Vitesse Energy (VTS) Q2 FY26 earnings call: guidance and Q&A

Update on contemplations for operated activity as a vector for organic growth capex and its impact on the narrowed CapEx guide.

Vitesse is actively evaluating operated development, specifically looking for partnering opportunities to extend laterals, which are considered optimal. This is currently in the works.

“Yes, on the operated piece for development, we are in the heat of evaluating that. You know, when we talk about extended laterals, that's obviously the optimal situation. So we're looking at acreage that is... by others around us to see if there's partnering opportunities to extend those laterals. to come there that's very much in the works right now.”

asked by Jeff Grampp · answered by Unknown Speaker

Update on the markets for near-term development acquisitions and producing property acquisitions, given commodity market volatility and its impact on deal timing/ability to transact.

The near-term development acquisition market has become more competitive due to Vitesse maintaining high return hurdles. The producing property acquisition market, however, has been robust, especially for larger packages in their core basins (Powder River, DJ, Williston), which generate significant day-one cash flow and are acquired at teens to low 20% free cash flow yields.

“I would say the near-term development acquisition market has has gotten a little bit more competitive in the last year or two. You can just tell from the dollars we spend each year on acquisitions that we're not spending quite as much as we have in prior years. Big reason for that is we kept our return hurdles high there... The producing property acquisitions, there was an article that came out about how deal flow slowed down in the second quarter. We did not find that to be true in the non-op specific part of the market.”

asked by Jeff Grampp · answered by Ben Messier

Updated thoughts on the Powder River Basin acquisition after a full quarter, including geological interests and A&D activity on the ground.

The company is excited about the Powder River Basin acquisition, fully implementing assets and evaluating AFEs. It was underwritten at low strip prices and looks like a very good deal at current higher strip prices. They target basins where they have information (Williston, Powder River, DJ).

“As far as the Powder River Basin goes, as Jimmy touched on, we're excited to have that one. We're fully implementing those assets and evaluating under the different sensitivities and market prices where those things will go again getting that cash flow in house was a a big hurdle for us and happy that's done. Now we're going to start looking at the AFEs that come in and what we want to do with those, so more to follow on the DJ. Powder River as well.”

asked by Noel Parks · answered by Unknown Speaker

Inquiry about whether the acquired Powder River Basin assets are operated by large players or smaller, less familiar private entities.

The Powder River Basin package was primarily operated by larger players like EOG and Continental, which Vitesse is very happy to be aligned with.

“That package was definitely advantaged by primarily being operated by a couple of the bigger operators there, namely EOG and Continental. So very happy to be aligned with them. and have them as partner operators on that asset. That's one of the reasons we liked it so much.”

asked by Noel Parks · answered by James Henderson