Vermilion Energy Inc. · TSX:VET
Vermilion Energy — Q1 2024 Earnings Presentation
28 slides from Vermilion Energy's earnings presentation, May 11, 2024
Slide 1: Vermilion Energy Annual General Meeting
VERMILION ENERGY INTERNATIONALLY DIVERSIFIED FREE CASH FLOW FOCUSED ANNUAL GENERAL MEETING ESG LEADERSHIP
Slide 2: Agenda
AGENDA • Formal Business • Presentation from the President & CEO • Q1 2024 Results • 2024 Outlook 2
Slide 3: Vermilion Energy Board of Directors
VERMILION ENERGY BOARD OF DIRECTORS Robert B. Dion Hatcher James J. Carin S. Knickel Stephen P. Larke Michaleski Kleckner Jr. Dr. Timothy R. William B. Roby Manjit K. Sharma Myron M. Judy A. Steele Marchant Stadnyk 3
Slide 4: Vermilion Energy Executive Committee
VERMILION ENERGY EXECUTIVE COMMITTEE Dion Hatcher President & Chief Executive Officer Lars Glemser Darcy Kerwin Randy McQuaig Vice President & Vice President Vice President Chief Financial Officer International & HSE North America 4
Slide 5: Meeting Matters
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Slide 6: Annual Business: Fixing Number of Directors
ANNUAL BUSINESS • Meeting Matter • Fixing the number of directors of Vermilion Energy Inc. to be elected at ten (10) 6
Slide 7: Annual Business: Election of Directors
ANNUAL BUSINESS • Meeting Matter • Election of the directors of Vermilion for the ensuing year 7
Slide 8: Annual Business: Appointment of Auditors
ANNUAL BUSINESS • Meeting Matter • Appointment of Deloitte LLP as auditors for the ensuing year 8
Slide 9: Annual Business: By-Law No.2 Approval
ANNUAL BUSINESS • Meeting Matter • Confirm and approve By-Law No.2 requiring advance notice of director nominations 9
Slide 10: Annual Business: Executive Compensation Advisory Vote
ANNUAL BUSINESS • Meeting Matter • Advisory vote to accept Vermilion’s approach to executive compensation disclosed in the 2024 Information Circular 10
Slide 11: Annual Business: Receipt of Financial Statements
ANNUAL BUSINESS • Meeting Matter • Receipt of financial statements and the respective auditor’s report for the year ended December 31, 2023 11
Slide 12: Annual Business: Preliminary Voting Results
ANNUAL BUSINESS • Meeting Matter • Preliminary voting results 12
Slide 13: Presentation by President & CEO
PRESENTATION BY PRESIDENT & CEO 13
Slide 14: 30 Years of Vermilion
30 YEARS OF VERMILION 1994 2024 14
Slide 15: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS Q1 2024 Q4 2023 %∆ • Production above the upper end of our Q1 2024 North America (boe/d) 52,959 54,216 (2%) guidance range International (boe/d) 32,546 33,381 (3%) o Primarily due to strong performance from our Total(1) (boe/d) 85,505 87,597 (2%) Germany and United States assets •
Slide 16: International Operational Highlights
INTERNATIONAL OPERATIONAL HIGHLIGHTS Q1 2024 PRODUCTION INTL • International production averaged 32,546 boe/d, while sales averaged 35,026 on large 38% inventory draws • Continued to advance our deep gas exploration and development program in Germany FFO(1) o Successfully completed drilling on the O
Slide 17: Germany Gas Exploration Program
GERMANY GAS EXPLORATION PROGRAM • Targets are on trend and analogous to Netherlands plays where we have drilled 29 gas wells with an average success rate over 70% • Successfully drilled the Osterheide well (100% WI) and discovered gas within the targeted zone, plan to test the well during Q2 2024 an
Slide 18: Croatia Gas Development
CROATIA GAS DEVELOPMENT • Successfully drilled two (1.2 net) of the four (2.4 net) exploration wells on the SA-7 block and completed drilling an additional one (0.6 net) well in April 2024 o All three wells drilled to date discovered hydrocarbons in multiple zones o Testing operations are planned fo
Slide 19: North America Operational Highlights
NORTH AMERICA OPERATIONAL HIGHLIGHTS Q1 2024 PRODUCTION • North American production averaged 52,959 boe/d in Q1 2024 N.A. 62% • In Canada we drilled 13 (13.0 net) wells, completed 13 (13.0 net) wells, and brought on production nine (9.0 net) wells FFO(1) • In the United States six (2.0 net) non-oper
Slide 20: Montney Battery Progress
MONTNEY BATTERY PROGRESS • Construction on 16,000 boe/d battery is in the final stages, on schedule for start-up in late Q2 2024 o Battery increases our total Montney production capacity to approximately 20,000 boe/d, which we intend to fill over the coming years as we build out our BC Montney asset
Slide 21: BC Montney Well Results
BC MONTNEY WELL RESULTS • First two wells on VET drilled BC Montney 16-28 AVERAGE DAILY WELL PRODUCTION pad (16-28) produced ~700 mboe combined, 1,600 including over 215 mbbls of liquids, in first >1,000 boe/d per well with 30+% 330 days on production 1,400 liquids (majority oil) over the first 330
Slide 22: 2024 Outlook
2024 OUTLOOK 22
Slide 23: Outlook
OUTLOOK • Drilling operations will continue on the remaining BC Category 2024 Guidance(1) Mica Montney wells in Canada, the second exploration well in Germany and the fourth exploration well on Production (boe/d) 82,000 - 86,000 the SA-7 block in Croatia E&D capital expenditures ($MM) $600 - 625 • B
Slide 24: Strong Financial Position
STRONG FINANCIAL POSITION Execution on debt reduction and asset high-grading initiatives allows us to shift focus to key growth project execution NET DEBT VS FFO* Focus on Debt Reduction Low Debt, Increased ROC & High Debt & Asset High-Grade Development of Key Projects $2,000 100 PRODUCTION (‘000 BO
Slide 25: Free Cash Flow Allocation
FREE CASH FLOW ALLOCATION Forecast to return ~10% of our market cap to shareholders in 2024 with significant share buy backs FREE CASH FLOW* $1,200 60% $1,000 50% FREE CASH FLOW ($MM) $800 40% EFCF PAYOUT % $600 30% $400 20% $200 10% $0 0% 2021 2022 2023 2024e Debt Reduction Net Acquisitions ARO/Lea
Slide 26: Strategic Achievements
STRATEGIC ACHIEVEMENTS Debt Reduction & Asset High-Grade European Gas Exploration and Development • Achieved net debt target of $1 billion in Q1 2024 by • Successfully drilled first well of Germany deep gas reducing net debt by over $1.2 billion since 2020; lowest exploration program, proceeding to
Slide 27: Q&A
Q&A 27
Slide 28: Advisory
ADVISORY This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an Disclosures, and the Sustainability Accounting Standards Board. Vermilion has used best efforts to align with the most offer to sell or the solicitation of an offer to bu
Vermilion Energy Inc. Common (Canada) — Q1 2024 Earnings Presentation on 6ix