Vital Energy Acquires Additional Working Interests in the Permian Basin

Source: www.gulfoilandgas.com 12/21/2023, Location: North America

Vital Energy, Inc. announced the acquisition of additional working interests in producing assets associated with the recent asset acquisition from Henry Energy LP, Moriah Henry Partners LLC and Henry Resources LLC (collectively "Henry") for total consideration of $55 million1.

The purchase will increase Vital Energy’s working interest in 45 wells by an average of 24%, increasing the Company’s estimated 2024 production by approximately 1,400 BOE/d (57% oil). The transaction is expected to increase Vital Energy’s 2024 Free Cash Flow2 by approximately $20 million3, furthering Vital Energy’s deleveraging goals.

The transaction is associated with the exercise of tag-along rights by owners of certain assets in the Henry acquisition that enable Vital Energy to purchase and finance the assets on the same terms as the Henry purchase and sale agreement, in which the Company’s shares were issued at $54.96. Vital Energy funded the transaction through the issuance of 627,000 shares of its common stock and 595,000 shares of its 2.0% cumulative mandatorily convertible preferred securities.

"This transaction further demonstrates the opportunities provided by our increased scale in the Permian," stated Jason Pigott, President and Chief Executive Officer. "Our larger operating footprint across the Midland and Delaware basins continues to drive new efficiencies through bolt-on transactions that increase working interest or optimize our development plans by enabling longer laterals. As we successfully integrate these high-value acquisitions we expect to see continued gains in capital efficiency and stronger Free Cash Flow."


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