In a new report, Vital Energy of Tulsa indicated it plans a small expansion of its drilling efforts in the Permian Basin where it focuses its exploration. It’s also in the hunt for more acreage in West Texas.
The SEC filing 10-K report indicated Vital plans to run four to six drilling rigs and one to three completions crews throughout 2025. The company, according to the report, had five drilling rigs and two completions crews contracted to drill and complete horizontal wells in 2024.
“We may adjust our drilling rig count and/or completions crews to maximize efficiencies and cash flow. If we decrease our drilling rig count and/or completions crews, it may have a negative impact on our production,” stated the company in the filing.
By the end of 2024, Vital had assembled 286,796 largely contiguous net acres in the Permian Basin. Most of the holdings are in a multi-zone development in Crane, Glasscok, Howard, Midland, Reagan and Upton Counties in the Midland Basin. Vital also has acreage in Pecos, Reeves and Ward counties in the Delaware Basin.
Vital explained its current focus is on horizontal drilling targets inthe Wolfcamp, Spraberry, and Bone Spring formations. At the end of 2024, the company had an average working interest of 74% in Vital-operated active productive wells and 69% in all wells in which the company has an interest.
In the past few years, Vital has worked on expanding its holdings in the Permian Basin. As a result, the integration of the assets drove total production growth of 39%, revenue growth of 27% and increased estimate proved reserves of 12% in 2024.
“Our larger acreage footprint expands opportunities to create value by acquiring or leasing acreage adjacent to our properties, enabling the addition of new drilling locations or improving the economics of existing locations. We will continue to evaluate prospective formations to add additional economic inventory to our existing leasehold.”
Since 2019, Vital significantly expanded its Permian Basin leasehold, acquiring nearly 165,000 net acres in both the Midland and Delaware Basins.
“We executed large, high-value acquisitions in 2023 and 2024, including our single largest transaction in the Company’s public history with the acquisition of the assets of Point Energy Partners,” stated the company in the SEC filing.
Vital also strengthened its balance sheet and liquidity, issuing $1 billion of new senior unsecured notes due 2032.
“The lenders party to our senior secured credit facility increased their elected commitments by $250 million to $1.5 billion and we have hedged approximately 75% of our anticipated 2025 oil production at $75 per barrel WTI. We believe our business strategy is clear and sustainable.”