Vermilion Energy has entered into a definitive agreement for the sale of its United States assets for cash proceeds of $120 million.
Net proceeds from the Transaction will be directed towards debt repayment to further accelerate deleveraging efforts and strengthen Vermilion's balance sheet. Based on current strip commodity pricing(1) and operational plans, we would expect to exit 2025 with net debt(2) of $1.3 billion, with a trailing net debt to FFO ratio(3) of 1.3 times.
The Assets consist of approximately 5,500 boe/d (81% oil and liquids) of production and approximately 10 mmboe of Proved Developed Producing reserves estimated as evaluated by McDaniel & Associates Consultants Ltd. at December 31, 2024. The Transaction has an effective date of January 1, 2025 and is anticipated to close in Q3 2025, subject to the satisfaction of other customary closing conditions. The Transaction agreement includes $10 million of contingent payments(4) based on WTI prices over the two-year period starting July 1, 2025.
This Transaction, combined with the sale of our East Finn assets in 2023, completes our exit from the United States, allowing us to focus on our core gas-weighted assets in Canada and Europe. Vermilion would like to sincerely thank our talented and dedicated field teams in Wyoming for their commitment to safe and efficient operations over the past 11 years as well as the technical teams, which provided support from Denver and Calgary.
Updated 2025 Guidance
Vermilion is adjusting its 2025 capital budget to a range of $630 to $660 million, reflecting a reduction of approximately $100 million from the mid-point of our previous capital budget range of $730 to $760 million. This reduction reflects the removal of all remaining E&D capital associated with the Saskatchewan and United States divested assets post-closing. Vermilion expects full year and second half 2025 production to range between 117,000 to 122,000 boe/d, 68% natural gas-weighted in the second half of 2025. On a go-forward basis, it is estimated that over 90% of production will come from our global gas portfolio and over 80% of capital is expected be allocated to these assets. 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.
Advisors
Wells Fargo is acting as exclusive financial advisor and Citi is acting as strategic advisor to Vermilion in connection with the Transaction. Torys LLP is acting as legal advisor on the Transaction with Davis Graham & Stubbs LLP acting as co-advisor.
Click here for full announcement
Source: Vermilion Energy
