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 > Free cash flow over 50% in 2022

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Comment by delissioon Mar 10, 2022 5:32pm

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Post# 34504686

RE:RE:RE:RE:RE:RE:RE:RE:Free cash flow over 50% in 2022

Fair points, thank you for your contribution to this topic, inluding your calculations.
So by using all hedged numbers we would get:

WTI $17 X 10.6M= 180M
TFF $6.5 x 13.7M = 89M

FCF 1900M+180M+89M = 2.17B

Certainly, the commodity prices used in the calculation are relatively very high. Also, I think an important part in the budget estimate is if the company used any backwardation as mentioned by Oldnagger.

GLTA.

clamlinguine wrote:

delissio wrote: Thanks Oldnagger for the calculation and the high quality post as always.

I will share my thought process, please feel free to correct any calculation errors or wrong assumptions.

After the review of the last presentation, my understanding is the company is estimating to make 2022 FCF of 1.9B hedged (slide 10), using the prices from slide 37 (as per their footnotes 1 and 3 from slide 10):

WTI US$93.06
Brent US$99.68
TTF $58.44

Since WTI average for the Q1 is close to ~US$93, I could consider not adding anything to WTI/Brent part of the additional FCF. If the 2022 annual average price changes to today WTI price of US$110, then additional 272 M can be added. ($110-$93=$17 and $17x16M=272M)

I am not an expert on converting TTF in Euros to TTF in $/mmbtu. I have seen a formula in your other post, so let's see if I understood your approach:
Yesterday TTF price was 156 EUR, dividing it by 3.41 and then multiplying by EUR/CAD rate:
156/3.41X 1.42 = ~$65

TTF ($/mmbtu): $65-$58.44= ~$ 6.5
$6.5x 39.1 M (unhedged) = 254 M

Total FCF would be 1900 + 272 + 254 = 2.43 B CAD, using their last presentation, unhedged additions and the approximate current (relatively high) commodity prices.

And of course - if this number becomes reality, drinks are on me ;).

Cheers!

Thanks for doing a cleaned up version of what I was doing. I think a mistake you're making is that you're using the unhedged number. I believe that is the wishful projection as if we weren't hedged at some lower prices this year. If we weren't laden with hedges on the eurogas we'd be making an extra 34 million for every dollar over $58 cad. So for this years projections you should use the "hedged" column. imo