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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$4759.5m
Last closeC$31.23
High / Low (52 weeks)C$50.1 / C$31.1
Stock market listingCN
Forecast net debt (C$m)1706
Forecast gearing ratio (%)69
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(7.1)(24.3)(24.9)
Relative *(3.5)(17.7)(18.7)

* % Relative to local index

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Investment summary

Vermilion’s investor day highlighted its self-funded growth and income business model. 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. Project inventory supports 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 falls to C$54.5/share (from C$57.9/share), largely driven by a global E&P sector de-rating. The share price is well supported by an 8.2% yield, which we believe is fully covered (in addition to growth capex) at c 20% below our base case commodity price forecasts for FY19.

Last updated on 06/12/2018

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 7.1
2017A 1024.0 673.0 124.0 86.0 36.3 6.4
2018E 1535.0 693.0 11.0 (9.0) N/A 5.0
2019E 1857.0 1170.0 351.0 206.4 15.1 4.4

Last updated on 06/12/2018

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 29/11/2018

Key management

Tony Marino, President and CEO
Kyle Preston , IR Director

Company address

520 3rd Avenue SW, 3500
Calgary
T2P 0R3
Canada
14032694884
View website