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Vermilion Energy Inc. Announces Results for the Three Months Ended March 31 , 2021 CALGARY , AB , April 28 , 2021 / CNW / - Vermilion Energy Inc. ( " Vermilion " , " We " , " Our " , " Us " or the " Company " ) ( TSX : VET ) ( NYSE : VET ) is pleased to report operating and condensed financial results for the three months ended March 31 , 2021 . The unaudited interim financial statements and management discussion and analysis for the three months ended March 31 , 2021 will be available on the System for Electronic Document Analysis and Retrieval ( " SEDAR " ) at www.sedar.com , on EDGAR at www.sec.gov/edgar.shtml , and on Vermilion's website at www.vermilionenergy.com . Highlights • Fund flows from operations ( " FFO " ) ( 1 ) was $ 162 million in Q1 2021 , an increase of 20 % from the prior quarter . The increase was primarily due to higher commodity prices , most notably global crude oil and European natural gas benchmarks , which represent our two most dominant products from a revenue generating perspective . • We generated $ 79 million of free cash flow ( " FCF " ) ( 1 ) in Q1 2021 after investing $ 83 million in exploration and development ( " E & D " ) capital expenditures , resulting in a payout ratio of 56 % including reclamation and abandonment expenditures . • Net debt at the end of Q1 2021 was just under $ 2.0 billion , representing a 5 % decrease compared to year - end 2020. We have reduced the amount outstanding under our revolving credit facility by over $ 190 million or 11 % since Q2 2020 . • Production in Q1 2021 averaged 86,276 boe / d ( 2 ) , a decrease of 2 % from the prior quarter and slightly above the upper - end of our annual guidance range of 83,000 to 85,000 boe / d . The quarter - over - quarter decrease was primarily due to natural decline , partially offset by higher production in Australia and Germany as a result of better operational uptime . Production from our North American assets averaged 56,780 in Q1 2021 , a decrease of 3 % from the prior quarter primarily due to natural decline and cold weather related downtime during February . The Q1 2021 drilling campaign was focused on drilling condensate - rich Mannville natural gas wells in west - central Alberta , where we drilled ten ( 9.7 net ) wells and completed 15 ( 14.7 net ) wells during the first quarter . The overall results from this drilling program were in line with expectations , and these wells are expected to be strong contributors of production volumes in Q2 2021 . • Production from our International assets averaged 29,496 in Q1 2021 , an increase of 1 % from the prior quarter primarily due to higher production in Australia and Germany , which offset natural declines in our other International operating areas . We drilled three wells in Europe during the first quarter , comprised of one ( 0.5 net ) well in the Netherlands , one ( 1.0 net ) well in Hungary and one ( 1.0 net ) well in Croatia . • In the Netherlands , we successfully drilled the Blesdijke natural gas well ( 0.5 net ) , which encountered 38 meters of combined net pay from three separate formations and is expected to be brought on production later this year . We also initiated production from the Weststellingwerf ( 0.5 net ) well at the beginning of the year to take advantage of strong European natural gas prices . • As part of our progression towards developing a comprehensive , long - term environmental , social and governance ( " ESG " ) strategy , we have established two new emissions - related targets . The first is our commitment to net zero emissions in our own operations , including Scope 1 and Scope 2 emissions , by 2050. To achieve this we will be setting shorter - term targets every five years , with the initial target to reduce Scope 1 emissions from our operations by 15 to 20 % by 2025 , using a baseline year of 2019 . ( 1 ) Non - GAAP Financial Measure . Please see the " Non - GAAP Financial Measures " section of the accompanying Management's Discussion and Analysis . ( 2 ) Please refer to Supplemental Table 4 " Production " of the accompanying Management's Discussion and Analysis for disclosure by product type . ( $ M except as indicated ) Q1 2021 Q4 2020 Q1 2020 Financial Petroleum and natural gas sales 368,137 Fund flows from operations 162,051 Fund flows from operations ( $ / basic share ) ( 1 ) 1.02 Fund flows from operations ( $ / diluted share ) ( 1 ) 1.00 Net earnings ( loss ) 499,964 316,198 135,212 0.85 0.85 ( 57,707 ) 328,314 170,225 1.09 1.09 ( 1,318,504 ) Net ( loss ) earnings ( $ / basic share ) 3.15 Capital expenditures 83,363 ( 0.36 ) 59,894 ( 8.42 ) 233,704 Acquisitions 393 Asset retirement obligations settled 7,023 4,821 7,271 11,337 3,732 Cash dividends ( $ / share ) 0.575 Dividends declared 90,067 % of fund flows from operations % % 53 % Payout ( 1 ) 90,386 67,165 % of fund flows from operations Free Cash Flow ( 1 ) 56 % 78,688 Net debt 1,996,675 50 % 75,318 2,105,983 319,858 188 % ( 63,479 ) 2,155,623