Vermilion is an international energy producer that seeks to create value through the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia. Our business model emphasizes free cash flow generation and returning capital to investors when economically warranted, augmented by moderate organic production growth and value-adding acquisitions.
Vermilion is targeting growth in production primarily through the exploitation of light oil and liquids-rich natural gas conventional resource plays in Canada and the United States, the exploration and development of high impact natural gas opportunities in the Netherlands and Germany, and through oil drilling and workover programs in France and Australia. Vermilion holds a 20% working interest in the Corrib gas field in Ireland.
Vermilion's priorities are health and safety, the environment, and profitability, in that order. Nothing is more important to us than the safety of the public and those who work with us, and the protection of our natural surroundings. We have been recognized as a top decile performer amongst Canadian publicly listed companies in governance practices, as a Climate Leadership level (A-) performer by the CDP, and a Best Workplace in the Great Place to Work® Institute's annual rankings in Canada, the Netherlands and Germany. In addition, Vermilion emphasizes strategic community investment in each of our operating areas.
Employees and directors hold approximately 5% of our fully diluted shares and are committed to delivering long-term value for all stakeholders. Vermilion trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol VET.
- Low decline conventional and semi-conventional assets
- Global commodity exposure with low cost structure that delivers high margins
- Diversified and extensive project slate with strong capital efficiencies
* Free Cash Flow (FCF) is a non-GAAP measure (see Corporate Presentation Advisory).
Vermilion's strategic model aims to deliver annual organic production growth funded with internally generated cash flow. Vermilion sets its targets for organic production per-share growth at rates that are appropriate to our asset base. This self-funded growth model is underpinned by our operating, geographic and organizational models.
The operating model provides a framework to ensure that our asset composition is aligned with our free cash flow-oriented model. Vermilion's largely conventional and semi-conventional asset base delivers the high margins, low base decline rates and strong capital efficiencies required to successfully execute our strategic model. We continue to target these characteristics as we further develop the diversified project inventory that supports our targeted organic growth rates for the long-term. We expect to further augment this organic growth in project inventory and production through acquisitions. Prospective acquisitions are subject to disciplined tests focused on ensuring accretion for existing shareholders and consistency with our free cash flow focused operating model.
Our geographic model is largely unique to Vermilion and is characterized by our geographically diversified asset base. Since our first international acquisition in 1997, Vermilion has demonstrated the ability to successfully enter new jurisdictions and add assets to our portfolio that are aligned with our operating model. In addition, Vermilion's geographic diversification increases the flexibility to tailor the allocation of capital to different products and projects depending on the prevailing economic environment. Vermilion's geographic model requires that existing and potential regions feature stable political, fiscal and regulatory regimes.
A relatively-decentralized business unit organizational model effectively manages Vermilion's geographic diversity. Despite this element of decentralization, we maintain a consistent technical focus and emphasize the importance of our shared culture. Business units compete for capital by developing and proposing a slate of potential capital projects. Capital investment selection is then managed as a portfolio at the corporate level. Once the Company has finalized its capital plan for a given period, the business units are responsible for achieving the related production, capital and operating expense targets. Capital allocation and production source can be modified intra-year if required, based on business unit delivery.
We believe that our focus on health, safety and the environment, our strategic model and our key financial priorities, will allow Vermilion to continue to create value for our stakeholders.
· Global independent E&P with leading positions in high netback businesses in North America, Europe and Australia
· Self-funded growth-and-income model supported by high margins, low decline production and strong capital efficiencies
· Defensive issue with multiple risk-reducing attributes: global commodity exposure, project diversification and low financial leverage
· Consistent production growth from well-defined conventional projects and additional growth potential in unconventional resource plays
· Substantial management ownership and long-term record of relative market out-performance