Canadian energy producer Vermilion Energy has reached a definitive agreement to divest its assets in Saskatchewan and Manitoba for $415m in cash proceeds.
The transaction is a strategic move to accelerate the company’s debt repayment and enhance its financial stability.
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The sale is expected to generate around $110m in annual net operating income, based on current strip commodity prices.
These assets, primarily oil and liquids, are producing roughly 10,500 barrels of oil equivalent per day (boepd).
McDaniel & Associates Consultants evaluated the Proved Developed Producing reserves at 30 million barrels of oil equivalent as of 31 December 2024, with future abandonment liabilities estimated at $250m.
With a targeted closing in the third quarter of 2025, the transaction is effective from 1 May 2025.
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By GlobalDataIt is contingent upon regulatory approvals and other standard closing conditions.
Vermilion anticipates that its full-year production in 2025 will average between 120,000boepd to 125,000boepd, with capital expenditures forecasted to be between $680m to $710m.
This reflects a reduction of approximately $50m due to the divested assets.
Vermilion’s executive team has indicated a commitment to prudent capital investment throughout periods of market volatility.
The company plans to adjust capital expenditure as needed to prioritise free cash flow over production growth in 2025 and 2026.
The proceeds from this asset sale will not only reinforce Vermilion’s balance sheet but also provide additional capital flexibility for its core assets in Canada and Europe.
National Bank Financial is serving as the exclusive financial advisor, Scotiabank as the strategic advisor, and Torys as the legal advisor for this transaction.
In February, Vermilion expanded its Alberta Deep Basin asset base with the acquisition of Westbrick Energy for C$1.075bn ($746.53m), demonstrating its ongoing commitment to growth and operational excellence.
