Vitesse (VTS) Q3 2024 earnings summary

Executive summary

• Reported Q3 2024 net income of $17.4 million, adjusted net income of $7.6 million, and adjusted EBITDA of $37.6 million, driven by higher production and favorable derivative gains.

• Production averaged 13,009 BOE/day (68% oil), with total revenue up 6% year-over-year to $59.7 million including hedges.

• Paid a $0.525 per share dividend in Q3 and declared the same for Q4 2024, maintaining a fixed dividend yield of 9%.

• Cash flow from operations was $45.7 million, free cash flow reached $18.6 million, and $10 million of debt was repaid.

• Focused on non-operated working and mineral interests in the Bakken, with over 80% of assets undeveloped and a diversified asset base.

Financial highlights

• Q3 production averaged 13,009 BOE/day, with a 68% oil cut, keeping nine-month production within prior guidance.

• Lease operating expense was $11.6 million ($9.71/BOE), slightly down from Q2; G&A expense per BOE increased 16% to $4.37.

• Adjusted EBITDA was $37.6 million; adjusted net income was $7.6 million; GAAP net income was $17.4 million.

• Cash CapEx and acquisition costs were $17.2 million for Q3 and $87 million for the first nine months.

• Operating cash flow (net of working capital) was $35.1 million, covering dividend and CapEx, with excess used to pay down $10 million in debt.

Outlook and guidance

• 2024 CapEx guidance reduced by 18% to $105–$120 million, with production guidance revised to 13,000–13,500 BOE/day.

• 2025 outlook projects 7% production growth on 2% less CapEx at the midpoints, with annual production of 13,750–14,500 BOE/day and CapEx of $105–$120 million.

• Over 200 net estimated remaining locations and approximately 25 years of drilling inventory support long-term production.

• 54% of remaining 2024 oil production hedged above $78/bbl; 43% of 2025 production hedged at $73.21/bbl.

• Management expects sufficient liquidity from cash flow and credit facility to meet capital and dividend needs for the next twelve months.