Financial Data and Key Metrics Changes - Vermilion generated CAD 254 million in fund flows from operations in Q3, with free cash flow of CAD 108 million after exploration and development capital expenditures of CAD 146 million [7] - Net debt has been reduced by over CAD 650 million since Q1 2023, bringing net debt to under CAD 1.4 billion as of September 30, resulting in a net debt to four-quarter trailing fund flows from operations ratio of 1.4 times [7][8] - The company returned CAD 26 million to shareholders through dividends and share buybacks during the quarter, comprising CAD 20 million in dividends and CAD 6 million in share buybacks [7] Business Line Data and Key Metrics Changes - Q3 production averaged 119,062 BOE per day with a 67% gas weighting, at the upper end of guidance [8] - In North America, production averaged 88,763 BOE per day, while international operations averaged 30,299 BOE per day, up 2% from the previous quarter [8] - The Deep Basin drilling program exceeded expectations, with 12 wells completed, six testing over 10 million cubic feet per day of gas production [36] Market Data and Key Metrics Changes - The realized gas price in Q3 was CAD 4.36 per MCF, significantly outperforming the AECO 5A pricing, with Canadian realized prices more than double the AECO benchmark [4][26] - Including hedging gains, the realized price increased to CAD 5.62 per MCF, highlighting the strategic advantage of being a global gas producer [4][28] Company Strategy and Development Direction - The company has repositioned its asset base, concentrating 85% of production and capital in its global gas business, which is expected to drive sustainable long-term success [4] - The 2026 budget includes an exploration and development capital budget of CAD 600 million to CAD 630 million, with approximately 85% allocated to the global gas portfolio [10] - The focus is on operational excellence and financial discipline, with plans to invest in high-return, liquids-rich gas wells in the Montney and Deep Basin [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain production guidance while reducing exploration and development capital guidance, reflecting improved capital efficiency [14][15] - The company is well-positioned to benefit from improving gas prices, with significant free cash flow expected from key development assets [29] - The intention to increase the quarterly cash dividend by 4% reflects confidence in operational activities and financial performance [13] Other Important Information - The company plans to bring the discovery well at Visselhöhe online in Germany in 2026 and expand takeaway capacity over the next two years [5][10] - In the Netherlands, two successful wells were drilled, discovering gas in two zones, with production expected to commence in Q4 2025 [9][35] Q&A Session Summary Question: Current volumes and setup for Australia through 2026 and 2027 - Management indicated that current volumes are around 4,000 barrels per day, with the next drilling program tentatively planned for 2027, depending on rig rates and commodity prices [18] Question: Balancing share buybacks and dividend growth - Management emphasized the focus on driving per share value through various means, including share buybacks and maintaining a strong balance sheet, while also reserving excess free cash flow for debt reduction [20][21] Question: Drivers behind the realized gas price being seven times the AECO price - The diversified portfolio, including strong Canadian and European gas operations, contributed to the high realized price, with strategic decisions to shut in and defer wells without impacting liquids production [26][27] Question: Next steps for the Visselhöhe prospect in Germany - The first discovery well is expected to be tied in and producing by Q2 2026, with follow-up wells planned for January 2027 [31][32] Question: Discoveries in the Netherlands - Two successful wells were drilled, discovering about 16 BCF gross of recoverable gas, with production expected to commence in Q4 [35] Question: Results of the Q3 drilling program in the Deep Basin - The program exceeded expectations, with strong initial test results and coming in under budget, indicating the benefits of a consistent drilling program [36]

I primarily invest in turnarounds in natural resource industries, where I have a typical holding period of 2-4 years. Focusing on value offers good downside protection and can still provide great upside participation. The portfolio has over the last 7 years had a compounded annual growth rate of 34% .If you like this article and are interested in more frequent analysis of my holding companies, real-time notifications on portfolio changes, together with macro and industry analysis. I would encourage you to h ...

VERMILION ENERGY INVESTOR PRESENTATION GLOBAL GAS PRODUCER FREE CASH FLOW FOCUSED FINANCIAL DISCIPLINE NOVEMBER 2025 WHY INVEST IN VERMILION? Repositioned Global Gas Portfolio o More efficient, long-life assets with direct exposure to premium-priced European gas Dominant Deep Basin Montney Momentum o Free cash flow inflection following infrastructure build-out Germany Production Growth o Positioned for organic growth with production from new discoveries, upside from additional prospects Return of Capital o ...

Core Insights - Vermilion Energy reported a quarterly loss of $0.02 per share, missing the Zacks Consensus Estimate of $0.04, and a significant decline from earnings of $0.24 per share a year ago, indicating an earnings surprise of -150.00% [1] - The company generated revenues of $326.42 million for the quarter ended September 2025, which was 14.63% below the Zacks Consensus Estimate and down from $359.27 million year-over-year [2] - Vermilion's stock has underperformed, losing approximately 21.7% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] Earnings Outlook - The future performance of Vermilion's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $397.7 million, and for the current fiscal year, it is $0.90 on revenues of $1.64 billion [7] Industry Context - The Oil and Gas - Exploration and Production - International industry, to which Vermilion belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests that trends in earnings estimate revisions are strongly correlated with near-term stock movements, which could impact Vermilion's performance [5][6]

CALGARY, AB, Nov. 5, 2025 /PRNewswire/ - Vermilion Energy Inc. ("Vermilion", "We", "Our", "Us" or the "Company") (TSX: VET) (NYSE: VET) is pleased to report operating and condensed financial results for the three and nine months ended September 30, 2025. The unaudited interim financial statements and management discussion and analysis for the three and nine months ended September 30, 2025 will be available on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at www.sedarplus.ca, ...

Core Insights - Vermilion Energy is a Canadian producer with oil and gas assets across multiple countries including Canada, Germany, Ireland, The Netherlands, France, Australia, and Croatia [1] Group 1: Company Overview - The company is approaching a state of free cash flow, indicating potential financial stability and growth opportunities [1] Group 2: Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology, which enhances the credibility of the insights provided [1]

Core Thesis - Vermilion Energy Inc. (VET) is viewed positively due to recent insider buying, macroeconomic factors, and potential for strategic acquisitions, indicating management's confidence in the company's prospects [2][3][5] Insider Activity - A notable cluster of insider buying has been observed, including CAD 250,000 from VP of Business Development Lara Conrad, suggesting strong management conviction in Vermilion's future [2] - Independent director Stephen Larke's CAD 200,000 purchase and CEO Dion Hatcher's CAD 16,000 buy further support the notion that management believes the stock is undervalued [3] Strategic Acquisitions - Lara Conrad's previous experience with a significant acquisition at ARC Resources indicates that Vermilion may be preparing for strategic acquisitions, enhancing its growth potential [3] Macro Factors - The current Atlantic hurricane season has been unusually quiet, which historically correlates with colder winters in Europe, potentially increasing heating demand by 20-50% and benefiting Vermilion's natural gas operations in Europe [4] - The accelerating data center buildout in Canada is expected to provide structural support to domestic natural gas prices, positioning Vermilion to benefit from price appreciation in both European (TTF) and Canadian (AECO) markets [5] Financial Position - Despite a 3.70% depreciation in stock value since the last bullish thesis coverage, the company's strategic direction remains intact, with ongoing share buybacks and undervalued assets presenting a compelling investment opportunity [6]

Core Viewpoint - Vermilion Energy Inc. is set to release its third quarter operating and financial results for 2025 on November 5, 2025, after North American markets close, with a conference call scheduled for November 6, 2025, to discuss these results [1][2]. Group 1: Financial Results Announcement - The unaudited interim financial statements and management discussion for the three and nine months ended September 30, 2025, will be available on SEDAR, EDGAR, and Vermilion's website [1]. - A conference call and webcast presentation will take place on November 6, 2025, at 9:00 AM MT (11:00 AM ET) to discuss the results [2]. Group 2: Conference Call Details - Participants can join the conference call by calling designated numbers for Canada, the US, and international attendees, with a recording available for replay from November 6 to November 13, 2025 [2][3]. - An automated call back option is available for participants who register their phone numbers, and a webcast will also be accessible [3]. Group 3: Company Overview - Vermilion Energy Inc. is a global gas producer focused on acquiring, exploring, and developing liquids-rich natural gas in Canada and conventional natural gas in Europe, while optimizing low-decline oil assets [4]. - The company prioritizes health and safety, environmental protection, and profitability, emphasizing strategic community investment in its operating areas [5].

Industry Overview - The Zacks Oil and Gas - International E&P industry consists of companies focused on the exploration and production of oil and natural gas outside the United States, with cash flow heavily influenced by commodity prices [2] - E&P companies are vulnerable to volatile energy market prices, which affect their returns and production growth rates [2] Key Challenges - The industry faces oversupply risks due to OPEC+ easing production cuts and the International Energy Agency projecting stronger supply growth than demand, leading to potential price pressures [3] - Weakening U.S. demand, highlighted by rising crude inventories, raises concerns about economic growth and could lead to reduced pricing leverage for E&P firms [4] - Persistent cost inflation, including labor shortages and higher service expenses, is squeezing profitability and could narrow E&P margins further [6] Growth Opportunities - Natural gas and LNG are emerging as structural growth drivers, with global demand expanding, particularly in Asian markets and Europe, providing longer-term visibility for producers [5] - Companies with diversified portfolios and strong cash generation capabilities are positioned to benefit from these trends [1] Performance Metrics - The Zacks Oil and Gas - International E&P industry currently holds a Zacks Industry Rank of 178, placing it in the bottom 27% of 245 Zacks industries, indicating challenging near-term prospects [7][8] - The industry's earnings estimates for 2025 have decreased by 111.1% over the past year, reflecting a negative outlook [9] - Over the past year, the industry has underperformed, losing more than 40%, compared to a 3.9% increase in the broader sector and a 17.8% gain in the S&P 500 [11] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 5.84X, significantly lower than the S&P 500's 18.34X but above the sector's 5.13X [14] Notable Companies - **Vermilion Energy**: Focuses on free cash flow generation with a diversified portfolio across Canada, Europe, and Australia. The company has seen a 210.3% increase in earnings estimates for 2025, indicating strong growth potential [17][18] - **VAALCO Energy**: An independent oil and gas company with operations in Africa and Canada, focusing on oil production. The company has a market cap of approximately $446 million and has experienced a 27% decline in shares over the past year [20][21] - **Capricorn Energy**: A UK-based producer with a focus on Egypt, known for its cash flow-driven strategy and significant shareholder returns. The company has a market cap of just over $200 million and has seen a 3% increase in shares over the past year [23][24]

Financial Data and Key Metrics Changes - Vermillion Energy reported a production average of 136,000 BOEs per day in Q2, a 32% increase from the previous quarter, primarily due to the Westbrook acquisition [4] - Fund flows from operations reached $260 million, with free cash flow of $144 million after capital expenditures [5] - The company expects to end 2025 with approximately $1.3 billion in net debt, a decrease of $750 million from Q1 [16] Business Line Data and Key Metrics Changes - The production base is now approximately 120,000 BOEs per day, with 70% weighted to natural gas, and over 90% of production coming from global gas assets [5] - Montney production averaged about 15,000 BOEs per day in Q2, with significant cost reductions achieved in drilling operations [7] - The company plans to invest approximately $100 million in additional infrastructure and drilling 40 wells over the next few years to reach a targeted production rate of 28,000 BOEs per day by 2028 [8][19] Market Data and Key Metrics Changes - European gas prices are currently over $15 per MMBtu, significantly higher than AECO prices, which averaged $1.69 [12][18] - The realized gas price for the company in Q2 was $4.88 per Mcf, reflecting a competitive advantage due to the unique gas portfolio [18][51] Company Strategy and Development Direction - Vermillion is transitioning towards becoming a global gas producer, with over 80% of future capital investments directed towards global gas assets [5] - The company is focused on enhancing operational scale and long-duration assets to position itself for sustainable growth [5][14] - Vermillion aims to streamline its portfolio further by exiting non-core assets in Europe and focusing on high-return development opportunities [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a new cost benchmark for Montney wells, which will improve future development costs and returns [8] - The company is well-positioned for long-term shareholder value with a more focused asset base and improved cost structure [20] - Management highlighted the importance of operational excellence during a busy period of integration and divestment [14] Other Important Information - Vermillion achieved its Scope one emission reduction target one year ahead of schedule, with a 16% reduction in emissions intensity compared to 2019 levels [13] - The company has identified synergies worth a combined $300 million on an NPV-ten basis from the Westbrook acquisition [15] Q&A Session Summary Question: What is next in terms of reshaping the portfolio? - Management indicated ongoing efforts to streamline the portfolio, including exiting Hungary and not pursuing opportunities in Slovakia, while considering the future of assets in Croatia [24][25] Question: What is the payout ratio and bias towards dividends or buybacks? - The company plans to return 40% of excess free cash flow to shareholders, prioritizing share buybacks over dividends [28] Question: Can you provide a breakdown of the Westbrook synergies? - Management detailed that the $200 million in synergies includes operational efficiencies and restructuring of the Canadian organization, with an estimated $30 million in annual savings [33][35] Question: What is the update on acquisition potential in Europe? - Management sees potential for acquisitions in Europe, particularly in the Netherlands, and feels comfortable financing these opportunities due to ongoing deleveraging [37] Question: What happened with the deferred CapEx? - The company deferred capital expenditures on non-core assets to prioritize debt reduction, with a current forecast of $630 to $660 million for the year [46]