Adding Vermilion Energy to both portfolios

  • Vermilion currently pays a dividend just shy of 6%
  • The company did not cut the dividend in the last crude price downturn
  • Vermilion has just made an offer to acquire Spartan Energy, a light oil producer in Saskatchewan for $1.4 billion
  • The purchase will be immediately accretive to Vermilion as Spartan is trading at a much lower valuation
  • Analysts do not expect another competing bid for Spartan as there is a $40 million breakup fee if the deal falls through
  • This purchase will add an additional 23,000 barrels per day of oil equivalent taking its new output to 95,000 barrels per day
  • Vermilion currently operates in France, Holland, Germany, Ireland and Australia where it receives the higher Brent crude price

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