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May 11 2022 General Meeting Presentation – Vermilion Energy Inc.

Vermilion Energy Inc. · May 11, 2022 · 41 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. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 1
    MAY 11, 2022 ANNUAL GENERAL MEETING INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ESG LEADERSHIP
  2. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 2
    AGENDA Formal Business Presentation from the President 2021 Review 2022 Outlook Q1 2022 Results 2
  3. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 3
    FORMAL BUSINESS 3
  4. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 4
    VERMILION ENERGY BOARD OF DIRECTORS Lorenzo Donadeo Larry J. Macdonald James J. Kleckner Jr. Carin S. Knickel Stephen P. Larke Dr. Timothy R. Marchant Robert B. Michaleski William B. Roby Manjit K. Sharma Judy A. Steele 4
  5. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 5
    VERMILION ENERGY EXECUTIVE COMMITTEE Lorenzo Donadeo Dion Hatcher Lars Glemser Executive President Vice President & Chairman Chief Financial Officer Darcy Kerwin Bryce Kremnica Gerard Schut Jenson Tan Vice President Vice…
  6. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 6
    MEETING MATTERS 6
  7. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 7
    ANNUAL BUSINESS Meeting Matter Fixing the number of directors of Vermilion Energy Inc. to be elected at nine (9) 7
  8. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 8
    ANNUAL BUSINESS Meeting Matter Election of the directors of Vermilion for the ensuing year 8
  9. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 9
    ANNUAL BUSINESS Meeting Matter Appointment of Deloitte LLP as auditors for the ensuing year 9
  10. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 10
    SPECIAL BUSINESS Meeting Matter Advisory vote to accept Vermilions approach to executive compensation as set forth in the 2022 Information Circular 10
  11. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 11
    SPECIAL BUSINESS Meeting Matter Approval of the Omnibus Incentive Plan 11
  12. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 12
    ANNUAL BUSINESS Meeting Matter Receipt of financial statements and the respective auditors report for the year ended December 31, 2021 12
  13. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 13
    ANNUAL BUSINESS Meeting Matter Preliminary voting results 13
  14. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 14
    MAY 11, 2022 ANNUAL GENERAL MEETING INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ESG LEADERSHIP
  15. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 15
    PRESENTATION AGENDA Vermilions Core Business Principles 2021 Review Q1 2022 Results 2022 Outlook 15
  16. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 16
    VERMILIONS CORE BUSINESS PRINCIPLES Maintain a strong balance sheet with low financial leverage Manage total payout ratio at less than 100% Consistently deliver results that meet or exceed expectations Protect equity and…
  17. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 17
    2021 REVIEW 17
  18. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 18
    2021 HIGHLIGHTS & KEY ACHIEVEMENTS Delivered average production of 85,408 boe/d, at the high end of our guidance range of 84,500 to 85,500 boe/d 2021 2020 % 920 502 83% Generated record annual FFO and FCF, representing a Y/Y FFO…
  19. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 19
    /mmbtu US/bbl 0.00 2.00 4.00 6.00 8.00 10.00 0.00 100.00 120.00 20.00 40.00 60.00 80.00 Jan-19 Jan-19 Apr-19 Apr-19 Jul-19 Jul-19 Oct-19 Oct-19 Jan-20 Jan-20 Apr-20 Apr-20 * Source: Bloomberg. Forward…
  20. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 20
    2022 OUTLOOK 20
  21. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 21
    2022 BUDGET & GUIDANCE E&D CAPITAL BUDGET GUIDANCE 2022 E&D capital budget of 500 million 600 500 o North America - 290 million 400 300 MM o International - 210 million 200 100 0 2022 annual production guidance of 86,000…
  22. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 22
    Q1 2022 HIGHLIGHTS Q1 Q4 % Delivered average production of 86,213 boe/d, above the 2022 2021 upper end of initial guidance range of 83-85,000 boe/d North America (boe/d) 56,598 55,295 2% International (boe/d) 29,616 29,123 2%…
  23. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 23
    VALUE DRIVEN ACQUISITION 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…
  24. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 24
    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 400MM(1) o Total consideration of 600MM (including…
  25. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 25
    LEUCROTTA ACQUISITION OVERVIEW Vermilion to acquire Leucrotta Exploration Inc. for total cash consideration of 477 million Enhances North American depth and quality of inventory: o Multi-zone, inventory-rich Montney land base of…
  26. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 26
    ENHANCED VALUE ON A PER SHARE BASIS ACCRETIVE PRODUCTION GROWTH Announced in excess of 1.2 billion of strategic PRODUCTION PER SHARE (BOE/D PER MM SHARES) acquisitions in 2021 and 2022 100,000 600 Acquisitions were done…
  27. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 27
    PRO FORMA FINANCIAL OUTLOOK Base Corrib & Pro Forma 2022E(1) Vermilion Leucrotta w/ Corrib & Our internationally diversified asset portfolio Acquisitions Leucrotta generates significant FFO and FCF FFO (unhedged) 2.2B 0.6B 2.8B…
  28. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 28
    THE VERMILION ADVANTAGE 28
  29. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 29
    THREE CORE OPERATING AREAS 2022E PRO FORMA CORRIB & LXE ACQUISITIONS(1) PRODUCTION E&D CAPEX INT INT 42% N.A. 38% 62% N.A. 58% FFO FCF INT N.A. N.A. INT 58% 38% 42% 62% VERMILION FOCUSED IN THREE CORE AREAS…
  30. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 30
    ADVANTAGES OF INTERNATIONALLY DIVERSIFIED PORTFOLIO Business drivers o Premium pricing drives top decile netbacks o High quality conventional assets reduces corporate decline rates o Estimated corporate decline rate in the low 20%…
  31. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 31
    GLOBAL CRUDE OIL PRICING ADVANTAGE OIL PRICES In aggregate, Vermilions global crude oil portfolio has 130 sold at an average 5/bbl premium to the Canadian light 120 oil benchmark (MSW) over the past 7 years 110 100…
  32. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 32
    PREMIUM EUROPEAN NATURAL GAS PRICING European natural gas forward price currently trading at GLOBAL NATURAL GAS PRICES C40/mmbtu in 2022 and C32/mmbtu in 2023 o Significant premium to North American benchmarks 45 C41/ mmbtu This…
  33. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 33
    ENHANCED OPERATING NETBACK 2022E OPERATING NETBACKS 100.00 100% 90.00 90% 2022E OPERATING NETBACK (/BOE)* 2022E LIQUIDS WEIGHTING (%)* 80.00 80% 70.00 70% 60.00 60% AVERAGE = 50.99 50.00 50% 40.00 40% 30.00 30% 20.00…
  34. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 34
    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…
  35. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 35
    FREE CASH FLOW ALLOCATION & VALUATION 35
  36. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 36
    FREE CASH FLOW ALLOCATION FRAMEWORK NET DEBT AND NET DEBT TO TRAILING FFO RATIO FREE CASH FLOW ALLOCATION FRAMEWORK 2,500 5.0x BALANCE SHEET STRENGTH & RETURN TO SHAREHOLDERS 2,000 4.0x ACQUISITIONS 1,500 3.0x FREE CASH 1,000…
  37. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 37
    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…
  38. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 38
    COMPELLING VALUATION 2023E FCF YIELD* 2023E EV/DACF* 40% 5.0x 4.5x 35% 4.0x 30% 3.5x AVERAGE = 3.1x 25% 3.0x AVERAGE = 18% 20% 2.5x 2.0x 15% 1.5x 10% 1.0x 5% 0.5x 0% 0.0x VET CPG ERF SDE BTE WCP TVE NVA PEY KEL…
  39. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 39
    VALUE CREATION 1994 - CURRENT MARKET CAPITALIZATION(3) TOTAL VALUE 4.5B CREATION OF 5.2B DIVIDENDS EQUITY PAID(2) ISSUED(1) 3.9B (3.2B) VERMILION HAS GENERATED SIGNIFICANT SHAREHOLDER VALUE OVER THE PAST 27 YEARS (1)…
  40. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 40
    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…
  41. May 11 2022 General Meeting Presentation – Vermilion Energy Inc. – slide 41
    Q&A 41

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