Vitesse Energy, Inc.. 31st Annual EnerCom Energy Investment Conference

Good morning, everybody. Ooh, that's loud. My name is James Parrott. I am a shareholder at a law firm called Beatty & Wozniak, where I chair the M&A group. I am here to introduce the CEO of Vitesse, and the President, Mr. Jamie Benard. Mr. Benard is incredibly accomplished. He was just recently appointed to the board of Vitesse, and as President and CEO in May of this year. Previously, he served as president of SOGC, which many of you know as Sinclair, and in that role was a member of the North Dakota Petroleum Council Board of Directors. Prior to SOGC, he was the principal and owner of Benergy, which provided executive management services to energy companies. Prior to that, Summit Discovery Resources, which is an upstream E&P where he rose rapidly through the ranks to become president and CEO.

He's a proud graduate of SUNY Fredonia near Buffalo, where he played college hockey. I'm guessing that one of his proudest accomplishments in life is as a board member of the Snowdrop Foundation. You're currently there, right? Which provides scholarships for college-bound pediatric cancer patients and raises awareness of childhood cancer issues. If we could all give a warm welcome to Mr. Benard. He's here to talk to you about Vitesse.

Thanks, James. Thanks, everyone. Good morning. First I want to thank EnerCom for having us. As James said, my name is Jamie Benard. I'm President and CEO of Vitesse Energy. For those of you that aren't particularly familiar with Vitesse, we're a Denver-based E&P company. A little bit different model than most. We own both operated and predominantly non-operated interests in over 7,800 wells, through 30 operators in three different basins. At its core, though, the business is pretty simple. We invest capital where we believe we can earn accretive returns, convert those investments into free cash flow, and return a meaningful portion of that cash to our shareholders through a durable dividend. I'm going to spend the next few minutes explaining how we do that, where we're investing today, why we think this model creates an attractive combination of income, returns, and capital flexibility.

Before doing that, the disclaimer our attorneys have appropriately told me, you guys can all breeze through real quickly. Then we'll move on here. I'm sure you guys have already digested that. This slide really summarizes how we think about Vitesse. There's four parts to the model: own, acquire, convert, and return. Like I said, we own interests in over 7,800 wells. We acquire additional interests. When they clear our return thresholds, we convert that inventory into production and free cash flow. Then we return that capital to our shareholders with a dividend coming first. One of the strengths of this model is diversification. Our average working interests across those 7,800 wells is 3.5%. Our capital and production exposure is spread across very vastly.

At the midpoint of our current production guidance in 2026, we'll produce 16,750 BOE per day, 61% oil, and paying a dividend annualized at $1.75 per share. Our hedging philosophy is pretty straightforward. We put on incremental hedges unless they support the dividend. Obviously, we meet the minimum requirements of our credit facility, but beyond that, the purpose of our hedge book is to provide visibility around the cash flows that support our dividend. You can see that that expands all the way through 2029. We take a similarly conservative approach to leverage. We want to maintain a balance sheet with the flexibility to weather commodity downturns, and when prices are strong, paying down the revolver becomes another attractive use of free cash flow. Those last two points are really important because this isn't simply about generating returns in a strong commodity environment.

We've built a business that can generate a return on capital through the various cycles that we're all familiar with. Geographically, we're concentrated in three basins: the Williston Basin, the DJ, and the Powder River. The Williston being the largest portion of our portfolio. One of the things that I think illustrates the quality of our Williston position particularly is how much industry activity intersects with our acreage. Historically, 30%-70% of the rigs running in the Williston Basin have been on our acreage. Currently, 17 of the 31 or 54%, over half the rigs running in the Williston are on Vitesse acreage. That gives us a broad opportunity set, but we're not passive in that process. Each well is an election based on economics at strip, and we participate when returns meet those thresholds. That discipline is key to the overall model.

You'll hear me talk a lot about that this morning. We also have a meaningful operating position that came through the acquisition of Lucero, which closed in 2025, so we're currently operating approximately 60 wells in the McKenzie-Dunn area of the Williston Basin. That just gives us another avenue to deploy capital when the returns justify it. Increasingly, we're seeing operators develop longer laterals. I'm sure you guys have already heard a lot about that this morning. We'll talk more about that here in a little bit, but that's been a big contributor to our capital efficiency. The non-op advantage, there's a few of us out there, but this is one thing I find most attractive about the Vitesse model in particular. We have a lot of different ways to deploy capital. We can participate in wells proposed on our acreage we already own.

We can acquire interests in individual well bores. We can acquire larger producing properties that often come with undeveloped inventory, pardon me. We can partner with operators or acquire interests that operators carve out of their own development programs. Regardless of the size, the fundamental discipline is the same. The investment has to compete for capital. All these conversations every day at our office. Since 2013, when Vitesse was founded, the company has completed over 175 acquisitions, representing approximately $800 million in value. What's interesting is the range of those 175 acquisitions. Just five of those acquisitions were in the $35 million-$194 million range. Together, that's about $642 million of the $800. The other 170 acquisitions, about $158 million, they're just under $1 million per acquisition. Again, we're looking at a wide range of opportunities and very flexible in doing so.

This model can deploy capital very efficiently at both ends of the spectrum, from relatively small, highly targeted investments all the way through sizable asset acquisitions. Every opportunity is underwritten individually through a data platform that is proprietary to Vitesse, we have coined the name Luminis. We have consented to 93% of the wells proposed to us since we spun out in 2023, but obviously still retain the right to say no. I think that 93% consent rate really speaks to the quality of the opportunities and the acreage. Most of what comes clears our return thresholds. That combination of flexibility, selectivity, and scalability is a significant part of what differentiates this model. Consistent strategy. Since joining on May 1st, I have been asked quite a bit about has Vitesse's strategy changed? The answer is very straightforward, it has not.

In fact, the philosophy behind Vitesse is particularly relevant to where the industry has evolved. For a long time, you guys will all remember upstream E&P companies were rewarded and incentivized to grow for growth's sake, replacing reserves, production asset base. Growth itself was considered success. Around, maybe arguably 2015-2019, you really began to see investor sentiment and expectations change. The focus on increasing move towards capital efficiency, free cash flow, and ultimately delivering returns back to shareholders. COVID even further accelerated that. What is important with Vitesse is that embracing that discipline has been a mainstay well before it became an investor mandate. Capital discipline and returning capital to shareholders were not a response to changing investor expectations, they were foundational to the model. I want to be clear about something. We absolutely intend to grow.

We see significant opportunities to grow this company and growth is very much part of our strategy, but we intend to do so with that discipline I keep going back to. Growth has to create value and earn an appropriate return and fit within the capital allocation principles that have defined our company. Our priorities reflect that. First, deliver a durable dividend. Second, grow through accretive acquisitions that create value on a per share basis and support the dividend. Third, maintain a conservative balance sheet. Then deploy the remaining free cash flow toward higher return opportunities available to us. When I say the strategy is not changing, I do not mean Vitesse is standing still. What I am trying to say is we intend to grow, but we just are not going to compromise those return thresholds that have got us to where we are today.

The balance sheet, the dividend, all those things. The underlying philosophy is one I believe in very strongly. Disciplined growth, disciplined capital allocation, and delivering returns to our shareholders. This is how that discipline translates into capital allocation. The dividend sits at the top of the waterfall. After that, every incremental dollar has to compete for capital. It may go to an organic AFE in our existing acreage. It may go toward near-term development acquisition. In other words, buying an AFE. It may go towards a larger producing property acquisition. It may go towards reducing debt. What we are trying not to do is chase an arbitrary production growth target or spend capital simply because it is available. We target 1x leverage or less, although for a compelling acquisition, we will go above that target. Assuming we have a clear and credible path back towards our target of less than 1x.

If high return opportunities exceed internally generated free cash flow, we can use the revolver. If, when, I should say, internally generated cash exceeds the opportunities that meet our thresholds, reducing debt becomes a very attractive use of capital. We are often asked why share repurchases are not on this slide. We certainly recognize that the return available for buying our shares at current levels. Today, we also have an abundance of attractive opportunities to reinvest in the business across our organic inventory, near-term development acquisitions, and larger producing properties. Importantly, those types of investments, we can hedge those. There is always a balance between reinvesting in the business and returning capital to shareholders. We have deliberately sized our dividend to allow us to do both. That is really what this slide is about. Capital does not have a predetermined destination. It has to earn its way there.

Regardless of where that dollar ultimately goes, every reinvestment decision is screened through the support of the dividend. This is a pretty busy slide here. I will read my script, not the slide. The important point is, although these categories have different risk profiles, our underwriting discipline is consistent. This is really how we look at the framework after the dividend. We underwrite using strip prices that we can actually hedge. We use well-level data through Luminis, this data set of thousands of wells, LOE, across the board, AFE cost, capital, production. We look at an IRR, ROI, and payout. Our required return adjusts based on a risk that we are assuming. For larger producing properties, we also focus heavily on a per-share accretion, particularly NAV per share and discounted cash flow. We do not evaluate an acquisition separately from the balance sheet.