Vital Energy, Inc. (NYSE:VTLE) entered into a purchase and sale agreement to acquire Oil and gas properties in Delaware Basin, including 21,450 net acres in Reeves County from Tall City Operations III LLC and Tall City Exploration III LLC for approximately $440 million on September 13, 2023. VTLE will pay $300 million in cash and will issue approximately 2.27 million shares of Common Stock, each subject to purchase price adjustments and customary closing adjustments. In related transactions, Vital Energy, Inc. entered into a purchase and sale agreement to acquire Oil and gas properties in Delaware Basin, including 15,500 net acres of Maple Energy Holdings, LLC for approximately $210 million and a purchase and sale agreement to acquire oil and gas properties in the Midland and Delaware Basin, including approximately 15,900 net acres located in Midland, Reeves and Upton Counties, equity interests in certain subsidiaries and related assets and contracts from Henry Resources, LLC, Henry Energy LP and Moriah Henry Partners LLC for consideration comprising approximately 3.72 million shares of the Company?s common stock and approximately 4.98 million shares of the Company?s 2.0% Cumulative Mandatorily Convertible Series A Preferred Stock. Combined, the transactions have a total consideration of approximately $1.165 billion. Vital Energy to fund the cash consideration from borrowings under its senior secured facility.

Transaction is subject to conditions including all approvals from Governmental Bodies required for the Contemplated Transactions under the HSR Act shall have been granted, or the necessary waiting period shall have expired, or early termination of the waiting period shall have been granted; Stock constituting the Stock Consideration shall have been approved for listing on the NYSE. VTLE expects the Tall City Acquisition to close in the fourth quarter of 2023, subject to customary closing conditions. The acquisitions and pro forma development plan are expected to increase the Company?s 2024 Free Cash Flow by approximately 90%, at $80 per barrel WTI. Improvements to capital efficiency are expected to be recognized in 2024 and be sustainable in the future. The combined transactions are attractively priced at 2.9x next 12 months Consolidated EBITDAX1, as of the effective dates.

Houlihan Lokey is serving financial advisor and KeyBanc Capital Markets Inc. financial advisor to VTLE on Tall City transaction. American Stock Transfer and Trust Company, LLC acting as transfer agent to VTLE. Bryan Edward Loocke, Joclynn Marsh, Todd Way, Matt Dobbins, Becky Baker, David D?Alessandro, Missy Spohn, Evan Miller, James Longhofer and Thomas G. Zentner III of Vinson & Elkins LLP acted as legal advisors to Vital Energy, Inc. Kate Rainey Willson, Julian J. Seiguer, Ieuan Adrian List, Mark Dundon, Ryan D. Phelps, Adam D. Larson, Alia Y. Heintz and Christopher S.C. Heasley of Kirkland & Ellis LLP acted as legal advisors to Tall City. Guggenheim Securities, LLC, Wells Fargo Securities, LLC and Citigroup advised as financial advisor to Tall City. Christopher Erik Centrich of Akin Gump also acting as legal advisor to VTLE.