Vermilion Energy (VET) Q2 2026 earnings summary

Executive summary

• Q2 2026 production averaged 125,800 BOE/d (71% natural gas), exceeding guidance and driving a 6% year-over-year increase in production per share.

• Net income reached $134 million ($0.88 per basic share), supported by strong European gas and crude oil pricing and derivative gains.

• Free cash flow exceeded CAD 120 million ($122 million), fully funding $110 million in exploration and development capital expenditures.

• Net debt reduced by $70 million to $1.22 billion, totaling $840 million in debt reduction over 15 months.

• Return of capital framework increased to 40%-60% of excess free cash flow to shareholders, with $26 million returned in Q2 via dividends and buybacks.

Financial highlights

• Fund flows from operations for Q2 2026 were $231 million ($1.51 per basic share); free cash flow was $122 million.

• Net debt to trailing four-quarter fund flows from operations at 1.3x as of June 30, 2026.

• Interest expense declined 35% year-over-year, with full-year interest expense expected to be down $30 million from 2025.

• Average realized natural gas price was $5.08/mcf, over three times the AECO benchmark.

• Operating netback was $26.23/boe; FFO per boe was $20.55.

Outlook and guidance

• Full-year 2026 production guidance raised to 121,000–123,000 BOE/d (70% natural gas), with unchanged E&D capital expenditures of $600–$630 million.

• Q3 2026 production expected at 116,000–118,000 BOE/d due to planned maintenance; Q4 expected at ~122,000 BOE/d.

• Quarterly dividend of $0.135 per share declared, payable September 29, 2026.

• No significant downtime expected through mid-2027 beyond planned turnarounds.

• Capital expenditures and operating expenses weighted to the second half of the year.