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CALGARY, Aug. 10, 2015 /CNW/ - Vermilion Energy Inc. ("Vermilion", "We", "Our", "Us" or the "Company") (TSX, NYSE: VET) is pleased to report operating and unaudited financial results for the three and six months ended June 30, 2015.
|(1)||Additional GAAP Financial Measure. Please see the "Additional and Non-GAAP Financial Measures" section of Management's Discussion and Analysis.|
|(2)||Slootdorp-06 (Slochteren) production test was performed over an 18-day period at a maximum choke of 64/64" with approximately 45% drawdown over the test period. Slootdorp-07 (lower zone - Z2) production test was performed over a 4-hour test period at a maximum choke of 36/64" with approximately 35% drawdown over the test period. Slootdorp-07 (upper zone - Z3) production test was performed over a 12-hour test period at a maximum choke of 16/64" with approximately 40% drawdown over the test period. This test result is not necessarily indicative of long-term performance or of ultimate recovery.|
|(3)||Corrib P2 well produces from the Sherwood sandstones. The production test was performed over a 12-hour period at a maximum choke of 80/64", achieving a peak production rate of 113 mmcf/d and a stabilized flow rate of 107 mmcf/d with approximately 30% drawdown over the test period. This test result is not necessarily indicative of long-term performance or of ultimate recovery.|
Conference Call and Audio Webcast Details
Vermilion will discuss these results in a conference call to be held on Monday, August 10, 2015 at 9:00 AM MST (11:00 AM EST). To participate, you may call 1-888-231-8191 (Canada and US Toll Free) or 1-647-427-7450 (International and Toronto Area). The conference call will also be available on replay by calling 1-855-859-2056 using conference ID number 61285178. The replay will be available until midnight mountain time on August 17, 2015.
You may also listen to the audio webcast by going to http://event.on24.com/r.htm?e=1008324&s=1&k=F4CB45E944014BE7D369F641D1A3B805 or visit Vermilion's website at www.vermilionenergy.com/ir/eventspresentations.cfm.
|Three Months Ended||Six Months Ended|
|($M except as indicated)||Jun 30,||Mar 31,||Jun 30,||Jun 30,||Jun 30,|
|Petroleum and natural gas sales||264,331||195,885||387,684||460,216||768,867|
|Fund flows from operations (1)||129,496||120,795||216,076||250,291||421,439|
|Fund flows from operations ($/basic share)||1.18||1.12||2.05||2.31||4.05|
|Fund flows from operations ($/diluted share)||1.17||1.11||2.01||2.28||3.99|
|Net earnings ($/basic share)||0.06||0.01||0.51||0.07||1.51|
|Asset retirement obligations settled||1,218||3,107||2,381||4,325||5,032|
|Cash dividends ($/share)||0.645||0.645||0.645||1.290||1.290|
|% of fund flows from operations||55%||57%||32%||56%||32%|
|Net dividends (1)||28,675||48,012||49,561||76,687||96,683|
|% of fund flows from operations||22%||40%||23%||31%||23%|
|% of fund flows from operations||93%||187%||87%||138%||103%|
|% of fund flows from operations (excluding the Corrib project)||76%||173%||73%||123%||92%|
|Net debt (1)||1,377,902||1,388,603||1,168,998||1,377,902||1,168,998|
|Ratio of net debt to annualized fund flows from operations (1)||2.7||2.9||1.4||2.8||1.4|
|Crude oil (bbls/d)||28,916||28,181||30,184||28,550||28,759|
|Natural gas (mmcf/d)||114.29||115.00||114.08||114.64||108.73|
|Average realized prices|
|Crude oil and NGLs ($/bbl)||68.90||58.25||109.89||64.23||110.73|
|Natural gas ($/mcf)||4.86||5.26||6.19||5.06||7.04|
|Production mix (% of production)|
|% priced with reference to WTI||27%||28%||30%||27%||27%|
|% priced with reference to AECO||21%||20%||18%||21%||18%|
|% priced with reference to TTF||16%||18%||18%||17%||19%|
|% priced with reference to Dated Brent||36%||34%||34%||35%||36%|
|Netbacks ($/boe) (1)|
|Fund flows from operations netback||26.76||29.07||46.24||27.83||46.98|
|Average reference prices|
|WTI (US $/bbl)||57.94||48.63||102.99||53.29||100.84|
|Edmonton Sweet index (US $/bbl)||55.08||41.83||96.85||48.46||93.65|
|Dated Brent (US $/bbl)||61.92||53.97||109.63||57.95||108.93|
|Average foreign currency exchange rates|
|CDN $/US $||1.23||1.24||1.09||1.24||1.10|
|Share information ('000s)|
|Shares outstanding - basic||109,806||107,718||106,620||109,806||106,620|
|Shares outstanding - diluted(1)||112,626||110,761||109,371||112,626||109,371|
|Weighted average shares outstanding - basic||109,319||107,513||105,577||108,421||103,936|
|Weighted average shares outstanding - diluted||110,746||109,305||107,330||109,792||105,531|
The above table includes additional GAAP and non-GAAP financial measures
which may not be comparable to other companies.
Please see the "ADDITIONAL AND NON-GAAP FINANCIAL MEASURES" section of Management's Discussion and Analysis.
Certain statements included or incorporated by reference in this document may constitute forward looking statements or financial outlooks 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: capital expenditures; business strategies and objectives; operational and financial performance; estimated reserve quantities and the discounted present value of future net cash flows from such reserves; petroleum and natural gas sales; future production levels (including the timing thereof) and rates of average annual production growth; estimated contingent resources and prospective resources; exploration and development plans; acquisition and disposition plans and the timing thereof; operating and other expenses, including the payment and amount of future dividends; royalty and income tax rates; the timing of regulatory proceedings and approvals; and the timing of first commercial natural gas and the estimate of Vermilion's share of the expected natural gas production from the Corrib field.
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; and management's expectations relating to the timing and results of exploration and development activities.
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; 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 and interest rates; health, safety and environmental risks; 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; uncertainty in amounts and timing of royalty payments; risks associated with existing and potential future law suits and regulatory actions against 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.
All oil and natural gas reserve information contained in this document has been prepared and presented in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The actual crude oil and natural gas reserves and future production will be greater than or less than the estimates provided in this document. The estimated future net revenue from the production of crude oil and natural gas reserves does not represent the fair market value of these reserves.
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.
|AECO||the daily average benchmark price for natural gas at the AECO 'C' hub in southeast Alberta|
|bbls/d||barrels per day|
|bcf||billion cubic feet|
||barrel of oil equivalent, including: crude oil, natural gas liquids and natural gas (converted on the basis of one boe for six mcf of natural gas)|
|boe/d||barrel of oil equivalent per day|
|HH||Henry Hub, a reference price paid for natural gas in US dollars at Erath, Louisiana|
|mboe||thousand barrel of oil equivalent|
|mcf||thousand cubic feet|
|mcf/d||thousand cubic feet per day|
|mmboe||million barrel of oil equivalent|
|mmcf||million cubic feet|
|mmcf/d||million cubic feet per day|
|NGLs||natural gas liquids|
|NGTL||NOVA Gas Transmission Ltd., a wholly owned subsidiary of TransCanada is the owner of a gas transmission system known as the NGTL system. The NGTL system is a 23,500 km pipeline that gathers natural gas for both use in Alberta, and to deliver it to provincial border points for export to North American markets.|
|PRRT||Petroleum Resource Rent Tax, a profit based tax levied on petroleum projects in Australia|
||the day-ahead price for natural gas in the Netherlands, quoted in MWh of natural gas, at the Title Transfer Facility Virtual Trading Point operated by Dutch TSO Gas Transport Services|
|WTI||West Texas Intermediate, the reference price paid for crude oil of standard grade in US dollars at Cushing, Oklahoma|
MESSAGE TO SHAREHOLDERS
After appearing to reach some degree of range-bound stability during the second quarter, crude oil prices have recently come under renewed pressure as a result of a number of macroeconomic uncertainties. Although this price environment poses significant challenges for many energy sector participants, Vermilion remains comparatively well-positioned given our disciplined approach to financial management and our commodity diversification. In particular, our exposure to European natural gas markets, where fundamentals and pricing remain strong, is a key advantage differentiating Vermilion from its competitors.
As current European natural gas prices remain nearly triple those in Canada, a significant part of our strategic focus has been on maximizing our exposure to this advantageously priced commodity. In 2014, we expanded our European natural gas production by nearly 50%