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Vermilion Energy (TSE:VET)
TSX:VET

Vermilion Energy (VET) AI Stock Analysis

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Vermilion Energy

(TSX:VET)

Rating:58Neutral
Price Target:
C$10.50
▲(6.49%Upside)
Vermilion Energy's overall stock score is primarily influenced by its mixed financial performance and valuation concerns. Positive earnings call outcomes and strategic corporate events provide some support, but the technical analysis suggests caution due to trading below key moving averages.
Positive Factors
Asset acquisition
The acquisition includes a significant amount of land and gas plants, potentially boosting future production volumes.
Exploration potential
The Wisselshorst test well shows encouraging rates and has the potential to be one of Vermilion's largest discoveries in Europe.
Production performance
A good production beat and in-line CFPS, along with improving Montney well costs, should be encouraging and should help offset the disappointing 'drill suspension' of the 3rd German exploration well.
Negative Factors
Debt and acquisition strategy
Higher debt and limited clarity on synergies from the acquisition likely leave investors cautious.
European gas prices
Uncertainties related to European gas prices, leverage, and exploration success have all weighed on investor risk appetite for VET.
Financial performance
For every dollar spent, there was a loss of $0.04 in value in 2024.

Vermilion Energy (VET) vs. iShares MSCI Canada ETF (EWC)

Vermilion Energy Business Overview & Revenue Model

Company DescriptionVermilion Energy Inc., together with its subsidiaries, engages in the acquisition, exploration, development, and production of petroleum and natural gas in North America, Europe, and Australia. The company owns 81% working interest in 636,714 net acres of developed land and 85% working interest in 301,026 net acres of undeveloped land in Canada; 130,715 net acres of land in the Powder River basin in the United States; 96% working interest in 248,873 net acres of developed land and 86% working interest in 134,160 net acres of undeveloped land in the Aquitaine and Paris Basins in France; 53% working interest in 901,791 net acres of land in the Netherlands; 54,625 net developed acres and 920,723 net undeveloped acres in Germany; 975,375 net acres land in Croatia; 946,666 net acres land in Hungary; and 48,954 net acres land in Slovakia. It also owns 20% interests in the offshore Corrib natural gas field located to the northwest coast of Ireland; and 100% working interest in the Wandoo offshore oil field and related production facilities that covers 59,553 acres located on Western Australia's northwest shelf. As of December 31, 2021, the company had 401 net producing conventional natural gas wells and 2,132 net producing light and medium crude oil wells in Canada; 167.6 net producing light and medium crude oil wells in the United States; 297.0 net producing light and medium crude oil wells and 3 net producing conventional natural gas wells in France; and 47 net producing natural gas wells in the Netherlands. Vermilion Energy Inc. was founded in 1994 and is headquartered in Calgary, Canada.
How the Company Makes MoneyVermilion Energy generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids. The company's revenue model is centered around the exploration and production of these hydrocarbon resources, which are then sold in the global commodity markets. Key revenue streams include the sale of oil and gas produced from its various international operations, with significant contributions from its assets in North America, Europe, and Australia. Vermilion's earnings are influenced by factors such as commodity prices, production volumes, and operational efficiencies. The company may also engage in strategic partnerships or joint ventures to optimize its resource development and management, though specific partnerships are not detailed in the provided information.

Vermilion Energy Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 16.00%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant production growth and successful integration of the Westbrick acquisition, alongside positive cash flow and strategic hedging. However, concerns about market volatility, a suspended project in Germany, and stock performance issues were also noted.
Q1-2025 Updates
Positive Updates
Significant Production Increase
Production for Q1 2025 increased by 23% to just over 103,000 BOEs per day, reflecting the acquisition of Westbrick assets.
Westbrick Acquisition Synergies
Integration of the Westbrick acquisition is ahead of schedule with $100 million in operational and development synergies identified.
Strong Free Cash Flow and Shareholder Returns
Generated $256 million of fund flows in Q1 with $74 million in free cash flow. Returned $37 million to shareholders through dividends and share buybacks.
Successful Deep Gas Exploration
In Germany, successfully tested the Wisselshorst deep gas exploration well with a combined test rate of 41 million cubic feet per day.
Debt Reduction and Liquidity
Ended the quarter with just over $2 billion of net debt (1.7x trailing fund flows) and ample liquidity with plans for further debt reduction.
Robust Hedging Strategy
Over 50% of 2025 production hedged, providing a buffer against market volatility.
Negative Updates
Market Volatility Impact
Recent market volatility due to the global trade war has negatively impacted commodity prices and increased the risk of a global economic slowdown.
Suspended Well in Germany
The Weissenmoor South well did not achieve expected flow rates and has been suspended for the time being.
Stock Performance Concerns
Concerns raised over stock underperformance tied to executive compensation, with linkage to elevated debt levels during market volatility.
Company Guidance
During Vermilion Energy's 2025 Annual General Meeting, President and CEO Dion Hatcher provided guidance on the company's performance metrics and strategic outlook. In Q1 2025, Vermilion's production increased by 23% to over 103,000 BOEs per day, largely due to the acquisition of Westbrick, which contributed approximately 50,000 BOEs per day. The integration of Westbrick is progressing well, with $100 million in identified operational and development synergies. The company generated $256 million in fund flows and $74 million in free cash flow after investing $182 million in E&D capital. Vermilion returned $37 million to shareholders, with $20 million in dividends and $17 million in share buybacks. The company ended the quarter with over $2 billion in net debt, aiming to reduce this both organically and through potential asset sales. Vermilion's 2025 guidance remains unchanged, with a focus on global gas assets and strategic capital allocation to enhance value per share. The company forecasts annual fund flows of $1 billion to $1.1 billion, with over $300 million in free cash flow, while maintaining a quarterly dividend of $0.13 per share. Vermilion is well-hedged, with over 50% of 2025 production hedged and plans to continue opportunistic hedging. The strategic focus on transitioning to a global gas producer aims to leverage long-life, high-quality assets for sustained free cash flow and shareholder returns.

Vermilion Energy Financial Statement Overview

Summary
Vermilion Energy displays a mixed financial performance with moderate stability in its asset base and positive operating cash flows. However, challenges in profitability and revenue growth, along with a need for careful leverage management, highlight areas for improvement.
Income Statement
47
Neutral
Vermilion Energy shows a mixed performance in its income statement. The company has seen fluctuating revenue, with a recent decline in the TTM period compared to the previous annual data. Gross profit margin is moderate, and net profit margin is negative, indicating profitability issues. Although EBIT and EBITDA margins are positive, they are not strong enough to offset the negative net income, which raises concerns about operational efficiency.
Balance Sheet
62
Positive
The balance sheet indicates a relatively stable financial position with a reasonable equity base. The debt-to-equity ratio is moderately high, reflecting leverage that could pose risks if not managed properly, but the equity ratio remains healthy. Return on equity is negative due to the net loss, which impacts overall financial health. However, the company maintains a solid asset base, providing some level of stability.
Cash Flow
55
Neutral
Cash flow analysis shows a decline in free cash flow growth, although the company is generating positive operating cash flow. The free cash flow to net income ratio is positive, but the overall net loss affects the cash flow metrics. The operating cash flow to net income ratio indicates that the company is generating cash despite profitability challenges, which is a positive sign.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.07B2.07B1.93B3.72B2.23B1.25B
Gross Profit
998.58M1.12B359.39M2.59B1.32B432.53M
EBIT
299.51M249.40M235.92M1.88B715.21M-188.24M
EBITDA
783.92M835.80M519.55M2.55B2.07B-1.19B
Net Income Common Stockholders
-34.09M-46.74M-237.59M1.31B1.15B-1.52B
Balance SheetCash, Cash Equivalents and Short-Term Investments
23.53M131.73M141.46M13.84M6.03M6.90M
Total Assets
7.08B6.12B6.24B6.99B5.91B4.11B
Total Debt
1.93B1.02B947.02M1.13B1.71B2.01B
Net Debt
1.91B886.72M805.56M1.12B1.71B2.00B
Total Liabilities
4.20B3.30B3.20B3.59B3.84B3.18B
Stockholders Equity
2.88B2.81B3.03B3.40B2.07B925.40M
Cash FlowFree Cash Flow
272.66M332.04M292.06M1.26B459.66M132.95M
Operating Cash Flow
893.84M967.75M1.02B1.81B834.45M500.15M
Investing Cash Flow
-1.71B-634.87M-576.43M-1.06B-469.70M-401.43M
Financing Cash Flow
582.61M-344.08M-320.34M-748.37M-363.45M-120.60M

Vermilion Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.86
Price Trends
50DMA
9.23
Positive
100DMA
10.87
Negative
200DMA
12.08
Negative
Market Momentum
MACD
0.07
Negative
RSI
59.54
Neutral
STOCH
75.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VET, the sentiment is Positive. The current price of 9.86 is above the 20-day moving average (MA) of 9.26, above the 50-day MA of 9.23, and below the 200-day MA of 12.08, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 59.54 is Neutral, neither overbought nor oversold. The STOCH value of 75.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:VET.

Vermilion Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSVET
58
Neutral
$1.52B-1.19%4.97%1.04%94.48%
57
Neutral
$7.23B3.16-4.49%5.63%0.82%-49.15%
$1.37B13.996.10%4.75%
$1.14B7.8529.87%6.28%
$887.73M-25.82%7.58%
$1.01B26.584.98%
$1.06B13.254.22%10.26%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:VET
Vermilion Energy
9.86
-5.44
-35.56%
BIREF
Birchcliff Energy
5.03
0.65
14.84%
CDDRF
Headwater Exploration
4.76
-0.22
-4.42%
AOIFF
Africa Oil
1.30
-0.39
-23.08%
KELTF
Kelt Exploration
5.08
0.58
12.89%
PARXF
Parex Resources
10.79
-3.96
-26.85%

Vermilion Energy Corporate Events

M&A TransactionsBusiness Operations and Strategy
Vermilion Energy Sells U.S. Assets, Refocuses on Gas-Weighted Operations
Neutral
Jun 5, 2025

Vermilion Energy Inc. has announced the sale of its United States assets for $120 million, a move that completes its exit from the U.S. market and allows it to focus on its core gas-weighted assets in Canada and Europe. The transaction is expected to close in Q3 2025, with proceeds directed towards debt repayment, enhancing the company’s financial position. Additionally, Vermilion has updated its 2025 guidance, reducing its capital budget and adjusting production expectations, reflecting its strategic shift towards maximizing free cash flow over production growth amid market volatility.

The most recent analyst rating on (TSE:VET) stock is a Buy with a C$16.00 price target. To see the full list of analyst forecasts on Vermilion Energy stock, see the TSE:VET Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Vermilion Energy Sells Saskatchewan Assets to Strengthen Financial Position
Positive
May 23, 2025

Vermilion Energy Inc. has announced a definitive agreement to sell its Saskatchewan and Manitoba assets for $415 million, with the proceeds directed towards accelerating debt repayment and strengthening its balance sheet. This transaction is part of Vermilion’s strategic plan to reposition its portfolio towards long-duration, scalable assets with high return opportunities, enhancing its global gas franchise and providing capital allocation flexibility for its core Canadian and European assets.

The most recent analyst rating on (TSE:VET) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on Vermilion Energy stock, see the TSE:VET Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Vermilion Energy Announces AGM Voting Results and Board Changes
Neutral
May 8, 2025

Vermilion Energy Inc. announced the results of its annual general meeting, where 50.03% of its common shares were voted. Key resolutions included the election of eight directors, the appointment of Deloitte LLP as auditors, and approval of executive compensation and the Omnibus Incentive Plan. The company also acknowledged the retirement of two directors, Robert B. Michaleski and Timothy R. Marchant, expressing gratitude for their contributions. These developments reflect Vermilion’s ongoing commitment to governance and strategic oversight, potentially impacting its operational focus and stakeholder relations.

DividendsBusiness Operations and Strategy
Vermilion Energy Declares July 2025 Cash Dividend
Positive
May 7, 2025

Vermilion Energy Inc. announced a cash dividend of $0.13 CDN per common share, payable on July 15, 2025, to shareholders of record on June 30, 2025. This announcement reflects Vermilion’s commitment to returning capital to investors and may positively impact investor sentiment, reinforcing the company’s strategic focus on profitability and shareholder value.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Vermilion Energy Reports Q1 2025 Results and Strategic Acquisition
Positive
May 7, 2025

Vermilion Energy reported a slight decrease in fund flows from operations for Q1 2025 compared to the previous quarter, but saw an increase in free cash flow due to strong European gas prices. The company completed the acquisition of Westbrick, enhancing its position in Alberta’s Deep Basin and identifying significant operational synergies. Vermilion’s production increased, driven by the acquisition and successful exploration activities in Germany. The company remains focused on free cash flow and debt reduction, with a stable capital budget and guidance for 2025.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.