Viper Energy Partners LP (NASDAQ: VNOM) recently revealed that second-half 2016 was a royal gain with deals nearly doubling its holdings since it went public.

Viper, owned by Diamondback Energy Inc. (NASDAQ: FANG), closed 26 deals worth $194.4 million in the second half of 2016, adding more than 1,900 net royalty acres in the Permian, Travis Stice, CEO of Viper's general partner, said Jan. 18. Stice is also Diamondback’s president and CEO.

Most recently, Viper acquired an additional 34,210 gross (887 net) royalty acres in the Permian for $68.1 million during the fourth quarter. Diamondback, RSP Permian Inc. (NYSE: RSPP), Pioneer Natural Resources Co. (NYSE: PXD) and Callon Petroleum Co. (NYSE: CPE) serve as primary operators on the assets.

Pro forma for the acquisitions, Viper’s acreage now totals 108,049 gross (6,415 net) royalty acres, which is up from the 3,172 net acres the company held at the time of its IPO in 2014.

Viper financed the recent acquisitions with its revolving credit facility, leaving a balance of $121 million. The company plans to repay the outstanding borrowings through an upsized equity issuance of 8.5 million shares with a roughly $1.3 million shoe.

“With a historical track record of maintaining little to no debt and 100% of quarterly distributable cash flow provided to unit holders, the issuance is not surprising in our view as the company continues to grow its footprint in the Permian,” Gordon Douthat, senior analyst with Wells Fargo Securities, said in a Jan. 18 report.

Prior to upsizing, Douthat said Viper’s offering was 6% dilutive to 2017 earnings/cash flow per share, based on the firm’s model.

Viper expects about $131.8 million in gross proceeds after its offering closes Jan. 24. Credit Suisse, Citigroup and UBS Investment Bank are joint book-running managers for the offering.

“We anticipate staying active in the acquisition market by continuing to look at deals that are accretive on net asset value, yield and acreage valuation metrics,” Stice said in a statement.

Viper plans to finance future acquisitions through a combination of cash on hand, borrowings and issuing debt or equity. The company’s primary focus will continue to be on Diamondback-operated acreage because of its immediate accretion to future Viper distributions, Stice said.

As of November, Diamondback operated 44% of Viper’s net royalty acres, according to a company presentation.

Viper’s mineral acreage includes about 246 active well permits and seven active rigs. Production was reported up 27% in the fourth quarter compared to the previous quarter. Fourth-quarter production attributable to Viper’s mineral interests was 7,919 barrels of oil equivalent per day (boe/d), compared to 6,255 boe/d in the third quarter.

“We believe this performance is a direct reflection of the quality of Viper’s asset base, where operators responded quickly to a rising commodity price environment,” Stice said.

For the full year 2016, average production attributable to Viper grew by 18% to 6,432 boe/d from the 5,431 boe/d produced in 2015.

Emily Patsy can be reached at epatsy@hartenergy.com.