Vermilion Energy entered a binding sale agreement for the sale of its Saskatchewan and Manitoba assets for cash consideration of $302 million USD ($415 million CAD).
Net proceeds from the transaction will be employed to retire debt to accelerate deleveraging efforts and strengthen Vermilion's balance sheet, the Calgary-based company stated.
The properties currently produce approximately 10,500 boed (86% liquids and oil) and are expected to produce about $110 million of annual net operating income at current strip commodity prices.
Excluding a mid-Q3 2025 close, Vermilion sees full year 2025 average production of 120,000 to 125,000 boed with capital expenditures of $680 to $710 million, a decrease of approximately $50 million from divested assets that closed in the period. Vermilion will continue to watch levels of capital expenditure over this period of increased volatility and will decapitalize if necessary to defer free cash flow before production growth until 2025 and 2026.
The firm said the deal represented another key milestone in its three-year effort to high-grade the asset base, de-emphasizing short-duration assets and shifting toward long-duration, scalable assets with a deep inventory of high return on capital opportunities.