Exhibit 99.1 

Disclaimer

Certain statements included or incorporated by reference in this document may constitute forward-looking statements or information under applicable securities legislation. Such forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this document may include, but are not limited to: capital expenditures, including Vermilion’s 2025 guidance, and Vermilion’s ability to fund such expenditures; the flexibility of Vermilion’s capital program and operations; business strategies and objectives; operational and financial performance; wells expected to be drilled and the timing thereof; exploration and development plans and the timing thereof; future drilling prospects; the ability of our asset base to deliver modest production growth; the evaluation of international acquisition opportunities; statements regarding the return of capital; our asset petroleum and natural gas sales; future production levels and the timing thereof, including Vermilion’s 2025 guidance, and rates of average annual production growth; the effect of changes in crude oil and natural gas prices, changes in exchange and inflation rates; the payment and amount of future dividends; the effect of possible changes in critical accounting estimates; the Company’s review of the impact of potential changes to financial reporting standards; the potential financial impact of climate-related risks; Vermilion’s goals regarding its debt levels, including maintenance of a ratio of net debt to four quarter trailing fund flows from operations; statements regarding Vermilion’s hedging program and the stability of our cash flows; operating and other expenses; royalty and income tax rates and Vermilion’s expectations regarding future taxes and taxability and the timing of regulatory proceedings and approvals.

Such forward-looking statements or information are based on a number of assumptions, all or any of which may prove to be incorrect. In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things: the ability of Vermilion to obtain equipment, services and supplies in a timely manner to carry out its activities in Canada and internationally; the ability of Vermilion to market crude oil, natural gas liquids, and natural gas successfully to current and new customers; the timing and costs of pipeline and storage facility construction and expansion and the ability to secure adequate product transportation; the timely receipt of required regulatory approvals; the ability of Vermilion to obtain financing on acceptable terms; foreign currency exchange rates and interest rates; future crude oil, natural gas liquids, and natural gas prices; management’s expectations relating to the timing and results of exploration and development activities; the impact of Vermilion’s dividend policy on its future cash flows; credit ratings; hedging program; expected earnings/(loss) and adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected future cash flows and free cash flow and expected future cash flow and free cash flow per share; estimated future dividends; financial strength and flexibility; debt and equity market conditions; general economic and competitive conditions; ability of management to execute key priorities; and the effectiveness of various actions resulting from the Vermilion's strategic priorities.

Although Vermilion believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Vermilion can give no assurance that such expectations will prove to be correct. Financial outlooks are provided for the purpose of understanding Vermilion’s financial position and business objectives, and the information may not be appropriate for other purposes. Forward-looking statements or information are based on current expectations, estimates, and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Vermilion and described in the forward-looking statements or information. These risks and uncertainties include, but are not limited to: the ability of management to execute its business plan; the risks of the oil and gas industry, both domestically and internationally, such as operational risks in exploring for, developing and producing crude oil, natural gas liquids, and natural gas; risks and uncertainties involving geology of crude oil, natural gas liquids, and natural gas deposits; risks inherent in Vermilion's marketing operations, including credit risk; the uncertainty of reserves estimates and reserves life and estimates of resources and associated expenditures; the uncertainty of estimates and projections relating to production and associated expenditures; potential delays or changes in plans with respect to exploration or development projects; Vermilion's ability to enter into or renew leases on acceptable terms; fluctuations in crude oil, natural gas liquids, and natural gas prices, foreign currency exchange rates, interest rates and inflation; health, safety, and environmental risks; uncertainties as to the availability and cost of financing; the ability of Vermilion to add production and reserves through exploration and development activities; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; uncertainty in amounts and timing of royalty payments; risks associated with existing and potential future law suits and regulatory actions against or involving Vermilion; and other risks and uncertainties described elsewhere in this document or in Vermilion's other filings with Canadian securities regulatory authorities. References to Vermilion or the Company in this document include Westbrick Energy Ltd. ("Westbrick" or "Westbrick Energy") which was acquired by Vermilion Energy Inc. on February 26, 2025.

The forward-looking statements or information contained in this document are made as of the date hereof and Vermilion undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.

This document discloses certain oil and gas metrics, including DCET costs, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this MD&A to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the Company's future performance and future performance may not compare to the Company's performance in previous periods and therefore such metrics should not be unduly relied upon. DCET costs includes all capital spent to drill, complete, equip and tie-in a well. Additional oil and gas metrics in this document may include, but are not limited to:

Boe Equivalency: Per barrel of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent (6:1). Barrel of oil equivalents (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, as the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Estimates of Drilling Locations: Unbooked drilling locations are the internal estimates of Vermilion based on Vermilion's prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and prospective). Unbooked locations have been identified by Vermilion's management as an estimation of Vermilion's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Vermilion will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and natural gas reserves, resources or production. The drilling locations on which Vermilion will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While a certain number of the unbooked drilling locations have been de-risked by Vermilion drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management of Vermilion has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

Financial data contained within this document are reported in Canadian dollars, unless otherwise stated.

Abbreviations

Highlights

Q2 2025 Results

Outlook

Subsequent to February 26, 2025, net debt to four quarter trailing fund flows from operations is calculated inclusive of Westbrick Energy's pre-acquisition four quarter trailing fund flows from operations, as if the acquisition of Westbrick Energy occurred at the beginning of the four-quarter trailing period, and exclusive of the four quarter trailing fund flows from discontinued operations from assets held for sale to reflect the Company’s ability to repay debt on a pro forma basis.

Message to Shareholders

Vermilion significantly advanced its North American high-grading initiative in Q2 2025, announcing the divestment of its Saskatchewan and United States assets. These divestments were a key component of Vermilion’s broader strategic transition into a global gas producer, enabling us to enhance operational scale in long-duration assets and better position the company for sustainable, profitable growth. Both divestments were subsequently closed in July 2025 and the proceeds used to reduce our outstanding debt balance. On a go-forward basis, Vermilion has a production base of approximately 120,000 boe/d (70% natural gas) with over 90% of production coming from our global gas assets in Canada and Europe and over 80% of capital directed toward these assets.

Following the divestments and continued integration of the Westbrick Energy Ltd. ("Westbrick") acquisition, which closed earlier in the year, we have taken additional steps to further streamline the business by reorganizing our Canadian business unit. This has resulted in dedicated technical and corporate teams concentrating exclusively on our Deep Basin and Montney liquids-rich gas assets. We continue to identify upside as we fully integrate Westbrick, including proving up additional locations with our successful first half drilling program, reducing service costs with the larger development program and renegotiating processing fees on favourable terms. To date, we have identified over $200 million (NPV10)⁽²⁾ of synergies post-acquisition, which demonstrates the benefits of our dominant Deep Basin position and our continued focus on enhancing profitability.

In Germany, the Osterheide deep gas well produced above expectations during its first quarter on production, while the Wisselshorst deep gas well remains on schedule to come online in the first half of 2026. These wells provide Vermilion with organic European gas growth, and we will continue to allocate capital to the Germany deep gas program given strong project economics. In addition, we will continue to evaluate opportunities in our core European operations, specifically pursuing European gas acquisition opportunities that complement our existing portfolio and enhance value for our shareholders.

Through these high-grading initiatives, Vermilion has a focused and resilient asset base, underpinned by high-return development opportunities, unique exposure to premium-priced European gas and a lower cost structure that we believe will drive significant shareholder value over the long term. As we look out over the next few years, our efforts will be primarily focused on building out the final phase of our Mica Montney infrastructure in British Columbia to support our target production rate of 28,000 boe/d, optimizing development of our larger Deep Basin assets, and progressing our deep gas exploration program in Germany, where we expect to grow production to over 10,000 boe/d in the coming years. While progressing these core growth initiatives over the next few years, we will continue to prioritize free cash flow generation and debt reduction to further enhance the resiliency of the business.

Q2 2025 Review

Vermilion generated $260 million of fund flows from operations ("FFO") in Q2 2025, which included a full quarter of contribution from the acquired Westbrick assets as well as the FFO contribution from the Saskatchewan and United States assets that were classified as held for sale at June 30, 2025. E&D capital expenditures of $115 million decreased quarter-over-quarter due to seasonality of drilling activity in Western Canada and the deferral of some E&D capital associated with assets held for sale, resulting in increased free cash flow ("FCF") of $144 million.

Production for Q2 2025 averaged 136,002 boe/d (63% gas)⁽¹⁾, representing a 32% increase over the prior quarter primarily due to a full quarter contribution from the Westbrick assets. Production from Vermilion's North American operations averaged 106,379 boe/d⁽¹⁾ in Q2 2025, an increase of 44% from the previous quarter primarily due to the Westbrick assets and new production brought online in the Montney. Production from Vermilion's International operations averaged 29,623 boe/d⁽¹⁾ in Q2 2025, an increase of 1% from the previous quarter due to new production in Germany and Croatia, partially offset by natural declines.

Capital activity during Q2 2025 remained focused on our global gas assets in the Mica Montney, Alberta Deep Basin and Germany. At Mica, Vermilion completed five (5.0 net) and brought on production eleven (11.0 net) Montney liquids-rich shale gas wells. Production in the Montney averaged approximately 15,000 boe/d in Q2 2025, with production from the new wells and increased takeaway capacity from the operated infrastructure expansion completed earlier this year. Our operational teams achieved a new benchmark for Vermilion with an average DCET cost of $8.5 million per well for the two most recent pads, while maintaining initial production results in-line with expectations. We believe the $8.5 million is repeatable and is now our go-forward cost estimate for an extended reach Mica well, which reduces our future development cost by an incremental $50 million on a NPV10⁽²⁾ basis. In the Deep Basin, the Company executed a one-rig program and drilled four (3.4 net), completed three (2.4 net), and brought on production three (2.4 net) liquids-rich conventional natural gas wells. We plan to add two rigs and execute a three-rig program during the second half of 2025.

In Germany, Vermilion drilled, completed and brought on production two (2.0 net) light and medium crude oil wells. Facility and tie-in activity on the Osterheide well (1.0 net) was completed during Q1 2025 and the well produced approximately 1,100 boe/d in Q2 2025, which is above original constrained expectations. Production from the well remains above expectations due to stronger than anticipated seasonal demand.

In Croatia, the Company drilled, completed and brought on production one (1.0 net) conventional natural gas well on the SA-10 block, which began producing through the existing facility in May 2025.

Outlook and Guidance Update

Vermilion expects Q3 2025 production to average between 117,000 to 120,000 boe/d (67% natural gas)⁽³⁾ factoring in the divestment of the Saskatchewan and United States assets in July 2025, the impact of planned turnaround activity, and shut-in gas due to low summer AECO prices. The 2025 capital budget and guidance remain unchanged as we continue to prioritize free cash flow and debt reduction, while continuing to return capital to shareholders through the dividend and share buybacks. Our capital program will continue to be focused on our global gas assets with continued investment in the Montney, Deep Basin and Germany gas program.

Sustainability

At year-end 2024, Vermilion had achieved an approximately 16% reduction in Scope 1 emissions intensity compared to 2019 (0.016 tCO2e/boe from 0.019 tCO2e/boe), which was good progress toward our target of 15 to 20% by year-end 2025. Given the structural changes to the business, we have decided to retire our 2025 target and focus now on evaluating the emission profile of our new assets, looking ahead to the 2030 target that we announced last year - a goal of reducing Scope 1 plus Scope 2 emissions by 25 to 30% versus 2019. While we are no longer referencing net zero in the aspirations we have for the future, we remain committed to our Climate Strategy, which comprises four pillars to support our management of climate risks and opportunities from now through 2050: emission reduction, calibration of our portfolio, adaptation to new technologies, and offsets. More information can be found in our Sustainability Report, available at https://www.vermilionenergy.com/sustainability.

Commodity Hedging

Vermilion hedges to manage commodity price exposures and increase the stability of our cash flows. In aggregate, we have 56% of our expected net-of-royalty production hedged for the remainder of 2025. With respect to individual commodity products, we have hedged 53% of our European natural gas production, 57% of our crude oil production, and 55% of our North American natural gas volumes, respectively. Please refer to the Hedging section of our website under Invest With Us for further details using the following link:

https://www.vermilionenergy.com/invest-with-us/hedging.

Board of Directors

Vermilion is pleased to announce the appointment of Mr. Corey Bieber to its Board of Directors, effective August 8, 2025. Mr. Bieber brings over 40 years of financial, strategic and operational leadership across the energy sector, with deep expertise in capital markets, corporate governance, investor relations and enterprise risk management. He served in multiple executive roles at Canadian Natural Resources Limited ("CNRL"), including Chief Financial Officer and Executive Advisor where he was a member of CNRL's Management Committee for over a decade. Prior to CNRL, Mr. Bieber was engaged in various financial and leadership roles at Enbridge Inc., Nexen Inc. and KPMG where he developed extensive financial and reporting skills as well as significant experience in financial oversight and systems of internal control.

Mr. Bieber currently serves on the board of Trans Mountain Corporation, and previously served on the Board of Veren Inc. Mr. Bieber’s community efforts include active involvement of various industry initiatives and with charitable activities such as the United Way and as a Member of the Heart & Stroke Alberta Board.

Non-GAAP and Other Specified Financial Measures

This report and other materials released by Vermilion includes financial measures that are not standardized, specified, defined, or determined under IFRS Accounting Standards and are therefore considered non-GAAP or other specified financial measures and may not be comparable to similar measures presented by other issuers. These financial measures include:

Total of Segments Measures

Fund flows from operations (FFO): Most directly comparable to net loss, FFO is a non-GAAP financial measure and total of segments measure comprised of sales less royalties, transportation, operating, G&A, corporate income tax, PRRT, interest expense, equity based compensation settled in cash, realized gain (loss) on derivatives, realized foreign exchange gain (loss), and realized other income (expense). The measure is used by management to assess the contribution of each business unit to Vermilion's ability to generate income necessary to pay dividends, repay debt, fund asset retirement obligations and make capital investments. Reconciliation to the most directly comparable primary financial statement measures can be found below. Fund flows from continuing operations and fund flows from discontinued operations are calculated in the same manner as FFO and is most directly comparable to net earnings (loss) from continuing operations and net earnings (loss) discontinued operations, respectively.

Non-GAAP Financial Measures and Non-GAAP Ratios

Fund flows from operations per basic and diluted share: FFO per basic share and diluted share are non-GAAP ratios. Management assesses fund flows from operations on a per share basis as we believe this provides a measure of our operating performance after taking into account the issuance and potential future issuance of Vermilion common shares. Fund flows from operations per basic share is calculated by dividing fund flows from operations (total of segments measure) by the basic weighted average shares outstanding as defined under IFRS Accounting Standards. Fund flows from operations per diluted share is calculated by dividing fund flows from operations by the sum of basic weighted average shares outstanding and incremental shares issuable under the equity based compensation plans as determined using the treasury stock method. Fund flows from continuing operations per basic and diluted share and fund flows from discontinued operations per basic and diluted share are calculated in the same manner as FFO per basic and diluted share.

Fund flows from operations per boe: Management uses fund flows from operations per boe to assess the profitability of our business units and Vermilion as a whole. Fund flows from operations per boe is calculated by dividing fund flows from operations (total of segments measure) by boe production. Fund flows from continuing operations per boe and fund flows from discontinued operations per boe are calculated in the same manner as FFO per boe.

Free cash flow (FCF) and excess free cash flow (EFCF): Most directly comparable to cash flows from operating activities, FCF is a non-GAAP financial measure calculated as fund flows from operations less drilling and development costs and exploration and evaluation costs and EFCF is comprised of FCF less payments on lease obligations and asset retirement obligations settled. FCF is used by management to determine the funding available for investing and financing activities including payment of dividends, repayment of long-term debt, reallocation into existing business units and deployment into new ventures. EFCF is used by management to determine the funding available to return to shareholders after costs attributable to normal business operations. Reconciliation to the primary financial statement measures can be found in the following table.

Capital expenditures: Most directly comparable to cash flows used in investing activities, capital expenditures is a non-GAAP financial measure calculated as the sum of drilling and development costs and exploration and evaluation costs as derived from the Consolidated Statements of Cash Flows. We consider capital expenditures to be a useful measure of our investment in our existing asset base. Capital expenditures are also referred to as E&D capital. Reconciliation to the primary financial statement measures can be found below.

Payout and payout % of FFO: Payout and payout % of FFO are, respectively, a non-GAAP financial measure and non-GAAP ratio. Payout is most directly comparable to dividends declared. Payout is comprised of dividends declared plus drilling and development costs, exploration and evaluation costs, and asset retirement obligations settled, and payout % of FFO is calculated as payout divided by FFO. The measure is used by management to assess the amount of cash distributed back to shareholders and reinvested in the business for maintaining production and organic growth. Payout as a percentage of FFO is also referred to as the payout ratio or sustainability ratio. The reconciliation of the measure to the primary financial statement measure can be found below.

Return on capital employed (ROCE): A non-GAAP ratio, ROCE is a measure that management uses to analyze our profitability and the efficiency of our capital allocation process; the comparable primary financial statement measure is earnings before income taxes. ROCE is calculated by dividing net loss before interest and taxes ("EBIT") by average capital employed over the preceding twelve months. Capital employed is calculated as total assets less current liabilities while average capital employed is calculated using the balance sheets at the beginning and end of the twelve-month period.

Adjusted working capital (deficit): Adjusted working capital (deficit) is a non-GAAP financial measure calculated as current assets less current liabilities, excluding current derivatives and current lease liabilities. The measure is used by management to calculate net debt, a capital management measure disclosed below.

⁽¹⁾ Current lease liability includes the lease liability associated with assets held for sale. Current derivative liability includes the derivative liability associated with assets held for sale. See Note 4 - "Discontinued Operations" for more information.

Acquisitions: Acquisitions is a non-GAAP financial measure and is calculated as the sum of acquisitions, net of cash acquired and acquisitions of securities from the Consolidated Statements of Cash Flows, Vermilion common shares issued as consideration, the estimated value of contingent consideration, the amount of acquiree's outstanding long-term debt assumed, and net acquired working capital deficit or surplus. Management believes that including these components provides a useful measure of the economic investment associated with our acquisition activity and is most directly comparable to cash flows used in investing activities. A reconciliation to the acquisitions line items in the Consolidated Statements of Cash Flows can be found below.

Operating netback: Operating netback is non-GAAP financial measure and is calculated as sales less royalties, operating expense, transportation costs, PRRT, and realized hedging gains and losses, and when presented on a per unit basis is a non-GAAP ratio. Operating netback is most directly comparable to net loss. Management assesses operating netback as a measure of the profitability and efficiency of our field operations.

Net debt to four quarter trailing fund flows from operations: Management uses net debt (a capital management measure, as defined below) to four quarter trailing fund flows from operations to assess the Company's ability to repay debt. Net debt to four quarter trailing fund flows from operations is a non-GAAP ratio calculated as net debt (capital management measure) divided by fund flows from operations (total of segments measure) from the preceding four quarters.

Capital Management Measure

Net debt: Net debt is a capital management measure in accordance with IAS 1 "Presentation of Financial Statements" that is most directly comparable to long-term debt. Net debt 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), and represents Vermilion's net financing obligations after adjusting for the timing of working capital fluctuations.

Supplementary Financial Measures

Diluted shares outstanding: The sum of shares outstanding at the period end plus outstanding awards under the Long-term Incentive Plan (“LTIP"), based on current estimates of future performance factors and forfeiture rates.

Production per share growth: Calculated as the change in production determined on a per weighted average shares outstanding basis over a predefined period of time, expressed as a compounded, annualized return percentage. Measuring production growth per share better reflects the interests of our existing shareholders by reflecting the dilutive impact of equity issuances.

F&D (finding and development) and FD&A (finding, development and acquisition) costs: used as a measure of capital efficiency, calculated by dividing the applicable capital expenditures for the period, including the change in undiscounted FDC (future development capital), by the change in the reserves, incorporating revisions and production, for the same period.

Operating Recycle Ratio: A non-GAAP ratio that is calculated by dividing the Operating Netback, excluding realized gain (loss) on derivatives and petroleum resource rent tax, by the cost of adding reserves (F&D and FD&A cost). Management assesses operating recycle ratio as a measure of the reinvestment of earnings.

Management's Discussion and Analysis

The following is Management’s Discussion and Analysis (“MD&A”), dated August 7, 2025, of Vermilion Energy Inc.’s (“Vermilion”, “we”, “our”, “us” or the “Company”) operating and financial results as at and for the three and six months ended June 30, 2025 compared with the corresponding period in the prior year.

This discussion should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025 and the audited consolidated financial statements for the years ended December 31, 2024 and 2023, together with the accompanying notes. Additional information relating to Vermilion, including its Annual Information Form, is available on SEDAR+ at www.sedarplus.ca or on Vermilion’s website at www.vermilionenergy.com.

The unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025 and comparative information have been prepared in Canadian dollars, except where another currency has been indicated, and in accordance with IAS 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board ("IASB").

The operating results attributable to the Company's Saskatchewan and United States operations have been classified and presented as discontinued operations, with all other operating results presented as continuing operations. The prior period results have been presented to conform with current period presentation. See Note 4 - "Discontinued Operations" of the condensed consolidated interim financial statements for the three and six months ended June 30, 2025 for additional information.

This MD&A includes references to certain financial measures which are not specified, defined, or determined under IFRS® Accounting Standards and are therefore considered non-GAAP and other specified financial measures. These financial measures are unlikely to be comparable to similar financial measures presented by other issuers. For a full description of these non-GAAP and other specified financial measures and a reconciliation of these measures to their most directly comparable GAAP measures, please refer to “Non-GAAP and Other Specified Financial Measures”.

Product Type Disclosure

Under National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities", disclosure of production volumes should include segmentation by product type as defined in the instrument. In this report, references to "crude oil" and "light and medium crude oil" mean "light crude oil and medium crude oil" and references to "natural gas" mean "conventional natural gas".

In addition, in Supplemental Table 4 "Production", Vermilion provides a reconciliation from total production volumes to product type and also a reconciliation of "crude oil and condensate" and "NGLs" to the product types "light crude oil and medium crude oil" and "natural gas liquids".

Production volumes reported are based on quantities as measured at the first point of sale.

Guidance

On December 19, 2024, Vermilion released the 2025 capital budget and associated production guidance. On March 5, 2025, the Company updated the 2025 capital budget and associated production guidance following the close of the acquisition of Westbrick Energy Ltd. ("Westbrick"), with incremental capital expenditures and production from the acquired assets reflected in guidance for the remainder of the year. On June 5, 2025, the Company provided updated guidance reflecting the removal of all remaining E&D capital associated with the Saskatchewan and United States assets following the announcement of the sale of these assets. Current capital and production guidance incorporates the July 2025 close of these sales transactions. The Company’s guidance for 2025 is as follows:

Consolidated Results Overview

Q2 2025 vs. Q2 2024

Q2 2025 YTD vs. Q2 2024 YTD

Q2 2025 vs. Q2 2024

For the three months ended June 30, 2025, capital expenditures were $115.5 million.

Free cash flow

Long-term debt and net debt

Benchmark Commodity Prices

As an internationally diversified producer, we are exposed to a range of commodity prices. In our North America core region, our crude oil is sold at benchmarks linked to WTI (including the Edmonton Sweet index, the Saskatchewan LSB index, and the Canadian C5+ index) and our natural gas is sold at benchmarks linked to the AECO index (in Canada) or the Henry Hub ("HH") index (in the United States). In our International core region, our crude oil is sold with reference to Dated Brent and our natural gas is sold with reference to NBP, TTF, or indices highly correlated to TTF.

North America

During the second quarter of 2025, Vermilion entered into agreements to dispose of the Company's non-core assets in Saskatchewan and the United States. As a result of these agreements, the operating results for these assets held for sale have been presented as discontinued operations throughout this MD&A in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations". Please refer to Note 4 "Discontinued operations" and Note 14 "Subsequent events" of the condensed consolidated interim financial statements for the three and six months ended June 30, 2025 for additional information. As a result, the North America continuing operations consists of our Deep Basin and Mica Montney assets.

Production from Vermilion's North American operations averaged 106,379 boe/d in Q2 2025, an increase of 44% from the previous quarter primarily due to a full quarter of contribution from the acquired Westbrick assets following the close of the transaction in February 2025, as well as new production brought online in the Montney in the quarter.

In Q2 2025, Vermilion completed five (5.0 net) and brought on production eleven (11.0 net) Montney liquids-rich shale gas wells. In the Deep Basin, the Company drilled four (3.4 net), completed three (2.4 net), and brought on production three (2.4 net) liquids-rich conventional natural gas wells. Vermilion did not have an active drilling program in Saskatchewan or the United States as these assets were marketed for sale, and definitive agreements to sell both assets were announced in Q2 2025. In the United States, four (1.4 net) non-operated light and medium crude oil wells were brought on production.

Sales in North America increased for the three and six months ended June 30, 2025 compared to the prior year primarily due to increased production in Alberta from the Westbrick acquisition, and in British Columbia with fifteen Mica Montney wells brought online in 2024 and twelve in the first six months of 2025, partially offset by decreased production in the United States due to lower capital allocation. Sales decreased on a per boe basis for the three months ended June 30, 2025 primarily on decreased North American crude pricing. Sales decreased for the six months ended June 30, 2025 primarily on lower United States sales volumes coupled with decreased North American crude pricing.

Royalties in North America remained fairly flat on a dollar basis for the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to decreased United States crude production and lower realized liquids pricing. The decrease was partially offset by royalties on production from the Westbrick acquisition in Q1 2025 and sliding scale price decreases. Royalties decreased on a per unit basis for the three and six months ended June 30, 2025 primarily due to lower realized crude prices and the higher gas weighting in our production mix following the Westbrick acquisition, subject to lower royalty rates relative to liquids.

Transportation expense in North America increased on a dollar basis for the three and six months ended June 30, 2025 compared to the prior year comparable periods primarily due to transportation costs on acquired Westbrick assets. On a per boe basis, transportation expense decreased for the three months ended June 30, 2025, primarily due to lower per unit costs on acquired production and increased for the six months ended June 30, 2025 primarily due to higher pipeline fees in British Columbia.

Operating expense in North America increased on a dollar basis for the three and six months ended June 30, 2025 compared to the prior year comparable period primarily due to the Westbrick acquisition, partially offset by lower downhole maintenance, lower trucking costs in British Columbia and lower wages and facility maintenance in Saskatchewan. Operating expense decreased on a per boe basis for the three and six months ended June 30, 2025, primarily due to lower per unit operating costs on increased production impacted by the Westbrick acquisition and new wells coming on stream.

International

Production from Vermilion's International operations averaged 29,623 boe/d in Q2 2025, an increase of 1% from the previous quarter due to new production in Germany and Croatia, partially offset by natural declines.

In Germany, Vermilion drilled, completed and brought on production two (2.0 net) light and medium crude oil wells. The Osterheide well (1.0 net) that was brought on production at the end of Q1 2025 produced approximately 1,100 boe/d in Q2 2025, driven by strong local demand. In Croatia, the Company drilled, completed and brought on production one (1.0 net) conventional natural gas well on the SA-10 block, which began producing through the existing facility in May 2025.

As a result of changes in inventory levels, our sales volumes for crude oil in Australia, France, and Germany may differ from our production volumes in those business units. The following table provides the crude oil sales volumes (consisting entirely of "light crude oil and medium crude oil") for those jurisdictions.

Sales decreased on a dollar and per boe basis for the three months ended June 30, 2025 compared to the prior year primarily due to the timing of inventory combined with slightly lower realized oil prices. For the six months ended June 30, 2025, sales decreased on a dollar basis and increased on a per boe basis compared to the prior year primarily due to the timing of inventory and downtime partially offset by higher realized sales prices on our European natural gas.

Royalties in our International core region are primarily incurred in France, Germany, the Netherlands and Croatia, where royalties, depending on jurisdiction, include charges based on a percentage of sales and fixed per boe charges. Our production in Australia and Ireland is not subject to royalties.

Royalties on a per boe basis increased for the three months and six months ended June 30, 2025, primarily due to higher sales volumes in Croatia, which carried higher associated royalty rates. Royalties increased on a dollar basis for the three months ended June 30, 2025 primarily due to higher production volumes in Croatia, partially offset by lower sales volumes in France. For the six months ended June 30, 2025, royalties decreased on a dollar basis primarily due to lower sales volumes in France, partially offset by higher sales volumes in Croatia and Germany.

Transportation expense for the three and six months ended June 30, 2025 remained relatively flat on a dollar basis compared to the prior year. On a per boe basis, transportation expense increased for the six months ended June 30, 2025 compared to the prior year primarily due to higher vessel costs in France.

Our production in Australia, Netherlands and Central and Eastern Europe is not subject to transportation expense.

Operating expenses decreased on a dollar and per unit basis for the three months ended June 30, 2025, primarily due to a prior period gas processing fee recovery in Germany and lower sales volumes in Australia which has higher per unit costs. For the six months ended June 30, 2025, operating expenses decreased primarily due to lower sales volumes in Australia, higher gas gathering in the Netherlands and the timing of sales in France. On a per boe basis, operating expenses remained relatively flat for the six months ended June 30, 2025 compared to the prior year due to lower sales volumes in Australia and France, partially offset by fixed charges in Central and Eastern Europe and Germany.

Consolidated Financial Performance Review