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What were the key takeaways from Vermilion Energy's earnings call?

- **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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

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Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

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Net Income from Continuing Operations

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Diluted EPS from Discontinued Operations

VET

VET fundamentals

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