Vital Energy, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Vital’s business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas. Vital Energy ranks #31 in wells drilled in 2022 with 66 wells drilled in the Mid Continent of the US. The Mid Continent region includes Texas, Oklahoma, New Mexico and Louisiana.
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Vital Energy Wells Drilled 2023
Vital Energy Drilling Rigs July 2023
Drilling Rig Report
Active drilling rigs in the US last 30 days
Wells Drilled in the US 2023
Detailed list of wells drilled in the US in 2023
Second-Quarter 2023 Financial and Operations Summary
Financial Results. The Company reported net income attributable to common stockholders of $294.8 million, or $16.30 per diluted share, including income of $222.2 million related to the reduction of the valuation allowance against the Company’s gross deferred tax asset. Adjusted Net Income was $78.6 million, or $4.35 per adjusted diluted share. Cash flows from operating activities were $248.9 million and Consolidated EBITDAX was $239.5 million.
Production. Consistent with preliminary volumes disclosed in July, Vital Energy’s oil and total production during the period averaged 44,360 barrels of oil per day and 90,030 barrels of oil equivalent per day, respectively. Production outperformance was driven by improvements in base production and acceleration of production from new wells.
Capital Investments. Total incurred capital expenditures were $149 million, excluding non-budgeted acquisitions and leasehold expenditures. Capital investments were lower than expected, primarily related to moderating inflationary pressures and continuing operational efficiencies. Vital Energy completed 16 wells and turned-in-line (“TIL”) 23 wells during second-quarter 2023. Investments included $125 million in drilling and completions, $10 million in land, exploration and data related costs, $7 million in infrastructure, including Vital Midstream Services investments, and $7 million in other capitalized costs.
Operating Expenses. Lower than expected unit lease operating expenses (“LOE”) during the period were $7.05 per BOE, primarily related to higher production levels and reduced inflationary pressures for tangible goods and day rates for workover rigs and rental equipment.
General and Administrative Expenses. General and administrative (“G&A”) expenses, excluding long-term incentive plan (“LTIP”) expenses and transaction expenses, for second-quarter 2023 were $1.88 per BOE, lower than guidance, primarily related to lower compensation related expenses. Cash and non-cash LTIP expenses were in line with expectations at $0.16 per BOE and $0.32 per BOE, respectively.
Liquidity. At June 30, 2023, the Company had $575 million drawn on its $1.0 billion senior secured credit facility and cash and cash equivalents of $72 million.
At August 4, 2023, the Company had $595 million drawn on its senior secured credit facility and cash and cash equivalents of $73 million.
2023 Outlook
Production. The Company recently increased expectations for full-year 2023 production to incorporate second-quarter 2023 outperformance and production associated with the Forge acquisition. Higher than expected volumes year-to-date were primarily related to stronger base production, which exceeded expectations for both oil and total production by approximately 10%. As a result, full-year 2023 oil production guidance is further increased to 41.9 – 43.4 MBO/d (previously 40.0 – 43.0 MBO/d) and total production guidance to 87.0 – 89.0 MBOE/d (previously 82.0 – 86.0 MBOE/d).
Capital Investments. Vital Energy recently updated full-year 2023 capital investment guidance to incorporate activity associated with the Forge acquisition. To optimize completions activities across the Midland and Delaware basin programs, Vital Energy expects to utilize a second completions crew in the Midland Basin commencing in late November 2023, a month earlier than previously planned. The additional capital expenditures are expected to be offset by operational efficiencies and moderating inflation. Accordingly, full-year 2023 capital investment guidance is reduced to $665 – $695 million (previously $675 – $725 million).
Operating Expenses. Total LOE is expected to increase slightly in the second half of the year, with unit LOE varying with production volumes. Unit LOE in the second half of 2023 is estimated at $7.40 per BOE.
Free Cash Flow. Through the first half of 2023, Vital Energy generated $57 million of Free Cash Flow. Integration of the Forge acquisition enhances the outlook for Free Cash Flow, which is expected to be approximately $90 million in the second half of 2023, at $80 WTI. Full-year 2023 Free Cash Flow is estimated to be approximately $150 million.
2024 Outlook
“Our recent operational performance and successful acquisitions have materially strengthened our outlook for 2024,” said Mr. Pigott. “In 2024, we expect to maintain our full-year 2023 production levels while holding investment levels relatively flat and growing full-year 2024 Free Cash Flow to approximately $175 million, at current strip commodity prices.”
Vital Energy expects to operate three drilling rigs and approximately 1.7 completions crews across the Company’s Midland and Delaware basin assets in 2024. The Company expects to complete and TIL 70 – 75 gross (58 – 62 net) wells in 2024, a slight increase versus 2023.
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