Vermilion Energy Inc. revised capital expenditure and production guidance for 2016. For 2016 E&D capital expenditures budget of $285 million is a reduction of $65 million or 19% from its preliminary 2016 expenditure guidance of $350 million (announced in November 2015), and a decrease of $200 million or 41% from its projected 2015 E&D expenditures of approximately $485 million. This marks the second year-over-year decrease in E&D spending in response to lower commodity prices, and a total reduction in annual E&D investment of more than $400 million (59%) as compared to 2014.

The company is reducing E&D investment to preserve value, maintain its strong balance sheet, and support the long-term sustainability of its capital markets model. At current strip prices, the company anticipates that fund flows from operations will fully fund 2016 E&D expenditures and cash dividends. Surplus funds will be applied to debt reduction during 2016.

The company will continue to monitor commodity prices and make further adjustments to its capital program if required. The company's production guidance for 2016 is 62,500 to 63,500 boe/d. This is little changed from the range of 63,000 to 65,000 boe/d that the company originally set in March 2014, before the significant decrease in commodity prices began. Despite the significant decrease in E&D spending, the company expects to deliver year-over-year production growth of approximately 15% in 2016.