MARCH 2022 VERMILION ENERGY INVESTOR PRESENTATION INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ESG LEADERSHIP
VERMILIONS KEY ATTRIBUTES PRODUCITON (2022E PRO FORMA CORRIB ACQUISITION)(3) Compelling investment with growing free cash flow(1), accelerated deleveraging and OIL (BRENT) return of capital 16% EUROPEAN GAS o Trading at one of…
VERMILIONS KEY ATTRIBUTES Financially disciplined with a focus on balance sheet strength and returning capital to shareholders o 2022E year end net debt(1) of 0.4B(2) with a net debt to trailing FFO ratio of 0.2x(2,3) o Return of…
CAPITAL MARKETS SUMMARY Market Summary Trading Price (March 4, 2022) 25.03 (TSX), 19.70 (NYSE) Ticker Symbol (TSX & NYSE) VET Shares Outstanding (December 31, 2021) 162.3 million Average Daily Trading Volume (shares) 1.9 million…
ESG LEADERSHIP Environmental Vermilion is committed to reducing the environmental impact of traditional energy production, enriching and caring for the communities in which we live and work, and maintaining our strong corporate…
BUILDING A SUSTAINABLE FUTURE VERMILION RECOGNIZED BY BMO AS AN INDUSTRY LEADER IN ESG Vermilion continues to rank in the top quartile in emissions intensity Relative to its peers, Vermilion ranks well on total fresh water use…
VALUE DRIVEN ACQUISTION STRATEGY Target underexploited consolidation opportunities and new development within existing core areas o Accretive while minimizing equity dilution to maximize per share value o Generates strong free cash…
INVENTORY AND RESERVE LIFE OPTIMIZATION 16 2021 1P and 2P reserve life index increased to 9.7 14 years and 15.4 years, respectively 12 Vermilion actively manages its inventory and 10 acquisition strategy to optimize reserve life…
CORRIB CONSOLIDATION ACQUISITION Acquisition of an incremental 36.5% interest, increases our operated ownership to 56.5% o 7,700 boe/d of 2022E production expected to generate FCF of 500MM(1) o Total consideration of 600MM (including…
PRO FORMA FINANCIAL OUTLOOK Base Corrib 2022E Vermilion(1) Acquisition(1) Pro Forma(2) Our internationally diversified asset portfolio generates significant FFO and FCF FFO (unhedged) 2.3B 0.9B 3.2B FCF (unhedged) 1.9B 0.9B 2.8B…
INTERNATIONAL DIVERSIFICATION 11
THREE CORE OPERATING AREAS 2022E PRO FORMA CORRIB ACQUISITION* PRODUCTION E&D CAPEX INT N.A. 39% N.A. INT 61% 50% 50% FFO FCF N.A. N.A. 34% 31% INT INT 66% 69% VERMILION FOCUSED IN THREE CORE AREAS NORTH AMERICA,…
ADVANTAGES OF INTERNATIONALLY DIVERSIFIED PORTFOLIO Business drivers o Premium pricing drives top decile netbacks o High quality conventional assets reduces corporate decline rates o Unique high IRR acquisition opportunities (e.g.…
GLOBAL CRUDE OIL PRICING ADVANTAGE OIL PRICES In aggregate, Vermilions global crude oil portfolio has 120 sold at an average 5/bbl premium to the Canadian light 110 oil benchmark (MSW) over the past 7 years 100 90 Approximately…
PREMIUM EUROPEAN NATURAL GAS PRICING European natural gas forward price currently trading at GLOBAL NATURAL GAS PRICES C62/mmbtu in 2022 and C34/mmbtu in 2023 C65/ o Significant premium to North American benchmarks mmbtu 60 This…
EUROPEAN GAS MARKET FUNDAMENTALS Europe consumes approximately 45-50 Bcf/d of natural gas, with * demand increasing due to energy transition government policies Power sector gas use is expected to grow during the transition o…
FREE CASH FLOW 14.00 2,000 12.00 10.00 1,500 8.00 C/SHARE MM 1,000 6.00 4.00 500 2.00 0 0.00 2018 2019 2020 2021 2022E* E&D CAPEX FCF PRO FORMA CORRIB ACQ. CASH FLOW FROM OPERATING ACTIVITIES FCF/SHARE…
COMPELLING VALUATION 2022E FCF YIELD* 2023E FCF YIELD* 50% 40% 40% 30% 30% AVERAGE = 23% AVERAGE = 18% 20% 20% 10% 10% 0% 0% VET** BIR ERF WCP BTE PEY ARX NVA CPG TVE TOU AAV POU ATH KEL VET ERF BIR BTE PEY CPG ARX TOU WCP NVA…
VALUE CREATION 1994 - CURRENT 6,000 5,000 4,000 3,000 MARKET CAPITALIZATION(3) TOTAL VALUE 2,000 3.9B CREATION OF 4.6B MM 1,000 0 DIVIDENDS (1,000) EQUITY PAID(2) ISSUED(1) 3.9B (2,000) (3.2B) (3,000)…
BALANCE SHEET 23
BALANCE SHEET COMPOSITION CURRENT CREDIT CAPACITY 2.5B No near-term maturities AS AT DECEMBER 31, 2021 o Covenant-based credit facility termed out to May 2024 2,250 o US Senior Notes termed out to March 2025 2,000 o March 2022…
DEBT REDUCTION AND FUTURE FCF ALLOCATION Reinstated quarterly dividend of 0.06/share in Q1 NET DEBT AND NET DEBT TO TRAILING FFO RATIO 2022 2,500 5.0x o…
COMMODITY HEDGE POSITION 2022 2023 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% Crude Oil…
SUMMARY Compelling investment with growing free cash flow, accelerated deleveraging and return of capital, currently trading at the lowest valuations compared to our peers Unique portfolio of internationally diversified assets that…
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…
CEE EXPLORATION POTENTIAL VERMILION HAS BUILT A HIGHLY PROSPECTIVE EXPLORATION PORTFOLIO ACROSS CEE Approximately 2.0 million net acres of undeveloped land in the Pannonian basin across three countries Focused on under-invested…
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…
NORTH AMERICA CANADA Targeting light oil and condensate-rich natural gas in West Central Alberta and light oil in SE Saskatchewan Approximately 400,000 net acres in West Pembina targeting the Mannville (2,400 2,700m depth) and…
OPTIMIZING FCF IN THE POWDER RIVER BASIN Contiguous land position of 76,000 net acres in the Hilight area with multizone potential Vermilion Acreage o FCF positive with self-funded Turner development over the next 5+ years o…
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 have near-term and…
EMISSION REDUCTION TARGETS In April 2021, Vermilion introduced near-term and long-term emission reduction targets o Aspirational target of net zero emissions in our operations, including Scope 1 and Scope 2 emissions, by 2050 o…
SUSTAINABILITY PROJECTS Vermilion is committed to advancing environmental sustainability, economic inclusivity and creating partnerships within the communities in which we live and work PARENTIS SUSTAINABILITY PARTNERSHIP LA TESTE…
2022 BUDGET E&D CAPITAL BUDGET GUIDANCE 500 2022 E&D capital budget of 425 million 400 o North America - 215 million (3% decrease vs 2021) 300 MM Activity directed to Mannville condensate-rich natural gas 200 wells in Alberta…
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