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Vermilion Energy Inc. Announces 2014 Year-End Summary Reserves and Resource Information

February 27, 2015

CALGARY, Feb. 27, 2015 /CNW/ - Vermilion Energy Inc. ("Vermilion", the "Company", "We" or "Our") (TSX, NYSE: VET) is pleased to announce summary 2014 year-end reserves and resource information.  The estimates of reserves and resources and other oil and gas information contained in this news release has been estimated by GLJ Petroleum Consultants Ltd. ("GLJ") and prepared in accordance with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" of the Canadian Securities Administrators ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGEH"). For additional information about Vermilion, including Vermilion's statement of reserves data and other information in Form 51-101F1, report on reserves data by independent qualified reserves evaluator or auditor in Form 51-101F2 and report of management and directors on oil and gas disclosure in Form 51-101F3, please review the Company's Annual Information Form for the year ended December 31, 2014, to be filed on March 6, 2015 and available on SEDAR at www.sedar.com and on the SEC's EDGAR system at www.sec.gov.

HIGHLIGHTS

  • Total proved ("1P") reserves increased 17% to 151.5 mmboe(1), while total proved plus probable ("2P") reserves increased 24% to 246.9 mmboe(1). This represents year-over-year 1P and 2P per share reserves growth of 12% and 18%, respectively.

  • Finding and Development ("F&D") and Finding, Development and Acquisition ("FD&A") costs, including Future Development Capital ("FDC") for 2014 on a 2P basis were $17.37/boe and $22.38/boe, resulting in Recycle Ratios of 3.2 and 2.5, respectively.  Similarly, our three-year F&D and FD&A, including FDC, on a 2P basis were $19.26/boe and $20.83/boe, respectively.

  • In 2014, we added 66.5 mmboe of 2P reserves with 37.7 mmboe (57%) of additions coming from exploration and development ("E&D") activities and 28.8 mmboe (43%) of additions through acquisitions.  This represents production replacement at the 2P level of 208% through E&D related activities and 367% including acquisitions.  At a 1P level, we replaced 125% and 225% of 2014 production, respectively.

  • Our independent GLJ 2014 Resource Assessment(1) indicates low, best, and high estimates for contingent resources of 103.1(1) mmboe, 293.4(1) mmboe, and 408.0(1) mmboe, an increase of 39%, 26% and 16%, respectively, compared to our GLJ 2013 Resource Assessment(2).  Prospective resources were assessed at low, best and high estimates of 308.3(1) mmboe, 601.6(1) mmboe, and 900.3(1) mmboe, an increase of 419%, 21%, and 10%, respectively versus our GLJ 2013 Resource Assessment.  Importantly, the GLJ 2014 Resource Assessment reflects a significant increase in even the most conservative "Low Estimate" for both contingent and prospective resources in Canada, as well as incremental increases across our European asset base.

  • At year-end 2014, 2P reserves were comprised of 30% Brent-based light crude, 18% Canadian-based light crude, 10% natural gas liquids, 20% European natural gas and 22% Canadian natural gas.

  • Reserve life index for 2P reserves increased to 13.6 years for year-end 2014 reserves based on annualized Q4 2014 production, compared to 13.3 years at year-end 2013. Year-end 2014 reserve life index for 1P reserves was 8.4 years, as compared to 8.6 years at year-end 2013.

  • Following on our successful 2013 program, our 2014 drilling activity resulted in an additional 22 (16.8 net) undeveloped wells booked at the 2P level in the Mannville liquids-rich gas play in Alberta, with average reserves of approximately 790 mboe/well.

  • The successful drilling of Deblinghausen Z7 well in Germany added 1.3 mmboe of 2P reserves for Vermilion's 25% working interest.

  • Our Diever-2 discovery in the Netherlands added 1.3 mmboe of 2P reserves for Vermilion's 33.1% working interest (projected average interest over well life).

(1)      Vermilion retained GLJ to conduct an independent resource evaluation to assess contingent and prospective resources across all of the Company's key operating regions with an effective date of December 31, 2014 (the "GLJ 2014 Resource Assessment")
(2)      Vermilion retained GLJ to conduct an independent resource evaluation to assess contingent and prospective resources across all of the Company's key operating regions with an effective date of December 31, 2013 (the "GLJ 2013 Resource Assessment")
   

DISCLAIMER

Certain statements included or incorporated by reference in this news release may constitute forward looking statements or financial outlooks under applicable securities legislation.  Such forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook.  Forward looking statements or information in this news release may include, but are not limited to:

  • capital expenditures;
  • business strategies and objectives;
  • estimated reserve quantities and the discounted present value of future net cash flows from such reserves;
  • petroleum and natural gas sales;
  • future production levels (including the timing thereof) and rates of average annual production growth, estimated contingent resources and prospective resources;
  • exploration and development plans;
  • acquisition and disposition plans and the timing thereof;
  • operating and other expenses, including the payment of future dividends;
  • royalty and income tax rates;
  • the timing of regulatory proceedings and approvals;
  • the timing of first commercial gas from the Corrib field; and
  • the estimate of Vermilion's share of the expected natural gas production from the Corrib field.

Such forward-looking statements or information are based on a number of assumptions all or any of which may prove to be incorrect.  In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things:

  • the ability of the Company to obtain equipment, services and supplies in a timely manner to carry out its activities in Canada and internationally;
  • the ability of the Company to market crude oil, natural gas liquids and natural gas successfully to current and new customers;
  • the timing and costs of pipeline and storage facility construction and expansion and the ability to secure adequate product transportation;
  • the timely receipt of required regulatory approvals;
  • the ability of the Company to obtain financing on acceptable terms;
  • foreign currency exchange rates and interest rates;
  • future crude oil, natural gas liquids and natural gas prices; and
  • Management's expectations relating to the timing and results of development activities.

Although the Company believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct.  Financial outlooks are provided for the purpose of understanding the Company's financial strength and business objectives and the information may not be appropriate for other purposes.  Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward looking statements or information.  These risks and uncertainties include but are not limited to:

  • the ability of management to execute its business plan;
  • the risks of the oil and gas industry, both domestically and internationally, such as operational risks in exploring for, developing and producing crude oil, natural gas liquids and natural gas;
  • risks and uncertainties involving geology of crude oil, natural gas liquids and natural gas deposits;
  • risks inherent in the Company's marketing operations, including credit risk;
  • the uncertainty of reserves estimates and reserves life and estimates of resources and associated expenditures;
  • the uncertainty of estimates and projections relating to production, costs and expenses;
  • potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
  • the Company's ability to enter into or renew leases on acceptable terms;
  • fluctuations in crude oil, natural gas liquids and natural gas prices, foreign currency exchange rates and interest rates;
  • health, safety and environmental risks;
  • uncertainties as to the availability and cost of financing;
  • the ability of the Company to add production and reserves through exploration and development activities;
  • general economic and business conditions;
  • the possibility that government policies or laws may change or governmental approvals may be delayed or withheld;
  • uncertainty in amounts and timing of royalty payments;
  • risks associated with existing and potential future law suits and regulatory actions against the Company; and
  • other risks and uncertainties described elsewhere in the annual information form of the Company for the year ended December 31, 2014 or in the Company's other filings with Canadian securities authorities.

The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.

RESERVES, FUTURE NET REVENUE AND OTHER OIL AND GAS INFORMATION

The following is a summary of the oil and natural gas reserves and the value of future net revenue of Vermilion as evaluated by GLJ, independent petroleum engineering consultants in Calgary in a report dated February 6, 2015 with an effective date of December 31, 2014 (the "GLJ 2014 Reserves Evaluation").  The GLJ 2014 Reserves Evaluation was prepared in accordance with National Instrument 51-101 and COGEH.

Reserves and other oil and gas information in this news release is effective December 31, 2014 unless otherwise stated.

All evaluations of future net production revenue set forth in the tables below are stated after overriding and lessor royalties, Crown royalties, freehold royalties, mineral taxes, direct lifting costs, normal allocated overhead and future capital investments, including abandonment and reclamation obligations.  Future net production revenues estimated by the GLJ 2014 Reserves Evaluation do not represent the fair market value of the reserves.  Other assumptions relating to the costs, prices for future production and other matters are included in the GLJ 2014 Reserve Evaluation.  There is no assurance that the future price and cost assumptions used in the GLJ 2014 Reserves Evaluation will prove accurate and variances could be material.

Reserves for Australia, Canada, France, Germany, Ireland, the Netherlands and the United States are established using deterministic methodology.  Total proved reserves are established at the 90 percent probability (P90) level.  There is a 90 percent probability that the actual reserves recovered will be equal to or greater than the P90 reserves.  Total proved plus probable reserves are established at the 50 percent probability (P50) level.  There is a 50 percent probability that the actual reserves recovered will be equal to or greater than the P50 reserves.

Estimates of reserves have been made assuming that development of each property, in respect of which estimates have been made, will occur without regard to the availability of funding required for that development.

With respect to finding and development costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

Pricing used in the forecast price estimates is set forth in the table below and referenced in the notes to subsequent tables.

Table 1: Forecast Prices used in Estimates (1)

                     
          Natural Gas Natural Gas Natural Gas Inflation Exchange Exchange
  Light and Medium Crude Oil Crude Oil Canada Europe Liquids Rate Rate Rate
  WTI Edmonton Cromer Brent Blend   National Balancing        
  Cushing Par Price Medium FOB AECO Point FOB      
  Oklahoma 40˚ API 29.3˚ API North Sea Gas Price (UK) Field Gate Percent    
Year ($US/bbl) ($Cdn/bbl) ($Cdn/bbl) ($US/bbl) ($Cdn/MMBtu) ($US/MMBtu) ($Cdn/bbl) Per Year ($US/$Cdn) (EUR/$Cdn)
2014 93.06 94.77 89.86 99.89 4.52 8.26 72.59 2.0 0.905 1.467
Forecast                    
2015 62.50 64.71 61.47 67.50 3.31 7.50 38.13 2.0 0.850 1.450
2016 75.00 80.00 76.00 82.50 3.77 8.25 47.68 2.0 0.875 1.450
2017 80.00 85.71 81.43 87.50 4.02 8.75 52.15 2.0 0.875 1.450
2018 85.00 91.43 86.86 90.00 4.27 9.00 55.62 2.0 0.875 1.450
2019 90.00 97.14 92.29 95.00 4.53 9.50 59.10 2.0 0.875 1.450
Thereafter 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 0.875 1.450
 
Note:
(1)  The pricing assumptions used in the GLJ Report  with respect to net values of future net revenue (forecast) as well as the inflation rates used for operating
and capital costs are set forth above. The NGL price is an aggregate of the individual natural gas liquids prices used in the Total Proved plus Probable
evaluation. GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
   

All forecast prices in the table above are provided by GLJ.  For 2014, the price of Vermilion's natural gas in the Netherlands was based on the TTF day-ahead index, as determined on the Title Transfer Facility Virtual Trading Point operated by Dutch TSO Gas Transport Services, plus various fees. GasTerra, a state owned entity purchases all natural gas produced by Vermilion in the Netherlands.  The price of Vermilion's natural gas in Germany is based on the TTF month-ahead index, as determined on the Title Transfer Facility Virtual Trading Point operated by Dutch TSO Gas Transport Services, plus various fees.  The benchmark price for Australia and France crude oil was Dated Brent. The benchmark price for Canadian crude oil was Edmonton Par and Canadian natural gas was priced against AECO.  For the year ended December 31, 2014, the average realized sales prices before hedging were $113.80 per bbl (Australia), $8.70 per Mcf (Netherlands), $7.67 per Mcf (Germany), $105.43 per bbl (France) for Brent-based crude oil, $74.08 per bbl (United States) for WTI, $88.98 per bbl for Canadian-based crude oil and NGLs and $4.53 per Mcf for Canadian natural gas.

The following table summarizes the capital expenditures made by Vermilion on oil and natural gas properties for the year ended December 31, 2014:

Table 2: Capital Costs Incurred

    Acquisition Costs            
    Proved   Unproved   Exploration   Development   Total
(M$)   Properties   Properties   Costs   Costs   Costs
Australia   -     -     -     44,283   44,283
Canada   249,485   168,334   45,157   291,046   754,022
France   -     -     11,833   136,019   147,852
Germany   156,806   16,065   -     2,747   175,618
Ireland   -     -     -     94,439   94,439
Netherlands   -     -     12,045   49,695   61,740
United States   11,175   -     -     460   11,635
Total   417,466   184,399   69,035   618,689   1,289,589

The following table sets forth the reserve life index based on total proved and proved plus probable reserve and fourth quarter 2014 production of 49,571 boe/d.

Table 3: Reserve Life Index

Commodity Production   Reserve Life Index (years)
  Fourth Quarter 2014   Total Proved   Proved Plus Probable
Oil and natural gas liquids (bbl/d) 31,668   7.8   12.4
Natural gas (mmcf/d) 107.42   9.5   15.9
Oil Equivalent (boe/d) 49,571   8.4   13.6

The following tables provide reserves data and a breakdown of future net revenue by component and production group using forecast prices and costs.  For Canada, the tables following include Alberta gas cost allowance.

The following tables may not total due to rounding.

Table 4: Oil and Gas Reserves - Based on Forecast Prices and Costs (1)

  Light and Medium Crude Oil Heavy Oil Natural Gas Natural Gas Liquids BOE BOE
  Gross (2) Net (2) Gross (2) Net (2) Gross (2) Net (2) Gross (2) Net (2) Gross Net
  (Mbbl) (Mbbl) (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mbbl) (Mboe) (Mboe)
Proved Developed Producing (3) (5) (6)                    
Australia 10,434 10,434 -   -   -   -   -   -   10,434 10,434
Canada 16,174 13,206 10 9 94,264 85,967 5,150 3,804 37,046 31,347
France 31,650 29,431 -   -   9,875 9,430 -   -   33,297 31,003
Germany -   -   -   -   29,432 25,245 -   -   4,905 4,208
Ireland -   -   -   -   -   -   -   -   -   -  
Netherlands -   -   -   -   14,123 13,450 28 25 2,382 2,267
United States 165 137 -   -   61 51 2 2 177 148
Total Proved Developed Producing 58,423 53,208 10 9 147,755 134,143 5,180 3,831 88,241 79,407
Proved Developed Non-Producing (3) (5) (7)                    
Australia -   -   -   -   -   -   -   -   -   -  
Canada 1,227 1,099 -   -   12,561 11,248 476 322 3,797 3,296
France 977 874 -   -   -   -   -   -   977 874
Germany -   -   -   -   10,324 8,806 -   -   1,721 1,468
Ireland -   -   -   -   -   -   -   -   -   -  
Netherlands -   -   -   -   17,863 17,863 16 16 2,993 2,993
United States -   -   -   -   -   -   -   -   -   -  
Total Proved Developed Non-Producing 2,204 1,973 -   -   40,748 37,917 492 338 9,488 8,631
Proved Undeveloped (3) (8)                    
Australia 2,100 2,100 -   -   -   -   -   -   2,100 2,100
Canada 10,077 8,789 -   -   70,589 64,886 7,924 6,542 29,766 26,145
France 2,975 2,780 -   -   -   -   -   -   2,975 2,780
Germany -   -   -   -   502 (39) -   -   84 (7)
Ireland -   -   -   -   105,931 105,931 -   -   17,655 17,655
Netherlands -   -   -   -   5,169 2,584 10 5 872 436
United States 284 234 -   -   182 150 8 6 322 265
Total Proved Undeveloped 15,436 13,903 -   -   182,373 173,512 7,942 6,553 53,774 49,374
Proved (3)                    
Australia 12,534 12,534 -   -   -   -   -   -   12,534 12,534
Canada 27,478 23,094 10 9 177,414 162,101 13,550 10,668 70,609 60,788
France 35,602 33,085 -   -   9,875 9,430 -   -   37,249 34,657
Germany -   -   -   -   40,258 34,012 -   -   6,710 5,669
Ireland -   -   -   -   105,931 105,931 -   -   17,655 17,655
Netherlands -   -   -   -   37,155 33,897 54 46 6,246 5,696
United States 449 371 -   -   243 201 10 8 500 413
Total Proved 76,063 69,084 10 9 370,876 345,572 13,614 10,722 151,502 137,412
Probable (4)                    
Australia 5,449 5,449 -   -   -   -   -   -   5,449 5,449
Canada 14,797 12,175 2 2 141,032 126,232 11,331 8,689 49,635 41,905
France 20,288 18,848 -   -   2,582 2,465 -   -   20,719 19,259
Germany -   -   -   -   21,301 17,816 -   -   3,550 2,969
Ireland -   -   -   -   38,707 38,707 -   -   6,451 6,451
Netherlands -   -   -   -   47,076 41,987 103 85 7,949 7,083
United States 1,338 1,104 -   -   1,402 1,159 58 48 1,630 1,345
Total Probable 41,872 37,576 2 2 252,100 228,366 11,492 8,822 95,383 84,461
Proved Plus Probable (3) (4)                    
Australia 17,983 17,983 -   -   -   -   -   -   17,983 17,983
Canada 42,275 35,269 12 11 318,446 288,333 24,881 19,357 120,244 102,693
France 55,890 51,933 -   -   12,457 11,895 -   -   57,967 53,916
Germany -   -   -   -   61,559 51,828 -   -   10,260 8,638
Ireland -   -   -   -   144,638 144,638 -   -   24,106 24,106
Netherlands -   -   -   -   84,231 75,884 157 131 14,195 12,779
United States 1,787 1,475 -   -   1,645 1,360 68 56 2,129 1,758
Total Proved Plus Probable 117,935 106,660 12 11 622,976 573,938 25,106 19,544 246,884 221,873
 
Notes:
(1)  The pricing assumptions used in the GLJ Report with respect to net values of future net revenue (forecast) as well as the inflation rates used for operating and capital
costs are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an aggregate of the individual natural gas liquids prices used in the Total Proved
plus Probable evaluation.  GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
(2) "Gross Reserves" are Vermilion's working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of Vermilion.
"Net Reserves" are Vermilion's working interest (operating or non-operating) share after deduction of royalty obligations, plus Vermilion's royalty interests in reserves.
(3) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities recovered
will exceed the estimated proved reserves.
(4)  "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities
recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(5)  "Developed" reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would
involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production.
(6)  "Developed Producing" reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may
be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
(7)  "Developed Non-Producing" reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date
of resumption of production is unknown.
(8)  "Undeveloped" reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost
of drilling a well) is required to render them capable of production.  They must fully meet the requirements of the reserves classification (proved, probable, possible) to which
they are assigned.
   

Table 5: Net Present Values of Future Net Revenue - Based on Forecast Prices and Costs (1)

  Before Deducting Future Income Taxes Discounted At   After Deducting Future Income Taxes Discounted At
(M$) 0% 5% 10% 15% 20%   0% 5% 10% 15% 20%
Proved Developed Producing (2) (4) (5)                      
Australia 291,164 263,104 239,218 218,979 201,803   280,825 242,543 213,082 189,932 171,394
Canada 1,262,154 972,328 790,894 668,312 580,565   1,262,155 972,328 790,895 668,312 580,565
France 2,054,566 1,447,105 1,120,222 918,238 781,399   1,655,535 1,184,551 921,918 755,890 641,911
Germany 104,703 88,743 76,967 68,031 61,063   104,703 88,743 76,967 68,031 61,063
Ireland -   -   -   -   -     -   -   -   -   -  
Netherlands 44,934 46,660 46,565 45,756 44,670   44,726 46,457 46,366 45,563 44,480
United States 8,235 6,662 5,619 4,885 4,343   8,235 6,662 5,619 4,885 4,343
Total Proved Developed Producing 3,765,756 2,824,602 2,279,485 1,924,201 1,673,843   3,356,179 2,541,284 2,054,847 1,732,613 1,503,756
Proved Developed Non-Producing (2) (4) (6)                      
Australia -   -   -   -   -     -   -   -   -   -  
Canada 101,096 72,953 56,758 46,332 39,099   54,946 50,000 44,899 39,996 35,611
France 57,393 38,340 27,990 21,760 17,681   37,650 24,928 18,020 13,868 11,154
Germany 46,636 32,713 23,976 18,295 14,442   46,636 32,713 23,976 18,295 14,442
Ireland -   -   -   -   -     -   -   -   -   -  
Netherlands 61,915 45,630 34,900 27,543 22,322   60,340 44,093 33,399 26,075 20,884
United States -   -   -   -   -     -   -   -   -   -  
Total Proved Developed Non-Producing 267,040 189,636 143,624 113,930 93,544   199,572 151,734 120,294 98,234 82,091
Proved Undeveloped (2) (7)                      
Australia 71,575 47,975 31,079 18,724 9,524   25,361 12,037 2,650 (4,084) (8,989)
Canada 681,560 465,275 327,825 235,860 171,712   508,412 345,509 242,605 173,718 125,419
France 197,047 145,815 109,125 83,358 64,840   128,782 92,384 66,709 48,918 36,283
Germany 831 1,201 991 566 125   831 1,201 991 566 125
Ireland 774,335 642,348 534,368 451,049 387,017   774,335 642,348 534,368 451,049 387,017
Netherlands 14,875 12,536 10,658 9,129 7,868   14,704 12,369 10,495 8,969 7,712
United States 8,855 4,795 2,502 1,084 141   7,367 3,917 1,939 696 (139)
Total Proved Undeveloped 1,749,078 1,319,945 1,016,548 799,770 641,227   1,459,792 1,109,765 859,757 679,832 547,428
Proved (2)                      
Australia 362,739 311,079 270,297 237,703 211,327   306,187 254,580 215,732 185,848 162,405
Canada 2,044,810 1,510,556 1,175,477 950,504 791,376   1,825,513 1,367,837 1,078,399 882,026 741,595
France 2,309,006 1,631,260 1,257,337 1,023,356 863,920   1,821,967 1,301,863 1,006,647 818,676 689,348
Germany 152,170 122,657 101,934 86,892 75,630   152,170 122,657 101,934 86,892 75,630
Ireland 774,335 642,348 534,368 451,049 387,017   774,335 642,348 534,368 451,049 387,017
Netherlands 121,724 104,826 92,123 82,428 74,860   119,770 102,919 90,260 80,607 73,076
United States 17,090 11,457 8,121 5,969 4,484   15,602 10,579 7,558 5,581 4,204
Total Proved 5,781,874 4,334,183 3,439,657 2,837,901 2,408,614   5,015,544 3,802,783 3,034,898 2,510,679 2,133,275
Probable (3)                      
Australia 344,309 273,659 222,624 185,158 157,114   196,770 151,343 119,726 97,200 80,756
Canada 1,473,018 920,352 628,307 455,987 345,800   1,102,943 680,073 458,267 328,291 245,822
France 1,561,454 867,399 562,195 397,231 296,268   1,022,105 555,401 349,205 238,204 170,866
Germany 95,306 62,229 43,077 31,263 23,563   85,929 56,977 39,975 29,351 22,344
Ireland 430,350 269,590 183,438 133,486 102,376   430,350 269,590 183,438 133,486 102,376
Netherlands 302,536 222,307 172,861 140,087 117,110   259,231 184,444 138,913 109,209 88,748
United States 68,675 36,091 21,316 13,434 8,723   46,431 23,501 12,945 7,264 3,865
Total Probable 4,275,648 2,651,627 1,833,818 1,356,646 1,050,954   3,143,759 1,921,329 1,302,469 943,005 714,777
Proved Plus Probable (2) (3)                      
Australia 707,048 584,738 492,921 422,861 368,441   502,957 405,923 335,458 283,048 243,161
Canada 3,517,828 2,430,908 1,803,784 1,406,491 1,137,176   2,928,456 2,047,910 1,536,666 1,210,317 987,417
France 3,870,460 2,498,659 1,819,532 1,420,587 1,160,188   2,844,072 1,857,264 1,355,852 1,056,880 860,214
Germany 247,476 184,886 145,011 118,155 99,193   238,099 179,634 141,909 116,243 97,974
Ireland 1,204,685 911,938 717,806 584,535 489,393   1,204,685 911,938 717,806 584,535 489,393
Netherlands 424,260 327,133 264,984 222,515 191,970   379,001 287,363 229,173 189,816 161,824
United States 85,765 47,548 29,437 19,403 13,207   62,033 34,080 20,503 12,845 8,069
Total Proved Plus Probable 10,057,522 6,985,810 5,273,475 4,194,547 3,459,568   8,159,303 5,724,112 4,337,367 3,453,684 2,848,052
 
Notes:
(1) The pricing assumptions used in the GLJ Report with respect to net values of future net revenue (forecast) as well as the inflation rates used for operating and capital
costs are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an aggregate of the individual natural gas liquids prices used in the Total Proved
plus Probable evaluation.  GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
(2) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities recovered
will exceed the estimated proved reserves.
(3)  "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities
recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(4)  "Developed" reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would
involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production.
(5)  "Developed Producing" reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may
be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
(6)  "Developed Non-Producing" reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date
of resumption of production is unknown.
(7)  "Undeveloped" reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost
of drilling a well) is required to render them capable of production.  They must fully meet the requirements of the reserves classification (proved, probable, possible) to which
they are assigned.
   

Table 6: Total Future Net Revenue (Undiscounted) Based on Forecast Prices and Costs (1)

          Abandonment Future Net   Future Net
        Capital and Revenue   Revenue
      Operating Development Reclamation Before Future After
(M$) Revenue Royalties Costs Costs Costs Income Taxes Income Taxes Income Taxes
Proved (2)                
Australia 1,360,391 -   712,428 245,532 39,691 362,740 56,553 306,187
Canada 4,302,228 648,056 1,026,393 534,106 48,863 2,044,810 219,297 1,825,513
France 3,982,049 279,641 1,083,549 124,021 185,833 2,309,005 487,038 1,821,967
Germany 374,000 57,252 147,030 8,056 9,492 152,170 -   152,170
Ireland 1,149,786 -   218,436 89,042 67,973 774,335 -   774,335
Netherlands 378,250 32,084 135,382 44,893 44,167 121,724 1,954 119,770
United States 43,127 11,043 6,605 8,190 199 17,090 1,488 15,602
Total Proved 11,589,831 1,028,076 3,329,823 1,053,840 396,218 5,781,874 766,330 5,015,544
Proved Plus Probable (2) (3)                
Australia 2,035,436 -   1,039,962 245,532 42,893 707,049 204,092 502,957
Canada 7,407,493 1,181,971 1,715,243 931,517 60,935 3,517,827 589,371 2,928,456
France 6,504,904 456,374 1,596,847 342,728 238,496 3,870,459 1,026,387 2,844,072
Germany 598,427 93,266 234,697 12,180 10,808 247,476 9,377 238,099
Ireland 1,656,494 -   294,794 89,042 67,973 1,204,685 -   1,204,685
Netherlands 918,290 90,017 262,155 87,177 54,681 424,260 45,259 379,001
United States 198,397 50,816 26,673 34,589 554 85,765 23,732 62,033
Total Proved Plus Probable 19,319,441 1,872,444 5,170,371 1,742,765 476,340 10,057,521 1,898,218 8,159,303
 
Notes:
(1)  The pricing assumptions used in the GLJ Report with respect to net values of future net revenue (forecast) as well as the inflation rates used for operating
and capital costs are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an aggregate of the individual natural gas liquids prices
used in the Total Proved plus Probable evaluation.  GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
(2) "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves.
(3)  "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
   

Table 7: Future Net Revenue by Production Group Based on Forecast Prices and Costs (1)

            Future Net Revenue    
          Before Income Taxes (2)    
          (Discounted at 10% Per Year)   Unit Value
Proved Developed Producing           (M$)   ($/boe)
Light and medium crude oil (3)           1,993,508   33.44
Heavy Oil (3)           197   14.45
Natural gas (4)           278,281   15.12
Shale Gas           6,234   17.02
Coal Bed Methane           1,265   1.26
Total Proved Developed Producing           2,279,485   28.71
Proved Developed Non-Producing                
Light and medium crude oil (3)           55,301   26.31
Heavy Oil (3)           -     -  
Natural gas (4)           84,921   14.46
Shale Gas           -     -  
Coal Bed Methane           3,402   5.19
Total Proved Developed Non-Producing           143,624   16.64
Proved Undeveloped                
Light and medium crude oil (3)           338,689   18.97
Heavy Oil (3)           -     -  
Natural gas (4)           671,645   22.60
Shale Gas           -     -  
Coal Bed Methane           6,214   3.44
Total Proved Undeveloped           1,016,548   20.59
Proved                
Light and medium crude oil (3)           2,387,498   29.76
Heavy Oil (3)           197   14.22
Natural gas (4)           1,034,847   19.52
Shale Gas           6,234   16.75
Coal Bed Methane           10,881   3.22
Total Proved           3,439,657   25.03
Probable                
Light and medium crude oil (3)           1,192,527   27.46
Heavy Oil (3)           107   24.80
Natural gas (4)           632,758   16.07
Shale Gas           1,912   18.54
Coal Bed Methane           6,514   4.15
Total Probable           1,833,818   21.71
Proved Plus Probable                
Light and medium crude oil (3)           3,580,025   28.97
Heavy Oil (3)           304   16.75
Natural gas (4)           1,667,605   18.04
Shale Gas           8,146   17.24
Coal Bed Methane           17,395   3.50
Total Proved Plus Probable           5,273,475   23.77
 
Notes:
(1)  The pricing assumptions used in the GLJ 2014 Reserves Evaluation with respect to net values
of future net revenue (forecast) as well as the inflation rates used for operating and capital costs
are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an aggregate
of the individual natural gas liquids prices used in the Total Proved plus Probable evaluation.
GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
(2)  Other Company revenue and costs not related to a specific production group have been allocated
proportionately to production groups.  Unit values are based on Company Net Reserves.  Net
present values of reserves categories are an approximation based on major products.
(3)  Including solution gas and other by-products.
(4)  Including by-products but excluding solution gas.
   

Reconciliations of Changes in Reserves

The following tables set forth a reconciliation of the changes in Vermilion's gross light and medium crude oil, heavy oil and associated and non-associated gas (combined) reserves as at December 31, 2014 compared to such reserves as at December 31, 2013.

Table 8: Reconciliation of Company Gross Reserves by Principal Product Type - Based on Forecast Prices and Costs (3)

AUSTRALIA Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 14,024 5,439 19,463 14,024 5,439 19,463 -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 900 (900) -   900 (900) -   -   -   -   -   -   -  
Technical Revisions 8 910 918 8 910 918 -   -   -   -   -   -  
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (2,398) -   (2,398) (2,398) -   (2,398) -   -   -   -   -   -  
At December 31, 2014 12,534 5,449 17,983 12,534 5,449 17,983 -   -   -   -   -   -  
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 -   -   -   -   -   -   -   -   -   14,024 5,439 19,463
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   900 (900) -  
Technical Revisions -   -   -   -   -   -   -   -   -   8 910 918
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   (2,398) -   (2,398)
At December 31, 2014 -   -   -   -   -   -   -   -   -   12,534 5,449 17,983
                         
CANADA Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 20,863 10,453 31,316 20,850 10,450 31,300 13 3 16 8,167 5,685 13,852
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 2,105 2,013 4,118 2,105 2,013 4,118 -   -   -   2,654 2,889 5,543
Technical Revisions 1,544 (1,950) (406) 1,543 (1,949) (406) 1 (1) -   2,368 1,970 4,338
Acquisitions 7,081 4,283 11,364 7,081 4,283 11,364 -   -   -   1,265 787 2,052
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (4,105) -   (4,105) (4,101) -   (4,101) (4) -   (4) (904) -   (904)
At December 31, 2014 27,488 14,799 42,287 27,478 14,797 42,275 10 2 12 13,550 11,331 24,881
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 154,961 90,663 245,624 131,058 80,536 211,594 23,903 10,127 34,030 54,857 31,249 86,105
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 28,466 47,945 76,411 26,811 47,525 74,336 1,656 420 2,076 9,503 12,893 22,396
Technical Revisions 2,716 (4,631) (1,915) 1,296 (4,536) (3,240) 1,420 (95) 1,325 4,365 (752) 3,613
Acquisitions 11,589 7,055 18,644 11,589 7,055 18,644 -   -   -   10,278 6,246 16,524
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (20,318) -   (20,318) (17,191) -   (17,191) (3,127) -   (3,127) (8,395) -   (8,395)
At December 31, 2014 177,414 141,032 318,446 153,563 130,580 284,143 23,852 10,452 34,304 70,608 49,635 120,243

FRANCE Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 34,391 18,394 52,785 34,391 18,394 52,785 -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 1,049 2,195 3,244 1,049 2,195 3,244 -   -   -   -   -   -  
Technical Revisions 4,181 (301) 3,880 4,181 (301) 3,880 -   -   -   -   -   -  
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (4,019) -   (4,019) (4,019) -   (4,019) -   -   -   -   -   -  
At December 31, 2014 35,602 20,288 55,890 35,602 20,288 55,890 -   -   -   -   -   -  
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 11,031 3,269 14,300 11,031 3,269 14,300 -   -   -   36,230 18,939 55,168
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   1,049 2,195 3,244
Technical Revisions (1,156) (687) (1,843) (1,156) (687) (1,843) -   -   -   3,989 (415) 3,574
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   (4,019) -   (4,019)
At December 31, 2014 9,875 2,582 12,457 9,875 2,582 12,457 -   -   -   37,249 20,719 57,967
                         
GERMANY Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 -   -   -   -   -   -   -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   -   -   -  
Technical Revisions -   -   -   -   -   -   -   -   -   -   -   -  
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   -   -   -  
At December 31, 2014 -   -   -   -   -   -   -   -   -   -   -   -  
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 -   -   -   -   -   -   -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 2,784 3,856 6,640 2,784 3,856 6,640 -   -   -   464 643 1,107
Technical Revisions 21 6 27 21 6 27 -   -   -   4 1 5
Acquisitions 42,923 17,439 60,362 42,923 17,439 60,362 -   -   -   7,154 2,906 10,060
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (5,470) -   (5,470) (5,470) -   (5,470) -   -   -   (912) -   (912)
At December 31, 2014 40,258 21,301 61,559 40,258 21,301 61,559 -   -   -   6,710 3,550 10,260

IRELAND Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 -   -   -   -   -   -   -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   -   -   -  
Technical Revisions -   -   -   -   -   -   -   -   -   -   -   -  
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   -   -   -  
At December 31, 2014 -   -   -   -   -   -   -   -   -   -   -   -  
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 105,931 38,707 144,638 105,931 38,707 144,638 -   -   -   17,655 6,451 24,106
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   -   -   -  
Technical Revisions -   -   -   -   -   -   -   -   -   -   -   -  
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   -   -   -  
At December 31, 2014 105,931 38,707 144,638 105,931 38,707 144,638 -   -   -   17,655 6,451 24,106
                         
NETHERLANDS Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 -   -   -   -   -   -   -   -   -   61 99 160
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   14 9 23
Technical Revisions -   -   -   -   -   -   -   -   -   7 (5) 2
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production -   -   -   -   -   -   -   -   -   (28) -   (28)
At December 31, 2014 -   -   -   -   -   -   -   -   -   54 103 157
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 36,750 44,592 81,342 36,750 44,592 81,342 -   -   -   6,186 7,531 13,717
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 6,741 4,950 11,691 6,741 4,950 11,691 -   -   -   1,138 834 1,972
Technical Revisions 7,606 (2,466) 5,140 7,606 (2,466) 5,140 -   -   -   1,275 (416) 859
Acquisitions -   -   -   -   -   -   -   -   -   -   -   -  
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors -   -   -   -   -   -   -   -   -   -   -   -  
Production (13,942) -   (13,942) (13,942) -   (13,942) -   -   -   (2,352) -   (2,352)
At December 31, 2014 37,155 47,076 84,231 37,155 47,076 84,231 -   -   -   6,247 7,949 14,196

UNITED STATES Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 -   -   -   -   -   -   -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   -   -   -  
Technical Revisions -   -   -   -   -   -   -   -   -   -   -   -  
Acquisitions 477 1,340 1,817 477 1,340 1,817 -   -   -   12 66 78
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors (10) (2) (12) (10) (2) (12) -   -   -   (2) (8) (10)
Production (18) -   (18) (18) -   (18) -   -   -   -   -   -  
At December 31, 2014 449 1,338 1,787 449 1,338 1,787 -   -   -   10 58 68
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 -   -   -   -   -   -   -   -   -   -   -   -  
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery -   -   -   -   -   -   -   -   -   -   -   -  
Technical Revisions -   -   -   -   -   -   -   -   -   -   -   -  
Acquisitions 297 1,605 1,902 297 1,605 1,902 -   -   -   539 1,674 2,212
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors (54) (203) (257) (54) (203) (257) -   -   -   (21) (44) (65)
Production -   -   -   -   -   -   -   -   -   (18) -   (18)
At December 31, 2014 243 1,402 1,645 243 1,402 1,645 -   -   -   500 1,630 2,129
                         
TOTAL COMPANY Total Crude Oil Light and Medium Crude Oil Heavy Oil Natural Gas Liquids
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
At December 31, 2013 69,278 34,286 103,564 69,265 34,283 103,548 13 3 16 8,228 5,784 14,012
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 4,054 3,308 7,362 4,054 3,308 7,362 -   -   -   2,668 2,898 5,566
Technical Revisions 5,733 (1,341) 4,392 5,732 (1,340) 4,392 1 (1) -   2,375 1,965 4,340
Acquisitions 7,558 5,623 13,181 7,558 5,623 13,181 -   -   -   1,277 853 2,130
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors (10) (2) (12) (10) (2) (12) -   -   -   (2) (8) (10)
Production (10,540) -   (10,540) (10,536) -   (10,536) (4) -   (4) (932) -   (932)
At December 31, 2014 76,073 41,874 117,947 76,063 41,872 117,935 10 2 12 13,614 11,492 25,106
  Total Natural Gas Conventional Natural Gas Unconventional Natural Gas BOE
      Proved +     Proved +     Proved +     Proved +
Proved Probable P+P (1) (2) Proved Probable Probable Proved Probable Probable Proved Probable Probable Proved Probable Probable
Factors (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (Mboe) (Mboe) (Mboe)
At December 31, 2013 308,673 177,231 485,904 284,770 167,104 451,874 23,903 10,127 34,030 128,952 69,609 198,559
Discoveries -   -   -   -   -   -   -   -   -   -   -   -  
Extensions & Improved Recovery 37,991 56,751 94,742 36,336 56,331 92,667 1,656 420 2,076 13,054 15,665 28,719
Technical Revisions 9,187 (7,778) 1,409 7,767 (7,683) 84 1,420 (95) 1,325 9,640 (672) 8,969
Acquisitions 54,809 26,099 80,908 54,809 26,099 80,908 -   -   -   17,971 10,825 28,796
Dispositions -   -   -   -   -   -   -   -   -   -   -   -  
Economic Factors (54) (203) (257) (54) (203) (257) -   -   -   (21) (44) (65)
Production (39,730) -   (39,730) (36,603) -   (36,603) (3,127) -   (3,127) (18,094) -   (18,094)
At December 31, 2014 370,876 252,100 622,976 347,025 241,648 588,673 23,852 10,452 34,304 151,502 95,383 246,884
 
Notes:
(1)  "Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
(2)  "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(3)  The pricing assumptions used in the GLJ Report with respect to net values of future net revenue (forecast) as well as the inflation rates used for operating and capital costs are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an aggregate of the individual natural gas liquids prices used in the Total Proved plus Probable evaluation.  GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.

The table below sets out the future development costs deducted in the estimation of future net revenue attributable to total proved reserves and total proved plus probable reserves (using forecast prices and costs).

Table 9: Future Development Costs(1)

  Total Proved Total Proved Plus Probable
(M$) Estimated Using Forecast Prices and Costs Estimated Using Forecast Prices and Costs
Australia    
2015 81,700 81,700
2016 78,438 78,438
2017 21,120 21,120
2018 36,506 36,506
2019 13,747 13,747
Remainder 14,021 14,021
Total for all years undiscounted 245,532 245,532
Canada    
2015 166,244 200,656
2016 192,500 269,800
2017 98,904 265,047
2018 55,131 156,202
2019 11,784 25,639
Remainder 9,543 14,173
Total for all years undiscounted 534,106 931,517
France    
2015 31,772 67,540
2016 32,483 73,283
2017 10,032 83,687
2018 19,018 52,090
2019 6,395 41,807
Remainder 24,321 24,321
Total for all years undiscounted 124,021 342,728
Germany    
2015 653 4,778
2016 6,887 6,887
2017 384 384
2018 65 65
2019 67 67
Remainder -   (1)
Total for all years undiscounted 8,056 12,180
Ireland    
2015 60,029 60,029
2016 9,450 9,450
2017 -   -  
2018 -   -  
2019 1,882 1,882
Remainder 17,681 17,681
Total for all years undiscounted 89,042 89,042
Netherlands    
2015 6,920 7,795
2016 1,871 6,934
2017 416 18,628
2018 28,678 35,767
2019 433 11,479
Remainder 6,575 6,574
Total for all years undiscounted 44,893 87,177
United States    
2015 8,190 10,920
2016 -   23,669
2017 -   -  
2018 -   -  
2019 -   -  
Remainder -   -  
Total for all years undiscounted 8,190 34,589
     
     
Total Company    
2015 355,508 433,418
2016 321,629 468,461
2017 130,856 388,866
2018 139,398 280,630
2019 34,308 94,621
Remainder 72,141 76,769
Total for all years undiscounted 1,053,840 1,742,765
   
Note:  
(1)  The pricing assumptions used in the GLJ Report with respect to net values of future net revenue (forecast) as well as the inflation
rates used for operating and capital costs are set forth above.  See "Forecast Prices used in Estimates".  The NGL price is an
aggregate of the individual natural gas liquids prices used in the Total Proved plus Probable evaluation.  GLJ is an independent
qualified reserves evaluator appointed pursuant to NI 51-101.
   

Vermilion expects to source its capital expenditure requirements from internally generated cash flow and, as appropriate, from Vermilion's existing credit facility, equity or debt financing.  It is anticipated that costs of funding the future development costs will not impact development of its properties or Vermilion's reserves or future net revenue.

CONTINGENT AND PROSPECTIVE RESOURCES

Vermilion retained GLJ to conduct an independent resource evaluation to assess contingent and prospective resources across all of the Company's key operating regions with an effective date of December 31, 2014 (the "GLJ 2014 Resources Assessment").

All contingent and prospective resources evaluated in the GLJ 2014 Resources Assessment were deemed economic at the effective date of December 31, 2014.

The estimates of volumes of, and the net present value of the future net revenue attributable to, contingent resources and prospective resources in this news release are derived from the GLJ 2014 Resources Assessment.  The GLJ 2014 Resources Assessment was prepared in accordance with COGEH and NI 51-101 by GLJ, an independent qualified reserve evaluator.

A range of contingent and prospective resources estimates (low, best and high) were prepared by GLJ.  See notes 5 to 8 of following Table 11 in this section for a description of low estimate, best estimate and high estimate.

Contingent Resources

"Contingent resources" are not, and should not be confused with, petroleum and natural gas reserves. "Contingent resources" are defined in COGEH as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resource the estimated discovered recoverable quantities associated with a project in the early evaluation stage.

The primary contingencies which currently prevent the classification of Vermilion's contingent resource as reserves include but are not limited to:

  • preparation of firm development plans, including determination of the specific scope and timing of projects;
  • project sanction;
  • access to capital markets;
  • shareholder and regulatory approvals;
  • access to required services and field development infrastructure;
  • oil and natural gas prices in Canada and internationally in jurisdictions in which Vermilion operates;
  • demonstration of economic viability;
  • future drilling program and testing results;
  • further reservoir delineation and studies;
  • facility design work;
  • limitations to development based on adverse topography or other surface restrictions; and
  • the uncertainty regarding marketing and transportation of petroleum from development areas.

There is no certainty that it will be commercially viable to produce any portion of the contingent resources or that Vermilion will produce any portion of the volumes currently classified as contingent resources. The estimates of contingent resources involve implied assessment, based on certain estimates and assumptions, that the resources described exists in the quantities predicted or estimated and that the resources can be profitably produced in the future.  The net present value of the future net revenue from the contingent resources does not necessarily represent the fair market value of the contingent resources.  Actual contingent resources (and any volumes that may be reclassified as reserves) and future production therefrom may be greater than or less than the estimates provided herein.

Prospective Resources

Prospective resources are not, and should not be confused with, petroleum and natural gas reserves. "Prospective resources" are defined in COGEH as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.

There is no certainty that any portion of the prospective resources will be discovered.  If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources or that Vermilion will produce any portion of the volumes currently classified as prospective resources. The estimates of prospective resources involve implied assessment, based on certain estimates and assumptions, that the resources described exists in the quantities predicted or estimated and that the resources can be profitably produced in the future. The net present value of the future net revenue from the prospective resources does not necessarily represent the fair market value of the prospective resources. The recovery and resources estimates provided herein are estimates only.  Actual prospective resources (and any volumes that may be reclassified as reserves or contingent resources) and future production from such prospective resources may be greater than or less than the estimates provided herein.

Summary information regarding contingent and prospective resources and net present values of future net revenues from contingent and prospective resources are set forth below

Table 10: Company Gross and Net Contingent and Prospective Resources as at December 31, 2014 (1) (2) - Forecast Prices and Costs (3) (4)

  Gross   Gross   Net
  Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources
  P+P   Low Best High Low Best High Low Best High Low Best High
Crude Oil and NGLs (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
Australia 17,983   1,350 3,950 6,200 -   1,207 3,046 1,350 3,950 6,200 -   1,207 3,046
Canada 67,168   38,923 109,571 151,394 99,092 215,169 335,029 30,165 83,004 113,008 77,132 165,088 253,483
France 55,890   16,714 32,640 49,379 3,478 12,512 34,866 15,797 30,639 46,388 3,325 11,553 33,074
Germany -     -   -   -   -   -   -   -   -   -   -   -   -  
Ireland -     -   -   -   -   -   -   -   -   -   -   -   -  
Netherlands 157   14 44 1,116 149 264 1,262 14 44 1,116 149 264 1,262
United States 1,855   -   8,482 8,482 -   -   -   -   6,998 6,998 -   -   -  
Total 143,053   57,001 154,687 216,571 102,719 229,152 374,203 47,326 124,635 173,710 80,606 178,112 290,865
                               
  Gross   Gross   Net
  Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources
  P+P   Low Best High Low Best High Low Best High Low Best High
Natural Gas (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf) (MMcf)
Australia -     -   -   -   -   -   -   -   -   -   -   -   -  
Canada 318,446   260,803 772,308 1,055,506 1,031,549 1,869,590 2,475,894 238,734 703,634 952,492 958,760 1,730,748 2,283,476
France 12,457   475 1,330 2,613 -   -   -   449 1,257 2,469 -   -   -  
Germany 61,559   -   -   -   -   -   -   -   -   -   -   -   -  
Ireland 144,638   6,359 23,842 35,734 -   -   -   6,359 23,842 35,734 -   -   -  
Netherlands 84,231   8,704 27,539 47,394 202,035 365,182 680,499 8,704 27,539 47,394 202,035 365,182 680,499
United States 1,645   -   7,300 7,300 -   -   -   -   6,022 6,022 -   -   -  
Total 622,976   276,341 832,319 1,148,547 1,233,584 2,234,772 3,156,393 254,246 762,294 1,044,111 1,160,795 2,095,930 2,963,975
                               
  Gross   Gross   Net
  Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources
  P+P   Low Best High Low Best High Low Best High Low Best High
Total Oil Equivalent (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe) (Mboe)
Australia 17,983   1,350 3,950 6,200 -   1,207 3,046 1,350 3,950 6,200 -   1,207 3,046
Canada 120,243   82,390 238,290 327,312 271,016 526,767 747,678 69,954 200,276 271,757 236,925 453,546 634,062
France 57,967   16,793 32,862 49,814 3,478 12,512 34,866 15,871 30,849 46,800 3,325 11,553 33,074
Germany 10,260   -   -   -   -   -   -   -   -   -   -   -   -  
Ireland 24,106   1,060 3,974 5,956 -   -   -   1,060 3,974 5,956 -   -   -  
Netherlands 14,196   1,464 4,634 9,015 33,822 61,128 114,679 1,464 4,634 9,015 33,822 61,128 114,679
United States 2,129   -   9,698 9,698 -   -   -   -   8,001 8,001 -   -   -  
Total 246,884   103,057 293,408 407,995 308,316 601,614 900,269 89,699 251,684 347,729 274,072 527,434 784,861

Table 11: Summary of Net Present Value of Future Net Revenues as at December 31, 2014 - Forecast Prices and Costs (3)

Contingent Resources Before Income Taxes, Discounted at (5) After Income Taxes, Discounted at (5)
(M$) 0% 5% 8% 10% 0% 5% 8% 10%
Low Estimate (C1) (6)                
Australia 53,588 36,337 28,793 24,638 9,903 3,796 1,318 26
Canada 2,095,806 1,211,845 901,127 747,500 1,563,303 873,722 634,037 516,572
France 1,204,380 661,229 474,985 384,557 789,158 410,775 283,929 223,171
Germany -   -   -   -   -   -   -   -  
Ireland 26,010 13,311 8,376 5,846 26,010 13,311 8,376 5,846
Netherlands 30,396 16,766 11,216 8,274 15,020 4,981 1,049 (979)
United States -   -   -   -   -   -   -   -  
Total Low Estimate 3,410,180 1,939,488 1,424,497 1,170,815 2,403,394 1,306,585 928,709 744,636
Best Estimate (C2) (7)                
Australia 284,255 200,400 164,163 144,286 103,353 68,354 53,704 45,831
Canada 6,459,393 3,570,683 2,589,387 2,111,760 4,818,494 2,586,094 1,831,852 1,466,556
France 2,360,314 1,292,886 932,442 758,266 1,547,524 807,329 562,967 446,486
Germany -   -   -   -   -   -   -   -  
Ireland 154,048 63,672 39,612 29,455 154,048 63,672 39,612 29,455
Netherlands 148,184 93,040 70,699 58,839 78,990 42,647 28,323 20,855
United States 374,344 181,832 122,734 95,296 243,284 115,575 76,064 57,643
Total Best Estimate 9,780,538 5,402,513 3,919,037 3,197,902 6,945,693 3,683,671 2,592,522 2,066,826
High Estimate (C3) (8)                
Australia 553,551 390,331 320,676 282,676 222,157 151,267 121,670 105,741
Canada 9,925,528 5,423,537 3,955,769 3,252,645 7,404,229 3,961,260 2,843,018 2,309,361
France 3,948,744 2,142,264 1,549,595 1,265,979 2,589,524 1,357,470 959,971 771,728
Germany -   -   -   -   -   -   -   -  
Ireland 346,330 128,788 80,411 61,194 346,330 128,788 80,411 61,194
Netherlands 369,732 241,527 189,883 162,531 198,799 118,282 86,830 70,491
United States 374,344 181,832 122,734 95,296 243,284 115,575 76,064 57,643
Total High Estimate 15,518,229 8,508,279 6,219,068 5,120,321 11,004,323 5,832,642 4,167,964 3,376,158
                 
Prospective Resources Before Income Taxes, Discounted at (5) After Income Taxes, Discounted at (5)
(M$) 0% 5% 8% 10% 0% 5% 8% 10%
Low Estimate (Pr1) (6)                
Australia -   -   -   -   -   -   -   -  
Canada 5,138,207 1,799,192 942,409 596,896 3,827,943 1,216,719 565,019 308,857
France 240,765 108,770 68,603 50,665 149,458 62,138 36,495 25,322
Germany -   -   -   -   -   -   -   -  
Ireland -   -   -   -   -   -   -   -  
Netherlands 1,569,880 707,181 475,734 374,648 840,417 344,972 211,133 153,483
United States -   -   -   -   -   -   -   -  
Total Low Estimate 6,948,852 2,615,143 1,486,746 1,022,209 4,817,818 1,623,829 812,647 487,662
Best Estimate (Pr2) (7)                
Australia 115,650 73,506 56,869 48,203 46,695 28,681 21,730 18,160
Canada 15,779,806 6,480,938 3,975,248 2,911,534 11,769,017 4,661,647 2,770,999 1,977,330
France 822,384 388,117 254,918 194,691 533,257 234,616 146,329 107,336
Germany -   -   -   -   -   -   -   -  
Ireland -   -   -   -   -   -   -   -  
Netherlands 3,529,396 1,693,769 1,196,675 975,168 1,904,042 881,861 602,841 479,314
United States -   -   -   -   -   -   -   -  
Total Best Estimate 20,247,236 8,636,330 5,483,710 4,129,596 14,253,011 5,806,805 3,541,899 2,582,140
High Estimate (Pr3) (8)                
Australia 356,273 214,338 162,747 136,788 148,981 88,333 66,497 55,578
Canada 28,841,614 11,940,966 7,525,330 5,652,671 21,515,226 8,730,765 5,414,330 4,016,964
France 2,663,885 1,204,684 784,942 600,089 1,745,296 748,687 471,094 351,229
Germany -   -   -   -   -   -   -   -  
Ireland -   -   -   -   -   -   -   -  
Netherlands 7,454,176 3,747,532 2,709,105 2,236,659 4,053,657 2,003,614 1,427,834 1,166,840
United States -   -   -   -   -   -   -   -  
Total High Estimate 39,315,948 17,107,520 11,182,124 8,626,207 27,463,160 11,571,399 7,379,755 5,590,611
 
Notes:
(1)  The contingent and prospective resource assessments were prepared by GLJ in accordance with the definitions, standards and procedures contained in the COGEH and NI 51-101. Contingent resource is defined in the COGEH as those quantities of petroleum estimated to be potentially recoverable from known accumulations using established technology or technology under development, but which do not currently qualify as reserves or commercially recoverable due to one or more contingencies.  See "Presentation of Oil and Gas Reserves and Production Information - Contingent Resources" for the primary contingencies which prevent the classification of the resources as reserves. There is no certainty that it will be commercially viable to produce any portion of the contingent resources or that Vermilion will produce any portion of the volumes currently classified as contingent resources. The estimates of contingent resources involve implied assessment, based on certain estimates and assumptions, that the resources described exists in the quantities predicted or estimated, as at a given date, and that the resources can be profitably produced in the future. The net present value of the future net revenue from the contingent resources does not necessarily represent the fair market value of the contingent resources. Actual contingent resources (and any volumes that may be reclassified as reserves) and future production therefrom may be greater than or less than the estimates provided herein.   Prospective resource is defined in the COGEH are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.  There is no certainty that any portion of the prospective resources will be discovered.  If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources or that Vermilion will produce any portion of the volumes currently classified as prospective resources. The estimates of prospective resources involve implied assessment, based on certain estimates and assumptions, that the resources described exists in the quantities predicted or estimated and that the resources can be profitably produced in the future. The net present value of the future net revenue from the prospective resources does not necessarily represent the fair market value of the prospective resources. The recovery and resources estimates provided herein are estimates only.  Actual prospective resources (and any volumes that may be reclassified as reserves or contingent resources) and future production from such prospective resources may be greater than or less than the estimates provided herein.
(2)  GLJ prepared the estimates of contingent and prospective resources shown for each property using deterministic principles and methods. Probabilistic aggregation of the low and high property estimates shown in the table might produce different total volumes than the arithmetic sums shown in the table.
(3)  The forecast price and cost assumptions utilized in the year-end 2014 reserves report were also utilized by GLJ in preparing the contingent resource and prospective resource assessments. See "GLJ December 31, 2014 Forecast Prices" in Vermilion's Annual Information Form for the year ended December 31, 2014.
(4) "Gross" Reserves or Contingent Resources or Prospective Resources are Vermilion's working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of Vermilion.  "Net" Reserves or Contingent Resources or Prospective Resources are Vermilion's working interest (operating or non-operating) share after deduction of royalty obligations, plus Vermilion's royalty interests in Reserves or Contingent Resources or Prospective Resources.
(5)  The net present value of future net revenue attributable to the contingent or prospective resources does not necessarily represent the fair market value of the contingent or prospective resources. Estimated abandonment and reclamation costs have been included in the evaluation.
(6)  Low estimate is considered to be a conservative estimate of the quantity of contingent (C1) or prospective (Pr1) resources that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate.  Those contingent or prospective resources at the low end of the estimate range have the highest degree of certainty - a 90% confidence level - that the actual quantities recovered will be equal or exceed the estimate.
(7)  Best estimate is considered to be the best estimate of the quantity of contingent (C2) or prospective (Pr2) resources that will actually be recovered.  It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate.  Those contingent or prospective resources that fall within the best estimate have a 50% confidence level that the actual quantities recovered will be equal or exceed the estimate.
(8)  High estimate is considered to be an optimistic estimate of the quantity of contingent (C3) or prospective (Pr3) resources that will actually be recovered. It is unlikely that the actual remaining quantities of contingent or prospective resources recovered will meet or exceed the high estimate. Those contingent or prospective resources at the high end of the estimate range have a lower degree of certainty - a 10% confidence level - that the actual quantities recovered will equal or exceed the estimate.

ABOUT VERMILION

Vermilion is an oil-leveraged producer that adheres to a value creation strategy through the execution of full cycle exploration and production programs focused on the acquisition, exploration, development and optimization of producing properties in Western Canada, Europe and Australia. Our business model targets annual organic production growth of approximately 5% along with providing reliable and increasing dividends to investors.  Vermilion is targeting growth in production primarily through the exploitation of conventional resource plays in Western Canada, including Cardium light oil and liquids rich natural gas, the exploration and development of high impact natural gas opportunities in the Netherlands and through drilling and workover programs in France and Australia. Vermilion also holds an 18.5% working interest in the Corrib gas field in Ireland. In addition, Vermilion pays a monthly dividend of Canadian $0.215 per share, which provides a current yield in excess of 4%.  Management and directors of Vermilion hold approximately 8% of the outstanding shares and are dedicated to consistently delivering superior rewards for all stakeholders, featuring an 20-year history of market outperformance. Vermilion trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol VET.

Natural gas volumes have been converted on the basis of six thousand cubic feet of natural gas to one barrel equivalent of oil.  Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation.  A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Fund flows from operations and recycle ratio are non-GAAP (as defined herein) measures that do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS" or, alternatively, "GAAP") and therefore may not be comparable with the calculations of similar measures for other entities. "Fund flows from operations" represents cash flows from operating activities before changes in non-cash operating working capital and asset retirement obligations settled. Management considers fund flows from operations and fund flows from operations per share to be key measures as they demonstrate Vermilion's ability to generate the cash necessary to pay dividends, repay debt, fund asset retirement obligations and make capital investments. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, fund flows from operations provides a useful measure of Vermilion's ability to generate cash that is not subject to short-term movements in non-cash operating working capital. "Recycle Ratio" means a measure of capital efficiency calculated by dividing the operating netback of production by the cost of adding reserves. "Netbacks" are per boe and per Mcf measures used in operational and capital allocation decisions. After-tax cash flow netbacks are calculated as cash flow from operating activities (determined in accordance with GAAP) expressed on a per boe basis.

SOURCE Vermilion Energy Inc.

Vermilion Energy Inc.
3500, 520 3rd Avenue SW
Calgary, Alberta T2P 0R3
Phone: 1-403-269-4884
Fax: 1-403-476-8100
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