Vermilion Energy (VET) Investor Day 2025 summary

Strategic direction and portfolio focus

• 85% of capital from 2026-2030 will be allocated to Deep Basin, Montney, and onshore European gas assets, with Germany and the Netherlands as key growth drivers for excess free cash flow generation.

• The company expects to generate CAD 1.7 billion in excess free cash flow from 2026 to 2030, nearly 90% of its current market cap, with a structural inflection in 2028.

• Portfolio repositioning has led to a more focused, efficient, and inventory-rich asset base, with over 20 years of drilling inventory in core regions and divestment of non-core assets.

• Germany's production is set to double by 2030, supported by recent discoveries and a robust pipeline of prospects.

• The company will continue to harvest cash from mature assets in Ireland, France, and Australia to fund growth and shareholder returns.

Operational excellence and asset performance

• Operational improvements have reduced capital intensity by 30% and increased production per share by over 40% compared to 2024.

• Deep Basin and Montney assets have delivered well results above peers, with recent Deep Basin wells achieving IP30 rates nearly double previous programs.

• Montney infrastructure build-out is nearing completion, enabling a pivot to sustained free cash flow generation by 2028 and a plan to reach 28,000 boe/d by 2028.

• German deep gas wells offer higher margins and longer durations, with payouts four times over their lifetime, outperforming unconventional assets.

• Batch drilling and modular facilities in Germany are expected to reduce capital and cycle times by 20-30%.

Financial guidance and capital allocation

• Average annual E&D investment is guided at CAD 600–630 million, with a peak in 2027 for the Australia drilling program.

• By 2030, net debt is projected to be CAD 700 million lower, with over 40 million shares repurchased and a significantly higher base dividend at a payout ratio near 10%.

• Per-share excess free cash flow is expected to double to CAD 2.75 by 2028, with a sustainable yield exceeding 20% at current share prices.

• The company targets a balanced allocation of excess free cash flow between debt reduction, share buybacks, dividends, and organic growth, with 60% of EFCF allocated to debt repayment and 40% to shareholder returns.

• Financial resilience is supported by terming out 85% of debt to 2030/2033 and maintaining over CAD 1 billion in liquidity, with no near-term debt maturities.