EPS - $4.50 actual Estimated $4.58
Generated 1Q-23 Consolidated EBITDAX1 of $214.2 million and Free Cash Flow1 of $(3.9) million; big turnaround from last quarter.
Highlights Posted on VTLE Site:
Reported 1Q-23 oil and total production that exceeded the high-end of Company guidance, producing 38.5 thousand barrels of oil per day ("MBO/d") and 80.4 thousand barrels of oil equivalent per day ("MBOE/d")
Reported 1Q-23 incurred capital expenditures below the low-end of guidance, investing $188 million, excluding non-budgeted acquisitions and leasehold expenditures
Reported 1Q-23 net income of $113.9 million and cash flows from operating activities of $116.1 million
Generated 1Q-23 Consolidated EBITDAX1 of $214.2 million and Free Cash Flow1 of $(3.9) million
Announced and recently closed (April 2023) an accretive acquisition of approximately 11,200 net acres in the Midland Basin from Driftwood Energy Operating, LLC ("Driftwood")
Disclosed preliminary 2022 greenhouse gas intensity and methane intensity levels that demonstrate achievement of 2025 targets
"The benefits of Vital Energy's strategy were evident in our outstanding first quarter results," commented Jason Pigott, President and Chief Executive Officer. "We have a proven track record of successfully acquiring and integrating high-value properties, reducing emissions and using our proprietary technologies to enhance performance and returns. Our results are benefiting from process improvements that increase efficiencies, improve well productivity and increase confidence in our forecasting.
"We are highly confident in our ability to deliver on our 2023 plan," continued Pigott. "Production from base wells and recent completions is performing better than expectations. With increasing operational efficiencies, we are projecting additional completions within our original capital budget expectations. We have successfully integrated the Driftwood acquisition and are currently completing wells on the prolific Upton County acreage. Our outlook for the rest of the year is strong as we remain focused on maintaining capital discipline, generating Free Cash Flow, reducing debt, and creating shareholder value through the capital efficient development of our acquired properties."
1Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release.
First-Quarter 2023 Financial and Operations Summary
Financial Results. The Company reported net income attributable to common stockholders of $113.9 million, or $6.89 per diluted share. Adjusted Net Income1 was $74.4 million, or $4.50 per adjusted diluted share. Cash flows from operating activities was $116.1 million and Consolidated EBITDAX was $214.2 million.
Production. Consistent with preliminary volumes disclosed in April, Vital Energy's oil and total production during the period averaged 38,522 barrels of oil per day and 80,416 barrels of oil equivalent per day, respectively. Results were driven by earlier than expected production from new completions and less than anticipated downtime related to offset completions activity.
Capital Investments. Total incurred capital expenditures were $188 million, excluding non-budgeted acquisitions and leasehold expenditures. Lower than expected investment levels were primarily related to the deferral of facilities investments into second-quarter 2023, moderating inflationary pressures and a brief weather-related deferral of completions activity. Investments included $170 million in drilling and completions, $7 million in infrastructure, including Vital Midstream Services investments, $8 million in other capitalized costs and $3 million in land, exploration and data related costs. Vital Energy completed 21 wells and turned-in-line ("TIL") 18 wells during first-quarter 2023.
Operating Expenses. Lower than expected lease operating expenses ("LOE") during the period were $6.93 per BOE, primarily related to higher production levels.
General and Administrative Expenses. General and administrative ("G&A") expenses, excluding long-term incentive plan ("LTIP") expenses and transaction expenses, for first-quarter 2023 were $3.02 per BOE, higher than guidance, primarily related to timing of accounting for benefits and compensation. Cash and non-cash LTIP expenses were $0.13 per BOE and $0.31 per BOE, respectively. Cash LTIP expense was below guidance due to the decline of the Company's stock price in first-quarter 2023. Transaction expenses related to the Driftwood acquisition were $0.12 per BOE.
Liquidity. At March 31, 2023, the Company had $120 million drawn on its $1.0 billion senior secured credit facility and cash and cash equivalents of $28 million. Through the regular semi-annual redetermination process, the Company's lenders recently have reaffirmed the senior secured credit facility's $1.3 billion borrowing base and $1.0 billion elected commitment
At May 5, 2023, the Company had $255 million drawn on its senior secured credit facility and cash and cash equivalents of $68 million. The drawn amount includes funds utilized to fund closing of the Driftwood acquisition in April 2023.