Vermilion Energy Inc. Announces Results for the Three Months Ended March 31, 2024

Highlights

• Q1 2024 fund flows from operations (“FFO”)⁽¹⁾ was $431 million ($2.68/basic share)⁽²⁾ and exploration and development (“E&D”) capital expenditures⁽³⁾ were $190 million, resulting in free cash flow (“FCF”)⁽⁴⁾ of $241 million ($1.49/basic share)⁽⁵⁾.
• Net debt⁽⁶⁾ decreased by $134 million in Q1 2024 to $944 million, achieving our net debt target of $1 billion and representing a net debt to trailing FFO ratio⁽⁷⁾ of 0.7 times, the lowest in over a decade.
• Vermilion returned $56 million to shareholders during Q1 2024, comprised of $19 million of dividends and $37 million of share buybacks. The Q1 2024 dividend represents a 20% increase over our previous quarterly dividend, aligned with our intention to provide ratable dividend increases as part of our return of capital framework.
• With the achievement of our $1 billion net debt, we increased our return of capital target to 50% of excess FCF on an annual basis and significantly increased our pace of share buybacks during the quarter, repurchasing and cancelling 2.4 million shares, including 1.0 million shares during the month of March and repurchasing an additional 1.0 million shares during the month of April. We plan to maintain a robust pace of share buybacks in the months ahead as we manage towards an annual return of capital target of 50% of excess FCF.
• In conjunction with our Q1 2024 release, we announced a quarterly cash dividend of $0.12 per share, payable on July 15, 2024 to shareholders of record on June 28, 2024.
• Production during the first quarter of 2024 averaged 85,505 boe/d⁽⁸⁾, comprised of 52,959 boe/d⁽⁸⁾ from our North American assets and 32,546 boe/d⁽⁸⁾ from our International assets. Production for the quarter was above the upper end of our Q1 2024 guidance range primarily due to strong operating performance from our Germany and United States assets.
• In Germany, we successfully drilled our first deep gas exploration well and are pleased to report that we discovered gas within the targeted zone. This well was drilled to a total depth of approximately 5,000 metres, representing the deepest well we have ever drilled in Europe. We plan to test the well during the second quarter and prepare for tie-in operations with an anticipated on-stream date of early 2025. We also plan to commence drilling on the second well (0.6 net) of our inaugural deep gas program in Q2 2024, which is a higher risk prospect targeting a very large structure that is expected to take three to four months to drill.
• In Croatia, construction of the gas plant on the SA-10 block is nearing completion which will add over 2,000 boe/d of European gas currently behind pipe. This production will contribute to FCF immediately upon start-up of the gas plant. In addition, we successfully completed drilling two of the four planned exploration wells on the SA-7 block, and completed drilling a third well subsequent to the quarter. All three wells drilled to date have discovered hydrocarbons in multiple zones which we expect will contribute to FCF in the years ahead.
• In Canada, construction of the 16,000 boe/d Mica Montney battery is nearing completion and remains scheduled for startup in late Q2 2024. We successfully completed the first six (6.0 net) BC Montney wells of our 2024 program and initial flowback results are in line with the strong performance seen on the original two wells on the 16-28 pad.