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New words:
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Removed:
agreeing, allocable, Amegy, anticipation, appointed, automatically, back, banking, beginning, Black, bore, borne, California, call, claim, closed, closure, combination, commercial, competition, computation, conduct, conform, constant, continued, curtailing, de, decreasing, deduction, deposit, deposited, depressed, detail, disease, documentation, earliest, effected, eligible, employment, EPP, EPU, establishment, eurodollar, executed, external, falling, FDIC, forgiving, forma, founding, fuel, GT, half, head, heating, highly, historic, Innovation, Inseparable, instance, institution, interpolated, invited, involving, lead, leasehold, leverage, LIBOR, life, loan, manager, measurement, methodology, nonrecourse, nontaxable, nonvested, nonvoting, offered, Oklahoma, opportunity, order, originally, origination, outlined, passed, personally, physical, practice, prescribed, principle, private, pro, Protection, quickly, quotient, rata, ratable, ratify, reached, receipt, receiver, receivership, reclassification, reimbursed, remeasured, repaid, Republic, request, responded, retrospective, Russian, satisfaction, scope, security, semiannual, settle, shutting, Signature, Silicon, Silvergate, Similarly, SVB, swept, thereunder, tiered, transactional, transition, treated, undrawn, uninsured, unitholder, Valley, vest, vote, voting, waterfall
Financial report summary
?Risks
- An active, liquid trading market for our common stock may not continue, which may limit your ability to sell your shares.
- Vitesse is an emerging growth company and the information we provide stockholders may be different from information provided by other public companies, which may result in a less active trading market for our common stock and higher volatility in our stock price.
- Although we expect to continue to pay dividends, we cannot provide assurance that we will pay dividends on our common stock, and our indebtedness may limit our ability to pay dividends on our common stock.
- Certain provisions in our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and Delaware law may discourage takeovers.
- Your percentage ownership in Vitesse may be diluted in the future.
- Our Amended and Restated Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
- Oil and natural gas prices are volatile. Extended declines in oil and natural gas prices have adversely affected, and could in the future adversely affect, our business, financial position, results of operations and cash flow.
- Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect our financial condition or results of operations.
- Due to previous declines in oil and natural gas prices, we have in the past taken writedowns of our oil and natural gas properties. We may be required to record further writedowns of our oil and natural gas properties in the future.
- We have incurred net losses in the past, in part due to fluctuations in oil and gas prices, and we may incur such losses again in the future.
- Our estimated proved reserves are based on many assumptions that may prove to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our total reserves.
- Our future success depends on our ability to replace reserves.
- The present value of future net cash flows from our proved reserves is not necessarily the same as the current market value of our estimated proved reserves.
- Our business depends on transportation and processing facilities and other assets that are owned by third parties.
- Seasonal weather conditions, extreme climatic events, and shifts in meteorological conditions, which may be impacted by climate change, may adversely affect our operators’ ability to conduct drilling and completion activities and to sell oil and natural gas for periods of time or affect demand for oil and gas, in some of the areas where our properties are located.
- As a non-operator, the successful development and operation of our assets relies extensively on third parties, which could have an adverse effect on our financial condition and results of operations.
- The inability of one or more of our operators to meet their financial obligations to us may adversely affect our financial results.
- We could experience periods of higher costs as activity levels fluctuate or if oil and natural gas prices rise. These increases could reduce our profitability, cash flow, and ability to complete development activities as planned.
- The development of our proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we anticipate. Therefore, these undeveloped reserves may not be ultimately developed or produced.
- Our acquisition strategy will subject us to certain risks associated with the inherent uncertainty in evaluating properties for which we have limited information.
- Our business plan requires the expenditure of significant capital, which we may be unable to obtain on favorable terms or at all.
- We may be unable to successfully integrate any assets we may acquire in the future into our business or achieve the anticipated benefits of such acquisitions.
- The majority of our producing properties are located in the Williston Basin, making us vulnerable to risks associated with operating in one major geographic area.
- The loss of any member of our management team, upon whose knowledge, relationships with industry participants, leadership and technical expertise we rely, could diminish our ability to conduct our operations and harm our ability to execute our business plan.
- Deficiencies of title to our leased interests could significantly affect our financial condition.
- We conduct business in a highly competitive industry.
- Global pandemics have previously, may continue to, and may in the future adversely impact our financial condition and results of operations.
- The ongoing military conflicts in Ukraine and the Middle East have caused unstable market and economic conditions and are expected to have additional global consequences. Our business, financial condition, and results of operations may be materially adversely affected by the negative global and economic impact resulting from such military conflicts or any other geopolitical tensions.
- Inflation could adversely impact our ability to control our costs, including the operating expenses and capital costs of our operators.
- Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.
- Our derivatives activities could adversely affect our profitability, cash flow, results of operations and financial condition.
- Asset retirement costs are difficult to predict and may be substantial. Unplanned costs could divert resources from other projects.
- We depend on computer and telecommunications systems, and failures in our systems or cybersecurity threats, attacks or other disruptions could significantly disrupt our business operations.
- Decarbonization measures and related governmental initiatives, technological advances, increased competitiveness of alternative energy sources and negative shift in market perception towards the oil and natural gas industry could reduce demand for oil and natural gas.
- Increased attention to ESG matters, including climate change, may impact our business and access to capital.
- Any significant reduction in the borrowing base under our Revolving Credit Facility may negatively impact our liquidity and could adversely affect our business and financial results.
- Our Revolving Credit Facility and other agreements governing indebtedness may contain operating and financial restrictions that may restrict our business and financing activities.
- We may not be able to generate enough cash flow to meet our debt obligations or to pay dividends to our stockholders.
- Our ability to pay dividends to our stockholders is restricted by requirements under our Revolving Credit Facility.
- Variable rate indebtedness could subject us to interest rate risk, which could cause our debt service obligations to increase significantly.
- We may be adversely affected by developments in the SOFR market, changes in the methods by which SOFR is determined or the use of alternative reference rates.
- Restrictions on our ability to acquire federal leases and more stringent regulations affecting our operators’ exploration and production activities on federal lands may adversely impact our business.
- Our business involves the selling and shipping of oil by rail, which involves risks of derailment, accidents and liabilities associated with cleanup and damages, as well as potential regulatory changes that may adversely impact our business, financial condition or results of operations.
- Our derivative activities expose us to potential regulatory risks.
- Legislative and regulatory developments could have an adverse effect on our ability to use derivative instruments to reduce the effect of volatile oil and natural gas price, interest rate and other risks associated with our business.
- Our business is subject to complex federal, state, and local laws, as well as other laws and regulations that could adversely affect the cost, manner or feasibility of doing business.
- Failure to comply with federal, state and local environmental laws and regulations could result in substantial penalties and adversely affect our business.
- Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.
- The adoption of climate change legislation or regulations restricting emissions of carbon dioxide, methane, and other greenhouse gases could result in increased operating costs and reduced demand for the oil and natural gas we produce.
- Regulatory requirements to reduce gas flaring and to further restrict emissions could have an adverse effect on our operations.
- If the Distribution does not qualify as a transaction that is tax-free for U.S. federal income tax purposes, Jefferies and holders of Jefferies common stock who received shares of our common stock in connection with the Spin-Off could be subject to significant tax liability.
- We agreed to numerous restrictions to preserve the non-recognition treatment of the Distribution, which may reduce our strategic and operating flexibility.
- We could have an indemnification obligation to Jefferies in certain circumstances if the Distribution were determined not to qualify for tax-free treatment for U.S. federal tax purposes, or in certain other circumstances, which could materially adversely affect our business, financial condition and results of operations.
- Taxable gain or loss on the sale of our common stock could be more or less than expected.
- The IRS Forms 1099-DIV that our stockholders receive from their brokers may over-report dividend income with respect to our common stock for U.S. federal income tax purposes, which may result in a stockholder’s overpayment of tax. In addition, failure to report dividend income in a manner consistent with the IRS Forms 1099-DIV may cause the IRS to assert audit adjustments to a stockholder’s U.S. federal income tax return. For non-U.S. holders of our common stock, brokers or other withholding agents may overwithhold taxes from dividends paid, in which case a stockholder generally would have to timely file a U.S. tax return or an appropriate claim for refund to claim a refund of the overwithheld taxes.
- Some stockholders might be deemed to have received a taxable distribution as a result of our repurchase of our own stock.
Management Discussion
- Oil and Natural Gas Revenue and Volumes. Oil and natural gas revenue increased to $61.2 million for the three months ended March 31, 2024 from $58.0 million for the three months ended March 31, 2023. The increase in oil and natural gas revenue was due to a 10% increase in production volumes, driven by acquisition and development activity, which was partially offset by a 4% decrease in the average realized prices per Boe before hedging for the three months ended March 31, 2024. The increase in production volumes increased oil and natural gas revenue by approximately $5.6 million, while the decrease in average realized prices per Boe before hedging decreased oil and natural gas revenue by approximately $2.4 million.