Vermilion Energy (VET) Q4 2025 earnings summary

Executive summary

• Achieved record annual production in 2025, up 46% per share year-over-year, driven by strategic M&A and a focus on gas-weighted assets in Canada and Europe.

• Repositioned as a global gas producer with top decile realized gas prices, significant organic and inorganic reserves growth, and a long-duration asset base.

• Realized strong fund flows from operations (FFO) of $1,010 million and free cash flow (FCF) of $375 million, fully funding $635 million in E&D capital expenditures.

• Returned $116 million to shareholders via dividends and share buybacks, and reduced net debt by over $700 million since Q1 2025.

• Reported a net loss of $654 million for 2025, primarily due to non-cash impairments and discontinued operations, with no impact on FFO or ongoing operations.

Financial highlights

• Q4 2025 FFO was $241 million, with FCF of $49 million on $192 million in E&D capital expenditures.

• Q4 2025 production averaged 121,308–124,000 boe/d, with 69–70% natural gas weighting.

• Average realized natural gas price in 2025 was $6.01/mcf after hedging, over three times the AECO benchmark.

• Net debt ended 2025 at $1.34 billion, with a net debt to trailing FFO ratio of 1.4x.

• Operating netback for 2025 was $25.62–29.91/boe, and FFO per boe was $23.10.

Outlook and guidance

• Q1 2026 production guidance is 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.

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

• 48% of 2026 expected net-of-royalty production hedged, including 50% of European gas, 53% crude oil, and 45% North American gas.

• Portfolio repositioning delivers over 40% production growth and over 30% reduction in unit costs and capital intensity from 2024 to 2026.

• Montney asset to pivot to excess free cash flow in 2028 after infrastructure build-out, targeting 28,000 boe/d.