Tulsa’s Vital Energy recorded improved earnings and oil production in the second quarter.
The company not only had record quarterly total and oil production of 129.4 thousand barrels of oil equivalent a day and 59.2 thousand barrels of oil a day, it reversed a first quarter net loss of $66 million. Vital had net income in the second quarter of $36.7 million and 98 cents a share and adjusted net income of $55 million and $1.46 a share and cash flows from operating activities of $338.4 million. It also generated consolidated EBITDAX of $290.4 million and adjusted free cash flow of $44.7 million.
The oil production compared to 124.7 thousand barrels of oil equivalent a day in the first quarter and 58.5 thousand barrels of oil as well.
“Our team continues to deliver strong results as our optimized development strategy enhances well productivity on acquired properties,” stated Jason Pigott, President and Chief Executive Officer.
Vital’s July acquisition of assets of Point Energy Partners added 15.5 MBOE/d of production along with 68 oil weighted locations at cclosing. It also increased Vital’s 2025 oil hedges to 15.4 million barrels at approximately $75 a barrel WTI.
“Combined with our strategic acquisition of the assets of Point, we have increased our inventory of estimated sub-$50 per barrel WTI breakeven inventory to 395 locations,” added Pigott.
He said the company is on its way to building value through increased well productivity, lowering costs and adding high-return inventory.
As a result of improved earnings, Vital leadership increased guidance for the remainder of 2024, from $750-$850 million to $820-$870 million.
During the quarter, Vital operated four drilling rigs and two completions crews and turned in line 27 wells for oil sales. The Company shut-in 25 high-cost wells during the period and exited the quarter at a full-Company LOE rate of approximately $8.95 per BOE. During the third quarter of 2024, Vital Energy plans to operate four drilling rigs and two completions crews, and TIL 16 wells. Upon closing of the Point acquisition, which is anticipated to occur at the end of the third quarter, the Company expects to operate five drilling rigs and 1.2 completions crews.
Following closing of the Point acquisition, Vital Energy will have added approximately 100 new locations to its oil-weighted inventory in 2024, increasing total inventory to approximately 885 high-return locations, net of development activity through the first half of 2024. At current activity levels, this represents more than a decade of drilling inventory with an estimated average breakeven of less than $55 per barrel WTI.
2024 Outlook
Production. The Company increased its full-year 2024 total production guidance to 127.0 – 131.0 MBOE/d (from 116.5 – 121.5 MBOE/d), including volumes in the fourth quarter associated with the Point acquisition. Full-year 2024 oil production was raised to 59.0 – 61.0 MBO/d (from 55.0 – 59.0 MBO/d), including volumes in the fourth quarter associated with the Point acquisition.
