VERMILION ENERGY INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED INVESTOR PRESENTATION ESG LEADERSHIP DECEMBER 2023
VERMILION AT A GLANCE Market Summary VET Trading Price (Dec. 11, 2023) 15.12 (TSX), 11.15 (NYSE) Shares Outstanding (Nov. 30, 2023) 163.1 MM Average Daily Trading Volume (shares) 1.0 MM (TSX), 1.3 MM (NYSE) Quarterly dividend (effective…
KEY ATTRIBUTES International energy company with 29 years operating in Europe and North America Diversified portfolio delivers outsized free cash flow, with top decile netbacks, low declines, and enhanced capital allocation…
KEY UPDATES 2024 BUDGET Strong financial outlook FREE CASH FLOW GROWTH(1) 1,000 2024 FFO(1) and FCF(1) forecasted to be approx. 1.3B and 700MM, respectively, based on forward commodity prices 2024e FCF represents a 40% increase…
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…
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…
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…
STRONG FINANCIAL POSITION NET DEBT VS FFO* Focus on Debt Reduction Increased ROC & High Debt & Asset High-Grade Strong Balance Sheet 2,000 100 Production (000 boe/d) 1,500 75 MM 1,000 50 500 25 0 0 2018 2019 2020…
FREE CASH FLOW ALLOCATION FREE CASH FLOW* 1,250 1,000 750 MM 500 250 0 FCF Use of FCF Use of FCF Use of FCF Use of FCF FCF FCF FCF 2021 2022 2023e 2024e ARO/Leases Return of Capital Debt Reduction Net…
INTERNATIONAL ADVANTAGE 11
ADVANTAGES OF INTERNATIONAL DIVERSIFICATION 2024e PRODUCTION (1) EXPOSURE TO PREMIUM COMMODITY PRICES DRIVES TOP DECILE NETBACKS OIL / EUROPEAN CONDENSATE / GAS NGL 22% (WTI) ASSET DIVERSIFICATION REDUCES RISK AND CASHFLOW…
EUROPEAN GAS PRICE ADVANTAGE HISTORICAL AND FORWARD PRICING OF NATURAL GAS NATURAL GAS 60 PRODUCTION %** 100% 50 Q4/23 Q1/24 2024 2025 TTF forward pricing is 6x AECO* 40% of Vermilions natural gas production is % Hedged 45% 46% 39%…
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…
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…
INTERNATIONAL OPERATING NETBACKS 2024e OPERATING NETBACK 100 80 60 / BOE 40 PEER AVERAGE = 25.40 20 0 Ireland Croatia Australia Netherlands France Germany International assets generate strong netbacks on…
LOW DECLINE ASSETS BASE PRODUCTION DECLINE 50 At 84,000 boe/d, our lower decline rate means VET doesnt need to replace 6k boe/d of production 40 AVERAGE = 30% DECLINE RATE (%) 30 20 10 0 Peer 1 Peer 2 VET Peer 3…
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…
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 OVERVIEW 21
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 Capital required to maintain production is Non-operated Oil lower 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…
EXPANDING MULTI-ZONE DEVELOPMENT DEEP BASIN MONTNEY PEACE RIVER ARCH Apply Deep Basin learnings to Montney assets Develop and delineate highest return zones in the stack Allocate capital to optimize asset free cashflow…
MULTI-ZONE DEVELOPMENT PRODUCTION BY PLAY 40 35 30 25 BOE/D (000s) 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 CARDIUM (OIL-WEIGHTED) DEEP BASIN LIQUIDS-RICH GAS ZONES…
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, including construction…
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…
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 31
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,…
ESG LEADERSHIP Vermilion is committed to Reducing the environmental impact of safe, responsible energy production Caring for our people and communities, and Environment Maintaining our strong corporate governance 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…
SUMMARY International energy company with 29 years operating in Europe and North America Diversified portfolio delivers outsized free cash flow, with top decile netbacks, low declines, and enhanced capital allocation optionality…
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