VTLE - Earnings call transcript Q1 2024

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Operator

Good day, ladies and gentlemen. And welcome to Vital Energy's First Quarter 2024 Earnings Conference Call. My name is John and I will be your conference operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.It is now my pleasure to introduce to you Mr. Ron Hagood, Vice President of Investor Relations for the Company. ahead. go Please

Ron Hagood

good and Thank morning. you

President Joining me members Executive Officer; of President Officer; Vice Chief our management Jason Bryan are Katie well Lemmerman, additional Senior Financial Pigott, Officer; Chief Executive and and Operating today Vice as Chief and team. Hill, as President

Securities statements, of by forecasts Reform During are and Litigation These forward-looking intended today's the the our describing to making be those call, covered safe assumptions, provisions harbor beliefs, Private we'll be XXXX. of statements. including goals, Act expectations,

actual press may a GAAP to website can addition, accessed non-GAAP of beyond Jason Officer. in the press Our www.vitalenergy.com.I'll release results forward-looking to differ at Pigott, statements Reconciliations and Executive control.In variety which financial from presentation call and for The President on be release over measures our we'll our these reference we turn measures. afternoon. now the many issued be are making of Chief included to and reasons, financial are presentation yesterday

Mikell Pigott

Good morning us today. thank joining you and for

value First as demonstrating cash operational acquired we free production, adjusted delivered exceeded and create expectations flow across solid results to additional ability our acreage. leasehold, execution were our achieved again record quarter on outstanding

optimize XXXX we acquisitions you costs If our integrate lower are operations working capital, enhance and to productivity. to and operational reduce

our Western of the XX are our recently encouraging of costs of on success first publicly reduce with the this paired continue in recognized inventory and Teller results optimize the XXXX.Notably, leases. breakeven we to concept the feet that reducing I'd on length acquired. multiple in More efficiencies. our wells a We investor production wells In are X wells, focused wells and extend drilled as we that pursuing acquisitions. accomplishing strong we're designed schedule we This our will highlight To X from our barrel.As wells, we which lateral a by creating these our are the position. we XX,XXX-foot inventory. Glasscock focus completed as averaging Vitals Forge quarter.Next, completion horizon breakeven. in this Wolfcamp the observing brought modern assets couple are the not to per what start, to average X both much productivity are instead company, These in highly the we $XXX D to we not we confidence have The results of the Highlighted Niedermeyer leases XX-well test will of acquisition significantly, significant that us reduce outperformance a of Basin. the assign and $XX wells inventory, to on million Upton area expect we techniques County, combined Teller breakeven saving capital offsetting public and our operational expand the improved already from markedly value.As to Southern and The to breakevens horseshoe in gains lateral City. reduce and on of versus of paths Tall included acquired our a XX,XXX the target C horseshoe development of underwrote stated and ways from apply at contributor Wolfcamp smaller the time X of our package The properties of capital for wells and online XXXX and XX did C on lateral company, extend wells. very wells short this The are additional high-intensity are to Teller and from are our deck, inventory. outperforming Energy's our package Midland we first are in horizons that shaped use initial are in design the innovative like the examples short value a We're gave wells wells wells.Third, industry in wells flowback. with was significant ahead production of and entire just is weeks currently of this. to wells Delaware

We We improving are horizons, average wide new increased and extending high-intensity XXXX X productivity base by XX% well lateral past much completions, oil up the since by in operations comes acquiring acquired we and improving of nearly from assets years. testing productivity and new technologies, production of assets, proving array a pumping new so lengths, implementing more. XX% our our

consistent by and now generating value to for will structure improving We quality free in also financial operational and depth inventory, turn create have update. been flow.I over building Katie call our the our of cash an strategy while to

Katie Hill

Thank you, Jason.

package schedule.At of area. developed producing peak package, expectations schedule. our First utilized began are did quarter spanned largest producing production exceeded improvement Western all [Technical primarily Basin. an XX oil X Difficulty] months, Glasscock gross the this days of ever in driven efficiency package XX-well package executing with horizons. our from XX% incredible completions mid-April, X our wells is production has development by was This over achieved a DSU consisting the currently outperformance ahead full Delaware previous operations laterals in the team XX targeting oil a these the a by expectations, Vital X XX%. and X-well ahead development, crews Western of In package of in safely the and package and XX,XXX-foot the wells Glasscock beating job

properties, we million Wolfcamp managing enhancing Since operators. cost to significantly productivity They of acquisition inventory quality, are our current unlock X drilled acquiring enhance does leveraging Delaware to spacing we When XXXX, last assets are X the a in now than industry the by approximately include not operational efficiencies strategy, Delaware quarter value or footprint.The optimized $XX.X extend acquired design. positive outcomes by due completed and We well well capital in the productivity from lateral marked and reduced assets due The we X our here Delaware promising. our enhancing appraisal wells one our unit improving results complete early compared we lowering wells in within C, fully public These the mid-XXXX. $XX well to in we've are C by had first our and Since a first quarter completion service X-well and could is Wolfcamp life package initial appraisal subsequently inventory particularly completed inventory operationally decreasing online.Between increased to Teller the completed leveraging million packages, our $XX completion our with comparable we are the both productivity prior barrel. development and the design the $X that horseshoe administratively. as adjacent Southern November. design, organic existing Of and costs Southern acreage, cost lower midyear test. integrated, XX% encouraged higher our X XX,XXX-foot and of Forge assets wells to by scale.Moreover, efficiency, performance to brought a drilled acquired on Delaware the was of breakevens packages development its

$XX extended in stated these of is total position lateral the currently and efficient, horseshoe successfully wells XX,XXX are what have intensive to are horseshoe reducing converted to transferred averaging X wells capitally converts close barrel. per feet and Upton would X,XXX-foot our completing by less and have drilled XX expected County. locations extremely laterals barrel. inventory to to the have on long length been economics $XX X into This of laterals, the our breakeven designs We Midland well.We compelling. per Development XX well X lateral a breakevens reducing of extended more average impact package an Preliminary laterals

of year several XX,XXX day inventory We averaging position. production per identified the completed we new oil Delaware rates our our water improper roughly chemical ahead we this These since enhancement schedule, producing the higher the the X with operating wells inefficiencies costs midyear. of is exceeded Thanks work delivered schedule in program efficiency in design of usage bringing and targeting. production on XX% XX first to and planned along driven costs the carried maintaining quarter, wells over guidance outsized we barrels oil by accelerated online new capital the BOE half close, the meeting already a area integration expect and preceding our our XXX,XXX In from also day.We've and of higher XX,XXX improve expectations of first per in our caused to year, operators of addition anticipate to operating spotted full of barrels by leasehold. plan.In QX, assets oil per In XXXX of while limited well production opportunities impacts day. XX,XXX to

down produce oil and accounted remainder assets with total year, reduction consolidated and XXX annual reduction shared which shut-in speed second we've coming ranges. our were Permanent production in first are the that centralized gathering LOE quarter wells result the net surface the has footprint in per acquisition in wells further LOE to and new barrels day throughout in will strength drive results per profitability the the shutting and starting and unit the operating new been for which wells a able to meeting the system treating including online.We're temporarily chemical second been both solutions leveraging implemented will of year. half for quarter.The of effectiveness the in integrate quarter second requirements, are of of reaffirmed We strategy. not encouraged equipment the volume using in optimization our This will speak infrastructure our program further to by our be in forecasted the that to and the water expanding

quality flow available call operating opportunities free over to now to expenses, of and enhance effectiveness of generation.I'll improve continuing Bryan. We further focus to cash are both quantity inventory, turn increase on the

Bryan Lemmerman

the we notes, X.X%. process cash we our these $X.XX save of notes capital and interest semiannual $XXX and in term X.XX% to delivered we volatility, the to results, higher timing-related RBL, now unchanged reduce $X.XX we due issued proceeds from and from our In our program first Katie. to $XXX and redeem deliver be just $XX Utilized additional you, of with quarter, investments. ensure million of capital of commitment of at an largely million Consistently generating free XXXX.Additionally, Lower guidance adjusted operating redeem commodity year moves flow will $XXX first $XXX XXXX production delivering another the flows reduce continue to until used million.We to increased due driven by Thank generate is regular cash banks no These full than returns and and of activities hedging financial our lower our drilling an quarter and cash expected million, solid XX.XXX% was interest as leverage on added elected XXXX. the to have Due price that reduce million X transactions around issued to million rate just expense.In subsequently months integral part can the further focused our strong bank prior. $XX for facility. in executing reduce fully X debt We in ratio.Hedging on first and of this we of to interest the XX% strengthening part higher progress March, notes our million demand commitment. issuance redeemed $XXX to sheet. bond our an debt notes made portion quarter, our billion senior to balance billion rate to under X.XXX% at for a is we and at front on annually great us extended maturities strong redetermination the our this compared opportunistic unsecured maturities market

$XX XX% lower per we our produces ratio EBITDAX hedged debt-to-consolidated year, X.XXx. flow insulating are at a from cash barrel. the profile, around is anticipated associated oil with on us currently very For This risk consistent prices.Net production

redemption new and premium Our slightly debt XXXX due XXXX notes, to of to and of their a the at issuance value. costs ratio notes our as rose result redeeming debt a and par issuance

down paying integration expense efficiency scale free since successful of the strengthen generation. acquisitions are reducing We focused and flow our have line capital improved structure from build mid-XXXX.Capital driving our open that benefits significantly sustainable debt, We're acquisitions accretive interest targeting business.Operator, for questions. smart please and cash on our

Operator

of line [Operator Truist the Securities. Dingmann Instructions] The from from first question comes Neal

Neal Dingmann

question quarter. latest or on my X presentation. Jason, you Nice first the for Slide on Katie, maybe

slide that talk you about optimized on like I development. the Specifically, where

versus, what is effective these design, what you improved seen changed? and highlight completion just about now that you spacing, now most spacing results. wondering, completion all year? You Delaware has I'm that have last even that type could in the Midland of let's say, how things both consider talk -- the the And

Katie Hill

Katie. excited about. is This Neil. There's a we're pretty morning, few Good that this pieces of

And of and are Delaware on continuing strong so that the promising be the plan far some the you we've from certainly we've piece I the but influence that to the think some and we'll results up-spacing see results, the as already. first I we down by across will that really between development XXXX But drive results that's area profitability X about of first able and to the the is a the XX,XXX-foot impact also supported. together think that lateral previous effectively Delaware to operating.So to design productivity of of Delaware really the months compared in the well story to reduced completion in well really that X XXXX but we inventory, XX% other a test able having can plans of is see well, acreage. the that up-spaced been capital costs cost in for

Neal Dingmann

to great -- that's go ahead, hear. Jason. No, Then

Mikell Pigott

you think question. your Midland had I in also

think working quarter is the just what right I this co-development. quarter. both for just and -- zones, part we're these through of new last Midland, talked we're about now We've

As rack the wine There's the for us new mentioned in that see in is we underwritten. a for there, we a commentary development. zone Glasscock new test wasn't have that Katie that her Western

think through the zones these that co-develop working have. when about how we So we're do new we're really with existing we finding that inventory we Midland,

to that And optimize so that's something continue into to we're 'XX. going

Neal Dingmann

those that at bake into additional inventory you some Will the zones? point,

Mikell Pigott

and look zones some C really Again, new one but with of intensity are about test then production. It's just so the the Western quarter zones. -- talked of very and outperformance and Glasscock of they're package. have they they our this promising higher we that weeks mean those good, the first X kind I contributors Yes. of C design, to last very,

Neal Dingmann

continue very show our lastly Will of especially -- year. seen debt you've acquisitions just that thoughts focus try slip for in are allocation, you estimates about that almost with in be that or free then continues ramp to Bryan. Maybe what there entire capital? to Or nicely, there? And the were repayment? talk you we do cash second flow half Okay. could the capital Jason, mean, I you on Well, to this would to already

Bryan Lemmerman

paydown. Sure. Bryan. is towards any it I acquisition say, This would go absent debt opportunities, will definitely

consolidation there coming first of packages the front, half half year, in On the operators, the a it's cetera, et been slow the year. back M&A numerous of but are from operators,

our packages we've we'll accretive we that -- any stuff looking to continuing portfolio absence definitely our into looking those So and eyes But things. somewhat the got not that, in they're to fitting that be and see upon at will and of of it.So down we're how out, what be business. focused those whether dependent come But be we'll pay our debt. or at on

Mikell Pigott

us the completion and We're doing impacts we for the now, what We're the these we're team reducing they're capital quarter trying techniques. acquisitions in -- is Katie out of done new and we've are this wells, past more -- highlight to new of We're getting costs. finding trying what zones. to what the are

of that few And come great a we so market deal a in things find to several that months. our is that we works portfolio capital and the and next of us kind for still see expect the fits in think use when

Neal Dingmann

that guys. Look forward to

Operator

the from of line from JPMorgan. comes The question next Zach Parham

Zachary Parham

talk wells? opportunity you about You set more $XX could breakeven on on those barrel. a the being the First, talked per by bit reduced horseshoe little wells about the

you trying those about plans slotting should think into about how those to future development the those in how Going Do forward? inventory we developing or think get future? think going future do Just your plans? you about wells moved forward,

Kyle Coldiron

the This for is Coldiron. Kyle thanks question. Zach,

to most we wells toolbox that case, you So I to efficient into shape where $XX incredible. is our drives ultimately, capital is the acreage In you the a barrel The And is available before. U-turn as capital looking of been we deploy us this do X,XXX-foot that [ really a wasn't XX,XXX-foot about in can think really not ton to with breakeven allows this this the horseshoe tool already ] by another at the develop.Our think as our laterals, opportunity drill this in dropping program. development that laterals We unlock to drilling perhaps forward. year wells toolbox tool mentioned, Basin. early this in strategically team design us backend see could these going and this ability as is next way efficiency which we're towards laterals year ultimately or planning on have horseshoe almost of the Delaware that as have

put to it's that going we're So work away. to something right

Mikell Pigott

we've got to economics talk the the inventory improved on. that wells ability We too, inventory say have move technology that this our or that will the I'd in our have into we about move in wells now these don't aren't future.

a then wells on both before. inventory it's win So or haven't counted breakeven creating inventory that for reducing we new in cost our and

Zachary Parham

following of And comments. maybe Jason, earlier up some on your then,

you've the know about does Wolfcamp us drilled Wolfcamp on impact success what's maybe potential much remind on to booked inventory but for early in I be the you successful talked on, those inventory? latest that the D this wells if And spacing and C that versus of could to what Wolfcamp inventory you assumed you've prove the how the Glasscock early already Glasscock pad? and that You C it's pad,

Kyle Coldiron

this Kyle Zach, again. is Yes,

Glasscock over it in to your could locations answer there our the on up we So unlock acreage. Western to Wolfcamp XX think C,

on. Wolfcamp section, the this which X what we're our but just us. at wells there encouraged far, flowback into we what the see locations casing few per drilled So D again, period.On both book number wells, encouraging. only It's far, in C is we're it's so them so by obviously free we during D, Like a for on said, we Jason a been did very a a early ultimately big pressure results for our add The lot weeks of Wolfcamp before put of and at. weeks X.X ESP. have fact, These a had package XX-well start float and drill-out we

pressure, hole strong results We're bottom strong with see. far. So encouraged so we what

Operator

The next from Whitfield from line Stifel. of the comes Derrick question

Derrick Whitfield

and And congrats update. quarter strong on operational a

Mikell Pigott

Derrick. Thanks,

Derrick Whitfield

your package clearly and as It's over roll to actions in you cut X, oil the to indicates. to on accounted Could expected led that Page Glasscock. QX production response speak the the the expected in chart faster than on the shown XX-well in for guide? you've Leaning but how inflecting higher Western

Katie Hill

I of hit think there's a couple to here pieces on.

strong before better both first of the at good was as that really of online all and outperformance. We the QX the midyear day helped largest really we C get the the on to across package We the than last then really developed were year. planned supported excited team's at the Kyle's performance drilling well is pieces and there's X year disciplines and and being of package support than planned D the really sooner oil plan.So teams, earlier. really a than faster So getting plan. This to or to started oil able wells earlier, sooner execution cutting cycle couple speak there's point were by a And phases. QX by -- to cut then to the last across deliver ability Vital team that time.So this and is handover on all between completing we've

yet package to get of wells want to just support the this start the soon.There's D C we turn we to in. how It's not that enough tests are before better until really the and full In start data over. that build terms re-forecasting we too that influences with year,

in key the part the volume that is, has think it later accelerated year. I from

year a dailies. be so first the to now And from our weighting on the half of volume a standpoint expect heavier we

Derrick Whitfield

elaborate And you -- like implement Katie, you, staying LOE the on just Terrific. higher LOE lower drive lower? on near- medium-term perhaps your to with and would expenses. that you the Could objectives to

Katie Hill

bet. You

and but in some and we're were water had the we're in trying reflection getting make shut team got that QX, cost bought efficiencies. the operating so costs that profitable lineaments that a water development have over Delaware.So progress to the the opportunity an not we're year our subset So making would tackling drilled wells on and where is on so there's last Those from some so sure chemical one us integrated and of production to saltwater good now that two quickly turned seem around well QX understand we is over in think, I LOE that far some wells. producing we have of and be the is to Those from think a set, of oil, disposal QX early costs really time. these increasing around in in small in The cut with and LOE there's area.I only assets effectively came that flat that late for producing we've subsurface a plan, across control side. something managing assets declining

were For I'm the in assets really we're previously that we opportunity that infrastructure wasn't The treating by area continuing a there the the highest us really or chemicals, in standpoint.So this cost consolidation these year. I operated, front it? we onto reduce focus have shared everything better and And from that [indiscernible] Delaware, sales. support much leverage with think how these to other our efficiency costs of to do way chemical more then with do we assets are get the to and how do associated fault treat our right how improve of effectively the each program, encouraged on we scale

Operator

of from comes KeyBanc question Rezvan from next The Capital the line Tim Markets.

Timothy Rezvan

with in place a don't tech of that's if Jason, Katie optimize work the takes I assets? I all for to acquired and stand know ask update you sort on I where part critical production. time -- get production proposition. optimization to of provide it know on some to the value the but know an wanted recently you can or base I more it's

a So now you have full just that any that color quarter under on belt? your

Katie Hill

tools optimization in the We're our continuing evolve base Midland. to

the of frame this starting lot technical into Henry from Southern been of to the and wells picked our the of really think on I acreage and a that up it expertise great into and would we've that lot completed So operations. Delaware.At that sort we're Delaware. They're Delaware support of we team. Midland over Driftwood as a I ESP They've expanded a Midland stage, to leading as focused the been of the the over transition has some expansion there's

And would so taking we're group.We I of technical think knowledge a some spot of take in and that any that fully of before. AI That side. hardware be advantage the learning of our really machine support complete the not we the able tools to are that from we've ability effectively will 'XX across talked to lot deployed the of about a yet Delaware the and most

leveraging there's So in a quite toolkit. our optimization still of I bit base think opportunity

Timothy Rezvan

Okay. over couple have strong peers That's ] And results. of Basin last as some Dean great. the reporting follow-up, really That's just then a years [ great. Midland been

to in kind fully kind You've Just that's you Where something of seen on look Martin on them rest inventory? your the County radar your and is of what your interval. are that of North. develop is farther as curious Midland thoughts that --

Kyle Coldiron

is This again. Kyle

Wolfcamp acreage So us Howard Spraberry in interval the Dean a we great the essentially developed for A. Lower and our sits has there, Dean up County between been up as the

huge the Dean the A there the Howard outperformance where or was Lower know that Dean saw were to Dean County in between the in target and we would a contributor assets. the boundaries we explicitly essentially where so Dean we would Wolfcamp hit other And and times the the times Spraberry.We

Western that as it where and that can add was us. zones of other full and our you've South we available part We've it Delaware. of a Howard took are the a unlocking acquisitions the parts and inventory advantage for demonstrated model. we upside And seen County we of on in and other value So purchased, to. basin, test Upton on and in and we It's to always that appraise looking then Glasscock acquisition

Operator

from the of line question Wells Hanwen Fargo. The next Chang comes from

Hanwen Chang

and I breakevens. potential on there Midland any inventory Are that the could benefit want areas to or in the the the Delaware upside zones follow wells or to development Basin from specific up your producing and horseshoe the lowering it? disproportionately of Basin

Mikell Pigott

across the because look the greater we opportunity see just size footprint our of our Midland to Basin at the of opportunity probably we When a and side, X/X of assets, the weighting set set in a footprint on demonstrated having done the can side, opportunity what now really for about us the our we're that Midland side the the opportunity on which Midland excited and really is Delaware that side. But portfolio. this unlocks we across have be terms

Kyle Coldiron

Yes, don't a set acreage because basin trapped, but footprint as just where I a so either development it's that on weighted got think of you've much side, or your weighted wells zone is and to could be again that an compared technology us kind longer opportunity testing looking lot a this we're of like for bolt-ons and as of as our things we're to laterals and do testing peers.

Hanwen Chang

XXXX? outlook in the differentials for second Could you gas of half your some colors on price provide

Mikell Pigott

from standpoint, in the definitely we're a gas basin. at strengthening looking a price Yes, specifically

a to the expecting in day that's another Express with some to capacity quarter, the later in Pipeline are We The the to add Matterhorn year additional come going the basin. Bcf online capacity tight of third but some capacity, the of already have on on been and not only last place brownfield put been last hampered in existing maintenance and later -- greenfield earlier off few months that with have year. projects X.X

And period soon are be we Pipeline Matterhorn next to so time rise a tight, until is but getting online, it expecting Express the of the through as quarter. this going comes as

Operator

next Daniel Partners. The from of comes Jay line the Energy question Geoff from

Geoff Jay

purely things to it like QX. of the QX. your you pulling spent are some quarter. in crest guys a changed And Obviously, CapEx just is It increased cadence this looks CapEx wondering that from less like year. sort the I'm going efficiencies sort is, My function seen? looks a Is bit of have of you what about forward? thought you question is of it last expectations in it really than you

Katie Hill

think X good I there's some but on appreciate visuals help support your I this, -- appreciate to Slide I about QX. point

second half, with a QX. we the that some our spot movement to timing-related notice, capital is QX flat. we year, the of QX And full half that capital plan. year and spend as more then that of a movement reflective QX. into ensure have just the between we're in we're in plan the the It's the first to lot seeing crew use moderate opportunity you'll fourth first and small But So to half reduction hitting in movement We'll of stay year less to quarter. the continue of in over

Geoff Jay

having And associated I'm I Are guess other Great. the horseshoe there I was these maybe around understanding sort wells, wells for casing. that with savings savings real not of? just the then is Okay. the my of wondering, is aware needs vertical

Mikell Pigott

Yes, it all those things I the wellhead, it's cutting production, think costs the the effectively, wells ESPs, correctly. thinking the It's on half. the well, in when of you're the with pad, portion vertical associated go about

And as so rock get time your to the to and dollars in productive the savings drilling there, comes spend to spending opposed that's spending where that true lateral from. ability point, more your to real dollars

Operator

next of Citi. Paul comes question The from the line Diamond from

Paul Diamond

relative on you're wells, about Just performance one got standard a that differentiates standard talk anything you decline versus wells and the rates, kind seeing horseshoe to can a lateral? bit quick staying of these

Kyle Coldiron

Yes.

pattern horseshoe Allison that wanted highlight at one a the Basin make to look Midland what side. the Slide in that Teller and sure are you similar wells here are we the if we that drilled very wells So is on thing X, drilled wells to

taken we well production to think on perform. relative at wells one performing can versus time are the industry the to that about conservative these how just right very approach You area.So of example benchmarks When those wells can spacing. when our look have we profile see set, opportunity that's a always bottom the in design, more we the from

little we assets, into a we we new that same the peers wider that these terms our in is big our the spacing our driver in these a have and than think in are bit As pattern. space the past with industry wider and well they come area.We've of spaced results approach and seen outperformance

benefit wells as would as of result long get from not any We or only performance So really as do of ultimately, comes as a effectively. reservoir differential of being The drilling straight lateral not think degradation we negative saved seeing X as drilling a and anticipate you the kind them horseshoe. by draining the that efficient be. X the capital that's

Paul Diamond

on Understood. mean, that going 'XX? bit of just some does that is function follow-up of that? be, early what versus Difficulty]? to a Or market into what a more of set I up spending. of to is drives you but know -- versus it's QX, see a in capital quarterly that a quick this that about [Technical what to And year? drives want just of of function There's how kind I talk how is kind more Is optionality it and the that,

Katie Hill

opportunity This continue for to the us development is an really to optimize throughout year.

we're in really using that that a we to total 'XX getting spend and where that help make we on moderating sustainable sure stay way. 'XX to crew we So maintaining spot see year, work the that support we're where later efficiencies capital excited help throughout about so Delaware, but want be the in will with far that in really into the 'XX in can

Operator

Next question of Bank comes Brody of from the America. from Gregg line

Gregg Brody

I the everyone's appreciate wells. interested really details on the it. in horseshoe all Obviously,

to could of gave opportunity is how how a convert you sort -- split and wells technology you are inventory? that Do versus Midland of this that have much leverage for on many You based number inventory in out of Delaware. there cumulative a

Kyle Coldiron

Yes.

X public wells can bottom opportunity. you our of see stated So talk the inventory, those XX within we previously have on Slide bullet, this on about

we'll capital XX be So are and wells capital effectively, of as that XX. increased would think of effectively as that making because inventory with a recovering pulled is previously the efficiency said count into his there those about resource talking for the XX million in reduction saved But is it's thing you public updated now that comments, it wells.The update of there, come becomes It in to with other our the Jason for inventory. that will up $XXX our have when laterals counts this lost inventory about. up effectively we we're weren't same

even our grades this breakevens our positive view improves flat as high a dramatic around. ultimately, It It inventory inventory. a result. And by go counts amount. as stay will we So up or a all

Gregg Brody

where XX? Midland came X/X about that Is that That's think X/X, how it, total should we the Delaware from?

Kyle Coldiron

Yes.

the is footprint as opportunity it's your is many really I big So talking X/X, earlier, set about how function said and -- XX Jason X/X laid and there talked that are that so opportunities the that where based the of of way a upon acreage and about. X/X, and out. we to of And our reflective XX is kind is is really how is the X/X split

Gregg Brody

limit why in your that the have opportunity Got core you inventory? an it. I you this think -- do of to that there longer? that What's degradation question go with not physical guess, is, some Is performance? this the

Kyle Coldiron

capital to wells is one drilled links. of lateral just we've largest extend the to-date, continuing that's obviously of XX,XXX, drivers The It's above. So even industry efficiency available.

feet thinking that certainly the These were that are about near wells we that, on open Allison themselves. possibility. drilled XX,XXX package We to

will can lengths wells. and capital the push continue out to improving lateral of we efficiency, these getting that capital optimum limit, we So driving efficiency to all

Gregg Brody

do where see take Do a wells we to could try your with X drill and like you there's a you XX,XXX-foot time actually think to laterals [indiscernible] that? U-turn there

Kyle Coldiron

on to is by opportunities to it's always opportunities, that land where evaluate do where something a a creative situations of that, have locked about thinking case-by-case The we've we've like but in with types been we there been -- something considered basis. just those creative team position have

Mikell Pigott

too I that say, let's invested being need any consider first in again mean, to it. well, And the much at shot risk but capital our is you one this and

it's an on in moved and and the there's again, going Basin future team, great technology in acquired to opportunities this the in of Midland their lots did execution. They Basin.So quickly think again, a assets immediately asset took be new Delaware first I from to try. So it the the

highlight today, but So it potential future take to take and all and kind technology trying culture techniques another ultimately performance. best -- really that's to corporate this the one Vital just embracing do the the technology trying -- acquisitions of for really Energy drive in lots to there's as of us from just proud acquired asset and and take team, the we build there's of we're one from

Gregg Brody

look data have data. from unit the So at days just it Teller as and X here, have of like set wells you looks XXX you I the

data -- the there in maybe do there that contextually, like you much the You're much just other of you you performance. repeatable confidence the how terms similar have Midland, saying that around is gives wherever this for throughout And data How time? industry you is that you have drill?

Kyle Coldiron

On the middle Midland according side, [ we and ] the completion and wells have going to are of is and going successfully our those well, cemented plan. we everything operations in drilled

have we're these shape we used wells, horseshoe that In associated XX of with type plan. aware this degradation not have seen with terms shape data, including of of of and that kind industry any production the well

Gregg Brody

what's -- One get for Got look you it. M&A wells asked What's I Usually been question and as last -- have sense just the there and of out you what's dominant obviously, horseshoe you. appreciate about there's that. it today. opportunity at today? your set

Mikell Pigott

a there's see. pretty think opportunities that I pipeline still of we good

there, of have rooms we come. Some them some data expect to out

public just which haven't there large a that be are other pipeline hit will think for I us. see those we're assets could in. It's something interested recently selling.So we privates still very are good a here and of corporate result as several, that but of been from lot new some a versus companies, deals, see market these the

to immediately with that to you at from good were another acquired assets zones, one. new been acquired Henry acquired able and the company As find we these assets. things being again, highlight we quarterly tried from took, out implement wells we one again, new really it from cost, on -- a as drive results, we've These took technique acquired Allison to technology team.So

there. great there's think, them. So is assets just think more acquired What we've a of of lots really of squeezing out I opportunity we've job, these after I done

we're don't new of some organically our build favor extending to still this year, our also we're go through or inventory in think we so And not inventory finding these and acquisitions we're technology of that's case trying in portfolio.But a part important successful zones.

as we'll whether But that's we great And not. year have a to do something so us it's still acquisitions company. important or a

Operator

the from comes from of question next One Brian Capital The Securities. line Velie

Brian Velie

Just while at one on M&A, we're it more here.

be think look you flow deals your cash deals would current after? you metrics possibilities, yields accretive multiples, have for about do you that of or terms in that should Or we as how trading to go to on you think As guidelines? future about those at transact that any future free

Mikell Pigott

the think to to to sheet are hard single forward, I I where our the virtually transaction of year the that year, you'll going accretive metric. accretive it's transactions question. want last make Great we going need be Yes, are we metrics that got think we with them, all this forward. every for we shareholders see balance will one accomplished the it. sheet to every will sometimes And catch any and is that on to mean focus of protective I sure but shareholders be balance acquisitions do

through So the tools all for is we that that believe we can used do past the in we've focus. the acquisitions and

Operator

brief closing concludes this Q&A turn Hagood As remarks. like Ron to session. queue for would there I our at no the to further at back over time, the are call questions this

Ron Hagood

Vital Thank this call. you for today's and joining We in Energy us this interest your concludes morning. appreciate

Operator

call. and your Thank you conference today's for concludes participation. Ladies gentlemen, this

now disconnect. may You

Vital Energy (VTLE) 9 May 242024 Q1 Earnings call transcript