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July 2017 Investor Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Jul 26, 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 1
    INTERNATIONALLY DIVERSIFIED SUSTAINABLE GROWTH AND INCOME JULY 2017
  2. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 2
    CONTENTS Vermilion Overview............................................................................................................................ 3…
  3. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 3
    VERMILION OVERVIEW 3
  4. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 5
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (June 30, 2017) 41.14 (TSX), 31.73 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding 120.9 million Average Daily Trading Volume (shares) 0.7 million Monthly Dividend…
  6. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 6
    VERMILION HISTORY Issued senior Launched as an Alberta-based oil & unsecured notes in Canadian gas exploration and production company Converted to High Yield market Issued senior IPO in April 1994 at 0.30 per share Vermilion…
  7. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 7
    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…
  8. July 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. July 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 (87%) PEY (92%) 200 PXT (0%) VET (22%) ARX (67%) BIR (84%)…
  10. July 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 62 128 France 148 92 69 67 Netherlands 62 47 24 32 Germany 3 5 4 15 Australia 44 62 60 30…
  11. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 11
    FUND FLOWS FROM OPERATIONS / FREE CASH FLOW FFO FCF 1,000 500 80,000 800 400 70,000 FFO LESS E&D CAPEX* (MM) PRODUCTION (BOE/D) 300 60,000 600 FFO (MM) 200 50,000 400 100 40,000 200 0 30,000 0 -100 20,000…
  12. July 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) 5.50 550 577 598 622 651 675 6.00 554 581 602 626 655 679 6.50 558 585 606 630 659 683 7.00 563 590 611 635 665 689 7.50 567 594 615 639…
  13. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 13
    FREE CASH FLOW YIELD 2018E FREE CASH FLOW (FCF) TO ENTERPRISE VALUE 8% 6% 4% 2018E FCF YIELD 2% 0% -2% -4% -6% FANG COG VET CVE SU PXD TOU DVN CNQ HSE CPG CXO ECA APA…
  14. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 14
    DIVIDENDS 14
  15. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 15
    RELIABLE AND GROWING DIVIDENDS CUMULATIVE DIVIDENDS PAID PER SHARE (2003 THRU Q2 2017) = 32.88 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…
  16. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 16
    RELATIVE DIVIDEND YIELD 18% 16% 14% 12% DIVIDEND YIELD 10% 8% 6% 4% 2% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 VET Average Group average yield including companies not currently paying a dividend…
  17. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 17
    SUSTAINABILITY RATIO 200% 175% 162% 150% TOTAL EXPENDITURES / FFO* 140% 125% 121% 117% 121% 111% 109% 111% 100% 108% 75% 81% 95% 87% 74% 73% 70% 50% 59% 25% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  18. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 18
    WTI BREAK-EVENS 80 70 60 50 AVERAGE 40 US WTI 30 20 10 0 VET SPE PXX MEG BTE ATH ERF SU CPG KEL HSE CVE NVA TOG DEE ECA CNQ BNE CJ RRX NBZ RMP…
  19. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 19
    ELEMENTS OF SUSTAINABLE MODEL 19
  20. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 20
    ELEMENTS OF SUSTAINABLE MODEL SELF-FUNDED GROWTH-AND-INCOME MODEL 1. High Margins 2. Low Base Production Decline Rates 3. Strong Capital Efficiencies Profitability on a per boe basis Required production replacement before growth…
  21. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 21
    COST REDUCTIONS OPERATIONAL EFFICIENCY CAPITAL EFFICIENCY 14.00 40.00 27% Reduction 12.00 35.00 84% Reduction 30.00 10.00 25.00 8.00 / BOE / BOE 20.00 6.00 15.00 29% Reduction 4.00 4% Reduction 10.00 2.00 5.00…
  22. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 22
    NETBACKS Q1 2017 Netbacks by Country Canada France Netherlands Germany Ireland Australia United States Total Company (/BOE*) Sales 33.63 67.85 44.19 47.30 45.92 77.11 55.99 46.94 Royalties (3.79) (6.06) (0.69) (3.60) - - (15.79)…
  23. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 23
    RELATIVE NETBACKS 2017E FIELD NETBACKS (EXCLUDING HEDGING) 45 40 35 30 25 20 15 10 5 0 ATH BTE PMT PPY BIR SPE PEY BXE VET RMP PXX ECA CPG SU HSE CVE NVA KEL…
  24. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 24
    FULL-CYCLE PROFITABILITY 2016 FULL-CYCLE PROFIT US/BOE (EXCLUDING HEDGING) 10 5 0 US / BOE -5 -10 -15 -20 NFX BTE SPE OAS PE DVN SN APC COG CLR BIR PXD XEC AREX PDCE**…
  25. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 25
    BASE PRODUCTION DECLINE RATES Effective Natural Country Decline Decline 50% Rate* Rate* VET CANADA VET France 8% 10% 40% ONLY CORPORATE DECLINE NATURAL VET Netherlands** 0% 19% DECLINE CORPORATE 30% EFFECTIVE Germany 10%…
  26. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 26
    MAJOR DRILLING PROJECTS 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…
  27. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 27
    RESERVES / RESOURCES 27
  28. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 28
    RESERVES AND RESOURCE BASE RESERVES* 2016 RESOURCES* 350 350 300 300 16% CAGR 250 250 200 200 MMBOE 7% CAGR MMBOE 150 150 100 100 50 50 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016…
  29. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 29
    RECYCLE RATIOS Including FDC RECYCLE RATIO (F&D incl. FDC) 2016 F&D / FD&A Costs* (/BOE) 6.0x F&D (E&D CAPEX) 5.57 5.0x FD&A (Total CAPEX, 6.62 including acquisitions) 4.0x F&D Operating Recycle Ratio 4.9x 3.0x 2.0x 13.1…
  30. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 30
    RELATIVE PDP RECYCLE RATIOS 3-YEAR PROVED DEVELOPED PRODUCING (PDP) FD&A RECYCLE RATIOS* 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x VET ARX PONY JOY BNP BIR BNE PEY RRX PNE TVE BXE TOG WCP YGR NVA CPG LXE TET TOP RECYCLE RATIOS…
  31. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 31
    BALANCE SHEET / RISK MANAGMENT 31
  32. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 32
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY C1.8 BILLION NET DEBT TO FFO RATIO* PRO-FORMA ESTIMATE AS AT MARCH 31, 2017 4.0 0.5 B 3.0 0.4 B 2.0 0.9 B 1.0 REVOLVING CREDIT FACILITY 0.0 2017E 2018E 2003 2004 2005…
  33. July 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 BTE KOS OAS FRU EPE BXE CRZO VET BIR SPE JONE ECR…
  34. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 34
    CREDIT METRICS YE 2012 YE 2013 YE 2014 YE 2015 YE 2016 Q1 2017 Credit Facility ( millions) 950 1,200 1,750 2,000 2,000 1,400 Undrawn 1 481 425 727 812 618 521 Liquidity 2 583 815 848 853 681 522 Subordinated Debt ( millions) 225 225…
  35. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 35
    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,…
  36. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 36
    ANNUAL COMMODITY HEDGE POSITION Full Year 2017 Full Year 2018 Full Year 2019 WTI Percent of Production Hedged 43% - - Average Floor / Ceiling / Swap (/bbl) 59.63 / 77.99 / 70.79 -/-/- -/-/- Brent Percent of Production Hedged 32%…
  37. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 37
    QUARTERLY COMMODITY HEDGE POSITION OIL HEDGES NATURAL GAS HEDGES Q1 2017 70.27 67.61-73.62 73.45 67.27- European Gas North American Gas 79.95 Q1 2017 7.71 6.54-8.03 Q1 2017 3.09 2.31-3.01 Q2 2017 70.00- 69.82- 75.00 79.45 Q2…
  38. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 38
    INTERNATIONAL DIVERSIFICATION 38
  39. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 39
    CORE OPERATING AREAS NORTH AMERICA EUROPE AUSTRALIA VERMILION IS FOCUSED IN THREE CORE AREAS 39
  40. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 40
    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…
  41. July 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. July 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 12% United 10% 17% 22% 6% 1% States United 1% Germany France States Germany…
  43. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 44
    GLOBAL CRUDE OIL PRICING ADVANTAGE Approximately 65% of Vermilions crude oil CRUDE OIL** production is priced with reference to Dated Brent* BRENT 47 WTI 45 Reduces Vermilions exposure to the Differential (5)…
  45. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 45
    EUROPEAN NATURAL GAS PRICING 45
  46. July 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. July 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. July 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 continues to decline European Domestic Production 26.5 22.5 21.5 20.0 Russia 9.9 13.8…
  49. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 49
    EUROPEAN ASSETS 49
  50. July 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 90%…
  51. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 51
    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* 2016 2017E E&D CAPEX AS % OF FFO** n/a…
  52. July 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. July 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. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 55
    CHAMPOTRAN DEVELOPMENT 18 wells drilled from 2013 to 2016 at 100% success rate CHAMPOTRAN PRODUCTION Reduced DCET costs by 23% since 2013 6,000 36 net drilling locations identified in reserves and resources* 5,000 Successful…
  56. July 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. July 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 2,500 70% production growth since acquisition…
  58. July 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. July 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. July 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…
  61. July 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. July 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 48 kbbl/d of oil and 0.75 Bcf/d of natural gas (170 kboe/d) GAS AND OIL…
  63. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 63
    GERMAN LAND POSITION Initial Non-Operated DUMMERSEE-UCHTE ACQUISITION (2014) Acquisition First entry into Germany, non-operated interest Farm-In Agreement 2016 production 2,400 boe/d Awarded Licenses Member of 4 party consortium…
  64. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 64
    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…
  65. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 65
    IRELAND OVERVIEW Vermilion holds 18.5% non-operated interest in the Corrib gas field, offshore Ireland Corrib field constitutes 90% of Irelands gas production ASSET CHARACTERISTICS Pricing indexed to National Balancing Point (NBP)…
  66. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 66
    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…
  67. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 67
    CORRIB PERFORMANCE 400 Production volumes reach Planned downtime, or constrained production, has full plant capacity occurred for plant maintenance, well testing, pressure 350 build-ups and partner marketing decisions First gas…
  68. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 68
    CENTRAL AND EASTERN EUROPE (CEE) EXTENSION OF EUROPEAN GROWTH STRATEGY Modest back-loaded capital commitments BRATISLAVA Prospective for both oil and gas Under-invested basin that can benefit from new technology CROATIA Awarded 4…
  69. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 69
    NORTH AMERICAN ASSETS 69
  70. July 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. July 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. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 73
    CARDIUM DEVELOPMENT NET CARDIUM PROSPECT INVENTORY* 12,000 AS AT MARCH 31, 2017 10,000 8,000 WELLS DRILLED 6,000 BOE/D 207 4,000 UNRISKED CONTINGENT REMAINING 2P 2,000 DEVELOPMENT LOCATIONS PENDING 70 0 252 2009 2010…
  74. July 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. July 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. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 77
    MANNVILLE DEVELOPMENT NET MANNVILLE PROSPECT INVENTORY* 16,000 AS AT MARCH 31, 2017 14,000 DRILLED TO DATE 12,000 50 10,000 BOE/D 8,000 6,000 BOOKED 2P NOTIKEWIN UNRISKED CONTINGENT 51 143 4,000 DEVELOPMENT PENDING…
  78. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 79
    SOUTHEAST SASKATCHEWAN DEVELOPMENT NET SE SASK PROSPECT INVENTORY* 4,000 AS AT MARCH 31, 2017 WELLS 3,000 DRILLED 27 BOE/D 2,000 REMAINING 2P UNRISKED LOCATIONS PROSPECTIVE 107 46 1,000 UNRISKED CONTINGENT 0…
  80. July 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 (81,500 net 250 acres at 100% working interest) in the Powder River BOPD…
  81. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 81
    UNITED STATES PRODUCTION 1,000 900 800 700 600 500 BOE/D 400 300 200 100 0 2014 2015 2016 2017E E&D CAPEX AS % OF OF ATAX NOI* 64% 535% 353% 156% Crude Oil & NGL Gas EARLY-STAGE LIGHT OIL GROWTH PROJECT * ATAX…
  82. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 82
    AUSTRALIAN ASSETS 82
  83. July 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. July 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. July 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. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 87
    GOVERNANCE / CORPORATE CITIZENSHIP 87
  88. July 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. July 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. July 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. July 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. July 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. July 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. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 94
    RECORD OF VALUE CREATION 94
  95. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 95
    VALUE CREATION 1994 2017 8,000 6,000 6,000 4,976 MILLIONS 4,000 TOTAL VALUE 2,804 MARKET CREATION CAPITALIZATION(2) 2,000 DIVIDENDS PAID(2) 0 EQUITY ISSUED(1) -2,000 (1,780) MORE THAN 20-YEAR RECORD OF STRONG…
  96. July 2017 Investor Presentation – Vermilion Energy Inc. – slide 96
    RETURN ON CAPITAL EMPLOYED 12 10 8 6 4 ROCE (%) 2 0 -2 -4 -6 -8 3 YEAR AVERAGE 5 YEAR AVERAGE 10 YEAR AVERAGE Vermilion Peer Average STRONG CAPITAL EFFICIENCY IN A CAPITAL INTENSIVE BUSINESS * Source: Canoils. ROCE…
  97. July 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. July 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. July 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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