11:20 AM EST, 12/19/2024 (MT Newswires) -- (Adds analyst comment and updates shares.)

Vermilion Energy ( VET ) on Thursday said it is boosting its dividend by 8% to $0.13 per share, effective in the first quarter of 2025, and released 2025 guidance.

The dividend is payable April 15. The base dividend will amount to approximately $80 million on an annual basis, representing approximately 8% of 2025 funds from operations.

The hike comes as Vermilion outlined a 2025 capital-spending budget of $600 million to $625 million and production guidance of 84,000 to 88,000 barrels of oil equivalent per day.

Vermilion estimated its 2025 fund flows from operations and free cash flow at $1.0 billion and $400 million, respectively, based on forward commodity prices.

In Germany, the company said it successfully tested its second deep gas exploration well, which was drilled during the third quarter of 2024.

The well flow tested at a restricted rate of 21-million cubic feet per day of natural gas and the company expects volumes would have been higher without testing equipment limitations.

Vermilion said it plans to conduct further testing operations over the coming weeks and will proceed with tie-in operations in order to bring the well online in the first half of 2026.

National Bank of Canada maintained its outperform rating and $17.50 price target at following the news.

Vermilion shares were last seen up $0.50 to $12.99 on the Toronto Stock Exchange.

Price: 13.00, Change: +0.51, Percent Change: +4.08