Vermilion Energy announces the closing of the acquisition of Westbrick Energy.

The Acquisition adds stable annual production of 50,000 boe/d(1) (75% gas and 25% liquids) and approximately 1.1 million (770,000 net) acres of land in the southeast portion of the Deep Basin trend in Alberta, and includes four operated gas plants with total capacity of 102 mmcf/d. This footprint is contiguous and complementary to Vermilion's legacy Deep Basin assets, providing significant operational and corporate synergies. Vermilion has identified over 700 future drilling locations on the acquired acreage, across multiple zones including the Ellerslie, Notikewin, Rock Creek, Falher, Cardium, Wilrich and Niton formations, with half-cycle IRRs ranging from 40% to over 100% based on estimates provided by McDaniel & Associates Consultants Ltd ("McDaniel")(2). With this depth and quality of inventory, Vermilion expects the acquired assets to have the ability to maintain flat production for over 15 years while generating significant free cash flow(3) to enhance the Company's long-term return of capital framework.

Included in the Arrangement Agreement was an option for Westbrick shareholders to elect to receive up to a maximum of 1.7 million Vermilion common shares not to exceed $25 million in value as a portion of the total consideration. Certain shareholders of Westbrick have elected to receive Vermilion common shares totaling 1.1 million shares at a value of $14.2 million. The remainder of the consideration for the Acquisition will be paid in cash, funded through cash on hand, Vermilion's new $450 million term loan, and Vermilion's undrawn $1.35 billion revolving credit facility.

(1) Anticipated 2025 production from acquired assets, based on company estimates at February 26, 2025. Full year production estimates may not align with Company 2025 guidance, which will reflect post-close production contributions.
(2) Estimated gross proved, developed and producing, total proved, and total proved plus probable reserves as evaluated by McDaniel & Associates Consultants Ltd. ("McDaniel") in a report dated December 17, 2024, with an effective date of November 30, 2024 (the "McDaniel Reserves Report"). Three consultant average October 1, 2024 pricing assumptions used in reserve estimates as follows: 2025 WTI US$72.00/bbl, AECO C$2.50/mmbtu, CAD/USD FX rate 0.747; 2026 WTI US$74.98/bbl, AECO C$3.36/mmbtu, CAD/USD FX rate 0.753; 2027 WTI US$76.65/bbl, AECO C$3.62/mmbtu, CAD/USD FX rate 0.753.
(3) Free cash flow ("FCF") is a non-GAAP financial measure comparable to cash flows from operating activities. FCF is comprised of fund flows from operations less drilling and development and exploration and evaluation expenditures.

KeyFacts Energy: Vermilion Canada country profile   l   KeyFacts Energy: Acquisitions & Mergers news