Vermilion Energy Inc VET

5% Production Increase based on share buybacks (YTD 2024)

[MyHoneyPot]

8 million shares were bought back in 2024 todate, which effectively means a 5% increase in CF, FCF, Production on a per share. 

Every 3 million shares repurchased, increases the production per share by roughly 2%. (The cost is in the 40 million dollars ball park.)

In Q3 VET spent 40 million dollars in share buybacks. 

In theory when you buy back 2% of the shares every quarter which is effectively what VET did in Q3, you should get a 2 percent rerating of business metrics,  absense of changes in commodity prices meaning you should get 2% better share price, (27 cents roughly, value marker, market driven) 

In Q3 they Also paid off 73 million in debt, which is effectively 47 cents a share. That is the increase in enterprise value as a product of paying down the debt. (47 cents is real debt reduciton per share)

Also you get a 12 cent dividend this quarter. (This is cash in your pocket)

So for a share holder holding VET you effectively got

( 27 cents attributed to share buyback, + 47 cents debt reduction + 12 cents dividend)
In q3  = 86 cents a share returned to share holder this quarter

Effectively with respect to a $13.25 share price, a 6.5% quarter over quarter return. (Anualized 26%) 

In Q4 FCF was 154 million dollars so 40 million in share buybacks is roughly 26% of the FCF.

There is effectively a 2% quarterly compounding impact of share buybacks, and the impact of reduced debt costs, and the steading progress they make on Production. 

It amazing in Q3 the work at Mica, the Croiata production that was increased from 122 boe/day to 1855 boe/day and is now over 2000 boe/day (understated), and the Germany success. 

Really compelling opportunity with a ton of gas (and growing) at the right end of the LNG deliveries. 

IMHO

[Trapped]

I'm confused. In the past you've said buybacks are a complete waste of money. Why is it okay for VET but bad for other names?

[MyHoneyPot]

It is easy they can buy back 40 million million dollars worth of share and increase production per share 2% compounded every quarter. They don't have a bloated float and only 155 million shares. The FFO was 275 million last quarter and ARX FFO was 592 million, and their market is 2 billion and ARX is 15 billion, it a screaming buy, way undervalued. VET has FCF of 154 million Arx had FCF of

[Quintessential1]

Yup every measurement  but share price accreation and ROI but I expect that will change.  Soon With VET buying back in large amounts I expect VET and ARX to meet in the $30 per share range. Hopefully they gobble that 10% NCIB up fairly quickly without the market catching on. If they keep the dividend low, that shouldn't be a problem. Once the share price bounces VET can start

[MyHoneyPot]

Interesting Arc is $25.71 and pays a new 19 cents a share a quarter                   Vet is $14.00 and pays an existing dividend of 12 cents a quarter So for  every $25.71 dollars of Vet stock you own you get, 22 cents in dividends, Vet stock is already 22% higher than ARX dividend. In terms of FFO per share ARC 99 cents per share VET $1.76

[Quintessential1]

The only number that i think ARX leads in is Market Cap Yeah it's too bad that doesn't translate into share price accreation and ROI huh? GLTA

[MyHoneyPot]

Arx stock is amout twice the cost of VET and Vet has also acheived the same debt target.  1: So VET FFO is almost double that of ARX, so with every share Vet buys back they get 4X times the  impact on FFO as ARX does and their share are half the price.  2. So lets talke FCF Vet FCF is greater  than ARX FCF and VET has roughly 1/4 of the shares ARX has, so for every share VET

[Quintessential1]

So why did you buy ARX then? GLTA

[MyHoneyPot]

I sold it all, i trade all the time, every day. My job is my hobby, my focus is trading oil and gas stocks.   Arx is a good buy for the herd analyst that know nothing, and with the share buybacks by the company there in momentum in the trading, it is a good stock to trade, not a good stock to own for value.  VET is worth more than double what it is trading for, they are hedging

[Quintessential1]

And yet YTD for 2024 ARX is eclipsing both VET and TOU in share price accreation.  In fact ARX is doing better than both of them put together including their dividends in 2024. It seems like it is all a day trade for you.  Investing is not your thing.   GLTA

[MyHoneyPot]

Investing is where i do well, and ARX is not investable in my opinion it for the herd.  It wasn't bad enought that they had a dismal corporate gas price $1.78, they effectively have zero in term of gas marketing because hedging and gas marketing go hand in hand.  Did you listen to the confrence call that said if they didn't shutin Sunrise their realized gas price would of been

[Quintessential1]

Not investable?  Yup. Only increased their market cap 600% in the 4 years since they bought your Investable company. LOL   And you're still crying about them. GLTA

[papaloapan]

The problem with historical comments is you get to pick your own comparison points. You are correct, of course, but it is also selling for about 30% of what it sold for 2 years ago.  I don't blame the company, who seem to be performing well, but not enough investors seem to care.

[MyHoneyPot]

ARX is not investable the entire company performance hindges on the price that they can sell their products for. Arx had a realized gas price of $1.78 in Q3, while TOU average gas price was $3.19. Its as simple as that, ARX has the whole company running on a fast tread mill, with not a lot of output.  So the Company have a disminished value because the way they are managed.  Poor gas

[Quintessential1]

That is your whole issue with ARX.  You have an issue with management. They snubbed you.  The rest of the investing world (the herd) loves them. You're not wrong poo pot it's the rest of the world. ;-) VET is modeling their return strategy right after ARX's. Buybacks first and foremost then dividends and then the shareprice will follow. Just like ARX. GLTA

[MyHoneyPot]

Here is the issue with ARX, just tell the RATS to run faster, produce more for cheaper. The management is going to sell you gas at a huge discount to TOU, because fiscally they keep taking making mistakes with hedging and gas marketing, like this quarter. The cost to the share holder in my opinion is 200 million dollars. This directly impacts share holder return.  Their gas marketing/risk

[Quintessential1]

"the entire company performance hindges on the price that they can sell their products for"   LOL What product / commodity based company doesn't? FYI  TOU YTD 2024 share price performance  +5.14% ARX YTD 2024 share price performance +29.91% Who are you trying to buffalo poo pot? Most investors here would love to have ARX performance this year, last year, 5

[MyHoneyPot]

ARX poor performance is real and it is measurable, so if you think that dumb? what can i say.  ARX needs to be competative on the gas price they get, Kakwa saved the day for them and they ramped it up in 3rd quarter, and it represented 70% of the funds from oil + gas sales. The gas side of the business they have destroyed, to the point that their cheapest, most economical production they

[Quintessential1]

Yup because TOU being down over 6% from last year is good example of killing it with gas sales. LOL Stop dude. And yeah I think it's dumb.  If you think it isn't,  what can I say?  GLTA

[Pandora]

A deep conversation but if I may interject with simple numbers over the past 12 months. If I read the 1 year graph correctly T.ARX is up roughly $4/share while T.VET is down roughly $4/share. So on simple terms over the one year return people have been much better off with the ARX shares. Not that that has anything to do with what the next 12 months will show.

[Quintessential1]

Right?!  Next 12 months?  VET obviously has way more torque to the upside and if they stick with the ARX formula of increasing production, reducing share count and paying off debt should make their way into the $20 per share range. GLTY and all longs

[Oldnagger]

. Thank you Pandora . I was wondering where I had to go to get info on VET . The KEL board or the ARX board ?? 

[Trapped]

It's a good point. NoMoneyBot should stick to his day-trade pumps and leave the blue chips to the experts. I wouldn't take any of his advice as it pertains to ARX because he has an irrational hatred of its leadership team, who has done a phenomenal job over the last few years by all accounts. But for some reason he can't keep its name out of his idiot mouth. Go figure...

[MyHoneyPot]

I would recommend you don't take my advice at face value as well, if you are an invester just go and review the information for yourself. It is all in the quarterly reports. Good Point!  However here is a clue regarding investors, they like to pursue facts, not personnel attacks. IMHO MHP

[Trapped]

Go upstream and ask yourself why people criticize your posts. You have an irrational hatred of ARX's management team when the vast majority of investors, analysts and investment funds count them among the indistry's best. It calls your credibility into question. If ARX hedges, that's bad. If other companies hedge, that's good. Same goes for dividends, buybacks, shut-ins

[Quintessential1]

I wonder why he keep attacking ARX "personnel"  then? LOL.  The boy also has a serious homonym comprehension issue. Shake you pompoms for VET all you want poo (not that its done you any good over at KEL). But Trapped is quite correct.  Your poor opinion of ARX and its performance taints everything else you post badly. Thats on you, not him. We all believe in VET here

[MyHoneyPot]

It really demonstartes series underlying issues, concerning people who a so insecure of the own investment thesis, that they have to follow other around, and comment on unrelated matter in investmen forums/Boards where they own zero stock. It is both scary and worrisome. MHP IMHO  

[Quintessential1]

Yup it sure is. (238) ••• Post by MyHoneyPot on Sep 21, 2024 11:36am Here is my Question I sent to ARX IR Maybe someone on this board can answer it for me, without a personnel attack. This is an investment board and this is a good investment question. I passed this question past a CEO friend of my and he says its 100% fair to ask.   

[Trapped]

Lol there are no underlying issues or insecurities, but thanks for asking. I just think people should be given fair warning that you have unhealthy fixations and biases that cloud your investment research. Forewarened is forearmed. That is all.

[downwithdotcom1]

oh no !!!..it looks like one of SH's MOST ANNOYING poster is now back  here - i just see some of the replies as i had put "it" on ignore previously to save my own sanity...a few comments are in order-i had to read "its" drival on the Arc BB for many months about bad hedging and worst management not just daily but sometimes hourly-i think i counted 30+ posts in one 24