Vermilion Energy Inc. · TSX:VET
Vermilion Energy — Merger or Acquisition (March 2022)
15 slides from Vermilion Energy's merger presentation, Mar 28, 2022
Slide 1: Vermilion Energy Acquisition of Leucrotta Conference Call
MARCH 28, 2022 VERMILION ENERGY ACQUISITION OF LEUCROTTA CONFERENCE CALL INTERNATIONALLY DIVERSIFIED | FREE CASH FLOW FOCUSED | ESG LEADERSHIP
Slide 2: Leucrotta Acquisition Overview
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 81,000 (77,000 net) acres; 20+ years of high value Tier 1 drilling
Slide 3: Alignment with Acquisition Strategy
ALIGNMENT WITH 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 flow in a mid-cycle pricing environment to support a sustainabl
Slide 4: Fully Funded with 2022 Free Cash Flow
FULLY FUNDED WITH 2022 FREE CASH FLOW FREE CASH FLOW ALLOCATION ► 2022 Budgeted FCF of ~$680MM 2,500 Excess FCF Options: based on Nov 2021 pricing • Debt Repayment • Increase Base ► Corrib acquisition and improved 2,000 Dividend • Share Buyback commodity prices adds over $1.2B of • Special/Variable
Slide 5: Maintaining Geographic Diversification
MAINTAINING GEOGRAPHIC DIVERSIFICATION 2023E PRO FORMA CORRIB & ► Combination of the Corrib and Leucrotta acquisition LEUCROTTA ACQUISITION(1) maintains our geographical mix, including 20% of our PRODUCTION production base exposed to European gas ► Based on preliminary 2023 estimates, our internatio
Slide 6: Enhanced Value on a Per Share Basis
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 without issuing equity and 95,000 580 560 diluting shareholders 90,000 540
Slide 7: Montney Evaluation Process
MONTNEY EVALUATION PROCESS ► Vermilion team has extensive experience in the Montney o VP Geosciences and multi-disciplined technical team with direct and proven experience in the Montney NEBC o Identified Peace River Arch as a Montney sweet-spot with less Core Leucrotta competition Acquisition ► Ver
Slide 8: Leucrotta Asset Details
LEUCROTTA ASSET DETAILS ► Primary asset is the Mica property in the Peace River Arch straddling the Alberta and British Columbia borders Upper Target – Tier 1 ► Comprised of 81,000 gross (77,000 net) contiguous acres of >15 years Inventory IRR > 100% Montney mineral rights ► Conservatively identifie
Slide 9: Mica Development Plans
MICA DEVELOPMENT PLANS ► Forecast to produce approximately 13,000 boe/d in 2023 4-30 BC AB 5-19 ► Infrastructure plan is in place to achieve a production base of 28,000 boe/d with the option to expand 8-4 A13-7 13-7 ► Longer-term development plan maintains optimal production level Proposed Water Hub
Slide 10: Updated 2022 Budget and Guidance
UPDATED 2022 BUDGET AND GUIDANCE 2022 Original Guidance 2022 Revised Guidance Production 83,000 – 85,000 boe/d 86,000 – 88,000 boe/d E&D Capital Expenditures $425MM $500MM ► 2022 E&D Capital Budget increased to $500MM o Plan to invest ~$75MM to drill and complete a 6-well Montney pad in Alberta on t
Slide 11: Pro Forma Financial Outlook
PRO FORMA FINANCIAL OUTLOOK Base Corrib Pro Forma Pro Forma ► Continue to anticipate reaching $1.2B 2022E Vermilion(1,2) Acquisition(2,3) w/ Corrib w/ Corrib & LXE (2,4) debt target in 2H 2022 FFO (unhedged) $2.3B $0.9B $3.2B $3.3B ► YE 2022 net debt estimated at $0.9B FCF (unhedged) $1.9B $0.9B $2.
Slide 12: Debt Reduction and FCF Allocation
DEBT REDUCTION AND FCF ALLOCATION ► Reinstated quarterly dividend of $0.06/share in Q1 NET DEBT AND NET DEBT TO TRAILING FFO RATIO 2022, payable April 18, 2022 2,500 5.0x o Represents <2% of 2022E FFO Under the status- o Equates to <5% of FFO at mid-cycle pricing* 2,000 quo Vermilion would 4.0x NET
Slide 13: Key Strategic Objectives
KEY STRATEGIC OBJECTIVES ► Vermilion’s 2030 strategic plan developed in early 2021 included the following key near term objectives: o Reduce absolute debt from YE 2020 levels by $600MM by YE 2023, and $1.0B by YE 2025, with a net debt to FFO ratio of less than 1.5x o Execute a deep-value internation
Slide 14: Q&A
Q&A 14
Slide 15: 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 solicitation of an offer to buy, securities of Vermilion. This presentation and its contents should not be construed, under any circumstances, as inv
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