Vermilion Energy Inc. is pleased to announce that it has completed its previously announced purchase and sale agreements with Total E&P France (“Total”) whereby Vermilion, through its wholly owned subsidiaries, has acquired certain working interests in six producing fields located in the Paris and Aquitaine basins in France (the “Acquisition”). The Assets (as defined below) are expected to average approximately 2,200 boe per day of production in 2012, weighted 86% to high quality Brent based crude, and add an estimated 6.7 (1) million boe of proved plus probable reserves (96% crude oil). Taking into consideration an effective date of January 1, 2011 and customary closing adjustments, Vermilion paid approximately $108 million cash at closing of the Acquisition.

The acquired assets consist of interests in six fields including the Itteville (79%), Vert Le Grand (90%), Vert Le Petit (100%), La Croix Blanche (100%) and Dommartin-Lettree (56%) fields in the Paris Basin and the Vic Bilh (73%) field in the Aquitaine Basin (the “Assets”). Vermilion previously held the remaining non-operated working interests in each of the Itteville, Vert Le Grand and Vic Bilh fields and now holds a 100% operated working interest in each of the acquired fields with the exception of the Dommartin-Lettree field in the Paris Basin in which the Company now holds a 56% non-operated interest.

Based on estimated 2012 average daily production levels the acquisition metrics reflect a cash cost of approximately C$52,000 per boepd and C$17.21 per boe of proved plus probable reserves as evaluated by GLJ and effective December 31, 2011.

Vermilion continues to maintain considerable financial flexibility after closing of the Acquisition with approximately C$640 million of remaining borrowing capacity.

The Acquisition is a natural addition to the Company’s current France asset base and is well aligned with its strategic objective to maintain and consolidate the Company’s core operating areas and own and operate 100% of its assets. The Acquisition further strengthens Vermilion’s position as the leading oil producer in France, and with a significant weighting toward high quality oil will provide robust netbacks in the current commodity price environment. Vermilion believes it has identified numerous areas where it can reduce the Asset's current cost struture and increase production through optimized production operations, waterflood management and exploitation of infill development opportunities.


(1) Estimated proved plus probable reserves attributable to the Assets as evaluated by GLJ Petroleum Consultants Ltd. (“GLJ”) in a report dated October 14, 2011 with an effective date of December 31, 2011