CALGARY, AB, May 1, 2024 /CNW/ - Vermilion Energy Inc. ("Vermilion", "We", "Our", "Us" or the "Company") (TSX:VET) (NYSE:VET) is pleased to report operating and condensed financial results for the three months ended March 31, 2024. The unaudited interim financial statements and management discussion and analysis for the three months ended March 31, 2024 will be available on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at www.sedarplus.ca, on EDGAR at www.sec.gov/edgar.shtml, and on Vermilion's website at www.vermilionenergy.com. Highlights Q1 2024 fund flows from operations ("FFO")(1) was $431 million ($2.68/basic share)(2) and exploration and development ("E&D") capital expenditures(3) were $190 million, resulting in free cash flow ("FCF")(4) of $241 million ($1.49/basic share)(5). Net debt(6) decreased by $134 million in Q1 2024 to $944 million, achieving our net debt target of $1 billion and representing a net debt to trailing FFO ratio(7) of 0.7 times, the lowest in over a decade. Vermilion returned $56 million to shareholders during Q1 2024, comprised of $19 million of dividends and $37 million of share buybacks. The Q1 2024 dividend represents a 20% increase over our previous quarterly dividend, aligned with our intention to provide ratable dividend increases as part of our return of capital framework. With the achievement of our $1 billion net debt, we increased our return of capital target to 50% of excess FCF on an annual basis and significantly increased our pace of share buybacks during the quarter, repurchasing and cancelling 2.4 million shares, including 1.0 million shares during the month of March and repurchasing an additional 1.0 million shares during the month of April. We plan to maintain a robust pace of share buybacks in the months ahead as we manage towards an annual return of capital target of 50% of excess FCF. In conjunction with our Q1 2024 release, we announced a quarterly cash dividend of $0.12 per share, payable on July 15, 2024 to shareholders of record on June 28, 2024. Production during the first quarter of 2024 averaged 85,505 boe/d(8), comprised of 52,959 boe/d(8) from our North American assets and 32,546 boe/d(8) from our International assets. Production for the quarter was above the upper end of our Q1 2024 guidance range primarily due to strong operating performance from our Germany and United States assets. In Germany, we successfully drilled our first deep gas exploration well and are pleased to report that we discovered gas within the targeted zone. This well was drilled to a total depth of approximately 5,000 metres, representing the deepest well we have ever drilled in Europe. We plan to test the well during the second quarter and prepare for tie-in operations with an anticipated on-stream date of early 2025. We also plan to commence drilling on the second well (0.6 net) of our inaugural deep gas program in Q2 2024, which is a higher risk prospect targeting a very large structure that is expected to take three to four months to drill. In Croatia, construction of the gas plant on the SA-10 block is nearing completion which will add over 2,000 boe/d of European gas currently behind pipe. This production will contribute to FCF immediately upon start-up of the gas plant. In addition, we successfully completed drilling two of the four planned exploration wells on the SA-7 block, and completed drilling a third well subsequent to the quarter. All three wells drilled to date have discovered hydrocarbons in multiple zones which we expect will contribute to FCF in the years ahead. In Canada, construction of the 16,000 boe/d Mica Montney battery is nearing completion and remains scheduled for startup in late Q2 2024. We successfully completed the first six (6.0 net) BC Montney wells of our 2024 program and initial flowback results are in line with the strong performance seen on the original two wells on the 16-28 pad. ($M except as indicated) Q1 2024 Q4 2023 Q1 2023 Financial Petroleum and natural gas sales 508,035 522,969 552,698 Cash flows from operating activities 354,295 343,831 388,629 Fund flows from operations (1) 431,358 372,117 253,167     Fund flows from operations ($/basic share) (2) 2.68 2.27 1.56     Fund flows from operations ($/diluted share) (2) 2.64 2.27 1.51 Net earnings (loss) 2,305 (803,136) 380,332     Net earnings (loss) ($/basic share) 0.01 (4.91) 2.34 Cash flows used in investing activities 181,343 132,932 108,695 Capital expenditures (3) 190,442 142,887 154,820 Acquisitions (9) 9,752 25,724 251,772 Dispositions — 14,855 182,152 Asset retirement obligations settled 4,975 28,937 2,554 Repurchase of shares 36,409 28,736 30,141 Cash dividends ($/share) 0.12 0.10 0.10 Dividends declared 19,183 16,227 16,226     % of fund flows from operations (10) 4 % 4 % 6 % Payout (12) 214,600 188,051 173,600     % of fund flows from operations (11) 50 % 51 % 69 % Free cash flow (4) 240,916 229,230 98,347 Long-term debt 933,506 914,015 933,463 Net debt (6) 944,496 1,078,567 1,368,029 Net debt to four quarter trailing fund flows from operations (7) 0.7 0.9 0.9 Operational Production (8)     Crude oil and condensate (bbls/d) 32,695 32,866 33,291     NGLs (bbls/d) 7,046 7,412 7,896     Natural gas (mmcf/d) 274.59 283.91 247.61     Total (boe/d) 85,505 87,597 82,455 Average realized prices     Crude oil and condensate ($/bbl) 104.26 107.91 98.62     NGLs ($/bbl) 34.16 33.38 36.23     Natural gas ($/mcf) 6.10 8.48 10.77 Production mix (% of production)     % priced with reference to WTI 32 % 29 % 39 %     % priced with reference to Dated Brent 15 % 17 % 12 %     % priced with reference to AECO 32 % 31 % 34 %     % priced with reference to TTF and NBP 21 % 23 % 15 % Netbacks ($/boe)     Operating netback (12) 62.07 57.48 46.33     Fund flows from operations ($/boe) (13) 53.86 48.83 34.52 Average reference prices     WTI (US $/bbl) 76.96 78.32 76.13     Dated Brent (US $/bbl) 83.24 84.05 81.27     AECO ($/mcf) 2.50 2.30 3.22     TTF ($/mcf) 11.77 17.45 22.99 Share information ('000s) Shares outstanding - basic 159,859 162,271 162,261 Shares outstanding - diluted (14) 164,044 166,456 168,874 Weighted average shares outstanding - basic 161,221 163,335 162,585 Weighted average shares outstanding - diluted (14) 163,648 163,335 167,857 (1) Fund flows from operations (FFO) is a total of segments measure comparable to net earnings that is comprised of sales less royalties, transportation, operating, G&A, corporate income tax, PRRT, windfall taxes, interest expense, realized gain (loss) on derivatives, realized foreign exchange gain (loss), and realized other income (expense). The measure is used to assess the contribution of each business unit to Vermilion's ability to generate income necessary to pay dividends, repay debt, fund asset retirement obligations, and make capital investments. FFO does not have a standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. More information and a reconciliation to primary financial statement measures can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. (2) Fund flows from operations per share (basic and diluted) are supplementary financial measures and are not standardized financial measures under IFRS, and therefore may not be comparable to similar measures disclosed by other issuers. They are calculated using FFO (a total of segments measure) and basic/diluted shares outstanding. The measure is used to assess the contribution per share of each business unit. More information and a reconciliation to primary financial statement measures can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. (3) Capital expenditures is a non-GAAP financial measure that is the sum of drilling and development costs and exploration and evaluation costs from the Consolidated Statements of Cash Flows. More information and a reconciliation to primary financial statement measures can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. (4) Free cash flow (FCF) and excess free cash flow (EFCF) are non-GAAP financial measures comparable to cash flows from operating activities. FCF is comprised of FFO less drilling and development and exploration and evaluation expenditures and EFCF is FCF less payments on lease obligations and asset retirement obligations settled. More information and a reconciliation to primary financial statement measures can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. (5) Free cash flow per basic share is a non-GAAP supplementary financial measure and is not a standardized financial measure under IFRS and may not be comparable to similar measures disclosed by other issuers. It is calculated using FCF and basic shares outstanding. (6) Net debt is a capital management measure comparable to long-term debt and is comprised of long-term debt (excluding unrealized foreign exchange on swapped USD borrowings) plus adjusted working capital (defined ...