We are currently offering a free two-week trial to Distressed Value Investing . Join our community to receive exclusive research about various companies and other opportunities along with full access to my portfolio of historic research that now includes over 1,000 reports on over 100 companies.Vital Energy, Inc. (NYSE: VTLE ) is now projected to generate around $267 million in 2025 free cash flow at current strip. This is only modestly lower than what I had projected for Vital before oilAaron Chow, aka Ele ...

Group 1 - The article discusses the analysis of oil and gas companies, specifically highlighting Vital Energy and its recent quarterly report which shows the benefits of acquisitions becoming apparent to investors [2] - The industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] - The analysis includes a breakdown of companies' balance sheets, competitive positions, and development prospects, aimed at identifying undervalued opportunities in the oil and gas space [1] Group 2 - The article emphasizes that the benefits of acquisitions for Vital Energy are starting to be recognized by investors, indicating a positive trend in the company's performance [2] - The author has a beneficial long position in Vital Energy shares, suggesting confidence in the company's future prospects [3] - The article serves as an example of the detailed analysis provided to members of the Oil & Gas Value Research service, which includes insights not available on the free site [1]

I grant Vista Energy (NYSE: VIST ) a Buy rating. The company has an excellent financial position. It has an 80.18% gross profit margin and a 62.08% EBITDA margin. With these excellent results, the company has allocated significant financial resources toDaniel Mellado is an economist from Carabobo University with a Master's Degree in Statistics from Simon Bolivar University, both obtained in Venezuela.Daniel worked analyzing the agricultural commodity market and the financial investment portfolio for an agri ...

Vital Energy (VTLE) Q1 2025 Earnings Call May 13, 2025 08:30 AM ET Company Participants Ron Hagood - Vice President, Investor RelationsJason Pigott - President and Chief Executive OfficerDerrick Whitfield - Managing DirectorKatie Hill - Senior VP & COOZach Parham - Executive DirectorNoah Hungness - Equity Research AssociateBryan Lemmerman - Senior VP & CFOJohn Abbott - E&P Research Vice PresidentJonathan Mardini - Equity Research Associate Operator Good day, ladies and gentlemen, and welcome to Vital Energy ...

Financial Data and Key Metrics Changes - The company reduced net debt by $135 million, supported by higher than expected adjusted free cash flow and a non-core asset sale that generated $20.5 million [6][12] - Lease operating expenses (LOE) were reduced from $121 million in Q4 2024 to an anticipated $115 million per quarter for the remainder of 2025, while general and administrative (G&A) expenses are projected to be below $22 million per quarter [7][8] Business Line Data and Key Metrics Changes - First quarter production volumes were driven by 23 turn-in-line wells, with 21 located in the Southern Delaware, showcasing good well performance and early production from several development packages [6][9] - The company expects significant production ramp-up in the second half of the year, particularly in Q3, with low breakeven costs of about $45 per barrel WTI [9][10] Market Data and Key Metrics Changes - The company hedged 90% of its oil at $70.61 per barrel WTI for the remainder of the year, which is expected to ensure returns and reduce risk [12] - The company anticipates generating approximately $265 million in adjusted free cash flow and reducing net debt by $300 million, including non-core asset sales [12] Company Strategy and Development Direction - The company shifted focus from acquisitions to optimizing its asset base, successfully reducing costs and enhancing efficiencies [7][10] - The strategy includes prioritizing capital allocation to the lowest breakeven packages and leveraging high-quality wells to maximize cash flow and debt repayment [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year outlook, citing high returns from upcoming packages and recent cost reductions [8][10] - The company is prepared to adjust activity levels in response to market conditions, with no rig or completion contracts extending beyond early 2026 [13][14] Other Important Information - The company has seen little impact from tariff-related price increases, which have been offset by price concessions in a softening services environment [10] - The company is conducting a full review of its cost structure to continue reducing costs and enhancing margins [14] Q&A Session Summary Question: Maintenance capital outlook with recent efficiencies - Management plans to maintain flat production year over year and aims to remain free cash flow positive, with potential savings of nearly $90 million from reduced service costs [21][22] Question: Cost initiatives and LOE self-help - LOE is expected to be in the range of $110 million to $115 million per quarter for 2025, driven by reduced failure rates and fixed operating costs [23][26] Question: Hedging strategy for future years - The company raised hedges for the rest of the year to lock in free cash flow generation and will continue to monitor the environment for future hedging [30][31] Question: Production and CapEx trajectory into 2026 - The 2026 program is estimated to be flat year over year for both volume and capital, with flexibility to adapt based on market conditions [32][34] Question: Non-cash impairments and inventory impact - Non-cash impairments are expected to continue if oil prices remain stable, with a projected impairment of a couple hundred million dollars next quarter [39][40] Question: Breakeven analysis and asset sales opportunities - The corporate breakeven is projected to be around $53 per barrel, with potential for further reductions through cost efficiencies [43][44] - The company is continuously looking for opportunities for additional asset sales, although the current price environment may make this challenging [46][47]

Core Insights - Vital Energy reported revenue of $512.18 million for the quarter ended March 2025, reflecting a 6.2% increase year-over-year, but fell short of the Zacks Consensus Estimate of $532.28 million by 3.78% [1] - The company's EPS was $2.37, up from $1.91 in the same quarter last year, exceeding the consensus EPS estimate of $2.11 by 12.32% [1] Financial Performance - Average daily oil equivalent sales volumes were 140,159 BOE/D, slightly above the five-analyst average estimate of 139,265.1 BOE/D [4] - Average sales prices per Bbl for NGL were $17.72, slightly below the three-analyst average estimate of $17.83 [4] - Natural gas sales volumes reached 19,742 MMcf, marginally exceeding the average estimate of 19,717.95 MMcf [4] - NGL sales volumes were 3,484 MBBL, surpassing the average estimate of 3,426.85 MBBL [4] - Oil sales volumes were 5,840 MBBL, slightly below the average estimate of 5,854.69 MBBL [4] Revenue Breakdown - Revenues from natural gas were $27.34 million, below the estimated $31.48 million, but represented a significant year-over-year increase of 49.8% [4] - Revenues from NGL were $61.74 million, exceeding the two-analyst average estimate of $59.52 million, with a year-over-year change of 31.2% [4] - Oil revenues were $422.33 million, slightly below the estimated $433.52 million, with a year-over-year increase of 1.6% [4] Stock Performance - Vital Energy's shares returned 17.2% over the past month, outperforming the Zacks S&P 500 composite's 3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Vital Energy reported quarterly earnings of $2.37 per share, exceeding the Zacks Consensus Estimate of $2.11 per share, and showing an increase from $1.91 per share a year ago, representing an earnings surprise of 12.32% [1][2] Financial Performance - The company posted revenues of $512.18 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 3.78%, but increased from $482.34 million year-over-year [2] - Over the last four quarters, Vital Energy has surpassed consensus EPS estimates three times and topped consensus revenue estimates only once [2] Stock Performance - Vital Energy shares have declined approximately 48.1% since the beginning of the year, contrasting with the S&P 500's decline of 3.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.94 on revenues of $492.86 million, and for the current fiscal year, it is $7.64 on revenues of $2.03 billion [7] - The estimate revisions trend for Vital Energy is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7] Industry Context - The Alternative Energy - Other industry, to which Vital Energy belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

1Q-25 Earnings Presentation May 12, 2025 Forward-Looking / Cautionary Statements This presentation, including any oral statements made regarding the contents of this presentation, contains forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities that Vital Energy, Inc. (together with its subsidiaries, the "Company", " ...

Financial Performance - The company reported a net loss of $18.8 million, or $(0.50) per diluted share, impacted by a non-cash pre-tax impairment loss of $158.2 million on oil and gas properties[4] - Adjusted Net Income was $89.5 million, or $2.37 per adjusted diluted share, with cash flows from operating activities amounting to $351.0 million[5] - Total revenues for the three months ended March 31, 2025, increased to $512.18 million, up from $482.34 million in the same period of 2024, representing a growth of 6.9%[38] - The company reported a net loss of $18.84 million for the quarter, compared to a net loss of $66.13 million in the same quarter of 2024, indicating an improvement of 71.5%[38] - Net income (loss) for Q1 2025 was $(18,837,000), an improvement from $(66,131,000) in Q1 2024[48] - Adjusted Net Income for Q1 2025 was $89,514,000, up 31.5% from $68,081,000 in Q1 2024[48] - Consolidated EBITDAX for Q1 2025 reached $359,679,000, a 19.3% increase compared to $301,332,000 in Q1 2024[52] Production and Sales - The company produced an average of 140.2 thousand barrels of oil equivalent per day (MBOE/d) and 64.9 thousand barrels of oil per day (MBO/d), both within guidance[5] - Average daily oil equivalent sales volumes increased to 140,159 BOE/d, compared to 124,719 BOE/d in the previous year, reflecting a growth of 12.3%[38] - Oil sales reached $422.33 million, a slight increase from $415.78 million in the prior year, while NGL sales rose significantly to $61.74 million from $47.08 million, marking a 31% increase[38] - Second-quarter 2025 guidance estimates total production between 133.0 - 139.0 MBOE/d and oil production between 61.0 - 65.0 MBO/d[18] Expenses and Investments - General and Administrative expenses were reported at $22.7 million, or $1.80 per BOE, which was below guidance[10] - Total capital investments for the first quarter were $252.7 million, excluding non-budgeted acquisitions and leasehold expenditures[5] - Total capital investments for Q1 2025 were $252,671,000, compared to $217,900,000 in Q1 2024, reflecting a 15.9% increase[45] - The Company incurred impairment expenses of $158,241,000 in Q1 2025, compared to no impairment expenses in Q1 2024[52] - The Company’s interest expense for Q1 2025 was $50,380,000, an increase from $43,421,000 in Q1 2024[52] Debt and Cash Flow - The company reduced total and net debt by $145.0 million and $133.5 million, respectively, through free cash flow and asset sales[5] - Cash and cash equivalents decreased to $28.65 million from $40.18 million at the end of the previous year, a decline of 28.8%[36] - Net Debt as of March 31, 2025, was $2,306,929,000, down from $2,440,399,000 at the end of 2024[56] - Net Debt to Consolidated EBITDAX ratio is utilized for assessing the Company's leverage position and operational performance[57] - The Company reported cash flows from operating activities of $350,985,000 in Q1 2025, significantly higher than $158,590,000 in Q1 2024[54] Asset Management - The company closed the sale of non-core assets for $20.5 million, which included approximately 9,100 net acres and production of 1,300 BOE/d[7] - Total assets decreased to $5.71 billion from $5.88 billion, a reduction of 2.8%[36] - Long-term debt decreased to $2.31 billion from $2.45 billion, a decline of 5.8%[36] - The company reported an impairment expense of $158.24 million for the quarter, which was not present in the same period last year[38] Future Outlook - For full-year 2025, the company expects to generate approximately $265 million of Adjusted Free Cash Flow at current oil prices of ~$59 per barrel WTI[14] - Approximately 90% of expected oil production for the remainder of the year is hedged at an average price of $70.61 per barrel WTI[12]

Revenue and Sales Performance - Total oil, NGL, and natural gas sales revenues for Q1 2025 were $511.4 million, a 6% increase from $481.1 million in Q1 2024[134] - Oil sales volumes increased by 10% to 5,840 MBbl in Q1 2025 from 5,327 MBbl in Q1 2024[134] - NGL sales revenues rose by 31% to $61.7 million in Q1 2025, compared to $47.1 million in Q1 2024[134] - Natural gas sales revenues increased by 50% to $27.3 million in Q1 2025 from $18.2 million in Q1 2024[134] - Average daily oil equivalent sales volumes rose by 12% to 140,159 BOE/d in Q1 2025 from 124,719 BOE/d in Q1 2024[134] Costs and Expenses - Total costs and expenses increased by 53% to $526.3 million for the three months ended March 31, 2025, compared to $345.0 million in 2024[138] - Lease operating expenses decreased by 2% to $103.5 million, while per BOE sold decreased by 12% to $8.20 due to increased volumes sold[138][140] - Production and ad valorem taxes rose by 9% to $33.2 million, driven by increased oil, NGL, and natural gas sales revenues[138][141] - Gas gathering, processing, and transportation expenses surged by 184% to $6.8 million, attributed to increased processing agreements following a 2024 acquisition[138][143] - General and administrative expenses (excluding LTIP) fell by 18% to $19.7 million, primarily due to reduced workforce and professional expenses[138][144] - Depletion, depreciation, and amortization expenses increased by 14% to $189.9 million, with depletion expense per BOE sold remaining flat at $15.05[138][147] Impairments and Non-Operating Income - The company recorded a full cost impairment of $158.2 million for Q1 2025 due to the unamortized cost of evaluated oil and natural gas properties exceeding the full cost ceiling[126] - A full cost ceiling impairment of $158.2 million was recorded due to unamortized costs exceeding the full cost ceiling[138][149] - Non-operating income improved significantly, with a gain on derivatives of $44.2 million compared to a loss of $152.1 million in the prior year[150] Interest and Taxation - Interest expense rose by 16% to $50.4 million, influenced by increased borrowings related to a 2024 acquisition[152] - The effective tax rate decreased to 5.27% for the three months ended March 31, 2025, down from 19.23% in 2024, due to the application of the estimated annual effective tax rate[156] - As of March 31, 2025, the company had $241.7 million in net deferred tax assets, including approximately $190.8 million related to net operating loss carryforwards[158] Liquidity and Cash Flow - Total liquidity as of March 31, 2025, was $793.6 million, consisting of $28.6 million in cash and cash equivalents and $765.0 million available under the Senior Secured Credit Facility[165] - Net cash provided by operating activities increased by 121% to $350.985 million for the three months ended March 31, 2025, compared to $158.590 million in 2024[167] - The company experienced a net cash used in financing activities of $150.393 million for the three months ended March 31, 2025, compared to cash provided of $456.338 million in the same period in 2024[176] - As of March 31, 2025, the outstanding balance under the Senior Secured Credit Facility was subject to a weighted-average interest rate of 6.922%[169] - The company had outstanding borrowings under the Senior Secured Credit Facility of $735.0 million as of May 8, 2025, with available capacity reduced to $665.0 million[165] - The company anticipates a $136.1 million increase in cash flows from operating activities due to net changes in operating assets and liabilities for the three months ended March 31, 2025[168] Capital Investments - Capital investments for full-year 2025 are expected to be in the range of $835.0 million to $915.0 million[173] - Total capital investments for the three months ended March 31, 2025, were $252.671 million, a 16% increase compared to $217.900 million in 2024[174] Future Impairments - The company expects potential additional impairments of $200 million to $400 million in Q2 2025 if oil prices remain low[131]