VTS — Vitesse Energy, Inc.

Vitesse Energy Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Production: Averaged 17,354 barrels of oil equivalent per day (Boe/d), a 9% increase from Q1 2026, with a 60% oil cut.
• Revenue: Oil production accounted for 95% of total revenue.
• Adjusted EBITDA: $40.2 million.
• Adjusted Net Income: $1.8 million.
• GAAP Net Income: $33.1 million, primarily due to $40.2 million in unrealized hedging gains.
• Free Cash Flow: $16.3 million after $21.1 million in development capital expenditures.
• Debt: Total debt of $158.5 million, with a net debt-to-adjusted EBITDA ratio of less than 1x.
• Liquidity: Approximately $117 million in total liquidity before internal cash flows.
• Dividend: A cash dividend of $1.75 per share was declared, marking the 15th consecutive quarter of dividends since the spin-off in January 2023.

2. Strategic Updates and Business Highlights:

• Vitesse remains committed to its core strategy of prioritizing a durable dividend, disciplined capital allocation, and maintaining a conservative balance sheet.
• The company has a development pipeline of 19.4 net wells, with 6.4 net wells currently drilling or completing.
• The focus on longer lateral drilling (3- and 4-mile laterals) is driving efficiencies, with 69% of year-to-date AFEs being for laterals of 3 miles or longer.
• The company has a $60 million share-repurchase authorization to provide flexibility alongside the dividend.
• Vitesse has been actively layering on additional oil hedges through 2029 at a weighted-average price of approximately $67.

3. Forward Guidance and Outlook:

• Revised 2026 annual production guidance narrowed to 16,300 to 17,200 Boe/d, with oil production now expected to be 60% to 62%.
• Total cash capital expenditure guidance raised to a range of $65 million to $80 million for the year.
• The company is well-positioned to support its dividend through the cycle, backed by a hedge book extending into 2029.

4. Bad News, Challenges, or Points of Concern:

• The market for near-term development acquisitions has become more competitive, leading to a cautious approach in capital allocation.
• Although the company is optimistic about the Powder River Basin acquisition, the impact of market volatility and geopolitical events (e.g., the Iran war) on pricing and operations remains a concern.
• The reliance on unrealized hedging gains, which are non-cash items, could pose risks if commodity prices fluctuate significantly.

5. Notable Q&A Insights:

• Management is actively evaluating operated activity for potential organic growth CapEx, particularly focusing on extending laterals in partnership with neighboring operators.
• The near-term development acquisition market is competitive, but the company remains disciplined in maintaining high return hurdles.
• The Powder River Basin acquisition is progressing well, with favorable operators (EOG and Continental) involved, enhancing confidence in the asset's performance.
• The company is leveraging its proprietary data platform, Luminis, to identify and underwrite opportunities effectively, despite market fluctuations.

Overall, Vitesse Energy's Q2 2026 results reflect a solid operational performance and a commitment to its strategic priorities, although challenges in the acquisition landscape and market volatility remain key considerations for the future.