Vermilion Energy Inc. Announces 2025 Budget, 8% Dividend Increase and Strong Germany Well Test Results

Core Viewpoint - Vermilion Energy Inc. has announced its 2025 budget, which includes an 8% increase in dividends and positive results from well tests in Germany, indicating strong operational performance and growth potential for the upcoming year [1][2]. 2025 Budget - The approved capital expenditure budget for 2025 is between $600 million and $625 million, focusing on drilling and infrastructure across major business units, including the BC Montney asset and European gas exploration [2][3]. - Production guidance for 2025 is set at 84,000 to 88,000 barrels of oil equivalent per day (boe/d), reflecting a 2% growth at the mid-point compared to the original 2024 guidance [2][3]. Financial Outlook - Fund flows from operations (FFO) are forecasted to be approximately $1.0 billion, with free cash flow (FCF) expected to be around $400 million based on forward commodity prices [2][11]. - The quarterly cash dividend has been increased by 8% to $0.13 CDN per share, effective from Q1 2025, amounting to approximately $80 million annually [2][12]. Shareholder Returns - The company aims to return 50% of excess free cash flow (EFCF) to shareholders, with the remainder allocated to debt reduction [2][13]. - Since initiating the share buyback program in July 2022, Vermilion has repurchased 16.8 million shares, reducing the share count by 4.8% to 154.5 million [2][14]. Production and Operations - In North America, approximately $380 million will be invested, with plans to drill 36 wells across various regions, including the BC Montney and Alberta Deep Basin [4][5]. - Internationally, about $230 million will be allocated for European natural gas exploration, with plans to drill ten wells in Germany, the Netherlands, Croatia, and Slovakia [7][8]. Germany Well Test Results - Vermilion successfully tested its second deep gas exploration well in Germany, achieving a flow rate of 21 million cubic feet per day (mmcf/d) with a wellhead pressure of 6,150 psi, indicating strong deliverability potential [2][18]. - The combined flow tests from the deep gas exploration program in Germany now total 38 mmcf/d, with further testing and tie-in operations planned [2][19].