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March 2021 Corporate Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · Mar 1, 2021 · 39 slides

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Slides

  1. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 1
    MARCH 2021 VERMILION ENERGY INVESTOR PRESENTATION INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ESG LEADERSHIP
  2. March 2021 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. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 3
    CORE BUSINESS PRINCIPLES Maintain a strong balance sheet with low financial leverage o Targeting a Debt-to-Cash Flow ratio of less than 1.5x o Forecasted net debt reduction in excess of 350 million at US60 WTI in 2021* Manage total…
  4. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 4
    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…
  5. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 5
    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…
  6. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 6
    2021 BUDGET 6
  7. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 7
    2021 BUDGET & GUIDANCE SUMMARY Disciplined and balanced E&D capital budget of 300 million o Focused on maximizing returns and FCF* o Top priority is debt reduction and preserving financial liquidity Annual average production…
  8. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 8
    2021 CAPITAL ALLOCATION International capex increases 32% year-over- E&D CAPITAL BUDGET GUIDANCE year while North American capex decreases 400 38% year-over-year 350 300 Majority of 1H 2021 drilling program allocated to…
  9. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 9
    TRANSITION TO LEVEL-LOADED CAPEX QUARTERLY E&D CAPEX & PRODUCTION 250 105,000 100,000 200 95,000 Optional PRODUCTION (BOE/D) Capital 90,000 E&D CAPEX (MM) 150 85,000 80,000 100 75,000 70,000 50 65,000 60,000 0…
  10. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 10
    INTERNATIONAL DIVERSIFICATION 10
  11. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 11
    CORE OPERATING AREAS 2021E PRODUCTION* INT 33% N.A. 67% INT FFO* N.A. 38% 62% INT FCF* N.A. 44% 56% VERMILION IS FOCUSED IN STABLE CORE AREAS * 2021 production and FFO based on March 1, 2021 strip…
  12. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 12
    GLOBAL COMMODITY DIVERSIFICATION PRODUCTION (2021E)* ESTIMATED FFO CONTRIBUTION (2021E)* OIL (BRENT) OIL (BRENT) 16% 24% EUROPEAN GAS 17% OIL / OIL / EUROPEAN GAS CONDENSATE / CONDENSATE / 20% NGL NGL NORTH AMERICAN…
  13. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 13
    GLOBAL CRUDE OIL PRICING ADVANTAGE OIL BENCHMARKS Vermilion has significant leverage to oil prices 2021E VET Premium / 2021E VET An increase of US1/bbl generates approximately (Discount) to WTI o Crude Oil Mix (US/bbl)* 17MM of…
  14. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 14
    EUROPEAN NATURAL GAS PRICING Vermilion has significant leverage to improving European GLOBAL NATURAL GAS PRICES natural gas prices (+1/mmbtu = +28MM incremental FCF) 14 European natural gas forward prices are currently in the 8 12…
  15. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 15
    FOCUS ON PROFITABILITY 15
  16. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 16
    COST REDUCTION OPERATING EFFICIENCY ORGANIC CAPITAL EFFICIENCY 14.00 20.00 7% Reduction 12.00 40% Reduction 16.00 10.00 12.00 8.00 / BOE / BOE 49% Reduction 6.00 8.00 4.00 49% Reduction 17% Reduction 4.00 2.00…
  17. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 17
    FREE CASH FLOW FREE CASH FLOW GENERATION 1,000 900 800 700 600 MM* 500 FCF = 400 FFO less 300 CAPEX 200 100 0 2016 2017 2018 2019 2020 2021E* FFO E&D CAPEX FFO FORECAST E&D CAPEX GUIDANCE FROM 2016 THROUGH 2020 WE…
  18. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 18
    FREE CASH FLOW YIELD 2021E FCF YIELD 40% 35% 30% 2021E FCF YIELD (%)* 25% 20% 15% 10% 5% 0% BTE VET CPG ERF MEG CNQ CVE BIR WCP IMO NVA SU TOU POU PEY VERMILION TRADES AT ONE OF THE HIGHEST FCF YIELDS AMONGST…
  19. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 19
    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…
  20. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 20
    BALANCE SHEET 20
  21. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 21
    BALANCE SHEET COMPOSITION CURRENT CREDIT CAPACITY C2.5 BILLION No near-term maturities AS AT DECEMBER 31, 2020 o Covenant-based credit facility termed out to May 2024 o US Senior Notes termed out to March 2025 0.5 B Vermilions US…
  22. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 22
    FINANCIAL LEVERAGE LEVERAGE RATIOS 4.5x 4.0x 3.5x 3.0x 2.5x 2.0x VERMILION TARGETED LEVERAGE RANGE 1.5x 1.0x 0.5x 0.0x 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016…
  23. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 23
    ASSET OVERVIEW 23
  24. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 24
    VERMILION PRODUCTION 105,000 90,000 75,000 60,000 BOE/D 45,000 30,000 15,000 0 2003 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016 2017 2018 2019 2020 2021E E&D CAPEX AS % OF FFO** 50% 36%…
  25. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 25
    EUROPE NETHERLANDS GERMANY IRELAND 2 onshore gas producer Established production operations 20% operated interest in the Corrib Large and growing inventory of drilling opportunities and substantial exploratory land Natural Gas…
  26. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 26
    CEE EXPLORATION POTENTIAL VERMILION HAS BUILT A HIGHLY PROSPECTIVE EXPLORATION PORTFOLIO ACROSS CEE Approximately 3.4 million net acres of undeveloped land across three countries (Hungary, Croatia and Slovakia) Focused on…
  27. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 27
    AUSTRALIA 100% operated interest in Wandoo, an offshore oil field approximately 80 km N.W. of Australia (55m water depth) Horizontal well development with 20 producing wellbores and five dual lateral sidetracks tied into two…
  28. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 28
    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…
  29. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 29
    SUPPLEMENTAL INFORMATION 29
  30. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 30
    CAPITAL MARKETS SUMMARY Market Summary Trading Price (March 5, 2021) 9.39 (TSX), 7.41 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding (December 31, 2020) 158.7 million Average Daily Trading Volume (shares) 2.5 million…
  31. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 31
    FFO SENSITIVITY COMMODITY PRICES** ANNUAL 2021 UNHEDGED FFO SENSITIVITY (CMM)* 2021E Change FFO Impact (C) Brent (US/bbl) 61.57 WTI & Brent US1/bbl 17.0MM WTI (US/bbl) 58.60 LSB = WTI less (US/bbl) 4.46 LSB / WTI Differential…
  32. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 32
    COMMODITY HEDGE POSITION 2021 2022 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…
  33. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 33
    EUROPEAN NATURAL GAS LONG TERM OUTLOOK Global Gas Trade to 2035: European Import Dependence Grows LNG and pipeline gas import growth is set to continue and will Net imports (bcf/d) As % share of demand require future European gas…
  34. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 34
    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…
  35. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 35
    ENVIRONMENTAL PERFORMANCE CDP (FORMERLY CARBON DISCLOSURE PROJECT) CDP is a not-for-profit that provides a global disclosure system for investors and companies to manage their environmental impacts, including Climate (results at…
  36. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 36
    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…
  37. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 37
    PARENTIS SUSTAINABILITY PARTNERSHIP Vermilion received Frances Circular Economy Award for our project to supply geothermal heat from our oil operation to local greenhouses The award recognizes economically successful enterprises that…
  38. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 38
    LA TESTE ECO-NEIGHBOURHOOD Our operations in La Teste, France now support an eco-neighborhood heated the same way as the tomato greenhouses, using recycled geothermal energy from our oil operation 30-year partnership to provide 80%…
  39. March 2021 Corporate Presentation – Vermilion Energy Inc. – slide 39
    ANALYST COVERAGE FIRM ANALYST PHONE EMAIL ATB Capital Markets Patrick J. ORourke, CFA 403-539-8615 porourkeatb.com BMO Nesbitt Burns Ray Kwan, P.Eng. 403-515-1501 ray.kwanbmo.com Canaccord Genuity Anthony Petrucci 403-691-7807…

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