Vermilion Energy Inc. Announces Closing of the Acquisition of Westbrick Energy Ltd. and Confirms Q4 2024 Release Date and Conference Call Details
Vermilion Energy (VET) has completed the acquisition of Westbrick Energy , adding stable annual production of 50,000 boe/d (75% gas, 25% liquids) and approximately 1.1 million acres of land in Alberta's Deep Basin trend. The acquisition includes four operated gas plants with 102 mmcf/d total capacity.
The deal includes over 700 future drilling locations across multiple zones, with half-cycle IRRs ranging from 40% to over 100%. The acquired assets are expected to maintain flat production for over 15 years while generating significant free cash flow.
As part of the arrangement, Westbrick shareholders elected to receive 1.1 million Vermilion common shares valued at $14.2 million, with the remaining consideration paid in cash through available funds and credit facilities. Updated 2025 budget and financial guidance will be provided with Q4 2024 results on March 5, 2025.
Vermilion Energy (VET) ha completato l'acquisizione di Westbrick Energy, aggiungendo una produzione annuale stabile di 50.000 boe/d (75% gas, 25% liquidi) e circa 1,1 milioni di acri di terreno nel trend del Deep Basin dell'Alberta. L'acquisizione include quattro impianti di gas operati con una capacità totale di 102 mmcf/d.
Il contratto include oltre 700 futuri luoghi di perforazione in diverse zone, con tassi di rendimento interno (IRR) del ciclo parziale che vanno dal 40% a oltre il 100%. Si prevede che gli asset acquisiti mantengano una produzione costante per oltre 15 anni, generando nel contempo un significativo flusso di cassa libero.
Come parte dell'accordo, gli azionisti di Westbrick hanno scelto di ricevere 1,1 milioni di azioni ordinarie di Vermilion del valore di 14,2 milioni di dollari, con il resto del corrispettivo pagato in contante tramite fondi disponibili e linee di credito. Il budget aggiornato per il 2025 e le indicazioni finanziarie saranno forniti con i risultati del quarto trimestre del 2024 il 5 marzo 2025.
Vermilion Energy (VET) ha completado la adquisición de Westbrick Energy, añadiendo una producción anual estable de 50,000 boe/d (75% gas, 25% líquidos) y aproximadamente 1.1 millones de acres de tierra en la tendencia del Deep Basin de Alberta. La adquisición incluye cuatro plantas de gas operadas con una capacidad total de 102 mmcf/d.
El acuerdo incluye más de 700 futuras ubicaciones de perforación en múltiples zonas, con tasas internas de retorno de ciclo parcial (IRR) que varían del 40% a más del 100%. Se espera que los activos adquiridos mantengan una producción constante durante más de 15 años, generando un flujo de efectivo libre significativo.
Como parte del acuerdo, los accionistas de Westbrick eligieron recibir 1.1 millones de acciones comunes de Vermilion valoradas en 14.2 millones de dólares, con el resto del pago realizado en efectivo a través de fondos disponibles y líneas de crédito. El presupuesto actualizado para 2025 y la guía financiera se proporcionarán con los resultados del cuarto trimestre de 2024 el 5 de marzo de 2025.
버밀리온 에너지 (VET)가 웨스트브릭 에너지를 인수하여 연간 안정적인 생산량 50,000 boe/d (가스 75%, 액체 25%)와 앨버타 딥 베이슨 트렌드에 약 110만 에이커의 토지를 추가했습니다. 이번 인수에는 총 102 mmcf/d의 용량을 가진 4개의 가스 플랜트가 포함됩니다.
이번 거래에는 700개 이상의 미래 시추 위치가 여러 구역에 걸쳐 포함되어 있으며, 반주기 내부 수익률(IRR)은 40%에서 100% 이상입니다. 인수된 자산은 15년 이상 평탄한 생산을 유지하면서 상당한 자유 현금 흐름을 생성할 것으로 예상됩니다.
이번 협정의 일환으로 웨스트브릭 주주들은 1.1백만 주의 버밀리온 보통주를 1,420만 달러에 해당하는 가치로 받기로 결정했으며, 나머지 대가는 가용 자금과 신용 시설을 통해 현금으로 지급됩니다. 2025년 업데이트된 예산 및 재무 지침은 2024년 4분기 실적과 함께 2025년 3월 5일에 제공될 예정입니다.
Vermilion Energy (VET) a finalisé l'acquisition de Westbrick Energy, ajoutant une production annuelle stable de 50 000 boe/j (75 % gaz, 25 % liquides) et environ 1,1 million d'acres de terrain dans la tendance Deep Basin de l'Alberta. L'acquisition comprend quatre usines de gaz exploitées avec une capacité totale de 102 mmcf/j.
L'accord comprend plus de 700 futurs sites de forage dans plusieurs zones, avec des taux de rendement interne (IRR) de cycle partiel allant de 40 % à plus de 100 %. Les actifs acquis devraient maintenir une production stable pendant plus de 15 ans tout en générant un flux de trésorerie libre significatif.
Dans le cadre de l'accord, les actionnaires de Westbrick ont choisi de recevoir 1,1 million d'actions ordinaires de Vermilion d'une valeur de 14,2 millions de dollars, le reste de la contrepartie étant payé en espèces via des fonds disponibles et des lignes de crédit. Le budget et les orientations financières actualisés pour 2025 seront fournis avec les résultats du quatrième trimestre 2024 le 5 mars 2025.
Vermilion Energy (VET) hat die Übernahme von Westbrick Energy abgeschlossen und damit eine stabile Jahresproduktion von 50.000 boe/d (75% Gas, 25% Flüssigkeiten) sowie etwa 1,1 Millionen Acres Land im Deep Basin-Trend von Alberta hinzugefügt. Die Übernahme umfasst vier betriebene Gasanlagen mit einer Gesamtkapazität von 102 mmcf/d.
Der Deal umfasst über 700 zukünftige Bohrstandorte in mehreren Zonen, mit internen Renditen (IRR) im Teilzyklus von 40% bis über 100%. Die erworbenen Vermögenswerte sollen über 15 Jahre eine konstante Produktion aufrechterhalten und gleichzeitig signifikante freie Cashflows generieren.
Im Rahmen der Vereinbarung haben die Westbrick-Aktionäre beschlossen, 1,1 Millionen Vermilion-Stammaktien im Wert von 14,2 Millionen Dollar zu erhalten, während der verbleibende Betrag in bar über verfügbare Mittel und Kreditlinien gezahlt wird. Ein aktualisierter Budget- und Finanzleitfaden für 2025 wird mit den Ergebnissen des vierten Quartals 2024 am 5. März 2025 bereitgestellt.
- Adds 50,000 boe/d stable production
- Acquires 1.1 million acres of complementary Deep Basin assets
- Gains 700+ drilling locations with 40-100% IRRs
- 15+ years of flat production potential
- Operational synergies with existing assets
- Four operated gas plants adding 102 mmcf/d capacity
- Increased debt through $450M term loan
- Additional leverage from credit facility usage
Insights
Vermilion Energy has completed its $450+ million acquisition of Westbrick Energy, substantially expanding its Canadian natural gas footprint with 50,000 boe/d of production (75% gas) and 1.1 million acres in Alberta's Deep Basin. This transaction represents a significant strategic pivot, increasing Vermilion's North American production weight while adding important scale efficiencies through four operated gas plants and over 700 drilling locations.
The acquisition's financial structure balances immediate cash requirements with long-term capital flexibility. While most consideration was cash-funded through a new $450 million term loan and existing credit facilities, the 1.1 million shares ($14.2M) issued to certain Westbrick shareholders indicates confidence in Vermilion's future prospects. This transaction will materially impact Vermilion's leverage ratios in the near term, though the highly economic drilling inventory (with half-cycle IRRs of 40-100%) should support accelerated debt reduction.
The strategic value lies in both inventory depth and commodity diversification. The assets' ability to maintain flat production for 15+ years while generating free cash flow provides substantial operational runway and reduces Vermilion's reinvestment requirements. The increased gas weighting also partially insulates Vermilion from oil price volatility, though it increases exposure to AECO pricing dynamics.
For investors, this acquisition transforms Vermilion's production profile and financial outlook. The expanded scale should enhance operational efficiencies, while the high-quality inventory supports Vermilion's dividend sustainability. The transaction's timing also appears opportunistic, executed during a period of compressed natural gas valuations, potentially positioning Vermilion for significant upside as gas markets strengthen.
The Acquisition adds stable annual production of 50,000 boe/d(1) (
Included in the Arrangement Agreement was an option for Westbrick shareholders to elect to receive up to a maximum of 1.7 million Vermilion common shares not to exceed
Vermilion will provide updated 2025 budget and financial guidance reflecting the increased scale of the Company following the Acquisition with the release of its Q4 2024 results on March 5, 2025.
Q4 2024 Release Date and Conference Call Details
Vermilion will release its 2024 fourth quarter and year-end operating and financial results, along with its 2024 reserves information on Wednesday, March 5, 2025, after the close of North American markets. The audited financial statements, management discussion and analysis, and annual information form for the year ended December 31, 2024 will be available on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at www.sedarplus.ca, on EDGAR at www.sec.gov/edgar.shtml, and on Vermilion's website at www.vermilionenergy.com.
Vermilion will discuss these results in a conference call and webcast presentation on Thursday, March 6, 2025 at 9:00 AM MST (11:00 AM EST). To participate, call 1-888-510-2154 (
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3QfWLEa to receive an instant automated call back. You may also access the webcast at https://app.webinar.net/ABa84Bo0jdz. The webcast links, along with conference call slides, will be available on Vermilion's website at https://www.vermilionenergy.com/invest-with-us/events-presentations/ under Upcoming Events prior to the conference call. Participants who would like to submit questions ahead of time may do so by emailing investor_relations@vermilionenergy.com.
(1) | Anticipated 2025 production from acquired assets, based on company estimates at February 26, 2025. Full year production estimates may not align with Company 2025 guidance, which will reflect post-close production contributions. |
(2) | Estimated gross proved, developed and producing, total proved, and total proved plus probable reserves as evaluated by McDaniel & Associates Consultants Ltd. ("McDaniel") in a report dated December 17, 2024, with an effective date of November 30, 2024 (the "McDaniel Reserves Report"). Three consultant average October 1, 2024 pricing assumptions used in reserve estimates as follows: 2025 WTI |
(3) | Free cash flow ("FCF") is a non-GAAP financial measure comparable to cash flows from operating activities. FCF is comprised of fund flows from operations less drilling and development and exploration and evaluation expenditures. For further information refer to the "Non-GAAP Financial Measures and Other Specified Financial Measures" section in Vermilion's MD&A for the three and nine months ended September 30, 2024, available on SEDAR+ at www.sedarplus.ca. |
About Vermilion
Vermilion is a global gas producer that seeks to create value through the acquisition, exploration, development and optimization of producing assets in
Vermilion's priorities are health and safety, the environment, and profitability, in that order. Nothing is more important than the safety of the public and those who work with Vermilion, and the protection of the natural surroundings. In addition, the Company emphasizes strategic community investment in each of its operating areas.
Vermilion trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol VET.
Disclaimer
Certain statements included or incorporated by reference in this document may constitute forward-looking statements or information under applicable securities legislation. Such forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this document may include, but are not limited to: statements regarding the expected impacts of completing the Acquisition; well production timing and expected production rates and financial returns, including half-cycle internal rate of return, therefrom, including related to the Acquisition; wells expected to be drilled in 2025, 2026 and beyond, including as a result of the Acquisition; exploration and development plans and the timing thereof, including as a result of the Acquisition; Vermilion's debt capacity, including the availability of funds under financing arrangements that Vermilion has negotiated in connection with the Acquisition and its ability to meet draw down conditions applicable to such financing, and Vermilion's ability to manage debt and leverage ratios and raise additional debt; future production levels and the timing thereof, including Vermilion's 2025 guidance, and rates of average annual production growth, including Vermilion's ability to maintain or grow production; future production weighting, including weighting for product type or geography; estimated volumes of reserves and resources, including with respect to those reserves and resources acquired pursuant to the Acquisition; statements regarding the return of capital; the flexibility of Vermilion's capital program and operations; business strategies and objectives; operational and financial performance, including the ability of Vermilion to realize synergies from the Acquisition; significant declines in production or sales volumes due to unforeseen circumstances; statements regarding the growth and size of Vermilion's future project inventory, including the number of future drilling locations expected to be available following the Acquisition; operating and other expenses, including the payment and amount of future dividends; and the timing of regulatory proceedings and approvals.
Such forward-looking statements or information are based on a number of assumptions, all or any of which may prove to be incorrect. In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things: the ability of Vermilion to obtain equipment, services and supplies in a timely manner to carry out its activities in Canada and internationally; the ability of Vermilion to market crude oil, natural gas liquids, and natural gas successfully to current and new customers; the timing and costs of pipeline and storage facility construction and expansion and the ability to secure adequate product transportation; the timely receipt of required regulatory approvals; the ability of Vermilion to obtain financing on acceptable terms; foreign currency exchange rates and interest rates; future crude oil, natural gas liquids, and natural gas prices; management's expectations relating to the timing and results of exploration and development activities; the impact of Vermilion's dividend policy on its future cash flows; credit ratings; the ability of Vermilion to effectively maintain its hedging program; expected earnings/(loss) and adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected future cash flows and free cash flow and expected future cash flow and free cash flow per share; estimated future dividends; financial strength and flexibility; debt and equity market conditions; general economic and competitive conditions; ability of management to execute key priorities; and the effectiveness of various actions resulting from the Vermilion's strategic priorities.
Although Vermilion believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because Vermilion can give no assurance that such expectations will prove to be correct. Financial outlooks are provided for the purpose of understanding Vermilion's financial position and business objectives, and the information may not be appropriate for other purposes. Forward looking statements or information are based on current expectations, estimates, and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Vermilion and described in the forward-looking statements or information. These risks and uncertainties include, but are not limited to: the ability of management to execute its business plan; the risks of the oil and gas industry, both domestically and internationally, such as operational risks in exploring for, developing and producing crude oil, natural gas liquids, and natural gas; risks and uncertainties involving geology of crude oil, natural gas liquids, and natural gas deposits; risks inherent in Vermilion's marketing operations, including credit risk; the uncertainty of reserves estimates and reserves life and estimates of resources and associated expenditures; the uncertainty of estimates and projections relating to production and associated expenditures; potential delays or changes in plans with respect to exploration or development projects; constraints at processing facilities and/or on transportation; Vermilion's ability to enter into or renew leases on acceptable terms; fluctuations in crude oil, natural gas liquids, and natural gas prices, foreign currency exchange rates, interest rates and inflation; health, safety, and environmental risks and uncertainties related to environmental legislation, hydraulic fracturing regulations and climate change; uncertainties as to the availability and cost of financing; the ability of Vermilion to add production and reserves through exploration and development activities; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; weather conditions, political events and terrorist attacks; uncertainty in amounts and timing of royalty payments; risks associated with existing and potential future law suits and regulatory actions against or involving Vermilion; and other risks and uncertainties described elsewhere in this document or in Vermilion's other filings with Canadian securities regulatory authorities.
The forward-looking statements or information contained in this document are made as of the date hereof and Vermilion undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.
This document contains metrics commonly used in the oil and gas industry. These oil and gas metrics do not have any standardized meaning or standard methods of calculation and therefore may not be comparable to similar measures presented by other companies where similar terminology is used and should therefore not be used to make comparisons. Natural gas volumes have been converted on the basis of six thousand cubic feet of natural gas to one barrel of oil equivalent. Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Financial data contained within this document are reported in Canadian dollars, unless otherwise stated.
Estimates of Drilling Locations: Unbooked drilling locations, including those associated with the Acquisition, are the internal estimates of Vermilion based on Vermilion's prospective acreage and the acreage that may be acquired pursuant to the Acquisition and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and prospective). Unbooked locations have been identified by Vermilion's management as an estimation of Vermilion's multiyear drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information including expected activities if the Acquisition is completed. There is no certainty that Vermilion will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and natural gas reserves, resources or production. The drilling locations on which Vermilion will actually drill wells, including the number and timing thereof is ultimately dependent upon completion of the Acquisition, the availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While a certain number of the unbooked drilling locations have been de-risked by Westbrick drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management of Vermilion has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.
Reserves Data: There are numerous uncertainties inherent in estimating quantities of crude oil, natural gas and NGL reserves, and the future cash flows attributed to such reserves. The reserve and associated cash flow information incorporated in this release, including those relating to the reserves to be acquired pursuant to the Acquisition, are estimates only. Generally, estimates of economically recoverable crude oil, NGL and natural gas reserves (including the breakdown of reserves by product type) and the future net cash flows from such estimated reserves are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially from actual results. For those reasons, estimates of the economically recoverable crude oil, NGL and natural gas reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary. Vermilion's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates and such variations could be material.
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SOURCE Vermilion Energy Inc.
FAQ
What assets did Vermilion Energy (VET) acquire from Westbrick Energy?
How many drilling locations did VET gain through the Westbrick acquisition?
What is the share consideration in VET's Westbrick acquisition?
How long can the acquired Westbrick assets maintain production levels?
