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MIDLAND, Texas - Viper Energy, Inc. (NASDAQ:VNOM), a $41.5 billion market cap energy company with strong cash flows to cover interest payments according to InvestingPro analysis, announced Wednesday that its operating company has priced an offering of $1.6 billion in senior notes, consisting of $500 million in 4.900% notes due 2030 and $1.1 billion in 5.700% notes due 2035.
The notes were priced at 99.902% of principal amount for the 2030 notes and 99.636% for the 2035 notes, according to a company press release. The offering is expected to close on July 23, 2025.
Viper Energy plans to use the proceeds for general corporate purposes, including the redemption of its existing 7.375% senior notes due 2031 and 5.375% senior notes due 2027. If the company’s previously announced acquisition of Sitio Royalties Corp. is completed, proceeds will also be used to redeem Sitio’s 7.875% notes due 2028 and repay Sitio’s revolving credit facility.
The notes are being sold through a registered offering with Goldman Sachs & Co. LLC, Barclays Capital Inc., BofA Securities, Inc., and Wells Fargo Securities, LLC serving as joint book-running managers.
Viper Energy focuses on owning and acquiring mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin.
The offering comes as part of the company’s debt management strategy ahead of its potential acquisition of Sitio Royalties, which would expand its portfolio of mineral and royalty interests in key oil-producing regions.
In other recent news, Diamondback Energy announced an extension of its credit agreement, pushing the maturity date from 2028 to 2030. This move, involving Wells Fargo Bank, also reduces the interest rates and certain fees applicable to the company’s loans. Additionally, Viper Energy, a subsidiary of Diamondback Energy, is set to acquire Sitio Royalties in an all-equity transaction valued at approximately $4.1 billion, including Sitio’s net debt. The acquisition is expected to enhance Viper Energy’s cash distributions and lower its breakeven costs, aligning with UBS analysts’ maintained Buy rating for Diamondback Energy. UBS continues to support a price target of $163.00, citing the strategic benefits of the Viper-Sitio deal. Furthermore, Diamondback Energy has undergone executive changes, with Travis D. Stice transitioning to Executive Chairman and Kaes Van’t Hof stepping in as CEO. Meanwhile, JPMorgan has adjusted its price target for Viper Energy to $47.00, while maintaining an Overweight rating, following updated company guidance and first-quarter results. These developments reflect Diamondback Energy’s ongoing strategic initiatives and financial maneuvers.
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