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September 2020 Corporate Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Sep 8, 2020 · 43 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. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 1
    SEPTEMBER 2020 VERMILION ENERGY INVESTOR PRESENTATION INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ESG LEADERSHIP
  2. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 2
    VERMILIONS KEY ATTRIBUTES Unique portfolio of internationally diversified, highly efficient conventional oil and gas assets ideally suited to support a growth-and-income capital markets model o Paid out over 40 per share of dividends…
  3. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 3
    CORE OPERATING AREAS 2020E PRODUCTION* EUR 29% N.A. 66% AUS 5% EUR 32% FFO* N.A. 57% AUS 11% VERMILION IS FOCUSED IN THREE STABLE REGIONS * Company estimates as at August 31, 2020. 2020 FFO estimate based…
  4. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 4
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (August 31, 2020) 5.18 (TSX), 3.96 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding (June 30, 2020) 158.3 million Average Daily Trading Volume (shares) 2.3 million (TSX),…
  5. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 5
    FFO / FCF FFO FCF 1,000 FFO / FCF ASSUMING FULL-YEAR US50 WTI & C6.50 TTF** 500 ASSUMING FULL-YEAR US50 WTI & C6.50 TTF** 800 FFO LESS E&D CAPEX* (MM) 400 FFO (MM) 600 300 400 200 200 100 0 0 2012…
  6. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 6
    GLOBAL COMMODITY PRICE SENSITIVITY ANNUAL UNHEDGED FFO SENSITIVITY 100 80 FFO IMPACT (CMM)* 60 90MM 40 20 18MM 13MM 0 10% Increase in 2021 10% Increase in 2021 10% Increase in 2021 WTI / Brent Fwd Strip TTF & NBP Fwd…
  7. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 7
    FREE CASH FLOW YIELD 2020E FREE CASH FLOW AS A PERCENTAGE OF MARKET CAPITALIZATION 25% 20% 2020E FCF YIELD (%)* 15% 10% 5% 0% -5% -10% WCP VET ARX VII BTE CNQ TOU CPG MEG ERF SU IMO PEY CVE HSE NVA** BIR**…
  8. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 8
    RELATIVE VALUATION SHARE PRICE AS A PERCENTAGE OF BLOW-DOWN NET ASSET VALUE 150% SHARE PRICE / NAV PER SHARE (%)* 125% 100% 75% 50% 25% 0% VET BTE VII CPG POU PEY WCP BIR PXT TOU MEG ARX ERF CNQ SU CVE IMO HSE**…
  9. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 9
    RE-FOCUSING ON VERMILIONS CORE BUSINESS PRINCIPLES Maintain a strong balance sheet with low financial leverage Manage total payout ratio at less than 100% Consistently deliver results to all stakeholders that meet or exceed…
  10. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 10
    VERMILIONS NEAR-TERM PRIORITIES Pay down debt, targeting a Debt-to-Cash Flow ratio of less than 1.5x CASH OUTFLOW REDUCTIONS Continue to navigate the Company through the COVID-19 pandemic with a primary focus on HSE and business…
  11. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 11
    ESG LEADERSHIP We are committed to Environmental, Social and Governance matters Environmental Social Governance We reduce environmental impacts of We are committed to the care of our We demonstrate strong corporate traditional…
  12. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 12
    ESG PERFORMANCE Vermilion demonstrates strong corporate governance, with leadership that sets an example of the highest standards of ethics and integrity and a commitment to the responsible development of our diverse resource…
  13. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 13
    INTERNATIONAL DIVERSIFICATION 13
  14. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 14
    GLOBAL COMMODITY DIVERSIFICATION PRODUCTION (2020E)* ESTIMATED FFO CONTRIBUTION (2020E)* OIL (BRENT) OIL (BRENT) 15% EUROPEAN GAS 24% 19% OIL / OIL / EUROPEAN GAS CONDENSATE / CONDENSATE / 20% NGL NORTH AMERICAN NGL (WTI)…
  15. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 15
    GLOBAL CRUDE OIL PRICING ADVANTAGE We have significant leverage to oil prices (+US1/bbl = OIL BENCHMARKS +20MM FCF); we believe prices will recover to the US50 to Q2 2020 VET Premium US60 per barrel range as global economies recover…
  16. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 16
    EUROPEAN NATURAL GAS PRICING NATURAL GAS 12 European natural gas forward prices are currently in the 6 to 10 8/mmbtu range, representing a significant recovery from 2020 C/MMBTU* 8 lows of 2/mmbtu 6 Our European natural gas…
  17. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 17
    RELATIVE NETBACKS 2020E FIELD NETBACKS* (EXCLUDING HEDGING)** 30 25 20 / BOE 15 10 5 0 CNE CNQ ARX AAV BTE PEY PXT VET VII OVV POU GPRK MEG BIR KEL…
  18. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 18
    BALANCE SHEET 18
  19. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 19
    BALANCE SHEET COMPOSITION CURRENT CREDIT CAPACITY C2.5 BILLION 4-Year Covenant-based Credit Facility Covenant YE 2019 Q2 2020 AS AT JUNE 30, 2020 Financial Covenants Total debt / Consolidated EBITDA* Less than 4.0 1.9 2.8 0.4 B…
  20. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 20
    FINANCIAL LEVERAGE LEVERAGE RATIOS 4.0x 3.0x 2.0x VERMILION TARGETED LEVERAGE RANGE 1.0x 0.0x 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017…
  21. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 21
    ASSET OVERVIEW 21
  22. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 22
    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%…
  23. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 23
    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 2017 2018 2019 2020E E&D CAPEX AS %…
  24. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 24
    NORTH AMERICA CANADA Targeting light oil and condensate-rich natural gas in West Central Alberta and light oil in SE Saskatchewan Over 400,000 net acres in West Pembina targeting the Mannville (2,400 2,700m depth) and Cardium…
  25. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 25
    ATAX IRR (%) 20% 40% 60% 80% 0% 100% Ellerslie Frobisher/Alida Marten Hills Montney Montney Montney Eagle Ford Eagle Ford Condy Marcellus Viking Montney Cantuar Mannville Ellerslie Charlie Lake Montney…
  26. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 26
    NORTH AMERICAN PRODUCTION 70,000 60,000 50,000 40,000 BOE/D 30,000 20,000 10,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E E&D CAPEX AS % OF FFO* 21% 36% 67% 58% 31%…
  27. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 27
    AUSTRALIA Entered Australia in 2005 Offshore oil field 80 km N.W. of Australia (55m water depth) Horizontal well development with 20 wellbores, five dual laterals and 10 additional drilling opportunities identified* New wells…
  28. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 28
    AUSTRALIA PRODUCTION 10,000 8,000 6,000 BOE/D 4,000 2,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E E&D CAPEX AS % OF FFO* 19% 15% 43% 7% 48% 16% 40% 51% 34% 75% 81% 42% 96%…
  29. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 29
    FOCUS ON LONG-TERM PROFITABILITY 29
  30. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 30
    COST REDUCTION OPERATING EFFICIENCY ORGANIC CAPITAL EFFICIENCY 14.00 35.00 8% Reduction 12.00 30.00 67% Reduction 10.00 25.00 8.00 20.00 / BOE 24% Reduction / BOE from 2014 Peak 6.00 15.00 52% Reduction 15%…
  31. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 31
    RELATIVE PDP RECYCLE RATIO 3-YEAR PROVED DEVELOPED PRODUCING (PDP) FD&A RECYCLE RATIOS* 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x VET YGR WCP BIR TOG CR ERF ARX NVA GXE CPG IPO BTE TOU PONY TVE VII KEL LXE HIGH NETBACKS AND…
  32. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 32
    RETURN ON AVERAGE CAPITAL EMPLOYED RETURN ON AVERAGE CAPITAL EMPLOYED (ROACE) 40% 35% 30% 25% ROACE (%)* 20% 15% 10% 5% 0% -5% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010…
  33. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 33
    SUMMARY Unique portfolio of internationally diversified, highly efficient conventional oil and gas assets ideally suited to support a growth-and-income capital markets model o Paid out over 40 per share of dividends since 2003 Long…
  34. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 34
    SUPPLEMENTAL INFORMATION 34
  35. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 35
    2020 RESULTS TO-DATE 2020 Q2 2020 YTD 2020 Guidance Average Production boe/d 94,000 98,000 100,366 98,760 % Crude oil, condensate and NGLs % 55% 54% 54% % Natural gas % 45% 46% 46% Capital Expenditures MM 350 370 42 276…
  36. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 36
    FFO SENSITIVITY 2020 FORECAST FFO (CMM)* COMMODITY PRICES** WTI (US/BBL) 2020E 35 40 45 50 55 60 TTF (C/MMBTU) Brent (US/bbl) 42.34 3.00 411 437 465 490 515 538 WTI (US/bbl) 40.00 4.00 419 449 473 498 523 547 LSB = WTI less…
  37. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 37
    COMMODITY HEDGE POSITION 2020 2021 100% 100% PERCENTAGE OF PRODUCTION HEDGED (%) PERCENTAGE OF PRODUCTION HEDGED (%) 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% WTI Brent European N.A…
  38. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 38
    ENVIRONMENTAL SUSTAINABILITY We are playing a meaningful role in the energy transition by reducing the environmental impact of our traditional energy production and developing renewable energy projects o We deploy energy and…
  39. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 39
    ENVIRONMENTAL PERFORMANCE CDP (FORMERLY CARBON DISCLOSURE PROJECT) CDP is an international environmental organization that collects data about carbon emissions and energy use; its rankings are based on emissions disclosure and…
  40. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 40
    SOCIAL PERFORMANCE Committed to the care of our people and the enrichment of the communities where we live and work Give back through strategic community investment o In the past five years, Vermilion has invested more than 9.2…
  41. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 41
    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…
  42. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 42
    LA TESTE ECO-NEIGHBOURHOOD Our operations in La Teste, France now support an eco-neighborhood of 550 homes that are heated the same way as the tomato greenhouses, using recycled geothermal energy from our oil operation 30-year…
  43. September 2020 Corporate Presentation – Vermilion Energy Inc. – slide 43
    ANALYST COVERAGE FIRM ANALYST PHONE EMAIL ATB Capital Markets Patrick J. ORourke, CFA 403-539-8615 porourkeatb.com Bank of America Merrill Lynch Asit Sen, CFA 646-855-2602 asit.senbaml.com BMO Nesbitt Burns Ray Kwan, P.Eng. 403-515-1501…

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