Viper Minerals (VNOM, Financial) is facing declining production in the area of its mineral rights, but it is substantially hedged for 2020 and 2021 on oil prices which we expect to result in meaningful free cash flows even at very dire oil price scenarios. We believe that gives them enough runway to emerge on the other side of the price war and, based on our analysis, the risk/reward of that emergence could be attractive.
From FPA Capital Fund (Trades, Portfolio)'s first-quarter 2020 shareholder commentary.
