Vermilion Energy(US:VET) Prnewswireยท2025-08-07 21:01Core Insights - Vermilion Energy Inc. reported strong operational and financial results for Q2 2025, with fund flows from operations (FFO) of $260 million, a slight increase from $256 million in Q1 2025, and free cash flow (FCF) of $144 million, significantly up from $74 million in the previous quarter [4][16][21] - The company experienced a net loss of $233 million, primarily due to a non-cash adjustment related to the divestment of assets in Saskatchewan and the United States, despite net earnings of $74 million from continuing operations [4][11][17] - Production averaged 136,002 barrels of oil equivalent per day (boe/d), a 32% increase from the previous quarter, driven by contributions from the Westbrick assets and new production in the Montney region [4][17][18] Financial Performance - Fund flows from operations for Q2 2025 were $259.7 million, or $1.68 per basic share, compared to $256 million or $1.66 per share in Q1 2025 [6][34] - The company reported a net loss of $233.5 million, with net earnings from continuing operations at $74.4 million and a loss from discontinued operations of $307.8 million [6][34] - Free cash flow for the quarter was $144.2 million, up from $73.9 million in Q1 2025 [6][34] Production and Operations - Average production for Q2 2025 was 136,002 boe/d, with 63% from natural gas and 37% from crude oil and liquids [4][17] - Production from North American assets averaged 106,379 boe/d, a 44% increase from the previous quarter, while international production was 29,623 boe/d, a 1% increase [4][17] - The Montney region saw production of approximately 15,000 boe/d, an increase of 2,500 boe/d from Q1 2025, attributed to new wells and expanded takeaway capacity [4][18] Capital Expenditures and Debt Management - Exploration and development capital expenditures were $115 million, leading to a reduction in net debt from $2.1 billion at the end of Q1 2025 to $1.4 billion by June 30, 2025 [4][6] - The company returned $26 million to shareholders through dividends and share buybacks, with a quarterly cash dividend of $0.13 per share declared [4][7] - Following the divestment of assets, Vermilion expects to exit 2025 with net debt of approximately $1.3 billion [7][11] Strategic Initiatives - Vermilion is transitioning into a global gas producer, focusing on enhancing operational scale and profitability through strategic divestments and acquisitions [11][12] - The company has identified over $200 million in synergies post-acquisition of Westbrick Energy, indicating successful integration and operational efficiencies [12][15] - Future growth initiatives include expanding production in the Montney and Deep Basin regions, as well as pursuing gas acquisition opportunities in Europe [15][14] Sustainability Efforts - Vermilion achieved a 16% reduction in Scope 1 emissions intensity compared to 2019, surpassing its previous target and now focusing on a 25-30% reduction by 2030 [22][23] - The company remains committed to its Climate Strategy, which includes emission reduction, portfolio calibration, and adaptation to new technologies [23][24] Outlook - For Q3 2025, Vermilion expects production to average between 117,000 to 120,000 boe/d, primarily influenced by the recent asset divestments and planned seasonal turnarounds [7][21] - The 2025 capital budget remains unchanged, with continued emphasis on free cash flow generation and debt reduction while returning capital to shareholders [7][21]