0001528129-23-000092 | 10-Q | XBRL Viewer

Consolidated balance sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 27,682	$ 44,435
Accounts receivable, net	147,071	163,369
Derivatives	39,109	24,670
Other current assets	15,804	13,317
Total current assets	229,666	245,791
Oil and natural gas properties, full cost method:
Evaluated properties	9,735,559	9,554,706
Unevaluated properties not being depleted	50,142	46,430
Less: accumulated depletion and impairment	(7,401,480)	(7,318,399)
Oil and natural gas properties, net	2,384,221	2,282,737
Midstream service assets, net	128,012	127,803
Total property and equipment, net	2,512,233	2,410,540
Derivatives	26,448	24,363
Operating lease right-of-use assets	138,513	23,047
Other noncurrent assets, net	36,384	22,373
Total assets	2,943,244	2,726,114
Current liabilities:
Accounts payable and accrued liabilities	91,688	102,516
Accrued capital expenditures	67,221	48,378
Undistributed revenue and royalties	148,199	160,023
Derivatives	1,686	5,960
Operating lease liabilities	48,434	15,449
Other current liabilities	34,279	82,950
Total current liabilities	391,507	415,276
Long-term debt, net	1,163,807	1,113,023
Asset retirement obligations	71,308	70,366
Operating lease liabilities	87,301	9,435
Other noncurrent liabilities	3,953	7,268
Total liabilities	1,717,876	1,615,368
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued as of March 31, 2023 and December 31, 2022	0	0
Common stock, $0.01 par value, 40,000,000 shares authorized, and 17,024,976 and 16,762,127 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	170	168
Additional paid-in capital	2,754,765	2,754,085
Accumulated deficit	(1,529,567)	(1,643,507)
Total stockholders' equity	1,225,368	1,110,746
Total liabilities and stockholders' equity	$ 2,943,244	$ 2,726,114
Common stock authorized (in shares)	40,000,000	40,000,000

Related parties (Tables)

3 Months Ended

Mar. 31, 2023

Schedule of related party transactions

The following table presents the capital expenditures for oil and natural gas properties paid to Halliburton included in the consolidated statements of cash flows for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022

Capital expenditures for oil and natural gas properties	$	32,249	$	30,141

Equity Incentive Plan - Equity-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, net	$ 3,236	$ 8,181
Share-settled
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	3,141	2,636
Less amounts capitalized	(569)	(583)
Total equity-based compensation, net	2,572	2,053
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	2,717	2,175
Performance share awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	424	461
Cash-settled
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	714	6,175
Less amounts capitalized	(50)	(47)
Total equity-based compensation, net	664	6,128
Performance unit awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	497	5,566
Phantom unit awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation, gross	$ 217	$ 609

Fair value measurements - Carrying Amount of Debt Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Carrying amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	$ 1,174,151	$ 1,124,151
Carrying amount \| Secured Debt \| Senior Secured Credit Facility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	120,000	70,000
Fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	1,115,849	1,080,329
Fair value \| Secured Debt \| Senior Secured Credit Facility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	119,889	69,945
January 2025 Notes \| Carrying amount \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	455,628	455,628
January 2025 Notes \| Fair value \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	458,827	449,122
January 2028 Notes \| Carrying amount \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	300,309	300,309
January 2028 Notes \| Fair value \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	288,375	292,846
July 2029 Notes \| Carrying amount \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	298,214	298,214
July 2029 Notes \| Fair value \| Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	$ 248,758	$ 268,416

Fair value measurements - Changes in Contingent Consideration (Details) - Contingent Consideration Derivative - Level 3 - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Change in Amount of Contingent Consideration, Liability [Roll Forward]
Balance of Level 3 at beginning of period	$ 26,640	$ 35,861
Change in Sixth Street Contingent Consideration fair value	2,908	3,895
Settlements realized	(1,455)	0
Balance of Level 3 at end of period	$ 28,093	$ 39,756

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-35380
Entity Registrant Name	Vital Energy, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-3007926
Entity Address, Address Line One	521 E. Second Street
Entity Address, Address Line Two	Suite 1000
Entity Address, City or Town	Tulsa
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74120
City Area Code	918
Local Phone Number	513-4570
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	VTLE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,596,810
Entity Central Index Key	0001528129
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1

Consolidated statements of operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Total revenues	$ 332,507	$ 532,395
Costs and expenses:
Lease operating expenses	50,181	40,876
Production and ad valorem taxes	20,531	27,487
General and administrative	25,930	21,944
Depletion, depreciation and amortization	86,779	73,492
Other operating expenses, net	1,484	138
Total costs and expenses	209,987	261,644
Gain (loss) on disposal of assets, net	237	(260)
Operating income	122,757	270,491
Non-operating income (expense):
Gain (loss) on derivatives, net	20,490	(325,816)
Interest expense	(28,554)	(32,477)
Other income, net	854	144
Total non-operating expense, net	(7,210)	(358,149)
Income (loss) before income taxes	115,547	(87,658)
Income tax benefit (expense):
Current	(1,331)	(1,218)
Deferred	(276)	2,095
Total income tax benefit (expense)	(1,607)	877
Net income (loss)	$ 113,940	$ (86,781)
Net income (loss) per common share:
Basic (in USD per share)	$ 6.93	$ (5.18)
Diluted (in USD per share)	$ 6.89	$ (5.18)
Weighted-average common shares outstanding:
Basic (in shares)	16,431	16,767
Diluted (in shares)	16,545	16,767
Oil sales
Revenues:
Total revenues	$ 266,731	$ 347,443
NGL sales
Revenues:
Total revenues	33,006	65,155
Natural gas sales
Revenues:
Total revenues	18,074	38,589
Transportation and marketing expenses
Costs and expenses:
Cost of goods and services sold	10,915	14,743
Sales of purchased oil
Revenues:
Total revenues	13,851	78,864
Costs and expenses:
Cost of goods and services sold	14,167	82,964
Other operating revenues
Revenues:
Total revenues	$ 845	$ 2,344

Subsequent events (Tables)

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Schedule of open positions and derivatives in place

The following table summarizes open commodity derivative positions as of March 31, 2023, for commodity derivatives that were entered into through March 31, 2023, for the settlement periods presented:


	Remaining Year 2023		Year 2024
Oil:








WTI NYMEX - Collars:
Volume (Bbl)	3,658,000		—
Weighted-average floor price ($/Bbl)	$	69.00	$	—
Weighted-average ceiling price ($/Bbl)	$	85.47	$	—
















































































Natural gas:






Henry Hub NYMEX - Collars:
Volume (MMBtu)	19,250,000		—
Weighted-average floor price ($/MMBtu)	$	4.14	$	—
Weighted-average ceiling price ($/MMBtu)	$	8.43	$	—





Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	30,250,000		3,660,000
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.75)

The following table summarizes the Company's open oil and natural gas derivative positions as of March 31, 2023, updated for the derivative transactions entered into from March 31, 2023 through May 5, 2023, which includes derivatives acquired in the Driftwood Acquisition, for the settlement periods presented:


	Remaining Year 2023		Year 2024
Oil:
WTI NYMEX - Swaps:
Volume (Bbl)	1,287,000		75,950
Weighted-average price ($/Bbl)	$	74.27	$	63.75
WTI NYMEX - Collars:
Volume (Bbl)	3,885,450		—
Weighted-average floor price ($/Bbl)	$	68.75	$	—
Weighted-average ceiling price ($/Bbl)	$	85.45	$	—
WTI NYMEX - Three-way Collars:
Volume (Bbl)	301,250		217,350
Weighted-average sold put price ($/Bbl)	$	45.58	$	50.00
Weighted-average floor price ($/Bbl)	$	57.71	$	66.51
Weighted-average ceiling price ($/Bbl)	$	74.45	$	87.09







Argus WTI Midland to Argus WTI Formula Basis - Basis Swaps:
Volume (Bbl)	458,100		293,300
Weighted-average differential ($/Bbl)	$	0.18	$	0.11
Natural gas:
Henry Hub NYMEX - Swaps:
Volume (MMBtu)	120,500		455,700
Weighted-average price ($/MMBtu)	$	2.46	$	3.29
Henry Hub NYMEX - Collars:
Volume (MMBtu)	20,377,996		776,292
Weighted-average floor price ($/MMBtu)	$	4.11	$	3.40
Weighted-average ceiling price ($/MMBtu)	$	8.32	$	6.11
Henry Hub NYMEX - Three-way Collars:
Volume (MMBtu)	140,500		—
Weighted-average sold put price ($/MMBtu)	$	2.00	$	—
Weighted-average floor price ($/MMBtu)	$	2.50	$	—
Weighted-average ceiling price ($/MMBtu)	$	3.01	$	—
Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	31,638,996		4,891,992
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.82)

Derivatives - Gain (Loss) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative [Line Items]
Gain (loss) on derivatives, net	$ 20,490	$ (325,816)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Nonoperating Income (Expense)	Nonoperating Income (Expense)
Commodity
Derivative [Line Items]
Gain (loss) on derivatives, net	$ 17,582	$ (329,724)
Contingent consideration
Derivative [Line Items]
Gain (loss) on derivatives, net	2,908	3,895
Interest rate
Derivative [Line Items]
Gain (loss) on derivatives, net	$ 0	$ 13

Commitments and contingencies	3 Months Ended
Commitments and contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Commitments and contingencies From time to time, the Company is subject to various legal proceedings arising in the ordinary course of business, including those that arise from interpretation of federal, state and local laws and regulations affecting the oil and natural gas industry, personal injury claims, title disputes, royalty disputes, contract claims, contamination claims relating to oil and natural gas exploration and development and environmental claims, including claims involving assets previously sold to third parties and no longer part of the Company's current operations. The Company may not have insurance coverage for some of these proceedings and failure to comply with applicable laws and regulations can result in substantial penalties. While many of these matters involve inherent uncertainty, as of the date hereof, the Company believes that any such legal proceedings, if ultimately decided adversely, will not have a material adverse effect on the Company's business, financial position, results of operations or liquidity. The Company has committed to deliver, for sale or transportation, fixed volumes of product under certain contractual arrangements that specify the delivery of a fixed and determinable quantity. If not fulfilled, the Company is subject to firm transportation payments on excess pipeline capacity and other contractual penalties. These commitments are normal and customary for the Company's business. In certain instances, the Company has used spot market purchases to meet its commitments in certain locations or due to favorable pricing. A portion of the Company's commitments are related to transportation commitments with a certain pipeline pertaining to the gathering of the Company's production from established acreage that extends into 2024. The Company was unable to satisfy a portion of this particular commitment with produced or purchased oil, therefore, the Company expensed firm transportation payments on excess capacity of $2.5 million and $2.1 million during the three months ended March 31, 2023 and 2022, respectively, which are recorded in "Transportation and marketing expenses" on the consolidated statements of operations. The Company had an estimated aggregate liability of firm transportation payments on excess capacity of $11.9 million and$11.5 million as of March 31, 2023 and December 31, 2022, respectively, and is included in "Accounts payable and accrued liabilities" on the consolidated balance sheets. As of March 31, 2023, future firm sale and transportation commitments of $151.8 million are expected to be satisfied and, as such, are not recorded as a liability on the consolidated balance sheet.

Net income (loss) per common share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of calculation of basic and diluted weighted-average common shares outstanding and net income (loss) per common share

The following table reflects the calculations of basic and diluted (i) weighted-average common shares outstanding and (ii) net income (loss) per common share for the periods presented:


	Three months ended March 31,
(in thousands, except for per share data)	2023		2022
Net income (loss)	$	113,940	$	(86,781)
Weighted-average common shares outstanding:
Basic	16,431		16,767
Dilutive non-vested restricted stock awards	114		—



Diluted	16,545		16,767
Net income (loss) per common share:
Basic	$	6.93	$	(5.18)
Diluted	$	6.89	$	(5.18)

Equity Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Share-based Payment Arrangement, Activity

The following table presents activity for equity-based compensation awards for the three months ended March 31, 2023:


	Equity Awards			Liability Awards
(in thousands)	Restricted Stock Awards	Stock Option Awards	Performance Share Awards	Performance Unit Awards(1)(2)	Phantom Unit Awards(3)
Outstanding as of December 31, 2022	362	3	48	150	18
Granted	315	—	—	75	—
Forfeited	(3)	—	—	—	—
Vested	(133)	—	—	(67)	(16)

Expired or canceled	—	(1)	—	—	—
Outstanding as of March 31, 2023	541	2	48	158	2

_____________________________________________________________________________

(1)The performance unit awards granted on March 5, 2020 had a performance period of January 1, 2020 to December 31, 2022 and, as their market and performance criteria were satisfied, resulted in a 151% payout, or 101,368 units. As such, the granted awards vested and were paid out in cash on March 3, 2023 at $57.06 based on the Company's closing stock price on the vesting date.

(2)On February 15, 2023, the Company granted performance unit awards with a performance period of January 1, 2023 through December 31, 2025. The market criteria consists of: (i) annual relative total shareholder return comparing the Company's shareholder return to the shareholder return of the exploration and production companies listed in the Russel 2000 Index and (ii) annual absolute shareholder return. The performance criteria for these awards consists of: (i) earnings before interest, taxes, depreciation, amortization and exploration expense and three-year total debt reduction, (ii) growth in inventory and (iii) emissions reductions. Any units earned are expected to be paid in cash during the first quarter following the completion of the requisite service period, based on the achievement of market and performance criteria, and the payout can range from 0% to 225%.

(3)On March 1, 2023 and March 3, 2023, granted phantom unit awards vested and were paid out in cash at $52.56 and $57.06, respectively, based on the Company's closing stock price on the vesting date.

Schedule of allocated share-based compensation costs

The following table reflects equity-based compensation expense for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Equity awards:
Restricted stock awards	$	2,717	$	2,175
Performance share awards	424		461

Total share-settled equity-based compensation, gross	3,141		2,636
Less amounts capitalized	(569)		(583)
Total share-settled equity-based compensation, net	2,572		2,053
Liability awards:
Performance unit awards	497		5,566
Phantom unit awards	217		609
Total cash-settled equity-based compensation, gross	714		6,175
Less amounts capitalized	(50)		(47)
Total cash-settled equity-based compensation, net	664		6,128
Total equity-based compensation, net	$	3,236	$	8,181

Fair value measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets:
Total gross fair value	$ 63,871	$ 43,073
Net fair value presented on the consolidated balance sheets	39,109	24,670
Net fair value presented on the consolidated balance sheets	26,448	24,363
Liabilities:
Net fair value presented on the consolidated balance sheets	(1,686)	(5,960)
Amounts offset	0	0
Net derivative asset positions	63,871	43,073
Level 1
Liabilities:
Net derivative asset positions	0	0
Level 2
Liabilities:
Net derivative asset positions	(35,778)	(16,433)
Level 3
Liabilities:
Net derivative asset positions	28,093	26,640
Commodity Derivatives
Assets:
Net fair value presented on the consolidated balance sheets	37,100	22,393
Net fair value presented on the consolidated balance sheets	364
Liabilities:
Net fair value presented on the consolidated balance sheets	(1,686)	(5,960)
Contingent Consideration
Assets:
Net fair value presented on the consolidated balance sheets	2,009	2,277
Net fair value presented on the consolidated balance sheets	26,084	24,363
Current Assets \| Commodity Derivatives
Assets:
Total gross fair value	41,453	35,586
Amounts offset	(4,353)	(13,193)
Current Assets \| Commodity Derivatives \| Level 1
Assets:
Total gross fair value	0	0
Current Assets \| Commodity Derivatives \| Level 2
Assets:
Total gross fair value	41,453	35,586
Current Assets \| Commodity Derivatives \| Level 3
Assets:
Total gross fair value	0	0
Current Assets \| Contingent Consideration
Assets:
Total gross fair value	2,009	2,277
Amounts offset	0	0
Current Assets \| Contingent Consideration \| Level 1
Assets:
Total gross fair value	0	0
Current Assets \| Contingent Consideration \| Level 2
Assets:
Total gross fair value	0	0
Current Assets \| Contingent Consideration \| Level 3
Assets:
Total gross fair value	2,009	2,277
Noncurrent Assets \| Commodity Derivatives
Assets:
Total gross fair value	364
Amounts offset	0
Noncurrent Assets \| Commodity Derivatives \| Level 1
Assets:
Total gross fair value	0
Noncurrent Assets \| Commodity Derivatives \| Level 2
Assets:
Total gross fair value	364
Noncurrent Assets \| Commodity Derivatives \| Level 3
Assets:
Total gross fair value	0
Noncurrent Assets \| Contingent Consideration
Assets:
Total gross fair value	26,084	24,363
Amounts offset	0	0
Noncurrent Assets \| Contingent Consideration \| Level 1
Assets:
Total gross fair value	0	0
Noncurrent Assets \| Contingent Consideration \| Level 2
Assets:
Total gross fair value	0	0
Noncurrent Assets \| Contingent Consideration \| Level 3
Assets:
Total gross fair value	26,084	24,363
Current Liabilities \| Commodity Derivatives
Liabilities:
Total gross fair value	(6,039)	(19,153)
Amounts offset	4,353	13,193
Current Liabilities \| Commodity Derivatives \| Level 1
Liabilities:
Total gross fair value	0	0
Current Liabilities \| Commodity Derivatives \| Level 2
Liabilities:
Total gross fair value	(6,039)	(19,153)
Current Liabilities \| Commodity Derivatives \| Level 3
Liabilities:
Total gross fair value	$ 0	$ 0

Income taxes	3 Months Ended
Income taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income taxes	Income taxes For the three months ended March 31, 2023, the Company's effective tax rate was 1.37%, which differs from the statutory rate primarily as a result of maintaining a full valuation allowance for federal and state tax purposes, with the exception of Texas franchise tax. For the period ended March 31, 2022, our effective tax rate was 1.00% as a result of the pre-tax loss and the impact of the Company's full valuation allowance for federal and state tax purposes, with the exception of Texas franchise tax. The Company has significant federal and state net operating loss carryforwards. If the Company were to experience an "ownership change" as determined under Section 382 of the Internal Revenue Code, the Company's ability to offset taxable income arising after the ownership change with net operating losses arising prior to the ownership change may be limited in future years. Based on the information available as of March 31, 2023, no ownership change has occurred. As of March 31, 2023, the Company believes it is more likely than not that a portion of its deferred tax assets are not realizable. The Company continues to consider new evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is needed. A significant item of objective negative evidence considered was the cumulative historical three-year pre-tax loss and net deferred tax asset position. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s potential for future growth. The Company currently believes it is reasonably possible it could achieve a three-year cumulative level of profitability within the next 12 months, which would enhance the Company's ability to conclude that it is more likely than not that the deferred tax assets would be realized and support a release of the valuation allowance.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Supplemental cash flow and non-cash information

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental cash flow and non-cash information

The following table presents supplemental cash flow and non-cash information for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Supplemental cash flow information:
Cash paid for interest, net of $535 and $1,463 of capitalized interest, respectively	$	51,147	$	63,057


Supplemental non-cash operating information:
Right-of-use assets obtained in exchange for operating lease liabilities(1)	$	124,128	$	9,949
Supplemental non-cash investing information:
Change in accrued capital expenditures	$	18,843	$	18,433

_____________________________________________________________________________

(1)See Notes 5 and 18 in the 2022 Annual Report for additional discussion of the Company's leases.

Organization and basis of presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Organization and basis of presentation

Organization

Vital Energy, Inc. ("Vital" or the "Company"), together with its wholly-owned subsidiaries, is an independent energy company focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas. The Company has identified one operating segment: exploration and production. In these notes, the "Company" refers to Vital and its subsidiaries collectively, unless the context indicates otherwise. All amounts, dollars and percentages presented in these unaudited consolidated financial statements and the related notes are rounded and, therefore, approximate.

Basis of presentation

The unaudited consolidated financial statements were derived from the historical accounting records of the Company and reflect the historical financial position, results of operations and cash flows for the periods described herein. The unaudited consolidated financial statements have been prepared in accordance with GAAP. All material intercompany transactions and account balances have been eliminated in the consolidation of accounts.

The unaudited consolidated financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet as of December 31, 2022 is derived from the Company's audited consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements reflect all necessary adjustments to present fairly the Company's financial position as of March 31, 2023, results of operations for the three months ended March 31, 2023 and 2022 and cash flows for the three months ended March 31, 2023 and 2022. All adjustments are of a recurring nature unless otherwise disclosed herein.

Certain disclosures have been condensed or omitted from the unaudited consolidated financial statements. Accordingly, the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2022 Annual Report.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. There was no impact on previously reported total assets, total liabilities, net income (loss) or stockholders' equity for the periods presented.

Significant accounting policies

There have been no material changes in the Company's significant accounting policies during the three months ended March 31, 2023. See Note 2 in the 2022 Annual Report for discussion of significant accounting policies.

The following table presents the Company's cash, cash equivalents and restricted cash as of the dates presented:


	As of March 31,
(in thousands)	2023		2022
Cash and cash equivalents	$	27,682	$	65,137
Restricted cash(1)	16,324		—
Total cash, cash equivalents and restricted cash	$	44,006	$	65,137

______________________________________________________________________________

(1)Under the terms of the Driftwood PSA (defined below), the Company deposited $16.3 million into a third-party escrow account, which is included in "Other noncurrent assets, net" on the consolidated balance sheets as of March 31, 2023.

Use of estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ.

See Note 2 in the 2022 Annual Report for further information regarding the use of estimates and assumptions.

Organization and basis of presentation (Details)
$ in Thousands

3 Months Ended

Mar. 31, 2023

USD ($)

operating_segment

Dec. 31, 2022

USD ($)

Mar. 31, 2022

USD ($)

Dec. 31, 2021

USD ($)

Accounting Policies [Abstract]

Number of operating segments | operating_segment

Cash and cash equivalents

$ 27,682

$ 44,435

$ 65,137

Restricted cash

16,324

Cash and cash equivalents

$ 44,006

^[1]

$ 44,435

$ 65,137

^[1]

$ 56,798

[1]	See Note 1 for further discussion of the Company's cash, cash equivalents and restricted cash.

Debt - Senior Secured Credit Facility (Details) - Secured Debt - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Senior Secured Credit Facility
Debt Instrument [Line Items]
Maximum credit amount	$ 2,000,000,000
Borrowing base	1,300,000,000
Aggregate elected commitment	1,000,000,000
Amount of debt outstanding	$ 120,000,000
Credit facility, interest rate at period end (as a percent)	7.385%
Letter of Credit
Debt Instrument [Line Items]
Maximum credit amount	$ 80,000,000
Letters of credit outstanding	$ 0	$ 0

Equity Incentive Plan - Activity for Restricted Stock Awards, Performance Units and Shares and Stock Options (Details) - $ / shares	3 Months Ended	36 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Mar. 03, 2023	Mar. 01, 2023
March 6, 2020
Stock option awards
Overall payout (as a percent)		151.00%
February 15, 2023 \| Minimum
Stock option awards
Overall payout (as a percent)	0.00%
February 15, 2023 \| Maximum
Stock option awards
Overall payout (as a percent)	225.00%
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	362,000
Granted (in shares)	315,000
Forfeited (in shares)	(3,000)
Vested (in shares)	(133,000)
Outstanding at end of period (in shares)	541,000	362,000
Stock Option Awards
Stock option awards
Outstanding at beginning of period (in shares)	3,000
Expired or canceled (in shares)	(1,000)
Outstanding at end of period (in shares)	2,000	3,000
Performance share awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	48,000
Granted (in shares)	0
Forfeited (in shares)	0
Vested (in shares)	0
Outstanding at end of period (in shares)	48,000	48,000
Performance unit awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	150,000
Granted (in shares)	75,000
Forfeited (in shares)	0
Vested (in shares)	(67,000)
Outstanding at end of period (in shares)	158,000	150,000
Stock option awards
Performance share conversion (in shares)	101,368
Settlement/payment, per share			$ 57.06
Phantom unit awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	18,000
Vested (in shares)	(16,000)
Outstanding at end of period (in shares)	2,000	18,000
Stock option awards
Settlement/payment, per share			$ 57.06	$ 52.56

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Long-term debt, net

The following table presents the Company's long-term debt and debt issuance costs, net included in "Long-term debt, net" on the consolidated balance sheets as of the dates presented:


	March 31, 2023						December 31, 2022
(in thousands)	Long-term debt		Debt issuance costs, net		Long-term debt, net		Long-term debt		Debt issuance costs, net		Long-term debt, net
January 2025 Notes	$	455,628	$	(2,854)	$	452,774	$	455,628	$	(3,297)	$	452,331
January 2028 Notes	300,309		(3,302)		297,007		300,309		(3,478)		296,831
July 2029 Notes	298,214		(4,188)		294,026		298,214		(4,353)		293,861
Senior Secured Credit Facility(1)	120,000		—		120,000		70,000		—		70,000
Total	$	1,174,151	$	(10,344)	$	1,163,807	$	1,124,151	$	(11,128)	$	1,113,023

______________________________________________________________________________

(1)Debt issuance costs, net related to the Senior Secured Credit Facility of $6.6 million and $7.3 million as of March 31, 2023 and December 31, 2022, respectively, are included in "Other noncurrent assets, net" on the consolidated balance sheets.

Senior Secured Credit Facility

As of March 31, 2023, the Senior Secured Credit Facility, which matures on July 16, 2025 (subject to a springing maturity date of July 29, 2024 if any of the January 2025 Notes are outstanding on such date), had a maximum credit amount of $2.0 billion, a borrowing base and an aggregate elected commitment of $1.3 billion and $1.0 billion, respectively, with a $120.0 million balance outstanding, and was subject to an interest rate of 7.385%. The Senior Secured Credit Facility contains both financial and non-financial covenants, all of which the Company was in compliance with for all periods presented. Additionally, the Senior Secured Credit Facility provides for the issuance of letters of credit, limited to the lesser of total capacity and $80.0 million. As of March 31, 2023 and December 31, 2022, the Company had no letters of credit outstanding under the Senior Secured Credit Facility. For additional information see Note 7 in the 2022 Annual Report. See Note 13 for discussion of (i) additional borrowings and repayments on and (ii) the reaffirmation of the borrowing base and aggregate commitment of the Senior Secured Credit Facility subsequent to March 31, 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 470
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1C
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1I
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Subsequent events - Commodity Derivatives (Details) - Forecast - Not Designated as Hedges	9 Months Ended	12 Months Ended
	Dec. 31, 2023 MMBTU $ / bbl $ / MMBTU bbl	Dec. 31, 2024 MMBTU $ / bbl $ / MMBTU bbl
WTI NYMEX \| Crude Oil \| Swap
Subsequent Event [Line Items]
Volume (Bbl) \| bbl	1,287,000	75,950
Weighted-average price/differential (in USD per unit) \| $ / bbl	74.27	63.75
WTI NYMEX \| Crude Oil \| Collar
Subsequent Event [Line Items]
Volume (Bbl) \| bbl	3,885,450	0
WTI NYMEX \| Crude Oil \| Collar \| Minimum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	68.75	0
WTI NYMEX \| Crude Oil \| Collar \| Maximum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	85.45	0
WTI NYMEX \| Crude Oil \| Three-way Collar
Subsequent Event [Line Items]
Volume (Bbl) \| bbl	301,250	217,350
Weighted-average price/differential (in USD per unit) \| $ / bbl	45.58	50.00
WTI NYMEX \| Crude Oil \| Three-way Collar \| Minimum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	57.71	66.51
WTI NYMEX \| Crude Oil \| Three-way Collar \| Maximum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	74.45	87.09
Argus WTI Midland to Argus WTI \| Crude Oil \| Basis Swap
Subsequent Event [Line Items]
Volume (Bbl) \| bbl	458,100	293,300
Weighted-average price/differential (in USD per unit) \| $ / bbl	0.18	0.11
Henry Hub NYMEX \| Natural Gas \| Swap
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	2.46	3.29
Volume (MMBtu) \| MMBTU	120,500	455,700
Henry Hub NYMEX \| Natural Gas \| Collar
Subsequent Event [Line Items]
Volume (MMBtu) \| MMBTU	20,377,996	776,292
Henry Hub NYMEX \| Natural Gas \| Collar \| Minimum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	4.11	3.40
Henry Hub NYMEX \| Natural Gas \| Collar \| Maximum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	8.32	6.11
Henry Hub NYMEX \| Natural Gas \| Three-way Collar
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	2.00	0
Volume (MMBtu) \| MMBTU	140,500	0
Henry Hub NYMEX \| Natural Gas \| Three-way Collar \| Minimum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	2.50	0
Henry Hub NYMEX \| Natural Gas \| Three-way Collar \| Maximum
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	3.01	0
Waha Inside FERC to Henry Hub NYMEX \| Natural Gas \| Basis Swap
Subsequent Event [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / MMBTU	(1.53)	(0.82)
Volume (MMBtu) \| MMBTU	31,638,996	4,891,992

Income taxes (Details)	3 Months Ended
Income taxes (Details)	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate (as a percent)	1.37%	1.00%

Consolidated statements of stockholders' equity - USD ($) $ in Thousands	Total	Common stock	Additional paid-in capital	Treasury stock (at cost)	Accumulated deficit
Balance at beginning of period (in shares) at Dec. 31, 2021		17,075,000
Balance at beginning of period at Dec. 31, 2021	$ 513,780	$ 171	$ 2,788,628	$ 0	$ (2,275,019)
Balance at beginning of period (in shares) at Dec. 31, 2021				0
Increase (Decrease) in Stockholders' Equity
Restricted stock awards (in shares)		232,000
Restricted stock awards	0	$ 2	(2)
Restricted stock forfeitures (in shares)		(4,000)
Stock exchanged for tax withholding (in shares)				76,000
Stock exchanged for tax withholding	(5,847)			$ (5,847)
Retirement of treasury stock (in shares)		(76,000)		(76,000)
Retirement of treasury stock	0	$ (1)	(5,846)	$ 5,847
Share-settled equity-based compensation	2,636		2,636
Performance share conversion (in shares)		75,000
Performance share conversion	0	$ 1	(1)
Net income (loss)	(86,781)				(86,781)
Balance at end of period (in shares) at Mar. 31, 2022		17,302,000
Balance at end of period at Mar. 31, 2022	$ 423,788	$ 173	2,785,415	$ 0	(2,361,800)
Balance at end of period (in shares) at Mar. 31, 2022				0
Balance at beginning of period (in shares) at Dec. 31, 2022	16,762,127	16,762,000
Balance at beginning of period at Dec. 31, 2022	$ 1,110,746	$ 168	2,754,085	$ 0	(1,643,507)
Balance at beginning of period (in shares) at Dec. 31, 2022				0
Increase (Decrease) in Stockholders' Equity
Restricted stock awards (in shares)		315,000
Restricted stock awards	0	$ 3	(3)
Restricted stock forfeitures (in shares)		(3,000)
Stock exchanged for tax withholding (in shares)				49,000
Stock exchanged for tax withholding	(2,459)			$ (2,459)
Retirement of treasury stock (in shares)		(49,000)		(49,000)
Retirement of treasury stock	0	$ (1)	(2,458)	$ 2,459
Share-settled equity-based compensation	3,141		3,141
Net income (loss)	$ 113,940				113,940
Balance at end of period (in shares) at Mar. 31, 2023	17,024,976	17,025,000
Balance at end of period at Mar. 31, 2023	$ 1,225,368	$ 170	$ 2,754,765	$ 0	$ (1,529,567)
Balance at end of period (in shares) at Mar. 31, 2023				0

Organization and basis of presentation (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents and Restricted Cash

The following table presents the Company's cash, cash equivalents and restricted cash as of the dates presented:


	As of March 31,
(in thousands)	2023		2022
Cash and cash equivalents	$	27,682	$	65,137
Restricted cash(1)	16,324		—
Total cash, cash equivalents and restricted cash	$	44,006	$	65,137

______________________________________________________________________________

Derivatives

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

The Company has two types of derivative instruments as of March 31, 2023: (i) commodity derivatives and (ii) a contingent consideration derivative. In previous periods, the Company also engaged in an interest rate swap derivative, which concluded during the second quarter of 2022. See Note 8 for discussion of fair value measurement of derivatives on a recurring basis and Note 13 for discussion of derivatives subsequent events. The Company's derivatives were not designated as hedges for accounting purposes, and the Company does not enter into such instruments for speculative trading purposes. Accordingly, the changes in derivative fair values are recognized in "Gain (loss) on derivatives, net" under "Non-operating expense" on the consolidated statements of operations.

The following table summarizes components of the Company's gain (loss) on derivatives, net by type of derivative instrument for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Commodity	$	17,582	$	(329,724)
Contingent consideration	2,908		3,895
Interest rate	—		13

Gain (loss) on derivatives, net	$	20,490	$	(325,816)

Commodity

Due to the inherent volatility in oil, NGL and natural gas prices and the sometimes wide pricing differentials between where the Company produces and where the Company sells such commodities, the Company engages in commodity derivative transactions, such as puts, swaps, collars and basis swaps, to hedge price risk associated with a portion of the Company's anticipated sales volumes. By removing a portion of the price volatility associated with future sales volumes, the Company expects to mitigate, but not eliminate, the potential effects of variability in cash flows from operations. See Note 11 in the 2022 Annual Report for discussion of transaction types and settlement indexes. During the three months ended March 31, 2023, the Company’s derivatives were settled based on reported prices on commodity exchanges, with oil derivatives settled based on WTI NYMEX and natural gas derivatives settled based on Henry Hub NYMEX and Waha Inside FERC pricing.

The following table summarizes open commodity derivative positions as of March 31, 2023, for commodity derivatives that were entered into through March 31, 2023, for the settlement periods presented:


	Remaining Year 2023		Year 2024
Oil:








WTI NYMEX - Collars:
Volume (Bbl)	3,658,000		—
Weighted-average floor price ($/Bbl)	$	69.00	$	—
Weighted-average ceiling price ($/Bbl)	$	85.47	$	—
















































































Natural gas:






Henry Hub NYMEX - Collars:
Volume (MMBtu)	19,250,000		—
Weighted-average floor price ($/MMBtu)	$	4.14	$	—
Weighted-average ceiling price ($/MMBtu)	$	8.43	$	—





Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	30,250,000		3,660,000
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.75)

Contingent consideration

On May 7, 2021, the Company entered into a purchase and sale agreement (the "Sixth Street PSA"), to sell 37.5% of the Company's working interest in certain producing wellbores and the related properties primarily located within Glasscock and Reagan Counties, Texas. The Sixth Street PSA provides for potential contingent payments to be paid to the Company if certain cash flow targets are met related to divested oil and natural gas property operations (the "Sixth Street Contingent Consideration"). The Sixth Street Contingent Consideration provides the Company with the right to receive up to a maximum of $93.7 million in additional cash consideration, comprised of potential quarterly payments through June 2027 totaling up to $38.7 million and a potential balloon payment of $55.0 million in June 2027. As of March 31, 2023, the maximum remaining additional cash consideration of the contingent consideration was $87.8 million. The fair value of the Sixth Street Contingent Consideration was $28.1 million as of March 31, 2023 and $26.6 million as of December 31, 2022

Derivatives (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of gain (loss) on derivatives

The following table summarizes components of the Company's gain (loss) on derivatives, net by type of derivative instrument for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Commodity	$	17,582	$	(329,724)
Contingent consideration	2,908		3,895
Interest rate	—		13

Gain (loss) on derivatives, net	$	20,490	$	(325,816)

Schedule of open positions and derivatives in place

The following table summarizes open commodity derivative positions as of March 31, 2023, for commodity derivatives that were entered into through March 31, 2023, for the settlement periods presented:


	Remaining Year 2023		Year 2024
Oil:








WTI NYMEX - Collars:
Volume (Bbl)	3,658,000		—
Weighted-average floor price ($/Bbl)	$	69.00	$	—
Weighted-average ceiling price ($/Bbl)	$	85.47	$	—
















































































Natural gas:






Henry Hub NYMEX - Collars:
Volume (MMBtu)	19,250,000		—
Weighted-average floor price ($/MMBtu)	$	4.14	$	—
Weighted-average ceiling price ($/MMBtu)	$	8.43	$	—





Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	30,250,000		3,660,000
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.75)


	Remaining Year 2023		Year 2024
Oil:
WTI NYMEX - Swaps:
Volume (Bbl)	1,287,000		75,950
Weighted-average price ($/Bbl)	$	74.27	$	63.75
WTI NYMEX - Collars:
Volume (Bbl)	3,885,450		—
Weighted-average floor price ($/Bbl)	$	68.75	$	—
Weighted-average ceiling price ($/Bbl)	$	85.45	$	—
WTI NYMEX - Three-way Collars:
Volume (Bbl)	301,250		217,350
Weighted-average sold put price ($/Bbl)	$	45.58	$	50.00
Weighted-average floor price ($/Bbl)	$	57.71	$	66.51
Weighted-average ceiling price ($/Bbl)	$	74.45	$	87.09







Argus WTI Midland to Argus WTI Formula Basis - Basis Swaps:
Volume (Bbl)	458,100		293,300
Weighted-average differential ($/Bbl)	$	0.18	$	0.11
Natural gas:
Henry Hub NYMEX - Swaps:
Volume (MMBtu)	120,500		455,700
Weighted-average price ($/MMBtu)	$	2.46	$	3.29
Henry Hub NYMEX - Collars:
Volume (MMBtu)	20,377,996		776,292
Weighted-average floor price ($/MMBtu)	$	4.11	$	3.40
Weighted-average ceiling price ($/MMBtu)	$	8.32	$	6.11
Henry Hub NYMEX - Three-way Collars:
Volume (MMBtu)	140,500		—
Weighted-average sold put price ($/MMBtu)	$	2.00	$	—
Weighted-average floor price ($/MMBtu)	$	2.50	$	—
Weighted-average ceiling price ($/MMBtu)	$	3.01	$	—
Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	31,638,996		4,891,992
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.82)

Related parties (Details) - USD ($) $ in Thousands	3 Months Ended
Related parties (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Related Party Transaction [Line Items]
Capital expenditures for oil and natural gas properties	$ 165,042	$ 143,500
Halliburton \| Affiliated entity
Related Party Transaction [Line Items]
Operating lease liability	79,700
Capital expenditures for oil and natural gas properties	$ 32,249	$ 30,141

Consolidated statements of cash flows - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2023

Mar. 31, 2022

Cash flows from operating activities:

Net income (loss)

$ 113,940

$ (86,781)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Share-settled equity-based compensation, net

2,572

2,053

Depletion, depreciation and amortization

86,779

73,492

(Gain) loss on disposal of assets, net

(237)

260

Mark-to-market on derivatives:

(Gain) loss on derivatives, net

(20,490)

325,816

Settlements paid for matured derivatives, net

(2,343)

(125,370)

Deferred income tax expense (benefit)

276

(2,095)

Other, net

2,384

6,731

Changes in operating assets and liabilities:

Accounts receivable, net

13,961

(61,742)

Other current assets

(7,464)

5,092

Other noncurrent assets, net

2,345

(15,227)

Accounts payable and accrued liabilities

(10,693)

1,842

Undistributed revenue and royalties

(11,825)

44,294

Other current liabilities

(48,650)

(1,471)

Other noncurrent liabilities

(4,430)

3,988

Net cash provided by operating activities

116,125

170,882

Cash flows from investing activities:

Acquisitions of oil and natural gas properties, net

(7,870)

Capital expenditures:

Oil and natural gas properties

(165,042)

(143,500)

Other fixed assets

(2,771)

(2,345)

Proceeds from dispositions of capital assets, net of selling costs

2,175

2,019

Settlements received for contingent consideration

2,035

Net cash used in investing activities

(163,603)

(151,696)

Cash flows from financing activities:

Borrowings on Senior Secured Credit Facility

95,000

50,000

Payments on Senior Secured Credit Facility

(45,000)

(55,000)

Stock exchanged for tax withholding

(2,459)

(5,847)

Other, net

(492)

Net cash provided by (used in) financing activities

47,049

(10,847)

Net (decrease) increase in cash, cash equivalents and restricted cash

(429)

8,339

Cash, cash equivalents and restricted cash, beginning of period

44,435

56,798

Cash, cash equivalents and restricted cash, end of period

^[1]

$ 44,006

$ 65,137

[1]	See Note 1 for further discussion of the Company's cash, cash equivalents and restricted cash.

Subsequent events - Narrative (Details) - USD ($) $ in Thousands				3 Months Ended
	Apr. 24, 2023	Apr. 13, 2023	Apr. 03, 2023	Mar. 31, 2023	Mar. 31, 2022	May 05, 2023	Apr. 28, 2023
Subsequent Event [Line Items]
Borrowings on Senior Secured Credit Facility				$ 95,000	$ 50,000
Repayments of long-term lines of credit				45,000	$ 55,000
Secured Debt \| Senior Secured Credit Facility
Subsequent Event [Line Items]
Amount of debt outstanding				120,000
Borrowing base				1,300,000
Aggregate elected commitment				$ 1,000,000
Subsequent Event \| Secured Debt \| Senior Secured Credit Facility
Subsequent Event [Line Items]
Borrowings on Senior Secured Credit Facility		$ 30,000	$ 120,000
Repayments of long-term lines of credit	$ 15,000
Amount of debt outstanding						$ 255,000
Borrowing base							$ 1,300,000
Aggregate elected commitment							$ 1,000,000
Driftwood Acquisition \| Subsequent Event
Subsequent Event [Line Items]
Stock issued in asset acquisition (in shares)			1,578,948

New accounting standards	3 Months Ended
New accounting standards	Mar. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
New accounting standards	New accounting standards The Company considered the applicability and impact of all accounting standard updates ("ASU") issued by the Financial Accounting Standards Board to the Accounting Standards Codification ("ASC") and has determined there are no ASUs that are not yet adopted and meaningful to disclose as of March 31, 2023. Additionally, the Company did not adopt any new ASUs during the three months ended March 31, 2023.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Fair value measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair value measurements

See the beginning of Note 12 in the 2022 Annual Report for information about the fair value hierarchy levels.

Fair value measurement on a recurring basis

See Note 7 for further discussion of the Company's derivatives.

Balance sheet presentation

The following tables present the Company's derivatives by (i) balance sheet classification, (ii) derivative type and (iii) fair value hierarchy level, and provide a total, on a gross basis and a net basis reflected in "Derivatives" on the consolidated balance sheets as of the dates presented:


	March 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total gross fair value		Amounts offset		Net fair value presented on the consolidated balance sheets
Assets:
Current:
Commodity	$	—	$	41,453	$	—	$	41,453	$	(4,353)	$	37,100


Contingent consideration	—		—		2,009		2,009		—		2,009
Noncurrent:
Commodity	—		364		—		364		—		364


Contingent consideration	—		—		26,084		26,084		—		26,084
Liabilities:
Current:
Commodity	—		(6,039)		—		(6,039)		4,353		(1,686)









Net derivative asset positions	$	—	$	35,778	$	28,093	$	63,871	$	—	$	63,871


	December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total gross fair value		Amounts offset		Net fair value presented on the consolidated balance sheets
Assets:
Current:
Commodity	$	—	$	35,586	$	—	$	35,586	$	(13,193)	$	22,393



Contingent consideration	—		—		2,277		2,277		—		2,277
Noncurrent:



Contingent consideration	—		—		24,363		24,363		—		24,363
Liabilities:
Current:
Commodity	—		(19,153)		—		(19,153)		13,193		(5,960)










Net derivative asset positions	$	—	$	16,433	$	26,640	$	43,073	$	—	$	43,073

See Note 12 in the 2022 Annual Report for discussion of the significant Level 2 inputs used in the fair value mark-to-market analysis of commodity, interest rate and contingent consideration derivatives. The Company reviewed the third-party specialist's valuations of commodity, interest rate and contingent consideration derivatives, including the related inputs, and analyzed changes in fair values between reporting dates.

The Sixth Street Contingent Consideration associated with the Working Interest Sale was categorized as Level 3 of the fair value hierarchy, as the Company utilized its own cash flow projections along with a risk-adjusted discount rate generated by a third-party valuation specialist to determine the valuation. The Company reviewed the third-party specialist's valuation,

including the related inputs, and analyzed changes in fair values between the divestiture closing date and the reporting dates. The fair value of the Sixth Street Contingent Consideration was recorded as part of the basis in the oil and natural gas properties divested and as a contingent consideration asset. At each quarterly reporting period, the Company remeasures contingent consideration with the change in fair values recognized in "Gain (loss) on derivatives, net" under "Non-operating expense" on the consolidated statement of operations.

The following table summarizes the changes in contingent consideration derivatives classified as Level 3 measurements for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Balance of Level 3 at beginning of period	$	26,640	$	35,861
Change in Sixth Street Contingent Consideration fair value	2,908		3,895

Settlements realized(1)	(1,455)		—
Balance of Level 3 at end of period	$	28,093	$	39,756

_____________________________________________________________________________

(1)For the three months ended March 31, 2023, the settlements are included in "Settlements received for contingent consideration" in cash flows from investing activities on the consolidated statements of cash flows.

Items not accounted for at fair value

The carrying amounts reported on the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued capital expenditures, undistributed revenue and royalties and other accrued assets and liabilities approximate their fair values.

The Company has not elected to account for its debt instruments at fair value. The following table presents the carrying amounts and fair values of the Company's debt as of the dates presented:


	March 31, 2023				December 31, 2022
(in thousands)	Carrying amount		Fair value(1)		Carrying amount		Fair value(1)
January 2025 Notes	$	455,628	$	458,827	$	455,628	$	449,122
January 2028 Notes	300,309		288,375		300,309		292,846
July 2029 Notes	298,214		248,758		298,214		268,416
Senior Secured Credit Facility	120,000		119,889		70,000		69,945
Total	$	1,174,151	$	1,115,849	$	1,124,151	$	1,080,329

______________________________________________________________________________

(1)The fair values of the outstanding notes were determined using the Level 2 fair value hierarchy quoted market prices for each respective instrument as of March 31, 2023 and December 31, 2022. The fair values of the outstanding debt under the Senior Secured Credit Facility was estimated utilizing the Level 2 fair value hierarchy pricing model for similar instruments as of March 31, 2023 and December 31, 2022.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Related parties

3 Months Ended

Mar. 31, 2023

Related parties

Halliburton

The Chairman of the Company's board of directors is on the board of directors of Halliburton Company ("Halliburton"). Halliburton provides drilling and completions services to the Company. During the three months ended March 31, 2023, the Company entered into a lease agreement with Halliburton to provide an electric fracture stimulation crew and the related services, with the agreement extending through 2025. Under the agreement, the Company has a lease liability of $79.7 million as of March 31, 2023 which is included in both current and noncurrent "Operating lease liabilities" on the consolidated balance sheets. Services provided under the lease agreement do not differ substantially from historical services provided by Halliburton, which were previously not subject to a long-term agreement. Payments to Halliburton are included in capital expenditures for oil and natural gas properties in cash flows from investing activities on the consolidated statements of cash flows.

The following table presents the capital expenditures for oil and natural gas properties paid to Halliburton included in the consolidated statements of cash flows for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022

Capital expenditures for oil and natural gas properties	$	32,249	$	30,141

Consolidated balance sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	50,000,000	50,000,000
Preferred stock issued (in shares)	0	0
Common stock par value (in USD per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	40,000,000	40,000,000
Common stock issued (in shares)	17,024,976	16,762,127
Common stock outstanding (in shares)	17,024,976	16,762,127

Debt - Long-term Debt, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term debt	$ 1,174,151	$ 1,124,151
Debt issuance costs, net	(10,344)	(11,128)
Long-term debt, net	1,163,807	1,113,023
Secured Debt \| Senior Secured Credit Facility
Debt Instrument [Line Items]
Long-term debt	120,000	70,000
Debt issuance costs, net	0	0
Long-term debt, net	120,000	70,000
Secured Debt \| Senior Secured Credit Facility \| Other Noncurrent Assets
Debt Instrument [Line Items]
Debt issuance costs related to line of credit arrangements	6,600	7,300
January 2025 Notes \| Senior Notes
Debt Instrument [Line Items]
Long-term debt	455,628	455,628
Debt issuance costs, net	(2,854)	(3,297)
Long-term debt, net	452,774	452,331
January 2028 Notes \| Senior Notes
Debt Instrument [Line Items]
Long-term debt	300,309	300,309
Debt issuance costs, net	(3,302)	(3,478)
Long-term debt, net	297,007	296,831
July 2029 Notes \| Senior Notes
Debt Instrument [Line Items]
Long-term debt	298,214	298,214
Debt issuance costs, net	(4,188)	(4,353)
Long-term debt, net	$ 294,026	$ 293,861

Derivatives - Summary (Details) - Forecast - Not Designated as Hedges	9 Months Ended	12 Months Ended
	Dec. 31, 2023 MMBTU $ / bbl $ / MMBTU bbl	Dec. 31, 2024 MMBTU $ / bbl $ / MMBTU bbl
WTI NYMEX \| Crude Oil \| Collar
Derivative [Line Items]
Volume (Bbl) \| bbl	3,885,450	0
WTI NYMEX \| Crude Oil \| Collar \| Minimum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	68.75	0
WTI NYMEX \| Crude Oil \| Collar \| Maximum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	85.45	0
WTI NYMEX \| Outstanding at End of Period \| Crude Oil \| Collar
Derivative [Line Items]
Volume (Bbl) \| bbl	3,658,000	0
WTI NYMEX \| Outstanding at End of Period \| Crude Oil \| Collar \| Minimum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	69.00	0
WTI NYMEX \| Outstanding at End of Period \| Crude Oil \| Collar \| Maximum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit) \| $ / bbl	85.47	0
Henry Hub NYMEX \| Natural Gas \| Collar
Derivative [Line Items]
Volume (MMBtu) \| MMBTU	20,377,996	776,292
Henry Hub NYMEX \| Natural Gas \| Collar \| Minimum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	4.11	3.40
Henry Hub NYMEX \| Natural Gas \| Collar \| Maximum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	8.32	6.11
Henry Hub NYMEX \| Outstanding at End of Period \| Natural Gas \| Collar
Derivative [Line Items]
Volume (MMBtu) \| MMBTU	19,250,000	0
Henry Hub NYMEX \| Outstanding at End of Period \| Natural Gas \| Collar \| Minimum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	4.14	0
Henry Hub NYMEX \| Outstanding at End of Period \| Natural Gas \| Collar \| Maximum
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	8.43	0
Waha Inside FERC to Henry Hub NYMEX \| Natural Gas \| Basis Swap
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	(1.53)	(0.82)
Volume (MMBtu) \| MMBTU	31,638,996	4,891,992
Waha Inside FERC to Henry Hub NYMEX \| Outstanding at End of Period \| Natural Gas \| Basis Swap
Derivative [Line Items]
Weighted-average price/differential (in USD per unit)	(1.53)	(0.75)
Volume (MMBtu) \| MMBTU	30,250,000	3,660,000

Commitments and contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Unrecorded Unconditional Purchase Obligation [Line Items]
Minimum volume commitment deficiency payments	$ 2.5	$ 2.1
Firm Sale and Transportation Commitments
Unrecorded Unconditional Purchase Obligation [Line Items]
Minimum volume commitments deficiency payments liability	11.9		$ 11.5
Future commitments	$ 151.8

Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis


	March 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total gross fair value		Amounts offset		Net fair value presented on the consolidated balance sheets
Assets:
Current:
Commodity	$	—	$	41,453	$	—	$	41,453	$	(4,353)	$	37,100


Contingent consideration	—		—		2,009		2,009		—		2,009
Noncurrent:
Commodity	—		364		—		364		—		364


Contingent consideration	—		—		26,084		26,084		—		26,084
Liabilities:
Current:
Commodity	—		(6,039)		—		(6,039)		4,353		(1,686)









Net derivative asset positions	$	—	$	35,778	$	28,093	$	63,871	$	—	$	63,871


	December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total gross fair value		Amounts offset		Net fair value presented on the consolidated balance sheets
Assets:
Current:
Commodity	$	—	$	35,586	$	—	$	35,586	$	(13,193)	$	22,393



Contingent consideration	—		—		2,277		2,277		—		2,277
Noncurrent:



Contingent consideration	—		—		24,363		24,363		—		24,363
Liabilities:
Current:
Commodity	—		(19,153)		—		(19,153)		13,193		(5,960)










Net derivative asset positions	$	—	$	16,433	$	26,640	$	43,073	$	—	$	43,073

Schedule of changes in contingent consideration derivatives

The following table summarizes the changes in contingent consideration derivatives classified as Level 3 measurements for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Balance of Level 3 at beginning of period	$	26,640	$	35,861
Change in Sixth Street Contingent Consideration fair value	2,908		3,895

Settlements realized(1)	(1,455)		—
Balance of Level 3 at end of period	$	28,093	$	39,756

_____________________________________________________________________________

Schedule of carrying amount and fair value of debt instruments

The Company has not elected to account for its debt instruments at fair value. The following table presents the carrying amounts and fair values of the Company's debt as of the dates presented:


	March 31, 2023				December 31, 2022
(in thousands)	Carrying amount		Fair value(1)		Carrying amount		Fair value(1)
January 2025 Notes	$	455,628	$	458,827	$	455,628	$	449,122
January 2028 Notes	300,309		288,375		300,309		292,846
July 2029 Notes	298,214		248,758		298,214		268,416
Senior Secured Credit Facility	120,000		119,889		70,000		69,945
Total	$	1,174,151	$	1,115,849	$	1,124,151	$	1,080,329

______________________________________________________________________________

Subsequent events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent events

2023 Acquisition

On April 3, 2023, the Company closed the Driftwood Acquisition, and issued the 1,578,948 shares of its common stock constituting a portion of the purchase price. See Note 3 for additional discussion of the Driftwood Acquisition.

Senior Secured Credit Facility

On April 3, 2023 and April 13, 2023, the Company borrowed an additional $120.0 million and $30.0 million, respectively, and on April 24, 2023, the Company repaid $15.0 million on the Senior Secured Credit Facility. As a result, the outstanding balance under the Senior Secured Credit Facility was $255.0 million as of May 5, 2023.

On April 28, 2023, pursuant to the regular semi-annual redetermination, our lenders reaffirmed the borrowing base and aggregate elected commitment under our Senior Secured Credit Facility at $1.3 billion and $1.0 billion, respectively.

See Note 4 for additional discussion of the Senior Secured Credit Facility.

Commodity derivatives


	Remaining Year 2023		Year 2024
Oil:
WTI NYMEX - Swaps:
Volume (Bbl)	1,287,000		75,950
Weighted-average price ($/Bbl)	$	74.27	$	63.75
WTI NYMEX - Collars:
Volume (Bbl)	3,885,450		—
Weighted-average floor price ($/Bbl)	$	68.75	$	—
Weighted-average ceiling price ($/Bbl)	$	85.45	$	—
WTI NYMEX - Three-way Collars:
Volume (Bbl)	301,250		217,350
Weighted-average sold put price ($/Bbl)	$	45.58	$	50.00
Weighted-average floor price ($/Bbl)	$	57.71	$	66.51
Weighted-average ceiling price ($/Bbl)	$	74.45	$	87.09







Argus WTI Midland to Argus WTI Formula Basis - Basis Swaps:
Volume (Bbl)	458,100		293,300
Weighted-average differential ($/Bbl)	$	0.18	$	0.11
Natural gas:
Henry Hub NYMEX - Swaps:
Volume (MMBtu)	120,500		455,700
Weighted-average price ($/MMBtu)	$	2.46	$	3.29
Henry Hub NYMEX - Collars:
Volume (MMBtu)	20,377,996		776,292
Weighted-average floor price ($/MMBtu)	$	4.11	$	3.40
Weighted-average ceiling price ($/MMBtu)	$	8.32	$	6.11
Henry Hub NYMEX - Three-way Collars:
Volume (MMBtu)	140,500		—
Weighted-average sold put price ($/MMBtu)	$	2.00	$	—
Weighted-average floor price ($/MMBtu)	$	2.50	$	—
Weighted-average ceiling price ($/MMBtu)	$	3.01	$	—
Waha Inside FERC to Henry Hub NYMEX - Basis Swaps:
Volume (MMBtu)	31,638,996		4,891,992
Weighted-average differential ($/MMBtu)	$	(1.53)	$	(0.82)

See Note 7 for additional discussion regarding the Company's derivatives. There has been no other derivative activity subsequent to March 31, 2023.

Equity Incentive Plan

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Equity Incentive Plan

The Vital Energy, Inc. Omnibus Equity Incentive Plan (the "Equity Incentive Plan") provides for the granting of incentive awards in the form of restricted stock awards, stock option awards, performance share awards, performance unit awards, phantom unit awards and other awards. The Equity Incentive Plan allows for the issuance of up to 2,432,500 shares.

See Note 9 in the 2022 Annual Report for additional discussion of the Company's equity-based compensation awards.

The following table presents activity for equity-based compensation awards for the three months ended March 31, 2023:


	Equity Awards			Liability Awards
(in thousands)	Restricted Stock Awards	Stock Option Awards	Performance Share Awards	Performance Unit Awards(1)(2)	Phantom Unit Awards(3)
Outstanding as of December 31, 2022	362	3	48	150	18
Granted	315	—	—	75	—
Forfeited	(3)	—	—	—	—
Vested	(133)	—	—	(67)	(16)

Expired or canceled	—	(1)	—	—	—
Outstanding as of March 31, 2023	541	2	48	158	2

_____________________________________________________________________________

(3)On March 1, 2023 and March 3, 2023, granted phantom unit awards vested and were paid out in cash at $52.56 and $57.06, respectively, based on the Company's closing stock price on the vesting date.

As of March 31, 2023, total unrecognized cost related to equity-based compensation awards was $34.4 million, of which $5.3 million was attributable to liability awards which will be settled in cash rather than shares. Such cost will be recognized on a straight-line basis over an expected weighted-average period of 2.35 years.

Equity-based compensation

The following table reflects equity-based compensation expense for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Equity awards:
Restricted stock awards	$	2,717	$	2,175
Performance share awards	424		461

Total share-settled equity-based compensation, gross	3,141		2,636
Less amounts capitalized	(569)		(583)
Total share-settled equity-based compensation, net	2,572		2,053
Liability awards:
Performance unit awards	497		5,566
Phantom unit awards	217		609
Total cash-settled equity-based compensation, gross	714		6,175
Less amounts capitalized	(50)		(47)
Total cash-settled equity-based compensation, net	664		6,128
Total equity-based compensation, net	$	3,236	$	8,181

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of debt

The following table presents the Company's long-term debt and debt issuance costs, net included in "Long-term debt, net" on the consolidated balance sheets as of the dates presented:


	March 31, 2023						December 31, 2022
(in thousands)	Long-term debt		Debt issuance costs, net		Long-term debt, net		Long-term debt		Debt issuance costs, net		Long-term debt, net
January 2025 Notes	$	455,628	$	(2,854)	$	452,774	$	455,628	$	(3,297)	$	452,331
January 2028 Notes	300,309		(3,302)		297,007		300,309		(3,478)		296,831
July 2029 Notes	298,214		(4,188)		294,026		298,214		(4,353)		293,861
Senior Secured Credit Facility(1)	120,000		—		120,000		70,000		—		70,000
Total	$	1,174,151	$	(10,344)	$	1,163,807	$	1,124,151	$	(11,128)	$	1,113,023

______________________________________________________________________________

Acquisitions and divestitures - Narrative (Details) $ in Millions	Feb. 14, 2023 USD ($) a shares	Mar. 31, 2023 USD ($)	Oct. 03, 2022 USD ($)
Oil and Gas Properties
Asset Acquisition [Line Items]
Proceeds from dispositions after transaction costs			$ 106.1
Midland Basin
Asset Acquisition [Line Items]
Area of land (in acres) \| a	11,200
Cash consideration	$ 127.6
Stock issued in asset acquisition (in shares) \| shares	1,578,948
Escrow deposit		$ 16.3

Equity Incentive Plan - Equity Incentive Plan (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation not yet recognized	$ 34.4
Stock-based compensation, amount expected to be settled in cash	$ 5.3
Recognition period for costs not yet recognized	2 years 4 months 6 days
Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock authorized for issuance (in shares) \| shares	2,432,500

Net income (loss) per common share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income (loss)	$ 113,940	$ (86,781)
Weighted-average common shares outstanding:
Basic (in shares)	16,431	16,767
Diluted (in shares)	16,545	16,767
Net income (loss) per common share:
Basic (in USD per share)	$ 6.93	$ (5.18)
Diluted (in USD per share)	$ 6.89	$ (5.18)
Restricted stock awards
Weighted-average common shares outstanding:
Dilutive non-vested restricted stock awards (in shares)	114	0

Net income (loss) per common share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net income (loss) per common share

Basic and diluted net income (loss) per common share are computed by dividing net income (loss) by the weighted-average common shares outstanding for the period. Diluted net income (loss) per common share reflects the potential dilution of non-vested equity-based compensation awards. See Note 9 in the 2022 Annual Report for additional discussion of these awards. For the three months ended March 31, 2022, all of these awards were anti-dilutive due to the Company's net loss and, therefore, were excluded from the calculation of diluted net loss per common share.

The following table reflects the calculations of basic and diluted (i) weighted-average common shares outstanding and (ii) net income (loss) per common share for the periods presented:


	Three months ended March 31,
(in thousands, except for per share data)	2023		2022
Net income (loss)	$	113,940	$	(86,781)
Weighted-average common shares outstanding:
Basic	16,431		16,767
Dilutive non-vested restricted stock awards	114		—



Diluted	16,545		16,767
Net income (loss) per common share:
Basic	$	6.93	$	(5.18)
Diluted	$	6.89	$	(5.18)

Derivatives - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($) derivative	Dec. 31, 2022 USD ($)	May 07, 2021 USD ($)
Derivative [Line Items]
Number of types of derivative instruments \| derivative	2
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Sixth Street PSA
Derivative [Line Items]
Average working interest (as a percent)			37.50%
Balloon payment of additional cash contingent consideration			$ 55.0
Notional amount of derivative	$ 87.8
Fair value of contingent consideration	$ 28.1	$ 26.6
Maximum \| Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Glasscock and Reagan County - Working Interest Sale in Oil and Gas Properties
Derivative [Line Items]
Additional cash contingent consideration			93.7
Maximum \| Disposal Group, Disposed of by Sale, Not Discontinued Operations \| Sixth Street PSA
Derivative [Line Items]
Aggregate quarterly payments of additional cash contingent consideration			$ 38.7

Acquisitions and divestitures	3 Months Ended
Acquisitions and divestitures	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
Acquisitions and divestitures	Acquisitions and divestitures 2023 Acquisition On February 14, 2023, the Company entered into a purchase and sale agreement (the "Driftwood PSA") with Driftwood Energy Operating, LLC (the "Seller"), pursuant to which the Company agreed to purchase (the "Driftwood Acquisition") Seller's oil and gas properties in the Midland Basin, including approximately 11,200 net acres located in Upton and Reagan Counties and related assets and contracts, inclusive of derivatives, for a purchase price of (i) $127.6 million of cash, subject to customary closing price adjustments, and (ii) 1,578,948 shares of the Company's common stock. Under the terms of the Driftwood PSA, the Company deposited $16.3 million into a third-party escrow account, which is included in "Other noncurrent assets, net" on the consolidated balance sheets as of March 31, 2023. The Company funded the cash portion of the purchase price and related transaction costs with respect to the Driftwood Acquisition from cash on hand and borrowings under its Senior Secured Credit Facility. The Company expects to finalize its allocation of the purchase consideration as soon as practicable after completion of the Driftwood Acquisition. For income tax purposes, the Driftwood Acquisition will be treated as an asset purchase such that the tax basis in the assets and liabilities will generally reflect the allocated fair value at closing. Therefore, the Company does not anticipate a material tax consequence for deferred income taxes related to the Driftwood Acquisition. See Note 13 for discussion of the April 3, 2023 closing of the Driftwood Acquisition. 2022 Divestiture On August 16, 2022, the Company entered into a purchase and sale agreement with Northern Oil and Gas, Inc. ("NOG"), pursuant to which the Company agreed to sell to NOG the Company's working interests in certain specified non-operated oil and gas properties (the "NOG Working Interest Sale"). On October 3, 2022, the Company closed the NOG Working Interest Sale for an aggregate sales price of $106.1 million, inclusive of post-closing adjustments.

Supplemental cash flow and non-cash information (Tables)

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Schedule of non-cash investing & financing and supplemental cash flow information

The following table presents supplemental cash flow and non-cash information for the periods presented:


	Three months ended March 31,
(in thousands)	2023		2022
Supplemental cash flow information:
Cash paid for interest, net of $535 and $1,463 of capitalized interest, respectively	$	51,147	$	63,057


Supplemental non-cash operating information:
Right-of-use assets obtained in exchange for operating lease liabilities(1)	$	124,128	$	9,949
Supplemental non-cash investing information:
Change in accrued capital expenditures	$	18,843	$	18,433

_____________________________________________________________________________

(1)See Notes 5 and 18 in the 2022 Annual Report for additional discussion of the Company's leases.

Supplemental cash flow and non-cash information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental cash flow information:
Cash paid for interest, net of $535 and $1,463 of capitalized interest, respectively	$ 51,147	$ 63,057
Capitalized interest	535	1,463
Supplemental non-cash operating information:
Right-of-use assets obtained in exchange for operating lease liabilities	124,128	9,949
Supplemental non-cash investing information:
Change in accrued capital expenditures	$ 18,843	$ 18,433

Organization and basis of presentation (Policies)	3 Months Ended
Organization and basis of presentation (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The unaudited consolidated financial statements were derived from the historical accounting records of the Company and reflect the historical financial position, results of operations and cash flows for the periods described herein. The unaudited consolidated financial statements have been prepared in accordance with GAAP. All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The unaudited consolidated financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet as of December 31, 2022 is derived from the Company's audited consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements reflect all necessary adjustments to present fairly the Company's financial position as of March 31, 2023, results of operations for the three months ended March 31, 2023 and 2022 and cash flows for the three months ended March 31, 2023 and 2022. All adjustments are of a recurring nature unless otherwise disclosed herein. Certain disclosures have been condensed or omitted from the unaudited consolidated financial statements. Accordingly, the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2022 Annual Report.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. There was no impact on previously reported total assets, total liabilities, net income (loss) or stockholders' equity for the periods presented.
Use of estimates in the preparation of interim unaudited consolidated financial statements	The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ. See Note 2 in the 2022 Annual Report for further information regarding the use of estimates and assumptions.
New accounting standards	New accounting standards The Company considered the applicability and impact of all accounting standard updates ("ASU") issued by the Financial Accounting Standards Board to the Accounting Standards Codification ("ASC") and has determined there are no ASUs that are not yet adopted and meaningful to disclose as of March 31, 2023. Additionally, the Company did not adopt any new ASUs during the three months ended March 31, 2023.
Net income (loss) per common share	Net income (loss) per common shareBasic and diluted net income (loss) per common share are computed by dividing net income (loss) by the weighted-average common shares outstanding for the period. Diluted net income (loss) per common share reflects the potential dilution of non-vested equity-based compensation awards.