A rig operator works on a multi-well pad near Fort McMurray, Alta.Kevin Van Paassen
Vermilion Energy Inc. still sees a buyer's market for energy assets despite the industry's recovery this year, and its chief executive said the company has its eyes peeled for acquisitions.
Vermilion, which reported stronger-than-expected second-quarter results on Thursday, has been no stranger to deals, acquiring about $600-million of assets in Canada and Europe over the past year. The company is looking in each of its main operating regions, though North America is the biggest focus area.
"I would characterize it as a buyer-friendly acquisition market," Vermilion CEO Lorenzo Donadeo said in an interview. "It's a market that's really providing a number of acquisition opportunities at what we think are some pretty attractive prices."
The company has been evaluating a number of potential buys, with the expectation of more free cash flow next year as it wraps up construction work on the Corrib gas project in Ireland. That development is expected to yield about $200-million in annual cash flow.
Mr. Donadeo said Vermilion has been close to striking deals recently, but came up short in some competitions for assets.
"I would say the highest near-term opportunities are probably in North America," he said. Tight-oil resource plays are at the top of the shopping list.
In the past year, Vermilion has bought assets in the Netherlands, Germany and southeastern Saskatchewan, where it paid $400-million for a privately held oil producer.
For the second quarter, the company reported production of 58,089 barrels of oil equivalent a day, up 12 per cent from the same period a year earlier. The increase was driven by a 27 per cent gain in Western Canadian output, especially Mannvile liquids-rich gas and Cardium oil plays. The company bumped up its full-year production target by 500 barrels of oil equivalent a day to 48,500-49,500.