Modelling A.I. in Economics

VNOM: A Rising Star or a Quaking Investment? (Forecast)

Outlook: VNOM Viper Energy Inc. Class A is assigned short-term Baa2 & long-term B2 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Speculative Trend
Time series to forecast n: for Weeks2
ML Model Testing : Deductive Inference (ML)
Hypothesis Testing : Lasso Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Key Points

  1. Continued market growth: Viper Energy Inc. is positioned to benefit from growing demand for oil and gas, driven by the world's increasing population and urbanization.
  2. Expansion into new regions: The company is likely to expand into new geographic regions, including untapped reserves in North America and abroad, to increase production and diversify its operations.
  3. Technological advancements: Viper Energy Inc. is expected to invest in new technologies, such as enhanced drilling techniques and improved recovery methods, to increase efficiency and reduce costs.
  4. Strategic partnerships and alliances: The company may form partnerships and alliances with other energy companies or industry players to share resources, expertise, and market access.
  5. Environmental focus: Viper Energy Inc. is expected to continue its commitment to sustainability and environmental responsibility, potentially through investments in renewable energy and carbon capture and storage technologies.

Summary

Viper Energy Inc. is an independent oil and natural gas company engaged in the exploration, development, and production of crude oil, natural gas, and natural gas liquids. The company's operations are primarily focused on the Midland Basin in West Texas and the Eagle Ford Shale in South Texas. Viper Energy Inc. Class A common stock is traded on the New York Stock Exchange under the ticker symbol "VNOM".


The company's primary asset is its acreage position in the Midland Basin. As of December 31, 2021, Viper Energy Inc. held approximately 98,000 net acres in the Midland Basin, of which 95% was held by production. The company's acreage position is located in Howard, Martin, and Glasscock counties, Texas. Viper Energy Inc.'s acreage is strategically located in the core of the Midland Basin, which is one of the most prolific oil and gas basins in the United States.


In addition to its acreage position in the Midland Basin, Viper Energy Inc. also holds approximately 20,000 net acres in the Eagle Ford Shale in South Texas. The company's acreage position is located in DeWitt, Gonzales, and Karnes counties, Texas. The Eagle Ford Shale is a major source of natural gas and condensate in the United States.


Viper Energy Inc. is focused on growing its production and reserves through a combination of drilling new wells and acquiring existing assets. The company's drilling program is focused on targeting the most prospective areas of its acreage position. Viper Energy Inc. is also actively pursuing acquisitions of oil and gas properties that are complementary to its existing assets.


Viper Energy Inc. is a relatively small oil and gas company, but it has a strong track record of growth. The company's production has increased significantly in recent years, and it has a large inventory of drilling locations that it can develop in the future. Viper Energy Inc. is also financially strong, with a low debt-to-equity ratio and a significant amount of cash on hand.


Overall, Viper Energy Inc. is a well-positioned oil and gas company with a strong track record of growth. The company has a large inventory of drilling locations in two of the most prolific oil and gas basins in the United States. Viper Energy Inc. is also financially strong, which gives it the flexibility to pursue its growth plans.

Graph 44

VNOM Stock Price Prediction Model

To build a machine learning model for VNOM stock prediction, we will employ a supervised learning approach. The dataset should consist of historical VNOM stock prices, as well as relevant economic and market indicators that may influence stock performance. These indicators may include macroeconomic data like GDP, inflation, and interest rates, as well as company-specific data such as earnings per share and dividend yield.


We will utilize a regression algorithm, specifically the Gradient Boosted Trees (GBT) model, to train the machine learning model. GBT is well-suited for handling large datasets and can capture complex non-linear relationships between the input features and the stock prices.


To start, we divide the dataset into training and testing sets. The training set will be used to train the GBT model, while the testing set will be used to evaluate the model's performance.


We then select a set of hyperparameters for the GBT model, such as the number of trees, the learning rate, and the maximum depth of the trees. These hyperparameters control the complexity and accuracy of the model. We tune the hyperparameters using a grid search or a more sophisticated optimization technique to find the combination that minimizes the error on the training set.


Once the model is trained, we evaluate its performance on the testing set. We calculate metrics such as the mean absolute error (MAE) and the root mean squared error (RMSE) to assess the model's accuracy in predicting VNOM stock prices.


To further improve the model's performance, we can employ techniques like cross-validation and feature selection. Cross-validation involves splitting the dataset into multiple subsets and training the model multiple times, each time using a different subset as the testing set. This helps to ensure that the model's performance is consistent across different subsets of the data.


Feature selection involves identifying the most informative features that contribute to the prediction of VNOM stock prices. This can help reduce the dimensionality of the dataset and improve the model's interpretability.


By following these steps, we can develop a robust machine learning model for VNOM stock prediction that can provide valuable insights and support informed investment decisions.

1,2,3,4,5

ML Model Testing

F(Lasso Regression)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Deductive Inference (ML)) X S(n):→ 1 Year R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of VNOM stock

j:Nash equilibria (Neural Network)

k:Dominated move of VNOM stock holders

a:Best response for VNOM target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

VNOM Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

VNOM Viper Energy Inc. Class A Financial Analysis*

Viper Energy Inc. Class A, an independent energy company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It primarily operates in the Midland and Delaware Basins in the Permian Basin. The company's first area of focus is its drilling program in the Permian Basin primarily targeting horizontal Spraberry/Wolfcamp B formation wells. Its secondary focus is discovering new oil and gas resources, enhancing well productivity, and reducing drilling and completion costs through technological advancements.


Through strategic acquisitions and emerging technologies, Viper Energy aims to enhance its operational efficiency, increase its production and reserves, and generate significant returns for its investors. In recent years, the company has been actively involved in mergers and acquisitions, expanding its operations and asset portfolio. These acquisitions have contributed to the company's growth and increased its overall production capacity.


Analysts' Predictions and Financial Outlook:


1. Production Growth:

- Over the next few years, analysts project that Viper Energy will maintain a steady increase in its production. The company's focus on developing its acreage in the Permian Basin and its commitment to operational efficiency are expected to drive this growth. The continuous drilling program and the application of enhanced recovery techniques are anticipated to contribute to the company's expanding production levels.


2. Revenue and Earnings:

- As a result of the projected production growth and favorable commodity prices, Viper Energy's revenue is expected to show a positive trajectory. The company's ability to generate consistent cash flow and increase its profitability is seen as a positive sign for its financial health. The implementation of cost-saving measures and prudent capital allocation are expected to further enhance the company's earnings and profitability.


3. Capital Expenditures and Debt:

- Analysts expect Viper Energy to continue investing in its drilling program and exploration activities, resulting in sustained capital expenditures. However, the company's commitment to disciplined capital management is likely to keep its debt levels under control. By maintaining a healthy balance sheet, Viper Energy can ensure long-term financial stability and flexibility.


4. Dividend Policy:

- While Viper Energy has not yet initiated a dividend payment, analysts believe that the company may consider implementing a dividend policy in the future. However, the timing and amount of any potential dividend payments will depend on various factors, including the company's financial performance, cash flow generation, and long-term growth plans.


5. Acquisitions and Partnerships:

- Viper Energy's strategic approach to acquisitions and partnerships is expected to continue, enabling the company to expand its operations and access new growth opportunities. By collaborating with other industry players, the company can leverage its expertise and resources to drive innovation and achieve operational synergies.


6. Environmental, Social, and Governance (ESG) Initiatives:

- Recognizing the growing importance of sustainability and responsible operations, Viper Energy is likely to enhance its focus on ESG initiatives. This includes implementing measures to reduce its environmental footprint, supporting local communities, and promoting a culture of safety and ethical conduct. By incorporating ESG principles into its operations, the company aims to create long-term value for stakeholders and demonstrate its commitment to responsible energy production.


Overall, the financial outlook for Viper Energy Inc. Class A is considered positive. The company's strategic initiatives, asset portfolio, and commitment to operational efficiency are expected to drive growth and profitability. While commodity price fluctuations and industry conditions may impact the company's performance, the company's history of execution and its focus on value creation position it well for continued success.



Rating Short-Term Long-Term Senior
Outlook*Baa2B2
Income StatementBa1B3
Balance SheetBaa2Caa2
Leverage RatiosBaa2B3
Cash FlowBaa2C
Rates of Return and ProfitabilityB2Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Viper Energy Inc. Class A Market Overview and Competitive Landscape

Viper Energy Inc., Class A, is an oil and gas exploration and production company that operates in the Permian Basin of West Texas and Southeastern New Mexico. The company's primary focus is on acquiring and developing leasehold acreage in the Midland and Delaware basins, two of the most prolific sub-basins within the Permian. Viper Energy's business strategy involves utilizing advanced drilling and completion technologies to extract oil and gas from unconventional reservoirs, such as the Wolfcamp and Bone Spring formations.


The global oil and gas industry is characterized by intense competition among major integrated oil and gas companies, national oil companies, and independent exploration and production companies. The competitive landscape in the Permian Basin is particularly intense due to the region's rich hydrocarbon resources and relatively low production costs. Key competitors in the Permian Basin include ConocoPhillips, Pioneer Natural Resources, Devon Energy, Chevron, and ExxonMobil.


Viper Energy faces several challenges in the competitive oil and gas industry. These challenges include:


1. Fluctuating oil and gas prices: The global oil and gas market is subject to significant price volatility, which can impact Viper Energy's revenue and profitability. Factors such as supply and demand dynamics, economic conditions, geopolitical events, and OPEC decisions can influence oil and gas prices.


2. Intense competition: As mentioned earlier, the Permian Basin is a highly competitive region with numerous established players. Viper Energy must compete with these companies for access to land, drilling rights, and skilled labor, which can affect its ability to acquire and develop new projects.


3. Geological and operational risks: Oil and gas exploration and production activities involve inherent geological and operational risks. Exploration efforts may not result in the discovery of commercially viable hydrocarbon reserves, and drilling and production operations can be subject to unexpected geological conditions, equipment failures, and environmental incidents.


4. Environmental regulations: The oil and gas industry is subject to stringent environmental regulations aimed at minimizing the environmental impact of exploration and production activities. Compliance with these regulations can increase costs and operational complexity for Viper Energy.


5. Access to capital: Expanding operations and pursuing new projects require significant capital investment. Viper Energy's ability to secure financing from banks, institutional investors, or equity markets can impact its growth and development plans.


Despite these challenges, Viper Energy has several strengths that position it well in the competitive oil and gas landscape:


1. Experienced management team: Viper Energy is led by a team of experienced executives with a proven track record in the oil and gas industry. This team's expertise in exploration, drilling, and production can help the company navigate the challenges of the industry and capitalize on opportunities.


2. Focus on the Permian Basin: Viper Energy's strategic focus on the Permian Basin provides it with access to a region with significant hydrocarbon potential and relatively low production costs. The company's extensive leasehold acreage in the Midland and Delaware basins positions it well to benefit from the region's continued development.


3. Advanced drilling and completion technologies: Viper Energy employs advanced drilling and completion technologies to optimize production from its wells. These technologies can improve well productivity, reduce costs, and enhance recovery rates, giving the company a competitive edge in the market.


4. Strong financial position: Viper Energy maintains a strong financial position with low debt levels and a solid cash flow profile. This financial strength provides the company with flexibility to pursue growth opportunities, invest in new projects, and navigate periods of market volatility.


5. Commitment to ESG: Viper Energy recognizes the importance of environmental, social, and governance (ESG) factors in its operations. The company has implemented ESG initiatives to minimize its environmental impact, promote social responsibility, and maintain high standards of corporate governance. This commitment to ESG can enhance Viper Energy's reputation and stakeholder relationships.


Overall, Viper Energy operates in a competitive market with both challenges and opportunities. The company's experienced management team, focus on the Permian Basin, advanced technologies, strong financial position, and commitment to ESG provide it with a solid foundation to navigate the challenges and capitalize on the opportunities in the oil and gas industry.

Future Outlook and Growth Opportunities

Viper Energy Inc. Class A, an independent oil and gas company based in Texas, holds a diverse portfolio of assets across the Permian Basin and the Eagle Ford Shale. The company's primary focus remains the acquisition, exploration, and exploitation of oil and natural gas reserves in these prolific basins. As we delve into the future prospects of Viper Energy Inc. Class A, several key factors come into play.


1. Permian Basin Potential:

The Permian Basin stands as one of the most productive oil and gas basins in the United States. Viper Energy's strategic position in the heart of this basin offers significant growth potential. The company's acreage in the Midland Basin, a sub-basin of the Permian, boasts proven reserves and a substantial inventory of drillable locations. By leveraging advanced drilling techniques and optimizing operational efficiency, Viper Energy is well-positioned to capitalize on this prolific region's untapped potential.


2. Eagle Ford Shale Opportunities:

Viper Energy's presence in the Eagle Ford Shale, another prominent oil and gas basin, further diversifies its portfolio. The company holds a sizable acreage position in the Karnes Trough area, known for its high-quality oil and gas yields. By employing targeted exploration and development strategies, Viper Energy can unlock the vast potential hidden within this region, contributing to its overall production growth.


3. Technological Advancements:

The energy industry is constantly evolving, and technological advancements play a pivotal role in shaping the future of oil and gas exploration and production. Viper Energy's commitment to innovation positions it at the forefront of this transformation. The company actively invests in cutting-edge technologies such as horizontal drilling, multi-stage fracking, and real-time data analytics to optimize its operations. By embracing these advancements, Viper Energy enhances its efficiency, reduces costs, and increases the profitability of its projects.


4. Sustainable and Responsible Operations:

In today's climate-conscious environment, responsible and sustainable operations are essential for long-term success in the energy sector. Viper Energy recognizes the importance of minimizing its environmental impact while pursuing its growth objectives. The company is dedicated to implementing environmentally sound practices throughout its operations, reducing emissions, conserving water resources, and actively engaging with local communities. This commitment not only aligns with global sustainability goals but also enhances the company's reputation and social license to operate.


5. Financial Strength and Stability:

Viper Energy's financial strength and stability provide a solid foundation for future growth and expansion. The company maintains a healthy balance sheet with a manageable debt-to-equity ratio, ensuring its financial flexibility and resilience in volatile market conditions. This financial stability enables Viper Energy to pursue strategic investments, acquire new assets, and fund ongoing operations without compromising its long-term financial health.


In light of these factors, Viper Energy Inc. Class A exhibits a positive outlook for future growth and value appreciation. The company's strategic asset portfolio, commitment to innovation, focus on sustainable operations, and robust financial position position it well to thrive in the dynamic and ever-changing energy landscape.

Operating Efficiency

Viper Energy Inc. Class A, an oil and gas exploration and production company, showcases strong operating efficiency, reflected in various financial metrics and industry benchmarks.


Production Efficiency:


Viper Energy Inc. Class A demonstrates excellent production efficiency, maximizing hydrocarbon output from its assets. The company's relentless focus on operational excellence and technological advancements enables it to achieve higher production rates at lower costs. By optimizing well performance, reducing downtime, and implementing innovative drilling techniques, Viper Energy consistently outperforms industry averages in terms of production per well and unit operating costs.


Cost Efficiency:


Viper Energy Inc. Class A maintains a keen focus on cost control, employing various strategies to minimize expenses while maintaining operational integrity. The company's lean organizational structure, rigorous cost management practices, and strategic sourcing initiatives contribute to its cost-efficient operations. Viper Energy consistently delivers low-cost production through efficient drilling practices, optimized supply chain management, and effective risk mitigation strategies. This cost efficiency translates into improved profitability and higher returns on invested capital.


Capital Efficiency:


Viper Energy Inc. Class A demonstrates capital efficiency by prudently allocating financial resources to projects with high potential returns. The company's disciplined capital allocation process, coupled with its focus on low-cost operations, enables it to generate strong cash flows and returns on invested capital. Viper Energy's ability to identify and execute value-enhancing projects, while maintaining a strong financial position, underscores its commitment to capital efficiency and long-term sustainability.


Operational Excellence:


Viper Energy Inc. Class A's commitment to operational excellence extends beyond financial metrics. The company fosters a culture of continuous improvement, innovation, and accountability. By investing in employee training, implementing best practices, and utilizing advanced technologies, Viper Energy strives to achieve the highest standards of operational performance. This focus on operational excellence translates into enhanced safety, environmental stewardship, and community engagement.


Stakeholder Engagement:


Viper Energy Inc. Class A recognizes the importance of stakeholder engagement and maintains open communication channels with investors, employees, communities, and regulatory authorities. The company's transparent and proactive approach to stakeholder engagement fosters trust and builds strong relationships, which are essential for long-term success. Viper Energy's commitment to stakeholder engagement extends to actively participating in industry associations, supporting local initiatives, and promoting environmental responsibility.


In summary, Viper Energy Inc. Class A exemplifies operating efficiency through its strong production, cost, and capital efficiency metrics. The company's relentless focus on operational excellence, employee engagement, and stakeholder collaboration positions it for continued success in the dynamic energy industry.

Risk Assessment

Viper Energy Inc. Class A, formerly known as Viper Energy Partnership LP, is a publicly traded company that engages in the exploration and production of crude oil and natural gas in the United States. It operates in the Permian Basin, Williston Basin, and Mid-Continent regions. The company's primary focus is on the development of unconventional oil and gas resources, such as the Bakken formation in North Dakota and the Eagle Ford formation in South Texas.


Investing in Viper Energy Inc. Class A comes with various risks that investors should carefully consider before making an investment decision:


**Commodity Price Volatility:** The oil and gas industry is highly susceptible to commodity price fluctuations. Crude oil and natural gas prices can be affected by a range of factors, including global economic conditions, supply and demand dynamics, political events, and natural disasters. As a result, Viper Energy's revenue and profitability can fluctuate significantly based on commodity price movements.


**Operational Risks:** Oil and gas exploration and production activities involve inherent operational risks. These include geological and reservoir uncertainties, drilling and production hazards, equipment failures, and environmental incidents. Unforeseen geological conditions, drilling complications, or equipment malfunctions can lead to delays, reduced production, or even asset impairment.


**Regulatory and Legal Risks:** The oil and gas industry is subject to extensive regulations at both the state and federal levels. These regulations cover aspects such as environmental protection, drilling and production standards, and taxation. Changes in regulatory requirements or legal challenges can impact Viper Energy's operations, costs, and compliance obligations.


**Financial Risks:** Viper Energy, like many oil and gas companies, utilizes debt financing to fund its operations and growth. The company's financial leverage exposes it to interest rate fluctuations and refinancing risks. High debt levels can strain the company's cash flow and limit its flexibility to invest in new projects or respond to market downturns.


**Exploration and Development Risks:** The exploration for and development of oil and gas reserves involve significant upfront investments and carry a high degree of uncertainty. Not all exploration efforts result in successful discoveries, and the commercial viability of discovered resources may not be realized. Dry holes, unexpected geological conditions, and project delays can lead to substantial financial losses.


**Environmental, Social, and Governance (ESG) Risks:** The energy industry faces increasing scrutiny regarding its environmental impact and social responsibility. Viper Energy's operations may pose environmental risks, such as water contamination, air pollution, and greenhouse gas emissions. ESG concerns can lead to reputational damage, regulatory scrutiny, and potential legal liabilities.


In conclusion, investing in Viper Energy Inc. Class A carries various risks associated with commodity price volatility, operational hazards, regulatory changes, financial leverage, exploration uncertainties, and ESG considerations. Investors should carefully evaluate these risks and consider their risk tolerance and investment objectives before making an investment decision.

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