Vitesse Energy Inc: Could 9.2%-Yielder Jump 36%?
June 24, 2025
Outlook for VTS Stock Just Became More Compelling
The outlook for Vitesse Energy Inc (NYSE:VTS) just became a little more interesting.
Oil prices were trading at a 52-week low on concerns about the economy and, for a short time, optimism about a U.S./Iran nuclear agreement, which would likely result in Iranian oil hitting global markets.
Israel was done waiting, it seems, and struck at the heart of Iran’s nuclear and military sites on June 13. President Donald Trump warned that Iran needs to make a deal or further attacks will be even “more brutal.” Iran, for its part, has said that Israel will face “huge and destructive consequences.” (Source: “Make a deal or attacks will be ‘more brutal’, Trump warns Iran after Israel hits nuclear and military sites,” BBC, June 13, 2025.)
It’s fair to say that there will be further attacks, which could, extend beyond these two countries. These concerns have ignited oil prices, leading them to see their biggest one-day gain in years, closing in on $70.00 per barrel.
The attack has also led to fears that Iran could retaliate by blocking access to the Strait of Hormuz, a key shipping route for energy, with approximately 25% of global oil and 20% of global liquefied natural gas (LNG) passing through the critical, narrow channel.
Events like this highlight the need for the U.S. to rely on stable domestic players in the oil and gas industry. That includes Vitesse Energy Inc.
Most investors aren’t familiar with Vitesse Energy, but that’s only because it went public in early 2023. The Colorado-based company is engaged in the acquisition, development, and production of non-operated oil and natural gas properties in the U.S. (Source: “Investor Presentation May 2025,” Vitesse Energy Inc, May 5, 2025.)
In March 2025, it acquired Lucero Energy Corp. The acquisition is expected to be immediately accretive to Vitesse’s earnings, operating cash flow, free cash flow (FCF), and net value. (Source: “Vitesse Energy Announces Completion Of Lucero Acquisition,” Vitesse Energy Inc, March 7, 2025.)
The company’s assets now consist of more than 50,000 net acres and interests in over 7,000 gross producing wells. Vitesse basically invests in oil and gas wells operated by other oil companies. Some of the 30+ oil and gas operators include Chord Energy Corp (NASDAQ:CHRD), Devon Energy Corp (NYSE:DVN), Hess Corp (NYSE:HES), and ConocoPhillips (NYSE:COP).
Strong Q1 Results
For the first quarter ended March 31, 2025, Vitesse announced that total revenue increased eight percent year over year to $66.1 million. Of that, oil revenues were up three percent at $58.9 million, while natural gas revenues jumped 89% to $7.2 million. (Source: “Vitesse Energy Announces First Quarter 2025 Results and Revised 2025 Guidance,” Vitesse Energy Inc., May 5, 2025.)
The company’s first-quarter 2025 net income came in at $2.6 million, or $0.08 per year, a big improvement over a first-quarter 2024 net loss of $2.1 million, or a loss of $0.07 per share.
Adjusted net income slipped to $8.0 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) inched up to $39.9 million. Cash flow from operations was $17.5 million with FCF of $9.1 million.
Daily production grew approximately 20% to 14,971 barrels of oil equivalent (BOE), of which 68% was oil.
Business Outlook for Vitesse Energy Inc
Vitesse has revised its 2025 annual guidance in response to recent commodity price volatility and market uncertainty in an effort to preserve returns and maintain financial flexibility. As a result, it has widened its guidance range, now expecting to report:
- Annual daily BOE production of between 17,000–18,000 and 15,000–17,000
- Oil as a percentage of annual production from a range of 66%–70% to 64%–68%
- Total capital expenditures of between $130.0–$150.0 million to $80.0–$110.0 million
Quarterly Dividend Remains at $0.5625
Commenting on the first-quarter results, Bob Gerrity, Vitesse’s chairman and chief executive officer, said “In the first quarter, we delivered a 7% dividend increase and successfully closed the acquisition of Lucero. Our low leverage, disciplined hedging strategy, and foundational asset base provide us the flexibility to navigate market volatility.
“We believe we are well-positioned to succeed in this environment, and as a testament to our durability, the Board of Directors has maintained our dividend at an annual rate of $2.25 per share.”
Back in December, the company increased its annual dividend by seven percent to $0.5625 from $0.525 per share. Vitesse has maintained that distribution level since then. On June 30, it will pay out a second-quarter cash dividend of $0.5625 per share, or $2.25 per share on an annual basis, for a forward dividend yield of 9.21%. (Source: “Vitesse Energy Declares $0.5625 Quarterly Cash Dividend,” Vitesse Energy Inc, May 1, 2025.)
Does VTS Stock Have 36% Upside Potential?
VTS stock has actually been on a pretty solid run since its 2023 initial public offering, hitting a record high of $27.20 in November 2024. It continued to trade near that level until early 2025, especially in April. That’s when President Trump unveiled his global tariffs.
The entire market tumbled, but oil and gas stocks like VTS in particular took an oversized hit on fears of what a global trade war would do to the economy. A weak economy means less demand for oil and gas.
Since the start of June, though, VTS stock has rebounded on hopes that a U.S./China trade deal could be reached and on the conflict in the Middle East.
Wall Street expects VTS to continue to march steadily higher and hit fresh highs over the coming quarters, with a 12-month share price forecast of $25.60 to $33.00 per share. At current levels, this points to potential upside of up to 36%.
Chart courtesy of StockCharts.com
The Lowdown on Vitesse Energy Inc
Within two short years, Vitesse Energy has emerged as a top dividend stock. The company has a high-quality, long-duration asset base, with 80% made up of undeveloped locations. It also has a history of strategic acquisitions; nearly 200 of them, totaling $757.0 million.
For income hogs, Vitesse has reliable FCF, which helps support fixed quarterly distributions of $0.5625 per share. Since going public in 2023, it has raised its annual dividend twice.
Though less popular, Vitesse also returns value to shareholders though its $60.0-million share repurchase program. Insiders also own more than 25% of outstanding shares, which means they have a vested interest in seeing the company succeed. (Source: “Holders,” Yahoo! Finance, last accessed June 13, 2025.)
Institutions are also bullish on VTS stock, with 334 holding 52.07% of the outstanding shares. Some of the top holders include The Vanguard Group, BlackRock Inc, and State Street Corp.
