Vermilion Energy Inc. (VET) Q1 2025 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Vermilion Energy's Virtual 2025 Annual General Meeting. Following the formal portion of the meeting, a presentation will be given by Dion Hatcher, Vermilion's President and Chief Executive Officer. As a reminder, this event is being broadcast live on the Internet and is being recorded. The archived event will be posted on Vermilion's website under the heading Invest with Us and subheading Events & Presentations. [Operator Instructions]. I would now like to turn the conference call over to Myron Stadnyk, Vermilion's Chair of the Board. Please go ahead, Mr. Stadnyk.

Thank you. Good afternoon, and welcome to the 2025 Annual General Meeting of the Shareholders of Vermilion Energy. My name is Myron Stadnyk, and as Chair of the Board of Directors of Vermilion, it is my responsibility and privilege to act as the Chair of this meeting. I welcome our registered shareholders, proxyholders, and all guests that are joining this meeting through our virtual meeting platform. We are excited to have your participation in the meeting, and thank you for your interest in the affairs of Vermilion. As per our custom, Vermilion acknowledges the traditional lands on which we work and live. We respect the histories, languages, and cultures of the indigenous people where we operate and their continuing connection to the land, waters and community, and we pay our respects to elders, past and present. I would now like to introduce the other Independent Directors of Vermilion here with us today: James Kleckner, Jr.; Carin Knickel; Stephen Larke; William Roby; Manjit Sharma; and Judy Steele. I would also like to introduce Dion Hatcher, our President and CEO and Director; and Lars Glemser, our Vice President and CFO. In addition, present on this call are members of our executive team. In terms of our agenda today, I will deal first with the formal business of the meeting as described in the circular. Immediately following the formal business, Dion Hatcher will provide you with an overview of our business and strategy. A question period will then follow. As this meeting is being held virtually via live webcast, I will now ask Tamar Epstein, our General Counsel and Corporate Secretary, to go over the procedures for the orderly conduct of this meeting.

Thank you, Mr. Chair. I will now review the procedures. Only registered shareholders and proxyholders who have properly logged in with their control numbers or username will be able to vote on the motions being brought forth or ask questions. Questions in respect of a motion can be submitted by any registered shareholder or proxyholders using the instant messaging service of the virtual interface. Questions will be forwarded to the Chair shortly after they are submitted but will only be addressed if they relate to procedural matters or to the motions before the meeting. Questions which do not relate to procedural matters or to the motions before the meeting will be addressed during the question period at the end of the meeting. Questions which were already answered or that are redundant or repetitive will not be addressed, and all matters will be conducted by electronic ballot. The polls have been opened by our scrutineers, and registered shareholders and proxyholders who have not already voted or who wish to change their votes may do so on each business item until the polls are closed following the presentation of the formal business. If we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as possible.

Thank you, Tamar. The meeting will now come to order. I will ask Tamar Epstein to act as Secretary and the representatives of Odyssey Trust Company to act as Scrutineers. To ensure that this meeting covers all the business for which it was convened within a reasonable amount of time, we have arranged for certain Vermilion representatives who are also shareholders to move and second certain motions. As mentioned, the polls are now open. And at this time, all registered shareholders and proxyholders who have logged in with their control numbers or username and wish to vote will be able to see on the screen all motions being brought forth. Please register your votes by selecting the for or the withhold, against button next to each item to be voted on. If a registered shareholder or proxyholder has already voted on all matters, there is no need to vote again unless you wish to change your vote on a matter. To my knowledge, the decision of the meeting will be in favor of each resolution to be considered. The scrutineer will compile a report regarding the voting results once all votes have been conducted and the polls have closed. I have received confirmation from Odyssey Trust Company that all materials in respect of the meeting were delivered to shareholders in compliance with the applicable securities requirements. I direct that the affidavit, together with copies of the documents delivered to the shareholders, be filed with the minutes. I have been advised by the scrutineers that there is a quorum present at this meeting. Accordingly, I declare that this meeting is regularly called and properly constituted for the transaction of business. I direct that the scrutineers' report be filed with the minutes. The first item of business is to table the consolidated audited financial statements of Vermilion for the year ended December 31, 2024, and the report of the auditors thereon. A copy of these materials has been mailed to each registered shareholder who elected to receive it as such. Any questions relating to the financial statements can be raised later during the question period. The next item of business is to fix the number of directors of the company to be elected at 8. May I have a motion?

Mr. Chair, my name is Kyle Preston, and I am a representative of Vermilion and a shareholder. I move that the number of Directors of the company to be elected to be fixed at 8.

Mr. Chair, my name is Averyl Schraven, and I'm a representative of Vermilion and a shareholder. I second the motion.

Thank you, Kyle and Averyl. Any discussion? As there is no further discussion, I will ask registered shareholders and proxyholders who have not already done so to cast their votes through the online portal. The next item of business is the election of the company's directors. As noted in the circular, the Board has adopted an advance notice bylaw, which provides a procedure to be followed for the nomination of directors at shareholder meetings. There were no other nominations received within the requirements of the advance notice bylaw. Therefore, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in the circular as directed by the Board. I will ask Ms. Schraven, our VP of People and Culture and a shareholder, to read the nominees.

Thank you, Mr. Chair. The following people are hereby nominated to act as Directors of Vermilion: Myron M. Stadnyk; Dion Hatcher; James J. Kleckner, Jr.; Carin S. Knickel, Stephen P. Larke; William B. Roby; Manjit K. Sharma; and Judy A. Steele.

May I have a motion to elect Vermilion's Director nominees as Directors of the company?

Mr. Chair, I move that Vermilion's Director nominees be elected directors of the company until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

Mr. Chair, I second the motion.

Thank you. Any discussion? As there is no further discussion, I will ask registered shareholders and proxyholders who have not already done so to cast their votes through the online portal. In accordance with the company's majority voting policy, we will conduct the election on an individual basis for each director. The next item of business is the appointment of the company's auditors. May I have a motion?

Mr. Chair, I move that Deloitte LLP be appointed auditors of the company until the next Annual Meeting of Shareholders or until their successors are appointed and that the Directors of the company be authorized to fix their remuneration as such.

Mr. Chair, I second the motion.

Thank you. Any discussion? As there is no further discussion, I will ask registered shareholders and proxyholders who have not already done so to cast their votes through the online portal. The next item of business is the approval on an advisory non-binding basis of the company's approach to executive compensation. May I please have a motion?

Mr. Chair, I move that the related resolution as set out in the circular be approved.

Mr. Chair, I second the motion.

Thank you. Any discussion? As there is no further discussion, I will ask registered shareholders and proxyholders who have not already done so to cast their votes through the online portal. The final item of business is the approval of the unallocated entitlements under the company's Omnibus Incentive Plan. May I have a motion for this item?

Mr. Chair, I move that the related resolution as set out in the circular be approved.

Mr. Chair, I second the motion.

Thank you. Any discussion? As there is no further discussion, I will ask registered shareholders and proxyholders who have not already done so to cast their votes through the online portal. We will provide registered shareholders and proxyholders a few more moments to complete the electronic ballots before we close the polls. Once the electronic balloting closes, the voting page will disappear, and your votes will automatically be submitted. Odyssey, please close the polls. I would ask that the scrutineer now compile the report regarding the voting results. I've been advised by the scrutineers that greater than a majority of the votes cast at this meeting have been voted in favor of the resolutions. Accordingly, I declare all motions carried. I direct that the results of the poll be included with the minutes, and the results of the voting will be announced in a press release in accordance with the policies of the TSX and filed on SEDAR. As there is no further business to come before the meeting, I declare the formal part of this meeting concluded. Before turning it over to Dion Hatcher, our President and Chief Executive Officer, I'd like to extend my thanks to our management team and employees around the world for their dedication to Vermilion. Dion Hatcher will now provide an update on our business and strategy.

Thank you, Myron. Good afternoon, ladies and gentlemen. We will now move to the informal part of our AGM, where I'll provide an update on our Q1 2025 results announced this afternoon and our outlook for the remainder of 2025 and beyond. As a reminder, this 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 the forward-looking information, non-GAAP measures and oil and gas terms used today and outlines risk factors and assumptions relevant to this discussion. Production for the first quarter increased 23% to just over 103,000 BOEs per day, reflecting the close of the Westbrick acquisition in late February and approximately one month of production contribution from acquired assets. Westbrick adds approximately 50,000 BOEs per day to our Deep Basin asset in Alberta, and future quarters will reflect the full contribution. Integration of the Westbrick acquisition is progressing ahead of plan. And post close, we have identified an additional $100 million of operational and development synergies. We generated $256 million of fund flows in Q1 and $74 million of free cash flow after investing $182 million of E&D capital. We returned $37 million to our shareholders in Q1, comprised of $20 million in dividends and $17 million in share buybacks. Our fixed quarterly dividend of $0.13 per share, which has been increased 4x, since 2022, is resilient and remains well covered, representing less than 8% of our forecasted fund flow. With the close of the Westbrick acquisition in late February, which was predominantly funded on the balance sheet, we ended the quarter with just over $2 billion of net debt or 1.7x trailing fund flows, including Westbrick. We have ample liquidity and tenure on the balance sheet, and we have a plan to reduce debt both organically and through potential asset sales. In Q1, we launched a formal divestment process for our Saskatchewan and Wyoming assets. We have received very strong interest in these assets and are currently evaluating next steps. The first quarter was a very active quarter with several key milestones achieved. In addition to closing the Westbrick acquisition, we advanced infrastructure projects and reduced our DCET cost per well in the Mica Montney. We brought on production our first deep gas exploration well in Germany as well as proved out a large resource base with significant follow-up drilling opportunities. Our international assets contributed 28% of our Q1 production and 60% of our fund flows, while the majority of the capital was allocated to our global gas portfolio. One of the major advantages of Vermilion's globally diversified asset base is our ability to harvest strong free cash flow from the mature international assets and reallocate a portion to the earlier stage growth assets, which will contribute to strong free cash flow in future years. The integration of the Westbrick acquisition is progressing ahead of plan, and we continue to identify synergies that will further strengthen the long-term value of our larger, more concentrated position in the Deep Basin. Vermilion now has over 1.1 million net acres of land in the Deep Basin with current production over 75,000 BOEs per day, making Vermilion one of the largest producers in this prolific region. We are very pleased with the activities on the acquired Westbrick assets. And to date, we have identified multiple operational and development synergies, including longer laterals on planned wells, improved natural gas marketing opportunities and infrastructure optimization. The company estimates the NPV10 of these synergies to be approximately $100 million and anticipates additional synergies may be realized as the acquired assets are further integrated. We made significant progress on our Montney development during the quarter with the completion and tie-in of the new 8-4 pad and the completion of the Phase 2 infrastructure expansion, which added compression and sales line capacity. The expansion was both ahead of schedule and under budget. Our long-term development plan includes one more expansion phase to reach our targeted capacity of 28,000 BOEs per day of production by 2028, which will then translate to annual free cash flow of approximately $150 million at $3 AECO. This will then be supported by over 15 years of stay flat drilling inventory once we reach that targeted rate. We've achieved a new DCET cost milestone of $9 million per well on the 8-4 pad. This cost is at the lower end of our previously stated targeted cost range and compares to the prior pads at $9.6 million per well. The team has done a tremendous job improving the drilling and completion efficiencies through batch drilling, reduced water handling, completion and flowback optimization and standardizing equipment designs. We believe these DCET costs are repeatable and could potentially go lower as further efficiencies are realized. A $600,000 savings per well is material when applied to hundreds of drilling locations. Considering the full future development of our Montney asset, this cost saving would amount to approximately $100 million reduction in our future development costs or an NPV10 of approximately $50 million. In Germany, we are in the early stages of the exploration program on our significant land base. We have approximately 700,000 net undeveloped acres with a large portion of this land covered by 3D seismic. The zones of interest are very similar to the Netherlands where we have successfully drilled wells for two decades. To date, our technical team has progressed nine discrete targets, of which we have drilled three with positive results. With success, we see up to 30 locations between exploration and follow-up development, which represents a decade of drilling two to three wells per year. As an exploration program, we expect the success rate to be similar to the 70% that we achieved in the Netherlands. Results to date continue to validate our subsurface models and execution plans. Our team will continue to progress promising prospects across our land base, which we expect will provide strong organic growth in our Germany gas portfolio. The type curve information provided shows the size of the prize for these prospects that we are targeting. These wells are deep and high-pressure and therefore more expensive than a typical well in North America, but with a net present value of $60 million and an F&D of approximately CAD 1.50 per Mcf for premium-priced European gas, these are some of the most impactful wells in our portfolio. As we reported in early March, we successfully tested the Wisselshorst deep gas exploration well. That is a 64% working interest well. It was at a restricted combined test rate of 41 million per day from both zones. Team is advancing debottlenecking options to optimize production due to this very high deliverability. We also completed facility and tie-in operations on the Osterheide well, which is 100% working interest well during Q1, and brought that well in production at the end of the quarter. Since start-up in April, the well has produced at a restricted rate of approximately 7 million per day of gas or 1,200 BOEs per day, which is above the original constrained expectations due to the ongoing debottlenecking activities. We completed drilling operations on the third deep gas exploration well, Weissenmoor South, during the first quarter and encountered over 15 meters of net, gas-charged, porous sand in the Rotliegend formation, tested the well in March but did not achieve expected flow rates. This well has been suspended for the time being while we evaluate options to improve its deliverability. We are very pleased with the overall results of our 2024 deep gas exploration program, which exceeded our expectations. From the initial nine structures the team has identified to date, we have drilled three wells and proven up 85 Bcf or 60 Bcf net of reserves from these first two wells. As mentioned earlier, we recently brought the Osterheide well on production at the end of Q1, and using our current operating netbacks, that well is generating approximately $2 million per month of fund flow. We expect production to moderate through the summer months due to the seasonal demand in the area before increasing later in the year with winter demand. The Wisselshorst well is expected to come on production in the first half of 2026 at a restricted rate of approximately 800 BOEs per day and then increase to 3,000 BOEs per day by 2027 and 6,000 BOEs per day gross by 2028 as we debottleneck the throughput capacity. At these restricted rates, the 1.6 net wells are expected to produce approximately 27 million cubic feet per day of gas or 4,500 BOEs a day net to Vermilion and generate annual fund flows of approximately $90 million at current Euro gas prices. After-tax net present value of the exploration program, including the cost of all three wells and debottlenecking, is approximately $150 million or $1 per share. As noted in the Q4 release, the Wisselshorst well is our largest discovery in over a decade. More importantly, the discovery well sits in the middle of a structure with the potential to drill up to 6 more wells. Our midpoint estimate for this structure is 380 Bcf gross of gas in place. That equates to approximately 240 Bcf of gas in place net to Vermilion. In addition to the follow-up Wisselshorst wells, the team continues to mature our future drilling plans on multiple prospects that have been identified. As a result, we see the potential to double our 2P European gas reserves with a deep gas exploration program. It is early days in the development of this long-life, high-margin asset that is expected to add meaningful free cash flow in the years ahead. Our 2025 budget and guidance remains unchanged although we are closely monitoring the outlook. Our capital program will continue to be focused on our global gas assets with continued investment in the Montney, Deep Basin and the Germany gas program. We are focused on adding net asset value per share, as noted with the recent results in Germany, our reduced Mica per well costs and the Westbrick synergies, which combined represents approximately $300 million of PV10. That equates to $2 a share of incremental value. We will continue to prioritize debt reduction with 60% of our excess free cash flow allocated to debt reduction and 40% returned to shareholders in the form of dividends and share buybacks. With the Westbrick assets, we are currently producing around 135,000 BOEs per day and expect Q2 production to be in the 134,000 to 136,000 BOE per day range. The recent market volatility resulting from the global trade war has had a negative impact on commodity prices and has increased the risk of a global economic slowdown. Vermilion is well positioned to manage through this cycle with over 50% of our production hedged for the remainder of 2025, combined with approximately $1 billion of liquidity and no near-term debt maturities. Furthermore, our globally diversified asset base provides a natural hedge by minimizing our exposure to any single commodity and provides flexibility to allocate capital to our highest-return projects. With our financial position and unique market advantage, we are confidently navigating this business cycle with diligence. Our thorough review of remaining capital projects for 2025 has revealed opportunities to defer certain projects if needed without having a material impact on the 2025 production. We will continue to closely monitor our investment activity and adjust accordingly to prioritize our balance sheet. In addition, as noted earlier, we are evaluating next steps on the potential divestment of our Saskatchewan and Wyoming assets. These divestments would significantly accelerate debt reduction and would reduce capital requirements. As is our standard practice, we update our financial forecast each quarter based on the current strip pricing by factoring in our current hedge book. At this time, we are forecasting 2025 annual fund flows in the $1 billion to $1.1 billion range with over $300 million of free cash flow. Our quarterly dividend of $0.13 per share equates to approximately $80 million, which is less than 8% of our forecasted fund flow. Our CapEx and dividend are more than fully covered at the current pricing while there remains excess free cash flow in the system to fund ongoing share buybacks. As I mentioned, we are also well positioned with over 50% of our 2025 production hedged and approximately 30% of our 2026 production hedged. We will continue to add these hedges opportunistically where we're able to lock in prices that support our capital allocation priorities. We have made several strategic investments over the past few years, including the acquisitions in the Montney, Deep Basin and European gas, along with the ongoing strategic capital investments in these areas. All these initiatives have been geared towards enhancing our global gas portfolio and increasing our value per share. Through these strategic investments, we are now the fourth largest producer in the Deep Basin with long-life inventory that will support growth to over 80,000 BOEs per day and then with 15 years of inventory once we hit that target rate. In the Montney, we have built out the majority of our strategic infrastructure that will support the long-term production of 28,000 BOEs per day and, again, with over 15 years of inventory at that point. In Germany, we successfully executed a three-well deep gas exploration program, making a significant discovery that will add meaningful reserves and support future development with the potential to more than double our Germany production base. The combination of these strategic initiatives further enhances Vermilion's profile as a global gas producer. Resulting in these efforts is increased operational scale with 80% of our production and 70% of our capital investments into our global gas portfolio. While the oil assets in our portfolio remain profitable, our focus continues to shift to our global gas portfolio, which we believe has several advantages. With over 100 million a day of gas production in Europe, we get direct exposure to premium prices, which drives the highest realized gas prices among our peers. We achieved this exposure without the need for multi-decade take-or-pay commitments. Our international assets are also conventional and have lower decline rates relative to North American gas plays. Therefore, they require less capital to maintain production, which contributes to the strong free cash flow profile of these assets. In addition, we are uniquely positioned to consolidate and grow our European gas portfolio with acquisitions as the majors look to divest. Our North American gas portfolio is comprised of concentrated liquids-rich gas assets in the Deep Basin and Montney, which provide attractive short-cycle returns and allow flexible capital allocation. We're seeing the benefit of our increased operational scale with reduced E&D capital and ongoing operational cost synergies. On the macro side, we expect global gas demand to continue growing for decades and believe our global gas portfolio provides a foundation to support the company's long-term profitability. Well, that concludes our prepared remarks. With that, we'd like to open it up for questions.

So the first question here that we have is, can you provide more details on the Wisselshorst wells and future debottlenecking plans? What are the infrastructure requirements? What is the cost? And what is the timing?

Yes. Thanks for that question, Kyle. Our first priority on this first Wisselshorst well is to get the well-equipped and tied in. We expect that to complete with initial production expected in the first half of 2026. We have received approval for and have ordered all major long-lead items for the required gas processing facilities at the site and have acquired pipeline right away for the initial tie-in location into the local gathering infrastructure, which is about two kilometers away. We have several different tie-in options for this well with differing production restrictions. Initially, we expect to be constrained to a flow rate of about 5 million standard cubic feet a day with options to debottleneck this to 17.5 million cubic feet a day with a second phase pipeline in 2027, for which we've begun initial environmental screenings, and then to 35 million a day with expansion of the gas processing capacity in 2028. Secondly, we anticipate that there is up to six appraisal follow-up locations on this structure. We have initiated regulatory activities on these locations and expect to spud the first of these wells in Q1 2027.

Thanks, Darcy, for that. I mean just to summarize, and ties back to our earlier comment in my opening remarks there, when you add all that together with just the wells that we've drilled to date, that equates to 27 million a day of natural gas, of premium-priced European gas. And to put that in perspective, I mean Vermilion today is producing about 100 million a day in Europe, all across Europe. And so that's why we're so excited with this European German program where this 1.6 net wells can add 27 million a day of gas. And of course, we would look to grow that as we look to drill future wells and build upon that success. But thanks for the details there. Lots of moving parts, but the team is -- great job of moving that forward. Back to you, Kyle.

Yes. Thanks, Dion. So we have another question here. What is the current production from the Westbrick assets you acquired? And can you provide more details on the synergies, what part of the cost structure they're coming from? And what should we expect for an annual cost savings?

Thanks, Kyle. I'll just pass over to Randy McQuaig, our VP of North America.

Thanks, Dion. So yes, our production from the Westbrick assets came in around 52,000 barrels a day for Q1, and we expect the full year production to average around 50,000 barrels a day for 2025, so coming in as planned. In terms of the synergies, as Dion had mentioned, we have identified about $100 million of NPV synergies since closing the Westbrick acquisition in late February. Most of the immediate savings are operationally focused and related to structural changes in the business where we have reduced processing fees, we've optimized our production and marketing, along with identified operating cost reductions. These have directly resulted in about $5 million a year of identified savings and expect this to increase as we continue to evaluate further upside. Another portion of the synergies that we speak to are development-related, and they come from the ability to drill extended-reach wells with the combined legacy Vermilion and the Westbrick lands that increase the NPV on the Vermilion portion of these wells. This value will be achieved over time as we continue the development of these assets. So overall, we can expect to achieve around $10 million a year, and this should increase over time as we integrate the assets and evaluate further upside potential.

Thanks, Randy. Just to build on that, I mean we spoke at the last call, and we're really excited with the quality of the Westbrick assets and, I think, how complementary they are to Vermilion's land base, infrastructure and real -- the more we work these assets, the more excited we get, and we're seeing these synergies. And to Randy's point, I don't think we're done yet given the great work that the teams are doing. But back to you, Kyle.

Okay. Yes, we do have another question here. Why has executive comp increased when the stock is underperforming? And what are you doing to address share price underperformance?

I'll take that one, Kyle. I mean good question, and again, it's not lost on myself or the management team, the stock performance most recently. I'll start with the executive compensation. As a reminder, a significant portion of the executive compensation is what we call at-risk compensation, meaning that it's directly linked to the corporate performance as well as the stock performance. For me, personally, as a CEO, over 80% of my compensation is at risk. And again, that's appropriate given my role. What that means, if you look at the realized actual compensation for 2024, it was down 13% year-over-year. And again, that is largely due to the impact of stock performance. The only other thing I would note is we did engage a third-party firm to come in and review our compensation program to compare it with our peers. I would say there's modest adjustments as a result of that just to kind of tweak some of the individual comp based on what is the comp for that role in the industry. So we, again, directly tied to the performance of the company, and we brought in some external review. And then finally, ISS and Glass Lewis have voted both yes for our pay programs as well, which is another vote of confidence. Back to the stock question itself, I guess, two-part answer here. If you think about the year, we started quite strong. We started the year with, I would say, outperformance relative to our peers, and that was on the back of the Westbrick acquisition. Again, we are excited to have that high-quality, long-life, complementary asset base that gives us that operational scale that we've been looking for in the Deep Basin. And so the stock was doing quite well. We then entered a period of market volatility, and I would describe it as a risk-off period with the Liberation Day and tariffs. And I think what you see during those periods is companies that have elevated debt relative to their peers underperform, and we definitely saw that. And so there's been quite a bit of weakness most recently. And I think that's really short-term in focus given our elevated debt level. As stressed on the call, hopefully, it came across loud and clear that we have -- we're on track with our volumes. Westbrick looks well. We're excited about Germany. We've got over $1 billion of liquidity. We've got no near-term debt maturities. Our dividend is well covered. We're well hedged. And all that means we have the means and the plan to organically reduce our debt. In addition, we've got a number of options to reduce capital, which would further reduce near-term debt. And of course, we've talked about the potential divestments and we're excited with the interest there, and that would materially accelerate debt reduction. So it's -- again, it's a focus of the management team in the short term. It's reducing debt, and we've got a strong robust plan to happen over the upcoming quarters. Just to finish out then, if you zoom out, I think big picture, hopefully, what our shareholders are seeing is the strategic focus to improve the business. So we're transitioning to a global gas producer, one with long-life assets, one with high-quality inventory, one with a lower cost structure. And I think these long-life assets will really underpin these new streams of free cash flow that are coming into the business that we would have talked about on the call. So a long-winded way of saying we -- comp is linked to corporate performance. Of course, it is. Short term, we're focused on debt reduction. Big picture, we're focused on the high-grading asset base, which is making us a stronger company with long-life assets.

Thanks, Dion. There's no further questions online.

Okay. If there's no further questions, I want to, first of all, thank our staff and all the contractors' work for us throughout the organization. We're very fortunate to have such a strong workforce day in, day out. These milestones that we talked about are only achieved through the hard work of our employees, so I want to sincerely thank them for that. And in conclusion, I thank everyone for participating in our 2025 AGM and the conference call today.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.