Vitesse Energy, Inc. First Quarter 2023 Results

STOCKHOLDER RETURNS

On February 13, 2023, Vitesse's Board of Directors declared a regular quarterly cash dividend for Vitesse's common stock of $0.50 per share for stockholders of record as of March 15, 2023, which was paid on March 31, 2023. Additionally, Vitesse's Board of Directors approved a stock repurchase program authorizing the repurchase of up to $60 million of the Company's common stock. As the Company continues to focus on its goal of maximizing total stockholder return, we believe that a share repurchase program is complementary to the dividend and is a tax efficient means to further improve stockholder return.

In the first quarter of 2023, Vitesse repurchased $0.2 million of common stock at an average share price of $16.98.

In May 2023, Vitesse's Board of Directors declared its second quarterly cash dividend for Vitesse's common stock of $0.50 per share for stockholders of record as of June 15, 2023, which will be paid on June 30, 2023. Subject to Board approval, contractual restrictions and applicable law, Vitesse currently intends to pay quarterly dividends of $0.50 per share for the foreseeable future.

FINANCIAL AND OPERATING RESULTS

First quarter net loss of $47.8 million reflecting $77.4 million of charges associated with the Spin-Off, including (i) a one-time non-cash income tax expense of $44.1 million related to a change in corporate tax status, (ii) an acceleration of $26.8 million of non-cash equity-based compensation expense, and (iii) non-recurring transaction costs of $6.5 million.

First quarter Adjusted Net Income was $15.6 million. Adjusted EBITDA was $40.1 million, an increase of 6% over the first quarter of 2022. See "Non-GAAP Financial Measures" below.

Oil and gas production for the first quarter of 2023 averaged 11,524 Boe per day, an increase of 20% from the first quarter of 2022. Oil represented 67% of production and 87% of total revenue in the first quarter of 2023. Total revenue, including the effects of our realized hedges, for the first quarter of 2023 was $58.7 million compared to $52.1 million for the first quarter of 2022, despite a 20% drop in WTI oil price and a 42% drop in Henry Hub natural gas price.

Vitesse's realized oil and natural gas prices before hedging were $72.95 per Bbl and $3.61 per Mcf, respectively, during the first quarter of 2023. Vitesse hedges a portion of its oil production to reduce the impact of price volatility on its financial results. In the first quarter, the Company's realized oil price with hedging was $74.02 per Bbl.

Lease operating expenses in the first quarter of 2023 were $9.1 million, or $8.75 per Boe, an increase of 17% on a per unit basis compared to the first quarter of 2022. The higher lease operating expense was primarily related to increased workover activity and inflationary pressure on service costs.

General and administrative ("G&A") expenses for the first quarter of 2023 totaled $10.9 million, which included $6.5 million of costs related to the Spin-Off. Excluding these costs, G&A would have been $4.16 per Boe, an increase of 26% on a per unit basis compared to the first quarter of 2022. The increase in G&A expense per Boe, excluding the Spin-Off costs, was primarily due to higher costs associated with being a public company.

LIQUIDITY AND CAPITAL EXPENDITURES

As of March 31, 2023, Vitesse had $3.4 million in cash and $45.0 million of borrowings outstanding on its revolving credit facility. Vitesse had total liquidity of $128.4 million as of March 31, 2023, consisting of cash and committed borrowing availability under its revolving credit facility. On May 2, 2023 Vitesse amended its revolving credit facility in conjunction with the regular semi-annual borrowing base redetermination that reduced the borrowing base from $265 million to $245 million, primarily related to lower commodity prices, and reaffirmed elected commitments at $170 million, among other items.

During the quarter, Vitesse spent $21.6 million on development capital expenditures and $1.1 million on acquisitions of oil and gas properties.

OPERATIONS UPDATE

As of March 31, 2023, there were 43 drilling rigs operating in the Williston Basin of which 18 were drilling on acreage in which Vitesse owns an interest. The Company owned an interest in 276 gross (7.2 net) wells that were either drilling or in the completion phase, and another 408 gross (10.1 net) locations that had been permitted for development at the end of the quarter.

2023 ANNUAL GUIDANCE

Vitesse reaffirms its previously issued 2023 annual guidance, which is set forth below.

COMMODITY HEDGING

Vitesse hedges a portion of its expected annual oil production volumes to increase the predictability and certainty of its cash flow and to help maintain a strong financial position. Vitesse does not currently have hedges in place on its expected natural gas production volumes. The following table summarizes Vitesse's open oil commodity derivative swap contracts scheduled to settle after March 31, 2023.