Vermilion is a publicly traded, widely held, international oil and gas producer. We are headquartered in Calgary, Alberta, Canada, with onshore and offshore operations located around the world in regions noted for their stable, well-developed fiscal and regulatory policies related to oil and gas exploration and development. Our core business involves the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia.
Our asset base comprises a diversified product and project portfolio that receives premium pricing. This increases the stability of our cash flows and our flexibility in allocating our exploration and development capital. The result is a consistently strong return on capital, reliable growth, and exposure to robust end markets that include:
- North American-based midstream and downstream refiners
- Asia Pacific-based refining and lubricant businesses
- European downstream refiners
- Key aggregators and utilities, such as the 50% state-owned GasTerra in The Netherlands. G4-8
Founded in 1994, Vermilion has been delivering outstanding financial and operational performance for over 20 years. This is made possible by the superlative efforts of more than 720 staff (employees and contractors) located throughout our operations and through an extensive supply chain.
In 2015, our supply chain represented more than 6,000 entities and an investment from Vermilion of more than $730 million. This encompassed a wide range of inputs, including specialized field expertise and technology, supplies ranging from drilling mud to event facilities, and expert consultant advice. It is extremely important to us that our suppliers not only deliver a sound financial investment in their goods and services, but operate in a manner that aligns with the values that guide our own corporate culture. As a result, we have very strict requirements for third-party vendors who do business for Vermilion. G4-12
In spite of a reduction in 2015 and 2016 capital spending in response to lower commodity prices, we are targeting production of approximately 62,500 - 63,500 boe/d in 2016 (15% growth over 2015), primarily through:
- Semi-conventional resource play development in Western Canada and the US, including Cardium light oil, Mississippian light oil and Mannville condensate-rich gas
- Conventional high value natural gas drilling in The Netherlands and Germany
- Conventional infill drilling, waterflood and workover programs in France and Australia
- Our 18.5% non-operated working interest in the Corrib gas field in Ireland
In 2015, we strengthened our core regions, increasing our exposure to both European natural gas and light oil development, and adhering to our long term strategy of balanced and diversified growth G4-13
- We entered into a farm-in agreement that provides us with a material participating interest in 19 onshore exploration licenses in northwest Germany as well as ownership of key proprietary data. The licenses comprise approximately 850,000 net acres of undeveloped oil and natural gas rights in the prolific North German Basin. We were subsequently awarded two additional exploration licenses that added approximately 110,000 net acres to our land position.
- We were conditionally awarded four exploration blocks in northeast Croatia near the Hungarian border. The blocks span approximately 2.35 million gross acres with a substantial portion of the acreage located near existing crude oil and natural gas fields. These blocks were ratified by the Republic of Croatia in June 2016.
- We consolidated our ownership and working interest in the Turner Sand play in the eastern Powder River Basin in the United States to 100% through an acquisition of the remaining 30% interest.
- We achieved first gas production at our non-operated Corrib project in Ireland on December 30, 2015.
In mid-2016, we announced the acquisition of our first operated producing properties in Germany, further strengthening our presence in the country with assets complementary to our current European portfolio.
The acquisition includes operated and non-operated interests in nine oil and four gas producing fields; Vermilion will assume operatorship of five oil and three gas producing fields. It also includes a 50% operated interest in a 190-km oil pipeline network and a 66.7% operated interest in the Bedekaspel exploration license located in the Permian Rotliegend gas fairway, adding to Vermilion's existing 16.7% interest. The acquisition is expected to close in late 2016.