Viper Energy (VNOM) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Geopolitics and market conditions for oil and natural gas, and particularly volatility in prices for oil and natural gas, have in the past adversely affected, and may in the future adversely affect, our revenue, cash flows, profitability, growth and production
2. 02Our commodity price derivatives could result in financial losses, may fail to protect us from declines in commodity prices, prevent us from fully benefiting from commodity price increases and may expose us to other risks, including counterparty credit risk
3. 03The risks relating to the transition to a low carbon economy could impose new costs on our operations that may have a material and adverse effect on us
4. 04Changing political and social perspectives on climate change and other environmental, social and governance factors may create risks and uncertainties impacting our business
5. 05Increased costs of capital could adversely affect our business
6. 06To the extent we issue additional shares in connection with any acquisitions or growth capital expenditures or as in-kind dividends, the payment of dividends on those additional shares may increase the risk that we will be unable to maintain or increase our per share dividend level
7. 07The development of our proved undeveloped reserves may take longer and may require higher levels of capital expenditures by operators than we currently anticipate
8. 08We may not be able to terminate our leases if any of our operators declare bankruptcy, and we may experience delays and be unable to replace operators that do not make royalty payments
9. 09Our future success depends on the development or acquisition of additional reserves, and our failure to successfully identify, complete and integrate acquisitions of properties or businesses could slow our growth and adversely affect our results of operations and cash available for dividends
10. 10We may not realize the anticipated benefits from our acquisitions, including the Sitio Acquisition and the 2025 Drop Down
11. 11Project areas on our properties, which are in various stages of development, may not yield oil or natural gas in commercially viable quantities
12. 12Our estimated reserves are based on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves
13. 13We are dependent on electrical power, internet and telecommunication infrastructure and information and computer systems. If any of these systems are compromised or unavailable, our business could be adversely affected
14. 14We are subject to cybersecurity and data privacy risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss

Risks Related to Our Indebtedness

1. 15Our substantial indebtedness could adversely affect our results of operations, business flexibility and our ability to service our debt
2. 16A downgrade in our debt ratings could restrict our access to, and negatively impact the terms of, current or future financings or trade credit
3. 17Diamondback controls us and its interests may conflict with ours or yours in the future
4. 18We do not have any employees, and we rely solely on the employees of Diamondback to manage our business. The management team of Diamondback, which includes the individuals who manage us, also perform similar services for Diamondback and certain of its affiliates, and thus are not solely focused on our business
5. 19The market price of our shares of Class A Common Stock could be adversely affected by sales of substantial amounts of our Class A Common Stock in the public or private markets
6. 20U.S. tax legislation may adversely affect our business, results of operations, financial condition and cash flow
7. 21The provision of our certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against us and our directors, officers and stockholders
8. 22Our certificate of incorporation does not limit the ability of Diamondback and certain of its directors, principals, officers, employees and their respective affiliates to compete with us
9. 23Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable
10. 24Our ability to pay base and variable dividends to the holders of our Class A Common Stock or make repurchases under our repurchase program may be limited by requirements under our certificate of incorporation, our holding company structure, applicable provisions of Delaware law and contractual restrictions