Vermilion Energy (VET) Q4 2025 earnings summary

Executive summary

• Achieved record annual production of 119,919–121,308 BOE/d in 2025, up 46% per share year-over-year, driven by strategic M&A and a focus on liquids-rich and premium-priced gas in Canada and Europe.

• Strategic repositioning as a global gas producer, with portfolio optimization through Deep Basin acquisition and divestment of non-core assets in Saskatchewan and the US.

• Q4 2025 production exceeded guidance, supported by strong Deep Basin and Montney performance and new international wells.

• Realized premium natural gas prices, averaging $6.01/mcf in 2025 and $5.50/mcf in Q4, due to diversified market exposure and hedging.

• Net loss of $654 million for 2025, primarily from non-cash impairments and discontinued operations, with no impact on fund flows from operations.

Financial highlights

• Generated $1,010 million in fund flows from operations and $375 million in free cash flow for 2025; Q4 FFO was $241 million, with $49 million in FCF on $192 million of E&D capital expenditures.

• Reduced net debt by over $700 million since Q1 2025, ending at $1.34 billion and a net debt to trailing FFO ratio of 1.4x.

• Returned $116 million to shareholders in 2025 via $80 million in dividends and $36 million in share buybacks.

• Operating netback for 2025 was $25.62/BOE, with corporate unit operating costs at $11.86/BOE, the lowest since 2020.

• Montney and Deep Basin wells delivered record volumes and outperformance.

Outlook and guidance

• Q1 2026 production outlook: 122,000–124,000 BOE/d (70% natural gas); full-year 2026 guidance unchanged at 118,000–122,000 BOE/d on $600–$630 million E&D capital.

• Multi-year plan targets meaningful per-share Free Cash Flow growth, even under flat commodity prices.

• Free Cash Flow inflection expected in 2028, with upside from recent commodity price increases.

• Declared a quarterly dividend of $0.135/share, a 4% increase and the fifth consecutive annual increase.

• 48% of 2026 net-of-royalty production hedged, including 50% of European gas and 45% of North American gas.