Vermilion Energy offers a geographically diverse production base, the ability to fund an 8.2% dividend yield and a forecast FY19 c C$530m capital programme, all achievable even at realised commodity prices c 4% below Edison’s base case. This assumes Edison’s base case oil (WTI US$56.1/bbl, Brent US$62.8/bbl) and gas prices are correlated. Organic capex is a key driver of Vermilion’s reserves replacement, and with a three-year average recycle ratio of 3.8x, investment returns are robust. Vermilion’s diverse asset mix ensures that exposure is not over-concentrated to specific geographic regions or commodity price differentials. Canadian heavy crudes continue to trade at a material discount to WTI, whereas Vermilion’s average oil realisation in March 2019 stood at a US$1.25/bbl premium to WTI.
In this video, CEO Tony Marino provides an insight in to Vermilion’s ability to sustain a peer leading yield, rank highly in terms of ESG performance and continue to grow production through investment in the company’s high return drilling inventory.