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Vermilion Energy Inc. T.VET

Alternate Symbol(s):  VET

Vermilion Energy Inc. is a Canada-based international energy producer. The Company seeks to create value through the acquisition, exploration, development, and optimization of producing assets in North America, Europe, and Australia. Its business model emphasizes free cash flow generation and returning capital to investors when economically warranted, augmented by value-adding acquisitions. The Company’s operations are focused on the exploitation of light oil and liquids-rich natural gas conventional and unconventional resource plays in North America and the exploration and development of conventional natural gas and oil opportunities in Europe and Australia. The Company operates through seven geographical segments: Canada, the United States, France, Netherlands, Germany, Ireland, and Australia. In Canada, the Company is a key player in the highly productive Mannville condensate-rich gas play. It holds a 100% working interest in the Wandoo field, offshore Australia.


TSX:VET - Post by User

Comment by sclardaon Dec 27, 2020 8:22pm
186 Views
Post# 32186122

RE:RE:RE:RE:RE: Vermilion Energy: A Cash Flow Machine Even In 2020

RE:RE:RE:RE:RE: Vermilion Energy: A Cash Flow Machine Even In 2020Lemboy  wrote
Quintessential1 wrote: Just announce a special dividend and reward the faithfull.  Let the rest wonder whether they should get back onboard.
geemonet wrote: Buy back some shares at this cheap price and then go back to .23 a month for the faithful.

 

Get the balance sheet in good order, pay down the debt and the stock price will catch up to the balance sheet.

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At todays oil prices VET is likely generating $200 million in free cashflow per year after Capex. Some of that is because they have lowered their Capex to a minimum level and will likely have to raise Capex next year if they dont want production to drop to much.  The debt is also over $2 billion and this last year has not been a big money maker so its not as though this company is swimming in cash. 

VET is not in any position right now to pay any dividend.  Those thinking that we will be back to a 23 cent dividend anytime soon are dreaming. Paying that big dividend for many years is what put this company in the position it is in today.  If they would have cut the dividend in half 6 years ago VET would have half the debt it has today.

We also have to remember that while oil prices may rise further they can also drop from here it things dont go well and starting to pay a dividend that you cant afford only to have to cut it awhile later would make VETs current management look just as bad as the past CEO who claimed that VETs dividend was "Meaningfully over funded"  just to cut it completely a short time later.

VET has to get its financial  house in order  once and for all and then if oil prices cooperate later on they can start to pay a small dividend some time down the road.

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