Vital Energy Inc (VTLE) Options

China has shown strong gas imports in 2024...

https://lngprime.com/asia/china-boosts-gas-imports-in-may/114212/


so we watch...LJ

VTLE CEO has some explaining to do If

they only increase production about

4 mboe/day in 4th quarter after spending

over 1.1 billion on latest acquisitions...

page 24 for 3rd quarter production...

https://www.otcmarkets.com/filing/html?id=17030559&guid=NsJ-kKqjA3cmB3h

page 13 for latest guidance...

https://investor.vitalenergy.com/static-files/57d5e9bc-3e09-467a-98c6-3c712de00f2c


Numbers are hinting at some new

leader changes needed...

A billion dollars is still supposed to

buy a lot even with inflation...


So we watch...LJ

VTLE $837 million market cap, over $1,700,000,000 revenue

on four times recent quarterly revenue...

$435 million quarterly revenue x two quarters

= $870 million and higher than current

market cap...TWO quarters of revenue...

https://www.otcmarkets.com/stock/VTLE/security

https://www.otcmarkets.com/filing/html?id=17030559&guid=bK5-kaH2vzTCaBh

https://finance.yahoo.com/news/vital-energy-reports-third-quarter-202500879.html

This compares apples to apples of history...

*Thou shall not compare new, higher share

count without also having the new revenue

from much higher production post acquisitions...


This is real and not scy-fy...


So we watch...LJ

VTLE below $80/share with $77/bbl. WTI shows

there is a pricing problem by the

MMs in the oil sector...

VTLE won't be losing that projected

money on hedging in the 4th quarter on

over 40,000 bbls/day of oil production at

around $76/bbl hedge prices if oil stays down...

https://investor.vitalenergy.com/static-files/1412b460-5bad-4d3e-b2af-be059e0f9f89

Managers made those hedging contracts

to back up their biz plan...

Market pricing now on VTLE is saying

that those Managers have no idea what

they are doing...

Doesn't look to me like the market pricers

know what they are doing...

So we watch...LJ

'the proof of the pudding is in

the eating'...

Did Forge light up production?...

Should be known soon enough...

So we watch...LJ

Will VTLE be adding 2nd quarter,2024 natural

gas hedges now at better prices?...

https://www.barchart.com/futures/quotes/NGU23/futures-prices

To help reduce downside potential

like happened in 2nd quarter, 2023?...


Will VTLE have all operations winterized

on both new acquisitions before December?...

CC misses some good questions...

So we watch...LJ

VTLE, about 14% increase in quarterly oil production

in 2nd quarter, 2023 over the 1st

quarter, 2023 production guided...

It didn't look priced in at around

$70/bbl. oil price...now it's $80/bbl...

44,000 bbls/day over 38,500 bbls/day...

about 5,500 bbls/day increase quarterly...

https://finance.yahoo.com/news/vital-energy-provides-select-preliminary-205000697.html

Hard to see any credit yet for the

quarterly oil production growth...

Need to see that some before...

Latest acquisition boosts oil production

again in 3rd quarter handsomely,

which is forward looking thingy...

Share price seems to have room to

grow to catch up with production growth...

Folks looking back at financials for 2022

with Sky High receipt prices seem to be

missing the current growth story...

Handsome is nice looking growth...

Peon opinion, of course...

So we watch...LJ

NOG and VTLE completed Forge acquisition...

https://finance.yahoo.com/news/nog-announces-closing-forge-delaware-200500216.html

https://www.otcmarkets.com/filing/html?id=16767348&guid=U_D-keDrQVj4B3h

short and sweet...

So we watch...LJ

When the demand curve heats back up we’ll start to see the push higher in crude, IMO

China is slacking but it’s inevitable that they’ll burn through the inventory as their consumption gets back to the longer term trend

VTLE isn’t getting any love yet but that was a great acquisition

spec

U.S. Commercial Oil Inventory is 2% below

the five year average for this

time of year...

Gasoline inventories 8% lower than

five year average this time of year...

https://ir.eia.gov/wpsr/wpsrsummary.pdf

Going into summer...

May SSTs in 2023 were much warmer

in Caribbean and Atlantic Ocean

than in past four years...

Caribbean is south of Gulf of Mexico...

Buyers may be on Tropical vacations...


So we watch...LJ

06/01/21, VTLE $65+ /share, WTI $73+ /bbl...

06/01/23, VTLE $43 /share,

06/01/23 WTI $70+ /bbl...

'What we have here, is a lack of

appreciation'...

https://hfir.substack.com/p/the-saudi-put?r=f2v8q&utm_medium=ios&utm_campaign=post

So we watch...LJ

VTLE is going west young man, to

pursue increasing production...

https://investor.vitalenergy.com/static-files/02ceb567-66db-49a0-952c-f53d4a93ccb7

Did you hear a creaking sound

this evening...

It may be the recliners of a completion

crew moving back to horizontal...

A better oil price could see them put

back to work again...

Peon guessing on that...

Can you imagine oil production approaching

50,000 bbls/day, without increased

share count, if the oil price starts

stumbling up in 3rd quarter?...

So we watch...LJ

Slick willy name change didn't get any

retail voting support...

https://www.otcmarkets.com/filing/html?id=16685001&guid=Mqu-kFsYtmI-B3h

Out of touch with shareholders

shows in share price too...

No idea what this means, if anything...

So we watch...LJ

U.S drilling rig count drops sharply to

start May, 2023...

https://oilprice.com/Energy/Energy-General/Oil-Gas-Drilling-Activity-In-US-Sees-Largest-Single-Week-Drop-Since-Mid-2020.html

U.S. oil production showed a peak

of 12.4 million barrels per day in

April of 2023...

Any fly on the wall might now expect

the U.S. oil production declines to

continue as unconventional wells rushed

to be drilled in 2022 start entering their

natural decline stages,,,without more

drilling going on than is currently...

Flies also swarm to sweet deals that

come along with product price drops...

Has VTLE been watching fly videos

on U-Tube?...

They appeared to swarm quick...

So we watch...LJ

unVital Energy needs a page on website

that lists weekly share buybacks

made for each week...

To help make shareowners feel better

every month when price gets dropped...

And if the company isn't buying back

ultra cheap shares by the bucketfulls,

then shareowners can reassess,,,

if any remember the pump when the

buyback program was announced...


So we watch...LJ

VTLE share price is about equal to operating

cash flow per share if you use

the 4th quarter, 2022 numbers

that were at lower sale prices...

https://investor.vitalenergy.com/static-files/29ef5b4a-0804-4fc4-b738-7373a687cf09

If VTLE didn't do any Capex then

that operating revenue would be

more like net profit...of course that

won't happen...

But there should be an extra frac crew

getting released now that isn't forcast

to be used for rest of 2023 that reduces

budgets in quarters not used...

Just me, but I'm believing that those

crews might get called back in by

August or September if oil price moves

up like possible...LNG prices are mostly

headed up as well...

Current share price is now about 12%

lower or about $6/share lower than

around $48/share that was used for

the 01/01/23 deal done due for final

closing in April,2023...

https://finance.yahoo.com/news/vital-energy-announces-midland-basin-220800231.html

Now that has been a surprise...

Share price has stayed at a deal

for longer than most short drops...

1st,quarter, 2023 results will be the

first year with mostly pure results,

without bad hits from hedges, since

I started watching the company, and

should be refreshing to see...

So we watch...LJ

VTLE is priced like on a struggling, emerging

market listing where valuation

doesn't help share price...

Very un-American look to it now

in the share price...

So we watch...LJ

Less than stellar 4th quarter earnings have

been known for many months...

Those nasty, low ball, Oil hedges

fell off at end of 2022...

VTLE is very mispriced to downside...

Calender offers odd setup ahead

which could add to a prospect for

pre-earnings rebound...

Monday is a market holiday and

Tuesday is earnings day...

Guidance on Tuesday could bury shorts

that hold thru Friday close...

Highly speculative, of course...

So we watch...LJ

It feels like the overall market is flowing cash out of equities for a couple months now (a few talking heads have been trumpeting it too)

Getting defensive to weather.whatever recession we will tumble through in the next 12-18 months

I’m onboard and prepared for that shift too but I haven’t been scaling back on energy because I think oil, in particular, will outperform again this year

It would take a series of improbable events tho align in order for there to be a situation where WTI would be under $75-80 for long

Much more likely that demand growth will proceed at a somewhat slower pace and prices will hinge on production and midstream dynamics

Stalling our domestic energy sector was a stupid move by the swamp creatures and permanently damaged our nation’s economy

We will recover, but the loss cannot be restored

And we don’t start a real recovery for domestic energy until the house can make tangible progress on drilling, pipelines, and refineries

So many disastrous policies, not enough ducks to stamp out the fires

An injury has me sidelined a bit

I’ll call it a skiing accident because it doesn’t sound as stupid as the real story

And my rotator cuff doesn’t know the difference anyway

I am anxious to see your short theory play out, you’re most likely correct

spec

sector sentiment has improved recently...

so we watch...LJ

BlackRock likes your choices too

16% holder of VTLE

I hope they didn’t get burned too much on the Brinkman FTC scam

spec

VTLE - a pretty dramatic improvement in the de-leveraging and it shows on the balance sheet

It'll pay off in share price as momentum builds and the money flow into the energy sector big names begins to trickle over into tickers like VTLE

The chart is showing some conviction, IMO

spec

VTLE overmanipulated down at 1 p/e

price when cvx and xom are trading

at 9 to 10 p/e multiples...

Could be a take over artist working

in the trading churn...

Nothing else to explain it...

So we watch...LJ

VTLE looking good after the ticker change mayhem

That was a pretty significant short interest going into the rebranding, interested to see how those stats resolve in time

spec

You might find gold in the tailings...

So we watch...LJ

Picked up some VTLE average mid $46 and it is curious how it trades on the latest info

The ticker change is clunky, but sheesh!

I’m stuck on a phone size screen a lot more in recent days but some office time coming soon to drill down deeper

Strong production and we should be looking at almost certain increases in crude prices for 2023

spec

VTLE $48, LPI at about $59/share book value

at 3rd, quarter, 2022 end...

About $100 million of debt repurchased

and reduced in 4th quarter, 2022 per

latest Investor Presentation...

Could add about $6/share more book value...

https://investor.vitalenergy.com/static-files/da3f9dbf-cd2c-4ca2-bb42-edfdb1964b64

year end 2022 annual adjustments for

oil/gas pricing will adjust book value...

$20 per share net earnings were reported

for 3rd quarter, 2022...reducing derivative

changes would convert to about $14/share...

hard to guess where derivative changes move...

$14/share quarterly earnings on annual

basis yields about $56/share projected earnings

without derivatives,,,

or 1 p/e at $56/share for $56/share earnings...

Minimal earnings were recorded in 3rd, quarter,

2022 for the asset sale reported...

https://www.otcmarkets.com/filing/html?id=16175536&guid=_Xs-kqrcf5u4MVh

$337 million more of net earnings for 4th

quarter of 2022 would be nice to see like

came in 3rd quarter, 2022, but the share

price reflects much lower expectations...

Could be some foggy mirror thingies causing

those low expectations though...

Should still be plenty of money in the coffers

to fund buying back cheap shares now too...

Investor Presentation...
#WAHA gas prices reported for 4th quarter

of 2022 were a relief to see after the Port

shut in on the coast had energy sector

holders fretting over that item, hopefully

similar prices were averaged by others...


So we watch...LJ

Could former LPI shorts get squeezed?...

LPI has been buying back shares and

there could be lower shares out than

last stated...

https://finance.yahoo.com/quote/LPI/key-statistics?p=LPI

Institutions and Funds report owning

about 12 million of the shares out...

rough estimate only...

https://finance.yahoo.com/quote/LPI/holders?p=LPI

If the unshorted float is around 2 million

or less shares it makes ya wonder?...

Could a change to VTLE start a squeeze

event on those brave shorts?...


Or do low float, net profit making listed

companies just make easy shorts?...


So we watch and wonder...LJ

LPI to VTLE - looks good for a run from here

Good to have you back littlejohn

spec

VTLE , around 55 is needed for my green fields

to sprout new growth after this

bitter, winter cold snap...


https://www.okenergytoday.com/2022/12/laredo-to-be-rebranded-vital-energy/

One of these days the sun will be

out and birds singing again...

So we watch...LJ

Nice swing trade potential for $60-$80

Seems to be trending sideways with some bounce off a solid bottom ~$60 with enough energy and liquidity to keep things interesting

spec

odd move, lowers production and sale of

Howard County assets is a head

scratcher after Leech drilling left

LPI tucking tails in 2nd quarter...

Howard County has been the driver

to increase oil percentage production...

Decent for a short term pump item

but looks odd to me...

so we watch...LJ

@LPI getting some boost on the divestment

spec

LPI needs more disclosure in 10Q reporting

on Capex spending...

$135 million spent in 2nd quarter

should be detailed for shareholders...

Well drilling activity detailed in a

10Q filing seems like common sense...


And when the big monkeys take down

a share price, the shareholders would

have more detailed info on a course

for their own actions...

So we watch...LJ

Why did LPI pay most on lowest rate

note and farthest out in 2nd quarter?...

Debt reduction strategy should focus

cash flow on highest rate debt first...

That gives best return to shareholders

by reducing interest cost...

1st quarter presentation...

http://www.laredopetro.com/media/385946/june-2022-investor-presentation.pdf

2nd quarter presentation...

http://www.laredopetro.com/media/387852/q2-2022-earnings-presentation.pdf


OUCH...$172 million of shareholder

cash paid out for hedging losses in

2nd quarter set up by management...


Maybe the starter question is a waste

of time...

It was up from $125 million of shareholder

cash paid out in 1st quarter for losses

on hedges...


No one can say this management can't

grow anything...


So we watch...LJ

Where are the buyback pumpers for LPI today?...

so we watch...LJ

Last one out, turn out the lights...

so we watch...LJ

LPI reports bigger losses on hedging natural gas

and oil the higher the prices

go up...

Need prices to drop before

jumping for joy a lot...

Wait for those 2nd quarter earning's

release blues to buy cheaper...


At least dilution rose on Tuesday...

https://www.otcmarkets.com/stock/LPI/disclosure

If they can get that 10% interest

debt and 8% interest debt payed

off, then they should be able to

justify share buy backs...


So we watch...LJ

Blue skies here! $LPI

LPI now selling under 2 forward P/E ratio...

https://finance.yahoo.com/quote/LPI/key-statistics?p=LPI

For those keeping score at home...

Also selling under 2 times book

value with book value projected

to grow by over 50% by end of 3rd

quarter, 2022 with debt reduction...


So we watch...LJ

Just got gas for $4.25 for the weekend

and afternoon rider...

that's a deal you can't beat

with a stick...

Not sure about LPI pricing

being deal anymore...

About 25% of oil production

hedged at low pricing...

Some hedging at what would be

normally considered good pricing...

Only about 25% earning top dollar

for oil production as unhedged...

https://www.barchart.com/futures/energies

Can the company make it?...

So we watch...LJ

LPI CFO adressed paying down higher

interest debt in CC...

Besides increasing our borrowing
base to $1.25 billion and our elected
commitment to $1 billion, they built in
additional flexibility for us to determine
how we pay down debt. Through the
end of this year, as long as our net
debt-to-EBITDAX ratio is below 2.5
times, we have the flexibility to utilize
$250 million of our elected commitment
to purchase our call term debt.


CC transcript link...

https://www.fool.com/earnings/call-transcripts/2022/05/05/laredo-petroleum-lpi-q1-2022-earnings-call-transcr/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

And I did read the 10Q filing

this evening very closely...

https://www.otcmarkets.com/filing/html?id=15791953&guid=KtqwkpqXejruQOh

75,000 LPI shares were stated to

have been bot by LPI in 1st quarter

2022 on about page 40...

Oddly no real accounting elsewhere

pops out about it...They didn't say

they sold them in the same text...

No Treasury shares are on Balance

Sheet in the filing...

Is there a fund somewhere with

a lot more shares bot?...

Only a question, not an alarm...

https://www.otcmarkets.com/filing/html?id=15791953&guid=KtqwkpqXejruQOh

Over $6 million of higher interest

cost in 1st, quarter, 2022 versus

1st quarter, 2021...

Since company is on debt reduction

plans for 2022...

What did that ~ 6.5 million paid of

extra interest per quarter get?...

Oil Production up about 10,000

barrels per day is main answer...

+ 1,000,000 per day of revenue

at $100/bbl. oil price...

$30,000,000 per month...

$90,000,000 per quarter...

Almost a 14 fold increase of

revenue by using leverage...

On the increased and unhedged

oil production...

That is a good use of borrowing

that justifies the interest cost...


See, I'm not all Debbie Downer...


So we watch...LJ

LPI debt, would another say 2.70 of EPS

help the company?...

example on $578 million debt

of Senior notes at 9.5% rate...

borrow it at 1.5% with credit

revolver if allowed...

saves 9.5 - 1.5 = 8% interest cost

$578 million x 8% = $46 million interest

Expense annually...

46 million / 17 million shares

equals about $2.70 EPS increase

by saving on interest expense...


next...pay off $361 million debt...

$361 million senior notes at 10.125%

interest cost = $36 million interest cost...

$36 million / 17 million shares

equals about $2.10 of EPS increase

by saving on interest expense...

$2.70 + $2.10 = $4.80

http://www.laredopetro.com/media/385945/first-quarter-2022-earnings-presentation.pdf

LPI needs a Green Team on ESG

for reducing interest expense as

much as reducing gas flaring...


So we watch...LJ

LPI $78, did LPI recently renew loan

borrowing base at a rate of

Fed Funds rate plus 1/2%?...

Did I read that correctly when

that filing came out?...

here is fed funds rate link...

https://www.bankrate.com/rates/interest-rates/federal-funds-rate/

Could LPI use their credit revolver

to pay off the higher interest $578

million Senior Notes due in 2025...

Interest rate shows 9.25% on those...

http://www.laredopetro.com/media/385945/first-quarter-2022-earnings-presentation.pdf

If they could, then that interest

savings would have a better return

for shareholders than selling low

hedge priced oil...

It would leave the free cash flow

projected to come in during

2022 to pay off the $361 million

Senior Notes due in 2028...

Interest rate shows 10.125% on

those notes...


LPI can't beat inflation costs but

they can amend banking focus

to save on interest cost to help

higher costs of drlling activities...

Only a thesis, but it would increase

bottom line for shareholders if it

could possibly be done...

What good is a low interest cost

credit revolver with a low rate

cost with a billion of liquidity

if it isn't used to make money?...

LPI has some extra oil production

projected for 3rd quarter above

hedges that could be hedged at

current high prices for 3rd quarter

to help swing the deal to banker...

Yep, the banker needs convincing...


So we watch...LJ

LPI $78, spent about $10/share on capital expenses

in 1st quarter, 2022 that netted

18 new wells drilled and yielding

production revenue,(TIL'd)...

had to look TIL'd up...

https://www.otcmarkets.com/filing/html?id=15787781&guid=AEqwkpYMRbL4h3h

Mr. Market dropped the price in

after hours after such a blatant

amount of spending on production...

It was like 36% more spent on

production pursuits than paid out

for hedge losses in 1st quarter...


Mr. Market didn't like it...

Trying to spend more than they

pay the hedge bankers...

Of all the nerve...

Will a hedge banker making big

money offer super low interest rate

loan to LPI to increase production?...

Of course not...world needs to suffer

with high fuel costs...

LPI has to slash that cap ex budget

to please Mr. Market...


So we watch...LJ

M.S. raises price target to $130/bbl.

for Brent in 3rd quarter of 2022...


https://oilprice.com/Energy/Energy-General/Morgan-Stanley-Ups-Oil-Price-Forecast-On-Supply-Fears.html

M.S. can't forecast how oil

companies may be more leary

about drilling more with so much

oil flowing from world SPR tanks...


so we watch...LJ

Natural gas price has really been moving up...

so we watch...LJ

LPI $67.74, Wells Fargo raises to $113 price

target on 03/14/2022...


After Piper Sandler raised to

$93 price target on 03/10/2022...


https://www.benzinga.com/news/22/03/26119667/wells-fargo-maintains-underweight-on-laredo-petroleum-raises-price-target-to-113


https://www.benzinga.com/quote/LPI/analyst-ratings


So we watch...LJ

Midland 35 on Friday, Where is Global Warming

when folks need it?...


Brent $109, WTI $106,

Natural Gas Futures $4.66

WAHA $4.25


https://www.barchart.com/futures/energies


so we watch...LJ

Decent prices now to hedge next quarters

production some more to

lock in some extra gravy

if desired...


https://www.barchart.com/futures/quotes/CLJ22/futures-prices


Risk/reward seems decent on

adding hedging at 100/bbl.

or higher...

I paid too much for gas today...

you know what I mean?...


So we watch...LJ