VERMILION ENERGY INC. (VET): Financial results for Q3 2026
VERMILION ENERGY INC. (VET) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 Vermilion Energy Inc. Reports Q3 2026 Results and Releases 2027 Budget with Planned 4% Dividend Increase CALGARY, AB, Nov. 4, 2026 /CNW/ -- Vermilion Energy Inc. ("Vermilion", "We", "Our", "Us" or the "Company") (TSX: VET) (NYSE: VET) is pleased to report operating a
How this was made
The 30-second read
Why it matters
The company provided 2027 production and capital spending guidance, plus a dividend increase plan, while explaining that Q3 net loss was driven by unrealized derivative mark-to-market losses tied to higher forward oil and European gas prices.
Market read
Traders can update valuation assumptions for cash generation, net debt trajectory, and shareholder yield based on the disclosed 2027 capex/production plan and dividend step-up.
What to watch
Third-party downtime extending into Q4 2026 and Canada start-up deferrals may affect near-term production delivery versus the longer-run 2027 plan.
Vermilion Energy Inc. Reports Q3 2026 Results and Releases 2027 Budget with Planned 4% Dividend Increase
Q3 fund flows from operations and free cash flow remained positive and net debt declined, but production, fund flows from operations, free cash flow, and operating netback were lower than Q3 2025, while the Company reported a net loss driven by unrealized derivative losses.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue (sales, continuing operations) Q3 2026other | 593,856 ($M) | – | – |
| Fund flows from operations Q3 2026non-GAAP | 236,919 ($M) | – | – |
| Fund flows from operations per basic share Q3 2026non-GAAP | 1.55 | – | – |
| Fund flows from operations per diluted share Q3 2026non-GAAP | 1.55 | – | – |
| Net loss from continuing operations Q3 2026other | (35,499) ($M) | – | – |
| Net earnings from discontinued operations Q3 2026other | 859 ($M) | – | – |
| Net loss Q3 2026other | (34,640) ($M) | – | – |
| Net loss from continuing operations per basic share Q3 2026other | (0.23) | – | – |
| Net earnings from discontinued operations per basic share Q3 2026other | -- | – | – |
| Net loss per basic share Q3 2026other | (0.23) | – | – |
| Cash flows from operating activities Q3 2026other | 273,429 ($M) | – | – |
| Cash flows used in investing activities Q3 2026other | 140,012 ($M) | – | – |
| Capital expenditures Q3 2026non-GAAP | 146,466 ($M) | – | – |
| Acquisitions Q3 2026non-GAAP | (22,780) ($M) | – | – |
| Dispositions Q3 2026non-GAAP | 26,533 ($M) | – | – |
| Free cash flow Q3 2026non-GAAP | 90,453 ($M) | – | – |
| Excess free cash flow Q3 2026non-GAAP | 68,096 ($M) | – | – |
| Long-term debt at September 30, 2026other | 1,181,468 ($M) | – | – |
| Net debt at September 30, 2026other | 1,165,387 ($M) | – | – |
| Net debt to four quarter trailing fund flows from operations at September 30, 2026non-GAAP | 1.2 | – | – |
| Total production Q3 2026other | 117,349 boe/d | – | – |
| Crude oil and condensate production Q3 2026other | 21,524 bbls/d | – | – |
| NGLs production Q3 2026other | 12,267 bbls/d | – | – |
| Natural gas production Q3 2026other | 501.35 mmcf/d | – | – |
| Average realized price Q3 2026other | 53.37 ($/boe) | – | – |
| Average realized natural gas price Q3 2026other | 5.60 ($/mcf) | – | – |
| Average realized crude oil and condensate price Q3 2026other | 130.00 ($/bbl) | – | – |
| Average realized NGLs price Q3 2026other | 30.99 ($/bbl) | – | – |
| Operating netback Q3 2026non-GAAP | 27.13 ($/boe) | – | – |
| Fund flows from operations per boe Q3 2026non-GAAP | 21.29 ($/boe) | – | – |
| Fund flows from operations YTD 2026non-GAAP | 700,418 ($M) | – | – |
| Net loss YTD 2026other | (45,940) ($M) | – | – |
| Cash flows from operating activities YTD 2026other | 671,578 ($M) | – | – |
| Capital expenditures YTD 2026non-GAAP | 390,622 ($M) | – | – |
| Free cash flow YTD 2026non-GAAP | 309,796 ($M) | – | – |
| Excess free cash flow YTD 2026non-GAAP | 255,524 ($M) | – | – |
Q4 2026, full-year 2026 and 2027 outlook
- Operating expenses2027 Operating ($/boe) $12.50 - 13.50; General and administration ($/boe) $1.65 - 2.15; Transportation ($/boe) $3.00 - 3.50; Interest expense ($/boe) $1.75 - 2.25
- Tax rate2027 Cash taxes (% of pre-tax FFO) 7 - 11 %
- NoteQ4 2026 production expected to average 121,000 boe/d (71% natural gas)
- NoteFull-year 2026 production of 122,400 boe/d (71% natural gas) on E&D capital expenditures of $620 million
- Note2027 production (boe/d) 122,000 - 126,000
- Note2027 E&D capital expenditures ($MM) $675 - 725
- Note2027 Royalty rate (% of sales) 7 - 9 %
- Note2027 Asset retirement obligations settled ($MM) $50
- Note2027 Payments on lease obligations ($MM) $10
- NoteTargeting a 4% increase in the quarterly cash dividend to $0.14 per share, effective with the Q1 2027 dividend payable on March 31, 2027, subject to approval by the Company's Board of Directors in March 2027
Capital returns
- Repurchase of shares Q3 2026: 19,687 ($M)
- Dividends declared Q3 2026: 20,530 ($M)
- Cash dividends Q3 2026: 0.135 ($/share)
- Declared a quarterly cash dividend of $0.135 per common share, payable on December 31, 2026, to shareholders of record on December 15, 2026.
- Returned $41 million to shareholders through dividends and share buybacks, including $21 million in dividends and $20 million of share repurchases.
- Vermilion's return of capital framework targets 40% to 60% of EFCF to shareholders.
- The Company plans to increase the base dividend by 4% in 2027 to an annual level of $0.56/share.
What drove it
- Third-quarter production averaged 117,349 boe/d, reflecting planned maintenance in Ireland, Germany, and Canada.
- The 32-day turnaround in Ireland was completed on-time and on-budget, with production fully restored in September 2026.
- Average realized natural gas sales price was $5.60/mcf; the Company stated this was more than triple the AECO benchmark.
- The Company recorded non-cash, price-related losses on risk management contracts of $245 million ($188 million net of taxes), driven by higher forward oil and European gas prices.
- In Germany, acquired assets and the Wisselshorst Z1a well position the German business for production of approximately 7,500 boe/d in Q4 2026.
- Canadian unit operating expenses are down approximately 10% year-over-year, while general and administration and interest expenses are down approximately 30% year-over-year.
Concerns
- Reported net loss was $35 million ($0.23/basic share), driven by unrealized losses on derivative instruments.
- Total production of 117,349 boe/d was lower than 125,789 boe/d in Q2 2026 and 119,062 boe/d in Q3 2025.
- Fund flows from operations of 236,919 ($M), free cash flow of 90,453 ($M), and operating netback of 27.13 ($/boe) were lower than their Q3 2025 levels.
- Montney wells brought online in Q3 2026 were affected by third-party downtime that extended into Q4 2026.
- The revised timing of third-party gas processing infrastructure in Northeast British Columbia is expected to shift the 28,000 boe/d target production rate to early 2029 from mid-2028.
What to watch
- Restoration of European gas production to approximately 100 mmcf/d in Q4 2026.
- Q4 2026 production expected to average 121,000 boe/d and full-year production of 122,400 boe/d.
- Delivery of the $675 million to $725 million 2027 E&D capital program and 122,000 to 126,000 boe/d 2027 production guidance.
- Germany follow-up drilling at Wisselshorst and the planned debottlenecking pipeline, expected to increase productive capacity to 15 to 17 mmcf/d by the end of 2027.
- The proposed quarterly dividend increase to $0.14 per share, subject to Board approval in March 2027.
- Commodity hedging, with 53% of expected net-of-royalty production hedged for the remainder of 2026 and 38% in 2027.
Balance sheet and cash flow
- Net debt was 1,165,387 ($M) at September 30, 2026.
- Long-term debt was 1,181,468 ($M) at September 30, 2026.
- Adjusted working capital (deficit) was 12,784 ($M) at September 30, 2026.
- Cash flows from operating activities were 273,429 ($M) in Q3 2026.
- Free cash flow was 90,453 ($M) and excess free cash flow was 68,096 ($M) in Q3 2026.
- The Company reduced net debt by approximately $60 million during Q3 2026 and by nearly $180 million through the first nine months of 2026.
Analysis
Vermilion generated 236,919 ($M) of fund flows from operations and 90,453 ($M) of free cash flow in Q3 2026, while reducing net debt to 1,165,387 ($M). The quarter included 146,466 ($M) of capital expenditures, 20,530 ($M) of dividends declared, and 19,687 ($M) of share repurchases. Net debt to four quarter trailing fund flows from operations improved to 1.2 from 1.3 in Q2 2026 and 1.4 in Q3 2025.
Reported earnings diverged from cash generation. Vermilion recorded a net loss of (34,640) ($M), or (0.23) per basic share, after non-cash, price-related losses on risk management contracts of 245 ($M). The Company attributed these unrealized derivative losses to increases in forward oil and European gas prices. Fund flows from operations, net income, free cash flow, and operating netback were all lower than their Q3 2025 values, despite sales of 593,856 ($M), compared with 449,502 ($M) in Q3 2025.
Production averaged 117,349 boe/d, below both Q2 2026 and Q3 2025, as planned maintenance in Ireland, Germany, and Canada affected volumes. The Ireland turnaround was completed on schedule, production was restored in September, and European gas production is expected to be approximately 100 mmcf/d in Q4 2026. Realized natural gas pricing was 5.60 ($/mcf), while the average realized price rose to 53.37 ($/boe) from 42.18 ($/boe) in Q3 2025.
The 2027 program raises planned E&D capital to $675 million to $725 million and calls for production of 122,000 to 126,000 boe/d. The budget includes $150 million of investment intended to facilitate future growth without contributing to 2027 production. Management also identified a delay in third-party processing infrastructure that shifts the Montney 28,000 boe/d target production rate to early 2029 from mid-2028.
Capital allocation remains centered on debt reduction and shareholder returns. The Company retained its 40% to 60% EFCF return-of-capital framework, declared a $0.135 per common share quarterly dividend, and is targeting a 4% increase in the quarterly dividend to $0.14 per share for the Q1 2027 payment, subject to Board approval. The key near-term execution points are restored production after maintenance, resolution of third-party downtime, delivery of full-year 2026 production of 122,400 boe/d, and conversion of elevated European gas pricing into Q4 fund flows from operations.
Not in the filing
stated, not guessed- Gross margin
- Operating income
- GAAP or IFRS diluted earnings per share
- Segment revenue by operating segment
- Cash balance
- Prior outlook section for comparison with reported results
- Q4 2026 revenue guidance
- 2027 revenue guidance
- 2027 gross margin guidance
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Vermilion filed its Q3 2026 results on SEC Form 6-K, including operational highlights, cash-flow metrics, and an approved 2027 E&D capital budget.
Ticker impact
Vermilion reports Q3 2026 results plus a 2027 E&D budget and a planned 4% dividend increase to $0.14 per share.
Likely mixed-to-positive bias as investors focus on FFO/FCF generation, net debt reduction, and the dividend increase, while discounting the derivative-driven net loss.
The filing provides concrete operating metrics (FFO, FCF, net debt reduction), explicit 2027 production and capex ranges, and a dividend increase effective with the Q1 2027 payable date, which are direct inputs to valuation and capital-return expectations.
Market effects
Reinforces investor focus on gas-weighted upstream cash-flow resilience and capital discipline in North American and European gas exposure.
Highlights European gas pricing sensitivity (TTF and forward curves) and operational execution across Ireland, Germany, and Canada.
Limited spillover beyond energy income/cash-flow narratives tied to European gas and oil forward pricing.
Counterpoint
The headline net loss and derivative mark-to-market weakness could signal earnings volatility even if FFO and FCF remain strong.
Key entities
- companyVermilion Energy Inc.
Subject issuer reporting Q3 2026 results, 2027 budget, and a planned 4% dividend increase.