Vermillion Energy - CEO, Anthony Marino
CEO, Anthony Marino
Source: Info News
  • Vermilion Energy Inc (TSX:VET) has suspended its dividends for March 
  • The company had previously announced a 50 per cent reduction, then a further 82 per cent reduction of its dividends
  • The company’s share price has fallen 75 per cent in the past month, from a high of C$19 in mid-February 
  • Vermilion has reduced spending by $500 million for the year 
  • Vermilion Energy Inc (TSX:VET) is trading down 15 per cent at $5.13 per share and has a market cap of $933 million 

Vermillion Energy Inc (TSX:VET) has suspended its dividend for March, despite previously announcing it was cutting dividends to just C$0.02 per share. 

Vermillion were posting a monthly dividend of $0.23 per share just 40 days ago.

Stunningly, since a high of $19 per share in mid-February, Vermilion shares have gone into free-fall. They hit a low of $2.87 in mid-March, a fall of 85 per cent in a month.

That volatility has meant the company has revised its 2020 capital budget and announced dividends reductions, along with big capital expenditure cuts, as the company attempts to weather the storm.

In an announcement today, Vermilion stated that deterioration in near-term commodity prices had caused the company to dump its March dividend.

Since the beginning of March, the total cash spend by the energy giant has reduced by half a billion dollars. The company has also found another $30 million in savings across the business.

When the company announced last month it was cutting dividends to just 2 cents per share, the company stated “while we continue to believe the long-term fundamentals for the oil and gas industry are sound and will lead to higher prices in the future, we cannot predict how long the impact from COVID-19 and the OPEC+ price war will continue.” 

There is some light at the end of the tunnel for Vermilion, with the oil price war between Russia and the OPEC nations drawing to an end on the weekend. 

The OPEC+ countries signing an agreement to cut global production 10 per cent per day has at least given the company a fighting chance to regain some of its lost share price. 

Vermilion Energy Inc (TSX:VET) is trading down 15 per cent at $5.13 per share and has a market cap of $933 million.

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