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July 2018 Corporate Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Jul 10, 2018 · 102 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.

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  1. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 1
    INTERNATIONALLY DIVERSIFIED SUSTAINABLE GROWTH AND INCOME JULY 2018
  2. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 2
    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…
  3. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 3
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (June 29, 2018) 47.41 (TSX), 35.53 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding (March 31, 2018 plus shares issued on SPE acq) 150.7 million Average Daily Trading…
  4. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 4
    CORE OPERATING AREAS 2018E PRE-SPARTAN 2018E POST-SPARTAN ACQUISITION ACQUISITION (ANNUALIZED) NORTH PRODUCTION* AMERICA EUR N.A. EUR 35% N.A. 47% 46% 60% AUS AUS 5% 7% EUROPE N.A. EUR FFO* EUR 34% 37% N.A.…
  5. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 5
    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…
  6. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 6
    STRATEGY Self-funded production and dividend growth model Targeting free cash flow and dividend yield compression through per-share growth and risk reduction (low financial and Capital Markets Model operating leverage, consistent…
  7. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 7
    PRODUCTION GROWTH AND CAPEX ANNUAL PRODUCTION VS E&D CAPITAL EXPENDITURES 13% CAGR PRE-SPARTAN 100 800 17% CAGR 700 80 600 MBOE / D 500 MM 60 400 40 6% CAGR 300 200 20 100 0 0 2003 2004 2005 2006…
  8. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 8
    PRODUCTION GROWTH PER SHARE DEBT-AND-DIVIDEND-ADJUSTED INDEXED PRODUCTION PER SHARE (BASE VALUE = 100)* (INCLUDES PARTIAL YEAR IMPACT OF SPE ACQUISITION) COMPANY 250 (% OF PRODUCTION FROM N.A. GAS)** PXT (0%) TOU (84%) 200 VET…
  9. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 9
    E&D CAPITAL BUDGET Capital Expenditures by Country 2014 Actuals 2015 Actuals 2016 Actuals 2017 Actuals 2018 Budget* (MM) (MM) (MM) (MM) (MM) Canada 336 202 62 149 251 France 148 92 69 73 73 Netherlands 62 47 24 31 35 Germany 3 5 4…
  10. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 10
    FFO / FCF FFO FCF (CORPORATE ERA) 1,200 ANNUALIZED WITH ANNUALIZED WITH 600 SPARTAN SPARTAN 1,000 500 FFO LESS E&D CAPEX* (MM) PRE-SPARTAN 400 PRE-SPARTAN 800 FFO (MM) 300 600 200 400 100 200 0 0 -100 2003…
  11. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 11
    FFO SENSITIVITY 2018 FORECAST FFO COMMODITY ASSUMPTIONS (STRIP)*** (INCLUDES PARTIAL YEAR SPE) (CMM)* WTI (US/BBL) 2018E 55 60 65 70 75 80 TTF (C/MMBTU) 6.00 797 841 884 927 970 1,013 Brent (US/bbl) 76.13 7.00 803 846 890 933…
  12. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 12
    FREE CASH FLOW YIELD 2019E DEBT-ADJUSTED FREE CASH FLOW (DAFCF) TO ENTERPRISE VALUE (EV) 11% 10% 9% 8% 2019E DAFCF YIELD * 7% 6% 5% 4% 3% 2% 1% 0% VET FRU WCP TOG ERF RRX TVE OBE BTE CPG AAV PGF ECA POU VII PEY TOU…
  13. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 13
    DIVIDENDS 13
  14. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 14
    RELIABLE AND GROWING DIVIDENDS CUMULATIVE DIVIDENDS PAID PER SHARE (2003 THRU Q2 2018) = 35.49 0.25 Monthly dividend increased 7% to 0.23 per 8% share effective with the April 2018 dividend 0.23 7% 0.215 6% MONTHLY…
  15. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 15
    SUSTAINABILITY RATIO 200% 175% 162% 150% TOTAL EXPENDITURES / FFO* 140% 125% 121% 117% 121% 111% 109% 111% 100% 108% 88% 75% 81% 80% 74% 73% 70% 50% 59% 25% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  16. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 16
    CAPITAL SUSTAINABILITY 2018E SUSTAINING CAPEX AS A PERCENTAGE OF CASH FLOW 150% 2018E SUSTAINING CAPEX / CASH FLOW * 125% 100% 75% 50% 25% 0% VERMILION PROVIDES ONE OF THE MOST CAPITAL EFFICIENT MODELS IN THE…
  17. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 17
    ELEMENTS OF SUSTAINABLE MODEL 17
  18. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 18
    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…
  19. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 19
    NETBACKS Q1 2018 Netbacks by Country Total Spartan Canada France Netherlands Germany Ireland Australia United States (/BOE*) Company Energy**** Sales 32.19 81.70 53.31 56.86 58.79 86.94 72.94 51.13 60.49 Royalties (3.41) (10.60)…
  20. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 20
    RELATIVE NETBACKS 2018E FIELD NETBACKS (EXCLUDING HEDGING) 50 45 40 35 30 25 20 15 10 5 0 NVA ECA VET FRU PSK HSE CVE DEE SPE PXX CPG SU MEG ATH BIR PEY IBR BXE…
  21. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 21
    BASE PRODUCTION DECLINE RATES Effective Natural Country Decline Decline 50% Rate* Rate* VET CANADA VET ONLY CORPORATE France 8% 8% 40% DECLINE NATURAL DECLINE VET Netherlands 1% 19% CORPORATE 30% EFFECTIVE Germany 7% 7%…
  22. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 22
    DRILLING PROJECTS DCET Economics at US55 WTI IP365 EUR Prod. Efficiency Net Well 2018E Net Investment Well Cost (BOE/D) (MBOE) (IP365 /BOED) ATAX Recycle ATAX Payout Inventory* Wells Planned (CM) ROR Ratio (Years) European Gas…
  23. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 23
    COST REDUCTION OPERATING EFFICIENCY CAPITAL EFFICIENCY 14.00 40.00 24% Reduction 12.00 35.00 70% Reduction 30.00 10.00 25.00 8.00 / BOE / BOE 20.00 6.00 15.00 33% Reduction 4.00 24% Reduction from 2014 Peak 10.00…
  24. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 24
    RESERVES / RESOURCES 24
  25. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 25
    RESERVES AND RESOURCE BASE RESERVES* 2017 RESOURCES* 500 RESOURCE CONVERSIONS 300 CONTINGENT PROSPECTIVE 450 (MBOE) (MBOE) 2014 20,400 2,500 400 2015 17,500 500 2016 5,450 - 350 2017 20,456 1,734 200 300 MMBOE 250…
  26. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 26
    RECYCLE RATIOS Including FDC RECYCLE RATIO (F&D incl. FDC) 2017 F&D / FD&A Costs* (/BOE) 6.0x 2015-2017 F&D (E&D CAPEX) 10.57 3 Yr Avg 3.3x 5.0x 2012-2014 FD&A (Total CAPEX, 11.24 3 Yr Avg 2.7x including acquisitions) 4.0x…
  27. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 27
    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 BNE ARX BIR AAV PEY TOU SRX YGR CR WCP NVA RRX CPG VII BTE PONY SPE TVE KEL GXE ERF LXE TOP…
  28. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 28
    INTERNATIONAL DIVERSIFICATION 28
  29. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 29
    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…
  30. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 30
    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…
  31. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 31
    COMMODITY MIX PRODUCTION (2018E)* ESTIMATED FFO CONTRIBUTION (2018E)* ESTIMATED FCF CONTRIBUTION (2018E)** France United Australia Australia 13% States France Germany 8% Australia 6% 1% France 19% United 4% 19% 8% States 2%…
  32. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 32
    COMMODITY PRICE DIVERSIFICATION PORTFOLIO MIX STANDARD DEVIATION* 60% ANNUALIZED STANDARD 50% DEVIATION (%) 40% 30% 20% 10% 0% VET VET + TVE ERF OBE KEL BNE NVA ARX BNP WCP BTE TOU BIR CPG RRX PEY SPE**…
  33. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 33
    GLOBAL CRUDE OIL PRICING ADVANTAGE Approximately 40% of Vermilions crude oil CRUDE OIL** production is priced with reference to Dated Brent* BRENT 77 Reduces Vermilions exposure to the WTI 71 transportation-related discount between…
  34. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 34
    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 LNG-BUILD CEILING Realized forward prices are influenced by a number…
  35. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 35
    EUROPEAN NATURAL GAS IMPACT OF US LNG US LNG liquefaction capacity expected to grow by 7.5 BCF/D (post-FID projects) through 2020, LNG Costing to Europe from United States US/mmbtu C/mmbtu potentially increasing US LNG shipments to…
  36. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 36
    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…
  37. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 37
    BALANCE SHEET / RISK MANAGEMENT 37
  38. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 38
    CONSERVATIVE BALANCE SHEET CREDIT CAPACITY C2.0 BILLION NET DEBT-TO-FFO RATIO* AS AT MAY 28, 2018 4.0 0.4 B 3.0 0.4 B 1.2 B 2.0 (3/31/18 + SPE Debt) 1.0 Q4 2018E ANNUALIZED REVOLVING CREDIT FACILITY 0.0 US Senior Notes…
  39. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 39
    RELATIVE LEVERAGE 2018E DEBT TO CASH FLOW 6.0x 5.0x 4.0x 3.0x CANADIAN AVERAGE US AVERAGE 2.0x 1.0x 0.0x MEG ECR OAS ATH PXX NVA FRU BXE CQE BTE PPR DEE CPE CPG KOS…
  40. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 40
    CREDIT METRICS YE 2013 YE 2014 YE 2015 YE 2016 YE 2017 Q1 2018 Credit Facility ( millions) 1,200 1,750 2,000 2,000 1,400 1,400 Undrawn 1 425 727 812 618 493 410 Liquidity 2 815 848 853 681 540 429 Subordinated Debt ( millions) 225…
  41. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 41
    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,…
  42. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 42
    ANNUAL COMMODITY HEDGE POSITION Full Year 2018 Full Year 2019 Full Year 2020 WTI Percent of Production Hedged 13% 3% - Average Floor / Ceiling / Swap (/bbl) 66.73 / 74.60 / 76.34 - / - / 80.60 -/-/- Brent Percent of Production…
  43. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 43
    QUARTERLY COMMODITY HEDGE POSITION OIL HEDGES NATURAL GAS HEDGES (/bbl) (/mmbtu) Q1 2018 69.83 62.32-70.23 77.03 74.12 65.66- European Gas North American Gas Q1 2018 7.64 7.21-8.47 Q1 2018 2.65 2.67-3.06 Q2 2018 70.97 70.51-…
  44. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 44
    EUROPEAN ASSETS 44
  45. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 45
    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%…
  46. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 46
    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 2017 2018E E&D CAPEX AS %…
  47. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 47
    FRANCE Entered France in 1997 PARIS 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 Workover, infill drilling and…
  48. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 48
    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 2017 2018E E&D CAPEX AS % OF FFO* N/A 43% 51%…
  49. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 49
    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)…
  50. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 50
    CHAMPOTRAN DEVELOPMENT 18 wells drilled from 2013 to 2016 at 100% success rate CHAMPOTRAN PRODUCTION Reduced DCET costs by 26% since 2013 3,500 38 net drilling locations identified in reserves and resources* 3,000 2P reserves have…
  51. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 51
    NEOCOMIAN DEVELOPMENT NEOCOMIAN GROWTH POTENTIAL 4 WELLS PER YEAR Part of Paris Basin light oil assets (Neocomian field) acquired 2,500 from ZaZa Energy France in December 2012 PRE-ACQUISITION VERMILION WORKOVERS / OPTIMIZATIONS /…
  52. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 52
    PARENTIS SUSTAINABILITY PARTNERSHIP Vermilion was the recipient of Frances Circular Economy Award for our project to supply geothermal heat from our oil operation to local greenhouses The award recognizes economically successful…
  53. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 53
    LA TESTE ECO-HABITATS Our operations near La Teste, France now support an eco-neighborhood of 450 homes that are heated the same way as the tomato greenhouses, using recycled geothermal energy from our oil operation 30-year…
  54. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 54
    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…
  55. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 55
    NETHERLANDS PRODUCTION NETHERLANDS - Expected per well risked economics (based on recent drilling) DCET Well Cost ( million) 9.2 Expected IP30 Rate (boe/d) 1,690 12,000 Expected EUR per well (mboe) 1,350 After Tax ROR (%) 100%…
  56. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 56
    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…
  57. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 57
    NETHERLANDS ACTIVITY Vermilion has tripled its undeveloped land base since the beginning of 2012 We have drilled 14 high-rate extension and discovery gas wells since 2009, with an average success rate of approximately 70% over this…
  58. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 58
    NETHERLANDS SEISMIC Legacy 2D Line Q4 2017 SEISMIC ACQUISITION 310 km2 of new 3D seismic acquired in late 2017 in two concessions near Vermilions core operating area in the Netherlands This new survey has been merged with older…
  59. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 59
    INVESTING IN OUR NETHERLANDS COMMUNITIES MUNICIPALITY LINKAGE PROGRAM Vermilion launched the Municipality Linkage Program (MLP) in 2016 in the Netherlands, to support targeted and transparent connections between our capital…
  60. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 60
    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 (170k boe/d) Consistent fiscal…
  61. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 61
    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…
  62. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 62
    GERMANY PRODUCTION GERMANY Burgmoor Z3 Sidetrack (Non-op gas assets, reflects 25% W.I.) DCET Well Cost ( million) 4.0 IP30 Rate (boe/d) 350 5,000 EUR per well (mboe) 780 ENGIE ACQUISITION After Tax ROR (%) 36% (CLOSED DECEMBER…
  63. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 63
    GERMANY OPERATING PERFORMANCE Operated oil fields acquired by Vermilion GERMANY OPERATED OIL ASSETS at the end of 2016 1,200 Vermilion has grown production by 30% ENGIE ACQUISITION (CLOSED since the acquisition closed 1,000 DECEMBER…
  64. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 64
    IRELAND OVERVIEW Vermilion currently holds an 18.5% non-operated interest in the Corrib gas field, offshore Ireland On July 12, 2017 Vermilion and Canada Pension Plan Investment Board (CPPIB) announced a strategic partnership At…
  65. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 65
    IRELAND PRODUCTION 12,000 10,000 8,000 6,000 BOE/D 4,000 2,000 0 2015 2016 2017 2018E E&D CAPEX AS % OF FFO* NM 9% 1% 1% Gas EFFICIENT TRANSLATION OF REVENUE FUND FLOWS FROM OPERATIONS FREE CASH FLOW * 2018…
  66. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 66
    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 HUNGARY Awarded South…
  67. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 67
    NORTH AMERICAN ASSETS 67
  68. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 68
    NORTH AMERICA CANADA Production and assets are focused in West Central Alberta and SE Saskatchewan In West Pembina, potential for three significant development projects sharing surface infrastructure with a land position of…
  69. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 69
    NORTH AMERICAN PRODUCTION 50,000 INCLUDES PARTIAL YEAR IMPACT OF SPARTAN ACQUISITION* 40,000 30,000 BOE/D 20,000 10,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E* E&D CAPEX AS %…
  70. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 70
    WEST PEMBINA AND FERRIER MANNVILLE NOTIKEWIN Industry Mannville Horizontals Key Oil Battery 330 net sections (211,800 acres) of Mannville rights, largely held Key Gas Plant Key Compressor by production VET Gas Pipeline 39 net West…
  71. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 71
    WEST PEMBINA (LOWER MANNVILLE ELLERSLIE) CONDENSATE-RICH GAS LOWER MANNVILLE 2,000 ELLERSLIE 1,800 1,600 1,400 1,200 BOE/D 1,000 LOWER MANNVILLE ELLERSLIE Expected per well economics 800 DCET Well Cost ( million) 3.4…
  72. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 72
    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) 3.7…
  73. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 73
    MANNVILLE DEVELOPMENT NET MANNVILLE PROSPECT INVENTORY* 20,000 AS AT MARCH 31, 2018 18,000 DRILLED TO DATE 16,000 71 14,000 12,000 BOE/D 10,000 8,000 UNRISKED BOOKED 2P NOTIKEWIN 6,000 CONTINGENT 65 142 4,000…
  74. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 74
    WEST PEMBINA CARDIUM Dominant 104,000 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…
  75. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 75
    SOUTHEAST SASKATCHEWAN Entered area through acquisition of Elkhorn Resources Inc. in April 2014, with further land added subsequent to acquisition Acquired Spartan Energy May 2018, adding over 400,000 net acres to our SE SK land…
  76. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 76
    ACQUISITION OF SPARTAN ENERGY CORP. TRANSACTION METRICS Purchase Price (MM) 1.40 billion 2P Reserves (92% oil and NGLs) 113.5 mmboe * EV/FFO Multiple (annualized) 4.7 x 2P Reserves Acquisition Cost 12.33 per boe FFO per Share…
  77. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 77
    EXPANSION OF SE SASKATCHEWAN POSITION SPARTAN ACQUISITION Approximately 480,000 net acres (750 net sections) 457,000 net acres, 714 net sections in Sask 20,000 net acres, 17 net sections in AB 3,000 net acres, 4 net sections in…
  78. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 78
    SE SASKATCHEWAN DEVELOPMENT NET SE SASK PROSPECT INVENTORY* 18,000 AS AT MARCH 31, 2018 (PRE-SPARTAN) INCLUDES PARTIAL YEAR IMPACT 16,000 OF SPARTAN ACQUISITION* 14,000 WELLS DRILLED 12,000 38 BOE/D 10,000 8,000…
  79. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 79
    UNITED STATES WYOMING DEVELOPMENT TURNER SAND WELL PERFORMANCE 450 Entered U.S. in September 2014 400 350 Large, operated contiguous land position (83,500 net acres at 300 100% working interest) in the Powder River Basin with…
  80. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 80
    ATAX IRR 20% 60% 80% 0% 40% 100% Woodenhouse ** Ellerslie ** Frobisher/Alida Montney Eagle Ford Woodford Marcellus Eagle Ford Woodford Lloydminster Mannville Eagle Ford Ellerslie Condy Wasatch…
  81. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 81
    AUSTRALIAN ASSETS 81
  82. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 82
    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…
  83. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 83
    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…
  84. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 84
    AUSTRALIA OPERATING PERFORMANCE VALUE CREATION (2P RESERVES)* MMBOE Acquisition Date Reserves Reserves at initial acquisition (2005) 26.7 30,000 Total Acquisition Date Reserves 26.7 Production to YE 2017 32.7 25,000 Reserves at…
  85. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 85
    AUSTRALIA ACTIVITY Oil is trapped above and between the existing wells, creating opportunity to drill to a higher structural elevation and between existing wells to capture attic, flank and undrained oil 12 additional identified…
  86. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 86
    GOVERNANCE / CORPORATE CITIZENSHIP 86
  87. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 87
    GOVERNANCE Vermilions external awards and recognition provide important benchmarks for our strong performance The Globe and Mail, Report on Business, Board Games In 2017, Vermilion ranked 4th within the oil and gas sector, and among…
  88. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 88
    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…
  89. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 89
    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…
  90. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 90
    SUSTAINABILITY Investors and governments need to rely on companies with Best In Class sustainability practices through the energy transition Carbon Disclosure Project (CDP) Vermilion was named to the CDP (formerly Carbon Disclosure…
  91. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 91
    CDP (CARBON DISCLOSURE PROJECT) CDP (formerly Carbon Disclosure Project) is an international environmental organization that collects information about carbon emissions and energy use Vermilion was named to the CDP Climate…
  92. July 2018 Corporate 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 2018 Corporate Presentation – Vermilion Energy Inc. – slide 93
    GLOBAL RESPONDER PROGRAM The Netherlands Rescue and Help on Water In 2017, Vermilion established our Global Emergency Responder Program to support critical equipment and training needs for emergency medevac and similar services in…
  94. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 94
    CORPORATE CULTURE GREAT PLACE TO WORK INSTITUTES ANNUAL RANKING Great Place to Work Institute evaluates companies by analyzing results of a confidential Trust Index survey provided to employees and evaluating the workplace through a…
  95. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 95
    RECORD OF VALUE CREATION 95
  96. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 96
    VALUE CREATION 1994 2018 8,000 7,143 7,131 6,000 4,000 MARKET TOTAL VALUE CAPITALIZATION(2) CREATION MILLIONS 2,000 0 EQUITY DIVIDENDS (2,000) ISSUED(1) PAID(2) (3,049) 3,037 (4,000) MORE THAN 20-YEAR RECORD OF…
  97. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 97
    RETURN ON CAPITAL EMPLOYED 10 YEAR TOTAL RETURN VERSUS 10 YEAR AVERAGE ROCE 150% VET FRU 100% TOTAL RETURN (%) PEY CNQ 50% POU ARX SU 0% BIR ERF CPG IMO SPE NVA AAV -50% ECA CR BTE OBE PGF -100% -15% -10% -5% 0%…
  98. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 98
    ESG AND SHAREHOLDER RETURNS Sustainability performance is integral to our business and is positively correlated to our strong shareholder returns 5-Year Total Return vs. Sustainalytics Score 5-Year Total Return vs. CDP Score 5-Year…
  99. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 99
    RELATIVE MARKET PERFORMANCE CUMULATIVE TOTAL RETURN SINCE BEGINNING OF GROWTH AND INCOME ERA 1,600% 1,400% 1,200% 1,000% 800% 600% 400% 200% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016…
  100. July 2018 Corporate Presentation – Vermilion Energy Inc. – slide 100
    ANALYST COVERAGE FIRM ANALYST PHONE EMAIL AltaCorp Capital Patrick J. ORourke, CFA 403-539-8615 porourkealtacorpcapital.com BMO Nesbitt Burns Ray Kwan, P.Eng. 403-515-1501 ray.kwanbmo.com Canaccord Genuity Corp. Dennis Fong 403-508-3884…

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