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Published: 2021-12-15 16:23:58 ET
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EX-99.2 4 viperex992-12x17x21.htm EX-99.2 Document

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

The following unaudited pro forma condensed consolidated balance sheet (the “pro forma balance sheet”) is based on the historical condensed consolidated balance sheet of Viper Energy Partners LP (“Viper”) and its subsidiary Viper Energy Partners LLC (“Viper OpCo”) as of September 30, 2021, adjusted to give effect to (i) the acquisition (the “Acquisition”) of certain mineral and royalty interests (the “Assets”) by Viper and Viper OpCo (collectively, the “Buyer Parties”) from Swallowtail Royalties LLC and Swallowtail Royalties II LLC (collectively, the “Seller”) under a definitive purchase agreement, dated as of August 6, 2021, by and between the Buyer Parties and the Seller (the “Purchase and Sale Agreement”), and (ii) the funding of the purchase price for the Acquisition. The purchase price of $562.2 million for the Acquisition consisted of the issuance of 15.25 million common units representing limited partnership interests in Viper (the “Common Unit Consideration”) and payment of approximately $225.3 million in cash after purchase price adjustments (the “Cash Consideration”). The Cash Consideration for the Acquisition was funded through a combination of cash on hand and $190.0 million in borrowings under Viper OpCo’s revolving credit facility.

The Assets consist of 2,313 net royalty acres primarily in the Northern Midland Basin, of which 62% are operated by Viper’s parent, Diamondback Energy, Inc. At Closing, as contemplated by the Purchase and Sale Agreement, the Assets acquired by Viper for the Common Unit Consideration were immediately contributed to Viper OpCo in exchange for an equivalent number of units representing limited liability company interests in Viper OpCo. The Acquisition was completed on October 1, 2021, with an effective date of August 1, 2021.

The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable, as further described below in Note 2—Pro Forma Adjustments and Assumptions. In the opinion of management, all adjustments necessary to present fairly the pro forma balance sheet have been made.

The pro forma balance sheet has been developed from and should be read in conjunction with the accompanying notes to the pro forma balance sheet, as well as the separate historical consolidated balance sheet and related notes thereto in Viper’s filings with the Securities and Exchange Commission.

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Viper Energy Partners LP and Subsidiary
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2021

HistoricalPro Forma AdjustmentsPro Forma Combined
(In thousands)
Assets
Current assets:
Cash and cash equivalents$41,515 $(5,333)(a)$36,182 
Royalty income receivable (net of allowance for credit losses)47,133 — 47,133 
Royalty income receivable—related party22,022 — 22,022 
Other current assets654 — 654 
Total current assets111,324 (5,333)105,991 
Property:
Oil and natural gas interests, full cost method of accounting2,902,270 562,231 (b)3,464,501 
Land5,688 — 5,688 
Accumulated depletion and impairment(570,406)— (570,406)
Property, net2,337,552 562,231 2,899,783 
Funds held in escrow30,025 (30,025)(a)— 
Other assets3,567 — 3,567 
Total assets$2,482,468 $526,873 $3,009,341 
Liabilities and Unitholders’ Equity
Current liabilities:
Accounts payable$208 $— $208 
Accrued liabilities26,000 — 26,000 
Derivative instruments35,357 — 35,357 
Total current liabilities61,565 — 61,565 
Long-term debt, net564,452 190,000 (c)754,452 
Derivative instruments697 — 697 
Total liabilities626,714 190,000 816,714 
Unitholders’ equity:
General partner749 — 749 
Common units580,992 336,873 (d)812,580 
(105,285)(e)
Class B units956 — 956 
Total Viper Energy Partners LP unitholders’ equity582,697 231,588 814,285 
Non-controlling interest1,273,057 105,285 (e)1,378,342 
Total equity1,855,754 336,873 2,192,627 
Total liabilities and unitholders’ equity$2,482,468 $526,873 $3,009,341 

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

NOTE 1 — BASIS OF PRESENTATION

The historical financial information of Viper and its subsidiary, Viper OpCo, has been derived from Viper’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Pro forma adjustments have been made to reflect the Acquisition, as discussed further in Note 2—Pro Forma Adjustments and Assumptions. The pro forma balance sheet should be read in conjunction with Viper’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. The pro forma balance sheet gives effect to the Acquisition as if it had been completed on September 30, 2021.

In the opinion of Viper’s management, all material adjustments have been made that are necessary to present fairly, in accordance with Article 11 of Regulation S-X, the pro forma balance sheet. The pro forma balance sheet does not purport to be indicative of what Viper’s financial position would have been on a consolidated basis, if the Acquisition had occurred on the date indicated, nor is it indicative of its future financial position.

NOTE 2 — PRO FORMA ADJUSTMENTS AND ASSUMPTIONS

The unaudited pro forma balance sheet reflects the following adjustments:

(a) to record the partial financing of the Acquisition with cash on hand and funds held in escrow,

(b) to record the purchase accounting assigned to the Assets acquired in the Acquisition,

(c) to record the partial financing of the Acquisition with borrowings under Viper OpCo's revolving credit facility,

(d) to record the partial financing of the Acquisition with the issuance of 15.25 million Viper common units to the Seller representing the Common Unit Consideration for the Acquisition. and

(e) to record the change in ownership interest attributable to Viper’s noncontrolling interest which resulted from the issuance of 15.25 million Viper common units to the Seller representing the Common Unit Consideration for the Acquisition.


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