VET · Vermilion Energy Inc.

Vermilion Energy Inc. delivered strong Q1 2026 operational and financial results, generating $232 million in fund flows from operations and $98 million in free cash flow, which fully funded $135 million in exploration and development capital expenditures. This performance enabled a $50 million reduction in net debt to $1.29 billion, continuing a $770 million deleveraging trend over the past 12 months, while returning $27 million to shareholders through dividends and share repurchases. Production reached 125,618 boe/d, a 22% increase from Q1 2025 driven by Canadian assets (99,746 boe/d) and international contributions (25,872 boe/d), with full-year output trending toward the upper end of guidance due to sustained Q1 momentum into Q2. Despite a $146 million net loss primarily from a $286 million unrealized derivative loss amid geopolitical-driven spikes in oil and European gas prices, realized natural gas prices averaged $5.41/mcf, more than double the AECO benchmark, underscoring portfolio diversification benefits. Operational highlights included Deep Basin wells ranking among Alberta's most prolific, Montney liquids-rich gas wells brought online ahead of schedule at reduced $8.2 million DCET costs per well, and progress on German infrastructure with the Osterheide well generating $30 million in excess free cash flow to date. The announced acquisition of German producing assets adds approximately 1,000 boe/d of low-decline, TTF- and Brent-linked production, bolstering cash flow stability and infrastructure control. Cost reductions of 25% in controllable expenses reflect successful asset repositioning and operational excellence, positioning Vermilion for continued balance sheet strengthening and capital returns.