Production beat guidance and cost reductions are positive, but the GAAP net loss and FFO decline may weigh on sentiment. Monitor Q2 production guidance (123-125k boe/d) and the trajectory of European gas prices, which drive ~77% of revenue. The Germany acquisition and Croatia divestiture are small but strategically positive.
Price Chart
Executive Summary
Vermilion Energy reported Q1 2026 results with production of 125,618 boe/d (up 22% YoY), FFO of $232M ($1.52/share), and free cash flow of $98M. Net debt was reduced by $50M to $1.29B. However, the company reported a net loss of $146M driven by a $286M unrealized loss on derivatives due to rising commodity prices. Full-year production guidance was maintained but trending to the upper end of the range.
Key Facts
- Q1 2026 production averaged 125,618 boe/d, up 22% from Q1 2025 and 4% from Q4 2025
- FFO of $232M ($1.52/basic share) vs $256M ($1.66/share) in Q1 2025
- Net loss of $146M ($0.95/share) vs net income of $15M in Q1 2025, driven by $286M unrealized derivative loss
- Free cash flow of $98M, up from $74M in Q1 2025
- Net debt reduced by $50M to $1.29B, net debt/FFO ratio of 1.4x
- Declared quarterly dividend of $0.135/share, up from $0.130 in prior quarter
- Full-year 2026 production guidance unchanged at 118,000-122,000 boe/d, trending to upper end
- Q2 2026 production expected 123,000-125,000 boe/d
- Controllable expenses per boe decreased 25% vs Q1 2025
- Signed agreement to acquire German producing assets (~1,000 boe/d) and divest remaining 60% of Croatia SA-07 block for ~$24M
Financial Impact
FFO declined 9% YoY to $232M; net loss of $146M vs net income of $15M in Q1 2025; free cash flow improved 32% to $98M; net debt reduced $50M to $1.29B
Risk Factors
- Unrealized derivative losses of $286M signal significant hedging exposure to rising commodity prices
- International production declined 14% QoQ due to cyclone downtime in Australia and natural declines in Europe
- Full-year production guidance unchanged despite Q1 beat, with Q3 expected to be lower due to planned maintenance
- Geopolitical uncertainty in the Middle East and Strait of Hormuz disruptions could impact European gas prices and operations
- Net debt remains elevated at $1.29B despite $770M reduction over 12 months
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001279569-26-000380 |
| Document: vermilion6k.htm | 0001279569-26-000380 |
| Document: 0001279569-26-000380-index-headers.html | 0001279569-26-000380 |
| Document: 0001279569-26-000380-index.html | 0001279569-26-000380 |
| Document: 0001279569-26-000380.txt | 0001279569-26-000380 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 21, 2026 4d ago | 6-K | $13.45 | awaiting T+60 | — | $14.10 (+4.83%) |
Oct 21, 2026 5d ago | Press Release | $13.45 | awaiting T+60 | — | $14.10 (+4.83%) |
Jul 8, 2026 15w ago | Press Release | $9.47 $11.68 | ▲ +23.34% | ▲ +21.70% | $14.10 (+48.89%) |
May 7, 2026 24w ago | 6-K | $11.79 $11.04 | ▼ −6.36% | ▼ −11.20% | $14.10 (+19.59%) |
May 7, 2026 24w ago | 6-K | $11.86 $11.55 | ▼ −2.61% | ▼ −6.45% | $14.10 (+18.89%) |
May 6, 2026 24w ago | 6-K | $11.87 $11.92 | ▲ +0.42% | ▼ −1.64% | $14.10 (+18.79%) |
May 6, 2026 24w ago | 6-K | $11.87 $11.92 | ▲ +0.42% | ▼ −1.64% | $14.10 (+18.79%) |
Apr 2, 2026 29w ago | 6-K | $13.38 $9.37 | ▼ −29.97% | ▼ −44.13% | $14.10 (+5.38%) |
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