Vitesse Energy(US:VTS)2025-11-04 17:00Financial Data and Key Metrics Changes - In Q3 2025, production averaged 18,163 barrels of oil equivalent (BOE) per day, with a 65% oil cut, bringing year-to-date production to 17,373 BOE per day [6][9] - Adjusted EBITDA for the quarter was $41.6 million, while adjusted net income was $3.8 million; however, GAAP net income reported a loss of $1.3 million [9] - Cash capital expenditures (CapEx) for the quarter totaled $31.8 million, funded within operating cash flows, with total debt at $114 million and net debt at $108 million, resulting in a net debt to adjusted annualized EBITDA ratio of 0.65 times [9][10] Business Line Data and Key Metrics Changes - The company successfully completed two Vitesse-operated wells, which exceeded initial production expectations and were completed approximately 15% under budget [6][9] - The company has over 2 million net lateral feet of development remaining, translating to more than 200 net two-mile equivalent wells [5] Market Data and Key Metrics Changes - Approximately 60% of remaining oil production for 2025 is hedged at nearly $70 per barrel, with under half of remaining natural gas production hedged at a weighted average floor of $3.73 and ceiling of $5.85 per MMBtu [7][8] Company Strategy and Development Direction - The company is focused on disciplined capital allocation and has increased production and capital expenditure guidance for 2025 due to advancements in technology and successful well completions [4][5] - The strategy of acquiring acreage outside the core of the Bakken is yielding returns comparable to those seen in the core area, as drilling activity progresses into these regions [4] Management's Comments on Operating Environment and Future Outlook - Management noted that the oil industry is highly cyclical, and the company's long-duration assets and low leverage position it to be opportunistic during market disruptions [5] - The company is evaluating a 2026 and 2027 operated program, which will depend on oil prices and capital expenditures from partners [22][29] Other Important Information - The board declared a fourth-quarter dividend at an annual rate of $2.25 per share, reflecting the company's commitment to capital allocation [5] Q&A Session Summary Question: What percentage of the program involves three- and four-mile laterals? - Approximately half of the AFEs received this year have been extended laterals, with no one-mile laterals seen this year [14] Question: What is the outlook on the acquisition market? - The market is competitive, but the company remains disciplined in its approach to acquisitions, having closed a couple of deals in Q3 [17] Question: What is the line of sight on operated inventory opportunities for 2026? - The company has around 15 net undeveloped locations from the Lucero acquisition and is evaluating the best ways to drill these [22] Question: How does the cost structure for Q3 compare to Q2? - Q3 is a better indicator of the run rate for G&A and LOE, with expectations for slightly lower costs going forward [24][25] Question: How is the credit environment affecting producers' 2026 budgets? - Operators are primarily influenced by oil prices and consolidation trends rather than the interest rate environment [28][29] Question: What are the company's thoughts on gas opportunities in different basins? - The company is looking for gas assets at the right price, with a focus on the Bakken first, while the M&A market remains active [31]