Vermilion Energy to sell Saskatchewan, Manitoba assets for $415M

Vermilion Energy (VET) announced that it has entered into a definitive agreement for the sale of its Saskatchewan and Manitoba assets for cash proceeds of $415M. Net proceeds from the transaction will be directed towards debt repayment to accelerate deleveraging efforts and strengthen Vermilion’s balance sheet. Based on current strip commodity pricing and operational plans, the company expects to exit 2025 with net debt of $1.5B, with a trailing net debt to FFO ratio of 1.4 times. The assets are currently producing approximately 10,500 boe/d and are forecast to generate approximately $110M of annual net operating income at current strip commodity prices. The assets had proved developed producing reserves of 30 mmboe at December 31, 2024, and approximately $250M of undiscounted future abandonment liabilities. The transaction has an effective date of May 1 and is anticipated to close in Q3, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions. Assuming a mid-Q3 2025 close, Vermilion expects full year 2025 production to average between 120,000 to 125,000 boe/d with capital expenditures in the range of $680M to $710M, reflecting an approximately $50M reduction associated with the divested assets post-closing. Vermilion will continue to evaluate capital investment levels during this period of increased volatility and will adjust capital if necessary to prioritize free cash flow over production growth during 2025 and 2026.