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Vitesse Inks a $222M Strategic Expansion Deal to Acquire Lucero Energy
VTSVitesse Energy(VTS) ZACKS·2024-12-27 13:10

Core Insights - Vitesse Energy, Inc. (VTS) has announced an all-stock transaction to acquire Lucero Energy for 222million,expectedtocloseinQ22025pendingapprovals[1]−TheacquisitionwillenhanceVTS′sproductioncapacitybyadding6.4Mboeperday,increasingtotalproductionto19.4Mboeperday[2]−Vitesseanticipatesimmediatebenefitsinearnings,cashflow,andnetassetvaluepost−acquisition,alongsideaplannedincreaseindividendsfrom222 million, expected to close in Q2 2025 pending approvals [1] - The acquisition will enhance VTS's production capacity by adding 6.4 Mboe per day, increasing total production to 19.4 Mboe per day [2] - Vitesse anticipates immediate benefits in earnings, cash flow, and net asset value post-acquisition, alongside a planned increase in dividends from 2.10 to 2.25pershare[7]AcquisitionDetails−ThedealinvolvesVitesseacquiringover65producingwellsfromLuceroEnergy[1]−ShareholdersofLucerowillreceive0.01239sharesofVitessecommonstockforeachsharetheyhold[6]−Theacquisitionisexpectedtocreateauniqueoil−weightedcompanywithassetsprimarilyintheWillistonBasin,knownforlowerproductiondeclinesandstrongcapitalefficiencies[12]FinancialImplications−Vitesseexpectstoachieveannualsynergiesofapproximately2.25 per share [7] Acquisition Details - The deal involves Vitesse acquiring over 65 producing wells from Lucero Energy [1] - Shareholders of Lucero will receive 0.01239 shares of Vitesse common stock for each share they hold [6] - The acquisition is expected to create a unique oil-weighted company with assets primarily in the Williston Basin, known for lower production declines and strong capital efficiencies [12] Financial Implications - Vitesse expects to achieve annual synergies of approximately 3 million in general and administrative costs following the acquisition [11] - Lucero's strong balance sheet, featuring $56 million in cash and no debt, aligns with Vitesse's strategy to reduce borrowings and enhance dividend payouts [7] Governance and Management - Two members from Lucero's board will join Vitesse's nine-member board to ensure continuity and collaboration, while Vitesse will maintain its current executive leadership [15]