Vital Energy (VTLE) Q4 Results - Feb 21

[dan_s]

Fourth-Quarter 2023 Highlights

Reported 4Q-23 net income of $281.4 million, Adjusted Net Income of $76.1 million and cash flows from operating activities of $233.7 million < Compares to my forecast of $88.6 million Adjusted Net Income and $249.9 million Adjusted Operating Cash Flow. Reported Net Income (or GAAP) included a $229 million gain on their hedges.

Generated 4Q-23 Consolidated EBITDAX of $304.2 million and Adjusted Free Cash Flow of $69.0 million < A profitable company like this, that is generating free cash flow, should not be trading below book value.

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. < Outstanding production growth from Q3 to Q4.

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.

Key take aways:
Reports record total and oil production for 4Q-23 and FY-23
Plans to invest $750 - $850 million, increasing FY-24 oil production ~10% from 4Q-23 exit < This is above my current 2024 forecast.
Updates development inventory to >10 years of oil-weighted locations < Outstanding "Running Room"
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I will be updating my forecast/valuation model tomorrow morning. Nothing here points to a lower valuation than my $100/share current valuation.