The energy sector has been a cornerstone of the economy and an area of interest for investors seeking substantial returns.
But investing in this sector doesn’t necessarily mean buying shares of major oil companies.
There is a unique opportunity to invest in a company that profits from the ownership of mineral rights.
Imagine an investment in a company that has strategic mineral and royalty interests in some of the most productive oil and natural gas properties in the United States.
A company that leverages these rights to earn revenue without the operational hassles or costs associated with actual drilling or production.
And to sweeten the deal, this company pays out a substantial portion of its earnings as dividends.
The opportunity at hand is Viper Energy Partners LP (VNOM), a publicly traded subsidiary of Diamondback Energy.
Viper owns mineral and royalty interests in oil and natural gas properties in the Permian Basin of West Texas, one of the most prolific oil and gas producing regions in the U.S.
Unlike traditional energy companies, Viper doesn’t drill or produce oil and gas itself.
Instead, it leases its mineral rights to other companies that do the drilling, and in return, it receives a percentage of the revenue generated.
This unique business model allows Viper to generate substantial revenue without the capital expenditures and operational risks associated with drilling and production.
Plus, as a publicly traded partnership, Viper is required to distribute most of its income to shareholders in the form of dividends, providing a steady income stream for investors.
As with any investment, there are risks, including fluctuations in oil and gas prices and changes in regulations.
However, Viper’s unique business model and substantial dividend make it an interesting option for those looking to invest in the energy sector without direct exposure to operational risks.