In response to today’s announcement that Viper Energy, a subsidiary of Diamondback Energy, would acquire Sitio Royalties Corp for $4.1 billion, Andrew Dittmar, principal analyst at Enverus Intelligence® Research provided this commentary explaining the deal’s significance:
“While corporate mergers are a staple of oil and gas operators, they have been rare in the more sedate minerals space. Now, for just the second time Enverus has tracked, two publicly traded minerals companies are combing with Viper Energy Partners buying Sitio Royalties for $4.1 billion inclusive of net debt. The only other significant mineral public company merger tracked by Enverus also involved Sitio when it acquired Brigham Minerals for $1.9 billion in 2022. Deal activity, while active in the space, is usually confined to smaller bolt-on transactions and consolidation of individual interests.
Viper, which is affiliated with upstream operator Diamondback Energy, has turned to an unusually active spree of deals to create a public mineral company with differentiated scale compared to peers. Inclusive of the Sitio merger and a major dropdown from Diamondback, Viper has now spent over $8 billion on acquisitions in 2025 or more than the cumulative value of all disclosed mineral M&A in 2023 and 2024. Since the start of 2023, Viper has accounted for 70% of publicly disclosed mineral M&A, taking on the job of consolidating and bringing to public markets at an investible scale the fragmented space.
Despite the attractive yields and low capital requirement of the mineral space, the small size and market capitalization of these somewhat niche companies likely limited their appeal to the broader investment community. Viper already had a leading scale among pure mineral companies with a market capitalization over $12 billion. But, adding Sitio still helps boost the company’s public float given the substantial ownership by Diamondback, sitting at 41% pro forma for the Sitio acquisition. Viper will have a pro-forma market capitalization of around $15 billion, trailing just Texas Pacific Land, which has a mixed royalty and surface ownership business, and about five times the scale of the next largest company, Blackstone Minerals. Its market capitalization will sit between operators Coterra and Permian Resources.
Besides its scale, Viper is differentiated by the quality of its asset base with a concentration in the Permian Basin, by a significant margin the largest and most economic U.S. shale play. The company was previously focused on the Midland Basin and particularly on interests operated by Diamondback. This deal materially increases its exposure to the Delaware Basin. That does drop Viper’s weighting towards Diamondback and the unique insight into development plans that offers but given the quality of Delaware inventory investors are likely to take that in stride. Furthermore, ExxonMobil accounts for almost half of third-party operated production including third-party Midland volumes, per Viper, giving investors further confidence in these assets.
Besides the increased Permian exposure, Sitio brings to the table royalty interests in the DJ, Eagle Ford and Williston Basin. That is something Viper could look to sell once the deal closes to return to its status as a Permian pure play. That should be straight forward to accomplish as there is a ready and active market for minerals including significant interest from private capital. Additionally, with one less potential merger partner now available, other public companies like Kimbell Royalties and Blackstone Minerals might feel more pressure to find acquisition targets either on the public or private side to boost their own scale and relevancy.”
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Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
