Mr. Dion Hatcher reports

VERMILION ENERGY INC. ANNOUNCES RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2023

Vermilion Energy Inc. has released operating and condensed financial results for the three months ended March 31, 2023.

The unaudited interim financial statements and management discussion and analysis for the three months ended March 31, 2023, will be available on the System for Electronic Document Analysis and Retrieval (SEDAR), on EDGAR and on Vermilion's website.

Highlights:

• Q1 2023 fund flows from operations (FFO) was $253-million ($1.56/basic share) and exploration and development (E&D) capital expenditures were $155-million, resulting in free cash flow (FCF) of $98-million (60 cents/basic share).
• Net earnings were $380-million ($2.34/basic share) for Q1 2023, primarily driven by acquisition and disposition activity in the quarter.
• Vermilion's average realized natural gas price of $10.77 per mcf (thousand cubic feet) was over three times higher than the average AECO benchmark index price for the quarter, as 32 per cent of the company's Q1 2023 gas had direct exposure to European gas pricing. On a go-forward basis, with the Corrib natural gas project acquisition in Ireland now closed, approximately 40 per cent of Vermilion's gas is now priced off of European gas benchmarks.
• Repurchased 1.6 million common shares for $30-million and declared cash dividends of $16-million, for a total of $46-million returned to shareholders in the quarter. In conjunction with its Q1 2023 release, the company announced a quarterly cash dividend of 10 cents per share, payable on July 17, 2023, to shareholders of record on June 30, 2023. The base dividend was increased by 25 per cent in Q1 2023, and has increased 67 per cent from Q1 2022 to the current 10 cents per share per quarter.
• Q1 2023 production averaged 82,455 boe/d (barrels of oil equivalent per day), a decrease of 4 per cent from the previous quarter due to unplanned downtime in Australia, partially offset by new well production from Vermilion's Alberta Deep basin and Montney assets in Canada.
• Q1 2023 Montney drilling program delivered positive results as the company continues to optimize the drilling and completion methods. The most recent two (2.0 net) wells drilled on its British Columbia lands were tied in during the second half of March, 2023, and produced at an average IP30 rate of 1,250 boe/d (51 per cent liquids).
• On March 31, 2023, the company successfully closed the acquisition of an incremental 36.5-per-cent interest in Corrib, increasing Vermilion's operated interest to 56.5 per cent. The acquisition adds approximately 7,000 boe/d of premium-priced, high-netback, low-emission European natural gas production, further strengthening Vermilion's international portfolio. The acquisition makes Vermilion the largest provider of domestic natural gas in Ireland.
• Made significant progress on the company's asset high-grading strategy during Q1 2023 with the closing of the Corrib acquisition and divestment of select non-core assets in southeast Saskatchewan. These asset high-grading initiatives serve to position Vermilion for long-term success by increasing its exposure to premium-priced European gas, redirecting capital to higher-rate-of-return projects, and reducing its operating cost structure and asset retirement obligations.

Message to shareholders

"The first quarter of 2023 was an active quarter for Vermilion, as we executed our winter drilling program in Canada while also closing two strategic transactions to further high-grade our portfolio. We invested $155-million of exploration and development capital during Q1 2023, primarily focused on our winter drilling campaign in Canada, which included drilling and completion activity in Alberta, British Columbia and southeast Saskatchewan. We continue to make significant progress on our Montney development through further optimization of the drilling and completion process. Our most recent two (2.0 net) wells drilled on our British Columbia lands were tied in during the second half of March, 2023, and produced at an average IP30 rate of 1,250 boe/d (51 per cent liquids). In addition, we completed the sale of select southeast Saskatchewan assets during the quarter and closed the acquisition of an incremental 36.5-per-cent ownership in the Corrib natural gas project in Ireland. These two transactions, combined with the Mica Montney acquisition completed in 2022, were all part of our asset high-grading strategy, which serves to position Vermilion for long-term success by increasing our exposure to premium-priced European gas, expanding our North American inventory, redirecting capital to higher rate of return projects, and reducing our operating cost structure and asset retirement obligations.

"Production in the first quarter averaged 82,455 boe/d, which included the impact of Australia maintenance downtime as previously reported. We generated $253-million of fund flows from operations in Q1 2023, resulting in $98-million of free cash flow, which was used to fund our base dividend, share repurchases and acquisitions. Including the dividend and share repurchases, we returned over $46-million of capital to our shareholders. Net debt of $1.37-billion at the end of Q1 2023 represented 0.9 times trailing FFO.

"We will continue to allocate the majority of FCF to debt reduction until we achieve our next net debt target of $1-billion. The majority of the incremental capital return beyond the base dividend will be in the form of share buybacks, as we believe our common shares remain significantly undervalued. To date, we have repurchased 2.2 million common shares in 2023 and 4.6 million in total under our existing NCIB. We plan to renew our NCIB in July, 2023, and based on our current pace of share repurchases and base dividend, we anticipate returning 25 per cent to 30 per cent of FCF to shareholders in 2023, depending on commodity prices. Once we achieve our $1-billion debt target we plan to increase our return of capital to shareholders and will communicate the specific targets at that time.

"Over the past two years we have focused on strengthening the balance sheet and high-grading the asset base to position Vermilion for long-term success. We have made significant progress on both of these fronts, and while we will continue to advance these initiatives, we will now place an even greater focus on operational execution throughout our asset base. In Canada, we will continue to develop and grow our strategic Montney position where we are seeing very encouraging results from recently drilled wells. In the United States, we will continue to develop and grow our Turner oil play in the Powder River basin while also testing new prospects across our Wyoming land base, including the Niobrara and Parkman formations. In Europe, we will continue to advance our deep gas exploration and development plans in Germany and new gas development in Croatia. We have a large land base with significant gas resource potential in both Germany and Croatia and we will continue to work with the respective governments in each country to identify opportunities for Vermilion to assist in developing their domestic supply of natural gas."

Q1 2023 operations review

North America

"Production from our North American operations averaged 60,046 boe/d in Q1 2023, an increase of 3 per cent from the prior quarter, primarily due to new production from our Alberta Deep basin and Montney assets in Canada. In Alberta, we drilled seven (3.1 net), completed 10 (6.3 net) and brought on production nine (7.6 net) Mannville liquids-rich conventional natural gas wells, while at Mica we drilled six (6.0 net), completed five (5.0 net) and brought on production four (4.0 net) Montney liquids-rich shale gas wells. We also completed two small tuck-in acquisitions within our Montney and Alberta Deep basin assets during the quarter.

"We continue to focus on optimizing the drilling and completion process on our Mica Montney assets and are seeing improved results from new wells. Our most recent two (2.0 net) wells drilled on our British Columbia lands were tied in during the second half of March, 2023, and produced at an average IP30 rate of 1,250 boe/d (51 per cent liquids). We are encouraged by these recent results and we continue to work through the permitting process for the planned 16,000 boe/d battery in British Columbia, which will facilitate the next phase of expansion on our Montney asset. We received one additional permit in Q1 2023 and are confident we will receive the remaining permit required to proceed with the construction of the battery in the near future.

"In Saskatchewan, we drilled three (3.0 net), completed three (3.0 net) and brought on production four (4.0 net) light and medium crude oil wells. In the United States, we drilled five (2.1 net), completed two (0.7 net) and brought on production two (0.7 net) light and medium crude oil wells in Wyoming. All of the wells drilled in the United States were two-mile lateral wells, which are significantly more economic than one-mile laterals. During the quarter we participated in two non-operated Parkman wells and one non-operated Niobrara well, the results from which will enhance our understanding of these formations as it relates to future development prospects on our Powder River basin acreage in Wyoming. We have a large land base with approximately 15,000 net acres in the Powder River basin prospective for the Niobrara and the Parkman formations. Our six-well (5.3 net) operated Turner drilling program is currently under way with all wells expected to be completed and onstream by the third quarter."

International

"Production from our international operations averaged 22,408 boe/d n Q1 2023, a decrease of 17 per cent from the prior quarter, primarily due to unplanned downtime in Australia, which was off-line during the first quarter for maintenance. In Europe, production in the Netherlands increased over the prior quarter due to volumes from a new well brought on-line during the quarter, and production in France was fully restored following forest fire-related downtime in the second half of 2022. A nationwide strike in France affected several of the refineries in France in late March and April; however, the strike has not had any material impact on our operations.

"In Germany, we drilled two (2.0 net), completed three (3.0 net) and brought on production three (3.0 net) light and medium crude oil wells during the quarter. We also continued to advance our deep gas exploration and development plans in Germany as we prepare for our first well to be drilled in the fourth quarter of 2023. In the Netherlands, we completed and brought on production one (0.5 net) conventional natural gas well from our Q4 2022 drilling campaign. We also drilled the first (0.5 net) conventional natural gas well of our two (1.0 net) well 2023 program and commenced drilling of the second (0.5 net) conventional natural gas well late in the quarter. The first well did not encounter commercial hydrocarbons; however, initial results from the second well look encouraging, with an approximately 10-metre gas column identified. In Australia, maintenance work on the Wandoo platform progressed as planned through the first quarter. To date, we have performed over 95 per cent of the inspections and completed repairs where necessary to ensure we operate with the highest safety standards. Much of the identified repair work resulting from the inspections is pre-emptive, which we expect to result in higher operational run rates with less unplanned downtime in the future. In early April, a cyclone entered the region which forced us to evacuate the offshore platform and temporarily halt maintenance operations. While there was no physical damage to the platform, the evacuation occurred during final maintenance work and will now require additional time to reorganize and complete the remaining inspections. As a result, we now anticipate production to remain off-line for most of the second quarter."

Outlook and guidance update

"With most of our Canadian assets currently under spring breakup restrictions, our second quarter drilling and completion activity has shifted to the United States. In addition to our Q1 2023 drilling activity, we plan to drill five (4.4 net) wells targeting the Turner sands and participate in six (1.5 net) wells targeting the Parkman sands and Niobrara shale formations over the remainder of 2023. As noted above, our Australia maintenance program has been extended into late Q2 2023 due to severe cyclone activity in the region. Taking into account the acquisition and divestiture transactions that closed in Q1 2023, the delayed start-up of Australia production, and our planned activity in Q2 2023, we expect Q2 2023 production to average 84,000 to 86,000 boe/d. Our 2023 annual production guidance of 82,000 to 86,000 boe/d and capital budget of $570-million remain unchanged."

Commodity hedging

"Vermilion hedges to manage commodity price exposures and increase the stability of our cash flows. In aggregate, as of May 3, 2023, we have 15 per cent of our expected net-of-royalty production hedged for the remainder of 2023. With respect to individual commodity products, we have hedged 49 per cent of our European natural gas production, 0 per cent of our crude oil production and 13 per cent of our North American natural gas volumes for the remainder of 2023, respectively. Please refer to the hedging section of our website under 'invest with us' for further details."

Signed,

Dion Hatcher

President and chief executive officer

May 3, 2023

Management's discussion and analysis and consolidated financial statements

To view Vermilion's management's discussion and analysis and interim condensed consolidated financial statements for the three months ended March 31, 2023, and 2022, please refer to SEDAR or Vermilion's website.

Vermilion will hold its annual general meeting on May 3, 2023, at 3 p.m. MT. Its meeting will be held as a virtual-only shareholder meeting with participation electronically as explained further in the management information circular. As a reminder, proxies must be received by 3 p.m. MT on Monday, May 1, 2023.

Shareholders can participate electronically. Please see Vermilion's virtual meeting guide on the company's website for detailed instructions on how to access the meeting, vote on resolutions and submit questions. Following the formal portion of the meeting, a presentation will be given by Mr. Hatcher, president and chief executive officer of Vermilion. Guests may also view the event on-line by registering as a guest. The live webcast link, webcast slides and archive link will be available on Vermilion's website.

Please visit the annual general meeting page on Vermilion's website under "invest with us" for complete details and links to all relevant documents ahead of the meeting.

About Vermilion Energy Inc.

Vermilion is an international energy producer that seeks to create value through the acquisition, exploration, development and optimization of producing assets in North America, Europe and Australia. Its 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 to the company than the safety of the public and those who work with Vermilion, and the protection of the company's natural surroundings. Vermilion has been recognized by leading ESG (environmental, social, governance) rating agencies for its transparency on and management of key environmental, social and governance issues. In addition, the company emphasizes strategic community investment in each of its operating areas.

We seek Safe Harbor.