Vital Energy (VTLE) Valuation Update - May 17
Posted: Wed May 17, 2023 3:38 pm
The Forge Energy Acquisition via joint agreement with NOG is a very significant transaction for Vital Energy.
We will be publishing an updated profile on VTLE tomorrow morning. Read it carefully.
Vital Energy (formerly Laredo Petroleum) is based in Tulsa. I believe that is one reason it does not get the attention it deserves from the Wall Street Gang. On a per share basis it is the most profitable company in the Sweet 16. Analysts don't like going to Tulsa and this Company's management team really needs to get out and tell their story more often.
I have updated my forecast/valuation model based on the assumption that the Forge Energy acquisition will close in June. In addition to current production of ~9,500 Boepd net to Vital's 70% working interest, it will add over 100 high-quality drilling locations in the Delaware Basin, a sub-basin of the Permian Basin. I believe the Wall Street Gang has believed Vital's Permian Basin leasehold to be of low quality and some of it may be, but the financial results they put up in 2022 ($37.67 EPS and $47.75 Adjusted Operating CFPS) tells me something is working for them.
At the time of this post VTLE was trading for $43.93.
My updated valuation increases by $8 to $122 per share. VTLE's 52-week trading range is $39.74 to $120.86, so it was near my valuation back in June, 2022. Obviously, much higher oil & gas prices had something to do with that price spike.
My updated forecast shows 2023 results could be $23.16 EPS and $45.44 operating CFPS. TipRanks consensus for 2023 is $22.73 EPS and $46.10 operating CFPS. There is NOTHING which I can find that justifies this stock trading for less than 1X operating CFPS.
Vital's December 31, 2022 reserve report shows a PV10 Net Asset $279/share.
We will be publishing an updated profile on VTLE tomorrow morning. Read it carefully.
Vital Energy (formerly Laredo Petroleum) is based in Tulsa. I believe that is one reason it does not get the attention it deserves from the Wall Street Gang. On a per share basis it is the most profitable company in the Sweet 16. Analysts don't like going to Tulsa and this Company's management team really needs to get out and tell their story more often.
I have updated my forecast/valuation model based on the assumption that the Forge Energy acquisition will close in June. In addition to current production of ~9,500 Boepd net to Vital's 70% working interest, it will add over 100 high-quality drilling locations in the Delaware Basin, a sub-basin of the Permian Basin. I believe the Wall Street Gang has believed Vital's Permian Basin leasehold to be of low quality and some of it may be, but the financial results they put up in 2022 ($37.67 EPS and $47.75 Adjusted Operating CFPS) tells me something is working for them.
At the time of this post VTLE was trading for $43.93.
My updated valuation increases by $8 to $122 per share. VTLE's 52-week trading range is $39.74 to $120.86, so it was near my valuation back in June, 2022. Obviously, much higher oil & gas prices had something to do with that price spike.
My updated forecast shows 2023 results could be $23.16 EPS and $45.44 operating CFPS. TipRanks consensus for 2023 is $22.73 EPS and $46.10 operating CFPS. There is NOTHING which I can find that justifies this stock trading for less than 1X operating CFPS.
Vital's December 31, 2022 reserve report shows a PV10 Net Asset $279/share.