Vermilion Energy Inc. Announces Results for the Three Months Ended March 31, 2025

Canada NewsWire

CALGARY, AB, May 7, 2025

CALGARY, AB, May 7, 2025 /CNW/ - Vermilion Energy Inc. ("Vermilion", "We", "Our", "Us" or the "Company") (TSX: VET) $(VET)$ is pleased to report operating and condensed financial results for the three months ended March 31, 2025.

The unaudited interim financial statements and management discussion and analysis for the three months ended March 31, 2025 will be available on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at www.sedarplus.ca, on EDGAR at www.sec.gov/edgar.shtml, and on Vermilion's website at www.vermilionenergy.com.

Highlights

Q1 2025 Results

   -- Generated $256 million ($1.66/basic share)(2) of fund flows from 
      operations ("FFO")(1), compared to $263 million ($1.70/basic share) in Q4 
      2024. Exploration and development ("E&D") capital expenditures(3) were 
      $182 million, resulting in free cash flow ("FCF")(4) of $74 million, 
      compared to $62 million in the prior quarter. 
 
   -- As a result of strong European gas prices, Vermilion's corporate average 
      realized natural gas price in Q1 2025 was $7.80/mcf, compared to 
      $2.17/mcf for the AECO 5A benchmark. 
 
   -- Closed the Westbrick acquisition at the end of February 2025, adding 
      approximately 50,000 boe/d of liquids rich gas and establishing a 
      dominant position in the Deep Basin of Alberta. To date, the Company has 
      identified operational and development synergies of approximately $100 
      million ($0.65/basic share) on a NPV10(5) basis, and anticipates 
      additional synergies may be identified and realized as the acquired 
      assets are further integrated. 
 
   -- Net debt(6) increased to $2,063 million, reflecting the close of the 
      Westbrick acquisition in February 2025. Net debt to four quarter trailing 
      FFO(7), including the trailing 12-month contribution of the Westbrick 
      assets, is 1.7 times. 
 
   -- Vermilion returned $37 million to shareholders through dividends and 
      share buybacks, comprising $20 million in dividends and $17 million of 
      share buybacks. During the quarter, the Company repurchased and cancelled 
      1.3 million shares through the NCIB, and issued 1.1 million shares as 
      part of the Westbrick acquisition. 
 
   -- Production averaged 103,115 boe/d(8) (60% natural gas and 40% crude oil 
      and liquids), comprising 73,760 boe/d(8) from the North American assets 
      and 29,355 boe/d(8) from the International assets. Q1 2025 production 
      includes approximately one month of production associated with the 
      Westbrick acquisition. 
 
   -- In Germany, Vermilion successfully tested the second zone on the 
      Wisselshorst deep gas exploration well (0.6 net) in Q1 2025. This zone 
      flow tested at a restricted rate of 20 mmcf/d(15) of natural gas with a 
      flowing wellhead pressure of 6,200 psi, resulting in a combined test flow 
      rate of 41 mmcf/d from both zones. The well is expected to be brought on 
      production in the first half of 2026. 
 
   -- The Osterheide deep gas exploration well (1.0 net) in Germany was 
      successfully commissioned and brought online at the end of Q1 2025 and 
      has produced at a restricted rate of approximately 7 mmcf/d or 1,200 
      boe/d(16) since startup. 
 
   -- Overall, the 2024 three (2.6 net) well deep gas exploration program in 
      Germany has proven up 85 Bcf (60 Bcf net)(17) from the first two (1.6 
      net) wells and discovered a geological structure large enough to support 
      up to six follow-up drilling locations. The after-tax net present 
      value(5) of the three (2.6 net) wells drilled to date is estimated at 
      approximately $150 million ($1.00/basic share), with the bulk of capital 
      already spent and positive cash flow beginning in Q2 2025. 
 
   -- At the Mica Montney, the recent 8-4 BC pad was drilled, completed, 
      equipped and tied-in at a cost of approximately $9 million per well, 
      which is at the low end of our previously stated target cost range and 
      further improves the development economics. This equates to an 
      approximately $100 million reduction in future development costs or 
      approximately $50 million ($0.30/basic share) on a NPV10(5) basis. In 
      addition, our recent infrastructure expansion, which facilitates 
      near-term and future production growth from our BC Montney asset, was 
      completed ahead of schedule and under budget. 

Outlook

   -- The 2025 capital budget and guidance remains unchanged as we continue to 
      prioritize free cash flow and debt reduction, while returning capital to 
      shareholders through the dividend and ongoing share buybacks. 
 
   -- With the Westbrick acquisition closed and the Q1 2025 drilling program 
      complete, Q2 2025 production is anticipated to average between 134,000 to 
      136,000 boe/d (62% natural gas), including full contribution from the 
      Westbrick assets. 
 
   -- Vermilion is well positioned to manage through the current market 
      volatility with over 50% of net-of-royalty production hedged for the 
      remainder of 2025 combined with approximately $1 billion of liquidity on 
      the balance sheet and no near-term debt maturities. The Company will 
      continue to monitor the macro and commodity price environment and is 
      prepared to adjust the capital program if necessary. 
 
   -- Declared a quarterly cash dividend of $0.13 per common share, payable on 
      July 15, 2025 to shareholders of record on June 30, 2025. 
 
($M except as indicated)                          Q1 2025    Q4 2024   Q1 2024 
Financial 
Petroleum and natural gas sales                     568,846   504,352  508,035 
Cash flows from operating activities                280,384   212,587  354,295 
Fund flows from operations (1)                      256,029   262,698  431,358 
   Fund flows from operations ($/basic share) 
    (2)                                                1.66      1.70     2.68 
   Fund flows from operations ($/diluted share) 
    (2)                                                1.65      1.68     2.64 
Net earnings (loss)                                  14,953  (18,316)    2,305 
   Net (loss) earnings ($/basic share)                 0.10    (0.12)     0.01 
Cash flows used in investing activities           1,255,746   154,672  181,343 
Capital expenditures (3)                            182,119   200,659  190,442 
Acquisitions (9)                                  1,120,998     5,257    9,752 
Asset retirement obligations settled                  9,347    23,282    4,975 
Repurchase of shares                                 16,576    17,637   36,409 
Cash dividends ($/share)                               0.13      0.12     0.12 
Dividends declared                                   20,043    18,521   19,183 
   % of fund flows from operations (10)                 8 %       7 %      4 % 
Payout (12)                                         211,509   242,462  214,600 
   % of fund flows from operations (11)                83 %      92 %     50 % 
Free cash flow (4)                                   73,910    62,039  240,916 
Long-term debt                                    1,874,033   963,456  933,506 
Net debt (6)                                      2,062,805   966,882  944,496 
Net debt to four quarter trailing fund flows 
 from 
 operations (7)                                         1.7       0.8      0.7 
Operational 
Production (8) 
   Crude oil and condensate (bbls/d)                 32,386    30,327   32,695 
   NGLs (bbls/d)                                      9,167     6,612    7,046 
   Natural gas (mmcf/d)                              369.36    279.59   274.59 
   Total (boe/d)                                    103,115    83,536   85,505 
Average realized prices 
   Crude oil and condensate ($/bbl)                   99.36    100.06   104.26 
   NGLs ($/bbl)                                       31.56     29.38    34.16 
   Natural gas ($/mcf)                                 7.80      8.47     6.10 
Production mix (% of production) 
   % priced with reference to AECO                     43 %      33 %     32 % 
   % priced with reference to TTF and NBP              17 %      23 %     21 % 
   % priced with reference to WTI                      28 %      29 %     32 % 
   % priced with reference to Dated Brent              12 %      15 %     15 % 
Netbacks 
   Operating netback ($/boe) (12)                     38.48     43.92    62.07 
   Fund flows from operations ($/boe) (13)            27.77     34.67    53.86 
Average reference prices 
   WTI (US $/bbl)                                     71.42     70.27    76.96 
   Dated Brent (US $/bbl)                             75.66     74.67    83.24 
   AECO ($/mcf)                                        2.17      1.48     2.50 
   TTF ($/mcf)                                        20.81     18.73    11.77 
Share information ('000s) 
Shares outstanding - basic                          154,177   154,344  159,859 
Shares outstanding - diluted (14)                   157,665   157,837  164,044 
Weighted average shares outstanding - basic         154,173   154,954  161,221 
Weighted average shares outstanding - diluted 
 (14)                                               155,609   156,184  163,648 
 
 
(1)   Fund flows from operations (FFO) is a total of segments 
       and non-GAAP financial measure most directly comparable 
       to net earnings and is calculated as sales less royalties, 
       transportation expense, operating expense, G&A expense, 
       corporate income tax expense (recovery), PRRT expense, 
       interest expense, equity based compensation settled 
       in cash, realized (gain) loss on derivatives, realized 
       foreign exchange (gain) loss, and realized other (income) 
       expense. The measure is used by management to assess 
       the contribution of each business unit to Vermilion's 

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