Vital Energy scored improved earnings and more acquisitions in 3Q

Vital Energy - Independent Energy Company


Stronger production, adjusted net income of nearly $96 million and three Permian Basin acquisitions totaling 53,000 acres—it represented the third quarter report from Tulsa’s Vital Energy Inc.

The quarterly net income was $4.9 million or 26 cents a share while adjusted net income was $95.8 million and $5.16 a share and cashflows from operating activities were $214.2 million. Vital managed to generate consolidated EBITDAX of $286.5 million and free cash flow of $91.3 million.

The company’s third quarter adjusted net income was an improvement over the second quarter’s $78.6 million in adjusted net income. But third quarter cash flow was down from the $248.9 million reported in the previous quarter.

During the quarter, Vital closed October 31 on one of the three acquisitions  worth $1.17 billion made in the Permian Basin. The closing was of the land previously held by Maple Energy Holdings, LLC and was in the Delaware Basin in Reeves County, Texas. The two remaining acquistions are expected to close early this month.

Vital’s third quarter oil and total production also exceeded the high-end of its guidance by 1% and 4% respectively, producing 49 thousand barrels of oil a day and 101.7 thousand barrels of oil equialent a day. Both were company records. Wells completed by Vital Energy on the recently integrated Driftwood and Forge assets are currently outperforming historical oil production results by 7% and 29%, respectively.

The oil production was better than the second quarter when it totaled 44.4 thousand barrels of oil a day while the oil equivalent a day had been 90,000 barrels in the second quarter.

Capital expenditures for the quarter were $158.2 million.

“Vital Energy delivered across the board in the third quarter,” stated Jason Pigott, President and Chief Executive Officer.

“We had the powerful combination of higher-than-expected production and lower-than-planned capital investments. These exceptional results translated directly to strong financial performance, driving $91 million of Free Cash Flow.”

He said the company’s success so far has been based on acquiring high-value acquisitions.

“This year we have captured five opportunities that increase our scale in the Permian Basin, reduce leverage and generate a highly-competitive Free Cash Flow yield.”

Vital Energy turned-in-line (“TIL”) 10 wells during third-quarter 2023. Investments included $133 million for drilling and completions, $12 million in infrastructure investments (including Vital Midstream Services), $4 million in land, exploration and data related costs and $9 million in other capitalized costs.