
“We believe VTS underwrote most of these acquisitions in the much lower strip prices in the May-August time frame and did most of its hedging in the much higher-priced September period, making these highly attractive acquisitions,” Schafer said. (Source: Shutterstock)
Vitesse Energy, a non-operating oil and gas producer, said Oct. 9 it made acquisitions totaling roughly $50 million in oil and gas interests in the Williston Basin in North Dakota, a development that an analyst said should be well received by investors.
Donovan Shafer, Northland Capital Markets senior research analyst, said Vitesse’s non-operating acquisitions were agreed upon later in the summer when oil futures were still lower. The acquisitions, he said, were “a good move” and are “absolutely positive for the stock.”
“It’s mostly the timing,” Schafer said, adding that the acquisitions were announced the day the markets opened after attacks in Israel boosted the price of oil.
According to Vitesse’s press release, the company expects the acquisitions to increase the company’s capex guidance range and cash flows in the fourth quarter. The interests were acquired through the company’s near-term development acquisition program and underwritten above the company’s internal rate of return hurdle, using a discount to current NYMEX strip prices.
“We believe VTS underwrote most of these acquisitions in the much lower strip prices in the May-August time frame and did most of its hedging in the much higher-priced September period, making these highly attractive acquisitions,” Schafer said.
Schafer said the acquisition appears to be the work of Vitesse’s new CFO James Henderson, who joined the company in August.
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