Vermilion Energy (VET) Q4 2025 earnings summary

Executive summary

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

• Strategic repositioning as a global gas producer, focusing on gas-weighted assets in Canada and Europe after major acquisitions and divestitures.

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

• Realized premium natural gas prices due to diversified market exposure, with a 2025 average of $6.01/mcf after hedging.

• Net loss of $654 million for 2025, primarily due to 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 capital expenditures.

• Reduced net debt by over $700 million since Q1 2025, ending the year 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.

• Realized gas price was $5.50 per Mcf in Q4, double the AECO benchmark, supported by European exposure and hedging.

Outlook and guidance

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

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

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

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