The company did in the 2022 report confirm that the Corrib acquisition is set to close in the end of March this year, with a cash payment of C$200M. Note that these charts do not include the C$223M in windfall profit tax during 2022, which the company reported under the corporate segment. The below figure illustrates that while the majority of 2022 production came from Canada, European natural gas as represented by Ireland, Germany, and the Netherlands is a large percentage of fund flows and free cash flow. This translates to a 25-36% FCF yield for 2022, depending on if we use the market cap or enterprise value that incorporates the net debt. This is a strong result given that the company has a C$3B market cap and an enterprise value of C$4.4B, using the latest stock price and financials. Net Earnings were C$1.3B, which comes to C$8.03 per share. Vermilion reported a record C$1.6B in fund flows from operations ('FFO') during 2022 and C$1.1B in free cash flow ('FCF'). and European natural gas markets, represented by the Dutch TTF here.įigure 3 - Source: CME Group 2022 Results & Guidance In the chart below, we can also see the massive difference in futures prices between the U.S. A substantial part of Vermilion's revenues is also derived from crude oil, which has seen less of a decline compared to natural gas. That is illustrated by the two red series in the chart below compared to the orange series for U.S. However, the market is in my view still underappreciating how profitable the European natural gas market is for Vermilion, even with the windfall taxes, where prices are still above the peak levels we saw in the U.S. Vermilion has seen the share price decline by more than 50% from the peak in 2022, part of the decline makes sense due to lower oil & natural gas prices together with the windfall profit taxes in Europe, which came into effect for 2022-2023 in the end of last year. This is my take on the 2022 results and what to expect over the near term. I wrote a detailed article on Vermilion Energy ( NYSE: VET) a few months ago, which is worth the read.

7 segment ttf