EQUITY-BASED COMPENSATION

The following table presents the effects of the equity compensation plans and related costs:



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
	(in thousands)
General and administrative expenses	$	5,650	$	6,168	$	13,101	$	13,231
Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties	2,349		1,901		4,990		4,244

Restricted Stock Units

The following table presents the Company’s restricted stock units activity under the Equity Plan during the six months ended June 30, 2018:



	Restricted Stock Awards & Units		Weighted Average Grant-Date Fair Value
Unvested at December 31, 2017	243,577		$	90.88
Granted	81,633		$	113.81
Vested	(115,711	)	$	86.75
Forfeited	(5,672	)	$	92.78
Unvested at June 30, 2018	203,827		$	102.86

The aggregate fair value of restricted stock units that vested during the six months ended June 30, 2018 and 2017 was $10.0 million and $11.4 million, respectively. As of June 30, 2018, the Company’s unrecognized compensation cost related to unvested restricted stock awards and units was $15.0 million. Such cost is expected to be recognized over a weighted-average period of 1.6 years.

Performance Based Restricted Stock Units

To provide long-term incentives for the executive officers to deliver competitive returns to the Company’s stockholders, the Company has granted performance-based restricted stock units to eligible employees. The ultimate number of shares awarded from these conditional restricted stock units is based upon measurement of total stockholder return of the Company’s common stock (“TSR”) as compared to a designated peer group during a two-year or three-year performance period.

In February 2018, eligible employees received performance restricted stock unit awards totaling 117,423 units from which a minimum of 0% and a maximum of 200% units could be awarded. The awards have a performance period of January 1, 2018 to December 31, 2020 and cliff vest at December 31, 2020.

The fair value of each performance restricted stock unit is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of units to be earned during the performance period.

The following table presents a summary of the grant-date fair values of performance restricted stock units granted and the related assumptions for the February 2018 awards.



	2018
	Three-Year Performance Period
Grant-date fair value	$	170.45
Risk-free rate	1.99		%
Company volatility	35.90		%

The following table presents the Company’s performance restricted stock units activity under the Equity Plan for the six months ended June 30, 2018:



	Performance Restricted Stock Units		Weighted Average Grant-Date Fair Value
Unvested at December 31, 2017	202,326		$	139.83
Granted	285,737		$	130.96
Vested	(168,314	)	$	103.41
Unvested at June 30, 2018⁽¹⁾	319,749		$	151.08


(1)	A maximum of 639,498 units could be awarded based upon the Company’s final TSR ranking.

As of June 30, 2018, the Company’s unrecognized compensation cost related to unvested performance based restricted stock awards and units was $27.6 million. Such cost is expected to be recognized over a weighted-average period of 1.5 years.

Phantom Units

Under the Viper LTIP, the Board of Directors of the General Partner is authorized to issue phantom units to eligible employees. The Partnership estimates the fair value of phantom units as the closing price of the Partnership’s common units on the grant date of the award, which is expensed over the applicable vesting period. Upon vesting the phantom units entitle the recipient one common unit of the Partnership for each phantom unit.

The following table presents the phantom unit activity under the Viper LTIP for the six months ended June 30, 2018.



	Phantom Units		Weighted Average Grant-Date Fair Value
Unvested at December 31, 2017	105,439		$	17.10
Granted	101,403		$	23.18
Vested	(46,379	)	$	21.41
Unvested at June 30, 2018	160,463		$	19.70

The aggregate fair value of phantom units that vested during the six months ended June 30, 2018 was $1.0 million. As of June 30, 2018, the unrecognized compensation cost related to unvested phantom units was $1.9 million. Such cost is expected to be recognized over a weighted-average period of 1.1 years.