From Greg Pardy (Co-Head Global Energy Research), RBC Dominion Securities Inc
Vermilion unveiled a 2021 budget that pointed towards mid-point production of 84,000 boe/d and a refocused capital spending program of $300 million aimed at its most attractive projects. Fundamentally, the company’s budget seeks to maximize free cash flow earmarked for debt reduction. We are maintaining a Sector Perform recommendation on Vermilion and boosting our one-year target price by $1 (14%) to $8 per share.