Earnings call transcript: Vitesse Energy Q2 2025 earnings beat forecasts, stock rises

Vitesse Energy reported its financial results for Q2 2025, surpassing market expectations with an earnings per share (EPS) of $0.60, significantly above the forecasted $0.42. The company’s revenue also exceeded projections, reaching $81.76 million compared to the anticipated $57 million. Following the announcement, Vitesse Energy’s stock surged by 8.41%, closing at $24.79, reflecting strong investor confidence. The company, currently trading at a P/E ratio of 29.87, offers investors an attractive dividend yield of 9.56%.

InvestingPro analysis reveals several key insights about Vitesse Energy, with 8 additional exclusive ProTips available to subscribers, including valuable information about the company’s valuation and financial stability.

Key Takeaways

• Vitesse Energy’s EPS of $0.60 beat forecasts by 42.86%.
• The company achieved a revenue surprise of 43.44%, reaching $81.76 million.
• Stock price increased by 8.41% following the earnings announcement.
• Production increased by 27% quarter-over-quarter, reaching 18,950 BOE per day.
• The company reduced total debt to $106 million.

Company Performance

Vitesse Energy demonstrated robust performance in Q2 2025, with significant improvements in production and financial metrics. The company reported a production increase of 27% quarter-over-quarter, reaching 18,950 barrels of oil equivalent (BOE) per day. This growth was supported by the integration of Lucero assets and strategic operational enhancements.

Financial Highlights

• Revenue: $81.76 million, exceeding forecasts by 43.44%.
• Earnings per share: $0.60, a 42.86% surprise over expectations.
• Adjusted EBITDA: $61.1 million.
• Adjusted net income: $18.4 million.
• GAAP net income: $24.7 million.
• Total debt reduced to $106 million.

Earnings vs. Forecast

Vitesse Energy’s Q2 2025 earnings per share of $0.60 significantly outperformed the forecast of $0.42, marking a 42.86% surprise. Revenue also exceeded expectations, totaling $81.76 million against the projected $57 million, a 43.44% surprise. This marks a strong quarter for the company, with both EPS and revenue showing substantial positive deviations from forecasts.

Market Reaction

Following the earnings announcement, Vitesse Energy’s stock rose by 8.41%, closing at $24.79. The stock’s performance reflects investor optimism, driven by the company’s strong financial results and operational improvements. The stock is currently trading closer to its 52-week high of $28.41, indicating positive market sentiment. With a beta of 0.66, the stock demonstrates relatively low volatility, while analyst price targets range from $20 to $33 per share.

Outlook & Guidance

Vitesse Energy maintains its full-year production guidance of 15,000-17,000 BOE per day, with an oil cut of 64-68%. The company plans cash capital expenditures of $80-$110 million and has hedged 71% of its remaining 2025 oil production at $69.83 per barrel. This strategic hedging aims to support the company’s dividend and manage market volatility.

Executive Commentary

CEO Bob Garrity highlighted the company’s strong deal pipeline, stating, "This is by far the most amount of deal flow we have ever seen in the bigger chunkier realm." CFO Jimmy Henderson emphasized the company’s focus on analyzing and scrutinizing potential deals. President Brian Cree noted, "Capital efficiency that we’re seeing just continues to improve in The Bakken."

Risks and Challenges

• Fluctuating oil prices could impact revenue and profitability.
• Potential operational disruptions from integration of new assets.
• Market volatility affecting hedging strategies and capital allocation.
• Regulatory changes in the energy sector.
• Competition from larger energy firms in the Bakken basin.

Q&A

During the earnings call, analysts inquired about the company’s acquisition strategy and potential impacts from Chevron’s Hess acquisition. Vitesse Energy expressed optimism about acquisition opportunities and emphasized its focus on capital efficiency and strategic investments in the Bakken basin.

Full transcript - Vitesse Energy Inc (VTS) Q2 2025:

Conference Operator: Greetings and welcome to the Vitesse Energy Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that this conference is being recorded. I will now turn the conference over to the Director, Investor Relations and Business Development at Fitesse, Ben Messier.

Thank you. You may begin.

Ben Messier, Director, Investor Relations and Business Development, Vitesse Energy: Good morning, everyone, and thanks for joining. Today, we will be discussing our financial and operating results for the 2025. Our 10 Q and earnings were released yesterday after market close, and an updated investor presentation can be found on the Vitesse website. I’m joined this morning by our Chairman and CEO, Bob Garrity our President, Brian Cree and our CFO, Jimmy Henderson. Before we begin, please be reminded that this call may contain estimates, projections and other forward looking statements within the meaning of the federal securities laws.

Forward looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. Please review our earnings release and risk factors discussed in our filings with the SEC for additional information. In addition, today’s discussion may reference non GAAP financial measures. For a reconciliation of historical non GAAP financial measures to the most directly comparable GAAP measure, please reference our 10 Q and earnings release.

Now I will turn the call over to Vitesse’s Chairman and CEO, Bob Garrity.

Bob Garrity, Chairman and CEO, Vitesse Energy: Thank you, Ben, and good morning, everyone. The second quarter demonstrated the resilience of our asset and the discipline of our team. I want to thank our team members for the awesome job they continue to do. Importantly, we are positioned to deliver in a subdued oil price market, while remaining well prepared for when prices strengthen. During the 2025, we fully integrated the Lucero assets and certain employees into the test with the accretive impact apparent in our financial metrics and balance sheet.

The asset is performing as expected and we are realizing better G and A synergies than we underwrote. The operated leg to our strategy provides another lever that we can pull at our discretion. We successfully settled a multiyear lawsuit with one of our key operating partners, which resulted in a one time cash payment as well as entering into long term gas gathering, processing and marketing agreements. Kudos to our team for their diligent efforts in seeing this through. We continue to invest capital selectively, while generating excess free cash flow that was used to reduce debt.

We allocate capital based on our returns driven hierarchy as noted in our investor presentation posted on our website. And again, we’re not held to a fixed capital budget. As I’ve said before, in addition to our organic drilling, we are always looking at both near term development deals and larger asset acquisitions that will support the dividend, but these deals must meet our strict return hurdles. Additional hedges were added in the quarter to take advantage of increased oil prices and we will continue to make decisions that bolster the dividend. Last week, our Board declared our third quarter dividend at an annual rate of $2.25 per share.

I will now hand the call over to our President, my partner, Brian Cree to discuss our operations.

Brian Cree, President, Vitesse Energy: Thanks, Bob. Good morning, everyone and thank you for joining today’s call. Production for the quarter averaged just under 19,000 barrels of oil equivalent per day, which was an increase of 27% from the first quarter. This brings our year to date production to just under 17,000 barrels of oil equivalent per day. As of 06/30/2025, we had 23 net wells in our development pipeline, including 7.9 net wells that were either drilling or completing and another 15.1 net locations that had been permitted for development.

As Bob touched on, during the quarter, we resolved pending litigation with one of our largest operators related to post production revenue deductions. We received a one time cash payment of $24,000,000 which was recorded to revenue and to offset litigation costs previously expensed. In addition to the one time cash payment, we have elected to take virtually all of our gas production in kind from this operator’s wells and simultaneously entered into long term processing and marketing agreements with the operator and its affiliates. We capitalized on increased oil prices during the quarter by adding oil hedges at price levels that support our dividend. For 2025, we have approximately 71% of our remaining oil production hedged at a weighted average price of $69.83 per barrel and nearly half of the remaining 2025 natural production hedge with attractively priced collars at a weighted average floor of $3.73 and ceiling of $5.85 per MMBtu, both percentages based on the midpoint of our guidance.

Additionally, we have over 3,300 barrels per day and 12,700 MMBtu per day of our 2026 oil and natural gas production hedged at $66.43 per barrel and through a costless collar of $3.72 by $4.99 per MMBtu. In the 2027, we have over 8,800 MMBtu per day of natural gas production hedged with a $4 floor by 5.68 collar. Additionally, we have over 207,000 barrels of NGL production hedged in the 2025 and twenty twenty twenty six at $23.61 per barrel. Thanks for your time. Now I will turn the call over to our CFO, Jimmy Henderson.

Jimmy Henderson, CFO, Vitesse Energy: Thanks, Brian. Good morning, everyone. I just want to highlight a few items from our financial results for the 2025. You refer to our earnings release and 10 Q, which were filed last night for further details. With the Lucero assets fully integrated, our production for the quarter was 18,950 BOE per day with a 65% oil cut.

For the quarter, adjusted EBITDA was $61,100,000 adjusted net income was $18,400,000 and GAAP net income was $24,700,000 All of these figures include the effect of the legal settlement as we’ve discussed earlier. You can see the reconciliation in our press release filed last night. Cash CapEx and acquisition costs for the quarter were $35,700,000 which was almost entirely organic as we had minimal acquisition costs during the quarter. These costs were funded within our operating cash flows and excess cash flow was used to pay down debt. During quarter, we decreased our total debt to $106,000,000 giving us net debt to an adjusted annualized EBITDA of just 0.4 times.

Our annual guidance for 2025 has not changed. We anticipate production in the range of 15,000 to 17,000 BOE per day for the full year with an anticipated oil cut of 64% to 68%. Cash CapEx for the year is now anticipated to be 80,000,000 to $110,000,000 weighted towards the first half of the year. With that, let me turn the call over to the operator for Q and A.

Conference Operator: Thank you. We will now be conducting a question and answer session. Our first question today comes from Jeff Grampp of Northland Capital Markets. Please proceed with your question.

Ben Messier, Director, Investor Relations and Business Development, Vitesse Energy: Good morning, Thanks for the time.

Jimmy Henderson, CFO, Vitesse Energy: Hey, Jeff.

Ben Messier, Director, Investor Relations and Business Development, Vitesse Energy: Wanted to first question on the production side of things. You guys had pretty nice performance in Q2. Guidance for the full year was maintained, which I guess kind of implies a fairly decent decline in production in the second half of the year. I know activity levels in the basin have slowed down, so not too surprising, but just hoping to get a little more increased clarity on kind of what your guys’ production expectations are for the remainder of the year. Thanks.

Brian Cree, President, Vitesse Energy: Yes, Jeff, this is Brian. I’ll take the first crack at that and anyone can add in. But yes, we kept our guidance the same for the year. Obviously, second quarter numbers were real strong. We liked them.

From that standpoint, we did have some wells that got turned down a little sooner than we had expected. And we are constantly watching the amount of organic CapEx that we’re seeing. We’re very encouraged by the AFE activity that we’ve seen with oil prices in the mid-60s. We’re pretty happy to see a lot more AFE activity than we were seeing earlier in the year actually. We’re not quite at the levels we were last year from an AFE activity, but certainly above the levels we’ve seen on average over the last few years.

So something that we’re encouraged. But at this point in time, just with the visibility that we have, we’ve decided to keep that those estimates in terms of the second half production right in line with where we were earlier.

Ben Messier, Director, Investor Relations and Business Development, Vitesse Energy: Okay. Thanks for that Brian. For my follow-up on the acquisition side of things, I know that at least looking at the cash flow statement, the kind of ground game acquisition side of the business has been a little bit slower. I know you guys have been seemingly pretty bullish the last couple of calls on acquisition deal flow overall, both for small and larger deals. So just hoping to get an update what you guys kind of view as the pipeline for acquisitions both for round game and larger deals?

Jimmy Henderson, CFO, Vitesse Energy: Yes, Jeff, I’ll take a cut at that. This is Jimmy. Yes, definitely, we’ve seen as Brian said, with the organic on the organic side, we’ve seen pretty robust activity. And we’ve seen quite a bit into the pipeline on NTD or near term development, just nothing that’s really achieved our hurdles that we have. Just haven’t felt the inclination to change our hurdle rate and accept lower returns to do some of these things.

So we just kind of feel pretty comfortable about where we’re at. We continue to look at bigger, chunkier deals and we got a lot of things that we’re analyzing and really scrutinizing. But as we’ve always said, as Bob said earlier in the prepared remarks, we have pretty strenuous requirements when we look at these things. So we’re very optimistic given the number of opportunities that are out there and continue to be cautiously optimistic that something will get to the finish line.

Ben Messier, Director, Investor Relations and Business Development, Vitesse Energy: Understood. All right. Thank you guys for the time. Appreciate it.

Jimmy Henderson, CFO, Vitesse Energy: Thanks, Jeff.

Conference Operator: The next question is from Poe Fratt of Alliance Global Partners. Please proceed with your question.

Paul Fratt, Analyst, Alliance Global Partners: Hey, good morning. Just to follow-up on the guidance question. You look at the if you could just help me understand the chances that you’re going to hit the low end of the guidance, that would be helpful. What would it what would have to happen to see 15,000 BOE per day for the year? I mean, it seems like an outlier example, but if you could just help me understand the low end of the guidance, that’d be helpful.

Jimmy Henderson, CFO, Vitesse Energy: Yes, Paul, this is Jimmy. Thanks for the question. Yes, obviously, the low end of the guidance is pretty minimal chance that it’s going to hit that level. But I think Brian described it pretty well. Excited about the second quarter.

There were some things that came pulled forward from the second half into the quarter. So we’re comfortable. We’ve got great momentum going into the second half. So we’re pretty excited, but we’re not quite to the

Brian Cree, President, Vitesse Energy: point where we wanted to adjust that up. Yes. Paul, I would just add quickly to that, that even in the second quarter, we did see some operators in the basin curtail production. So realistically, to get to that lower end of the range, think you’d have to see a pretty good drop in the price of oil and you’d have to see operators start to curtail production.

Paul Fratt, Analyst, Alliance Global Partners: Okay. That’s really helpful. And then can we just talk about the cost structure a little bit? It looks like LOE was up quarter to quarter on a BOE basis. And then I’d like to understand what your run rate on G and A is.

Obviously, the settlement had an impact there, but on your reported G and A, if you could just help me understand sort of those two factors going forward, that would be helpful.

Brian Cree, President, Vitesse Energy: Yes, I’ll take the first crack on LOE and let Jimmy handle the G and A question. But look, on our LOE, we closed the transaction and the acquisition of Lucero. There were some things that we wanted to do out in the field in that first three, four months of getting those operations under our belt. So we did a few things. And look, I think you can also see that some of those additional LOE costs probably drove our production a little higher in the second quarter also.

So those two kind of offset each other a little bit, but it was just really getting the operated properties into the format that we want them to be in.

Jimmy Henderson, CFO, Vitesse Energy: Paul, on G and A, yes, obviously, it’s kind of hard to get a run rate given all the things that we’ve had running through there over the last few quarters with legal costs as well as costs related to Lucero acquisition. But I think if you make the adjustment based on what is in there this quarter with the legal the reimbursement on the legal costs, we’re sort of in the mid-3s per BOE. And I think we firmly believe that, that will continue to decline as we scale up. Think we’ll have a lot of leverage with our existing team and not a lot of ads on the G and A side as production scales up over time. So I think continue to see that ramp down.

Paul Fratt, Analyst, Alliance Global Partners: Okay. And then I should have congratulated you on the settlement. Big cash payment obviously, but more importantly going forward, can you help me understand the implications of taking your gas in kind? And then also can you give me an appreciation for how the GPM contracts compared to what you’ve been paying historically?

Jimmy Henderson, CFO, Vitesse Energy: Phil, this is Jim again. Yes. So that obviously they’re better than what they were before. Have bespoke contractual situation now with the operator and their affiliates to move our gas primarily. And so, it’s definitely expect to be better going forward.

I think just to give you a little guidepost that if we look at say the first half, we probably we would have seen an improvement in the $2.5.3000000 dollars range for the first half of the year. So kind of give you an idea of what we expect to see as a run rate going forward.

Paul Fratt, Analyst, Alliance Global Partners: Great. And then, Bob, on the last conference call, you did talk about chunkier assets that might be available. Has have those and it sounds like you’re optimistic that something might happen over the second half of the year. Have you actually passed or declined on any deals that are dead right now or is the acquisition pipeline still fairly active?

Bob Garrity, Chairman and CEO, Vitesse Energy: Thanks for the question, Poe. This is Bob. I will say that since we’ve been in business for twelve years, this is by far the most amount of deal flow we have ever seen in the bigger chunkier realm. We have also been able to add as the industry consolidates, we’re able to add an engineer and an ops guy to our evaluation team and they’re completely busy. So again, we especially now that the transaction of the legal process is over, we are spending a lot of time looking at deals.

So we have very high hurdles. It’s got to be dividend supportive or accretive. And it’s difficult to find that, but believe me, we would love to get one when we can. So it’s we’ve got a war room that’s very busy. We’d love to do a deal.

Thankfully, our underlying asset is performing very well. So anything we do, we are very sensitive not to dilute that performance, but we’re hunting.

Paul Fratt, Analyst, Alliance Global Partners: Perfect. Thank you.

Bob Garrity, Chairman and CEO, Vitesse Energy: Thanks, Paul.

Conference Operator: The next question is from Noel Parks of Tuohy Brothers. Please proceed with your question.

Noel Parks, Analyst, Tuohy Brothers: Hi, good morning. I apologize if you already touched on this, but I just wonder if you’ve gotten any sense from the finally completed Hess transaction with Chevron if over time there you’re going to see any sort of changes to their planned activity levels up there and whether you think that would have the possibility of changing sort of the dynamics of maybe Bakken consolidation and so forth?

Bob Garrity, Chairman and CEO, Vitesse Energy: Paul, this is Bob. I’ll take a first crack at that. We don’t know the specific plans that Chevron has for the Bakken, but we’ve got a paradigm to work with because Chevron came in and made a big purchase in the DJ and we really are encouraged by how they’ve performed with Noble. And so if that’s any indication, we’re very much looking forward to Chevron taking control of the Hess asset. The Hess asset up there is fantastic.

And so we are encouraged that Chevron will actually increase the activity, but that’s speculational.

Noel Parks, Analyst, Tuohy Brothers: Sure. Fair enough. And I guess, I feel like there is still a little bit of a lag market perception around sort of the status of inventory in the Bakken remaining inventory and what is and still can be achieved through technical efficiency, maybe even we’re hearing more about that as far as your downhole monitoring and AI and advanced technologies and so forth. And do you see that do you see any opportunities for maybe a little bit greater awareness of the opportunity that still exists up there in the Bakken?

Brian Cree, President, Vitesse Energy: This is Brian. I can talk to it first and let others add in. But yes, I mean, capital efficiency that we’re seeing, it just continues to improve in The Bakken. We’re just very excited about what we see each month in terms of the three mile laterals. Now we’re seeing a lot more four mile laterals, refracs.

There’s just so many things going on in the Bakken that we think continues to make that field more and more productive over time and certainly from a capital efficiency standpoint.

Noel Parks, Analyst, Tuohy Brothers: Great. Thanks a lot.

Bob Garrity, Chairman and CEO, Vitesse Energy: Thanks, Phil.

Conference Operator: This now concludes our question and answer session. I would like to turn the floor back over to Bob Guaranty for closing comments.

Bob Garrity, Chairman and CEO, Vitesse Energy: We’d like to thank everyone for their continued support. Please reach out to Ben if you have any specific questions and we look forward to talking to everybody again in three months. Thank you.

Conference Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s teleconference. You may disconnect your lines and have a wonderful day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.