Vitesse Energy(US:VTS)2025-05-06 16:02Financial 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]