Vital Energy: Adjusted Free Cash Flow Points To A Better 2025

Summary

• Vital Energy showed significant adjusted free cash flow improvement in fiscal year 2024.
• Despite initial high operating costs from acquired properties, management's rework efforts are expected to yield better profitability and larger cash flow in fiscal year 2025.
• The debt ratio remains within an acceptable range. Therefore, the debt ratio is finally less of a concern than in the past. Further improvement is needed, however.
• Higher natural gas prices due to a colder winter should boost earnings and cash flow in the first quarter of the new fiscal year.
• New lower-cost wells will result in a lower cost average combined with higher value production. Oil percentage of production mix has been rising.