Vitesse Energy(US:VTS)2023-11-04 03:03Financial Data and Key Metrics Changes - The company reported production levels of just over 11,000 Boe per day, with approximately 67% being oil [18] - Adjusted EBITDA remained flat sequentially at $34.7 million, while adjusted net income was $11.1 million [19] - GAAP net income showed a loss of $1.5 million [19] - Cash CapEx and acquisition costs for the quarter were approximately $34.1 million, funded through operating cash flows and credit facility withdrawals, resulting in outstanding debt increasing by $15 million to $56 million as of September 30 [20] Business Line Data and Key Metrics Changes - The company completed several impactful acquisitions during the third quarter, which are expected to provide material increases to production and cash flow in Q4 2023 and throughout 2024 [11] - The acquisitions involved approximately $50 million of additional CapEx, primarily in the second half of 2023 [11] Market Data and Key Metrics Changes - The company hedged approximately 50% of its estimated fourth quarter 2023 oil production and close to 40% of its estimated full-year 2024 oil production at $79 per barrel [14] Company Strategy and Development Direction - The company emphasizes a return of capital strategy, with the payment of a fixed dividend being the top priority, having declared a cash dividend of $0.50 per share for both Q3 and Q4 [8] - The company is actively pursuing near-term development drilling deals and larger asset acquisitions to support its dividend [9] Management's Comments on Operating Environment and Future Outlook - Management noted a consistent pace of development on existing assets and highlighted the importance of organic conversion of undeveloped locations [13] - The company is experiencing significant deal flow in both near-term and larger asset classes, indicating a robust M&A environment [39] Other Important Information - The company reported that NGL prices were low due to high storage levels, which impacted realized prices for natural gas [28] - Management indicated that cost inflation in the Bakken has not been as pronounced as in other basins, with operators effectively managing costs [43] Q&A Session Summary Question: Details on acquisition activity - Management confirmed that the acquisition pipeline has been active, with several transactions coming together in the latter part of Q3, primarily involving wells in the drilling process [23][24] Question: Natural gas price realizations - Management explained that realized prices were affected by low NGL prices and transportation costs, which are netted out in their reporting [28][30] Question: Hedge book additions - Management indicated that recent hedges were opportunistic, locking in higher prices for expected production from acquisitions [34][36] Question: State of the M&A market - Management noted a significant increase in deal flow, with many opportunities being assessed, although closing deals is not guaranteed [39] Question: Cost side updates - Management reported that cost inflation has not been significant in the Bakken, with operators managing costs effectively [43]