VTLE - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to Vital Energy's, Inc.

Third Quarter 2024 Earnings Conference Call. My name is Jericho, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

It's now my pleasure to introduce Mr. Investor President, Vice Hagood, Relations. Ron

sir. You may proceed,

Ron Hagood

Thank you, good morning. and

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

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

actual these Our of forward-looking for a control. results beyond are many reasons, statements may differ from variety which our of

addition, In afternoon. release website and included making are in financial non-GAAP the accessed at presentation press www.vitalenergy.com. can The measures. press be presentation to on yesterday Reconciliations we'll release our GAAP issued measures be to financial and reference we

to call President turn over Chief now Jason I'll Officer. Executive Pigott, the and

Mikell Pigott

Good us you for thank joining today. morning, and

announce the delivered to has that Energy surpassing delighted quarter, are expectations. third We Vital in results exceptional our

recent during Our We production cash significantly the new our have acquisition our a reached new Point record us improving transformative to quarter, reduction propelled initiatives heights. and flow. cost are acquisitions, the strategic particularly

questions take today, X we cover your Before items. key I'll

from quarter. the some First, highlights quick third

fourth Importantly, quarter recent increase results will our outlook. production

provide extend will Then exceeded to our continuing adding I'll activity XXXX. a our acquisition. expectations information in and us in Point additional the how has Next, I of luxury inventory. about productivity team early asset improve provides This recent our with on and discuss higher is area

thoughts on Lastly, our I XXXX early will share some outlook.

reinforced build expect early until quarter results. share on While next full details third we the we've strengths our we to with year, won't

about the third let's talk Now quarter.

on in-line a driven assets. our surpassed acquired by demonstration time lower operating higher-than-expected expectations, of results costs financial capital over and production, ability to solid Our

both of high and produce per of day. XX,XXX assets the the barrels about For stand-alone oil at combining end the expectations, Vital Energy Energy delivered Point production to quarter,

XX,XXX was oil the did for any day guidance and include production to quarter not per of XX,XXX oil Our Point. barrels for volumes

been a with us close great weather-related did would we are XX-well approximately production weren't excited and our shut day X new for surpassing However, demonstrate have County, giving why for today's job oil the the transaction altogether. beat package. early, transaction, in Howard of X% both this be barrels for about in per boost caused to which deck flooding underwriting Point team so in, showing almost a to a Help we charts Point slide XXX quarter. If have expectations the some it a production on base

Additionally, us the these cost compared wells develop were completed wider the than on to with operator. design to way paving operator, for a at significantly an asset optimized prior this frac reduced the previous spacing

per BOE, the Lease These are guidance per BOE, $X.XX X% $X.XX in substantially second of inclusive expenses improvement improved LOE at a higher coming operating assets. to operating the over expense. costs related Point of our quarter, during below quarter

Point, LOE $X.XX been have BOE. just per Excluding would over

and optimizing delivered downtime targeted in several efficiency and projects efficiency. workover improved fleet use. XX-hour aimed our resource costs operating we and reduction quarter, cost through third reduced at which our several the In to Key initiatives optimizing operations, on included improving rigs planned transitioning

chemical costs and implemented chemical material improvements our product also and Midland reducing improving Basins, HXS processing and We to introduced both changes Delaware across in quality.

with made to needs. base better labor align long-term strategic staffing we the Throughout and operational the quarter, adjustments

profitability delivered through enhancing our substantial power operational to use significant overall cost for portion cost our a to our us efforts hedging power in continue and volatility cost-effective efficiency. We cross-basin These and locked savings, derisk combined reduce cost positioning of to sustained support future have strategy pressure. a and scale have

million. cost $XXX capital and savings within the million production the quarter. quarter were a for capital the $X will Vital total million stand-alone of resulting fourth additional The of quarter, for resulted early Point $XXX guidance in close from million The the carry investments for outperformance momentum expenditure into of $XXX in Energy million to Capital in $XXX of quarter.

the quality X X,XXX our X,XXX of Basin of Permian oil day we We day capital have assets total Delaware while production complements midpoint barrels Basin increased oil acres. changed of position completed Point materially Permian April XX,XXX our by enhanced of our our acquisitions previous XXXX, production, almost fundamentally position. to and have overall Delaware and our the footprint, guidance reiterating growing per BOE of Since per acquisition have and The our guidance.

highest through has of shift structure done job over adding XXX locations, added years testing designs innovating our flexibility like of inventory. more portfolio these before. under horseshoe-shaped inventory wells, on couple efforts, ever years X.X and than today last reducing well of optionality Through formations. new we return have cost just representing to The and the over an organically incredible our Our projects has capital to team

have that number large We just breakeven $XX a cutoff. wells above sit our of

January little sub-$XX As breakeven we to a into would available in X years, over of just range, breakeven XXXX. XXX sub-$XX the these wells of wells had shift our number cost extending Xx wells improvement X% us as of wells the to the runway in of

Delaware costs faster basin. foot $X,XXX with per entered expectation from Our per in year. per laterals operations times reduced XXXX to drill the Basin $XXX $X,XXX is team next we foot has longer since already foot the and

a trend. plenty rapid this delivered of and to change, opportunities of at we continue rate see have We

In cost-cutting addition to measures, formations like new Barnett our could lengthen via the also runway. adds inventory

oil are over encouraging. results X,XXX a initial reached very County per Crane Our well barrels of rate Barnett These day. peak

now design County right will The wells design. efficient performance is these being of optimal future. second X a completion completed relative Crane triangulate with the smaller, help the Our well more for

asset that us and last increase of the pause allows take instead transitions. on have rapid years and emphasis operational inventory excellence The put we a on on delivered in quality few length to over M&A more

cash impact free for $XXX anticipate or provide prices, million of we of positive the able to greatest the XXXX. commodity We flow all will next through quarters shareholders. end over at which cash we current our use flow free forward, will debt that adjusted Going generate than of be X the more our reduction, should nearly for

Our leverage. for hedge debt this over our flows forecast maintaining timeframe and supports lower our cash position and strong

forward, with can efficiencies as million Looking $XXX consensus expect the to production for improving to And flat below is efficiency, next our we of improve, X $XXX to this trend hold barrels production capital around XXXX. oil maintain for believe around intention our range maintain years. we capital we flat and guidance with continue oil XX,XXX with day of range of million, midpoint expectations XQ per original of a

my quarter. we comments conclude this for To expectations for beat morning, the third

quarter. raising are the We for fourth us. guidance is asset for great a Point

progressing production next fronts, flat XXXX years capital resulting are efficiencies to for capital and Our X and operational quality us all in expected with to operating spending the allow lower well maintain efficiencies on costs. for decreasing should

we now for Operator, questions. are ready

Operator

[Operator Instructions] Securities. Neal Truist Our first question Dingmann comes from of

Neal Dingmann

on question driven efficiency reductions first foot where year. X, D&C is is My Slide much length mentioned? the wondering this the per you cost on improvement targeting just of how by show your lateral next I'm you just $XXX

slide? you're that on give you well other that And upside that cost details maybe experiencing of sort about that within could notable

Mikell Pigott

at team over in all been the lot in quickly excited has of Neal, had swings but Basin we're improving Delaware that, a made progress really, really not both very we've Yes, have about the time. the basins,

turn I'll future. more over give it to And to the some color you Katie on

Katie Hill

to land and about Neal, the our said, work laterals great excited a next a operations put a team both like extended It Jason reflects really foot. we're us position together year. getting team allows drill across that $XXX of that lot and

less reduced Like really able I in we it's noting per Jason think to small over had than something that's entered wells basin in XX reduction worth is said, turn with little so that, to dollar a that year to ago. a we've spud the since line, foot we've from costs the we've by deliver been program far. XX% already and that take really opportunity about And a

are efficiencies months then year some that to on going we down work already also $XXX of both extended drill So cost executing to excited ability opportunity laterals next the few plus operating today, over about that's the helping have the to drive we've able additional being on That implemented the next forward. that even sight and and implement reflects line that further.

lower release. And even that have delivering spud days well. is consistent And we're closer per XX days at set to at One progress of areas with first from looking cycle the the to drilling wells times. end XX- rig a were much trend the started really across than back that When record really we XX at phases. 'XX, a underwriting expectations pleased we're consistently that is looked and well to XX-day all today, at of and

us. So in and just still the work by some of team opportunity great execution front

Neal Dingmann

what Katie. in just point? your And benefit Midland versus you follow-up looking maybe you the maybe and sort because if potential assume within if just operations be I that ops or then me could will important think will much so. regional most And broadly we of is my direction? of I could Del, be that remind get at type And and of operations, the still continue XX how Del in details, Great so, LOE so it's trajectory

Katie Hill

today. us, that is Point with integrate The to for great Delaware the asset particularly working opportunity a we're

You the can well. see on Slide on X, early outperformance Point

XX% take in other or that together activity capital can investing Point the year will on shifting then our that that certainly be to XXXX put of what half about excited heavily in really be towards Midland. to of be year. really so. we XX%, and will the assets capital asset. Almost end year Of do About asset last Delaware about that the will XX% there our we're going portfolio. the over Delaware, and We're of the on this half immediately, So next

the for both in that the is that Really and we've in quarter. 'XX a projects We basins. LOE address. us lot about think that the great one great were down delivering helped important able pleased QX. report a to We talked to of costs drive with one I question we $XXX an on to had executed a across

take to A Delaware, of onboarding. long-term lot not work rate. applicable can $X.XX We've of a of reflect to is 'XX those really to That Midland lot in both in are a period already. Point, in we're at done Point. and integration we just absolutely do BOE, and again, to our starting that asset the that left And and we've run per QX opportunities expected we're that,

back be to and the So this We'll be $X.XX. costs I'd year XXXX across exit end to of down high into expect by around year next driving Xs. expect

for So the be a with just asset. lot investing, our does portfolio. really It to opportunity great pleased

Operator

Our next JPMorgan. question comes with from Zach Parham

Zachary Parham

with compete you Delaware your wells a the Barnett cost on earlier. wells bit and little those bit you little about the commented First, Basin? Can will the there Midland in talk and how a

Mikell Pigott

Barnett, We And plan be I We're for very We as It's excited X relative. our acreage. HBP also -- in we about what really a Zach. wells cost it spaced and wells in did and on the on can. when the frac, for well both new future. we those new footprint, still of that you're early. to as the formation wouldn't about zipper completing you drilling our a these aren't as as one inefficiently drilled these our take across instead like a costs well

And it's early. still

we sand it. large frac mentioned, on a with I As very of lot we're a -- pumped

that which can day to to kind down deliver phase On a smaller you Point these We're we're fracs, where it, like not? see pump the us saw doing test message frac it much the first big -- we then a come exactly team wells it how one, see they the on of frac. and does in The performance smaller does going -- was should next for much be is thing to down a or more. cheaper deliver, same step can that X,XXX or barrels the and my

kind different Wolfcamp So I decline hit. well. start just They are our and it's see too early. estimate peaks better than new. get final think of wells decline. rates. at still These very from A profile production other day versus We wells good it's haven't every These slowly They on -- assets. off we don't are too a high have They

it. So it's early, about just -- really it's but excited we're

when acreage zone an a for need and we good started M&A out a add we in me, to ago, of it. we have think initial up X Crane, in years all this production where we this we've don't concepts had our not today gone have doing new is what acquisitions organically. future and time We tested that test then but parallel first and the really can tested been on it add and with we've For in done bought setting of it that we're wells idea were, where that's there I a the and

early, So we'll are very more results give far. future, it's in the you really but color so but still some positive

Zachary Parham

And drilled Bear said then my little slide the deck. Can on it pad detail Cave Bear had give you wanted well how that I I on or you was was on was ask that with follow-up, you which that to pad a pad us knew Vital And the in developed? Cave the design, forward? at well. to developed that those you expect and wells completed by And kind but of section? Point, assets per how maybe that as zones comment X is develop going

Katie Hill

per and our than wells our A the It's wells. plans. Thanks, Point XX-well completion on the B. Zach. bit This did all section. is developed across drilled are during design a These We transition. at the that little X a spacing was these the tighter long-term being pad pump

is but space this completion on up go-forward looks expect what the development to of we space plan the and So our to reflective going remainder forward. like, of up

Operator

comes from with Hungness question America. next Bank Noah of Our

Noah Hungness

wanted Just here on hedges. off start to

kind strip the and 'XX the oil into year should hedges How is second and about through that move this of 'XX in you all for we think of $XX. below we year? next given as half Just adding

Mikell Pigott

great our very see we've when team been here into done be consistent hedges. the volatility. in I we'll with -- done, think lately just And of we the tended hedges is future. We've range. again, $XX we add that playing has XX% it, Yes. out hedged We to What job a

had East, this Middle we the conflict when them up flare added the this We in Middle in East.

where kind So that's of we are.

add of for next As 'XX. end right we we those. year, get may closer the we're to now, for X/X But hedged

we're this or the the rest so end of XX% I hedged for of year. think

a year, $XXX So flow. make $X per doing. XX to we've that's has barrel We been impact what million cash over million barrels free our

'XX prices want we opportunity also cash we're give the protect year-end, oil to to flows budget. but and get for as we So to up rise, closer setting

Noah Hungness

impact implement? how then makes to could maybe noting you be give That all your may maybe on costs you're adds Is try us sense. just to anything there lower operational looking to the additional of give and -- could And color inventory. planning what on what guys a D&C reduction, any that you you any guys details X% to

Katie Hill

and that's from good questioning the been both really implemented already We've left time really we're cost, that you're and I is still of What experiences Delaware. and kind But spud frankly, work our left Midland efficiency partners market through learning were say, making either still best and working what's to on do, sure every turn-in-line accomplished. cycle in better the the to with to and Delaware. at repeat constantly team that would through than service implementing do the is or practices, in -- working the is

we've X% been lot wells, the when a on down a the have work costs $XXX a of drive next it's on of when I that question the and a years. that show over a not goal pretty in of to of that year to improvement, ability able small our about The continue I really us on in I just if, noted is fair subset a inventory for to past continued think You confidence couple X% deliver sensitivity and foot. we really think

continue So in be excited to the to developing Delaware.

capital of there allocation amount fair a have We year. next

cost be So us for continue good there to a will to opportunity drive down.

Operator

further no hand call to Hagood. Mr. over are I'll the Ron There questions.

Ron Hagood

us joining for today. all you thank Well,

for for the our every what you excellence and for and cash in flow you're the can future, to future allowing see us. this we about slow return us excited and this in be as down to As pay And very going are we've take M&A to, we is showing up going quarter, store operational our again, which our free down hear, future. the debt, the discussed shareholders great a has quarter

our Thank to forward look we on so to next And you talking you. call.

Operator

you Have concluded. joining. Thank a day. has for pleasant Conference

Vital Energy (VTLE) 7 Nov 242024 Q3 Earnings call transcript