Better Energy Stock: Vitesse Energy vs. Devon Energy
The two oil companies make for a fascinating comparison. High-yielding Vitesse Energy (NYSE: VTS) and Devon Energy (NYSE: DVN) are connected in that Vitesse has minority interests in Devon-operated wells in the Williston Basin of North Dakota and Montana (Bakken Formation). However, they have different business models, risk profiles, and capital allocation priorities. Here's a look at what each offers and which might be the better stock overall.The $725 million market cap stock has an unusual business model that takes full advantage of management's expertise and the company's flexibility as a small company. Vitesse focuses on owning interests in wells operated by other leading oil companies in the Bakken. It invests in wells run by more than 30 different operators, with only three companies responsible for more than 10% of its total working interests, namely Chord Energy (23%), Devon Energy (11%), and Continental Resources (10%). The strategy diversifies working and royalty interest across more than 7,000 working wells. However, its assets are overwhelmingly in the Bakken, and management argues that since Vitesse participates in 30%- 55% of drilling rigs in the Bakken, it's "effectively creating a Bakken ETF." Continue reading
The two oil companies make for a fascinating comparison. High-yielding Vitesse Energy (NYSE: VTS) and Devon Energy (NYSE: DVN) are connected in that Vitesse has minority interests in Devon-operated wells in the Williston Basin of North Dakota and Montana (Bakken Formation). However, they have different business models, risk profiles, and capital allocation priorities. Here's a look at what each offers and which might be the better stock overall.
The $725 million market cap stock has an unusual business model that takes full advantage of management's expertise and the company's flexibility as a small company. Vitesse focuses on owning interests in wells operated by other leading oil companies in the Bakken. It invests in wells run by more than 30 different operators, with only three companies responsible for more than 10% of its total working interests, namely Chord Energy (23%), Devon Energy (11%), and Continental Resources (10%).
The strategy diversifies working and royalty interest across more than 7,000 working wells. However, its assets are overwhelmingly in the Bakken, and management argues that since Vitesse participates in 30%- 55% of drilling rigs in the Bakken, it's "effectively creating a Bakken ETF."
