Viper Energy, Inc. Acquires Sitio Royalties Corp. for $4.1 Billion

Viper Energy, Inc. (NASDAQ:VNOM), a global leader in acquiring and managing mineral and royalty interests in oil-weighted basins, has finalized a significant all-stock deal to acquire Sitio Royalties Corp. (NYSE:STR), a prominent owner of mineral rights and royalties across major U.S. shale basins, located in Denver.

Viper Energy, Inc. (NASDAQ:VNOM) is a subsidiary of Texas-based Diamondback Energy, Inc. (NASDAQ:FANG), a Fortune 500 company. This deal marks a rare consolidation between two big mineral rights holders in the U.S. that are also publicly traded. It strengthens Viper’s position in the mineral and royalty market.

Under this $4.1 billion deal, Viper Energy, Inc. (NASDAQ:VNOM) gains access to 34,300 net royalty acres, including a 50% overlap with its existing Permian Basin assets. In a conference call with analysts and investors on Tuesday, Viper Chief Executive Officer Kaes Van’t Hof stated:

“This is just another step toward being, kind of, the big mineral champion in the public markets.”

He added:

“While we are excited about the acreage outside the Permian, we intend to continue to be a Permian-focused company and see the other basins as upside to our base case projections.”

The all-stock deal consists of exchanging 0.4855 shares of a new holding company for each share of Sitio Royalties Corp.’s (NYSE:STR) Class A common stock. It also includes 0.4855 units of Viper Energy, Inc.’s (NASDAQ:VNOM) operating subsidiary for each unit of Sitio’s subsidiary.

As part of the deal, Viper is also taking on Sitio Royalties’ outstanding net debt of $1.1 billion. Following the closing of the deal, Diamondback Energy, Inc. (NASDAQ:FANG) will own roughly 41% of Viper.

Shortly after the announcement was made, Sitio Royalties Corp.’s (NYSE:STR) shares climbed 13% – the biggest intraday uptick since 2020. Meanwhile, Viper Energy, Inc.’s (NASDAQ:VNOM) share price remained relatively unchanged.

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