VERMILION ENERGY INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED INVESTOR PRESENTATION ESG LEADERSHIP NOVEMBER 2023
VERMILION AT A GLANCE Market Summary VET Trading Price (October 31, 2023) 20.01 (TSX), 14.42 (NYSE) Shares Outstanding (Sept. 30, 2023) 163.7 MM Average Daily Trading Volume (shares) 1.2 MM (TSX), 1.5 MM (NYSE) Quarterly dividend…
WHAT DIFFERENTIATES VERMILION Internationally diversified portfolio delivers outsized free cash flow and reduces volatility Exposure to premium global commodities, top decile netbacks, low base decline and enhanced flexibility for…
KEY UPDATES FROM Q3 2023 Building operational momentum Australia back online with strong production Mica BC battery and Croatia gas plant construction underway Commenced drilling of first Germany gas exploration well (right)…
FINANCIAL DISCIPLINE AND CAPITAL ALLOCATION 5 5
CAPITAL ALLOCATION PRIORITIES Provide Resilient Increase Return of Maintain Strong Maintain Robust & Increasing Base Capital As Debt Balance Sheet Asset Base Dividend Decreases Target net debt to trailing Rolling 10-year plan of…
IMPROVING FINANCIAL METRICS NET DEBT VS FFO* Compared to average 2018-2020 period 2,000 1,500 MM 1,000 500 0 2018 2019 2020 2021 2022 2023E 2024E** WTI (US/bbl) 64.77 57.03 39.40 67.92 94.23 79.41 80.01 AECO (/GJ)…
INCREASING RETURN OF CAPITAL NET DEBT VS. RETURN OF CAPITAL* 2,000 Expect to hit debt target in 60% Q1 2024 and increase 1,750 shareholder returns 50% 1,500 40% 1,250 % of FCF MM 1,000 30% 750 20% 500 10% 250 0…
FREE CASH FLOW ALLOCATION FREE CASH FLOW* 1,200 Forecasting Significant 1,000 FCF in 2024 800 600 MM 400 200 0 FCF Use of FCF FCF Use of FCF FCF Use of FCF FCF 2021 2022 2023E 2024E** FCF ARO/Leases/Other*** Net…
FINANCIAL LEVERAGE NET DEBT TO FFO* CURRENT CREDIT CAPACITY AS AT SEPTEMBER 30, 2023 4.5x 4.0x 3.5x 541MM 3.0x 2.5x 2.0x 406MM 1,567MM 1.5x 1.0x 0.5x 33MM 0.0x Undrawn Capacity on Revolving Credit Facility Revolving…
INTERNATIONAL ADVANTAGE 11
ADVANTAGES OF DIVERSIFICATION 2023E PRODUCTION (1) EXPOSURE TO PREMIUM COMMODITY PRICES DRIVES TOP DECILE NETBACKS EUROPEAN OIL / GAS CONDENSATE / 20% NGL ASSET DIVERSIFICATION REDUCES RISK AND CASHFLOW VOLATILITY (WTI) OIL…
GLOBAL CRUDE OIL PRICING ADVANTAGE OIL PRICES 140 12 Vermilions global crude oil portfolio sells at an 120 10 average 5/bbl premium to the Canadian light oil VET PREMIUM TO MSW (C/BBL) benchmark (MSW) 100 8 Approximately…
EUROPEAN GAS PRICE ADVANTAGE HISTORICAL AND FORWARD PRICING OF NATURAL GAS NATURAL GAS 60 PRODUCTION %** 100% 50 Q4/23 2024 2025 TTF forward pricing is 6x AECO* 40% of Vermilions natural gas production is % Hedged 45% 38% 20% GAS…
STRUCTURAL DRIVERS FOR EUROPEAN GAS EUROPEAN SUPPLY/DEMAND BALANCE HISTORY** Europe* consumes an average of 45-50 Bcf/d, with a 30- 70 Winter 2023 demand down 10 Bcf/d 40 Bcf/d swing between summer and winter due to 2nd warmest…
RESILIENT BUSINESS 2024E PAYOUT RATIO* Vermilions low payout ratio, low base decline, diverse commodity mix, and reduced leverage make for a more resilient business across the commodity cycle 100% 80% 60% 40% 20% 0%…
RESILIENT VALUATION DECREASING NET DEBT*** Net debt per boe/d decreased by over 40% 30,000 4.5 since 2014 which de-risks equity valuation 4.0 25,000 2024 EV/DACF multiple* of 3.0x compared to 3.5 pro-forma YE 2022 PDP RLI** of 6…
OPERATIONAL EXCELLENCE 19
GLOBAL OPERATIONAL EXPERTISE ALBERTA MONTNEY, CANADA OVER 900 HORIZONTAL 15 OFFSHORE WELLS WELLS DRILLED IN DRILLED IN AUSTRALIA NORTH AMERICA ONSHORE AND OFFSHORE; CONVENTIONAL AND WANDOO, AUSTRALIA UNCONVENTIONAL…
OPERATIONAL EXCELLENCE Sharing ideas and learnings across multi-jurisdictions drives continuous Benchmark performance to identify opportunities improvement Continuous Apply best practices across global operations Engage external…
ENVIRONMENT, SOCIAL AND GOVERNANCE EMISSIONS INTENSITY TREND Scope 1&2 tCO2e per BOE Vermilions Purpose: 0.035 To responsibly produce essential energy 0.030 while delivering long-term value to our 0.025 people, shareholders,…
DEEP BASIN MULTI-ZONE DEVELOPMENT DEEP BASIN 30,000 25,000 20,000 Production growth from liquids-rich gas zones BOE/D 15,000 offset Cardium declines 10,000 5,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019…
FUTURE MULTI-ZONE ASSET POTENTIAL POWDER RIVER BASIN MONTNEY PEACE RIVER ARCH Apply learnings to Powder River and Montney assets Develop and delineate highest return zones in the stack Allocate capital to optimize asset…
MONTNEY DEVELOPMENT Alberta infrastructure in place and pursuing an Alberta drill-to-fill strategy to optimize the development of the overall Montney asset Primary focus now is building out BC infrastructure, 4-3 Battery including…
BC MONTNEY RESULTS Production rates from first VET drilled BC 16-28 AVERAGE DAILY WELL PRODUCTION Montney pad (16-28) continues to show 1,600 strong production rates after 180 days 1,400 o Validates Tier 1 BC inventory and…
VALUE DRIVEN ACQUISITION STRATEGY Target underexploited consolidation opportunities and new development within existing core areas Accretive while minimizing equity dilution to maximize per share value Generates strong free cash…
ASSET PORTFOLIO HIGH GRADING Acquired a private oil and gas company in Wyoming, Q3 expanding our multi-zone , extended reach drilling 2021 HIGHER FREE CASH FLOW PER BOE inventory in the Powder River Basin Acquired Leucrotta…
SUMMARY Internationally diversified portfolio delivers outsized free cash flow and reduces volatility Exposure to premium global commodities, top decile netbacks, low base decline and enhanced flexibility for capital allocation…
ASSET OVERVIEW 30
EUROPE NETHERLANDS 2 onshore gas producer IRELAND 800,000 net acres of undeveloped land 56.5% operated interest in the Corrib Natural Gas Project Q3 2023 production = 4,091 boe/d (99% gas) Corrib represents 100% of Irelands…
EUROPE HIGHLIGHTS Operated Exploration Non-op Exploration Producing assets with PDP RLI* of 5.5 years Operated Gas Non-operated Gas Operated Oil Minimal drilling activity required to maintain Non-operated Oil production due to…
AUSTRALIA 100% operated interest in Wandoo, an offshore oil field approximately 80 km N.W. of Australia (55m water depth) Horizontal well development with 21 producing wellbores and five dual lateral sidetracks tied into two…
NORTH AMERICA MONTNEY CANADA SOUTHEAST SASKATCHEWAN Targeting liquids-rich gas in the Q3 2023 production = 50,007 boe/d (45% liquids) Targeting light oil in conventional Peace River Arch straddling the reservoirs AB and BC border…
2022 RESERVES RESERVE LIFE INDEX 18 2P reserves increased 9% to 523 mmboe 16 14 Replaced 234% of production on a 2P basis at a 12 RLI (Years) FD&A cost of 19.22/boe, including changes in 10 FDC 8 6 High netback production…
ESG & SUSTAINABILITY 36
ESG LEADERSHIP Vermilion is committed to Reducing the environmental impact of safe, responsible energy production Caring for our people and communities, and Maintaining our strong corporate governance Environmental Emission…
SUSTAINABILITY PROJECTS Advancing environmental sustainability in communities where we live and work PARENTIS SUSTAINABILITY PARTNERSHIP LA TESTE ECO-NEIGHBOURHOOD Our geothermal energy tomato greenhouse Our oil operations provide…
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