Vermilion Energy Inc. (VET): A Bull Case Theory

We came across a bullish thesis on Vermilion Energy Inc. on Value investing subreddit by International_Lie372. In this article, we will summarize the bulls’ thesis on VET. Vermilion Energy Inc.’s share was trading at $7.60 as of August 22^nd. VET’s trailing and forward P/E were 11.22 and 9.43 respectively according to Yahoo Finance.

Over the past year, Vermilion Energy has made a series of strategic moves that have significantly strengthened its operational and financial profile, creating a compelling investment opportunity. The company acquired Westbrick, adding approximately 50,000 boe/d, while divesting assets producing 16,000 boe/d at a net cost of CAD 540 million (USD 389 million), with projected synergies of up to CAD 300 million NPV. If realized, these synergies imply an effective cost of roughly USD 4,500 per flowing barrel for the incremental 34,000 boe/d, highlighting strong potential returns. Additionally, Vermilion’s European gas assets, including significant new and replacement finds, command premium pricing, further enhancing the value proposition.

While oil and gas price volatility remains a key risk, Vermilion’s diversified international portfolio provides exposure to different pricing benchmarks, partially mitigating commodity risk. AECO natural gas prices, currently at 35-year lows, are expected to rebound with the recent commissioning of LNG Canada, which should absorb about 10% of Canadian natural gas production over six months, though geopolitical developments, such as the conclusion of the Ukraine conflict, could affect European price premiums. Oil prices, when adjusted for inflation, historically range between USD 61–78 per barrel, suggesting upside potential from current levels.

The company is currently trading near bear-case valuations, while a likely base-case scenario points to USD 12–15 per share as debt targets are met and share buybacks reduce outstanding stock. With management compensation heavily tied to share price appreciation, alignment with shareholders is strong, making Vermilion an attractive opportunity with significant upside relative to current market pricing.

Previously we covered a bullish thesis on Vermilion Energy Inc. (VET) by Unemployed Value Degen in March 2025, highlighting the company’s aggressive growth, European gas discoveries, and Westbrick acquisition. The stock has appreciated modestly since then as strategic consolidation and operational improvements played out. International_Lie372 shares a similar thesis but emphasizes valuation, synergies, and commodity price risks, providing a more detailed financial perspective.

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Disclosure: None.