Viper Energy is set to acquire certain mineral and royalty interest-owning subsidiaries of Tumbleweed Royalty IV for $461m and 10.1 million shares of its operating subsidiary, Viper Energy Partners.
The definitive purchase and sale agreement signed by Viper Energy also includes a potential additional payment of up to $41m in contingent cash consideration in Q1 2026, contingent on the average 2025 West Texas Intermediate (WTI) price.
Viper Energy, a subsidiary of Diamondback Energy, is listed on Nasdaq. It was established by Diamondback Energy to acquire and exploit oil and natural gas properties in North America, focusing on oil-weighted basins in the Permian Basin.
Tumbleweed Royalty IV president Grant Wright said: “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.”
The deal, expected to close in early Q4 2024, is subject to customary closing conditions.
In addition to this transaction, Viper Energy has completed two more acquisitions. Its operating subsidiary has acquired certain mineral and royalty interest-owning entities from Tumbleweed-Q Royalty Partners and MC Tumbleweed Royalty for a combined cash consideration of $189m.
These two acquisitions also include potential additional payments of up to $9m in Q1 2026, based on the average 2025 WTI price.
Together, the three acquisitions will add approximately 3,727 net royalty acres (NRAs) in the Permian Basin to Viper Energy Partners.
Current production stands at approximately 2,500 barrels of oil equivalent per day (Boepd). The production is expected to increase to about 4,500Boepd for the full year 2025 based on current producing wells (PDP), drilled but uncompleted wells (DUCs), permits, and Diamondback Energy’s expected development plan.
Viper Energy anticipates that Diamondback Energy will complete roughly 120-140 gross locations beyond existing DUCs and permits on the acquired properties by the end of 2026. This development is expected to boost Diamondback Energy-operated production from an average of approximately 1,000Boepd in 2025 to approximately 3,000Boepd in 2026.
Viper Energy CEO Travis Stice said: “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% 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.”
Earlier this week, Diamondback Energy completed the $26bn merger with Permian Basin rival Endeavor Energy Resources. The merger is estimated to yield a combined pro forma scale of about 838,000 net acres and 816,000Boepd of net production.
