The threat to Vermilion Energy's (VET) dividend comes primarily from the potential for structurally lower long-term European natural gas prices. Vermilion could easily handle oil prices similar to 2019 averages when TTF natural gas was $7 or $8.
The continuing flood of LNG imports in Europe and the Russia-Ukraine gas transit agreement means that TTF could end up averaging $4 indefinitely going forward, which erodes Vermilion's safety buffer once its hedges run low in 2022.
While European oil (priced based on Brent) is a bigger contributor to Vermilion's results than European natural gas,