CALGARY — Shares in Vermilion Energy Inc. traded lower on Monday after the company announced the unexpected, immediate departure of its president and CEO Anthony Marino and its decision to go forward without a chief executive.
Company chairman and co-founder Lorenzo Donadeo, who was CEO from 2003 to 2016, has been named executive chairman and will head up an executive committee to operate the oil and gas producer, Vermilion said.
Curtis Hicks, who served as Vermilion's chief financial officer from 2003 to 2018, has rejoined the company as president, it said.
"In these challenging times, Vermilion will redouble its focus on its core business principles that have served it well over its successful 26-year history," said Donadeo in a press release.
"These principles are based on a conservative, long-term focus on balance-sheet strength and capital discipline to generate strong returns."
Vermilion has experienced and learned from several previous severe downturns, he said.
Donadeo was not available for an interview, the company said.
Analysts were supportive of the executive changes given the past experience of Donadeo and Hicks.
"We expect that once the dust settles, this will be viewed as a positive decision as Vermilion repositions itself as a relatively low-risk operator, backed by an asset portfolio that can provide shareholder returns through both the quality of the asset base and the dividend," said National Bank analyst Travis Wood in a report.
Stifel FirstEnergy analyst Michael Dunn said, "we view the moves as a reflection of the board's desire to re-establish past principles (i.e. conservative balance sheet, key decision making by committee)."
Marino earned $4.8 million in 2019, including $933,000 in base salary and $3.5 million in share-based awards, according to a company filing.
Last month, Vermilion announced a $1.2-billion writedown in the value of its oil and gas assets due to low global commodity prices. About 60 per cent of its production comes from Canada but it also operates in countries including Australia, Ireland, the United States, Netherlands, Germany and France.
It also trimmed $100 million from its 2020 capital spending budget and announced $35 million in other cuts to expenses.
Oil prices have fallen dramatically over the past three months due to demand destruction from measures to fight the COVID-19 pandemic, as well as lingering effects of a market share battle between Russia and Saudi Arabia.
Vermilion's shares traded as low as $6.85, down 4.2 per cent, Monday morning on the Toronto Stock Exchange. In the past year they've varied between $2.21 and $30.04.
Vermilion said the company has used the executive committee structure in the past and that it has been re-established formally.
The executive committee will include a minimum of five senior executives including the executive chairman, president and chief financial officer.
This report by The Canadian Press was first published May 25, 2020.
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Dan Healing, The Canadian Press