| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 5.70 | -41 |
| Intrinsic value (DCF) | 4.12 | -57 |
| Graham-Dodd Method | 6.60 | -32 |
| Graham Formula | n/a |
Vermilion Energy Inc. (NYSE: VET) is a global oil and gas exploration and production company with operations across North America, Europe, and Australia. Founded in 1994 and headquartered in Calgary, Canada, Vermilion focuses on acquiring, developing, and producing petroleum and natural gas assets. The company boasts a diversified portfolio, including significant land holdings in Canada, the U.S., France, the Netherlands, Germany, Croatia, Hungary, and Slovakia. Key assets include the Corrib natural gas field off Ireland and the Wandoo offshore oil field in Australia. With a balanced mix of conventional natural gas and light/medium crude oil wells, Vermilion leverages its international footprint to mitigate regional risks while capitalizing on energy demand. The company’s strategic focus on stable jurisdictions and long-life assets positions it as a resilient player in the volatile energy sector. Vermilion’s commitment to sustainable operations and shareholder returns, evidenced by its dividend policy, enhances its appeal to income-focused investors.
Vermilion Energy presents a mixed investment case. On one hand, its geographically diversified asset base reduces exposure to regional volatility, and its strong operating cash flow ($967.8M in the latest period) supports dividend payouts ($0.35 per share). However, the company reported a net loss (-$46.7M) and negative EPS (-$0.30), reflecting sensitivity to commodity price swings (beta: 1.54). High debt ($1.02B) relative to cash ($131.7M) raises leverage concerns, though capital expenditures ($635.7M) suggest reinvestment for growth. Investors bullish on oil/gas prices may find value in Vermilion’s high-beta exposure, but risk-averse investors should weigh its cyclicality and leverage.
Vermilion Energy’s competitive advantage lies in its international diversification, with production spanning stable OECD markets (Europe, Australia) and higher-growth North American basins. This contrasts with many peers focused solely on North America, reducing geopolitical risk. Its European gas assets provide exposure to premium-priced markets, while Australian and Canadian operations offer cost-efficient production. However, Vermilion lacks the scale of integrated majors or large-cap E&P firms, limiting economies of scale. Its focus on conventional (vs. shale) assets differentiates it but may constrain growth in a shale-dominated industry. The company’s dividend yield is competitive, but its higher debt-to-equity ratio compared to peers like Tourmaline Oil could deter conservative investors. Vermilion’s niche is its ability to balance yield with moderate growth, but it must navigate commodity cycles carefully to maintain leverage and shareholder returns.