Vermilion Energy Inc (VET) 2022 Q2 法說會逐字稿

Good morning. My name is Samara, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vermilion Energy Q2 Conference Call. (Operator Instructions) Mr. Dion Hatcher, you may begin your conference.

早上好。我的名字是薩馬拉，今天我將成為您的會議接線員。在這個時候，我想歡迎大家參加 Vermilion Energy Q2 電話會議。 （操作員說明）Dion Hatcher 先生，您可以開始您的會議了。

Thank you, Samara. Well, good morning, ladies and gentlemen. Thank you for joining us. I'm Dion Hatcher, President of Vermilion Energy. With me today are Lars Glemser, Vice President and CFO; Darcy Kerwin, Vice President, International and HSE; Bryce Kremnica, Vice President, North America; Jenson Tan, Vice President, Business Development; and Kyle Preston, Vice President, Investor Relations.

謝謝你，薩馬拉。嗯，早上好，女士們，先生們。感謝您加入我們。我是 Vermilion Energy 總裁 Dion Hatcher。今天和我在一起的是副總裁兼首席財務官 Lars Glemser； Darcy Kerwin，國際和 HSE 副總裁； Bryce Kremnica，北美副總裁； Jenson Tan，業務發展副總裁；和投資者關係副總裁 Kyle Preston。

We'll be referencing a PowerPoint presentation to discuss our Q2 2022 results and our return of capital framework we announced this morning. Presentation can be found on our website under Invest With Us and Events & Presentations. Please refer to our advisory on forward-looking statements at the end of the presentation. It describes forward-looking information, non-GAAP measures and oil and gas terms used today and outlines the risk factors and assumptions relevant to this discussion.

我們將參考 PowerPoint 演示文稿來討論我們的 2022 年第二季度業績以及我們今天上午宣布的資本回報框架。演示文稿可在我們網站的 Invest With Us 和 Events & Presentations 下找到。請參閱我們在演示文稿末尾關於前瞻性陳述的諮詢。它描述了當今使用的前瞻性信息、非公認會計原則措施和石油和天然氣術語，並概述了與本次討論相關的風險因素和假設。

As shown on Slide 2, we delivered another quarter with record fund flows of $453 million and record free cash flow of $340 million, which is over $2.00 a share. That's up 16% and 12%, respectively, from the previous quarter. The increase was mainly driven by strong commodity prices as global oil prices and North American gas prices were strengthened during the quarter. European gas prices remained strong in Q2 and relatively consistent with the prior quarter with TTF in excess of CAD 38 per MMBtu. Over the past several months, European gas forward prices have nearly doubled, which will bode well for Vermilion. I will review the fundamental drivers for this later in my presentation.

如幻燈片 2 所示，我們又一個季度實現了創紀錄的 4.53 億美元的資金流量和創紀錄的 3.4 億美元的自由現金流，即每股超過 2.00 美元。這比上一季度分別增長了 16% 和 12%。這一增長主要是由於本季度全球油價和北美天然氣價格走強導致商品價格走強。歐洲天然氣價格在第二季度保持強勁，與上一季度相對一致，TTF 超過每 MMBtu 38 加元。過去幾個月，歐洲天然氣遠期價格幾乎翻了一番，這對 Vermilion 來說是個好兆頭。我將在稍後的演示文稿中回顧這方面的基本驅動因素。

Production during Q2 averaged 84,868 BOE a day, which is down slightly from the previous quarter, mainly due to planned and unplanned downtime. Key notable event during the quarter was the closing of the Leucrotta acquisition on May 31. We have successfully integrated the Leucrotta assets and some of the Mica asset team, which is now focused on completing a 6-well pad that was drilled in Q2. Very excited to have these high quality assets in our portfolio and look forward to scaling up our development.

第二季度的平均產量為每天 84,868 桶油當量，比上一季度略有下降，主要是由於計劃內和計劃外的停機時間。本季度的主要值得注意的事件是 5 月 31 日 Leucrotta 收購的結束。我們已成功整合 Leucrotta 資產和部分 Mica 資產團隊，該團隊現在專注於完成第二季度鑽探的 6 井平台。很高興能在我們的投資組合中擁有這些優質資產，並期待擴大我們的發展。

The Leucrotta acquisition was mostly funded by free cash flow generated in the quarter. As a result, net debt increased only slightly in Q2 to $1.6 billion. However, our net debt to fund flow ratio decreased to 1.1x as a result of our increasing fund flows from operations. We remain on track to achieve our next debt target of $1.2 billion by the end of 2022. And with this clear line of sight, we are pleased to outline our return on capital framework.

收購 Leucrotta 的資金主要來自本季度產生的自由現金流。因此，第二季度的淨債務僅略有增加，達到 16 億美元。然而，由於我們的運營資金流量增加，我們的淨債務與資金流量比率下降至 1.1 倍。我們仍有望在 2022 年底之前實現 12 億美元的下一個債務目標。有了這一清晰的視野，我們很高興概述我們的資本回報框架。

Before I get into the details of our return of capital framework, Slide 3 reviews some of the key strategic objectives we accomplished over the last 2 years that will position Vermillion to deliver very strong returns over the long term. These objectives were part of the strategic plan we developed during the 2020 downturn.

在我詳細介紹我們的資本回報框架之前，幻燈片 3 回顧了我們在過去 2 年中實現的一些關鍵戰略目標，這些目標將使 Vermillion 能夠在長期內提供非常強勁的回報。這些目標是我們在 2020 年經濟衰退期間制定的戰略計劃的一部分。

Our number one financial priority was to reduce debt and strengthen the balance sheet. We have reduced debt by approximately $1 billion relative to Q2 2020 by the end of this year, while also funding over $1 billion of strategic acquisitions without issuing any equity. We increased our international weighting in European gas exposure through the Corrib acquisition, which we expect to close in Q4 this year. Our international assets now represent over 1/3 of our production base and contribute approximately 2/3 of our fund flow and free cash flow. This international diversification is what differentiates Vermilion from our peers.

我們的首要財務優先事項是減少債務並加強資產負債表。截至今年年底，與 2020 年第二季度相比，我們已將債務減少了約 10 億美元，同時還在不發行任何股權的情況下為超過 10 億美元的戰略收購提供了資金。我們通過收購 Corrib 增加了我們在歐洲天然氣業務中的國際權重，我們預計將在今年第四季度完成收購。我們的國際資產現在占我們生產基地的 1/3 以上，貢獻了大約 2/3 的資金流和自由現金流。這種國際多元化是 Vermilion 與我們同行的不同之處。

We reinstated a base dividend in Q1 of this year, and today, we're excited to announce a 33% increase in our Q3 quarterly dividend to $0.08 per share. The dividend is very resilient at less than 3% of our fund flows and leaves ample home for ratable increases over time.

我們在今年第一季度恢復了基本股息，今天，我們很高興地宣布第三季度季度股息增加 33% 至每股 0.08 美元。在不到我們資金流動的 3% 時，股息非常有彈性，並且隨著時間的推移為可評估的增長留下了充足的空間。

We completed the Leucrotta acquisition in Q2. This Mica asset significantly increases the depth and quality of our North American inventory, which will further enhance our free cash flow profile and underpin our long-term return of capital.

我們在第二季度完成了對 Leucrotta 的收購。這種雲母資產顯著提高了我們北美庫存的深度和質量，這將進一步增強我們的自由現金流狀況並支持我們的長期資本回報。

And finally, we said that we would increase our return of capital when we achieved the line of sight to our $1.2 billion mid-cycle debt target. With less than 2 quarters remaining in 2022 and robust outlook for 2023, let me now return -- review the return of capital framework on Slide 4. Vermilion has a long history of returning capital to its shareholders. In the past, this has been primary through base dividends, which we've delivered over $40 a share. Going forward, base dividends will remain a key component of our return of capital framework. However, we want to ensure the base dividend is resilient over the long term through the commodity cycles while allowing for ratable increases over time where they place a burden on our business or the balance sheet. With this philosophy in mind, we plan to limit the annual base dividend outlay to approximately 10% of our mid-cycle fund flows. For reference, this would equate to approximately $100 million based on the current asset base, but could increase if our asset base grows or if we see a fundamental shift in our mid-cycle commodity price assumptions.

最後，我們表示，當我們實現 12 億美元的中期債務目標時，我們將增加資本回報率。 2022 年僅剩不到 2 個季度，2023 年前景強勁，現在讓我返回 - 回顧幻燈片 4 上的資本回報框架。Vermilion 向股東返還資本的歷史悠久。過去，這主要是通過基本股息，我們已經交付了每股超過 40 美元。展望未來，基本股息仍將是我們資本回報框架的關鍵組成部分。但是，我們希望確保基本股息在商品週期的長期內具有彈性，同時允許隨著時間的推移可評級增加，這會給我們的業務或資產負債錶帶來負擔。考慮到這一理念，我們計劃將年度基本股息支出限制在我們週期中期資金流量的約 10%。作為參考，根據當前的資產基礎，這相當於大約 1 億美元，但如果我們的資產基礎增長或我們看到我們的中期商品價格假設發生根本性變化，這可能會增加。

In conjunction with our Q2 release, we announced a 33% increase to our Q3 quarterly dividend to CAD 0.08 per share. This equates to an annual dividend of CAD 0.32 per share, or approximately $53 million based on the current number of shares outstanding. At this dividend per share level, we have the capacity to increase base dividend, and we look forward to provide ratable increases over time.

結合我們第二季度的發布，我們宣布將第三季度的季度股息增加 33% 至每股 0.08 加元。這相當於每股 0.32 加元的年度股息，或基於當前流通股數的約 5300 萬美元。在這個每股股息水平上，我們有能力增加基本股息，我們期待隨著時間的推移提供可評估的增長。

With our debt approaching target levels, we will pivot from allocating free cash flow for debt reduction to the return of capital. Maintaining a strong balance sheet is a core principle of Vermillion, and we will remain focused on that going forward. We plan to enhance our return of capital to shareholders going forward while continuing to reduce debt to a target of $850 million by the end of 2023, which implies approximately another $350 million of further debt reduction beyond our year end 2022 target. It also implies we will be undrawn on our $1.6 billion credit facility, leaving just our termed U.S. notes outstanding.

隨著我們的債務接近目標水平，我們將從分配自由現金流以減少債務轉向資本回報。保持強勁的資產負債表是 Vermillion 的核心原則，我們將繼續專注於這一點。我們計劃在未來提高對股東的資本回報，同時繼續將債務減少到 2023 年底 8.5 億美元的目標，這意味著在我們 2022 年底的目標之外再進一步減少約 3.5 億美元的債務。這也意味著我們將無法動用我們 16 億美元的信貸額度，只留下我們的定名美國票據未償付。

The amount of free cash flow available for return of capital will increase as debt levels decrease based on the illustrative grid outlined on Slide 4. The grid is not intended to be prescriptive quarter-to-quarter, but will be used as a tool to guide near-term return of capital allocation decisions, while taking into account other capital requirements such as further debt reduction, asset retirement obligations and acquisitions. As you can see from this grid and near-term debt targets I discussed, a significant portion of our future free cash flow will be available to the return to shareholders.

根據幻燈片 4 中概述的說明性網格，隨著債務水平的降低，可用於資本回報的自由現金流量將增加。該網格並非按季度進行規定，而是用作指導工具資本分配決策的近期回報，同時考慮其他資本要求，例如進一步減少債務、資產報廢義務和收購。從我討論的這個網格和近期債務目標中可以看出，我們未來自由現金流的很大一部分將用於回報股東。

Based on our return of capital allocation grid, recent commodity strip and internal estimates, we anticipate returning up to 25% of free cash flow in the second half of 2022, and up to 50% to 75% of free cash flow in 2023, while achieving our debt targets. Our goal is to return capital in the most beneficial method to shareholders. We will consider various options to return capital, including share buybacks through the normal course issuer bid, regular and special dividends and a potential substantial issuer bid.

根據我們的資本配置回報率、最近的商品剝離和內部估計，我們預計 2022 年下半年將返回高達 25% 的自由現金流，到 2023 年將高達 50% 至 75% 的自由現金流，而實現我們的債務目標。我們的目標是以最有利於股東的方式返還資本。我們將考慮多種返還資本的選擇，包括通過正常的發行人出價回購股票、定期和特別股息以及潛在的大量發行人出價。

Based on our review of a number of data points, we will initially allocate the vast majority of this capital return to share buybacks. Given the structural improvements in our business, combined with the strong fundamental outlook for global commodities, we believe Vermilion is very well positioned to generate significant free cash flow in the years ahead. However, we do not believe this value proposition is accurately reflected in our share price today. And therefore, at this time, we view share buybacks as the most compelling use of free cash flow that will benefit long-term shareholders.

根據我們對多個數據點的審查，我們最初會將大部分資本回報分配給股票回購。鑑於我們業務的結構性改善，再加上全球大宗商品的強勁基本面前景，我們相信 Vermilion 非常有能力在未來幾年產生大量的自由現金流。但是，我們認為這一價值主張並未準確反映在我們今天的股價中。因此，目前，我們認為股票回購是自由現金流最引人注目的用途，這將使長期股東受益。

In early July, we announced the approval of our normal course issuer bid for the purchase of up to 16 million common shares, representing approximately 10% of Vermilion's public float. To date, we have repurchased 1.25 million common shares for $35 million. As we reduce our share count, this will also enhance our ability to increase the base dividend while adhering to our annual dollar limit of 10% mid-cycle fund flows. We look forward to providing continued updates on our return of capital initiatives through the second half of this year and throughout 2023 as we carefully weigh capital allocation decisions against various uses of excess free cash flow with a view of acting in the long-term interest of our shareholders.

7 月初，我們宣布批准我們的正常發行人出價購買多達 1600 萬股普通股，約佔 Vermilion 公眾持股量的 10%。迄今為止，我們已經以 3500 萬美元的價格回購了 125 萬股普通股。隨著我們減少股票數量，這也將增強我們增加基本股息的能力，同時遵守我們每年 10% 的中期資金流動美元限制。我們期待在今年下半年和整個 2023 年繼續提供有關資本回報計劃的最新信息，因為我們會仔細權衡資本分配決策與超額自由現金流的各種用途，以期為長期利益行事我們的股東。

Slide 5 is from our Investor Relations presentation where we provide an updated financial outlook for 2022 based on the actuals to date and our estimates for the balance of the year using the current commodity strip. As you can see, on a pro forma basis, including the full year impact from the Corrib acquisition, we are forecasting pro forma fund flows of $2.4 billion and free cash flow of $1.8 billion, or approximately $11 per share. We also show our year end debt target of $1.2 billion, which incorporates the return of upwards of 25% of free cash flow in the second half of this year.

幻燈片 5 來自我們的投資者關係演示文稿，其中我們根據迄今為止的實際情況和我們使用當前商品條對今年餘額的估計提供了 2022 年的最新財務展望。如您所見，在備考基礎上，包括收購 Corrib 對全年的影響，我們預測備考資金流量為 24 億美元，自由現金流為 18 億美元，或每股約 11 美元。我們還展示了我們 12 億美元的年終債務目標，其中包括今年下半年超過 25% 的自由現金流的回報。

We have not yet provided any formal guidance for 2023, but if you assume production is held flat at our exit rate forecast of 95,000 to 100,000 BOE a day, and you honor the backwardation in the commodity price forward strips, we are looking at generating similar amounts of free cash flow in 2023, which is consistent with the analysts' estimates.

我們尚未提供 2023 年的任何正式指導，但如果您假設產量保持在我們每天 95,000 至 100,000 BOE 的退出率預測水平，並且您兌現大宗商品價格遠期合約的逆價差，我們正在考慮產生類似的2023 年的自由現金流量，這與分析師的估計一致。

As outlined on Slide 6, looking at our cumulative free cash flow over a 3-year period from 2022 through to 2024, assuming flat production from our existing asset base and applying the forward pricing, we expect Vermilion to generate over $5 billion of free cash flow over this time, represented by the blue bars. This amount of free cash flow is equal to our current market capitalization. The gray bars show the cumulative free cash flow we currently plan to allocate to debt reduction. And as you can see, the majority of the free cash flow was allocated to debt reduction in 2022, including the funding of over $1 billion of acquisitions, whereas for 2023 and 2024, we will pivot and majority of the free cash flow will be available for return of capital to shareholders now that we have a much stronger balance sheet.

如幻燈片 6 所述，著眼於從 2022 年到 2024 年 3 年期間的累計自由現金流，假設我們現有資產基礎的產量持平並應用遠期定價，我們預計 Vermilion 將產生超過 50 億美元的自由現金流過這段時間，由藍色條表示。這筆自由現金流量等於我們當前的市值。灰色條顯示我們目前計劃分配給減債的累積自由現金流。正如您所看到的，大部分自由現金流分配給了 2022 年的債務減免，包括為超過 10 億美元的收購提供資金，而在 2023 年和 2024 年，我們將轉向並且大部分自由現金流將可用既然我們擁有更強大的資產負債表，就可以向股東返還資本。

As I mentioned in my earlier remarks, the fundamentals for European gas are very strong. Slide 7 shows historical pricing of European gas and Asian LNG, which have traded in a similar band since 2015 compared to the Canadian benchmark price of AECO. The blue bars represent the average premium that Vermilion receives on its total gas sales relative to AECO. This premium was approximately $6 per mcf in 2021 and is forecast to be approximately $19 in 2022. We also show the forward pricing for the balance of 2022 and 2023, which has increased significantly from historical levels. Second half 2022 TTF is $75 per MMBtu, and 2023 is now over CAD 70 per MMBtu. For every dollar increase in Euro gas prices, this adds an incremental $37 million of fund flows to Vermillion on an annual unhedged basis.

正如我在之前的發言中提到的，歐洲天然氣的基本面非常強勁。幻燈片 7 顯示了歐洲天然氣和亞洲液化天然氣的歷史定價，自 2015 年以來，與加拿大 AECO 基準價格相比，它們的交易區間相似。藍色條表示 Vermilion 相對於 AECO 的總天然氣銷售收入的平均溢價。 2021 年該溢價約為每 mcf 6 美元，預計 2022 年約為 19 美元。我們還顯示了 2022 年和 2023 年餘額的遠期定價，該價格較歷史水平顯著增加。 2022 年下半年 TTF 為每 MMBtu 75 美元，而 2023 年現在超過每 MMBtu 70 加元。歐元汽油價格每上漲 1 美元，就會在每年未對沖的基礎上增加 3700 萬美元的資金流向 Vermillion。

Our hearts, thoughts and prayers are with the Ukrainian people, and our hope is that a negotiated settlement can reach you quickly. The tragic events in Ukraine are undoubtedly contributing to the price increase, however, the underlying fundamental drivers for high European gas prices were in place prior to the invasion.

我們的心、思念和祈禱與烏克蘭人民同在，我們希望通過談判達成的解決方案能夠迅速到達你們手中。烏克蘭的悲慘事件無疑是導致價格上漲的原因，然而，歐洲高油價的根本驅動因素在入侵之前就已經存在。

Chart on Slide 8 shows the 2023 and 2024 forward price for TTF and how much it has increased since the beginning of the year. Calendar year 2023 TTF price has increased from under $20 at the beginning to year to over $60 today. This will have a significant impact on Vermilion's fund flows in 2023, and we have been adding more European hedges in 2023 in recent weeks. We believe the structural drivers will be supportive for European gas prices for many years to come. Europe consumes approximately 45 to 50 Bcf a day of natural gas with approximately 40% of that being supplied from Russia in 2021. Recent events, EU is now trying to significantly reduce its dependence on Russian gas.

幻燈片 8 上的圖表顯示了 TTF 的 2023 年和 2024 年遠期價格以及自年初以來的漲幅。 2023 日曆年 TTF 價格從年初的不到 20 美元增加到今天的 60 美元以上。這將對 Vermilion 2023 年的資金流動產生重大影響，最近幾週我們一直在增加 2023 年的歐洲對沖。我們相信結構性驅動因素將在未來許多年支持歐洲天然氣價格。歐洲每天消耗大約 45 到 50 Bcf 的天然氣，其中大約 40% 將在 2021 年由俄羅斯供應。最近發生的事件是，歐盟現在正試圖顯著減少對俄羅斯天然氣的依賴。

EU recognized natural gas as a transition fuel, which we believe will help facilitate the permitting and development of domestic supplies over time as countries increase use of natural gas for power generation. Examples of this transition include Germany shutting down nuclear and accelerating the phaseout of coal from 2038 to 2030, and Ireland committing to build 9 gas-fired power generators by 2024.

歐盟承認天然氣是一種過渡燃料，我們相信隨著各國增加使用天然氣發電，隨著時間的推移，這將有助於促進國內供應的許可和發展。這種轉變的例子包括德國從 2038 年到 2030 年關閉核能並加速淘汰煤炭，愛爾蘭承諾到 2024 年建造 9 台燃氣發電機。

With domestic supply in Europe continuing to decline, the only viable option to replace Russian gas is to increase LNG imports. But there is limited new LNG supply coming on the market prior to 2025 and 2026. These new projects require significant and longer term contracts, significant capital. So in order to attract LNG to Europe, buyers need to compete with Asia, which is driving European gas prices even higher. Short term, we expect Asian LNG demand to increase as they look to build inventories prior to this winter, but more importantly, mid to longer term, Asian demand for LNG is forecast to significantly increase.

隨著歐洲國內供應持續下降，替代俄羅斯天然氣的唯一可行選擇是增加液化天然氣進口。但在 2025 年和 2026 年之前，市場上的新液化天然氣供應有限。這些新項目需要大量和長期合同，需要大量資金。因此，為了將液化天然氣吸引到歐洲，買家需要與亞洲競爭，這正在推動歐洲天然氣價格進一步上漲。短期而言，我們預計亞洲液化天然氣需求將增加，因為他們希望在今年冬季之前增加庫存，但更重要的是，從中長期來看，亞洲對液化天然氣的需求預計將顯著增加。

As I mentioned, we are starting to layer in more 2023 European gas hedges to lock in some of our fund flows at these higher prices. As shown on Slide 9, since our last update, we have increased our 2023 Euro gas hedge position from 32% to 45%. Those recent hedges were executed primarily with wide collars with an average floor of about $40 and ceiling of about $70. Due to the higher gas prices, we may further increase our 2023 Euro gas hedge position to 60% to lock in even more fund flows. At the corporate level, given our low debt levels and current outlook, we tend on keeping our total hedge percentage at the lower end of our target range of 25% to 50%, which will leave us with the exposure to sustain higher oil prices.

正如我所提到的，我們開始在 2023 年進行更多的歐洲天然氣對沖，以這些更高的價格鎖定我們的一些資金流。如幻燈片 9 所示，自我們上次更新以來，我們已將 2023 年歐元天然氣對沖頭寸從 32% 增加到 45%。這些最近的對沖主要是用寬領執行的，平均底價約為 40 美元，頂價約為 70 美元。由於天然氣價格上漲，我們可能會將 2023 年歐元天然氣對沖頭寸進一步提高至 60%，以鎖定更多資金流。在企業層面，鑑於我們的低債務水平和當前前景，我們傾向於將總對沖百分比保持在 25% 至 50% 的目標範圍的下限，這將使我們有機會維持較高的油價。

Going back to our Q2 results, we have provided a brief summary of our operational highlights on Slide 10 and 11. The most notable activity in our international operations in Q2 was our offshore drilling program in Australia. This program was scheduled to start early in the second quarter, but was delayed approximately 1 month due to unexpected maintenance and repairs on a third party contracted rig. During routine inspection prior to moving the rig to our location, the operator identified some maintenance requirements and had to mobilize the rig to Singapore for repairs. We commenced drilling late in the second quarter, and drilling operations are progressing. However, the delay did result in some deferred production and higher costs. We expect to finish drilling in early September, and we'll start the wells shortly thereafter.

回到我們的第二季度業績，我們在幻燈片 10 和 11 上簡要總結了我們的運營亮點。我們在第二季度的國際業務中最引人注目的活動是我們在澳大利亞的海上鑽井計劃。該計劃原定於第二季度初開始，但由於第三方合同鑽井平台的意外維護和維修而推遲了大約 1 個月。在將鑽機運往我們所在地之前的例行檢查中，操作員確定了一些維護要求，不得不將鑽機調動到新加坡進行維修。我們在第二季度末開始鑽探，鑽探作業正在進行中。然而，延遲確實導致了一些延遲生產和更高的成本。我們預計將在 9 月初完成鑽探，此後不久我們將開始打井。

It was a relatively quiet quarter in Europe as the teams focused their efforts on preparing for our second half 2022 drilling campaign, which will include 2 wells in the Netherlands, 3 wells in Hungary and 2 wells in Croatia.

這是歐洲相對平靜的一個季度，因為團隊集中精力準備我們的 2022 年下半年鑽井活動，其中包括荷蘭的 2 口井、匈牙利的 3 口井和克羅地亞的 2 口井。

Subsequent to the quarter, a forest fire near our Cazaux field in Southern France resulted in approximately 1,500 barrels of production being temporary shut in. Our staff in France worked closely with emergency responders to ensure the safety and security of our employees, our contractors and installations, assuring there were no HSE incidents. We're in the process of making the necessary repairs and bringing this production back online, however, this will have an impact on our France production in the second half of 2022.

在本季度之後，我們在法國南部的 Cazaux 油田附近發生森林火災，導致大約 1,500 桶生產暫時關閉。我們在法國的員工與應急響應人員密切合作，以確保我們的員工、承包商和設施的安全和保障，確保沒有 HSE 事件。我們正在進行必要的維修並使該生產重新上線，但這將對我們在 2022 年下半年的法國生產產生影響。

It was a relatively quiet quarter in Canada as drilling and completion activities in West Central Alberta, Southeast Saskatchewan was limited during the second quarter due to spring breakup. Following the announcement of the Leucrotta acquisition in late March, we summoned our Mica asset team and focused on integrating the assets and working closely with the Leucrotta team in drilling the first 6-well Montney pad. Drilling was successfully completed during the second quarter, and the team is now focused on completion activities that is progressing as per plan.

這是加拿大相對平靜的一個季度，由於春季解散，第二季度薩斯喀徹溫省東南部阿爾伯塔省中西部的鑽井和完井活動受到限制。在 3 月下旬宣布收購 Leucrotta 之後，我們召集了 Mica 資產團隊，專注於整合資產並與 Leucrotta 團隊密切合作，鑽探第一個 6 井 Montney 平台。鑽井在第二季度成功完成，團隊現在專注於按計劃進行的完井活動。

In the U.S., we drilled 4 wells of our planned 6 operated Turner wells and completed 2 wells during the second quarter. One well was brought on production during the second quarter, where the remaining wells will be completed and brought on production during the third quarter. Overall results to date are in line with expectations. Subsequent to the quarter, we successfully executed drilling and completion activities on 3 2-mile laterals, which are significantly more economic than the 1-mile laterals.

在美國，我們在計劃的 6 口特納井中鑽了 4 口井，並在第二季度完成了 2 口井。一口井在第二季度投產，其餘井將在第三季度完成並投產。迄今為止的總體結果符合預期。在本季度之後，我們成功地在 3 個 2 英里支管上進行了鑽井和完井活動，這比 1 英里支管經濟得多。

Moving to Slide 12. Our Q3 2022 capital program is well underway, and in Europe, we will start our drilling campaign later this month and continue through the fourth quarter. As mentioned, the forest fire near our Cazaux field in Southern France resulted in approximately 1,500 barrels a day of production being temporary shut-in, and we expect to have most of it back online by the end of the year.

轉到幻燈片 12。我們的 2022 年第三季度資本計劃正在進行中，在歐洲，我們將在本月晚些時候開始我們的鑽探活動，並持續到第四季度。如前所述，我們在法國南部 Cazaux 油田附近發生的森林大火導致每天大約 1,500 桶的生產暫時關閉，我們預計其中大部分將在今年年底前恢復生產。

Looking at our Q3 production forecast, we will benefit from a full quarter of contribution from the Leucrotta acquisition and new production from the U.S.-Southeast Saskatchewan drilling programs, partially offset by the Australia drilling program delay and fire-related downtime in France. Taking all this into account, we expect Q3 production to be in line with Q2.

從我們的第三季度產量預測來看，我們將受益於 Leucrotta 收購和美國-東南薩斯喀徹溫省鑽探項目的新產量的整個季度貢獻，部分被澳大利亞鑽探項目延遲和法國與火災相關的停機時間所抵消。考慮到所有這些，我們預計第三季度的產量將與第二季度一致。

As a result of the forest fire-related downtime in France, offshore drilling delays in Australia, combined with inflationary pressure, we are increasing our 2022 capital budget by $50 million to $550 million. We are maintaining our annual production guidance of 86,000 to 88,000, excluding the Corrib acquisition volumes. We plan to update our production guidance once we have greater certainty on the timing of the Corrib close, which we expect to occur in Q4. Our exit rate forecast of 95,000 to 100,000 BOE a day, including Corrib acquisition volumes, remains unchanged.

由於法國與森林火災相關的停機時間、澳大利亞海上鑽井延誤以及通脹壓力，我們將 2022 年的資本預算增加 5000 萬美元至 5.5 億美元。我們維持 86,000 至 88,000 輛的年度生產指導，不包括 Corrib 收購量。一旦我們對 Corrib 關閉的時間有了更大的確定性，我們計劃更新我們的生產指導，我們預計這將在第四季度發生。我們對每天 95,000 至 100,000 BOE 的退出率預測（包括 Corrib 收購量）保持不變。

Before we open it up for Q&A, I want to make some closing remarks on our upcoming leadership changes. As we announced earlier this year, Vermillion's Executive Chairman and Co-Founder, Lorenzo Donadeo, will be retiring from the company effective September 1. Lorenzo was instrumental in creating what Vermilion is today, along with creating significant value for our shareholders during his tenure. On behalf of the full organization. I would like to thank Lorenzo for his leadership and guidance of the company over the 27 years. He will be greatly missed by everyone at Vermilion. But if anyone deserves a long, happy and fulfilling retirement, it is Lorenzo. We wish you all the best, and we look forward to providing you regular quarterly updates as a meaningful shareholder of Vermilion for many years to come.

在我們開始問答之前，我想對我們即將到來的領導層變動做一些總結。正如我們今年早些時候宣布的那樣，Vermillion 的執行主席兼聯合創始人 Lorenzo Donadeo 將於 9 月 1 日從公司退休。Lorenzo 在創造 Vermilion 的今天以及在他任職期間為我們的股東創造重要價值方面發揮了重要作用。代表整個組織。我要感謝 Lorenzo 27 年來對公司的領導和指導。 Vermilion的每個人都會非常想念他。但如果有人值得長期、快樂和充實地退休，那就是洛倫佐。我們祝您一切順利，並期待在未來許多年為您提供定期的季度更新，作為 Vermilion 的重要股東。

As previously announced, Mr. Bob Michaleski will assume the role of Independent Chairman on Lorenzo's departure. Bob has 41 years of experience and oversaw Pembina's transformation from an Alberta-based oil company into one of North America's leading integrated energy transition service companies. He served as the President and CEO of Pembina for 13 years. He joined Vermilion Board in 2016 and was pointed as Chair of the Audit Committee in 2020. Vermilion's executive committee structure will continue and will fill the role -- we will fill the role of the chief executive officer. It will be led by myself and will include all the existing members.

正如之前宣布的，Bob Michaleski 先生將在 Lorenzo 離職後擔任獨立主席一職。 Bob 擁有 41 年的經驗，並監督 Pembina 從一家位於阿爾伯塔省的石油公司轉變為北美領先的綜合能源轉型服務公司之一。他擔任 Pembina 的總裁兼首席執行官長達 13 年。他於 2016 年加入 Vermilion 董事會，並於 2020 年被任命為審計委員會主席。Vermilion 的執行委員會結構將繼續存在並將填補這一角色——我們將填補首席執行官的角色。它將由我自己領導，並將包括所有現有成員。

Well, that concludes my prepared remarks. And with that said, we'd like to open it up for questions.

好了，我準備好的發言到此結束。話雖如此，我們想提出問題。

(Operator Instructions) And we'll take our first question from Menno Hulshof with TD Securities.

（操作員說明）我們將回答道明證券的 Menno Hulshof 提出的第一個問題。

I'll start with a question on Corrib. If we assume that it does close, what is your best guess in terms of the purchase price, net of accrued free cash flow? We've run some numbers on this end, and our estimate is very low. But any thoughts here would be helpful.

我將從關於 Corrib 的問題開始。如果我們假設它確實關閉了，您對購買價格的最佳猜測是什麼，扣除應計的自由現金流？我們為此計算了一些數字，我們的估計非常低。但這裡的任何想法都會有所幫助。

Thanks, Menno. I'm going to pass it over to Lars to address that one.

謝謝，門諾。我將把它交給拉斯來解決這個問題。

Menno, I think you're thinking about it the right way in terms of cash to close at December 31 of this year from a modeling perspective, and then obviously full access to the cash flows in 2023. I think the number that is good to use for year end this year would be a purchase price of CAD 100 million to CAD 150 million, if it were to close at the end of 2022. And that would be inclusive of the contingent payment that is in the money for 2023, which was USD 25 million. So I think that's the best way to model it and a good way in terms of how you're thinking about it.

Menno，我認為你在考慮現金方面的正確方式，從建模的角度來看，在今年 12 月 31 日關閉，然後顯然可以在 2023 年完全獲得現金流。我認為這個數字對如果在 2022 年底結束，今年年底的購買價格將是 1 億至 1.5 億加元。這將包括 2023 年的或有付款，即2500 萬美元。所以我認為這是最好的建模方式，也是你思考它的好方法。

Terrific. And then on acquisitions, in the past you've talked about smaller Euro gas packages potentially becoming available. And I know there are limits to what you can say here. But like at a high level, what are the boxes that need to be checked to pull the trigger on another Euro package? And do you see these opportunities being able to compete with buybacks at the current share price?

了不起。然後在收購方面，您過去曾談到可能會出現較小的歐元天然氣套餐。而且我知道你在這裡可以說的內容是有限的。但就像在高層次上一樣，需要檢查哪些框才能扣動另一個歐元包裹的扳機？您是否認為這些機會能夠以當前股價與回購競爭？

Thanks, Menno. I'll pass it back to Lars to address how we're thinking about that relative to our return of capital framework.

謝謝，門諾。我將把它傳回給拉斯，以說明我們如何考慮與我們的資本回報框架相關的問題。

Yes. Thanks, Dion. And maybe I'll just rewind a little bit, Menno. With the return of capital grid, what we really wanted to do was shift focus back to the $11 per share of free cash flow that we're generating. Dion mentioned $1.8 billion of free cash flow in 2022. That's on a pro forma basis. That's probably not a bad proxy to think about free cash flow for 2023. And then what the return of capital grid is going to do is create discipline in terms of where we are allocating capital. There's flexibility in there in terms of how we return capital at this point in time. We'll be doing it through share buybacks.

是的。謝謝，迪翁。也許我會倒帶一點，門諾。隨著資本網格的回歸，我們真正想做的是將注意力轉移到我們正在產生的每股 11 美元的自由現金流上。迪翁提到了 2022 年 18 億美元的自由現金流。這是在備考基礎上。考慮到 2023 年的自由現金流，這可能不是一個糟糕的代理。然後資本網格的回報要做的是在我們分配資本的地方建立紀律。在此時我們如何返還資本方面存在靈活性。我們將通過股票回購來做到這一點。

And as importantly, in terms of acquisitions, when it comes to North America, nothing big. We think that we have done the heavy lifting in terms of high-grading the inventory here in North America. It'll be more tuck-in bolt-ons in terms of our existing position within North America. And then Europe, I think we've had good success, a good track record there of making acquisitions. Now that those acquisitions will continue to compete with returning capital to shareholders, we will be looking for, I'd call it, deep value type opportunities in Europe as we move forward here. Some acquis -- sorry, some announcements have been made in the past in terms of potential opportunities in jurisdictions like Netherlands. But again, it's going to have to be competitive in terms of where we return capital.

同樣重要的是，在收購方面，就北美而言，沒什麼大不了的。我們認為我們在北美的高等級庫存方面已經完成了繁重的工作。就我們在北美的現有地位而言，這將是更多的補充。然後是歐洲，我認為我們取得了很好的成功，在那裡進行了良好的收購記錄。既然這些收購將繼續與向股東返還資本競爭，我們將在歐洲尋找，我稱之為深度價值類型的機會，因為我們在這裡前進。一些收購 - 對不起，過去已經發布了一些關於荷蘭等司法管轄區潛在機會的公告。但同樣，它必須在我們的資本回報方面具有競爭力。

We'll take our next question from Greg Pardy with RBC Capital Markets.

我們將回答來自加拿大皇家銀行資本市場的 Greg Pardy 的下一個問題。

Dion and Lorenzo, just all the very best in your -- I guess it's your second shot at your retirement. A couple -- maybe just one maybe modeling question is what kind of book tax rate should we sort of think about on a consolidated basis? And Lars, I want to ask that, just that tax question. Is it still, I don't know, 11%, 12% or so pre-tax?

迪翁和洛倫佐，你們的一切都很好——我想這是你們退休後的第二次嘗試。一對夫婦——也許只是一個建模問題是我們應該綜合考慮什麼樣的賬面稅率？ Lars，我想問一下，就是那個稅收問題。還是，我不知道，11%，12%左右的稅前嗎？

Yes. So I think for 2022 -- and I'll sort of correlate these tax rates to the pro forma numbers. So we're referencing $2.4 billion of cash flow for 2022. In the context of that, 10% to 11% is still a good way to think about it, Greg. For 2023, I would say that rate has gone up in the context of current strip pricing. I would sort of peg it at 13% to 15% for full year 2023.

是的。所以我認為 2022 年 - 我會將這些稅率與備考數字相關聯。所以我們參考的是 2022 年 24 億美元的現金流。在這種情況下，10% 到 11% 仍然是一個很好的思考方式，格雷格。對於 2023 年，我想說的是，在當前帶鋼定價的背景下，這一比率已經上升。我會在 2023 年全年將其固定在 13% 到 15% 之間。

Okay. What about book? Sort of like 30-odd percent or so, just as a book tax rate?

好的。書呢？有點像百分之三十左右，就像書本稅率一樣？

Sorry, could you repeat that, Greg?

抱歉，你能再說一遍嗎，格雷格？

Yes, just your book tax rate, what would you sort of be thinking? I know you're giving me the cash taxes, but just as a book tax rate?

是的，只是你的賬面稅率，你會怎麼想？我知道你給我現金稅，但只是作為賬面稅率？

Yes. So I think a good way to think about it is in the 30% range.

是的。所以我認為考慮它的一個好方法是在 30% 範圍內。

Okay. Okay. Great. And maybe just sort of related to Menno's question. With Europe now kind of thinking very differently about gas as a transition fuel, as you mentioned, are there -- are you -- are policymakers or governments now starting to come to you as one of the long-standing developers in Europe in terms of just encouraging domestic supply growth as opposed to just relying upon imports?

好的。好的。偉大的。也許只是與 Menno 的問題有關。正如您所提到的，隨著歐洲現在對天然氣作為過渡燃料的看法非常不同，是否有 - 你是 - 政策制定者或政府現在開始作為歐洲長期發展商之一來找你只是鼓勵國內供應增長而不是僅僅依賴進口？

Thanks, Greg. I'll take this one. I think what's happening when you look over the last several quarters with the crisis, and I believe it is an energy crisis in Europe, the policymakers have triaged their approach with starting with LNG, which is material, albeit a longer timeline. Next there's been discussions around offshore. And that leads us to your question around onshore. And so yes, we are having continued engagement in both Netherlands and Germany in particular. Questions that would be framed around what could Vermilion as an operator in some of those jurisdictions for decades be able to offer with increased activity?

謝謝，格雷格。我要這個。我認為當你回顧過去幾個季度的危機時會發生什麼，我相信這是歐洲的能源危機，政策制定者已經從液化天然氣開始對他們的方法進行了分類，儘管時間較長，但液化天然氣很重要。接下來是圍繞離岸的討論。這將我們引向您關於陸上的問題。所以，是的，我們特別是在荷蘭和德國繼續參與。圍繞 Vermilion 作為其中一些司法管轄區的運營商幾十年來能夠通過增加活動提供什麼而提出的問題？

What we've done, we always focus on what we can control. So we've added staff in both Netherlands and Germany, technical staff to be able to prepare for higher levels of activity. I would caution that time lines are longer in Europe. And so the time from a conversation to action and drills is longer. But I would say it's encouraging and somewhat logical that you would see some increased activity associated with the current situation and need for more domestic supply from responsible producers like Vermilion.

我們所做的，我們總是專注於我們可以控制的。因此，我們在荷蘭和德國都增加了技術人員，以便能夠為更高水平的活動做好準備。我會警告說，歐洲的時間線更長。因此，從對話到行動和演習的時間更長。但我想說的是，你會看到一些與當前形勢相關的活動增加，並且需要來自像 Vermilion 這樣負責任的生產商的更多國內供應，這是令人鼓舞的，而且在某種程度上是合乎邏輯的。

And we'll take our next question from Patrick O'Rourke with ATB Capital Market.

我們將回答來自 ATB Capital Market 的 Patrick O'Rourke 的下一個問題。

Congratulations to Lorenzo. Obviously, a long and well-storied career here at Vermilion. So, appreciative of all of your work. Guys, maybe just to build on Greg's question there. You talked about sort of the regulatory regime and time lines in Europe. As we get into the 2023 budgeting cycle and as you look at the portfolio, sort of what are the other hurdles to bringing on production in Europe? Where could you allocate capital to sort of capture this windfall gas price that we're seeing over there in sort of the quickest manner? Is it in the Netherlands? Is it in the CEE? What are sort of the infrastructure constraints? I don't think that you would have any in the Netherlands there.

祝賀洛倫佐。顯然，在 Vermilion 有著悠久而傳奇的職業生涯。所以，感謝你所有的工作。伙計們，也許只是為了建立格雷格的問題。你談到了歐洲的監管制度和時間表。隨著我們進入 2023 年的預算週期，當您查看投資組合時，在歐洲實現生產的其他障礙是什麼？您可以在哪里分配資金來以最快的方式捕獲我們在那邊看到的這種意外的天然氣價格？是在荷蘭嗎？是在中東歐嗎？有哪些基礎設施限制？我認為您在荷蘭不會有任何東西。

Well, thanks, Patrick. I think first of all, the acquisition with Corrib to bring on that 7,700 BOE a day, it's probably the most impactful thing. That in hindsight was very well timed, and we're excited to close that at the end of this year. So again, that's 7,700 BOE there. From an organic point of view, we're focused on every BU to look for opportunities. I think in Germany, we do have a deep inventory of drilling prospects that, again, we've added resources back to look at some of the more, I would say, larger targets, but a little more higher risk. So that's something we're reviewing. CEE is an area, once we get these permits in place like SA-10, we're able to follow through and drill wells in shorter time lines. And then Netherlands, we used to drill 4 to 6 wells in the Netherlands. We're drilling 2 in the second half this year. So our view would be less work back to those higher levels of activities.

好吧，謝謝，帕特里克。我認為首先，收購 Corrib 帶來每天 7,700 BOE，這可能是最有影響力的事情。事後看來，這是非常及時的，我們很高興在今年年底結束。再說一次，那裡有 7,700 BOE。從有機的角度來看，我們專注於每個 BU 以尋找機會。我認為在德國，我們確實有大量的鑽探前景庫存，我們再次增加了資源來研究一些更大的目標，我想說的是，更大的目標，但風險更高一些。這就是我們正在審查的內容。中東歐是一個領域，一旦我們像 SA-10 一樣獲得這些許可證，我們就能夠在更短的時間內跟進並鑽井。然後是荷蘭，我們過去常常在荷蘭鑽 4 到 6 口井。今年下半年我們要鑽2個。所以我們的觀點是減少工作回到那些更高層次的活動。

So I would say all jurisdictions, Netherlands does have the potential to increase activity as well as Germany. We drilled 3 wells earlier this year. And we're looking at on the gas side, what we might be able to do in late 2023 and into 2024. So quite excited to be having those conversations. And again, our near-term focus is getting more staff in those BUs to be able to react once it aligns with the regulatory framework to be able to put more capital into those business units.

所以我想說所有的司法管轄區，荷蘭和德國一樣有增加活動的潛力。今年早些時候，我們鑽了 3 口井。我們正在關注天然氣方面，我們可能在 2023 年末到 2024 年能夠做些什麼。能夠進行這些對話非常興奮。同樣，我們近期的重點是讓這些業務部門的更多員工能夠在符合監管框架後做出反應，以便能夠將更多資金投入這些業務部門。

Okay. And then maybe shifting over to the return of capital framework here, and in particular the dividend. You guys referred to ratable dividend increases. The pro forma math that we have on today's dividend increase would sort of be sub-4% of 2023 free cash flow. So I wonder in terms of -- maybe you can provide some goalposts around what you mean with respect to ratable, and also sort of the cadence or review period, like how frequently you plan to review the dividend going forward here.

好的。然後可能會轉移到這裡的資本回報框架，特別是股息。你們提到了可評級的股息增長。我們對今天股息增長的預估數學將低於 2023 年自由現金流的 4%。所以我想知道 - 也許你可以提供一些關於你對可評級的意思的目標，以及節奏或審查期，比如你計劃在這裡審查股息的頻率。

So I'll pass that one to Lars to talk about our thoughts on the base dividend.

所以我會把那個傳給拉斯，談談我們對基本股息的看法。

Yes. Thanks, Patrick. The way we have framed the base dividend component is look to not exceed 10% of our cash flows at mid-cycle pricing. And I think that's some discipline that we want to continue to have in the business to ensure that, that base dividend is resilient. Based on our current numbers with the increase today, we're about $50 million to fund the increased dividend that we did announce today. So that is where there is ample room to continue increasing that and still be in line with our not to exceed 10%.

是的。謝謝，帕特里克。我們制定基本股息部分的方式是在周期中期定價時不超過我們現金流的 10%。我認為這是我們希望在業務中繼續擁有的一些紀律，以確保基本股息具有彈性。根據我們今天增加的當前數字，我們大約有 5000 萬美元用於資助我們今天宣布的增加的股息。所以這就是有足夠的空間繼續增加它，並且仍然符合我們不超過 10% 的要求。

Now in terms of the cadence or how we will do that, I would say at this point, we're looking for ratable type increases over time. We think that also with the return of capital framework that we announced today, there is flexibility in terms of how we return that capital. The base dividend will be one mechanism that we use or one medium that we use. It will not be the majority of capital that will be returned through that. So that's where we have flexibility in terms of share buybacks, variable dividends, special dividends. We will err towards buybacks at this point in time just based on the data points that we're reviewing where we think capital is best allocated.

現在就節奏或我們將如何做到這一點而言，我想說的是，我們正在尋找隨著時間的推移可評級的類型增加。我們認為，同樣隨著我們今天宣布的資本回報框架，我們在如何回報資本方面具有靈活性。基本紅利將是我們使用的一種機製或我們使用的一種媒介。通過這種方式返還的資本將不會是大部分。這就是我們在股票回購、可變股息、特別股息方面具有靈活性的地方。僅根據我們正在審查的數據點，我們將在這個時間點錯誤地回購我們認為最好的資本配置。

So hopefully that provides a little bit of clarity in terms of the fixed base dividend will be one component of our return of capital. But we truly want to make sure that, that base dividend is fixed and resilient in prices that are much lower than what we're seeing today.

因此，希望在固定基數股息方面提供一點明確性，這將是我們資本回報的一個組成部分。但我們真的想確保，基本股息是固定的，並且價格比我們今天看到的要低得多。

(Operator Instructions). We'll take our next question from Josef Schachter with Schachter Energy Research.

（操作員說明）。我們將向 Schachter Energy Research 的 Josef Schachter 提出下一個問題。

In Europe, we're seeing a lot of demand management. U.K. talking about preparing for blackouts. Germany telling certain industries, you may get cut back certain percentages of gas, assuming the Russians are aggressive in terms of cutting back. Is there anything going on, on the supply management side where they're asking you to hold back and put into storage near consuming areas, gas to bring on later? Or if you have new wells coming on, bring them on close to the winter? Is there any supply management stuff going on that would impact your Vermilion in Q3, Q4 and into Q1 of next year?

在歐洲，我們看到了很多需求管理。英國正在談論為停電做準備。德國告訴某些行業，假設俄羅斯人在削減方面積極進取，你可能會削減一定比例的天然氣。在供應管理方面，他們要求您暫緩並儲存在消費區附近，是否有任何事情發生，稍後再帶上天然氣？或者，如果你有新的水井，在接近冬天的時候把它們打開？是否有任何供應管理工作會影響您在第三季度、第四季度和明年第一季度的 Vermilion？

Josef, I'll take that one. The quick answer is no. We're selling all the gas that we're producing, and there's no discussions around us storing or restricting our production.

約瑟夫，我要那個。快速回答是否定的。我們正在出售我們生產的所有天然氣，我們周圍沒有討論儲存或限制我們的生產。

Okay. Good. That should do it.

好的。好的。那應該這樣做。

Thanks, Josef. With that, I think that -- I think we have no more questions. So I guess, Samara, we would like to thank everyone again for participating in our Q2 conference call and look forward to future updates.

謝謝，約瑟夫。有了這個，我認為 - 我認為我們沒有更多問題了。所以我想，薩馬拉，我們要再次感謝大家參加我們的第二季度電話會議，並期待未來的更新。

Thank you. And this concludes today's call. Thank you for your participation. You may now disconnect.

謝謝你。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。