VET · Vermilion Energy Inc.

Vermilion Energy Inc. delivered robust Q1 2026 results, generating $232 million in fund flows from operations ($1.52 per basic share) and $98 million in free cash flow, which fully covered $135 million in exploration and development capital expenditures while enabling $27 million in shareholder returns and a $50 million net debt reduction to $1.29 billion. Production rose to 125,618 boe/d (72% natural gas), reflecting a 4% increase from Q4 2025 and 22% from Q1 2025, driven by strong performances in Deep Basin and Montney assets, where six liquids-rich gas wells came online ahead of schedule at lower DCET costs of $8.2 million per well. Despite a $146 million net loss primarily from $286 million unrealized derivative losses amid rising oil and European gas prices due to geopolitical events, operational netbacks held at $25.49/boe and FFO per boe at $20.33. The company realized premium natural gas pricing of $5.41/mcf, over double AECO, thanks to international market exposure. Balance sheet strength improved with net debt to four-quarter trailing FFO at 1.4x. Strategic moves included signing a Germany acquisition adding 1,000 boe/d low-decline production tied to TTF gas and Brent oil, enhancing EFCF and infrastructure control, plus three new North German Basin concessions doubling land to over 1 million net acres. Offsetting this, a deal to divest 60% of Croatia's SA-07 block for €15 million ($24 million) proceeds earmarked for debt paydown, closing H2 2026. Management highlights operational excellence, with 25% lower controllable costs from asset repositioning. Outlook remains positive, with Q2 production at 123,000-125,000 boe/d and full-year trending to the top of 118,000-122,000 boe/d on $600-630 million capex, plus a $0.135/share dividend.