Diamondback Energy, Inc. is selling 17,391,304 shares of Viper Energy’s Class A common stock in an underwritten secondary offering that will raise approximately $798 million in gross proceeds. The shares are being sold at an implied price of about $45.89 per share, calculated from the total proceeds divided by the number of shares, while the nominal par value of $0.000001 per share is used for accounting purposes.
The proceeds from the sale go entirely to Diamondback and the other selling shareholders; Viper Energy will not receive any cash from the transaction. In addition, Viper has agreed to purchase 1,000,000 units of its operating company, VNOM Holding Company LLC, from Oaktree affiliates, a move that consolidates ownership within Viper’s operating structure.
For Diamondback, the sale represents a way to monetize a portion of its investment in Viper while preserving a strategic stake in the royalty‑focused company. The transaction is non‑dilutive for Viper, meaning the company’s total share count remains unchanged, but it does reduce the direct ownership of the selling shareholders. The move aligns with Diamondback’s broader Permian consolidation strategy, which includes its recent $26 billion acquisition of Endeavor Energy Resources and ongoing efforts to manage its portfolio and return capital to shareholders.
Viper Energy’s Q4 2025 results showed a net loss of $103 million, a decline from a $210 million profit in Q4 2024, but the company still had $145 million in cash available for distribution and declared a dividend of $0.52 per share. The company’s focus on shareholder returns is underscored by its plan to buy back units from Oaktree, reinforcing its commitment to consolidating ownership and supporting its dividend policy.
Diamondback’s Q4 2025 financials revealed revenue of $3.38 billion and an earnings per share of $1.74, down from $3.64 in Q4 2024. The company’s trailing‑twelve‑month net margin compressed to 11.1% from 31.4% a year earlier, reflecting cost inflation and a shift in production guidance to 500‑510 MBO/d for 2026. Management has emphasized strict cost control and the use of free cash flow to reduce share count and net debt.
Kaes Van’t Hof, Diamondback’s CEO, has highlighted a focus on controlling costs and using free cash flow to shrink the share count and net debt. He has indicated that the company’s 2026 production guidance of 500‑510 MBO/d reflects a “yellow light” macro outlook, with a “red light” scenario deemed less likely. Viper’s management has underscored a transformational year in 2025, with significant acquisitions and a focus on shareholder returns, noting that its base dividend is fully covered below $30 WTI and represents about 50% of estimated 2026 free cash flow at $50 WTI.
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