Debt Reduction and Free Cash Flow
Vital Energy reduced net debt by $135 million, supported by higher-than-expected adjusted free cash flow, which beat street consensus. The company anticipates reducing net debt by $300 million by year-end 2025.
Cost Reductions
Lease operating expenses and general and administrative expenses have been successfully reduced by approximately 5%. LOE is anticipated to be around $115 million per quarter, down from $121 million. G&A expenses are projected to be below $22 million per quarter.
Hedge Portfolio and Production Strategy
90% of oil is hedged at $70.61 per barrel WTI, providing confidence in cash flow and debt reduction targets. The company expects to generate about $265 million in adjusted free cash flow.
Operational Efficiencies
Drilling and completions teams set cycle time records, improving Delaware Basin year-over-year capital efficiency by 30%. More than 50% of completions in 2025 will be simul-frac.
Successful Asset Sale
A non-core asset sale generated $20.5 million, with no significant impact on production.