Vermilion Energy Inc T.VET

Alternate Symbol(s): VET

Energy Oil & Gas E&P

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

Vermilion Energy Inc > Oil will it $ 100

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Comment by PipelessPauperon Aug 02, 2021 2:53am

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Post# 33639324

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Oil will it $ 100

No its more than ‘like’, it IS starting over.

stockmarket1 wrote: 100% well stated. Couldn't agree more. Debt, like consumer debt, is and will be the end of everything if not managed appropriately. Brian Acker , for several years, kept repeating that VET's divy payout was unsustainable! Well before it actually happened. Like he also said... " earnings do matter "! And you're right... Look at where we are today. It's like starting over.

sclarda wrote:
stockmarket1 wrote

Oil, without any doubt is, and always will be very cyclical. Can't say much more than that in that realm. I think, if anything, investors just want stability and a "reliable " dividend again. Long term.
sclarda wrote: stockmarket1 wrote

Let's hope the market sees what you are calculating P. P. Still bizarre why the share price is still lagging immensely!! Unreal!

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The shareprice is "Lagging" because many oil investors have learned from hard experience that the oil price is impossible to predict and having been burned many times they are now very cautious about jumping back into oil stocks no matter how many times a day some pumpers post their b.s.

According to message board oil stock pumpers for the last 10 years oil prices were alway going to $100 and more and VET was going back to $50 anyday. And where have oil prices averaged for the last 6 or so years. Around $50 to $60 if that.

Will this time be different? Maybe but the pumpers always have said this time is different and it never is. And if it is it doesnt last long.

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It is hard to have stability when the companies income is based on producing and selling a commodity whose price can and often does flucutate wildly. One day you are making a lot of money as VET currently is and then the next day you are on the verge of bankruptcy. The oil price is completely out of the companies control.

The only thing companies like VET can control is how much they produce and the most important thing is how much debt they have. As i have said before if VET would have cut their dividend by one third in 2015 when oil price collapsed they would have aprox. $1.3 billion in debt today and could have kept paying the reduced dividend untill this day.

That is why it is important for VET to get its debt down which they can now do with the current high oil prices. When that happens likely by next year they can pay a small dividend and use the rest to pay down debt and buy new assets.

At todays oil prices VET is cashflowing aprox. close to $500 million after capex. Lets say $450 million to be conservative as capex may go up next year and where oil prices go is anybodies guess. Lets assume oil prices stay in this range for a few years. Once VET has gotten their debt down to aprox. $1.6 billion early next year they could pay out from their $450 million in cashflow dividends equal to one third or $150 million or aprox. 95 cents per share. 10.5% yield at todays shareprice. They could then use another third or $150 million for debt reduction. Doing that would lower the debt by another $450 million over the next 3 years down to $1.15 billion. They then could use the last third or $150 million to purchase assets and possible share buybacks.

This is the way to build a solid dividend paying, sustainable oil company for the long term. First get the debt under control. Then keep reducing it at a lower pace while buying more assets and paying a reasonable dividend.

Paying out a huge dividend as VET did for years is a very poor way to run an oil company and lead them to where they were last year at the banks mercy. Hopefully they have learned from their mistakes as it appears they have judging by the way they are acting now.