CALGARY, March 16, 2020 /CNW/ - Vermilion Energy Inc.
("Vermilion", "We", "Our", "Us" or the "Company") (TSX, NYSE: VET)
announces that its Board of Directors has approved a reduction to
our 2020 capital budget of $80 to
$100 million and a reduction in our
monthly dividend from $0.115 CDN per
share to $0.02 CDN per share in
response to the pronounced decline in global commodity
prices. The new dividend amount will be implemented in the
April dividend payable in May
2020.
Following the release of our Q4 2019 results on March 6, 2020, we have witnessed a further
decrease in oil prices as a result of the growing COVID-19 outbreak
and the ensuing oil price war between OPEC+ members. While we
continue to believe the long-term fundamentals for the oil and gas
industry are sound and will lead to higher prices in the future, we
cannot predict how long the impact from COVID-19 and the OPEC+
price war will continue. As we stated in our Q4 2019 release,
in the event that we experienced an even more pronounced and
protracted commodity downturn due to COVID-19 or any other cause,
we would be attentive to all forms of cash outlays to protect
Vermilion's financial position. As we assessed the status of
the global emergency, we determined that it was now appropriate to
take these additional actions regarding capital investment and
dividends.
The new capital investment and dividend reductions reduce our
annualized cash outlays by an additional $260 to $280
million, providing greater flexibility to manage our
business through this period of depressed and uncertain commodity
prices. In combination with the dividend reduction we
announced on March 6, our annualized
cash outlays will have been reduced by $465 to $485
million. These reductions will substantially
contribute to Vermilion's financial strength, and we will remain
vigilant to make further adjustments based on our assessment of
evolving business conditions. Vermilion fully intends to exit
this period of economic turmoil in a position of enhanced financial
strength.
Our revised capital budget of $350
to $370 million is expected to
deliver 2020 annual production of 94,000 boe/d to 98,000 boe/d,
reflecting both a reduced capital slate and allowance for potential
disruptions to our operations due to COVID-19. Thus far, we
have had no operational or supply chain impacts from
COVID-19.
March 2020 Dividend
Declaration
As discussed in our Q4 2019 release, Vermilion is reaffirming a
cash dividend of $0.115 CDN per share
payable on April 15, 2020 to all
shareholders of record on March 31,
2020. The ex-dividend date for this payment is
March 30, 2020. This dividend
is an eligible dividend for the purposes of the Income Tax Act
(Canada). As previously
announced, we are phasing out the Dividend Reinvestment Plan
("DRIP") over the course of 2020. We will be prorating the
available DRIP shares by 25% each quarter starting in Q1 2020,
until completely eliminated by Q4 2020. The net market
proration factor may differ slightly each month from the stated
factor to ensure the total quarterly proration of 25% remains
in-tact. For those investors that would like to continue
reinvesting the cash portion of their dividends in Vermilion
shares, we encourage you to contact your brokerage firm about
setting up an automated reinvestment plan to purchase shares on the
open market.
About Vermilion
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 organic production growth augmented with value-adding
acquisitions, along with providing a meaningful dividend stream to
investors. 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, are committed to consistently delivering superior
rewards for all stakeholders, and have delivered over 20 years of
market outperformance. Vermilion trades on the Toronto Stock
Exchange and the New York Stock Exchange under the symbol VET.
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SOURCE Vermilion Energy Inc.