VTS Vitesse Energy Inc

Vitesse Energy, Inc. (NYSE: VTS) (“we,” “our,” “Vitesse,” or the “Company”) today reported the Company’s second quarter 2024 financial and operating results.

SECOND QUARTER 2024 HIGHLIGHTS

• As previously announced, declared a quarterly cash dividend of $0.525 per common share to be paid on September 30, 2024
• Net income of $10.9 million and Adjusted Net Income(1) of $11.7 million
• Adjusted EBITDA(1) of $43.1 million
• Cash flow from operations of $35.2 million and Free Cash Flow(1) of $15.9 million
• Production of 13,504 barrels of oil equivalent (“Boe”) per day (70% oil)
• Total cash development capital expenditures and acquisition costs of $37.6 million
• Total debt of $115.0 million and Net Debt to Adjusted EBITDA ratio(1) of 0.67

(1)

Non-GAAP financial measure; see reconciliation schedules at the end of this release

MANAGEMENT COMMENTS

“In the second quarter we increased our dividend by 5%,” commented Bob Gerrity, Vitesse’s Chairman and Chief Executive Officer. “We closed previously announced near-term development acquisitions and added hedges to protect returns, which supports the dividend as the added production comes online later this year and in early 2025.”

STOCKHOLDER RETURNS

In July 2024, Vitesse’s Board of Directors declared its third quarter cash dividend for Vitesse’s common stock of $0.525 per share for stockholders of record as of September 16, 2024, which will be paid on September 30, 2024.

On June 28, 2024, the Company paid its second quarter cash dividend of $0.525 per share to common stockholders of record as of June 14, 2024.

FINANCIAL AND OPERATING RESULTS

Second quarter net income was $10.9 million and Adjusted Net Income was $11.7 million. Adjusted EBITDA was $43.1 million. See “Non-GAAP Financial Measures” below.

Oil and natural gas production for the second quarter of 2024 averaged 13,504 Boe per day, an increase of 8% from the first quarter of 2024. Oil represented 70% of production and 96% of total oil and natural gas revenue. Total revenue, including the effects of our realized hedges, was $65.6 million.

Vitesse’s average realized oil and natural gas prices before hedging were $74.63 per Bbl and $1.11 per Mcf, respectively, during the second quarter of 2024. The Company had hedges covering 62% of oil production in the second quarter of 2024 and its realized oil price with hedging was $73.42 per Bbl.

Lease operating expenses in the second quarter of 2024 were $12.3 million, or $9.99 per Boe, a 3% decrease on a per unit basis compared to the first quarter of 2024. The lower lease operating expense is primarily attributable to weather related expenses in the first quarter. General and administrative expenses for the second quarter of 2024 totaled $4.7 million, or $3.84 per Boe.

LIQUIDITY AND CAPITAL EXPENDITURES

As of June 30, 2024, Vitesse had $0.1 million in cash and $115.0 million of borrowings outstanding on its revolving credit facility. Vitesse had total liquidity of $130.1 million as of June 30, 2024, consisting of cash and $130.0 million of committed borrowing availability under its revolving credit facility.

During the quarter, Vitesse invested $24.5 million in development capital expenditures and $13.1 million in acquisitions of oil and gas properties.

OPERATIONS UPDATE

As of June 30, 2024 the Company owned an interest in 308 gross (11.1 net) wells that were either drilling or in the completion phase, and another 372 gross (8.7 net) locations that had been permitted for development.

The Company closed previously announced near-term development acquisitions in the Williston Basin of North Dakota that will result in over $40 million of acquisition and related development capital expenditures primarily during 2024. These acquisitions are expected to provide significant increases to production and cash flows primarily during the fourth quarter of 2024 and into 2025.

2024 ANNUAL GUIDANCE

Vitesse reaffirms its previously revised 2024 annual guidance, which is set forth below.

 

2024 Guidance

Annual Production (Boe per day)

13,000 - 14,000

Oil as a Percentage of Annual Production

67% - 71%

Total Capital Expenditures ($ in millions)

$130 - $150

SECOND QUARTER 2024 RESULTS

The following table sets forth selected financial and operating data for the periods indicated.

 

 

 

 

 

 

 

 

 

QUARTER ENDED JUNE 30,

 

INCREASE (DECREASE)

($ in thousands, except production and per unit data)

2024

 

2023

 

AMOUNT

 

PERCENT

Financial and Operating Results:

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Oil

$

64,127

 

$

48,733

 

$

15,394

 

 

32

%

Natural gas

 

2,471

 

 

2,855

 

 

(384

)

 

(13

%)

Total revenue

$

66,598

 

$

51,588

 

$

15,010

 

 

29

%

Operating Expenses

 

 

 

 

 

 

 

Lease operating expense

$

12,272

 

$

9,316

 

$

2,956

 

 

32

%

Production taxes

 

5,426

 

 

4,919

 

 

507

 

 

10

%

General and administrative

 

4,724

 

 

4,461

 

 

263

 

 

6

%

Depletion, depreciation, amortization, and accretion

 

25,315

 

 

18,748

 

 

6,567

 

 

35

%

Equity-based compensation

 

2,047

 

 

1,428

 

 

619

 

 

43

%

Interest Expense

$

2,585

 

$

1,115

 

$

1,470

 

 

132

%

Commodity Derivative Gain, Net

$

379

 

$

4,779

 

$

(4,400

)

 

(92

%)

Income Tax (Benefit) Expense

$

3,678

 

$

6,812

 

$

(3,134

)

 

(46

%)

Production Data:

 

 

 

 

 

 

 

Oil (MBbls)

 

859

 

 

697

 

 

162

 

 

23

%

Natural gas (MMcf)

 

2,217

 

 

2,018

 

 

199

 

 

10

%

Combined volumes (MBoe)

 

1,229

 

 

1,034

 

 

195

 

 

19

%

Daily combined volumes (Boe/d)

 

13,504

 

 

11,359

 

 

2,145

 

 

19

%

Average Realized Prices before Hedging:

 

 

 

 

 

 

 

Oil (per Bbl)

$

74.63

 

$

69.90

 

$

4.73

 

 

7

%

Natural gas (per Mcf)

 

1.11

 

 

1.41

 

 

(0.30

)

 

(21

%)

Combined (per Boe)

 

54.20

 

 

49.91

 

 

4.29

 

 

9

%

Average Realized Prices with Hedging:

 

 

 

 

 

 

 

Oil (per Bbl)

$

73.42

 

$

72.18

 

$

1.24

 

 

2

%

Natural gas (per Mcf)

 

1.11

 

 

1.41

 

 

(0.30

)

 

(21

%)

Combined (per Boe)

 

53.36

 

 

51.45

 

 

1.91

 

 

4

%

Average Costs (per Boe):

 

 

 

 

 

 

 

Lease operating

$

9.99

 

$

9.01

 

$

0.98

 

 

11

%

Production taxes

 

4.42

 

 

4.76

 

 

(0.34

)

 

(7

%)

General and administrative

 

3.84

 

 

4.32

 

 

(0.48

)

 

(11

%)

Depletion, depreciation, amortization, and accretion

 

20.60

 

 

18.14

 

 

2.46

 

 

14

%

 

 

 

 

 

 

 

 

COMMODITY HEDGING

Vitesse hedges a portion of its expected oil production volumes to increase the predictability and certainty of its cash flow and to help maintain a strong financial position to support our dividend. Vitesse does not currently have hedges in place on its expected natural gas production volumes. The following table summarizes Vitesse’s open oil commodity derivative swap contracts scheduled to settle after June 30, 2024, including those entered into in July 2024.

 

 

 

 

SETTLEMENT PERIOD

OIL (Bbls)

 

WEIGHTED AVERAGE PRICE

Swaps-Crude Oil

 

 

 

2024:

 

 

 

Q3

507,500

 

$

77.97

Q4

490,000

 

$

78.11

2025:

 

 

 

Q1

397,500

 

$

73.92

Q2

382,500

 

$

74.72

Q3

202,500

 

$

74.83

Q4

202,500

 

$

74.83

 

 

 

 

The following table presents Vitesse’s settlements on commodity derivative instruments and unsettled gains and losses on open commodity derivative instruments for the periods presented:

 

 

 

 

 

QUARTER ENDED JUNE 30,

(in thousands)

2024

 

2023

Realized (loss) gain on commodity derivatives (1)

$

(1,033

)

 

$

1,595

Unrealized gain on commodity derivatives (1)

 

1,412

 

 

 

3,184

Total commodity derivative gain

$

379

 

 

$

4,779

 

 

 

 

(1) 

Realized and unrealized gains and losses on commodity derivatives are presented herein as separate line items but are combined for a total commodity derivative gain (loss) in the statements of operations included below. Management believes the separate presentation of the realized and unrealized commodity derivative gains and losses is useful, providing a better understanding of our hedge position.

 Q2 2024 EARNINGS CONFERENCE CALL

In conjunction with Vitesse’s release of its financial and operating results, investors, analysts and other interested parties are invited to listen to a conference call with management on Tuesday, August 6, 2024 at 11:00 a.m. Eastern Time.

An updated corporate slide presentation that may be referenced on the conference call will be posted prior to the conference call on Vitesse’s website, www.vitesse-vts.com, in the “Investor Relations” section of the site, under “News & Events,” sub-tab “Presentations.”

Those wishing to listen to the conference call may do so via the Company’s website or by phone as follows:

Website: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ex7kWVY5

Dial-In Number: 877-407-0778 (US/Canada) and 201-689-8565 (International)

Conference ID: 13747956 - Vitesse Energy Second Quarter 2024 Earnings Call

Replay Dial-In Number: 877-660-6853 (US/Canada) and 201-612-7415 (International)

Replay Access Code: 13747956 - Replay will be available through August 13, 2024

UPCOMING INVESTOR EVENTS

Vitesse management will be participating in the upcoming investor events:

• EnerCom Denver Energy Conference - Denver - August 19-20, 2024.
• Midwest IDEAS Conference - Chicago - August 29, 2024.
• Barclays 38th Annual CEO Energy-Power Conference - New York - September 3-4, 2024.
• Pickering Energy Partners Energy Conference - Austin - September 16-18, 2024.

Any investor presentations to be used for such events will be posted prior to the events on Vitesse’s website, www.vitesse-vts.com, in the “Investor Relations” section of the site, under “News & Events,” sub-tab “Presentations.”

ABOUT VITESSE ENERGY, INC.

Vitesse Energy, Inc. is focused on returning capital to stockholders through owning financial interests as a non-operator in oil and gas wells drilled by leading US operators.

More information about Vitesse can be found at www.vitesse-vts.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this release regarding Vitesse’s financial position, operating and financial performance, business strategy, dividend plans and practices, guidance, plans and objectives of management for future operations, and industry conditions are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond Vitesse’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in oil and natural gas prices; the pace of drilling and completions activity on Vitesse’s properties; Vitesse’s ability to acquire additional development opportunities; potential acquisition transactions; integration and benefits of property acquisitions, or the effects of such acquisitions on Vitesse’s cash position and levels of indebtedness; changes in Vitesse’s reserves estimates or the value thereof; disruptions to Vitesse’s business due to acquisitions and other significant transactions; infrastructure constraints and related factors affecting Vitesse’s properties; cost inflation or supply chain disruption; ongoing legal disputes over and potential shutdown of the Dakota Access Pipeline; the impact of general economic or industry conditions, nationally and/or in the communities in which Vitesse conducts business, including central bank policy actions, bank failures and associated liquidity risks; changes in the interest rate environment, legislation or regulatory requirements; conditions of the securities markets; Vitesse’s ability to raise or access capital; cyber-related risks; changes in accounting principles, policies or guidelines; and financial or political instability, health-related epidemics, acts of war (including the armed conflict in the Middle East and Ukraine) or terrorism, and other economic, competitive, governmental, regulatory and technical factors affecting Vitesse’s operations, products and prices. Additional information concerning potential factors that could affect future results is included in the section entitled “Item 1A. Risk Factors” and other sections of Vitesse’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as updated from time to time in amendments and subsequent reports filed with the SEC, which describe factors that could cause Vitesse’s actual results to differ from those set forth in the forward looking statements.

Vitesse has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Vitesse’s control. Vitesse does not undertake any duty to update or revise any forward-looking statements, except as may be required by the federal securities laws.

FINANCIAL INFORMATION

VITESSE ENERGY, INC. Condensed Consolidated Statements of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

 

FOR THE THREE MONTHS ENDED

 

FOR THE SIX MONTHS ENDED

 

JUNE 30,

 

JUNE 30,

(In thousands, except share data)

2024

 

2023

 

2024

 

2023

Revenue

 

 

 

 

 

 

 

Oil

$

64,127

 

 

$

48,733

 

 

$

121,491

 

 

$

99,219

 

Natural gas

 

2,471

 

 

 

2,855

 

 

 

6,301

 

 

 

10,330

 

Total revenue

 

66,598

 

 

 

51,588

 

 

 

127,792

 

 

 

109,549

 

Operating Expenses

 

 

 

 

 

 

 

Lease operating expense

 

12,272

 

 

 

9,316

 

 

 

24,063

 

 

 

18,397

 

Production taxes

 

5,426

 

 

 

4,919

 

 

 

11,226

 

 

 

10,174

 

General and administrative

 

4,724

 

 

 

4,461

 

 

 

10,098

 

 

 

15,323

 

Depletion, depreciation, amortization, and accretion

 

25,315

 

 

 

18,748

 

 

 

48,860

 

 

 

37,220

 

Equity-based compensation

 

2,047

 

 

 

1,428

 

 

 

3,652

 

 

 

29,400

 

Total operating expenses

 

49,784

 

 

 

38,872

 

 

 

97,899

 

 

 

110,514

 

Operating Income (Loss)

 

16,814

 

 

 

12,716

 

 

 

29,893

 

 

 

(965

)

Other (Expense) Income

 

 

 

 

 

 

 

Commodity derivative gain (loss), net

 

379

 

 

 

4,779

 

 

 

(13,445

)

 

 

12,198

 

Interest expense

 

(2,585

)

 

 

(1,115

)

 

 

(4,788

)

 

 

(2,295

)

Other (expense) income

 

(2

)

 

 

52

 

 

 

28

 

 

 

50

 

Total other (expense) income

 

(2,208

)

 

 

3,716

 

 

 

(18,205

)

 

 

9,953

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

$

14,606

 

 

$

16,432

 

 

$

11,688

 

 

$

8,988

 

 

 

 

 

 

 

 

 

(Provision for) Benefit from Income Taxes

 

(3,678

)

 

 

(6,812

)

 

 

(2,946

)

 

 

(47,183

)

 

 

 

 

 

 

 

 

Net Income (Loss)

$

10,928

 

 

$

9,620

 

 

$

8,742

 

 

$

(38,195

)

Net income attributable to Predecessor common unit holders

 

—

 

 

 

—

 

 

 

—

 

 

 

1,832

 

Net Income (Loss) Attributable to Vitesse Energy, Inc.

$

10,928

 

 

$

9,620

 

 

$

8,742

 

 

$

(40,027

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

30,046,190

 

 

 

29,659,771

 

 

 

29,990,077

 

 

 

29,661,556

 

Weighted average common shares outstanding – diluted

 

33,026,818

 

 

 

33,077,824

 

 

 

32,984,826

 

 

 

29,661,556

 

Net income (loss) per common share – basic

$

0.36

 

 

$

0.29

 

 

$

0.29

 

 

$

(1.35

)

Net income (loss) per common share – diluted

$

0.33

 

 

$

0.29

 

 

$

0.27

 

 

$

(1.35

)

 

 

 

 

 

 

 

 

VITESSE ENERGY, INC. Condensed Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

JUNE 30,

 

DECEMBER 31,

(in thousands, except shares)

2024

 

2023

Assets

 

 

 

Current Assets

 

 

 

Cash

$

121

 

 

$

552

 

Revenue receivable

 

46,319

 

 

 

44,915

 

Commodity derivatives

 

152

 

 

 

10,038

 

Prepaid expenses and other current assets

 

2,394

 

 

 

2,841

 

Total current assets

 

48,986

 

 

 

58,346

 

Oil and Gas Properties-Using the successful efforts method of accounting

 

 

 

Proved oil and gas properties

 

1,235,125

 

 

 

1,168,378

 

Less accumulated DD&A and impairment

 

(512,527

)

 

 

(464,036

)

Total oil and gas properties

 

722,598

 

 

 

704,342

 

Other Property and Equipment—Net

 

189

 

 

 

189

 

Other Assets

 

 

 

Commodity derivatives

 

277

 

 

 

1,109

 

Other noncurrent assets

 

6,378

 

 

 

1,984

 

Total other assets

 

6,655

 

 

 

3,093

 

Total assets

$

778,428

 

 

$

765,970

 

Liabilities and Equity

 

 

 

Current Liabilities

 

 

 

Accounts payable

$

13,613

 

 

$

27,692

 

Accrued liabilities

 

42,997

 

 

 

32,507

 

Commodity derivatives

 

2,527

 

 

 

—

 

Other current liabilities

 

30

 

 

 

204

 

Total current liabilities

 

59,167

 

 

 

60,403

 

Long-term Liabilities

 

 

 

Credit facility

 

115,000

 

 

 

81,000

 

Deferred tax liability

 

67,135

 

 

 

64,329

 

Asset retirement obligations

 

8,677

 

 

 

8,353

 

Other noncurrent liabilities

 

9,944

 

 

 

5,479

 

Total liabilities

$

259,923

 

 

$

219,564

 

Commitments and Contingencies

 

 

 

Equity

 

 

 

Preferred stock, $0.01 par value, 5,000,000 shares authorized; 0 shares issued at June 30, 2024 and December 31, 2023, respectively

 

—

 

 

 

—

 

Common stock, $0.01 par value, 95,000,000 shares authorized; 32,629,594 and 32,812,007 shares issued at June 30, 2024 and December 31, 2023, respectively

 

326

 

 

 

328

 

Additional paid-in capital

 

531,013

 

 

 

567,654

 

Accumulated deficit

 

(12,834

)

 

 

(21,576

)

Total equity

 

518,505

 

 

 

546,406

 

Total liabilities and equity

$

778,428

 

 

$

765,970

 

 

 

 

 

NON-GAAP FINANCIAL MEASURES

Vitesse defines Adjusted Net Income (Loss) as net income (loss) before (i) non-cash gains and losses on unsettled derivative instruments, (ii) non-cash equity-based compensation, and (iii) certain other non-cash items; reduced by the estimated impact of income tax expense.

Net Debt is calculated by deducting cash on hand from the amount outstanding on our revolving credit facility as of the balance sheet or measurement date.

Adjusted EBITDA is defined as net income (loss) before expenses for interest, income taxes, depletion, depreciation, amortization and accretion, and excludes non-cash equity-based compensation and non-cash gains and losses on unsettled derivative instruments in addition to certain other items.

Vitesse defines Free Cash Flow as cash flow from operations, adding back changes in operating assets and liabilities, less development of oil and gas properties.

Management believes the use of these non-GAAP financial measures provides useful information to investors to gain an overall understanding of financial performance. Specifically, management believes the non-GAAP financial measures included herein provide useful information to both management and investors by excluding certain items that management believes are not indicative of Vitesse’s core operating results. In addition, these non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring Vitesse’s performance, and management believes it is providing investors with financial measures that most closely align to its internal measurement processes. A reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measure is included below.

RECONCILIATION OF ADJUSTED NET INCOME

 

 

 

(in thousands)

FOR THE THREE MONTHS ENDED JUNE 30, 2024

Net Income

$

10,928

 

Add:

 

Unrealized loss (gain) on derivative instruments

 

(1,412

)

Equity-based compensation

 

2,047

 

Provision for income taxes

 

3,678

 

Adjusted Income Before Adjusted Income Tax Expense

 

15,241

 

 

 

Adjusted Income Tax Expense(1)

 

(3,566

)

 

 

Adjusted Net Income (non-GAAP)

$

11,675

 

 

 

(1)

The Company determined the income tax impact on the “Adjusted Income Before Adjusted Income Tax Expense” using the relevant statutory tax rate of 23.4%.

RECONCILIATION OF NET DEBT AND ADJUSTED EBITDA

 

 

 

(in thousands except for ratio)

AT JUNE 30, 2024

Revolving credit facility

$

115,000

 

Less: Cash

 

121

 

Net Debt

$

114,879

 

 

 

 

 

 

FOR THE THREE MONTHS ENDED JUNE 30, 2024

Net Income

$

10,928

 

Add:

 

Interest expense

 

2,585

 

Provision for income taxes

 

3,678

 

Depletion, depreciation, amortization, and accretion

 

25,315

 

Equity-based compensation

 

2,047

 

Unrealized loss (gain) on derivative instruments

 

(1,412

)

Adjusted EBITDA

$

43,141

 

 

 

Annualized Adjusted EBITDA

 

172,564

 

Net Debt to Adjusted EBITDA ratio

 

0.67

 

 

 

RECONCILIATION OF FREE CASH FLOW

 

 

 

(in thousands)

FOR THE THREE MONTHS ENDED JUNE 30, 2024

Net cash provided by operating activities

$

35,161

 

Add back: changes in operating assets and liabilities

 

5,197

 

Cash flow from operations before changes in operating assets and liabilities

 

40,358

 

Less: development of oil and gas properties

 

(24,482

)

Free Cash Flow

$

15,876

 

 

 

 

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INVESTOR AND MEDIA CONTACT Ben Messier, CFA Director – Investor Relations and Business Development (720) 532-8232 benmessier@vitesse-vts.com