Vitesse Energy, Inc.. 17th Annual Midwest IDEAS Conference

Afternoon, everyone. I'm Jeff Elliott with Three Part Advisors. Thank you all for joining us. Our next presenting company is Vitesse Energy. With us here today from the company, we have Jamie Benard, the CEO, James Henderson, the CFO, and Ben Messier, Director of Corporate Development and Investor Relations. With that, I'll just turn it over to Jamie.

Thanks, Jeff. Welcome, everyone, for hanging out late in the afternoon on day two. Look forward to telling you about Vitesse a little bit. I'm new to the organization, joined May 1st of this year. A little bit about my background. Came from what used to be Sinclair Oil and Gas. We were operator in the Williston Basin and the Permian Basin, Arkoma Basin, and then had a portfolio of 1,000 non-operating wells also. Vitesse's business model, we're an upstream E&P company based in Denver, Colorado. We own interests in about 7,900 wells across the Williston, Delaware, and Powder River Basin. This is the disclaimer slide that we need to show everyone. Our attorneys make sure that everybody sees this, so I'll give you a second to breeze through that. Vitesse at a glance. Our business, upstream E&P, has evolved over time, but we try to keep ours under these four pillars, which is own the assets, acquire more, convert them into free cash flow, and return capital back to the shareholders.

Our dividend is 11% right now. That's key to our thesis and where we are. That's number one priority as we think about capital allocation, et cetera. We're producing about 6.3-7.2 thousand BOE based off our guidance. We're very prudent at our hedging portfolio, mostly through swaps and collars. We're hedged through 2029, about 29% of it, as it says here, $67 per barrel. From a leverage standpoint, we're very disciplined there and conservative. We aim for less than one times. If you recall the evolution of our industry and how folks were getting extremely over-levered, we're definitely not going to let that happen.

We will go over slightly for an acquisition, but we want to be right back to one times within six months. This is a good overview of our acreage position in the three basins which we have a presence. The Williston Basin, North Dakota, and Montana, for those of you that aren't familiar, is core. Our founder, Bob Gerrity, and Brian Cree did a wonderful job of putting this together. 53,000 acres there in a very prolific basin. We've since branched out in the Powder River, Wyoming, DJ, and Colorado. What's interesting about the Williston Basin position from a diversification standpoint, our average working interest in a single well is 3.6%. No single well. If one well goes down, our concentration risk isn't overly concerning.

As you can see from this picture here, of the drilling rigs running in the Williston Basin today, over 50% of them are running on our acreage. That is something we are very proud of and is unique to Vitesse. You can see in the bottom left here, those are the operators, the suspects that you have probably heard of. Hess has over 19% of the acreage, and then Chord Energy does 9%. We operate, of our acreage, 9% of that was acquired through an acquisition closing in the first quarter of 2025. We like having that lever, another feather in our cap. If we need to throttle up on things, we can. If not, we have got exposure to some of the tier 1 operators within the basin. For those of you that are not familiar with what a non-operator is, we are an interest owner in a well.

We pay our proportionate share of the bills. We get our proportionate share of the revenue. However, we do not need to have the staff of an operating entity, as many engineers, geoscientists, field staff, et cetera. We have a lot of capital flexibility. We have got that built-in diversification. What is really nice about this model is our asset base can increase. It can double, and our G&A is going to stay the same. It is the scalability, the flexibility. There are so many different ways to invest in non-operative working interests, whether it be partnering with an operator, carving out a piece, buying producing properties, et cetera. As it says here, selectively, at scale, we have closed over 175 acquisitions since our inception in 2013. Discipline is the word that you will hear us talk about a lot as far as capital allocation, leverage, and the way it is deployed.

Again, our dividend is number 1. We like to grow through accretive acquisitions without getting over-levered, maintaining that conservative balance sheet exactly 1 time or less is actually where we are at right now. Excess free cash flow after that, we will look at the highest rate of return. That is when we will deploy that capital, whether it be in organic capital and wells and acreage that we already own, whether it be acquiring near-term development wellbore by wellbore, or larger producing properties that are being marketed through investment banks, et cetera. Again, the returns, dividends number 1. These are how we look at deployment of capital. Again, in that organic CapEx with the 53,000 acres across the Williston, every dollar has to support the dividend.

Whether it be a large PDP acquisition through a portfolio of wells, whether it be a single wellbore, et cetera, it has to be accretive to our dividend producing properties. Then obviously we can look at paying down debt. This is returns-based capital allocation, just elaborating on the previous piece there. We have got how we look and underwrite things and where we are putting our capital dollars. Everything is at strip, so what does that mean? We can hedge it. Upon closing the acquisition, we can hedge that and lock in our returns that are accretive to the dividend, free cash flow, and NAV. We are targeting the Williston Basin, the Powder River Basin, the DJ, both that and on near-term development. That market has been much more competitive of late.

You look at previous years where we may have had $35 million of capital that goes into near-term development, that has become much more competitive. We have not won as many of those, and we are okay with that. People that are coming in and being very aggressive, we are not going to deviate from the returns that meet our KPI and investment thesis. Then producing properties, we have been very busy. I have been very delighted since arriving on May 1st, seeing how much activity there has been there. A lot of people talk about the Permian Basin. We have competed there, but again the dollars that are being spent there are not at the levels that we appreciate and support our business. We have been in the Williston, which is our backyard, and the Powder and the DJ, which have been less competitive for various reasons.

The DJ, that is all about people are worried about the regulatory environment there, rightfully so. However, at Vitesse, when we are looking at acquisitions in the DJ, we are buying producing properties only. So that risk is eliminated. Wells that are producing today, no matter who is in office, they will be producing tomorrow. It is the undeveloped acreage that we are not paying for that is the risk. So we are not pricing that into our models at all. Again, that market has been conveniently, delightfully is the word, I think Ben last month submitted 6 bids in one day, and that is much more deal flow than we have seen in the past. Technically speaking, this is not just unique to Vitesse, but this is going across the basin, not just our industry, but laterals are getting longer, meaning we are drilling horizontally. So the infancy of the unconventional horizontal drilling, 1 mile was about the limit.

Then we reached out to 2 miles. Now we are out to 3 and 4 miles on the lateral. What that does is your capital efficiency, you have to normalize it on a per foot basis, brings your capital efficiency down, your decline rate. The unconventional world wells come on at a very high rate and decline very quickly. With these longer laterals, you are not getting the huge IP, initial production volumetrically, but when it flattens out, it is at a higher level. So we like that from a base production corporately is that base production is naturally higher. You do not need as much CapEx to maintain that level. You are doing more with less. You are drilling one vertical section and going out 4 miles where you used to have to do that twice in the vertical section. That is a huge savings.

Luminus, since I have been here in May, I had read about Luminus. This is an incredible feature that I would refer to as best in class with Vitesse. It is a data management system that allows us to underwrite, track look backs. It is a system that scrapes public data and our proprietary cost data all in one system that can help us. What used to take us, places I have worked previously, 4-5 days, we can underwrite an acquisition or a single wellbore look backs in a matter of minutes. It is layered on with an AI chatbot that we can ask it very direct questions. Show me how have the rates returned? When has payout on a single well happened? It is all broken up regionally. We have got type curves for every area within the Williston Basin.

So again, this augments the G&A from the perspective that the asset base can grow and our headcount can stay relatively flat. How is Vitesse able to do that? That is because we have all this data from these 7,900 wells that we have an interest in that you can get a subscription to Enverus and you can get production data, you can get completion design, et cetera, but what is not in there is the cost. How much did it cost to drill that well? How much does it cost Devon to drill that well versus Chord versus Continental, et cetera? We have all that and we can pinpoint exactly when we receive, whether it be an AFE to consent on a near-term drilling, looking at an acquisition. We have all that centralized into one location.

The other piece value add that I have noticed is we have in an E&P space, there is massive amounts of data, and your accounting department and your engineering department, your geoscientist, is all collectively pulling data from different places. This is all centralized and knowing and having the confidence that we are all looking at the same data is huge. That might sound simple to some businesses, but that has been a challenge in E&P for a number of years, and Vitesse has cracked the code there. So, when we think about what differentiation, why is Vitesse unique? These are the things that come to mind, the highlights. Look, it is a long duration, high quality asset base. Since we have been in existence and had AFEs sent to us, we have consented on 93% of them. We can opt in or opt out. What does that speak to?