Vital Energy, Inc. (NYSE: VTLE) ("Vital Energy" or the "Company")
today reported fourth-quarter and full-year 2023 financial and
operating results and provided its 2024 outlook. Supplemental
slides have been posted to the Company's website and can be found
at www.vitalenergy.com. A conference call and webcast is planned
for 7:30 a.m. CT, Thursday, February 22, 2024. Participation
details can be found within this release.
Fourth-Quarter 2023 Highlights
- Reported 4Q-23 net income of $281.4 million, Adjusted Net
Income1 of $76.1 million and cash flows from operating activities
of $233.7 million
- Generated 4Q-23 Consolidated EBITDAX1 of $304.2 million and
Adjusted Free Cash Flow1 of $69.0 million
- Reported 4Q-23 total and oil production that exceeded the
high-end of Company guidance by 7% and 4%, respectively, producing
113.7 thousand barrels of oil equivalent per day ("MBOE/d") and
53.1 thousand barrels of oil per day ("MBO/d"), both Company
records
- Reported 4Q-23 capital investments of $184.2 million, excluding
non-budgeted acquisitions and leasehold expenditures, in line with
Company guidance
- Closed three Permian Basin acquisitions and announced a fourth
transaction to increase working interests on a portion of the
acquired properties
- Organically added ~185 new oil-weighted locations
Full-Year 2023 Highlights
- Reported FY-23 net income of $695.1 million, Adjusted Net
Income1 of $325.0 million and cash flows from operating activities
of $813.0 million
- Generated FY-23 Consolidated EBITDAX1 of $1.04 billion and
Adjusted Free Cash Flow1 of $217.1 million
- Reported FY-23 total production of 96.6 MBOE/d and oil
production of 46.3 MBO/d, an increase of 17% and 22%, respectively,
versus FY-22
- Exited 2023 with a Net Debt1/Consolidated EBITDAX1 ratio of
1.09x (credit facility covenant calculation), 8% lower than prior
year-end
- Reported year-end 2023 proved reserves of 404.9 million BOE, an
increase of 34% versus prior year
- Closed six accretive Permian Basin acquisitions for $1.6
billion, adding approximately 88,000 net acres and 465 gross
oil-weighted locations, 280 of which were announced with the
acquisitions, increasing inventory of oil-weighted development
locations to more than 10 years at current activity levels
- Reported reduced Scope 1 GHG emissions intensity and methane
emissions intensity of 38% and 65%, respectively, as of year-end
2022
1Non-GAAP financial measure; please see supplemental
reconciliations of GAAP to non-GAAP financial measures at the end
of this release.
"Our 2023 accomplishments were impressive as we enhanced scale,
established a core operating position in the Delaware and
significantly improved the depth and quality of our inventory,"
said Jason Pigott, President and Chief Executive Officer.
"Operationally, we exceeded expectations and delivered
Company-record production for lower-than-expected capital.
Continued capital discipline maximized our cash flows from
operating activities and Adjusted Free Cash Flow and allowed us to
strengthen our balance sheet."
"Our strategy to build long-term value is clear and proven,"
continued Pigott. "We now have the scale and inventory to
sustainably maximize cash flows from operating activities and
generate Adjusted Free Cash Flow. In 2024, we are focused on adding
inventory through targeted leasing and bolt-on acquisitions and
delineating additional formations in and around our existing
positions. We are applying our operational and technological
expertise to recent acquisitions to enhance efficiencies and
improve returns while reducing debt and strengthening our leverage
ratio."
Fourth-Quarter 2023 Financial and Operations
Summary
Financial Results. The Company reported net income of $281.4
million, or $9.44 per diluted share, and Adjusted Net Income of
$76.1 million, or $2.55 per adjusted diluted share. Cash flows from
operating activities were $233.7 million and Consolidated EBITDAX
was $304.2 million.
Production. Consistent with preliminary volumes disclosed in
January, Vital Energy's fourth quarter total and oil production set
Company records, averaging 113,747 BOE/d and 53,070 BO/d,
respectively. Production volumes benefited from outperformance of
new wells across the Company's leasehold.
Capital Investments. Total capital investments, excluding
non-budgeted acquisitions and leasehold expenditures, were $184
million, consistent with preliminary amounts disclosed in January.
Vital Energy turned-in-line ("TIL") 15 wells during fourth-quarter
2023. Investments included $143 million for drilling and
completions, $27 million in infrastructure investments (including
Vital Midstream Services), $8 million in other capitalized costs
and $6 million in land, exploration and data related costs.
Operating Expenses. Lease operating expenses ("LOE") during the
period were $8.33 per BOE, in line with expectations.
General and Administrative Expenses. General and administrative
("G&A") expenses, excluding long-term incentive plan ("LTIP")
and transaction expenses, for fourth-quarter 2023 were $2.12 per
BOE. Cash LTIP expenses, reflecting the price decline of Vital
Energy's common stock during the fourth quarter of 2023, were
$(0.09) per BOE. Non-cash LTIP expenses were lower than
expectations at $0.22 per BOE.
Liquidity. At December 31, 2023, the Company had $135 million
drawn on its $1.25 billion senior secured credit facility and cash
and cash equivalents of $14 million.
2024 Outlook
Capital Investments. The Company's 2024 development plan is
designed to maximize Adjusted Free Cash Flow, enhance capital
efficiency and organically add high-return locations. Vital Energy
plans to invest $750 - $850 million in 2024, excluding non-budgeted
acquisitions and leasehold expenditures, operating four drilling
rigs throughout the year and averaging 1.7 completions crews.
Capital investments are expected to peak in the first quarter due
to higher working interest on wells being TIL'd during the
quarter.
Production. The Company expects total production of 116.5 -
121.5 MBOE/d and oil production of 55.0 - 59.0 MBO/d for full-year
2024.
Oil-Weighted Inventory
Vital Energy significantly increased its inventory of
high-return development locations in 2023. The Company closed six
acquisitions in 2023 to expand its Midland Basin position and
initiate a core position in the Delaware Basin, adding
approximately 280 locations. Subsequently, the Company added an
additional 185 locations on the acquired properties through further
technical evaluation.
At year-end 2023, Vital Energy had approximately 830 high-return
locations with an average breakeven WTI oil price of <$55 per
barrel, representing more than 10 years of drilling inventory at
current activity levels. Approximately 275 of these locations
breakeven below $50 per barrel WTI.
2023 Proved Reserves
Vital Energy's total proved reserves at year-end 2023 were 404.9
MMBOE (39% oil, 71% developed). The standardized measure of
discounted net cash flows was $4.15 billion and the PV-10 value was
$4.49 billion utilizing SEC benchmark pricing of $78.22 per barrel
for oil and $2.64 per MMBtu for natural gas. Consistent with its
past methodology of only booking locations it intends to develop
over the next three years, the Company booked a total of 212 proved
undeveloped locations.
Proved reserves increased 34% over the prior year, driven
primarily by reserve adds from acquired properties. Proved
developed and proved undeveloped reserves from the acquired
properties were valued at $1.63 billion at year-end 2023. The
Company has included only 111 of the 355 development locations on
properties acquired in 2023 as proved undeveloped reserves.
Sustainability
In 2023, Vital Energy published the Company's fourth
Sustainability Report and an inaugural Climate Risk and Resilience
Report. Both reports detail the Company’s performance against its
sustainability targets. Two Company targets (Scope 1 GHG emissions
intensity and methane emissions reductions) were achieved as of
year-end 2022, three years ahead of schedule.
The Company is committed to quickly mitigating emissions on
acquired assets. From year-end 2020 to year-end 2022, Vital Energy
reduced absolute emissions on acquired assets by 36% while growing
production on those assets by 42%. Additionally, the Company was
the first Permian operator to receive the third-party TrustWell
certification for responsible operations, placing Vital Energy in
the top-quartile of U.S. onshore operators. In 2023, Vital Energy
expanded this certification to approximately 60% of its gross
operated oil production and became the first company to receive the
TrustWell Low Methane Rating.
First-Quarter 2024 Guidance
During the first quarter of 2024, Vital Energy plans to operate
four drilling rigs and two completions crews, and TIL 15 wells,
with 10 being TIL'd in the second half of the quarter as part of a
20 well development package.
The table below reflects the Company's guidance for production
and capital investments for first-quarter 2024.
|
|
1Q-24E |
Total production
(MBOE/d) |
|
117.5 - 122.5 |
Oil production
(MBO/d) |
|
54.5 - 58.5 |
Capital investments, excluding
non-budgeted acquisitions ($
MM) |
|
$225 - $250 |
The table below reflects the Company's guidance for select
revenue and expense items for first-quarter 2024.
|
|
1Q-24E |
Average sales price
realizations (excluding derivatives): |
|
|
Oil (% of WTI) |
|
101% |
NGL (% of WTI) |
|
23% |
Natural gas (% of Henry
Hub) |
|
51% |
|
|
|
Net settlements received
(paid) for matured commodity derivatives ($ MM): |
|
|
Oil |
|
$(14) |
NGL |
|
$0 |
Natural gas |
|
$7 |
|
|
|
Selected average costs &
expenses: |
|
|
Lease operating expenses
($/BOE) |
|
$8.40 |
Production and ad valorem taxes (% of oil, NGL and natural gas
sales
revenues) |
|
6.30% |
Oil transportation and marketing expenses
($/BOE) |
|
$0.90 |
Gas gathering, processing and transportation expenses
($/BOE) |
|
$0.35 |
General and administrative expenses (excluding LTIP and transaction
expenses,
$/BOE) |
|
$2.10 |
General and administrative expenses (LTIP cash,
$/BOE) |
|
$0.10 |
General and administrative expenses (LTIP non-cash,
$/BOE) |
|
$0.25 |
Depletion, depreciation and amortization
($/BOE) |
|
$14.75 |
|
|
|
Conference Call Details
Vital Energy plans to host a conference call at 7:30 a.m. CT on
Thursday, February 22, 2024, to discuss its fourth-quarter and
full-year 2023 financial and operating results and management's
outlook, the content of which is not part of this earnings release.
A slide presentation providing summary financial and statistical
information will be posted to the Company's website. The Company
invites interested parties to listen to the call via the Company's
website at www.vitalenergy.com, under the tab for "Investor
Relations | News & Presentations." Portfolio managers and
analysts who would like to participate on the call should dial
800.715.9871, using conference code 6099172. A replay will be
available following the call via the Company's website.
About Vital Energy
Vital Energy, Inc. is an independent energy company with
headquarters in Tulsa, Oklahoma. Vital Energy's business strategy
is focused on the acquisition, exploration and development of oil
and natural gas properties in the Permian Basin of West Texas.
Additional information about Vital Energy may be found on its
website at www.vitalenergy.com.
Forward-Looking StatementsThis press release
and any oral statements made regarding the contents of this
release, including in the conference call referenced herein,
contain forward-looking statements as defined under Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, that address activities that
Vital Energy assumes, plans, expects, believes, intends, projects,
indicates, enables, transforms, estimates or anticipates (and other
similar expressions) will, should or may occur in the future are
forward-looking statements. The forward-looking statements are
based on management’s current belief, based on currently available
information, as to the outcome and timing of future events. Such
statements are not guarantees of future performance and involve
risks, assumptions and uncertainties. General risks relating
to Vital Energy include, but are not limited to, continuing and
worsening inflationary pressures and associated changes in monetary
policy that may cause costs to rise; changes in domestic and global
production, supply and demand for commodities, including as a
result of actions by the Organization of Petroleum Exporting
Countries and other producing countries ("OPEC+") and the
Russian-Ukrainian or Israeli-Hamas military conflicts, the decline
in prices of oil, natural gas liquids and natural gas and the
related impact to financial statements as a result of asset
impairments and revisions to reserve estimates, reduced demand due
to shifting market perception towards the oil and gas industry;
competition in the oil and gas industry; the ability of the Company
to execute its strategies, including its ability to successfully
identify and consummate strategic acquisitions at purchase prices
that are accretive to its financial results and to successfully
integrate acquired businesses, assets and properties, pipeline
transportation and storage constraints in the Permian Basin, the
effects and duration of the outbreak of disease, and any related
government policies and actions, long-term performance of wells,
drilling and operating risks, the possibility of production
curtailment, the impact of new laws and regulations, including
those regarding the use of hydraulic fracturing, and under the
Inflation Reduction Act (the "IRA"), including those related to
climate change, the impact of legislation or regulatory initiatives
intended to address induced seismicity on our ability to conduct
our operations; uncertainties in estimating reserves and production
results; hedging activities, tariffs on steel, the impacts of
severe weather, including the freezing of wells and pipelines in
the Permian Basin due to cold weather, technological innovations
and scientific developments, physical and transition risks
associated with climate change, increased attention to ESG and
sustainability-related matters, risks related to our public
statements with respect to such matters that may be subject to
heightened scrutiny from public and governmental authorities
related to the risk of potential "greenwashing," i.e., misleading
information or false claims overstating potential
sustainability-related benefits, risks regarding potentially
conflicting anti-ESG initiatives from certain U.S. state or other
governments, possible impacts of litigation and regulations, the
impact of the Company's transactions, if any, with its securities
from time to time, the impact of new environmental, health and
safety requirements applicable to the Company's business
activities, the possibility of the elimination of federal income
tax deductions for oil and gas exploration and development and
imposition of any additional taxes under the IRA or otherwise, and
other factors, including those and other risks described in its
Annual Report on Form 10-K for the year ended December 31, 2022 and
those set forth from time to time in other filings with the
Securities and Exchange Commission ("SEC"). These documents are
available through Vital Energy's website at
www.vitalenergy.com under the tab "Investor Relations" or
through the SEC's Electronic Data Gathering and Analysis Retrieval
System at www.sec.gov. Any of these factors could cause Vital
Energy's actual results and plans to differ materially from those
in the forward-looking statements. Therefore, Vital Energy can give
no assurance that its future results will be as estimated. Any
forward-looking statement speaks only as of the date on which such
statement is made. Vital Energy does not intend to, and disclaims
any obligation to, correct, update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
This press release and any accompanying disclosures include
financial measures that are not in accordance with generally
accepted accounting principles ("GAAP"), such as Adjusted Free Cash
Flow, Adjusted Net Income and Consolidated EBITDAX. While
management believes that such measures are useful for investors,
they should not be used as a replacement for financial measures
that are in accordance with GAAP. For a reconciliation of such
non-GAAP financial measures to the nearest comparable measure in
accordance with GAAP, please see the supplemental financial
information at the end of this press release.
Unless otherwise specified, references to "average sales price"
refer to average sales price excluding the effects of the Company's
derivative transactions.
All amounts, dollars and percentages presented in this press
release are rounded and therefore approximate.
Vital Energy,
Inc.Selected operating data
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
Sales volumes: |
|
|
|
|
|
|
|
|
Oil (MBbl) |
|
|
4,881 |
|
|
|
3,302 |
|
|
|
16,894 |
|
|
13,838 |
NGL (MBbl) |
|
|
2,808 |
|
|
|
1,900 |
|
|
|
9,128 |
|
|
8,028 |
Natural gas
(MMcf) |
|
|
16,644 |
|
|
|
11,812 |
|
|
|
55,404 |
|
|
49,259 |
Oil equivalent
(MBOE)(1)(2) |
|
|
10,465 |
|
|
|
7,171 |
|
|
|
35,256 |
|
|
30,076 |
Average daily oil equivalent sales volumes
(BOE/d)(2) |
|
|
113,747 |
|
|
|
77,947 |
|
|
|
96,591 |
|
|
82,400 |
Average daily oil sales volumes
(Bbl/d)(2) |
|
|
53,070 |
|
|
|
35,887 |
|
|
|
46,284 |
|
|
37,912 |
Average sales prices(2): |
|
|
|
|
|
|
|
|
Oil ($/Bbl)(3) |
|
$ |
79.37 |
|
|
$ |
85.31 |
|
|
$ |
78.64 |
|
$ |
97.65 |
NGL ($/Bbl)(3) |
|
$ |
14.14 |
|
|
$ |
19.77 |
|
|
$ |
15.00 |
|
$ |
29.22 |
Natural
gas ($/Mcf)(3) |
|
$ |
0.90 |
|
|
$ |
2.50 |
|
|
$ |
1.14 |
|
$ |
4.23 |
Average sales price
($/BOE)(3) |
|
$ |
42.26 |
|
|
$ |
48.64 |
|
|
$ |
43.36 |
|
$ |
59.66 |
Oil, with commodity
derivatives ($/Bbl)(4) |
|
$ |
77.73 |
|
|
$ |
68.03 |
|
|
$ |
76.99 |
|
$ |
70.32 |
NGL, with commodity
derivatives ($/Bbl)(4) |
|
$ |
14.14 |
|
|
$ |
19.01 |
|
|
$ |
15.00 |
|
$ |
24.29 |
Natural gas, with commodity
derivatives ($/Mcf)(4) |
|
$ |
1.18 |
|
|
$ |
2.14 |
|
|
$ |
1.34 |
|
$ |
2.83 |
Average sales price, with commodity derivatives
($/BOE)(4) |
|
$ |
41.94 |
|
|
$ |
39.88 |
|
|
$ |
42.87 |
|
$ |
43.48 |
Selected average costs and
expenses per BOE sold(2): |
|
|
|
|
|
|
|
|
Lease operating
expenses |
|
$ |
8.33 |
|
|
$ |
6.53 |
|
|
$ |
7.41 |
|
$ |
5.78 |
Production and ad valorem
taxes |
|
|
2.27 |
|
|
|
3.00 |
|
|
|
2.64 |
|
|
3.69 |
Oil transportation and marketing
expenses |
|
|
0.85 |
|
|
|
2.05 |
|
|
|
1.17 |
|
|
1.79 |
General and administrative (excluding LTIP and transaction
expenses) |
|
|
2.12 |
|
|
|
2.20 |
|
|
|
2.26 |
|
|
1.91 |
Total selected operating
expenses |
|
$ |
13.57 |
|
|
$ |
13.78 |
|
|
$ |
13.48 |
|
$ |
13.17 |
General and administrative (LTIP): |
|
|
|
|
|
|
|
|
LTIP cash |
|
$ |
(0.09 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.11 |
|
$ |
0.11 |
LTIP non-cash |
|
$ |
0.22 |
|
|
$ |
0.25 |
|
|
$ |
0.28 |
|
$ |
0.24 |
General and administrative (transaction
expenses) |
|
$ |
0.79 |
|
|
$ |
— |
|
|
$ |
0.32 |
|
$ |
— |
Depletion, depreciation and
amortization |
|
$ |
14.58 |
|
|
$ |
11.86 |
|
|
$ |
13.14 |
|
$ |
10.36 |
_______________________________________________________________________________(1)
BOE is calculated using a conversion rate of six Mcf per one
Bbl.(2) The numbers presented are calculated based on actual
amounts and may not recalculate using the rounded numbers presented
in the table above.(3) Price reflects the average of actual sales
prices received when control passes to the purchaser/customer
adjusted for quality, certain transportation fees, geographical
differentials, marketing bonuses or deductions and other factors
affecting the price received at the delivery point.(4) Price
reflects the after-effects of the Company's commodity derivative
transactions on its average sales prices. The Company's calculation
of such after-effects includes settlements of matured commodity
derivatives during the respective periods.
Vital Energy,
Inc.Consolidated balance sheets
(in thousands, except share data) |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
(unaudited) |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
14,061 |
|
|
$ |
44,435 |
|
Accounts receivable,
net |
|
|
238,773 |
|
|
|
163,369 |
|
Derivatives |
|
|
99,336 |
|
|
|
24,670 |
|
Other current
assets |
|
|
18,749 |
|
|
|
13,317 |
|
Total current
assets |
|
|
370,919 |
|
|
|
245,791 |
|
Property and equipment: |
|
|
|
|
Oil and natural gas properties, full cost method: |
|
|
|
|
Evaluated
properties |
|
|
11,799,155 |
|
|
|
9,554,706 |
|
Unevaluated properties not being
depleted |
|
|
195,457 |
|
|
|
46,430 |
|
Less: accumulated depletion and
impairment |
|
|
(7,764,697 |
) |
|
|
(7,318,399 |
) |
Oil and natural gas properties,
net |
|
|
4,229,915 |
|
|
|
2,282,737 |
|
Midstream and other fixed assets,
net |
|
|
130,293 |
|
|
|
127,803 |
|
Property and equipment,
net |
|
|
4,360,208 |
|
|
|
2,410,540 |
|
Derivatives |
|
|
51,071 |
|
|
|
24,363 |
|
Operating lease right-of-use
assets |
|
|
144,900 |
|
|
|
23,047 |
|
Deferred income
taxes |
|
|
188,836 |
|
|
|
— |
|
Other noncurrent assets,
net |
|
|
33,647 |
|
|
|
22,373 |
|
Total assets |
|
$ |
5,149,581 |
|
|
$ |
2,726,114 |
|
Liabilities and
stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
159,892 |
|
|
$ |
102,516 |
|
Accrued capital
expenditures |
|
|
91,937 |
|
|
|
48,378 |
|
Undistributed revenue and
royalties |
|
|
194,307 |
|
|
|
160,023 |
|
Derivatives |
|
|
— |
|
|
|
5,960 |
|
Operating lease
liabilities |
|
|
70,651 |
|
|
|
15,449 |
|
Other current
liabilities |
|
|
78,802 |
|
|
|
82,950 |
|
Total current
liabilities |
|
|
595,589 |
|
|
|
415,276 |
|
Long-term debt,
net |
|
|
1,609,424 |
|
|
|
1,113,023 |
|
Asset retirement
obligations |
|
|
81,680 |
|
|
|
70,366 |
|
Operating lease
liabilities |
|
|
71,343 |
|
|
|
9,435 |
|
Other noncurrent
liabilities |
|
|
6,288 |
|
|
|
7,268 |
|
Total
liabilities |
|
|
2,364,324 |
|
|
|
1,615,368 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized and
595,104 and zero issued as of December 31, 2023 and December 31,
2022,
respectively |
|
|
6 |
|
|
|
— |
|
Common stock, $0.01 par value, 80,000,000 and 40,000,000 shares
authorized, and 35,413,551 and 16,762,127 issued and outstanding as
of December 31, 2023 and 2022,
respectively |
|
|
354 |
|
|
|
168 |
|
Additional paid-in
capital |
|
|
3,733,775 |
|
|
|
2,754,085 |
|
Accumulated
deficit |
|
|
(948,878 |
) |
|
|
(1,643,507 |
) |
Total stockholders'
equity |
|
|
2,785,257 |
|
|
|
1,110,746 |
|
Total liabilities and stockholders'
equity |
|
$ |
5,149,581 |
|
|
$ |
2,726,114 |
|
|
|
|
|
|
|
|
|
|
Vital Energy,
Inc.Consolidated statements of
operations
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands, except per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Revenues: |
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
387,536 |
|
|
$ |
281,665 |
|
|
$ |
1,328,518 |
|
|
$ |
1,351,207 |
|
NGL sales |
|
|
39,705 |
|
|
|
37,576 |
|
|
|
136,901 |
|
|
|
234,613 |
|
Natural gas
sales |
|
|
14,954 |
|
|
|
29,528 |
|
|
|
63,214 |
|
|
|
208,554 |
|
Sales of purchased
oil |
|
|
121 |
|
|
|
13,378 |
|
|
|
14,313 |
|
|
|
119,408 |
|
Other operating
revenues |
|
|
2,205 |
|
|
|
1,984 |
|
|
|
4,658 |
|
|
|
7,014 |
|
Total revenues |
|
|
444,521 |
|
|
|
364,131 |
|
|
|
1,547,604 |
|
|
|
1,920,796 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Lease operating
expenses |
|
|
87,190 |
|
|
|
46,847 |
|
|
|
261,129 |
|
|
|
173,983 |
|
Production and ad valorem
taxes |
|
|
23,726 |
|
|
|
21,485 |
|
|
|
93,224 |
|
|
|
110,997 |
|
Oil transportation and marketing
expenses |
|
|
8,893 |
|
|
|
14,670 |
|
|
|
41,284 |
|
|
|
53,692 |
|
Gas gathering, processing and transportation
expenses |
|
|
1,642 |
|
|
|
— |
|
|
|
2,013 |
|
|
|
— |
|
Costs of purchased
oil |
|
|
209 |
|
|
|
13,602 |
|
|
|
15,065 |
|
|
|
122,118 |
|
General and
administrative |
|
|
31,766 |
|
|
|
17,282 |
|
|
|
104,819 |
|
|
|
68,082 |
|
Organizational restructuring
expenses |
|
|
1,654 |
|
|
|
— |
|
|
|
1,654 |
|
|
|
10,420 |
|
Depletion, depreciation and
amortization |
|
|
152,626 |
|
|
|
85,085 |
|
|
|
463,244 |
|
|
|
311,640 |
|
Impairment
expense |
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
40 |
|
Other operating expenses,
net |
|
|
1,685 |
|
|
|
1,829 |
|
|
|
6,223 |
|
|
|
8,583 |
|
Total costs and
expenses |
|
|
309,391 |
|
|
|
200,840 |
|
|
|
988,655 |
|
|
|
859,555 |
|
Gain (loss) on disposal of assets,
net |
|
|
132 |
|
|
|
(6,031 |
) |
|
|
672 |
|
|
|
(1,079 |
) |
Operating
income |
|
|
135,262 |
|
|
|
157,260 |
|
|
|
559,621 |
|
|
|
1,060,162 |
|
Non-operating income
(expense): |
|
|
|
|
|
|
|
|
Gain (loss) on derivatives,
net |
|
|
229,105 |
|
|
|
(7,728 |
) |
|
|
96,230 |
|
|
|
(298,723 |
) |
Interest
expense |
|
|
(50,431 |
) |
|
|
(28,870 |
) |
|
|
(149,819 |
) |
|
|
(125,121 |
) |
Loss on extinguishment of debt,
net |
|
|
(4,039 |
) |
|
|
(1,214 |
) |
|
|
(4,039 |
) |
|
|
(1,459 |
) |
Other income,
net |
|
|
6,051 |
|
|
|
1,831 |
|
|
|
9,748 |
|
|
|
2,155 |
|
Total non-operating income (expense),
net |
|
|
180,686 |
|
|
|
(35,981 |
) |
|
|
(47,880 |
) |
|
|
(423,148 |
) |
Income before income
taxes |
|
|
315,948 |
|
|
|
121,279 |
|
|
|
511,741 |
|
|
|
637,014 |
|
Income tax benefit
(expense): |
|
|
|
|
|
|
|
|
Current |
|
|
(3,425 |
) |
|
|
(1,350 |
) |
|
|
(5,723 |
) |
|
|
(6,121 |
) |
Deferred |
|
|
(31,089 |
) |
|
|
(1,705 |
) |
|
|
189,060 |
|
|
|
619 |
|
Total income tax benefit
(expense) |
|
|
(34,514 |
) |
|
|
(3,055 |
) |
|
|
183,337 |
|
|
|
(5,502 |
) |
Net income
|
|
|
281,434 |
|
|
|
118,224 |
|
|
|
695,078 |
|
|
|
631,512 |
|
Preferred stock
dividends |
|
|
(449 |
) |
|
|
— |
|
|
|
(449 |
) |
|
|
— |
|
Net income available to common
stockholders |
|
$ |
280,985 |
|
|
$ |
118,224 |
|
|
$ |
694,629 |
|
|
$ |
631,512 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
10.04 |
|
|
$ |
7.19 |
|
|
$ |
34.30 |
|
|
$ |
37.88 |
|
Diluted |
|
$ |
9.44 |
|
|
$ |
7.13 |
|
|
$ |
33.44 |
|
|
$ |
37.44 |
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
27,991 |
|
|
|
16,441 |
|
|
|
20,254 |
|
|
|
16,672 |
|
Diluted |
|
|
29,813 |
|
|
|
16,585 |
|
|
|
20,783 |
|
|
|
16,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vital Energy,
Inc.Consolidated statements of cash
flows
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
281,434 |
|
|
$ |
118,224 |
|
|
$ |
695,078 |
|
|
$ |
631,512 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Share-settled equity-based compensation,
net |
|
|
2,592 |
|
|
|
2,108 |
|
|
|
10,994 |
|
|
|
8,403 |
|
Depletion, depreciation and
amortization |
|
|
152,626 |
|
|
|
85,085 |
|
|
|
463,244 |
|
|
|
311,640 |
|
Impairment
expense |
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
40 |
|
(Gain) loss on disposal of assets,
net |
|
|
(132 |
) |
|
|
6,031 |
|
|
|
(672 |
) |
|
|
1,079 |
|
Mark-to-market on derivatives: |
|
|
|
|
|
|
|
|
(Gain) loss on derivatives,
net |
|
|
(229,105 |
) |
|
|
7,728 |
|
|
|
(96,230 |
) |
|
|
298,723 |
|
Settlements paid for matured derivatives,
net |
|
|
(3,328 |
) |
|
|
(62,505 |
) |
|
|
(17,648 |
) |
|
|
(486,173 |
) |
Loss on extinguishment of debt,
net |
|
|
4,039 |
|
|
|
1,214 |
|
|
|
4,039 |
|
|
|
1,459 |
|
Deferred income tax (benefit)
expense |
|
|
31,089 |
|
|
|
1,705 |
|
|
|
(189,060 |
) |
|
|
(619 |
) |
Other, net |
|
|
5,804 |
|
|
|
8,521 |
|
|
|
14,655 |
|
|
|
34,453 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable,
net |
|
|
(38,935 |
) |
|
|
1,843 |
|
|
|
(77,742 |
) |
|
|
(9,226 |
) |
Other current
assets |
|
|
6,835 |
|
|
|
796 |
|
|
|
(2,754 |
) |
|
|
8,370 |
|
Other noncurrent assets,
net |
|
|
(782 |
) |
|
|
387 |
|
|
|
484 |
|
|
|
1,837 |
|
Accounts payable and accrued
liabilities |
|
|
48,520 |
|
|
|
16,450 |
|
|
|
52,763 |
|
|
|
31,534 |
|
Undistributed revenue and
royalties |
|
|
(32,106 |
) |
|
|
(89,271 |
) |
|
|
(31,907 |
) |
|
|
42,085 |
|
Other current
liabilities |
|
|
7,190 |
|
|
|
22,859 |
|
|
|
(5,656 |
) |
|
|
(18,503 |
) |
Other noncurrent
liabilities |
|
|
(2,007 |
) |
|
|
(12,297 |
) |
|
|
(6,632 |
) |
|
|
(26,994 |
) |
Net cash provided by operating
activities |
|
|
233,734 |
|
|
|
108,918 |
|
|
|
812,956 |
|
|
|
829,620 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Acquisitions of oil and natural gas
properties |
|
|
(309,379 |
) |
|
|
— |
|
|
|
(849,508 |
) |
|
|
(5,581 |
) |
Capital expenditures: |
|
|
|
|
|
|
|
|
Oil and natural gas
properties |
|
|
(162,351 |
) |
|
|
(134,865 |
) |
|
|
(617,397 |
) |
|
|
(566,989 |
) |
Midstream and other fixed
assets |
|
|
(3,329 |
) |
|
|
(3,883 |
) |
|
|
(14,021 |
) |
|
|
(14,147 |
) |
Proceeds from dispositions of capital assets, net of selling
costs |
|
|
60 |
|
|
|
105,949 |
|
|
|
2,403 |
|
|
|
108,888 |
|
Settlements received for contingent
consideration |
|
|
311 |
|
|
|
322 |
|
|
|
2,393 |
|
|
|
1,877 |
|
Net cash used in investing
activities |
|
|
(474,688 |
) |
|
|
(32,477 |
) |
|
|
(1,476,130 |
) |
|
|
(475,952 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings on Senior Secured Credit
Facility |
|
|
135,000 |
|
|
|
120,000 |
|
|
|
765,000 |
|
|
|
455,000 |
|
Payments on Senior Secured Credit
Facility |
|
|
— |
|
|
|
(90,000 |
) |
|
|
(700,000 |
) |
|
|
(490,000 |
) |
Issuance of senior unsecured
notes |
|
|
— |
|
|
|
— |
|
|
|
897,710 |
|
|
|
— |
|
Early repayments of long-term
debt |
|
|
(457,792 |
) |
|
|
(100,583 |
) |
|
|
(457,792 |
) |
|
|
(282,902 |
) |
Proceeds from issuance of common stock, net of offering
costs |
|
|
220 |
|
|
|
— |
|
|
|
161,223 |
|
|
|
— |
|
Share
repurchases |
|
|
— |
|
|
|
(10,704 |
) |
|
|
— |
|
|
|
(37,290 |
) |
Stock exchanged for tax
withholding |
|
|
(21 |
) |
|
|
— |
|
|
|
(3,077 |
) |
|
|
(7,442 |
) |
Payments for debt issuance
costs |
|
|
(10,680 |
) |
|
|
(213 |
) |
|
|
(27,011 |
) |
|
|
(1,938 |
) |
Other, net |
|
|
(1,407 |
) |
|
|
(447 |
) |
|
|
(3,253 |
) |
|
|
(1,459 |
) |
Net cash provided by (used in) financing
activities |
|
|
(334,680 |
) |
|
|
(81,947 |
) |
|
|
632,800 |
|
|
|
(366,031 |
) |
Net decrease in cash and cash
equivalents |
|
|
(575,634 |
) |
|
|
(5,506 |
) |
|
|
(30,374 |
) |
|
|
(12,363 |
) |
Cash and cash equivalents,
beginning of
period |
|
|
589,695 |
|
|
|
49,941 |
|
|
|
44,435 |
|
|
|
56,798 |
|
Cash and cash equivalents, end
of period |
|
$ |
14,061 |
|
|
$ |
44,435 |
|
|
$ |
14,061 |
|
|
$ |
44,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vital Energy,
Inc.Supplemental reconciliations of GAAP to
non-GAAP financial measures
Non-GAAP financial measures
The non-GAAP financial measures of Adjusted Free Cash Flow,
Adjusted Net Income, Consolidated EBITDAX, Net Debt and Net Debt to
Consolidated EBITDAX, as defined by the Company, may not be
comparable to similarly titled measures used by other companies.
Furthermore, these non-GAAP financial measures should not be
considered in isolation or as a substitute for GAAP measures of
liquidity or financial performance, but rather should be considered
in conjunction with GAAP measures, such as net income or loss,
operating income or loss or cash flows from operating
activities.
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP financial measure that the
Company defines as net cash provided by operating activities (GAAP)
before net changes in operating assets and liabilities and
non-budgeted acquisition costs, less capital investments, excluding
non-budgeted acquisition costs. Management believes Adjusted Free
Cash Flow is useful to management and investors in evaluating
operating trends in its business that are affected by production,
commodity prices, operating costs and other related factors. There
are significant limitations to the use of Adjusted Free Cash Flow
as a measure of performance, including the lack of comparability
due to the different methods of calculating Adjusted Free Cash Flow
reported by different companies.
The following table presents a reconciliation of net cash
provided by operating activities (GAAP) to Adjusted Free Cash Flow
(non-GAAP) for the periods presented:
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
Net cash provided by operating
activities |
|
$ |
233,734 |
|
|
$ |
108,918 |
|
|
$ |
812,956 |
|
|
$ |
829,620 |
Less: |
|
|
|
|
|
|
|
|
Net changes in operating assets and
liabilities |
|
|
(11,285 |
) |
|
|
(59,233 |
) |
|
|
(71,444 |
) |
|
|
29,103 |
General and administrative (transaction
expenses) |
|
|
(8,221 |
) |
|
|
— |
|
|
|
(11,341 |
) |
|
|
— |
Cash flows from operating
activities before net changes in operating assets and liabilities
and non-budgeted acquisition costs
|
|
|
253,240 |
|
|
|
168,151 |
|
|
|
895,741 |
|
|
|
800,517 |
Less capital investments, excluding non-budgeted acquisition
costs: |
|
|
|
|
|
|
|
|
Oil and natural gas
properties(1) |
|
|
179,696 |
|
|
|
127,663 |
|
|
|
663,025 |
|
|
|
566,831 |
Midstream and other fixed
assets(1) |
|
|
4,511 |
|
|
|
3,951 |
|
|
|
15,601 |
|
|
|
13,745 |
Total capital investments, excluding non-budgeted acquisition costs
|
|
|
184,207 |
|
|
|
131,614 |
|
|
|
678,626 |
|
|
|
580,576 |
Adjusted Free Cash Flow
(non-GAAP) |
|
$ |
69,033 |
|
|
$ |
36,537 |
|
|
$ |
217,115 |
|
|
$ |
219,941 |
_____________________________________________________________________________
(1) Includes capitalized share-settled equity-based compensation
and asset retirement costs.Adjusted Net Income
Adjusted Net Income is a non-GAAP financial measure that the
Company defines as net income or loss (GAAP) plus adjustments for
mark-to-market on derivatives, premiums paid or received for
commodity derivatives that matured during the period,
organizational restructuring expenses, impairment expense, gains or
losses on disposal of assets, income taxes, other non-recurring
income and expenses and adjusted income tax expense. Management
believes Adjusted Net Income helps investors in the oil and natural
gas industry to measure and compare the Company's performance to
other oil and natural gas companies by excluding from the
calculation items that can vary significantly from company to
company depending upon accounting methods, the book value of assets
and other non-operational factors.
The following table presents a reconciliation of net income
(GAAP) to Adjusted Net Income (non-GAAP) for the periods
presented:
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands, except per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Net
income |
|
$ |
281,434 |
|
|
$ |
118,224 |
|
|
$ |
695,078 |
|
|
$ |
631,512 |
|
Plus: |
|
|
|
|
|
|
|
|
Mark-to-market on derivatives: |
|
|
|
|
|
|
|
|
(Gain) loss on derivatives,
net |
|
|
(229,105 |
) |
|
|
7,728 |
|
|
|
(96,230 |
) |
|
|
298,723 |
|
Settlements paid for matured derivatives,
net |
|
|
(3,328 |
) |
|
|
(62,763 |
) |
|
|
(17,068 |
) |
|
|
(486,753 |
) |
Settlements received for contingent
consideration |
|
|
311 |
|
|
|
580 |
|
|
|
1,813 |
|
|
|
2,457 |
|
Organizational restructuring
expenses |
|
|
1,654 |
|
|
|
— |
|
|
|
1,654 |
|
|
|
10,420 |
|
Impairment
expense |
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
40 |
|
(Gain) loss on disposal of assets,
net |
|
|
(132 |
) |
|
|
6,031 |
|
|
|
(672 |
) |
|
|
1,079 |
|
Loss on extinguishment of debt,
net |
|
|
4,039 |
|
|
|
1,214 |
|
|
|
4,039 |
|
|
|
1,459 |
|
Income tax (benefit)
expense |
|
|
34,514 |
|
|
|
3,055 |
|
|
|
(183,337 |
) |
|
|
5,502 |
|
General and administrative (transaction
expenses) |
|
|
8,221 |
|
|
|
— |
|
|
|
11,341 |
|
|
|
— |
|
Adjusted income before adjusted income tax
expense |
|
|
97,608 |
|
|
|
74,109 |
|
|
|
416,618 |
|
|
|
464,439 |
|
Adjusted income tax
expense(1) |
|
|
(21,474 |
) |
|
|
(16,304 |
) |
|
|
(91,656 |
) |
|
|
(102,177 |
) |
Adjusted Net Income
(non-GAAP) |
|
$ |
76,134 |
|
|
$ |
57,805 |
|
|
$ |
324,962 |
|
|
$ |
362,262 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
10.04 |
|
|
$ |
7.19 |
|
|
$ |
34.30 |
|
|
$ |
37.88 |
|
Diluted |
|
$ |
9.44 |
|
|
$ |
7.13 |
|
|
$ |
33.44 |
|
|
$ |
37.44 |
|
Adjusted Net Income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.72 |
|
|
$ |
3.52 |
|
|
$ |
16.04 |
|
|
$ |
21.73 |
|
Diluted |
|
$ |
2.55 |
|
|
$ |
3.49 |
|
|
$ |
15.64 |
|
|
$ |
21.48 |
|
Adjusted
diluted |
|
$ |
2.55 |
|
|
$ |
3.49 |
|
|
$ |
15.64 |
|
|
$ |
21.48 |
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
27,991 |
|
|
|
16,441 |
|
|
|
20,254 |
|
|
|
16,672 |
|
Diluted |
|
|
29,813 |
|
|
|
16,585 |
|
|
|
20,783 |
|
|
|
16,867 |
|
Adjusted
diluted |
|
|
29,813 |
|
|
|
16,585 |
|
|
|
20,783 |
|
|
|
16,867 |
|
_______________________________________________________________________________(1)
Adjusted income tax expense is calculated by applying a statutory
tax rate of 22% for each of the periods ended December 31,
2023 and 2022.Consolidated EBITDAX
Consolidated EBITDAX is a non-GAAP financial measure defined in
the Company's Senior Secured Credit Facility as net income or loss
(GAAP) plus adjustments for share-settled equity-based
compensation, depletion, depreciation and amortization, impairment
expense, organizational restructuring expenses, gains or losses on
disposal of assets, mark-to-market on derivatives, accretion
expense, interest expense, income taxes and other non-recurring
income and expenses. Consolidated EBITDAX provides no information
regarding a company's capital structure, borrowings, interest
costs, capital expenditures, working capital movement or tax
position. Consolidated EBITDAX does not represent funds available
for future discretionary use because it excludes funds required for
debt service, capital expenditures, working capital, income taxes,
franchise taxes and other commitments and obligations. However,
management believes Consolidated EBITDAX is useful to an investor
because this measure:
- is used by investors
in the oil and natural gas industry to measure a company's
operating performance without regard to items that can vary
substantially from company to company depending upon accounting
methods, the book value of assets, capital structure and the method
by which assets were acquired, among other factors;
- helps investors to
more meaningfully evaluate and compare the results of the Company's
operations from period to period by removing the effect of the
Company's capital structure from the Company's operating structure;
and
- is used by
management for various purposes, including (i) as a measure of
operating performance, (ii) as a measure of compliance under the
Senior Secured Credit Facility, (iii) in presentations to the board
of directors and (iv) as a basis for strategic planning and
forecasting.
There are significant limitations to the use of Consolidated
EBITDAX as a measure of performance, including the inability to
analyze the effect of certain recurring and non-recurring items
that materially affect the Company's net income or loss and the
lack of comparability of results of operations to different
companies due to the different methods of calculating Consolidated
EBITDAX, or similarly titled measures, reported by different
companies. The Company is subject to financial covenants under the
Senior Secured Credit Facility, one of which establishes a maximum
permitted ratio of Net Debt, as defined in the Senior Secured
Credit Facility, to Consolidated EBITDAX. See Note 7 in the 2023
Annual Report for additional discussion of the financial covenants
under the Senior Secured Credit Facility. Additional information on
Consolidated EBITDAX can be found in the Company's Eleventh
Amendment to the Senior Secured Credit Facility, as filed with the
SEC on September 13, 2023.
The following table presents a reconciliation of net income
(GAAP) to Consolidated EBITDAX (non-GAAP) for the periods
presented:
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Net income
|
|
$ |
281,434 |
|
|
$ |
118,224 |
|
|
$ |
695,078 |
|
|
$ |
631,512 |
|
Plus: |
|
|
|
|
|
|
|
|
Share-settled equity-based compensation,
net |
|
|
2,592 |
|
|
|
2,108 |
|
|
|
10,994 |
|
|
|
8,403 |
|
Depletion, depreciation and
amortization |
|
|
152,626 |
|
|
|
85,085 |
|
|
|
463,244 |
|
|
|
311,640 |
|
Impairment
expense |
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
|
40 |
|
Organizational restructuring
expenses |
|
|
1,654 |
|
|
|
— |
|
|
|
1,654 |
|
|
|
10,420 |
|
(Gain) loss on disposal of assets,
net |
|
|
(132 |
) |
|
|
6,031 |
|
|
|
(672 |
) |
|
|
1,079 |
|
Mark-to-market on derivatives: |
|
|
|
|
|
|
|
|
(Gain) loss on derivatives,
net |
|
|
(229,105 |
) |
|
|
7,728 |
|
|
|
(96,230 |
) |
|
|
298,723 |
|
Settlements paid for matured derivatives,
net |
|
|
(3,328 |
) |
|
|
(62,763 |
) |
|
|
(17,068 |
) |
|
|
(486,753 |
) |
Settlements received for contingent
consideration |
|
|
311 |
|
|
|
580 |
|
|
|
1,813 |
|
|
|
2,457 |
|
Accretion
expense |
|
|
988 |
|
|
|
933 |
|
|
|
3,703 |
|
|
|
3,879 |
|
Interest
expense |
|
|
50,431 |
|
|
|
28,870 |
|
|
|
149,819 |
|
|
|
125,121 |
|
Loss extinguishment of debt,
net |
|
|
4,039 |
|
|
|
1,214 |
|
|
|
4,039 |
|
|
|
1,459 |
|
Income tax (benefit)
expense |
|
|
34,514 |
|
|
|
3,055 |
|
|
|
(183,337 |
) |
|
|
5,502 |
|
General and administrative (transaction
expenses) |
|
|
8,221 |
|
|
|
— |
|
|
|
11,341 |
|
|
|
— |
|
Consolidated EBITDAX
(non-GAAP) |
|
$ |
304,245 |
|
|
$ |
191,105 |
|
|
$ |
1,044,378 |
|
|
$ |
913,482 |
|
Transaction adjustments (Senior Secured Credit Facility covenant
calculation)(1) |
|
|
|
|
|
$ |
444,314 |
|
|
$ |
— |
|
Consolidated EBITDAX (non-GAAP) (Senior Secured Credit Facility
covenant
calculation)(1) |
|
|
|
|
|
$ |
1,488,692 |
|
|
$ |
913,482 |
|
_______________________________________________________________________________(1)
Calculation conforms to Senior Secured Credit Facility covenant
which requires various treatment of asset transaction impacts.The
following table presents a reconciliation of net cash provided by
operating activities (GAAP) to Consolidated EBITDAX (non-GAAP) for
the periods presented:
|
|
Three months ended December 31, |
|
Year ended December 31, |
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Net cash provided by operating
activities |
|
$ |
233,734 |
|
|
$ |
108,918 |
|
|
$ |
812,956 |
|
|
$ |
829,620 |
|
Plus: |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
50,431 |
|
|
|
28,870 |
|
|
|
149,819 |
|
|
|
125,121 |
|
Organizational restructuring
expenses |
|
|
1,654 |
|
|
|
— |
|
|
|
1,654 |
|
|
|
10,420 |
|
Current income tax
expense |
|
|
3,425 |
|
|
|
1,350 |
|
|
|
5,723 |
|
|
|
6,121 |
|
Net changes in operating assets and
liabilities |
|
|
11,285 |
|
|
|
59,233 |
|
|
|
71,444 |
|
|
|
(29,103 |
) |
General and administrative (transaction
expenses) |
|
|
8,221 |
|
|
|
— |
|
|
|
11,341 |
|
|
|
— |
|
Settlements received for contingent
consideration |
|
|
311 |
|
|
|
580 |
|
|
|
1,813 |
|
|
|
2,457 |
|
Other, net |
|
|
(4,816 |
) |
|
|
(7,846 |
) |
|
|
(10,372 |
) |
|
|
(31,154 |
) |
Consolidated EBITDAX
(non-GAAP) |
|
$ |
304,245 |
|
|
$ |
191,105 |
|
|
$ |
1,044,378 |
|
|
$ |
913,482 |
|
Transaction adjustments (Senior Secured Credit Facility covenant
calculation)(1) |
|
|
|
|
|
$ |
444,314 |
|
|
$ |
— |
|
Consolidated EBITDAX (non-GAAP) (Senior Secured Credit Facility
covenant
calculation)(1) |
|
|
|
|
|
$ |
1,488,692 |
|
|
$ |
913,482 |
|
_______________________________________________________________________________(1)
Calculation conforms to Senior Secured Credit Facility covenant
which requires various treatment of asset transaction
impacts.Net Debt
Net Debt is a non-GAAP financial measure defined in the
Company's Senior Secured Credit Facility as the face value of
long-term debt plus any outstanding letters of credit, less cash
and cash equivalents, where cash and cash equivalents are capped at
$50 million when there are borrowings on the Senior Secured Credit
Facility. Management believes Net Debt is useful to management and
investors in determining the Company's leverage position since the
Company has the ability, and may decide, to use a portion of its
cash and cash equivalents to reduce debt.
(in thousands) |
|
December 31, 2023 |
|
|
(unaudited) |
Total senior unsecured
notes |
|
$ |
1,498,523 |
Senior Secured Credit
Facility |
|
|
135,000 |
Total long-term
debt |
|
$ |
1,633,523 |
Less: cash and cash
equivalents |
|
|
14,061 |
Net Debt
(non-GAAP) |
|
$ |
1,619,462 |
Net Debt to Consolidated EBITDAX
Net Debt to Consolidated EBITDAX is a non-GAAP financial measure
defined in the Company's Senior Secured Credit Facility as Net Debt
divided by Consolidated EBITDAX for the previous four quarters,
which requires various treatment of asset transaction impacts. Net
Debt to Consolidated EBITDAX is used by the Company’s management
for various purposes, including as a measure of operating
performance, in presentations to its board of directors and as a
basis for strategic planning and forecasting.
PV-10
PV-10 is a non-GAAP financial measure that is derived from the
standardized measure of discounted future net cash flows, which is
the most directly comparable GAAP financial measure. PV-10 is a
computation of the standardized measure of discounted future net
cash flows on a pre-tax basis. PV-10 is equal to the standardized
measure of discounted future net cash flows at the applicable date,
before deducting future income taxes, discounted at 10 percent.
Management believes that the presentation of PV-10 is relevant and
useful to investors because it presents the discounted future net
cash flows attributable to the Company's estimated proved reserves
prior to taking into account future corporate income taxes, and it
is a useful measure for evaluating the relative monetary
significance of the Company's proved oil, NGL and natural gas
assets. Further, investors may utilize the measure as a basis for
comparison of the relative size and value of proved reserves to
other companies. The Company uses this measure when assessing the
potential return on investment related to proved oil, NGL and
natural gas assets. However, PV-10 is not a substitute for the
standardized measure of discounted future net cash flows. The PV-10
measure and the standardized measure of discounted future net cash
flows do not purport to present the fair value of the Company's
oil, NGL and natural gas reserves of the property.
(in millions) |
|
December 31, 2023 |
|
|
(unaudited) |
Standardized measure of discounted future net cash
flows |
|
$ |
4,151 |
|
Less: present value of future
income taxes discounted at
10% |
|
|
(338 |
) |
PV-10
(non-GAAP) |
|
$ |
4,489 |
|
Investor Contact:Ron
Hagood918.858.5504ir@vitalenergy.com
Vital Energy (NYSE:VTLE)
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