Ticker Symbol: VUX Price: $0.095 Common Shares: 82,249,971 Market Cap: $7.8 million Insider Holdings: 55,311,353 or 67.2% of the float Company description: Vital Energy Inc. is a public company whose shares trade on the TSXV under the symbol “VUX”. Vital is incorporated in the Province of Alberta, Canada and its activities consist of exploration for, development and production of primarily light and medium gravity crude oil in Western Canada. Notes: - Currently profitable. $3.86 million revenue with a $637k net income for the first half of 2021 - Just added production bringing total production to around 1000bopd (See October 5th, 2021 News) Most recent financial results (Ending June 30th 2021) ASSETS Cash: $611,512 Short Term Investments: $215,385 Trade & Receivables: $1,143,719 Prepaid Expenses: $42,300 Deposits: $562,689 Exploration & Evaluation Assets: $425,590 Property & Equipment: $8,022,443 Total Assets: $11,023,638 LIABILITIES Accounts Payable: $1,301,769 Contract Liabilities: $344,401 Loan Payable: $3,800,643 – From director of Vital Energy. See MD&A Highlights below. Bank Loan: $60,000 Decommissioning Liability: $1,689,405 Total Liabilities: $7,196,218 3 Month Performance Revenue: $2,205,448 Net Income: $499,659 6 Month Performance Revenue: $3,860,705 Net Income: $636,498 MD&A Highlights Highlights • The Company reported net income of $499,659 in Q2 2021 as compared to a net loss of $450,652 in Q2 2020. • Revenue was $2,205,448 in Q2 2021 as compared to Q2 2020 revenue of $134,556, an increase of $2,070,892. • Q2 2021 realized oil price was $62.88 as compared to $54.59 in Q1 2020. • Production increased by 27,372 boe in Q2 2021 as compared to Q2 2020. Properties In first half of 2021, the Company completed a review of the properties. As a result, workovers were performed at nine (9) wells including 2 wells at Gull Lake, 2 wells at Pennant, 4 wells at Baxter Lake, and 1 well at Standard Hill. The Company also replaced the desulfurization tower at Sullivan Lake with a desulfurization tower with increased capacity. This will assist in the resumption of operations and allow the Company to maintain a stable production. Gull Lake In one of the Company’s core areas of operations, Gull Lake, Saskatchewan, Vital is the designated operator and maintains a 50% working interest. The property is covered with 3D seismic data and has 9 wells producing, or capable of producing, crude oil from the Roseray , Cantuar and Upper Shaunavon formations. This project has a salt-water disposal facility and a gas collection pipeline system. In the Company’s opinion, future drilling opportunities remain on these lands. In Gull Lake, Vital’s net daily oil and natural gas production for the first half of 2021 was 232 boe/d (2020 – 206 boe/d). The increase in production was attributable to the lack of production in Q2 2020 during the COVID-19 pandemic which had resulted in lower oil prices. In order to better evaluate the oil development potential, the Company has utilized the 3D seismic survey which covers all of its Gull Lake lands. As of December 31, 2021, the reserves evaluator, Trimble Engineering, assigned 216,200 (2020 - 217,300) boe of proven oil and natural gas reserves net to the Company and 116,700 (2020 - 172,200) boe of probable oil reserves net to the Company. Pennant Vital is the Operator and maintains a 100% working interest in 12 contiguous sections of land. To date one (1) vertical well and nine (6) horizontal wells have been drilled. Four of the horizontal wells and the vertical well have had production. The Company has commenced abandonment and reclamation work on some well sites. 3D seismic coverage on about 35% of Vital’s lands indicates the potential for additional drilling locations. The company’s crude oil production was 29 bbls/d in the first half 2021 as compared to 14 bbls/d in 2020. Non-core In addition to its core properties, Vital has land holdings primarily in the Sullivan Lake Area located in central Alberta. There are three Sullivan Lake wells which produced for the six months ended June 30th at 65 bbls/d in 2021 (2020 – 74 bbls/d). It is anticipated that with the Sullivan Lake desulfurization tower being replaced with a larger capacity tower, stable production may reach more than 150 bbl/d. The Company has built production facilities at Sullivan Lake with a capacity of 300 boe/d. In addition to its core properties, Vital has land holdings primarily in the Sullivan Lake Area located in central Alberta. There are three Sullivan Lake wells which produced for the six months ended June 30th at 65 bbls/d in 2021 (2020 – 74 bbls/d). It is anticipated that with the Sullivan Lake desulfurization tower being replaced with a larger capacity tower, stable production may reach more than 150 bbl/d. The Company has built production facilities at Sullivan Lake with a capacity of 300 boe/d. Outlook The impact of COVID-19 is difficult to measure on the Company’s results as the energy sector has been in a downturn for a number of years. As much as oil prices were depressed in the first half of 2020, they have recovered in first half of 2021 as demand seems to be improving Gull Lake In 2015 the Company expended a significant amount of its capital installing water injection facilities and other infrastructure on the Gull Lake property. The result has been to lower operating costs and to increase the netbacks. The Company is encouraged by the drilling results of the wells that came on production in late 2018 and 2019. As a result, additional drilling locations have been identified by geological and 3D seismic interpretation and mapping. With the current land inventory, detailed interpretation of 3D seismic data, integrated study of seismic, geology, reservoir and engineering data, the Company has identified additional potential drilling locations on its “Core Properties” at Gull Lake and Pennant, S.W. Saskatchewan Sullivan Lake The successful appraisal development well, 10-1, was drilled in the Banff limestone reservoir in December 2019 and two additional horizontal wells were drilled in 2020 and all are now on production. The 10-1well was shut down for several months in 2020 and 2021 because of the Covid-19 pandemic and low crude oil prices. In addition, gas with small amounts of H2S was discovered. As the Sullivan Lake desulfurization tower was replaced with a larger desulfurization tower with more capacity, the Company believes it has resolved the long-standing production and operating issues, and should have a more stable production in the second half of the year. Pennant The company has five (5) producing oil wells on the lands. The medium gravity crude oil is being produced from the Upper Shaunavon formation and geology indicates that the entire land block may be prospective. The Company has acquired additional 3D seismic data and now has coverage on about 35% of the lands. The 3D seismic data confirms the geology and indicates that further drilling activities on the lands may be justified. Vital is the Operator of the Pennant Area project. The Company has a medium to long term plan to develop the whole reservoir including an integrated study to evaluate the reservoir detail features, to drill an exploration well, and to build facilities including disposal wells that could reduce operational costs significantly. Baxter Lake The Company performed remedial work in 2021 to reactivate certain wells in the Baxter Lake area as oil prices have improved. Lampman The Company purchased a quarter section of crown land in Saskatchewan in Q3 2020. In order to confirm the Frobisher reservoir quality and the potential in the deeper Winnipegosis zone, a vertical pilot hole 1-4- 6-5-W2 was designed and drilled. The results indicated the Frobisher reservoir was promising and the Winnipegosis zone was uneconomic. The the pilot hole was abandoned in the deeper section and was plugged back. This existing vertical well bore was utilized to drill Hz C7-4-6-5W2 in the Frobisher zone from 1-4 to 7-4 (second event for the pilot well 1-4). The other two Frobisher horizontal wells were drilled in July 2021 from the same surface pad as the pilot hole and will be completed in August 2021. The Company anticipates production of over 400 bbl/d of light oil from these multiple well projects. Ante Creek The Company purchased 2.5 sections of crown land in Alberta in Q1 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 25 horizontal Montney development wells. Pembina The Company purchased a quarter section of crown land in Alberta in Q2 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 4 horizontal Cardium development wells. Loan Payable On May 22, 2020, the Corporation entered into a loan agreement with a director that provides for a $4,000,000 credit facility (the “Credit Facility”) that is unsecured and matures on May 22, 2022. Funds advanced under the Credit Facility bear interest at a rate of 12% per annum, payable annually. In May 2020, $1,800,643 was received pursuant to the credit facility and was used to pay down the contract liabilities and a further $2,000,000 was received and used for general working capital purposes.
Vital Energy's Lampman wells produce 630 bopd 2021-10-05 16:52 ET - News Release Mr. Yingchuan Wu reports VITAL ENERGY INC. LAMPMAN NEW DRILL RESULTS A UPDATE Vital Energy Inc. successfully drilled and completed three horizontal wells in Q3 2021 in Lampman, southwest Saskatchewan, on a multiwell pad (01-04-006-05W2). The completed formation is in the Frobisher zone. From Aug. 29 to now, the three horizontal wells' (HZ C7-4, HZ C8-4 and HZ D8-4) total average daily oil production has stabilized at approximately 630 barrels per day. The average water cut (BS&W) is approximately 13 per cent, and the oil's API is 32.5 (sweet light oil). The three wells are pipelined to an adjacent third party oil battery. All three pump jack wells include equipment with electric motors with electric power supplied by the SaskPower grid in the area. As a result, lower maintenance costs are anticipated which should significantly improve field netbacks. Vital is the operator of the three wells in the Lampman area and maintains a 100-per-cent working interest. Vital Energy is a publicly traded junior oil and gas company, the primary focus of which is developing light and medium crude oil production in Western Canada. We seek Safe Harbor.
Vital Energy Earns $9 Million In 2021 - $0.11c EPS Vital Energy Inc. (Audited Year End Results). All Information Can Be Found On Sedar. Ticker Symbol: VUX Price: $0.39 Common Shares: 82,249,971 Warrants: Nil Options: 1,250,000 @ $0.25 Market Cap: $32 million Insider Holdings: 55,311,353 or 67.3% of the float *Note* Q1 2022 Results (January – March) will be out end of May 2022. Financials (Ending December 31, 2021) ASSETS Cash: $1,456,841 Short Term Investments: $205,022 Receivables: $2,050,711 Prepaid Expenses: $17,146 Deposits: $564,101 Exploration & Evaluation Assets: $66,273 Right Of Use Assets: $190,725 Property & Equipment: $11,731,118 Total Assets: $16,281,937 LIABILITIES Accounts Payable & Accrued Liabilities: $792,568 Contract Liabilities: $1,288,648 Portion Of Lease Liability: $49,773 Portion Of Decommissioning Liability: $258,574 Bank Loan: $60,000 Lease Liability: $143,254 Decommissioning Liability: $1,552,428 Total Liabilities: $4,145,245 Asset/Debt Ratio – 3.93:1 2021 Performance Revenue: $15,066,687 Net Income: $8,945,770 Earnings per Share: $0.11 2021 Reserves (51-101) Available On Sedar – Oil Pricing under $70 & Gas Under $4 Light Oil – 537,400 Barrels NET Heavy Oil – 306,900 Barrels NET Natural Gas – 493,700 Barrels NET Natural Gas Liquids – 2,100 Barrels NET Total Net Barrels: 1,340,100 Management Discussion and Analysis Highlights Overall Performance Highlights · The Company reported net income of $8,945,770 in 2021 as compared to a net loss of $7,564,554 in 2020. · Revenue was $15,066,687 in 2021 as compared to 2020 revenue of $4,940,701, an increase of $10,125,986. · The 2021 realized oil price was $71.33 as compared to $36.22 in 2020. · Production increased to 579 boe/d in 2021 from 373 boe/d in 2020 with the increase being mainly attributable to improvements in operations at Sullivan Lake and the commencement of production of three new horizontal wells at Lampman. · The Company exited the 2021 year with production of 809 boe/d. · A loan payable of $3,800,643 was repaid in the year Properties In Q3 2021, the Company completed three horizontal wells at Lampman with production from all wells commencing in September. In the first nine months of 2021, the Company completed a review of their other properties. As a result, workovers were performed at eleven (11) wells including 3 wells at Gull Lake, 3 wells at Pennant, 4 wells at Baxter Lake, and 1 well at Standard Hill. The Company also replaced the desulfurization tower at Sullivan Lake with a desulfurization tower with increased capacity. This assisted in the resumption of operations and allowed the Company to maintain a stable production. Core Properties Lampman The Company purchased a quarter section of crown land in Saskatchewan in Q3 2020. In order to confirm the Frobisher reservoir quality and the potential in the deeper Winnipegosis zone, a vertical pilot hole 1-4- 6-5-W2 was designed and drilled. The results indicated the Frobisher reservoir was promising and the Winnipegosis zone was uneconomic. The pilot hole was abandoned in the deeper section and was plugged back. This existing vertical well bore was utilized to drill Hz C7-4-6-5W2 in the Frobisher zone from 1-4 to 7-4 (second event for the pilot well 1-4). The other two Frobisher horizontal wells were drilled in July 2021 from the same surface pad as the pilot hole and were completed in August 2021. The Company produced 709 bbl/d of sweet light oil (API ranging from 32.5 -36.0) from these multiple well projects in Q4 2021. Sullivan Lake The successful appraisal development well, 10-1, was drilled in the Banff limestone reservoir in December 2019 and two additional horizontal wells were drilled in 2020 and all are now on production. The 10-1well was shut down for several months in 2020 and 2021 because of the Covid-19 pandemic and low crude oil prices. In addition, gas with small amounts of H2S was discovered. As the Sullivan Lake desulfurization tower was replaced with a larger desulfurization tower with more capacity, the Company believes it has resolved the long-standing production and operating issues. This area produced 37,630 boe in 2021 and produced 99 boe/d in Q4 2021. The Company has built production facilities at Sullivan Lake with a capacity of 300 boe/d. Gull Lake In one of the Company’s core areas of operations, Gull Lake, Saskatchewan, Vital is the designated operator and maintains a 50% working interest. The property is covered with 3D seismic data and has 9 wells producing, or capable of producing, crude oil from the Roseray , Cantuar and Upper Shaunavon formations. This project has a salt-water disposal facility and a gas collection pipeline system. In the Company’s opinion, future drilling opportunities remain on these lands. At Gull Lake, Vital’s net daily oil and natural gas production for the year ended December 31, 2021 was 209 boe/d (2020 – 223 boe/d). The decrease in production was attributable to natural declines in the property. In order to better evaluate the oil development potential, the Company has utilized the 3D seismic survey which covers all of its Gull Lake lands. As of December 31, 2021, the reserves evaluator, Trimble Engineering, assigned 160,400 (2020 – 216,200) boe of proven oil and natural gas reserves net to the Company and 79,400 (2020 – 116,700) boe of probable oil reserves net to the Company. Pennant Vital is the Operator and maintains a 100% working interest in 12 contiguous sections of land. To date one (1) vertical well and six (6) horizontal wells have been drilled. Four of the horizontal wells and the vertical well have had production. The Company has commenced abandonment and reclamation work on some well sites. 3D seismic coverage on about 35% of Vital’s lands indicates the potential for additional drilling locations. The company’s crude oil production was 34 bbls/d in 2021 as compared to 17 bbls/d in 2020 when the property was shut-in for a considerable time period due to depressed oil prices. Non-core Properties Baxter Lake The Company performed remedial work in 2021 to reactivate certain wells in the Baxter Lake area as oil prices have improved. Ante Creek The Company purchased 2.5 sections of crown land in Alberta in Q1 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 25 horizontal Montney development wells. Pembina The Company purchased a quarter section of crown land in Alberta in Q2 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 4 horizontal Cardium development wells. Hume The Company purchased 2 LDS of crown land in Saskatchewan in Q4 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 2 horizontal Frobisher development wells. Outlook The company plans to continue to acquire crown lands from upcoming crown land sales. The company will continue to optimize production from the existing properties and from the plan to drill 4 to 6 wells in 2022.
RBC Report Showing VUX Has Some Top Tier Wells In Saskatchewan https://twitter.com/rockcreekfreak/status/1519524746454388736 #12 and #14 spots, up there with the majors.
VUX is a cash monster and I can't wait to see the Q1 2022 results with likely more production and of course $95 Q1 average oil pricing vs $71 they got in 2021. CBV.V (Cobra Venture Corporation) Q1 results already came out and they spent $80k(their portion) to increase production at Gull Lake. VUX owns 50% of that asset, so their production went up for sure on that one asset alone, nevermind whatever else was drilled. From page 2 of CBV's recent MD&A(Gull Lake is their only producing oil asset at the moment): Direct costs for the three-month period ended February 28, 2022, were $211,391 compared to $157,055 in the comparative three-month period ended November 30, 2021. The costs increased in comparison to the comparative period due to increased production. The overall direct costs as a percentage of revenue has returned to pre-pandemic levels during the three months ended February 28, 2022, of 56.5% of sales compared to 73.5 during the period ended November 30, 2020. Also on page 3 of CBV's MD&A, which VUX has not yet mentioned in their Gull Lake MD&A section: The Company currently participates in 12 wells, 7 wells of which are operated by Taku Gas Ltd. ("Taku"), and 5 wells operated by Vital Energy Ltd. ("Vital"). As well, the Company has also elected to participate in the drilling of two development well locations. The additional wells will target the primary producing reservoir in the wells operated by Vital. Following the drilling of these two wells, and evaluation of the well results, Cobra has the option to elect to further participate in the drilling of a horizontal well.
Ideally White Cap Resources should partner and then eventually takeover VUX because they have assets in similar areas( Montney, Cardium, Southeast Saskatchewan): https://boereport.com/2022/04/28/wh...d-first-quarter-results-and-director-nominee/ OPERATIONS UPDATE Whitecap’s operational performance through the winter drilling program was exceptional as the optimization and development enhancements applied to the acquired assets have continued to generate positive results. Including the 44 (34.2 net) wells drilled in the fourth quarter, we have drilled a total of 115 (97.6 net) wells through the winter season up to the end of the first quarter of 2022 with the following highlights: Kakwa Montney. Our three well 14-13 pad was tied into permanent facilities during the first quarter with the wells quickly cleaning up and production stabilizing. Over the first 90 days on production, the three wells have averaged 1,831 boe/d (36% condensate and NGLs) per well, which is more than 75% higher than our budget expectations of 1,026 boe/d (34% condensate and NGLs). We are currently drilling the final well of a four-well pad at Kakwa with the wells expected to be brought on production during the third quarter. A total of nine (6.0 net) wells are expected to be brought on production at Kakwa in the second half of 2022. Central Alberta Glauconite and Cardium. Whitecap closed the acquisition of TimberRock Energy Corp. at the start of the first quarter and drilled a total of four (3.8 net) Glauconite wells during the quarter. Three of the wells have been on production for over 30 days, averaging approximately 1,138 boe/d (74% oil and NGLs) per well, which is above our budget expectations of 627 boe/d (56% oil and NGLs) over the first 30 days on production. We have also executed on multiple optimization opportunities on the acquired assets, including well reactivations and gathering system optimizations which increase production rates as well as the percentage of volumes that flow through Whitecap owned facilities. Subsequent to the quarter, the Company has secured operatorship of Pembina Cardium Unit No. 11 (55.2% working interest) and has partner-approved plans to commence development of the unit utilizing longer laterals and optimized waterflood technology and configurations which have been proven in our nearby Cardium developments. Southeast Saskatchewan Conventional. The Company drilled a total of 18 (17.7 net) Mississippian conventional wells over the winter drilling program, achieving strong results on both legacy and acquired acreage. The average production rate over the first 30 days of 223 bbls/d of oil per well is 45% above our budget expectations, and we have 289 (258.4 net) locations of similar quality remaining in inventory.
VUX also has $51.3 million in tax pools that expire between 2028 and 2040. Based on their current profitability, this will likely get all used up over the next 2-3 years. At December 31, 2021, the Company has tax pools and non-capital losses as described below totaling approximately $51,308,000 (2020 - $57,622,000) that are available to shelter future taxable income. The Company’s non-capital losses expire between the years 2028 and 2040.
Vital Energy took down their corporate presentation a while ago to likely update it. Then Covid hit and it was probably put on the back burner while they spent time acquiring most of their new leases between 2020-2021. However, this old one I found hidden on their website shows big potential just on Pennant, Baxter and Gull Lake. Now if you include their 5 new leases, the entire portfolio has dozens of drill locations, plus already established production/cash flow to fund this operation and a clean balance sheet. http://www.vitalenergyoil.com/presentations/VITALCorporatePresentationJun2017.pdf Based On Presentation & Recent Management Highlights. Includes Producers + Locations Gull Lake - 30+ (9 Drilled) Pennant - 30+ (7 Drilled) Baxter - 6+ (Several Drilled & To Be Reactivated) Lampman - 3+ (3 Drilled) Sullivan - 1+ (1 Drilled, Has Facility For Higher Output) Ante(Montney) - 25+ Pembina(Cardium) 4+ Hume - 2+
Vital Energy May 2022 Company Presentation - http://www.vitalenergyoil.com/presentations/Vital Assets 2022 Presentation .pdf Good to know that they're listening, considering the last presentation was released in 2017. Dare I even say a marketing campaign could come later on? Some people were correct in saying that Lampman would decline as 600bopd last September was off the hop and every single well declines, especially from initial production rates. But it's likely stabilized now(slower declines) and there's one more drill location. At the same time, Gull Lake doubled in production and Baxter started producing again. The company has lots of drill locations and can easily bounce production from 600-1000bopd (not considering Montney wells yet because they'll add 2000bopd+ each and cost a lot). Cost associated with adding production vs cash coming in for Vital is in a sweet spot. Add $4-6 million cash per quarter while spending around $1-1.5 million in drilling (based on the 2021 numbers). Here's a breakdown of all the wells they have to drill from that presentation, including some new properties: Lampman - 1 well Gull Lake - 2 wells Sullivan - 2 wells Pennant - Done, no more locations Baxter - 4 wells (cheaper wells) Ante - 25 Montney wells (More expensive, ideal case is a JV) Pembina - 4 Cardium wells Steelman - 4 wells (same zone as lampman wells) Gainsborough - 2 wells (same zone as lampman wells) Hume - 2 wells (same zone as lampman wells) From the MD&A - Plan is to drill 4-6 wells in 2022. If they're going to bring in $16-24 million, spending $4-6 million drilling wells and another $2 million for G&A/other expenses, earnings should be massive, especially if they can hit a few more Lampman wells and get 1-2 quarters of boosted production like last year. I believe they'll hit the low hanging fruit before going for the bigger and more expensive wells, which makes sense.
Vital Energy Inc. Q1 2022 Results. Ending March 31, 2022 (All Information Available On Sedar) Ticker Symbol: VUX Price: $0.385 Common Shares: 82,249,971 Warrants: Nil Options: 1,250,000 @ $0.25 Market Cap: $32 million Insider Holdings: 55,311,353 or 67.3% of the float Tax Pools: $51 million (Less Q1 2022 earnings. Available in 2021 audited results) Financials (Ending March 31, 2022) ASSETS Cash: $2,487,862 Short Term Investments: $2,705,022 Trade & Receivables: $2,499,958 Prepaid Expenses: $68,321 Deposits: $564,797 Exploration & Evaluation Assets: $80,013 Right Of Use Assets: $177,419 Property & Equipment: $11,029,479 Total Assets: $19,612,871 LIABILITIES Accounts Payable: $1,068,494 Contract Liabilities: $848,300 Current Lease Liability: $50,523 Current Decommissioning Liability: $258,574 Bank Loan: $60,000 Lease Liability: $130,339 Decommissioning Liability: $1,538,934 Total Liabilities: $3,955,164 Asset/Debt Ratio – 4.96:1 Q1 2022 Performance Revenue: $5,854,810 Net Income: $3,521,015 Earnings per share: $0.043 2021 Performance Revenue: $15,066,687 Net Income: $8,945,770 Earnings per share: $0.11 2021 Reserves (51-101) Available On Sedar – Oil Pricing under $70 & Gas Under $4 Light Oil – 537,400 Barrels NET Heavy Oil – 306,900 Barrels NET Natural Gas – 493,700 Barrels NET Natural Gas Liquids – 2,100 Barrels NET Total Net Barrels: 1,340,100 (Less Q1 2022 sales) Q1 2022 Management Discussion Highlights (Available on Sedar) Overall Performance Highlights • The Company reported net income of $3,521,015 in Q1 2022 as compared to net income of $136,839 in Q1 2021. • Revenue was $5,854,810 in Q1 2022 as compared to Q1 2021 revenue of $1,655,257, an increase of $4,199,553. • The Q1 2022 realized oil price was $97.73 as compared to $54.59 in Q1 2021. • Production increased to 666 boe/d in Q1 2022 from 337 boe/d in Q1 2021 with the increase being mainly attributable to improvements in operations at Sullivan Lake and the production of three horizontal wells at Lampman Outlook The Company plans to continue to acquire crown lands from upcoming crown land sales. The Company will continue to optimize production from the existing properties and plans to drill seven (7) horizontal wells in SE Saskatchewan that are expected to increase production by approximately 500 bbl/d in 2022. Core Properties Lampman The Company purchased a quarter section of crown land in Saskatchewan in Q3 2020. In order to confirm the Frobisher reservoir quality and the potential in the deeper Winnipegosis zone, a vertical pilot hole 1-4- 6-5-W2 was designed and drilled. The results indicated the Frobisher reservoir was promising and the Winnipegosis zone was uneconomic. The pilot hole was abandoned in the deeper section and was plugged back. This existing vertical well bore was utilized to drill Hz C7-4-6-5W2 in the Frobisher zone from 1-4 to 7-4 (second event for the pilot well 1-4). The other two Frobisher horizontal wells were drilled in July 2021 from the same surface pad as the pilot hole and were completed in August 2021. The Company produced 318 bbls/d of sweet light oil (API ranging from 32.5 -36.0) from these multiple well projects in Q1 2022. Sullivan Lake The successful appraisal development well, 10-1, was drilled in the Banff limestone reservoir in December 2019 and two additional horizontal wells were drilled in 2020 and all are on production. As the Sullivan Lake desulfurization tower was replaced with a larger desulfurization tower in 2021 with more capacity, the Company believes it has resolved the long-standing production and operating issues. This area produced 102 boe/d in Q1 2022 compared to 99 boe/d in Q4 2021. The Company has built production facilities at Sullivan Lake with a capacity of 300 boe/d Gull Lake In one of the Company’s core areas of operations, Gull Lake, Saskatchewan, Vital is the designated operator and maintains a 50% working interest. The property is covered with 3D seismic data and has 9 wells producing, or capable of producing, crude oil from the Roseray , Cantuar and Upper Shaunavon formations. This project has a salt-water disposal facility and a gas collection pipeline system. In the Company’s opinion, future drilling opportunities remain on these lands. At Gull Lake, Vital’s net daily oil and natural gas production in Q1 2022 was 192 boe/d (Q1 2021 – 240 boe/d). The decrease in production was attributable to natural declines in the property. In order to better evaluate the oil development potential, the Company has utilized the 3D seismic survey which covers all of its Gull Lake lands. As of December 31, 2021, the reserves evaluator, Trimble Engineering, assigned 160,400 boe of proven oil and natural gas reserves net to the Company and 79,400 boe of probable oil reserves net to the Company. Pennant Vital is the Operator and maintains a 100% working interest in 12 contiguous sections of land. To date one (1) vertical well and six (6) horizontal wells have been drilled. Four of the horizontal wells and the vertical well have had production. The Company has commenced abandonment and reclamation work on some well sites. 3D seismic coverage on about 35% of Vital’s lands indicates the potential for additional drilling locations. The company’s crude oil production was 21 bbls/d in Q1 2022 as compared to 15 bbls/d in Q1 2021 when the property was shut-in for a considerable time period due to depressed oil prices. Non-core Properties Baxter Lake The Company performed remedial work in 2021 to reactivate certain wells in the Baxter Lake area as oil prices have improved. In Q1 2022, this area produced 25 boe/d. Ante Creek The Company purchased 2.5 sections of crown land in Alberta in Q1 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 25 horizontal Montney development wells. Pembina The Company purchased a quarter section of crown land in Alberta in Q2 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 4 horizontal Cardium development wells. Hume The Company purchased 2 LDS of crown land in Saskatchewan in Q4 2021 and is currently working on a detailed geology study and development plan. This may allow the drilling of up to 2 horizontal Frobisher development wells.
Average monthly prices for WTI in Apil and May were $101.78 and $109.55 ( https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=M ). As per VUX's last presentation from May, average production was around 650 barrels per day. Let's do a rough calculation to what they've should of earned over the last 60 days, assuming no additional costs from drilling, land acquisitions, workovers, etc. Rounding WTI price to $100, dropping production to 600bopd average for 60 days, using similar cost metrics from Q1, which was $13 all in ($100-$13=$87 net) $87 WTI X 60 Days X 600 bpd = $3,132,000 profit (round down to $3 million). I always like to go worse case on pricing, production and profit.
For those that follow technical charts, here's the most recent technicals on Vital Energy - https://www.barchart.com/stocks/quotes/VUX.VN/opinion
Nope, not many at all. But based on earnings, it's still pretty undervalued. Especially when their books are so clean and no baggage from bank debt or loans. I have a $1 target in 5-6 months and that's without them adding the 500 barrels of production they mention in the last MD&A. Should of never gone below 25 cents in the past, but it's a pretty unknown company until recently. Insiders own so much and I also found out that there's a large overseas institutional group holding. True retail shares available is under 10%, so she'll run fast once 50 cents breaks and we get another update or quarterly report.
Vital Energy Q2 results will be out end of August and the company should be able to show another hefty profit, given their production cost is around $13 per barrel. At the same time, the company has just started drilling a series of wells in Saskatchewan, in the same area as the three Lampman wells that were put into production last year. I am estimating that the company cash position + receivables will have gone up by at least $3 million and if all four wells hit, total company production should be around 1000bopd. Image link: https://cdn-ceo-ca.s3.amazonaws.com/1hf2995-Vital Level 2 more wells.JPG
Nothing earth shattering, but good to know there's lots of activity in the area now. Means the leases and production are more sought after: https://pipelineonline.ca/saskatchewan-drilling-rig-report-for-aug-2/#/?playlistId=0&videoId=0 The Lampman area is the new centre of activity in recent years, with five rigs in close proximity. Stampede Drilling Rig 4 was east of Lampman, drilling for Tundra Oil & Gas. Panther Drilling Rig 4 was just south of Lampman drilling for Vital Energy Inc.
Vital Energy Q2 2022 Results. Ending June 30, 2022 (All Information Available On Sedar) Ticker Symbol: VUX Price: $0.375 Common Shares: 82,249,971 Warrants: Nil Options: 1,250,000 @ $0.25 Market Cap: $31 million Insider Holdings: 55,311,353 or 67.3% of the float Tax Pools: $51 million (Less Q1-Q2 2022 earnings. Available in 2021 audited results) 2021 Reserves: 1,340,100 barrels (Breakdown Available On Sedar) Financials ASSETS Cash: $1,512,995 Short Term Investments: $4,415,385 Receivables: $2,269,103 Prepaid Expenses: $539,581 Deposits: $566,229 Exploration & Evaluation Assets: 2,205,136 Right Of Use Assets: $164,113 Property & Equipment: $10,812,367 Total Assets: $22,484,909 LIABILITIES Accounts Payable: $1,666,485 Contract Liabilities: $419,522 Current Lease Liability: $42,522 Current Decommissioning Liability: $268,279 Bank Loan: $60,000 Lease Liability: $125,991 Decommissioning Liabilities: $1,482,304 Total Liabilities: $4,065,103 2022 Six Month Performance Revenue: $11,654,334 Net Income: $6,283,114 Earnings Per Share: $0.0764c Rather than posting the usual MD&A highlights as stated on Vital Energy’s MD&A, I have put a link below to a well documented video that breaks down everything in fantastic detail:
Vital Energy Q3 2022 Results. Ending September 30, 2022 (All Information Available on Sedar) Ticker Symbol: VUX Price: $0.31 Common Shares: 82,249,971 Warrants: Nil Options: 1,250,000 @ $0.25 Market Cap: $25 million Insider Holdings: 55,311,353 or 67.3% of the float Tax Pools: $51 million (Less Q1-Q3 2022 earnings. Available in 2021 audited results) 2021 Reserves: 1,340,100 barrels (Breakdown Available on Sedar) Financials ASSETS Cash: $639,870 Short-Term Investments: $4,115,385 Trade & Receivables: $1,814,897 Prepaid Expenses: $136,659 Deposits: $566,229 Exploration & Evaluation Assets: $3,059,241 Right Of Use Assets: $150,807 Property & Equipment: $15,158,295 Total Assets: $25,641,383 LIABILITIES Accounts Payable & Accrued Liabilities: $4,576,791 Contract Liabilities: $133,670 Lease Liability: $52,058 Current Decommissioning Liabilities: $305,739 Bank Loan: $60,000 Lease Liability: $103,921 Decommissioning Liabilities: $1,578,818 Total Liabilities: $6,810,997 Nine Month Performance Revenue: $15,715,827 Net Income: $6,693,694 or $0.081c EPS Project Updates Properties The Company’s strategical plan included further drilling in 2022. As such, in Q3 2022, the Company successfully completed its 2022 new drill program on three (3) Saskatchewan properties where the Company holds a 100% working interest on each property. The properties are located in Steelman, Lampman and Hume. In total, five (5) wells were drilled and completed - Steelman three (3) wells, Lampman one (1) well and Hume one (1) well. The initial production on the three (3) new wells at Steelman are meeting the Company’s economic expectation. The one (1) new well at Lampman is on production with a lower production rate than expected. The one (1) new well at Hume is uneconomic. The Company revised the 2022 drilling project from the original plan of eight (8) new wells to five (5) new wells due to (1) the drilling costs of the wells being higher than expected, (2) the reservoirs are more complicated than expected and the Company requires more time to mitigate the risks and uncertainties to an acceptable level and (3) the cost of surface pipeline and infrastructure is higher than planned. The operational results of the properties for the nine months ended September 30, 2022 were positively impacted by work completed on the properties in 2021. In Q3 2021, the Company completed three horizontal wells at Lampman with production from all wells commencing in September 30, 2021. In the first nine months of 2021, the Company completed a review of their other properties. As a result, workovers were performed at thirteen (13) wells including two (2) wells at Sullivan lake, three (3) wells at Gull Lake, three (3) wells at Pennant, four (4) wells at Baxter Lake, and one (1) well at Standard Hill. The Company also replaced the desulfurization tower at Sullivan Lake with a desulfurization tower with increased capacity. This assisted in the resumption of operations and allowed the Company to maintain a stable production. Core Properties Lampman Three (3) Frobisher horizontal (“Hz”) wells drilled in July 2021 were from the same surface location and were completed in August 2021. All three (3) Hz wells has been demonstrating stable production rates with very reasonable natural production declines. All wells are fully equipped with electrical primer drivers and pipelines and are periodically tested with Vital’s own onsite 2 phase separator (satellite). For the nine months ended September 30,2022, the average production wass 278 bbls/d, (sweet light oil, API ranging from 32.5 -36.0) In Q3 of 2022, the Company drilled one additional Hz well in the southern part of the Lampman property in order to produce the remaining Frobisher reserves. The well was put on production in August 2022. The initial production rate is lower than expected as the well is geologically located on the edge of reservoir, and the limestone target zone changes in both lateral and vertical directions. In order to increase productivity, the Company has initiated a full-scale production optimization analysis. Future work may entail a frac or acid squeeze to stimulate production. Sullivan Lake This property has two (2) Ellerslie Hz producing wells and one (1) Banff Hz producing well which were drilled in 2018 and 2019. These Hz wells have a stable production rate with a natural production decline. This property has completed surface facilities including a desulfurization tower and a gas pipeline. There are 6 potential Banff Hz development wells This area produced 87 boe/d for the nine months ended September 30, 2022 compared to 104 boe/d for the same period in 2021. Gull Lake In one of the Company’s core areas of operations, Gull Lake, Saskatchewan, Vital is the designated operator and maintains a 50% working interest. The property is covered with 3D seismic data and has 9 wells producing, or capable of producing, crude oil from the Roseray , Cantuar and Upper Shaunavon formations. This project has a salt-water disposal facility and a gas collection pipeline system. In the Company’s opinion, future drilling opportunities remain on these lands. At Gull Lake, Vital’s net daily oil and natural gas production for the nine months ended September 30, 2022 was 189 boe/d (2021 – 197 boe/d). The decrease in production was attributable to natural declines in the property. A Waterflood Project (Enhanced Oil Recovery) has been undertaken and it should be completed in Q4 2022. In order to better evaluate the oil development potential, the Company has utilized the 3D seismic survey which covers all of its Gull Lake lands. As of December 31, 2021, the reserves evaluator, Trimble Engineering, assigned 160,400 boe of proven oil and natural gas reserves net to the Company and 79,400 boe of probable oil reserves net to the Company. Pennant Vital is the Operator and maintains a 100% working interest in 12 contiguous sections of land. To date one (1) vertical well and six (6) horizontal wells have been drilled. Four of the horizontal wells and the vertical well have had production. The Company has commenced abandonment and reclamation work on some well site. 3D seismic coverage on about 35% of Vital’s lands indicates the potential for additional drilling locations. The company’s crude oil production was 26 bbls/d for the nine months ended September 30, 2022 as compared to 33 bbls/d in the comparable period in 2021 when the property was shut-in for a considerable time period due to depressed oil prices, 2 wells workover will be completed in Q4 2022 Steelman Vital acquired a quarter section of crown land in Saskatchewan in April 2022 and drilled 3 Frobisher Hz wells from the same surface location in Q3 2022. The facility equipment has been installed and the tie-in to the pipeline completed. The average initial production from the three (3) wells is 80 bbl/d which is meeting the Company’s economic expectation and production targets. Ante Creek The Company purchased 2.5 sections of crown land in Alberta in Q1 2021. As part of the Company’s 2023 strategic plan, the Montney play in Ante Creek will be the Company’s main focus. Currently, the Company has been working on a detailed geological study and finalizing development plan. The preliminary development plan indicates there are up to 25 development wells. Evaluation Properties Hume The property comprises 6 LSDs of crown land in Saskatchewan with a potential for three (3) Frobisher Hz development wells. In Q3 2022, one Frobisher Hz wells was drilled and was considered uneconomic. The drilling result showed the Frobisher limestone target zone changes in both lateral and vertical directions that indicated that the risks of both geology and drilling engineering would be higher than expected. There were indications that main geological fractures might be encountered which could result in a much higher water cut and be uneconomic to produce. As a result, the well was abandoned after swab test. The Company will continue to review the results of the first drilled well with the plan of drilling future wells. Gainsborough The company acquired 3 LSDs of crown land in Saskatchewan in April 2022 and had planned to drill 2 Hz wells in Q3 2022. The Gainsborough 2022 drilling project was postponed due to the risks and uncertainties related to the geology and projected higher costs than initially planned for drilling operation, surface pipeline and infrastructure. The Company will continue work on the reservoirs and the geology and will re-evaluate the feasibility of the project at a later date. The drilling program will be resumed if risks and uncertainties are mitigated to an acceptable level. Non-core Properties Baxter Lake The Company performed remedial work in 2021 to reactivate certain wells in the Baxter Lake area as oil prices have improved. In 2022, this area produced 25 boe/d. Pembina The Company acquired a quarter section of crown land in Alberta in Q3 2021 and another adjoining quarter section of crown land in June 2022. The Company is currently working on a detailed geology study and development plan. This may allow the drilling of up to 4 Hz Cardium development wells.
