Vital Energy has announced the second 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 approx. $78 million(1).
The purchase increases Vital Energy’s working interest in 54 producing, low-decline wells by an average of 67%, increasing the Company’s estimated 2024 production by approximately 1,850 BOE/d (51% oil) and estimated 2024 Free Cash Flow(2) by approximately $25 million(3).
This is the second transaction associated with the exercise of tag-along rights by owners of certain assets in the Henry acquisition. Vital Energy purchased and financed the assets on the same terms as the Henry purchase and sale agreement, which valued the Company’s shares at $54.96. Vital Energy funded the transaction through the issuance of approximately 879,000 shares of its common stock and approximately 980,000 shares of its 2.0% cumulative mandatorily convertible preferred securities. The Company does not anticipate any additional transactions related to the exercise of tag-along rights.
'We are pleased to have closed our second transaction to increase our working interests in high-value properties associated with the Henry acquisition,' stated Jason Pigott, President and Chief Executive Officer. 'Both transactions were attractively priced, accretive to Free Cash Flow per share and highly supportive of our deleveraging goals.'
(1) Assumes VTLE February 2, 2024 closing price;
(2) Non-GAAP financial measure; please see supplemental discussion of GAAP to non-GAAP financial measures at the end of this release;
(3) Assumes $72 WTI / $2.50 HH for FY-24
Source: Vital Energy
