Viper Energy Model Update

Research evidence excerpt

Viper Energy Model Update

Arun Jayaram AC North America Equity Research

(1-212) 622-8541 18 May 2026 J P M O R G A N

arun.jayaram@jpmchase.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Viper Energy is Diamondback Energy’s publicly traded

minerals subsidiary. Minerals companies own the perpetual

royalty interests under oil and gas leasehold, which provides

exposure to growth with no capital or operating expenses.

VNOM returns ~75% of all distributable cash flow to

shareholders via share buybacks and base/variable dividends.

Viper is heavily levered to the Permian Basin and is unique given

its relationship with Diamondback Energy. FANG operates a

significant portion VNOM’s acreage, providing unique

YTD 1m 3m 12m visibility and reducing a key uncertainty associated with the

Abs 26.8% 5.3% 10.7% 19.1% minerals space. In Viper’s case, between EBITDA growth and

Rel 14.3% 2.4% 5.2% -14.2%

FCF yield, we see an attractive total return proposition.

Company Data

Valuation

Shares O/S (mn) 366

52-week range ($) 51.13-35.10 Our Dec 2026 price target is based on NYMEX strip pricing. Our

Market cap ($ mn) 17,916.88 NAV methodology begins with a DCF of the company’s PDP

Exchange rate 1.00 reserves, adjusted for the company’s operating costs, our

Free float (%) 93.1%

3M ADV (mn) 3.02 commodity price assumptions, and balance sheet items. Our

3M ADV ($ mn) 138.9 undeveloped valuation is based on a future development

Volatility (90 Day) 30 schedule. Our Dec 2026 price target is at parity with our NAV at

Index RUSSELL 2000

BBG ANR (Buy | Hold | Sell) 18|0|0 strip.

Key Metrics (FYE Dec)

Performance Drivers$ in millions FY25A FY26E FY27E FY28E

Financial Estimates

Revenue 1,395 2,352 2,175 2,158

Adj. EBITDA 1,302 2,171 1,983 1,966

Adj. EBIT 659 1,256 1,043 999