Vermilion Energy Enters Williston Basin By Buying Reserves On The Cheap
- Latest acquisition continues the company's history of value-oriented and accretive deals; cash flow of new assets will self-fund future growth.
- Based on current netbacks, VET paid ~50% below the cash flow value of proved reserves; potential upside for another doubling of the assets' reserves due to unbooked drilling locations.
- Bargain deal buys reserves on the cheap and opens up a new core area for the company in the Williston Basin.
- For $400 million (~5.5% of EV), VET grew proved reserves by 8%. Conservative upside is another 4% growth in proved reserves.