Canada-based gas producer Vermilion Energy is set to exit fully from the US market following an agreement to sell its remaining assets in Wyoming to an undisclosed buyer for C$120m ($87.75m).
The assets involved in the deal include production of approximately 5,500 barrels of oil equivalent per day (boe/d), with 81% comprising oil and liquids.
Also included in the transaction are roughly 10 million barrels of oil equivalent (mmboe) of proven developed producing reserves, as evaluated by McDaniel & Associates Consultants, as of the end of last year.
The transaction is effective from 1 January 2025, and is expected to conclude in Q3 2025, contingent on standard closing conditions.
The agreement also features C$10m ($7.3m) in contingent payments dependent on WTI prices over two years starting from 1 July 2025.
Vermilion had earlier disposed its East Finn assets in the US in 2023. The company intends to redirect its focus to its primary gas-weighted assets located in Canada and Europe.
Proceeds from the latest transaction will be channelled towards debt repayment, aiming to speed up deleveraging efforts and strengthen Vermilion’s balance sheet. The company projects exiting 2025 with net debt amounting to C$1.3bn ($950m) and a trailing net debt to funds from operations (FFO) ratio of 1.3 times, based on prevailing commodity pricing and operational strategies.
Vermilion has revised its capital expenditure for 2025 to C$630–C$660m ($460.7-$482.6m), reflecting a C$100m ($73m) reduction from its prior capital budget range. This adjustment accounts for the removal of exploration and development capital tied to divested assets in Saskatchewan and the US post-closure.
For the full year and second half of 2025, production is expected to fall between 117,000 and 122,000boe/d, with second-half production being 68% natural gas-weighted.
Looking ahead, over 90% of production is anticipated from Vermilion’s global gas portfolio and more than 80% of capital allocation is expected for these assets.
Vermilion plans to continually assess investment levels amid market volatility and adjust as needed to prioritise free cash flow over production growth through 2025 and 2026.
In a related move last month, Vermilion announced the sale of its Saskatchewan and Manitoba assets for C$415m ($303.4m). These assets were producing approximately 10,500boe/d with an oil and liquids composition of 86% at the time of the sale announcement.
Earlier this year, Vermilion finalised the acquisition of Westbrick Energy for C$1.07bn ($780m), enhancing its presence in Alberta’s Deep Basin. This acquisition included about 1.1 million acres of land with Vermilion holding a net interest in 770,000 acres along with four operated gas plants having a combined processing capacity of 102 million cubic feet per day.
