Vital Energy Reports Third-Quarter 2024 Financial and Operating Results
Raises fourth-quarter and full-year 2024 total and oil production forecasts
TULSA, OK, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Vital Energy, Inc. $(VTLE)$ ("Vital Energy" or the "Company") today reported third-quarter 2024 financial and operating results. Strong performance year-to-date also allowed the Company to increase its fourth-quarter and full-year 2024 production outlook. Supplemental slides have been posted to the Company's website and can be found at www.vitalenergy.com. A conference call and webcast is planned for 7:30 a.m. CT, Thursday, November 7, 2024. Participation details can be found within this release.
Highlights
-- Closed the Point Energy acquisition for total cash consideration of $815
million, exclusive of transaction- related expenses and post-closing
adjustments
-- Reported net income of $215.3 million, Adjusted Net Income1 of $60.4
million and cash flows from operating activities of $246.2 million
-- Generated Consolidated EBITDAX1 of $309.5 million and Adjusted Free Cash
Flow1 of $34.0 million
-- Reduced lease operating expense ("LOE") to $8.78 per BOE, below guidance
of $8.95 per BOE
-- Produced Company-record 133.3 thousand barrels of oil equivalent per day
("MBOE/d") and oil production of 59.2 thousand barrels of oil per day
("MBO/d")
-- Reported capital investments of $241.9 million, excluding non-budgeted
acquisitions and leasehold expenditures
-- Increased 2025 oil hedges to approximately 16.1 million barrels at $74.79
per barrel NYMEX WTI
-- Reduced methane intensity by 90% from 2019 baseline, as of YE-23
"We delivered strong results as we closed the largest single acquisition in our history and continued to optimize operations on acquisitions closed late last year," stated Jason Pigott, President and Chief Executive Officer. "Higher production from both standalone Vital Energy assets and the assets acquired from Point Energy, operating cost reductions and disciplined capital investments drove strong Adjusted Free Cash Flow in the quarter. Today, we raised our fourth quarter expectations for both total and oil production. Importantly, we plan to deliver this higher production without increasing capital investments."
"Our operational momentum will carry us into 2025," continued Mr. Pigott. "We have increased flexibility to allocate capital to our highest return projects, which will enhance our capital efficiencies. We expect to invest about $900 million in 2025 and maintain oil production of approximately 66,500 barrels per day. We believe that sustainable development efficiencies will benefit Adjusted Free Cash Flow and allow us to maintain a leverage ratio of about 1.5x through year-end 2025."
(1) Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release.
Third-Quarter 2024 Financial and Operations Summary
Financial Results. The Company reported net income of $215.3 million, or $5.73 per diluted share, and Adjusted Net Income of $60.4 million, or $1.61 per adjusted diluted share. Cash flows from operating activities were $246.2 million and Consolidated EBITDAX was $309.5 million.
Production. Vital Energy's third quarter total and oil production averaged 133,339 BOE/d and 59,198 BO/d, respectively. Both total and oil production volumes benefited from 11 days of production associated with the early closing of the Point Energy acquisition, accelerated completion of a 10-well package on Point Energy acreage and outperformance of Point Energy wells compared to initial assumptions. Weather-related downtime on a Howard County facility impacted quarterly total and oil production by 850 BOE/d and 650 BO/d, respectively. The issue has been remediated and we do not expect it to impact fourth-quarter production.
Capital Investments. Total capital investments, excluding non-budgeted acquisitions and leasehold expenditures, were $242 million, including $6 million associated with activity on assets acquired from Point Energy. Investments included $197 million for drilling and completions, $35 million in infrastructure investments, $8 million in other capitalized costs and $2 million in land, exploration and data-related costs.
Operating Expenses. Vital Energy significantly reduced its lease operating expenses ("LOE") recently through optimized workover activity and lower chemical processing costs. The Company believes these reductions are largely sustainable and will benefit future periods. LOE during the period was $8.78 per BOE ($8.72 per BOE excluding Point Energy assets), below guidance of $8.95 per BOE.
General and Administrative Expenses. General and administrative expenses totaled $1.78 per BOE for third-quarter 2024, excluding transaction-related expenses. General and administrative expenses, excluding long-term incentive plan ("LTIP") and transaction expenses were $1.53 per BOE. Cash LTIP expenses were $(0.03) per BOE and reflected the decrease in Vital Energy's common stock price during the third quarter. Non-cash LTIP expenses were $0.28 per BOE.
Liquidity. At September 30, 2024, the Company had $860 million drawn on its $1.5 billion senior secured credit facility and cash and cash equivalents of $22 million.
Point Energy
On September 20, 2024, the Company closed the Point Energy acquisition, its largest single acquisition. Production from the acquired assets is exceeding expectations, including base production and a recently completed 10-well package that commenced production earlier than anticipated. Integration efforts are progressing well and the Company completed a five-well package on the assets early in the fourth quarter.
2024 Outlook
Production. The Company increased its full-year 2024 total and oil production guidance to 131.0 - 132.5 MBOE/d (from 127.0 - 131.0 MBOE/d) and to 60.9 - 61.7 MBO/d (from 59.0 - 61.0 MBO/d), respectively. The increase reflects third quarter outperformance and higher expected fourth quarter volumes related to the outperformance of the Point asset.
Capital Investments. Full-year 2024 capital investments guidance was adjusted to $845 - $870 million (from $820 - $870 million), reflecting capital investments in the third quarter which included investments related to the early closing of the Point Energy acquisition.
Fourth-Quarter 2024 Guidance
During the fourth quarter of 2024, Vital Energy plans to operate five drilling rigs and one to two completions crews, and TIL 26 wells, including five on Point acreage.
The Company today increased its fourth quarter total and production guidance to 137.0 - 143.0 MBOE/d (from 134.0 - 140.0 MBOE/d) and 66.5 - 69.5 MBO/d (from 65.0 - 68.0 MBO/d), respectively. The Company reiterated its capital guidance at $175 - $200 million. The table below reflects the Company's guidance for production and capital investments for the fourth quarter of 2024.
4Q-24E
Total production (MBOE/d) 137.0 - 143.0
Oil production (MBO/d) 66.5 - 69.5
Capital investments, excluding non-budgeted acquisitions
($ MM) $175 - $200
The table below reflects the Company's guidance for select revenue and expense items for fourth-quarter 2024.
4Q-24E
Average sales price realizations (excluding derivatives):
Oil (% of WTI) 102%
NGL (% of WTI) 23%
Natural gas (% of Henry Hub) 5%
Net settlements received (paid) for matured commodity
derivatives ($ MM):
Oil $36
NGL $0
Natural gas $16
Selected average costs & expenses:
Lease operating expenses ($/BOE) $9.35
Production and ad valorem taxes (% of oil, NGL and
natural gas sales revenues) 6.20%
Oil transportation and marketing expenses ($/BOE) $1.05
Gas gathering, processing and transportation expenses
($/BOE) $0.55
General and administrative expenses (excluding LTIP
and transaction expenses, $/BOE) $1.70
General and administrative expenses (LTIP cash, $/BOE) $0.04
General and administrative expenses (LTIP non-cash,
$/BOE) $0.27
Depletion, depreciation and amortization ($/BOE) $15.50
Conference Call Details
Vital Energy plans to host a conference call at 7:30 a.m. CT on Thursday, November 7, 2024, to discuss its third-quarter 2024 financial and operating results and its enhanced future outlook. Supplemental slides will be posted to the Company's website. Interested parties are invited to listen to the call via the Company's website at www.vitalenergy.com, under the tab for "Investor Relations | News & Presentations | Upcoming Events." Portfolio managers and analysts who would like to participate should dial 800.715.9871, using conference code 1544492. A replay will be available following the call via the website.
About Vital Energy
Vital Energy, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Vital Energy's business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.
Additional information about Vital Energy may be found on its website at www.vitalenergy.com.
Forward-Looking Statements
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