Vermilion Energy Inc. T.VET

Asset Sales to Address Debt?

[ngarala]

Does it make sense to sell some non-core assets to cut debt? I'm sure production can be kept relatively constant given the amount of cutbacks over the last 18 months.

It seems that we are not going to get any significant love until the D/CF number is addressed in a meaningful way.

[stockmarket1]

2nd quarter results should poresent a better picture. With WTI well over $60, VET is generating a bundle of FCF. It's no secret now for anyone who follows VET.

[geemonet]

Doesn't make sense.  They just need to keep doing what they're doing. Pay off 100 mil a quarter and in 2 years bring back the div. If you want to get rich quick try crypto. 

[halitosis8]

yes, they have to pay down a significant amount of debt.  I don't think they have to wait two years before bringing back a dividend, but for the next quarter at least it's more of the same. Brent is over $70 again.  The last time this happened, VET almost broke $11

[geemonet]

It's over $70 today.... what will it be next week? $75? $65? $95? $45? Expecting the div to come back any sooner than 2 years is setting yourself up for disappointment. Hey, I hope I'm wrong, but i guarantee it won't happen in 2021.

[lashing]

Especially when managment already said as much point blank.

[ngarala]

Who is asking for the Div to come back? The problem is that the D/CF ratio is still at best 2.5 when looking forward as of January 2022 (Debt = ~$1.5B, CF = ~$0.6B). Sell assets, get the numerator to ~$1.2B and now you have a chance at a D/CF of less than 2.0. A lot of E&P are getting to 1.0 and below right now.

[geemonet]

I'm pretty sure every single share holder of vet wants the div to come back.... isn't that kinda why we all bought in the first place???  if you sell assets then the cash flow goes down... keep the denominator high and use that money to make the numerator get littler.  have a lil patience young grass hopper. or just move your money to a better company. 

[ngarala]

Well, FTR, I don't care about the Div. Give me 50% price appreciation over a 5% dividend. I mean, if the dividend increases the price due to more buyers, so be it. But that is a means to an end, not an end to itself. Also, normally selling assets would lead to less production and less CF. But IN THIS ERA, where VET has the inventory to move on to and is clearly not pumping at full capacity

[geemonet]

Then why did you buy a dividend paying modeled company??? That's like going to McDonalds and asking for a taco!!!

[ngarala]

Higher share price, the dividend, and getting debt under control are all related. You want the dividend... I want a higher share price. Neither of us get what we want without the debt being addressed. One faster way to do this would be to sell assets (ideally non-core) to get there.

[stockmarket1]

Agree and when that day comes.... They'd better reward us long term holders nicely!