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ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc.

Vermilion Energy Inc. · Aug 16, 2011 · 43 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 1
    EnerComs The Oil & Gas Conference 16 Vermilion Energy Inc. Steady Growth Stable Dividends August 14 - 18, 2011 A World of Energy 1
  2. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 2
    Market Profile VET Toronto Stock Exchange (August 9, 2011) 43.19 Monthly dividend 0.19 Current yield 5.3% Market capitalization (90 MM shares outstanding) C3.9 billion Management ownership and control position 9% Net debt…
  3. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 3
    Global Operations Netherlands FOCUS: FOCUS: Q2 Production High impact natural New gas field under Ireland 5,682 boe/d gas exploration & development (Corrib) (Royalty free development drilling natural gas priced to oil) 2011E…
  4. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 4
    Diversified Leverage to Oil Prices 2011 Guidance: 35,000 - 36,000 boe/d 2011E Exit Rate: 37,000 boe/d Targeting 10% Growth 2011 Production (E) Dec 31/2010 Reserves (P+P) Oil Oil (Brent) (Brent) 48% 42% Oil (WTI) Oil (WTI)…
  5. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 5
    Why Invest in Vermilion Existing assets can support growth of 10% per year Corrib 25% to 30% production increase when on-stream Corrib 30% to 35% increase in fund flows per share Balance sheet strength to fund growth (no…
  6. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 6
    Visible Growth - Production Anticipate production growth to more than 50,000 boe/d by 2015 50 Projected Production Growth (mboe/d) 10+% CAGR* Key contributors of near term growth Cardium Oil Netherlands Gas Corrib…
  7. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 7
    Visible Growth - Prospects Robust prospect inventory to drive growth beyond 2017 Over 425 net undrilled Cardium locations (A & B) Over 115 net undrilled liquids-rich tight gas locations Over 20 net undrilled Netherlands gas…
  8. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 8
    Balance Sheet Strength Balance sheet supports long term growth plans 800 MM revolving credit facility (bank syndicated 3-year term) 225 MM 5-year high yield notes (6.5%); 3 year non-call 435 MM net debt (Q2 2011) 0.9 times debt to…
  9. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 9
    Balance Sheet Protection Debt levels may slightly exceed Company target levels of 1.0x or less until Corrib first gas but will remain well below current industry debt levels Capital will be protected with hedges and reduced as…
  10. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 10
    Stable, Reliable Dividends Maintain stable dividend policy Use balance sheet strength to fund excess capital requirements Once Ireland on-stream - total payout target 70 80% of fund flows Strategic plan based on conservative…
  11. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 11
    Relative Performance Total Return Performance by Period 60% 40% 20% 0% Total Period Return Performance to Dec 31, 2010 -20% 1yr 3yr 5yr Vermilion Energy Vermilion Energy 49.6% 55.0% 92.2% S&P/TSX Composite Index…
  12. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 12
    Value Creation 1994 Q2 2011 6,000 Total Value Creation to Q2 2011 = 5,154 5,000 4,000 4,589 3,000 millions 2,000 1,000 0 654 (1,000) Equity issued for cash Dividends (1,219 mm) Current market since 1994 2003 -…
  13. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 13
    Prospects Overview 14
  14. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 14
    2010 / 2011 Development Capital Key 2011 Capital Activities 2010 2011E (mm) (mm) Canada 30-35 Cardium Oil, 6 deep/tight gas, battery/ 243 255 infrastructure, workovers/recompletions, land France Active workover/recompletions,…
  15. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 15
    Strategy Focus - Canada Develop conventional and unconventional resource plays Cardium oil Liquids-rich gas Grow significant resource based drilling inventory and supporting infrastructure Expand large contiguous land base…
  16. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 16
    West Pembina Cardium Overview Cardium Vermilion has a dominant position in the Productive Trend best quality Cardium (A/B) D Cardium D Zero Sandstone/Conglomerate play Edge Low gas to oil ratio (GOR) C A C Thick pay zone (6 -…
  17. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 17
    Building a Leading Land Position Overall Land Addition Cost Average Cost Prospective Acreage Cost (MM) (/Acre) Legacy Land Position 77,440 n.a. 0 (at December 31, 2009) Crown Land Sales 24,005 85.1 3,545 (2010/11) 3rd Party…
  18. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 18
    Vermilion Cardium Position Significant development opportunity in best quality Cardium reservoir Net Sec Geology Wells / Sec Total Wells Q1 2011 A Thick Sand 94.5 4 378 B Siltstone / Shale / Sand 34 3 102 C Siltstone /…
  19. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 19
    Cardium Results - West Pembina Vermilions initial results exceeding expectations and industry results 2010 & 2011 Cardium Well Performance Operated Type A vs. Actual - Producing & Calendar Day as at May 26 350 30 300 Type Curve…
  20. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 20
    Cardium Well Costs Operated well costs (DCET) to date 2011 Cardium Target Avg 2011 (MM) Program (1) Well Cost (MM) 7 Drill 1.80 Complete (Oil Frac) 1.75(2) 6 Equip & Tie-in 0.55 Total well costs 4.10(3) 5 (DCET) Infrastructure…
  21. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 21
    Cardium Near Term Development 2010 Drilling activity 13.9 operated wells in 2010 (A Quality) 5.3 net non-operated wells in 2010 Tested water based frac in Q4-2010 2011 Budget 40 to 50 net wells 35 gross operated wells 10 net…
  22. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 22
    Liquids-Rich Gas Overview West Pembina & Ferrier Underexploited stacked Mannville sands Conventional Notikewin Ellerslie Resource Notikewin Resource Additional emerging gas plays Multi-zone, liquids-rich gas 120 identified…
  23. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 23
    Strategic Focus - Netherlands Second largest onshore gas operation in Netherlands 4 wells drilled in 2009/10 adding approximately 2,500 boe/d and 4 mmboe of P50 reserves First two wells (Middleburen-2 / Middenmeer-3) brought on…
  24. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 24
    Netherlands 2011 Activity Production from initial producing zone (Vlieland) of Middelburen 2 Vinkega-1 discovery (drilled 2009) brought on in late May 2011 Legend Vermilion Concessions Production from second zone Producing Gas…
  25. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 25
    Strategic Focus - Australia Wandoo Field - 100% owned and operated 21 producing wells, 2 offshore oil production platforms with fluid processing capacity of 160,000+ bpd Maintain production through ongoing development…
  26. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 26
    Wandoo Activity 2010 - 2011 2008 Wells Three new legs drilled in 2H 2010 with 2010 Wells strong productive capability New wells used deviated sidetracks off existing well bores Brought on production at restricted rate of 1,500…
  27. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 27
    Strategic Focus - France Maintain stable production through workover and recompletion program Optimize performance of large waterfloods Reduce drill/completion/well servicing costs Evaluate and position for potential future…
  28. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 28
    Recent Developments - France Legislative bill to ban hydraulic fracturing became law July 14, 2011 Final bill approved June 30, 2011, published in Official Journal on July 14, 2011 Effectively banned use of hydraulic fracturing for…
  29. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 29
    Asset Overview - Ireland Corrib Partnership Interests 45.5% Shell (Operator) 36.0% Statoil 18.5% Vermilion (acquired in 2009) Corrib will provide 65% of Irelands domestic gas needs at start-up Key permits now received 30
  30. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 30
    Corrib Schematic 31
  31. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 31
    Corrib Pipeline Routing 32 32
  32. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 32
    Corrib Preparation of tunneling site for on-shore pipeline underway Final approvals received as of April 2011 with preparation work beginning July 2011 Construction of on-shore pipeline expected to begin in 2012 and take at least…
  33. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 33
    Why Invest in Vermilion Disciplined visible growth of 10% per year through 2015 Robust oil rich portfolio to support growth beyond 2017 Corrib 25% - 30% accretive production increase Corrib 30% - 35% accretive cash flow…
  34. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 34
    Vermilion Energy Inc. Steady Growth Stable Dividends www.vermilionenergy.com 35
  35. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 35
    Appendix 36
  36. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 36
    Historical Financial Summary Financial Summary (MM CDN except per unit 2003 2004 2005 2006 2007 2008 2009 2010 amounts) Revenue 314.1 354.5 529.9 618.1 707.3 1,001.9 639.8 727.8 Royalties (74.7) (63.6) (88) (92.2) (97.5) (130.8) (97.6)…
  37. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 37
    Consolidated Netbacks Operating Netbacks, /boe (Gas converted at 6:1) 2003 2004 2005 2006 2007 2008 2009 2010 Price 39.90 43.21 57.94 61.80 61.86 83.61 55.83 65.38 Realized hedging gain (loss) (2.38) (3.73) (4.46) (0.02) (0.25) (0.89)…
  38. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 38
    Netbacks by Country - 2010 CDN/boe 1 Canada France Netherlands Australia TOTAL Revenue 44.04 80.26 42.53 81.86 62.06 Royalties (6.65) (5.15) - (14.73) (7.12) Operating cost (9.71) (14.02) (10.50) (15.66) (12.33) Transportation…
  39. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 39
    Total Payout Net Dividends + Interest + Taxes CAPEX (incl. Aband./Reclam .) Corrib CAPEX 180% Corrib Development Phase Vermilions long term strategy targets free cash flow in 2013 post 162% 160% Corrib development phase 140%…
  40. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 40
    Dividend Payout Policy Future dividend will be based on available funds Short term commodity price weakness will be managed by reduced CAPEX to moderate balance sheet impact Long term strategy is to have dividends represent between…
  41. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 41
    A Great Place to Work In Canada Vermilion has once again been recognized as one of Canadas Top 25 employers on the 2011 Best Workplaces in Canada list. (15th Place) In France We are proud to celebrate this achievement together with…
  42. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 42
    Environmentally Prudent Vermilion continues to pursue creative solutions to improve the environment Vermilion has entered into a cogeneration project with a producer of greenhouse tomatoes to capture waste heat and previously flared…
  43. ENERCOMS THE OIL AND GAS CONFERENCE – Vermilion Energy Inc. – slide 43
    Community Investment Vermilion Energy / YWCA Skills Training Centre Together with the Friends of Vermilion our Companys founders, board of directors, executive and staff, we have committed over 4MM Provides disadvantaged women…

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