Vitesse Energy, Inc. Q3 FY2024 earnings call

• Return of capital strategy continued: Paid $0.525 per share dividend in September and declared another for December. Has strict return hurdle for capital allocation, can flex CapEx to meet hurdles. - Production: Third quarter average 13,009 BOE/day, year-to-date 13,023 BOE/day (low end of prior guidance), but CapEx through September below guidance. Development pipeline had 20.2 net wells as of September 30, including 11.3 being drilled/completed, to start producing late 4th quarter and early 2025. - Organic acreage: Acceleration of development to continue in 2025, highest return investment opportunity. - Hedging: Continue to add oil hedges through end of 2025; 54% of 2024 remaining production hedged above $78/barrel at midpoint of revised guidance, 43% of 2025 production hedged above $73/barrel at midpoint of preliminary outlook. - Guidance revision: Revised 2024 guidance reduced CapEx by 18% while keeping production guidance in prior range; 2025 expects 7% production growth on 2% less CapEx at midpoint.

In the third quarter, Vitesse's production averaged 13,009 barrels of oil equivalent per day, with year-to-date production at 13,023 barrels of oil equivalent per day over the first nine months. The production had a 68% oil cut. Lease operating expense for the quarter was $11.6 million, $9.71 per BOE, a slight decrease from the second quarter. Adjusted EBITDA for the quarter was $37.6 million, adjusted net income was $7.6 million, and GAAP net income was $17.4 million. Cash CapEx and acquisition costs totaled $17.2 million for the quarter and $87 million for the first nine months, projected to be below prior guidance at $110 million to $120 million annually while keeping production guidance within the prior range. For 2025, preliminary outlook has annual production ranging from 13,750 to 14,500 BOE per day (7% increase at midpoint from 2024 revised guidance) and total CapEx of $105 million to $120 million.

• Revised 2024 guidance: Reduced CapEx from $130 million to $150 million to $110 million to $120 million while keeping production guidance within prior range. - 2025 preliminary outlook: Annual production ranges 13,750 - 14,500 BOE/day (7% increase at midpoint from 2024 revised guidance), total CapEx $105 million to $120 million.

• Forward-looking statements subject to risks and uncertainties beyond control that could cause actual results to differ from expectations, including matters described in earnings release and periodic filings.

Q: Jeff Grampp asked about CapEx, organic CapEx, and acquisitions.

A: CapEx third quarter low due to acquisition wells pushed to 4th quarter and early 2025; organic acreage AFEs close to double 2023, more drilling; near-term opportunities attractive at $60-70 oil but selective as organic return higher; selective with near-term and large deals.

Q: Noel Parks asked about wildfires in North Dakota.

A: Jimmy Henderson said wildfires didn't impact production volumes much.

Q: Noel Parks asked about trends in AFEs costs.

A: Brian Cree said AFEs consistent between 2nd and 3rd quarter, expect drilling costs to come down with lower oil prices