Vermilion Energy's Buyback Blitz: A Bold Bet on Its Undervalued Future?

Let me tell you, folks—when a company is so confident in its stock price that it's willing to buy back shares on a massive scale, you'd better sit up and take notice. That's exactly what Vermilion Energy (VET) is doing with its renewed Normal Course Issuer Bid (NCIB), and here's why this move could be a game-changer for shareholders.

The Buyback Blueprint: Big Numbers, Bigger Confidence
Vermilion's renewal of its NCIB on July 12, 2025, isn't just another routine capital return program. The company has been given the green light to repurchase up to 15.3 million shares—a full 10% of its public float—over the next 12 months. That's no small potatoes. The daily purchase limit of 205,865 shares ensures steady action, and with an Automatic Share Purchase Plan (ASPP) in place, they'll keep buying even during blackout periods. Management isn't messing around here; they're laser-focused on value creation.

But here's the kicker: Vermilion isn't just doing this to please investors. They're doing it because they believe their stock is undervalued. As one executive put it, the current price “does not reflect the appropriate value of the company.” Translation? They think this is a steal, and they're putting billions of their own cash to work to prove it.

Why Now? The Undervaluation Argument
Let's get real: share buybacks are only effective if the stock is indeed undervalued. Is that the case here? Let's check the math.

Vermilion's previous NCIB saw them repurchase 5.6 million shares at an average price of $12.96. If the current share price is lower than that—and given their comments, it likely is—this buyback becomes a value-accretive bonanza. Lower purchase prices mean each dollar spent returns more equity to shareholders, boosting EPS and the company's overall value per share.

But wait—there's more! This isn't just about price. Vermilion's financial discipline is rock-solid. They've hedged 50% of their production through 2025, shielding themselves from oil price swings. With over $1 billion in liquidity, they're not just surviving—they're thriving. And with the Westbrick assets now fully integrated, their production outlook of 134,000-136,000 boe/d isn't just a guess; it's a plan.

The Cramer Verdict: Buy, Hold, and Let the Buyback Work for You
Here's the bottom line: Vermilion isn't just returning cash to shareholders—they're making a strategic bet on their own future. By using 40% of excess free cash flow for dividends and buybacks, they're prioritizing shareholders while maintaining the financial flexibility to grow.

If you're on the fence, consider this: the ASPP ensures Vermilion can buy low when the market dips, compounding value over time. Plus, their dividend track record—over $40 per share since 2003—is a testament to long-term commitment.

Action Alert: This is a “buy and hold” situation. Vermilion's buyback isn't just about boosting EPS; it's about proving their stock is undervalued and deserves to rise. If you're in it for the long haul, this is a goldilocks moment—not too hot, not too cold, but just right for value hunters.

Final Take: Vermilion Energy's renewed NCIB is no accident. It's a bold, calculated move to capitalize on undervaluation and reward shareholders. With a solid balance sheet and a management team that's willing to put its money where its mouth is, this could be one of the best plays in energy right now.

Stay hungry, stay foolish—buy VET.