VERMILION ENERGY INC.

Vermilion sold a further 26,000,000 Coelacanth shares at $0.76 each ($19.76 million), lowering its stake from about 15.0% to about 10.2% (54,179,104 shares). It again cites debt reduction, and says it may now sell no more than 4,000,000 further shares without Coelacanth's consent under the amended agreement.

asset acquisition disposition

Vermilion sold 30,000,000 Coelacanth shares at $0.76 each ($22.8 million) to a group of purchasers, cutting its stake from about 20.7% to about 15.0% (80,179,104 shares). It says the sale continues its priority of reducing debt, and an amended investor rights agreement bars it from selling more than 60,000,000 of its prior shares before June 8, 2026 without Coelacanth's consent. This begins unwinding the Coelacanth stake built since 2022-2024.

asset acquisition disposition

Vermilion agreed to sell its US assets (about 5,500 boe/d) for $120 million cash plus up to US$7 million of contingent payments tied to WTI oil prices, with closing expected in Q3 2025; proceeds go to debt repayment. Together with the 2023 East Finn sale this completes its exit from the US, ending the Wyoming operations and the planned 2025 US drilling in earlier context. It expects to end 2025 with net debt of about $1.3 billion (1.3 times trailing fund flows) and cut 2025 capex to $630-660 million with production of 117,000-122,000 boe/d. The release also states the Westbrick acquisition closed February 26, 2025, resolving that open thread.

asset acquisition disposition

Vermilion agreed to sell its Saskatchewan and Manitoba assets for $415 million cash, with net proceeds going to debt repayment; they produce about 10,500 boe/d, and closing is expected in Q3 2025 subject to approvals. It expects to end 2025 with net debt of about $1.5 billion (1.4 times trailing fund flows) at current strip prices, and with a mid-Q3 close expects 2025 production of 120,000-125,000 boe/d and capex of $680-710 million. This sells the southeast Saskatchewan/Williston position held in earlier context; the release also shows the Westbrick-inclusive guidance in use.

asset acquisition disposition

Vermilion closed its US$400 million offering of eight-year senior unsecured notes, due February 15, 2033, at a 7.250% fixed coupon paid semi-annually from August 15, 2025. This completes the offering priced on January 28; the release does not say how the proceeds will be used.

debt financing

Vermilion priced a US$400 million offering of eight-year senior unsecured notes at a 7.250% coupon, maturing February 15, 2033, with closing expected on or about February 11, 2025. Proceeds may be used to redeem or repay its existing 5.625% notes due 2025, fund part of the Westbrick Energy acquisition, pay related costs, or repay credit facility borrowings, in any combination. This adds new debt alongside the term loan increase, and the filing does not say how the proceeds will be split.

debt financing

Vermilion filed financial information on its proposed acquisition of Westbrick Energy Ltd., a new deal not mentioned in earlier context, and lenders agreed to raise a previously announced fully underwritten term loan maturing May 2028 from $250 million to $450 million. The filing gives no purchase price or the loan's purpose beyond linking it to the announcement; inference: the loan is likely meant to help fund the acquisition.

debt financing

Vermilion set its 2025 budget: $600-625 million of capital spending, production of 84,000-88,000 boe/d, and forecast fund flows of about $1.0 billion and free cash flow of about $400 million, lower than the 2024 forecast of $1.3 billion and $700 million. It raised the quarterly dividend 8% to $0.13 from $0.12 starting with the April 15, 2025 payment, and keeps the 50% of excess free cash flow return target, with the variable part going to buybacks. It has bought back and retired 16.8 million shares since July 2022 (9.1 million in 2024), cutting the share count 4.8% to 154.5 million. In Germany, its second deep gas exploration well (Wisselshorst, 64% working interest, up from 30%) flow tested at a restricted 21 mmcf/d, with production expected online in the first half of 2026. It also plans to resume operated US drilling in 2025 after none in 2024, and says the Croatia SA-7 discoveries are still being evaluated.

well test result

Vermilion set its 2024 budget: $600-625 million of capital spending, production of 82,000-86,000 boe/d, and forecast fund flows of about $1.3 billion and free cash flow of about $700 million (roughly 40% above its 2023 forecast). It raised the quarterly dividend 20% to $0.12 from $0.10 starting with the April 2024 payment, and plans to raise its return-of-capital target to 50% of excess free cash flow from April 1, 2024 (30% until then), with buybacks expected to double from 2023. It says the $1 billion net debt target was achieved, which fulfils the earlier commitment to raise returns once debt came down. The Mica Montney battery (16,000 boe/d) and Croatia SA-10 gas plant are now both expected mid-2024, so the Croatia start-up is later than the late 2023/early 2024 timing in earlier context. The release says the EU did not propose extending the temporary windfall tax beyond 2023.

dividend declaration

Vermilion set a 2023 capital budget of $570 million and production guidance of 87,000-91,000 boe/d (assuming Corrib closes March 31, 2023), raised the quarterly dividend 25% to $0.10 CDN from $0.08 starting with Q1 2023, and resumed share buybacks, which it had paused in Q4 2022 because of uncertainty over the European windfall tax. It expects about $800 million of 2023 free cash flow, with up to 25% returned to shareholders and the rest used for debt reduction, and net debt of $1.4 billion or less at the end of 2022. Irish government consent for the Corrib acquisition was obtained in December 2022, with closing expected in Q1 2023, which moves that thread forward but does not close it. At Mica, the first six-well Alberta pad produced about 7,500 boe/d in December; 2023 volumes are expected at 8,000 boe/d and the ramp to 13,000 boe/d is now expected in 2024, a year later than the earlier 2023 target. Windfall taxes are estimated at about $250 million for 2022 and $300 million for 2023, which the company opposes.

dividend declaration

Vermilion announced a 33% increase in its dividend to $0.08 CDN per share, now described as quarterly, payable October 17, 2022 to holders of record September 30 (ex-dividend September 29). This follows the pause in dividends seen in 2020 and the March 2022 statement that return of capital would rise once the debt target was reached; the filing itself does not state the reason for the increase. The old $0.23 monthly payment is replaced by a quarterly one.

dividend declaration

Vermilion closed the Leucrotta acquisition on May 31, 2022, paying $1.73 per Leucrotta share (it already held 7,536,800 shares, about 2.9%). It also paid $14.3 million for 53,303,668 shares of Coelacanth, the spun-out company, giving it 18.0% on a partially diluted basis, and intends to exercise its Coelacanth warrants. The Mica Montney property (77,000 net acres, 275 drilling prospects) is now Vermilion's. This resolves the March 2022 Leucrotta deal; the Coelacanth stake ended up at 18.0% rather than the roughly 12.5% first announced.

business combination

Vermilion agreed to buy Leucrotta Exploration, a Montney-focused company in northeast British Columbia and northwest Alberta, for a net cash price of $477 million ($1.73 per share), with closing expected in the second half of May 2022. The deal adds 77,000 net acres, 275 identified drilling prospects, and total proved plus probable reserves of 49.5 MMboe; a spun-out ExploreCo (later named in the closing filing as Coelacanth) goes to Leucrotta holders, with Vermilion taking about 12.5% for about $14 million. Vermilion says it was funded from 2022 free cash flow without issuing equity. The release also refers to a previously announced Corrib acquisition expected to close in 2H 2022, and a $1.2 billion net debt target in 2H 2022, with an intended higher return of capital afterwards. This is a new Canadian growth asset and a development of the open Corrib thread: the Corrib deal described here is a further purchase, not the earlier 2019-era 20% interest.

business combination

Vermilion reported Q3 2020 fund flows from operations of $115 million, up 40% from the prior quarter, and free cash flow of $83 million; it paid down $55 million on its credit facility. Net debt was $2,136 million, and no dividends were declared in Q3 or Q2 2020 (cash dividends per share were nil in both quarters, against $0.575 year to date). The company says its number one financial priority is debt reduction and that it will sacrifice near-term production growth for it. 2020 production guidance is tightened to 94,000-96,000 boe/d from 94,000-98,000. Year-to-date net loss was $1.46 billion. The release attributes the capital cuts to the commodity price collapse and COVID-19, and says a 2021 capital budget will come early in the new year. This continues the dividend and DRIP threads: the $0.23 monthly payment seen through February 2020 has stopped, and this release does not explain when or why beyond the nil figures.

regulatory community update

The TSX approved Vermilion's normal course issuer bid, letting it buy back up to 7,750,000 common shares (about 5% of 155,161,464 outstanding at July 31, 2019) from August 9, 2019 to no later than August 8, 2020, with a daily limit of 267,558 shares. Bought shares will be cancelled. Vermilion says it intends to use the bid when it has free cash flow left after dividends, splitting that excess between debt reduction and buybacks. This is the first buyback in the history seen here, a new way of returning cash alongside the dividend. The boilerplate yield jumps to about 13.5% from 9.5%; the filing gives no reason.

security holder rights change

Vermilion closed the Spartan acquisition on May 28, 2018, ahead of the roughly June 15 date expected, for $1.40 billion: $1.23 billion in shares plus about $175 million of assumed debt. It issued 27.9 million new Vermilion shares at 0.1476 per Spartan share, so existing shareholders now own a smaller slice of a larger company. Spartan brings about 480,000 net acres and about 23,000 boe/d projected for 2018 (91% oil). Vermilion also extended its revolving credit facility to May 31, 2022 and raised it to $1.6 billion from $1.4 billion. This resolves the main open Spartan thread.

business combination

Vermilion agreed to acquire Spartan Energy Corp., a public southeast Saskatchewan oil producer (~23,000 boe/d, 91% oil), for about $1.40 billion: $1.23 billion in Vermilion shares plus ~$175 million of assumed debt. Spartan holders get 0.1476 of a Vermilion share per share (about $6.50, a 5% premium), so existing Vermilion shareholders are diluted by the new share issuance. There is a $40 million reciprocal break fee, and closing is expected around June 15, 2018 subject to court, Spartan shareholder, TSX/NYSE and regulatory approvals. Vermilion says it is accretive per share (production 7%, fund flows 15%, 2P reserves 13%). 2018 production guidance rises to 86,000-90,000 boe/d and the capital budget to $430 million. It also intends to eliminate the 2% DRIP discount starting with the dividend payable July 16, 2018. This is a large expansion of the southeast Saskatchewan position begun with Elkhorn and the January 2018 private acquisition.

business combination

Vermilion raised its monthly dividend to $0.23 CDN per share (from $0.215), payable May 15, 2018 to holders of record April 30 (ex-dividend April 27). It calls this the fourth increase since distributions began in 2003, ending the unchanged $0.215 level in place since February 2014. The filing is signed by Lars Glemser as VP and Chief Financial Officer, whereas earlier filings were signed by Curtis Hicks as CFO; the filing does not explain the change.

dividend declaration

Vermilion agreed to buy an unnamed private southeast Saskatchewan oil producer for $90.8 million cash, plus assumption of its debt, funded from existing credit facilities. The assets are in the Sinclair and Fertile areas on the Saskatchewan/Manitoba border, with about 42,600 net acres, ~1,150 bbl/d of oil in Q4 2017 and 6.7 mmboe of 2P reserves. Closing is expected around February 15, 2018, subject to court, shareholder and regulatory approvals. 2018 production guidance rises to 75,000-77,500 boe/d (from 74,500-76,500) and the capital budget to $325 million (from $315 million). It adds to the southeast Saskatchewan position first entered via Elkhorn in 2014.

business combination

Canada Pension Plan Investment Board (CPPIB) agreed to buy Shell's 45% interest in the Corrib gas field in Ireland for €830 million (plus possible contingent payments), with closing expected in the first half of 2018. Vermilion, which already holds 18.5%, would take over as operator and buy SEPIL (the Shell subsidiary holding the interest) along with a 1.5% working interest from CPPIB for €19.4 million, taking it to 20%. It plans to fund this from existing credit facilities. This replaces Shell as operator, which was a role noted in earlier context; the deal is subject to conditions and government consents.

joint venture update

Vermilion completed the German acquisition from Engie E&P Deutschland GmbH announced in June 2016. Total consideration is €33 million ($46.2 million, versus $47.9 million quoted in June), and after adjustments for cash flows since the January 1, 2016 effective date its cash cost is projected at about €28.3 million ($39.6 million). The assets are operated and non-operated interests in five oil and three gas fields plus one operated exploration licence, with Vermilion operating six of the eight fields. They averaged 2,000 boe/d (51% oil) in 2016 through October; the company expects about 10% growth in 2017 on €3.6 million ($5.1 million) of budgeted capital and forecasts about €17.6 million ($24.9 million) of 2017 fund flows from the assets.

business combination

Vermilion declared a $0.215 CDN per share dividend payable January 16, 2017 to holders of record December 22 (ex-dividend December 20). The amount is unchanged. It is raising the Premium Dividend proration by a further 25% from this payment, so participants get the 1.5% premium on 50% of their participating shares and regular cash on the other 50%. The company repeated that it intends to keep increasing proration during 2017, ending with no further share issuance under that component.

dividend declaration

Vermilion declared a $0.215 CDN per share dividend payable October 17, 2016 to holders of record September 22 (ex-dividend September 20). The amount is unchanged. It also said, as previously announced, it will prorate the Premium Dividend part of its reinvestment plan by 25% from this payment, so participants get the 1.5% premium on 75% of their shares and regular cash on the other 25%. The company intends to keep increasing the proration during 2017, ending with no further share issuance under the Premium Dividend component. The boilerplate yield reads about 5%.

dividend declaration

Vermilion agreed to buy interests in several German oil and gas assets from Engie E&P Deutschland GmbH for €33 million ($47.9 million), effective January 1, 2016, with closing expected in late Q4 2016 and funding from existing credit facilities. The assets are five oil and three gas producing fields plus an operated exploration licence, forecast at about 2,000 boe/d in 2016 (50% oil) with 9.2 million boe of proved plus probable reserves (GLJ). The filing says these are Vermilion's first operated producing properties in Germany, building on its 2014 entry through a 25% non-operated consortium interest and the July 2015 farm-in.

business combination

Vermilion signed a farm-in agreement on July 27, 2015 with Mobil Erdgas-Erdöl (held by ExxonMobil) and BEB Erdgas und Erdöl (held by ExxonMobil and Shell) for a 50% share of 19 undeveloped onshore exploration licences in northwest Germany (about 850,000 net acres). In return Vermilion will fund the other partners' remaining 50% share of 11 gross (6 net) exploration wells over five years. No production is acquired, Vermilion takes over as operator for the exploration phase on 11 licences, and closing is expected January 1, 2016 subject to approvals. This builds on its early-2014 entry into Germany; the earlier proposed GDF Suez consortium deal was never confirmed as closed in the filings seen. The release states a dividend yield of about 6%.

farm in farm out agreement

Vermilion completed the Saskatchewan acquisition announced March 18, naming the target as Elkhorn Resources Inc. Total consideration was about $427 million: about $42 million of assumed debt, $180 million cash and 2.8 million new Vermilion shares valued at about $205 million. This resolves the pending deal; the final price is higher than the $400 million first announced, driven by the share price at closing ($72.50 vs $63.81 assumed) and a cash figure of $180 million vs $172.5 million.

business combination

Vermilion agreed to buy a private southeast Saskatchewan oil producer (Northgate region) for $400 million: $345 million in cash and shares (half cash from existing credit facilities, half in about 2.7 million new Vermilion shares) plus $55 million of assumed debt. It adds a new Williston Basin core area, and 2014 production guidance rises to 47,500-48,500 boe/d from 45,000-46,000 and the 2014 capital budget to $590 million from $555 million. Closing is expected around April 29, 2014, subject to court, shareholder and regulatory approvals; holders of about 60% of the target's shares have signed support agreements. The release does not mention the proposed Germany deal in its guidance discussion, though its business description still lists Germany.

business combination

The board approved a 7.5% increase in the monthly dividend to $0.215 CDN from $0.20, expected to start with the January 2014 dividend payable February 17, 2014, subject to final board approval on January 15, 2014. The release also says Vermilion completed a Netherlands acquisition (Northern Petroleum Nederland B.V.) on October 10, 2013 and proposes to buy a 25% participation interest in a German consortium from GDF Suez E&P Deutschland (estimated cash cost about $170M, target close by December 31, 2013 or by January 31, 2014). For 2014 it set a development budget of about $555M, expects 2014 production of 45,000-46,000 boe/d (about 10-12% growth, assuming the German deal closes January 31), raised 2013 development capital to $530M, and now expects first gas at Corrib around mid-2015 after tunnelling restarted November 3 following a worksite fatality.

dividend declaration

Vermilion confirmed the dividend increase of 5.3% to $0.20 CDN per share, up from $0.19, payable February 15, 2013 to holders of record January 31 (ex-dividend January 29). This resolves the pending increase flagged since November 2012; the release says the dividend has never been reduced and this is the second increase since 2003 (the December 27 release called it the third, so the filings are inconsistent on the count).

dividend declaration

Vermilion closed its purchase of 100% of ZaZa Energy France (from ZaZa Energy Corporation), which holds 100% working interests in five Paris Basin fields, adding to its French oil operations. It paid about US$76 million cash at closing, current production is about 850 bbl/d of light crude, and about 6.3 million boe of proved plus probable developed producing reserves (GLJ) are attributed to it. The company states more than $500 million of borrowing capacity remains, and that it has started the process for a secondary NYSE listing expected in the first quarter of 2013.

business combination

Vermilion declared a $0.19 CDN per share dividend payable December 17, 2012 to holders of record November 30 (ex-dividend November 28). It also says its board has approved a 5.3% increase in the monthly dividend to $0.20 CDN, expected to take effect with the January 2013 dividend payable February 15, 2013, subject to final board approval and formal declaration around mid-January.

dividend declaration

Vermilion closed its purchase of working interests in six French oil fields from Total E&P France, the deal announced in December 2011. It paid about $108 million cash at closing (the December estimate was about C$115 million), and now holds 100% operated interests in five of the fields and a 56% non-operated interest in Dommartin-Lettree. The assets are expected to produce about 2,200 boe per day in 2012 and add an estimated 6.7 million boe of proved plus probable reserves. Remaining borrowing capacity is stated as about C$640 million (December estimate was about C$650 million).

business combination

Vermilion signed agreements with Total E&P France to buy working interests in six producing fields in France's Paris and Aquitaine basins, expanding its existing French operations. Estimated cash to close is about C$115 million, with closing expected in late January 2012 subject to customary conditions and regulatory approvals. The assets are expected to produce about 2,200 boe per day in 2012 (86% Brent-based crude) and add an estimated 6.7 million boe of proved plus probable reserves. Vermilion already held the other non-operated interests in three of the fields and would hold 100% operated interests in five of the six after closing. It says about C$650 million of borrowing capacity would remain and net debt to funds flow would be about 1.0 times.

business combination

Ireland granted the Foreshore License for the Corrib onshore gas pipeline, following An Bord Pleanála approval on January 20, 2011 and a Section 40 approval on February 28, 2011. The Corrib partners can now start building the onshore pipeline in the coming months and expect to finish it in 2013. That is later than the end-2011 first-gas timing in earlier filings (inference: first gas now likely depends on the 2013 completion), which affects the timing of Vermilion's deferred payment to Marathon.

regulatory community update

Verenex, where Vermilion holds 18,760,540 shares (41.9%), signed a deal for the Libyan Investment Authority to buy all its shares for $7.09 cash per share plus a working-capital amount (about $0.15 per share expected). This replaces the earlier C$10.00 CNPC International offer, which needed Libyan NOC consent that was never reported as received. Vermilion has signed a voting agreement to back the deal. Verenex shareholders vote on December 11, 2009 (75% of votes cast needed), with court and regulatory approvals also required; a $350 million letter of credit is in escrow.

business combination

Vermilion closed an equity offering of 7,282,000 trust units at $30.90 each for gross proceeds of $225 million, with underwriters holding an option for 809,000 more units (up to $25 million). Proceeds will first reduce debt and later fund development programs and possible acquisitions. For existing unitholders this means more units outstanding.

capital raising announcement

Vermilion completed the Corrib deal announced in June, paying Marathon US$100 million at closing. A further payment of about US$135-300 million remains, depending on the date of first gas, and capital costs of up to US$300 million net from the January 1, 2009 effective date. This resolves the June purchase agreement; Vermilion still expects production to rise about 30% once the field is on-stream.

business combination

Vermilion agreed to buy Marathon Oil's 18.5% non-operated interest in the Corrib gas field off Ireland. It pays US$100 million at closing, plus a later payment of roughly US$135-300 million depending on when first gas arrives (currently expected end of 2011, implying about US$190-200 million). It also takes on its share of capital costs of up to US$300 million. Vermilion expects the field to raise its annual production by about 30% once on-stream; Shell (45.5%, operator) and Statoil (36%) are the partners.

business combination

Verenex Energy, in which Vermilion holds 18,760,540 shares (42.4%), agreed to a C$10.00 per share cash takeover offer from a subsidiary of CNPC International, valuing Verenex at about C$499 million. Vermilion signed a lock-up agreement to tender its shares. The offer will only be mailed if Libya's National Oil Corporation consents, which has been requested but not received, and it needs 66 2/3% acceptance plus regulatory approvals.

business combination