Q4 2025 Vermilion Energy Inc Earnings Call

March 5, 2026

Speaker #1: Good morning , ladies and gentlemen , and welcome Vermilion Q4 2025 conference call At this time , all lines on listen only mode .

Speaker #1: Following the presentation , we will conduct a question and answer session . If at any time during this call , you require me assistance , please press star zero for the operator This call is being recorded on Thursday , March 5th , 2026 .

Speaker #1: I would now like to turn the conference over to Dion Hatcher , president and CEO . Please go ahead

Speaker #2: Thank you . Good morning , ladies and gentlemen . I'm Dion Hatcher , president and CEO of Vermilion Energy . With me today are Lars Glemser vice president and CFO Darcy Kerwin vice president , international HSC .

Dion Hatcher: Thank you. Good morning, ladies and gentlemen. I'm Dion Hatcher, President and CEO of Vermilion Energy. With me today are Lars Glemser, Vice President and CFO, Darcy Kerwin, Vice President, International & HSE, Randy McQuaig, Vice President North America, Lara Conrad, Vice President Business Development, Travis Thorgerson, Director of Investor Relations and Corporate Planning. Please refer to our advisory on forward-looking statements in our Q4 release. It describes forward-looking information, non-GAAP measures, and oil and gas terms used today, and it relies on risk factors and assumptions relevant to this discussion. Vermilion had an impactful year, positioning herself as a global gas producer with top decile realized gas prices, a lower cost structure, and a long duration asset base capable of delivering sustainable free cash flow for decades to come.

Speaker #2: Randy McQuade , vice president , North America . Lara Conrad , vice president , business development and Travis Thorgeirsson , director of investor relations and corporate planning .

Speaker #2: Please refer to our advisory and forward looking statements in our Q4 release and the forward looking information . non-GAAP measures and oil and gas terms used today and the realize of risk factors and assumptions relevant to this discussion Vermillion an impactful year positioning herself as a global gas producer with top decile realized gas prices , a lower cost structure , and a long duration asset base capable of delivering sustainable free cash flow for decades to come In 2025 , we delivered record production and marked a pivotal year in our company's history through strategic and activity , particularly the acquisition of the high quality assets in our core Deep basin area and the disposition of non-core assets in Saskatchewan and the United States .

Dion Hatcher: In 2025, we delivered record production and marked a pivotal year in our company's history through strategic M&A activity, particularly the acquisition of the high-quality assets in our core Deep Basin area and the disposition of non-core assets in Saskatchewan and the United States. Our portfolio is now focused on liquids-rich gas assets in Canada and premium priced gas assets in Europe. Building one of the largest land footprints in the Deep Basin, along with our growing liquids-rich gas business in the Montney, has sharpened our operational focus. This allows us to improve our cost structure and more importantly, higher profitability in our Canadian portfolio. In Germany, during Q1, we brought online the first well of the deep gas exploration program, Osterheide, and progressed the build-out of infrastructure to facilitate the production from one of our largest European gas discoveries, Wisselshorst, which we expect to bring online by mid-2026.

Speaker #2: Our portfolio is now focused on liquids rich gas assets in Canada and premium priced gas assets in Europe . Building one of the largest land footprints in the deep basin , along with our growing liquids rich gas business in the montney , has sharpened our operational focus This allows us to improve our cost structure and more importantly , higher profitability in our Canadian portfolio .

Speaker #2: In Germany , during Q1 , we brought online the first well of the gas exploration program and progressed the build up of infrastructure to facilitate the production from one of our largest European gas discoveries vis a horse , which we expect to bring online by mid 2026 .

Speaker #2: In the Netherlands , we successfully drilled two wells with multiple prospective zones and brought them on production in Q4 . The long runway of future prospects we've identified in Europe with finding and development costs to approximately $1.50 Canadian per m.c.f represents an opportunity for profitable organic growth in our domestic European gas business .

Dion Hatcher: In the Netherlands, we successfully drilled two wells with multiple prospective zones and brought them on production in Q4. The long runway of future prospects we've identified in Europe with finding and development costs of approximately $1.50 Canadian per Mcf represents an opportunity for profitable organic growth in our domestic European gas business. These core assets drove another strong quarter in Q4, both operationally and financially. Production of 121,308 BOEs per day was ahead of guidance. This was partially driven by highly productive wells in the Deep Basin, where three of the most productive gas wells in December were Vermilion-owned and operated.

Speaker #2: These core assets drove another strong quarter in Q4 , both operationally and financially Production of 121,308 votes per day was ahead of guidance .

Speaker #2: This was partially driven by highly productive wells in a deep basin , where three of the most productive gas wells in December were Vermilion owned and operated .

Speaker #2: Production also benefit from record volumes . In the montney , as well as outperformance from the well in Germany , which had 40% higher production compared to the third quarter and generated approximately $8 million of free cash flow in Q4 alone Strong realized gas pricing of 550 per MCF , or double the benchmark , was driven by our direct European gas exposure for TTF .

Dion Hatcher: Production also benefit from record volumes in the Montney, as well as outperformance from the Osterheide well in Germany, which had 40% higher production compared to Q3 and generated approximately USD 8 million of free cash flow in Q4 alone. Strong realized gas pricing of $5.50 per Mcf or double the AECO benchmark was driven by our direct European gas exposure, where TTF prices averaged EUR 15 per MMBtu in the quarter. Our realized gas prices also benefit from enhanced market diversification in Canada and a sophisticated hedging program. On the operational side, we apply a continuous improvement mindset to the areas within our control, including safety, production, and cost management. I'm excited about the progress by each team across the business.

Speaker #2: Prices averaged $15 per MMBtu in the quarter . Our realized gas prices also benefited from enhanced market diversification in Canada and a sophisticated hedging program on the operational side , we have we apply a continuous improvement mindset to the areas within our control , safety , production and cost management .

Speaker #2: I am excited about the progress by each team across the business in Canada . Due to the improved operational scale , high quality assets , our unit operating costs are now the lowest in over a decade , which improves our corporate unit costs .

Dion Hatcher: In Canada, due to the improved operational scale, high-quality assets, our unit operating costs are now the lowest in over a decade, which improves our corporate unit costs, now the lowest since 2020. Investments in infrastructure such as the Mica facility and development initiatives in Germany are expected to deliver an increase in excess free cash flow over the next few years. The long duration of our asset base and our commitment to disciplined capital allocation, when combined with only 153 million shares outstanding, positions Vermilion to add meaningful per share value. Moving to reserves, Vermilion's total proved plus probable, or 2P reserves, increased by 36% from the prior year, reaching 592 million BOEs.

Speaker #2: Now the lowest since Investments in infrastructure such as the Mica facility and development initiatives in Germany are expected to deliver an increase in excess free cash flow over the next few years .

Speaker #2: The long duration of our asset base and our commitment to disciplined capital allocation when combined with only 153 million shares outstanding , positions Vermillion to add meaningful per share value , moving to reserves Vermillion's total proved plus probable or to reserves increased by 36% from the prior year , reaching 592 million views .

Speaker #2: This growth was driven by a combination of organic development and the Deep Basin acquisition , which closed in February 2025 . Partially offset by the divestment of the United States and Saskatchewan assets in mid 2025 .

Dion Hatcher: This growth was driven by a combination of organic development and the Deep Basin acquisition, which closed in February 2025, partially offset by the divestment of the United States and Saskatchewan assets in mid-2025. We added 86 million BOEs of proved developed producing or PDP reserves and 201 million BOEs of 2P reserves in 2025. Our average funding development and acquisition costs, including future development costs, were $14.91 per BOE for PDP and $7.71 per BOE for 2P. That's a recycle ratio of 1.8 to 3.5 times, respectively. These recycle ratios highlight the capital efficiency and strong returns of our reserve additions.

Speaker #2: We added 86 million views approved , developed , producing or PDP reserves and 201 million views , of two reserves in 2025 . Our average funding development and acquisition costs , including future development costs , were $14.91 per boe for PDP and seven .

Speaker #2: 71 per BOE for Toopi . That's a recycled ratio of 1.8 and 3.5 times , respectively . These recycled ratios highlight the capital efficiency and strong returns of our reserve additions .

Dion Hatcher: It is also worth noting that PDP reserves do not include any volumes or present value associated with the Wisselshorst discovery well on the Bammesen license, whereas 2P reserves include approximately 7 million BOE or 43 Bcf related to our 64% working interest in the initial discovery. We have identified up to six additional drilling locations on the Bammesen license that currently have no 2P reserves assigned, representing significant further upside for European reserves. We remain on track to spud the first two of these locations in early 2027, with long lead equipment ordered, the drilling rig secured, and permitting progressing as expected. By applying the learnings from the previous program, we anticipate lower costs and faster cycle times, resulting in these wells being on production in the second half of 2028. The 2P Reserve Life Index was 14 years, in line with our historical averages.

Speaker #2: It is also worth noting that PDP reserves do not include any volumes or present value associated with the horse discovery well , on the license , whereas Toopi reserves include approximately 7 million boe or 43 BCF .

Speaker #2: Related to our 64% working interest in the initial discovery , we have identified up to six additional drilling locations on the license that currently have no Toopi reserves assigned , representing significant further upside for European reserves .

Speaker #2: We remain on track to spud the first two of these locations in early 2027 , with long lead equipment ordered the drilling rig secured and permitting , progressing as expected by applying the learnings from the previous program , we anticipate lower costs and faster cycle times , resulting in these wells being on production in the second half of 2028 .

Speaker #2: The Toopi Reserve Life Index was 14 years in line with our historical averages . Our internal estimate , as we have 1700 drilling locations across our 1.3 million net acres of land .

Dion Hatcher: Our internal estimate is that we have 1,700 drilling locations across our 1.3 million net acres of land that's in the Deep Basin and Montney, and only 23% of these are included in our year-end reserves. Also of note, internal estimates of initial gas in place related to exploration and development prospects in Europe are minimally included in our year-end reserves. We believe there's significant upside to our European gas reserves, given our 1.4 million net acres land across Germany and Netherlands, combined with our track record of exploration success. Across our portfolio, the combination of both reserves and additional internally estimated locations provide long-term visibility for future production and cash flow.

Speaker #2: That's in the deep basin and Montney , and only 23% of these are included in our year end reserves . Also of note , internal estimates of initial gas in place related to exploration and development prospects in Europe are minimally included in our year end reserves .

Speaker #2: We believe there's a significant upside to our European gas reserves , given our 1.4 million net acres land across Germany and Netherlands , combined with our track record of exploration success across our portfolio , the combination of both reserves and additional internally estimated locations provide long term visibility for future production and cash flow before tax .

Dion Hatcher: The before tax net present value of our 2P reserves, discounted at 10% using the three consultant average pricing as of 1 January 2026, and deducting year-end net debt, is CAD 23 per basic share, well in excess of our current share price. I will now pass it to Lars to discuss the Q4 results and more in depth.

Speaker #2: Net present value of our reserves discounted at 10% . Using a three consultant . Average pricing as of Jan one , 2026 and deducting year end net debt is $23 per basic share , well in excess of our current share price .

Speaker #2: We'll now pass it to discuss the Q4 results in more depth. Thank you, Dion. Vermilion generated $241 million of funds flow from operations in the fourth quarter.

Lars Glemser: Thank you, Dion. Vermilion generated CAD 241 million of funds flow from operations in Q4. An active quarter of drilling saw CAD 192 million invested in exploration and development capital expenditures, resulting in free cash flow of CAD 49 million. Production averaged 121,308 BOE a day, with a 69% weighting to natural gas. In Canada, we executed a three-rig drilling program in the Deep Basin, drilling 16 and bringing on production 17 liquids-rich gas wells. We made the deliberate decision to defer the startup of several highly productive wells that were drilled and completed in Q3 into mid Q4, allowing us to capture stronger realized gas prices and maximize returns. As Dion noted, these were some of the most prolific wells in Alberta.

Speaker #2: An active quarter of drilling saw $192 million invested in exploration and development capital expenditures, resulting in free cash flow of $49 million.

Speaker #2: Production averaged 121,308 boe a day , with a 69% weighting to natural gas . In Canada , we executed a three rig drilling program in the deep basin drilling 16 and bringing on production 17 liquids rich gas wells .

Speaker #2: We made the deliberate decision to defer the startup of several highly productive wells that were drilled and completed in the third quarter into mid-Q4, allowing us to capture stronger realized gas prices and maximize returns.

Speaker #2: As Dion noted , these were some of the most prolific wells in Alberta . In the montney , we drilled for gross and net liquids rich gas wells , which are scheduled for completion and start up in Q2 2026 .

Lars Glemser: In the Montney, we drilled 4 gross and net liquids-rich gas wells, which are scheduled for completion and startup in Q2 2026. The combination of strong Deep Basin well results, the return of previously shut-in production, and record Montney performance drove a significant increase in production in Canada. Normalized for disposition activity, our Q4 production was more than 5,000 BOE per day higher than in Q3, with a lower unit cost structure, improving cash flow net backs and overall profitability of our Canadian operations. International operations averaged 30,137 BOE per day in Q4, consistent with Q3. New production in the Netherlands and increased gas output in Germany largely offset natural declines in Ireland, Australia, and Croatia. Vermilion completed and brought online 2 gross or 1.2 net natural gas wells in the Netherlands during Q4.

Speaker #2: The combination of strong deep basin well results , the return of previously shut in production and record Montney performance drove a significant increase in production in Canada , normalized for disposition activity , are Q4 production was more than 5000 boe per day , higher than in Q3 , with a lower unit cost structure improving cash flow .

Speaker #2: Netbacks and overall profitability . Profitability of our Canadian operations , international operations averaged 30,137 boe per day in the fourth quarter , consistent with Q3 new production in the Netherlands and increased gas output in Germany , largely offset natural declines in Ireland , Australia and Croatia .

Speaker #2: Vermilion completed and brought online two gross or 1.2 net natural gas wells in the Netherlands during the fourth quarter . We also advanced permitting and technical work in the Netherlands to facilitate , facilitate the drilling of one gross or 0.5 net wells in 2026 .

Lars Glemser: We also advanced permitting and technical work in the Netherlands to facilitate the drilling of 1 gross or 0.5 net wells in 2026. Our approach to European development remains disciplined, leveraging our long-standing operating experience and strong regulatory relationships. In Germany, infrastructure development for the first Wisselshorst well, which is a 0.6 net ownership to Vermilion, continued during the Q, with first production expected mid-2026. The Osterheide well, brought on earlier in the year, saw an increase in production, averaging 10 million a day or 1,600 BOE a day for the Q. Germany continues to be a key region for Vermilion, providing direct exposure to premium European gas markets and development upside.

Speaker #2: Our approach to European development remains disciplined , leveraging our long standing operating experience and strong regulatory relationships in Germany , infrastructure development for the first vessel horse well , which is a 0.6 net ownership to Vermilion , continued during the quarter , with first production expected mid 2026 .

Speaker #2: The Austen well brought on earlier in the year , saw an increase in production average , averaging 10 million a day or 1600 boe a day for the quarter .

Speaker #2: Germany continues to be a key region for Vermilion , providing direct exposure to premium European gas markets and development . Upside on the balance sheet , we accelerated our debt reduction during the fourth quarter by selling a portion of our ownership in coelacanth energy , which resulted in 42 million of incremental debt reduction and a realized gain on disposition of 12 million .

Lars Glemser: On the balance sheet, we accelerated our debt reduction during Q4 by selling a portion of our ownership in Coelacanth Energy, which resulted in CAD 42 million of incremental debt reduction and a realized gain on disposition of CAD 12 million. We continue to hold a 10% ownership in Coelacanth. Returning capital to shareholders remains a core priority. Our strong free cash flow generation and disciplined capital allocation provide the foundation for sustainable dividends and opportunistic share buybacks. Our debt reduction trajectory has been accelerated with the sale of the Coelacanth shares and an increasing commodity price environment. This allows us to continue to be opportunistic in our balance of further debt reduction and returning capital to shareholders. As we continue to grow our asset base and improve profitability, we are confident in our ability to deliver attractive shareholder returns over the long term.

Speaker #2: We continue to hold a 10% ownership in Coelacanth. Returning capital to shareholders remains a core priority. Our strong free cash flow generation and disciplined capital allocation provide the foundation for sustainable dividends and opportunistic share buybacks.

Speaker #2: Our debt reduction trajectory has been accelerated with the sale of the coelacanth shares and an increase in commodity price environment . This allows us to continue to be opportunistic in our balance .

Speaker #2: With further debt reduction and returning capital to shareholders as we continue to grow our asset base and improve profitability, we are confident in our ability to deliver attractive shareholder returns over the long term.

Lars Glemser: I will now pass it back to Dion.

Dion Hatcher: Thank you, Lars. Prior to my closing remarks, I want to take a moment and thank our staff in Australia. In Q1, our Wandoo platform was impacted by a Category 3 cycle, which resulted in minor damage and a delay of the planned crude export lifting. We do budget for cyclone downtime each year. Unfortunately, it has been more than 5 years since we've had an experience of a direct storm event. Again, thank you to our staff for their hard work and commitment to safety in the lead up during and after the cyclone event. In addition, our team has worked very closely with the regulator on the integrity of our asset, including planned maintenance of the export system, which is already included in our budgets.

Speaker #2: I will now pass it back to Dion.

Speaker #3: Thank you, Lars. Prior to my closing remarks, I want to take a moment and thank our staff in Australia in Q1.

Speaker #3: Our Wandoo platform was impacted by a category three cyclone , which resulted in minor damage and a delay of the planned crude export lifting .

Speaker #3: We do budget for cyclone downtime each year and fortunately , it has been more than five years since we've had an experience of a direct storm event .

Speaker #3: Again , thank you to our staff for their hard work and commitment to safety in the lead up . During and after the cyclone event .

Speaker #3: In addition, our team has worked very closely with the regulator on the integrity of our asset, including planned maintenance of the export system, which was already included in our budgets.

Dion Hatcher: In late February, we exported over 300,000 barrels of crude following the cyclone-related delay. We're in the process of restoring production on the Wandoo B platform. On the back of the record 2025 annual production and strong Q4, while factoring in Australian cyclone-related downtime, we are providing a Q1 outlook of 122,000 to 124,000 BOEs per day. We expect production in the first half of 2026 to be in line with recent levels, with lower Q3 production reflective of the planned maintenance as outlined with our budget release. The recent run-up in global gas prices offers a reminder that in a commodity-based business, being able to sell your product for more offers a substantial advantage.

Speaker #3: In late February , we exported over 300,000 barrels of crude following the cyclone delay , and we're in a process of restoring production on the One Dubai platform .

Speaker #3: So on the back of the record , 2025 annual production and strong Q4 , while factoring in Australia , cyclone related downtime , we are providing a Q1 outlook of 122 to 124,000 per day .

Speaker #3: Expect production in the first half of 2026 to be in line with recent levels, with lower Q3 production reflective of the planned maintenance as outlined with our budget release.

Speaker #3: The recent run up in global gas prices offers a reminder that in commodity based business , being able to sell your product for more offers a substantial advantage .

Dion Hatcher: Our unique portfolio offers direct exposure to European Gas, where inventories are well below the five-year averages and the current price is over $20 per MMBtu, as well as Brent Crude, both of which have been impacted by recent geopolitical events. In closing, it has been a very active year, migrating our portfolio and advancing major projects. Through this busy time, we have outperformed on the operational side, and that comes down to the exceptional work of our employees and contractors. This is an exciting time at Vermilion, with a strategic roadmap to 2030 as outlined in our recent Investor Day. This multi-year plan reflects a disciplined approach to long-term profitability designed to generate meaningful per-share excess free cash flow growth even under a flat commodity price environment. The higher free cash flow growth will support debt reduction and increase shareholder returns.

Speaker #3: Our unique portfolio offers direct exposure to European gas, where inventories are well below the five-year averages and the current price is over $20 per MMBtu.

Speaker #3: As well as Brent crude , both of which have been impacted by recent geopolitical events . In closing , it has been a very active year , hydrating our portfolio and advancing major projects through this busy time .

Speaker #3: We have outperformed on the operational side and that comes down to the exceptional work of our employees and contractors . This is an exciting time at Vermilion with a strategic roadmap to 2030 , as outlined in our recent Investor Day , this multi-year plan reflects a disciplined approach to long term profitability designed to generate meaningful per share excess free cash flow growth even under a flat commodity price environment .

Speaker #3: A higher free cash flow growth will support debt reduction and increased shareholder returns . Our asset base offers longevity , capital allocation , flexibility , our top decile realized gas price , along with significant upside driven both by our operational excellence and our large resource position .

Dion Hatcher: Our asset base offers longevity, capital allocation flexibility, our top decile realized gas price, along with significant upside driven both by our operational excellence and our large resource position. We remain committed to operating with discipline, maintaining a strong balance sheet, and investing in high return projects that drive value for our shareholders. With that, we'll now open the line for questions.

Speaker #3: We remain committed to operating with discipline , maintaining a strong balance sheet and investing in high return projects that drive value for our shareholders .

Speaker #3: With that , we'll now open the line for questions .

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Menno Hulshof with TD Cowen. Your line is now open.

Speaker #1: Thank you . Ladies and gentlemen , we will now begin the question and answer session . Should you have a question , please press star followed by the one on your touchtone phone .

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two.

Speaker #1: If you are using the speakerphone, please lift the handset before pressing any keys. Your first question comes from Menno Hulshof with TD Cowan.

Speaker #1: Your line is now open

Menno Hulshof: Good morning, and thanks for taking my questions. At your Investor Day in December, you talked about material free cash flow inflection starting in 2028. At that time, I believe you were anchoring to something close to strip gas prices and oil prices that were generally north of $70, which could now prove conservative. With that in mind, how would you frame free cash flow inflection in 2028 relative to what you were talking about in December?

Speaker #4: Good morning and thanks for taking my questions at your Investor Day in December . You talked about material free cash flow , inflection starting in 2028 .

Speaker #4: And at that time , I believe you were anchoring to something close to strip gas prices and oil prices that were generally north of $70 , which could now prove conservative .

Speaker #4: So with that in mind , how would you frame free cash flow inflection in 2028 relative to what you were talking about in December

Dion Hatcher: Thank you, Menno. Appreciate the question. You're right. When we went through the Investor Day, we used $70 WTI, CAD 3.50 AECO and CAD 13 for TTF. You know, using those numbers, and to your point, the inflection is driven by the ramp up in Germany volumes with the gas that we see coming online there, but also of course, the Montney, where we've nearly built out the kit and we'll get our production up to 28,000 BOEs a day. With that, we'll see that higher production, lower capital. We were running at about CAD 2.70 per share of excess free cash flow at that time, which was again, based on that price deck.

Speaker #3: Thank you . I appreciate the question . You're right . When we went through the Investor Day , we used 70 WTI 358 and 13 CAD for TTF .

Speaker #3: And you know , using those numbers . And to your point , the inflection is driven by the ramp up in Germany volumes with the gas that we see coming online .

Speaker #3: There . But also of course , the montney where we've nearly built out the kit . And we'll get our production up to 28,000 views a day .

Speaker #3: And with that , we'll see that higher production , lower capital . So we were running at about 270 per share of excess free cash flow at that time , which was again based on that price tag .

Dion Hatcher: Maybe I'll pass over to Lars if you wanna kinda tie that price deck to potential upside from, where we are today.

Speaker #3: But maybe I'll pass over if you want to kind of tie that price tag to potential upside from where we are today .

Lars Glemser: Yeah, no, it's a good observation, Menno, in terms of the run-up here that we've seen recently. We've updated the slide in our slide deck. This would be slide 13, to show what the impact of the run-up in commodity pricing is here. We're showing FFO for 2026, around CAD 950 million. That's a 40% increase to our excess free cash flow. Some of these near-term price moves haven't necessarily rippled through the curve yet, so that's something that we'll monitor. We stress the business as well as look at upside to the business on multiple price decks. We are capturing a pretty decent portion of what we've seen here the last week or so in terms of the commodity price run-up.

Speaker #2: Yeah . No . And it's a good observation in terms of the run up here that we've seen recently . And so we've updated the slide in our slide deck .

Speaker #2: This would be slide 13 to show what the impact of the run up in commodity pricing is here . So we're showing FFO for 2026 around 950 million .

Speaker #2: That's a 40% increase to our excess free cash flow. Some of these near-term price moves haven't necessarily rippled through the curve yet.

Speaker #2: So that's something that will monitor . We stress the business as well as look at upside to the business on multiple price decks .

Speaker #2: But we are capturing a pretty decent portion of what we've seen here . The last week or so . In terms of the commodity price run up .

Menno Hulshof: Yeah, thanks for that.

Dion Hatcher: Thanks, Lars. yeah.

Speaker #5: Okay .

Menno Hulshof: Oh, sorry.

Speaker #4: Yeah , thanks for that . Thanks . Yes . Oh , sorry .

Dion Hatcher: Oh, go ahead.

Speaker #3: Oh go ahead

Menno Hulshof: Yeah. I mean, I guess my second question ties in exactly into what you were just describing, and it's the, it's a standard hedging question. Like, there's a lot of backwardation, there's limited liquidity the further out you go. Are you getting anything done today? Are you looking to capitalize on that? Capitalize the wrong word, it's a horrible situation. Are there opportunities to hedge further, and is there a scenario where you hedge more aggressively than you have in the past?

Speaker #4: Yeah . I mean , I was just I guess my second question ties in exactly into what you were just describing . And it's the it's the standard hedging question .

Speaker #4: There's a lot of backwardation . There's limited liquidity . The further out you go . Are you are you getting anything done today ?

Speaker #4: Are you looking to to capitalize on that . Capitalize the wrong words a horrible situation , but are there opportunities to to hedge further ?

Speaker #4: And is there a scenario where you hedge more aggressively than you , than you have in the past ?

Lars Glemser: Yeah. Menno, Lars here again. We're about 50% hedged on European gas for 2026.

Speaker #2: Yeah , Lars , here again . So we're about 50% hedged on European gas for 20 26 , 53% on oil . And then 45% on North American gas .

Dion Hatcher: 53% on oil and then 45% on North American gas. Some of the recent hedges that we've put in place, specifically on oil, have had participating structures. You know, calls that allow us to participate in this rally. On European gas specifically, we have been active hedging this past week, locking in some of the price increases here. In the past, and not saying that this will be the playbook here, but in the past, we have taken our hedge percentage on a commodity up to 70% if you see an opportunity to lock in revenue as a result of significant price increases. That is something that we'll continue to look at as a team.

Lars Glemser: 53% on oil and then 45% on North American gas. Some of the recent hedges that we've put in place, specifically on oil, have had participating structures. You know, calls that allow us to participate in this rally. On European gas specifically, we have been active hedging this past week, locking in some of the price increases here. In the past, and not saying that this will be the playbook here, but in the past, we have taken our hedge percentage on a commodity up to 70% if you see an opportunity to lock in revenue as a result of significant price increases. That is something that we'll continue to look at as a team.

Speaker #2: Some of the recent hedges that we've put in place specifically on oil have had participating structures . So , you know , calls that are allow us to participate in this rally on European gas , specifically , typically , we have been active hedging this past week , locking in some of the price increases here in the past .

Speaker #2: And not saying that this will be the playbook here , but in the past we have taken our hedge percentage on a commodity up to 70% .

Speaker #2: If you see an opportunity to to lock in revenue as a result of significant price increases , so that that is something that we'll continue to look at as a team , we will also continue to monitor periods like 2027 , 2028 , as well , to see if some of the see if some of these moves are going to be structural throughout the curve .

Dion Hatcher: We will also continue to monitor periods like 2027, 2028 as well to see if some of these moves are going to be structural throughout the curve and, take advantage if there is something to take advantage of.

Lars Glemser: We will also continue to monitor periods like 2027, 2028 as well to see if some of these moves are going to be structural throughout the curve and, take advantage if there is something to take advantage of.

Speaker #2: And take advantage if there is something to take advantage of

Menno Hulshof: Thanks to you both. I'll turn it back.

Dion Hatcher: Thank you, Mina.

Speaker #4: Thanks to you both. I'll turn it back.

Operator: Your next question comes from Amir Arif with ATB Capital. Your line is now open.

Speaker #3: Thank you . Middle .

Speaker #1: Your next question comes from Amir Arif with ATB capital . Your line is now open .

Operator: Okay. Thanks. Good morning, guys. Just a few quick questions. Just first on the Deep Basin well outperformance. Just curious, are you targeting more tier one locations or specific zones, or do you feel that this recent well outperformance relative to your budget or your type curve can continue through the rest of 2026?

Amir Arif: Okay. Thanks. Good morning, guys. Just a few quick questions. Just first on the Deep Basin well outperformance. Just curious, are you targeting more tier one locations or specific zones, or do you feel that this recent well outperformance relative to your budget or your type curve can continue through the rest of 2026?

Speaker #6: Okay , thanks . Good morning guys . Just a few quick questions . Just first on the deep basin . Well outperformance . Just curious is that are you targeting more tier one locations or specific zones or do you feel that this recent .

Speaker #6: Well outperformance relative to your budget or your type curve can continue through the rest of 26 ?

Dion Hatcher: Oh, thanks, Amir. I'll pass over to Randy. He can't wait to answer those questions.

Speaker #3: Oh , thanks , I'll pass it over to Randy . He can't wait to answer this question . Yeah , yeah . Thanks

Randy McQuaig: Thanks. This really is kind of a continuation of the positive results that we showed in the Investor Day, where we had the strong kind of IP30 rates from the second half of 2025 drill program. That's continued to perform. Then when you take the results from our current three-rig program where we're currently drilling, we've brought on an additional 14 wells, and they've also exceeded expectations. You know, it's worth noting that in that well mix, we have quite a wide range of well types and production areas. You know, we're not, as you mentioned, it's not all tier 1 locations. We are also drilling proof of concept wells.

Speaker #7: So yeah , this this really is kind of continuation of the positive results that we showed in the Investor Day where we had the strong kind of IP 30 rates from the second half of 2025 drill program .

Speaker #7: That's continued to perform . And then when you take the results from our current three rig program that we're we're currently drilling , we've brought on an additional 14 wells .

Speaker #7: And they've also exceeded expectations . So , you know , it's worth noting that in that well mix , we have quite a wide range of well types .

Speaker #7: And production areas . So that really does speak to our depth of inventory . You know , we're not as you mentioned , it's not all tier one locations .

Randy McQuaig: It speaks to our depth of inventory and really the efforts of everybody on the Deep Basin teams to continue to achieve these strong results.

Speaker #7: We are also drilling proof of concept wells . So it speaks to our depth of inventory . And really the efforts of everybody on the deep basin teams to continue to achieve these strong results .

Operator: Okay. It sounds like there's a good chance for these well, performance to continue above the type curve. Would that be a fair comment?

Amir Arif: Okay. It sounds like there's a good chance for these well, performance to continue above the type curve. Would that be a fair comment?

Speaker #6: Okay . So it sounds like there's a good chance for these . Well , outperformance to continue above the type curve . Does that would that be a fair comment ?

Randy McQuaig: Yeah. It's very. Yeah. Based on the results to date, yes.

Operator: Okay.

Amir Arif: Okay.

Speaker #7: Yeah , it's very Yeah . Based on the results to date . Yes .

Dion Hatcher: Yeah. I mean, think if we've got 40, 45 wells, Amir, for the program and, you know, we're Q1 into it, but everything we're seeing in the Q1 is encouraging. You know, we can provide more updates as we go. To Randy's point, I think the team's doing an excellent job with the locations they're selecting and the execution. You know, as we get more data, we can revisit, where we are.

Speaker #3: Yeah, I mean, we think we've got 4,045 wells in there for the program. And, you know, we're first quarter into it.

Speaker #3: But everything we're seeing in the first quarter is encouraging . So you know we can provide more updates as we go . But to Randy's point , I think the team's doing an excellent job with the locations are selecting and the execution .

Speaker #3: So, as we get more data, we can revisit where we are. Okay.

Operator: Okay. Yeah. Those great results. The second question, just on Australia, can you provide a little more granularity on when you expect Australian volumes to ramp back up to their previous production levels?

Amir Arif: Okay. Yeah. Those great results. The second question, just on Australia, can you provide a little more granularity on when you expect Australian volumes to ramp back up to their previous production levels?

Speaker #6: Yeah . No , those are great results . The second question just on Australia , can you provide a little more granularity . And do you expect this trillion volumes to ramp back up to their to previous production levels

Dion Hatcher: Yep. Thanks. I'll pass it to Darcy Kerwin, our VP International, and just talk with on Australia, the plan there to what's maybe a little more color on what happened, but more importantly, the plan to restore production here.

Speaker #3: No thanks . to Darcy Kerwin , our VP international , and just talk about the on Australia , the kind of plan there to to kind of watch maybe a little more color on what happened .

Randy McQuaig: Yeah. Thanks for that, Amir. I'll start by giving a bit of background on the issues that we've been having in Australia. In December 2023, while we're performing inspection and maintenance activities on our export system, we did have a small leak on one component of that system. Now, at the time, the system was not exporting. We were isolated for maintenance, but nonetheless, we did have a release of residual crude oil from that part of the system. We liaised pretty closely with the regulator, both with our initial spill response and then subsequent repair plans for that system. That did require an approved diving campaign to address the issue that we had. That diving campaign was completed by mid-January.

Speaker #3: But more importantly the plan to restore production here .

Speaker #8: Yeah . Thanks for that . Amir . I'll start by giving a bit of background issue on background on the issues that we've been having in Australia .

Speaker #8: So , I in December of last year , while we were performing inspection and maintenance activities on our export system , we did have a small leak on one component of that system .

Speaker #8: Now , at the time , the system was not exporting . We were we were isolated for maintenance , but nonetheless , we did have a release of residual crude oil from that .

Speaker #8: That part of the system we liaised pretty closely with the regulator , both with our initial spill response and then subsequent repair plans for that system that did require an approved diving campaign to address the issue that we had , that diving campaign was completed by mid January .

Randy McQuaig: On 6 February, we did receive a notice from the regulator that limited the use of this export system, kind of a standard regulator response in a situation like that. Later that same day, we did receive their approval to complete a plan loading, after we formally responded to their issued notice. In parallel to all this, we had a tropical cyclone that had been building offshore Australia, and we did have a direct hit from a category 3 tropical cyclone on the weekend of 7 February. That shut in both our production operations and our export systems, which did delay an export that we had planned. We've conducted the damage assessments and are completing necessary repairs at this point in order to restart production operations on Wandoo.

Speaker #8: On February 6th , we did receive a notice from the regulator that limited the use of this export system , kind of a standard regulator response in kind of in a situation like that .

Speaker #8: And then later that same day we did receive their approval to complete a plan . Loading . After we formally responded to their to their issued notice .

Speaker #8: So in parallel to all this , we had a tropical cyclone that had been building offshore Australia , and we did have a direct hit from a category three tropical cyclone on the weekend of February 7th that shut in both our our production operations and our export systems , which did delay an export that we had planned .

Speaker #8: We've conducted the damage assessments and are completing necessary repairs. At this point, in order to restart production operations, we want to be...

Randy McQuaig: We did manage to successfully complete an export of over 300,000 barrels last Friday, 27 February 2024. A little bit more longer term, we had already planned and budgeted for the replacement of portions of this export system. You know, we had to complete an engineering, receive bids in 2025. We've committed to fabrication starting this year and offshore installation in 2027. That's kinda now a formal commitment we've made to the regulator to do that.

Speaker #8: We did manage to successfully complete an export of 300,000 barrels last Friday . So February 27th , a little bit more . Longer term .

Speaker #8: We had already planned and budgeted for the replacement of portions of this export system . And , you know , we had a completed engineering , received bids in 2025 .

Speaker #8: We've committed to fabrication starting this year, and offshore and installation in 2027. And that's now a formal commitment we've made to the regulator to do that.

Dion Hatcher: Oh, thanks, Darcy. Like, with respect to Q1, you know, we've assumed minimal volumes, Amir, post, you know, post the early Fed shutdown. You know, our Q1 was effectively, we just wanna diligently give the guys some time to restart, which they're in the process of doing. You know, going into Q2, we expect things to be back to normal, but at this point, we wanna be conservative for Q1.

Speaker #3: So thanks , Darcy . And then with respect to Q1 , you know , we've assumed minimal , minimal volumes near post . You know , post the February early Feb shutdown .

Speaker #3: So , you know , our Q1 , we've effectively we just want to diligently give the guys some time to , to restart , which are in the process of doing so , you know , going into Q2 , we expect things to be back to normal .

Operator: Okay. By Q2, you should be fully ramped back up by the end of Q2 for sure? Around there?

Amir Arif: Okay. By Q2, you should be fully ramped back up by the end of Q2 for sure? Around there?

Speaker #3: But at this point , we want to be conservative for Q1 .

Speaker #6: Okay . So both by to Q you should be fully ramped back up . But at the end of two Q for sure around there .

Dion Hatcher: That's our plan. Yep.

Operator: Okay. Okay. Sounds good. Just 1 final question. Just did notice some negative technical revisions on the 1P, 2P side of both North America and international. Could you just provide a little color behind that?

Amir Arif: Okay. Okay. Sounds good. Just 1 final question. Just did notice some negative technical revisions on the 1P, 2P side of both North America and international. Could you just provide a little color behind that?

Speaker #3: That's our plan .

Speaker #6: Yeah . Okay . Okay . Sounds good . And then just one final question , just to notice some negative technical revisions on the one P2P side on both North America and international , could you just provide a little color behind that ?

Dion Hatcher: Just wanna make sure I heard you there, Amir. Negative technical regions on the international side?

Speaker #3: Just want to make sure I heard you there. Negative technical regions on the international side.

Operator: It was on both the international and the North American side. There was some negative...

Amir Arif: It was on both the international and the North American side. There was some negative...

Dion Hatcher: Gotcha. Gotcha.

Speaker #6: It was it was on both the international and the North American side . There was some negative revisions on one and two . So just some color around .

Operator: Revisions on 1P and 2P. Just some color around what was driving that.

Amir Arif: Revisions on 1P and 2P. Just some color around what was driving that.

Dion Hatcher: Okay. I'll pass it over to Lara. She'll take that one. Thanks.

Speaker #6: What was driving that ?

Lara Conrad: For sure. Thanks, Amir. Really when we look at the negative technicals, this is a result of us high-grading our reserves book really primarily as a result of the M&A activity. When we think about in Canada, you know, the team in Canada under Randy have done a great job of high-grading locations, part of why we saw those great results in the Deep Basin. Now we've shifted our reserves book to reflect that. Really the negative technicals are because we've replaced locations with locations that we see as having better profitability. You can really see this because when you look at the numbers, you know, we've added 4 times as much volume through drilling extensions as we removed in our technical revisions in the Deep Basin.

Speaker #3: Okay , I'll pass it over to Lara . She'll take that one .

Speaker #9: Thanks for sure . Thanks , Amir . So really when we look at the negative technicals , this is a result of us high grading our reserves book .

Speaker #9: Really, primarily as a result of M&A activity. So when we think about in Canada, you know, the team in Canada under Randy have done a great job of hydrating locations.

Speaker #9: Part of why we saw those great results in the Deep Basin. And so now we've shifted our reserves book to reflect that.

Speaker #9: So really the negative technicals are because we've replaced locations with locations that as having better profitability . And you can really see this because when you look at the numbers , you know , we've added four times as much volume through drilling extensions as we removed in our technical revisions in the deep basin .

Lara Conrad: A net positive overall, but negative from the ones that we've replaced. As far as the international side of the books, we did have some minor negative technicals in the Netherlands, Germany, and France. This is really to do with again, shifting development plans between wells as well as our capital allocation decisions, prioritizing drilling in Canada, the Deep Basin, Montney, and Germany over development opportunities in France. Just really making sure that our reserves book matches our long-term plans as an organization.

Speaker #9: So, a net positive overall, but negative from the ones that we replaced. As far as the international side of the books, we did have some minor negative technicals in the Netherlands, Germany, and France.

Speaker #9: And this is really to do with , again , shifting development plans between wells as well as our capital allocation decisions , prioritizing drilling in Canada and the Deep Basin and Montney .

Speaker #9: And in Germany over a development opportunities in France . So just really making sure that our reserves book matches our long term plans as that organization .

Operator: Okay. No, that makes a lot of sense. It's mostly locations that have been taken out, not really production performance on existing wells. Is that fair?

Amir Arif: Okay. No, that makes a lot of sense. It's mostly locations that have been taken out, not really production performance on existing wells. Is that fair?

Speaker #6: Okay , that makes a lot of sense . So it's mostly locations that have been taking out , not really production performance on existing wells .

Lara Conrad: That's correct. Yeah.

Operator: Okay. Okay, sounds great. Thank you.

Amir Arif: Okay. Okay, sounds great. Thank you.

Speaker #6: Is that fair ?

Speaker #9: That's correct .

Speaker #6: Yeah okay . Okay . Sounds great . Thank you .

Operator: Your next question comes from Jeremy McMeekin with BMO Capital Markets. The line is now open.

Speaker #1: Your next question comes from Jeremy McRae with BMO Capital Markets . Your line is now open .

Jeremy McMeekin: Yeah. Hi, guys. maybe this is probably back to Lara here. Can you give me a sense of what the M&A market looks like here now, just in terms of how many deals have you potentially looked at? Is there more deals potentially to come you think? Then I got 1 more follow-up question here as well.

Speaker #10: Yeah . Hi , guys . Maybe this is probably back to Laura here . Can you give me a sense of what the M&A market looks like here ?

Speaker #10: Now , just in terms of how many deals have you potentially looked at ? Is there more deals potentially to come , you think ?

Speaker #10: And then, got one more follow-up question here as well.

Dion Hatcher: Thanks, Jeremy. Just general M&A, where are we? Maybe, Lara, do you wanna provide us commentary there?

Speaker #5: Sure .

Speaker #3: Thanks , Jeremy . So just general M&A where are we . But maybe Laura do you want to write a commentary there .

Lara Conrad: For sure. You know, we've got a really great portfolio when it comes to looking at M&A opportunities, especially on the back of the Westbrick Energy acquisition. I think whenever you do a rejig of your portfolio, it opens up further opportunities. You know, I'll give the standard M&A response. We look at everything, and when we have something to talk to, we'll let you know. I do think there's gonna be some interesting opportunities both in Canada and in Europe. You know, you've seen us core up the portfolio. Vermilion has done some divests recently, which is, you know, a little bit different than historically, but we're really trying to create that focused portfolio. M&A will be part of that when we see the right opportunities.

Speaker #9: For sure . You know we've got a really great portfolio when it comes to looking at M&A opportunities , especially on the back of the Westbrook acquisition .

Speaker #9: I think whenever you do a rejig of your portfolio , it opens up further opportunities . So , you know , I'll give the standard M&A response .

Speaker #9: We look at everything . And when we have something to talk to , we'll let you know . But I do think there's going to be some interesting opportunities both in Canada and in Europe .

Speaker #9: You know , you've seen us core up the portfolio . Vermilion has done some divests recently , which is , you know , a little bit different than historically , but we're really trying to create that focused portfolio .

Speaker #9: So M&A will be part of that when we see the right opportunities.

Jeremy McMeekin: Okay, okay. Maybe just a bit more follow-up with Amir's question here earlier. When these better wells were coming out of the Deep Basin, was there anything, I know you talked about, like, the geology looks good, and you have a lot of two one. Was there anything different that you did on the drill or completion design that led to the better results, or was it just almost 100% geology?

Speaker #10: Okay , okay . And maybe just a bit more follow up with the mayor's question here earlier when these better wells were coming out of the deep basin , was there anything I know you talked about like the geology looks good and have a lot of Q1 , but was there anything different that you did on the drill or completion design that led to the better results , or was it just almost 100% geology ?

Dion Hatcher: Yeah. I'll just give the quick answer and pass it to Randy if he wants to elaborate. No, I think it's the rock, Jeremy. You know, as you know, the history is we've developed our legacy land position over the years, and I think teams did a great job of working that land base harder. In fact, now they've got a bunch of new inventory and high quality, and you put the, I would say, the high-performing teams of Vermilion and Westbrick together, and that brain trust has found a lot of opportunities, ability to extend wells and again, just make things happen. You know, I think it's really the rock quality we're seeing. Randy, anything I missed there or?

Speaker #3: Yeah , I'll just give the quick answer and pass it around . If you want to elaborate . But no , I think it's the Rock .

Speaker #3: Jeremy . You know , we as you know , the history is we've developed our legacy land position over the years . And I think teams did a great job of working that land base harder effectively .

Speaker #3: Now they've got a bunch of new inventory and high quality , and you put the I would say the high performing teams , of Vermilion and Westbrook together .

Speaker #3: And that brain trust has has found a lot of opportunities , ability to extend Wells and and again just make things happen . But you know I think it's really the rock quality we're seeing .

Operator: Yeah. The only other thing I would add is the ability that, you know, the combination of our two land bases plus all the deals we've done. We've done lots of swaps and Crown land sales that have created a bit more of land, so we're able to drill optimal locations as opposed to previous where we weren't. I would say on the drilling completions, nothing different than what we've done. We've continued to perform. Costs come in where we expect them to come in. That's all good. It really comes down to geology and optimal from the land position.

Randy McQuaig: Yeah. The only other thing I would add is the ability that, you know, the combination of our two land bases plus all the deals we've done. We've done lots of swaps and Crown land sales that have created a bit more of land, so we're able to drill optimal locations as opposed to previous where we weren't. I would say on the drilling completions, nothing different than what we've done. We've continued to perform. Costs come in where we expect them to come in. That's all good. It really comes down to geology and optimal from the land position.

Speaker #3: But Randy, anything I missed there, or...

Speaker #7: Yeah . The only other thing I would add is the ability that , you know , the combination of our two land bases plus all the deals we've done , we've done lots of and , and crown land sales that have created a bit more of land .

Speaker #7: So we're able to drill optimal locations as opposed to previously, where we weren't. So I would say on the drilling completions, nothing different than what we've done.

Speaker #7: We've continued to perform . Costs come in where we expect them to come in . So that's all good . It's really comes down to geology and optimal from the land position .

Dion Hatcher: Thanks, Randy.

Jeremy McMeekin: Okay. Thanks, guys.

Dion Hatcher: Thanks, Jeremy.

Speaker #7: Thanks , Randy .

Speaker #5: Okay .

Operator: Your next question comes from Dennis Fong with CIBC World Markets. Your line is now open.

Speaker #10: Thanks guys .

Speaker #3: Thanks , Jeremy .

Speaker #5: Yeah .

Speaker #1: Your next question comes from Dennis Fong with CIBC World Markets . Your line is now open .

[Analyst] (Aiera): Hi. Good morning. Thanks for taking my questions. My first one is just around Osterhavn. Obviously, that's fantastic to see the incremental uplift in terms of the production. As I recall, there was, I think from your Investor Day, you highlighted a little bit about infrastructure and kinda local gathering constraints. Can you talk towards, we'll call it the durability of the higher throughput, what some of the considerations happen to be?

Dennis Fong: Hi. Good morning. Thanks for taking my questions. My first one is just around Osterhavn. Obviously, that's fantastic to see the incremental uplift in terms of the production. As I recall, there was, I think from your Investor Day, you highlighted a little bit about infrastructure and kinda local gathering constraints. Can you talk towards, we'll call it the durability of the higher throughput, what some of the considerations happen to be?

Speaker #7: Hi . Good morning and thanks for taking my questions . My first one is just around austere obviously . That's fantastic to see the incremental uplift in terms of the production .

Speaker #7: As I recall , there was I think from your Investor Day , you highlighted a little bit about infrastructure and kind of local gathering constraints .

Speaker #7: Can you talk towards we'll call it the durability of the higher throughput and kind of what some of the considerations happen to be

Dion Hatcher: Oh, thanks, Dennis. I mean, I'll give the quick answer then pass it to Darcy to elaborate. I mean, I think the guys, you know, have positioned it well, or we've got the well set up to be able to deliver, and we've seen higher demand, which again, probably no surprise with the situation in Europe, and it's been pretty steady here into the new year as well. Darcy, what am I missing there?

Speaker #3: Oh thanks , Dennis . I mean , I'll give you the quick answer and then pass it to Darcy . But I mean , I think the guys , you know , have positioned it well where we've got the well set up to be able to deliver .

Speaker #3: And we've seen higher demand , which again , probably no surprise with the situation in Europe . And it's been pretty steady here into the new year as well .

Operator: Yeah, I think that covers it. You know, I would add, Dennis, the...

Randy McQuaig: Yeah, I think that covers it. You know, I would add, Dennis, the...

Speaker #3: But am I missing there?

Speaker #8: Yeah , I think I think that covers it . You know , I would add Dennis , the kind of infrastructure constraints that we had assumed are probably not as not as negative as we assumed initially .

Randy McQuaig: Kind of infrastructure constraints that we had assumed are probably not as negative as we assumed initially. We expect that the production rates that we have seen as of late will continue flat kinda through 2026. There is some day-to-day kinda market variation depending on who's buying and sending gas to different points. Overall, I think there is more capacity in that part of the system than we had assumed, and the market seems to have a desire for that gas. I think we expect that will stay flat.

Speaker #8: So we expect that the production rates that we have seen as of late will continue flat kind of through 2026 . There is some day to day kind of market variation depending on on who's buying and sending gas to to different points .

Speaker #8: But overall , I think I think there is more capacity in that part of the system than we had assumed . And the market seems to have a desire for that gas .

[Analyst] (Aiera): Okay, great. Then does that also bode well then for some of the opportunities you were discussing around Wisselshorst Horse?

Dennis Fong: Okay, great. Then does that also bode well then for some of the opportunities you were discussing around Wisselshorst Horse?

Speaker #8: So we expect that that will stay flat .

Speaker #7: Okay, great. And then, does that also bode well, then, for some of the opportunities you were discussing around Isselhorst?

Randy McQuaig: Yeah, I think it does. Now, it's not a direct, same kind of tie-in point.

Speaker #8: Yeah , I think it does now . It's not it's not a direct same tie in point , but I think .

[Analyst] (Aiera): Mm-hmm.

Dennis Fong: Mm-hmm.

Randy McQuaig: We were, again, quite conservative on our assumptions on both the infrastructure and what the market in that area would take. I think directionally it's going in the right direction. Yeah, I think we hope to see the same results on kind of Wisselshorst Horse takeaway as we've seen in Ostade.

Speaker #7: We were .

Speaker #8: We were again , quite , quite conservative on our assumptions on both the infrastructure and what the market in that area would take .

Speaker #8: But I think directionally it's going in the in the right direction . And yeah , I think we we hope to see the same results on on kind of takeaway as we've seen in Australia .

[Analyst] (Aiera): Great. My second question, really we're shifting focus to the Netherlands. It's obviously great to see that you received the permits there, helping kinda confirm the timing of your drilling in the region later this year. Maybe more broadly, can you... obviously understanding it's still incredibly early stage, can you talk to any shifts in terms of regulatory government discussions and discussions around kind of permitting timelines? I know that's been, we'll call it a not point of friction, but a bit of a bottleneck in terms of the pace of activity that you guys were looking to pursue in some of these regions. How has it been shifting? How has that been evolving through time? Has there been kind of an uptick this, even this past week?

Dennis Fong: Great. My second question, really we're shifting focus to the Netherlands. It's obviously great to see that you received the permits there, helping kinda confirm the timing of your drilling in the region later this year. Maybe more broadly, can you... obviously understanding it's still incredibly early stage, can you talk to any shifts in terms of regulatory government discussions and discussions around kind of permitting timelines? I know that's been, we'll call it a not point of friction, but a bit of a bottleneck in terms of the pace of activity that you guys were looking to pursue in some of these regions. How has it been shifting? How has that been evolving through time? Has there been kind of an uptick this, even this past week?

Speaker #7: Great . My , my second question really shifting focus to the Netherlands . It's obviously great to see that you received the permits there helping kind of confirm the timing of your drilling in the region later this year , maybe more broadly , can you and obviously understanding it's still incredibly early stage .

Speaker #7: Can you talk to any shifts in terms of regulatory government discussions and discussions around kind of permitting timelines ? I know that's been we'll call it a a point of friction , but a bit of a bottleneck in terms of the pace of activity that you guys were looking to pursue in some of these regions .

Speaker #7: How has it been shifting? How has that been evolving through time, and has there been kind of an uptick even this past week?

Dion Hatcher: Yeah. I'll pass it back to Darcy to walk you through.

Randy McQuaig: Yeah, I think, Dennis, certainly the messages that we're constantly trying to send out about the benefits of domestic production in Europe is maybe falling on more open ears all of a sudden, so that can only be good for us. You asked specifically about regulators sticking to timelines. You know, I think we have seen and heard commitments, especially from the Dutch regulator, about sticking to their own timelines. Just kind of, we have been quite successful lately in building up a nice pipeline of opportunities, both in the Netherlands and Germany. Just as a reminder, you know, we drilled two wells in the Netherlands, in Oppenheim in Q3 of last year. We discovered 16 Bcf of gas there at F&D cost less than $1.50. Then we brought those wells on production in Q4, right?

Speaker #3: Yeah , I'll pass it back to Darcy to walk you through .

Speaker #8: Yeah . I think Dennis certainly the the messages that we're constantly trying to send out about the benefits of domestic production in Europe is maybe falling on more open ears all of a sudden .

Speaker #8: So that can only be good for us . You specifically about regulators sticking to timelines . You know , I think we we have seen and heard commitments , especially from the Dutch regulator about about sticking to their own timelines and just kind of we've had been quite successful lately in building up a nice pipeline of opportunities , both in the Netherlands and Germany , and just as a reminder , we drilled two wells in the Netherlands , in Oppenheim , in Q3 of last year .

Speaker #8: We discovered 16 Bcf of gas there at a cost less than A, and then we brought those wells on production in Q4. Right?

Randy McQuaig: It was a pretty quick cycle time. You know, we brought Ostade on as planned in 2025. As you mentioned, that continues to have strong production volumes and had record volumes for us in Q4. We're progressing well on Wisselshorst Horse with gas plant installation and the pipeline tie-in. We're still on schedule to start up mid this year. You know, that's again, a significant discovery. Our net share is 43 Bcf there. On plan to drill 2 additional wells in the Netherlands in 2026. Plans to spud 2 more wells in Germany in early 2027. You know, I think probably one of the biggest differences, and you would have saw that in the investor day, is the opportunities that we're drilling. You know, they're more step-out exploration type opportunities. They're bigger.

Speaker #8: So it was a pretty quick cycle time . You know , we brought us on as planned in 2025 , as you mentioned , that continues to have strong production volumes and had record volumes for us in Q4 .

Speaker #8: We're progressing well on source with gas plant installation and the pipeline tie in . We're still on schedule to to start up mid this year .

Speaker #8: You know , that's again a significant discovery with our net shares 43 BCF . There on plan to drill two additional wells in the Netherlands in 2026 .

Speaker #8: Plans to spud two more wells in Germany in early 2027 . And I think probably one of the biggest differences , and you would have saw that in the Investor Day is the opportunities that we're we're drilling , you know , they're more step out exploration type opportunities .

Randy McQuaig: If we look at kind of the last 30 wells that we drilled in Europe versus the next 30, they're kind of 2.5 times to 3 times the size of what we've drilled over what was a pretty successful decade of exploration drilling there with a 70% success rate. We'll continue to work with the regulators and stakeholders to develop support for additional domestic gas production. We, we think it's a, it's a strong message. It, it has security of supply implications that I think people are starting to listen more and more to.

Speaker #8: They're bigger . If we look at kind of the the 30 wells that we drilled in , in Europe versus the next 30 , they're kind of two and a half times to three times the size of what we've drilled over what was a pretty successful decade of exploration drilling there with a 70% success rate .

Speaker #8: We'll continue to work with the regulators and stakeholders to to develop support for additional domestic gas production . We think it's it's a strong message .

Speaker #8: It it has security of supply implications that I think people are starting to listen more and more to .

Dion Hatcher: Thanks, Darcy.

[Analyst] (Aiera): Great. Really appreciate the color. I'll turn it back. Thanks.

Dennis Fong: Great. Really appreciate the color. I'll turn it back. Thanks.

Speaker #3: Thanks .

Speaker #11: Darcy .

Dion Hatcher: Thanks, Dennis.

Speaker #7: Great . Really appreciate the color . I'll turn it back . Thanks .

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Josef Schachter with Schachter Energy Research. Your line is now open.

Speaker #3: Thanks , Dennis .

Speaker #1: Ladies and gentlemen , as a reminder , should you have a question , please press star one . Your next question comes from Joseph Shikata with Qeqqata Energy Research .

Josef Schachter: Good morning, everyone, thanks for taking my questions. Congratulations on Germany and Netherlands. I'm wondering about Ireland. Have you done any more work there? Is there much opportunity to maybe do some future drilling there? Maybe if you can give us some idea of Croatia, if there's any further work that you're doing that might open up some opportunities in, you know, late 26 or 27 for growth in those areas.

Speaker #1: Your line is now open

Speaker #12: Good morning , everyone , and thanks for taking my questions . And congratulations on Germany and Netherlands . I'm wondering about Ireland . Have you done any more there ?

Speaker #12: And is there much a opportunity to maybe do some future drilling ? There ? And then maybe if you can give us some idea of Croatia , if there's any further work that you're doing , that might open up some opportunities In late 26 or 27 for growth in those areas .

Dion Hatcher: Thanks, Josef. I'll just give the high level on Ireland and Darcy, please fill in the blanks. Quick answers, you know, we don't see any drilling activity in Ireland. You know, Darcy just talked about, in particular, Germany, those prospects that are 30 Bcf, they're onshore. It's about $1.50 an Mcf to drill those from a cap. What that means, Josef, like when we look at it from a capital allocation, we really like Germany and it just screams so well. You know, Ireland's a great asset. The team's optimizing. It's super steady and generates strong free cash flow. You know, no plans internally to allocate capital to drilling in Ireland, just given the strong opportunities that we have in Germany. Yeah, there you go.

Speaker #3: Thanks , Joseph . I'll , I'll just give the high level on Ireland . And Darcy , please fill in the blanks . But a answers .

Speaker #3: You know , we don't see any drilling activity in Ireland . You know Darcy just talked about in Germany . Those prospects that are 30 BCF .

Speaker #3: They're onshore . It's about a buck 50 at MCF to drill those from a cow . So what that means . So like when we look at it from a capital allocation , we really like Germany .

Speaker #3: And it just seems so well that , you know , Ireland's a great asset . The team's optimizing . It's super steady and generates strong strong free cash flow .

Speaker #3: But you know no plans internally to allocate capital to drilling in Ireland . Just given the strong opportunities that we have in Germany .

Randy McQuaig: Yeah. I think, Josef, you know, our focus certainly in Ireland has been on the existing well stock that we have and making sure that that plant is as efficient as possible, and we have the highest recovery as we can out of those the wells that are currently drilled.

Speaker #3: yeah there .

Speaker #8: Yeah . Yeah I think Joseph you know our focus certainly in Ireland has been on on the existing . Well stock that we have and making sure that that plant is as efficient as possible .

Speaker #8: And we have the highest recoveries you can out of those , those the wells that are currently drilled .

Dion Hatcher: With our activity over the last couple years here in the coring up, you know, we are progressing the potential divestment of some of the assets in Croatia. I know we can't say a lot, but Lara, any color to add to Croatia or CEE?

Speaker #3: And then, with our activity over the last couple years here in the coring up, you know, we are progressing the potential divestment of some of the assets in Croatia.

Speaker #3: I know we can't say a lot, but any color to add to Croatia or see?

Lara Conrad: I mean, we announced that we'll be exiting those areas. For Croatia in specific, there are nice drilling opportunities there. We just decided, as Dion just said, we really like Germany. You have to make tough decisions around where you're gonna focus your portfolio. From a Croatia perspective, I think there are some lovely opportunities, but they're not opportunities for us, and that's why we're divesting and focusing elsewhere.

Speaker #9: Yeah , I think I mean , we announced that we'll be exiting those areas . And so for Croatia and like in specific there are nice drilling opportunities there .

Speaker #9: And we just decided, as Dion just said, we really like Germany. And so you have to make tough decisions around where you're going to focus your portfolio.

Speaker #9: So from a Croatia perspective , I think there are some lovely opportunities , but they're not opportunities for us . And that's why we're divesting .

Dion Hatcher: Okay. Thanks, Laura. Thanks for the color. Okay, thanks, Joseph.

Speaker #9: And and focusing elsewhere

Speaker #11: Okay . Thanks for the color okay .

Operator: There are no further questions at this time. I will now turn the call over to Dion for closing remarks.

Speaker #3: Thanks , Joseph .

Speaker #1: There are no further questions at this time . I will now turn the call over to Dion for closing remarks

Dion Hatcher: Well, with that, thank you again for participating in our Q4 call. Enjoy the rest of your day.

Speaker #3: Well, with that, thank you again for participating in our Q4 call. Enjoy the rest of your day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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