Market value: CDN$ 2.07 billion
Total assets: C$1746 million
Total liabilities: C$486 million
Net debt: 285 million
yield:7.6%(CDN$ 0.19/month)
payout ratio: 2007:35% 2006:38% 2005:46%
funds from flow per unit: 2007: C$5.28 2006: C$4.86 2005: C$4.08
netback(per BOE): 2007: C$33.75 2006: C$34.25 2005: C$30.15
Production: current: 33 743 boe/d 2007: 31,325 boe/d 2006: 27,401 boe/d 2005: 25,166 boe/d
Reserves(proved&probable): 2007:127.6 million boe 2006: 123.3 million boe 2005:110.8 million boe.
Current reserves consist of: 58% oil, 4% NGL, Oil based gas 14%, Canadian Gas 24%, Reserve Life Index: 10.6 years.
reserves per trust unit: 1.66 BOE
*Geographically diverse asset base: Canada(gas), France(oil), Australia(oil), Netherlands(gas),
*Management ownership 9%
*Converting to a corporation between 2011 to 2013
*48% ownership of Verenex Energy Inc.(TSX:VNX)
There isn't much upside in Vermillion's own oil&gas assets but Verenexs concessions in Libya are a different mather: Verenex announces increased oil and gas resource estimates for Area 47 in Libya
Area 47 Gross Contingent Resources September 30, 2008 Total- million barrels oil equivalent(5) Low Estimate 180.7, Best Estimate 351.7, High Estimate 1,099.5
One has to keep in mind that Libya's revenue sharing contracts are very strict and Verenex's share of the revenues will probably be below 10% of the total.
A some what conservative value estimate for Vermillion ((33.75+34.25+30.15)/3)x0.70)x(127.6x0.7)-486+200=1759(30% discount on reserves and netbacks(due to lower ng& oil prices), Verenex shares valued at 200 million).
Update
After listening to the Vermillion earnings call it seems clear that Vermillion is planning to sell the Verenex stake. The current market situation will probably either delay the transaction or will result in a lower price. The latter alternative is unlikely since Vermillion has no urgent need for cash.
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