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October 2016 Corporate Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Oct 5, 2016 · 91 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. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 1
    INTERNATIONALLY DIVERSIFIED SUSTAINABLE GROWTH AND INCOME OCTOBER 2016
  2. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 2
    CONTENTS Vermilion Overview......................................................................................................................... 3 Sustainable…
  3. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 3
    VERMILION OVERVIEW 3
  4. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 4
    VERMILIONS KEY ATTRIBUTES Global independent E&P with leading positions in high netback businesses in Europe, North America and Australia Self-funded growth and income model supported by high margins, low decline rates and strong…
  5. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 5
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (September 30, 2016) 50.82 (TSX), 38.74 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding 117.4 million Average Daily Trading Volume (shares) 0.7 million Monthly…
  6. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 6
    STRATEGY Self-funded growth-and-income Targeting yield contraction through per-share growth and risk reduction (low financial and operating leverage, Capital Markets Model consistent dividend history, and diversification) Cost…
  7. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 7
    PRODUCTION GROWTH AND CAPEX 2016 GUIDANCE 62,500 TO 63,500 BOE/D Y/Y E&D Capital 80,000 Production Y/Y PPS Capex Intensity Year (boe/d) Growth* Growth* (MM) (/boe/d)** 70,000 13% CAGR 2011 35,202 10% 6% 491 13,900 60,000 2012…
  8. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 8
    PER SHARE GROWTH 650 3,000 600 2,750 MBOE PER MILLION SHARES BOE/D PER MILLION SHARES 550 2,500 500 2,250 450 2,000 400 1,750 350 1,500 300 1,250 250 1,000 2011 2012 2013 2014 2015 2016E 2017E 2018E…
  9. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 9
    E&D CAPITAL BUDGET 2014 Actuals 2015 Actuals 2016 Budget* 2016 vs 2015 2016 vs 2014 Capital Expenditures by Country (MM) (MM) (MM) % Change % Change Canada 336 202 58 (71%) (83%) France 148 92 66 (28%) (55%) Netherlands 62 47 27…
  10. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 10
    FUND FLOWS FROM OPERATIONS (FFO) 1,000 Fund Flows from Fund Flows Y/Y 800 Year Operations (MM) per Share Growth 2011 474 5.22 33% 600 FFO (MM) 2012 558 5.69 18% 2013 668 6.61 20% 400 2014 805 7.63 21% 2015 516 4.71 (36%)…
  11. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 11
    FFO SENSITIVITY 2016 FFO C6.00/MMBTU EUROPEAN GAS 2016 FFO C7.00/MMBTU EUROPEAN GAS BRENT (US) BRENT (US) OIL OIL PRICE 35 40 45 50 55 60 65 421 PRICE 35 40 45 50 55 60 65 Forecast FFO (CMM) Forecast FFO (CMM) 35 450 458 466…
  12. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 12
    RELIABLE AND GROWING DIVIDENDS CUMULATIVE DIVIDENDS PAID PER SHARE (2003 THRU Q3 2016) = 30.95 0.25 0.215 MONTHLY DIVIDENDS 0.20 0.20 0.19 0.17 0.15 0.10 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013…
  13. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 13
    DIVIDEND YIELD HISTORY 8 AVERAGE DIVIDEND YIELD SINCE CONVERSION TO A CORPORATION = 4.7% 6 DIVIDEND YIELD (%) Current Yield = 5.1% 4 2 0 Sep-10 Dec-10 Sep-11 Dec-11 Sep-12 Dec-12 Sep-13…
  14. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 14
    SUSTAINABILITY RATIO 175% 162% 150% 140% TOTAL EXPENDITURES / FFO* 121% 125% 121% 117% 108% 111% 109% 111% 100% 81% 74% 73% 74% 75% 59% 50% 25% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  15. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 15
    SUSTAINABLE MODEL 15
  16. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 16
    ELEMENTS OF SUSTAINABLE MODEL Vermilion's asset base delivers the three key elements necessary to support a sustainable, long-term dividend growth model: High margins (represented as /boe) Low base production decline rates…
  17. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 17
    COST REDUCTION CAPITAL EFFICIENCY OPERATIONAL EFFICIENCY 40.00 14.00 26% Reduction 35.00 12.00 30.00 10.00 74% Reduction 25.00 / BOE 8.00 / BOE 20.00 6.00 15.00 23% Reduction 4.00 10.00 5% Reduction 5.00 2.00…
  18. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 18
    NETBACKS United Total Q2 2016 Netbacks by Country (/boe*) Canada France Netherlands Germany Ireland Australia States Company Revenue 25.39 57.82 31.77 28.94 32.59 61.53 46.80 36.83 Royalties (1.55) (6.16) (0.52) (4.44) - - (14.02)…
  19. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 19
    RELATIVE NETBACKS 2016 Q2 YTD OPERATING NETBACK EXCL. HEDGING* 2016 Q2 YTD AFTER TAX CASH NETBACK EXCL. HEDGING* 25 15 20 10 /BOE /BOE 15 5 10 0 5 -5 0 -10 PXT VET PEY CR CPG NVA MEG GTE…
  20. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 20
    BASE PRODUCTION DECLINE RATES Effective Natural 50% Country Decline Rate* Decline Rate* VET France 11% 11% 40% CORPORATE NATURAL VET CANADA DECLINE Netherlands** 0% 19% ONLY DECLINE 30% Germany 14% 14% VET CORPORATE…
  21. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 21
    CAPITAL EFFICIENCY Well Cost IP365 ATAX Recycle ATAX Payout Prod. Efficiency Net Well 2016E Net Investment (CM) (boe/d) ROR Ratio (Years) (IP365 /boed) Inventory* Wells Planned European Gas Netherlands E&D 8.8 1,260 100% 4.5 x 1.3…
  22. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 22
    RESERVES / RESOURCES 22
  23. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 23
    RESERVES 2015 Year End P+P Reserves* (mmboe) Canada France Netherlands Germany Ireland Australia United States Total At December 31, 2014 120.2 58.0 14.2 10.3 24.1 18.0 2.1 246.9 Additions from E&D 8.7 10.2 4.9 (1.1) 1.4 1.8 4.6…
  24. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 24
    RESERVES / RESOURCE BASE 2015 YEAR END WORKING INTEREST RESERVES AND RISKED CONTINGENT RESOURCE (DEVELOPMENT PENDING)* Proved plus Probable WI (mmboe) Risked Contingent Resource (Development Pending) Reserves Low Best Estimate High…
  25. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 25
    RESERVES GROWTH 275 250 2015 F&D / FD&A Costs* Including FDC (/boe) 225 F&D (E&D CAPEX) 8.98 10% CAGR 200 FD&A (Total CAPEX, 175 10.03 including acquisitions) MMBOE 150 FD&A Operating Recycle Ratio 3.2x 125 100 11.7…
  26. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 26
    PDP RECYCLE RATIO 2015 PDP FD&A RECYCLE RATIOS* 4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x VET CR ERF RRX PEY BNE CPG WCP BNP NVA PPY VII BTE KEL LTS INCREASING RECYCLE RATIOS DESPITE COMMODITY PRICE WEAKNESS *…
  27. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 27
    BALANCE SHEET 27
  28. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 28
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY 2.0 BILLION NET DEBT TO FFO RATIO* AS AT JUNE 30, 2016 4.0 PEER AVERAGE 2017 = 3.9x 3.0 627 VET 2017 = 2.3x 2.0 1,373 1.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  29. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 29
    RELATIVE LEVERAGE DEBT TO CASH FLOW 16.0x 14.0x 12.0x 10.0x US AVERAGE 8.0x 6.0x CANADA AVERAGE 4.0x 2.0x 0.0x ECR RSPP POU WPX TET PGF ERF WCP BXE EPE LPI CR NVA TOG PDCE…
  30. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 30
    CREDIT METRICS YE 2012 YE 2013 YE 2014 YE 2015 Q2 2016 Credit Facility ( millions) Approved credit facility 950 1,200 1,750 2,000 2,000 Bank line undrawn** 481 425 727 812 627 Total debt to EBITDA* 0.8 1.1 1.2 2.2 2.4 Total debt to…
  31. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 31
    RISK MANAGEMENT 31
  32. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 32
    RISK MANAGEMENT Vermilion employs a systematic process to identify and manage risk across our business Financial Risk Market Risk Operational Risk Target low financial leverage to Hedging program reduces risk Integrated,…
  33. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 33
    COMMODITY HEDGE POSITION Full Year 2016 Full Year 2017 Full Year 2018 WTI Percent of Production Hedged 14% - - Average Floor / Ceiling / Swap (/bbl) 57.83 / 71.06 / - -/-/- -/-/- Brent Percent of Production Hedged 17% 11% -…
  34. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 34
    INTERNATIONAL DIVERSIFICATION 34
  35. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 35
    CORE OPERATING AREAS NORTH AMERICA EUROPE AUSTRALIA VERMILION IS FOCUSED IN THREE CORE AREAS 35
  36. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 36
    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…
  37. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 37
    ORGANIZATIONAL MODEL Vermilion utilizes a decentralized business unit (BU) structure to manage our diverse global portfolio Country-based business units are grouped into three Vermilion Energy Inc. regions: Europe, North America and…
  38. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 38
    COMMODITY MIX PRODUCTION (2016)* 2P RESERVES (YE 2015)** ESTIMATED FFO CONTRIBUTION (2016)* Australia France Australia France Australia 24% 10% United 14% United 19% United 7% States States Germany States 1% Canada 0% France 4%…
  39. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 39
    COMMODITY PRICE DIVERSIFICATION Commodity North American European WTI Brent PORTFOLIO MIX STANDARD DEVIATION* 100% ANNUALIZED STANDARD DEVIATION Exposures Natural Gas Natural Gas Crude Oil Crude Oil 90% Vermilion 80% North…
  40. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 40
    GLOBAL CRUDE OIL PRICING ADVANTAGE Over 65% of Vermilions crude oil production is priced with CRUDE OIL** reference to Dated Brent* BRENT US49 WTI US48 Differential (4) Reduces Vermilions exposure to the transportation-…
  41. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 41
    EUROPEAN NATURAL GAS PRICING 41
  42. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 42
    EUROPEAN NATURAL GAS PRICING - SUMMARY Futures markets continue to reflect a significant NATURAL GAS* premium for European natural gas versus AECO and 12 2016 Euro Gas Henry Hub Collar Ceiling C8.98 10 Realized forward prices are…
  43. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 43
    EUROPEAN NATURAL GAS IMPACT OF US LNG US LNG liquefaction capacity expected to grow by 7.5 bcf/d (post-FID LNG Costing to Europe from United States US/mmbtu C/mmbtu projects) through 2020, potentially increasing US LNG shipments to…
  44. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 44
    EUROPEAN NATURAL GAS DOMESTIC SUPPLY / DEMAND European Supply & Demand (Bcf/d) 2012 2015E 2017E 2020E EUROPEAN SUPPLY European Domestic Production 26.5 22.5 21.5 20.0 European domestic production continues to decline Russia 9.9 13.8…
  45. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 45
    EUROPEAN ASSETS 45
  46. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 46
    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 Establishing production…
  47. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 47
    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 2015 2016E France Netherlands Germany Ireland…
  48. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 48
    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…
  49. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 49
    FRANCE PRODUCTION 14,000 12,000 10,000 8,000 BOE/D 6,000 4,000 2,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E E&D CAPEX AS A % OF FFO* n/a 43% 51% 101% 45%…
  50. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 50
    FRANCE OPERATING PERFORMANCE Value Creation (2P Reserves) mmboe Acquired Reserves 14,000 Initial acquisition (1997) 22.6 2006 Acquisition 15.0 2012 Acquisition 1 6.7 2006 Acquisition 12,000 2012 Acquisition 2 6.3 15.0 mmboe (2P)…
  51. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 51
    CHAMPOTRAN DEVELOPMENT 14 wells drilled from 2013 to 2015 at 100% success rate CHAMPOTRAN PRODUCTION Reduced DCET costs by 23% since 2013 6,000 39 identified future net drilling locations in 5,000 reserves and resources*…
  52. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 52
    NEOCOMIAN DEVELOPMENT NEOCOMIAN GROWTH POTENTIAL 10 WELLS PER YEAR Part of Paris Basin light oil assets (Neocomian field) acquired 3,500 Vermilion 10 Wells per Year from ZaZa Energy France in December 2012 3,000 Pre-acquisition…
  53. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 53
    NETHERLANDS Entered Netherlands in 2004 HARLINGEN 2 onshore gas producer High impact natural gas drilling and development AMSTERDAM Strong gas price, favorable fiscal regime, and low OPEX enhance netbacks NETHERLANDS Seven…
  54. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 54
    NETHERLANDS PRODUCTION NETHERLANDS - Expected per well risked economics (based on recent drilling) DCET Well Cost ( million) 8.8 Expected IP30 Rate (boe/d) 1,690 10,000 Expected EUR per well (mboe) 1,350 After Tax ROR (%) 100%…
  55. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 55
    NETHERLANDS OPERATING PERFORMANCE Value Creation (2P Reserves) mmboe Acquired Reserves Initial acquisition (2004) 16.5 14,000 2013 Acquisition 2.3 Total Acquired Reserves 18.8 12,000 Production to YE 2015 23.8 Initial…
  56. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 56
    NETHERLANDS ACTIVITY LEGEND Vermilion has tripled its undeveloped land base since the beginning of 2012 Vermilion producing concessions Licences acquired (Northern Petroleum PLC 2013) Exploration concessions (awarded 2012 2014) We…
  57. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 57
    GERMANY COUNTRY OVERVIEW Largest gas market in Europe, with a long history of oil and natural gas development Country-wide production is approximately 44 kbbl/d of oil and 0.7 bcf/d of natural gas (160 kboe/d) Consistent fiscal…
  58. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 58
    GERMANY LAND POSITION Largely contiguous land position of over 1.1 million net acres in the prolific North German LEGEND Basin, which has cumulative production of more than 2 Bbbls of oil and 34 Tcf of natural gas Initial…
  59. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 59
    GERMANY PRODUCTION GERMANY Burgmoor Z3 Sidetrack (Based on Vermilions 25% W.I.) DCET Well Cost ( million) 3.9 5,000 IP30 Rate (boe/d) 350 Engie acquisition (expected to close late EUR per well (mboe) 780 After Tax ROR (%) 22% Q4…
  60. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 60
    GERMAN ACQUISITION On June 28, 2016, Vermilion announced the acquisition of producing assets in northwest Germany from Engie E&P Deutschland GmbH for 33 million (47.9 million). Expected close Q4 2016 Acquisition provides Vermilions…
  61. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 61
    IRELAND BELLANABOY GAS PLANT OVERVIEW Vermilion holds 18.5% non-operated interest in the Corrib gas field, offshore Ireland CORRIB GAS FIELD PIPELINE (83km Offshore) NORTHERN FROM UK Over 90% of supply imported prior to Corrib…
  62. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 62
    IRELAND PRODUCTION 10,000 8,000 6,000 BOE/D 4,000 2,000 0 2015 2016E E&D CAPEX AS A % OF FFO* NM 9% Gas EFFICIENT TRANSLATION OF REVENUE FUND FLOWS FROM OPERATIONS FREE CASH FLOW * 2016E: Company estimates as of…
  63. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 63
    CENTRAL AND EASTERN EUROPE (CEE) EXTENSION OF EUROPEAN GROWTH STRATEGY Modest back-loaded capital commitments BUDAPEST EBES Prospective for both oil and gas HUNGARY Under-invested basin that can benefit from new technology SOUTH…
  64. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 64
    NORTH AMERICAN ASSETS 64
  65. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 65
    CANADA Production and assets focused in West Pembina near Drayton Valley and Northgate in SE Saskatchewan In West Pembina, potential for three significant development projects sharing the same surface ALBERTA SASKATCHEWAN…
  66. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 66
    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 2015 2016E E&D CAPEX AS A % OF FFO * 21% 36% 67% 58% 31% 76% 247% 225% 165% 101% 86% 104% 45%…
  67. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 67
    WEST PEMBINA CARDIUM Dominant 90,000 net acre land position in West Pembina Cardium resource play Pembina is the largest conventional oil field in Western Canada Control key infrastructure 15,000 bbl per day oil battery and two…
  68. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 68
    CARDIUM DEVELOPMENT NET CARDIUM PROSPECT INVENTORY* 12,000 AS AT JUNE 30, 2016 10,000 Wells 8,000 Drilled 245 BOE/D Risked 6,000 Contingent Development 4,000 Pending 171 Remaining 2P Locations 2,000 116 0 Note:…
  69. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 69
    MANNVILLE CONDENSATE-RICH GAS VET Land Mannville Fairway 340 net sections (220,000 acres) of Mannville rights, VET Natural Gas Pipelines largely held by production VET Oil Battery VET Mannville HZ NG Processing Plants Average 6…
  70. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 70
    MANNVILLE WELL PERFORMANCE MANNVILLE Expected per well economics - Ellerslie Hz. in Drayton Valley DCET Well Cost ( million) 3.5 1,600 IP30 Rate (boe/d) 680 EUR per well (mboe) 760 After Tax ROR (%) 100% 1,400 After Tax Payout…
  71. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 71
    MANNVILLE DEVELOPMENT NET MANNVILLE PROSPECT INVENTORY* AS AT JUNE 30, 2016 12,000 10,000 Drilled to Date 38 8,000 Risked Contingent Development BOE/D 6,000 Pending 147 Booked 2P 52 4,000 Notikewin 84 2,000…
  72. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 72
    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…
  73. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 73
    UNITED STATES - WYOMING DEVELOPMENT TURNER SAND WELL PERFORMANCE 400 Entered U.S. in September 2014 350 300 Large, operated contiguous land position (83,000 net 250 BOPD acres at 100% working interest) in the Powder River…
  74. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 74
    UNITED STATES PRODUCTION 600 500 400 300 BOE/D 200 100 0 2014 2015 2016E E&D CAPEX AS A % OF ATAX NOI* 64% 535% 296% Crude Oil & NGL Gas EARLY-STAGE LIGHT OIL GROWTH PROJECT * ATAX NOI is defined as FFO before G&A…
  75. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 75
    AUSTRALIAN ASSETS 75
  76. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 76
    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 1,500 - 3,700 m measured depths Contracted oil…
  77. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 77
    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 (%) 18% After Tax Payout…
  78. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 78
    AUSTRALIA OPERATING PERFORMANCE Value Creation (2P Reserves) mmboe (net) Acquisition Date Reserves 16,000 Reserves at initial acquisition (2005) 26.7 Total Acquisition Date Reserves 26.7 14,000 Production to YE 2015 28.2 Reserves…
  79. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 79
    AUSTRALIA ACTIVITY New wells are sidetracks from existing wellbores Oil is trapped above the existing wells, creating opportunity to sidetrack to a higher structural elevation to capture attic and flank oil 13 additional identified…
  80. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 80
    GOVERNANCE / CORPORATE CITIZENSHIP 80
  81. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 81
    GOVERNANCE External awards and recognitions provide important benchmarks for strong performance: The Globe and Mail, Report on Business, Board Games In 2015, Vermilion was ranked 2nd within the energy sector, and 20th among 234…
  82. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 82
    LONG-TERM COMPENSATION APPROACH Pay-for-performance is the foundation of Vermilions approach to compensation, both at the executive level and company-wide All employees participate in Vermilions equity-based Long-Term Incentive Plan…
  83. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 83
    SUSTAINABILITY Vermilion is recognized as a responsible oil and gas producer in our industry: Carbon Disclosure Project (CDP) Vermilion is the leading energy company on the Canadian Climate Disclosure Leadership Index (CLDI) for…
  84. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 84
    STRATEGIC COMMUNITY INVESTMENT Vermilion is committed to giving Canada France Netherlands Australia back to the communities in which we operate We assess the critical needs in each community, and determine where our financial…
  85. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 85
    CORPORATE CULTURE GREAT PLACE TO WORK INSTITUTES ANNUAL RANKING Since 2010, Vermilion has been ranked among the Top 30 Best Workplaces in Canada and France Demonstrates strong corporate culture, creating a high-performance…
  86. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 86
    RECORD OF VALUE CREATION 86
  87. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 87
    VALUE CREATION 1994 2016 8,000 6,910 5,966 TOTAL VALUE 6,000 CREATION MARKET CAPITALIZATION(2) MILLIONS 4,000 2,684 2,000 DIVIDENDS PAID(2) 0 EQUITY ISSUED(1) -2,000 (1,739) MORE THAN 20-YEAR RECORD OF STRONG…
  88. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 88
    RETURN ON CAPITAL EMPLOYED 14 12 10 8 6 ROCE (%) 4 2 0 -2 -4 -6 3 Year Average 5 Year Average 10 Year Average Vermilion Peer Average STRONG CAPITAL EFFICIENCY IN A CAPITAL INTENSIVE BUSINESS * Source:…
  89. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 89
    RELATIVE MARKET PERFORMANCE Since Inception Indices 2016 YTD 1 Year 3 Year 5 Year 10 Year 15 Year (22 Years) S&P TSX Oil & Gas E&P Index 44.6% 43.5% (9.8%) (5.7%) (5.3%) 4.6% 4.9% ENERGY INDICES S&P TSX Oil & Gas E&P Total…
  90. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 90
    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…
  91. October 2016 Corporate Presentation – Vermilion Energy Inc. – slide 91
    ANALYST COVERAGE FIRM ANALYST PHONE EMAIL AltaCorp Capital Patrick J. ORourke, CFA 403-539-8615 porourkealtacorpcapital.com Barclays Capital Grant Hofer, CFA 403-592-7460 grant.hoferbarclays.com BMO Nesbitt Burns Ray Kwan, P.Eng.…

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