Veren Announces Q4 & Full Year 2024 Results

FINANCIAL HIGHLIGHTS

Fourth Quarter 2024

• Adjusted funds flow totaled $619.6 million, or $1.01 per share diluted, driven by a strong operating netback of $36.56 per boe.
• Development capital expenditures, which included drilling and development, facilities and seismic costs, totaled $363.0 million. This included capital spending on facilities projects and improvements to further optimize the Company's completions design in the Alberta Montney.
• The Company generated excess cash flow of $203.8 million, or $0.33 per share diluted.
• Veren closed its previously announced strategic sale of certain infrastructure assets in the Alberta Montney and directed net cash proceeds of $400 million to further strengthen the balance sheet. As at December 31, 2024, Veren's net debt was $2.48 billion, or 1.0 times annualized adjusted funds flow, reflecting a reduction of $481.5 million in the quarter.
• The Company reported adjusted net earnings from operations of $247.0 million, or $0.40 per share diluted.

Full Year 2024

• Adjusted funds flow totaled $2.35 billion, or $3.79 per share diluted, driven by a strong operating netback of $36.83 per boe.
• Development capital expenditures, which included drilling and development, facilities and seismic costs, totaled $1.51 billion, in-line with the Company's annual guidance range.
• The Company generated excess cash flow of $641.6 million, or $1.04 per share diluted.
• Veren reduced its net debt by $1.26 billion, or approximately 35 percent in 2024, through a combination of excess cash flow and proceeds received from the strategic disposition of non-core assets.
• The Company reported adjusted net earnings from operations of $848.8 million, or $1.37 per share diluted.

RETURN OF CAPITAL HIGHLIGHTS

Fourth Quarter 2024

• Veren returned $105.7 million to shareholders during the quarter. The Company paid a base dividend of $0.115 per share, or $70.7 million, and repurchased 4.6 million shares for $35.0 million through its normal course issuer bid during the quarter.
• Subsequent to the quarter, Veren's Board of Directors declared a quarterly cash base dividend of $0.115 per share payable on April 1, 2025, to shareholders of record on March 15, 2025.

Full Year 2024

• Veren returned $385.7 million to shareholders, or 60 percent of excess cash flow, in 2024. This included the Company repurchasing a total of 10.4 million shares for $101.1 million during the year.
• Veren remains committed to returning 60 percent of its annual excess cash flow to shareholders through a combination of dividends and share repurchases.

OPERATIONAL HIGHLIGHTS

Fourth Quarter 2024

• Veren achieved fourth quarter average production of 188,721 boe/d, comprised of 64 percent oil and liquids, including strong December production of 190,296 boe/d. The Company's Alberta Montney and Kaybob Duvernay assets contributed 77 percent of total production in the fourth quarter, with production from these key assets growing by 10 percent as compared to the first quarter of 2024.
• Veren brought two multi-well pads on stream in late fourth quarter in the Karr South area of its Alberta Montney asset which were completed using the single-point entry ("SPE") design. These pads generated an average 30-day initial production ("IP30") rate which exceeded the average type wells in the area by 30 percent, while producing at a strong light oil rate of 80 percent.
• During the fourth quarter, Veren initiated the capacity expansion of its Gold Creek West facility in the Alberta Montney to accommodate an expected increase in production from future pads. The Company also invested in significant gas egress infrastructure in the area and has successfully connected to multiple third-party gas plants to minimize future downtime. Building on Veren's strong results from wells brought on stream in Gold Creek West in early 2024, the Company expects to bring a multi-well pad on stream in the area in late first quarter 2025.
• In the Kaybob Duvernay, the Company brought two multi-well pads on stream in the fourth quarter. These pads generated an average IP30 rate which exceeded the average type wells in the area by 25 percent, while producing at a strong condensate rate of 70 percent.
• Veren achieved responsibly sourced gas (RSG) certification under Equitable Origin's EO100™ Standard for Responsible Development for its Alberta Montney asset's natural gas production. The Company obtained this rigorous certification following an independent assessment of Veren's performance targets within five areas: corporate governance, transparency and ethics; human rights, social impacts and community development; Indigenous Peoples' rights; fair labour and working conditions; and climate change, biodiversity and environmental.

Full Year 2024

• The Company achieved annual average production of 191,163 boe/d in 2024, comprised of 65 percent oil and liquids, in-line with production guidance of 191,000 boe/d.
• Veren continued to focus on optimizing infrastructure in its Alberta Montney asset, which is expected to drive future operating cost savings, reduce downtime and enhance production capacity. The Company entered into a strategic partnership with Pembina Gas Infrastructure in 2024 which resulted in Veren operating all oil battery sites within its land position, while also acquiring priority access for all products and firm processing for 100 percent of capacity at the Patterson Creek Gas Plant. In addition, Veren invested in infield optimization projects throughout the play to increase operational flexibility and accommodate future growth in 2025 and throughout the five-year plan.
• During the year, the Company brought 57 wells on stream across 11 multi-well pads in the Alberta Montney. Veren plans to continue optimizing its completions by testing the SPE design in Karr and utilize SPE design in the Gold Creek area moving forward, as previously announced.
• Veren continued to deliver consistent results within its Kaybob Duvernay asset throughout 2024, demonstrating the strength of its operational execution. The Company brought 37 wells on stream across eight multi-well pads in the Volatile Oil window. Veren's 2024 development program included several successful delineation wells on the eastern and western portion of the Company's land position, derisking drilling inventory in these areas. Veren's 2025 development program includes additional delineation drilling in the Liquids-Rich and Lean Gas windows of the play.
• The Company also continued to advance its decline mitigation initiatives in 2024, including successfully converting 35 producing wells to water injection wells. These initiatives support Veren's low base decline rate of approximately 15 percent in its Saskatchewan assets, further enhancing its strong excess cash flow generation from the area. In 2025, the Company will continue to build on its operational momentum in the play by advancing its decline mitigation and open hole multi-lateral development programs.

RESERVE HIGHLIGHTS

• As previously announced, Veren's Proved plus Probable ("2P") reserves totaled 1,133.3 million boe ("MMboe"), Proved ("1P") reserves totaled 739.1 MMboe and Proved Developed Producing ("PDP") reserves totaled 333.1 MMboe at year-end 2024. The Company's reserves were comprised of over 60 percent oil and liquids across all categories.
• The Company's 2P reserve life index ("RLI") is approximately 16 years based on mid-point of 2025 annual average production guidance.
• The Company achieved reserve additions of 121.4 MMboe on a 2P basis, excluding acquisitions and dispositions ("A&D"), replacing 173 percent of its 2024 annual production. On a 1P and PDP basis, the Company replaced 161 percent and 114 percent of its 2024 annual production, excluding A&D, respectively.
• Veren's Alberta Montney asset contributed the majority of its 2P reserve additions, with the remaining additions coming from its Kaybob Duvernay asset. As at year-end 2024, over 65 percent of the Company's total premium drilling locations in the Alberta Montney and Kaybob Duvernay were unbooked, allowing for future reserves growth.
• Veren generated 2P finding and development ("F&D") costs, including change in future development capital ("FDC"), of $17.65 per boe, producing a recycle ratio of 2.1 times based on an operating netback of $36.83 per boe in 2024.
• Veren's 2P FDC decreased by approximately $480 million to $9.19 billion, primarily driven by non-core asset dispositions completed in 2024.

OUTLOOK

Veren has had a strong start to 2025, generating 191,000 boe/d of production in January. The Company remains on track to meet its previously released full year annual average production guidance of 188,000 to 196,000 boe/d (65% oil and liquids), based on its development capital expenditures budget of $1.48 billion to $1.58 billion. Veren's capital program is weighted to the first half of 2025, while its production is weighted to the second half of the year due to the timing of its development program and planned facilities downtime in early 2025. The Company will remain disciplined in the execution of its capital program, with the flexibility to adjust spending in response to market conditions in order to maximize long-term shareholder value.

Approximately 85 percent of the Company's 2025 budget is allocated to its short-cycle Alberta Montney and Kaybob Duvernay assets, which provide top quartile returns, scalability and quick well payouts. Veren's remaining capital is allocated to its long-cycle, low-decline Saskatchewan assets, which generate significant excess cash flow.

The Company continues to hedge a portion of its production as part of its ongoing commodity marketing and diversification program. Veren has hedged 35 percent of its oil and liquids production and 35 percent of its natural gas production for 2025, net of royalty interest. The Company has also diversified its natural gas pricing exposure, resulting in the majority of its production through 2026 receiving a combination of fixed prices and pricing related to major U.S. markets.

Veren expects to generate excess cash flow of $625 million to $825 million (US$70/bbl to US$75/bbl WTI and $2.25/Mcf AECO) in 2025, which is weighted to the second half of the year based on the timing of its development program and expected production growth. The Company will continue to target the return of 60 percent of its annual excess cash flow to shareholders through the base dividend and share repurchases, with the remaining 40 percent directed toward the balance sheet. Veren plans to increase the percentage of excess cash flow returned over time as the balance sheet strengthens further.

CONFERENCE CALL DETAILS

Veren's management will host a conference call on Thursday, February 27, 2025 at 10:00 a.m. MT (12:00 p.m. ET) to discuss the Company's results and outlook. A slide deck will accompany the conference call and can be found on Veren's website.

Participants can listen to this event online via webcast. To join the call without operator assistance, participants may register online by entering their phone number to receive an instant automated call back. Alternatively, the conference call can be accessed with operator assistance by dialing 1–888–510–2154.

The webcast will be archived for replay and can be accessed online. The replay will be available shortly after the call's completion.

The Company's most recent investor presentation is available on Veren's website.

2025 GUIDANCE

The Company's guidance for 2025 is as follows:

RETURN OF CAPITAL OUTLOOK

The Company's audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2024, will be available on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at www.sedarplus.ca, on EDGAR at www.sec.gov and on Veren's website at www.vrn.com.

Summary of Reserves 

The Company's reserves were independently evaluated by McDaniel & Associates Consultants Ltd. ("McDaniel") effective as at December 31, 2024. The reserves evaluation and reporting was conducted in accordance with the definitions, standards and procedures contained in the COGEH and National Instrument 51-101 Standards for Disclosure of Oil and Gas Activities ("NI 51-101").

As at December 31, 2024 ^{(1) (2) (3) (4)}

Summary of Before Tax Net Present Values

As at December 31, 2024 ⁽¹⁾ 

RESERVES RECONCILIATION

Gross Reserves ^{(1) (2) (3) (4)}

Finding, Development and Acquisition Costs for 2024

Future Development Capital 

At year-end 2024, FDC for 2P reserves totaled $9.19 billion, compared to $9.67 billion at year-end 2023. The Company's FDC decreased by approximately $480 million, primarily driven by non-core asset dispositions.

CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS

FINANCIAL AND OPERATING HIGHLIGHTS FROM CONTINUING OPERATIONS

Specified Financial Measures

Throughout this press release, the Company uses the terms "total operating netback", "total operating netback from continuing operations", "total netback", "total netback from continuing operations", "operating netback", "netback", "adjusted funds flow from operations" (or "adjusted FFO"), "adjusted funds flow from operations per share - diluted", "adjusted funds flow from continuing operations", "adjusted funds flow from continuing operations per share - diluted" "adjusted funds flow from discontinued operations", "adjusted funds flow from operations netback", "adjusted funds flow from continuing operations netback", "excess cash flow", "excess cash flow per share - diluted", "base dividends", "base dividends per share - diluted", "total return of capital", "adjusted working capital surplus (deficiency)", "net debt", "net debt to adjusted funds flow from operations", "net debt to annualized adjusted funds flow", "adjusted net earnings from operations", "adjusted net earnings from operations per share - diluted", "adjusted net earnings from continuing operations", "adjusted net earnings from continuing operations per share – diluted", "adjusted net earnings from discontinued operations", "development capital expenditures", "development capital expenditures from continuing operations", "development capital expenditures from discontinued operations", "recycle ratio", "total capital acquisitions" and "total capital dispositions". These terms do not have any standardized meaning as prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other issuers. For information on the composition of these measures and how the Company uses these measures, refer to the Specified Financial Measures section of the Company's MD&A for the year ended December 31, 2024, which section is incorporated herein by reference, and available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov/edgar.

Adjusted funds flow from operations netback is a non-GAAP financial ratio and is calculated as adjusted funds flow from operations divided by total production. Adjusted funds flow from operations netback is a common metric used in the oil and gas industry and is used to measure operating results on a per boe basis.

The following table reconciles oil and gas sales to total operating netback from continuing operations, total netback from continuing operations and total adjusted funds flow from continuing operations netback.