Vitesse Energy's Q4 2024: Navigating Contradictions in Acquisition Strategy and Infrastructure Insights

These are the key contradictions discussed in Vitesse Energy's latest 2024Q4 earnings call, specifically including: Acquisition strategy and focus, and Infrastructure and Takeaway Capacity:



Dividend Increase and Acquisition Impact:
- Vitesse Energy increased its dividend by 7% to $2.25 per share on an annualized basis, following the acquisition of Lucero Energy Corp.
- The acquisition closed on March 8, 2024, and is expected to be accretive to key financial metrics, bolstering the dividend and strengthening the balance sheet.

Production and Reserve Growth:
- The company's production for the year was over 13,000 barrels of oil equivalent per day, with an expected increase to between 14,000 and 15,000 barrels in the first quarter of 2025 due to the Lucero acquisition.
- Proved reserves at year-end 2024 were 40.3 million barrels of oil equivalent, with a PV-10 value of $586.6 million. The pro forma PV-10 value, including Lucero's reserves, would have been over $800 million.

Capital Expenditure and Hedging Strategy:
- Vitesse Energy plans to allocate $130 million to $150 million for capital expenditures in 2025, with a focus on high-return projects.
- The company hedged 53% of its oil production at a weighted average price of $71.16 per barrel and 15% of its natural gas production at a weighted average floor of $3.73 and a ceiling of $4.88 per MMBtu.

Operational and Financial Position:
- Vitesse Energy ended 2024 with $117 million in total debt and a net debt to adjusted full-year EBITDA ratio of 0.7 times.
- The acquisition of Lucero further strengthened the balance sheet, with additional borrowing capacity and a net cash position of approximately $50 million.