Page 1

VERMILION ENERGY News Release Vermilion Energy Inc. Announces Results for the Three and Six Months Ended June 30 , 2021 CALGARY , Alberta , August 16 , 2021 - Vermilion Energy Inc. ( " Vermilion ” , “ We ” , “ Our ” , “ Us " or the " Company " ) ( TSX , NYSE : VET ) is pleased to report operating and condensed financial results for the three and six months ended June 30 , 2021 . The unaudited interim financial statements and management discussion and analysis for the three and six months ended June 30 , 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 • • ( 1 ) ( 2 ) Fund flows from operations ( " FFO " ) ( 1 ) was $ 173 million in Q2 2021 , an increase of 7 % from the prior quarter . The increase was primarily due to higher commodity prices . We generated $ 94 million of free cash flow ( " FCF " ) ( ¹ ) in Q2 2021 after investing $ 79 million in exploration and development ( “ E & D ” ) capital expenditures , resulting in a payout ratio of 48 % including reclamation and abandonment expenditures . During the first half of 2021 , we have generated $ 173 million of FCF compared to negative $ 24 million in the first half of 2020. With the continued strength in commodity prices , as reflected under current strip pricing , we expect to generate significantly higher FFO during the second half of 2021 and now forecast annual FCF in excess of $ 400 million , or over $ 2.50 per share , for 2021 . Net debt at the end of Q2 2021 was $ 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 $ 327 million or 19 % since Q2 2020. With the excess FCF we expect to generate over the balance of the year , we will continue to reduce net debt , with our ultimate goal of having leverage reduced to 1.5 times debt to cash flow or less . Production in Q2 2021 averaged 86,335 boe / d ( 2 ) , relatively consistent with first quarter production of 86,276 boe / d as new production adds in Canada from our Q1 2021 drilling program offset declines in other operating regions . Production from our North American assets averaged 58,354 in Q2 2021 , an increase of 3 % from the prior quarter primarily as a result of new production added from our Q1 2021 Canadian drilling program . Production from our International assets averaged 27,981 in Q2 2021 , a decrease of 5 % from the prior quarter primarily due to natural declines and downtime in Australia and Ireland . In Canada , during the second quarter we drilled one ( 0.2 net ) well and brought on two ( 1.7 net ) condensate - rich Mannville natural gas wells and initiated our drilling campaign in south - east Saskatchewan , where we drilled eight ( 6.9 net ) wells and completed six ( 5.4 net ) wells . Five ( 4.4 net ) of these wells were brought on production during the quarter with the remaining wells to be brought on production in Q3 2021 . In the United States we commenced our four ( 4.0 net ) well drilling program centered on Turner horizontal wells in the Powder River basin . Two of the wells were completed and brought on production in the quarter , and are performing as expected . The remaining two wells are expected to be completed and brought on production in Q3 2021. Drilling costs on this program were reduced by 20 % compared to budget . In the Netherlands , we successfully drilled one ( 1.0 net ) natural gas well which encountered a 16 meter gas column in the Rotliegend Slochteren formation and multiple thin sands with reservoir potential in the Rotliegend Ten Boer formation . The well was completed at the end of June and we expect to bring it on production in Q3 2021. Subsequent to Q2 2021 , we began inline testing of the Rotliegend formation on the Blesdijke natural gas well ( 0.5 net ) drilled in Q1 2021 and achieved initial rates up to 7.0 mmcf / d . We plan on conducting further testing in Q3 2021 and expect to bring the well onstream later in the year . Furthering our focus on the energy transition , we established a third geothermal application from our produced water in France . Our Vic Bilh facility will provide geothermal heat to a nearby Fleur de Vie facility that produces high quality spirulina , a microalgae with a wide variety of uses . The facility is expected to be completed in autumn 2021 . We published our 2021 Sustainability Report , Value Matters , which includes 2020 ESG - related data updates . Non - GAAP Financial Measure . Please see the " Non - GAAP Financial Measures " section of the accompanying Management's Discussion and Analysis . Please refer to Supplemental Table 4 " Production " of the accompanying Management's Discussion and Analysis for disclosure by product type .