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.

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Vermilion Energy Inc > 3 reasons why this strategist sees Brent crude hitting $120

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Comment by sclardaon Feb 10, 2022 10:18pm

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Post# 34418976

RE:RE:RE:3 reasons why this strategist sees Brent crude hitting $120

stockmarket1 wrote

You, me and everyone else here too. As long as you aren't expecting the same divy payout as it once did under Marino. That ain't gonna happen. A small divy is coming but, I would rather see it's debt paid down dramatically first. A feasible amount of course.

saintpeeter wrote: Sounds good 2 me too. So now where is the VET dividend? I'm impatient. I want some reward now.

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"As long as you arent expecting the same divy payout as it once did under Marino. That aint gonna happen. "

I wouldnt be to sure about that. The 23 cent per month or $2.76 per year dividend under Marino cost the company aprox. $ 460 million per year. That was aprox. the annual Free Cashflow that VET had for several years before Covid when oil was in the $50 range. so they were basically spinning their wheels paying out all of their Free cashflow in dividends while burning up 100 thousand barrels per day of resources.

In looking at their presentation they are forecasting Free Cashflow this year after Capex of aprox. $1.5 billion. That would bring their Debt to Free cashflow ratio down to around 1 as of right now. VET could start paying the previous 23 cent monthly dividend right now and still be keeping well over $1 billion in Free Cashflow per year for the company which could repay all debt in the next year and a half while paying the dividend. At the current shareprice that dividend would equal a yield of aprox. 13%

Not saying that that is what VETshould or will do in the short term but if oil prices hold around these levels if not higher VET will be spitting out over $4 million per day everyday of the year in Free Cashflow.

With $1.5 billion in Free Cashflow at 8 times cashflow that would equal a market cap of aprox. $ 12 billion which would result in a shareprice of aprox. $75 per share.

VET was foolish in paying an unsustainable dividend for many years. In the last couple of years they cut the dividend completely and now with much higher oil price and the Corrib gift they have turned the ship around and will soon again be the market darling that they were years ago.

And this time Free Cashflow will be a lot higher than ever before.