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Vermilion Energy Inc. (VET) CEO Anthony Marino on Q4 2019 Results - Earnings Call Transcript

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Vermilion Energy Inc. (NYSE:VET) Q4 2019 Earnings Conference Call March 6, 2020 11:00 AM ET

Company Participants

Anthony Marino - President & CEO

Adam Iwanicki - Risk Manager & Marketing Director

Lars Glemser - VP & CFO

Conference Call Participants

Dennis Fong - Canaccord Genuity

Asit Sen - Bank of America

Josef Schachter - Schachter Energy Research

Jeremy McCrea - Raymond James

Greg Pardy - RBC Capital Markets

Mike Dunn - Stifel FirstEnergy

Chris Varcoe - Calgary Herald


Ladies and gentlemen, thank you for standing by and welcome to the Vermilion Energy Inc. Year-End 2019 Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Anthony Marino, President and CEO of Vermilion. Thank you. Please go ahead.

Anthony Marino

Good morning, ladies and gentlemen. Thank you for joining us. I'm Tony Marino, President and CEO of Vermilion Energy. With me today are Mike Kaluza, Executive Vice President and COO; Lars Glemser, Vice President and CFO; Kyle Preston, Vice President of Investor Relations; and other members of our management team who may be called on during the Q&A session.

We will be referring to a PowerPoint presentation to discuss our fourth quarter 2019 financial and operating results and year-end reserves update. The presentation can be found on our website under Invest With Us and Events and Presentations. Slides 2 and 3 in the presentation refer to our advisory on forward-looking statements. These advisories describe the forward-looking information, non-GAAP measures, and oil and gas terms referred to today and outline the risk factors and assumptions relevant to this discussion.

Let me start off with our dividend. Slide 4, dividend reduction. Our Board of Directors has approved a 50% reduction in our monthly dividend to CAD11.5 per share

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Comments (24)

I’d rather see the div go away and start paying down debt and expand drilling. Drill baby drill!!!!
River18 profile picture
More drilling to sell at $30???
Good thing you are not running VET.
To save this ship you will have to cut the dividend again on Monday, if oil will sink by 10$ or more.
Bigger picture----Saudis and Russia will finally get there way.......

Using the VIRUS(n which is not as bad as media says as it IS retreating in China now ) as an opportunity to create a price war and CRUSH the shale revolution in the US......
Expect another emergency rate cut THIS week.....
River18 profile picture
@Contemplating Retirement
You mean like this???

Fed slashes interest rates to zero, boosts assets by $700B to fight coronavirus pandemic
Target range for the federal funds rate lowered to 0 to 1/4 percent
Oil price down nearly 10% in one day cause Russia disagreed to follow production cut. What is Russias agenda?
Saudi Arabia and Russia are starting a price war and shale oil companies are the battlefield. Source: www.zerohedge.com/...
It's Russia, what do you think?
River18 profile picture
What is Russia's agenda???
Well, it is certainly not to try to help Trump get reelected.
Maybe Putin is trying to show how totally corrupt the American mainstream media is.
So Putin already knows that Biden is a crooked politician that will bend over for a couple of million dollars for his kid Hunter, and will sell out the US energy producers in the name of climate change.
So the equation is real easy for Putin to try to help Biden, since he knows that his comrade Bernie would never get elected to turn the US into another Cuba or Venezuela.
Anyone investing in an E&P company with a double digit dividend yield is a fool.

The market, not the CEO, killed VET. Markets do that, routinely.
They are growing their reserves at just a bit over 9$ F&D a barrel. Massive FCF, diversified over 3 continents and are obviously keeping strict dividend focus.

Oil took a big hit. It allways bottoms at around 25$ which means their FCF will be hit but theyll wont go under. World cant function on 25$ barrel for long, they are preparing for future higher cashflows.

Time to buy EP is not on 150$ oil. Its on 25$ oil... Anyways Im a slamm position in and waiting for signs of market capitulation, noone wanting to buy in and final huge selloff sign. Then its time to double down. We are nearing that point. Brace for further volatility
Plain and simple.....this CEO is full of it....in January, just days ago in an interview on BNN with Catherine Murray, he said they had no plans on ever cutting the dividend. They kept the dividend going when oil was at 25.....what a piece of work. I saw the same garbage with Cam Bartley of ACB saying they were close to being EBITA positive. What a joke that was. You just can’t trust any company executive anymore......pretty sad.
Loophole69 profile picture
In the Church Lady's voice I can hear "Well, how convenient." Covid-19 hmm...........
Look out below. And below.
Chancer profile picture
If the virus is the reason to cut the dividend by 50%, one could assume that if the virus is contained (ref. some possible cures with currently available drugs), the dividend will restored.

Somehow with this CC, I do not feel assured that would happen.
My take away is taht they want pay down the debt m7ch faster and Corona was jus the perfect excuse for that direction change....
As we all know by now, oil and gas stocks are cyclical and only the most prudent and best capitalized companies will succeed. Sometimes a buy low opportunity is obvious which can lead to a fairly quick doubling of investment. I'm not saying this is a bottom now - there is so much easily produced oil in the ground just waiting for a better price. To be safer, own a variety of industries, limiting position size to 3% of your portfolio, which will require 33 stocks. Then if one goes to zero it won't wipe you out - don't gamble - invest carefully.
Join the club of lying CEO's . You said you would cut Capex before cutting the dividend. I give you a month before they show you the door.
I wish they would show him the door but I doubt it.
Covid 19 is going to be blamed in every company's earnings call for the next two quarters. Get used to it.
@Drewworm only the companies that underperform.
Soldiers and hikers do not scapegoat heavy packs when they reach the summit. The types of warriors and pikers who do scapegoat heavy packs are those who fall to the canvas following a Tyson Fury of punches.
Cut capex you FOOLs
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