Vitesse (VTS) 16th Annual Midwest Ideas Conference summary

Business model and asset overview

• Focuses on non-operated participation in oil and gas wells, primarily in the Bakken, with over 7,000 wells and 2.5%-3% average ownership.

• Recent acquisition of Lucero Energy Corp. added a small operated position and increased free cash flow.

• Over 95% of production and assets are in North Dakota, with diversification across many operators.

• Maintains a long-duration asset base, with 80% undeveloped and a 20+ year drilling inventory.

• Asset base benefits from technological advances, such as longer laterals and improved drilling efficiency.

Capital allocation and financial strategy

• Prioritizes a fixed dividend ($2.25/share, ~9% yield) as the main return to shareholders.

• Maintains a conservative balance sheet, targeting less than 1x debt/EBITDA (currently 0.6x pro forma).

• Uses free cash flow for dividends, organic capex, small and large acquisitions, and opportunistic share buybacks.

• Hedging program protects cash flow and dividend, with 70% of 2025 oil production hedged at ~$70/bbl.

• Leverages a proprietary data and AI platform for underwriting and capital allocation decisions.

Operational performance and technology

• Drilling and completion costs have declined 26% since 2014, while first-year production per lateral foot has increased 75%.

• Asset diversification across 7,500+ wells and exposure to major operators like Continental, Devon, Chevron, EOG, and ConocoPhillips.

• Maintains low maintenance capex ($95M) to hold production flat, with a 50% reinvestment rate.

• AI and proprietary database enhance underwriting, modeling, and contract analysis.

• Heavy hedging and risk management result in the lowest volatility among peers (35%).