Vital Energy (VTLE) Update - April 11

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Vital Energy (VTLE) Update - April 11

Post by dan_s »

Vital Energy Provides Select Preliminary First-Quarter 2023 Results and Increases Expectations for Full-Year 2023 Production
Vital Energy, Inc.
Mon, April 10, 2023 at 5:45 AM CDT

First-quarter 2023 production exceeds high-end of guidance

Capital investments for first-quarter 2023 below guidance expectations

Company provides first-quarter 2023 earnings and conference call details

TULSA, OK, April 10, 2023 (GLOBE NEWSWIRE) -- Vital Energy, Inc. (NYSE: VTLE) ("Vital Energy" or the "Company") today provided an update on first-quarter 2023 expected average production and incurred capital investments. As a result of strong performance in the first quarter and closing of the Driftwood Energy Operation, LLC ("Driftwood") acquisition, Vital Energy updated its expectations for full-year 2023 production. The Company also scheduled its first-quarter 2023 earnings release and conference call with details provided within this release.

First-Quarter 2023 Preliminary Production and Capital Expenditure Results

Production. The Company’s first-quarter 2023 total production averaged ~80.2 thousand barrels of oil equivalent per day ("MBOE/d"), above guidance of 72.5 - 76.5 MBOE/d. Oil production for the quarter averaged ~38.3 thousand barrels of oil per day ("MBO/d"), above guidance of 33.0 - 36.0 MBO/d. Production outperformance was primarily related to earlier than expected production from new completions, less than expected production downtime related to offset completions activity and improved uptime of wells and production facilities from field-level process improvements.

Capital Investments. Total incurred capital expenditures during the first quarter were ~$200 million, excluding non-budgeted acquisitions and leasehold expenditures, below guidance of $210 - $230 million. Lower than expected investment levels were related to moderating inflationary pressures and a one-week deferral of completions in February related to severe weather.

Driftwood Acquisition Closed

On April 3, 2023, Vital Energy closed its previously announced transaction to acquire the assets (inclusive of derivative positions) of Driftwood for aggregate consideration, after closing price adjustments, of $120.4 million in cash and 1,578,948 shares of Vital Energy common stock.

Updated Full-Year 2023 Production Guidance is now 76 to 80 MBoepd, which looks extremely conservative to me.

First-Quarter 2023 Earnings Release and Conference Call Details

Vital Energy plans to report complete first-quarter 2023 financial and operating results after market close on Tuesday, May 9, 2023, and host a conference call and webcast at 7:30 a.m. CT on Wednesday, May 10, 2023.

To participate in the call, dial 800.715.9871, using conference code 1077806 or listen to the call via the Company's website at www.vitalenergy.com, "Investor Relations | News & Presentations | Upcoming Events." 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's business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Vital Energy (VTLE) Update - April 11

Post by dan_s »

Note from Mizuho Securities this morning.

1Q23 Preview: No way to dodge weaker commodity prices, but strong ops
update. We are forecasting a ~1% miss vs consensus EBITDA after updating for
VTLE's ops update this morning, which highlighted 1Q23 production that was
7%+ ahead of the midpoint of prior guidance. Expect focus on the sustainability
of the operations beat this quarter and variables affecting the updated 2023 guide
as well as the sensitivity of the company's development and bolt-on acreage plans
at lower commodity prices, with FCF still forecasted negative for the quarter.
Our NAV-based price target increases to $53 from $49.
Dan Steffens
Energy Prospectus Group
Fraser921
Posts: 2955
Joined: Mon Mar 22, 2021 11:48 am

Re: Vital Energy (VTLE) Update - April 11

Post by Fraser921 »

>FCF still forecasted negative for the quarter

This is key. if a fine company like VTLE is losing money (cash) , how will the crap names do?

Goldman downgraded a few names today
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Vital Energy (VTLE) Update - April 11

Post by dan_s »

Just remember that any company (regardless of the industry) can easily go free cash flow positive by stopping all capex spending on growth. Our Sweet 16 is a "Growth Portfolio".

Vital has a relatively new CEO and he is guilty of "under-promising and over-delivering", which is a good thing if not overdone. Q1 production came in way over their mid-February guidance for the quarter. They raised their full-year production guidance, but it looks like their production will be flat for the rest of the year. I think the CEO is being extremely conservative.

If WTI stays over $80/bbl they should be free cash flow positive for the year, especially since the Driftwood Acquisition closed earlier than I expected. It adds ~5,400 Boepd of production (~63% oil) and lots of running room.

Vital and Callon Petroleum (CPE) should be two of the most profitable companies in the Sweet 16 this year on a per-share basis.
Dan Steffens
Energy Prospectus Group
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