Thank you. Good morning, ladies and gentlemen.

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; Randy McQuaid, Vice President, North America; Laura Conrad, Vice President, Business Development; and Travis Thorgerson, Director, Investor Relations and Corporate Planning.

Please refer to the advisory on forward-looking statements in our Q2 release. It describes forward-looking information, non-GAAP measures, and oil and gas terms used today, and outlines the risk factors and assumptions relevant to this discussion.

The second quarter of 2026 was another strong quarter for Vermilion, with production averaging 125,800 boe per day, exceeding the top end of our guidance range. Positive results across our portfolio continue to support performance that is trending ahead of our 5-year plan that we communicated during our investor day in December of 2025.

With this current performance in mind and with significant progress on debt reduction, we have increased our return of capital target to a range of 40% to 60% of excess free cash flow, up from 40% previously. Production performance was driven by record output at Mica Montney, continued strong execution in the Deep Basin, and the safe restart of production in Australia following the back-to-back cyclones earlier this year.

Based on operational performance year-to-date, we have increased our full year production guidance now 121,000 to 123,000 boe per day, while maintaining our E&D capital budget range of $600 to $630 million. Our E&D capital expenditures and operating expenses are weighted towards the second half of the year, and we expect full year costs to be within the stated guidance ranges for these items.

In the Montney, strong performance from the most recent BC six-well pad at 8-35 drove quarterly production at Mica up 18,000 boe per day. The pad achieved an IP90 of more than 950 boe per day per well, comprised of 3 million a day of natural gas and 470 barrels per day of oil and NGLs, with DC&T costs reduced to $8.2 million per well.

These results continue to support the quality, the repeatability, and the improving capital efficiency of our Montney inventory. In the Deep Basin, activity was moderated through spring break-up.

The program continues to outperform budget expectations and has been the primary driver of corporate production outperformance through the first half of the year. In Europe, following the quarter end, we achieved another important milestone in our German deep gas exploration program, with the Wisselshorst well being brought on to production in July.

This represents first production from the largest discovery Vermilion has made in Europe to date. I would like to take this opportunity to thank our teams for their commitment to safe operations during the many steps required to bring this well on production.

We are excited about the next steps: debottlenecking the production with a new sales pipeline, as well as drilling the next two wells on this license in 2027. Elsewhere, the Osterheide well continues to perform in line with prior quarter rates, with cumulative free cash flow of $43 million since start-up.

We expect production growth in Germany to be driven by our deep gas exploration program, reaching 10,000 boe per day by 2030, and given the significant resource, continue to grow into the next decade. Also in Germany, we closed a previously announced bolt-on acquisition following quarter end.

The transaction adds approximately 1,000 boe per day of production, weighted 85% to natural gas, as well as ownership of key infrastructure around the Osterheide well. Adding production from Wisselshorst and these acquired assets is particularly impactful with the recent rally in European gas prices, currently over $25 per MMBtu through winter 2026.

European storage levels are well below average for this time of year, and the current pace of refilling is not sufficient to reach the 80% target for winter. We plan to increase our domestic gas production through debottlenecking infrastructure, as well as exploration and development across our significant land base in both Germany and the Netherlands.

Growing prospect list of high-return, capital-efficient targets, Vermilion is well positioned to grow our production and free cash flow while providing our communities with a reliable source of energy. In Australia, production operations at Wandoo safely resumed following repair work completed during the quarter.

Our next export is planned for the third quarter, and we expect to return to more regular exports thereafter. Our 5-year plan continues to progress well.

Operational execution across the portfolio, combined with the first production from Wisselshorst and continued success in the Deep Basin and Montney, reinforces our confidence in the ability to generate growing free cash flow. Before I pass it to Lars to further discuss these results, I want to take a moment to acknowledge the challenges faced by several of our employees, contractors, and their families that have been impacted by the fires in Southern France.

Our thoughts are with you, and we hope the situation continues to improve in the upcoming days.

Thank you, Dion. In the second quarter, Vermilion generated fund flows from operations of $231 million on E&D capital expenditures of $110 million, resulting in free cash flow of over $120 million.

Capital allocation remains focused on disciplined investment, continued balance sheet improvement, and shareholder returns. During the quarter, net debt was reduced by approximately $70 million to $1.22 billion.

As of June 30th, 2026, net debt to trailing four-quarter fund flows from operations was 1.3 times. Over the past five quarters, Vermilion has reduced debt by approximately $840 million, accelerating progress toward our $1 billion net debt target and significantly strengthening the balance sheet.

This continued deleveraging has also reduced structural financing costs, with unit interest expense declining approximately 35% from the prior year, and we are on track to reduce full year interest expense by $30 million from 2025. Reflecting this progress, as well as improved visibility to future cash flow and confidence in the sustainability of the business, we have enhanced our return of capital framework.

Vermilion now intends to return 40% to 60% of excess free cash flow to shareholders, compared to the previous target of 40%. This framework continues to be supported by our base dividend and ongoing share repurchase program.

Subsequent to the quarter, we announced the renewal of our NCIB out to July 2027. During the quarter, we returned approximately $26 million to shareholders through dividends of $21 million and $5 million of share repurchases.

With the increased return of capital target, we expect the pace of share buybacks to increase. Turning to commodity risk management, Vermilion recognized a gain on hedging during the quarter, as a realized loss of $57 million was more than offset by unrealized mark-to-market gains of $174 million on our hedge portfolio.

These unrealized gains reflect changes in forward commodity prices relative to our hedge position at March 31, 2026. Our percentage of production hedged will decrease in the second half of 2026 relative to the second quarter levels, which increases our exposure to current elevated commodity prices.

Operationally, Canadian production averaged 99,605 boe per day during the quarter, which included record production from Mica. We continue to actively manage AECO exposure and prioritize profitability over production during periods of weaker natural gas pricing.

We maintained strong well performance and continued to shift Deep Basin activity toward liquids-rich opportunities in the Rock Creek, Niton, and Ellerslie. Several of our wells in Canada, in both the Deep Basin and Montney, ranked among the most prolific wells brought online during the quarter.

In Europe, in addition to our work getting Wisselshorst online and preparing for follow-up drilling, our activity this quarter focused on workovers, maintenance programs, and preparation for drilling activities in the Netherlands during the second half of 2026. These activities, together with production from Wisselshorst and Osterheide, support the continued development of our European gas platform.

Looking ahead, we expect third quarter production to average between 116,000 and 118,000 boe per day, reflecting planned maintenance activities in Ireland, Germany, and Canada. This is consistent with our assumptions at the time of the budget release.

We expect Q4 production to be approximately 122,000 boe per day, with European gas production back in line with first half levels. For the full year, production guidance has been increased to 121,000 to 123,000 boe per day, while E&D capital expenditure guidance remains unchanged at $600 million to $630 million.

Both operating expenses and capital expenditures are expected to be weighted toward the second half of the year, as Dion previously noted. The increased production guidance reflects our strong operational performance year-to-date, which has more than offset the impact of back-to-back cyclones in Australia earlier this year.

We are confident in the ability of the company to continue to deliver on our investor day outlook. I will now pass it back to Dion.

Thank you, Lars. In summary, Vermilion delivered another strong quarter and made significant progress executing our 5-year plan.

Production exceeded the top end of our guidance range, free cash flow totaled $122 million, and net debt was reduced by another $70 million. These results reflect the strength of our asset base, the quality of our teams, and our disciplined approach to capital allocation.

As Vermilion continues to focus on what we can control, as a result, we're seeing structural improvements in the business, through stronger capital efficiency, improving well performance, lower controllable costs, which improves our full cycle margins. Operationally, record production at Mica, continued Deep Basin outperformance, and the successful restart of Wandoo support a strong results across portfolio.

In Europe, we achieved first production from Wisselshorst, marking another important milestone executing our long-term European gas growth strategy. Financially, our balance sheet continues to strengthen, with approximately $840 million of debt reduction achieved over the past five quarters.

As leverage declines and visibility to growing free cash flow continues to improve, we are increasing our shareholder return framework to target 40% to 60% of excess free cash flow. Looking forward, operational momentum remains strong.

Production performance through the first half of '26 has allowed us to increase annual guidance without increasing capital spending. Supported by a repositioned portfolio, growing European gas exposure, a strengthening balance sheet, and a disciplined capital allocation framework, we believe Vermilion is well positioned to continue generating sustainable free cash flow and shareholder value.

With that, we will now open the line for questions.

Thanks and good morning, everyone. I'll start with the question on the higher-level operational setup through the middle of next year, and you did touch on this to some degree in your opening remarks.

I understand that you can't provide guidance for 2027, but beyond turnarounds this quarter, is there any significant downtime or other considerations we should be aware of between now and the middle of next year? Then—and I think you did guide Q4—but what could the exit rate look like for this year?

Great. Menno, thanks for that.

A couple comments to your point. I think the turnarounds that we're planning for and executing here in this quarter, Ireland's a great example.

That is a 5-year cycle on that turnaround, and so that would be very unique, but something we planned for on that key asset. Looking out from now into mid-2027, yeah, the answer is no.

We don't see any key downtime. The quick answer is no.

The setup, we're quite excited. If you look at the exit rate, Lars referenced this, we're back to 122 or better.

If you reference back to European gas, what does that mean for a business? The first half, we were 95 to 100 million a day.

Again, hopefully, we're on the higher end of that range as we exit this year. We'll get these turnarounds behind us, and I think have a strong Q4, and that really is a good setup going into 2027.

Terrific. Then second question is on the Germany drilling program.

Can you maybe just remind us of how you manage the risk on these larger wells, including the two that will go get drilled next year? I understand there's the farm-down component, but maybe you could just remind us of the broader risk mitigation strategy.

Maybe also the math on the out-of-pocket cost to Vermilion in the event of a dry hole, because if I recall, it's significantly lower than the actual well cost. Thank you.

Thanks, Menno. A lot of good questions there.

I think it comes down to I think the quality of the team and the G&G and the science, and the decades that we have, multiple decades of working on these structures in Europe. This particular formation, the Rotliegend, again is something we've been drilling for decades.

Second, I would just say we're in a proven fairway. When you look at some of those maps where we're drilling these structures, it is not uncommon.

There's multiple, let's call it a handful of structures, that have cumulatively produced over a Tcf. If you're going to find big gas, start drilling in areas where there's been big gas found.

We're excited about the setup. As to how we look at the risk-reward, let's call it.

First is economically, if you think about the cost to drill these wells at $50 million CAD, our target rate is 30 Bcf recoverable. Wisselshorst, of course, is twice that.

If you spend $50 million in the success case and that gets you the drill, the tests, the on-lease gas plant, the pipeline, for 50 million bucks and you get 30 Bs of gas, that's $1.50 an Mcf. If you assume gas prices are $13, and of course are more than double that now, but if at $13, the NPV per well is $60 million, right?

You can see with Osterheide, it's been on for a year and it's cumed over $40 million of free cash flow, and the well hasn't started to decline yet. The success case I think is pretty hopefully straightforward.

The failure case is we drill the well, we don't like what we see, we get out of the well, it's less than 15 million bucks. Okay?

The $50 million is the all-in success case. The dry hole case, let's call it, is sub-15, 1-5.

The final point is commercially. When we drilled Wisselshorst, we knew that it was a very large structure, but also we viewed that one as a little more higher risk, but it was big.

Commercially, we did use a farm-in to provide a promote, and with that carry, it effectively meant the after-tax dry hole cost was zero, right, or less than zero, maybe. That's another quiver in our strategy here is we can use farm-ins.

They're good prospects. We're going to drill these prospects, but if someone wants to come in and leverage some of the great work we've done, commercially, we can further reduce our risk.

Hopefully that gives you, right from, hey, we're looking for big targets in the area where big gas has been found. We got a team that's been doing this for decades.

We've done all the technology and reprocess seismic, and then the failure case is sub-15, and then commercially, we can further mitigate that failure case with a promote or carry.

Thanks for the rundown, Dion. I'll pass it back.

Thank you.

Thanks. Good morning.

I want to stay, just maybe on the back of Menno's question, maybe just to stay with Germany for a minute. Just in terms of the next two exploration wells that you have planned for early next year, I'm just wondering how far away those might be from Wisselshorst.

Then in addition to that, maybe just any potential debottlenecking opportunities that you would have in that area, maybe just to increase rates, and what's required to accomplish that.

Thanks, Greg, for those questions. I'm going to pass it over to Darcy, and just talk about the location of the next two Wisselshorst wells, and some of the steps as noted for the debottlenecking of the gas.

Yeah.

Greg, thanks for that. To answer your first question, those next two wells are located on a common pad, they'll be drilled together on one pad.

That location is kind of between 1 and 2 kilometers away from the original Wisselshorst discovery well, as the crow flies. In terms of debottlenecking the first Wisselshorst well that we brought online, we are in the process of permitting, acquiring land to build a new sales pipeline for that well.

We expect that that pipeline be online, ready for service towards the end of next year. Then we do for the next two new wells have a plan for an initial gas plant on that one site to capture their production.

We have the opportunity to twin that gas plant on that site if we have strong results there, and then that sales pipeline that we're building for Wisselshorst 1 will also be the sales point for the next two wells in Wisselshorst. Lots of opportunity to debottleneck that area kind of next year with this sales pipeline, and then hopefully a new gas plant for those next two wells in a success case.

Thanks, Darcy. Summarize there, that sales line, it's a 12-inch piece of pipe.

I think all the materials are ordered. We're going to plan to start construction here early next year.

As Darcy noted, that'll allow us to open that well up and get it up to that full 16, 17 million a day design rate. Further on that is this twinning of the infrastructure that Darcy mentioned, effectively you're able to double to go from 17 to 34 million a day with the amount of gas we've got behind pipe.

First step, Greg, to your point, is as Darcy mentioned, is getting that 12-inch pipe in the ground, and we're well on our route to do that.

Terrific. No, thanks for that.

Maybe just staying with Europe and maybe just moving into the Netherlands. In the past, you'd probably drilled potentially smaller prospects.

Now what I understand is you're drilling maybe perhaps fewer, but bigger prospects. Am I thinking about that the right way, and just any color around that would be great.

I'll pass it back to Darcy, but I think, just unwind the clock a little in the investor day, Jeff McDonald would have talked a lot about this, and the plot that he was emphasizing is these targets are 2.5 to 3 times bigger than what we were targeting before. Darcy, you want to build on that?

Sure. Thank you.

Then in the Netherlands, I think if we look back kind of the last 10 years, as you said, the prospects we were drilling were getting smaller. That was really driven by an effort from the permitting side to stay drilling on existing leases in existing areas.

We've been continuously pursuing drilling locations outside of those areas to access some of these bigger pools. The drilling that we have planned for later this year as well as next year kind of is on the back of that, where we are stepping out a little bit further from our existing operations, and able to access bigger pools again in that area.

Permitting for the wells that we have planned this year kind of firmly in hand, we're ready to go once we have the rig available towards the end of September. Then wells for '27 and '28 are in the midst of permitting, have everything kind of in hand to drill wells in '27 and onward into '28 in these bigger pools.

Team's done great work, again on the permitting, but also the technical side, building on Darcy's comments, to bring these larger structures forward. We're quite excited to allocate capital there.

Got it. All right.

Thank you very much, both of you.

Great. Thanks, Greg.

Hi, good morning, and thanks for taking my questions. Sorry to keep on focusing on Germany here, obviously a lot of kind of exciting things there.

I was hoping to dig into the recent concessions that you've been awarded, and how specifically you're thinking about balancing, we'll call it, step-outs or follow-up drilling, like things that you're doing at the Bomlitz license, versus, we'll call it, little-e exploration work to again further build out the depth of inventory that you have out in Germany, especially with the winning of these new concessions.

Thanks for that, Dennis. I can give you a good summary there.

The team's done a great job with the land we currently have, which is obviously a big number, over a million net acres, identifying those nine structures, and we see up to 30 wells on those structures. We're excited to now develop Wisselshorst, but also test some of those additional six structures in the upcoming years.

To build on that, deals like the one we closed, but also the new concessions, another half million net acres, the team will do, let's call it more that study, G&G work, relatively low costs, pulling a lot of data. We'll spend the next 2, 3 years really defining the prospectivity, maturing prospectivity.

Then you would look at the next couple of years after that to think about drill commitments and those kind of things. Really, we see this with the defined inventory that we've got, let's call it a decade at a risked base.

Things like this new concession is really extending that runway even further. I think, as we're having this conversation a couple years from now, Dennis, we'll be able to start to point to things on a map.

Right now, it's a lot of land in the fairway that we like. We're going to spend a year or two just doing the G&G work to mature what we expect to be some prospects on that.

It's just really building on that decade that we've got in front of us. You're going to see us test some new structures in the upcoming years, as well as develop Wisselshorst.

Great. I appreciate that color and context there, Dion.

My next question focuses a little bit more on the balance sheet and allocation of free cash to shareholders. Obviously you've continued to deliver, and this is kind of a nice bump-up in terms of directing 40% to 60% of excess free cash towards shareholder returns.

Can you talk towards kind of what kind of drives you to maybe a 40% versus a 60%? Is that more commodity or kind of value that you see in the shares?

Then how do you think about the confidence that you build in terms of allocating more and more free cash to shareholders, especially just given as you've improved obviously depth of inventory across the asset base, and then continue to execute across the various assets, whether it be in Canada or in Europe, or Australia? All

right, Lars can't wait to answer that question, I'm going to pass it over to him.

Great. No, thanks, Dennis, and I'll just try to give a little bit of context in terms of how we arrive at the decision to move to 40% to 60%.

Maybe two key data points that we look at. Obviously, the first one is just the status of the business today, in terms of where we've taken the balance sheet, the quality of inventory.

Maybe what I'll spend a bit more time on is just the rate of change of how we've gotten here. Made the comment in my remarks, we've reduced net debt by $840 million over the past 15 months, a lot of progress there made in a short period of time.

You think back to 15 months as well, we had just closed the Westbrick acquisition, consolidated into a 1.2 million-acre Deep Basin position. We still had some infrastructure spend in the Montney to execute on, some key pads to deliver on as well, and we were still trying to quantify what we had in Germany.

You fast-forward 15 months to the end of the second quarter here, and I think a lot of boxes have been checked, and in a very short period of time. Those are the type of things that we want to look at.

It's sort of structurally are we executing on the plan within the business? As we look back, we said, 'You know what?

We are more comfortable increasing that return of capital.' You'll recall when we did the Westbrick acquisition, we reduced or temporarily reduced the return of capital from 50% to 40%, with those boxes checked, happy to move to the 40% to 60%.

Now, one thing that we are going to continue to maintain here is flexibility within that 40% to 60%. You think back to the second quarter here, lots of volatility, whether it was commodity price-wise, share price-wise, and so we want to maintain flexibility in terms of how we allocate capital over the longer term.

With this announcement today, we are looking to increase what we're allocating to shareholder returns. Then maybe just the last point I'll make, Dennis, if you go back to the investor day last December, we laid out a framework of what we wanted to achieve here over the 5 years 5-year plan in terms of end of 2030.

I think we are well into that plan, delivering on that plan. We've been able to increase our guidance here in 2026 on the production side, maintain the capital as well.

We are looking at this from a long-term perspective in terms of allocating that capital. Maybe just lastly, you asked about Australia as well in terms of how we think about allocating capital.

We continue to evaluate the prospective drilling in Australia in 2027 with where oil prices are. We are leaning towards that being the right decision.

As we foreshadowed in our investor day, that would push capital for 2027 into that $700 million range, something that we'll manage within this framework. Anyways, I'll maybe stop there, Dennis, just to see if there's any follow-up.

Just appreciate that color there, Lars. I guess that was kind of a little bit of a lead-in to my follow question is kind of how to think about '27 CapEx.

Then, again, as you see that kind of free cash flow rate of change in the second half of next year as you round out effectively Montney drilling and then I guess now this Australia program, does that help drive more comfort in maybe moving up that targeted range if the balance sheet improves and so forth? Or is kind of there going to be a balance in terms of where you want to really kind of drive down net debt even further because for whatever reason on a go-forward basis?

Yeah. No, I think you framed it very appropriately there.

As we get into the second half of 2027 and then sort of, let's call it, the later 3 years of the 5-year plan that we laid out, capital comes back into that $600 to $630 million range as the business grows towards that 130,000 barrels a day. The reason that we are able to keep capital within that range, grow production, are for the reasons that you referenced there: Montney infrastructure spend starts to come down, we start to get some gas behind pipe in Germany online, we get the Australia drill behind us as well.

Those will be the type of things that we look at, and I think with the flexibility we have in the framework now, we don't necessarily need to wait for those inflection points to buy back shares. If we want to be a bit more aggressive leading up to that, we have the capability within the framework here.

The vice versa is also true in terms of toggling within that 40% to 60%.

Maybe just to build on Lars's comments there, because Lars would have presented a slide, it's in our deck that shows how that $1.7 billion of excess free cash flow tends to be allocated over that 5-year time frame. If you look at that plot, it shows the net debt getting down, midpoint around $750 million.

It shows the dividend, of course, lots of runway there. Then on share buybacks, right, we showed a range, but share count was coming down about 30%, right?

Now that, of course, would have been based on a $12 stock price, but that was based on $70 oil, that was based on $13 TTF. To summarize Lars's points there, as the business fundamentals continue to improve, as we return to capital, there's more free cash in the system, we're looking forward to returning more of that.

Again, I think the IR Day 5-year plan is a good summary of what this business can deliver at reasonable commodity prices, i.e., $70 oil. It's a big number: $1.7 billion of excess free cash flow for 5 years.

Great. I appreciate the color, both of you.

I'll turn it back.

Thanks, Dennis.

Thank you again for participating in our Q2 conference call. Enjoy the rest of your day.