11:39 AM EDT, 05/23/2025 (MT Newswires) -- (Adds comment and updates shares)

Vermilion Energy ( VET ) on Friday said it agreed to sell its Saskatchewan and Manitoba assets for $415 million in cash.

The assets are producing approximately 10,500 barrels of oil equivalent per day, 86% of which is oil and liquids, and are expected to generate roughly $110 million of annual net operating income. The assets had proved developed producing reserves of 30-million barrels equivalent as of Dec. 31. The deal is scheduled to close in the third quarter.

Proceeds from the sale will be used for debt repayment and strengthening the balance sheet. The company expects to exit 2025 with net debt of $1.5 billion and a trailing net debt to funds from operations ratio of 1.4 times.

National Bank of Canada maintained its outperform rating and $17.00 price target on Vermilion shares following the news.

While the sale and the company's guidance changes led to revisions to the bank's cash flow forecasts, National Bank said the updated estimates do not necessitate a change to the target price due to the proceeds from the disposition and its impact on net debt per share.

Vermilion shares were last seen down $0.135 to $8.275 on the Toronto Stock Exchange.

Price: 8.73, Change: -0.13, Percent Change: -1.47