Earning Date, Transcript Summary & Report

Asset Integration Success: Veren successfully integrated its Alberta Montney assets into its corporate portfolio, enhancing operational efficiency.

Excess Cash Flow Generation: The company generated over CAD640 million of excess cash flow in 2024, with nearly one-third realized in Q4.

Shareholder Value Commitment: Veren returned 60% of its excess cash flow to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value.

Debt Reduction Achievement: The company reduced its net debt by 35%, amounting to CAD1.3 billion, improving its financial stability.

Strong Reserve Additions: Veren achieved strong reserve additions across all categories, indicating robust asset quality and growth potential.

Asset Optimization Strategy: The company disposed of noncore assets and entered into a strategic long-term infrastructure partnership, optimizing its asset portfolio.

Investment-Grade Credit Rating: Veren achieved an investment-grade credit rating, allowing for a diversified capital structure and improved cost of capital.

Production Performance Highlights: In 2024, the company generated an annual average production of 191,000 BOE per day, with Q4 production at 189,000 BOE per day, reflecting strong operational performance.

Key Asset Contribution: The Alberta Montney and Duvernay assets accounted for nearly 80% of Q4 production, showing significant contribution from key areas.

Resource Replacement Efficiency: Veren replaced 173% of its 2024 production on a 2P basis, demonstrating effective resource management and growth.

Efficient Capital Allocation: The company achieved a strong recycle ratio of 2.1x based on its 2P F&D costs, indicating efficient capital allocation.

Multi-Well Pad Performance: Initial results from new multi-well pads in Alberta showed an average peak 30-day rate of 1,270 BOE per day per well, 30% above the area type well, highlighting operational success.

Well Performance Improvement: In the Kaybob Duvernay, new multi-well pads generated an average peak 30-day rate of 1,000 BOE per day per well, 25% above the area type well, showcasing strong performance.

Production Guidance Overview: Veren's 2025 production guidance is set at 188,000 to 196,000 BOE per day, with a strong start to the year at 191,000 BOE per day in January, indicating positive momentum.

Projected Excess Cash Flow: The company anticipates generating significant excess cash flow of $625 million to $825 million in 2025 based on favorable pricing assumptions, supporting future growth and shareholder returns.

Second Half Production Growth: Production growth is expected to be weighted to the second half of 2025 due to planned facilities downtime in the early part of the year, which may impact overall performance in the first half.

Capital Expenditures Guidance: The capital expenditures guidance for 2025 is set at $1.48 billion to $1.58 billion, indicating a significant investment that could strain cash flow if not managed properly.

WTI Pricing Dependency Risks: Despite generating excess cash flow, the company is still reliant on WTI pricing forecasts of $70 to $75 per barrel, which introduces uncertainty and risk to financial projections.

Debt Reduction and Risks: The company reported a 35% reduction in net debt, but this still leaves a substantial amount of debt on the balance sheet, which could pose risks in a volatile market.

Regional Risk Exposure: The reliance on Alberta Montney and Kaybob Duvernay assets for production growth may expose the company to regional risks and market fluctuations specific to these areas.