Published: September 12, 2024 |

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Diamondback Energy said it and its operating subsidiary Viper Energy Partners have entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interest- owning subsidiaries of Tumbleweed Royalty in exchange for $461 million of cash and approximately 10.1 million OpCo units, subject to customary adjustments.

The company also said it closed two related acquisitions. On September 3, 2024, OpCo completed the acquisition of certain mineral and royalty interest-owning entities from Tumbleweed-Q Royalty Partners and MC Tumbleweed Royalty for a combined $189 million of cash consideration, plus potential additional payments in Q1 2026 of contingent cash consideration of up to an aggregate of $9 million.

“The set of acquisitions announced today is a continuation of Viper’s strategy to consolidate high quality mineral and royalty assets that not only provide meaningful and immediate financial accretion, but also provide significant undeveloped inventory that supports our long-term production profile. With roughly 50 percent of the total Midland Basin acreage representing concentrated interests in potential long-lateral units that currently have zero existing producing wells or permits, we expect these assets to deliver significant production growth over the coming years,” said Travis Stice, chief executive officer of Viper.

“Viper was able to uniquely execute on this differentiated acquisition opportunity given its overall size and scale, but also due to the visibility we have into Diamondback’s expected multi-year development plan. With this visibility, we expect Diamondback-operated production to increase from an average of roughly 1,000 Bo/d in 2025 to approximately 3,000 Bo/d in 2026. This production growth, along with the remaining core inventory primarily operated by ExxonMobil, provide a high level of confidence to the implied valuation metrics and expected accretion beyond just the next twelve months of visibility typically associated with non-operated mineral and royalty interests,” added Stice.

“The Tumbleweed team has built an impressive mineral and royalty position over the last four years with the support of our dedicated team and long-term partners. The assets are a natural fit for Viper, and we look forward to closing the transaction,” said Grant Wright, president of Tumbleweed Royalty.

Viper Energy is a corporation formed by Diamondback to own, acquire, and exploit oil and natural gas properties in North America, with a focus on owning and acquiring mineral and royalty interests in oil-weighted basins, primarily the Permian Basin.

Diamondback Energy is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas.

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