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- **Record Q3 Performance**: 119,062 BOE/day (67% gas), CAD 254M fund flows, and 30% unit cost reduction.
- **Gas Dominance**: 85% of production/capital in gas, realized price 9x AECO (CAD 5.62/MCF post-hedges).
- **Strategic Moves**: Deferred 3,000 BOE/day in Q3, 2026 budget cuts 30% in capital/opex, and 4% dividend hike.
- **European Growth**: Germany/Visselhöhe to add 45Mcf/day by 2028, Netherlands to add 16 BCF at CAD 1.50/MCF.
- **Free Cash Flow Pivot**: Montney to generate CAD 125M/year excess FCF from 2028, Deep Basin with minimal new capex.

**【CEO Summary Section】**
- **Strong Q3 Performance**: Achieved production of 119,062 BOE/day (67% gas), at the upper end of guidance, with fund flows of CAD 254 million.
- **Cost Efficiency**: Reduced 2025 capital guidance by CAD 20 million and operating cost guidance by CAD 10 million, driven by asset repositioning.
- **Global Gas Dominance**: 85% of production and capital allocated to gas, with realized gas prices 9x AECO (CAD 5.62/MCF post-hedges).
- **Strategic Production Management**: Deferred 3,000 BOE/day in Q3 to capitalize on Q4 pricing, with plans to resume in Q4.
- **2026 Outlook**: Budget of CAD 600-630 million, focusing on Montney, Deep Basin, and European gas, with 30% improvement in capital efficiency.

**【CFO Financial Commentary】**
- **Financial Strength**: Free cash flow of CAD 108 million, net debt reduced to CAD 1.4 billion (1.4x debt/FFO ratio), and CAD 26 million returned to shareholders.
- **Production Highlights**: North America at 88,763 BOE/day (post-divestments), International up 2% to 30,299 BOE/day, with Deep Basin drilling exceeding expectations (12 wells drilled, 6 >10 MMcf/day).
- **2026 Budget Details**: CAD 415 million for liquids-rich gas (49 wells), CAD 200 million for European exploration, and 30% unit cost reduction.
- **Dividend Growth**: 4% increase to CAD 0.135/share, with plans to balance buybacks and debt reduction.

**【Q&A Highlights】**
- **Australia Strategy**: 4,000 bbl/day in 2026, with next drill in mid-2027, targeting premium pricing ($10-$15/bbl over Brent).
- **Realized Gas Price Drivers**: Diversified portfolio (Canada: 2x AECO, Europe: 7x AECO), hedging gains, and strategic production deferrals.
- **Germany (Visselhöhe)**: First well online mid-2026, with 68 BCF recoverable. Follow-up wells in Q1 2027, targeting 20+ MMcf/day by 2028.
- **Netherlands (Alpenhuizen)**: 16 BCF discovered at CAD 1.50/MCF, with Q4 2025 production ramp-up.
- **Deep Basin Success**: 12 wells drilled in Q3, 6 >10 MMcf/day, under budget, with 3-rig program continuing in 2026.

Vermilion Energy Inc (VET) Q3 2025 Earnings Call Transcript

- **Production Surge**: Q2 2025 production up 32% YoY to 136,000 BOEs/day, driven by Montney/Mica developments and Westbrick integration.
- **Debt Reduction**: Sold $535M in non-core assets, reducing net debt by $750M to $1.3B by year-end.
- **Gas Dominance**: 70% of production now gas-focused, with 80% of capex allocated to high-margin Montney and Germany.
- **Cost Efficiency**: $8.5M/Montney well cost (down $1M/year), $30M annual synergies from Westbrick integration.
- **Future Cash Flow**: Target $125-150M annual free cash flow at $70 WTI/$3 AECO, with 10,000 BOEs/day Germany growth by 2030.

**【CEO Summary Section】**
- **Q2 Production Growth**: 32% YoY increase to 136,000 BOEs/day, driven by the Westbrick acquisition and Montney/Mica developments.
- **Strategic Asset Sales**: Sold Saskatchewan and U.S. assets for $535M, reducing net debt by $750M to $1.3B by year-end.
- **Global Gas Focus**: 70% of production now weighted to natural gas, with 80% of future capital allocated to liquids-rich Montney and Germany.
- **Cost Efficiency**: Achieved $8.5M/Montney well cost benchmark (down $1M/year), with $30M annual synergies from Westbrick integration.
- **Future Growth**: Target 28,000 BOEs/day in Montney by 2028, 10,000 BOEs/day in Germany by mid-2030s, and $125-150M annual free cash flow at $70 WTI/$3 AECO.

**【CFO Financial Commentary】**
- **Q2 Fund Flows**: $260M from operations, $144M free cash flow after E&D capex.
- **Capital Allocation**: 2025 capex guidance of $630-660M, with flexibility to reduce if needed.
- **Debt Reduction**: Ended Q2 with $1.4B net debt, targeting $1B by 2026 through asset sales and free cash flow.
- **Hedging**: 50% of 2025 production hedged, including 60% of Q3 Canadian gas at $2.65/Mcf floor.

**【Q&A Highlights】**
- **Portfolio Reshaping**: Exiting non-core European assets (Hungary, Slovakia) and focusing on high-return Montney/Deep Basin/Germany projects.
- **Shareholder Returns**: 40% of excess free cash flow allocated to buybacks, with dividend increases constrained to 15-20% of free cash flow.
- **European Acquisitions**: Eyeing $200M+ deals in Netherlands/Germany, leveraging $750M annual free cash flow and 1x leverage target.
- **Sustainability**: Achieved 16% Scope 1 emission reduction 1 year ahead of schedule, targeting 25-30% reduction by 2030.

Vermilion Energy Inc. (VET) Q2 2025 Earnings Call Transcript

- **Production Surge**: Q1 2025 production up 23% to 103,000 BOEs/day, driven by Westbrick acquisition. Full-year 2025 target of 135,000 BOEs/day.
- **Cash Flow Strength**: $256M funds flow and $74M free cash flow. $37M returned to shareholders via dividends and buybacks.
- **German Gas Discovery**: Wisselshorst well testing at 41 MMcf/day, with potential to add 85 Bcf net reserves and $150M NPV10.
- **Cost Efficiency**: Montney DCET costs reduced to $9M/well, saving $100M in future development costs.
- **Debt Reduction Focus**: 60% of free cash flow allocated to debt, with $2B net debt (1.7x funds flow). Evaluating asset sales to accelerate paydown.

**【Dion Hatcher - Business Update】**
- **Production Growth**: Q1 2025 production increased 23% to 103,000 BOEs/day, driven by the Westbrick acquisition (50,000 BOEs/day contribution). Full-year 2025 production expected to average 135,000 BOEs/day.
- **Financial Performance**: Generated $256M in funds flow and $74M in free cash flow. Returned $37M to shareholders via $20M dividends and $17M buybacks. Debt reduced to $2B (1.7x trailing funds flow).
- **Westbrick Synergies**: Identified $100M in operational and development synergies, including longer laterals and infrastructure optimization. Additional synergies expected as integration progresses.
- **Germany Deep Gas Exploration**: Successful testing of Wisselshorst well (41 MMcf/day combined rate) and Osterheide well (7 MMcf/day production). Potential to add 85 Bcf net reserves and $150M NPV10 from the program.
- **Montney Development**: Achieved $9M/DCET cost milestone (down from $9.6M prior). Phase 2 infrastructure expansion completed under budget, targeting 28,000 BOEs/day by 2028.
- **Debt Management**: 60% of excess free cash flow allocated to debt reduction. Evaluating divestment of Saskatchewan and Wyoming assets to accelerate debt paydown.

**【Q&A Highlights】**
- **Wisselshorst Well**: Initial production expected in H1 2026 with 5 MMcf/day capacity. Phase 2 pipeline expansion in 2027 and gas processing upgrade in 2028. Six appraisal wells planned.
- **Westbrick Cost Savings**: $5M/year in operational savings and $10M/year in development synergies. Total NPV10 of $100M from identified synergies.
- **Shareholder Value**: 80% of production and 70% of capital allocated to global gas portfolio. European gas assets generate premium prices with minimal decline rates, supporting strong free cash flow.


Vermilion Energy Inc (VET) Q1 2025 Earnings Call Transcript

- **Record 2024 Performance**: 84,543 BOEs/day production (+4% YoY), $1.2 billion funds flow, and $583 million free cash flow.
- **German Gas Breakthrough**: Wisselshorst well tests 41 MMcf/day, with potential to double European 2P reserves.
- **Westbrick Synergies**: 50,000 BOEs/day production, 700+ future wells, and 15+ year inventory in Deep Basin.
- **Debt Reduction Plan**: $200-$300 million organic deleveraging in 2025, targeting <1.0x FFO/Debt.
- **Shareholder Returns**: 8% dividend increase, $216 million returned in 2024, and 40% EFCF allocated to buybacks.
- **Low-Risk Portfolio**: 50%+ revenue outside Canada, $1-$1.50/McF F&D costs in Germany, and 1.6x PDP recycle ratio.


**【CEO Summary Section】**
- 2024 production averaged 84,543 BOEs/day, up 4% year-over-year, driven by 12% growth in international production (Australia, Croatia) and 50,000 BOEs/day from the Westbrick acquisition.
- Generated $1.2 billion ($7.63/share) in funds flow and $583 million ($3.69/share) in free cash flow, both up 9% year-over-year.
- Completed $623 million E&D program, including investments in Germany, Croatia, and Montney infrastructure.
- Returned $216 million (10% of market cap) to shareholders via dividends and buybacks, including an 8% dividend increase in Q1 2025.
- Net debt reduced 10% to $967 million, with net debt/FFO ratio of 0.8x, the lowest in over a decade.
- Reserves increased 1% to 435 million BOEs, with recycle ratios of 1.6x (PDP) and 2.3x (2P).
- Announced Westbrick acquisition, adding 50,000 BOEs/day and 770,000 net acres in the Deep Basin with 700+ future drilling locations.
- Germany deep gas exploration success: Wisselshorst well tested 41 MMcf/day, with potential to double European 2P reserves.

**【CFO Financial Commentary】**
- 2024 net debt reduced by $100 million to $967 million, with FFO/Debt ratio of 1.1x.
- 2025 guidance: $400 million FCF, $7.50 FFO/share (30% increase vs. 2024), and 50% production growth to 125,000-130,000 BOEs/day.
- Capital allocation framework: 60% of EFCF to debt reduction, 40% to shareholder returns (dividends + buybacks).
- Issued $400 million 7.25% senior notes to fund Westbrick acquisition, extending debt maturity to over 5 years.
- Launched non-core asset disposition program for SE Saskatchewan and Wyoming assets, with strong bidder interest.
- Unit OpEx expected to decline 15% in 2025 due to scale in Deep Basin and Montney.

**【Germany Deep Gas Exploration】**
- Wisselshorst well tested 41 MMcf/day (20 MMcf/day per zone), with 68 BCF (43 BCF net) recoverable.
- First gas expected Q2 2025 at 3-5 MMcf/day, with capacity expansion to 35 MMcf/day by 2027.
- Potential for 4-6 follow-up wells on Wisselshorst structure, and 30+ locations across 9 identified prospects.
- F&D cost target of $1-$1.50/McF, with EURs of 68 BCF (43 BCF net) per well.

**【Westbrick Acquisition Integration】**
- 50,000 BOEs/day production, 770,000 net acres, and 700+ future drilling locations with 40%-100%+ half-cycle returns.
- Unit OpEx of $650/BOE vs. Vermilion's $750/BOE, with potential synergies from shared infrastructure.
- 2025 capital program includes 28 gross (24.9 net) wells in Deep Basin, supporting 50% production growth.
- Integration on track to achieve $200-$300 million organic deleveraging in 2025.

**【Risk Management & Tariff Update】**
- <50% of revenue exposed to U.S. tariffs on Canadian energy exports; most Canadian gas sold domestically.
- 40% hedged for 2025 at strong prices, with 20% hedged for 2026.
- Diversified portfolio (50%+ revenue outside Canada) reduces commodity price risk.


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