Vermilion Energy Inc. · TSX:VET
Vermilion Energy — Investor Presentation (January 2025)
47 slides from Vermilion Energy's investor presentation, January 2025
Slide 1: Vermilion Energy Investor Presentation
VERMILION ENERGY INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED INVESTOR PRESENTATION ESG LEADERSHIP JANUARY 2025
Slide 2: Vermilion at a Glance
VERMILION AT A GLANCE Market Summary VET Trading Price (Jan. 3, 2025) $14.27 (TSX), US$9.87 (NYSE) Shares Outstanding (Dec. 31, 2024) 154.3 MM Average Daily Trading Volume (shares) 0.8 MM (TSX), 1.2 MM (NYSE) Quarterly Dividend – Q1 2025 $0.13/share Capital Structure Current Pro Forma(4) Market Capi
Slide 3: Key Attributes
KEY ATTRIBUTES Global gas producer with 30 years operating in Europe and North America Diversified portfolio delivers outsized free cash flow, with top decile realized gas price, low declines, and enhanced capital allocation optionality Strong FCF(1) underpinned by robust asset base and unique oppor
Slide 4: Key Updates
KEY UPDATES Westbrick Energy Acquisition (Dec 2024) • Vermilion to acquire Westbrick Energy Ltd. for $1.075 billion, closing anticipated mid-Q1 2025 • Contiguous land and infrastructure footprint is complementary to Vermilion’s legacy Deep Basin assets • Production of 50,000 boe/d and 256 mmboe of 2
Slide 5: Westbrick Acquisition Overview
WESTBRICK ACQUISITION OVERVIEW • Vermilion to acquire Westbrick Energy Ltd. for total consideration of $1.075 billion • Contiguous land and infrastructure footprint is complementary to Vermilion’s legacy Deep Basin assets o ~1.1 million (770,000 net) acres(1) and four operated gas plants (see right)
Slide 6: Improved Deep Basin Drilling Economics
IMPROVED DEEP BASIN DRILLING ECONOMICS • Improved operational scale of Vermilion's core Deep Basin asset enables lower costs and improved full-cycle margins Upper Cretaceous o Acquisition lands attract capital within pro forma portfolio with higher half-cycle returns compared to Vermilion’s existing
Slide 7: Liquids-Rich Natural Gas Growth
LIQUIDS-RICH NATURAL GAS GROWTH • Vermilion has a successful track record of efficiently LIQUIDS-RICH GAS PRODUCTION(1) developing Deep Basin assets 120 Projected o Tripled production from 2010 to 2020, primarily from organic development 100 • Acquisition adds scale to an established core 80 operati
Slide 8: Acquisition Funding
ACQUISITION FUNDING • Acquisition funded through Vermilion’s existing HISTORICAL NET DEBT TO FFO $1.35 billion credit facility 4.0x o In connection with the Acquisition Vermilion entered 3.5x into a new $250 million term loan maturing May 2028 and a new US$300 million bridge loan 3.0x o Between cred
Slide 9: Acquisition Highlights
ACQUISITION HIGHLIGHTS • Refocused portfolio with liquids-rich Canadian gas and high-margin European gas Production(2) Portfolio • Premium-priced international commodity exposure remains a key differentiating High-Grading factor, with International businesses contributing 50% of corporate FFO INTL
Slide 10: 2025 Pro Forma Outlook
2025 PRO FORMA OUTLOOK 2025 Pro Forma Category 2024 Guidance(1) 2025 Guidance(1) Outlook(1) Production (boe/d) 84,000 – 85,000 84,000 – 88,000 126,000 – 133,000 E&D capital expenditures ($MM) $600 – 625 $600 – 625 $725 – 775 • Assuming acquisition closes mid-Q1 2025, we anticipate FY2025 production
Slide 11: Western Canadian Natural Gas Landscape
WESTERN CANADIAN NATURAL GAS LANDSCAPE West Coast Canadian LNG(1) North American Power Demand • Natural gas demand for Canadian LNG is expected to • Increased power associated with datacenter development increase notably by end of decade (>6.0 bcf/d) is underpinning long-term natural gas demand o St
Slide 12: Germany Well Test Results
GERMANY WELL TEST RESULTS • Successfully tested the Wisselshorst well (64% WI) in Q4 2024 • Flow tested at a restricted rate of 21 mmcf/d(1) with wellhead pressure of 6,150 psi, expect deliverability would have been higher without testing equipment limitations o Plan to conduct further testing opera
Slide 13: Capital Allocation
CAPITAL ALLOCATION 13 13
Slide 14: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Provide Resilient Increase Return of Maintain Strong Maintain Robust & Increasing Base Capital As Debt Balance Sheet Asset Base Dividend Decreases Rolling 10-year plan of NCIB approval to Targeting net debt to FFO Base dividend represents stable production while repurch
Slide 15: Strong Financial Position
STRONG FINANCIAL POSITION NET DEBT VS FFO(1) $2,000 126 – 133 150 mboe/d 125 PRODUCTION (‘000 BOE/D) $1,500 Annualized 100 2025 FFO(2) $MM $1,000 75 50 $500 25 $0 0 2023 2024e 2025e PF Net Debt to Trailing FFO* 0.9x 0.8x 1.5x FFO ($/basic share) $ 6.98 ~$ 7.60 ~$ 7.80 Unhedged FFO ($/basic share) $
Slide 16: Asset Portfolio High Grading
ASSET PORTFOLIO HIGH GRADING Q2 Acquired Leucrotta Exploration, adding strategic Montney asset 2022 and significantly enhancing drilling inventory INCREASED OPERATIONAL SCALE Q1 Closed acquisition of Equinor’s 36.5% interest in Corrib in Ireland, 2023 significantly increasing exposure to premium-pri
Slide 17: Impactful Return of Capital
IMPACTFUL RETURN OF CAPITAL ANNUAL DIVIDEND PER SHARE VS. SHARE COUNT $0.80 165 SHARES OUTSTANDING (MM) DIVIDENDS PER SHARE $0.60 160 $0.40 155 $0.20 150 $0.00 145 2022 2023 2024* 2025e Annualized Dividend per Share Share Count Decreasing share count contributes to ratable dividend increases and val
Slide 18: Compounding Shareholder Returns
COMPOUNDING SHAREHOLDER RETURNS GROWING SHAREHOLDER RETURNS CUMULATIVE NCIB ACTIVITY 10% 18 16 8% SHARES REPURCHASED (MM)** SHAREHOLDER RETURN % 14 6% 12 10 4% 2020-2023 8 focus was debt reduction 2% 6 4 0% 2 -2% 0 2022 2023 2024e 2025e 2022 2023 2024 PPS Growth Dividend Yield Shares Repurchased Inc
Slide 19: International Advantage
wm INTERNATIONAL : ADVANTAGE 19
Slide 20: Advantages of Diversified Portfolio
ADVANTAGES OF DIVERSIFIED PORTFOLIO 2025E PRODUCTION(1) European EXPOSURE TO PREMIUM COMMODITY BENCHMARKS DRIVES TOP REALIZED PRICES Gas 14% Int'l Oil 9% Deep Basin / ASSET DIVERSIFICATION REDUCES RISK AND CASHFLOW VOLATILITY SE Sask / USA Montney (Light Oil) (Liquids-Rich Gas) 12% 65% INTERNATIONAL
Slide 21: European Gas Price Advantage
EUROPEAN GAS PRICE ADVANTAGE HISTORICAL AND FORWARD PRICING OF NATURAL GAS $60 $50 Euro Gas 2024 2025 TTF forward pricing is 8x AECO* GAS PRICES (C$/MMBTU) ~40% of Vermilion’s natural gas production is % Hedged 48% 51% priced off premium European benchmarks Average Floor $29 $17 $40 $30 $20 $10 $0 2
Slide 22: Structural Drivers for European Gas
STRUCTURAL DRIVERS FOR EUROPEAN GAS EUROPEAN SUPPLY/DEMAND BALANCE HISTORY** • Europe* consumes an average of ~40 Bcf/d, with a 30 Bcf/d 80 Winter 2023 demand down ~10 Bcf/d due to 2nd warmest winter, government swing between summer and winter 60 policy, and extremely high prices • Russian supply ha
Slide 23: Global Crude Oil Pricing Advantage
GLOBAL CRUDE OIL PRICING ADVANTAGE OIL PRICES $140 $14 • Vermilion’s global crude oil portfolio sells at an $120 $12 average $5/bbl premium to the Canadian light oil benchmark (MSW) VET PREMIUM TO MSW (C$/BBL) $100 $10 • Approximately one-third of Vermilion’s crude oil $80 $8 production is priced wi
Slide 24: Realized Prices
REALIZED PRICES Q3 2024 PF REALIZED NATURAL GAS PRICE Q3 2024 PF REALIZED OIL PRICE $5 $105 REALIZED NATURAL GAS PRICE ($/MCF) $4 $100 REALIZED OIL PRICE ($/BBL) AVERAGE = $96.53 $3 $95 $2 $90 AVERAGE = $1.49 $1 $85 $0 $80 VET Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer VET Peer
Slide 25: International Operating Netbacks
INTERNATIONAL OPERATING NETBACKS VERMILION 2025E OPERATING NETBACK $100 $80 $60 $/ BOE* $40 PEER AVERAGE = $26.38 $20 $0 Ireland Netherlands Croatia Australia Germany France International assets generate strong netbacks on premium pricing * Source: Based on company 2025 estimates and 2025 full year
Slide 26: Low Decline Assets
LOW DECLINE ASSETS 2024 BASE PRODUCTION DECLINE 50 At ~84,500 boe/d, our lower decline rate means VET doesn’t need to replace ~6,000 boe/d of production 40 DECLINE RATE (%)* AVERAGE = 30% 30 20 10 0 Peer 1 VET Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Pe
Slide 27: Global Operational Expertise
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 HARLINGEN, EXPERTISE NETHERLANDS NINE OPERATED OVER 80 WELLS GAS PLANTS DRILLED IN EU
Slide 28: Value Driven A&D Strategy
VALUE DRIVEN A&D 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 flow in a mid-pricing environment to support a sustainable dividend Differe
Slide 29: Asset Overview
AW ASSET OVERVIEW 29
Slide 30: Europe
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 2024 production = 4,216 boe/d (99% gas) • Corrib represents 100% of Ireland’s domestic gas production GERMANY • Q3 2024 production = 9,844 boe
Slide 31: Australia
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 platforms • New wells drilled every 2-3 years • Q3 2024 production = 2,
Slide 32: North America
NORTH AMERICA MONTNEY CANADA SOUTHEAST SASKATCHEWAN • Targeting liquids-rich gas in the • Q3 2024 production = 48,772 boe/d (46% liquids) • Targeting light oil in conventional Peace River Arch straddling the reservoirs AB and BC border • ~275,000 net acres of land with • ~80,000 net acres of Montney
Slide 33: Expanding Multi-Zone Development
EXPANDING MULTI-ZONE DEVELOPMENT DEEP BASIN MONTNEY PEACE RIVER ARCH POWDER RIVER BASIN Apply Deep Basin learnings to Develop and delineate highest Allocate capital to optimize Montney and PRB assets return zones in the stack asset free cashflow Multi-zone development provides inventory upside and m
Slide 34: Premium Montney Acreage
PREMIUM MONTNEY ACREAGE VET owns ~22% of CEI.V* Oil Wet Gas Dry Gas A significant and contiguous premium acreage block in the oil window of the Montney Source: Land information sourced from XI Technologies Asset Book * Vermilion has ownership of, or control and direction over, approximately 22% of t
Slide 35: BC Montney Well Results
BC MONTNEY WELL RESULTS BC MONTNEY AVERAGE IP90 PRODUCTION(1) 1,400 Wells are shorter lateral 1,200 length, initially constrained by infrastructure, and include 1,000 several child wells • 9-21 BC pad averaged IP90(1) rate of over 1,000 boe/d (43% liquids)(1) 800 BOE/D 600 o Average lateral length ~
Slide 36: Montney Development
MONTNEY DEVELOPMENT • Focus is building out BC infrastructure, construction of 16,000 boe/d battery completed in Q2 2024 4-3 Battery o Battery and water hub infrastructure has achieved 99% 8-33 Battery run time since starting up o New battery allows us to grow our Montney production, targeting avera
Slide 37: 2023 Reserves
2023 RESERVES RESERVE LIFE INDEX 18 16 14 RLI (YEARS) 12 10 8 6 4 2 - 2013 2014 2015 2016 2017 2018** 2019 2020 2021 2022 2023 PDP - RLI* 1P - RLI* 2P - RLI* PDP Average 1P Average 2P Average Proved Developed Producing Proved Proved Plus Probable North America (mboe)(1) 112,204 195,685 316,040 Inter
Slide 38: History of International Development
HISTORY OF INTERNATIONAL DEVELOPMENT ACQUIRED 2P RESERVES VS. POST-ACQUISITION PRODUCTION AND 2P RESERVES 350,000 300,000 250,000 MBOE 200,000 150,000 100,000 50,000 - 1 2 ACQUIRED RESERVES RESERVE ADDITIONS PRODUCTION 2023 RESERVES** (1997-2023)* (1997-2023) (1997-2023) France Entered in 1997, acqu
Slide 39: ESG & Sustainability
ESG & SUSTAINABILITY 39
Slide 40: Environment, Social and Governance
ENVIRONMENT, SOCIAL AND GOVERNANCE EMISSIONS INTENSITY TREND Vermilion’s Purpose: 0.030 Scope 1&2 tCO2e per BOE To responsibly produce essential energy 0.025 while delivering long-term value to our people, shareholders, customers, partners 0.020 and communities 0.015 2019 2020 2021 2022 2023 • Reduc
Slide 41: Sustainability Projects
SUSTAINABILITY PROJECTS Advancing environmental projects in communities where we live and work PARENTIS SUSTAINABILITY PARTNERSHIP LA TESTE ECO-NEIGHBOURHOOD • Our geothermal energy tomato greenhouse • Our oil operations provide 1MW of geothermal project in Parentis, France provides 8 MW of energy t
Slide 42: Summary
SUMMARY Global gas producer with 30 years operating in Europe and North America Diversified portfolio delivers outsized free cash flow, with top decile realized gas price, low declines, and enhanced capital allocation optionality Strong FCF(1) underpinned by robust asset base and unique opportunity
Slide 43: Appendix
APPENDIX 43
Slide 44: Pricing and FFO Sensitivity
PRICING AND FFO SENSITIVITY COMMODITY PRICES* 2024e 2025e 2025 PRO FORMA FFO SENSITIVITY (C$MM)** FFO Impact (C$) FFO Impact (C$) Change Brent (US$/bbl) $80.64 $72.31 Hedged Unhedged WTI (US$/bbl) $75.59 $68.49 WTI & Brent US$1/bbl $15MM $18MM LSB = WTI less (US$/bbl) $ 5.98 $ 4.96 MSW = WTI less (U
Slide 45: Commodity Hedge Position
COMMODITY HEDGE POSITION 2024 2025 PERCENTAGE OF PRODUCTION HEDGED (%)* PERCENTAGE OF PRODUCTION HEDGED (%)* 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Crude Oil European N.A. Corporate Crude Oil European N.A. Corporate Natural Gas Natural Gas Total Natur
Slide 46: Base Budget and Guidance
BASE BUDGET AND GUIDANCE Vermilion plans to provide an updated 2025 budget and financial guidance upon closing of Westbrick acquisition Category 2025 Guidance(1) 2025 Drilling Program Well Count Production (boe/d) 84,000 - 88,000 Germany 5 gross (5.0 net) E&D capital expenditures ($MM) $600 - 625 Ne
Slide 47: Advisory
ADVISORY This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer to sell or the inherent in Vermilion's marketing operations, including credit risk; the uncertainty of reserves estimates and reserves life and estimates of solicit
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