Vermilion Energy to acquire Alberta assets in deal with Westbrick Energy
Vermilion Energy Inc., Calgary, has agreed to acquire Westbrick Energy Ltd., a privately held oil and gas company operating in the liquids-rich Alberta Deep Basin, for total consideration of $1.075 billion (Can.).
"The Deep Basin is an area Vermilion has been operating in for nearly three decades and is currently the largest producing asset in the company,” said Dion Hatcher, president and chief executive officer of Vermilion in a release Dec. 23.
“The acquisition adds 50,000 boe/d of stable production and approximately 1.1 million (770,000 net) acres of land from which Vermilion has identified over 700 drilling locations, providing a robust inventory to keep production flat for over 15 years while generating significant free cash flow to enhance the company's long-term return of capital framework,” Hatcher continued.
The drilling locations lie in the Ellerslie, Notikewin, Rock Creek, Falher, Cardium, Wilrich, and Niton formations.
The company said the deal “enhances depth and quality of Vermilion's Deep Basin inventory and complements the company's high-growth, liquids-rich Montney asset.”
In addition to the acreage, the deal provides Vermilion with four operated gas plants with total capacity of 102 MMcfd in the southeast portion of the Deep Basin trend in Alberta.
The deal excludes undeveloped Duvernay rights on about 300,000 (290,000 net) acres of land which will be retained by Westbrick shareholders, Vermilion said.
Pro forma outlook
Upon closing of the deal, expected in first-quarter 2025, Vermilion expects to be a 135,000-boe/d entity with greater than 80% of its production derived from its gas portfolio, consisting of about 550 MMcfed of liquids-rich gas in Alberta and BC and over 100 MMcfd of European gas with direct exposure to LNG pricing.
The operator anticipates corporate 2025 production to be 126,000-133,000 boe/d with capital expenditures of $725-775 million (Can.). Inclusive of the incremental capital being allocated to the newly acquired Deep basin assets, the aggregate capital investment into Vermilion's global gas portfolio will represent over 70% of total capital for 2025, the company said.