Netherlands

In the Netherlands, Vermilion enjoys natural gas prices that are nearly double those received in North America and has a portfolio of more than 30 high-impact drilling opportunities.  A recently completed four-well drilling program yielded incremental production of approximately 4,000 boe/d, half of which is now tied into production facilities, with the remainder to be placed on production by the third quarter of 2011 once regulatory approvals are completed and the wells are tied into production facilities.  Vermilion has submitted for approval 16 new locations with plans to drill four to six additional wells in 2011.

In the Netherlands, Vermilion completed the De Hoeve-1 exploration well, which tested at gross rates of more than 20 mmcf/d.   Vermilion continued to work towards receipt of permitting and regulatory approvals in anticipation of a four to six well drilling program to be initiated in 2011.  Further work also continued with respect to identification and delineation of further drilling prospects in the region.  Two of the four highly successful wells drilled as part of the 2009 drilling program were initially brought on at restricted rates late in the first quarter and are now producing in excess of 2,000 boe/d with the remaining two wells targeted for first production in the third quarter of 2011.