Vitesse (VTS) 2024 Southwest IDEAS Conference summary

Strategic focus and business model

• Operates as a non-operated oil and gas company with small ownership stakes in over 7,000 wells, primarily in the Bakken Shale of North Dakota.

• 80% of assets are undeveloped, providing over 25 years of drilling opportunities and long-term asset duration.

• Investment decisions prioritize maintaining and growing a fixed quarterly dividend, currently at $0.525 per share, yielding about 7.5%.

• Flexibility in capital allocation allows for organic development, selective acquisitions, and share buybacks, though buybacks have been minimal.

• Maintains low leverage, targeting debt below 1x EBITDA to ensure flexibility in various price environments.

Operational and financial highlights

• Produces approximately 13,000 barrels of oil equivalent per day, with over 90% of revenue from oil.

• Present value of proved developed producing assets was $521 million at year-end, rising to $682 million including proved but undeveloped wells.

• Exposure to more than 30 operators, with Chord being the largest at 23% of acreage.

• Utilizes proprietary data system Luminus for efficient decision-making and underwriting, leveraging public and proprietary data.

• Hedges production about a year out to protect free cash flow and dividend stability.

Dividend policy and risk management

• Dividend growth is a key goal, but increases depend on the availability of high-return investments, which can be irregular.

• Can sustain the dividend down to $60 oil, with flexibility to cut back on development or borrow modestly during downturns.

• Maintains prudent risk management through low debt, diversified operator exposure, and active hedging.

• Strong investor alignment, with over 20% of shares held by former Jefferies top shareholders, two of whom are on the board.