Good morning, ladies and gentlemen. Thank you for joining us. I'm Dion Hatcher, President and CEO of Vermilion Energy. With me today are Lars Glemser, Vice President and CFO; Darcy Kerwin, Vice President, International and HSE; Randy MacQuarrie , Vice President, North America; and Jeff MacDonald, Vice President of Geosciences. We will be referencing a PowerPoint presentation to discuss the acquisition of Westbrick Energy announced this morning. The presentation can be found on our website under "Invest with Us" in Events and Presentations. Please refer to our advisory and forward-looking statements at the end of this presentation. It describes the forward-looking information, the non-GAAP measures, and oil and gas terms used today, and it outlines the risk factors and assumptions relevant to this discussion. We're excited to announce the acquisition of Westbrick Energy.
This strategic acquisition represents a significant forward step of Vermilion's North American high-grading initiative to increase operational scale and enhance full-cycle margins in our liquids-rich Deep Basin. The acquisition adds 50,000 BOE a day of production and 770,000 net acres of contiguous land, along with valuable infrastructure. As shown on the map on this slide, this land and infrastructure is complementary to Vermilion's legacy Deep Basin assets, which we expect will provide operational synergies and add further value over time. The acquisition adds 256 million BOE of 2P reserves, increasing our pro forma 2P reserves by 60% to approximately 690 million BOE. From our initial evaluation, our team has identified over 700 net future drilling locations, providing a robust inventory to keep production flat for over 15 years while generating significant free cash flow.
Based on forward commodity prices, we forecast 2025 net operating income of CAD 275 million, with over CAD 110 million of free cash flow, which is immediately accretive to all per-share metrics. The acquisition also significantly increases our long-term free cash flow profile, which will further enhance our return to capital. So now I'll pass it to Jeff to provide an overview of the inventory.
Thanks, Dion. Some history for context. Since our first Spirit River, Ellerslie, and Cardium wells going back as far as 2009, Vermilion has drilled nearly 300 wells spanning the corridor that we're acquiring from Westbrick. With this technical familiarity, we proactively mapped Westbrick's position some time ago, determining that we could add over 700 net drilling locations across multiple formations that Vermilion has a history of exploiting in the Deep Basin. Furthermore, Vermilion currently operates significant infrastructure in the Deep Basin, which we can leverage in developing these newly acquired locations. We've grouped these formations into three groups, the shallowest being the oily Upper Cretaceous Belly River, Cardium, and Viking formations. The middle being the high deliverability Spirit River group, which includes Notikewin, Falher, and Wilrich. And lastly, the liquids-rich Lower Mannville and Jurassic Age Bluesky Ellerslie and Rock Creek.
Of note, we were already a partner with Westbrick on approximately 140 of these locations, which speaks to the operational synergies as well as our knowledge of the asset. These newly acquired locations are competitive with Vermilion's existing Deep Basin inventory, with half-cycle rates of return ranging from 40% to over 100% based on our third-party reserve engineer estimates. Except in unique cases, the existing surface infrastructure in the Deep Basin allows us to view half-cycle economics as a reasonable proxy for full-cycle returns. With ongoing discovery, delineation, and development of additional zones, the attractive capital efficiency and return profile of the Deep Basin can be expected to perpetuate well into the future. We expect these assets to attract capital within the pro forma portfolio immediately and for the foreseeable future.
Although not shown on the Deep Basin rate of return plot, we continue to be impressed by our Montney returns, which rank at the top end of our pro forma Canadian inventory. I'll now pass it back to Dion.
Thank you, Jeff. As noted, we have a long, successful history of nearly 30 years operating in the Deep Basin. As shown in the chart on the right-hand side of this slide, we've successfully tripled production from 2010 to 2020, mainly from organic development of the Cardium, the Ellerslie, the Notikewin, and Falher zones, where we recently started having success in the Rock Creek formation. The acquisition of Westbrick adds significant operational scale to an established core operating region, increasing our footprint to over 1.1 million net acres of land, with over 75,000 BOEs a day of current production. Following integration of the asset, we expect to realize operational and financial synergies, including capital efficiency improvements, infrastructure optimization, gas marketing opportunities, and other corporate synergies. The red wedge on the plot is our Montney Mica asset.
We remain excited about the asset and confident in achieving our target of 28,000 BOEs per day of production and CAD 9-9.5 million of D&C costs. We'll produce over 13,000 BOEs per day in Q4 due to the continued strong well performance. Montney is another long-duration asset where we see over two decades of runway, given our production plans and depth of drilling inventory. Our Deep Basin Montney liquids-rich natural gas assets will be the primary drivers of growth within our Canadian portfolio, with combined production expected to exceed 100,000 BOEs per day in the next several years. Upon closing of the acquisition, Vermilion will have a production base of approximately 135,000 BOEs per day, with 80% of our production derived from our global gas franchise consisting of liquids-rich gas in Alberta and BC, and European gas-weighted production in Ireland, Germany, Netherlands, and Croatia.
Our Canadian gas netbacks are enhanced by an average liquid yield of 28%, half of which is light oil and condensate, while our European gas production provides direct exposure to LNG prices, which results in top decile netbacks. As a result of this global gas mix, Vermilion realizes the highest gas price among our Canadian peers, as shown on the chart illustrating the pro forma realized prices. Pro forma: the company will maintain a balanced fund flow profile between North America and international. We are committed to our international portfolio and continue to view the diversification as a key strategic advantage for the company. We believe our increased scale in North America positions us for even larger international opportunities. Our international assets provide exposure to premium global prices and strong capital efficiencies, owing to the low decline nature of the conventional assets, which drives significant free cash flow.
We will continue to focus on growing our international assets organically and by acquisitions. As we have demonstrated following prior acquisitions, we will initiate a process to identify and execute non-core asset investments in order to accelerate debt reduction and further high-grade our portfolio. With that, I will now pass it over to Lars to discuss the acquisition and pro forma outlook.
Thank you, Dion. We plan to fund the acquisition through Vermilion's existing CAD 1.35 billion credit facility. In connection with the acquisition, we have entered into a new CAD 250 million term loan maturing May of 2028 and have access to a new $300 million bridge loan through a debt commitment letter with Royal Bank of Canada and TD Securities. Over the past four years, Vermilion made a very concerted effort to pay down debt and successfully reduce debt by over CAD 1.1 billion, while also funding over a billion dollars of acquisitions during this timeframe.
It is because of this prudence that we are able to execute this strategic, long-duration acquisition. Upon closing, Vermilion is expected to have net debt of CAD 2 billion, with pro forma year-end 2025 net debt of CAD 1.8 billion, a net debt-to-FFO ratio of one and a half times, and ample liquidity of approximately CAD 500 million.
We plan to increase hedge levels to mitigate financial risk, and as mentioned, we will pursue non-core asset divestments in North America to accelerate debt reduction and further high-grade our portfolio, with the objective of reducing the net debt-to-FFO ratio for a targeted range of one times or less. We expect the acquisition to close by mid-February 2025. Based on this assumption, we anticipate full year 2025 average production to be in the range of 126,000 to 133,000 BOEs a day and 62% natural gas weighted. Capital expenditures are expected to be in the range of CAD 725 million-CAD 775 million. Inclusive of the incremental capital being allocated to the newly acquired Deep Basin assets, the aggregate capital investment into Vermilion's global gas portfolio will represent over 70% of total capital for 2025. We plan to release an updated budget when the acquisition closes.
As noted in our budget press release last week, we are increasing our base dividend by 8% to CAD 0.13 per share per quarter effective Q1 2025. This represents four consecutive years of dividend increases since 2022. The fixed dividend represents less than 7% of 2025 pro forma FFO and remains at a level we believe is sustainable through commodity cycles while also providing capacity for continued increases in the future. We remain committed to returning capital to our shareholders through our base dividend and utilizing share buybacks to further reduce our share count. On a pro forma basis, the company will target a return to capital payout of 40% of excess free cash flow until net debt reaches an appropriate level, at which time we will increase the payout back to 50%.
The absolute amount of capital returned to shareholders at the pro forma target is expected to be equivalent to our base business with a 50% return of capital payout. Over the long term, the acquisition is expected to increase the amount of capital available for shareholder returns. On a pro forma basis, assuming a mid-February close and using the midpoint of our preliminary production guidance, we forecast 2025 FFO of CAD 1.2 billion, or approximately CAD 7.80 per share.
On an unhedged basis, FFO was forecast to be about CAD 7.70 per share, which represents a 34% increase over the forecasted 2024 unhedged FFO per share. Free cash flow is forecast to be CAD 450 million, or approximately CAD 2.80 per share on an unhedged basis, which represents an over 70% increase over forecast 2024 unhedged FCF and is an indication of just how much value per share this acquisition provides.
Based on this preliminary forecast, we expect to exit 2025 with net debt of approximately CAD 1.8 billion, representing a net debt-to-FFO ratio of one and a half times. In addition to funding our increased dividend, we plan to continue share repurchases and expect the total value of share repurchases for 2025 to be equivalent to what we would have repurchased under our base business. I will now pass it back to Dion.
Thank you, Lars. To close out this presentation, I would like to summarize the positive attributes of this acquisition and the pro forma business. The acquisition refocuses our portfolio on liquids-rich Canadian gas and high-margin European gas. Our premium priced international commodity exposure remains a key differentiating factor for Vermilion, with our international assets generating 50% of our corporate fund flow. On a pro forma basis, Vermilion, after almost three decades of operational experience in the Deep Basin, is now the fifth largest Deep Basin producer. The acquisition enhances the quality and quantity of our Deep Basin inventory and increases our operational scale, which should drive improved margins. Our absolute return of capital in the near term is expected to be equivalent to our base business and expected to be positive to shareholder return of capital in the medium and long term.
We're able to fund the acquisition on our balance sheet, which enhances the per share value. Debt structure is appropriately termed out and provides ample liquidity of our revolving credit facility. 2025 year-end debt-to-fund flow ratio is forecast to be very manageable, 1.5 times under current strip. We plan to divest non-core assets to accelerate debt reduction and further high-grade our portfolio, with the objective of reducing the net debt-to-fund flow ratio to our targeted range of one times or less. With this acquisition, the pro forma company has 15% higher excess free cash flow per share in 2025, excluding the impact from any synergies which we expect to realize over time. We also have 60% higher reserves per share, with hundreds of on-book locations providing significant upside and duration. Well, that concludes my prepared remarks. With that, we'd like to open it up for questions.
Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. And if you're using a speakerphone, please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. First, we will hear from Menno Hulshof at TD Securities. Please go ahead, Menno.
Thanks, and good morning, everyone. Can you maybe just give us some background on how this deal came together, how much tension there was in the process, and why you settled on this opportunity instead of consolidating Coelacanth or doing another Euro gas acquisition? And finally, presumably this precludes you from doing any other acquisitions over the medium term, but any thoughts there would be helpful as well. Thank you.
Thanks, Menno, for the call. I'll kick it off and then pass it to Lars to talk about the funding of potential other acquisitions. Yeah, without getting into details, I think if you look at this acquisition, Menno, building on Jeff's comments earlier, I mean, this is an asset that's adjacent to us. We're already a partner in about 140 locations, and so it's something that we've been monitoring closely for quite a period of time and doing some detailed work for at least a couple of quarters here. There was a process in the fall, and that ultimately ended with this acquisition today and this announcement. The process, again, was competitive, but if you look at what's unique about Vermilion in this area, it's just given our legacy position. Again, we've got a lot of land, a lot of infrastructure, a lot of knowledge.
We've drilled wells, over 300 of them, from top to bottom of this land base. I think we are in a unique position given our history and significant holdings in this area. As to Coelacanth, we are a holder in Coelacanth, about 22% of that company. As mentioned on the call, we are very, very excited about our Montney position. Our wells continue to perform quite well. We're trending over 13,000 BOEs per day in Q4, just given the strong well results. We're currently drilling right now, and we'll drill into next year. Coelacanth, we're a happy shareholder. They've got some activity planned going into next year with their infrastructure and starting some production, and so we'll continue to monitor that activity and that opportunity as we go forward. As to other European acquisitions, we are super keen to grow our international assets.
We've been quite active and looked at multiple opportunities, as one would expect, given that's our backyard. We are uniquely positioned, given that we're only 5% of the market in Netherlands and Germany. When you think about that, the majors have messaged they will exit. We are excited about that. We're well positioned, given our 30 years of working with them in these kinds of jurisdictions. But one thing we have learned with the majors is you don't control the timing. So we'll be well positioned, like everything in our backyard, to add operational scale with time. With that, I'll pass it over to Lars to talk about funding of future acquisitions with our debt.
Yeah, thanks for the question, Menno. And what we press released this morning was the fully underwritten financing plan that gives us that CAD 500 million of liquidity. So very comfortable with that. If we're able to enhance that plan with non-core asset sales and/or being able to access the public debt markets, that would be more incremental to what we announced in there. And then to Dion's point, from a European acquisition perspective, I would say right now our capital allocation is very focused on the organic side, just as we look at the sort of queue of opportunities there. As we go forward, being a larger entity, as we execute on our deleveraging plan, we think that we are going to be in a position to be opportunistic if the right opportunity comes to fruition overseas.
Thanks, Lars. Thank you, Menno.
Yeah, yeah, thanks to you both for that. And maybe I'll just, for my second question, I'll just touch on operational synergies, which you talked about in your prepared remarks. They're not factored into the valuation, but they are expected to be realized over time. Can you just maybe give us a sense of what is most likely to drive that synergies upside over time? And then are you in a position today to put some rough bookends around it? Thanks.
Thanks. I'll get it kicked off here, and I'll pass it over to Randy MacQuarrie . We're not prepared to provide bookends on that. It's something that is real and we'll look to do over time, but maybe just to provide some color on that, Randy, can you elaborate on the type of synergies we're thinking about?
Sure, thanks. Yeah, so as mentioned, through this acquisition, we've become one of the dominant players in our core area. So that leads to the ability of further consolidating working interests and drilling high rate return, long reach wells. A large portion of this infrastructure will now be interconnected, which allows us to optimize production and our area operating costs. We also see the ability to high grade the existing locations that we currently have in our budget, so we can expect to see an improvement there. And then lastly, we do see marketing upside with our commercial-based approach and successful track record of maximizing pricing in the area.
So thanks, Randy. And Menno, you can get a sense, again, if you look at the map, you look at the infrastructure, you look at the gas plants, you look at the pipes, hopefully you get a sense of how intertwined this land base and this infrastructure is. And to Randy's point, whether it's the wells we drill, the length of those wells, the sharing of rigs, sharing of services, the synergies you would expect across the field, things like technology, we're really excited, and I think we'll provide more color on that and clarity as we go forward. But at this point, we're quite pleased with the outlook and the opportunity for these synergies.
Thanks again. I'll turn it back.
Thanks, Menno.
Next question will be from Jeremy McCrea at BMO. Please go ahead, Jeremy.
Yeah, hi guys. A couple of questions. The first one I want to start on here is just the inventory that's coming with Westbrick. I'm wondering if you can give some economics around payout. When you get two times payout, how does this inventory compare to what you have existing here in Vermilion? How do you plan to capitalize this on this inventory in terms of your change in spending plans? And is there anything that you are looking at Westbrick's land and say, "We can do better here. We're going to try doing this drill design, this completion design"? So a lot in there, if you just kind of just generally commented on any one of those.
Thanks, Jeremy. Appreciate the question. I'll start with some high-level comments and then pass it over to Randy and Jeff if they want to add to that. We did show the rate of return, so maybe we can start there for the inventory that we see on the land base, and again, this is based on current outlook of commodity prices, so we'll see what happens there. But again, we're seeing 40%-100% rate of returns. And Jeff talked about the different play types. If you count them up, there's nine discrete plays on our land base here. The range, again, of rate of returns are anywhere from 40%-100%. The spending profile, Randy touched on this, as you look at the legacy business and the opportunity for synergies.
We've been quite active on our land base over the decades, and I think you will see us high grading some of the inventories that we've got planned with some of these new assets, and then finally, on other areas we can do better. I think we want to give credit to Westbrick. They are a very good operator and low-cost operator, and we've done a lot of work, as you can imagine, around benchmarking and whether it's operating costs or drilling costs, so I think we're at a very, very similar level. We'll look to improve on that over time, and that's maybe some of those synergies that we referred to before with more activity, more rigs, more wells, those kind of things, tying it up, infrastructure between the different areas in which we operate, so again, the long-winded way to say is we're quite confident in the outlook.
We think we're going to see a high grading of our current inventory. They're a great operator. Randy, is there anything else you want to add on the payouts or returns on some of the wells in addition to the rate of returns?
Yeah, the payouts are averaging one to two years, and some of the best wells are paying out in under a year. So I mean, very positive in that sense. Another way to think about when you compare what we're acquiring versus what we have is we've been active in this area for over three decades, and so we're much deeper into our inventory set than Westbrick. Another way to look at it is roughly 25% of our current land position in this area is undeveloped, whereas our evaluation showed that roughly 75% of Westbrick's land is undeveloped. So there's a lot more tier one inventory available, which has higher rate of returns, and we'll continue to progress that as we evaluate.
Thanks, Randy.
Okay, thanks for that. Maybe this is kind of a final question. Just pulling up Westbrick's production here just for their most recent October month. I know there's some nuances and different things, but we pull something closer to like 57,000 BOE for Westbrick. Does the extra production just relate to their Duvernay production and some other associated production with the Duvernay lands, or is there a bit of a cushion here, just not knowing how quickly some of this production is going to decline with Westbrick?
Yeah, thanks for that, Jeremy. I would say the Westbrick Duvernay production is low. It would not be material relative to the numbers you're quoting here. As to the current production, again, we're guiding to 50,000 for the year. We're quite confident in that production guidance, and we'll look to work hard to deliver that or better. But to your point, I think the current run rate is higher than the 50,000. You also have to factor in the level of capital that we're spending this year. So quite confident. We think we've got a good runway, a good plan to meet or beat the guidance that we're talking about today.
Okay, perfect. Thank you.
Thanks, Jeremy.
Next question will be from Arun Jayaram at J.P. Morgan. Please go ahead.
Yeah, good morning, gentlemen. I wanted to get your thoughts on how the CapEx profile could look over the next five years. You guys have highlighted about just under CAD 140 million of incremental CapEx to your pro forma guide, but the plan is to maybe grow the production base from 50 to 60 over the next five years in BOE per day. Give us a sense of maybe what the CapEx requirements to achieve that level of growth and maybe just your planned activity levels next year in the Deep Basin.
Thanks, Arun. I'll get it kicked off at a high level and then pass it over to Lars. I would say at the corporate allocation strategy, nothing's changed there. We're going to target modest production growth of that 2-3%. We want to ensure we've got a resilient base dividend, and we've increased our base dividend. We've got the capacity and commitment to increase it from here, given the low percentage of our fund flow. And then the variable return of capital for us will continue to be share buybacks. We see a lot of value in the base business, and we're excited to be buying back shares. And again, that's going to range to 3-5%. So when you add those things up, again, we're targeting that consistent 9-10% TSR.
If we're able to supplement that from time to time with high rate of return acquisitions, we're excited to do that. Maybe I'll now pass it over to Lars, and you can talk maybe some of the nuance about our capital allocation within that overall framework.
Yeah, and so Arun, with the guidance we put out last week, the base business, roughly 86,000 barrels a day on capital of, call it CAD 610 million, the midpoint there. Now, with the pro forma entity, we'll be closer to that 135,000 barrels a day. Capital on these assets will be in that CAD 175 million range. That's on the Westbrick assets for full year 2025. So I think going forward, we are still committed to delivering that 1% to 3% production growth, beyond a higher production level now, and growing off of that 135 base. And sort of think about those two capital numbers that I gave you as a pro forma capital number for Vermilion.
I think the other thing that's really exciting too, and Dion pointed this out in his prepared remarks. The majority of that production growth, the majority of that capital investment happens within this natural gas-weighted portion of the portfolio, so Montney, Deep Basin in North America, and then the onshore gas portfolio within Europe, but hopefully that gives you a sense, and I mean, if you fast forward that over the next five years, those aren't bad bookends to think about in terms of 1%-3% production growth on that capital number of, call it 610 plus the 175.
Got it, got it. So the 140 increase is just because it's a partial year close because you'll close in Q1. Got it. Okay. In terms of Lars, any more specifics on just the general asset sales program? What are some thoughts on what type of proceeds would you like to get in terms of your high grading with this acquisition this morning? But just maybe some bookends on just general thoughts on the divestiture program.
Yeah, no, I think at this point we have done some internal work on this leading up to today's acquisition. We would like to complete that internal work. I think we do have a vast, robust portfolio here in North America. You think about light oil in the U.S., Southeast Saskatchewan, the legacy Deep Basin position, and then even this position that we just acquired here. We want to do a fulsome analysis of that in terms of what is the right path forward to sort of strike that balance between accelerating the deleveraging side of it, but also just having as long of a runway possible from an inventory perspective as well.
So at this point, Arun, I'd say it's hard to put out sort of targeted disposition numbers and that type of thing because it's really going to depend on what is sold, what is kept as we sort of go on that path forward.
Okay, fair enough. Thanks a lot.
Thanks, Arun.
Next question will be from Travis Wood at National Bank Financial. Please go ahead.
Yeah, thanks, and good morning. Wanted to get a sense around the non-core value. I'm sure you've kind of walked through some debt repayment scenarios on the back end of the deal here, trying to get a sense of at least some numbers. And then if you could shed any light on what non-core means to Vermilion in the context of the pro forma business, that would be great.
Thanks, Travis. So I'll get started here and pass it to Lars to elaborate more. A couple of data points that we referenced on the call. We're planning to be without acquisition sales, about 1.5 times debt to cash flow by the end of the year. Our pro forma business will generate on current strip about CAD 200 million of free cash flow to go down against the balance sheet. And so we'll be deleveraging about a couple hundred million a year, and we'll finish this year about CAD 1.5 million without any asset sales. And so again, I think we're in a position to strengthen anything we do on the non-core side, and we will do something as we've shown before. It really comes down to that capital allocation thinking. We'll look across the portfolio. We'll say which assets may not attract capital. We'll run a process.
We'll say, "Can those assets, can we obtain a retention value that warrants the investment?" And through that, we'll make the best business decision for the long-term shareholders. So difficult to point to particular assets at this point, as Lars mentioned, because we're going to want to do that detailed work. We're going to want to test the market. But capital allocation as to what's going to attract capital and what's not will be a big part of that decision, given the high-graded depth and quality inventory that we now find ourselves being able to fund. Lars, do you want to add to that?
Yeah, and the only thing I would add, Travis, just on the balance sheet side specifically, we're not in a rush to execute those asset sales as well. And so we'll take our time, let that process unfold. That was the rationale for having CAD 500 million of liquidity fully underwritten. We're comfortable here in the near term at that one and a half times leverage. That's on sub-$70 oil. That's on, let's call it CAD 2.35 gas per MCF. So that's the only thing I would add in addition to Dion's comments is we'll let this process play out, and we're not in a rush.
Okay, fair enough. And any potential of the infrastructure that comes with this deal on close, have you kind of earmarked a potential value around that? And given some of your peers have done some infrastructure deals, do you see opportunity there to unlock some short-term liquidity to help fund some of the bridge loans to structure this?
Yeah, we'll evaluate everything, Travis. To Randy's point around some of the synergies that we'll look for, Jeff's comments on just the quality of the inventory, we'll look to preserve as much of that as we can. Now, if the right decision is to sort of forward sell some of those economics because of the price that you can get today, something that we'll consider, but the cost base that we've been able to execute on over the past couple of decades, the cost structure that Westbrick has been able to execute on, it is because of that infrastructure, or at least partially as a result of that infrastructure, so it's something we'll consider, but you just got to think about the cost benefits of it.
Okay, that's good. Thanks for that color. And then final question from me is, was the Duvernay ever part of the discussion in terms of the negotiations on getting this across the line?
Yeah, we look at everything, Travis. I mean, I think we would have put some initial work in the Duvernay. We look at our legacy skill sets. Jeff spoke about the three decades we've spent working in the Deep Basin and the nine different plays in which we have an opportunity to drill. It's green lower for us, just given what we're focused on with our skill sets and where we see the most value. So that led us to the position we're in today.
Okay, that's all from me. Thanks very much.
Great. Thanks, Travis.
Next question will be from Greg Pardy at RBC Capital Markets. Please go ahead.
Hi, good morning. Congrats and thanks for doing the call. Wondering if you could put a little context around the potential for acquisition opportunity in Europe as it relates to funding in the balance sheet. We talked about sources, but I guess with this transaction, we go to about one and a half times and then bring it down. Is there kind of a level you're willing to take it to that's above that one and a half for future acquisition opportunities when they show up?
Thanks, Greg. I'll get it kicked off here and then pass it to Lars to build on that. A couple of things. There are still opportunities on the horizon that we've spoke in the past, particularly in the Netherlands. We do expect to see that divestment onshore in the Netherlands proceed, and again, in summary, we're 5% of the market in the Netherlands and Germany, and the majors, although they control the timeline, have messaged that over time we would expect them to divest. The other color I would add to this, if you think back to the core acquisition where we consolidated our working interests in Ireland, again, that was a great deal for us, and as a reminder, the effective date was January 1, 2022. We spent 15 months, which is not uncommon with international acquisitions, to close that acquisition. So it closed in March 2023.
That interim free cash flow, in that case, it was CAD 400 million [that] took our purchase price from CAD 600 million to an effective purchase price of CAD 200 million at close. We cut a check for CAD 200 million and consolidated our working interests and added about 8,000 BOEs today. Again, the nuance in international versus their often valued deals. Second, they do take time to close. The actual check you cut to acquire those assets is a reasonable number. With that, do you want to build on that, Lars, with respect to funding of international opportunities?
Yeah, a couple of things I'll add to that, Greg. We are very focused on reducing leverage here over the next bit as opposed to increasing leverage. That will be the primary focus. And then the comment I made earlier too is when we look at capital allocation opportunities, right now it's actually the organic investment into Europe that is screening higher than acquisition opportunities. And so we have another very active year in 2025 within Europe, and that's where the focus will be here in the time being. But again, we'll continue to screen everything in our backyard that potentially comes to market.
Thanks, Lars.
Okay, great. That's helpful. And then with this acquisition and the added scale as well as leverage, any updates we should expect or any conversations you've had with the rating agencies?
Yeah, no. I think with an acquisition of this magnitude, we will make sure that we're in touch with the rating agencies, and you can look back at some of their past publishing and research. I think they've spoken about the desire for Vermilion to add more operational scale. Dion referenced our reserve book is going to be growing 60% as a result of this. The production base growing significantly as well. Now, we don't do deals just for the sake of getting bigger. The fact that we have an operational presence in the Deep Basin where we're able to add meaningful operational scale, we hope that things like that do come through on the equity and the debt research side.
Okay, perfect. And if I could just one quick last one, I know you kind of gave what the expectations were for organic production growth. Can you give us a sense as to what maintenance CapEx would look like, both North America and total?
Yeah, so we started to steer away from referencing sustaining CapEx. There's a lot of inputs into it in terms of you look at even our capital program here in 2024. A meaningful amount of our capital was invested in projects that won't deliver production growth until 2025 and beyond. And so I think sort of a good couple of benchmarks there, Greg, would be pro forma production in that 135,000 barrel a day range. If you have capital kind of in that, call it CAD 775 million-CAD 825 million range, that's not a bad way to think about the company. You're getting some production growth out of that. You're still investing in projects that will yield production sort of other than the year that the capital is being invested.
So it's not getting to your question there around sustaining CapEx, but we started to steward towards those numbers versus just a flat sustaining capital number.
Okay, understood. Thank you guys for your help. I appreciate it.
Thanks, Jason.
At this time, Mr. Hatcher, we have no other questions registered. Please proceed, sir.
Thanks for that. We appreciate the time. As we go into the holidays, it's fair to say I am super excited about this acquisition. As I look around the team here, the management team, they're pumped. We're excited to move into the new year, this opportunity. I want to thank everyone. I want to thank the teams for all their hard work. Thank you for participating in this conference call.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Happy safe holidays.