Vermilion Energy Inc. (NYSE:VET) Q4 2023 Earnings Conference Call March 7, 2024 11:00 AM ET

Company Participants

Dion Hatcher - President and CEO

Lars Glemser - Vice President and CFO

Conference Call Participants

Greg Pardy - RBC Capital Markets

Travis Wood - National Bank Financial

Operator

Good morning, ladies and gentlemen, and welcome to the Vermilion Energy Q4 Conference Call. At this time, all lines are in a lesson only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday, March 7, 2024.

I would now like to turn the conference over to Mr. Dion Hatcher. Thank you. Please go ahead.

Dion Hatcher

Thank you. Good morning, ladies and gentlemen. Thank you for joining us. 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 and HSE; Brandon McCue, Vice President, North America; Jenson Tan, Vice President, Business Development; and Kyle Preston, Vice President of Investor Relations.

We'll be referencing a PowerPoint presentation to discuss our 2023 Q4 and year-end results. Presentation can be found on our website under Invest with Us and Events & Presentations.

Please refer to our advisory on forward-looking statements at the end of the presentation. It describes forward-looking information, non-GAAP measures and oil and gas terms used today and outline risk factors and assumptions relevant to this discussion.

Production during the fourth quarter averaged 87,597 boes per day, which was at the midpoint of our Q4 guidance range of 86,000 to 89,000. This represents a 6% increase over the prior quarter, primarily driven by the Wandoo platform in Australia and Corrib Gas in Ireland, which were online for the full quarter, while the maintenance downtime in the prior quarter.

Wandoo and Corrib are high-margin assets and both continue to perform quite well in Q1. We generated $372 million of fund flow and $225 million of free cash flow in Q4, which represents a 38% and 59% increase over the prior quarter, respectively. With this amount of free cash flow, we were able to reduce net debt by $164 million and returned $45 million to shareholders during the quarter comprised of $16 million in dividends and $29 million in share buybacks.

Looking at the full year results on Slide 3, we achieved the midpoint of our annual production guidance of 84,000. We achieved it despite wildfire related downtime in Western Canada and on planned maintenance downtime in Australia. Our ability to meet annual production guidance despite these issues, illustrates the strategic advantage of operating a diverse portfolio as we're able to reallocate capital to offset the production impacts in Canada and Australia.