Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vermilion Energy Q2 Conference Call. All lines that in place don't mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Dion Hatcher, you may begin your conference.

Well, thank you, Julie. Well, good morning, ladies and gentlemen. Thank you for joining us. I'm Don Hatcher, President and CEO of Vermilion Energy. With me today are Lars Glemser, Vice President and CFO; Darcy Kerwin, Vice President, International and HSE; Bryce Kremnica, Vice President of North America; Jenson Tan, Vice President, Business Development; and Kyle Preston, Vice President of Investor Relations. We'll be referencing a PowerPoint presentation to discuss our Q2 2023 results. Presentation can be found on our website under Invest with Us and Events & Presentations. Please refer to our advisory and forward-looking statements at the end of the presentation. It describes forward-looking information, non-GAAP measures and oil and gas terms used today, and it relies to risk factors and assumptions relevant to this discussion. Production during the second quarter averaged 83,152 BOEs per day, which was at the top end of our Q2 guidance range of 80,000 to 83,000. We revised our Q2 production guidance in mid-May to reflect the temporary shut-in of approximately 30,000 BOEs a day in West Central Alberta due to forest fires, defined impact of Q2 volumes from the wildfires and -- the Australia downtime was approximately 8,000 BOEs per day. Our team was quick to respond to the fire situation in Alberta and was able to safely restore all of the production within weeks of the initial shut-in, which minimized the impact of the fire. In addition, we achieved strong operational performance across many of our other assets. We generated $247 million of fund flows and invested $167 million of E&D capital, resulting in $80 million of free cash flow of which we returned $40 million to shareholders via the base dividend and share buybacks, representing a return of capital payout of approximately 50%. During the first half of 2023, we…

Thank you, Dion. As a result of the increased scope of repair work on the Wandoo platform in Australia as well as the planned turnaround at the core facility in Ireland, we expect Q3 volumes to be consistent with Q2 guidance of 80,000 to 83,000 BOE a day. As we complete the Australia integrity work and core turnaround, we will be positioned to deliver Q4 production in the range of 86,000 to 89,000 BOE a day. As a result of strong operational execution and performance across our portfolio, we are maintaining our 2023 annual production guidance of 82,000 to 86,000 BOE a day as we have been able to offset much of the impact from the Alberta wildfires and extended Australia downtime. The rest of our annual financial guidance remains unchanged from our last revision. Our disciplined approach towards debt reduction, combined with our asset high-grading initiatives over the past three years has made Vermilion a more resilient business today. By the end of this year, we will have nearly cut our debt in-house while also funding over CAD 1 billion of strategic acquisitions and have significantly increased our average annual FFO from pre-COVID levels. While strong commodity prices have contributed to this improvement, we believe the company is much better positioned. Our top decile netbacks, low-base decline, diversified commodity exposure and capital-efficient asset base combined with our modest base dividend payout, translates to a very resilient business that could be managed through low commodity cycles and is well positioned for increased return of capital to shareholders as debt is reduced. As we look out to 2024, we are currently forecasting a significant increase in FFO to over CAD 1.4 billion, assuming a flat production profile. With this, we expect to achieve our next net debt target of CAD 1…

Thanks, Lars. To further expand Lars’s comments on free cash flow generating capacity. I would like to highlight the following chart, which shows our free cash flow allocation over the past few years. The blue bar shows the total amount of free cash flow generated by the stack parcels, how this free cash flow was allocated in each of the years. As you can see, the majority of our free cash flow, a total of $1.6 billion between 2021 and 2023 was allocated to debt reduction and acquisitions -- is aligned with our strategy of ensuring a strong balance sheet and robust asset base. Going in 2024, most of that heavy lifting on debt reduction will be behind us, which means we have more free cash flow to allocate the shareholder returns in the years ahead. As you look into 2024, we are positioned to generate significantly higher free cash flow. As I mentioned earlier, we intend to increase the amount of return to our shareholders once we achieve our $1 billion debt target expected during the first half of 2024. Well, that concludes my prepared remarks. And with that, we would like to open it up for questions.

Thank you. [Operator Instructions] Your first question comes from Amir Arif from ATB Capital. Please go ahead.

Thanks. Good morning, guys. Just a few quick questions. First of all, just on the Montney side. I think you're planning 10 wells next year. Were you planning on drilling those currently with the construction in the first half. So should we expect Montney production to start being meaningful in the second half in terms of growth, or is it -- all the drilling be happening once you've got better clarity on start-up of the facility. A – Dion Hatcher: Maybe I can take that high-level question here. It's Dion. Thanks for the question. As noted on the call, the construction of the battery itself will -- some of that site prep work will initiate second half of this year, but the bulk will be in the first half of 2024. So from a planning point of view, we would initiate that drilling. But realistically, I think the time line for that production coming on would be closer to midyear. So that's our assumption, our plans right now.

Okay. And then so Dion, would you drill all 10 wells in the first half, or the 10 is spread throughout the year for next year? A – Dion Hatcher: These well, there's basically two -- mainly two pads, and so this would be back-to-back drilling. As you can imagine, there's some cost synergies and efficiencies. So yes, we would look to drill those pads back to back and line up midyear.

Got it. Appreciate that. And then just a quick question on the German -- Germany. I know you continue to drill that deep exploration gas well over there. Can you just give us an update on when you expect to hit TD? And when do you expect to have some results on that?

Sure. I'm going to ask -- pass it over to Darcy Kerwin, our Vice President of International. Darcy, do you want to take that one?

Yes. Thanks, Amir. I think as you know, we've been excited about the deep gas exploration potential in Germany. We have successfully drilled deep gas wells there before, we drilled Burgmoor [ph] in 2019, that well is still producing nicely for us. And so we're kind of after some pause during the COVID downturn, put renewed focus on that exploration program, both on the GSI side and on the permitting side. So we have a number of interesting prospects to look out there in Germany, and we'll kick off kind of the first of that set of prospects starting here in Q4 2023 with the first exploration well that we plan to drill.

So I guess from a TD point of view, Darcy, we're really looking at early next year with the time we take to spud the well and get those well results.

Yes, we'll spud the well in Q4, and then that well will drill through the end of the year and TD early in 2024.

Okay. I appreciate that. And just a final question on the windfall taxes, the TTF gas price was down sequentially quarter-over-quarter, yet windfall taxes were up. Can you just help me understand, why would it move with the TTF prices? Is there just a lag in terms of the payments?

Yes. Let me pass over to Lars to address that question.

Yes. Thanks, Amir. The big reason for the increase in windfall taxes from Q1 to Q2 of this year is the fact that we closed the Corrib acquisition on March 31 of this year. And so, in Q2, we started to recognize the production and FFO or free cash flow impact of the incremental 36.5%. So that would explain the bulk of the increase Q1 to Q2.

Appreciate that. Thanks

[Operator Instructions] There are no further questions at this time. Please proceed with your closing remarks.

With that, thank you again for participating in our Q2 conference call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect.