Vermilion Energy


CA$3030.3m market cap

CA$19.53 last close

Vermilion Energy is an international E&P with assets in Europe, North America and Australia. Management expects FY19 production to average 101–106kboed.

Investment summary

Vermilion Energy’s geographically diverse portfolio spreads geopolitical and pricing risk across different economies. The company has grown both organically and inorganically through a series of new country entries, with a solid track record of hitting guidance targets. Additionally, management has delivered on environmental, social and corporate governance (ESG) objectives, being highly rated across multiple ESG rating platforms. Notwithstanding this, Vermilion has been affected by the current negative sentiment around Canadian E&P equities, which has dragged down its share price. This decrease results in a highly attractive dividend yield of c 14%, which we believe is sustainable for the coming years under most oil price scenarios. Based on a blended approach of fundamental and market methodologies, our valuation is C$38.3/share, although this remains highly sensitive to commodity price assumptions.

Y/E Dec
Revenue (C$m)
PBT (C$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 1024.0 673.0 124.0 86.0 22.7 N/A
2018A 1526.0 1037.0 355.0 226.0 8.6 N/A
2019E 1747.0 976.0 179.0 (1.0) N/A N/A
2020E 1571.0 898.0 95.0 55.0 35.5 N/A
Industry outlook

Vermilion’s operations are in OECD countries and predominantly onshore; political, operational and subsurface risk is well spread. Vermilion benefits from realisations based on a number of regional commodity prices including Brent, WTI crude and Henry Hub, TTF, NBP and AECO gas.

Last updated on 15/11/2019
Oil & gas
Share price graph
Balance sheet
Forecast net debt (C$m) 1898
Forecast gearing ratio (%) 76
Price performance
Actual (2.3) 0.3 (40.9)
Relative* (5.8) (5.7) (47.4)
52-week high/low C$36.7/C$17.4
*% relative to local index
Key management
Kyle Preston IR Director
Tony Marino President and CEO

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