Vital Energy (VTLE) Valuation Update - July 29

[dan_s]

I have updated my forecast/valuation model for Vital Energy. It will be available on the EPG website this afternoon.

My valuation increases by $2 to $107/share. < 3.25 X annualized operating CFPS.
> My model assumes that the Point Energy Acquisition closes late in September, 2024.
> It should push Vital's production over 132,000 Boepd in Q4 2024.
> It will improve the Company's production mix to 49% crude oil, 26% natural gas and 25% NGLs.
> MOST IMPORTANT, the acquisition will add high-quality "Running Room" in the Delaware Basin
> The acquisition adds more debt, but increased free cash flow should pay down debt quickly.
> Vital's balance sheet is in good shape and debt is structured so they have no near-term debt repayment issues.
> New oil hedges reduce commodity price risk.

Based on Vital's updated guidance, the Company's operating cash flow should exceed $28/share in 2024 and exceed $31/share in 2025.