Vitesse Q3 Net Loss Reflects Derivative Mark; 2026 Output Set

Vitesse Energy (NYSE: VTS) reported a third-quarter 2026 net loss of $36.4 million, including a $46.6 million unrealized loss on derivative instruments, while adjusted EBITDA remained positive at $39.3 million. The oil and gas interest owner also set its revised 2026 production guidance at 16.6 MBoe/d to 17.2 MBoe/d and reiterated a dividend-focused capital allocation strategy supported by hedging and free cash flow.

The quarterly result compared with net income of $33.1 million and adjusted EBITDA of $40.2 million in the second quarter. In addition to the derivative mark, third-quarter results included $32.8 million of depletion, depreciation, amortization and accretion, $3.3 million of interest expense and $2.2 million of equity-based compensation. The company recorded a $9.1 million income tax benefit.

For the 12 months ended September 30, Vitesse reported a net loss of $46.3 million and adjusted EBITDA of $149.6 million. Adjusted EBITDA is a non-GAAP measure that excludes interest, taxes, depletion, depreciation, amortization and accretion, non-cash equity compensation, unrealized derivative gains and losses, and certain other items.

Production and investment outlook

Management expects 2026 production of 16.6 MBoe/d to 17.2 MBoe/d, with oil accounting for 60% to 62% of output. Cash development capital expenditures are projected at $80 million to $90 million.

Vitesse owns working and mineral interests in 8,732 productive wells, equivalent to 275.6 net wells, across the Williston, Denver-Julesburg and Powder River basins. Its average working interest is about 3.7% per well, spreading exposure across more than 30 operators. An additional 663 gross wells, or 19.6 net wells, were drilling, being completed or permitted as of September 30.

The company said longer horizontal laterals are improving capital efficiency in the Williston Basin. Average lateral length increased 40% from 2022 to 2026, and about 70% of its 2026 wells are three miles or longer. Median capital expenditure per foot was 25% lower for four-mile laterals than for two-mile laterals, according to Vitesse’s analysis. Management expects longer laterals and their lower decline rates to reduce the capital required to maintain production over time.

Vitesse also highlighted the scalability of its predominantly non-operated model. Production increased 68% from 2022 through 2025, while cash general and administrative expense per barrel of oil equivalent fell 27% to $3.82. As of September 30, its 33 full-time employees managed interests in about 265 productive wells per employee.

Dividend, hedging and balance sheet

Vitesse’s capital allocation framework prioritizes its quarterly cash dividend of $0.4375 per share, equivalent to $1.75 annually, subject to board approval and credit agreement restrictions. The company has declared a dividend in each of the 16 quarters since its January 2023 spin-off, bringing cumulative declared dividends to $8.075 per share.

After funding the dividend, management plans to direct remaining free cash flow and revolving-credit capacity toward organic development, near-term development acquisitions, producing-property acquisitions and debt reduction, ranked by expected return. Acquisitions are expected to support dividend coverage and be accretive to net asset value per share under the company’s criteria.

Net debt stood at $189.8 million on September 30, consisting of $190.5 million drawn on the revolving credit facility less $0.7 million of cash. Net debt was 1.3 times trailing-12-month adjusted EBITDA, above management’s target leverage of less than 1.0 times. Following an October expansion of the borrowing base to $290 million, available liquidity was $100.2 million based on September 30 balances. Vitesse also has a $60 million share-repurchase authorization.

The company has commodity hedges extending into 2030. Its oil swaps are concentrated around the high-$60s to low-$70s per barrel through 2029, with smaller volumes hedged in 2030. Management said its hedge program is intended to protect cash flow and support the dividend through commodity-price cycles.

Vitesse identified oil and natural gas prices, drilling and completion activity, acquisition execution and integration, reserve revisions, infrastructure constraints, cost inflation and access to capital among its principal uncertainties. The company also cited regulatory changes, tariffs, cyber risks, the Dakota Access Pipeline dispute and geopolitical instability as factors that could cause actual results to differ from its current expectations.