Good day, ladies and gentlemen, and welcome to Vital Energy Incorporated, Delaware Basin Bolt-On Acquisition Conference Call. My name is Alex, and I will be your operator for today. At this time, all participants are in listen-only mode. We will be conducting a question and answer session after the financial and operations report. As a reminder, this conference is being recorded for replay purposes. It is now my pleasure to introduce Mr. Ron Hagood, Vice President, Investor Relations. You may proceed, sir. Thank you and good morning. We appreciate you joining us today for our discussion of our most recent Delaware Basin acquisition. With me today are Jason Pigott, President and Chief Executive Officer, Brian Lemmerman, Executive Vice President and Chief Financial Officer, Katie Hill, Senior Vice President, Chief Operating Officer, as well as additional members of our management team. During today's call, we'll be making forward-looking statements. These statements, including those describing our beliefs, goals, expectations, forecasts, and assumptions, are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results may differ from these forward-looking statements for a variety of reasons, many of which are beyond our control. In addition, we'll be making reference to non-GAAP financial measures. Reconciliations to GAAP financial measures are included in the press release and presentation we issued yesterday afternoon. Press release and presentation can be accessed at our website at www.vitalenergy.com. I turn the call over to Jason Pigott, President and Chief Executive Officer. Morning, and thanks for dialing in. As always, we appreciate your interest in Vital Energy. We are excited about today's announcement and the tremendous future value we can create. This is a great fit for us. It is a high-quality asset, adding valuable inventory and oil-weighted production. It's right in our backyard and enhances our growing Delaware position. It's highly accretive to per-share metrics, bolstering our numbers in 2024 and beyond. We can finance it on our credit facility with strong cash flows, providing a path to reduce debt in the near term. The significant steps we have taken to strengthen our business over the last two years put us in an advantaged position to capture this opportunity. We increased our Permian scale, built more than 10 years of high-quality inventory, and strengthened our capital structure. Our business model is proven and repeatable. We've come a long way in the last 15 months, capturing 5 high-quality deals in the Delaware Basin and balancing our Permian position. We have a meaningful business in the Delaware today that will soon represent one-third of our daily production. This operational scale will allow us to effectively manage risks and allocate capital to our highest return developments. Before we take questions, let me provide some highlights. First, this deal is attractively priced and highly accretive. It is priced well below recent Delaware Basin transactions at about 2.4x forward consolidated EBITDAX. In addition, it is also priced at a discount to Vital Energy's current valuation. We have high confidence in our underwriting assumptions. Third-party engineer estimated PDP reserves have a PV-10 value of $742 million alone, and work in process wells have another $71 million in value, substantially underwriting our net purchase price. High-value inventory is being acquired at only $1.4 million per location. Transaction is not only immediately accretive to key or per share financial metrics, but is also expected to be accretive to results over the next five years. Second, this deal adds 68 quality gross, 49 net inventory locations and high-margin oil production. Most of these locations compete for capital today and can move to the front of the line, providing us with more flexibility. Deal deepens and strengthens our development inventory and expands our growing Delaware position. Locations have an average breakeven of approximately $47 per barrel WTI. Production on the asset is around 64% oil, higher than our company average in the 46%-48% range. Next is operational scale. Positively impacts every facet of our business, from our supply chain and preferred service providers to credit facility financial partners. Here, bigger is better. Over the last several years, we have more than doubled our Permian Basin footprint and will have approximately 280,000 net acres in a decade of quality drilling inventory. We have assembled a strong Permian-based footprint, and our teams are executing a proven strategy to safely develop our assets and enhance return. Number four, we could fund this deal at attractive rates through our recently expanded credit facility, and we expect to deliver from 1.5x to 1.3x within 12 months. Partnered with Northern Oil and Gas in an 80/20 financial arrangement, scaling the transaction to the appropriate size. Know the importance of maintaining a strong balance sheet and plan to use higher free cash flow to rapidly reduce leverage over the next year. Hedges provide us with certainty on debt repayment. We've added significant new hedges in 2025 to ensure cash flow and reduce commodity price volatility. You can see all the details in today's deck. Turning to the Point assets, as you know, our development pace usually differs from private companies preparing for a sale. Its recent activity levels have been high, leading to flush production and lots of near-term cash flow. We plan to moderate activity in the future and use cash flow to reduce debt. Effective date production in April was high, at about 30,000 BOE per day, and reflected a 15-well package that Point had recently turned in line. From effective date until closing date, the asset will be on a natural decline, with no new wells being put online. We expect production to decline around 50% by closing. In the fourth quarter, post-closing, we expect production on the asset to average around 15,500 BOE per day, about 64% oil. Expect to operate one drilling rig during the quarter and to conduct completion operations on approximately seven wells. Capital investments are expected to be approximately $45 million. This transaction provides us with new options as we plan our 2025 capital allocation. Going forward, we will optimize activity levels and high-grade capital across our portfolio. For modeling purposes, we estimate that a single rig program on these new assets can maintain about 15,000 BOE per day, 64% oil, with about $100 million of capital, drilling and completing approximately 12 wells per year. Consistent with normal practice, we will have complete 2025 outlook for you early next year. Let me quickly summarize today's acquisition. This deal is highly accretive to key per-share metrics, and we expect it to be so for the next five years. We bought this asset at a very attractive valuation and expect to delever to 1.3x within 12 months. This asset fits perfectly into our growing Delaware Basin position, enhancing scale, and the high-quality inventory will be quickly integrated into our development plans. This concludes our prepared remarks, and we are now ready to take questions. Operator, please turn over the line for questions. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. Your first question comes from the line of Neal Dingmann with Truist Securities. Please go ahead. Morning, guys. Thanks for the time, and congrats. My maybe Jason, first question is just on, on the well inventory. You guys talked a lot about it in the release, but I'm just wondering, how would you anticipate on the new wells? I know you talked about a one, a one-rig program, but just on a broader basis, how do you all, you know, maybe you, Katie, whatever the team, see the new assets competing for capital, you know, against the broader portfolio? Yeah, these wells are high-quality wells. It's one of the big drivers for the acquisition. While we describe it as one well, incrementally drilling, we will ultimately optimize the portfolio. We could see two rigs out here, because, again, the big thing here was we were able to reduce our break-evens with this well and ultimately reduces them for the whole company as part of the transaction. That actually leads me to the second, which some of you had just mentioned. I'm just wondering, can you talk a little bit more about that on the continued Delaware, you know, the D&C improvements, you know, specifically talking about maybe spacing, lateral length, all that good stuff. What has helped with that efficiencies and lower costs you all talked about? Yeah, I think we do a good job reducing costs. We underwrote this one at $10.7 million per well for a 10,000-foot lateral, which aligns with our early 2024 Delaware capital execution. There's always opportunities for us to continue to optimize there, because we bring scale, a larger supply chain to this area. We'll have a little bit different completion than the Point team did. As we demonstrated on our past transactions, we'll drive down costs quickly by applying this to scale and increase purchasing power. We also see a big benefit by going through to wider spacing. That's one of the things that we've really seen over time. The Point team developed these wells at six wells per section. We've underwritten 4 wells per section. As we highlighted in prior calls on our southern Delaware area, that's been a real driver of outperformance there and hope to see these same things on these new assets. Jason, I could sneak one last one. If you just talk about the infrastructure and, you know, if you'll have more than ample takeaways, you see it sort of on the near term. Right. We're really excited about this, this area because it's got centralized facilities and water disposal and plenty of capacity. But I'll turn that question over to Ben, who's running our midstream operations, and give you some more color. Thanks, Jason. So on the gas side, you know, as you're obviously well aware, we continue to find success in moving our gas to market through this constraint period. Not once have we had a downstream market advise us of our inability to clear our gas out of the basin. Specific to these Point assets, the gas marketing arrangements that are coming with the properties... ... are solid and dovetail really nicely into our overall gas portfolio. So I wouldn't see any change there from picking up on these assets to where we've been in the past, where we're going in the future. On the water side, we're really excited about their owned water infrastructure that's coming with the transaction. This includes infield gathering, storage for both fresh and recycled water, and then also multiple saltwater disposal wells that support a large portion of the acreage. The infrastructure is robust, and we believe a catalyst in supporting further LOE improvements for our Delaware operation. Very good. Thank you for the details. Your next question comes from the line of Gregg Brody with Bank of America. Please go ahead. Good morning, guys, and congrats on the transaction. Just on the cost side, you mentioned this is an opportunity to improve your Delaware costs. I'm just curious how we should think about what the costs are associated with this on a run rate once you get down to 15,000 barrels per day. I noticed in the slide you have an $11 number on page 5. I wasn't sure if that's for these assets. How just hooking up this thing through a sort of run rate cost basis from that. Morning. The Point assets are comparable to previous Delaware assets that we've purchased. One of the good opportunities here is that we see lower H2S than some of the assets that are a little bit further to the west from last year. We see less risk on the lineament side, and then consistent with Ben's comments around water infrastructure, I think there's a really interesting opportunity here with their existing owned water takeaway and disposal, along with some of the central facilities that we, that they built. So I think from a run rate and LOE standpoint, this will fit in really nicely with the Delaware assets that we already own. Got it. And when you take ownership of the asset, I know it's effective April first, but I think you're expected to close end of this third quarter. Is that right? What should we think about the run rate production? What level should it be at by that point? We'll, we'll work the LOE opportunities effectively from now through close. I would anticipate that post-close, we'll be ready to guide to additional, you know, operating cost, run rate and reduction from there. I think at this stage, we're really focused on getting through close and successfully integrating this asset, both under the team and for, like you said, additional operating cost reductions. Yeah. I was just looking for the production number at that, when it closes, but if that's the comma, I'll yield on that one and just ask one more question. You mentioned that you can- No, yeah, we- Yeah, sorry. So we showed we gave you what Q4 should look like in the press release, and it's very similar to what a 12-month go forward would look like. So you're in that 15-ish thousand run rate. Barrel per day and about 10,000 barrels of oil per day. Got it. You'll be there by then. Great. And then last question. You, you mentioned you can, you can put on your credit facility. Is that, in your view, is that the plan, that you're gonna, you're gonna keep that in place to pay that down? Or will you be opportunistic at some point, when it makes sense to potentially term that out? Yeah. I mean, one of the things is, again, we value our equity very seriously, and we're a much stronger company today than we were before, and we're much bigger and have a stronger balance sheet. Want to emphasize, we have no plans to issue equity as part of this transaction at this time. And then I'll turn it over to Brian as we think about capital, the rest of the capital markets and bonding. Yeah, at this time, there aren't any plans to go to the bond market to term it out. We'll obviously evaluate the bond markets going forward and, you know, make a decision later. But at this current time, we plan to put it on the RBL. We'll be roughly 50% drawn at close and generating free cash flow to pay it down. So that gives us a place to prepay debt better than our other options currently. So that's the plan. I appreciate, appreciate all the time, guys. Congrats again. Thank you. Your next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Please go ahead. Good morning, folks, and thank you for taking my question. The first one I had is, it sounds like you're gonna come out in early 2025 with an update on the capital program. So if we think about the four-rig program now and your comments on $100 million annually to keep that flat, so is it fair to say that you haven't decided yet if one or more of those four rigs will go to that area, or if you'll add a fifth rig? I'm just trying to understand what this acquisition means, you know, for your activity levels. Yes, we're, we're trying to highlight here that we'd be running five rigs for next year with a incremental cost of approximately $100 million. Now, whether that rig is running on the Point asset, just one on Point asset, or we move two rigs to the Point asset, that's what we're really gonna be working to optimize the rest of the year, is where is the, what's the right balance for our activity. But I, we would plan on putting in a fifth rig into our portfolio for next year. Okay. I appreciate you clearing that up. And then my follow-up, you know, we're trying to get comfortable with sort of the PDP, PV-10 value you put out there, and we've had some investors ask questions about that. Did you set that price deck at, as of, I guess, the April first effective date? And, I guess that factors in the decline. And I'm just trying to understand the value. How did you associate value in the natural gas? Did you incorporate kind of the Waha differentials? You know, obviously, the dynamics are pretty bleak here this quarter. ... How did those all kind of shake into that 740 PV-10 number you put out there? Just trying to understand that a little better. Those were, we worked with Ryder Scott on those reserves. They were prepared in accordance with how you would view SEC reserve valuation. Okay. So they would take into basis differentials into that equation? They take into the basis differentials, and the pricing was chosen according to how SEC pricing would be done. Okay. Okay, fair enough. Thank you. Your next question comes from the line of Zach Parham with JP Morgan. Please go ahead. Thanks for taking my questions. First, could you just talk about the opportunity set to add inventory on this asset? In the slide deck, I think you mentioned the potential to add in the first and second Bone Spring and the Wolfcamp C. You know, do you plan to test those zones in the near term? And do you think those zones need to be co-developed with the core zones on the asset? Yeah, we're really excited about the inventory we're getting with this asset. As you can see in the presentation materials, we're getting some highly productive formations. Our view, again, is this adds about 50 net locations with an average breakeven of $47 WTI, across the Third Bone Springs, the Wolfcamp A, and the Wolfcamp B. All three of these formations have robust well control in and around the assets. I think one of the other advantages for us in this process is we were able to underwrite 16 horseshoe-shaped wells in the inventory. And our successful demonstration of the horseshoe development in both Midland and Delaware Basins enabled us to capture this additional inventory on the asset. We also highlight on slide 5 of the presentation, there's upside in both the First Bone Springs and the Wolfcamp C. One of the things that we'll be working through is, how do we delineate and test some of these other zones? We've proven with all of our acquisitions, we have the ability to bring in more inventory that we've underwrote, and then more importantly, we applied no value to these upside locations. We only underwrote the core, development zones. Thanks, Jason. And just my follow-up, how do you think about further M&A from here? I mean, y'all have a history of successfully integrating multiple boatloads at the same time. You know, would you consider doing other deals in the near term, or do you expect to stay on the sidelines while you close and integrate the Point asset? Yeah, we're really excited about what this transaction means for us in the future. I mean, today we are focused on getting this new transaction closed and integrated into Vital. I can tell you that the good deals are getting harder to find, and we have a high bar. Any future transaction needs to add to inventory that is, again, at the beginning of our rig schedule, and reduces our breakevens. It has to be accretive to our financial metrics and be leverage neutral in the near term, and any deal must make us better and not just bigger. I think for us, we're not gonna issue a lot of shares in a future transaction. I don't. So I think we're gonna really just execute the next year on this and be focused on. And again, it's not just this asset. We've had, again, five that we've integrated or need or in, in the process of integrating. So we're gonna be really focused on getting more out of the assets we have today, and excited about it. We'll. If other things pop up, they pop up, but I'd say we're more focused now on just delineating, getting our optimization in place, and again, finding new wells and new zones under our expanded footprint that we've put together over the last year and a half. Thanks. Appreciate the call. Thank you. That concludes our Q&A session. I will now turn the conference back over to Mr. Ron Hagood for closing remarks. Thank you for joining us this morning, and this concludes today's call. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.