Vermilion Energy restarts Wandoo facility production, provides update

Vermilion Energy provided an update on our Australia and Ireland operations and European gas hedge program. The company reported that it now expects Q3 production to come in at the upper end of our quarterly guidance range of 80,000 to 83,000 boe/d due to positive developments in Australia and Ireland. In Australia, the company successfully completed the remaining inspection and repair work on our Wandoo facility and restarted production in early September without incident. Initial production rates are strong and Australia is forecasted to produce approximately 4,000 bbl/d in Q4 2023. The Wandoo asset has been in our portfolio since 2004 and has generated a significant amount of free cash flow over this time frame. In 2022, Wandoo crude sold at a $14 premium to Brent, which drives very strong netbacks. Under current strip pricing we are forecasting over $100 million of FCF from Australia in 2024. In Ireland, the company completed the planned major turnaround at Corrib approximately five days ahead of schedule in August. Corrib is forecasted to produce approximately 10,000 boe/d of premium-priced European gas net to Vermilion in Q4. European gas prices remain strong due to continued supply concerns as winter approaches. The 2024 and 2025 forward prices of $22 and $21 per mmbtu, respectively, generate robust free cash flow. As a result, we continue to add more European gas hedges over this period, and currently have 51% of our 2H 2023 European gas hedged at an average floor price of $32 per mmbtu, 31% of our 2024 European gas production hedged at an average floor price of $33 per mmbtu and 14% of our 2025 European gas production hedged at an average floor price of $21 per mmbtu. Hedging at these price levels enables us to lock in future fund flows from operations and provides greater certainty on achieving our near-term debt targets while enhancing our future return of capital to shareholders. Our Q4 production forecast of 86,000 to 89,000 boe/d and full year guidance range of 82,000 to 86,000 boe/d remains unchanged.