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March 2017 Investor Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Mar 10, 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 1
    INTERNATIONALLY DIVERSIFIED SUSTAINABLE GROWTH AND INCOME MARCH 2017
  2. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 2
    CONTENTS Vermilion Overview............................................................................................................................ 3…
  3. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 3
    VERMILION OVERVIEW 3
  4. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 5
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (February 24, 2017) 51.58 (TSX), 39.34 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding 118.7 million Average Daily Trading Volume (shares) 0.6 million Monthly Dividend…
  6. March 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. March 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. March 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. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 10
    E&D CAPITAL BUDGET Capital Expenditures by Country 2014 Actuals 2015 Actuals 2016 Actuals 2017 Budget* (MM) (MM) (MM) (MM) Canada 336 202 62 122 France 148 92 69 69 Netherlands 62 47 24 35 Germany 3 5 4 15 Australia 44 62 60 30…
  11. March 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 2016 511 4.41 (1%) 0…
  12. March 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) 5.50 514 554 588 628 669 702 6.00 522 563 596 636 676 711 6.50 530 571 605 644 684 719 7.00 537 578 612 651 691 726 7.50 542 583 618 656…
  13. March 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…
  14. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 14
    DIVIDENDS 14
  15. March 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. March 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. March 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. March 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% 83% 74% 73% 77% 70% 50% 59% 25% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  19. March 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% PEY PPY BIR PMT ECA BXE TOU PXT VET NVA DEE KEL TOG ERF CPG PNE ARX RRX…
  20. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 20
    ELEMENTS OF SUSTAINABLE MODEL 20
  21. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 22
    COST REDUCTIONS CAPITAL EFFICIENCY OPERATIONAL EFFICIENCY 40.00 14.00 27% Reduction 35.00 12.00 84% Reduction 30.00 10.00 25.00 8.00 / BOE / BOE 20.00 6.00 15.00 29% Reduction 4.00 10.00 4% Reduction 5.00…
  23. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 23
    NETBACKS Q4 2016 Netbacks by Country Canada France Netherlands Germany Ireland Australia United States Total Company (/BOE*) Sales 33.48 63.71 40.84 36.54 44.29 69.05 53.58 45.93 Royalties (3.51) (5.93) (0.46) (0.06) - - (16.05)…
  24. March 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 BTE MEG BIR VET PXT PEY CPG NVA TOG…
  25. March 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. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 27
    RESERVES / RESOURCES 27
  28. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 28
    RESERVES / RESOURCE BASE 2016 YEAR END WORKING INTEREST RESERVES AND RISKED CONTINGENT & PROSPECTIVE RESOURCE* Proved Plus Probable Risked Contingent Resource Risked Prospective Resource WI Reserves (mmboe) (Development Pending)…
  29. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 29
    RESERVES GROWTH Including FDC 2016 F&D / FD&A Costs* 300 (/BOE) 275 250 F&D (E&D CAPEX) 5.57 225 10% CAGR 200 FD&A (Total CAPEX, 6.62 175 including acquisitions) 150 MMBOE 125 F&D Operating Recycle Ratio 4.9x 100 75…
  30. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 30
    RELATIVE PDP RECYCLE RATIOS 3-YEAR PROVED DEVELOPED PRODUCING (PDP) RECYCLE RATIO (F&D incl. FDC) FD&A RECYCLE RATIOS* 6.0x 3.0x 5.0x 2.5x 4.0x 2.0x 3.0x 1.5x 2.0x 1.0x 1.0x 0.5x 0.0x 0.0x VET BIR RRX ERF PEY BNP RMP…
  31. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 31
    BALANCE SHEET 31
  32. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 32
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY 2.0 BILLION NET DEBT TO FFO RATIO* AS AT DECEMBER 31, 2016 4.0 3.0 620 2.0 1,380 1.0 0.0 REVOLVING CREDIT FACILITY 2017E 2018E 2003 2004 2005 2006 2007 2008 2009…
  33. March 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 FRU BTE KOS OAS CRZO BIR FANG SPE RSPP VET JONE…
  34. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 34
    CREDIT METRICS YE 2012 YE 2013 YE 2014 YE 2015 YE 2016 Credit Facility ( millions) Approved credit facility 950 1,200 1,750 2,000 2,000 Bank line undrawn** 481 425 727 812 618 Liquidity*** 583 815 848 853 681 Adjusted EBITDA* (…
  35. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 35
    RISK MANAGEMENT 35
  36. March 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 Diversification of: Hedging program reduces risk associated with Integrated,…
  37. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 37
    ANNUAL COMMODITY HEDGE POSITION Full Year 2017 Full Year 2018 Full Year 2019 WTI Percent of Production Hedged 36% - - Average Floor / Ceiling / Swap (/bbl) 69.73 / 78.19 / 69.95 -/-/- -/-/- Brent Percent of Production Hedged 28%…
  38. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 38
    QUARTERLY COMMODITY HEDGE POSITION OIL HEDGES NATURAL GAS HEDGES Q1 2017 69.70 European Gas North American Gas 67.27-73.25 72.85 66.73-79.31 72.67 Q1 2017 7.62 6.79-7.96 Q1 2017 3.08 2.31-3.01 70.00- Q2 2017 75.00 66.77-79.21…
  39. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 39
    INTERNATIONAL DIVERSIFICATION 39
  40. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 40
    CORE OPERATING AREAS NORTH AMERICA EUROPE AUSTRALIA VERMILION IS FOCUSED IN THREE CORE AREAS 40
  41. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 42
    COMMODITY MIX PRODUCTION (2017)* 2P RESERVES (YE 2016)** ESTIMATED FFO CONTRIBUTION (2017)* United Australia Australia France France Australia States 11% United 9% 18% 22% 6% 1% States United 2% Germany France States Germany…
  43. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 44
    GLOBAL CRUDE OIL PRICING ADVANTAGE Approximately 65% of Vermilions crude oil production is priced with reference to Dated Brent* CRUDE OIL** BRENT 56 Reduces Vermilions exposure to the WTI 54 Differential (5) transportation-related…
  45. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 45
    EUROPEAN NATURAL GAS PRICING 45
  46. March 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. March 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. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 49
    EUROPEAN ASSETS 49
  50. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 50
    EUROPEAN CORE AREA NETHERLANDS GERMANY 2 onshore gas producer Establishing production operations and IRELAND Large and growing inventory of drilling opportunities substantial exploratory land position in Corrib field constitutes 95%…
  51. March 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 2016 2017E France Netherlands Germany…
  52. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 52
    FRANCE Entered France in 1997 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) Workover, infill drilling and secondary…
  53. March 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 2016 2017E E&D CAPEX AS % OF FFO* N/A 43% 51% 101%…
  54. March 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 15.0 MMBOE (2P)…
  55. March 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 36 identified future net drilling locations in reserves and resources* 5,000…
  56. March 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. March 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. March 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. March 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. March 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 2016 Acquisition (Drenthe WI) 0.6 12,000 INITIAL ACQUISITION Total Acquired Reserves…
  61. March 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 66…
  62. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 63
    GERMAN LAND POSITION Largely contiguous land position of 1.1 million net acres in the prolific North Initial Non-Operated German Basin, which has cumulative production of more than 2 Bbbls of oil Acquisition and 34 Tcf of natural gas…
  64. March 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. Acquisition closed December 19, 2016 for total consideration of 32.5 million (45.6…
  65. March 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 (%) 34% (CLOSED DECEMBER…
  66. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 66
    IRELAND OVERVIEW Vermilion holds 18.5% non-operated interest in the Corrib gas field, offshore Ireland Corrib field constitutes 95% of Irelands gas production ASSET CHARACTERISTICS Pricing indexed to National Balancing Point (NBP)…
  67. March 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 2016 2017E E&D CAPEX AS % OF FFO* NM 9% 1% Gas EFFICIENT TRANSLATION OF REVENUE FUND FLOWS FROM OPERATIONS FREE CASH FLOW * 2017E: Company…
  68. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 68
    CENTRAL AND EASTERN EUROPE (CEE) EXTENSION OF EUROPEAN GROWTH STRATEGY SLOVAKIA Modest back-loaded capital commitments BRATISLAVA Prospective for both oil and gas BUDAPEST EBES Under-invested basin that can benefit from new…
  69. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 69
    NORTH AMERICAN ASSETS 69
  70. March 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. March 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 2016 2017E E&D CAPEX AS % OF FFO* 21% 36% 67% 58% 31% 76% 247% 225% 165% 101% 86% 104%…
  72. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 73
    CARDIUM DEVELOPMENT NET CARDIUM PROSPECT INVENTORY* 12,000 AS AT DECEMBER 31, 2016 10,000 8,000 WELLS DRILLED 6,000 202 BOE/D 4,000 UNRISKED CONTINGENT REMAINING 2P 2,000 DEVELOPMENT LOCATIONS PENDING 75 0 252 2009…
  74. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 75
    WEST PEMBINA (LOWER MANNVILLE) CONDENSATE-RICH GAS LOWER MANNVILLE 1,800 ELLERSLIE 1,600 1,400 1,200 1,000 BOE/D LOWER MANNVILLE ELLERSLIE Expected per well economics 800 DCET Well Cost ( million) 3.5 600 IP30 Rate…
  76. March 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 BOE/D UPPER MANNVILLE FERRIER Expected per well economics 1,000 DCET Well Cost ( million) 3.6…
  77. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 77
    MANNVILLE DEVELOPMENT NET MANNVILLE PROSPECT INVENTORY* 14,000 AS AT DECEMBER 31, 2016 12,000 DRILLED TO DATE 45 10,000 8,000 6,000 BOE/D BOOKED 2P NOTIKEWIN UNRISKED CONTINGENT 56 4,000 143 DEVELOPMENT PENDING 197…
  78. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 78
    SOUTHEAST SASKATCHEWAN Legend Midale Fairway Entered area through acquisition of Elkhorn Resources Inc. in Vermilion Land VET Identified Locations April 2014, with further land added subsequent to acquisition Midale HZ Wells…
  79. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 79
    SOUTHEAST SASKATCHEWAN DEVELOPMENT NET SE SASK PROSPECT INVENTORY* 4,000 AS AT DECEMBER 31, 2016 WELLS 3,000 DRILLED 20 BOE/D 2,000 REMAINING 2P UNRISKED LOCATIONS PROSPECTIVE 114 46 1,000 UNRISKED CONTINGENT 0…
  80. March 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 acres at 100% working interest) in the Powder River BOPD…
  81. March 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 2016 2017E E&D CAPEX AS % OF OF ATAX NOI* 64% 535% 353% 108% Crude Oil & NGL Gas EARLY-STAGE LIGHT OIL GROWTH PROJECT * ATAX NOI is…
  82. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 82
    AUSTRALIAN ASSETS 82
  83. March 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 18 wellbores and five lateral sidetracks Wells 600m below sea bed with 1,500 - 3,700 m measured…
  84. March 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. March 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 2016 30.5 Reserves at YE…
  86. March 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 12 additional identified…
  87. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 87
    GOVERNANCE / CORPORATE CITIZENSHIP 87
  88. March 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. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 90
    HEALTH, SAFETY AND ENVIRONMENT (HSE) PHILOSOPHY Safety, environmental protection, and regulatory compliance go hand-in-hand with VERMILIONS PRIORITIES maximizing profitability WE CONDUCT ALL ACTIVITIES TO: These priorities should…
  91. March 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. March 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. March 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. March 2017 Investor Presentation – Vermilion Energy Inc. – slide 94
    RECORD OF VALUE CREATION 94
  95. March 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. March 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. March 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. March 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. March 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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