Vitesse Energy(US:VTS)2023-05-13 00:18Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $47.8 million, primarily due to $77.4 million in one-time charges related to the spin-off [12] - Adjusted net income for the quarter was $15.6 million, with adjusted EBITDA at $40.1 million, reflecting a 6% increase over the prior quarter [13] - Total revenue was $59 million, up from $52 million in Q1 2022, despite a 20% drop in WTI oil prices and a 42% drop in gas prices [14] Business Line Data and Key Metrics Changes - First quarter production increased by 20% year-over-year, totaling 11,524 Boe per day, with oil accounting for 67% of production and 87% of total revenue [14] - Lease operating expenses rose by 17% compared to Q1 2022 on a per Boe basis, attributed to increased capital allocation for workovers [15] Market Data and Key Metrics Changes - At the end of Q1, there were 42 rigs drilling in the Williston Basin, with over 50% of the rigs on acreage owned by the company [17] - The borrowing base for the credit facility decreased from $265 million to $245 million due to lower commodity prices, although elected commitments remained unchanged at $170 million [16] Company Strategy and Development Direction - The company is focused on returning capital to shareholders, having declared a second quarterly dividend of $0.50 per share to be paid in June 2023 [9] - The strategy includes organic drilling and near-term development acquisitions to support cash flow [10] - The company is exploring M&A opportunities but will only pursue larger deals if they support or expand the dividend [21][53] Management's Comments on Operating Environment and Future Outlook - Management noted a vibrant flow of near-term drilling opportunities, particularly in the Bakken, but did not indicate a substantial increase in deal flow compared to previous years [21] - The company is optimistic about improvements in drilling and completion costs, which have decreased from last year [23] - Management reaffirmed 2023 annual guidance and expressed excitement about capital expenditures in Q1 [18][55] Other Important Information - The company completed its spin-off from Jefferies and acquired Vitesse Oil, now operating as a fully integrated independent public company [8] - The company has a deep inventory of over 20 years of economic drilling locations, which is crucial for its business model [9] Q&A Session Summary Question: M&A landscape and opportunities - Management indicated that while the deal flow remains consistent, they are open to pursuing opportunities that support dividends, particularly in the Bakken [21][53] Question: Operator behavior and oilfield service costs - Management noted a decrease in average drilling and completion costs compared to last year, which is encouraging [23] Question: CapEx run rate and future guidance - Management stated that CapEx is unpredictable due to being a non-operating entity, but they are excited about the Q1 expenditures [55] Question: Refracs and recovery rates - Management discussed the potential for refracs, indicating that many older wells are candidates for this technology, which could significantly improve recovery rates [42][43]