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 European gas assets, with Germany as a key driver for free cash flow growth.

• 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 significant inflection in 2028.

• Portfolio streamlining and divestment of non-core assets have increased production per share by over 40% and reduced capital intensity by 30% compared to 2024.

• Inventory depth supports 20+ years of drilling in Montney and Deep Basin, and 10+ years in Germany, providing long-term growth and flexibility.

• The company will continue to harvest cash from mature assets in Ireland, France, and Australia, funding growth in core areas.

Operational excellence and asset performance

• Operational improvements have led to lower costs, with drilling costs in Deep Basin and Montney down over 30% and production exceeding type curves.

• Deep Basin wells have IP30 rates nearly double previous programs, and Montney DCET costs have dropped by over CAD 1 million per well.

• Montney production is targeted to reach 28,000 BOE/d by 2028, with infrastructure investments nearly complete and sustainable free cash flow of CAD 125–150 million annually for 20 years.

• Germany's deep gas program is expected to double production by 2030, with recent discoveries adding over 20% to European gas reserves.

• Batch drilling and modular facilities in Germany are reducing capital and cycle times, enhancing project economics.

Financial guidance and capital allocation

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

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

• The company targets per-share excess free cash flow of CAD 2.75 by 2028, more than doubling from current levels.

• Capital allocation will balance debt reduction, organic growth, share buybacks, and dividends, with flexibility to adapt to market cycles.

• Net debt to FFO ratio targeted below 1.0x, with 60% of EFCF allocated to debt repayment and 40% to shareholder returns.