Alberta Oil - - JUNIORS -

Ver­mil­ion is the Cana­dian pro­ducer with an in­ter­na­tional ad­van­tage. While oil and gas pro­duc­ers strug­gle with de­pressed North Amer­i­can nat­u­ral gas prices, Ver­mil­ion en­joys much bet­ter pric­ing with its global pro­duc­tion. Be­ing di­ver­si­fied in­ter­na­tion­ally is unique for a Cana­dian independent.

Ver­mil­ion’s op­er­at­ing ar­eas look more like list of coun­tries par­tic­i­pat­ing in the Olympics than they do a list of as­sets be­long­ing to an oil and gas ex­plorer that’s not in the ma­jor league. Ver­mil­ion has op­er­a­tions in Canada, the U.S., France, Ger­many, Ire­land, Aus­tralia and the Nether­lands.

Those in­ter­na­tional op­er­a­tions have al­lowed Ver­mil­ion to con­tinue to pay its div­i­dend through this oil col­lapse while also main­tain­ing a solid bal­ance sheet. With nat­u­ral gas prices well over $6 per Mbtu, Ver­mil­ion’s Euro­pean pro­duc­tion has been earn­ing three times what North Amer­i­can gas has in 2016. Ver­mil­ion con­tin­ues to main­tain a size­able amount of Cana­dian-based pro­duc­tion with 25,000 boe/d, but in­ter­na­tional pro­duc­tion is its lion’s share.

Ver­mil­ion, which was launched back in 1994, is one of the older independent pro­duc­ers still op­er­at­ing. The com­pany listed for $0.10 per share on the Alberta stock ex­change in the spring of 1996 and joined the TSX later that year. What drove Ver­mil­ion to Europe in the first place was a be­lief that as­set prices in the mid-90s in Western Canada were too high. It was a quick change in strat­egy that only an en­tre­pre­neur­ial young com­pany could make.

Two of Ver­mil­ion’s three ini­tial co-founders are still on its board, with Lorenzo Don­adeo act­ing as chair­man and Clau­dio Ghersinich act­ing as a direc­tor. Ver­mil­ion’s di­ver­si­fied as­set base may make it less ap­peal­ing to larger suit­ors as an ac­qui­si­tion can­di­date, but that should suit long-time share­hold­ers just fine as they should con­tinue to re­ceive a re­li­able and grow­ing div­i­dend stream for years to come.


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