Vermilion Energy Inc. T.VET

Total Debt at 1.75bil

[shakka]

See slide #17 in August presentation.

[Oldnagger]

Thanks for pointing that out. That is the debt that VET pays interest on. The rest is simply the provisions that arise due to mark to market accounting rules concerning their hedge book at the end of Q2 !! The provisions would be realized if VET were forced to buy back all their hedge positions on June 30.In reality they will not as all these hedges are more than covered by physical production so

[whoLuLu]

VET has been treated very poorly today. Wonder if there was any misinterpretation of the release?

[Tommy123]

This post has been removed in accordance with Community Policy

[whoLuLu]

IF that is so Tom maybe it should have fallen 50% or more.

[EnergyWatcher55]

You are wrong. VET's Q2 earnings was amazing! Total debt was decreased to $1.7B and the outlook is promising!

[Oldnagger]

An amazing thing has happened, after posting remarks concerning mark to market, Google sent me an article concerning the subject (without me asking). The subject is complex, but normally a company does not need `to make provisions if they are hedging a product that they produce. So now I do not really understand why VET is doing this. Could it possibly be that management wants the share price low

[halitosis8]

I think Google is wrong for oil & gas in Canada, Oldnagger. https://corporatefinanceinstitute.com/resources/knowledge/finance/oil-and-gas-company-balance-sheets/ Derivative Fair Value The derivative fair value item is not specifically unique to only oil and gas companies. It is, however, a very commonly seen item on oil and gas company balance sheets. Within the industry, the prices of

[Oldnagger]

Thanks for the info, I was really trying to surmise whether it was necessary to record the provisions I am not sure whether your post answers that question definetively ?

[Oldnagger]

Also, could it be possible that since VET is using three way options to create crack spreads they must necessarily record the provisions. That is why I was hoping that management would have clarified what is really going on !! After all we certainly do not need VET to be lower in value than it already is. Every time there is doubt , the Hedge funds swoop in to make investors pay for it. Retail

[halitosis8]

re reporting derivatives as assets or liabilities I glanced at some other material that linked reporting derivatives as assets or liabilities was required by Securities Acts in Alberta and other jurisdictions. Whitecap, for example, reported much smaller numbers in this category:  $15,854,000 In an earlier post, you guessed the liabilities were probably related mainly to nat gas.  I

[Oldnagger]

Thanks for clearing that up !!

[halitosis8]

it's still not clear to me oldnagger--your comments helped me a lot. swaps, puts, three way collars.  it all sounds like a sex manual from the 70s. just one more example of the same accounting Tourmaline : $60 million VET is no better or worse than many other companies re hedging.  In the end, it's the FFO and FCV that matter, or so I tell myself....

[Oldnagger]

Ah yes, the 70's !!!, don't forget the 60's either !!!

[mnztr]

It could be CDN reporting rules are different. Also mgmt may want to defer taxes.

[Oldnagger]

I don't know about misinterpretation , but anyone saying that $2.50 FCF on an $8.31. Stock price is Catastrophic needs some very Special Attention IMHO

[Relaxrelax]

Just another buying opportunity.....results should continue to get better and better as all economies will have to keep opening.  India just lowered their covid alert.  Be patient all longs, the shorts can't keep this down forever.