Vermilion Energy Inc. Price & Performance (VET)

Production averaged 84,543 meters a day, which was above the midpoint of our original guidance and represents annual production per share growth of 4%. Our international production increased 12% year over year. Reflecting strong operational run times in Australia, the midyear start up of the gas plant on the SA-ten block in Croatia. Our North American production was down 5% year over year This is reflecting the full year impact from the 5,500 BOE per day investment in in Southeast Saskatchewan that was completed in 2023. Now that was partially offset by the growth from our Montney asset We generated $1,200,000,000 or $7.63 per share of fund flow $583,000,000 or $3.69 per share of free cash flow. Both representing a 9% increase over 2023 a per share basis. We successfully executed a $623,000,000 E and D capital program within budget. Capital program included significant investments in New Growth Project in Germany, Croatia and the B. C. Montney, which will all contribute strong free cash flow in future years. We've returned $216,000,000 or approximately 10% of our market cap to our shareholders in 2024.

That comprised of $75,000,000 Vermilion hundred and $41,000,000 of share buybacks. In December, we announced an 8% increase to our quarterly dividend effective Q1 twenty twenty five. This represents our fourth consecutive increase in reinstating the dividend. Net debt decreased by 10% in 2024 nine sixty seven million dollars at the end of the year.

Representing a net debt to trailing fund flow ratio of 0.8 times the lowest ratio in over a decade.

Included in our year end release was an updated reserve estimate for 2024. Total proved plus probable reserves increased by 1% from the prior year $435,000,000 boes Vermilion. Primarily due to extensions and improved recovery on the Mica Montney asset. We added 26,000,000 BOEs of PDP reserves 36,000,000 BOEs of 2P reserves at an average FD and A cost including future development costs of $22.81 per PDP BOE. And 15.77 per 2PBOE. Now this results in a recycle ratio of 1.6x on a PDP basis 2.3 times on a 2P basis.

The 2024 FD and A figures include significant upfront capital costs associated with the early stage growth projects such as the Montney infrastructure as well as Germany and Croatia exploration. Which limited reserves compared to our internal estimates have been recognized to date. Our PDP and 2P reserve life index as of 12/31/2024 was five point four percent and four point one years respectively. Both of these are consistent with the long term average The after tax net present value of our PDP reserves discounted at 10% is $2,800,000,000 and the after tax net present value of our 2P reserves Production for the fourth quarter averaged 83,536 views per day, which includes the impact from planned third party turnaround activity and partial shut in of some Canadian gas in response to weak April prices. We generated $263,000,000 of fund totals, that's $1.7 per share $62,000,000 of free cash flow. Of which $36,000,000 was returned to shareholders by the dividend and share buybacks. D and D capital increased in Q4 relative to Q3 as drilling activity picked up in Germany and Canada. Germany activity included the completion and testing of the successful second well and the commencement of drilling on a third exploration well that was originally scheduled for 2025.

Net debt increased slightly due to the stronger U. S. Dollar and the full repayment of the Montney Battery lease. This provides immediate lease and interest savings well as increasing our excess free cash flow that's available for shareholder returns in 2025 and beyond. As I mentioned, drilling and fleeces activity picked up in Q3 In Europe, our primary focus was on the German deep gas exploration program where we progressed facility construction and tie in operations on the Osterheide well completed testing operations on the Bissselhors well, including testing upon a second zone subsequent to the quarter. Commenced drilling in the third deep gas exploration well in Germany Bismar, during Q4. And completed drilling it in Q1. I will provide more detail on the successful German exploration program in the following slides. We're also very active in North America during the fourth quarter in Canada and drilled six Montney liquids rich gas wells including five wells on the new eight zero four pad in BC and one land retention well in Alberta. The team continues to make progress towards achieving our $9,000,000 to $9,500,000 decent the deep basin, we drilled, completed and brought up production five liquids rich gas wells.

In Saskatchewan, we drilled and completed six wells and brought on production seven oil wells. In The U. S, we participated in the drilling completions of five gross or 0.6 net non op oil wells. In addition to executing a very active program in Canada, our teams spent the better part of Q4 evaluating the Westberg acquisition where we were successful on and announced on December 23. We're very, very excited about the results 2024 German deep gas exploration program. We have made significant gas discovery on our second gas well. [indiscernible] Bisel Horse, which grew 64% work interest. We tested two zones within this well at a combined restricted rate of $41,000,000 per day Vermilion. With flowing wellhead pressures of 6,200 psi. We've got an estimated EUR of 68 BCF or 43 Bcf net As we announced in late December, this first test first zone tested at a restricted rate of 21,000,000 Vermilion day of gas with a flowing wellhead pressure of 6,200 psi. Subsequent to year end, we tested the second zone in this well, which flow tested at a restricted grade of 20,000,000 a day with a similar pressure of 6,200 psi. Based on our assessment, we believe the Viscile Horse structure is large enough to support an additional four to six follow-up locations.

We expect to bring the first well on production in the first half of twenty six and are advancing options to debottleneck our takeaway capacity in the second half of 'twenty seven sorry, first half of 'twenty seven given the very strong deliverability of this well. The successful development of these follow-up locations as well as the additional prospects identified across our land base, we see the potential to double our current European 2P gas reserves Subsequent to year end, we also include drilling operations and devised more gas exploration well were 100% working interest and we discovered multiple hydrocarbon bearing zones. This would mark our third discovery in Germany. The well is currently in the process of being tested. The first well under German program, OsserHyde, which 100% working interest, was drilled in the first half of twenty twenty four and tested at a restricted rate of 17,000,000 a day of gas with a flowing wellhead pressure of 4,600 psi. The wellsite gas facility is nearing completion first gas expected in Q2. In aggregate, the Osterhite and Bissoworse wells tested at a combined rate of 56,000,000 Vermilion day. This is equivalent to 50% of Vermillion's current European gas production.

The success of our deep gas exploration program today validates the technical models and our ability to achieve F and D costs of approximately $1 to $1.5 per MMBtu with the potential to more than double our German production. It is early days in the development of this long life high margin asset that is expected to add meaningful free cash flow in the years ahead. Last week, we were very pleased to announce closing of the Westbridge. Acquisition. The strategic acquisition represents a significant step forward in Vermillion's North American high grading initiative. To increase operational scale and enhance full cycle margins in the deep basin. As a reminder, the acquisition adds 50,000 BUsidea production and over 770,000 net acres of contiguous land along with valuable infrastructure have identified over 700 net future drilling locations providing a robust inventory to keep production flat for over fifteen years. While generating significant free cash flow. As shown on the map on this slide, land and infrastructure is very complementary Vermillion's legacy deep basin assets, which we expect to provide operational synergies and add further value over time. Since our first Spirit River, Allersley and Cardium wells going back as far as 02/2009, million has drilled nearly 300 wells spanning the Delaware Basin.

We operate significant infrastructure in the deep basin. Which we will leverage in developing these newly acquired locations. Addition, we were already a partner with Westbrook on approximately 140 of these locations, which speaks both to the operational synergies as well as our knowledge on the asset. Newly acquired locations are competitive with Vermillion's existing B Basin inventory with half cycle returns ranging from 40% to over 100% based on third party reserve engineering estimates. We'll now like to hand over to Lars to discuss our balance sheet deleveraging plans along with our revised 2025 outlook. Thank you, Dion. Vermillion has taken a prudent approach in balancing debt reduction, high grading our asset base and returning capital to shareholders. We have reduced net debt by over $1,000,000,000 from 2020 while also reducing the share count over this time period. This prudent balance of capital allocation provided us the opportunity to complete the opportunistic acquisition of Westbrook with the balance sheet and minimal share issuance. Over the past three years, we have completed over $2,100,000,000 of acquisitions while continuing to reduce the share count and now have a plan to reduce our debt and leverage. Subsequent to the announced acquisition of Westbrook, we issued U. S. $400,000,000 of senior unsecured notes with a maturity date of April 2033 and an interest rate of 7.25%.

This extends our weighted average maturity of our debt to over five years and results in over $1,000,000,000 of liquidity. With the Westbrook acquisition now closed, Vermillion has net debt of approximately $2,100,000,000 today and anticipates about $200,000,000 to $300,000,000 of organic deleveraging in 2025 based on our current forecast assuming no divestments This leaves us with ample liquidity of approximately $1,000,000,000 As part of the Westbrook acquisition, we also launched a process to divest non core assets as another means to accelerate deleveraging while directing 60% of excess free cash flow to the balance sheet. As mentioned, our non core asset disposition program has been formally launched for our Southeast Saskatchewan and Wyoming assets. The Saskatchewan assets include approximately 10,000 barrels a day of production 85% liquids with moderate declines in multilateral development upside. Our Wyoming assets include 5,000 barrels a day 80% liquids of production with multi zone development potential. Including the Niobrara and the Parkman. The interest to date on these packages has been very strong. These are high quality assets with strong retention values that will be incorporated into the decision making process on how to best maximize shareholder value. The potential sale of these assets would help accelerate Vermillion's deleveraging efforts as we remain committed to reducing our net debt to FFO ratio to a target range of one times or less Going back to 2022, Vermillion has taken a a concerted effort to build operational scale where we have a competitive advantage by increasing our ownership in the Irish core project, adding a material position in the Micah Montney oil window and making Vermillion one of the largest operators in the prolific De Basin.

This has been complemented with organic investment into our onshore European gas portfolio, most recently in Germany, and Croatia. The results of these efforts is increased operational scale with 80% of our production and 70% of our capital investment into our global gas portfolio and a reweight of our portfolio towards gas where we see strong demand dynamics across the coming decades. The benefit of this global exposure is stronger realized prices than any of our peers even when factoring in various marketing, and diversification strategies. We have access to LNG driven prices without the cost and risk exposure of liquefying and transporting gas across oceans. With elevated prices in Europe, and multiple successes from our recent exploration program in Germany, including follow-up development expect to maintain our pricing advantage over the coming years. We also expect strong tailwinds for demand and pricing in Western Canada. Where we now have a much larger production and project inventory base to take advantage of this positive trend. Within our Q4 twenty twenty four release, we provided updated 2025 capital budget and production guidance to incorporate the closing of the Westbrook acquisition on February 26, 2025, Annual production is expected to range between one hundred and twenty five one hundred and thirty thousand BOEs a day with E and D capital expenditures of $730,000,000 to $760,000,000 The revised capital program includes an additional 13 gross 12.3 net wells to be drilled on the Westbrook assets bringing the total deep basin well count to 28 gross 24.9 net wells for 2025.

The forecasted 50% increase in 2025 production coupled with efficient operations from an increased position in the deep basin is seen in our 2025 financial guidance. Which includes a substantial reduction in our unit operating and G and A costs. We continue to monitor the tariff situation between The U. S. And Canada, which includes a 10% tariff on Canadian energy exports, Over half of Vermillion's revenue is derived from assets located outside of Canada and the vast majority of our Canadian gas production is sold within Canada. As such, we do not expect the tariffs in place today to have a material impact. Based on forward commodity prices, we forecast 2025 FCF of $400,000,000 The unhedged FFO per share is forecast to increase from $5.61 in 2024 approximately $7.5 in 2025. An increase of over 30% As you will note in our financial guidance table on the prior slide, our lease obligations are substantially lower in 2025 due to the fact we repaid the full Monty Battery lease obligation in Q4 twenty twenty four, which had an interest cost well in excess of our most recent debt issuance. Our return to capital framework has continued to evolve and we believe it provides the appropriate flexibility to effectively manage our business while providing shareholders As Dion mentioned, we announced our fourth consecutive dividend increase effective for Q1 twenty twenty five At $0.13 per share per quarter, annual dividend obligations amount to approximately $80,000,000 or 7% of our forecast FFO providing capacity to manage the dividend through various commodity cycles 2025, we will continue to target shareholder returns at 40% of EFCF inclusive of the quarterly base dividend, with 60% of EFCF going towards debt reduction, The variable component of shareholder returns will continue to be allocated towards share [indiscernible] Since initiating the share buyback program in July, 2022, Vermillion has repurchased and retired 17,800,000.0 shares and reduced our outstanding share count to approximately 154,000,000 shares inclusive of the 1,100,000.0 share issuance associated with the closing of the West These are exciting times at Vermillion.

North America, we are focused on the integration of Westbrook, and operational scale in the deep basin and the continued development of Remontmy asset. We're very pleased to be positioned with a long life liquids rich North American gas portfolio. In addition, the potential U. S. And SaaS events will accelerate our debt reduction, while also improving our full cycle margins. In Europe, we will bring on production in the first of our German deep gas exploration wells by planning for future activity including the development reservoir structure that we successfully discovered. That's our largest discovery in over a decade. These investments along with our share buybacks are expected to add meaningful free cash flow per share in the upcoming years. That concludes our prepared remarks. With that, we would like to open it up for questions. Ladies and gentlemen, we will now begin the question and answer session.

You are using a speakerphone please make sure to lift your handset before pressing any keys. Your first question comes from the line of Greg Pardy from RBC Capital. [indiscernible] Please go ahead.

Hi, it's Justin Ho on for Greg. Thanks for taking my questions. Just first one for me on the the German gas side. So pretty sizable discoveries there on the [indiscernible] we look ahead, we're wondering if you can remind us what types of unrestricted Thanks for that. So just to clarify, yes, timing of the on production dates. So I'll pass it over to Darcy Crew and he can walk you through that. Yes. Thanks, Jeff. Darcy here. On the first discovery we made at Ocea, Haida, we are currently progressing construction of the on-site gas plant there in the tie in to the pipeline system. We do expect first production to be on in 2025. We will be initially rate [indiscernible] due to some downstream capacity constraints, some seasonality constraints. And we do expect that kind of throughout 2025 into 2026, start to see more and more capacity in that area as other production drops off. For the second well at VysilSource, where we tested two zones together in excess of 40,000,000 standard cubic feet a day. Our initial tie in point is kind of the closest tie in point to that well. We would expect to have that tied in in early twenty twenty six.

Again, we'll be rate limited at that initial tie in point to that 3,000,000 to 5,000,000 cubic feet a day. But we have a number of fee bottlenecking options that we are pursuing here in parallel that will take us in a first stage up to about 17,500,000 cubic feet per day in a and the second stage up to 35. We would expect that those debottlenecking activities would incur early twenty twenty seven, [indiscernible] the size of the EURs that we've talked about here. The opportunity to increase these rates per time, you can start to visualize the free cash flow stream that's associated with these wells given that the capital was largely invested as we finished up the year here. So So thanks for the question. And again, we're excited about the impact this is going have on the business. As we mentioned on the call too, it's the structure itself. We talked with a well We're trying to also talk about the size of the structure. We see multiple drilling locations upwards of six locations to follow-up just on this second prospect alone. With that, back to you.

That's great. Thanks for all the detail there. If I can quickly shift gears here. On the sales process for the Saskatchewan, Wyoming assets, could you just update us on where you're at on that process?

Thanks.

You bet. Larry has touched on it on script there. I can add a little more color, but the formal process for SaaS in U. S. Is well advanced. We're in the formal process. We're teasers went out weeks ago and management presentations are ongoing. As you're on the call, these are good quality assets. Their assets are high liquids, high netbacks, reasonable declines drilling opportunities. So we've got a strong retention value for these assets and we're excited to see how our potential bidders are going to try to step up to meet those. So too early to pin a date on it, but we are well advanced in those processes as of today.

Thank you very much. I'll turn it back. Great.

Thank you.

Your next question is from the line of Amir Arie from ATB Capital.

Please go ahead.

Thanks. Good morning, guys. Just a follow-up on the Germany exploration success over there. Can you give us a sense of your next exploration wells that you're planning to grow?

I can get it kicked off here and then I'll let Darcy feel free to add any color. And so first of all thanks for the question. We've messaged not only two wells per year. If you think about last year, we actually drilled three wells we brought the third well forward and we finished drilling that in Q1. We've got another follow-up gas well planned for this year. And then our work right now is twofold. The exciting thing is that with this vessel horse structure being so large, we see basically development locations there that we're advancing. And then in parallel, we've also got the other six plus prospects that the team has identified to mature. So quick answer would be two wells a year. And with that, I think we'll be as a management team, reviewing annually, do we allocate more capital to Germany given this Got it. And then just a question on that second successful Wellb. Can you just remind us what was the total capital on that well and just what development wells will cost? [indiscernible] total capital on that vessel source well, the second well we drilled If I include kind of all the drilling completion costs as well as the tie in and the wellsite gas plant that will be required, We're kind of at Vermilion million gross for that, so we're 64%.

Working interest in that particular well.

And that excludes Sorry, go say that again.

Sorry, I was just going to say that still assuming the development wells will be significantly less than in terms of the follow-up wells you need?

Yes. We might be able to optimize gathering just gathering kind of concepts there as well as the location gas plant and and drive those costs downwards. You're right.

Okay.

So these are our expensive wells, but you think about it on an F and D basis, given the cost structure and the size of the gas that we're discovering as referenced on the note that $1.5 we would have We've had significantly on the Visitor Horse well, but over the program, it's confirming our ability to deliver on that Yes, sounds good. And then just a question on the Westbrook acquisition. Pleasure only surprised in terms of your operating cost guidance On the corporate basis. Just relative to your own deep basin cost structure, how would you compare the Westbrook assets? And are you planning on doing anything different in terms of going forward on those assets? I'll get it kicked off and I can pass it over to Randy if you want to add more color. Randy, But we did a lot of work on that, of course, as you would imagine. The good news is we've been in that area for almost three decades and so we operate a lot of the same infrastructure and well types. As noted, the Westbrook assets would have been in that six fifty a Boe range. Our assets are in that $750 a Boe range on unit OpEx.

I'm saying that our assets are a little more oilier. We had the Caribbean development and some other more oily development in our deep basin. So net net when you look at the assets, you're in that $650,000,000 to $750,000,000 range. What we're excited about as you can see on the map and the infrastructure map as well, as we start to combine these businesses and look for opportunities to drill longer wells, to look for synergies across infrastructure. We think there's some upside there as as we start to work through that, but high level those are kind of the unit costs that seen to date. Randy, anything to add to that?

No. Like I said, I think with the large portion of the infrastructure now being interconnected, we'll work towards optimize production, our marketing and ultimately reduce our area operating costs.

Sounds great. Thanks. Thanks, Amir.

Your last question comes from the line of Travis Wood from National Bank Financial. Please go ahead. Yes. Thanks guys. I have a couple of questions.

On the Germany, just to round that out, has the risk profile as you think about budgeting future exploration wells, have you changed that at all given the recent success? In terms of percentage of success, however you guys want to think about that?

Yes. Thanks, Travis. I'm going to pass it back to Darcy again.

Yes. Thanks, Travis. Yes, certainly, success on these first wells has increased our confidence about this entire exploration program. However, we do risk each continue to do that. We'll calculate independent chances of success for each of those prospects. I think what's really changed is we've now gone from a pure exploration program to a program that has a combination of exploration and now development wells. So that that in itself will reduce the risk of the entire program.

Okay. That's a good color. And then for the Westbrook assets at closing where would volumes have been kind of at on the closing date or at least close to in terms of current BOE production? Thanks Travis. I'll pass it back to Randy for that one.

Yes. Thanks, Charles. So I think volumes were coming in right around that 50,000 barrels a day, which is where we expected it to be. And then when we bring on some of the development that we had spoke about in the script earlier, we expect our annualized volumes to remain that 50,000 barrels a day.

So we had aligned with where we had our evaluation and expectations.

Okay, perfect. And then the the couple I mean, it's only a couple of weeks in terms of the delay to closing. Was that just kind of crossing T's and dotting I's or was there anything kind of last minute on the negotiating table that kind of delayed it a couple of weeks?

Yes. I just see our initial to to the holiday period, it's just execution and receipt of required approvals adjusted the date by two weeks, so nothing too concerning.

Okay, perfect. That makes great sense. And then lastly, probably for Lars here, you kind of walked through the return of capital mandate and kind of the forty-sixty split And we can make an assumptions on some proceeds for the asset sales. But do you have a a debt number in in mind on when you could see that 40% on the return of capital start to shift higher and the debt allocation [indiscernible] Yes. Thanks, Travis. And before sort of diving into that, I think the other thing that we tried to point out in the script too is very minimal share issuance with the acquisition of Westbrook. And so that's where we got comfortable taking the fifty-fifty allocation to 40% in terms of return to shareholders.

Just in terms of we think we've made really good progress reducing the share count here over the last three years.

I think at this point, we'd like to see how the dispositions shake out As we mentioned in the script, we are going to have retention values on these assets [indiscernible] Unfolds. Let's continue to direct 60% of that EFCF to the balance sheet. And then you're most likely reassessing in the second half of this year.

In terms of how those things shake out. At this point, the dividend is very well covered at that 40% level. We're actively buying back shares still within that 40% So we think that we can make adequate returns to shareholders here as we work through some of the deleveraging events that we have here.

Okay. And sorry, I might have missed it. Do you think for that 40% to head higher, You're kind of budgeting around $1,800,000,000 at the end of the year. Just through organic free cash if that number is like where could you what's the debt target that you have kind of longer term with your organic cash flow and some of your fund with numbers on proceeds on some of the asset sales where kind of do a 180 in terms of sixty-forty on return of capital and debt reduction.

Yes. I think, Travis, if you look yes, if you look at where we were pre the Westbrook acquisition, we were around one times, a little bit sub one times leverage.

We were comfortable with the fifty-fifty while at that leverage level. I don't think that's a bad data point or benchmark to think about in terms of where we would look to increase from the 40% Okay. Okay. Yeah, that's perfect. Thanks, Lars. That's all. That's all for me. [indiscernible] There are no further questions.

Over the phone lines at this time. We will now move over to Mr. Kyle Preston with additional questions.

Yes. Thank you, operator. So we had a number of questions come through.

Through our Investor Relations inbox here. I'll sort of try to categorize them into a few.

First one here is can you please provide some insight into the longer term development potential timeline of your Germany deep gas [indiscernible] I can get this all kicked off and then ask Barcie to add more color.

But We've talked before about the number of prospects, let's call it the number structures that we see and that's nine, but teams identified so far and the exciting thing about these structures we drill, they're often multi well structures and see that with BissileForce where we drilled a well and albeit a well that can do net to us over 40 Bcf recoverable we see another six locations on that so as we make our way down the exploration program, or to Darcy's point heading development locations as we go. So long way of saying, with success, there's upwards of 30 locations and that would provide a very, very, very long runway for drilling. So for where we are today, we're excited after two wells that we've been able to add meaningful recovery. I mean, we've added 36Bs for the first two wells on average. And so that's well within our bucket MCF type target. So what all that means is we can I think comfortably more than double Dermys production and I made a call on the comment on the script there that we think we can double our 2P reserves that we've got booked in Europe As you start to add up the numbers associated with these wells, think it becomes very meaningful as we drill two to three wells per year?

So we could double our production, if we could double our reserves in Europe, we're going to be pretty pretty happy with that. And it's early days, but the first couple of wells are pointing to a [indiscernible] overview? Yes, I don't think so. You talked about the the number of prospects we have initially and then what that translates into in a success case of over 30 location that we could drill at at a pace that we might adopt as we look forward. And maybe remind everyone we got into these prospects by farming into land in Germany and there is other prospective land in Germany. We'll continue to look at that and look for additional opportunities to add to deep gas portfolio there.

Yes, it's a good point. We've got 700,000 net acres of undeveloped land and we're currently focused on that portion of that. Thanks. All right. Thanks, Dion Darcy. Second question here, what is the potential impact from The U. S. Tariffs on Canadian energy and do your current does your current hedge book protect you from that?

Yes. No, thanks for the question. And certainly topical or maybe just zoom out a little bit before addressing the tariffs specifically. But I think our industry is defined by cycles, some of them driven by commodity prices, some of them driven by political events. So like over the thirty one years that we've been operating, we placed a lot of value on diversify perspective, over half of our revenues for 2025 are coming from outside North America or outside Canada.

And so that becomes an insulating factor.

And then operational scale, I think you're starting to see a shift there. We've got a very material to position onshore Europe that provides the majority of that international revenue stream that I referenced. And then you're starting to see an increase in the scale here in Western Canada. You see that in our outlook for 2025.

In terms of the reduction in our unit costs As an example, our lifting and and transportation costs in our liquids rich gas business is about $1.75 in Mcf, and generates a lot of liquids in addition to the gas. And so we're focused on those items first and foremost in terms of derisking the business. Kind of what that means when you sort of look at it through the lens of tariffs is, we're just not talking about a [indiscernible] we're pretty confident around that in terms of the way that the tariffs are framed right now.

In terms of hedging, I think once you derisk the business from an operational perspective through diversification, operational scale, financial hedging does play a role as well. We're just under 40% hedged for 2025. We think at fairly strong prices here as we go through a deleveraging process here in the next couple of quarters. We're in around 20% hedged for 2026. And so expect us to be in that 25% to 50% range and that does help absorb some of the noise out there that's been driven by tariffs and other events as well.

Thank you, Lars.

Next question we have here is your presentation says you are now a global gas company. Why does your stock seem to trade or be so impacted by oil price movements? And why does why do you have a why do you not have a gas company multiple? I can take that one. It's first of all, it's hard to explain the day to day movements in the stock. So I'll move on from that. But yes, if you look at it's I think it's really a timing issue. We We just closed the Westbrook acquisition here a couple of weeks ago.

We're talking on the call today about the success in Germany about our first well coming on here very quickly, better ability to bottleneck of those volumes. MICA, again, we're over half invested on our infrastructure and we're getting to point where we're going to build up to that target rate and that asset is going to be generating a ton of free cash flow. So I think it's timing. This shift to a gas weighted company is is really hot off the press. But if you look at the the runway ahead of us with the Westbreak, depth and quality of inventory there fifteen plus years to keep that The MICA asset that again we're comfortable and increasingly optimizing that asset to get it 28,000 and then Germany Again, we've talked a lot about it, but we see a long runway. And then finally, the nuance about our business is we have direct exposure and Lars talked about us on the call, but we have direct exposure to these premium prices without the need to have the risk associated with these long term contracts that span decades and large volumes. So we've got short cycle exposure to a commodity in Europe that's extremely valuable and we're able to benefit from that today.

With gas prices in Europe about 10 times higher. So we think the combination of the top realized gas price with our structural low declines with flexibility capital allocation and the new part as we've high grade the portfolio is the long runway that we've got ahead of us with West Brick, the basin, with Montney and with Germany. We think it's a good setup and we think good time. Hopefully, that will be recognized in the valuation of the company. All right. Thank you, Dion. So we have no more questions here. So with that, I will pass it back to Dion for your closing remarks.

Thanks, Kyle. I would just like to thank everyone again for participating in our Q4 results. Conference call. Enjoy the rest of your day.

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.