Vermilion Energy Inc. (NYSE:VET) reported mixed fourth-quarter results on Wednesday, with earnings falling short of expectations even as revenue came in well above forecasts.
The company posted a loss of Cdn$2.86 per share for the quarter, far below the analyst consensus estimate of earnings of Cdn$0.30 per share. However, revenue reached Cdn$458.72 million, beating the Cdn$385.62 million forecast by about 19% and rising from Cdn$410.02 million in the same period a year earlier.
The earnings shortfall was largely driven by non-cash impairment charges totaling Cdn$572 million tied to mature legacy assets in Australia, France and Ireland. The company said the charges did not affect quarterly fund flows from operations or free cash flow.
Production averaged 121,308 barrels of oil equivalent per day (boe/d) in the fourth quarter, exceeding the upper end of company guidance and marking a 46% increase on a per-share basis compared with the prior-year period.
Vermilion generated Cdn$241 million in funds from operations and Cdn$49 million in free cash flow during the quarter while investing Cdn$192 million in capital expenditures.
The company also reduced net debt by Cdn$42 million and returned Cdn$26 million to shareholders through dividends and share repurchases.
Average realized natural gas prices after hedging reached Cdn$5.50 per mcf, more than double the AECO natural gas benchmark.
“It was an impactful year for Vermilion, repositioning the Company as a Global Gas Producer with long-duration assets, improving profitability and growing free cash flow per share,” said Dion Hatcher, President and CEO.
For the first quarter of 2026, Vermilion expects production of between 122,000 and 124,000 boe/d. The company maintained its full-year 2026 production outlook of 118,000 to 122,000 boe/d, based on planned capital spending of Cdn$600 million to Cdn$630 million.