Vermilion Energy Inc. (Vermilion) (TSX: VET) is pleased to announce that it has entered into a definitive agreement for the sale of its Saskatchewan and Manitoba assets (the "Assets") for cash proceeds of $415 million (the "Transaction").

Net proceeds from the Transaction will be directed towards debt repayment to accelerate deleveraging efforts and strengthen Vermilion's balance sheet. Based on current strip commodity pricing(1) and operational plans, we would expect to exit 2025 with net debt(2) of $1.5 billion, with a trailing net debt to FFO ratio(3) of 1.4 times.

The Assets are currently producing approximately 10,500 boe/d (86% oil and liquids) and are forecast to generate approximately $110 million of annual net operating income at current strip commodity prices(1). The Assets had Proved Developed Producing reserves of 30 mmboe as evaluated by McDaniel & Associates Consultants Ltd. at December 31, 2024, and approximately $250 million of undiscounted future abandonment liabilities. The Transaction has an effective date of May 1, 2025 and is anticipated to close in Q3 2025, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.

Assuming a mid-Q3 2025 close, Vermilion expects full year 2025 production to average between 120,000 to 125,000 boe/d with capital expenditures in the range of $680 to $710 million, reflecting an approximately $50 million reduction associated with the divested Assets post-closing. Vermilion will continue to evaluate capital investment levels during this period of increased volatility and will adjust capital if necessary to prioritize free cash flow over production growth during 2025 and 2026.

The Transaction marks another significant step in our strategic plan to high-grade the asset portfolio that began three years ago, shifting our focus toward long-duration, scalable assets with deep inventory of high return on capital opportunities. Our liquids-rich gas position in Western Canada, combined with strategic acquisitions in Europe and significant exploration success in Germany have reframed Vermilion's global gas franchise that will serve shareholders for years to come. Cash proceeds from the Transaction will strengthen Vermilion's balance sheet and provide further capital allocation flexibility for core Canadian and European assets. Vermilion would like to sincerely thank our talented and dedicated field teams in Saskatchewan for their commitment to safe and efficient operations over the past 11 years as well as the technical teams, which provided support from Calgary.

Advisors

National Bank Financial Inc. is acting as exclusive financial advisor and Scotiabank is acting as strategic advisor to Vermilion in connection with the Transaction. Torys LLP is acting as legal advisor on the Transaction.

(1) 2025 forward strip pricing as at May 20, 2025: Brent US$67.51/bbl; WTI US$63.69/bbl; LSB = WTI less US$4.85/bbl; TTF $18.01/mmbtu; NBP $17.81/mmbtu; AECO $2.23/mcf; CAD/USD 1.40; CAD/EUR 1.56 and CAD/AUD 0.89.

(2) Net debt is a capital management measure most directly 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 as current assets less current liabilities, excluding current derivatives and current lease liabilities). More information and a reconciliation to long-term debt, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of Vermilion's Management's Discussion and Analysis for the three months ended March 31, 2025.

(3) Net debt to four quarter trailing fund flows from operations ("FFO") is a non-GAAP ratio and is not a standardized financial measure under IFRS Accounting Standards and therefore may not be comparable to similar measures disclosed by other issuers. Net debt to four quarter FFO is calculated as net debt divided by FFO from the preceding four quarters. Management uses this measure to assess the Company's ability to repay debt. More information can be found in the "Non-GAAP and Other Specified Financial Measures" section of Vermilion's Management's Discussion and Analysis for the three months ended March 31, 2025.

About Vermilion

Vermilion (NYSE: VET) is a global gas producer that seeks to create value through the acquisition, exploration, development and optimization of producing assets in North America, Europe and Australia. The Company's business model emphasizes free cash flow generation and returning capital to investors when economically warranted, augmented by value-adding acquisitions. Vermilion's operations are focused on the exploitation of light oil and liquids-rich natural gas conventional and unconventional resource plays in North America and the exploration and development of conventional natural gas and oil opportunities in Europe and Australia.

Vermilion's priorities are health and safety, the environment, and profitability, in that order. Nothing is more important than the safety of the public and those who work with Vermilion, and the protection of the natural surroundings. In addition, the Company emphasizes strategic community investment in each of its operating areas.

Vermilion trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol VET.