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Vitesse Energy(VTS) - 2024 Q3 - Earnings Call Transcript
VTSVitesse Energy(VTS)2024-11-05 19:09
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Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of 37.6millionandadjustednetincomeof37.6 million and adjusted net income of 7.6 million for Q3 2024, while GAAP net income was 17.4million[15]−CashCapExandacquisitioncoststotaled17.4 million [15] - Cash CapEx and acquisition costs totaled 17.2 million for the quarter, with a year-to-date total of 87million,leadingtoarevisedannualCapExguidanceof87 million, leading to a revised annual CapEx guidance of 110 million to 120million[16]−Operatingcashflownetofworkingcapitalchangeswas120 million [16] - Operating cash flow net of working capital changes was 35.1 million, which covered the dividend and CapEx, allowing for a 10milliondebtreduction[17]BusinessLineDataandKeyMetricsChanges−Productionaveraged13,009barrelsofoilequivalent(BOE)perdayinQ32024,withayear−to−dateproductionof13,023BOEperday[12]−Thecompanyhad20.2netwellsinitsdevelopmentpipeline,with11.3wellsbeingdrilledandcompletedasofSeptember30[13]MarketDataandKeyMetricsChanges−Thecompanyhedged5410 million debt reduction [17] Business Line Data and Key Metrics Changes - Production averaged 13,009 barrels of oil equivalent (BOE) per day in Q3 2024, with a year-to-date production of 13,023 BOE per day [12] - The company had 20.2 net wells in its development pipeline, with 11.3 wells being drilled and completed as of September 30 [13] Market Data and Key Metrics Changes - The company hedged 54% of its remaining 2024 oil production at above 78 per barrel and 43% of its 2025 production at above 73perbarrel[14]CompanyStrategyandDevelopmentDirection−Thecompanycontinuesitsreturnofcapitalstrategy,havingpaidadividendof73 per barrel [14] Company Strategy and Development Direction - The company continues its return of capital strategy, having paid a dividend of 0.525 per share in September and declaring another for December [8] - The company reduced CapEx by 18% while maintaining production guidance, indicating a focus on capital efficiency [10] - The company is opportunistic in its capital allocation, flexibly adjusting CapEx to meet return hurdles [9] Management's Comments on Operating Environment and Future Outlook - Management noted that lower oil prices create more attractive near-term opportunities for acquisitions, while also emphasizing the high return from organic drilling [26] - The company expects a 7% production growth in 2025 with a CapEx of 105millionto105 million to 120 million [19] Other Important Information - The company amended its credit facility, extending the maturity date and reaffirming the borrowing base at 245million,whilereducingelectedcommitmentsto245 million, while reducing elected commitments to 235 million [18] Q&A Session Summary Question: CapEx dynamics and activity levels - Management explained that lower CapEx in Q3 was due to the timing of wells coming online, which were pushed to Q4 and early 2025 [22] Question: Organic CapEx visibility and trends - Management indicated that AFEs received in 2024 are nearly double those in 2023, allowing for more capital allocation to higher return opportunities [24] Question: Impact of wildfires in North Dakota - Management confirmed that wildfires did not significantly impact production volumes, attributing any production adjustments to well timing [29] Question: Trends in costs embedded in AFEs - Management noted that AFEs remained consistent, with expectations for drilling costs to decrease due to lower oil prices [30]