Vital Energy Reports Second-Quarter 2025 Financial and Operating Results
TULSA, OK, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Vital Energy, Inc. (NYSE:VTLE) ("Vital Energy" or the "Company") today reported second-quarter 2025 financial and operating results. Supplemental slides have been posted to the Company's website and can be found at www.vitalenergy.com. A conference call is planned for 7:30 a.m. CT, Thursday, August 7, 2025. A webcast will be available through the Company's website.
Second-Quarter 2025 Highlights
Reported a net loss of $582.6 million, Adjusted Net Income1 of $76.1 million and cash flow from operating activities of $252.3 million
Generated Consolidated EBITDAX1 of $338.1 million and Adjusted Free Cash Flow1 of $36.1 million
Reported capital investments of $257.0 million, excluding non-budgeted acquisitions and leasehold expenditures, above guidance of $215-$245 million
Reported lease operating expense ("LOE") of $107.8 million, below guidance of $112-$118 million
Reported total general and administrative expenses ("G&A") of $23.8 million, below guidance of $24.6-$26.7 million
Produced 137.9 thousand barrels of oil equivalent per day ("MBOE/d") and oil of 62.1 thousand barrels of oil per day ("MBO/d"), within guidance of 133.0-139.0 MBOE/d and 61.0-65.0 MBO/d, respectively
Commenced production from the Company's first two J-Hook wells
On schedule to TIL all 38 second-half 2025 wells by early October
Divested 3,800 net non-core acres in Crane and Upton counties, Texas, for $6.5 million in July 2025, with proceeds allocated to debt reduction
1Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release.
"Our second quarter results demonstrate our ongoing efforts to lower costs and optimize our assets, with the ultimate goal of enhancing returns," stated Jason Pigott, President and CEO. "We have made substantial progress to sustainably reduce operating, personnel and corporate costs as we streamline our business and strengthen our balance sheet. Additionally, we continue to lead the industry in the application of optimized well designs, completing our first J-Hook wells and commencing drilling on a section to be fully developed with 12 horseshoe wells. We remain committed to the capital and cost discipline that will allow us to generate sustainable Adjusted Free Cash Flow from our high-quality asset base."
Second-Quarter 2025 Financial and Operations SummaryFinancial Results. The Company had a net loss of $582.6 million, or $(15.43) per diluted share. Results were impacted by a non-cash pre-tax impairment loss on oil and gas properties of $427.0 million and a valuation allowance against the Company's federal net deferred tax asset of $237.9 million. Adjusted Net Income was $76.1 million, or $2.02 per adjusted diluted share. Cash flows from operating activities were $252.3 million and Consolidated EBITDAX was $338.1 million.
The impairment was related to the full cost ceiling limitation, driven primarily by the decline in the trailing 12-month SEC mandated oil price calculation, and excludes the value of the Company's commodity derivative positions and only includes the 171 proved undeveloped locations in the Company's current proved reserves out of approximately 920 inventory locations at the beginning of the year, net of divestitures. Additionally, as a result of the full cost ceiling impairment and the expectation of future impairments, a valuation allowance against the Company's net deferred tax asset was recorded.
Production. Vital Energy's total and oil production averaged 137,864 BOE/d and 62,140 BO/d, respectively. Weather and temporary curtailments related to the installation of additional production equipment negatively impacted average daily production by 780 BOE/d, 500 BO/d of which was oil.
Capital Investments. Total capital investments, excluding non-budgeted acquisitions and leasehold expenditures, were $257 million, including approximately $13 million related to drilling cost overruns and $11 million to accelerate development activity into the second quarter. Second quarter investments included $216 million in drilling and completions, $27 million in infrastructure investments, $8 million in other capitalized costs and $6 million in land, exploration and data-related costs.
Operating Expenses. LOE was 6% lower than the midpoint of guidance at $107.8 million, driven by lower than expected costs on the recently acquired Point Energy assets and ongoing cost optimization across the Midland and Delaware basins that reduced field power generation and chemicals costs.
G&A Expenses. Total G&A expenses were 7% below the midpoint of guidance at $23.8 million as the Company continued to reduce employee and professional costs.
Adjusted Free Cash Flow and Net Debt. Adjusted Free Cash Flow was $36 million, with sustainable expense reductions largely offsetting drilling outspend. Net Debt1 increased by $8 million during the quarter as the Company's net changes in operating assets and liabilities decreased by $41 million.
Liquidity. At June 30, 2025, the Company had $745 million outstanding on its $1.4 billion senior secured credit facility and cash and cash equivalents of $30 million.
1Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release.
2025 OutlookProduction. Planned completion of 38 wells in late third quarter/early fourth quarter is expected to meaningfully increase production volumes. Total and oil production ranges for full-year 2025 were narrowed to account for actual second-quarter 2025 volumes and are expected to be 136.5-139.5 MBOE/d and 63.3-65.3 MBO/d, respectively.
Capital Investments. Vital Energy reduced expectations for third quarter investments by $25 million to $235-$265 million, in part reflecting the acceleration of capital into the second quarter. Guidance for the fourth quarter is unchanged. Full-year 2025 capital expectations were narrowed to $850-$900 million.
Operating Expenses. The Company expects recent improvements in operating expenses to be sustainable. Third quarter LOE is expected to be $109-$115 million and decline to $107-$113 million in the fourth quarter of 2025.
G&A Expenses. In June, Vital Energy reduced its combined employee and contractor headcount by approximately 10%, resulting in sustainably lower G&A expense. Total G&A for both the third and fourth quarters of 2025 is expected to decline approximately 12% from second-quarter 2025 to a range of $20.0-$22.0 million.
Non-core Divestitures. In July 2025, Vital Energy closed on the sale of approximately 3,800 net acres in Crane and Upton counties for $6.5 million. The sale included five of the Company's inventory locations in the Barnett formation with no impact to production. Year-to-date, Vital Energy has closed on non-core asset sales totaling $27 million.
Adjusted Free Cash Flow and Net Debt. For full-year 2025, the Company expects to generate approximately $305 million of Adjusted Free Cash Flow at current oil prices of ~$67 per barrel WTI, inclusive of hedging proceeds, and reduce Net Debt by approximately $310 million. The estimated Net Debt reduction includes proceeds from non-core asset sales and increases in debt from working capital changes and organizational restructuring expenses. Through the first half of 2025, Vital Energy reduced Net Debt by $125 million. The Company expects to reduce Net Debt by approximately $25 million in the third quarter of 2025 and approximately $160 million in the fourth quarter.
Third-Quarter 2025 GuidanceThe table below reflects the Company's guidance for production and capital investments.
3Q-25E
Total production (MBOE/d)
128.0 - 134.0
Oil production (MBO/d)
58.0 - 62.0
Capital investments, excluding non-budgeted acquisitions ($ MM)
$235 - $265
The table below reflects the Company's guidance for select revenue and expense items.
3Q-25E
Average sales price realizations (excluding derivatives):
Oil (% of WTI)
101%
NGL (% of WTI)
21%
Natural gas (% of Henry Hub)
23%
Net settlements received (paid) for matured commodity derivatives ($ MM):
Oil
$11
NGL
$5
Natural gas
$20
Selected average costs & expenses:
Lease operating expenses ($ MM)
$109 - $115
Production and ad valorem taxes (% of oil, NGL and natural gas sales revenues)
6.40%
Oil transportation and marketing expenses ($ MM)
$10.7 - $11.7
Gas gathering, processing and transportation expenses ($ MM)
$5.5 - $6.5
General and administrative expenses (excluding LTIP and transaction expenses, $ MM)
$16.9 - $18.4
General and administrative expenses (LTIP cash, $ MM)
$0.4 - $0.5
General and administrative expenses (LTIP non-cash, $ MM)
$2.7 - $3.1
Depletion, depreciation and amortization ($ MM)
$168 - $178
Conference Call DetailsVital Energy plans to host a conference call at 7:30 a.m. CT on Thursday, August 7, 2025, to discuss its second-quarter 2025 financial and operating results. Supplemental slides will be posted to the Company's website. Interested parties are invited to listen to the call via the Company's website at www.vitalenergy.com, under the tab for "Investor Relations | News & Presentations | Upcoming Events."
About Vital EnergyVital Energy, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Vital Energy's business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.
Additional information about Vital Energy may be found on its website at www.vitalenergy.com.
Forward-Looking StatementsThis press release and any oral statements made regarding the contents of this release, including in the conference call referenced herein, contain forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities that Vital Energy assumes, plans, expects, believes, intends, projects, indicates, enables, transforms, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current belief, based on currently available information, as to the outcome and timing of future events. Such statements are not guarantees of future performance and involve risks, assumptions and uncertainties. General risks relating to Vital Energy include, but are not limited to: the volatility of oil, NGL and natural gas prices, including the Company's area of operation in the Permian Basin; changes, uncertainty and instability in domestic and global production, supply and demand for oil, NGL and natural gas, and actions by the Organization of the Petroleum Exporting Countries members and other oil exporting nations ("OPEC+"); changes in general economic, business or industry conditions and market volatility, including as a result of slowing growth, inflationary pressures, monetary policy, tariffs, trade barriers, price and exchange controls and other regulatory requirements, including such changes that may be implemented by the United States ("U.S.") and foreign governments; the Company's ability to execute its strategies, including its ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to its financial results and to successfully integrate acquired businesses, assets and properties; the Company's ability to optimize spacing, drilling and completions techniques in order to maximize its rate of return, cash flows from operations and stockholder value; the ongoing instability and uncertainty in the U.S. and international energy, financial and consumer markets that could adversely affect the liquidity available to the Company and its customers and the demand for commodities, including oil, NGL and natural gas; competition in the oil and gas industry; the Company's ability to discover, estimate, develop and replace oil, NGL and natural gas reserves and inventory; insufficient transportation capacity in the Permian Basin and challenges associated with such constraint, and the availability and costs of sufficient gathering, processing, storage and export capacity; a decrease in production levels which may impair the Company's ability to meet its contractual obligations and ability to retain its leases; risks associated with the uncertainty of potential drilling locations and plans to drill in the future; the inability of significant customers to meet their obligations; revisions to the Company's reserve estimates as a result of changes in commodity prices, decline curves and other uncertainties; the availability and costs of drilling and production equipment, supplies, labor and oil and natural gas processing and other services; ongoing war and political instability in Ukraine, Israel and the Middle East and the effects of such conflicts on the global hydrocarbon market and supply chains; risks related to the geographic concentration of the Company's assets; the Company's ability to hedge commercial risk, including commodity price volatility, and regulations that affect the Company's ability to hedge such risks; the Company's ability to continue to maintain the borrowing capacity under its Senior Secured Credit Facility or access other means of obtaining capital and liquidity, especially during periods of sustained low commodity prices; the Company's ability to comply with restrictions contained in its debt agreements, including its Senior Secured Credit Facility and the indentures governing its senior unsecured notes, as well as debt that could be incurred in the future; the Company's ability to generate sufficient cash to service its indebtedness, fund its capital requirements and generate future profits; drilling and operating risks, including but not limited to, risks related to hydraulic fracturing, securing sufficient electricity to produce its wells without limitation, natural disasters and other matters beyond the Company's control; U.S. and international economic conditions and legal, tax, political and administrative developments, including the effects of energy, trade and environmental policies and existing and future laws and government regulations; the Company's ability to comply with federal, state and local regulatory requirements, including the One Big Beautiful Bill Act (the "OBBB Act") and any impact thereon by the OBBB Act taxes, tariffs and international trade; the impact of repurchases, if any, of securities from time to time; the Company's ability to maintain the health and safety of, as well as recruit and retain, qualified personnel, including senior management or other key personnel, necessary to operate its business; evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, third-party service provider failures, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, social engineering, physical breaches or other actions; and the Company's belief that the outcome of any current legal proceedings will not materially affect its financial results and operations, and other factors, including those and other risks described in its Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"), subsequent Quarterly Reports on Form 10-Q and those set forth from time to time in other filings with the Securities and Exchange Commission ("SEC"). These documents are available through Vital Energy's website at www.vitalenergy.com under the tab "Investor Relations" or through the SEC's Electronic Data Gathering and Analysis Retrieval System at www.sec.gov. Any of these factors could cause Vital Energy's actual results and plans to differ materially from those in the forward-looking statements. Therefore, Vital Energy can give no assurance that its future results will be as estimated. Any forward-looking statement speaks only as of the date on which such statement is made. Vital Energy does not intend to, and disclaims any obligation to, correct, update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
This press release and any accompanying disclosures include financial measures that are not in accordance with generally accepted accounting principles ("GAAP"), such as Adjusted Free Cash Flow, Adjusted Net Income, Net Debt and Consolidated EBITDAX. While management believes that such measures are useful for investors, they should not be used as a replacement for financial measures that are in accordance with GAAP. For a reconciliation of such non-GAAP financial measures to the nearest comparable measure in accordance with GAAP, please see the supplemental financial information at the end of this press release.Unless otherwise specified, references to "average sales price" refer to average sales price excluding the effects of the Company's derivative transactions.
All amounts, dollars and percentages presented in this press release are rounded and therefore approximate.
Vital Energy, Inc.Selected operating data
Three months ended June 30,
Six months ended June 30,
2025
2024
2025
2024
(unaudited)
(unaudited)
Sales volumes:
Oil (MBbl)
5,655
5,388
11,495
10,715
NGL (MBbl)
3,573
3,173
7,057
6,107
Natural gas (MMcf)
19,908
19,264
39,650
37,798
Oil equivalent (MBOE)(1)
12,546
11,771
25,160
23,121
Average daily oil equivalent sales volumes (BOE/d)(1)
137,864
129,356
139,005
127,038
Average daily oil sales volumes (Bbl/d)(1)
62,140
59,209
63,509
58,872
Average sales prices(1):
Oil ($/Bbl)(2)
$
64.65
$
81.97
$
68.55
$
80.03
NGL ($/Bbl)(2)
$
14.29
$
12.57
$
15.98
$
14.24
Natural gas ($/Mcf)(2)
$
0.53
$
(0.28
)
$
0.96
$
0.34
Average sales price ($/BOE)(2)
$
34.06
$
40.45
$
37.31
$
41.40
Oil, with commodity derivatives ($/Bbl)(3)
$
74.12
$
76.90
$
74.96
$
75.93
NGL, with commodity derivatives ($/Bbl)(3)
$
14.93
$
12.33
$
16.00
$
14.05
Natural gas, with commodity derivatives ($/Mcf)(3)
$
1.73
$
0.70
$
1.62
$
1.05
Average sales price, with commodity derivatives ($/BOE)(3)
$
40.40
$
39.66
$
41.29
$
40.61
Selected average costs and expenses per BOE sold(1):
Lease operating expenses
$
8.59
$
9.66
$
8.40
$
9.49
Production and ad valorem taxes
2.10
2.30
2.37
2.50
Oil transportation and marketing expenses
0.85
1.04
0.83
0.95
Gas gathering, processing and transportation expenses
0.43
0.43
0.48
0.32
General and administrative (excluding LTIP and transaction expenses)
1.68
1.67
1.62
1.89
Total selected operating expenses
$
13.65
$
15.10
$
13.70
$
15.15
General and administrative (LTIP):
LTIP cash
$
(0.01
)
$
0.03
$
(0.01
)
$
0.10
LTIP non-cash
$
0.23
$
0.30
$
0.24
$
0.29
Depletion, depreciation and amortization
$
14.86
$
14.81
$
14.96
$
14.72
_______________________________________________________________________________(1) The numbers presented are calculated based on actual amounts and may not recalculate using the rounded numbers presented in the table above.(2) Price reflects the average of actual sales prices received when control passes to the purchaser/customer adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point.(3) Price reflects the after-effects of the Company's commodity derivative transactions on its average sales prices. The Company's calculation of such after-effects includes settlements of matured commodity derivatives during the respective periods.
Vital Energy, Inc.Consolidated balance sheets
(in thousands, except share data)
June 30, 2025
December 31, 2024
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
30,194
$
40,179
Accounts receivable, net
242,956
299,698
Derivatives
129,444
101,474
Other current assets
27,836
25,205
Total current assets
430,430
466,556
Property and equipment:
Oil and natural gas properties, full cost method:
Evaluated properties
14,136,321
13,587,040
Unevaluated properties not being depleted
176,117
242,792
Less: accumulated depletion and impairment
(9,915,495
)
(8,966,200
)
Oil and natural gas properties, net
4,396,943
4,863,632
Midstream and other fixed assets, net
122,022
134,265
Property and equipment, net
4,518,965
4,997,897
Derivatives
33,165
34,564
Operating lease right-of-use assets
82,049
104,329
Deferred income taxes
3,396
239,685
Other noncurrent assets, net
32,446
35,915
Total assets
$
5,100,451
$
5,878,946
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities
$
158,125
$
185,115
Accrued capital expenditures
109,844
95,593
Undistributed revenue and royalties
172,415
187,563
Operating lease liabilities
45,778
73,143
Other current liabilities
59,341
59,725
Total current liabilities
545,503
601,139
Long-term debt, net
2,321,294
2,454,242
Derivatives
19,466
5,814
Asset retirement obligations
75,620
82,941
Operating lease liabilities
27,941
26,733
Other noncurrent liabilities
5,049
7,506
Total liabilities
2,994,873
3,178,375
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued and outstanding as of June 30, 2025 and December 31, 2024
—
—
Common stock, $0.01 par value, 80,000,000 shares authorized, and 38,687,645 and 38,144,248 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively
387
381
Additional paid-in capital
3,829,651
3,823,241
Accumulated deficit
(1,724,460
)
(1,123,051
)
Total stockholders' equity
2,105,578
2,700,571
Total liabilities and stockholders' equity
$
5,100,451
$
5,878,946
Vital Energy, Inc.Consolidated statements of operations
Three months ended June 30,
Six months ended June 30,
(in thousands, except per share data)
2025
2024
2025
