Q3 2025 Vermilion Energy Inc Earnings Call
I ask the question and answer session. If at any time. During this call you require immediate assistance. Please press star zero for the operator. This call is being recorded on Thursday November six 2025 now.
Dion Hatcher: Good morning, ladies and gentlemen. I'm Dion Hatcher, President and CEO of Vermilion Energy. With me today are Lars Glemser, Vice President, CFO, Darcy Kerwin, Vice President, International and HSE, Brandon McQuaid, Vice President, North America, Laura Conrad, Vice President, Business Development, and Travis Ferguson, Director of Investor Relations and Corporate Planning. Please refer to the advisory on forward-looking statements in our Q3 release. It describes the forward-looking information, non-GAAP measures, and oil and gas terms used today, and outlines the risk factors and assumptions relevant to this discussion. Vermilion delivered another strong quarter in Q3, demonstrating both operational excellence and financial discipline. Our production came in at the upper end of our guidance range, and we were able to generate robust fund flows from operations in a challenging commodity price environment.
Now like to turn the conference call over to Mr. Diana <unk>, President and CEO. Please go ahead.
Good morning, ladies and gentlemen, Dion at your President and CEO of Vermilion Energy with me today are Larry <unk>, Vice President and CFO.
Speaker #1: Good morning , ladies and gentlemen , and welcome to the Vermilion Q3 2025 conference call . At this time , all lines are in listen only mode .
Carbon Vice President International and HSE.
Speaker #1: Following the presentation , we will conduct a question and answer session . If at any time during this call , you require immediate assistance , please press star zero for the operator .
Nandan Mcquade, Vice President North America, Lara Conrad Vice President business development, and Travis <unk> director of Investor Relations and corporate planning.
Speaker #1: This call is being recorded on Thursday , November 6th , 2025 . I would now like to turn the conference call over to Mr. Diane Hatcher , president and CEO .
Please refer to the advisory on forward looking statements in our Q3 release describes forward looking information non-GAAP measures and oil and gas short term to use today.
Speaker #1: Please go ahead .
Nevertheless, the risk factors and assumptions relevant to this discussion.
Speaker #2: Good morning , ladies and gentlemen . I'm Diane Hatcher , president and CEO of Vermilion Energy . With me today are Lars Glemser vice president and CFO Darcy Kirwan , vice president , international and HSC Randy McQuade , vice president , North America Lara Conrad , vice president , business development .
Vermilions delivered another strong quarter in Q3, demonstrating both operational excellence and financial discipline. Our production came in at the upper end of our guidance range and we were able to generate robust fund flows from operations and a challenging commodity price environment. Our performance this quarter reflects improvements in both <unk>.
Dion Hatcher: Our performance this quarter reflects improvements in both capital and operating efficiencies, driven by the strategic repositioning of our asset base. These structural improvements enabled us to lower the top end of our 2025 capital guidance by CAD 20 million without impacting our production. This speaks to the growing efficiency of our capital deployment. In addition, we lowered our full-year operating cost guidance by more than CAD 10 million due to the improvements we are realizing in the second half of 2025. This momentum will carry into the 2026 budget guidance, which includes even lower capital and unit operating costs, reflective of our larger, more cord up portfolio. When compared to 2024, the last full year before we launched our asset high-grading initiative, our production per share has increased by over 40%, while our unit cost structure is down by 30%.
Speaker #2: And Travis Jorgenson , director of investor relations and corporate planning . Please refer to the advisory on forward looking statements in our Q3 release .
<unk> and operating efficiencies driven by the strategic repositioning of our asset base.
Speaker #2: It describes forward looking information , non-GAAP measures , and oil and gas terms used today . Note lines of risk factors and assumptions relevant to this discussion .
These structural improvements enabled us to lower the top end of our 2025 capital guidance by $20 million without impacting our production.
Speaker #2: Vermillion delivered another strong quarter in Q3 , demonstrating both operational excellence and financial discipline . Our production came in at the upper end of our guidance range , and we're able to generate robust fund flows from operations in a challenging commodity price environment .
This speaks to the growing efficiency of our capital deployment.
In addition, we lowered our full year operating cost guidance by more than $10 million due to the improvements we are realizing in the second half of 2025.
This momentum will carry into 2026 budget guidance, which includes even lower capital and unit operating costs reflective of our larger more corridor portfolio.
Speaker #2: Our performance this quarter reflects improvements in both capital and operating efficiencies driven by the strategic repositioning of our asset base . These structural improvements enabled us to lower the top end of our 2025 capital guidance by $20 million without impacting our production .
When compared to 2024, the last full year before we launched our asset high grading initiatives our production per share has increased by over 40%.
Dion Hatcher: This reflects the strength of our repositioned portfolio, where 85% of both production and capital is now concentrated in our global gas business. By focusing on these more efficient, longer duration assets, we have better positioned Vermilion for sustainable, long-term success. Our Q3 results underscore the resilience, and the competitive strength, of our differentiated asset base. Notably, our realized gas price in the quarter, excluding hedging gains, was $4.36 per MCF, significantly outperforming the AECO 5A pricing. In Canada, we realized a gas price that was more than double the AECO benchmark, and when combined with our direct exposure to premium priced European gas, our realized pricing is seven times the AECO benchmark. When you include hedging gains, the realized price increased to $5.62 per MCF, nine times the AECO benchmark, highlighting the strategic advantage of being a global gas producer.
Speaker #2: This speaks to the growing efficiency of our capital deployment . In addition , we lowered our full year operating cost guidance by more than $10 million due to the improvements we are realizing in the second half of 2025 .
Our unit cost structure is down by 30% this.
This reflects the strength of our reposition portfolio for 85% of both production and capital is now concentrated in our global gas business.
Speaker #2: This momentum will carry into the 2026 budget guidance , which includes even lower capital and unit operating costs reflective of our larger , more caught up portfolio when compared to 2020 .
Focusing on these more efficient longer duration assets, we are better positioned for sustainable long term success.
Our Q3 results underscore the resilience and the competitive strength of our differentiated asset base.
Speaker #2: For the last full year before we launched our asset hydrating initiative . Our production , per share has increased by over 40% for our unit cost structure is down by 30% .
Our realized gas price in the quarter, excluding hedging gains was $4 36 per Mcf.
Significantly outperforming the equal <unk> pricing.
Speaker #2: This reflects the strength of our repositioned portfolio for 85% of both production and capital is now concentrated in our global gas business . By focusing on these more efficient , longer duration assets , we have better position vermilion for sustainable long term success .
In Canada, we realized gas price that was more than double the equal benchmark.
And when combined with our direct exposure to premium price European gas, our realized pricing of seven times vehicle benchmark.
When you include hedging gains to realized price increased to $5 62 per Mcf.
Dion Hatcher: During the quarter, we made a deliberate and strategic choice to temporarily shut in a portion of our Deep Basin gas production and defer the startup of several wells, resulting in approximately 3,000 BOEs per day of production impact in the quarter. We expect to bring these volumes online in Q4, where pricing is more favorable. During the quarter, we met a portion of our volume commitments by purchasing rather than producing our own gas, demonstrating our commitment to profitable development. We continue to make progress towards key milestones with the development of our global gas assets in Germany, the Montney, and the Deep Basin. In Germany in 2026, we will bring our discovery well at Visselhöfte online and look to expand takeaway capacity over the next two years to maximize the economics of this prolific well.
Speaker #2: Our Q3 results underscore the resilience and the competitive strength of our differentiated asset base , notably , our realized gas price in the quarter .
Nine times vehicle benchmark, highlighting the strategic advantage of being a global gas producer.
Speaker #2: Excluding hedging gains was $4.36 per MCF , significantly outperforming the pricing in Canada . We realized a gas price that was more than double the equal benchmark , and when combined with our direct exposure to premium priced European gas , our realized pricing is seven times the benchmark .
During the quarter, we made a deliberate strategic choice temporary shut in a portion of our deep basin gas production and deferred the startup of several wells, resulting in approximately 3000 boe's per day of production impact in the quarter. We expect to bring these volumes online in Q4, where pricing is more favorable.
During the quarter, we made a portion of our volume commitments by purchasing rather than producing our own gas demonstrating our commitment to profitable development.
Speaker #2: When you include hedging gains , the realized price increase to $5.62 per MCF , nine times the equal benchmark , highlighting the strategic advantage of being a global gas producer during the quarter , we made a deliberate and strategic choice to shut in a portion of our deep basin gas production and defer the startup of several wells , resulting in approximately 3000 views per day of production .
We continue to make progress towards key milestones with the development of our global gas assets in Germany.
Anthony and the deep basin in.
Dion Hatcher: We will also advance our plans to spud the follow-up Visselhöfte structure in early 2027, and with a shorter cycle time than our initial exploration well, plan to bring these wells on production in the second half of 2028. In Canada, we will continue to invest in the Montney asset as we progress towards a significant inflection in free cash flow in 2028. In the Deep Basin, we will run an efficient, consistent three-rig program, and generate strong free cash flow by producing volumes into our existing infrastructure. As we look over the next three years, these projects will significantly improve our free cash flow outlook. I will now pass it over to Lars to discuss the Q3 results, as well as our 2026 budget guidance.
In Germany in 2026, we will bring our discovery well at visceral horse online and look to expand takeaway capacity over the next two years to maximize the economics of this prolific well.
Speaker #2: Impact . In the quarter . We expect to bring these volumes online in Q4 , where pricing is more favorable . During the quarter , we made a portion of our volume commitments by purchasing rather than producing our own gas , demonstrating our commitment to profitable development .
We will also advance our plans to spud the follow up this horse structure in early 2027, and with a shorter cycle time than our initial exploration well planned to bring these wells on production in the second half of 2028.
Speaker #2: We continue to make progress towards key milestones with the development of our global gas assets in Germany . The Montney and the Deep Basin in Germany .
In Canada, we will continue to invest in the Montney asset as we progress towards a significant inflection in free cash flow in 2028.
In the deep basin, we will run an efficient consistent three rig program and generate strong free cash flow by producing volumes into our existing infrastructure.
Speaker #2: In 2026 will bring our discovery well , at Bissel Haus online and look to expand takeaway capacity over the next two years to maximize the economics of this prolific well .
[Company Representative] (Vermilion Energy): Thank you, Dion. Vermilion generated CAD 254 million in fund flows from operations in Q3, with free cash flow of CAD 108 million after E&D capital expenditures of CAD 146 million. We continue to reduce debt during the quarter and have now reduced our net debt by over CAD 650 million since Q1 2023, bringing net debt to under CAD 1.4 billion as of 30 September 2023. This resulted in a net debt to four-quarter trailing FFO ratio of 1.4x, reflecting continued progress towards strengthening Vermilion's balance sheet. In addition, Vermilion returned CAD 26 million to shareholders through dividends and share buybacks, comprising CAD 20 million in dividends, and CAD 6 million of share buybacks during the quarter. This resulted in the company repurchasing 600,000 shares for a total of 2.5 million shares repurchased year to date. In total, we have repurchased approximately 20 million shares since mid-2022.
As we look out over the next three years these projects will significantly improve our free cash flow outlook.
Speaker #2: We will also advance our plans to spud the follow up structure in early 2027 , and with a shorter cycle time than our initial exploration .
I will now pass it over to Lars to discuss the Q3 results as well as our 2026 budget guidance.
Speaker #2: Well , plan to bring these wells on production in the second half of 2028 . In Canada , we will continue to invest in the Montney asset as we progress towards a significant inflection in free cash flow in 2028 .
Dr. Vermilion generated $254 million in fund flows from operations in Q3 with free cash flow of $108 million after E&E capital expenditures of $146 million.
Speaker #2: In the basin , we will run an efficient , consistent three rig program and generate strong free cash flow by producing volumes into our existing infrastructure .
We continue to reduce debt during the quarter and have now reduced our net debt by over $650 million. Since Q1, 2025, bringing net debt to under $1 4 billion as of September 30th.
Speaker #2: As we look out over the next three years , these projects will significantly improve our free cash flow outlook . We'll now pass it over to Lars to discuss the Q3 results , as well as our 2026 budget guidance .
This resulted in a net debt to <unk>.
To four quarter trailing <unk> ratio of one four times, reflecting continued progress towards strengthening vermilions balance sheet.
Speaker #2: Thank you . Dionne Vermillion generated $254 million .
Speaker #3: In fund flows from operations in Q3 , with free cash flow of $108 million after end capital expenditures of 146 million . We continue to reduce debt during the quarter and have now reduced our net debt by over 650 million since Q1 2025 , bringing net debt to under 1.4 billion as of September 30th .
In addition, vermillion returned $26 million to shareholders through dividends and share buybacks, comprising $20 million in dividends and $6 million of share buybacks during the quarter.
This resulted in the company repurchasing 600000 shares for a total of $2 5 million shares repurchased year to date.
[Company Representative] (Vermilion Energy): Q3 production averaged 119,062 BOE per day with a 67% gas weighting, which was at the upper end of our guidance range. In North America, production averaged 88,763 BOE per day, inclusive of the July divestments of our Saskatchewan and US assets, as well as shutting gas production and deferral of new well startups in Q3 in response to pricing. International operations averaged 30,299 BOE per day, up 2% from the previous quarter due to strong performance across our business units. In the Deep Basin, we ramped up to a three-rig drilling program in Q3, targeting multiple stack zones across our 1.1 million net acre land base. We drilled 13, completed 12, and brought on production three gross liquid-rich gas wells in the Deep Basin. The drill program results to date are exceeding our expectations, with test rates indicating deliverability well in excess of our type curves.
In total we have repurchased approximately 20 million shares since mid 2022.
Speaker #3: This resulted in a net debt to to four quarter , trailing FFO ratio of 1.4 times , reflecting continued progress towards strengthening Vermilion's balance sheet .
Q3 production averaged 119060.
62 Boe per day, with a 67% gas weighting, which was at the upper end of our guidance range.
Speaker #3: In addition , Vermillion returned 26 million to shareholders through dividends and share buybacks , comprising 20 million in dividends and 6 million of share buybacks during the quarter .
In North America production averaged 88763 Boe per day inclusive of the July divestments of our Saskatchewan and U S assets as.
Speaker #3: This resulted in the company repurchasing 600,000 shares for a total of 2.5 million shares repurchased . Year to date . In total , we have repurchased approximately 20 million shares since mid 2022 .
As well as shut in gas production and deferral of new well startups in Q3 in response to pricing.
International operations averaged 30299 Boe per day up 2% from the previous quarter due to strong performance across our business units.
Speaker #3: Q3 production averaged 119,062 boe per day , with a 67% gas weighting , which was at the upper end of our guidance range in North America , production averaged 88,763 boe per day , inclusive of the July divestments of our Saskatchewan and US assets .
In the deep basin, we ramped up to a three rig drilling program in Q3 targeting multiple stack zones across our $1 1 million net acre land base with.
We drove 13 completed 12 and brought on production three gross liquids rich gas wells in the deep basin.
Speaker #3: As well as shutting gas production and deferral of new well start in Q3 . In response to pricing international operations averaged 30,299 boe per day , up 2% from the previous quarter due to strong performance across our business units in the Deep basin , we ramped up to a three rig drilling program in Q3 , targeting multiple stack zones across our 1.1 million net acre land base .
[Company Representative] (Vermilion Energy): Internationally, we executed a successful two gross or 1.2 net well drilling program in the Netherlands, discovering commercial gas across two zones, the Rottliegen and Zechstein. Both wells are expected to be completed, tied in, and brought on production in Q4 2025. These two wells are the latest successes in our two-plus decades of exploration and development in the Netherlands, and, combined with recent discoveries in Germany, demonstrate Vermilion's broader European gas exploration capabilities to repeatedly add European gas reserves at a cost of $1.50 per MCF into a gas market currently in excess of $15 per MCF. Meanwhile, Osterheide, our first German exploration well, continues to produce at a restricted rate of 1,100 BOE per day, generating nearly $2 million per month of excess free cash flow.
The drill program results to date are exceeding our expectations with test rates, indicating deliverability well in excess of our type curves.
Internationally, we executed a successful two gross or one two net well drilling program in the Netherlands.
This government commercial gas across two zones throughout <unk> and <unk>.
Both wells are expected to be completed tied in and brought on production in Q4 of 2025.
Speaker #3: We drilled 13 , completed 12 , and brought on production three gross liquids rich gas wells in the deep basin . The drill program results to date are exceeding our expectations , with test rates indicating deliverability .
These two wells are the latest successes in our two plus decades of exploration and development in the Netherlands, and combined with recent discoveries in Germany demonstrates vermilions broader European gas exploration capabilities to repeatedly add European gas reserves at a cost of $1 50 per mcf into a gas.
Speaker #3: Well in excess of our tight curves . Internationally , we executed a successful two gross or 1.2 net well drilling program in the Netherlands , discovering commercial gas across two zones throughout Lingen and Zechstein .
Market currently in excess of $15 per Mcf.
Meanwhile, <unk>, our first German exploration well continues to produce at a restricted rate of.
Speaker #3: Both wells are expected to be completed , tied in and brought on production in Q4 2025 . These two wells are the latest successes in our two plus decades of exploration and development in the Netherlands , and combined with recent discoveries in Germany , demonstrate Vermilion's broader European gas exploration capabilities to repeatedly add European gas reserves at a cost of $1.50 per MCF into a gas market .
[Company Representative] (Vermilion Energy): Our second well, Visselhöfte, is on track for startup by mid-2026, with preparations underway for follow-up drilling of two gross or 1.3 net wells in the Visselhöfte structure. As a reminder, the first well is expected to recover 68 BCF of gas, and our P50 estimate of gross gas in place for the structure is 380 BCF. We also released our 2026 budget yesterday, featuring an exploration and development capital budget of CAD 600 to 630 million, with approximately 85% allocated to our global gas portfolio. Key investments include drilling and strategic infrastructure in the Montney, a continuous drilling program targeting high-return liquid-rich gas wells in the Deep Basin, and drilling and infrastructure capital in Germany and the Netherlands. We expect modest production growth from second half 2025 levels on our continuing operations, with annual average production.
<unk> thousand 100 Boe per day, generating nearly $2 million per month of excess free cash flow and.
And our second well This'll horse is on track for startup by mid 2026 with preparations underway for follow up drilling of two gross or one three net wells in the visceral horse structure.
As a reminder, the first well is expected to recover 68 Bcf of gas and our P. 50 estimate of gross gas in place for the structure is 380 Bcf.
Speaker #3: Currently in excess of $15 per MCF . Meanwhile , our first German exploration well continues to produce at a restricted rate of 1100 boe per day , generating nearly 2 million per month of excess free cash flow .
We also released our 2026 budget yesterday, featuring an exploration and development capital budget of $600 million to $630 million with approximately 85% allocated to our global gas portfolio.
Speaker #3: And our second , well , this horse is on track for start up by mid 2026 with preparations underway for follow up drilling of two gross or 1.3 net wells in the structure .
The investments include drilling and strategic infrastructure in the Montney, a continuous drilling program targeting high return liquids rich gas wells in the deep basin, and drilling and infrastructure capital in Germany, and the Netherlands, we.
Speaker #3: As a reminder , the first well is expected to recover 68 BCF of gas and our P50 estimate of gross gas in place for the structure is 380 BCF .
[Company Representative] (Vermilion Energy): Between 118,000 and 122,000 BOE per day, maintaining our commitment to financial discipline and free cash flow generation. Our 2026 budget includes a significant reduction in our overall cost structure, with a 30% improvement in capital and operating efficiencies, reflecting the benefits of our repositioned global gas portfolio, and our focus on operational excellence. For 2026, we plan to invest approximately CAD 415 million into liquid-rich gas assets in the Montney and Deep Basin, drilling 49 gross wells, which translates to approximately 45 net wells, reflecting our high working interest in Canada. In the Deep Basin, we plan to run a three-rig program to drill 43 gross wells. Notably, minimal new infrastructure spending is required to support this development, which is a key advantage of our Deep Basin asset. In the Montney, we plan to drill six and complete and bring on production 10 wells.
We expect modest production growth from second half 2025 levels on our continuing operations with annual average production between 118 and 122000 Boe per day.
Maintaining our commitment to financial discipline and free cash flow generation.
Our 2026 budget includes a significant reduction in our overall cost structure with a 30% improvement in capital and operating efficiencies.
Reflecting the benefits of a repositioned global gas portfolio and our focus on operational excellence.
For 2026, we plan to invest approximately $415 million into liquids rich gas assets in the Montney and deep basin drilling 49, gross wells, which translates to approximately 45 net wells, reflecting our high working interest in Canada.
In the deep basin, we plan to run a three rig program to drill 43 gross wells, notably minimal new infrastructure spending is required to support this development, which is a key advantage of our deep basin asset in.
[Company Representative] (Vermilion Energy): In addition, we will continue to expand our infrastructure in advance of total Montney throughput, growing to 28,000 BOE per day by 2028, which aligns with the buildout of third-party gas infrastructure. Once we achieve target production, infrastructure and drilling capital requirements will decrease as we expect to drill about eight wells per year to sustain production. The combination of higher production and lower capital will pivot the Montney asset to significant excess free cash flow of approximately CAD 125 million per year for 15-plus years, assuming commodity prices of CAD 3 AECO and $70 WTI. Internationally, we plan to invest around CAD 200 million in 2026, focusing on European gas exploration and development, and optimizing base production. This includes drilling one well at a 50% working interest in the Netherlands and preparing for two additional follow-up wells at 64% working interest at the Visselhöfte discovery in Germany in early Q1 2027.
In the Montney, we plan to drill six and complete and bring on production 10 wells.
In addition, we will continue to expand our infrastructure in advance of total montney throughput growing to 28000 Boe per day by 2028.
Which aligns with the build out of third party gas infrastructure.
Once we achieve target production infrastructure.
The infrastructure and drilling capital requirements will decrease as we expect to drill about eight wells per year to sustain production.
A combination of higher production and lower capital, we'll pivot the montney asset to significant excess free cash flow of approximately $125 million per year for 15, plus years, assuming commodity prices of $3 eco and $70 <unk>.
Internationally, we plan to invest around $200 million in 2026, focusing on European gas exploration and development and optimizing base production.
This includes drilling one well at a 50% working interest in the Netherlands and preparing for two additional follow up wells at 64% working interest after visceral horse discovery in Germany in early Q1 2027.
[Company Representative] (Vermilion Energy): We will bring the initial Visselhöfte well online mid-2026 and expand the supporting infrastructure to enable significantly higher production over the next two years. We will also invest in economic workovers and optimization projects across our international assets. Higher maintenance spending in 2026 compared to prior years is due to non-recurring turnarounds, including a planned 32-day turnaround in Ireland, the scope of which is scheduled to occur every five years. Our priorities on shareholder returns remain unchanged. We will use excess free cash flow to maintain a strong balance sheet, fund a sustainable base dividend, and be opportunistic with share buybacks. I'm pleased to announce our intention to increase the quarterly cash dividend by 4% to CAD 0.135 per share, effective with the Q1 2026 dividend.
We will bring the initial visceral horse well online mid 2026, and expand the supporting infrastructure to enable significantly higher production over the next two years.
For 15 plus years. Assuming commodity prices of 3 Acre and 70. WTI
We will also invest in economic Workovers and optimization projects across our international assets.
internationally, we plan to invest around 200 million in 2026.
Higher maintenance spending in 2026 compared to prior years is due to non reoccurring turnarounds.
Focusing on European gas, exploration, and development and optimizing base production.
<unk> a planned 32 day turnaround in Ireland.
<unk>, which is scheduled to occur every five years.
Our priorities on shareholder returns remain unchanged, we will use excess free cash flow to maintain a strong balance sheet funded sustainable base dividend and be opportunistic with share buybacks.
This includes drilling 1. Well at a 50% working interest in the Netherlands and preparing for 2 additional follow-up Wells at 64%. Working interest at the Visa horse. Discovery in Germany, in early, q1 2027.
[Company Representative] (Vermilion Energy): The dividend payout remains at a modest level even during this commodity price period, and we see the potential for higher return of capital as free cash flow increases in the Montney, Germany, and Deep Basin. I will now pass it back to Dion. Thank you, Lars. Looking ahead, Q4 will mark the first full quarter of our repositioned global gas portfolio. Following an active year of acquisition and disposition activity, we expect fourth quarter production to average between 119,000 and 121,000 BOEs per day, inclusive of the decision to defer the startup of multiple wells. Based on this performance, our 2025 full-year production guidance is expected to be 119,500 BOEs per day. Importantly, we're able to maintain this production outlook while reducing our E&D capital guidance to between CAD 630 and 640 million. The CAD 20 million reduction at the top end of our guidance reflects continued improvement in capital efficiency.
I am pleased to announce our intention to increase the quarterly cash dividend by 4% to $13.05 Canadian per share effective with the Q1 2026 dividend.
We will bring the initial Vista horse. Well online, mid 2026 and expand the supporting infrastructure to enable significantly higher production over the next 2 years,
We will also invest in economic work overs and optimization projects across our International assets.
The dividend payout remains at a modest level, even during this commodity price period, and we see the potential for higher return of capital as free capsule increases in the Montney, Germany and deep basin.
Higher maintenance spending in 2026 compared to Prior years, is due to non-recurring turnarounds, including a planned 32-day turnaround in Ireland.
the scope of which is scheduled to occur every 5 years,
I'll now pass it back to Dr. <unk> looking ahead Q4 will mark the first full quarter of our repositioned global gas portfolio.
Our priorities on shareholder returns remain unchanged. We will use excess free cash flow to maintain a strong balance sheet.
We have an active year of acquisition and disposition activity, we expect fourth quarter production to average between 119 and 121000 Boe's per day inclusive of the decision to defer the startup of multiple wells based on this performance. Our 2025 full year production guidance is expected to be 119500.
Fund, a sustainable base dividend and be opportunistic with share BuyBacks.
I'm pleased to announce Our intention to increase the quarterly cash dividend by 4%.
To 13 and a half cents Canadian per share effective with the q1 2026 dividend.
<unk> per day.
Importantly, we were able to maintain this production outlook, while reducing our A&D capital guidance to between 630 and $640 million.
[Company Representative] (Vermilion Energy): The capital reduction aligns with the improvement in operating costs, enabling a $10 million reduction in operating cost guidance. We are now entering the next phase of our strategy with a larger, more focused asset base, one that is characterized by longer duration assets, high-return drilling inventory, a more efficient cost structure, and a top net sell realized gas price. With proven success in exploration and development across our portfolio, the plan to increase free cash flow in our key development assets, and an improving outlook for natural gas pricing, Vermilion is very well positioned for the future. In closing, I want to thank the entire Vermilion team for your efforts over the past year in creating our high-grade portfolio and realizing strong efficiencies throughout the business. It has truly been a heavy lift by all, and I am extremely proud of your work, of our team. With that, thank you.
The dividend payout remains at a modest level, even during this commodity price period and we see the potential for higher return of capital as free cash flow increases in the money. Germany and the basin.
The $20 million reduction at the top end of our guidance reflects continued improvement in capital efficiency capital reduction aligns with improvement in operating costs, enabling a $10 million reduction in operating cost guidance.
I will now pass it back to Dion. Thank you, Lars. Looking ahead, Q4 will mark the first full quarter of a repositioned global gas portfolio.
We're now entering the next phase of our strategy with the larger more focused asset base. One that is characterized by longer duration assets high return drilling inventory and more efficient cost structure and a top decile realized gas price with proven success in exploration and development across our portfolio.
Public an active year of acquisition and disposition activity. We expect fourth quarter production, to average between 119 and 121,000 Views per day inclusive of the decision to defer, the startup of multiple Wells. Based on this performance, are 2025 full year, production, guidance is expected to be 119,500 views per day.
Our plan to increase free cash flow and our key development assets and an improving outlook for natural gas pricing for <unk> is very well positioned for the future.
Importantly, we're able to maintain this production Outlook while reducing our end Capital guidance between 630 and 640 million.
In closing I want to thank the entire <unk> team for your efforts over the past year, and creating our hybrid portfolio and realize strong efficiencies throughout the business.
[Company Representative] (Vermilion Energy): We'll now open the line for questions.
Operator: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Travis Wood from National Bank Capital Markets. Please go ahead.
The 20 million reduction at the top end of our guidance, reflects continued Improvement in capital efficiency, Capital reduction aligns with the Improvement in operating costs. Enabling a 10 million reduction in operating cost guidance.
This has truly been a heavy lift while I'm extremely proud of your work of our team with that thank you.
We will now open the line for questions.
We are now entering the next phase of our strategy with the larger more focused acid base 1. That's characterized by longer duration assets,
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone you broke your prompt Ian Hudson rate.
High return, drilling inventory and more efficient cost structure and a top decile realized gas price with proven success and expiration and development across our portfolio.
We wish to decline from the polling process. Please press the star followed by the Q.
The plan to increase free cash flow and our key development assets and an improving able to look for natural. Gas pricing for a million is very well positioned for the future.
If you are using a speakerphone please lift the handset before.
Travis Wood: Yeah, good morning, guys. Could you provide some additional color or further color around Australia in terms of where current volumes would be sitting at, and how you're setting that asset up through 2026 and potentially into 2027 with incremental drills, and what that capital would look like?
Thank you one moment please for your first question.
And your first question comes from Kevin <unk> from National Bank Capital markets. Please go ahead.
In closing, I want to thank the entire Vermilion team for your efforts over the past year and creating our high grid portfolio and real like a strong efficiency throughout the business.
Yes. Good morning, guys could you provide some additional color or further color around Australia in terms of.
Well, now open the line for questions.
We're current volumes would be sitting at and how you're setting that asset up.
Thank you, ladies and gentlemen, we'll now begin the question and answer session.
[Company Representative] (Vermilion Energy): Thanks, Travis. Dion, I'll take the call. Yeah, Australia, as you know, is a premium pricing there. We get $10 to $15 US premium to Brent pricing, which helps our net max. The last year here, we've been focused on optimizing the platform and, frankly, getting ahead on some of our maintenance. We're well advanced on that. With respect to the next drilling program, we drill every two to four years tentatively. We planned a next drill for 2027. Frankly, we have flexibility on that depending on rig rates as well as commodity price environment. We'll be in around 4,000bbl per day currently. We'll drift a little lower next year and then set up for that drilling program likely in kind of mid-2027.
Through 2026 and potentially into 2027 with <unk>.
Should you have a question, please? Press the star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised.
Incremental drills and what that capital would look like.
Should you wish to decline from the polling process? Please press the star followed by the 2?
Thanks, Travis I'll.
I'll take the call, Yes, Australia as you know the.
If you are using a speaker-phone, please lift the handset. Before pressing any Keys 1 moment, please for your first question.
Premium pricing there, we get 10 to $15 U S premium to Brent pricing, which helps our net backs.
And your first question comes from Travis Wood from National Bank Capital markets. Please go ahead.
The last year here, we've been focused on optimizing the.
The platform and frankly getting get ahead on some of our maintenance of are well advanced on that with respect to the next drilling program.
We drill every two to four years tentatively we planned an external for 2027.
But frankly, we have flexibility on that depending on rig rates as well as commodity price environment. So we will be at around 4000 barrels per day currently will drift a little lower next year, and then set up for that drilling program likely in mid 2027.
Uh, yeah, good morning, guys. Um, could you provide some additional color or further color around Australia in terms of, um, kind of where current volumes would be sitting at, uh, and how you're setting that asset up, uh, through 2026 and potentially into 2027 with incremental drills, and what that capital would look like.
Travis Wood: Okay, perfect. Probably for Lars, you gave a modest dividend bump on the back of the quarter. I think you've walked through this before, but just to remind us, how are you finding that balance of buying back more stock at this valuation versus kind of the base dividend growth as you look out on the 2026 budget and flexing some optionality around commodity prices too, I guess?
Thanks, Travis this deal and I'll, I'll take the call. Uh, yeah, Australia. As you know, it was a, you know, a premium pricing there. We get 10 to 15 us premium to rent pricing, which helps our net backs.
Okay, perfect and then.
For Lars.
You gave a modest dividend bump.
On the back of the quarter.
How.
You've walked through this before but just to remind us what.
Or rather how are.
Are you.
Finding that balance of buying back more stock at this valuation versus kind of the base dividend growth.
Uh, the last year here, we've been focused on optimizing the uh the platform and frankly getting getting ahead on some of our maintenance. Uh we're well Advanced on that for respect to the next drilling program. Um, you know, we drill every 2 to 4 years. Uh tentatively we plan the next drill for 2027. Uh, but frankly, we have flexibility.
[Company Representative] (Vermilion Energy): Yeah, for sure, Travis. Thanks for the question. I think at the end of the day, what we're really focused on is things that we can control, and driving per share value. We've got a number of ways to drive per share value. I would say that share buybacks is one of those ways to do it. There are other options as well. If you kind of look at the portfolio now, we're getting a lot of this infrastructure spend in the Montney behind us. We've got a lot of infrastructure to fill up in the Deep Basin. We've been able to de-risk some of these exploration projects in Germany as well. We want to balance that operational momentum with return of capital as well, in delivering per share value over the longer term. Part of that is to continue strengthening the balance sheet as well.
As you look out to 2026 budget and flexing some optionality around commodity prices too I guess.
On that, depending on, you know, rig reach as well as commodity price environment. So, you know, we'll be in around 4,000, barrels per day. Currently, we'll drift a little lower next year and then set up for that drilling program, likely and kind of mid 2027.
Yes for sure Travis Thanks for the question.
I think at the end of the day, what we're really focused on is things that we can control and driving per share value. We've got a number of ways to drive per share value I would say that share buybacks is one of those ways to do it.
There are other options as well and if you kind of look at the portfolio now we're getting a lot of this infrastructure spend in the Montney behind US we've got a lot of infrastructure to fill up in the deep basin, we've been able to derisk. Some of these exploration projects in Germany, as well and we want to balance that operational momentum.
Um, okay perfect. And then uh, probably for Lars uh, you you gave a modest dividend bump, uh, on the back of the quarter. Um, how and and I think you've walked through this before but just to remind us what um or rather how how are you?
Finding that balance of buying back more stock at, at this valuation versus kind of the base dividend growth. Uh, as you look out on the, the 2026 budget, and flexing some optionality around commodity prices, too. I guess.
[Company Representative] (Vermilion Energy): We will have a chunk of our excess free cash flow reserved for debt reduction in 2026 as well. I think the dividend increase should be viewed as confidence in a lot of these operational activities that we're executing on as well. In addition to that, we will continue to buy back shares and be opportunistic on that front. Thanks, Lars.
With return of capital as well in delivering per share value over the longer term.
Part of that is to continue strengthening the balance sheet as well and so we will have a chunk of our excess free cash flow.
Or for debt reduction in 2026 as well.
I think the dividend increase that should be viewed as.
Confidence in a lot of these operational activities that we're executing on as well and in addition to that we will continue to buy back shares and be opportunistic on that front.
Travis Wood: Okay, fantastic. That's all for me. I'll turn it back. Thanks, guys.
[Company Representative] (Vermilion Energy): Thanks, Travis.
Operator: Thank you. There are no further questions at this time. I'd like to turn the conference call back over to Dion Hatcher for further questions.
Thanks, Larry.
Yeah, for for sure. Travis, thanks for the question. Um, you know, I think at the end of the day, what we're really focused on is things that we can control and driving per share value. We've got a number of ways to drive per share value. I would say that share BuyBacks is 1 of those ways to do it. There, there are other options as well. And if you kind of look at the portfolio, now, um, we're getting a lot of this infrastructure spend in the money behind us. We've got a lot of information to fill up in the Deep Basin. Uh, we've been able to de-risk some of these exploration projects in, uh, Germany as well and we want to balance that.
That's all for me I'll turn it back thanks, guys.
[Company Representative] (Vermilion Energy): Great. I'm going to pass it back to Travis here. I know we had some questions on the inbox from IR, so maybe we can work through a couple of those.
Thanks Travis.
Thank you there are no further questions at this time I'd like to turn the conference call back over to Dan Houser for further questions.
Travis Ferguson: Yeah, for sure. Thanks, Dion. The first one just for Lars here. You mentioned in the release the realized gas price of about seven times the AECO price in the quarter. Can you please help me understand the drivers behind this?
Great I'm going to pass it back to Travis here I know, we had some questions on the.
Inbox Meyer so maybe you can walk through a couple of those yeah for sure. Thanks Dion.
[Company Representative] (Vermilion Energy): Yeah, for sure. Thanks, Travis, for the question. Zooming out here, a lot has changed with the portfolio in terms of the repositioning that we have done. Something that has not changed is we continue to have a very diverse portfolio. If you start with that AECO benchmark price, which is the price a lot of our peers use as well in terms of how do we do relative to that, it's not just the European assets that are contributing to a strong corporate realized price. Here in Canada, we actually realized the price in the third quarter of CAD 1.37 per MCF, which was more than double the AECO benchmark. We've got an active program in terms of selling into the daily and the monthly price index as well. We also have over 26 million MCF a day exposed to the Chicago market as well.
The first one just for Lars here. So you mentioned in the release the realized gas price of about seven times vehicle price in the quarter can you. Please help me understand the drivers behind this.
Operational momentum with return of capital as well, in delivering per share value over the longer term. Um, part of that is to continue strengthening the, the balance sheet as well. And so, we, we will have a chunk of our excess. Free cash flow reserved for debt reduction in 2026 as well. Um, you know, I think the dividend increase that should be viewed as, um, confidence in a lot of these operational activities that were executing on as well. And in addition to that, uh, we will continue to buy back shares and, and be opportunistic on that front.
Yeah for sure. Thanks, Travis for the question.
Zooming out here a lot has changed with the portfolio in terms of repositioning that we have done.
Thanks. Okay. Fantastic. That's uh that's that's all for me. I'll turn it back. Thanks guys.
Thanks for having us.
Something that has not changed as we continue to have a very diverse portfolio and so if you start with that equal benchmark price, which is the price a lot of our peers. He was as well in terms of how do we do relative to that.
Thank you. There are no further questions at this time. I'd like to turn the conference. Call back over to Dion Hatcher for further questions.
It's not just the European assets that are contributing to our strong corporate realized price. So here in Canada, we actually realize the price in the third quarter of $1 37 per Mcf, which was more than double the April benchmark. We've got an active program in terms of selling into the daily and monthly price index as well we also have over <unk>.
[Company Representative] (Vermilion Energy): We're well diversified within our Canadian portfolio. We were also able to strategically shut in and defer wells without meaningfully impacting the liquids production in our Canadian business as well. A combination of all these led to that outperformance. When you combine this strong Canadian business with our European gas business, that's where you really start to see the impact and benefits of a diversified portfolio. The impact of that is we end up with a realized price of CAD 4.36 per MCF before hedges. Before hedges, we do have an active hedging program both here in Canada as well as European gas. The majority of our hedge gain in the third quarter was driven by our gas hedges. When you combine that with the realized price, we get up to CAD 5.62 per MCF.
Great. I'm going to pass it back to Travis here and we had some questions on the uh the inbox for tomorrow so maybe we can work through a couple of those. Yeah, for sure. Thanks Dione. Um the first 1 uh just for Lars here. So you mentioned in the release of realized gas price of about 7 times the echo price in the quarter. Uh can you please help me understand the drivers behind this?
<unk> thousand 6 million Mcf, a day exposed to the Chicago market as well, so we're well diversified within our Canadian portfolio. We were also able to strategically shut in and defer wells without meaningfully impacting the liquids production in our Canadian business as well so combination of all of these led to that outperformance.
When you combine this strong Canadian business with our European gas business.
That's where you really start to see the impact and benefits of a diversified portfolio and so the impact of that is we end up with a realized price of $4 36 per Mcf before hedges.
Say before hedges, we do have an active hedging program both here in Canada as well as the European gas the majority of our hedge gain in the third quarter was driven by our gas hedges when you combine that with the realized price we get up to $5 62 per Mcf. So a really strong quarter really shows the Ben.
[Company Representative] (Vermilion Energy): A really strong quarter really shows the benefits of that diversified portfolio. We are organically investing in both the Canadian assets as well as the European assets. Just a reminder as well, Travis, as we move into 2026 here, I think it's worth noting that a $1 increase in that AECO price would effectively add CAD 100 million of excess free cash flow. Lots of exposure to that AECO price and still lots of exposure to the TTF price as well. A $1 improvement in that TTF marker would add about CAD 24 million of excess free cash flow. We feel that Vermilion is very well positioned to benefit from improving gas prices here into 2026. Yeah, the only thing I can add to that, I think it's worth walking through the details because, again, it was nine times the AECO benchmark.
<unk> of that diversified portfolio and we are organically investing in both the Canadian assets as well as the European assets.
CF today exposed to the Chicago Market as well. So we're well Diversified within our Canadian portfolio. We were also able to strategically shut in and defer Wells without meaningfully impacting, the liquids production in our Canadian business as well. So combination of all these led to that outperformance, when you combine this strong Canadian business with our European gas business,
that's where you really start to see the impact and benefits of a diversified portfolio.
Just a reminder, as well Travis as we move into 2026 year.
It's worth noting that a dollar increase in that equal price it would effectively add $100 million of excess free cash flow. So lots of exposure to that equal price and still lots of exposure to the TGF price as well a $1 improvement in that.
So the impact of that is we end up with a realized price of $4.36 per mcf before hedges.
<unk> would add about $24 million of excess free cash flow. So we feel that $4 million is a very well positioned to benefit from improving gas prices here to 2026.
[Company Representative] (Vermilion Energy): It's worth thinking through how we're able to deliver that with our differentiated portfolio. Back to you, Travis.
Travis Ferguson: Thanks, Dion and Lars. Next couple here for Darcy. Could you provide more background on the next steps of the Visselhöfte prospect in Germany? What are the bottlenecking plans, and how are you thinking about drilling follow-up locations there?
Yes, the only thing I can add to that I think it's worth walk through the details because again it was nine times. The April benchmark. So it's worth thinking through how we were able to deliver that with our differentiate portfolio, but back to your <unk>.
Next couple here for Darcy.
[Company Representative] (Vermilion Energy): Yeah, thanks, Travis. In Germany at Visselhöfte, as you know, we have the one discovery at a well we call Visselhöfte Z1A that tested at pretty prolific rates, so a combined test rate of slightly over 40 million cubic feet a day. Our intention is to have that well tied in and producing by Q2 of next year, so Q2 2026. I think we've talked before that that initial rate kind of ties into a more local gathering system that will be restricted for some time, but we expect that those restrictions start to go away in 2027, allowing us to bring production kind of up into that 17.5 million cubic feet a day. There are some additional debottlenecking options that we expect to have online in 2028 that doubles that to 35 million a day. That kind of talks about that first discovery well.
Could you provide more background on the next steps of the vessels horse prospect in Germany, what are the Debottlenecking plans and how youre thinking about drilling follow up locations are okay. Thanks Travis.
Um say before Hedges, we do have an active hedging program. Both here in Canada as well as Erp and gas, the majority of our Edge gain. In the third quarter was driven by our gas Hedges. When you combine that with the realized price, we get up to $5.62 per mcf. So a really strong quarter, really shows the benefits of that Diversified portfolio. And we are organically investing in both the Canadian assets as well as the European assets. Um, just a reminder as well Travis as we move into 2026 here. Um, you know, I think it's worth noting that a dollar increase in that ACO price, it would effectively add a hundred million dollars of excess free cash flow. So lots of exposure to that ACO price and still lots of exposure to the ttf price, as well. A $1, uh, Improvement in that,
So in Germany official source.
As you know we have.
One discovery and whether this was sources Edwin.
Uh, TTF marker would add about $24 million of excess free cash flow. So, we feel that for a million is very well positioned to benefit from improving gas prices here to 2026.
That tested at pretty prolific rates Youll combined test rate of slightly over 40 million cubic feet a day.
Our intention is to have that well tied in and producing by Q2 of next year. So Q2 of 2026 and I think we've talked before that that initial rate kind of ties into a more local gathering system that will be restricted through for some time, but we expect that those restrictions start to go away in 2027.
Yeah, the only thing I can add to that, I think it's worth walking through the details because again, it was 9 times the equal benchmark. So, it's worth thinking through, and we're able to deliver that with our differentiated portfolio. But back to you, Travis Smith. Thanks. Thanks, Dione. And Lars, uh, next couple here for Darcy. Um, could you provide more background on the next steps of the Bissell Source prospect in Germany? Uh, what are the deb bottlenecking plans? And, uh, how are you thinking about drilling follow-up locations there?
Allow us, allowing us to bring production kind of up into that $17 5 million cubic feet. A day and then there's some additional debottlenecking auctions that we expect to have online in 2028th double stack to 30 million a day, so that that kind of talks about the first discovery well.
[Company Representative] (Vermilion Energy): On the back of that successful discovery well, we see a number of follow-up locations. We intend to spot two of those, so the second and third well into the Visselhöfte structure in January 2027. Timing is partially driven by our ability to secure the rig that we want to use to drill those wells and really does not impact our expectation around online time. We expect to get those wells drilled kind of through the first half of 2027 and expect them tied in and producing by the second half of 2028.
So on the back of that successful discovery, well, we see a number of follow up locations, we intend to spud.
Two of those of the second and third well into the vessels for structure in January 2027.
Timing is partially driven by.
Our ability to secure the rig that we want to use to drill those wells and really doesn't impact our.
Expectation round online time, we expect to get those wells drilled kind of through the first first half of 2027 and expecting tied in and producing by second half of 2028.
Travis Ferguson: Maybe I can summarize that. I think the takeaway is quite interesting. We're excited about Germany, but the simple math is the 1.6 net wells that we drilled with the Osterheide and the Visselhöfte well that'll come on mid-next year. That's going to add about 25 million a day of gas, which is, again, about 25% of our production. The two wells that Darcy just walked us through, the two Visselhöfte follow-up wells, that'll be 1.3 net wells. Once those are on in the second half of 2028, that'll be another 20-plus million a day of gas. If you zoom out, three net wells, you know it's going to add about 45 million a day of gas, which is almost half of all our European gas production. Again, that's why we're excited about Germany, just the materiality of these wells.
Yeah, thanks Travis. Um, so in Germany at Bissell source, as, you know, we have, uh, the 1 we had what we call business sources 818, um, that tested, it pretty prolific rates. So combined test rate of of slightly over 40 million cubic feet a day. Um, Our intention is to have that well, tied, in and producing by Q2 of next year. So, Q2 2026. And I think we've, we've talked before that that initial rate kind of ties into a, a more local Gathering system that will be restricted from for some time. But we expect that those restrictions start to go away in in 2027 allow us allowing us to bring production, kind of up into that 17 and a half million cubic feet a day. And then there's some additional deep bottlenecking options that we expect, uh, to have online in in 2028 that said, doubles that to to 35 million.
So maybe I can summarize that look I think the takeaway it's quite interesting we're excited about Germany, but the simple math is the one six net sorry, one six net wells that we drilled with Ulster hide visceral horse well that'll come out mid next year.
It's going to add about 25 million a day of gas, which is again about 25% of our production. The two wells that Darcy just walked us through the two vessel horse follow up wells that will be one three net wells. So once those are on in the second half of 2008 that will be another 20 plus million a day of gas. So if you zoom out three net wells, that's going to add about 40.
A day. So that, that kind of talks about that first, um, Discovery. Well, so on the back of that successful Discovery while we see a number of follow-up locations, we intend to Spud, um, 2 of those. So, the second and third well into the vessel Source structure in January 2027. Um, timing is partially driven by, uh, our ability to secure. The the rig that we want to use to drill those Wells and really doesn't impact our our
Travis Ferguson: Kudos to the team to be able to get the rig we wanted and do all the pre-planning to really reduce that cycle time. Thanks for that, Darcy. Thanks. The next one here for Darcy, jumping into the Netherlands. A couple of discoveries in the quarter. Could you give a bit more background on what we're seeing there?
5 million a day of gas, which is almost half of all our European gas production. So.
Expectation around online time, we expect to get those Wells drilled kind of through the first first off of 2027 and expect them tied in and producing by a second half of 2028.
That's why we're excited about Germany, just materiality of these wells and kudos to the team to be able to get the rig we wanted and do all the preplanning to really reduce that cycle time. So thanks for that.
[Company Representative] (Vermilion Energy): Yeah. In the Netherlands, we drilled two successful wells in a field called Alpenhuizen. We discovered gas in two zones in each of those wells. We discovered gas in the Rottliegen and Zechstein formations, two of the primary formations that we do chase in the Netherlands. We've discovered about 16 BCF gross of recoverable gas. The F&D costs for those wells are less than $1.50 per MCF. We talked about tying those wells in Q4 of this year. Both wells are tied into existing facilities now. We're currently producing the first of those two wells at a rate of about 15 million cubic feet per day, limited by surface constraints at that location. We intend to kind of bring the second well on as capacity opens up there.
Thanks, and then the next one here for diversity jumping into the Netherlands.
So maybe y'all can summarize that, like I think the takeaway is it's quite interesting. We're we're excited that Germany but the simple math is the 1.6 net. Sorry 1.6, net Wells that we drilled with Oscar Hyde and the V of horse well that'll come on me next year. Like that's going to add about 25 million a day of gas which is again about 25% of our production.
Couple of discoveries in the quarter could you give a bit more background on what we're seeing there.
So in the Netherlands, we drilled two successful wells.
Field called <unk>, we discovered gas in two zones in each of those wells, we discovered gas in the <unk> and <unk> formations two of the primary formations that we do chase in the Netherlands.
Discovered about 16 Bcf gross of recoverable gas.
The 2 Wells that Darcy just walked us through the 2, vessel horse, follow-up Wells, that'll be 1.3 net, Wells. So once those are on in the second half of 28, that'll be another 20 plus million a day of gas. So if you zoom out 3, net Wells, you know, what's going to add about 45 million a day of gas which is almost half of all our European gas production. So again that's why we're excited about Germany, just the materiality of these Wells.
In the F&B costs for those wells are less than $1 50 per Mcf.
And kudos to the team, to be able to get the rig we wanted, and do all the pre-planning to really, uh, reduce that cycle time. So, thanks for that nursing.
We talked about tying those wells in Q4 of this year. So both wells are tied into existing facilities now.
Currently producing the first of those two wells at a rate of about 15 million cubic feet per day limited by surface constraints at that at that location.
Thanks. And then the next 1 here for Darcy jumping to the Netherlands um a couple of discoveries in the quarter. Could you give a bit more background on what we're seeing there?
Travis Ferguson: Great. Thanks, Darcy. The last one here, over to Randy. You noted the Q3 drilling program in the Deep Basin has exceeded expectations so far. Can you provide a bit more color on what we're seeing today in the results?
We intend to take kind of bring the second well on.
Capacity opens up there.
Great. Thanks, Darcy and then the last one here.
[Company Representative] (Vermilion Energy): Sure. Yeah. As Lars has mentioned, we completed 12 wells in Q3. Of these 12 wells, six of them tested at over 10 million a day of gas production. We also had some strong liquid rates from the other wells in the program. With our focus on profitability, most of these wells were deferred and will be coming on production over the next month. We'll have a better sense of performance, but those initial test results definitely exceeded our expectations. When we think about it on the capital front, the program also did come in under budget. That's really what we're starting to see, the cost benefits of running a consistent free rig drilling program, which we plan to, as we noted in the call, through 2026 and into 2027. Overall, very pleased with the results of this program.
Over to Randy you noted the Q3 drilling program in the deep basin has exceeded expectations. So far can you provide a bit more color on what we're seeing to date and the results sure. Yes. So yes.
We, we discovered gas in the route leg and and zein formations to the primary. Formations that we do Chase um in the Netherlands, we've discovered about 16 BCF gross of recoverable gas um and the fnd costs for those Wells are less than a dollar fifty per mcf. Um,
<unk> mentioned, we completed 12 wells in Q3 of these 12 wells six of them tested at over 10 million a day of gas production and then we also had some strong liquid rates from the other wells in the program with a focus on profitability.
Of these wells were deferred and will be coming on production over the next month. So we will have a better sense of performance, but those initial test results.
We talked about tying those wells in in Q4 of this year. So, both Wells are tied in to existing facilities. Now, we're currently producing the first of those 2 Wells at a rate of about 15 million cubic feet per day, limited by uh, surface constraints at that, at that location. And we intend to kind of bring the second well on as capacity, opens up there.
Definitely exceeded our expectations and then when we think about it on the capital front. The program also did come in under budget and that's really what we're starting to see is the cost benefits of running a consistent three rig drilling program, which we plan to as we noted in the call through 'twenty six and then to 27%. So overall very pleased with the results of this program.
Travis Ferguson: Great. Thanks, Randy. Dion, back to you. That's all we have for additional questions. Thanks, Travis. With that, I'd like to thank everyone again for participating in our Q3 results conference call. Enjoy the rest of your day.
Okay. Thanks, Ronny beyond back to you and that's all we have for additional questions. Thanks, Travis so with that I'd like to thank everyone again for participating in our Q3 results conference call during the rest of your day.
Operator: Thank you. Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day.
Thank you ladies.
Ladies and gentlemen, this does conclude your conference call for today, we thank you very much for your participation. You may now disconnect have a great day.
Great. Thanks Darcy. Um, and then the last 1 here uh, over to Randy uh you noted the Q3 drilling program in the Deep Basin has exceeded expectations so far. Um, can you provide a bit more color on on what we're seeing today in the results? Sure. Yeah. So yeah, you know, as, as large as mentioned, we completed 12, Wells, and Q3 of these 12 Wells, 6 of them, tested at over 10 million a day at a gas production. And then we also had some strong liquid rates from the other wells in the program, you know, with our focus on profitability. Uh, most of these Wells were deferred and we'll be coming on production over the next month. So we'll have a better sense of performance, but you know, those initial test results, uh, definitely exceeded our expectations. And then when we think about it on the Capitol Front, the program also did come in under budget and that
That's, you know, really what? We're starting to see is the cost benefits of running a consistent free rig drilling program, uh, which we plan to, is we noted in the call through 26 and into 27. So overall, um, very pleased with the results of this program.
Thank you, Randy Beyond back to you. That's all we have for additional questions. Thanks, Travis. So with that, I'd like to thank everyone again for participating in our Q3 results conference, call your address of your day.
Thank you, ladies and gentlemen, this does conclude your call conference call for today. We thank you very much for your participation and you may now disconnect have a great day.