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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-35380
Vital Energy, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  | 45-3007926
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

521 E. Second Street | Suite 1000 |
Tulsa | Oklahoma | 74120
(Address of principal executive offices) | (Zip code)

(918) 513-4570
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class | Trading symbol | Name of each exchange on which registered
Common stock, $0.01 par value per share | VTLE | New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of registrant's common stock outstanding as of October 29, 2025: 38,689,952

VITAL ENERGY, INC.
FOR THE QUARTER ENDED SEPTEMBER 30, 2025
TABLE OF CONTENTS

| Page
Glossary of Oil and Natural Gas Terms and Certain Other Terms | iii
Cautionary Statement Regarding Forward-Looking Statements | v
Part I | 1
Item 1. Consolidated Financial Statements (Unaudited) | 1
Consolidated balance sheets | 1
Consolidated statements of operations | 2
Consolidated statements of stockholders' equity | 3
Consolidated statements of cash flows | 5
Condensed notes to the consolidated financial statements: | 6
Note 1—Organization and basis of presentation | 6
Note 2—New accounting standards | 7
Note 3—Acquisitions | 8
Note 4—Property and equipment | 8
Note 5—Debt | 10
Note 6—Equity Incentive Plan | 11
Note 7—Net income (loss) per common share | 13
Note 8—Derivatives | 13
Note 9—Fair value measurements | 15
Note 10—Commitments and contingencies | 17
Note 11—Supplemental cash flow and non-cash information | 18
Note 12—Income taxes | 18
Note 13—Related parties | 19
Note 14—Segment reporting | 19
Note 15—Organizational restructuring | 19
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 20
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 36
Item 4. Controls and Procedures | 37
Part II | 38
Item 1. Legal Proceedings | 38
Item 1A. Risk Factors | 38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 43
Item 3. Defaults Upon Senior Securities | 43
Item 4. Mine Safety Disclosures | 43
Item 5. Other Information | 43
Item 6. Exhibits | 44
Signatures | 45

ii

Glossary of Oil and Natural Gas Terms and Certain Other Terms
The following terms are used throughout this Quarterly Report on Form 10-Q (this "Quarterly Report"):
"Basin"—A large natural depression on the earth's surface in which sediments, generally brought by water, accumulate.
"Bbl" or "barrel"—One stock tank barrel, of 42 U.S. gallons liquid volume, used herein in reference to crude oil, condensate, natural gas liquids or water.
"Bbl/d"—Bbl per day.
"Benchmark Prices"—The unweighted arithmetic average first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period before differentials, as required by SEC guidelines.
"BOE"—One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil.
"BOE/d"—BOE per day.
"Btu"—British thermal unit, the quantity of heat required to raise the temperature of a one pound mass of water by one degree Fahrenheit.
"Completion"—The process of treating a drilled well followed by the installation of permanent equipment for the production of oil or natural gas, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.
"Dry hole"—A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.
"Exchange Act" —The Securities Exchange Act of 1934, as amended.
"Formation"—A layer of rock which has distinct characteristics that differ from nearby rock.
"Fracturing" or "Frac"—The propagation of fractures in a rock layer by a pressurized fluid. This technique is used to release petroleum and natural gas for extraction.
"GAAP"—Generally accepted accounting principles in the United States.
"Gross acres"—The total acres or wells, as the case may be, in which a working interest is owned.
"Henry Hub"—A natural gas pipeline delivery point in south Louisiana that serves as the benchmark natural gas price underlying NYMEX natural gas futures contracts.
"Liquids"—Describes oil, condensate and natural gas liquids.
"MBbl"—One thousand barrels of crude oil, condensate or natural gas liquids.
"MBOE"—One thousand BOE.
"Mcf"—One thousand cubic feet of natural gas.
"MMBtu"—One million Btu.
"MMcf"—One million cubic feet of natural gas.
"Natural gas liquids" or "NGL"—Components of natural gas that are separated from the gas state in the form of liquids, which include propane, butanes and ethane, among others.
"Net acres"—The percentage of gross acres an owner has out of a particular number of acres, or a specified tract. An owner who has 50% interest in 100 acres owns 50 net acres.
"Non-TET"—The price designation which only applies to product traded in the Mont Belvieu Caverns facility.
"NYMEX"—The New York Mercantile Exchange.
"OPEC"—The Organization of the Petroleum Exporting Countries.
"Proved reserves"—The estimated quantities of oil, NGL and natural gas that geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.
iii

"Realized Prices"—Prices which reflect adjustments to the Benchmark Prices for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point without giving effect to our commodity derivative transactions.
"Reservoir"—A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is separate from other reservoirs.
"SEC" — The U.S. Securities and Exchange Commission.
"Securities Act" — The Securities Act of 1933, as amended.
"Senior Secured Credit Facility" — The Fifth Amended and Restated Credit Agreement among Vital Energy, Inc., as borrower, Wells Fargo Bank, N.A., as administrative agent, Vital Midstream Services, LLC, as guarantor, and the banks signatory thereto.
"Spacing"—The distance between wells producing from the same reservoir.
"Standardized measure"—Discounted future net cash flows estimated by applying realized prices to the estimated future production of year-end proved reserves. Future cash inflows are reduced by estimated future production and development costs based on period end costs to determine pre-tax cash inflows. Future income taxes, if applicable, are computed by applying the statutory tax rate to the excess of pre-tax cash inflows over our tax basis in the oil and natural gas properties. Future net cash inflows after income taxes are discounted using a 10% annual discount rate.
"WAHA Inside FERC"—Waha West Texas Natural Gas Index price as quoted in Platt's Inside FERC.
"Working interest"—The right granted to the lessee of a property to explore for and to produce and own crude oil, natural gas liquids, natural gas or other minerals. The working interest owners bear the exploration, development and operating costs on either a cash, penalty or carried basis.
"WTI"—West Texas Intermediate grade crude oil. A light (low density) and sweet (low sulfur) crude oil, used as a pricing benchmark for NYMEX oil futures contracts.
iv

Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Various statements contained in or incorporated by reference into this Quarterly Report are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. These forward-looking statements include statements, projections and estimates concerning our operations, performance, business strategy, oil, NGL and natural gas reserves, drilling program capital expenditures, liquidity and capital resources, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, derivative activities, potential financing and our pending merger with Crescent Energy Company, a Delaware corporation ("Crescent"). Forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "could," "may," "will," "foresee," "plan," "goal," "should," "intend," "pursue," "target," "continue," "suggest" or the negative thereof or other variations thereof or other words that convey the uncertainty of future events or outcomes. Forward-looking statements are not guarantees of performance. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Among the factors that significantly impact our business and could impact our business in the future are:
•our pending merger with Crescent and the expected timing of the merger consummation;
•the volatility of oil, NGL and natural gas prices, including our area of operation in the Permian Basin;
•changes, uncertainty and instability in domestic and global production, supply and demand for oil, NGL and natural gas, and actions by the Organization of the Petroleum Exporting Countries members and other oil exporting nations ("OPEC+");
•changes in general economic, business or industry conditions and market volatility, including as a result of slowing growth, inflationary pressures, monetary policy, tariffs, trade barriers, price and exchange controls and other regulatory requirements, including such changes that may be implemented by the United States ("U.S.") and foreign governments;
•our ability to execute our strategies, including our ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to our financial results and to successfully integrate acquired businesses, assets and properties;
•our ability to optimize spacing, drilling and completions techniques in order to maximize our rate of return, cash flows from operations and stockholder value;
•the ongoing instability and uncertainty in the U.S. and international energy, financial and consumer markets that could adversely affect the liquidity available to us and our customers and the demand for commodities, including oil, NGL and natural gas;
•competition in the oil and gas industry;
•our ability to discover, estimate, develop and replace oil, NGL and natural gas reserves and inventory;
•insufficient transportation capacity in the Permian Basin and challenges associated with such constraint, and the availability and costs of sufficient gathering, processing, storage and export capacity;
•a decrease in production levels which may impair our ability to meet our contractual obligations and ability to retain our leases;
•risks associated with the uncertainty of potential drilling locations and plans to drill in the future;
•the inability of significant customers to meet their obligations;
•revisions to our reserve estimates as a result of changes in commodity prices, decline curves and other uncertainties;
•the availability and costs of drilling and production equipment, supplies, labor and oil and natural gas processing and other services;
•ongoing war and political instability in Ukraine, Israel and the Middle East and the effects of such conflicts on the global hydrocarbon market and supply chains;
•risks related to the geographic concentration of our assets;
•our ability to hedge commercial risk, including commodity price volatility, and regulations that affect our ability to hedge such risks;
v

Table of Contents
•our ability to continue to maintain the borrowing capacity under our Senior Secured Credit Facility (as defined herein) or access other means of obtaining capital and liquidity, especially during periods of sustained low commodity prices;
•our ability to comply with restrictions contained in our debt agreements, including our Senior Secured Credit Facility and the indentures governing our senior unsecured notes, as well as debt that could be incurred in the future;
•our ability to generate sufficient cash to service our indebtedness, fund our capital requirements and generate future profits;
•drilling and operating risks, including but not limited to, risks related to hydraulic fracturing, securing sufficient electricity to produce our wells without limitation, natural disasters and other matters beyond our control;
•U.S. and international economic conditions and legal, tax, political and administrative developments, including the effects of energy, trade and environmental policies and existing and future laws and government regulations;
•our ability to comply with federal, state and local legal, tax and regulatory requirements, including the One Big Beautiful Bill Act, and any impact thereof on taxes, tariffs and international trade;
•the impact of repurchases, if any, of securities from time to time;
•our ability to maintain the health and safety of, as well as recruit and retain, qualified personnel, including senior management or other key personnel, necessary to operate our business;
•evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, third-party service provider failures, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, social engineering, physical breaches or other actions; and
•our belief that the outcome of any current legal proceedings will not materially affect our financial results and operations.
Reserve engineering is a process of estimating underground accumulations of oil, NGL and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify upward or downward revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil, NGL and natural gas that are ultimately recovered.
These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should therefore be considered in light of various factors, including those set forth under "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," under "Part II, Item 1A. Risk Factors," and elsewhere in this Quarterly Report, and under "Item 1A. Risk Factors," in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Annual Report") and those set forth from time to time in our other filings with the SEC. These documents are available through our website or through the SEC's Electronic Data Gathering and Analysis Retrieval system at https://www.sec.gov. In light of such risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report, or if earlier, as of the date they were made.
Should one or more of the risks or uncertainties described herein occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
vi

Table of Contents
Part I
Item 1. Consolidated Financial Statements (Unaudited)
Vital Energy, Inc.
Consolidated balance sheets
(in thousands, except share data)
(Unaudited)

|  | September 30, 2025 |  | December 31, 2024
Assets |  |  |  |
Current assets: |  |  |  |
Cash and cash equivalents |  | $ | 14,697 |  |  | $ | 40,179 |
Accounts receivable, net |  | 227,747 |  |  | 299,698 |
Derivatives |  | 149,332 |  |  | 101,474 |
Other current assets |  | 29,276 |  |  | 25,205 |
Total current assets |  | 421,052 |  |  | 466,556 |
Property and equipment: |  |  |  |
Oil and natural gas properties, full cost method: |  |  |  |
Evaluated properties |  | 14,429,480 |  |  | 13,587,040 |
Unevaluated properties not being depleted |  | 132,800 |  |  | 242,792 |
Less: accumulated depletion and impairment |  | (10,509,728) |  |  | (8,966,200) |
Oil and natural gas properties, net |  | 4,052,552 |  |  | 4,863,632 |
Midstream and other fixed assets, net |  | 121,050 |  |  | 134,265 |
Property and equipment, net |  | 4,173,602 |  |  | 4,997,897 |
Derivatives |  | 20,960 |  |  | 34,564 |
Operating lease right-of-use assets |  | 65,669 |  |  | 104,329 |
Deferred income taxes |  | 5,971 |  |  | 239,685 |
Other noncurrent assets, net |  | 29,878 |  |  | 35,915 |
Total assets |  | $ | 4,717,132 |  |  | $ | 5,878,946 |
Liabilities and stockholders' equity |  |  |  |
Current liabilities: |  |  |  |
Accounts payable and accrued liabilities |  | $ | 195,566 |  |  | $ | 185,115 |
Accrued capital expenditures |  | 93,390 |  |  | 95,593 |
Undistributed revenue and royalties |  | 142,799 |  |  | 187,563 |
Operating lease liabilities |  | 28,087 |  |  | 73,143 |
Other current liabilities |  | 81,637 |  |  | 59,725 |
Total current liabilities |  | 541,479 |  |  | 601,139 |
Long-term debt, net |  | 2,282,320 |  |  | 2,454,242 |
Derivatives |  | 25,837 |  |  | 5,814 |
Asset retirement obligations |  | 76,040 |  |  | 82,941 |
Operating lease liabilities |  | 29,218 |  |  | 26,733 |
Other noncurrent liabilities |  | 6,020 |  |  | 7,506 |
Total liabilities |  | 2,960,914 |  |  | 3,178,375 |
Commitments and contingencies |  |  |  |
Stockholders' equity: |  |  |  |
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued and outstanding as of September 30, 2025 and December 31, 2024 |  | — |  |  | — |
Common stock, $0.01 par value, 80,000,000 shares authorized, and 38,690,302 and 38,144,248 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  | 387 |  |  | 381 |
Additional paid-in capital |  | 3,833,813 |  |  | 3,823,241 |
Accumulated deficit |  | (2,077,982) |  |  | (1,123,051) |
Total stockholders' equity |  | 1,756,218 |  |  | 2,700,571 |
Total liabilities and stockholders' equity |  | $ | 4,717,132 |  |  | $ | 5,878,946 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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Table of Contents
Vital Energy, Inc.
Consolidated statements of operations
(in thousands, except per share data)
(Unaudited)

|  | Three months ended September 30, |  | Nine months ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |  |
Oil sales |  | $ | 367,511 |  |  | $ | 416,668 |  |  | $ | 1,155,448 |  |  | $ | 1,274,119 |
NGL sales |  | 42,929 |  |  | 41,807 |  |  | 155,714 |  |  | 128,752 |
Natural gas sales |  | 9,206 |  |  | (9,724) |  |  | 47,175 |  |  | 3,150 |
Sales of purchased oil |  | — |  |  | 8,986 |  |  | — |  |  | 8,986 |
Other operating revenues |  | 1,180 |  |  | 1,497 |  |  | 4,296 |  |  | 2,937 |
Total revenues |  | 420,826 |  |  | 459,234 |  |  | 1,362,633 |  |  | 1,417,944 |
Costs and expenses: |  |  |  |  |  |  |  |
Lease operating expenses |  | 114,259 |  |  | 107,686 |  |  | 325,494 |  |  | 327,156 |
Production and ad valorem taxes |  | 20,525 |  |  | 27,244 |  |  | 80,106 |  |  | 84,937 |
Oil transportation and marketing expenses |  | 10,527 |  |  | 12,445 |  |  | 31,296 |  |  | 34,477 |
Gas gathering, processing and transportation expenses |  | 6,774 |  |  | 4,602 |  |  | 18,910 |  |  | 12,066 |
Costs of purchased oil |  | — |  |  | 9,331 |  |  | — |  |  | 9,331 |
General and administrative |  | 25,046 |  |  | 22,005 |  |  | 71,517 |  |  | 74,934 |
Organizational restructuring expenses |  | — |  |  | — |  |  | 4,627 |  |  | — |
Depletion, depreciation and amortization |  | 180,516 |  |  | 187,063 |  |  | 556,840 |  |  | 527,468 |
Impairment expense |  | 419,955 |  |  | — |  |  | 1,005,242 |  |  | — |
Other operating expenses, net |  | 6,280 |  |  | 1,754 |  |  | 10,456 |  |  | 5,365 |
Total costs and expenses |  | 783,882 |  |  | 372,130 |  |  | 2,104,488 |  |  | 1,075,734 |
Gain (loss) on disposal of assets, net |  | 685 |  |  | 839 |  |  | 2,050 |  |  | 1,005 |
Operating income (loss) |  | (362,371) |  |  | 87,943 |  |  | (739,805) |  |  | 343,215 |
Non-operating income (expense): |  |  |  |  |  |  |  |
Gain (loss) on derivatives, net |  | 56,069 |  |  | 226,553 |  |  | 169,233 |  |  | 82,064 |
Interest expense |  | (49,994) |  |  | (40,119) |  |  | (150,228) |  |  | (124,230) |
Loss on extinguishment of debt, net |  | — |  |  | — |  |  | — |  |  | (66,115) |
Other income (expense), net |  | 999 |  |  | 1,247 |  |  | 2,215 |  |  | 5,921 |
Total non-operating income (expense), net |  | 7,074 |  |  | 187,681 |  |  | 21,220 |  |  | (102,360) |
Income (loss) before income taxes |  | (355,297) |  |  | 275,624 |  |  | (718,585) |  |  | 240,855 |
Income tax benefit (expense) |  | 1,775 |  |  | (60,324) |  |  | (236,346) |  |  | (54,984) |
Net income (loss) |  | (353,522) |  |  | 215,300 |  |  | (954,931) |  |  | 185,871 |
Preferred stock dividends |  | — |  |  | — |  |  | — |  |  | (652) |
Net income (loss) available to common stockholders |  | $ | (353,522) |  |  | $ | 215,300 |  |  | $ | (954,931) |  |  | $ | 185,219 |
Net income (loss) per common share: |  |  |  |  |  |  |  |
Basic |  | $ | (9.35) |  |  | $ | 5.75 |  |  | $ | (25.32) |  |  | $ | 5.08 |
Diluted |  | $ | (9.35) |  |  | $ | 5.73 |  |  | $ | (25.32) |  |  | $ | 4.97 |
Weighted-average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 37,801 |  |  | 37,459 |  |  | 37,714 |  |  | 36,472 |
Diluted |  | 37,801 |  |  | 37,580 |  |  | 37,714 |  |  | 37,370 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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Table of Contents
Vital Energy, Inc.
Consolidated statements of stockholders' equity
(in thousands)
(Unaudited)

|  | Preferred Stock |  | Common stock |  | Additional paid-in capital |  | Treasury stock (at cost) |  | Accumulated deficit |  |
|  | Shares |  | Amount |  | Shares |  | Amount |  |  | Shares |  | Amount |  |  | Total
Balance, December 31, 2024 |  | — |  |  | $ | — |  |  | 38,144 |  |  | $ | 381 |  |  | $ | 3,823,241 |  |  | — |  |  | $ | — |  |  | $ | (1,123,051) |  |  | $ | 2,700,571 |
Restricted stock awards |  | — |  |  | — |  |  | 651 |  |  | 7 |  |  | (7) |  |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock forfeitures |  | — |  |  | — |  |  | (7) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  |  | — |  |  | (126) |  |  | (1) |  |  | (3,922) |  |  | 126 |  |  | 3,923 |  |  | — |  |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (126) |  |  | (3,923) |  |  | — |  |  | (3,923) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,694 |  |  | — |  |  | — |  |  | — |  |  | 4,694 |
Performance share conversion |  | — |  |  | — |  |  | 40 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (18,837) |  |  | (18,837) |
Balance, March 31, 2025 |  | — |  |  | — |  |  | 38,702 |  |  | 387 |  |  | 3,824,006 |  |  | — |  |  | — |  |  | (1,141,888) |  |  | 2,682,505 |
Restricted stock awards |  | — |  |  | — |  |  | 24 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock forfeitures |  | — |  |  | — |  |  | (106) |  |  | (1) |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  | — |  | (2) |  | — |  | (33) |  | 2 |  | 33 |  | — |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | (33) |  |  | — |  |  | (33) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,167 |  |  | — |  |  | — |  |  | — |  |  | 4,167 |
Other |  | — |  |  | — |  |  | 70 |  |  | 1 |  |  | 1,510 |  |  | — |  |  | — |  |  | — |  |  | 1,511 |
Net income (loss) |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (582,572) |  |  | (582,572) |
Balance, June 30, 2025 |  | — |  |  | — |  |  | 38,688 |  |  | 387 |  |  | 3,829,651 |  |  | — |  |  | — |  |  | (1,724,460) |  |  | 2,105,578 |
Restricted stock awards |  | — |  |  | — |  |  | 17 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock forfeitures |  | — |  |  | — |  |  | (15) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  |  | — |  |  | — |  |  | — |  |  | (10) |  |  | — |  |  | 10 |  |  | — |  |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10) |  |  | — |  |  | (10) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,172 |  |  | — |  |  | — |  |  | — |  |  | 4,172 |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (353,522) |  |  | (353,522) |
Balance, September 30, 2025 |  | — |  |  | $ | — |  |  | 38,690 |  |  | $ | 387 |  |  | $ | 3,833,813 |  |  | — |  |  | $ | — |  |  | $ | (2,077,982) |  |  | $ | 1,756,218 |

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Table of Contents

|  | Preferred Stock |  | Common stock |  | Additional paid-in capital |  | Treasury stock (at cost) |  | Accumulated deficit |  |
|  | Shares |  | Amount |  | Shares |  | Amount |  |  | Shares |  | Amount |  |  | Total
Balance, December 31, 2023 |  | 595 |  |  | $ | 6 |  |  | 35,414 |  |  | $ | 354 |  |  | $ | 3,733,775 |  |  | — |  |  | $ | — |  |  | $ | (948,878) |  |  | $ | 2,785,257 |
Restricted stock awards |  | — |  |  | — |  |  | 445 |  |  | 5 |  |  | (4) |  |  | — |  |  | — |  |  | — |  |  | 1 |
Restricted stock forfeitures |  | — |  |  | — |  |  | (5) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  |  | — |  |  | (72) |  |  | (1) |  |  | (3,410) |  |  | 72 |  |  | 3,411 |  |  | — |  |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (72) |  |  | (3,411) |  |  | — |  |  | (3,411) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,348 |  |  | — |  |  | — |  |  | — |  |  | 4,348 |
Equity issued for acquisition of oil and natural gas properties |  | 980 |  |  | 10 |  |  | 879 |  |  | 9 |  |  | 78,721 |  |  | — |  |  | — |  |  | — |  |  | 78,740 |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (66,131) |  |  | (66,131) |
Balance, March 31, 2024 |  | 1,575 |  |  | 16 |  |  | 36,661 |  |  | 367 |  |  | 3,813,430 |  |  | — |  |  | — |  |  | (1,015,009) |  |  | 2,798,804 |
Restricted stock awards |  | — |  |  | — |  |  | 13 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock forfeitures |  | — |  |  | — |  |  | (8) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  |  | — |  |  | — |  |  | — |  |  | (9) |  |  | — |  |  | 9 |  |  | — |  |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (9) |  |  | — |  |  | (9) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,865 |  |  | — |  |  | — |  |  | — |  |  | 4,865 |
Equity issued for acquisition of oil and natural gas properties |  | — |  |  | — |  |  | (76) |  |  | (1) |  |  | (3,811) |  |  | — |  |  | — |  |  | — |  |  | (3,812) |
Preferred stock conversion |  | (1,575) |  |  | (16) |  |  | 1,575 |  |  | 16 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Preferred stock dividend paid |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (652) |  |  | (652) |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 36,702 |  |  | 36,702 |
Balance, June 30, 2024 |  | — |  |  | — |  |  | 38,165 |  |  | 382 |  |  | 3,814,475 |  |  | — |  |  | — |  |  | (978,959) |  |  | 2,835,898 |
Restricted stock awards |  | — |  |  | — |  |  | 12 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock forfeitures |  | — |  |  | — |  |  | (5) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock exchanged for tax withholding |  | — |  |  | — |  |  | (3) |  |  | — |  |  | (113) |  |  | 3 |  |  | 113 |  |  | — |  |  | — |
Retirement of treasury stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3) |  |  | (113) |  |  | — |  |  | (113) |
Share-settled equity-based compensation |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,756 |  |  | — |  |  | — |  |  | — |  |  | 4,756 |
Net income (loss) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 215,300 |  |  | 215,300 |
Balance, September 30, 2024 |  | — |  |  | $ | — |  |  | 38,169 |  |  | $ | 382 |  |  | $ | 3,819,118 |  |  | — |  |  | $ | — |  |  | $ | (763,659) |  |  | $ | 3,055,841 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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Table of Contents
Vital Energy, Inc.
Consolidated statements of cash flows
(in thousands)
(Unaudited)

|  | Nine months ended September 30,
|  | 2025 |  | 2024
Cash flows from operating activities: |  |  |  |
Net income (loss) |  | $ | (954,931) |  |  | $ | 185,871 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |
Share-settled equity-based compensation, net |  | 9,997 |  |  | 11,248 |
Depletion, depreciation and amortization |  | 556,840 |  |  | 527,468 |
Impairment expense |  | 1,005,242 |  |  | — |
Mark-to-market on derivatives: |  |  |  |
(Gain) loss on derivatives, net |  | (169,233) |  |  | (82,064) |
Settlements received (paid) for matured derivatives, net |  | 155,002 |  |  | 10,751 |
Loss on extinguishment of debt, net |  | — |  |  | 66,115 |
Deferred income tax (benefit) expense |  | 233,714 |  |  | 52,278 |
Other, net |  | 29,785 |  |  | 19,608 |
Changes in operating assets and liabilities: |  |  |  |
Accounts receivable, net |  | 71,479 |  |  | 13,815 |
Other current assets |  | (8,585) |  |  | (7,667) |
Other noncurrent assets, net |  | (5,813) |  |  | (836) |
Accounts payable and accrued liabilities |  | 10,451 |  |  | (21,281) |
Undistributed revenue and royalties |  | (44,764) |  |  | (19,593) |
Other current liabilities |  | 22,957 |  |  | (1,432) |
Other noncurrent liabilities |  | (22,263) |  |  | (11,125) |
Net cash provided by (used in) operating activities |  | 889,878 |  |  | 743,156 |
Cash flows from investing activities: |  |  |  |
Acquisitions of oil and natural gas properties, net |  | (1,636) |  |  | (831,225) |
Capital expenditures: |  |  |  |
Oil and natural gas properties |  | (756,640) |  |  | (633,279) |
Midstream and other fixed assets |  | (7,432) |  |  | (16,630) |
Proceeds from dispositions of capital assets, net of selling costs |  | 33,059 |  |  | 2,741 |
Other, net |  | 766 |  |  | (1,776) |
Net cash provided by (used in) investing activities |  | (731,883) |  |  | (1,480,169) |
Cash flows from financing activities: |  |  |  |
Borrowings on Senior Secured Credit Facility |  | 450,000 |  |  | 1,440,000 |
Payments on Senior Secured Credit Facility |  | (625,000) |  |  | (715,000) |
Issuance of senior unsecured notes |  | — |  |  | 1,001,500 |
Extinguishment of debt |  | — |  |  | (952,214) |
Stock exchanged for tax withholding |  | (3,966) |  |  | (3,533) |
Payments for debt issuance costs |  | — |  |  | (21,738) |
Other, net |  | (4,511) |  |  | (3,871) |
Net cash provided by (used in) financing activities |  | (183,477) |  |  | 745,144 |
Net increase (decrease) in cash and cash equivalents |  | (25,482) |  |  | 8,131 |
Cash and cash equivalents, beginning of period |  | 40,179 |  |  | 14,061 |
Cash and cash equivalents, end of period |  | $ | 14,697 |  |  | $ | 22,192 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
5

Table of Contents | Vital Energy, Inc. |

Condensed notes to the consolidated financial statements
(Unaudited)
Note 1—Organization and basis of presentation
Organization
Vital Energy, Inc. ("Vital Energy," "Vital" or the "Company"), together with its wholly-owned subsidiary, Vital Midstream Services, LLC ("VMS"), 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. In these notes, the "Company" refers to Vital Energy and VMS 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.
Explanatory Note
On August 24, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Crescent Energy Company, a Delaware corporation ("Crescent"), Venus Merger Sub I Inc., a Delaware corporation and a wholly owned subsidiary of Crescent (“Merger Sub Inc.”), and Venus Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Crescent (“Merger Sub LLC”). Pursuant to the terms of the Merger Agreement, Crescent will acquire the Company in an all-equity transaction through: (i) the merger of Merger Sub Inc. (the “First Company Merger”) with and into the Company, with the Company continuing as the surviving entity (the “Surviving Corporation”) and (ii) immediately following the First Company Merger, the merger of the Surviving Corporation (the “Second Company Merger” and, together with the First Company Merger, the “Mergers”) with and into Merger Sub LLC, with Merger Sub LLC continuing as the surviving entity (the “Surviving Company”), in each case, on the terms and subject to the conditions set forth in the Merger Agreement.
On the terms and subject to the conditions set forth in the Merger Agreement:
•at the effective time of the First Company Merger (the “Effective Time”), (i) each share of capital stock of Merger Sub Inc. issued and outstanding immediately prior to the Effective Time will be converted into and will represent one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation and (ii) each share of common stock, par value $0.01 per share, of the Company (“Common Stock”), issued and outstanding immediately prior to the Effective Time (excluding each share of Common Stock held by the Company as treasury shares or by Crescent, Merger Sub Inc. or Merger Sub LLC, or by any wholly owned subsidiary of the Company, Merger Sub Inc. or Merger Sub LLC immediately prior to the Effective Time ("Excluded Shares")) will be converted into the right to receive from Crescent 1.9062 fully paid and nonassessable shares of Class A common stock, par value $0.0001 per share, of Crescent (the “Crescent Common Stock” and such right to receive Crescent Common Stock, the "Merger Consideration"), with cash to be paid in lieu of fractional shares, if any, and (iii) each Excluded Share will automatically be canceled and will cease to exist and no consideration will be delivered in exchange for such share; and
•at the effective time of the Second Company Merger (the “Second Company Merger Effective Time”), (i) each share of common stock of the Surviving Corporation issued and outstanding immediately prior to the Second Company Merger Effective Time will automatically be cancelled and cease to exist, and no consideration will be delivered in exchange therefor, and (ii) the limited liability company interests of Merger Sub LLC issued and outstanding as of immediately prior to the Second Company Merger Effective Time will remain outstanding and will not be affected by virtue of the Second Company Merger, and no consideration will be paid in respect thereof, and Crescent will continue as the sole member of the Surviving Company.
As a result of the Mergers and as of the closing of the Mergers (the “Closing”), the Company's stockholders as of immediately prior to the Effective Time will own approximately 23% of the outstanding shares of Crescent Common Stock, and Crescent's stockholders as of immediately prior to the Effective Time will own approximately 77% of the outstanding shares of Crescent Common Stock. Pursuant to the Merger Agreement, prior to the Effective Time, Crescent will (i) cause the number of directors constituting the board of directors of Crescent (the “Crescent Board”) to increase to 12, to become effective immediately prior to, but conditioned on, the Effective Time and (ii) appoint two directors designated by the Company and reasonably acceptable to Crescent to the Crescent Board as of the Effective Time (such directors, the “Company Designated Directors”).
Our board of directors (the “Board”) and the Crescent Board have each unanimously approved and declared advisable the Merger Agreement and transactions contemplated thereby. The completion of the Mergers is generally subject to certain
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Table of Contents | Vital Energy, Inc. |

Condensed notes to the consolidated financial statements
(Unaudited)
customary mutual conditions, including (i) the receipt of the required approval from the Company’s stockholders, (ii) the receipt of the required approval from Crescent’s stockholders, (iii) the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iv) the absence of any governmental order or law that makes consummation of the Mergers illegal or otherwise prohibited, (v) Crescent’s registration statement on Form S-4 having been declared effective by the SEC under the Securities Act and no stop order having been issued, initiated or, to the knowledge of the Company or Crescent, threatened by the SEC, and (vi) the shares of Crescent Common Stock issuable in connection with the Mergers having been authorized for listing on the NYSE, subject to official notice of issuance. The obligation of each party to consummate the Mergers is further generally conditioned upon certain of the parties’ representations and warranties being true and correct (subject to certain materiality exceptions), the absence of a material adverse effect on each party, the parties having performed in all material respects their respective obligations under the Merger Agreement, and the receipt by each party of a compliance certificate. Until the approval by shareholders and the subsequent closing (as described above), the Company must continue to operate as a stand-alone entity.
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, 2024 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 interim financial position, results of operations and cash flows. 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 2024 Annual Report.
Significant accounting policies
There have been no material changes in the Company's significant accounting policies during the nine months ended September 30, 2025. See Note 2 in the 2024 Annual Report for further discussion of significant accounting policies.
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 as of 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 2024 Annual Report for further information regarding the use of estimates and assumptions.
Note 2—New accounting standards
The Company considered the applicability and impact of all Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB") to the Accounting Standards Codification. There were no new ASUs adopted during the nine months ended September 30, 2025. See below for discussion of ASUs not yet adopted.
ASU not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure about specific types of expenses included in the expense captions presented on the income statement. The amendments in this accounting standard are effective, on a prospective basis, for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. Adoption of this ASU is expected
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Condensed notes to the consolidated financial statements
(Unaudited)
to result in additional disclosure, but will not impact the Company's consolidated financial position, results of operations or cash flows.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires more detailed tax disclosures, including disaggregated information about an entity's effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The amendments in this accounting standard are effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption is permitted. Adoption of this ASU is expected to result in additional disclosure, but will not impact the Company’s consolidated financial position, results of operations or cash flows.
Note 3—Acquisitions
Point Acquisition
On September 20, 2024 (the "Point Closing Date"), the Company, together with Northern Oil and Gas, Inc. ("NOG"), purchased certain oil and natural gas properties located in the Delaware Basin from Point Energy Partners Petroleum, LLC, Point Energy Partners Operating, LLC, Point Energy Partners Water, LLC and Point Energy Partners Royalty, LLC (collectively, “Point”) for an aggregate purchase price of $1.0 billion in cash, including closing adjustments (the "Point Acquisition"). The Company purchased 80% of the acquired assets, consisting of approximately 16,300 net acres in Ward and Winkler Counties, and will operate the assets, and NOG purchased the remaining 20% of the assets. The Company's portion of the aggregate preliminary purchase price was $827.0 million, which consisted of (i) $805.1 million in cash and (ii) $21.9 million of estimated transaction-related expenses. See Note 4 in the 2024 Annual Report for additional discussion of the Point Acquisition.
PEP Acquisition
On February 2, 2024, the Company purchased additional working interests in producing properties associated with a previous acquisition. The aggregate purchase price, inclusive of final adjustments, of $77.6 million consisted of (i) 878,690 shares of Common Stock based upon the share price as of the closing date, totaling $37.1 million, (ii) 980,272 shares of the Company's 2.0% Cumulative Mandatorily Convertible Series A Preferred Stock, par value $0.01 per share ("Preferred Stock") based upon the share price as of the closing date, totaling $41.3 million, (iii) the fair value of preferred stock dividends totaling $0.3 million, (iv) $1.8 million of cash consideration received for closing adjustments and (v) $0.7 million in transaction-related expenses. The 980,272 shares of Preferred Stock were subsequently converted to an equal number of shares of Common Stock on May 23, 2024. See Note 4 in the 2024 Annual Report for additional discussion of the PEP Acquisition.
Note 4—Property and equipment
Full cost ceiling impairment
As discussed in Note 2 in the 2024 Annual Report, the Company uses the full cost method of accounting for its oil and natural gas properties. This accounting method requires a quarterly full cost ceiling test. The full cost ceiling is based principally on the estimated future net revenues from proved oil, NGL and natural gas reserves, which exclude the effect of the Company's commodity derivative transactions, discounted at 10%. The SEC guidelines require companies to use the unweighted arithmetic average first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period before differentials ("Benchmark Prices"). The Benchmark Prices are then adjusted for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead ("Realized Prices") without giving effect to the Company's commodity derivative transactions. The Realized Prices are utilized to calculate the estimated future net revenues in the full cost ceiling calculation. Additional significant inputs included in the calculation of discounted cash flows used in the impairment analysis include the Company's estimate of operating and development costs, anticipated production of proved reserves and other relevant data. In the event the unamortized cost of evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, as defined by the SEC, the excess is expensed in the period such excess occurs. Once incurred, a write-down of oil and natural gas properties is not reversible.
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Condensed notes to the consolidated financial statements
(Unaudited)
The unamortized cost of evaluated oil and natural gas properties being depleted exceeded the full cost ceiling as of September, 30, 2025, June 30, 2025 and March 31, 2025. The following table presents full cost ceiling impairment expense, which is included in "Impairment expense" on the unaudited consolidated statements of operations, for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Full cost ceiling impairment expense |  | $ | 419,955 |  |  | $ | — |  |  | $ | 1,005,242 |  |  | $ | — |

If prices remain at or below the current levels, subject to numerous factors and inherent limitations and all other factors remain constant, we could incur additional non-cash full cost ceiling impairments in future quarters, which will have an adverse effect on our statement of operations.
The following table presents the Benchmark Prices and the Realized Prices utilized in the full cost ceiling calculation as of the dates presented:

|  | September 30, 2025 |  | June 30, 2025 |  | March 31, 2025 |  | December 31, 2024 |  | September 30, 2024
Benchmark Prices: |  |  |  |  |  |  |  |  |  |
Oil ($/Bbl) |  | $ | 67.45 |  |  | $ | 70.48 |  |  | $ | 74.52 |  |  | $ | 75.48 |  |  | $ | 78.64 |
NGL ($/Bbl)(1) |  | $ | 67.45 |  |  | $ | 70.48 |  |  | $ | 74.52 |  |  | $ | 75.48 |  |  | $ | 78.64 |
Natural gas ($/MMBtu) |  | $ | 3.10 |  |  | $ | 2.86 |  |  | $ | 2.44 |  |  | $ | 2.13 |  |  | $ | 2.21 |
Realized Prices: |  |  |  |  |  |  |  |  |  |
Oil ($/Bbl) |  | $ | 68.35 |  |  | $ | 71.47 |  |  | $ | 75.55 |  |  | $ | 76.76 |  |  | $ | 79.92 |
NGL ($/Bbl) |  | $ | 16.16 |  |  | $ | 15.65 |  |  | $ | 13.87 |  |  | $ | 13.66 |  |  | $ | 14.06 |
Natural gas ($/Mcf) |  | $ | 1.11 |  |  | $ | 0.98 |  |  | $ | 1.04 |  |  | $ | 0.85 |  |  | $ | 0.81 |

_____________________________________________________________________________
(1) The Company utilizes WTI NYMEX in the calculation of its NGL Benchmark Prices.
Divestiture
During 2025, the Company sold non-core oil and natural gas properties for net proceeds of $30.5 million. Pursuant to the rules governing full cost accounting, the net proceeds and removal of $8.4 million in asset retirement obligations were recorded as adjustments to oil and natural gas properties.
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Condensed notes to the consolidated financial statements
(Unaudited)
Note 5—Debt
Long-term debt, net
The following table presents the Company's long-term debt and unamortized debt issuance costs, discounts and premiums included in "Long-term debt, net" on the consolidated balance sheets as of the dates presented:

(in thousands) |  | September 30, 2025 |  | December 31, 2024
7.750% senior unsecured notes due 2029 (July 2029 Notes) |  | $ | 298,214 |  |  | $ | 298,214 |
9.750% senior unsecured notes due 2030 (September 2030 Notes) |  | 302,364 |  |  | 302,364 |
7.875% senior unsecured notes due 2032 (March 2032 Notes) |  | 1,000,000 |  |  | 1,000,000 |
Senior Secured Credit Facility |  | 705,000 |  |  | 880,000 |
Total long-term debt |  | 2,305,578 |  |  | 2,480,578 |
Unamortized debt issuance costs(1) |  | (21,762) |  |  | (24,579) |
Unamortized discounts |  | (2,730) |  |  | (3,132) |
Unamortized premiums |  | 1,234 |  |  | 1,375 |
Total long-term debt, net |  | $ | 2,282,320 |  |  | $ | 2,454,242 |

______________________________________________________________________________
(1)Unamortized debt issuance costs related to the Senior Secured Credit Facility of $9.1 million and $12.5 million as of September 30, 2025 and December 31, 2024, respectively, are included in "Other noncurrent assets, net" on the consolidated balance sheets.
Senior Secured Credit Facility
As of September 30, 2025, the Senior Secured Credit Facility, which matures on September 13, 2027, had a maximum credit amount of $3.0 billion, a borrowing base and an aggregate elected commitment of $1.4 billion, and an outstanding balance of $705.0 million subject to a weighted-average interest rate of 7.008%. 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 or $80.0 million. As of September 30, 2025 and December 31, 2024, the Company had no letters of credit outstanding under the Senior Secured Credit Facility. For additional information on the Senior Secured Credit Facility, see Note 7 in the 2024 Annual Report.
Subsequent to September 30, 2025, the Company borrowed $95.0 million and repaid $75.0 million on the Senior Secured Credit Facility. As a result, the outstanding balance under the Senior Secured Credit Facility was $725.0 million as of October 29, 2025.
As a result of and in light of the pending merger with Crescent, the Company requested that Wells Fargo Bank, N.A., as administrative agent of the Senior Secured Credit Facility, and the banks signatory thereto, enter into a letter agreement to consent to postponing the fall 2025 borrowing base redetermination until December 19, 2025 from the currently required date of on or around November 1, 2025. The executed letter agreement was received by the Company before November 1, 2025.
Senior unsecured notes
On March 28, 2024, the Company completed an offering of $800.0 million in aggregate principal amount of 7.875% senior unsecured notes due 2032 (the "Initial March 2032 Notes") for net proceeds of $784.8 million. The net proceeds from this offering and the Tack-On March 2032 Notes (defined below) were used to (i) extinguish in full the Company's 10.125% senior unsecured notes due 2028 (the "January 2028 Notes"), (ii) reduce the outstanding principal amount of the 9.750% senior unsecured notes due 2030 (the "September 2030 Notes") and (iii) repay a portion of the outstanding borrowings on the Senior Secured Credit Facility. On March 29, 2024, the Company settled a cash tender offer on the January 2028 Notes for an aggregate principal amount outstanding of $431.2 million.
On April 3, 2024, the Company completed an offering of an additional $200.0 million in aggregate principal amount of 7.875% senior unsecured notes due 2032 (the "Tack-On March 2032 Notes," and, together with the Initial March 2032 Notes, the "March 2032 Notes"), at 100.750% of par, under the same indenture dated as of March 28, 2024 for net proceeds of
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Condensed notes to the consolidated financial statements
(Unaudited)
approximately $198.7 million. On April 3, 2024, the Company settled a cash tender offer on the September 2030 Notes of $197.6 million and on April 29, 2024, the Company redeemed the remaining principal amount outstanding on the January 2028 Notes of $269.2 million at a redemption price of 105.063%.
The following table presents the components of the Company's loss on extinguishment of debt, net during the period presented:

(in thousands) |  |  |  | Nine months ended September 30, 2024 |  |  |  |  |  |
Principal amount tendered or redeemed |  |  |  | $ | 897,945 |  |  |  |  |  |  |  |  |
Extinguishment of debt(1) |  |  |  | (952,214) |  |  |  |  |  |  |  |  |
Early tender or redemption premiums |  |  |  | (54,269) |  |  |  |  |  |  |  |  |
Write-off of debt issuance costs |  |  |  | (13,121) |  |  |  |  |  |  |  |  |
Write-off of issuance discount |  |  |  | (2,311) |  |  |  |  |  |  |  |  |
Write-off of issuance premium |  |  |  | 3,586 |  |  |  |  |  |  |  |  |
Loss on extinguishment of debt, net(2) |  |  |  | $ | (66,115) |  |  |  |  |  |  |  |  |

______________________________________________________________________________
(1)Amounts are included in "Extinguishment of debt" in cash flows from financing activities on the consolidated statements of cash flows.
(2)Amounts are included in "Loss on extinguishment of debt, net" on the consolidated statements of operations.
No gain or loss on extinguishment of debt was recorded during the three and nine months ended September 30, 2025 or the three months ended September 30, 2024.
Note 6—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 unit awards, restricted stock unit awards, stock appreciation rights, stock bonus awards and other awards. The Equity Incentive Plan allows for the issuance of up to 3,332,500 shares.
See Note 9 in the 2024 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 nine months ended September 30, 2025:

|  | Equity Awards |  | Liability Awards
(in thousands) |  | Restricted stock awards |  |  |  | Share-settled performance share unit awards(1) |  | Cash-settled performance share unit awards(2) |  |
Outstanding as of December 31, 2024 |  | 665 |  |  |  |  | 48 |  |  | 215 |  |  |
Granted |  | 692 |  |  |  |  | — |  |  | 192 |  |  |
Forfeited |  | (128) |  |  |  |  | — |  |  | (4) |  |  |
Vested |  | (345) |  |  |  |  | (48) |  |  | — |  |  |
Outstanding as of September 30, 2025 |  | 884 |  |  |  |  | — |  |  | 403 |  |  |

_____________________________________________________________________________
(1)The share-settled performance share unit awards granted on February 22, 2022 had a performance period of January 1, 2022 to December 31, 2024 and, as their market and performance criteria were satisfied, resulted in an 82% payout. As such, the granted awards vested and were converted into 39,691 shares of Common Stock during the first quarter of 2025 based on this 82% payout.
(2)On February 20, 2025, the Company granted cash-settled performance share unit awards with a performance period of January 1, 2025 through December 31, 2027. The market criteria consists of: (i) relative total shareholder return comparing the Company's shareholder return to the shareholder return of the exploration and production companies listed in the Russell 2000 Index and (ii) absolute shareholder return. The performance criteria consists of: (i) earnings before interest, taxes, depreciation, amortization and exploration expense and three-year total debt reduction and
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Condensed notes to the consolidated financial statements
(Unaudited)
(ii) an inventory quality component. 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%.
As of September 30, 2025, total unrecognized cost related to equity-based compensation awards was $25.7 million, of which $3.5 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 1.94 years.
Equity-based compensation
The following table reflects equity-based compensation expense for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Equity awards: |  |  |  |  |  |  |  |
Restricted stock awards |  | $ | 4,172 |  |  | $ | 4,421 |  |  | $ | 12,752 |  |  | $ | 12,615 |
Share-settled performance share unit awards |  | — |  |  | 335 |  |  | 281 |  |  | 1,354 |
Total share-settled equity-based compensation, gross |  | 4,172 |  |  | 4,756 |  |  | 13,033 |  |  | 13,969 |
Less: amounts capitalized |  | (1,012) |  |  | (943) |  |  | (3,036) |  |  | (2,721) |
Total share-settled equity-based compensation, net |  | 3,160 |  |  | 3,813 |  |  | 9,997 |  |  | 11,248 |
Liability awards: |  |  |  |  |  |  |  |
Cash-settled performance unit awards |  | 328 |  |  | (411) |  |  | (42) |  |  | 1,816 |
Total cash-settled equity-based compensation, gross |  | 328 |  |  | (411) |  |  | (42) |  |  | 1,816 |
Less: amounts capitalized |  | — |  |  | — |  |  | (2) |  |  | (14) |
Total cash-settled equity-based compensation, net |  | 328 |  |  | (411) |  |  | (44) |  |  | 1,802 |
Total equity-based compensation, net |  | $ | 3,488 |  |  | $ | 3,402 |  |  | $ | 9,953 |  |  | $ | 13,050 |

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Condensed notes to the consolidated financial statements
(Unaudited)
Note 7—Net income (loss) per common share
Basic net income (loss) per common share is computed by first subtracting preferred stock dividends, if any, from net income (loss) to arrive at net income (loss) available to common stockholders, and then dividing net income (loss) available to common stockholders by the basic weighted-average common shares outstanding for the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the diluted weighted-average common shares outstanding for the period, which reflects the potential dilution of non-vested equity-based compensation awards and outstanding preferred stock. In periods where the Company has a net loss, the non-vested equity-based compensation awards and outstanding preferred stock are excluded from the calculation of diluted net loss per common share as their effect would be anti-dilutive. See Notes 8 and 9 in the 2024 Annual Report for additional discussion of the Company's preferred stock and equity-based compensation awards, respectively.
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 September 30, |  | Nine months ended September 30,
(in thousands, except for per share data) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Net income (loss) |  | $ | (353,522) |  |  | $ | 215,300 |  |  | $ | (954,931) |  |  | $ | 185,871 |
Less: preferred stock dividends |  | — |  |  | — |  |  | — |  |  | 652 |
Net income (loss) available to common stockholders |  | $ | (353,522) |  |  | $ | 215,300 |  |  | $ | (954,931) |  |  | $ | 185,219 |
Weighted-average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 37,801 |  |  | 37,459 |  |  | 37,714 |  |  | 36,472 |
Dilutive non-vested restricted stock awards |  | — |  |  | 102 |  |  | — |  |  | 108 |
Dilutive non-vested share-settled performance share unit awards |  | — |  |  | 19 |  |  | — |  |  | 13 |
Dilutive preferred stock |  | — |  |  | — |  |  | — |  |  | 777 |
Diluted |  | 37,801 |  |  | 37,580 |  |  | 37,714 |  |  | 37,370 |
Net income (loss) per common share: |  |  |  |  |  |  |  |
Basic |  | $ | (9.35) |  |  | $ | 5.75 |  |  | $ | (25.32) |  |  | $ | 5.08 |
Diluted |  | $ | (9.35) |  |  | $ | 5.73 |  |  | $ | (25.32) |  |  | $ | 4.97 |
Anti-dilutive weighted-average common shares outstanding(1): |  |  |  |  |  |  |  |
Non-vested restricted stock awards |  | 714 |  | 396 |  | 745 |  | 104
Non-vested share-settled performance share unit awards |  | — |  | — |  | 7 |  | —

_____________________________________________________________________________
(1)Shares excluded from the diluted net income (loss) per common share calculation because their effect would be anti-dilutive.
Note 8—Derivatives
The Company has two types of derivative instruments as of September 30, 2025: (i) commodity derivatives and (ii) a contingent consideration derivative. See Note 9 for discussion of fair value measurement of derivatives on a recurring basis. 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 income (expense)" on the consolidated statements of operations.
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Condensed notes to the consolidated financial statements
(Unaudited)
The following table summarizes components of the Company's gain on derivatives, net by type of derivative instrument for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Commodity |  | $ | 62,778 |  |  | $ | 237,103 |  |  | $ | 167,027 |  |  | $ | 90,693 |
Contingent consideration |  | (6,709) |  |  | (10,550) |  |  | 2,206 |  |  | (8,629) |
Gain (loss) on derivatives, net |  | $ | 56,069 |  |  | $ | 226,553 |  |  | $ | 169,233 |  |  | $ | 82,064 |

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. During the nine months ended September 30, 2025, the Company’s derivatives were settled based on reported prices on commodity exchanges, with (i) oil derivatives settled based on WTI NYMEX pricing, (ii) NGL derivatives settled based on Mont Belvieu OPIS pricing and (iii) natural gas derivatives settled based on Henry Hub NYMEX and Waha Inside FERC pricing.
The following table summarizes open commodity derivative positions as of September 30, 2025, for commodity derivatives that were entered into through September 30, 2025, for the settlement periods presented:

|  | Remaining Year 2025 |  | Year 2026 |  | Year 2027
Oil: |  |  |  |  |  |
WTI NYMEX - Swaps: |  |  |  |  |  |
Volume (Bbl) |  | 6,053,600 |  |  | 13,306,500 |  |  | 3,285,000 |
Weighted-average price ($/Bbl) |  | $ | 67.75 |  |  | $ | 64.02 |  |  | $ | 61.07 |
WTI NYMEX - Collars: |  |  |  |  |  |
Volume (Bbl) |  | — |  |  | 1,086,000 |  |  | — |
Weighted-average floor price ($/Bbl) |  | $ | — |  |  | $ | 60.00 |  |  | $ | — |
Weighted-average ceiling price ($/Bbl) |  | $ | — |  |  | $ | 71.02 |  |  | $ | — |
NGL: |  |  |  |  |  |
Non-TET Propane - Swaps: |  |  |  |  |  |
Volume (Bbl) |  | 874,000 |  |  | — |  |  | — |
Weighted-average price ($/Bbl) |  | $ | 34.16 |  |  | $ | — |  |  | $ | — |
Non-TET Ethane - Swaps: |  |  |  |  |  |
Volume (Bbl) |  | 1,104,000 |  |  | — |  |  | — |
Weighted-average price ($/Bbl) |  | $ | 11.04 |  |  | $ | — |  |  | $ | — |
Natural gas: |  |  |  |  |  |
Waha Inside FERC - Swaps: |  |  |  |  |  |
Volume (MMBtu) |  | 15,034,000 |  |  | 55,480,000 |  |  | 43,800,000 |
Weighted-average price ($/MMBtu) |  | $ | 2.32 |  |  | $ | 2.41 |  |  | $ | 2.70 |
Waha Inside FERC to Henry Hub NYMEX - Basis Swaps: |  |  |  |  |  |
Volume (MMBtu) |  | — |  |  | — |  |  | 14,600,000 |
Weighted-average differential ($/MMBtu) |  | $ | — |  |  | $ | — |  |  | $ | (0.97) |

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
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Condensed notes to the consolidated financial statements
(Unaudited)
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, of which $20.0 million is still remaining, and a potential balloon payment of $55.0 million in June 2027. The estimated fair value of the Sixth Street Contingent Consideration was $18.5 million as of September 30, 2025 and $16.3 million as of December 31, 2024.
Note 9—Fair value measurements
See the beginning of Note 12 in the 2024 Annual Report for information about the fair value hierarchy levels.
Fair value measurement on a recurring basis
See Note 8 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:

|  | September 30, 2025
(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 |  | $ | — |  |  | $ | 158,376 |  |  | $ | — |  |  | $ | 158,376 |  |  | $ | (9,095) |  |  | $ | 149,281 |
Contingent consideration |  | — |  |  | — |  |  | 51 |  |  | 51 |  |  | — |  |  | 51 |
Noncurrent: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | (1,834) |  |  | — |  |  | (1,834) |  |  | 4,324 |  |  | 2,490 |
Contingent consideration |  | — |  |  | — |  |  | 18,470 |  |  | 18,470 |  |  | — |  |  | 18,470 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | (9,095) |  |  | — |  |  | (9,095) |  |  | 9,095 |  |  | — |
Noncurrent: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | (21,513) |  |  | — |  |  | (21,513) |  |  | (4,324) |  |  | (25,837) |
Net derivative asset (liability) positions |  | $ | — |  |  | $ | 125,934 |  |  | $ | 18,521 |  |  | $ | 144,455 |  |  | $ | — |  |  | $ | 144,455 |

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Condensed notes to the consolidated financial statements
(Unaudited)

|  | December 31, 2024
(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 |  | $ | — |  |  | $ | 98,825 |  |  | $ | — |  |  | $ | 98,825 |  |  | $ | 2,638 |  |  | $ | 101,463 |
Contingent consideration |  | — |  |  | — |  |  | 11 |  |  | 11 |  |  | — |  |  | 11 |
Noncurrent: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | 28,126 |  |  | — |  |  | 28,126 |  |  | (9,866) |  |  | 18,260 |
Contingent consideration |  | — |  |  | — |  |  | 16,304 |  |  | 16,304 |  |  | — |  |  | 16,304 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | 2,638 |  |  | — |  |  | 2,638 |  |  | (2,638) |  |  | — |
Noncurrent: |  |  |  |  |  |  |  |  |  |  |  |
Commodity |  | — |  |  | (15,680) |  |  | — |  |  | (15,680) |  |  | 9,866 |  |  | (5,814) |
Net derivative asset (liability) positions |  | $ | — |  |  | $ | 113,909 |  |  | $ | 16,315 |  |  | $ | 130,224 |  |  | $ | — |  |  | $ | 130,224 |

See Note 12 in the 2024 Annual Report for discussion of the significant inputs used in the fair value mark-to-market analysis of commodity and contingent consideration derivatives. The Company reviewed the third-party specialist's valuations of commodity and contingent consideration derivatives, including the related inputs, and analyzed changes in fair values between reporting dates.
The Sixth Street Contingent Consideration is categorized as Level 3 in the fair value hierarchy, as the Company provided cash flow projections to a third-party valuation specialist to determine the fair value. 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 at the closing date 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 income (expense)" on the consolidated statement of operations. See Note 8 for additional discussion of the Sixth Street Contingent Consideration.
The following table summarizes the changes in contingent consideration derivatives classified as Level 3 measurements for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Balance of Level 3 at beginning of period |  | $ | 25,230 |  |  | $ | 33,027 |  |  | $ | 16,315 |  |  | $ | 31,106 |
Change in Sixth Street Contingent Consideration fair value |  | (6,709) |  |  | (10,550) |  |  | 2,206 |  |  | (8,629) |
Balance of Level 3 at end of period |  | $ | 18,521 |  |  | $ | 22,477 |  |  | $ | 18,521 |  |  | $ | 22,477 |

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Condensed notes to the consolidated financial statements
(Unaudited)
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:

|  | September 30, 2025 |  | December 31, 2024
(in thousands) |  | Carrying amount(1) |  | Fair value(2) |  | Carrying amount(1) |  | Fair value(2)
Debt |  | $ | 2,305,578 |  |  | $ | 2,284,715 |  |  | $ | 2,480,578 |  |  | $ | 2,455,032 |

______________________________________________________________________________
(1)Amounts presented do not include issuance premiums or discounts.
(2)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 September 30, 2025 and December 31, 2024. The fair values of the outstanding amounts under the Senior Secured Credit Facility approximate the carrying values based on short-term floating interest rates available to the Company as of September 30, 2025 and December 31, 2024.
Note 10—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. As of September 30, 2025, future firm sale and transportation commitments of $69.8 million are expected to be satisfied and, as such, are not recorded as a liability on the balance sheet.
The Company has committed to purchase a fixed supply of electricity at specified prices through 2032. As of September 30, 2025, future minimum payments under the terms of these agreements are $217.0 million.
The Company has committed to take delivery of processed sand, which is utilized in the Company's completions activities, at specified prices through 2026. As of September 30, 2025, future minimum purchase commitments under the terms of these agreements are estimated to be $26.9 million.
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Condensed notes to the consolidated financial statements
(Unaudited)
Note 11—Supplemental cash flow and non-cash information
The following table presents supplemental cash flow and non-cash information for the periods presented:

|  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024
Supplemental cash flow information: |  |  |  |
Cash paid for interest, net of $207 and $1,181 of capitalized interest, respectively |  | $ | 124,138 |  |  | $ | 111,798 |
Supplemental non-cash operating information: |  |  |  |
Right-of-use assets obtained in exchange for operating lease liabilities(1) |  | $ | 26,875 |  |  | $ | 47,693 |
Supplemental non-cash investing information: |  |  |  |
Change in accrued capital expenditures |  | $ | (2,203) |  |  | $ | 17,040 |
Equity issued for acquisition of oil and natural gas properties(2) |  | $ | — |  |  | $ | 74,928 |
Liabilities assumed in acquisitions of oil and natural gas properties(2) |  | $ | — |  |  | $ | 27,861 |

_____________________________________________________________________________
(1)See Note 5 in the 2024 Annual Report for additional discussion of the Company's leases.
(2)See Note 3 for additional discussion of the Company's acquisitions.
Note 12—Income taxes
The following table presents income tax benefit (expense) for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Current |  | $ | (800) |  |  | $ | (469) |  |  | $ | (2,632) |  |  | $ | (2,706) |
Deferred |  | 2,575 |  |  | (59,855) |  |  | (233,714) |  |  | (52,278) |
Income tax benefit (expense) |  | $ | 1,775 |  |  | $ | (60,324) |  |  | $ | (236,346) |  |  | $ | (54,984) |

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBB Act") was signed into law. The OBBB Act is a significant piece of tax legislation that includes provisions which permanently restore an EBITDA-based section 163(j) calculation for tax years beginning after December 31, 2024; restore 100% bonus depreciation under section 168(k) for certain property acquired and placed in service after January 19, 2025; and allow for current expensing of R&D expenditures. ASC 740-10 requires the impact of changes to tax law to be recorded in the period of enactment, which is reflected in these financial statements.
The Company estimates its annual effective tax rate (“AETR”) in recording its quarterly income tax provision for the various jurisdictions in which it operates. The tax effects of statutory rate changes, significant unusual or infrequently occurring items, and certain changes in the assessment of the realizability of deferred tax assets are excluded from the determination of its estimated AETR and are recognized as discrete items in the quarter in which they occur. The Company's AETR as of September 30, 2025 was 0%, which reflects the impact of providing a valuation allowance on the 2025 activity of the Company's federal net deferred tax asset. The Company's effective tax rate for the three months ended September 30, 2025 was 0.5%. During the second quarter of 2025, the Company recorded a discrete charge of $237.9 million related to the valuation allowance recorded on the December 31, 2024 federal net deferred tax asset. As such, the Company's effective tax rate for the nine months ended September 30, 2025 is not meaningful. The effective tax rate for the three and nine months ended September 30, 2024 was 21.89% and 22.83%, respectively. Current income tax expense is primarily attributable to Texas Franchise tax.
Management is required to assess the realizability of deferred tax assets for each reporting period. This assessment involves evaluating all available evidence, both positive and negative, to determine whether it is more-likely-than-not that the deferred tax assets will be realized. One of the most significant pieces of objective evidence is the existence of a cumulative pre-tax income or loss over the past three years. A three-year cumulative loss significantly constrains a company's ability to rely on projected future taxable income as a source of support for the realizability of deferred tax assets.
As a result of full cost ceiling impairments recorded during 2025, and the expectation of potential additional impairments in future periods, the Company is in a three-year pre-tax loss position and anticipates continuing to be in a cumulative three-year pre-tax loss position at year end. This represents a significant negative indicator under applicable accounting guidance
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Condensed notes to the consolidated financial statements
(Unaudited)
and therefore management can no longer determine that it is more-likely-than-not that the Company's deferred tax assets will be realized. Accordingly, as of June 30, 2025, the Company recorded and continues to maintain a valuation allowance against its federal net deferred tax asset. As of September 30, 2025, the Company maintains a full valuation allowance against its Oklahoma deferred tax assets but has not recorded a valuation allowance on its $6.0 million Texas net deferred tax asset.
As of September 30, 2025, the Company had federal net operating loss carryforwards totaling $922.1 million, of which $477.7 million will begin to expire in 2035 and $444.4 million will not expire but may be limited in future periods, and Oklahoma net operating loss carryforwards that do not expire totaling $297.1 million.
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 loss carryforwards, interest expense carryforwards and certain other tax attributes arising prior to the ownership change could be significantly limited. Based on information available as of September 30, 2025, no such ownership change has occurred; however, the pending merger with Crescent is expected to result in an ownership change, which may significantly limit the future utilization of the Company's net operating loss carryforwards, interest expense carryforwards and other tax attributes. Moreover, as discussed above, as of September 30, 2025 these deferred tax assets are fully offset with a valuation allowance.
Note 13—Related parties
Halliburton
The Chairman of the Company's board of directors is on the board of directors of Halliburton Company ("Halliburton"). The Company had a lease agreement with Halliburton, which extended through 2025, to provide an electric fracture stimulation crew and the related services, which was terminated in third-quarter 2025. The Company had a lease liability related to this agreement of $24.0 million as of December 31, 2024, which is included in both current and noncurrent "Operating lease liabilities" on the consolidated balance sheets. 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:

|  | Nine months ended September 30,
(in thousands) |  | 2025 |  | 2024
Capital expenditures for oil and natural gas properties |  | $ | 62,711 |  |  | $ | 61,176 |

Note 14 —Segment reporting
The Company engages in a single activity, the exploration and development of oil and natural gas properties in the Permian Basin of West Texas, and, as such, has one reportable segment based upon the Company’s current organizational and management structure. The accounting policies for the segment, including those related to revenue, are the same as those described in Note 2 in the Company's 2024 Annual Report. Net income (loss), which is reported on the consolidated statements of operations, is the metric most consistent with GAAP that the Company uses to evaluate its performance and make decisions around the timing and allocation of capital investments and debt reduction. The Company does not use a measure of segment assets in its decision making. The Company’s chief operating decision maker (“CODM”) is the Senior Executive Team. There are no significant expense categories regularly provided to the CODM beyond those disclosed in the consolidated statements of operations.
Note 15—Organizational restructuring
In the second quarter of 2025, the Company incurred one-time charges of $4.6 million in connection with an approximate 10% workforce reduction. Such charges comprised of compensation, tax, professional and insurance-related expenses, and are recorded as "Organizational restructuring expenses" on the consolidated statements of operations. All non-vested equity-based compensation awards held by those affected by the workforce reduction were forfeited.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations is for the three and nine months ended September 30, 2025 and 2024, and should be read in conjunction with our unaudited consolidated financial statements and condensed notes thereto included elsewhere in this Quarterly Report as well as our audited consolidated financial statements and notes thereto included in our 2024 Annual Report filed on February 24, 2025. The following discussion contains "forward-looking statements" that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see "Cautionary Statement Regarding Forward-Looking Statements" and "Part II, Item 1A. Risk Factors." Except for purposes of the unaudited consolidated financial statements and condensed notes thereto included elsewhere in this Quarterly Report, references in this Quarterly Report to "Vital Energy," "Vital," "we," "us," "our" or similar terms refer to Vital Energy and its subsidiaries, collectively, unless the context otherwise indicates or requires. Unless otherwise specified, references to "average sales price" refer to average sales price excluding the effects of our derivative transactions. All amounts, dollars and percentages presented in this Quarterly Report are rounded and therefore approximate.
Executive overview
We are an independent energy company focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas. Since 2023, we have grown primarily through multiple strategic acquisitions.
Our capital expenditures for full-year 2025 are expected to be in the approximate range of $850.0 million to $900.0 million, of which $767.2 million was incurred during the first three quarters of the year. We do not anticipate any changes in the full-year estimate but are closely monitoring commodity prices and service costs. We have the ability to adjust our development plans, should market conditions warrant, with no rig or completions contracts extending beyond March 2026. Below is a summary of our financial and operating performance for the third quarter of 2025:
•Net loss of $353.5 million, which includes a $420.0 million non-cash full cost ceiling impairment on oil and natural gas properties. See Note 4 to our consolidated financial statements included elsewhere in this Quarterly Report for additional discussion of our full cost ceiling calculation.
•Oil, NGL, and natural gas sales of $419.6 million
•Oil sales volumes of 5,542 MBbl and oil production of 60,233 Bbl/d
•Oil equivalent sales volumes of 12,527 MBOE and total production of 136,158 BOE/d
•Capital investments of $257.5 million, excluding non-budgeted acquisition costs
Recent developments
Planned Merger with Crescent Energy Company
On August 24, 2025, we entered into the Merger Agreement with Crescent, Merger Sub Inc. and Merger Sub LLC. Pursuant to the terms of the Merger Agreement, Crescent will acquire Vital Energy in an all-equity transaction through: (i) the First Company Merger and (ii) immediately following the First Company Merger, the Second Company Merger, in each case, on the terms and subject to the conditions set forth in the Merger Agreement.
On the terms and subject to the conditions set forth in the Merger Agreement:
•at the Effective Time, (i) each share of capital stock of Merger Sub Inc. issued and outstanding immediately prior to the Effective Time will be converted into and will represent one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation, (ii) each share of Common Stock, issued and outstanding immediately prior to the Effective Time (excluding Excluded Shares) will be converted into the right to receive from Crescent 1.9062 fully paid and nonassessable shares of Crescent Common Stock, with cash to be paid in lieu of fractional shares, if any, and (iii) each Excluded Share will automatically be canceled and will cease to exist and no consideration will be delivered in exchange for such share, and
•at the Second Company Merger Effective Time, (i) each share of common stock of the Surviving Corporation issued and outstanding immediately prior to the Second Company Merger Effective Time will automatically be cancelled and cease to exist, and no consideration will be delivered in exchange therefor, and (ii) the limited liability company interests of Merger Sub LLC issued and outstanding as of immediately prior to the Second Company Merger Effective
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Time will remain outstanding and will not be affected by virtue of the Second Company Merger, and no consideration will be paid in respect thereof, and Crescent will continue as the sole member of the Surviving Company.
As a result of the Mergers and as of the Closing, Vital Energy's stockholders as of immediately prior to the Effective Time will own approximately 23% of the outstanding shares of Crescent Common Stock, and Crescent's stockholders as of immediately prior to the Effective Time will own approximately 77% of the outstanding shares of Crescent Common Stock. Pursuant to the Merger Agreement, prior to the Effective Time, Crescent will (i) cause the number of directors constituting the Crescent Board to increase to 12, to become effective immediately prior to, but conditioned on, the Effective Time and (ii) appoint two Company Designated Directors.
Our Board and the Crescent Board have each unanimously approved and declared advisable the Merger Agreement and transactions contemplated thereby. The completion of the Mergers is generally subject to certain customary mutual conditions, including (i) the receipt of the required approval from the Company’s stockholders, (ii) the receipt of the required approval from Crescent’s stockholders, (iii) the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iv) the absence of any governmental order or law that makes consummation of the Mergers illegal or otherwise prohibited, (v) Crescent’s registration statement on Form S-4 having been declared effective by the SEC under the Securities Act and no stop order having been issued, initiated or, to the knowledge of the Company or Crescent, threatened by the SEC, and (vi) the shares of Crescent Common Stock issuable in connection with the Mergers having been authorized for listing on the NYSE, subject to official notice of issuance. The obligation of each party to consummate the Mergers is further generally conditioned upon certain of the parties’ representations and warranties being true and correct (subject to certain materiality exceptions), the absence of a material adverse effect on each party, the parties having performed in all material respects their respective obligations under the Merger Agreement, and the receipt by each party of a compliance certificate. The Mergers are expected to close in the fourth quarter of 2025. However, no assurance can be given as to when, or if, the Mergers will occur.
The Merger Agreement imposes restrictions on our business and operations during the pendency of the Mergers. While we do not believe these restrictions are unduly burdensome, they may delay or prevent us from taking actions we could otherwise take. Accordingly, our results of operations prior to entering into the Merger Agreement may not be comparable to results of operations since we entered into the Merger Agreement.
Worldwide Tariffs
Our operations rely on a variety of domestically produced and imported raw materials and component products required to produce and transport oil and natural gas. In the first half of 2025, the U.S. imposed new or additional tariffs on a variety of imported raw materials and products. In response to said tariffs, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. On April 2, 2025, President Trump signed an Executive Order announcing 10% tariffs on imports from all countries, with higher tariffs initially imposed on some countries. In June, the U.S. raised tariffs on steel and aluminum imports, and in July 2025, the U.S. threatened higher tariffs on a number of trade partners, including the European Union and Mexico. OPEC+ has announced it is phasing out oil output cuts by increasing production by approximately 411,000 barrels per day each month from May 2025 to July 2025 and then increasing production by approximately 548,000 barrels per day in August and September 2025. While a number of these new or threatened tariffs have been paused or otherwise reversed as a result of new trade deals, the effect of the tariffs, increased production from OPEC+ and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continue to evolve, and we continue to monitor these matters. Moreover, the effect that new, increased or retaliatory tariffs will have on global economic activity and associated oil demand is still highly uncertain. If such tariffs slow or reverse economic growth, it could weigh heavily on crude oil demand and prices going forward. While we cannot predict with certainty (i) the impact of any new, increased or retaliatory tariffs, (ii) the difficulty in procuring these raw materials and component products, or (iii) the prices we have to pay for the drilling and completion of oil and gas wells increases. As a result, our financial position, cash flows and results of operations could be adversely affected.
Commodity prices, reserves and full cost ceiling test
Commodity prices
Our results of operations are heavily influenced by oil, NGL and natural gas prices. Commodity prices have historically been volatile. Conflicts in the Middle East, response to tariff policies implemented by the U.S. government, an anticipated increase in global supply of crude oil as a result of recent OPEC+ announcements and concerns of a potential global recession resulting
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from high inflation, interest rates, impacts of tariff policies on supply chains and increased costs as whole have contributed to price volatility and may continue to do so in the future. Any of the above or other factors could change or reverse, and global commodity and financial markets remain subject to heightened levels of uncertainty and volatility.
With natural gas production in the Permian Basin at all-time highs, transportation capacity to market hubs for our natural gas production provided by existing natural gas pipelines has been generally constrained. During this time of natural gas pipeline capacity constraint, our sales price for natural gas is lower than historical trends and may, at times, including during certain periods in 2024, be negative.
We maintain an active commodity derivatives program to minimize commodity price volatility and support cash flows for operations. We have entered into a number of commodity derivative contracts that have enabled us to offset a portion of the changes in our cash flow caused by fluctuations in price and basis differentials for our sales of oil, NGL and natural gas, as discussed in "Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk." See Notes 8 and 9 to our consolidated financial statements included elsewhere in this Quarterly Report for additional discussion of our commodity derivatives. Notwithstanding our derivatives strategy, another collapse or continued declines in commodity prices may affect the economic viability of, and our ability to fund, our drilling projects, as well as the economic valuation and economic recovery of oil, NGL and natural gas reserves. Further, to the extent we are unable to supplement our commodity derivatives program to offset further fluctuations and declines in commodity prices in future periods, our cash flows and results of operations may be adversely affected.
Reserves and full cost ceiling test
We use the full cost method of accounting for our oil and natural gas properties, with the full cost ceiling based principally on the estimated future net cash flows from our proved oil, NGL and natural gas reserves, which exclude the effect of our commodity derivative transactions, discounted at 10% under required SEC guidelines for pricing methodology. We review the carrying value of our oil and natural gas properties under the full cost accounting rules of the SEC on a quarterly basis. In the event the unamortized cost, or net book value, of our evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, the excess is expensed in the period such excess occurs. Once incurred, a write-down of evaluated oil and natural gas properties is not reversible and constitutes a non-cash charge to earnings.
Our reserves are reported in three product streams: oil, NGL and natural gas. The Realized Prices, which are utilized to value our proved reserves and calculated using the average first-day-of-the-month prices for each month within the 12-month period prior to the end of the reporting period, adjusted for factors affecting price received at the delivery point, as of September 30, 2025 were $68.35 for oil, $16.16 for NGL and $1.11 for natural gas. The unamortized cost of evaluated oil and natural gas properties being depleted exceeded the full cost ceiling as of September 30, 2025, June 30, 2025 and March 31, 2025. Accordingly, we incurred full cost ceiling impairment expense of $420.0 million and $1.0 billion for the three and nine months ended September 30, 2025, respectively. The unamortized cost of evaluated oil and natural gas properties being depleted did not exceed the full cost ceiling during the first, second or third quarter of 2024 and, as such, no full cost ceiling impairment expense was recorded during the nine months ended September 30, 2024.
If prices remain at or below the current levels, subject to numerous factors and inherent limitations, some of which are discussed below, and all other factors remain constant, we could incur additional material non-cash full cost ceiling impairments in future quarters, which would have an adverse effect on our statement of operations.
There are numerous uncertainties inherent in the estimation of proved reserves and accounting for oil and natural gas properties in future periods. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, changes in oilfield service costs, potential recognition of additional proved undeveloped reserves, transfers of unevaluated properties and other factors will determine our actual ceiling test calculation and impairment analysis in future periods. Also, purchases of proved properties may be recorded at a cost that exceeds the related increase in the full cost ceiling calculation as acquisitions are generally recorded at fair value based on expected future prices and other factors that may differ from historical prices used in the full cost ceiling test, among other factors.
Fourth-Quarter hypothetical impairments
In our upcoming fourth-quarter calculation to value our proved reserves, the October 2024 first-day-of-the-month oil price of $69.83 per Bbl will be replaced by the October 2025 first-day-of-the-month oil price of $61.78 per Bbl. Further, at the end of October 2025, oil prices were at or around $60 per Bbl while the fourth-quarter 2024 average oil price was closer to $69 per
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Bbl. To illustrate a range of implied impairment of our oil and natural gas properties in the fourth quarter of 2025 considering oil price only, we utilized two pricing scenarios under the SEC guidelines for pricing methodology as follows: (i) $66.47 per Bbl for oil, $16.47 per Bbl for NGL and $1.17 per Mcf for natural gas representing the use of October 2025 commodity prices for November 2025 and December 2025 and (ii) $66.16 per Bbl for oil, $16.52 per Bbl for NGL and $1.17 per Mcf for natural gas representing the same pricing assumptions used in (i), except for the substitution of $60 oil price per Bbl for November 2025 and December 2025 oil and NGL prices. Utilizing these pricing scenarios, with all other factors remaining constant with our third-quarter calculation, we would have a range of implied impairment of our oil and natural gas properties of approximately $150 million to $275 million in the fourth quarter of 2025. If oil prices were to remain at or below current levels after the fourth quarter of 2025, we could incur additional significant impairments in 2026. See Notes 2 and 6 in our 2024 Annual Report for discussion of the full cost method of accounting and our Realized Prices.
Each of the above factors is evaluated on a quarterly basis and if there is a material change in any factor it is incorporated into our reserves estimation utilized in our quarterly accounting estimates. We use our reserve estimates to evaluate, also on a quarterly basis, the reasonableness of our resource development plans for our reported proved reserves. Changes in circumstance, including commodity pricing, economic factors and the other uncertainties described above may lead to changes in our development plans. See "Critical accounting estimates" in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2024 Annual Report for further discussion of our oil, NGL and natural gas reserve quantities and standardized measure of discounted future net cash flows.
Results of operations
Revenues
The following table presents our composition of produced oil, NGL and natural gas revenue by product for the periods presented:

|  | Three months ended September 30, |  | Nine months ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Oil sales |  | 88 | % |  | 93 | % |  | 86 | % |  | 91 | %
NGL sales |  | 10 | % |  | 9 | % |  | 11 | % |  | 9 | %
Natural gas sales |  | 2 | % |  | (2) | % |  | 3 | % |  | — | %
Total |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %

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Oil, NGL and natural gas sales volumes, revenues and prices
The following tables present information regarding our oil, NGL and natural gas sales volumes, sales revenues and average sales prices for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024
|  | 2025 |  | 2024 |  | Change (#) |  | Change (%)
Sales volumes: |  |  |  |  |  |  |  |
Oil (MBbl) |  | 5,542 |  |  | 5,446 |  |  | 96 |  |  | 2 | %
NGL (MBbl) |  | 3,597 |  |  | 3,460 |  |  | 137 |  |  | 4 | %
Natural gas (MMcf) |  | 20,325 |  |  | 20,160 |  |  | 165 |  |  | 1 | %
Oil equivalent (MBOE)(1) |  | 12,527 |  |  | 12,267 |  |  | 260 |  |  | 2 | %
Average daily oil equivalent sales volumes (BOE/d)(1) |  | 136,158 |  |  | 133,339 |  |  | 2,819 |  |  | 2 | %
Average daily oil sales volumes (Bbl/d)(1) |  | 60,233 |  |  | 59,198 |  |  | 1,035 |  |  | 2 | %
Sales revenues (in thousands): |  |  |  |  |  |  |  |
Oil |  | $ | 367,511 |  |  | $ | 416,668 |  |  | $ | (49,157) |  |  | (12) | %
NGL |  | 42,929 |  |  | 41,807 |  |  | 1,122 |  |  | 3 | %
Natural gas |  | 9,206 |  |  | (9,724) |  |  | 18,930 |  |  | 195 | %
Total oil, NGL and natural gas sales revenues |  | $ | 419,646 |  |  | $ | 448,751 |  |  | $ | (29,105) |  |  | (6) | %
Average sales prices(1): |  |  |  |  |  |  |  |
Oil ($/Bbl)(2) |  | $ | 66.32 |  |  | $ | 76.51 |  |  | $ | (10.19) |  |  | (13) | %
NGL ($/Bbl)(2) |  | $ | 11.93 |  |  | $ | 12.08 |  |  | $ | (0.15) |  |  | (1) | %
Natural gas ($/Mcf)(2) |  | $ | 0.45 |  |  | $ | (0.48) |  |  | $ | 0.93 |  |  | 194 | %
Average sales price ($/BOE)(2) |  | $ | 33.50 |  |  | $ | 36.58 |  |  | $ | (3.08) |  |  | (8) | %
Oil, with commodity derivatives ($/Bbl)(3) |  | $ | 71.15 |  |  | $ | 78.37 |  |  | $ | (7.22) |  |  | (9) | %
NGL, with commodity derivatives ($/Bbl)(3) |  | $ | 13.64 |  |  | $ | 12.07 |  |  | $ | 1.57 |  |  | 13 | %
Natural gas, with commodity derivatives ($/Mcf)(3) |  | $ | 1.53 |  |  | $ | 0.45 |  |  | $ | 1.08 |  |  | 240 | %
Average sales price, with commodity derivatives ($/BOE)(3) |  | $ | 37.87 |  |  | $ | 38.95 |  |  | $ | (1.08) |  |  | (3) | %

__________________________________________________________________________
(1)The numbers presented in the three months ended September 30, 2025 and 2024 columns are based on actual amounts and may not recalculate using the rounded numbers presented in the table above or the table below.
(2)Price reflects the average of actual sales prices received when control passes to the purchaser/customer adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point.
(3)Price reflects the after-effects of our commodity derivative transactions on our average sales prices. Our calculation of such after-effects includes settlements of matured commodity derivatives during the respective periods.
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|  |  |  | Nine months ended September 30, |  | 2025 compared to 2024
|  |  |  |  |  | 2025 |  | 2024 |  | Change (#) |  | Change (%)
Sales volumes: |  |  |  |  |  |  |  |  |  |  |  |
Oil (MBbl) |  |  |  |  |  | 17,037 |  |  | 16,161 |  |  | 876 |  |  | 5 | %
NGL (MBbl) |  |  |  |  |  | 10,654 |  |  | 9,567 |  |  | 1,087 |  |  | 11 | %
Natural gas (MMcf) |  |  |  |  |  | 59,975 |  |  | 57,958 |  |  | 2,017 |  |  | 3 | %
Oil equivalent (MBOE)(1) |  |  |  |  |  | 37,687 |  |  | 35,388 |  |  | 2,299 |  |  | 6 | %
Average daily oil equivalent sales volumes (BOE/d)(1) |  |  |  |  |  | 138,046 |  |  | 129,153 |  |  | 8,893 |  |  | 7 | %
Average daily oil sales volumes (Bbl/d)(1) |  |  |  |  |  | 62,405 |  |  | 58,981 |  |  | 3,424 |  |  | 6 | %
Sales revenues (in thousands): |  |  |  |  |  |  |  |  |  |  |  |
Oil |  |  |  |  |  | $ | 1,155,448 |  |  | $ | 1,274,119 |  |  | $ | (118,671) |  |  | (9) | %
NGL |  |  |  |  |  | 155,714 |  |  | 128,752 |  |  | 26,962 |  |  | 21 | %
Natural gas |  |  |  |  |  | 47,175 |  |  | 3,150 |  |  | 44,025 |  |  | 1,398 | %
Total oil, NGL and natural gas sales revenues |  |  |  |  |  | $ | 1,358,337 |  |  | $ | 1,406,021 |  |  | $ | (47,684) |  |  | (3) | %
Average sales prices(1): |  |  |  |  |  |  |  |  |  |  |  |
Oil ($/Bbl)(2) |  |  |  |  |  | $ | 67.82 |  |  | $ | 78.84 |  |  | $ | (11.02) |  |  | (14) | %
NGL ($/Bbl)(2) |  |  |  |  |  | $ | 14.62 |  |  | $ | 13.46 |  |  | $ | 1.16 |  |  | 9 | %
Natural gas ($/Mcf)(2) |  |  |  |  |  | $ | 0.79 |  |  | $ | 0.05 |  |  | $ | 0.74 |  |  | 1,480 | %
Average sales price ($/BOE)(2) |  |  |  |  |  | $ | 36.04 |  |  | $ | 39.73 |  |  | $ | (3.69) |  |  | (9) | %
Oil, with commodity derivatives ($/Bbl)(3) |  |  |  |  |  | $ | 73.72 |  |  | $ | 76.75 |  |  | $ | (3.03) |  |  | (4) | %
NGL, with commodity derivatives ($/Bbl)(3) |  |  |  |  |  | $ | 15.20 |  |  | $ | 13.34 |  |  | $ | 1.86 |  |  | 14 | %
Natural gas, with commodity derivatives ($/Mcf)(3) |  |  |  |  |  | $ | 1.59 |  |  | $ | 0.84 |  |  | $ | 0.75 |  |  | 89 | %
Average sales price, with commodity derivatives ($/BOE)(3) |  |  |  |  |  | $ | 40.16 |  |  | $ | 40.04 |  |  | $ | 0.12 |  |  | — | %

__________________________________________________________________________
(1)The numbers presented in the nine months ended September 30, 2025 and 2024 columns are based on actual amounts and may not recalculate using the rounded numbers presented in the table above or the table below.
(2)Price reflects the average of actual sales prices received when control passes to the purchaser/customer adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point.
(3)Price reflects the after-effects of our commodity derivative transactions on our average sales prices. Our calculation of such after-effects includes settlements of matured commodity derivatives during the respective periods.
The following tables present net settlements received (paid) for matured commodity derivatives utilized in our calculation of the average sales prices, with commodity derivatives, for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024 |
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%) |
Oil |  | $ | 26,737 |  |  | $ | 10,153 |  |  | $ | 16,584 |  |  | 163 | % |
NGL |  | 6,148 |  |  | (29) |  |  | 6,177 |  |  | 21,300 | % |
Natural gas |  | 21,872 |  |  | 18,889 |  |  | 2,983 |  |  | 16 | % |
Total |  | $ | 54,757 |  |  | $ | 29,013 |  |  | $ | 25,744 |  |  | 89 | % |

|  | Nine months ended September 30, |  | 2025 compared to 2024 |
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%) |
Oil |  | $ | 100,487 |  |  | $ | (33,734) |  |  | $ | 134,221 |  |  | 398 | % |
NGL |  | 6,261 |  |  | (1,161) |  |  | 7,422 |  |  | 639 | % |
Natural gas |  | 48,254 |  |  | 45,646 |  |  | 2,608 |  |  | 6 | % |
Total |  | $ | 155,002 |  |  | $ | 10,751 |  |  | $ | 144,251 |  |  | 1,342 | % |

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Changes in average sales prices and sales volumes caused the following changes to our oil, NGL and natural gas revenues between the three and nine months ended September 30, 2025 and 2024:

(in thousands) |  | Oil |  | NGL |  | Natural gas |  | Total
Third-quarter 2024 Revenues |  | $ | 416,668 |  |  | $ | 41,807 |  |  | $ | (9,724) |  |  | $ | 448,751 |
Effect of changes in average sales prices |  | (56,446) |  |  | (529) |  |  | 19,009 |  |  | (37,966) |
Effect of changes in sales volumes |  | 7,289 |  |  | 1,651 |  |  | (79) |  |  | 8,861 |
Third-quarter 2025 Revenues |  | $ | 367,511 |  |  | $ | 42,929 |  |  | $ | 9,206 |  |  | $ | 419,646 |
Change ($) |  | $ | (49,157) |  |  | $ | 1,122 |  |  | $ | 18,930 |  |  | $ | (29,105) |
Change (%) |  | (12) | % |  | 3 | % |  | 195 | % |  | (6) | %

(in thousands) |  | Oil |  | NGL |  | Natural gas |  | Total
Third-quarter year-to-date 2024 Revenues |  | $ | 1,274,119 |  |  | $ | 128,752 |  |  | $ | 3,150 |  |  | $ | 1,406,021 |
Effect of changes in average sales prices |  | (187,712) |  |  | 12,339 |  |  | 43,915 |  |  | (131,458) |
Effect of changes in sales volumes |  | 69,041 |  |  | 14,623 |  |  | 110 |  |  | 83,774 |
Third-quarter year-to-date 2025 Revenues |  | $ | 1,155,448 |  |  | $ | 155,714 |  |  | $ | 47,175 |  |  | $ | 1,358,337 |
Change ($) |  | $ | (118,671) |  |  | $ | 26,962 |  |  | $ | 44,025 |  |  | $ | (47,684) |
Change (%) |  | (9) | % |  | 21 | % |  | 1,398 | % |  | (3) | %

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Costs and expenses
The following tables present information regarding costs and expenses and selected average costs and expenses per BOE sold for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024
(in thousands except for per BOE sold data) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Costs and expenses: |  |  |  |  |  |  |  |
Lease operating expenses |  | $ | 114,259 |  |  | $ | 107,686 |  |  | $ | 6,573 |  |  | 6 | %
Production and ad valorem taxes |  | 20,525 |  |  | 27,244 |  |  | (6,719) |  |  | (25) | %
Oil transportation and marketing expenses |  | 10,527 |  |  | 12,445 |  |  | (1,918) |  |  | (15) | %
Gas gathering, processing and transportation expenses |  | 6,774 |  |  | 4,602 |  |  | 2,172 |  |  | 47 | %
Costs of purchased oil |  | — |  |  | 9,331 |  |  | (9,331) |  |  | (100) | %
General and administrative (excluding LTIP and transaction expenses) |  | 15,022 |  |  | 18,752 |  |  | (3,730) |  |  | (20) | %
General and administrative (LTIP): |  |  |  |  |  |  |  |
LTIP cash |  | 328 |  |  | (411) |  |  | 739 |  |  | (180) | %
LTIP non-cash |  | 2,830 |  |  | 3,444 |  |  | (614) |  |  | (18) | %
General and administrative (transaction expenses) |  | 6,866 |  |  | 220 |  |  | 6,646 |  |  | 3,021 | %
Depletion, depreciation and amortization |  | 180,516 |  |  | 187,063 |  |  | (6,547) |  |  | (3) | %
Impairment expense |  | 419,955 |  |  | — |  |  | 419,955 |  |  | N/A
Other operating expenses, net |  | 6,280 |  |  | 1,754 |  |  | 4,526 |  |  | 258 | %
Total costs and expenses |  | $ | 783,882 |  |  | $ | 372,130 |  |  | $ | 411,752 |  |  | 111 | %
Gain (loss) on disposal of assets, net |  | $ | 685 |  |  | $ | 839 |  |  | $ | (154) |  |  | (18) | %
Selected average costs and expenses per BOE sold(1): |  |  |  |  |  |  |  |
Lease operating expenses |  | $ | 9.12 |  |  | $ | 8.78 |  |  | $ | 0.34 |  |  | 4 | %
Production and ad valorem taxes |  | 1.64 |  |  | 2.22 |  |  | (0.58) |  |  | (26) | %
Oil transportation and marketing expenses |  | 0.84 |  |  | 1.01 |  |  | (0.17) |  |  | (17) | %
Gas gathering, processing and transportation expenses |  | 0.54 |  |  | 0.38 |  |  | 0.16 |  |  | 42 | %
General and administrative (excluding LTIP and transaction expenses) |  | 1.20 |  |  | 1.53 |  |  | (0.33) |  |  | (22) | %
Total selected operating expenses |  | $ | 13.34 |  |  | $ | 13.92 |  |  | $ | (0.58) |  |  | (4) | %
General and administrative (LTIP): |  |  |  |  |  |  |  |
LTIP cash |  | $ | 0.03 |  |  | $ | (0.03) |  |  | $ | 0.06 |  |  | 200 | %
LTIP non-cash |  | $ | 0.23 |  |  | $ | 0.28 |  |  | $ | (0.05) |  |  | (18) | %
General and administrative (transaction expenses) |  | $ | 0.31 |  |  | $ | 0.02 |  |  | $ | 0.29 |  |  | 1,450 | %
Depletion, depreciation and amortization |  | $ | 14.41 |  |  | $ | 15.25 |  |  | $ | (0.84) |  |  | (6) | %

_____________________________________________________________________________
(1)Selected average costs and expenses per BOE sold are based on actual amounts and may not recalculate using the rounded numbers presented in the table above.
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|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands except for per BOE sold data) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Costs and expenses: |  |  |  |  |  |  |  |
Lease operating expenses |  | $ | 325,494 |  |  | $ | 327,156 |  |  | $ | (1,662) |  |  | (1) | %
Production and ad valorem taxes |  | 80,106 |  |  | 84,937 |  |  | (4,831) |  |  | (6) | %
Oil transportation and marketing expenses |  | 31,296 |  |  | 34,477 |  |  | (3,181) |  |  | (9) | %
Gas gathering, processing and transportation expenses |  | 18,910 |  |  | 12,066 |  |  | 6,844 |  |  | 57 | %
Costs of purchased oil |  | — |  |  | 9,331 |  |  | (9,331) |  |  | (100) | %
General and administrative (excluding LTIP and transaction expenses) |  | 55,768 |  |  | 62,337 |  |  | (6,569) |  |  | (11) | %
General and administrative (LTIP): |  |  |  |  |  |  |  |
LTIP cash |  | (44) |  |  | 1,890 |  |  | (1,934) |  |  | (102) | %
LTIP non-cash |  | 8,927 |  |  | 10,140 |  |  | (1,213) |  |  | (12) | %
General and administrative (transaction expenses) |  | 6,866 |  |  | 567 |  |  | 6,299 |  |  | 1,111 | %
Organizational restructuring expenses |  | 4,627 |  |  | — |  |  | 4,627 |  |  | N/A
Depletion, depreciation and amortization |  | 556,840 |  |  | 527,468 |  |  | 29,372 |  |  | 6 | %
Impairment expense |  | 1,005,242 |  |  | — |  |  | 1,005,242 |  |  | N/A
Other operating expenses, net |  | 10,456 |  |  | 5,365 |  |  | 5,091 |  |  | 95 | %
Total costs and expenses |  | $ | 2,104,488 |  |  | $ | 1,075,734 |  |  | $ | 1,028,754 |  |  | 96 | %
Gain on disposal of assets, net |  | $ | 2,050 |  |  | $ | 1,005 |  |  | $ | 1,045 |  |  | 104 | %
Selected average costs and expenses per BOE sold(1): |  |  |  |  |  |  |  |
Lease operating expenses |  | $ | 8.64 |  |  | $ | 9.24 |  |  | $ | (0.60) |  |  | (6) | %
Production and ad valorem taxes |  | 2.13 |  |  | 2.40 |  |  | (0.27) |  |  | (11) | %
Oil transportation and marketing expenses |  | 0.83 |  |  | 0.97 |  |  | (0.14) |  |  | (14) | %
Gas gathering, processing and transportation expenses |  | 0.50 |  |  | 0.34 |  |  | 0.16 |  |  | 47 | %
General and administrative (excluding LTIP and transaction expenses) |  | 1.48 |  |  | 1.76 |  |  | (0.28) |  |  | (16) | %
Total selected operating expenses |  | $ | 13.58 |  |  | $ | 14.71 |  |  | $ | (1.13) |  |  | (8) | %
General and administrative (LTIP): |  |  |  |  |  |  |  |
LTIP cash |  | $ | — |  |  | $ | 0.05 |  |  | $ | (0.05) |  |  | (100) | %
LTIP non-cash |  | $ | 0.24 |  |  | $ | 0.29 |  |  | $ | (0.05) |  |  | (17) | %
General and administrative (transaction expenses) |  | $ | 0.10 |  |  | $ | 0.02 |  |  | $ | 0.08 |  |  | 400 | %
Depletion, depreciation and amortization |  | $ | 14.78 |  |  | $ | 14.91 |  |  | $ | (0.13) |  |  | (1) | %

_____________________________________________________________________________
(1)Selected average costs and expenses per BOE sold are based on actual amounts and may not recalculate using the rounded numbers presented in the table above.
Lease operating expenses ("LOE"). LOE are daily expenses incurred to bring oil, NGL and natural gas out of the ground and to market, together with the daily expenses incurred to maintain our producing properties. Such costs also include maintenance, repairs and non-routine workover expenses related to our oil and natural gas properties. Total LOE increased and remained relatively flat for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.
Production and ad valorem taxes. Production and ad valorem taxes remained relatively flat for the three and nine months ended September 30, 2025 compared to the same periods in 2024. Production taxes are based on and fluctuate in proportion to our oil, NGL and natural gas sales revenues, and are established by federal, state or local taxing authorities. Ad valorem taxes are based on and fluctuate in proportion to the taxable value assessed by the various counties where our oil and natural gas properties are located and third-quarter 2025 reflects a downward adjustment of estimated assessed taxable values.
Oil transportation and marketing expenses. These are expenses incurred for the delivery of produced oil to customers in the U.S. Gulf Coast market via the Gray Oak pipeline. We ship the majority of our produced oil to the U.S. Gulf Coast, which we believe provides a long-term pricing advantage versus the Midland market. Firm transportation payments on excess pipeline capacity associated with transportation agreements are also included in oil transportation and marketing expenses. Oil
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transportation and marketing expenses decreased during the three and nine months ended September 30, 2025 compared to the same periods in 2024 primarily due to a decrease in firm transportation payments on excess capacity. See Note 10 to our consolidated financial statements included elsewhere in this Quarterly Report for additional discussion of our transportation commitments.
Gas gathering, processing and transportation expenses. We are party to certain natural gas processing agreements where the Company concluded it is the principal in the transaction and the customer is the ultimate third party, with control of the NGL or residue gas transferring at the tailgate of the midstream entity's processing plant. Revenue for such agreements is recognized on a gross basis, with gathering, processing and transportation fees presented as an expense on the consolidated statements of operations. Gas gathering, processing and transportation expenses increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024 primarily due to contracts obtained through our third-quarter 2024 acquisition, which increased the volume of natural gas processed under such agreements.
General and administrative ("G&A") (excluding LTIP and transaction expenses). G&A, excluding employee compensation expenses from our long-term incentive plan ("LTIP") and transaction expenses, decreased for the three and nine months ended September 30, 2025 compared to the same periods in 2024. The changes are primarily due to our organizational restructuring in the second quarter of 2025.
General and administrative (LTIP cash). LTIP cash expense increased for the three months ended September 30, 2025 and decreased for the nine months ended September 30, 2025 compared to the same periods in 2024 due to fluctuations in the fair value of our cash-settled LTIP awards as a result of the performance of our stock.
General and administrative (LTIP non-cash). LTIP non-cash expense decreased for the three and nine months ended September 30, 2025, compared to the same periods in 2024 due to the 2025 restricted stock awards granted in the first quarter having a lower grant-date market price than in prior periods. In addition, all performance share unit awards are currently cash-settled, while 2024 and the first quarter of 2025 included a tranche of share-settled performance share unit awards. See Note 6 to our consolidated financial statements included elsewhere in this Quarterly Report for information regarding our equity-based compensation.
General and administrative (transaction expenses). Transaction expenses for 2025 relate to the pending merger with Crescent discussed in "—Recent Developments."
Organizational restructuring. Organizational restructuring expenses are separation charges comprised of compensation, tax, professional and insurance-related expenses, which are recorded as "Organizational restructuring expenses" on the consolidated statements of operations. See Note 15 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report for information regarding our organizational restructuring.
Depletion, depreciation and amortization. The most significant component of DD&A for Vital Energy is depletion. The following table presents depletion expense per BOE sold for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Depletion expense per BOE sold |  | $ | 13.91 |  |  | $ | 14.80 |  |  | $ | (0.89) |  |  | (6) | %

|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Depletion expense per BOE sold |  | $ | 14.29 |  |  | $ | 14.46 |  |  | $ | (0.17) |  |  | (1) | %

Depletion expense per BOE sold decreased slightly for the three and nine months ended September 30, 2025, compared to the same periods in 2024. Factors impacting depletion expense per BOE sold include a decrease in reserves related to a drop in commodity prices and the impact of our third-quarter 2024 acquisition, offset by the effects of our full cost ceiling impairments recorded in the first three quarters of 2025 and fourth quarter of 2024. See Note 4 to our consolidated financial statements included elsewhere in this Quarterly Report and "—Commodity prices, reserves and full cost ceiling test" for additional information regarding the full cost method of accounting.
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Impairment expense. The full cost ceiling is based principally on the estimated future net revenues from proved oil, NGL and natural gas reserves, which exclude the effect of the Company's commodity derivative transactions, discounted at 10%. The Realized Prices are utilized to calculate the estimated future net revenues in the full cost ceiling calculation. In the event the unamortized cost of evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, as defined by the SEC, the excess is charged to expense in the period such excess occurs. Once incurred, a write-down of oil and natural gas properties is not reversible. The unamortized cost of evaluated oil and natural gas properties being depleted exceeded the full cost ceiling as of September 30, 2025, June 30, 2025 and March 31, 2025. Accordingly, we incurred full cost ceiling impairment expense of $420.0 million and $1.0 billion for the three and nine months ended September 30, 2025, respectively. These amounts are included in "Impairment expense" on the consolidated statements of operations. See Note 4 to our consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding our full cost ceiling calculation.
Non-operating income (expense)
The following tables present the components of non-operating income (expense), net for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Gain (loss) on derivatives, net |  | $ | 56,069 |  |  | $ | 226,553 |  |  | $ | (170,484) |  |  | (75) | %
Interest expense |  | (49,994) |  |  | (40,119) |  |  | (9,875) |  |  | (25) | %
Other income (expense), net |  | 999 |  |  | 1,247 |  |  | (248) |  |  | (20) | %
Total non-operating income (expense), net |  | $ | 7,074 |  |  | $ | 187,681 |  |  | $ | (180,607) |  |  | (96) | %

|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Gain (loss) on derivatives, net |  | $ | 169,233 |  |  | $ | 82,064 |  |  | $ | 87,169 |  |  | (106) | %
Interest expense |  | (150,228) |  |  | (124,230) |  |  | (25,998) |  |  | (21) | %
Loss on extinguishment of debt, net |  | — |  |  | (66,115) |  |  | 66,115 |  |  | 100 | %
Other income (expense), net |  | 2,215 |  |  | 5,921 |  |  | (3,706) |  |  | (63) | %
Total non-operating income (expense), net |  | $ | 21,220 |  |  | $ | (102,360) |  |  | $ | 123,580 |  |  | 121 | %

Gain (loss) on derivatives, net. The following tables present the changes in the components of gain (loss) on derivatives, net for the periods presented and the corresponding changes for such periods:

|  | Three months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Non-cash gain (loss) on derivatives, net |  | $ | 1,312 |  |  | $ | 197,540 |  |  | $ | (196,228) |  |  | (99) | %
Settlements received (paid) for matured derivatives, net |  | 54,757 |  |  | 29,013 |  |  | 25,744 |  |  | 89 | %
Gain (loss) on derivatives, net |  | $ | 56,069 |  |  | $ | 226,553 |  |  | $ | (170,484) |  |  | (75) | %

|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Non-cash gain (loss) on derivatives, net |  | $ | 14,231 |  |  | $ | 71,313 |  |  | $ | (57,082) |  |  | (80) | %
Settlements received (paid) for matured derivatives, net |  | 155,002 |  |  | 10,751 |  |  | 144,251 |  |  | 1,342 | %
Gain (loss) on derivatives, net |  | $ | 169,233 |  |  | $ | 82,064 |  |  | $ | 87,169 |  |  | 106 | %

Non-cash gain (loss) on derivatives, net is the result of new and matured contracts, including contingent consideration derivatives for the period subsequent to the initial valuation date and through the end of the contingency period, and the changing relationship between our outstanding contract prices and the future market prices in the forward curves, which we use to calculate the fair value of our derivatives. In general, if outstanding commodity contracts are held constant, we experience gains during periods of decreasing market prices and losses during periods of increasing market prices. Settlements paid or received for matured derivatives are for our (i) commodity derivative contracts, which are based on the settlement prices compared to the prices specified in the derivative contracts and (ii) contingent consideration derivative.
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See Notes 8 and 9 to our consolidated financial statements included elsewhere in this Quarterly Report and "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for additional information regarding our derivatives.
Interest expense. Interest expense increased during the three and nine months ended September 30, 2025 compared to the same periods in 2024. We reflect interest paid to the lenders and bondholders in interest expense, net of amounts capitalized. In addition, we include the amortization of (i) debt issuance costs, which includes origination, amendment and professional fees, (ii) commitment fees and (iii) annual agency fees in interest expense. The increase is due to increased borrowings under our Senior Secured Credit Facility related to the funding of our third-quarter 2024 acquisition, partially offset by decreased interest expense on our new senior unsecured notes issued during the first half of 2024, as these notes carry lower interest obligations compared to our January 2028 Notes and September 2030 Notes that were tendered in the first half of 2024. See Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding our long-term debt.
Loss on extinguishment of debt, net. During the nine months ended September 30, 2024, we recognized a loss on extinguishment of debt of $66.1 million related to settling cash tender offers on the January 2028 Notes and the September 2030 Notes and redeeming the remaining principal amount outstanding on the January 2028 Notes. The related loss on extinguishment of debt consisted of early tender and redemption premiums and write-offs of debt issuance costs, premiums and discounts. See Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding our long-term debt.
Income tax benefit (expense)
We are subject to federal and state income taxes and the Texas Franchise tax. Our effective rate for the three months ended September 30, 2025 was 0.5%. During the second quarter of 2025, we recorded a discrete charge of $237.9 million related to the valuation allowance recorded on the December 31, 2024 federal net deferred tax asset. As such, our effective tax rate for the nine months ended September 30, 2025 is not meaningful. The effective tax rate for the three and nine months ended September 30, 2024 was 21.89% and 22.83%, respectively. See Note 12 to our consolidated financial statements included elsewhere in this Quarterly Report for a discussion of our income taxes, including the recording of a valuation allowance.
As of September 30, 2025, we had federal net operating loss carryforwards totaling $922.1 million, of which $477.7 million will begin to expire in 2035 and $444.4 million will not expire but may be limited in future periods. If we were to experience an “ownership change,” as determined under Section 382 of the Internal Revenue Code, our ability to offset taxable income arising after the ownership change with net operating loss carryforwards, interest expense carryforwards and certain other tax attributes arising prior to the ownership change could be significantly limited. Based on information available as of September 30, 2025, no such ownership change has occurred; however, the pending merger with Crescent is expected to result in an ownership change, which may significantly limit the future utilization of our net operating loss carryforwards, interest expense carryforwards and other tax attributes. Moreover, as discussed above, as of September 30, 2025 these deferred tax assets are fully offset with a valuation allowance.
Liquidity and capital resources
Historically, our primary sources of liquidity have been cash flows from operations, proceeds from equity offerings, proceeds from senior unsecured and subordinated note offerings, borrowings under our Senior Secured Credit Facility and proceeds from asset dispositions. Our primary operational uses of capital have been for the acquisition, exploration and development of oil and natural gas properties and infrastructure development.
We continually seek to maintain a financial profile that provides operational flexibility and monitor the markets to consider which financing alternatives, including debt and equity capital resources, joint ventures and asset sales, are available to meet our future planned capital expenditures, a significant portion of which we are able to adjust and manage. We also continually evaluate opportunities with respect to our capital structure, including issuances of new securities, as well as transactions involving our outstanding senior notes, which could take the form of open market or private repurchases, exchange or tender offers, or other similar transactions, and our Common Stock, which could take the form of open market or private repurchases. We may make changes to our capital structure from time to time, with the goal of maintaining financial flexibility, preserving or improving liquidity and/or achieving cost efficiency. Such financing alternatives, or combination of alternatives, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. We continually look for other opportunities to maximize stockholder value.
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For further discussion of our financing activities related to debt instruments, see Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report.
Due to the inherent volatility in the prices of oil, NGL and natural gas and the sometimes wide pricing differentials between where we produce and where we sell such commodities, we engage in commodity derivative transactions to hedge price risk associated with a portion of our anticipated sales volumes. By removing a portion of the price volatility associated with future sales volumes, we expect to mitigate, but not eliminate, the potential effects of variability in cash flows from operations. See "Part I. Item 3. Quantitative and Qualitative Disclosures About Market Risk" below. See Note 8 to our consolidated financial statements included elsewhere in this Quarterly Report for discussion of our open commodity positions.
As of September 30, 2025, we had cash and cash equivalents of $14.7 million and available capacity under the Senior Secured Credit Facility of $695.0 million, resulting in total liquidity of $709.7 million. As of October 29, 2025, we had outstanding borrowings under our Senior Secured Credit Facility of $725.0 million, resulting in available capacity of $675.0 million. We believe that our operating cash flows and the aforementioned liquidity sources provide us with sufficient liquidity and financial resources to manage our cash needs and contractual obligations, to implement our currently planned capital expenditure budget and, at our discretion, to fund any share repurchases, pay down, repurchase or refinance debt or adjust our planned capital expenditure budget. See Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report for additional discussion of borrowings and repayments on and the semi-annual redetermination of the borrowing base under the Senior Secured Credit Facility subsequent to September 30, 2025.
Cash requirements for known contractual and other obligations
The following table presents significant cash requirements for known contractual and other obligations as of September 30, 2025:

(in thousands) |  | Short-term |  | Long-term |  | Total
Senior unsecured notes(1) |  | $ | 131,342 |  |  | $ | 2,275,075 |  |  | $ | 2,406,417 |
Senior Secured Credit Facility(2) |  | — |  |  | 705,000 |  |  | 705,000 |
Electricity purchase commitments |  | 48,692 |  |  | 168,311 |  |  | 217,003 |
Asset retirement obligations |  | 5,511 |  |  | 76,040 |  |  | 81,551 |
Operating lease commitments(3) |  | 9,888 |  |  | 56,258 |  |  | 66,146 |
Firm transportation commitments |  | 18,630 |  |  | 9,289 |  |  | 27,919 |
Sand purchase commitments |  | 20,151 |  |  | 6,730 |  |  | 26,881 |
Total |  | $ | 234,214 |  |  | $ | 3,296,703 |  |  | $ | 3,530,917 |

______________________________________________________________________________
(1)Amounts presented include both principal and interest obligations.
(2)Amounts presented do not include interest expense as it is a floating rate and we cannot determine with accuracy the future interest rates we will be charged. As of September 30, 2025, the outstanding balance under our Senior Secured Credit Facility was subject to a weighted-average interest rate of 7.008%.
(3)Amounts presented include both minimum lease payments and imputed interest.
We expect to satisfy our short-term contractual and other obligations with cash flows from operations. See Notes 5 and 10 to our consolidated financial statements included elsewhere in this Quarterly Report and Notes 2, 5 and 18 in our 2024 Annual Report for further discussion of our known contractual and other obligations.
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Cash flows
The following table presents our cash flows for the periods presented and the corresponding changes for such periods:

|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Net cash provided by (used in) operating activities |  | $ | 889,878 |  |  | $ | 743,156 |  |  | $ | 146,722 |  |  | 20 | %
Net cash provided by (used in) investing activities |  | (731,883) |  |  | (1,480,169) |  |  | 748,286 |  |  | 51 | %
Net cash provided by (used in) financing activities |  | (183,477) |  |  | 745,144 |  |  | (928,621) |  |  | (125) | %
Net increase (decrease) in cash and cash equivalents |  | $ | (25,482) |  |  | $ | 8,131 |  |  | $ | (33,613) |  |  | (413) | %

Cash flows from operating activities
Net cash provided by operating activities increased during the nine months ended September 30, 2025, compared to the same period in 2024. Notable cash changes include (i) an increase of $144.2 million in net settlements received for matured derivatives, due to decreased oil commodity prices, (ii) an increase of $71.6 million due to net changes in operating assets and liabilities and (iii) a decrease in total oil, NGL and natural gas sales revenues of $47.7 million. For additional information on changes in revenues and expenses, see "—Results of operations."
Our operating cash flows are sensitive to a number of variables, the most significant of which are the volatility of oil, NGL and natural gas prices, mitigated to the extent of our commodity derivatives' exposure, and sales volume levels. Regional and worldwide economic activity, weather, infrastructure, transportation capacity to reach markets, costs of operations, legislation and regulations, including potential government production curtailments, and other variable factors significantly impact the prices of these commodities. For additional information on risks related to our business, see "Part I. Item 3. Quantitative and Qualitative Disclosures About Market Risk" and "Part II. Item 1A. Risk Factors" included elsewhere in this Quarterly Report and "Part I. Item 1A. Risk Factors" in our 2024 Annual Report.
Cash flows from investing activities
For the nine months ended September 30, 2025, net cash used in investing activities was $731.9 million compared to $1.5 billion for the same period in 2024. The change is primarily due to (i) a $829.6 million decrease in our acquisitions of oil and natural gas properties and (ii) a $30.3 million increase in proceeds from divestitures, partially offset by (iii) a $123.3 million increase in capital expenditures for oil and natural gas properties as a result of increased drilling and completions activity.
We currently expect capital investments for full-year 2025 to be in the approximate range of $850.0 million to $900.0 million. We will continue to monitor commodity prices and service costs and adjust activity levels in order to proactively manage our cash flows and preserve liquidity. We do not have a specific acquisition budget since the timing and size of acquisitions cannot be accurately forecasted.
The following tables present the components of our capital investments, excluding non-budgeted acquisition costs, for the periods presented and the corresponding changes for such periods:

|  | Nine months ended September 30, |  | 2025 compared to 2024
(in thousands) |  | 2025 |  | 2024 |  | Change ($) |  | Change (%)
Oil and natural gas properties(1) |  | $ | 759,152 |  |  | $ | 652,604 |  |  | $ | 106,548 |  |  | 16 | %
Midstream and other fixed assets(1) |  | 8,019 |  |  | 17,233 |  |  | (9,214) |  |  | (53) | %
Total capital investments, excluding non-budgeted acquisition costs |  | $ | 767,171 |  |  | $ | 669,837 |  |  | $ | 97,334 |  |  | 15 | %

_____________________________________________________________________________
(1)Includes capitalized share-settled equity-based compensation and asset retirement costs.
The amount, timing and allocation of capital investments are largely discretionary and within management's control. If oil, NGL and natural gas prices are below our acceptable levels, or costs are above our acceptable levels, we may choose to defer a portion of our capital expenditures until later periods to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate near-term cash flow. Subject to financing alternatives, we may also increase our capital expenditures significantly to take advantage of
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opportunities we consider to be attractive. We continually monitor and may adjust our projected capital expenditures in response to world developments, as well as success or lack of success in drilling activities, changes in prices, availability of financing and joint venture opportunities, drilling and acquisition costs, industry conditions, the timing of regulatory approvals, the availability of rigs and supplies, changes in service costs, contractual obligations, internally generated cash flow and other factors both within and outside our control.
Cash flows from financing activities
For the nine months ended September 30, 2025, net cash used in financing activities was $183.5 million compared to $745.1 million cash provided by financing activities for the same period in 2024. Notable 2025 activity includes (i) payments on our Senior Secured Credit Facility of $625.0 million and (ii) borrowings on our Senior Secured Credit Facility of $450.0 million. For further discussion of our financing activities related to debt instruments, see Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report.
Sources of Liquidity
Senior Secured Credit Facility
As of September 30, 2025, the Senior Secured Credit Facility, which matures on September 13, 2027, had a maximum credit amount of $3.0 billion, a borrowing base and an aggregate elected commitment of $1.4 billion, with $705.0 million outstanding, and was subject to an interest rate of 7.008%. The Senior Secured Credit Facility contains both financial and non-financial covenants, all of which we were 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 or $80.0 million. As of September 30, 2025 and December 31, 2024, we had no letters of credit outstanding under the Senior Secured Credit Facility.
See Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report for further discussion of our Senior Secured Credit Facility.
Supplemental Guarantor information
As of September 30, 2025, approximately $1.6 billion of our senior unsecured notes remained outstanding. Our wholly-owned subsidiary, Vital Midstream Services, LLC (the "Guarantor"), jointly and severally, and fully and unconditionally, guarantees all of our outstanding senior unsecured notes.
The guarantees are senior unsecured obligations of the Guarantor and rank equally in right of payment with other existing and future senior indebtedness of such Guarantor, and senior in right of payment to all existing and future subordinated indebtedness of such Guarantor. The guarantees of the senior unsecured notes by the Guarantor are subject to certain Releases. The obligations of the Guarantor under its note guarantee are limited as necessary to prevent such note guarantee from constituting a fraudulent conveyance under applicable law. Further, the rights of holders of the senior unsecured notes against the Guarantor may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. Vital Energy is not restricted from making investments in the Guarantor and the Guarantor is not restricted from making intercompany distributions to Vital Energy.
The assets, liabilities and results of operations of the combined issuer and the Guarantor are not materially different than the corresponding amounts presented in our consolidated financial statements included elsewhere in this Quarterly Report. Accordingly, we have omitted the summarized financial information of the issuer and the Guarantor that would otherwise be required.
Critical accounting estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
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are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements.
There have been no changes to our identified critical accounting estimates during the nine months ended September 30, 2025. See our critical accounting estimates in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Annual Report. See "Commodity prices, reserves and full cost ceiling test" for additional discussion our full cost ceiling calculation.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term "market risk," in our case, refers to the risk of loss arising from adverse changes in oil, NGL and natural gas prices and in interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of how we view and manage our ongoing market risk exposures. All of our market risk-sensitive derivative instruments were entered into for hedging purposes, rather than for speculative trading.
Commodity price exposure
Due to the inherent volatility in oil, NGL and natural gas prices and the sometimes wide pricing differentials between where we produce and where we sell such commodities, we engage in commodity derivative transactions, such as puts, swaps, collars and basis swaps, to hedge price risk associated with a portion of our anticipated sales volumes. By removing a portion of the price volatility associated with future sales volumes, we expect to mitigate, but not eliminate, the potential effects of variability in cash flows from operations.
The fair values of our open commodity positions are largely determined by the relevant forward commodity price curves of the indexes associated with our open derivative positions. The following table provides a sensitivity analysis of the projected incremental effect on income or loss before income taxes of a hypothetical 10% change in the relevant forward commodity price curves of the indexes associated with our open commodity positions as of September 30, 2025:

(in thousands) |  | As of September 30, 2025
Commodity derivative asset position |  | $ | 125,934 |
Impact of a 10% increase in forward commodity prices |  | $ | (162,603) |
Impact of a 10% decrease in forward commodity prices |  | $ | 162,777 |

See Notes 8 and 9 to our consolidated financial statements included elsewhere in this Quarterly Report for further discussion of our commodity derivatives. For additional discussion of our quantitative and qualitative disclosures about market risk, see "Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our 2024 Annual Report.
Interest rate risk
Our Senior Secured Credit Facility bears interest at a floating rate and our senior unsecured notes bear interest at fixed rates. The interest rate on our Senior Secured Credit Facility as of September 30, 2025 was 7.008%. See Note 5 to our consolidated financial statements included elsewhere in this Quarterly Report for further discussion of our debt. The interest rate on borrowings may be based on an alternate base rate or term secured overnight financing rate ("Term SOFR"), at our option. Interest on alternate base rate loans is equal to the sum of (a) the highest of (i) the "prime rate" (as publicly announced by Wells Fargo Bank, N.A.) in effect on such day, (ii) the federal funds effective rate in effect on such day plus 0.5% and (iii) the Adjusted Term SOFR (as defined in our Senior Secured Credit Facility) for a one-month tenor in effect on such day plus 1% and (b) the applicable margin. Interest on Term SOFR loans is equal to the sum of (a)(i) the Term SOFR (as defined in our Senior Secured Credit Facility) rate for such period plus (ii) the Term SOFR Adjustment (as defined in our Senior Secured Credit Facility) of 0.1% (in the case of clause (a), subject to a floor of 0%) plus (b) the applicable margin. The applicable margin varies from 1.25% to 2.25% on alternate base rate borrowings and from 2.25% to 3.25% on Term SOFR borrowings, in each case, depending on our utilization ratio. As of September 30, 2025, the applicable margin on our borrowings were 1.75% for alternate base rate borrowings and 2.75% for Term SOFR borrowings.
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Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
As of the end of the period covered by this report, an evaluation of the effectiveness of the design and operation of Vital Energy's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), was performed under the supervision and with the participation of Vital Energy's management, including our principal executive officer and principal financial officer. Based on that evaluation, these officers concluded that Vital Energy's disclosure controls and procedures were effective as of September 30, 2025. Our disclosure controls and other procedures are designed to provide reasonable assurance that the information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to Vital Energy's management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of changes in internal control over financial reporting
There were no changes in our internal controls over financial reporting (as defined in Rule 13(a)-15(f) of the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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Part II
Item 1. Legal Proceedings
From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we may not have insurance coverage. While many of these matters involve inherent uncertainty as of the date hereof, we do not currently believe that any such legal proceedings will have a material adverse effect on our business, financial position, results of operations or liquidity.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risks discussed in our 2024 Annual Report, our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2025 (the "First Quarter 10-Q") and the quarter ended June 30, 2025 (the "Second Quarter 10-Q"), and those set forth from time to time in our other filings with the SEC. Other than the following risk factors, there have been no material changes in our risk factors from those described in our 2024 Annual Report, the First Quarter 10-Q and the Second Quarter 10-Q. The risks described in such reports and in this Quarterly Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results.
Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows.
In April 2025, the U.S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal tariff on the countries with which the U.S. has the largest trade deficits. As a result of the new U.S. presidential administration's trade policy, tariffs may increase our costs. We may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers.
The imposition of further tariffs by the U.S. on a broader range of imports, further retaliatory trade measures taken in response to additional tariffs, or a global recession could increase costs in our supply chain or reduce demand for oil and natural gas, which would adversely affect our results of operations.
The ultimate impact of these trade measures on our business operations and financial results is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate the negative impacts.
As a result of the volatility in prices for oil, NGL and natural gas, we have taken and may be required to take further write-downs of the carrying values of our properties.
We use the full cost method of accounting for our oil and natural gas properties, with the full cost ceiling based principally on the estimated future net cash flows from our proved oil, NGL and natural gas reserves, which exclude the effect of our commodity derivative transactions, discounted at 10% under required SEC guidelines for pricing methodology. The SEC pricing methodology is the unweighted arithmetic average first-day-of-the-month commodity price for each month within the trailing 12-month period, adjusted for differentials. We review the carrying value of our oil and natural gas properties under the full cost accounting rules of the SEC on a quarterly basis.
In the event the unamortized cost, or net book value, of our evaluated oil and natural gas properties being depleted exceeds the full cost ceiling, the excess is expensed in the period such excess occurs. Once incurred, a write-down of evaluated oil and natural gas properties is not reversible and constitutes a non-cash charge to earnings. In the first and second quarters of 2025 and in the fourth quarter of 2024, our unamortized cost of evaluated oil and natural gas properties exceeded the full cost ceiling. Such write-downs do not impact cash flows from operating activities but do reduce net income. For the three months ended March 31, 2025, June 30, 2025, and September 30, 2025, we recorded non-cash full cost ceiling impairments of $158.2 million, $427.0 million, and $420.0 million, respectively. In addition, we recorded a $481.3 million full cost impairment for the year ended December 31, 2024.
Based on prevailing commodity prices and specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we have been required to, and may be required to further, write-down the carrying value of our properties. See "Item 7. Management's
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Discussion and Analysis of Financial Condition and Results of Operations–Pricing and reserves" and Note 6 to our consolidated financial statements included in our Annual Report for additional information.
Risks Related to the Pending Mergers with Crescent
Because the Exchange Ratio is fixed and the market price of Crescent Class A Common Stock will fluctuate, Vital stockholders cannot be certain of the precise value of the Merger Consideration they will receive in the Mergers.
If the Mergers are completed, each issued and outstanding eligible share of Common Stock will be automatically converted into the right to receive the Merger Consideration. The Exchange Ratio for the Merger Consideration is fixed, and there will be no adjustment to the Merger Consideration for changes in the market price of Crescent Class A Common Stock or our Common Stock prior to the completion of the Mergers.
If the Mergers are completed, there will be a time lapse between the date of this Quarterly Report on Form 10-Q, the dates of the special meetings of Crescent and Vital, and the date on which Vital stockholders entitled to receive the Merger Consideration actually receive the Merger Consideration. The market value of shares of Crescent Class A Common Stock will fluctuate, possibly materially, during and after these periods as a result of a variety of factors, including general market and economic conditions, changes in Crescent’s businesses, operations and prospects and regulatory considerations. Such factors are difficult to predict and in many cases are beyond the control of Vital.
The Mergers are subject to a number of conditions to the obligations of both Vital and the Crescent Parties to complete the Mergers, which, if not fulfilled, or not fulfilled in a timely manner, may delay completion of the Mergers or result in termination of the Merger Agreement.
The respective obligations of Vital and the Crescent Parties to consummate the Mergers are subject to the satisfaction or, to the extent permitted by law, the waiver by each party at or prior to the Effective Time of a number of conditions.
Many of the conditions to completion of the Mergers are not within the control of Vital, and we cannot predict when, or if, these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to March 31, 2026 (the “End Date”), it is possible that the Merger Agreement may be terminated. Although Crescent and Vital have agreed in the Merger Agreement to use reasonable best efforts, subject to certain limitations, to consummate the Mergers as promptly as reasonably practicable, these and other conditions to the consummation of the Mergers may fail to be satisfied. In addition, satisfying the conditions to and completion of the Mergers may take longer, and could cost more, than Crescent and Vital expect. Furthermore, the requirements for obtaining the required clearances and approvals, including as a result of the government shutdown, could delay the completion of the Mergers for a significant period of time or prevent the Mergers from occurring. Any delay in completing the Mergers may adversely affect the cost savings and other benefits that Vital and Crescent expect to achieve if the Mergers and the integration of the companies’ respective businesses are not completed within the expected time frame.
As a result of the shutdown of the federal government, Crescent has determined to rely on Section 8(a) of the Securities Act to cause the registration statement on Form S-4 related to the Mergers to become effective automatically. Reliance on Section 8(a) could result in a number of adverse consequences, including the potential need for Vital to distribute an updated joint proxy/prospectus to shareholders to address comments provided by the SEC, or a stop order being issued preventing use of the registration statement, and a corresponding stock price decline or other negative results.
The registration statement on Form S-4 related to the Mergers is expected to become automatically effective by operation of Section 8(a) of the Securities Act on the 20th calendar day after the most recent amendment of the registration statement filed with the SEC, in lieu of the SEC declaring the registration statement effective following the completion of its review. Prior to the shutdown of the federal government and the filing the registration statement on Form S-4 related to the Mergers, the SEC indicated to Crescent that they had not completed their review of the registration statement, may have comments and would continue to review upon the federal government reopening. Reliance on Section 8(a) does not relieve Crescent, Vital and other parties from the responsibility for the adequacy and accuracy of the disclosure set forth in the registration statement and for ensuring that the registration statement complies with applicable requirements, and use of Section 8(a) poses a risk that, after the date of the joint proxy statement/prospectus which forms a part of the registration statement on Form S-4 related to the Mergers, Vital may be required to distribute an updated joint proxy/prospectus to shareholders, or otherwise delay the closing of the Mergers, if changes to the information in the joint proxy/prospectus are required, or if a stop order under Section 8(d) of the Securities Act prevents continued use of the registration statement. These or similar
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events could cause the trading price of the Common Stock to decline, further delay the closing of the Mergers or result in other negative outcomes.
Failure to complete the Mergers could negatively impact the price of shares of Common Stock, as well as Vital’s ongoing and future businesses and financial results.
The Merger Agreement may be terminated by either Crescent or Vital if the Mergers are not completed by 5:00 p.m. Houston, Texas time, on the End Date, except that this right to terminate the Merger Agreement will not be available to any party whose failure to fulfill any material covenant or agreement under the Merger Agreement is the primary cause of or resulted in the failure of the transactions to be consummated on or before that date. Crescent and Vital can also mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval is obtained. In addition, Crescent and Vital may elect to terminate the Merger Agreement in certain other circumstances.
If the Mergers are not completed for any reason, Vital’s ongoing and future businesses and financial results may be adversely affected and, without realizing any of the benefits of having completed the Mergers, Vital will be subject to a number of risks, including the following:
•Vital will be required to pay its costs relating to the Mergers, which are substantial, such as legal, accounting, financial advisory and printing fees, whether or not the Mergers are completed;
•time and resources committed by Vital’s management to matters relating to the Mergers could otherwise have been devoted to pursuing other beneficial opportunities;
•Vital may experience negative reactions from financial markets, including negative impacts on the price of its common stock, including to the extent that the current market price reflects a market assumption that the Mergers will be completed;
•Vital may experience negative reactions from employees, customers or vendors; and
•since the Merger Agreement restricts the conduct of Vital’s business prior to completion of the Mergers, Vital may not have been able to take certain actions during the pendency of the Mergers that would have benefited it as an independent company and the opportunity to take such actions may no longer be available.
If the Merger Agreement is terminated and the Vital Board seeks another merger or business combination, Vital may not be able to find a party willing to offer equivalent or more attractive consideration than the consideration Crescent has agreed to provide in the Mergers, or such other merger or business combination may not be completed. If the Merger Agreement is terminated under specified circumstances, Vital may be required to pay Crescent a termination fee of $22.5 million. If the Merger Agreement is terminated because of a failure of Vital’s stockholders to approve the proposals required to complete the Mergers, Vital may be required to reimburse Crescent for its transaction expenses in an amount equal to $5.5 million. In addition, any delay in completing the Mergers may significantly reduce the synergies and other benefits that Crescent and Vital expect to achieve if they successfully complete the Mergers within the expected timeframe and integrate their respective businesses.
The Merger Agreement contains provisions that limit Vital’s ability to pursue alternatives to the Mergers, could discourage a potential competing acquiror of Vital from making a favorable alternative transaction proposal and, in specified circumstances, could require Vital to pay Crescent a termination fee.
The Merger Agreement contains certain provisions that restrict Vital’s ability to initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals, or offers regarding, or the making of an acquisition proposal, engage in any discussions or negotiations with respect to an acquisition proposal or furnish any non-public information or access to its assets to any person in connection with an acquisition proposal, or enter into any letter of intent or agreement in principle concerning an acquisition proposal. In addition, the other party generally has an opportunity to offer to modify the terms of the transactions contemplated by the Merger Agreement in response to any third-party alternative transaction proposal before a party’s board of directors may change, withdraw, modify, or qualify its recommendation with respect to stockholder approval of the Mergers. In some circumstances, upon termination of the Merger Agreement, Vital will be required to pay a termination fee of $22.5 million to Crescent.
These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of Vital or pursuing an alternative transaction with either entity from considering or proposing such a transaction. The provisions could discourage a potential third-party acquiror or merger partner that was prepared to pay
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consideration with a higher per share price than the per share price proposed to be received in the Mergers, or might result in a potential third-party acquiror or merger partner proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee that is payable in certain circumstances.
We will be subject to business uncertainties while the Mergers are pending, which could adversely affect our businesses.
In connection with the pendency of the Mergers, it is possible that certain persons with whom Vital has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with Vital, as a result of the Mergers, which could negatively affect Vital’s revenues, earnings and cash flows, as well as the market price of our Common Stock, regardless of whether the Mergers are completed.
Under the terms of the Merger Agreement, Vital is subject to certain restrictions on the conduct of its business prior to the Effective Time, which may adversely affect its ability to execute certain of its business strategies. Limitations on Vital include, among other things, the ability to issue capital stock, make distributions, declare dividends, modify or enter into material contracts, the ability to acquire other businesses, incur indebtedness, incur encumbrances or incur capital expenditures, in each case, subject to certain exceptions set forth in the Merger Agreement. Such limitations could negatively affect Vital’s businesses and operations prior to the completion of the Mergers.
We will incur significant transaction and merger-related costs in connection with the Mergers, which may be in excess of those anticipated by us.
Vital has incurred and expects to continue to incur a number of non-recurring costs associated with the Mergers, many of which are payable regardless of whether or not the Mergers are completed. These fees and costs have been, and will continue to be, substantial. These costs include, among others, employee retention costs, fees paid to legal, accounting and financial advisors, severance and benefit costs, fees related to regulatory filings and notices, filing fees and printing and mailing fees. Vital will also incur transaction fees and costs related to the integration of the companies, which may be substantial. Moreover, Vital may incur additional unanticipated expenses in connection with the Mergers and the integration, including costs associated with any stockholder litigation related to the Mergers.
The costs described above, as well as other unanticipated costs and expenses, could have an adverse effect on the financial condition and operating results of Vital.
Completion of the Mergers may trigger change in control or other provisions in certain agreements to which Vital is a party.
The completion of the Mergers may, in and of itself or in combination with certain ratings downgrade events, trigger change in control or other provisions in certain agreements to which Vital is a party, including agreements governing its indebtedness and certain oil and gas leases. Failure to successfully negotiate a waiver could result in a counterparty to any provision that is triggered terminating an agreement or seeking monetary damages. Crescent and Vital may seek to negotiate waivers of change of control provisions, but the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to each company. Further, it may not be practicable to obtain waivers for certain change of control or other provisions and the conditions to such provisions may be subject to factors beyond Crescent’s and Vital’s control. For example, the parties expect that the transactions contemplated by the Merger Agreement will constitute a change of control under the indentures governing Vital’s 7.750% senior unsecured notes due 2029, 9.750% senior unsecured notes due 2030 and 7.875% senior unsecured notes due 2032 and, if such change of control were to be accompanied by a decrease in the rating of any such series of Vital’s notes by one or more gradations on any date from the date of the public announcement of the Mergers until the end of the 60-day period following such announcement (which period may be extended upon the occurrence of certain events), Vital would be required to offer to repurchase such notes at a 101% of the aggregate principal amount of the applicable series of notes. Although such ratings events are not expected to occur, no assurance can be provided that such ratings event will not occur.
We may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Mergers from being completed.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Vital’s liquidity and financial condition. Lawsuits that may be brought against the parties to the Merger Agreement or their respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request
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to rescind parts of the Merger Agreement already implemented and to otherwise enjoin the parties from consummating the Mergers. If a plaintiff is successful in obtaining an injunction prohibiting completion of the Mergers, then that injunction may delay or prevent the Mergers from being completed, which may adversely affect Vital’s ongoing and future business, financial position and results of operations.
One of the conditions to the Closing is that no injunction by any court, governmental, regulatory or administrative agency or commission or other governmental authority or instrumentality has been entered and continues to be in effect and no law has been adopted or is effective, in either case that prohibits or makes illegal the Mergers. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Mergers, then that injunction may delay or prevent the Mergers from being completed within the expected timeframe or at all, which may adversely affect Vital’s ongoing and future business, financial position and results of operations.
After the Mergers are completed, Vital stockholders will have their rights as stockholders governed by Crescent’s organizational documents. As such, they will have no right to vote on the election of directors to the Crescent Board.
The rights of Vital stockholders are currently governed by Vital’s organizational documents. Upon consummation of the Mergers, Vital stockholders will receive Crescent Class A Common Stock that will be governed by Crescent’s organizational documents. As a result, there will be differences between the rights currently enjoyed by Vital stockholders and the rights of Vital stockholders post-Mergers. The Crescent Charter and Crescent Bylaws provide that, subject to the rights of holders of Crescent Preferred Stock, until the Trigger Date (as defined in the Crescent Charter), the Series I Preferred Stockholder will have full and exclusive authority to appoint the entire Crescent Board and to certain other approval rights with respect to certain fundamental corporate actions, including debt incurrence in excess of 10% of the outstanding indebtedness, significant equity raises, preferred equity issuances, adoption of a stockholder rights plan, amendments of the Crescent Charter and certain sections of the Crescent Bylaws, a sale of all or substantially all of Crescent’s assets, mergers involving Crescent, removals of Crescent’s Chief Executive Officer and the liquidation or dissolution of Crescent.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Repurchases of Equity Securities
The following table summarizes purchases of common stock by Vital Energy for the periods presented:

Period |  | Total number of shares purchased(1) |  | Weighted-average price paid per share |  | Total number of shares purchased as part of publicly announced program |  | Maximum value that may yet be purchased under the program as of the respective period-end date(2)
July 1, 2025 - July 31, 2025 |  | 53 |  |  | $ | 16.53 |  |  | — |  |  | $ | 200,000,000 |
August 1, 2025 - August 31, 2025 |  | 359 |  |  | $ | 16.91 |  |  | — |  |  | $ | 200,000,000 |
September 1, 2025 - September 30, 2025 |  | 155 |  |  | $ | 17.82 |  |  | — |  |  | $ | 200,000,000 |
Total |  | 567 |  |  |  |  | — |  |  |

______________________________________________________________________________
(1)Represents shares that were withheld by us to satisfy tax withholding obligations that arose upon the lapse of restrictions on certain equity-based compensation awards, namely restricted stock awards.
(2)On May 31, 2022, our board of directors authorized a $200.0 million share repurchase program commencing on the date of such announcement and continuing through and including May 27, 2024. On May 23, 2024, our board of directors approved an amendment to the share repurchase program to (i) increase the shares of Common Stock which the Company may purchase by $37.3 million, resulting in aggregate authorization of $237.3 million, and (ii) extend the expiration date to May 22, 2026. Share repurchases under the program may be made through a variety of methods, which may include open market purchases, including under plans complying with Rule 10b5-1 of the Exchange Act, and privately negotiated transactions. During the three months ended September 30, 2025, no shares were repurchased under the share repurchase program.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangement Changes
None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period ended September 30, 2025.
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Item 6. Exhibits

|  |  |  | Incorporated by reference (File No. 001-35380, unless otherwise indicated)
Exhibit |  | Description |  | Form |  | Exhibit |  | Filing Date
2.1 |  | Agreement and Plan of Merger, dated as of August 24, 2025, by and among Vital Energy, Inc., Crescent Energy Company, Venus Merger Sub I Inc. and Merger Sub II LLC. |  | 8-K |  | 2.1 |  | 8/25/2025
3.1 |  | Second Amended and Restated Certificate of Incorporation of Vital Energy, Inc., dated as of May 28, 2024. |  | 8-K |  | 3.1 |  | 5/28/2024
3.2 |  | Fourth Amended and Restated Bylaws of Vital Energy, Inc., adopted January 9, 2023. |  | 8-K |  | 3.2 |  | 1/9/2023
4.1 |  | Form of Common Stock Certificate. |  | 8-A12B/A |  | 4.1 |  | 1/7/2014
4.2 |  | Indenture, dated as of March 18, 2015, among Laredo Petroleum, Inc., Laredo Midstream Services, LLC, Garden City Minerals, LLC and Wells Fargo Bank, National Association, as trustee. |  | 8-K |  | 4.1 |  | 3/24/2015
4.3 |  | Indenture, dated as of July 16, 2021, among Laredo Petroleum, Inc., Laredo Midstream Services, LLC, Garden City Minerals, LLC and Wells Fargo Bank, National Association, as trustee. |  | 8-K |  | 4.1 |  | 7/16/2021
4.4 |  | Fifth Supplemental Indenture, dated as of September 25, 2023, among Vital Energy, Inc., Vital Midstream Services, LLC and U.S. Bank Trust Company, National Association, as trustee. |  | 8-K |  | 4.2 |  | 9/25/2023
4.5 |  | Indenture, dated as of March 28, 2024, among Vital Energy, Inc., Vital Midstream Services, LLC and U.S. Bank Trust Company, National Association, as trustee. |  | 8-K |  | 4.1 |  | 3/28/2024
10.1 |  | Voting and Support Agreement, dated as of August 24, 2025, by and among Vital Energy, Inc., Crescent Energy Company and PT Independence Energy Holdings LLC. |  | 8-K |  | 10.1 |  | 8/25/2025
10.2 |  | Voting and Support Agreement, dated as of August 24, 2025, by and among Vital Energy, Inc., Crescent Energy Company and Independence Energy Aggregator LP. |  | 8-K |  | 10.2 |  | 8/25/2025
10.3 |  | Form of Voting and Support Agreement, dated as of August 24, 2025, by and among Vital Energy, Inc., Crescent Energy Company and John C. Goff. |  | 8-K |  | 10.3 |  | 8/25/2025
22.1 |  | List of Issuers and Guarantor Subsidiaries. |  | 10-K |  | 22.1 |  | 2/24/2025
31.1* |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. |  |  |  |  |  |
31.2* |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. |  |  |  |  |  |
32.1** |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |
101 |  | The following financial information from Vital’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) Condensed Notes to the Consolidated Financial Statements. |  |  |  |  |  |
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |  |  |  |  |  |

______________________________________________________________________________
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| VITAL ENERGY, INC.
Date: November 3, 2025 | By: | /s/ Jason Pigott
|  | Jason Pigott
|  | President and Chief Executive Officer
|  | (principal executive officer)
Date: November 3, 2025 | By: | /s/ Bryan J. Lemmerman
|  | Bryan J. Lemmerman
|  | Executive Vice President and Chief Financial Officer
|  | (principal financial officer)
Date: November 3, 2025 | By: | /s/ Stephen L. Faulkner, Jr.
|  | Stephen L. Faulkner, Jr.
|  | Vice President and Chief Accounting Officer
|  | (principal accounting officer)

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