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November 2015 Investor Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Nov 10, 2015 · 66 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. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 1
    DEFINED PRODUCTION GROWTH RELIABLE AND GROWING DIVIDENDS NOVEMBER 2015
  2. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 2
    VERMILIONS KEY ATTRIBUTES Leading positions in high netback businesses in Europe, North America and Australia Long-term dividend growth model supported by high margins, low decline rates and strong capital efficiencies Defensive…
  3. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 3
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (November 2, 2015) 46.51 (TSX), 35.47(NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding 110.8 million Monthly Dividend 0.215/share Dividend Yield 5.5% Director and…
  4. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 4
    PRODUCTION GROWTH 2015 GUIDANCE - 55,000 TO 57,000 BOE/D 70,000 60,000 16% CAGR Year Production (boe/d) Y/Y Growth 50,000 2011 35,202 10% 40,000 2012 37,803 7% 6% CAGR BOE/D 2013 41,005 8% 30,000 2014 49,573 21%…
  5. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 5
    FFO GROWTH 1,000 800 Fund Flows from Fund Flows Year Operations, MM per Share Y/Y Growth 2011 474 5.22 33% 600 FFO (MM) 2012 558 5.69 18% 400 2013 668 6.61 20% 2014 805 7.63 21% 200 2015E* 503 4.59 (38%) 0…
  6. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 6
    FFO SENSITIVITY 2015 FFO C8.50/MMBTU EUROPEAN GAS BRENT (US) FFO sensitivity to European Gas (TTF) = OIL 35 40 45 50 55 60 65 0.25MM for every 0.25/mmbtu change in TTF pricing PRICE Forecast FFO (CMM) FFO sensitivity to AECO =…
  7. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 7
    RELIABLE AND GROWING DIVIDENDS CUMULATIVE DIVIDENDS PAID PER SHARE (2003 THRU Q3 2015) = 28.365 0.25 0.215 0.20 MONTHLY DIVIDENDS 0.20 0.19 0.17 0.15 0.10 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013…
  8. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 8
    SUSTAINABILITY RATIO 86% AVERAGE PRE-CORRIB CORRIB DEVELOPMENT PHASE CORRIB CASH FLOW 175% 162% 150% 140% 121% 125% 125% TOTAL EXPENDITURES / FFO* 117% 108% 111% 109% 111% 100% 81% 74% 73% 75% 59% 50% 25%…
  9. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 9
    RESERVES / RESOURCES
  10. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 10
    RESERVES GROWTH 250 225 Excluding FDC Including FDC 200 2014 F&D / FD&A Costs* 10% CAGR (/boe) (/boe) 175 F&D (E&D CAPEX) 18.28 17.37 150 MMBOE FD&A (total CAPEX, 125 19.42 22.38 including acquisitions) 100 FD&A…
  11. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 11
    2014 TOTAL P+P RESERVES 2014 Year End P+P Reserves (mmboe) Canada France Netherlands Germany Ireland Australia United States Total At December 31, 2013 86.1 55.2 13.7 - 24.1 19.5 - 198.6 Additions from E&D 26.0 6.8 2.8 1.1 - 0.9…
  12. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 12
    RESERVES / RESOURCE BASE 2014 YEAR END WORKING INTEREST RESERVES, CONTINGENT RESOURCE AND PROSPECTIVE RESOURCE* Proved plus Probable (mmboe) Contingent Resource Prospective Resource WI Reserves* Low Best Estimate High Low Best…
  13. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 13
    BALANCE SHEET / RISK MANAGEMENT
  14. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 14
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY 2.25 BILLION* NET DEBT TO FFO RATIO** 5.0 225 PEER AVERAGE 2015 = 4.0x 4.0 800 PEER AVERAGE 2016 = 3.1x 3.0 VET 2015 = 2.6x 1,200 2.0 VET 2016 = 1.9x 1.0 REVOLVING CREDIT…
  15. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 15
    CREDIT METRICS YE 2012 YE 2013 YE 2014 Q2 2015 Credit Facility ( millions) Approved credit facility 950 1,200 1,750 2,000 Bank line undrawn* 481 425 727 773 Total debt to EBITDA** 0.83 1.06 1.21 1.85 Total debt to FFO** 1.2 1.5…
  16. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 16
    HEDGING PHILOSOPHY Vermilion hedges for the purpose of risk mitigation only Targeting up to 50% of net of royalty volumes through a portfolio of collars and swaps Control commodity, currency and cost exposures Typically hedge 12…
  17. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 17
    COMMODITY HEDGING Q4 2015 Full Year 2015 Full Year 2016 WTI Percent of Production Hedged 22% 17% 3% Average Floor / Ceiling / Swap (/bbl) 77.20 / 86.89 / - 78.52 / 90.48 / 75.10 75.40 / 84.75 / - Brent Percent of Production Hedged…
  18. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 18
    INTERNATIONAL DIVERSIFICATION
  19. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 19
    VERMILIONS INTERNATIONAL ADVANTAGE Focused in three core areas (Europe, North America and Australia) with stable, well-developed fiscal and regulatory regimes Global asset portfolio provides commodity diversification and premium…
  20. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 20
    GLOBAL COMMODITY MIX PRODUCTION (2015)* 2P RESERVES (YE 2014)** ESTIMATED FFO (2015)* France Australia Australia France Australia 18% 12% 23% United 22% United 7% United States States States 0% 0% France 1% Germany Germany OIL…
  21. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 21
    GLOBAL PRICING ADVANTAGE CRUDE OIL* NATURAL GAS** 12 (21) (4) VET BRENT US48 DATED BRENT US47 WTI US46 VET 10 BRENT GAS PRICE (/MMBTU) PRODUCTION EDMONTON 8 INDEX European gas price approximately 6 3x North American…
  22. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 22
    TOP QUARTILE CASH NETBACKS Q2 YTD 2015 Netbacks by Country (/boe*) Canada France Netherlands Germany Australia United States Total Company Revenue 38.24 68.52 48.13 44.27 81.60 54.07 51.19 Royalties (3.25) (5.68) (2.11) (7.71) -…
  23. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 23
    RELATIVE NETBACKS Q2 YTD 2015 OPERATING NETBACK EXCL. HEDGING* Q2 YTD 2015 AFTER TAX CASH NETBACK EXCL. HEDGING* 35 35 30 30 25 25 /BOE /BOE 20 20 15 15 10 10 5 5 0 0 VET BNE CPG PRE WCP COS ARX BTE PEY PWT PGF…
  24. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 24
    ASSET OVERVIEW
  25. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 25
    CORE OPERATING AREAS NORTH AMERICA EUROPE AUSTRALIA VERMILION IS FOCUSED IN THREE CORE AREAS 27
  26. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 26
    2015 E&D CAPITAL BUDGET 2015 Revised E&D CAPEX Budget (MM) Canada France Netherlands Australia Ireland Germany United States Total % Drilling, completions, new well equipment and 140 60 25 50 27 7 6 315 65 tie-in, workovers and…
  27. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 27
    BASE PRODUCTION DECLINE RATES Effective Natural 50% Country Decline Rate* Decline Rate* VET CANADA Canada 34% 34% 40% ONLY DECLINE France 11% 11% VET CORPORATE NATURAL DECLINE 30% Netherlands** 0% 22% VET CORPORATE EFFECTIVE…
  28. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 28
    EUROPEAN ASSETS
  29. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 29
    EUROPEAN CORE AREA DEVELOPING LEADING-TO-DOMINANT BUSINESSES IN EACH JURISDICTION IRELAND FRANCE 1 oil producer, with share of domestic industry NETHERLANDS 2 onshore gas producer NETHERLANDS GERMANY Entry into the…
  30. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 30
    EUROPEAN PRODUCTION 35,000 30,000 25,000 20,000 BOE/D 15,000 10,000 5,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E France Netherlands Germany Ireland…
  31. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 31
    FRANCE Entered France in 1997 Record production level in 2015 PARIS Assets characterized by large OOIP conventional fields with high PARIS BASIN working interest (OOIP in 5 largest fields 1.7 billion barrels of oil) FRANCE…
  32. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 32
    FRANCE PRODUCTION 14,000 12,000 10,000 BOE/D 8,000 6,000 4,000 2,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E E&D CAPEX AS A % OF FFO* n/a 43% 51% 101%…
  33. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 33
    FRANCE ACTIVITY 2014 CAPITAL ACTIVITIES 8-well drilling program in the Champotran, Cazaux, Tamaris and Parentis fields 18-well workover program PARIS Acquired 160 km2 of 3-D seismic across Champotran field PARIS BASIN 2015…
  34. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 34
    CHAMPOTRAN WELL PERFORMANCE FRANCE actual per well economics 2013-2015 DCET Well Cost ( million) 4.8 IP30 Rate (boe/d) 260 EUR per well (mboe) 345 550 After Tax ROR (%) 72% After Tax Payout (years) 2.2 500 After Tax NPV10 (…
  35. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 35
    NETHERLANDS Entered Netherlands in 2004 High impact natural gas drilling and development HARLINGEN Strong gas price, favorable fiscal regime, and low OPEX enhance netbacks Six consecutive years of production growth Undeveloped land…
  36. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 36
    NETHERLANDS PRODUCTION NETHERLANDS - Expected per well risked economics of average drilling prospect DCET Well Cost ( million) 10.4 Expected IP30 Rate (boe/d) 1,000 10,000 Expected EUR per well (mboe) 1,280 After Tax ROR (%) 100%…
  37. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 37
    NETHERLANDS ACTIVITY Recently added significant exploration concession at Ijsselmuiden (110,000 acres) Vermilion has tripled its undeveloped land base since the beginning of 2012 2014 CAPITAL ACTIVITIES Seven-well development…
  38. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 38
    GERMAN PRODUCING ASSETS OVERVIEW Acquired a 25% (non-operated) contractual participation interest in a four-partner consortium in February 2014 Assets include 4 gas producing fields across 11 production licenses 204,000 gross acres…
  39. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 39
    GERMANY PRODUCTION GERMANY Deblinghausen Z7A (Based on Vermilions 25% working interest) 6,000 DCET Well Cost ( million) 6.6 IP30 Rate (boe/d) 360 EUR per well (mboe) 1,000 After Tax ROR (%) 26% After Tax Payout (years) 3.0 After…
  40. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 40
    NORTH GERMAN BASIN FARM-IN OVERVIEW Entered into a significant farm-in agreement in July 2015 11 of 19 licenses under farm-in will be Vermilion operated Provides participating interest in 850,000 net undeveloped onshore acres in…
  41. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 41
    IRELAND BELLANABOY GAS PLANT IRISH GAS MARKET Over 90% of supply currently imported CORRIB GAS FIELD PIPELINE (83km Offshore) Corrib (Irelands only new planned supply) anticipated to deliver 60% to 65% of Irelands gas NORTHERN FROM…
  42. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 42
    HUNGARY AND CROATIA EXTENSION OF EUROPEAN GROWTH STRATEGY BUDAPEST EBES Modest back-loaded capital commitments HUNGARY Expect to provide production growth by 2020 SOUTH BATTONYA HUNGARY Awarded the Ebes and South Battonya…
  43. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 43
    NORTH AMERICAN ASSETS
  44. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 44
    CANADA Production and assets focused in West Pembina near Drayton Valley and Northgate in SE Saskatchewan In West Pembina, potential for three significant ALBERTA SASKATCHEWAN development projects sharing the same surface…
  45. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 45
    CANADA PRODUCTION 30,000 25,000 20,000 BOE/D 15,000 10,000 5,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E E&D CAPEX AS A % OF FFO* 22% 38% 77% 72% 34% 93% 286% 272% 197% 119% 99% 192%…
  46. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 46
    WEST PEMBINA CARDIUM Dominant land position in West Pembina Cardium resource play Control key infrastructure 15,000 bbl per day oil battery VET Oil Battery Two owned and operated gas plants Lifting…
  47. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 47
    CARDIUM WELL COST REDUCTION Successfully reduced Cardium well costs from AVERAGE COST PER SECTION 5 million in early 2010 to current costs of (INCLUDES DRILLING, COMPLETION, EQUIPMENT / FACILITIES & TIE-IN) 3 million, on a per…
  48. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 48
    CARDIUM DEVELOPMENT PLAN NET CARDIUM PROSPECT INVENTORY 12,000 AS AT JUNE 30, 2015 10,000 Wells 8,000 Drilled Contingent 245 BOE/D 6,000 Inventory 120 4,000 Remaining Drillable Inventory 169 2,000 0 Note:…
  49. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 49
    MANNVILLE LIQUIDS-RICH GAS 327 net sections (210,000 acres) of Mannville rights, VET Land Mannville Fairway largely held by production VET Natural Gas Pipelines VET Mannville HZ Average 6 month production rate per well over first…
  50. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 50
    MANNVILLE WELL PERFORMANCE MANNVILLE Expected per well economics - Ellerslie Hz. in Drayton Valley DCET Well Cost ( million) 3.9 IP30 Rate (boe/d) 670 1,800 EUR per well (mboe) 740 After Tax ROR (%) 100% 1,600 After Tax Payout…
  51. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 51
    MANNVILLE DEVELOPMENT PLAN NET MANNVILLE PROSPECT INVENTORY* 8,000 Contingent 6,000 (Best Estimate) Drilled to Date 195 17 BOE/D 4,000 Booked 2P 41 Prospective (Best Estimate) Notikewin 2,000 164 Ellerslie 143…
  52. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 52
    DUVERNAY LIQUIDS-RICH RESOURCE PLAY LAND POSITIONS SORTED ON NET SECTIONS IN LIQUIDS-RICH WINDOW* 800 700 600 NET SECTIONS 500 Liquids-Rich Window Oil Window Dry Gas Window 400 300 200 100 0 Shell Vermilion…
  53. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 53
    SOUTHEAST SASKATCHEWAN Elkhorn Lands New Land Existing HZ Wells VET Identified Locations SE SASKATCHEWAN STRATIGRAPHIC CHART Entered area through acquisition of Elkhorn Resources Inc. in April 2014, with further land added…
  54. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 54
    UNITED STATES - WYOMING DEVELOPMENT LATEST TURNER SAND HORIZONTAL WELL 300 Entered U.S. in September 2014 250 200 Current production of approximately 125 bbls/d (100% oil) 150 Large, operated contiguous land position…
  55. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 55
    AUSTRALIAN ASSETS
  56. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 56
    AUSTRALIA Entered Australia in 2005 Offshore oil field 80 km N.W. of Australia (55 m water depth) Horizontal well development with 21 producing wellbores Wells 600m below sea bed with 500 - 3,000+ m horizontal lengths Contracted…
  57. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 57
    AUSTRALIA PRODUCTION AUSTRALIA - per well economics based on performance of 2013 drilling program DCET Well Cost ( million) 34.8 IP30 Rate (boe/d) 4,000 12,000 EUR per well (mboe) 1,400 After Tax ROR (%) 22% After Tax Payout…
  58. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 58
    AUSTRALIA ACTIVITY 2013 Wells New wells are sidetracks from existing wellbores Future Sidetrack Locations Oil is trapped above the existing wells, creating opportunity to sidetrack to a higher structural elevation to capture attic…
  59. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 59
    GOVERNANCE / CULTURE
  60. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 60
    GOVERNANCE / SUSTAINABILITY GLOBE & MAIL BOARD GAMES GOVERNANCE REPORT CARBON DISCLOSURE PROJECT (CDP) EXPLORERS & PRODUCERS ASSOCIATION OF CANADA In 2014, Vermilion was ranked 3rd within the energy sector and Ranked 2nd out of 13 in…
  61. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 61
    CORPORATE CULTURE GREAT PLACE TO WORK INSTITUTES ANNUAL RANKING Since 2010 Vermilion has been ranked among the Top 25 Best Workplaces in Canada and France Demonstrates strong corporate culture Reflects highly engaged and motivated…
  62. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 62
    RECORD OF VALUE CREATION
  63. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 63
    VALUE CREATION 1994 Q2 2015 8,000 6,698 5,924 6,000 TOTAL MARKET 4,000 VALUE CAPITALIZATION(2) MILLIONS CREATION 2,204 2,000 DIVIDENDS PAID(2) 0 EQUITY ISSUED(1) -2,000 (1,430) MORE THAN 20-YEAR RECORD…
  64. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 64
    RETURN ON CAPITAL EMPLOYED 25 20 15 ROCE (%) 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 3 Year Average Peer Average Vermilion STRONG CAPITAL EFFICIENCY IN A CAPITAL INTENSIVE BUSINESS * ROCE =…
  65. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 65
    RELATIVE MARKET PERFORMANCE Since Inception Indices 1 Year 3 Year 5 Year 10 Year 15 Year (21 Years) BROAD INDICES MSCI World Index 2.9% 13.1% 7.9% 3.9% 1.2% 5.0% S&P 500 Composite Index 11.4% 17.9% 13.0% 5.4% 2.3% 7.6% S&P…
  66. November 2015 Investor Presentation – Vermilion Energy Inc. – slide 66
    SUMMARY Long-term, low-risk dividend growth model supported by High margins Diversified product mix Low base decline rate Diversified and well defined project slate Low financial leverage Focused on consistent growth in…

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