Vital Energy Attempts Turnaround After Rebranding

Photo of author
Written By Kevin MacDonald

Vital Energy, formerly known as Laredo Petroleum, has a troubled history but is attempting a turnaround through rebranding and asset restructuring.

  • Despite recent acquisitions and increased holdings in the Permian Basin, concerns remain about inventory issues and future well productivity.
  • The company is hedged for 2024 but faces long-term sustainability challenges.

Background and Rebranding

Credits: DepositPhotos

Vital Energy rebranded to distance itself from its near-bankruptcy history. This rebranding effort was aimed at shedding the negative perceptions tied to its past financial struggles.

Business Overview

Vital Energy holds 265,000 net acres in the Permian Basin, primarily in Reeves County in the Delaware Basin and Howard, Glasscock, and Reagan Counties in the Midland Basin.

The company has recently closed several high-profile transactions to expand its Permian holdings, adding over 100,000 net acres and significantly boosting production volumes.

Drilling and Production Analysis

Vital Energy’s drilling results vary significantly across its holdings:

  • Howard County: Historically preferred due to higher initial production rates (143,000 bopd vs. 108,000 bopd in Glasscock and 102,000 bopd in Reagan). Howard wells also have a higher oil cut (82.0% vs. 62.0% in Glasscock).
  • Glasscock and Reagan Counties: These areas are more gas-weighted, which is less favorable given the current natural gas market conditions.
  • Delaware Basin: Recently acquired with promising but more costly drilling results.

The company’s strategy to purchase more Howard County acreage in 2021 and divest gas-weighted assets was prudent. However, Howard County’s drilling inventory is depleting, and the company cannot sustain its current drilling pace there indefinitely. This depletion could lead to lower revenue per well in the future.

Recent Acquisitions and Long-Term Outlook

Vital Energy has acquired new positions in the Delaware Basin, notably from Forge Energy. These acquisitions added significant drilling locations with promising initial results.

However, Delaware wells are more expensive to drill due to higher operational costs.

2024 Outlook

Vital Energy’s 2024 production guidance is set at 119k boe/d, with 47.9% crude oil volumes. The company has hedged 93% of its expected crude oil production at $75.00 per barrel and nearly half of its natural gas production. Despite this, the high capital expenditure ($775 million) and the potential for tepid drilling results pose risks.

The 2024 drilling program is crucial for setting up 2025, but relying on early results from new acquisitions may be overly optimistic. The PV-10 reserve calculation indicates limited upside at current prices, highlighting potential challenges in sustaining profitability without significant cost inflation or better-than-expected well results.

Shift to New Properties Hold Promise

Credits: DepositPhotos

Vital Energy’s moderate scale and gas-weighted land holdings have historically constrained its performance. The focus on Howard County’s oily acreage has been beneficial in the short term but is not sustainable.

The shift to new properties in the Delaware Basin shows promise but comes with higher costs.

Given these challenges, investors should approach Vital Energy with caution.

Despite hedges protecting 2024, long-term sustainability issues and the potential for declining well productivity warrant caution. The company remains a candidate for shorting as an oil hedge, considering its vulnerabilities despite near-term protections.


You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.

The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at; the Financial Industry Regulatory Authority (the "FINRA") at, and relevant State Securities Administrator website and the OTC Markets website at The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.

The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.

By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: and

By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.