Kaes Van’t Hof: Yes. Paul, a lot of it is timing related. So if you think about Q1, right, it’s kind of in the lower end of the range mainly as a result of the lower well count that we saw turn production in Q4 carrying into the year. So when you think about the full year, we’ve obviously had this range of 25.5% to 27.5% on oil out there since September of last year when we announced the GRP deal as we kind of roll forward a couple of months and you look at our net well count with current activity being act up a little bit. So I think that hybrid a little bit higher than we previously thought in the back half of the year. But we’re typically pretty conservative when it comes to converting permits to production and kind of put some of that activity that you see there into the 2025 time line.
But if things stay current with current expert with operators pace of development is potentially there could be a little bit of upside to our guidance. But we just guide what we can see and be very confident in today. Yes. The beginning of the year is the toughest part for us on giving a full year guide, particularly on the mono side. I mean you know the bank side very, very well, and that moves around slightly. But I think, generally, we’re a little more conservative in what we think it gets popped in the second half of the year on the non-op piece.
Paul Diamond: And just a quick follow-up on — given the kind of proliferation of M&A across both on the mineral side as well as the non-op and just the operators more broadly, has that really shifted your guys’ mind as where you see as like the most attractive deal size post-GRP, has it gotten a little bit bigger because you guys are a bit bigger? Or is it still kind of run the gamut of different scale and geographies?
Travis Stice: I think generally, a deal like GRP showed our advantaged position because we could do a deal of that size with a significant amount of cash. It’s still a mid-size in the basin for smaller deals and probably the — let’s call it sub-$20 million, sub-$10 million deal market. And really, I think we still look at that market, but it’s just not a huge piece of our business anymore. I think generally, minerals have consolidated into funds that are sizable that we’ll need to monetize at some point and Viper should be the buyer of those larger positions rather than the blocking and tackling making a big difference in the story. I think Paul, minerals are, in our mind, well behind E&Ps in terms of consolidating. There’s going to be a probably more mineral consolidation in the next few years and more names that sell than upstream.
I mean, upstream has been consolidating very rapidly. But there’s going to be a solid wave of mineral positions that monetize big or small. And we want to be positioned to buy the best rock with the best visibility. And that, in our mind, is mainly Permian, if not mainly Midland Basin.
Operator: Our next question will come from the line of Leo Mariani from ROTH.
Leo Mariani: I appreciate some of the commentary there on your expectations for the minerals market to consolidate. Obviously, I think you guys laid out on the Endeavor acquisition call that Endeavor has roughly a portfolio that’s two-thirds the size of VNOM’s currently, which obviously is very, very significant. Would you guys be able to kind of just give us a little bit of a high-level plan in terms of how you see that maybe playing out over time to the benefit of them certainly seems like there’s significant drop-down potential. Is that something you think you could evaluate and kind of do multiple deals over kind of a handful of years? I mean, what do you think kind of the high-level game plan is?
Travis Stice: Yes, Leo, I mean, we gave some high-level information on the potential opportunity in the merger deck. I’ll say that we can’t really say much today on timing or sizing. But very clearly, it’s a meaningful position that would differentiate Viper if we could get a deal done at the right time. But I think we’re going to have to leave it up to the pro forma board to decide and get the deal closed. And as you know, we don’t move slowly. So we’ll get working on it quickly, but I can’t really give you much until that time comes.
Leo Mariani: And then just in terms of some of the numbers here, I certainly noticed that your G&A is kind of going up per barrel by a fair amount. I’m assuming that’s really just the conversion of the C corp and the additional costs that sort of come on that end?
Travis Stice: Yes, that’s fair, Leo. We’re not adding a ton of people or anything. We run this business pretty lean, but there are some added costs as we now allocate fully between the two, the parent and the sub.
Operator: Our next question will come from the line of Tim Rezvan from KeyBanc Capital Markets.
Tim Rezvan: I have two questions that are sort of related, following up on what’s been discussed here. Is it fair to say that despite the Endeavor opportunity coming around the end of 2024 that you are open and willing to transact with third-party minerals this year? I know in the past, the buying back history, you haven’t been afraid to back deals when we see opportunities. So are you sort of continuing to be on the prowl now and through 2024?
Travis Stice: I think we be selective, but certainly something that looks like a GRP like we did last year would be very interesting to us. I mean, I think although that deal didn’t have all Diamondback operations, there is actually a lot of endeavor permits and units — under it, but that visibility and that quality of remaining units in the Midland Basin into us has a lot of value. And if there are deals with a lot of undeveloped value, not just near-term free cash flow accretion that’s something we’re going to look at. I just don’t have direct ability into what that is today.
