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January 2017 Investor Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Jan 5, 2017 · 99 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. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 1
    INTERNATIONALLY DIVERSIFIED SUSTAINABLE GROWTH AND INCOME JANUARY 2017
  2. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 2
    CONTENTS Vermilion Overview............................................................................................................................ 3…
  3. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 3
    VERMILION OVERVIEW 3
  4. January 2017 Investor 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. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 5
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (December 30, 2016) 56.49 (TSX), 42.17 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding 118.3 million Average Daily Trading Volume (shares) 0.6 million Monthly Dividend…
  6. January 2017 Investor 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, consistent Capital Markets Model dividend history, and diversification) Cost…
  7. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 7
    ORGANIZATIONAL MODEL Vermilion uses a decentralized business unit structure to manage our diverse global portfolio Country-based business units are grouped into three regions: Vermilion Energy Inc. Europe, North America and…
  8. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 8
    PRODUCTION GROWTH AND CAPEX Vermilion is self-funded for E&D CAPEX and cash dividends Y/Y Y/Y E&D Capital 2017 GUIDANCE 69,000 TO 70,000 BOE/D Production Year Production PPS CAPEX Intensity (BOE/D) 80,000 Growth* Growth* (MM)…
  9. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 9
    CONSISTENT PRODUCTION GROWTH PER SHARE DEBT-AND-DIVIDEND-ADJUSTED INDEXED PRODUCTION PER SHARE (BASE VALUE = 100)* COMPANY 250 (% OF PRODUCTION FROM N.A. GAS)** TOU (88%) PEY (93%) 200 PXT (0%) VET (24%) ARX (66%) BIR (89%)…
  10. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 10
    E&D CAPITAL BUDGET Capital Expenditures by Country 2014 Actuals 2015 Actuals 2016 Estimate* 2017 Budget* (MM) (MM) (MM) (MM) Canada 336 202 59 108 France 148 92 66 69 Netherlands 62 47 24 46 Germany 3 5 4 18 Australia 44 62 63…
  11. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 11
    FUND FLOWS FROM OPERATIONS (FFO) FFO FFO Y/Y Year 1,000 (MM) per Share Growth 2011 474 5.22 33% 800 2012 558 5.69 18% 600 2013 668 6.61 20% FFO MM 2014 805 7.63 21% 400 2015 516 4.71 (36%) 200 2016E* 500 4.32 (3%) 0…
  12. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 12
    FFO SENSITIVITY 2017 Forecast FFO (CMM) WTI (US/BBL) 40 45 50 55 60 65 TTF (C/MMBTU) 5.50 512 557 600 646 689 728 6.00 521 566 608 654 697 736 6.50 529 575 617 663 706 744 7.00 537 582 624 670 713 752 7.50 542 588 629 675…
  13. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 13
    FREE CASH FLOW GENERATION 500 80,000 8% 7% 400 70,000 FFO LESS E&D CAPEX* (MM) 2017E DAFCF YIELDS** (MM) 6% PRODUCTION (BOE/D) 300 60,000 5% 4% 200 50,000 3% 100 40,000 2% 0 30,000 1% 0% -100 20,000 MEG…
  14. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 14
    DIVIDENDS 14
  15. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 15
    RELIABLE AND GROWING DIVIDENDS CUMULATIVE DIVIDENDS PAID PER SHARE (2003 THRU 2016) = 31.59 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 2014…
  16. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 16
    RELATIVE DIVIDEND HISTORY INDEXED DIVIDENDS PER SHARE (BASE VALUE = 100)* 160 140 120 MONTHLY DIVIDEND (INDEXED) 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 VET BNP PGF PWT ERF NVA TOG…
  17. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 17
    RELATIVE DIVIDEND YIELD 18% 16% 14% 12% DIVIDEND YIELD 10% 8% 6% 4% 2% 0% 2009 2010 2011 2012 2013 2014 2015 2016 VET Average Group average yield including companies not currently paying a dividend HIGHER…
  18. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 18
    SUSTAINABILITY RATIO 200% 175% 162% 150% TOTAL EXPENDITURES / FFO* 140% 125% 121% 117% 121% 111% 109% 111% 100% 108% 75% 81% 74% 73% 72% 73% 75% 50% 59% 25% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  19. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 19
    RELATIVE SUSTAINABILITY 200% 175% 150% 2-YEAR CAPEX / CF (2017-2018) 125% 100% 75% 50% 25% 0% TET LUPE PWT CR PMT ARX RRX CJ NBZ AAV SGY BNE CNE BNP EGL PGF GPRK…
  20. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 20
    ELEMENTS OF SUSTAINABLE MODEL 20
  21. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 21
    ELEMENTS OF SUSTAINABLE MODEL Vermilion's asset base delivers the three key elements necessary to support a sustainable, long-term dividend growth model: 1. High margins (represented as /boe) 2. Low base production decline rates…
  22. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 22
    COST REDUCTIONS CAPITAL EFFICIENCY OPERATIONAL EFFICIENCY 40.00 14.00 27% Reduction 35.00 12.00 74% Reduction 30.00 10.00 25.00 8.00 / BOE / BOE 20.00 6.00 15.00 28% Reduction 4.00 10.00 5% Reduction 5.00…
  23. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 23
    NETBACKS United Total Q3 2016 Netbacks by Country (/BOE*) Canada France Netherlands Germany Ireland Australia States Company Sales 28.75 55.88 31.80 30.47 28.68 60.61 44.53 38.40 Royalties (2.15) (6.06) (0.42) (1.10) - - (12.74)…
  24. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 24
    RELATIVE NETBACKS 2016 Q3 YTD OPERATING NETBACK EXCL. HEDGING* 2016 Q3 YTD AFTER-TAX CASH NETBACK EXCL. HEDGING* 25 20 20 15 /BOE /BOE 15 10 10 5 5 0 0 -5 PWT MEG CR BNE ARX BNP SGY POU PGF…
  25. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 25
    BASE PRODUCTION DECLINE RATES Effective Natural Country Decline Decline 50% Rate* Rate* VET CANADA VET ONLY CORPORATE France 11% 11% 40% DECLINE NATURAL DECLINE VET Netherlands** 0% 19% CORPORATE EFFECTIVE 30% DECLINE…
  26. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 26
    CAPITAL EFFICIENCY Investment Well Cost IP365 EUR Prod. Efficiency ATAX Recycle ATAX Payout Net Well 2017E Net (CM) (BOE/D) (MBOE) (IP365 /BOED) ROR Ratio (Years) Inventory* Wells Planned European Gas Netherlands E&D 8.5 1,260 1,350…
  27. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 27
    RESERVES / RESOURCES 27
  28. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 28
    RESERVES / RESOURCE BASE 2015 YEAR END WORKING INTEREST RESERVES AND RISKED CONTINGENT RESOURCE (DEVELOPMENT PENDING)* Proved Plus Probable WI (MMBOE) Reserves Risked Contingent Resource (Development Pending) Low Best Estimate High…
  29. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 29
    RESERVES GROWTH Including FDC 2015 F&D / FD&A Costs* 275 (/BOE) 250 F&D (E&D CAPEX) 8.98 225 10% CAGR 200 FD&A (Total CAPEX, 175 10.03 including acquisitions) 150 MMBOE 125 FD&A Operating Recycle Ratio 3.2x 100 75 50…
  30. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 30
    RELATIVE PDP RECYCLE RATIOS 3 YEAR PROVED DEVELOPED PRODUCING (PDP) FD&A RECYCLE RATIOS* 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x VET BIR RRX ERF PEY BNP RMP BXE DEE PPY YGR ARX PNE TVE NVA TET VII POU KEL HIGH NETBACKS AND…
  31. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 31
    BALANCE SHEET 31
  32. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 32
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY 2.0 BILLION NET DEBT TO FFO RATIO* AS AT SEPTEMBER 30, 2016 4.0 3.0 666 2.0 1,334 1.0 0.0 REVOLVING CREDIT FACILITY 2016E 2017E 2018E 2003 2004 2005 2006 2007 2008…
  33. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 33
    RELATIVE LEVERAGE 2017E DEBT TO CASH FLOW 10.0x 9.0x 8.0x 7.0x 6.0x 5.0x US AVERAGE 4.0x 3.0x CANADIAN AVERAGE 2.0x 1.0x 0.0x TET WPX LPI MRD WTI EPE OAS KOS CR BBG DNR BNP BNE…
  34. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 34
    CREDIT METRICS YE 2012 YE 2013 YE 2014 YE 2015 Q3 2016 Credit Facility ( millions) Approved credit facility 950 1,200 1,750 2,000 2,000 Bank line undrawn** 481 425 727 812 666 Total debt to EBITDA* 0.8 1.1 1.2 2.2 2.4 Total debt…
  35. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 35
    RISK MANAGEMENT 35
  36. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 36
    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 impart Hedging program reduces risk associated…
  37. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 37
    ANNUAL COMMODITY HEDGE POSITION Full Year 2016 Full Year 2017 Full Year 2018 Full Year 2019 WTI Percent of Production Hedged 23% 31% - - Average Floor / Ceiling / Swap (/bbl) 57.83 / 71.06 / - 69.93 / 77.29 / 71.31 -/- /- -/- /-…
  38. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 38
    QUARTERLY COMMODITY HEDGE POSITION OIL HEDGES NATURAL GAS HEDGES Q1 2017 71.31 European Gas North American Gas 68.22-74.29 74.54 68.27-81.14 74.54 Q1 2017 7.66 6.53-8.00 Q1 2017 3.10 2.31-3.01 70.00- 68.49-81.25 Q2 2017 75.00…
  39. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 39
    INTERNATIONAL DIVERSIFICATION 39
  40. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 40
    CORE OPERATING AREAS NORTH AMERICA EUROPE AUSTRALIA VERMILION IS FOCUSED IN THREE CORE AREAS 40
  41. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 41
    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…
  42. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 42
    COMMODITY MIX PRODUCTION (2017)* 2P RESERVES (YE 2015)** ESTIMATED FFO CONTRIBUTION (2017)* United Australia Australia France France Australia States 12% United 9% 18% 24% 7% 1% States United 2% Germany States France Germany…
  43. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 43
    COMMODITY PRICE DIVERSIFICATION Commodity Exposures North American European WTI Brent PORTFOLIO MIX STANDARD DEVIATION* Natural Gas Natural Gas Crude Oil Crude Oil 100% Vermilion STANDARD DEVIATION 80% ANNUALIZED North…
  44. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 44
    GLOBAL CRUDE OIL PRICING ADVANTAGE Over 65% of Vermilions crude oil production is priced with reference to Dated Brent* CRUDE OIL** BRENT 54 Reduces Vermilions exposure to the WTI 53 Differential (5) transportation-related…
  45. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 45
    EUROPEAN NATURAL GAS PRICING 45
  46. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 46
    EUROPEAN NATURAL GAS PRICING - SUMMARY Futures markets continue to reflect a significant premium NATURAL GAS* for European natural gas versus AECO and Henry Hub 12 Realized forward prices are expected to be influenced 10 by…
  47. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 47
    EUROPEAN NATURAL GAS IMPACT OF US LNG US LNG liquefaction capacity expected to grow by 7.5 BCF/D (post-FID projects) LNG Costing to Europe from United States US/mmbtu C/mmbtu through 2020, potentially increasing US LNG shipments to…
  48. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 48
    EUROPEAN NATURAL GAS DOMESTIC SUPPLY / DEMAND EUROPEAN SUPPLY European Supply & Demand (Bcf/d) 2012 2015 2017E 2020E European Domestic Production 26.5 22.5 21.5 20.0 European domestic production continues to decline Russia 9.9 13.8…
  49. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 49
    EUROPEAN ASSETS 49
  50. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 50
    EUROPEAN CORE AREA DEVELOPING LEADING-TO-DOMINANT BUSINESSES IN EACH JURISDICTION IRELAND FRANCE 1 oil producer, with share of domestic industry NETHERLANDS NETHERLANDS 2 onshore gas producer GERMANY Establishing production…
  51. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 51
    EUROPEAN PRODUCTION 40,000 35,000 30,000 25,000 BOE/D 20,000 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 2017E France Netherlands Germany…
  52. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 52
    FRANCE Entered France in 1997 PARIS Record production level in 2015 PARIS BASIN Assets characterized by large OOIP conventional fields with high working interest (OOIP in 5 largest fields 1.7 billion barrels of oil) FRANCE…
  53. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 53
    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 2017E E&D CAPEX AS % OF FFO* N/A 43% 51% 101%…
  54. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 54
    FRANCE OPERATING PERFORMANCE VALUE CREATION (2P RESERVES) MMBOE Acquired Reserves Initial acquisition (1997) 22.6 14,000 2006 Acquisition 15.0 2012 Acquisition 1 6.7 2012 Acquisition 2 6.3 2006 ACQUISITION 12,000 Total Acquired…
  55. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 55
    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 reserves and resources* 5,000…
  56. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 56
    NEOCOMIAN DEVELOPMENT NEOCOMIAN GROWTH POTENTIAL 4 WELLS PER YEAR Part of Paris Basin light oil assets (Neocomian field) acquired 2,500 VERMILION 4 WELLS PER YEAR DRILLING from ZaZa Energy France in December 2012 2,000…
  57. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 57
    CAZAUX FIELD OPTIMIZATION Cazaux field acquired by Vermilion in 2006 One of Frances largest conventional fields (400MMbbl OOIP); CAZAUX PRODUCTION located in the Aquitaine Basin 2500 70% production growth since acquisition…
  58. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 58
    NETHERLANDS Entered Netherlands in 2004 HARLINGEN 2 onshore gas producer High impact natural gas drilling and development Strong gas price, favorable fiscal regime, and low OPEX enhance netbacks AMSTERDAM NETHERLANDS Seven…
  59. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 59
    NETHERLANDS PRODUCTION NETHERLANDS - Expected per well risked economics (based on recent drilling) DCET Well Cost ( million) 8.5 Expected IP30 Rate (boe/d) 1,690 10,000 Expected EUR per well (mboe) 1,350 After Tax ROR (%) 100%…
  60. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 60
    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 INITIAL ACQUISITION 16.5 MMBOE (2P)…
  61. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 61
    NETHERLANDS ACTIVITY Vermilion has tripled its undeveloped land base since the beginning of 2012 We have drilled 12 high-rate extension and discovery gas wells since 2009, with an average success rate of 67% over this period 42…
  62. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 62
    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) GAS AND OIL PRODUCING…
  63. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 63
    GERMANY LAND POSITION Largely contiguous land position of over 1.1 million net acres in the prolific Initial Non-Operated North German Basin, which has cumulative production of more than 2 Bbbls Acquisition of oil and 34 Tcf of…
  64. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 64
    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 (46.2 million). Acquisition closed December 19, 2016, with approximate…
  65. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 65
    GERMANY PRODUCTION GERMANY Burgmoor Z3 Sidetrack (Non-op gas assets, reflects 25% W.I.) DCET Well Cost ( million) 3.8 IP30 Rate (boe/d) 350 5,000 EUR per well (mboe) 780 ENGIE ACQUISITION After Tax ROR (%) 36% (CLOSED DECEMBER…
  66. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 66
    IRELAND OVERVIEW Vermilion holds 18.5% non-operated interest in the Corrib gas field, offshore Ireland Over 90% of supply imported prior to Corrib startup Corrib is anticipated to deliver 60% to 65% of Irelands gas needs at peak…
  67. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 67
    IRELAND PRODUCTION 12,000 10,000 8,000 6,000 BOE/D 4,000 2,000 0 2015 2016E 2017E E&D CAPEX AS % OF FFO* NM 9% 1% Gas EFFICIENT TRANSLATION OF REVENUE FUND FLOWS FROM OPERATIONS FREE CASH FLOW * 2016E: Company…
  68. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 68
    CENTRAL AND EASTERN EUROPE (CEE) EXTENSION OF EUROPEAN GROWTH STRATEGY Modest back-loaded capital commitments Prospective for both oil and gas Under-invested basin that can benefit from new technology CROATIA Awarded 4…
  69. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 69
    NORTH AMERICAN ASSETS 69
  70. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 70
    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 infrastructure Cardium light…
  71. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 71
    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 2017E E&D CAPEX AS % OF FFO* 21% 36% 67% 58% 31% 76% 247% 225% 165% 101% 86% 104%…
  72. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 72
    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/d oil battery and two owned and…
  73. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 73
    CARDIUM DEVELOPMENT NET CARDIUM PROSPECT INVENTORY* 12,000 AS AT SEPTEMBER 30, 2016 10,000 8,000 WELLS DRILLED 6,000 245 RISKED BOE/D CONTINGENT 4,000 DEVELOPMENT PENDING 2,000 171 REMAINING 2P LOCATIONS 0 116 2009…
  74. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 74
    WEST PEMBINA AND FERRIER MANNVILLE NOTIKEWIN Industry Mannville Horizontals Key Oil Battery 340 net sections (220,000 acres) of Mannville rights, largely held Key Gas Plant by production Key Compressor VET Gas Pipeline 29 net West…
  75. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 75
    WEST PEMBINA (LOWER MANNVILLE) CONDENSATE-RICH GAS LOWER MANNVILLE ELLERSLIE 1,800 1,600 1,400 1,200 1,000 LOWER MANNVILLE ELLERSLIE Expected per well economics BOE/D 800 DCET Well Cost ( million) 3.5 IP30 Rate…
  76. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 76
    FERRIER (UPPER MANNVILLE) LIQUIDS-RICH GAS NOTIKEWIN FALHER 1,800 2,500 UPPER MANNVILLE 1,600 2,000 1,400 1,200 1,500 UPPER MANNVILLE FERRIER Expected per well economics 1,000 BOE/D DCET Well Cost ( million) 3.6…
  77. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 77
    MANNVILLE DEVELOPMENT NET MANNVILLE PROSPECT INVENTORY* 12,000 AS AT SEPTEMBER 30, 2016 10,000 DRILLED TO DATE 40 8,000 RISKED CONTINGENT 6,000 DEVELOPMENT BOE/D PENDING 4,000 147 NOTIKEWIN BOOKED 2P 83 50 2,000…
  78. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 78
    SOUTHEAST SASKATCHEWAN Entered area through acquisition of Elkhorn Resources Inc. in April 2014, with further land added subsequent to acquisition Elkhorn Lands 2P reserves totaling 18.0 mmboe* New Land Existing HZ Wells Land…
  79. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 79
    SOUTHEAST SASKATCHEWAN DEVELOPMENT NET SE SASK PROSPECT INVENTORY* 4,000 AS AT SEPTEMBER 30, 2016 WELLS 3,000 DRILLED 20 BOE/D 2,000 RISKED REMAINING 2P CONTINGENT 1,000 LOCATIONS DEVELOPMENT 113 PENDING 60 0…
  80. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 80
    UNITED STATES - WYOMING DEVELOPMENT TURNER SAND WELL PERFORMANCE Entered U.S. in September 2014 400 350 300 Large, operated contiguous land position (83,000 net 250 BOPD 200 acres at 100% working interest) in the Powder…
  81. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 81
    UNITED STATES PRODUCTION 1,400 1,200 1,000 800 BOE/D 600 400 200 0 2014 2015 2016E 2017E E&D CAPEX AS % OF OF ATAX NOI* 64% 535% 358% 103% Crude Oil & NGL Gas EARLY-STAGE LIGHT OIL GROWTH PROJECT * ATAX NOI is…
  82. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 82
    AUSTRALIAN ASSETS 82
  83. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 83
    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…
  84. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 84
    AUSTRALIA PRODUCTION AUSTRALIA - per well economics* based on performance of 2013-2016 drilling programs DCET Well Cost ( million) 25.6 IP30 Rate (boe/d) 4,400 EUR per well (mboe) 1,000 12,000 After Tax ROR (%) 82% After Tax Payout…
  85. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 85
    AUSTRALIA OPERATING PERFORMANCE VALUE CREATION (2P RESERVES) MMBOE Acquisition Date Reserves Reserves at initial acquisition (2005) 26.7 16,000 Total Acquisition Date Reserves 26.7 14,000 Production to YE 2015 28.2 Reserves at YE…
  86. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 86
    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…
  87. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 87
    GOVERNANCE / CORPORATE CITIZENSHIP 87
  88. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 88
    GOVERNANCE Vermilions external awards and recognition provide important benchmarks for our strong performance The Globe and Mail, Report on Business, Board Games In 2016, Vermilion ranked 3rd within the oil and gas sector, and among…
  89. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 89
    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…
  90. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 90
    HEALTH, SAFETY AND ENVIRONMENT (HSE) PHILOSOPHY Safety, environmental protection, and regulatory compliance go hand- VERMILIONS PRIORITIES in-hand with maximizing profitability WE CONDUCT ALL ACTIVITIES TO: These priorities should…
  91. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 91
    SUSTAINABILITY Vermilion is recognized as a responsible oil and gas producer in our industry Carbon Disclosure Project (CDP) Vermilion was named to the CDP Climate A List, one of 193 companies globally, and the only North American…
  92. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 92
    STRATEGIC COMMUNITY INVESTMENT Vermilion is committed to giving back to Canada France Netherlands Australia the communities in which we operate We assess the critical needs in each community, and determine where our financial…
  93. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 93
    CORPORATE CULTURE GREAT PLACE TO WORK INSTITUTES ANNUAL RANKING Great Place to Work Institute evaluates companies by analyzing results of a Trust Index survey provided to employees and evaluating the workplace through a Culture…
  94. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 94
    RECORD OF VALUE CREATION 94
  95. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 95
    VALUE CREATION 1994 2016 10,000 7,612 8,000 6,681 6,000 MILLIONS TOTAL VALUE 4,000 MARKET CREATION CAPITALIZATION(2) 2,646 2,000 DIVIDENDS PAID(2) 0 EQUITY ISSUED(1) -2,000 (1,715) MORE THAN 20-YEAR RECORD…
  96. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 96
    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: Canoils. ROCE…
  97. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 97
    RELATIVE MARKET PERFORMANCE Since Inception Indices 1 Year 3 Year 5 Year 10 Year 15 Year (23 Years) S&P TSX Oil & Gas E&P Index 52.5% -9.1% -6.7% -5.1% 4.4% 4.9% ENERGY INDICES S&P TSX Oil & Gas E&P Total Return Index 55.9%…
  98. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 98
    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…
  99. January 2017 Investor Presentation – Vermilion Energy Inc. – slide 99
    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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