Vermilion Energy has announced the strategic acquisition of Westbrick Energy, a privately held oil and gas company with operations in the Deep Basin in Alberta, Canada.
The C$1.075 billion ($746.53 million) deal is expected to close in the first quarter of 2025, increasing Vermilion production by an estimated 50,000 barrels of oil equivalent per day (boepd), with a mix of 75 % gas and 25% liquids.
Production is expected to generate more than C$110 million in free cash flow annually, based on current commodity prices.
The proceeds from the acquired assets will be divided evenly between liquids and gas. Vermilion also plans to hedge gas production to manage financial risks.
The acquisition expands Vermilion’s footprint in the Deep Basin with 1.1 million hectares of land and four operated gas plants with a capacity of 102 million cubic feet per day (mmcf/d).
It also adds proven developed production (PDP) and proven plus probable (2P) reserves of 92 million barrels of oil equivalent (mboe) and 256 mboe respectively, with a significant gas component in both categories.
These estimates are based on evaluations by McDaniel & Associates Consultants.
Vermilion Energy President and CEO Dion Hatcher said, “The strategic acquisition of Westbrick represents a significant step forward in Vermilion’s North American high-performance initiative to increase operating scale and improve full cycle margins in the liquids-rich Deep Basin.
“The Deep Basin is an area where Vermilion has operated for nearly three decades and is currently the company’s largest asset.”
Vermilion will draw on its C$1.35 billion revolving credit facility to finance the acquisition.
Additional financing includes a new C$250 million term loan from TD Securities and a $300 million bridge facility underwritten by Royal Bank of Canada and TD Securities.
Post-acquisition, Vermilion’s net debt is expected to be C$2 billion, with a ratio of 1.5 times net debt to finance operations and liquidity of approximately C$500 million.
“Vermilion Energy to Acquire Westbrick Energy for $746 Million in Canada” was originally created and published by Offshore Technology, a brand owned by GlobalData.
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