Jeremy Mccrea, an analyst from BMO Capital, has initiated a new Buy rating on Vermilion Energy (VET).
Jeremy Mccrea has given his Buy rating due to a combination of factors surrounding the strong potential of Vermilion Energy’s operations and assets. The company’s conventional inventory boasts a high level of profitability, which is a critical point in Mccrea’s analysis. Despite the volatility in the stock price, influenced by factors such as fluctuating European gas prices, windfall taxes, and occasional production outages, Vermilion Energy has been diligently executing its strategy. This includes the development of the Montney wells in British Columbia with new, more effective completion designs and the exploration of potentially high-impact natural gas wells in Germany, which are expected to yield results soon. Vermilion’s proactive approach in enhancing production and managing controllable elements underpins the Buy rating.
Furthermore, Mccrea’s assessment hinges on a 4-point checklist that evaluates inventory quality and duration, valuation, risk, and market sentiment. Vermilion’s strategic shift in its completion designs for Montney wells has led to a significant improvement in output, with recent wells on track for rapid payouts. Additionally, the upside potential in Germany, with its high-return prospects and substantial estimated ultimate recoveries, offers a compelling case for investment. Despite the inherent risks and the company’s historical leverage, the initial success in these wells could lead to substantial value creation. Mccrea’s Buy recommendation reflects his confidence in Vermilion’s ability to capitalize on these opportunities and deliver strong results.
According to TipRanks, Mccrea is a 5-star analyst with an average return of 15.4% and a 54.44% success rate. Mccrea covers the Energy sector, focusing on stocks such as Baytex Energy, Obsidian Energy, and Crescent Point Energy.
In another report released on May 2, Stifel Nicolaus also maintained a Buy rating on the stock with a C$22.00 price target.
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Vermilion Energy (VET) Company Description:
Vermilion Energy, Inc.engages in the business of acquisition, exploration, development, and production of oil and natural gas. It operates through the following segments: Australia, Canada, France, Ireland, Germany, United States of America, the Netherlands, and Corporate. The company was founded by Lorenzo Donadeo and Claudio A. Ghersinich in January 1994 and is headquartered in Calgary, Canada.
