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Vitesse Energy, Inc. (VTS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 printed a GAAP net loss of $5.1M while Adjusted Net Income was $6.1M and Adjusted EBITDA was $37.0M; management flagged one-time Lucero acquisition costs and hedge marks as drivers, with larger WI wells slipping into early 2025 timing .
  • Dividend raised 7% sequentially to $0.5625/quarter ($2.25 annualized) on March 11, supported by the Lucero acquisition closing (stock-for-stock) and expected accretion to key metrics and dividend coverage .
  • 2025 guidance stepped up meaningfully post-Lucero: production 17–18k Boe/d (+35% yoy at midpoint), oil mix 66–70%, and cash CapEx $130–$150M, with Q1 2025 production guided 14–15k Boe/d on March close timing .
  • Liquidity improved: borrowing base increased to $315M and commitments to $250M; Lucero closed with no borrowings and ~$50M net cash, further delevering consolidated balance sheet (Vitesse YE’24 net debt/Adj. EBITDA 0.73x) .
  • Strategic catalysts: disciplined M&A at $60s oil (“sweet spot”), broadened scope (including gas assets), and proprietary Luminis data platform enabling rapid diligence on large datasets .

What Went Well and What Went Wrong

What Went Well

  • Dividend-first strategy reaffirmed; management: “our product is our dividend… in a band of $55 to $85 oil, our dividend is solid” .
  • Lucero acquisition closed; immediately accretive to financial metrics, increased dividend, and added high-working-interest operated optionality (avg. WI ~75–80% across 60–65 producing wells) .
  • Hedging posture robust: ~53% of 2025 oil hedged at ~$71.16/bbl and initial gas collars added (15% of 2025 volumes, ~$3.73 floor/$4.88 ceiling), supporting cash flow predictability .

What Went Wrong

  • Q4 GAAP net loss ($5.1M) on higher G&A ($6.87/BoE) including $2.2M one-time Lucero costs; Adjusted Net Income remained positive ($6.1M) .
  • Q4 realized pricing weakened vs earlier 2024: oil before hedging $64.78/bbl; reserve PV-10 fell YoY driven by SEC price deck changes (WTI $70.36 vs $74.45; HH $1.20 vs $1.71) .
  • Some larger WI wells slipped to early 2025, dampening Q4 production (12,945 Boe/d; 68% oil) and timing of cash flow uptick .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Revenue incl. hedges ($USD Millions)$66.6 $59.7 $59.8
GAAP Net Income (Loss) ($USD Millions)$10.9 $17.4 $(5.1)
Adjusted Net Income ($USD Millions)$11.7 $7.6 $6.1
Adjusted EBITDA ($USD Millions)$43.1 $37.6 $37.0
Production (Boe/d)13,504 13,009 12,945
Oil % of Production70% 68% 68%
LOE ($/Boe)$9.99 $9.71 $10.00
G&A ($/Boe)$3.84 $4.37 $6.87 (excl. $2.2M one-time: $5.00)

EPS detail (where disclosed):

MetricQ2 2024Q3 2024Q4 2024
GAAP Diluted EPS ($)$0.27 $0.53 Not disclosed in press release

Additional KPIs:

  • Realized average oil price before hedging: $74.63 (Q2), $69.43 (Q3), $64.78 (Q4) per bbl .
  • Hedged oil price realized: $73.42 (Q2), $71.20 (Q3), $69.51 (Q4) per bbl .
  • YE 2024 reserves: 40.3 MMBoe (68% proved developed), PV-10 $586.6M; Standardized Measure $506.3M .

Segment breakdown: Not applicable (non-operator model) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual Production (Boe/d)FY 202413,000–14,000 13,000–13,500 Narrowed lower range; maintained production within prior envelope
Total Capital Expenditures ($M)FY 2024$130–$150 $110–$120 Lowered (−18% midpoint)
Annual Production (Boe/d)FY 202513,750–14,500 (prelim, Nov) 17,000–18,000 (post-Lucero) Raised significantly (+~35% YoY midpoint)
Oil % of ProductionFY 202568%–72% (prelim) 66%–70% Slightly lower range
Total Cash CapEx ($M)FY 2025$105–$120 (prelim) $130–$150 Raised
Q1 Production (Boe/d)Q1 2025N/A14,000–15,000 New item (post-close timing)
Dividend per ShareQ1 2025$0.525 (Q4 paid Dec 31) $0.5625 (paid Mar 31) Raised 7%

Liquidity update (context): Borrowing base increased to $315M; commitments to $250M post-Lucero .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Dividend philosophy/coverage“Dividend-first”; leverage kept <1x; stress tests at $50–$60; hedging to protect coverage “Our product is our dividend… band of $55–$85 oil, dividend is solid” Consistent, confidence reinforced with added hedges
M&A / Ground gameBetter economics at ~$70 oil; disciplined process; dry powder within conservative leverage $60s oil is “sweet spot” for acquisitions; seeing more “chunkier” deal flow; $20M acquisition placeholder in 2025 CapEx Opportunity set expanding; scope broadening incl. gas
Hedging strategyAdded oil hedges through 2025; ~43–57% coverage depending period ~53% 2025 oil at $71.16; initial gas collars (15% 2025) + basis swaps; early 2026 hedges established Increased breadth (gas) and duration
Technology / LuminisCore to underwriting; democratized across org Luminis expanded beyond Bakken (Haynesville, Mid-Con, Permian, DJ, Powder); can diligence thousands of wells in days Platform scale-up across basins
Infrastructure (Bakken)No major issues flagged; outlook stable Oil takeaway “in good shape”; need more gas processing/NGL takeaway; balancing ethane recovery Manageable constraints; NGL takeaway a watch item
Operator consolidationHelpful to economics; refracs opportunity growing Operators down from ~40 to ~30; top ~5 = ~75% of production Continued consolidation; concentrated production base

Management Commentary

  • Strategy and capital returns: “We continued to deliver on our mandate to return capital to shareholders… We expect [Lucero] to be immediately accretive to key financial metrics, bolstering the dividend” .
  • Production/operations: “Production for the year was just over 13,000 Boe/d… expect Q1 between 14,000 and 15,000 Boe/d with a significant increase in Q2, as Lucero was closed in March” .
  • Reserves and hedging: YE reserves PV-10 $586.6M; ~53% of 2025 oil hedged at $71.16/bbl; first-time gas collars added (15% 2025 volumes) .
  • Balance sheet and liquidity: “Borrowing base to $315M… commitments to $250M… Lucero had no borrowings and ~ $50M net cash” .

Selected quotes:

  • “Oil in the $60s is a sweet spot for us” .
  • “Our product is our dividend… in a band of $55 to $85 oil, our dividend is solid” .
  • “We do not have a CapEx budget… we will seek highly economic things when we can find them” .
  • “We scrape unbelievable amounts of data… analyze a deal that has thousands of wells literally within days” (on Luminis) .

Q&A Highlights

  • Acquisition posture: Management sees increased “chunkier” deal flow at $60s oil, will remain methodical; broadened lens including gas assets given the strip .
  • Dividend resilience: Focused on maintaining/growing dividend; dynamic CapEx and cost declines at lower oil support coverage; comfortable using balance sheet prudently .
  • Operated optionality: Lucero brings operated assets (~100% operated, avg. WI ~75–80%); plan to complete two DUCs in 2025 and evaluate drilling in 2026 .
  • Basin infrastructure: Oil takeaway solid; gas processing/NGL takeaway capacity is the bottleneck; balancing ethane recovery .
  • Consolidation: Operator count declined (~40 → ~30); ~5 operators represent ~75% of production—benefits to capital efficiency and economics .

Estimates Context

  • Wall Street consensus from S&P Global for Q4 2024 EPS and revenue was unavailable at the time of this analysis due to a data access limit. As a result, estimate comparisons could not be presented; we will update once S&P Global consensus is accessible.
  • Actual results: Revenue $59.8M; Adjusted EBITDA $37.0M; GAAP net loss $(5.1)M; Adjusted Net Income $6.1M .

Key Takeaways for Investors

  • Dividend durability improved: post-Lucero, hedges (~53% 2025 oil at ~$71.16) and broader acquisition pipeline underpin cash flow stability and dividend coverage .
  • Step-change in 2025 trajectory: Production raised to 17–18k Boe/d (+~35% YoY midpoint); CapEx $130–$150M with two operated DUCs and ~$20M acquisitions embedded .
  • Balance sheet flexibility: Borrowing base/commitments up; YE’24 net debt/Adj. EBITDA 0.73x, Lucero’s net cash further strengthens liquidity for selective M&A .
  • Near-term setup: Q1 2025 production 14–15k Boe/d on timing; bigger lift expected Q2 as Lucero integrates—watch volumes, LOE/BoE, and NGL takeaway constraints .
  • Cost discipline and dynamic CapEx are central to dividend-first model; management will flex spending to highest returns as pricing/AFEs evolve .
  • Technology edge: Luminis accelerates diligence and broadens basin scope, enabling faster, larger, and more selective deal execution .
  • Reserve/price sensitivity: PV-10 fell on SEC pricing changes; watch realized prices (oil differentials, NGLs) and hedge settlements to track cash generation .

Appendix: Additional Data Points

  • Q4 pricing: Oil before hedges $64.78/bbl; with hedges $69.51/bbl; gas $1.50/Mcf .
  • Q3 pricing: Oil before hedges $69.43/bbl; with hedges $71.20/bbl; gas $0.90/Mcf .
  • Q2 pricing: Oil before hedges $74.63/bbl; with hedges $73.42/bbl; gas $1.11/Mcf .
  • YE’24 debt: $117.0M; liquidity $121.0M (cash + availability) .
  • Q4 costs: LOE $11.9M ($10.00/BoE); G&A $8.2M ($6.87/BoE), including $2.2M one-time Lucero costs (ex-one-time $5.00/BoE) .