Company Performance - Vitesse Energy reported quarterly earnings of $0.6 per share, significantly exceeding the Zacks Consensus Estimate of $0.07 per share, and up from $0.35 per share a year ago, representing an earnings surprise of +757.14% [1] - The company posted revenues of $81.76 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.52%, compared to $66.6 million in the same quarter last year [2] - Over the last four quarters, Vitesse has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Market Performance - Vitesse shares have declined approximately 7.4% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $64.72 million, and for the current fiscal year, it is $0.26 on revenues of $267.82 million [7] Industry Outlook - The Oil and Gas - Exploration and Production - United States industry, to which Vitesse belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Vitesse's stock performance [5]

PART I FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Vitesse Energy's unaudited condensed consolidated financial statements as of June 30, 2025, show total assets at **$951.5 million** driven by the Lucero acquisition, with six-month net income surging to **$27.3 million** from **$8.7 million** due to derivative gains and a litigation settlement, and operating cash flow increasing to **$83.5 million** Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $67,977 | $50,911 | | **Total oil and gas properties, net** | $873,734 | $751,976 | | **Total assets** | **$951,504** | **$810,893** | | **Total current liabilities** | $71,770 | $100,329 | | **Revolving credit facility** | $106,000 | $117,000 | | **Total liabilities** | **$279,629** | **$310,559** | | **Total equity** | **$671,875** | **$500,334** | Condensed Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $81,755 | $66,598 | $147,925 | $127,792 | | **Operating Income** | $18,656 | $16,814 | $24,034 | $29,893 | | **Commodity derivative gain (loss), net** | $18,451 | $379 | $18,279 | $(13,445) | | **Net Income** | **$24,659** | **$10,928** | **$27,327** | **$8,742** | | **Net income per common share – diluted** | **$0.60** | **$0.33** | **$0.72** | **$0.27** | Condensed Consolidated Statements of Cash Flows Summary (in thousands) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash from Operating Activities** | $83,505 | $74,580 | | **Net cash from Investing Activities** | $(66,118) | $(69,876) | | **Net cash from Financing Activities** | $(18,392) | $(5,135) | | **Net decrease in cash** | $(1,005) | $(431) | - On March 7, 2025, the Company completed the acquisition of Lucero Energy Corp., issuing **8,169,839 shares** of common stock as consideration, valued at approximately **$194.3 million**; the acquisition is accounted for as a business combination, and the purchase price allocation is still preliminary[63](index=63&type=chunk)[64](index=64&type=chunk) - The company resolved litigation with Hess, receiving a one-time cash payment of **$24 million** in Q2 2025, recorded as a **$3.3 million** increase to oil revenue, a **$13.6 million** increase to gas revenue, and a **$7.1 million** reduction to general and administrative expenses[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **23%** year-over-year revenue growth in Q2 2025 to a **40%** increase in production volumes, primarily from the Lucero acquisition, which offset a **13%** decrease in realized commodity prices, with net income significantly boosted by a **$24 million** litigation settlement and an **$18.5 million** commodity derivative gain, while maintaining strong liquidity with **$144.0 million** available under its revolving credit facility and investing **$66.1 million** in capital expenditures [Executive Overview and Business Strategy](index=34&type=section&id=Executive%20Overview%20and%20Business%20Strategy) The company's strategy focuses on acquiring and developing oil and gas assets, primarily in the Williston Basin, to generate returns and distribute dividends, with Q2 2025 highlights including **18,950 BOE/day** production, **$24.7 million** net income, and a **$0.5625** per share quarterly dividend, incorporating Lucero Energy's operations post-acquisition - The company's business strategy is centered on creating stockholder value through the acquisition, development, and production of oil and gas assets, with a focus on the Bakken and Three Forks formations in the Williston Basin[126](index=126&type=chunk) Q2 2025 Financial and Operating Highlights | Metric | Value | | :--- | :--- | | **Production** | 18,950 BOE/day | | **Total Revenue** | $81.8 million | | **Net Income** | $24.7 million | | **Cash Flow from Operations** | $66.0 million | | **Capital Investment** | $35.7 million | | **Quarterly Dividend** | $0.5625 per share | | **Total Debt (at June 30, 2025)** | $106.0 million | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue increased **23%** to **$81.8 million** due to a **40%** production volume increase from the Lucero acquisition, despite a **20%** drop in realized oil prices, while general and administrative expenses fell **93%** due to a **$7.1 million** legal settlement reimbursement, and for the six-month period, revenue grew **16%** to **$147.9 million**, with net income surging to **$27.3 million** from **$8.7 million** aided by the settlement and a significant derivative swing Comparison of Three Months Ended June 30, 2025 and 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $81.8M | $66.6M | 23% | | **Combined Volumes (MBoe)** | 1,724 | 1,229 | 40% | | **Avg. Realized Price/Boe (pre-hedge)** | $47.41 | $54.20 | (13%) | | **Lease Operating Expense/Boe** | $11.38 | $9.99 | 14% | | **General & Admin Expense** | $0.3M | $4.7M | (93%) | | **Commodity Derivative Gain, Net** | $18.5M | $0.4M | * | Comparison of Six Months Ended June 30, 2025 and 2024 | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $147.9M | $127.8M | 16% | | **Combined Volumes (MBoe)** | 3,072 | 2,371 | 30% | | **Avg. Realized Price/Boe (pre-hedge)** | $48.16 | $53.89 | (11%) | | **General & Admin Expense** | $12.4M | $10.1M | 23% | | **Commodity Derivative Gain (Loss), Net** | $18.3M | $(13.4M) | 236% | - The significant decrease in General and Administrative expense in Q2 2025 was primarily due to a **$7.1 million** reimbursement of litigation costs from a legal settlement; excluding this and Lucero transaction costs, G&A per BOE decreased due to higher production volumes[158](index=158&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had **$2.0 million** in cash and **$144.0 million** available under its revolving credit facility, ensuring sufficient liquidity for the next twelve months, with the working capital deficit improving to **$3.8 million** from **$49.4 million** at year-end 2024 due to paying down accrued capital expenditures, while generating **$83.5 million** in operating cash flow and investing **$66.1 million** in capital expenditures during the first six months of 2025 - At June 30, 2025, the company had **$2.0 million** in cash and **$144.0 million** available under its Revolving Credit Facility; management expects these sources, along with operating cash flow, to be sufficient to fund material cash requirements for the next twelve months[192](index=192&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $83,505 | $74,580 | | Net cash from investing activities | $(66,118) | $(69,876) | | Net cash from financing activities | $(18,392) | $(5,135) | - The working capital deficit improved from **$49.4 million** at Dec 31, 2024, to **$3.8 million** at June 30, 2025, primarily due to a **$28.5 million** decrease in accounts payable and accrued liabilities from paying down accrued oil and gas development costs[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to commodity price and interest rate risks, mitigating commodity price volatility through derivative contracts to hedge anticipated production, where a hypothetical **$1** change in NYMEX WTI strip price would impact the net commodity derivative position by approximately **$2.5 million**, and a **1%** change in interest rates on its floating-rate revolving credit facility would impact annual interest expense by approximately **$1.2 million** - The company's primary market risk is commodity price volatility for oil and natural gas; it utilizes derivative contracts to reduce this exposure and achieve more predictable cash flow[216](index=216&type=chunk)[217](index=217&type=chunk) - A hypothetical **$1** increase or decrease in the NYMEX WTI strip price would change the fair value of the company's net commodity derivative position by approximately **$2.5 million** as of June 30, 2025[220](index=220&type=chunk) - The company is exposed to interest rate risk via its floating-rate Revolving Credit Facility; a **1%** change in the average interest rate would result in an approximate **$0.6 million** change in interest expense for the six-month period[221](index=221&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with the assessment of internal control over financial reporting excluding the recently acquired Lucero business, which accounted for approximately **22%** of total assets, and no other material changes to internal controls were reported - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[222](index=222&type=chunk) - Management's assessment of internal control over financial reporting as of June 30, 2025, excluded the recently acquired Lucero business, acquired on March 7, 2025, which represented **22%** of total assets and **12%** of total revenue for the six-month period[223](index=223&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company resolved a previously disclosed dispute with Hess regarding post-production revenue deductions, receiving a one-time cash payment of **$24 million** as part of the settlement effective May 28, 2025, and does not believe any other pending legal proceedings will materially affect its business - The company settled a legal dispute with Hess concerning post-production revenue deductions; the settlement, effective May 28, 2025, included a one-time cash payment of **$24 million** to Vitesse[227](index=227&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K, except for a newly detailed risk concerning the potential adverse effects of tariffs and other trade measures on operations, costs, and business - A new risk factor was disclosed regarding the potential adverse impact of U.S. government tariffs and other trade measures, which could increase operational costs and affect the business[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a board-authorized stock repurchase program for up to **$60 million** of its common stock, under which no shares were repurchased during the three months ended June 30, 2025, leaving approximately **$59.8 million** authorized for repurchase - The company did not repurchase any of its common stock during the three months ended June 30, 2025; approximately **$59.8 million** remains available for repurchase under the existing program[233](index=233&type=chunk)[235](index=235&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=54&type=section&id=Other%20Items) The company reported no defaults upon senior securities (Item 3) or mine safety disclosures (Item 4), and no directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements (Item 5), with Item 6 listing the exhibits filed with the report - No defaults upon senior securities or mine safety disclosures were reported for the period[236](index=236&type=chunk)[237](index=237&type=chunk) - No director or officer of the company adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[238](index=238&type=chunk)

[Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Vitesse Energy reported strong Q2 2025 results, highlighted by significant production increase, a legal settlement, and continued shareholder returns Key Financial and Operational Metrics | Metric | Value | | :--- | :--- | | Net Income | $24.7 million | | Adjusted Net Income | $18.4 million | | Adjusted EBITDA | $61.1 million | | Cash Flow from Operations | $66.0 million | | Free Cash Flow | $21.9 million | | Production | 18,950 Boe/day (65% oil) | | Total Debt | $106.0 million | | Net Debt to Adjusted EBITDA Ratio | 0.43x | - The company resolved a legal dispute with a key operator, resulting in a **one-time cash payment of $24 million** and new arrangements for gas production sales starting July 1, 2025[5](index=5&type=chunk)[6](index=6&type=chunk) - A quarterly cash dividend of **$0.5625 per common share** was declared, scheduled to be paid on September 30, 2025[4](index=4&type=chunk)[5](index=5&type=chunk) [Management Comments](index=1&type=section&id=Management%20Comments) Management emphasized successful Lucero asset integration, lawsuit settlement, and strategic use of free cash flow for debt reduction and hedging - CEO Bob Gerrity highlighted key achievements in Q2: full integration of Lucero assets, successful lawsuit settlement, selective capital investment, and using free cash flow for debt reduction[3](index=3&type=chunk) - The company took advantage of increased oil prices to add hedges for 2025 and 2026 at levels that support the dividend[3](index=3&type=chunk) [Financial and Operating Performance](index=2&type=section&id=Financial%20and%20Operating%20Performance) [Financial and Operating Results](index=2&type=section&id=Financial%20and%20Operating%20Results) Q2 2025 production significantly increased due to the Lucero acquisition, contributing to higher total revenue and net income - Production averaged **18,950 Boe/day**, a **27% sequential increase**, mainly driven by the Lucero acquisition, with oil constituting **65% of production**[8](index=8&type=chunk) - A litigation settlement resulted in a **one-time cash payment of $24 million**, which was recorded in the consolidated statements of operations[6](index=6&type=chunk) Financial Metrics (Q2 2025 vs Q2 2024) | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue ($ millions) | $81.8 | $66.6 | +23% | | Daily Production (Boe/day) | 18,950 | 13,504 | +40% | | Avg. Realized Oil Price (per Bbl) | $59.50 | $74.63 | -20% | | Avg. Realized Gas Price (per Mcf) | $4.17 | $1.11 | +276% | | G&A Expense ($ millions) | $0.3 | $4.7 | -93% | - General and administrative expenses were significantly lower at **$0.3 million**, or **$0.18 per Boe**, due to the offset of approximately **$7.1 million** in previously expensed litigation costs[10](index=10&type=chunk) [Liquidity and Capital Expenditures](index=2&type=section&id=Liquidity%20and%20Capital%20Expenditures) Vitesse maintained strong liquidity as of June 30, 2025, with substantial credit facility availability and strategic capital investments Liquidity and Capital Expenditures (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Cash | $2.0 million | | Revolving Credit Facility Borrowings | $106.0 million | | Total Liquidity | $146.0 million | | Q2 Development Capital Expenditures | $35.6 million | | Q2 Acquisition Costs | $0.1 million | [Operations Update](index=3&type=section&id=Operations%20Update) By Q2 2025 end, Vitesse held interests in a substantial portfolio of drilling, completion, and permitted development projects - As of June 30, 2025, the Company had an interest in **282 gross (7.9 net) wells** that were drilling or in completion[12](index=12&type=chunk) - The company also held interests in another **418 gross (15.1 net) locations** that were permitted for development[12](index=12&type=chunk) [Commodity Hedging](index=5&type=section&id=Commodity%20Hedging) Vitesse strategically hedged a significant portion of its expected oil and natural gas production to enhance cash flow predictability and support its dividend - Based on 2025 guidance, Vitesse has hedged approximately **71% of its remaining 2025 oil production** at a weighted average price of **$69.83/Bbl**[17](index=17&type=chunk) - Approximately **49% of remaining 2025 natural gas production** is hedged at a weighted average floor price of **$3.73/MMBtu**[17](index=17&type=chunk) Commodity Hedging Positions | Instrument | Settlement Period | Volume Hedged | Weighted Average Price | | :--- | :--- | :--- | :--- | | WTI Crude Oil Swaps | Q3 2025 - Q4 2026 | 2,016,504 Bbls | ~$67.60/Bbl | | Henry Hub Gas Collars | Q3 2025 - Q1 2027 | 7,456,000 MMbtu | Floor ~$3.75 / Ceiling ~$5.20 | [Outlook and Corporate Information](index=3&type=section&id=Outlook%20and%20Corporate%20Information) [2025 Annual Guidance](index=3&type=section&id=2025%20Annual%20Guidance) Vitesse reiterated its full-year 2025 guidance for annual production and total capital expenditures 2025 Annual Guidance | Guidance Metric | 2025 Range | | :--- | :--- | | Annual Production (Boe/day) | 15,000 - 17,000 | | Oil as % of Production | 64% - 68% | | Total Capital Expenditures ($ millions) | $80 - $110 | [Conference Call and Investor Events](index=6&type=section&id=Conference%20Call%20and%20Investor%20Events) The company scheduled an earnings conference call and management participation in two investor conferences for August 2025 - An earnings conference call is scheduled for **Tuesday, August 5, 2025, at 11:00 a.m. Eastern Time**[21](index=21&type=chunk)[22](index=22&type=chunk) - Management will participate in the **EnerCom Denver Energy Conference** on August 18-19 and the **Midwest IDEAS Conference** on August 27[27](index=27&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=9&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Vitesse reported increased total revenues, operating income, and a significant rise in net income year-over-year Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Income Statement (Three Months Ended June 30) | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Total Revenue | $81,755 | $66,598 | | Total Operating Expenses | $63,099 | $49,784 | | Operating Income | $18,656 | $16,814 | | Net Income | $24,659 | $10,928 | | Net Income per Share (Diluted) | $0.60 | $0.33 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Vitesse's balance sheet showed increased total assets, decreased total liabilities, and higher total equity Condensed Consolidated Balance Sheets | Balance Sheet | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $67,977 | $50,911 | | Total Assets | $951,504 | $810,893 | | Revolving Credit Facility | $106,000 | $117,000 | | Total Liabilities | $279,629 | $310,559 | | Total Equity | $671,875 | $500,334 | [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company provided reconciliations for key non-GAAP metrics for Q2 2025, including Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow Non-GAAP Financial Metrics (Q2 2025) | Non-GAAP Metric | Value | | :--- | :--- | | Adjusted Net Income | $18,421 thousand | | Adjusted EBITDA | $61,132 thousand | | Free Cash Flow | $21,904 thousand | | Net Debt | $104,038 thousand | | Net Debt to Adjusted EBITDA Ratio | 0.43x | - Adjusted EBITDA for the quarter includes a **$24 million benefit** from the resolution of a legal dispute with a key operator[42](index=42&type=chunk)

Core Viewpoint - The market has shown declining interest in oil stocks over the past year, with Devon Energy, Diamondback Energy, and Vitesse Energy experiencing stock price declines, yet they now offer attractive dividend yields and price-to-free cash flow multiples [1]. Group 1: Market Sentiment and Oil Prices - The oil price environment has been volatile, particularly following geopolitical events such as Israel's attack on Iran, which caused a spike in oil prices [3]. - Prior to this spike, oil prices were trading in the low-to-mid $60 per barrel range, with negative sentiment driven by slower economic growth and OPEC's decision to increase production [5]. - The negative sentiment towards oil intensified after spring events, prompting companies to adjust their capital expenditures [7]. Group 2: Company Responses to Market Conditions - Vitesse Energy implemented a 32% cut in planned capital expenditures to preserve returns and maintain financial flexibility amid commodity price volatility [7]. - Diamondback Energy reduced its planned capital expenditures for 2025 from a range of $3.8 billion to $4.2 billion down to $3.4 billion to $3.8 billion [7]. - Devon Energy has not made specific adjustments but is monitoring the macro environment and retains flexibility in its capital programs [8]. Group 3: Hedging Strategies - Following the recent oil price spike, there was a significant increase in hedging activities among oil companies, with independent oil companies likely taking advantage of the price surge [9]. - All three companies have integrated hedging into their capital allocation strategies to ensure returns to investors through dividends and share buybacks [11]. - Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel as of March [13]. - Diamondback has downside protection in place at $55 per barrel, allowing for upside exposure above this price [14]. - Devon Energy had over 25% of its expected 2025 oil production hedged, projecting significant free cash flow at various oil price levels [16]. Group 4: Dividend Security and Investment Opportunities - Diamondback and Devon Energy's dividends appear secure, with potential for increased discretionary dividends, share buybacks, or debt repayment [18]. - The hedging strategies employed by these companies enhance the security of their dividend payouts, providing passive income investors with confidence in their investments [18].

Financial Data and Key Metrics Changes - For Q1 2025, production averaged just under 15,000 barrels of oil equivalent per day, marking a 16% increase from Q4 2024 [9][12] - EBITDA for the quarter was $39.9 million, adjusted net income was $8 million, and GAAP net income was $2.7 million [12] - Total debt at the end of Q1 was $117 million, with a net debt to adjusted annualized EBITDA ratio of 0.7 times [13] - The company revised its 2025 production guidance to a range of 15,000 to 17,000 barrels per day, with an anticipated oil cut of 64% to 68% [13][14] Business Line Data and Key Metrics Changes - The company has 25 net wells in its development pipeline, including 9.5 net wells currently drilling or completing and 15.5 net locations permitted for development [9] - Approximately 61% of oil production is hedged at a weighted average price of $70.75 per barrel for the remainder of 2025 [10] Market Data and Key Metrics Changes - The company has chosen to defer the completion of 1.9 net wells due to recent commodity price volatility [10] - The company did not proceed with $20 million in acquisitions planned for early April due to market conditions [10] Company Strategy and Development Direction - The acquisition of Lucero is seen as a significant step, providing additional decision-making ability and control over capital spending [6][7] - The company aims to invest capital at the highest rates of return possible, allowing for capital returns to shareholders through all market cycles [7] - The board reaffirmed the dividend at an annual rate of $2.25 per share, reflecting confidence in the business model [8] Management's Comments on Operating Environment and Future Outlook - Management expressed a commitment to maintaining financial flexibility in response to commodity price volatility [13][14] - The company is actively monitoring market conditions and is prepared to adjust its strategy based on the performance of commodity prices [20][21] - Management noted that they are seeing more inquiries from companies under stress, indicating potential acquisition opportunities [45][46] Other Important Information - The company has hedged over 2,500 barrels per day and 12,700 MMBtu per day of its 2026 oil and natural gas production at approximately $67 per barrel [10] - G&A expenses increased due to the Lucero acquisition and litigation costs, with a projected run rate of around $4 per BOE [55] Q&A Session Summary Question: Guidance details and factors affecting production range - Management indicated that the timing of well completions and potential acquisitions are key factors influencing the production range [17][19] Question: Capital allocation and buyback considerations - Management emphasized a focus on maintaining the fixed dividend and balancing share buybacks with reinvestment in assets [23][25][27] Question: Lucero acquisition performance and synergies - The integration of Lucero assets is proceeding as expected, with potential synergies being explored [34] Question: Operator behavior and AFE quality - Management noted no significant changes in AFE quality, with a trend towards longer laterals being observed [41][42] Question: Potential acquisition opportunities in a down market - Management is actively looking at other basins and is prepared to take advantage of acquisition opportunities if commodity prices decline [46] Question: CapEx range and acquisition budget - The CapEx range allows flexibility for attractive acquisitions, with $10 million currently underwritten for base case acquisitions [49][50] Question: G&A expenses and litigation costs - G&A expenses are expected to run at about $4 per BOE, with additional litigation costs anticipated in the second quarter [55][58]

Financial Data and Key Metrics Changes - For Q1 2025, production averaged just under 15,000 barrels of oil equivalent per day, a 16% increase from Q4 2024 [9] - EBITDA for the quarter was $39.9 million, adjusted net income was $8 million, and GAAP net income was $2.7 million [14] - Total debt at the end of Q1 was $117 million, with a net debt to adjusted annualized EBITDA ratio of 0.7 times [14] - The company revised its 2025 production guidance to a range of 15,000 to 17,000 barrels per day, with an anticipated oil cut of 64% to 68% [14] Business Line Data and Key Metrics Changes - The acquisition of Lucero has expanded the development pipeline, which now includes 25 net wells, with 9.5 net wells either drilling or completing [9] - The company has deferred the completion of 1.9 net wells due to recent commodity price volatility [10] - Approximately 61% of oil production is hedged at a weighted average price of $70.75 per barrel [11] Market Data and Key Metrics Changes - The company has chosen not to close on $20 million of acquisitions due to market conditions [10] - The overall pipeline of development wells is higher than ever, primarily due to the Lucero acquisition [9] Company Strategy and Development Direction - The company aims to invest capital at the highest rates of return possible, allowing for capital returns to shareholders through all cycles [7] - The board reaffirmed the annual dividend at a rate of $2.25 per share, reflecting confidence in the business model [8] - The company is actively looking for acquisition opportunities that meet their return hurdles, especially in a volatile market [21][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain dividends despite current pricing environments [32] - The company is prepared to adapt its capital expenditures based on market conditions to protect long-term shareholder returns [15] - There is an ongoing assessment of operator behavior and AFE quality, with no significant changes noted [40] Other Important Information - G&A expenses increased due to the Lucero acquisition, with a projected run rate of about $4 per BOE [54] - Litigation costs are expected to continue into the second quarter due to an upcoming trial [56] Q&A Session Summary Question: What drives the guidance range? - Management indicated that the timing of well completions and potential acquisitions are key factors influencing the guidance range [18][19] Question: How does the company view buybacks in the current environment? - The focus remains on maintaining the fixed dividend, with buybacks considered in the context of capital investment and cash flow [23][25][27] Question: How is the Lucero acquisition performing? - The integration of Lucero assets is proceeding as expected, with performance aligning with initial underwriting [34] Question: What is the outlook for capital expenditures? - The company has a wide CapEx range to allow flexibility for attractive acquisitions, with $10 million currently underwritten for base case acquisitions [48][51] Question: Are there any early signs from operators regarding AFE quality? - Management noted no significant changes in AFE quality, with a trend towards longer laterals being observed [40] Question: Is the company looking at other basins for acquisitions? - The company is receiving inquiries from stressed private companies and is actively looking at other basins for potential acquisitions [44][45]

Company Overview - Vitesse's assets are comprised of over 80% undeveloped locations, indicating a long-term growth potential[8, 27] - Vitesse estimates having over 200 net remaining undeveloped locations across its asset[15, 18] - Vitesse has interests in 7,397 productive wells (221 net wells) with an average working interest of 3.6% per working interest well[18] Financial Performance & Strategy - Vitesse estimates 2025 net production to be 15.0 – 17.0 MBoe/d with 64-68% oil weighting[15] - Vitesse offers an 11% fixed dividend yield[8] - Vitesse has a returns-based capital allocation framework, including a $0.5625 per share quarterly cash dividend and a $60 million share repurchase program[10] - Vitesse targets a net debt to adjusted EBITDA ratio of less than 1.0x[10, 27] Asset Valuation - Vitesse's 1P PV-10 is $806 million, and PDP PV-10 is $609 million[15] - Vitesse has nearly 200 acquisitions and divestitures totaling $757 million[27]

For the quarter ended March 2025, Vitesse Energy (VTS) reported revenue of $66.17 million, up 8.1% over the same period last year. EPS came in at $0.23, compared to $0.34 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $65.06 million, representing a surprise of +1.71%. The company delivered an EPS surprise of +155.56%, with the consensus EPS estimate being $0.09.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ho ...

Vitesse Energy (VTS) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 155.56%. A quarter ago, it was expected that this energy company would post earnings of $0.26 per share when it actually produced earnings of $0.18, delivering a surprise of -30.77%. Over the last four quarters, the ...

PART I FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Q1 2025 unaudited financials reflect total assets of $975.2 million, net income of $2.7 million, and reduced operating cash flow [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show total assets at $975.2 million and equity at $667.7 million, primarily from the Lucero acquisition | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$975,236** | **$810,893** | | Total current assets | $70,448 | $50,911 | | Total oil and gas properties | $895,244 | $751,976 | | **Total Liabilities** | **$307,546** | **$310,559** | | Revolving credit facility | $117,000 | $117,000 | | **Total Equity** | **$667,690** | **$500,334** | - Total assets increased by approximately **$164.3 million**, primarily driven by a **$143.3 million** increase in oil and gas properties, largely due to the Lucero acquisition[22](index=22&type=chunk) - Total equity increased by **$167.4 million**, reflecting the issuance of common stock for the Lucero acquisition and net income for the period, partially offset by dividends[22](index=22&type=chunk)[26](index=26&type=chunk) [Condensed Consolidated Statements of Operations](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations show a return to profitability with $2.7 million net income and an 8.1% increase in total revenue | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenue (in thousands)** | **$66,171** | **$61,193** | | Operating Income (in thousands) | $5,380 | $13,079 | | Commodity derivative (loss), net (in thousands) | ($172) | ($13,824) | | **Net Income (Loss) (in thousands)** | **$2,668** | **($2,186)** | | Net income (loss) per share – basic | $0.08 | ($0.07) | | Net income (loss) per share – diluted | $0.08 | ($0.07) | - The company returned to profitability with a net income of **$2.7 million** in Q1 2025, compared to a net loss of **$2.2 million** in Q1 2024, primarily due to a significant reduction in net commodity derivative losses from **$13.8 million** to just **$0.2 million**[24](index=24&type=chunk) - Total revenue increased by **8.1%** year-over-year, driven by higher natural gas revenue and overall production volumes[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a 55.6% decrease in operating cash flow to $17.5 million, offset by financing activities | Cash Flow Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from Operating Activities (in thousands) | $17,489 | $39,419 | | Net cash from Investing Activities (in thousands) | ($30,374) | ($32,213) | | Net cash from Financing Activities (in thousands) | $14,413 | ($6,381) | | **Net Increase in Cash (in thousands)** | **$1,528** | **$825** | - Net cash from operating activities decreased by **55.6%** year-over-year, falling to **$17.5 million** from **$39.4 million**[28](index=28&type=chunk) - Financing activities provided a net cash inflow of **$14.4 million**, primarily due to **$49.8 million** in cash acquired from the Lucero Acquisition, which offset **$26.0 million** in dividend payments[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's oil and gas focus, Lucero acquisition, credit facility, and dividend declaration - The company's business is focused on acquiring and developing oil and gas properties, primarily non-operated working and royalty interests in the Williston Basin (Bakken and Three Forks formations)[30](index=30&type=chunk) - On March 7, 2025, Vitesse acquired Lucero Energy Corp. in an all-stock transaction, issuing **8,169,839** shares of common stock, accounted for as a business combination with assets and liabilities recorded at fair values[58](index=58&type=chunk) Preliminary Purchase Price Allocation for Lucero Acquisition (in thousands) | Category | Amount | | :--- | :--- | | Arrangement consideration | $194,279 | | **Assets Acquired** | | | Cash and cash equivalents | $49,846 | | Proved oil and gas properties | $150,395 | | Total assets acquired | $206,594 | | **Liabilities Assumed** | | | Total liabilities assumed | $12,315 | | **Net Assets Acquired** | **$194,279** | - The Revolving Credit Facility's borrowing base was increased to **$315 million** and elected commitments rose to **$250 million** in conjunction with the Lucero Acquisition, with **$117.0 million** outstanding as of March 31, 2025[72](index=72&type=chunk) - On May 1, 2025, the Board declared a quarterly cash dividend of **$0.5625 per share**, payable on June 30, 2025[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights the Lucero acquisition, Q1 2025 production and revenue growth, $2.7 million net income, and liquidity [Executive Overview](index=33&type=section&id=Executive%20Overview) Executive overview outlines the company's strategy, key Q1 2025 financial and operational highlights, and the Lucero acquisition - The company's strategy focuses on creating stockholder value through acquiring, developing, and producing oil and gas assets, maintaining a strong balance sheet, and paying a meaningful dividend[118](index=118&type=chunk) Q1 2025 Financial and Operating Highlights | Metric | Value | | :--- | :--- | | Quarterly Dividend | $0.5625 per share | | Production | 14,971 Boe/d (68% oil) | | Total Revenue | $66.2 million | | Net Income | $2.7 million | | Cash Flow from Operations | $17.5 million | | Capital Investment | $30.4 million | | Total Debt (as of March 31, 2025) | $117.0 million | - A key event in the quarter was the closing of the all-stock acquisition of Lucero Energy Corp. for a total consideration of **$194.3 million**[121](index=121&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Results of operations show 8% revenue growth from production, higher G&A from acquisition costs, and reduced derivative losses Comparison of Operating Results (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue ($ thousands)** | **$66,171** | **$61,193** | **8%** | | Daily Production (Boe/d) | 14,971 | 12,557 | 19% | | Avg. Realized Price/Boe (pre-hedging) | $49.11 | $53.55 | (8%) | | Lease Operating Expense/Boe | $10.28 | $10.32 | 0% | | G&A Expense/Boe | $9.00 | $4.70 | 91% | | DD&A/Boe | $19.72 | $20.61 | (4%) | - The **8%** increase in total revenue was driven by an **18%** rise in production volumes, partially offset by an **8%** decrease in average realized prices per Boe[142](index=142&type=chunk) - General and administrative expenses increased by **126%** to **$12.1 million**, primarily due to **$4.6 million** in transaction costs related to the Lucero Acquisition[148](index=148&type=chunk) - The net commodity derivative loss was significantly reduced to **$0.2 million** from **$13.8 million** in the prior-year quarter, mainly due to relatively flat oil prices in Q1 2025 compared to rising prices in Q1 2024[153](index=153&type=chunk)[154](index=154&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity and capital resources detail $4.5 million cash, $133 million available credit, and decreased operating cash flow - As of March 31, 2025, the company had **$4.5 million** in cash and **$133.0 million** available under its Revolving Credit Facility[161](index=161&type=chunk) - The working capital deficit narrowed to **$26.2 million** from **$49.4 million** at year-end 2024, due to an increase in revenue receivables and a decrease in accrued capital expenditures[163](index=163&type=chunk) - Cash flow from operations decreased **56%** to **$17.5 million** in Q1 2025 from **$39.4 million** in Q1 2024[164](index=164&type=chunk) - Total capital expenditures for Q1 2025 were **$30.4 million**, including development and acquisition activities[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity price and interest rate risks through hedging programs and monitors the impact of market fluctuations - The company's primary market risk exposure is from the volatility of oil and natural gas prices, which it manages through a derivative hedging program[185](index=185&type=chunk)[186](index=186&type=chunk) - A hypothetical **$1** increase or decrease in the NYMEX WTI strip price would change the fair value of the company's open oil commodity derivative positions by approximately **$2.6 million** as of March 31, 2025[189](index=189&type=chunk) - The company is exposed to interest rate risk through its floating-rate Revolving Credit Facility, where a **1%** change in the average interest rate would result in an approximate **$0.3 million** change in quarterly interest expense[190](index=190&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of March 31, 2025, with Lucero excluded from internal control over financial reporting assessment - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[191](index=191&type=chunk) - The assessment of internal controls over financial reporting as of March 31, 2025, excluded Lucero, which was acquired on March 7, 2025, permissible under SEC guidance for up to 12 months post-acquisition[192](index=192&type=chunk)[193](index=193&type=chunk) - Other than incorporating Lucero's controls, there were no changes in internal control over financial reporting during the first quarter of 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[194](index=194&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary legal proceedings, including a lawsuit over revenue deductions, with no material adverse effect expected - The company is the plaintiff in a lawsuit against an operator in North Dakota regarding improper post-production cost deductions from revenue payments, with the trial scheduled for June 2025[196](index=196&type=chunk) - Management believes that current legal proceedings, in aggregate, will not materially and adversely affect the company's business, financial condition, or results of operations[195](index=195&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for a new risk concerning potential adverse effects from new trade policies and tariffs - A new risk factor has been added regarding potential new trade policies and tariffs, such as the announced **10%** baseline tariff on imports, which could increase operating costs and adversely affect the business[199](index=199&type=chunk) - Other than the newly added risk factor, there have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases occurred in Q1 2025, with $59.8 million remaining available under the stock repurchase program - The company did not repurchase any shares of its common stock during the three months ended March 31, 2025[201](index=201&type=chunk)[202](index=202&type=chunk) - As of March 31, 2025, approximately **$59.8 million** remained available for repurchases under the company's approved Stock Repurchase Program[202](index=202&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[205](index=205&type=chunk)