamondback.

Stakeholder Impact

• Stockholders are impacted by the proposals being voted on, including director elections and executive compensation.
• Employees are indirectly impacted through the long-term incentive plan and compensation policies.
• The company's performance and governance practices affect its reputation and relationships with stakeholders.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Stockholders on June 4, 2024.
• The board and committees will conduct annual performance evaluations.
• The company will continue to monitor and manage cybersecurity risks.
• The company will continue to evaluate and refine its corporate governance practices.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, directors, corporate governance, incentive plan, auditors, Viper Energy, Diamondback, stockholders