Vitesse Energy Rebounds on Acquisition, But Leverage Climbs
Vitesse Energy swung to $33.1 million in net income during the second quarter, though the gain rested almost entirely on a non-cash derivative swing rather than operating results.
Vitesse Energy (VTS), the Denver-based oil and gas producer, reported second-quarter production of 17,354 barrels of oil equivalent per day, up 9% from the first quarter's 15,962 Boe/d, as the company integrated the Powder River Basin acquisition it closed in April 2026. The rebound followed a rockier stretch: production had already fallen 3% sequentially in the fourth quarter of 2025 to 17,653 Boe/d before dropping further in the first quarter ahead of the deal, meaning the second-quarter recovery still left volumes below the late-2025 level.
The acquisition reshaped the production mix as much as it grew the total. Oil fell to 60% of output in the second quarter from 63% in the first quarter and 65% for full-year 2025, as Powder River Basin volumes diluted Vitesse's traditionally oil-weighted base. Management responded by narrowing full-year guidance rather than widening it: the production range tightened to 16,300-17,200 Boe/d from 16,000-17,500, the oil-mix target dropped to 60%-62% from 60%-64%, and the capital-spending floor rose to $65 million from $50 million.
Revenue rose 11% year over year to $91.0 million from $81.8 million, powered by a 30% jump in oil revenue to $86.5 million that more than offset a 70% collapse in natural gas revenue to $4.5 million from $15.1 million. The pattern held even as combined daily production fell 8% year over year to 17,354 Boe/d from 18,950 Boe/d, with a 22% increase in realized combined price per barrel of oil equivalent, to $57.63 from $47.41, doing the work that volume did not. Realized oil price before hedging jumped 55% year over year to $91.98 a barrel, but hedging losses cut that gain to 11% after hedging, at $71.14 versus $64.21 a year earlier, a materially larger hedge headwind than in prior quarters.
Adjusted EBITDA climbed 20% sequentially to $40.2 million from $33.4 million, and free cash flow rose to $16.3 million from $12.0 million. Net income of $33.1 million reversed a $42.3 million loss in the first quarter, but the swing was driven almost entirely by a $40.2 million non-cash unrealized derivative gain, compared with a $48.2 million unrealized loss in the prior quarter. Adjusted Net Income, which strips out those unrealized items, was just $1.8 million. Across the first half of 2026, the derivative volatility pushed Vitesse to a $9.2 million net loss, versus $27.3 million in net income in the first half of 2025, on a $33.0 million commodity derivative loss compared with an $18.3 million gain a year earlier.
The balance sheet stretched to fund the acquisition. Total debt rose to $158.5 million at quarter-end from $144.5 million at the end of the first quarter and $124.5 million at year-end 2025, pushing net debt to Adjusted EBITDA to 1.0 times from 0.82 times in the first quarter and 0.69 times at year-end. Total liquidity rose to $117.4 million from $108.7 million, but committed borrowing availability narrowed to $116.5 million of a $275 million elected commitment following an April $25 million expansion of the credit facility.
Lease operating expense per barrel of oil equivalent rose to $11.38 from $10.67 in the first quarter, extending above the $10.92 full-year 2025 average. General and administrative expense per barrel of oil equivalent spiked to $3.89 from a near-zero $0.18 a year earlier, with total G&A rising to $6.15 million from $310,000 in the second quarter of 2025.
The quarter marked Jamie Benard's first full period as chief executive after his appointment, announced March 26, 2026, took effect May 1, following interim leadership from Brian Cree after Bob Gerrity's resignation. Vitesse increased its oil hedge coverage for the remainder of 2026 to roughly 70%, up from 67% of full-year oil production hedged as of a March hedging update, even as production and mix guidance tightened around it.