About Vermilion

Vermilion continues to focus on delivering the operational and financial objectives in its strategic plan by growing production through the organic development of its diverse portfolio of opportunities.  Light oil production from the Cardium resource play in western Canada and high-netback natural gas production in the Netherlands is expected to drive this growth in the near term.  Stable production from Australia and France is expected to underpin this growth and deliver strong fund flows from operations, while the Corrib gas project will add significant volumes upon achieving first gas. 

Full year capital expenditures for 2011 are currently estimated at $500 million, an approximate 8% increase relative to our original capital budget of $461 million.  The increase reflects approximately $70 million of spending on land purchases related to Vermilion's ongoing New Growth Initiatives, which target the identification and capture of meaningful unconventional resource related exploration exposure in Canada, Europe and Australia.  It also reflects increased Cardium development and facilities related expenditures resulting from higher activity levels offset to some extent by the deferral of certain expenditures in Ireland as a result of the delay of first gas to 2014. 

Given the existing economic and political instabilities in certain regions around the globe that have led to the current macroeconomic uncertainties and the recent and considerable volatility in both commodity and equity prices, Vermilion's management and Board of Directors has elected to complete further review of planned capital expenditure activities for 2012 to ensure that Vermilion retains maximum financial flexibility and to safeguard the continued strength of Vermilion's balance sheet.  Further details regarding Vermilion's planned 2012 capital expenditure budget will be released once management and the Board of Directors complete their review and approve the 2012 capital program.

The management and directors of Vermilion continue to control approximately 9% of the outstanding shares and remain well aligned with the interests of all stakeholders.

Lorenzo Donadeo, President & CEO