Vermilion Energy (VET) Q4 2024 earnings summary

Executive summary

• Achieved 2024 production of 84,543 boe/d, up 1% year-over-year and 4% per share, exceeding guidance midpoint, with strong operational execution and a $623 million E&D capital program.

• Generated $1.2 billion fund flow from operations ($7.63/share) and $583 million free cash flow ($3.69/share), both up year-over-year, marking the second strongest year on record.

• Closed the strategic Westbrick acquisition for $1.075 billion, adding 50,000 boe/d, over 700 net drilling locations, and significant Deep Basin scale and synergies.

• Announced and implemented the fourth consecutive dividend increase since reinstatement, returning $216 million to shareholders (~10% of market cap) via dividends and buybacks, reducing shares by 5%.

• Launched formal process to divest non-core Southeast Saskatchewan and Wyoming assets to accelerate deleveraging.

Financial highlights

• 2024 petroleum and natural gas sales were $2.0 billion, with Q4 sales at $504 million.

• Q4 2024 FFO was $263 million ($1.70/share), FCF $62 million; 2024 net loss was $47 million, improved from $238 million loss in 2023, mainly due to unrealized derivative and FX losses.

• Net debt decreased 10% to $967 million, with a net debt to trailing FFO ratio of 0.8x at year-end 2024.

• E&D capital expenditures totaled $623 million, within budget.

• Available liquidity of $1 billion, with $572 million undrawn on credit facility.

Outlook and guidance

• 2025 production guidance raised to 125,000–130,000 boe/d, reflecting Westbrick integration and 62% natural gas weighting.

• 2025 E&D capital budget set at $730–760 million, with 68% allocated to North America and 28 Deep Basin wells planned.

• 2025 free cash flow forecast at ~$400 million; unhedged FFO/share expected to rise over 30% to ~$7.50.

• Quarterly dividend increased 8% to $0.13/share, annual obligation ~$80 million; targeting 40% of excess FCF to shareholder returns, 60% to debt reduction.

• 38% of 2025 net-of-royalty production hedged, including 54% of European gas and 35% of North American gas.