Ladies and gentlemen, thank you for standing by and welcome to the Viper Energy Partners fourth quarter 2020 earnings call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star then one on your telephone. Please be advised that today's call is being recorded. If you require additional assistance, you may press star then zero to reach an operator. I would now like to hand the call over to Adam Lawlis, Vice President, Investor Relations. Please go ahead. Thank you, Michelle. Good morning and welcome to Viper Energy Partners fourth quarter 2020 conference call. During our call today, we will reference an updated investor presentation which can be found on Viper's website. Representing Viper today are Travis Stice, CEO, and Kaes Van't Hof, President. During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures. The reconciliation to the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon. I'll now turn the call over to Travis Stice. Thank you, Adam. Welcome everyone, and thank you for listening to Viper Energy Partners fourth quarter 2020 conference call. Viper's financial and operational performance rebounded strongly in the second half of last year after surviving the unprecedented volatility experienced through most of 2020. Commodity prices have increased and associated activity on Viper's acreage has increased alongside the commodity. Even in a year where we experienced historically low commodity prices, Viper was able to generate almost $200 million in operating cash flow, which was almost entirely converted to free cash flow due to our business having zero capital requirements. This recovery again highlights both the advantaged nature of the royalty business model, as well as the benefit of Viper's symbiotic relationship with our parent company, Diamondback. Looking at the fourth quarter specifically, Viper's 10% quarter-over-quarter increase in oil production was driven primarily by Viper having an interest in 21 of Diamondback's 35 completions, with well performance exceeding internal expectations. Viper also benefited from third-party operated well performance and timing of wells being turned to production outperforming our prior conservative expectations, which had been lowered due to the uncertainty presented by the volatile oil prices experienced early last year. Viper was once again able to generate significant free cash flow, both organically as well as inorganically through non-core asset sales, which accelerated in the fourth quarter. The truly unique nature of Viper's business model is highlighted by the fact that during the fourth quarter alone, we were able to declare a $0.14 distribution, repurchase over 2 million units, and repay over $40 million in debt. Over the past nine months, we have now reduced total debt by $110 million, or roughly 16% over this period. Further, the units we have repurchased to date represent 1.6% of total units previously outstanding. Looking ahead to 2021, we have initiated production guidance for 2021 that incorporates our strong backlog of work in progress plus line of sight wells, as well as the anticipated impact to our production from the recent winter storms in the Permian Basin. Viper is expected to have meaningful exposure to Diamondback's high graded, primarily Midland Basin focused development in 2021. Additionally, visibility into third-party operators' anticipated activity levels continues to increase as commodity prices have improved and operators have returned to work. However, in an effort to be conservative, we will continue to incorporate slower than normal timing assumptions in the guidance we have provided. Despite this conservatism, along with the production impact from the recent winter storms, Viper is still expected to generate roughly $250 million in free cash flow this year, assuming $55 WTI and production at the midpoint of our full year 2020 guide. This equates to greater than 8% free cash flow yield as a percentage of our enterprise value, or roughly 10% based on our current market cap. Viper remains in strong financial shape with $515 million of liquidity and will look to continue to decrease leverage while also increasing return of capital to our unit holders over the coming quarters. In conclusion, 2020 was truly historic for all the wrong reasons. Despite these difficult conditions, Viper showcased its differentiated business model and best-in-class cost structure to emerge from this down cycle with a positive forward outlook. Operator, please open the line for questions. As a reminder, to ask a question, please press star then one. If your question has been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Neal Dingmann with Truist Securities. Your line is open Morning, guys. I'm trying to figure out here with your guidance, maybe give me a little bit of help here. You mentioned that all the wells that are in process, then 529 you put in there, and then you talk about the 538 wells that are in sight. I'm just wondering, could you talk about what's based in the guide? Is that just these wells or maybe the expectations for total wells around that? Yeah, Neal. Good question. I think we're assuming somewhere in the range of 9- 10 net Diamondback wells throughout the year. I think while we had a lot of high-interest Diamondback wells come on in Q3 and Q4, we're taking a bit of a pause there based on the schedule today. That number will come down a little bit here in Q1, but pick back up in Q2 of 2021. We're assuming somewhere around one net well a quarter on the non-op. I think that probably is a little more back-half weighted than the Diamondback plan. I think we're pretty excited on the amount of net wells we're seeing on the non-op side start to get permitted, drilled, and eventually completed here as the commodities recover. Okay. No, that makes sense. I knew it was going to be back weighted. Just one follow-up. Should we think about that 58% oil weighting? I think the NRIs were around 6%. Is that going to be somewhere in that ballpark going forward? I think the oil weighting at 60% is a fair assessment, Austen, around the FANG operated 6% NRI. Yeah, that's probably about right, 6%- 7%. We kind of talked about it as percent exposure to the standalone Diamondback development plan. Probably 70% exposure or so to that plan, and that'll go down as QEP and Guidon are incorporated. Yeah, I think 6%-7% average NRI throughout the year will be fair. Okay. Thank you all. Thanks, Neal. Our next question comes from Derrick Whitfield with Stifel. Your line is open. Hi, good morning again. Hi, Derrick. Kaes, wanted to circle back to your comments on visibility at high level. Referencing your forward visibility slides on pages seven and nine, could you comment on how we should think about Diamondback's contribution to Viper post the QEP and Guidon transactions? Would it be safe to assume the combined value of work in progress and on-site wells would remain around that 10 to 11 net well, or in line with Q3 and Q4 levels? Yeah, I think that's right, Derrick. I think, we'll get into this probably later in the call, but we do have a lot of opportunity to increase mineral ownership under QEP and Guidon. We didn't own a lot of minerals under those two entities prior to announcing these two deals, our team is doing some work and trying to get more exposure under the couple pads that we have visibility to that might not have permits filed already to get a hop on a good deal there. I don't think the addition of QEP or Guidon changes the amount of net wells under Diamondback for the year. Certainly, as the year progresses, I think there will be opportunity to increase that number with selective purchasing of minerals underneath the pro forma Diamondback development plan. Kaes, that was, in fact, my follow-up with the pending successful close of those two transactions. Could you perhaps put some parameters or speak to the degree of A&D opportunity that presents to Viper? Yeah, it's pretty significant, Derrick, and people have been calling us. I think we've been still trying to work the pro forma development plan to make sure we're buying selectively. We also need to make sure we're managing our balance sheet appropriately. I think the capital allocation decision for us is going to be, do we continue buying back shares, or do we use some cash to buy minerals or trade minerals or continue to sell non-op minerals as we did in the fourth quarter? I think that market continues to heal, and I think as you think about Viper, we no longer need to be the biggest mineral company out there. We just need to be the best. To be the best means we have to have more visibility into the other side of our business card, which we're trying to do here by buying more minerals under Diamondback. That makes sense. Very helpful, guys. Thank you, Derrick. Our next question comes from Gail Nicholson with Stephens. Your line is open. Good morning. When looking at that $250 million of free cash flow generated at $55 oil, how do you bucket that in the standpoint of a cash distribution payment to shareholders versus debt reduction versus continuing the buyback and/or future M&A events? Yeah, Gail, I think we're pretty happy with the 50% of distributable cash flow going to investors in the form of a distribution right now. The board did have a very active discussion on the buyback, and we're very happy that the buyback has worked to date. I think the buyback versus buying more minerals under Diamondback is really the fulcrum here because I think probably a quarter of our free cash flow still goes towards debt reduction. I think we want our revolver to be at or as close to zero as possible by the end of this year. We're well on our way to doing that. If we have visibility into a revolver at zero. Our bonds are trading well, so I'm not concerned there. More free cash flow than the distribution percentage will probably likely increase over time. Great. Looking at the over $40 million in asset sales that were done this quarter, were those smaller packages? Was it a larger package? Can you just talk about what the M&A space looks like on the divestiture side for you guys? Yeah. It was really four deals, two of decent size. The two of decent size, one was in the $12 million-$15 million range, one was close to $20 million. Those were all under third parties, not operated by Diamondback, without true visibility. Not a lot of permits, no existing production, some vertical production, but no meaningful production. We were happy to get that deal done, I think it accelerated the de-leveraging process also allowed us to buy back a lot of stock in December and January as the stock was weaker than it is today. Also, we ended the year at under 3x leverage. I think that was a testament to the team getting these deals done before the end of the year and not touching that 3x number that we don't want to go above. Great. Thank you. Thank you. Our next question comes from Pearce Hammond with Simmons Energy. Your line is open. Good morning, thanks for taking my questions. My first question, well, first, just a statement. Congrats on the success in fortifying the balance sheet. I'm just curious what leverage ratio are you targeting for the balance sheet? When you reach that target, would you expect to increase the payout ratio? Or is the payout ratio a function of how much stock you expect to buy back? Good question, Pearce. It's more a gross debt reduction. I'd like the revolver down to zero. With the forward strip where it is, the forward free cash flow outlook looks strong enough that we'll be comfortably under 2x by the end of the year. Longer term, we'd prefer to be in the 1x- 1.5x ratio, but also paying down gross debt. First step is under 2x. It's going to happen pretty quickly here with the strip where it is. Just like at Diamondback, I don't think that precludes us from continuing to increase the returns to shareholders in the form of a distribution. Thank you, Kaes. As a follow-up to that, as the balance sheet is strengthened and as it continues to get better, would that mean that the desire to hedge would be going down as well? I think we've learned that maybe a small amount of hedging at Viper to protect the downside or protect a minimum distribution and a maximum leverage is probably going to be in the cards. I don't think it's going to be us hedging all of our production, but certainly protecting that downside and guaranteeing some returns to investors and simplifying this business is probably prudent over a longer period of time here. Okay. Thank you, Kaes. As a comment, I love the prepared remarks where Travis said 2020 truly historic for all the wrong reasons. Well put. Yeah. Thank you. We're on to 2021. There are no further questions. I'd like to turn the call back over to Travis Stice, CEO, for any closing remarks. Before Travis speaks, there wasn't a question about the storm impact in Q1. I just want to give investors some guidelines around the year because obviously, guidance was taken down a little bit at Viper. We're assuming four to five days of downtime on Diamondback-operated properties, and we're assuming five to seven days of downtime on non-op properties just to be conservative and then getting their production back. I'd point people to look at Q1 as very similar to what we produced in Q2 of 2020. Some pretty significant growth after that in Q2 through Q4 which equals a similar oil production guide to where the street was prior to the storm impact. While the storm impact is going to be meaningful in Q1, we do expect a pretty quick rebound in Q2, and we saw some positive things early in Q1 prior to the storm. Travis, I'll let you close. I appreciate those comments, Kaes. Thank you again to everyone participating in today's call. If you've got any questions, please contact us using the contact information provided. Ladies and gentlemen, this does conclude the program. You may all disconnect. Everyone, have a great day.