Vermilion Energy Inc T.VET

Share Price Punished?

[Quintessential1]

Not really as much as I thought given the incredible runup to earnings.

Still not a fan of buybacks especially when they added debt but if they use them to create a shareprice floor here it is going to be hard to fault them.

GLTA Longs

[stockmarket1]

Yes, Quin...I, Too,  was kind of surprised as well that the share price didn't decline after earnings report. However, that being said, next week is another whole week lol.  Different balls gm here, but, I looked at CNQ and SU and noticed they took a bit of a decline shortly after their day. Not saying VET will follow, BUT, if I were to make a " fun" call. I wouldn't

[stockmarket1]

My cpmment past Friday. Not surprised on today's pu;llback. In fact, I expected it. The old 3 day rule. We could potentially see VET drift a dollar or 2 below $30 soon. Fantastic buying chance then! Cheers

[Oldnagger]

VET buying back stock that pays $ 11 per year in FCF for $30 per share is perfectly fine by me. Management won't prepare their 2023 estimates till October. Once Corrib is fully integrated, VET will be able to take steps to enhance production. There are still many more barrels available within their acreage , and with the Europeans now realizing that they will need nat gas for a very long time,

[EnergyWatcher55]

Can you explain what you mean that VET is paying $11 per year in FCF for a $30 per share?

[L0ung3r]

Company is generating $11/share fcf this year, forcast to generate $11/share fcf next year. So the dollars they are  putting to work are buying an asset that will return 2/3 of their purchase cost in 2 years. This is the benchmark they have to compare against when drilling new wells, buying other companies, etc. 

[Oldnagger]

FCF or free cash flow is what is left over after sufficient cash has been used as Capex to sustain production. It can be used either to grow the company or to pay down corporate debt or return it to the shareholder by way of buybacks or dividends.  Think of it as a business that you can buy for 30 thousand dollars and will pay you back 11 thousand dollars each year , most likely for ever

[marketsense]

That is exactly what some people don't get about buybacks.  Not only do they reduce the outstanding shares,  they also put the dividends that the company had to pay out to shareholders for those shares back into the companies pocket book.  Its a bit of  a double whammy effect.  It really saves money for the company despite having to pay out of FCF initially to buy

[stockmarket1]

Well put. Wish I had a crystal ball to see what VET share price would be summer of 2024 lol.

[Konaboy]

The principle is good, but you need to pick your spots.   Given the choice between saving 1 percent on dividend payout, or idunno 6 percent on debt interest, I know what I would do with my own money. But to each his own.

[JohnnyDoe]

agreed. That's how I look at it. Mgmt is likely to lean heavily towards buybacks until the share price is more reflective of actual value. 11 fcf/share is a ridiculous number. If they mostly buyback shares from now through 2023 and then go into 2024 and flip to 50% fcf dividend, they can pay out 5.50 a share in 2024. Yielding 5%, that suggests a share price >100.

[Quintessential1]

Still not a big drop in share price since the ER IMO. Today's drop could easily be attributed to the oil price drop as the entire sector dipped with it today, This stock has seen worse market reactions to ER. GLTA

[stockmarket1]

The NCIB is in effect. Shorters are on edge lol.

[stockmarket1]

All good on paper but, will it get to $100? That is the question.

[JohnnyDoe]

That's why we're all here isn't it? I own a handful of mid caps and I see a clear path to a minimum double on all of them if oil spends the next few years at 90 or better. There's just too much cash flow. Maybe Vermilion, due to its international presence, grows production outside of Canada or looks for acquisitions outside Canada, but for those in Canada, growth at all costs is

[alta0264]

They will buyback the shares as cheaply as possible as they should. It is up to shareholders to toughen up and make them pay more IMO. Interesting to note, yesterday that as far as I could tell, the shares did not trade for nearly a full 5 minutes as the algos searched for weak sellers off the open. 

[stockmarket1]

What happened with that anyway? I've never seen a stock not trade right at the open unless it was halted. In the U.S it was trading at the start but not here. Weird.