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Vermilion Energy (VET)

Business description

Vermilion Energy is an international E&P with assets in Europe, North America and Australia. Management expects FY18 production to average 86-90kboed after incorporating the acquisition of Spartan.

Stock data

Market cap.C$5117.6m
Last closeC$33.58
High / Low (52 weeks)C$48.9 / C$27.0
Stock market listingCN
Forecast net debt (C$m)1706
Forecast gearing ratio (%)69
TeamResources - Oil & Gas
SectorOil & gas

Price performance

Relative *(1.9)(3.2)(23.9)

* % Relative to local index

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Investment summary

Vermilion Energy's defensive qualities include asset and commodity diversification, low financial leverage, high margins and low finding and development (F&D) costs. Management’s commitment to providing shareholders a sustainable dividend is supported by a deep and diverse portfolio of assets resilient to a volatile commodity price environment. A recycle ratio of over 2.5 times and the short-cycle nature of growth capex means spend can be rapidly diverted to projects that offer the highest returns or are curtailed. Our base case valuation stands at C$54.5/share. We believe dividend is fully covered (in addition to growth capex) at c 20% below our base case commodity price forecasts for FY19.

Last updated on 01/02/2019

Y/E Dec Revenue (C$m) EBITDA (C$m) PBT (C$m) EPS (c) P/E (x) P/CF (x)
2016A 829.0 362.0 (223.0) (210.4) N/A 7.6
2017A 1024.0 673.0 124.0 86.0 39.0 6.8
2018E 1535.0 693.0 11.0 (9.0) N/A 5.4
2019E 1857.0 1170.0 351.0 206.4 16.3 4.8

Last updated on 27/01/2019

Latest video

Bitesize briefing – Vermillion Energy

Industry outlook

Vermilion’s operations are in OECD countries and predominantly onshore; political, operational and subsurface risk is well spread. Vermilion benefits from realisations based on a number of regional commodity prices including Brent, WTI crude and Henry Hub, TTF, NBP and AECO gas.

Last updated on 01/02/2019

Key management

Tony Marino, President and CEO
Kyle Preston , IR Director

Company address

520 3rd Avenue SW, 3500
T2P 0R3
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