Energy Prospectus

This sale will lower Veren's interest expense by ~$8Cdn million from Q2 to Q3. Production will be down ~4.8% from Q2 to Q3, but increasing realized oil, gas and NGL prices should hold revenues flat from Q2 to Q3 at approximately $1Cdn billion per quarter. My valuation of VRN is $11.25US per share.
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Veren Inc. ("Veren", or the "Company") (TSX: VRN) (NYSE: VRN) is pleased to announce that it has successfully closed its previously announced disposition of certain non-core assets in Saskatchewan for $600 million in cash (approximately $540 million including closing adjustments).

Net proceeds from this strategic disposition will be directed to further strengthen the Company's balance sheet. Veren expects its net debt to total $2.8 billion by year-end 2024 based on average commodity prices of US$75/bbl WTI and $2.10/Mcf AECO for the full year.

The Company will continue to focus on its strategic priorities of operational execution, strengthening and optimizing its balance sheet, and increasing its return of capital to shareholders.

Our good friend the Petroleum Economist, found a few errors in my forecast model for Veren that have been corrected. The most significant error was in my 2025 forecast, so it did not have much of an impact on my valuation. Since Veren is relatively new to the Sweet 16 I had a big "cushion" in my 2025 forecast that could more than absorb the mistake in my model. My current valuation stays at $11.25US for VRN.

TipRanks on 6-17-2024: "In the last 3 months, 8 ranked analysts set 12-month price targets for VRN. The average price target among the analysts is $10.88. The 8 price targets range from $9.46 to $13.83." < Several of the most recent price target updates are over my valuation.

My $11.25 valuation is based on just 4X annualized operating cash flow per share. That is a low valuation multiple for a company of this quality.

Petroleum Economist and I have both noticed that the Canadian upstream companies are trading at much lower valuations than we both are coming up with. Hemisphere Energy (HMENF) and InPlay Oil (IPOOF) are both in Petroleum Economist's Top 5 picks. They both have pristine balance sheets, pay nice dividends, and they have some nice "Running Room".

VRN is a much larger company that generated 20.5% YOY production growth in 2023 and is on pace for over 22% YOY production growth this year.

My updated forecast model for VRN will soon be posted under the Sweet 16 tab on our website.

We will be publishing updated profiles on Hemisphere and InPlay next week.