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Vitesse Energy, Inc. (VTS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 printed mixed: revenue was $67.44M (up 16% YoY) on 18,163 Boe/d (-4% QoQ), but GAAP diluted EPS was -$0.03 vs S&P Global consensus of $0.08, while revenue was modestly ahead of the $65.7M consensus estimate (beat ~+$1.7M) . Consensus values marked with * are from S&P Global.*
  • Management raised 2025 production to 17,000–17,500 Boe/d (from 15,000–17,000) and lifted capex to $110–$125M (from $80–$110M), citing successful completion of two operated DUCs ~15% under budget and stronger extended-lateral activity on concentrated acreage .
  • Cash generation and balance sheet remained resilient: Adjusted EBITDA $41.6M, cash from ops $49.4M, FCF $13.6M, net debt/annualized adj. EBITDA 0.65x; dividend of $0.5625/share remains intact .
  • Credit facility redetermination cut the borrowing base to $295M (commitments reaffirmed at $250M) amid a lower price tape; hedge book provides downside protection (~60% of remaining 2025 oil at ~$69.99/bbl; ~44% of remaining 2025 gas with $3.73/MMBtu floors) .

What Went Well and What Went Wrong

What Went Well

  • Successful operated execution: two 95% WI wells were completed 15% under budget ($2M below plan) with IP outperforming underwriting; management highlighted technology-driven uplift from 3–4 mile laterals and activity moving into Vitesse’s concentrated acreage positions . “Technological improvements in the Bakken, most notably in the economic performance of three- and four-mile laterals, continue to enhance the value of our asset” — Bob Gerrity, CEO .
  • Raised FY25 outlook: production up 8% at midpoint (17–17.5k Boe/d) and capex tightened higher ($110–$125M) versus prior guide, reflecting incremental organic/drilling activity and the operated DUCs .
  • Capital returns and balance sheet discipline: declared $0.5625 quarterly dividend; net debt/annualized adj. EBITDA at 0.65x with $141.6M total liquidity post-quarter; strategy underscores “disciplined capital allocation” and dividend durability .

What Went Wrong

  • EPS miss on GAAP basis: -$1.3M net loss and -$0.03 diluted EPS vs S&P Global EPS consensus of $0.08*; YoY realized oil prices fell (to $59.73/bbl from $69.43) and LOE/boe increased to $11.05 . Consensus marked with * from S&P Global.*
  • Sequential moderation from Q2’s unusually strong print: production fell 4% QoQ (18,163 vs 18,950 Boe/d) and revenue declined from $81.76M in Q2, which benefited from a litigation settlement and favorable derivative gains .
  • Borrowing base reduced from $315M to $295M given lower commodity prices (commitments reaffirmed at $250M); while not constraining today, it reflects a tougher macro backdrop .

Financial Results

Quarterly Actuals (Company-Reported)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($)$58.28M $66.17M $81.76M $67.44M
Net Income ($)$17.44M $2.67M $24.66M $(1.31)M
Diluted EPS ($)$0.53 $0.08 $0.60 $(0.03)
Production (Boe/d)13,009 14,971 18,950 18,163

Q3 2025 vs S&P Global Consensus

MetricActual (Q3 2025)Consensus* (Q3 2025)Surprise
Revenue ($)$67.44M $65.70M*+$1.74M
Diluted EPS ($)$(0.03) $0.08*-$0.11

Values marked with * retrieved from S&P Global.

Margins (S&P Global) — GAAP

MetricQ1 2025Q2 2025Q3 2025
EBITDA Margin %60.22%*94.85%*57.18%*
EBIT Margin %16.24%*49.10%*1.29%*
Net Income Margin %4.42%*32.63%*-2.14%*

Values marked with * retrieved from S&P Global.

Operating KPIs and Costs

KPIQ1 2025Q2 2025Q3 2025
Production (Boe/d)14,971 18,950 18,163
Oil % of Mix68% 65% 65%
Realized Oil Price (pre-hedge)$64.18/bbl $59.50/bbl $59.73/bbl
Realized Gas Price (pre-hedge)$2.81/Mcf $4.17/Mcf $0.85/Mcf
LOE ($/Boe)$10.28 $11.38 $11.05
G&A ($/Boe)$9.00 (includes one-time items) $0.18 (net of offsets) $3.44
DD&A ($/Boe)$19.72 $20.05 $20.48
Adjusted EBITDA ($M)$39.9 $61.1 $41.6
Cash from Ops ($M)$17.5 $66.0 $49.4
Free Cash Flow ($M)$9.1 $21.9 $13.6
Capex + Acq. ($M)$30.4 $35.7 $31.8
Total Debt ($M)$117.0 $106.0 $114.0
Net Debt / Annualized Adj. EBITDA (x)0.71 0.43 0.65

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual Production (Boe/d)FY 202515,000–17,000 17,000–17,500 Raised
Oil % of Annual ProductionFY 202564%–68% 65%–67% Narrowed/Tightened
Total Capex ($M)FY 2025$80–$110 $110–$125 Raised
Dividend (per share)Q3/Q4 2025$0.5625 declared previously $0.5625 declared 10/27 for Dec 31 payment Maintained

Management also noted hedge coverage based on revised guidance: ~60% of remaining 2025 oil at ~$69.99/bbl and ~44% of remaining 2025 gas with $3.73/MMBtu floors .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Extended laterals (3–4 mile)Growing adoption; AFE cost declines 5–8% vs late-2024; strategic focus despite macro About half of AFEs are extended laterals; technology enhancing economics; activity moving into Vitesse’s concentrated acreage Improving penetration and economics
Operated program/DUCsDeferred 1.9 net DUCs amid price volatility; plan to flex with returns Completed two operated DUCs ~15% under budget with IP beats; evaluating broader 2026–2027 operated plan Positive execution; optionality for 2026
Capital allocation & dividendEmphasis on fixed dividend; maintain flexibility; consider buybacks vs AFEs Dividend maintained; capex increased where returns justify; leverage 0.65x Steady dividend-first discipline
Hedging~61% of 2025 oil and 30% gas hedged (Q1); added NGL hedges ~60% remaining 2025 oil at ~$69.99; ~44% remaining 2025 gas floors $3.73; 2026 oil/gas hedged Robust downside protection
Cost structure (LOE/G&A)Q1 G&A elevated by one-time items; LOE manageable Q3 LOE $11.05/boe; CFO said Q3 is a better run-rate; expected slightly lower ahead as workovers subside Stabilizing/normalizing
M&A/AFEs marketTurned down $20M acquisition; watching for “fat pitch” if oil at $50–60 Competitive market; more AFE activity on Vitesse acreage; closed small deals in Q3; evaluating gas assets opportunistically Active and selective

Management Commentary

  • “We participated in an increasing number of three and four-mile laterals… Extended laterals are delivering strong economic results through lower drilling and completion costs per lateral foot.” — Bob Gerrity, CEO .
  • “In late September… two gross (1.9 net) DUCs… were completed approximately $2 million, or 15%, under budget and initial oil and natural gas production is exceeding underwritten expectations.” — Brian Cree, President .
  • “Adjusted EBITDA was $41.6 million… total debt of $114 million and net debt of $108 million, giving us net debt to adjusted annualized EBITDA of 0.65x.” — Jimmy Henderson, CFO .

Q&A Highlights

  • Extended laterals mix: ~50% of AFEs in 2025 were extended laterals; virtually no 1-mile laterals this year; remaining AFEs are 2-mile .
  • Acquisition cadence: Market remains competitive but active; Q3 saw a couple of deals; team remains disciplined with return hurdles; expects more opportunities, especially on Vitesse acreage .
  • Capex and Q4 acquisitions: Budgeting conservatively (“few hundred grand” for Q4 acquisitions) but leaving room within a wide capex range to pursue attractive AFE buys if they arise .
  • Costs/run-rate: Q3 seen as a better indicator for G&A/LOE; LOE slightly higher due to workovers but expected to trend slightly lower into Q4; seasonally better gas pricing expected in winter .
  • 2026 operated plan: Planning for 2026–2027 but final cadence depends on oil prices and partner Capex; ~15 net undeveloped operated locations being optimized via potential trades .

Estimates Context

  • S&P Global consensus for Q3 2025: Revenue $65.7M*, EPS $0.08*, both with 2 estimates*. Actuals were revenue $67.44M and EPS $(0.03), implying a modest revenue beat and an EPS miss .
  • Given the raised FY25 production and capex outlook, Street models may lift near-term volumes/capex while modestly trimming unit margin assumptions (LOE/G&A run-rate) and incorporating the updated hedge profile to cash flow forecasts .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Execution momentum: Operated wells came in ~15% under budget with above-plan IPs; extended-lateral penetration continues to improve economics on Vitesse’s concentrated acreage .
  • Outlook upgraded: FY25 production raised to 17–17.5k Boe/d and capex to $110–$125M as activity/operated contributions improve; suggests a firmer volume base into 2026 .
  • Mixed print vs Street: Q3 revenue modestly beat consensus while EPS missed on GAAP; however, cash generation remained healthy with $41.6M Adjusted EBITDA and $13.6M FCF supporting the dividend .
  • Balance sheet resilience: Net debt/annualized adj. EBITDA at 0.65x and $141.6M liquidity; borrowing base trimmed to $295M but commitments reaffirmed at $250M .
  • Hedge protection: ~60% of remaining 2025 oil at ~$69.99 and ~44% of remaining 2025 gas floors at $3.73 stabilize cash flows into year-end and early 2026 .
  • Cost normalization watch: Q3 is a better cost run-rate; management expects slightly lower LOE ahead as workovers subside, a modest tailwind to unit economics .
  • Catalysts: Continued extended-lateral activity, potential selective AFE acquisitions, clarity on a 2026 operated plan cadence, and stable dividend could drive sentiment .