Tear Sheet: Vital Energy Inc.

The company closed on its most recent transaction—its $880 million acquisition of Point Energy Partners—in September, which added about 15,000 barrels of oil equivalent (boe) per day of net production (expected annual average rate), 117 million boe of net proved reserves, and 49 net future drilling locations in the Delaware Basin. Northern Oil&Gas Inc. acquired a 20% stake in the transaction, with Vital taking the remaining 80%. Vital funded its $815 million portion (net of about $65 million in purchase price adjustments) primarily with borrowings on its reserve-based lending (RBL) credit facility. Although the deal was slightly leveraging in the near term due to the all-cash financing, we expect the company will generate positive free operating cash flow

...November 12, 2024 Recent acquisitions have increased Vital Energy Inc.'s scale in the Permian Basin and improved its future drilling inventory. The company closed on its most recent transaction--its $880 million acquisition of Point Energy Partners--in September, which added about 15,000 barrels of oil equivalent (boe) per day of net production (expected annual average rate), 117 million boe of net proved reserves, and 49 net future drilling locations in the Delaware Basin. Northern Oil & Gas Inc. acquired a 20% stake in the transaction, with Vital taking the remaining 80%. Vital funded its $815 million portion (net of about $65 million in purchase price adjustments) primarily with borrowings on its reserve-based lending (RBL) credit facility. Although the deal was slightly leveraging in the near term due to the all-cash financing, we expect the company will generate positive free operating cash flow (FOCF) over the next 12 months and use this to repay a portion of its RBL borrowings and...

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