Vital Energy’s annual meeting has been set for May 25 in Tulsa. While the company plans it to be an “in person” meeting, leadership says the public health impact of COVID-19 could still result in a virtual meeting. It could also result in an in-person meeting with required wearing of a mask.
“Alternatively, we are planning for the possibility that the meeting may be held solely by means of remote communication. If we take this step, we will announce by press release the decision to do so in advance, along with details on how to participate in the meeting,” stated the company in announcing its annual meeting.
The agenda for the 9 a.m. meeting includes the company’s preferred election of four Class 1 directors who will serve three-year terms and one Class III director for a two-year term.
The agenda also includes the selection of Ernst & Young as Vital’s independent registered public accounting firm for the fiscal year ending Dec. 31, 2023. There will also be a vote approving the company’s compensation for its named executive officers.
The agenda includes an item to amend and restate the Certificate of Incorporation to clarify and eliminate obsolete provisions.
Details of the agenda were included in a filing with the Securities and Exchange Commission and in which company leadership pointed out its recent rebrand to Vital Energy.
“Our strategy has been unwavering since 2019 and we have successfully repositioned our Company within the Permian Basin,” wrote William Albrecht, the chairman of the board and Jason Pigott, Vital’s Chief Executive Officer.
“Our recent acquisitions have grown oil production, built scale, increased margins and improved our profitability. Our disciplined developments have led to higher Free Cash Flow and enabled absolute debt reduction, improved leverage and a strengthened capital structure.”
They called 2022 a year of “remarkable accomplishments” with record cash flows from operating activities totaling $830 million. The firm managed to reduce term debt by $285 million and also launched a $200 million equity repurchase program.
Our recent successes have been supported by the application of innovative new technologies that have increased production and revenues, enhanced returns and helped reduce emissions. We have the right strategy to create long-term value for our shareholders.
The year 2022 was one of remarkable accomplishments:
•Generated Company-record cash flows from operating activities of $830 million and Free Cash Flow(1) of $220 million
• Reduced term-debt by $285 million and strengthened our leverage ratio(2) to 1.18x at year-end
•Implemented a $200 million equity repurchase program and repurchased $37 million of common stock
•Increased oil production nearly 20%
•Organically added oil-weighted inventory locations in Glasscock County, maintaining more than 8 years of oil-weighted inventory in Howard and western Glasscock counties
•Reported Scope 1 GHG emissions intensity reduction of 34% and methane intensity reduction of 63%, compared to 2019 baseline levels; Added a 2025 recycled water target and established a combined Scope 1 and 2 emissions intensity goal for 2030.
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Our 2023 Outlook is focused on generating Free Cash Flow and balances debt reduction and the sustainable return of cash to shareholders with disciplined capital investments to profitably grow our business. Our development programs are focused on the most productive opportunities in Howard County and we recently announced an accretive acquisition that expands our Midland Basin footprint into Upton County and adds additional high-margin production and inventory.
We expect that our financial and operational results in 2023 will continue to benefit from our focused efforts on technological innovation. We are utilizing machine-learning algorithms to optimize production and increase revenue. As an example, we are now able to automatically adjust our electric submersible pumps multiple times per day. This allows us to cost-effectively enhance production and extend the productive life of our wells. Dynamic routing algorithms prioritize operator routes, improving response times and reducing production downtime. In addition, we are mitigating emissions events by employing cameras programmed to quickly recognize emissions and predict when these events could occur.
We made significant progress advancing our ESG initiatives across the business in 2022. Our commitment to sustainable energy production continues to deliver meaningful greenhouse gas and methane intensity reductions. Our compensations actions, which are detailed in this proxy, incentivize the right behaviors and reward performance in line with our objectives. This is demonstrated by the weighting of safety metrics in our executive short-term incentive plan goals. For the first time in our history, we recorded zero employee incidents in a calendar year.
Our annual stockholder outreach effort solicits input from institutions representing more than half of our outstanding shares, providing an opportunity for our Board and senior leadership to engage with our largest stockholders on our strategic priorities and disclosure practices. Based on these discussions, we remain confident that our strategy and business plan are aligned with our stockholders’ expectations. Our Board, management and employees have proven we can deliver results and we are excited to continue to grow the Company and deliver value in the coming years.
Thank you for your investment in Vital Energy.
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Sincerely,
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William E. Albrecht
Non-Ex
 ecutiveBoard Chair
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| Proposals | Board Recommendation |
Proxy
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| 1 | |||||||||||||||||
| FOR | 38 | ||||||||||||||||
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To hold an advisory vote approving the compensation of our named executive officers
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FOR | 42 | ||||||||||||||
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To approve an amendment and restatement of the Certificate of Incorporation to clarify and eliminate obsolete provisions
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FOR | 83 | ||||||||||||||
| 5 | To transact such other matters as may properly come before the Annual Meeting or any adjournments or postponements thereof. | ||||||||||||||||
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Proxy Materials
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 25, 2023. The Notice of Annual Meeting, Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“2022 Annual Report”), are available at http://materials.proxyvote.com/516806.
Important Information Regarding Meeting Attendance and Location.
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