Vital Energy Inc (VUX)

[JonnyRBuck12]

Vital Energy May 2022 Company Presentation - http://www.vitalenergyoil.com/presentations/Vital%20Assets%202022%20Presentation%20.pdf

Good to know that they're listening, considering the last presentation was released in 2017. Dare I even say a marketing campaign could come later on? Some people were correct in saying that Lampman would decline as 600bopd last September was off the hop and every single well declines, especially from initial production rates. But it's likely stabilized now(slower declines) and there's one more drill location. At the same time, Gull Lake doubled in production and Baxter started producing again. The company has lots of drill locations and can easily bounce production from 600-1000bopd (not considering Montney wells yet because they'll add 2000bopd+ each and cost a lot).

Cost associated with adding production vs cash coming in for Vital is in a sweet spot. Add $4-6 million cash per quarter while spending around $1-1.5 million in drilling (based on the 2021 numbers). Here's a breakdown of all the wells they have to drill from that presentation, including some new properties:

Lampman - 1 well
Gull Lake - 2 wells
Sullivan - 2 wells
Pennant - Done, no more locations
Baxter - 4 wells (cheaper wells)
Ante - 25 Montney wells (More expensive, ideal case is a JV)
Pembina - 4 Cardium wells
Steelman - 4 wells (same zone as lampman wells)
Gainsborough - 2 wells (same zone as lampman wells)
Hume - 2 wells (same zone as lampman wells)

From the MD&A - Plan is to drill 4-6 wells in 2022. If they're going to bring in $16-24 million, spending $4-6 million drilling wells and another $2 million for G&A/other expenses, earnings should be massive, especially if they can hit a few more Lampman wells and get 1-2 quarters of boosted production like last year. I believe they'll hit the low hanging fruit before going for the bigger and more expensive wells, which makes sense.