Vitesse Energy, Inc. (NYSE: VTS) (“we,” “our,” “Vitesse,” or the
“Company”) today reported the Company’s second quarter 2024
financial and operating results.
SECOND QUARTER 2024 HIGHLIGHTS
- As previously announced, declared a quarterly cash dividend of
$0.525 per common share to be paid on September 30, 2024
- Net income of $10.9 million and Adjusted Net Income(1) of $11.7
million
- Adjusted EBITDA(1) of $43.1 million
- Cash flow from operations of $35.2 million and Free Cash
Flow(1) of $15.9 million
- Production of 13,504 barrels of oil equivalent (“Boe”) per day
(70% oil)
- Total cash development capital expenditures and acquisition
costs of $37.6 million
- Total debt of $115.0 million and Net Debt to Adjusted EBITDA
ratio(1) of 0.67
(1)
Non-GAAP financial measure; see
reconciliation schedules at the end of this release
MANAGEMENT COMMENTS
“In the second quarter we increased our dividend by 5%,”
commented Bob Gerrity, Vitesse’s Chairman and Chief Executive
Officer. “We closed previously announced near-term development
acquisitions and added hedges to protect returns, which supports
the dividend as the added production comes online later this year
and in early 2025.”
STOCKHOLDER RETURNS
In July 2024, Vitesse’s Board of Directors declared its third
quarter cash dividend for Vitesse’s common stock of $0.525 per
share for stockholders of record as of September 16, 2024, which
will be paid on September 30, 2024.
On June 28, 2024, the Company paid its second quarter cash
dividend of $0.525 per share to common stockholders of record as of
June 14, 2024.
FINANCIAL AND OPERATING RESULTS
Second quarter net income was $10.9 million and Adjusted Net
Income was $11.7 million. Adjusted EBITDA was $43.1 million. See
“Non-GAAP Financial Measures” below.
Oil and natural gas production for the second quarter of 2024
averaged 13,504 Boe per day, an increase of 8% from the first
quarter of 2024. Oil represented 70% of production and 96% of total
oil and natural gas revenue. Total revenue, including the effects
of our realized hedges, was $65.6 million.
Vitesse’s average realized oil and natural gas prices before
hedging were $74.63 per Bbl and $1.11 per Mcf, respectively, during
the second quarter of 2024. The Company had hedges covering 62% of
oil production in the second quarter of 2024 and its realized oil
price with hedging was $73.42 per Bbl.
Lease operating expenses in the second quarter of 2024 were
$12.3 million, or $9.99 per Boe, a 3% decrease on a per unit basis
compared to the first quarter of 2024. The lower lease operating
expense is primarily attributable to weather related expenses in
the first quarter. General and administrative expenses for the
second quarter of 2024 totaled $4.7 million, or $3.84 per Boe.
LIQUIDITY AND CAPITAL EXPENDITURES
As of June 30, 2024, Vitesse had $0.1 million in cash and $115.0
million of borrowings outstanding on its revolving credit facility.
Vitesse had total liquidity of $130.1 million as of June 30, 2024,
consisting of cash and $130.0 million of committed borrowing
availability under its revolving credit facility.
During the quarter, Vitesse invested $24.5 million in
development capital expenditures and $13.1 million in acquisitions
of oil and gas properties.
OPERATIONS UPDATE
As of June 30, 2024 the Company owned an interest in 308 gross
(11.1 net) wells that were either drilling or in the completion
phase, and another 372 gross (8.7 net) locations that had been
permitted for development.
The Company closed previously announced near-term development
acquisitions in the Williston Basin of North Dakota that will
result in over $40 million of acquisition and related development
capital expenditures primarily during 2024. These acquisitions are
expected to provide significant increases to production and cash
flows primarily during the fourth quarter of 2024 and into
2025.
2024 ANNUAL GUIDANCE
Vitesse reaffirms its previously revised 2024 annual guidance,
which is set forth below.
2024 Guidance
Annual Production (Boe per day)
13,000 - 14,000
Oil as a Percentage of Annual
Production
67% - 71%
Total Capital Expenditures ($ in
millions)
$130 - $150
SECOND QUARTER 2024 RESULTS
The following table sets forth selected financial and operating
data for the periods indicated.
QUARTER ENDED JUNE 30,
INCREASE
(DECREASE)
($ in thousands, except production and
per unit data)
2024
2023
AMOUNT
PERCENT
Financial and Operating
Results:
Revenue
Oil
$
64,127
$
48,733
$
15,394
32
%
Natural gas
2,471
2,855
(384
)
(13
%)
Total revenue
$
66,598
$
51,588
$
15,010
29
%
Operating Expenses
Lease operating expense
$
12,272
$
9,316
$
2,956
32
%
Production taxes
5,426
4,919
507
10
%
General and administrative
4,724
4,461
263
6
%
Depletion, depreciation, amortization, and
accretion
25,315
18,748
6,567
35
%
Equity-based compensation
2,047
1,428
619
43
%
Interest Expense
$
2,585
$
1,115
$
1,470
132
%
Commodity Derivative Gain, Net
$
379
$
4,779
$
(4,400
)
(92
%)
Income Tax (Benefit) Expense
$
3,678
$
6,812
$
(3,134
)
(46
%)
Production Data:
Oil (MBbls)
859
697
162
23
%
Natural gas (MMcf)
2,217
2,018
199
10
%
Combined volumes (MBoe)
1,229
1,034
195
19
%
Daily combined volumes (Boe/d)
13,504
11,359
2,145
19
%
Average Realized Prices before
Hedging:
Oil (per Bbl)
$
74.63
$
69.90
$
4.73
7
%
Natural gas (per Mcf)
1.11
1.41
(0.30
)
(21
%)
Combined (per Boe)
54.20
49.91
4.29
9
%
Average Realized Prices with
Hedging:
Oil (per Bbl)
$
73.42
$
72.18
$
1.24
2
%
Natural gas (per Mcf)
1.11
1.41
(0.30
)
(21
%)
Combined (per Boe)
53.36
51.45
1.91
4
%
Average Costs (per Boe):
Lease operating
$
9.99
$
9.01
$
0.98
11
%
Production taxes
4.42
4.76
(0.34
)
(7
%)
General and administrative
3.84
4.32
(0.48
)
(11
%)
Depletion, depreciation, amortization, and
accretion
20.60
18.14
2.46
14
%
COMMODITY HEDGING
Vitesse hedges a portion of its expected oil production volumes
to increase the predictability and certainty of its cash flow and
to help maintain a strong financial position to support our
dividend. Vitesse does not currently have hedges in place on its
expected natural gas production volumes. The following table
summarizes Vitesse’s open oil commodity derivative swap contracts
scheduled to settle after June 30, 2024, including those entered
into in July 2024.
SETTLEMENT
PERIOD
OIL (Bbls)
WEIGHTED AVERAGE PRICE
Swaps-Crude Oil
2024:
Q3
507,500
$
77.97
Q4
490,000
$
78.11
2025:
Q1
397,500
$
73.92
Q2
382,500
$
74.72
Q3
202,500
$
74.83
Q4
202,500
$
74.83
The following table presents Vitesse’s settlements on commodity
derivative instruments and unsettled gains and losses on open
commodity derivative instruments for the periods presented:
QUARTER ENDED JUNE 30,
(in thousands)
2024
2023
Realized (loss) gain on commodity
derivatives (1)
$
(1,033
)
$
1,595
Unrealized gain on commodity derivatives
(1)
1,412
3,184
Total commodity derivative gain
$
379
$
4,779
(1)
Realized and unrealized gains and losses
on commodity derivatives are presented herein as separate line
items but are combined for a total commodity derivative gain (loss)
in the statements of operations included below. Management believes
the separate presentation of the realized and unrealized commodity
derivative gains and losses is useful, providing a better
understanding of our hedge position.
Q2 2024 EARNINGS CONFERENCE CALL
In conjunction with Vitesse’s release of its financial and
operating results, investors, analysts and other interested parties
are invited to listen to a conference call with management on
Tuesday, August 6, 2024 at 11:00 a.m. Eastern Time.
An updated corporate slide presentation that may be referenced
on the conference call will be posted prior to the conference call
on Vitesse’s website, www.vitesse-vts.com, in the “Investor
Relations” section of the site, under “News & Events,” sub-tab
“Presentations.”
Those wishing to listen to the conference call may do so via the
Company’s website or by phone as follows:
Website:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=ex7kWVY5
Dial-In Number: 877-407-0778
(US/Canada) and 201-689-8565 (International)
Conference ID: 13747956 - Vitesse
Energy Second Quarter 2024 Earnings Call
Replay Dial-In Number: 877-660-6853
(US/Canada) and 201-612-7415 (International)
Replay Access Code: 13747956 -
Replay will be available through August 13, 2024
UPCOMING INVESTOR EVENTS
Vitesse management will be participating in the upcoming
investor events:
- EnerCom Denver Energy Conference - Denver - August 19-20,
2024.
- Midwest IDEAS Conference - Chicago - August 29, 2024.
- Barclays 38th Annual CEO Energy-Power Conference - New York -
September 3-4, 2024.
- Pickering Energy Partners Energy Conference - Austin -
September 16-18, 2024.
Any investor presentations to be used for such events will be
posted prior to the events on Vitesse’s website,
www.vitesse-vts.com, in the “Investor Relations” section of the
site, under “News & Events,” sub-tab “Presentations.”
ABOUT VITESSE ENERGY, INC.
Vitesse Energy, Inc. is focused on returning capital to
stockholders through owning financial interests as a non-operator
in oil and gas wells drilled by leading US operators.
More information about Vitesse can be found at
www.vitesse-vts.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding
future events and future results that are subject to the safe
harbors created under the Securities Act of 1933 and the Securities
Exchange Act of 1934. All statements other than statements of
historical facts included in this release regarding Vitesse’s
financial position, operating and financial performance, business
strategy, dividend plans and practices, guidance, plans and
objectives of management for future operations, and industry
conditions are forward-looking statements. When used in this
release, forward-looking statements are generally accompanied by
terms or phrases such as “estimate,” “project,” “predict,”
“believe,” “expect,” “continue,” “anticipate,” “target,” “could,”
“plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other
words and similar expressions that convey the uncertainty of future
events or outcomes. Items contemplating or making assumptions about
actual or potential future production and sales, market size,
collaborations, and trends or operating results also constitute
such forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties, and important factors (many of which are beyond
Vitesse’s control) that could cause actual results to differ
materially from those set forth in the forward-looking statements,
including the following: changes in oil and natural gas prices; the
pace of drilling and completions activity on Vitesse’s properties;
Vitesse’s ability to acquire additional development opportunities;
potential acquisition transactions; integration and benefits of
property acquisitions, or the effects of such acquisitions on
Vitesse’s cash position and levels of indebtedness; changes in
Vitesse’s reserves estimates or the value thereof; disruptions to
Vitesse’s business due to acquisitions and other significant
transactions; infrastructure constraints and related factors
affecting Vitesse’s properties; cost inflation or supply chain
disruption; ongoing legal disputes over and potential shutdown of
the Dakota Access Pipeline; the impact of general economic or
industry conditions, nationally and/or in the communities in which
Vitesse conducts business, including central bank policy actions,
bank failures and associated liquidity risks; changes in the
interest rate environment, legislation or regulatory requirements;
conditions of the securities markets; Vitesse’s ability to raise or
access capital; cyber-related risks; changes in accounting
principles, policies or guidelines; and financial or political
instability, health-related epidemics, acts of war (including the
armed conflict in the Middle East and Ukraine) or terrorism, and
other economic, competitive, governmental, regulatory and technical
factors affecting Vitesse’s operations, products and prices.
Additional information concerning potential factors that could
affect future results is included in the section entitled “Item 1A.
Risk Factors” and other sections of Vitesse’s Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q, as updated from
time to time in amendments and subsequent reports filed with the
SEC, which describe factors that could cause Vitesse’s actual
results to differ from those set forth in the forward looking
statements.
Vitesse has based these forward-looking statements on its
current expectations and assumptions about future events. While
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond Vitesse’s control. Vitesse does not undertake
any duty to update or revise any forward-looking statements, except
as may be required by the federal securities laws.
FINANCIAL INFORMATION
VITESSE ENERGY, INC. Condensed
Consolidated Statements of Operations (Unaudited)
FOR THE THREE MONTHS
ENDED
FOR THE SIX MONTHS
ENDED
JUNE 30,
JUNE 30,
(In thousands, except share
data)
2024
2023
2024
2023
Revenue
Oil
$
64,127
$
48,733
$
121,491
$
99,219
Natural gas
2,471
2,855
6,301
10,330
Total revenue
66,598
51,588
127,792
109,549
Operating Expenses
Lease operating expense
12,272
9,316
24,063
18,397
Production taxes
5,426
4,919
11,226
10,174
General and administrative
4,724
4,461
10,098
15,323
Depletion, depreciation, amortization, and
accretion
25,315
18,748
48,860
37,220
Equity-based compensation
2,047
1,428
3,652
29,400
Total operating expenses
49,784
38,872
97,899
110,514
Operating Income (Loss)
16,814
12,716
29,893
(965
)
Other (Expense) Income
Commodity derivative gain (loss), net
379
4,779
(13,445
)
12,198
Interest expense
(2,585
)
(1,115
)
(4,788
)
(2,295
)
Other (expense) income
(2
)
52
28
50
Total other (expense) income
(2,208
)
3,716
(18,205
)
9,953
Income Before Income Taxes
$
14,606
$
16,432
$
11,688
$
8,988
(Provision for) Benefit from Income
Taxes
(3,678
)
(6,812
)
(2,946
)
(47,183
)
Net Income (Loss)
$
10,928
$
9,620
$
8,742
$
(38,195
)
Net income attributable to Predecessor
common unit holders
—
—
—
1,832
Net Income (Loss) Attributable to
Vitesse Energy, Inc.
$
10,928
$
9,620
$
8,742
$
(40,027
)
Weighted average common shares outstanding
– basic
30,046,190
29,659,771
29,990,077
29,661,556
Weighted average common shares outstanding
– diluted
33,026,818
33,077,824
32,984,826
29,661,556
Net income (loss) per common share –
basic
$
0.36
$
0.29
$
0.29
$
(1.35
)
Net income (loss) per common share –
diluted
$
0.33
$
0.29
$
0.27
$
(1.35
)
VITESSE ENERGY, INC. Condensed
Consolidated Balance Sheets (Unaudited)
JUNE 30,
DECEMBER 31,
(in thousands, except shares)
2024
2023
Assets
Current Assets
Cash
$
121
$
552
Revenue receivable
46,319
44,915
Commodity derivatives
152
10,038
Prepaid expenses and other current
assets
2,394
2,841
Total current assets
48,986
58,346
Oil and Gas Properties-Using the
successful efforts method of accounting
Proved oil and gas properties
1,235,125
1,168,378
Less accumulated DD&A and
impairment
(512,527
)
(464,036
)
Total oil and gas properties
722,598
704,342
Other Property and Equipment—Net
189
189
Other Assets
Commodity derivatives
277
1,109
Other noncurrent assets
6,378
1,984
Total other assets
6,655
3,093
Total assets
$
778,428
$
765,970
Liabilities and Equity
Current Liabilities
Accounts payable
$
13,613
$
27,692
Accrued liabilities
42,997
32,507
Commodity derivatives
2,527
—
Other current liabilities
30
204
Total current liabilities
59,167
60,403
Long-term Liabilities
Credit facility
115,000
81,000
Deferred tax liability
67,135
64,329
Asset retirement obligations
8,677
8,353
Other noncurrent liabilities
9,944
5,479
Total liabilities
$
259,923
$
219,564
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value,
5,000,000 shares authorized; 0 shares issued at June 30, 2024 and
December 31, 2023, respectively
—
—
Common stock, $0.01 par value, 95,000,000
shares authorized; 32,629,594 and 32,812,007 shares issued at June
30, 2024 and December 31, 2023, respectively
326
328
Additional paid-in capital
531,013
567,654
Accumulated deficit
(12,834
)
(21,576
)
Total equity
518,505
546,406
Total liabilities and equity
$
778,428
$
765,970
NON-GAAP FINANCIAL MEASURES
Vitesse defines Adjusted Net Income (Loss) as net income (loss)
before (i) non-cash gains and losses on unsettled derivative
instruments, (ii) non-cash equity-based compensation, and (iii)
certain other non-cash items; reduced by the estimated impact of
income tax expense.
Net Debt is calculated by deducting cash on hand from the amount
outstanding on our revolving credit facility as of the balance
sheet or measurement date.
Adjusted EBITDA is defined as net income (loss) before expenses
for interest, income taxes, depletion, depreciation, amortization
and accretion, and excludes non-cash equity-based compensation and
non-cash gains and losses on unsettled derivative instruments in
addition to certain other items.
Vitesse defines Free Cash Flow as cash flow from operations,
adding back changes in operating assets and liabilities, less
development of oil and gas properties.
Management believes the use of these non-GAAP financial measures
provides useful information to investors to gain an overall
understanding of financial performance. Specifically, management
believes the non-GAAP financial measures included herein provide
useful information to both management and investors by excluding
certain items that management believes are not indicative of
Vitesse’s core operating results. In addition, these non-GAAP
financial measures are used by management for budgeting and
forecasting as well as subsequently measuring Vitesse’s
performance, and management believes it is providing investors with
financial measures that most closely align to its internal
measurement processes. A reconciliation of each of the non-GAAP
financial measures to the most directly comparable GAAP measure is
included below.
RECONCILIATION OF ADJUSTED NET
INCOME
(in thousands)
FOR THE THREE MONTHS ENDED
JUNE 30, 2024
Net Income
$
10,928
Add:
Unrealized loss (gain) on derivative
instruments
(1,412
)
Equity-based compensation
2,047
Provision for income taxes
3,678
Adjusted Income Before Adjusted Income Tax
Expense
15,241
Adjusted Income Tax Expense(1)
(3,566
)
Adjusted Net Income (non-GAAP)
$
11,675
(1)
The Company determined the income tax
impact on the “Adjusted Income Before Adjusted Income Tax Expense”
using the relevant statutory tax rate of 23.4%.
RECONCILIATION OF NET DEBT AND
ADJUSTED EBITDA
(in thousands except for ratio)
AT JUNE 30, 2024
Revolving credit facility
$
115,000
Less: Cash
121
Net Debt
$
114,879
FOR THE THREE MONTHS ENDED
JUNE 30, 2024
Net Income
$
10,928
Add:
Interest expense
2,585
Provision for income taxes
3,678
Depletion, depreciation, amortization, and
accretion
25,315
Equity-based compensation
2,047
Unrealized loss (gain) on derivative
instruments
(1,412
)
Adjusted EBITDA
$
43,141
Annualized Adjusted EBITDA
172,564
Net Debt to Adjusted EBITDA
ratio
0.67
RECONCILIATION OF FREE CASH
FLOW
(in thousands)
FOR THE THREE MONTHS ENDED
JUNE 30, 2024
Net cash provided by operating
activities
$
35,161
Add back: changes in operating assets and
liabilities
5,197
Cash flow from operations before changes
in operating assets and liabilities
40,358
Less: development of oil and gas
properties
(24,482
)
Free Cash Flow
$
15,876
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805564397/en/
INVESTOR AND MEDIA CONTACT Ben Messier, CFA Director –
Investor Relations and Business Development (720) 532-8232
benmessier@vitesse-vts.com
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