The company posted a successful second quarter of 2024, hitting the higher end of its production guidance. The production for the quarter averaged 84,974 barrels of oil per day, which was a 2% increase year-over-year and almost touching the top end of its Q2 guidance of 83,000 to 85,000 barrels of oil per day per day. The increase in production was mainly due to the company's early startup of its BC Montney Battery. For perspective, Vermilion Energy Inc. (NYSE:VET) has been constructing a 16,000 barrels of oil per day battery in the Mica area Montney formation in British Columbia, Canada. The BC Montney Battery is a key growth prospect for the company as it will provide an avenue to expand future expansion to 28,000 barrels of oil per day as the company builds its assets.
Moreover, the company was also able to reduce its net debt by $38 million during the quarter indicating management's commitment to improve its fundamentals.
Is Vermilion Energy Inc. (NYSE:VET) a good investment?
The strength of Vermilion Energy Inc. (NYSE:VET) lies in its ability to grow its business on a global scale. During the Q2 of 2024, the company’s production from international operations averaged 29,987 barrels of oil per day per day and this was despite its scheduled maintenance. What’s more impressive is its operations in the European market. The company has been able to start the SA-10 plant in Croatia in addition to 5 successful explorations in Europe as a whole. As a result of management's efforts the company has grown its European natural gas production by over 15% during the past 2 years, this is expected to contribute further growth as European gas represents 40% of its total gas production.
If we look at the past 10 years' performance, VET has been able to grow its revenue by 3% and its levered free cash flow by 16%, indicating robust performance and profitability. Although the stock is trading at a premium to its sector, its earnings are expected to grow by 112.26% during the year to reach $0.44. 12 analysts have a Consensus Buy rating on the stock, with their 12-month median price target of $14.51 presenting an upside of 42.27% from the current level.
Overall VET ranks 4th on our list of the best Canadian stocks under $20.