Vermilion Energy sees FY24 FFO C$1.3B

Vermilion Energy announced its 2024 budget and updated return of capital framework, including a 20% dividend increase. Highlights include: 2024 FFO and free cash flow are forecasted to be approximately C$1.3B and C$700M, respectively, based on forward commodity prices; FCF represents an approximately 40% increase versus our 2023 forecast. Sees FY24 capital expenditure budget of C$600M-C$625M includes increased investment in our BC Montney asset and advancement of key growth projects in Germany and Croatia. Sees FY24 production guidance 82,000 – 86,000 boe/d. It reflects a mid-year start-up of the new BC Montney battery and Croatia gas plant and underpins the forecasted 40% increase to FCF. Vermilion continues to provide investors with market diversification as 40% of our 2024 natural gas production will be produced in Europe and receive European gas benchmark pricing, which is approximately six times higher than forward AECO pricing and supports our peer leading netbacks.On November 30 the European Union published a review of the temporary windfall tax and subsequent market developments in the energy sector. The report stated that the situation in energy markets is very different from the exceptional circumstances when the temporary windfall tax was initially established in October 2022, and therefore the European Union has not proposed to extend the mandate beyond 2023. Quarterly cash dividend increased by 20% to C$0.12 per share, effective with the Q1 2024 dividend payable in April 2024. Plan to increase return of capital allocation target to 50% of excess FCF, starting April 1, 2024. When combined, forecasted 40% increase in FCF, the amount of capital allocated to share buybacks in 2024 is expected to double from 2023 levels.