Viper Energy Partners (VNOM) Proxy Filing summary

Executive summary

• The proxy statement seeks shareholder approval for the acquisition of all equity interests in 1979 Royalties LP and 1979 Royalties GP, LLC from Endeavor Energy Resources, subsidiaries of Diamondback Energy, for $1.0 billion in cash and 69,626,640 OpCo Units and equivalent Class B Common Stock, subject to adjustments.

• The transaction, called the "Drop Down," will increase Diamondback's ownership in the company to approximately 52% and reduce unaffiliated stockholders' ownership to 48%.

• The acquisition will add approximately 22,847 net royalty acres in the Permian Basin, with significant oil production and reserves, to the company's portfolio.

• The company intends to fund the cash portion of the purchase with proceeds from a recent $1.2 billion equity offering.

• The transaction is expected to close in the second quarter of 2025, pending shareholder and regulatory approvals.

Voting matters and shareholder proposals

• Shareholders are asked to vote on three proposals: (1) approval of the Drop Down Purchase Agreement, (2) approval of the Equity Issuance, and (3) approval to adjourn the meeting if necessary.

• The Drop Down Proposal requires a majority of unaffiliated stockholders' votes, while the Equity Issuance and Adjournment Proposals require a majority of votes cast, including Diamondback.

• The Board and Audit Committee unanimously recommend voting FOR all proposals.

• No appraisal or dissenters' rights are available to stockholders for these proposals.

Board of directors and corporate governance

• The Audit Committee, composed entirely of independent directors, led the negotiation and evaluation of the transaction, including retaining Evercore as financial advisor.

• The Board, following the Audit Committee's recommendation, unanimously approved the transaction and recommends shareholder approval.

• Diamondback retains the right to designate up to three directors as long as it owns at least 25% of the outstanding common stock.