Vermilion Energy, Inc. Q2 FY2024 earnings call

Management Statement and Operational Highlights:

• Production: Q2 averaged 84,974 boes per day (top end of Q2 guidance range). Generated $237 million of fund flows and $126 million of free cash flow. Reduced net debt by $38 million to $907 million. Repurchased 2.8 million shares for $47 million in Q2, paid $19 million in dividends, total return $66 million.
• Operational Milestones: Started BC Montney battery, Mica Montney battery, and SA-10 gas plant in Croatia. Completed 5 exploration wells from Europe in H1.
• International: Commissioned SA-10 gas plant in Croatia, wells ramping up. European natural gas production grown over 15% in past 2 years. Germany: First deep gas well testing rescheduled to Q3, second deep gas exploration well to be drilled. Croatia: SA-10 gas plant commissioned, wells ramping up; SA-7 block had 4-well program with 100% success rate.
• North American: Production up 4% in Q2 due to Mica Montney wells. BC Montney battery completed; Mica battery start-up to double Montney production in 2025. Water hub infrastructure completed, achieving water recycling and cost savings in Montney operations.

Segment Performance:

• International operations: Averaged 29,987 boes per day in Q2. European natural gas production represents approximately 40% of corporate natural gas production, or over 100 million cubic feet per day.
• North American operations: Averaged 54,987 boes per day in Q2, an increase of 4% from the previous quarter due to new production from recent Mica Montney wells.

Guidance:

• Annual production guidance increased to 83,000 to 86,000 boe per day.
• Capital budget remains $600 million to $625 million.
• Q3 2024 production expected to be in the range of 83,000 to 85,000 boe per day, considering planned turnaround activity.
• Q3 plans: Complete 5 wells on 9-21 BC pad, commence drilling in Alberta and Saskatchewan, drill second exploration well in Germany.

Risks: No specific risks detailed in the transcript, but general risks could include commodity price fluctuations, operational delays, and regulatory changes.

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