Vital Energy (VTLE) Q1 Results - May 9

[dan_s]

Vital's Q1 results exceeded my forecast with higher production and higher Adjusted Operating Cash Flow.

First-Quarter 2024 Highlights

Execution of business plan and successful integration of acquired properties drove record production and higher-than-expected cash flows
Reported 1Q-24 net loss of $66.1 million, Adjusted Net Income of $68.1 million and cash flows from operating activities of $158.6 million. < Adjusted Operating Cash Flow (before changes in operating assets and liabilities) was $260.9 million ($7.12/share).

Generated 1Q-24 Consolidated EBITDAX of $301.3 million and Adjusted Free Cash Flow of $43.3 million < Free Cash Flow is Adjusted Operating Cash Flow less capital expenditures of $217.9 million.


Reported record 1Q-24 total and oil production that exceeded the high-end of guidance, producing 124.7 thousand barrels of oil equivalent per day ("MBOE/d") and 58.5 thousand barrels of oil per day ("MBO/d"), respectively < Very Good!

Production outperformance attributed to a 20-well package of long-lateral wells in W. Glasscock County being completed ahead of schedule and outperforming initial production expectations

Drilled three horseshoe wells in Upton County, one of which is believed to have set an industry record with a total measured depth of 23,650'
Reported 1Q-24 capital investments of $217.9 million, excluding non-budgeted acquisitions and leasehold expenditures

Issued $800.0 million of senior unsecured notes due 2032 at 7.875% (subsequent to quarter end, issued an additional $200.0 million of these notes) and utilized proceeds in March and April 2024 to redeem all 10.125% notes due in 2028 and $197.6 million of 9.75% notes due 2030, resulting in annualized interest expense savings of $11 million. < Ability to restructure debt at a lower interest is good news.

"We continued our trend of delivering strong financial and operational results while successfully integrating recent acquisitions," stated Jason Pigott, President and Chief Executive Officer. "Our focus on capital-efficient development is driving sustainable gains in well productivity and lowering capital costs. Results in the Southern Delaware position we built last year are far exceeding industry results. Recent success drilling horseshoe wells in the Midland Basin is expected to significantly increase returns on a large portion of our inventory. Our team has repeatedly demonstrated their ability to identify accretive transactions and apply our operational practices to create long-term value, enhance cash flows and strengthen our balance sheet."

I will update my stock valuation later this morning.