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Vermilion Energy Inc. Announces 2012 Year-End Summary Reserves and Resource Information

Monday, March 04, 2013

Vermilion Energy Inc. Announces 2012 Year-End Summary Reserves and Resource Information02:01 EST Monday, March 04, 2013 CALGARY, March 4, 2013 /PRNewswire/ - Vermilion Energy Inc. ("Vermilion", the "Company", "We" or "Our") (VET - TSX) is pleased to announce summary 2012 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 has been 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, please review the Company's Annual Information Form for the year ended December 31, 2012, to be filed on SEDAR at www.sedar.com on or before March 31, 2013. HIGHLIGHTS Total proved ("1P") reserves increased 9.1% to 105.3 million boe, while total proved plus probable ("2P") reserves increased 12.7% to 164.9 million boe. Replaced 235% of 2012 total production, adding 32.5 million boe of 2P reserves with 19.2 million boe (59%) of 2P reserves additions coming from exploration and development ("E&D") activities and 13.2 million boe (41%) of 2P reserves additions through acquisitions. Replaced 139% of 2012 total production through E&D activities. Excluding development related expenditures at Corrib, Vermilion reinvested only 71% of fund flows from operations to achieve an average cost of $20.48 /boe for E&D related 2P reserves additions and a recycle ratio of 2.7 times.  Including Corrib related development expenditures, Vermilion reinvested 81% of fund flows from operations to achieve an average cost of $23.53 /boe for E&D related 2P reserves additions and a recycle ratio of 2.4 times. Replaced 245% of 2012 total crude oil production, adding 21.5 million boe of 2P crude oil reserves comprised of 16.5 million boe (77%) of 2P Brent-based crude oil reserves and 5.0 million boe (23%) of 2P Canadian based light oil reserves.  Vermilion added 12.9 million boe (60%) of 2P Brent-based crude oil reserves at an average cost of approximately $14 /boe through completion of two separate acquisitions in France during 2012. GLJ estimated contingent resources of 83.9 million boe (low estimate) to 231.8 million boe (high estimate), with a best estimate of 160.9 million boe, and prospective resources of 9.6 million boe (low estimate) to 541.0 million boe (high estimate), with a best estimate of 249.4 million boe (See "Contingent and Prospective Resources" in this news release). Achieved finding and development ("F&D") costs (excluding future development costs ("FDC")) for 2P reserves of $23.53 /boe, and finding, development and acquisition ("FD&A") costs (excluding FDC) for 2P reserves of $19.52 /boe.  This compares to average F&D and FD&A costs (excluding FDC) for 2P reserves on a three-year basis of $26.34 /boe and $24.64 /boe, respectively, and on a five-year basis of $26.67 /boe and $23.30 /boe, respectively. All in FD&A costs (including FDC) in 2012 for 2P reserves were $23.36 /boe resulting in a recycle ratio of 2.4 times. 2012 year-end 2P reserves were comprised of 39% Brent-based light crude, 19.5% Canadian-based light crude, 20% European natural gas, 18% Canadian natural gas and 3.5% natural gas liquids. Reserve life index increased to 12.5 years for 2P reserves and 8.0 years for 1P reserves based on year-end 2012 reserves and annualized fourth quarter 2012 production. At year-end 2012, Vermilion had booked 267.1 net Cardium wells as compared to 207.7 net Cardium wells at the end of 2011.  Average booked 2P reserves per well remain relatively consistent at approximately 155.8 mboe/well. 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 annual information form 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 this annual information form 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 14, 2013 with an effective date of December 31, 2012 (the "GLJ Report").  The GLJ Report 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, 2012 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 Report 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 Report.  There is no assurance that the future price and cost assumptions used in the GLJ Report will prove accurate and variances could be material. Reserves for Australia, Canada, France, Ireland and the Netherlands 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 (8)       Light and Medium Crude Oil   Crude Oil   Natural Gas Canada   Natural Gas France   Natural Gas Netherlands   Natural Gas Liquids   Inflation Rate   Exchange Rate Year     WTI Cushing Oklahoma ($US/bbl)   Edmonton Par Price 40o API ($Cdn/bbl)   Cromer Medium 29.3o API ($Cdn/bbl)   Brent Blend FOB North Sea ($US/bbl)   AECO Gas Price ($Cdn/MMBtu)   National Balancing Point (UK)   Gas Price ($Cdn/Mcf)   FOB Field Gate ($Cdn/bbl)   Percent Per Year   ($US/$Cdn) 2012     94.10   86.86   81.56   111.60   2.45   9.37   9.70   65.42   1.6   1.001 Forecast                                           2013     90.00   85.00   79.90   105.00   3.38   9.13   9.68   65.38   2.0   1.000 2014     92.50   91.50   84.18   102.50   3.83   9.32   9.88   71.37   2.0   1.000 2015     95.00   94.00   86.48   102.50   4.28   9.76   10.35   75.51   2.0   1.000 2016     97.50   96.50   88.78   102.50   4.72   10.25   10.86   77.52   2.0   1.000 2017     97.50   96.50   88.78   100.00   4.95   10.00   10.60   77.52   2.0   1.000 Thereafter     2.0%   2.0%   2.0%   2.0%   2.0%   2.0%   2.0%   2.0%   2.0%   1.000                                             All forecast prices in Table 1 above provided by GLJ. For 2012, the price of Vermilion's natural gas in the Netherlands was based on pricing established by GasTerra, a state owned entity which purchases all natural gas produced by Vermilion in the Netherlands.  For 2012, the natural gas price in the Netherlands was calculated using a trailing average of Dated Brent and the natural gas prices from European trading hubs.  France natural gas production was benchmarked to National Balancing Point (UK).  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, 2012, the average realized sales prices before hedging were $117.03 per bbl (Australia) and $107.67 per bbl (France) for Brent-based crude oil, $82.84 per bbl for Canadian-based crude oil and NGLs, $9.81 per Mcf for European natural gas and $2.52 per Mcf for Canadian natural gas. The following table summarizes the capital expenditures made by Vermilion on oil and natural gas properties for the year ended December 31, 2012: Table 2: Capital Costs Incurred         Acquisition Costs       (M$)       Proved Properties     Unproved Properties     Exploration Costs (1)   Development Costs     Total Costs Australia       -     -     -   49,389     49,389 Canada       69     -     39,045   236,634     275,748 France       169,597     -     -   47,382     216,979 Ireland       -     -     -   58,764     58,764 Netherlands       -     -     272   21,052     21,324 Total       169,666     -     39,317   413,221     622,204                                 Note: (1) Includes costs of acquiring undeveloped lands. The following table sets forth the reserve life index based on total proved and proved plus probable reserve and fourth quarter 2012 production of 36,265 boe/d. Table 3: Reserve Life Index Commodity           Production     Reserve Life Index (years)               Fourth Quarter 2012       Total Proved     Proved Plus Probable   Oil and natural gas liquids (bbl/d)           24,875       7.1     11.2   Natural gas (mcf/d)           68,344       9.8     15.2   Oil Equivalent (boe/d)           36,265       8.0     12.5                                 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 (8)       Light and Medium Oil   Heavy Oil   Natural Gas   Natural Gas Liquids   BOE       Gross (1)   Net (1)   Gross (1)   Net (1)   Gross (1)   Net (1)   Gross (1)   Net (1)   Gross   Net       (Mbbl)   (Mbbl)   (Mbbl)   (Mbbl)   (MMcf)   (MMcf)   (Mbbl)   (Mbbl)   (Mboe)   (Mboe) Proved Developed Producing (2) (5)                                           Australia     10,327   10,327   -   -   -   -   -   -   10,327   10,327 Canada     9,521   7,890   17   16   66,035   59,340   2,360   1,564   22,905   19,361 France     30,898   28,962   -   -   1,377   1,336   -   -   31,127   29,184 Ireland     -   -   -   -   -   -   -   -   -   - Netherlands     -   -   -   -   20,778   20,778   33   33   3,496   3,496 Total Proved Developed Producing     50,746   47,179   17   16   88,190   81,453   2,393   1,597   67,855   62,368 Proved Developed Non-Producing (2) (6)                                           Australia     -   -   -   -   -   -   -   -   -   - Canada     549   478   -   -   7,032   6,424   154   114   1,875   1,662 France     602   576   -   -   -   -   -   -   602   576 Ireland     -   -   -   -   -   -   -   -   -   - Netherlands     -   -   -   -   15,828   15,828   29   29   2,667   2,667 Total Proved Developed Non-Producing     1,151   1,054   -   -   22,860   22,253   184   143   5,145   4,906 Proved Undeveloped (2) (7)                                           Australia     -   -   -   -   -   -   -   -   -   - Canada     8,045   7,172   -   -   40,947   38,215   1,051   866   15,920   14,407 France     1,017   984   -   -   -   -   -   -   1,017   984 Ireland     -   -   -   -   91,954   91,954   -   -   15,326   15,326 Netherlands     -   -   -   -   -   -   -   -   -   - Total Proved Undeveloped     9,062   8,157   -   -   132,901   130,170   1,051   866   32,263   30,717 Proved (2)                                           Australia     10,327   10,327   -   -               -   -   -   -   10,327   10,327 Canada     18,115   15,540   17   16   114,014   103,980   3,565   2,544   40,700   35,430 France     32,516   30,522   -   -   1,377   1,336   -   -   32,746   30,744 Ireland     -   -   -   -   91,954   91,954   -   -   15,326   15,326 Netherlands     -   -   -   -   36,606   36,606   62   62   6,163   6,163 Total Proved     60,959   56,389   17   16   243,951   233,875   3,627   2,606   105,262   97,991 Probable (3)                                           Australia     6,815   6,815   -   -   -   -   -   -   6,816   6,816 Canada     14,099   11,888   3   3   65,654   60,267   2,026   1,522   27,070   23,457 France     14,263   13,392   -   -   23   23   -   -   14,266   13,396 Ireland     -   -   -   -   35,078   35,078   -   -   5,846   5,846 Netherlands     -   -   -   -   33,277   33,277   60   60   5,607   5,607 Total Probable     35,177   32,095   3   3   134,033   128,646   2,086   1,582   59,605   55,121 Proved Plus Probable (2) (3)                                           Australia     17,143   17,143   -   -   -   -   -   -   17,143   17,143 Canada     32,214   27,428   20   19   179,668   164,247   5,591   4,066   67,770   58,887 France     46,779   43,914   -   -   1,401   1,358   -   -   47,012   44,140 Ireland     -   -   -   -   127,033   127,033   -   -   21,172   21,172 Netherlands     -   -   -   -   69,883   69,883   123   123   11,770   11,770 Total Proved Plus Probable     96,136   88,484   20   19   377,984   362,521   5,713   4,188   164,867   153,111                                             Table 5: Net Present Values of Future Net Revenue - Based on Forecast Prices and Costs (8)       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) (5)                                           Australia     494,122   448,134   409,522   376,948   349,281   243,707   220,036   200,192   183,496   169,361 Canada     720,151   571,011   473,635   405,829   356,227   720,151   571,011   473,635   405,829   356,227 France     1,840,380   1,360,328   1,096,420   929,750   814,095   1,346,767   1,007,535   815,310   691,887   605,409 Ireland     -   -   -   -   -   -   -   -   -   - Netherlands     95,859   96,540   95,068   92,801   90,287   59,351   61,232   60,854   59,590   57,997 Total Proved Developed Producing     3,150,512   2,476,013   2,074,645   1,805,329   1,609,890   2,369,977   1,859,814   1,549,991   1,340,802   1,188,995 Proved Developed Non-Producing (2) (6)                                           Australia     -   -   -   -   -   -   -   -   -   - Canada     58,017   45,252   37,604   32,430   28,672   58,017   45,252   37,604   32,430   28,672 France     36,048   26,937   21,530   17,961   15,415   23,500   17,340   13,696   11,299   9,598 Ireland     -   -   -   -   -   -   -   -   -   - Netherlands     127,942   105,445   89,847   78,497   69,903   92,674   73,423   60,477   51,329   44,592 Total Proved Developed Non-Producing     222,007   177,634   148,982   128,887   113,989   174,191   136,015   111,777   95,058   82,861 Proved Undeveloped (2) (7)                                           Australia     -   -   -   -   -   -   -   -   -   - Canada     427,998   272,807   176,581   113,758   70,957   426,312   272,031   176,211   113,575   70,863 France     62,306   35,200   23,126   15,933   11,043   40,767   21,078   12,160   6,890   3,377 Ireland     596,255   421,845   300,004   212,839   149,179   596,255   421,845   300,004   212,839   149,179 Netherlands     -   -   -   -   -   -   -   -   -   - Total Proved Undeveloped     1,086,558   729,852   499,712   342,531   231,178   1,063,333   714,953   488,375   333,305   223,419 Proved (2)                                           Australia     494,122   448,134   409,522   376,948   349,281   243,707   220,036   200,192   183,496   169,361 Canada     1,206,166   889,070   687,821   552,017   455,855   1,204,480   888,294   687,450   551,834   455,762 France     1,938,734   1,422,465   1,141,077   963,644   840,552   1,411,034   1,045,952   841,167   710,076   618,385 Ireland     596,255   421,845   300,004   212,839   149,179   596,255   421,845   300,004   212,839   149,179 Netherlands     223,801   201,985   184,915   171,298   160,190   152,025   134,656   121,331   110,919   102,589 Total Proved     4,459,077   3,383,499   2,723,339   2,276,748   1,955,057   3,607,500   2,710,782   2,150,144   1,769,165   1,495,276 Probable (3)                                           Australia     358,056   294,555   246,961   210,946   183,257   160,229   127,615   103,409   85,320   71,604 Canada     1,003,214   617,181   410,603   289,652   213,464   758,875   475,240   323,042   232,898   175,146 France     1,043,805   566,413   365,741   259,204   194,393   680,950   364,010   229,354   157,906   114,676 Ireland     343,183   221,294   148,593   103,454   74,378   343,183   221,294   148,593   103,454   74,378 Netherlands     290,794   215,925   171,706   143,092   123,206   161,323   119,036   94,056   77,928   66,768 Total Probable     3,039,051   1,915,368   1,343,605   1,006,348   788,698   2,104,560   1,307,195   898,454   657,506   502,572 Proved Plus Probable (2) (3)                                           Australia     852,178   742,689   656,483   587,895   532,539   403,936   347,650   303,601   268,816   240,965 Canada     2,209,380   1,506,251   1,098,424   841,669   669,319   1,963,355   1,363,534   1,010,492   784,732   630,909 France     2,982,538   1,988,878   1,506,818   1,222,848   1,034,945   2,091,984   1,409,963   1,070,520   867,983   733,061 Ireland     939,437   643,138   448,598   316,293   223,556   939,437   643,138   448,598   316,293   223,556 Netherlands     514,595   417,910   356,621   314,390   283,396   313,348   253,692   215,387   188,847   169,357 Total Proved Plus Probable     7,498,128   5,298,866   4,066,944   3,283,095   2,743,755   5,712,060   4,017,977   3,048,598   2,426,671   1,997,848                                             Table 6: Total Future Net Revenue (Undiscounted) Based on Forecast Prices and Costs (8) (M$)     Revenue     Royalties     Operating Costs   Capital Development Costs   Abandonment and Reclamation Costs   Future Net Revenue Before Income Taxes   Future Income Taxes   Future Net Revenue After Income Taxes Proved (2)                                       Australia     1,124,862     -     561,774   39,302   29,665   494,122   250,415   243,707 Canada     2,654,946     350,011     650,972   412,269   35,528   1,206,166   1,686   1,204,480 France     3,377,006     208,626     962,343   92,573   174,730   1,938,734   527,700   1,411,034 Ireland     983,693     -     156,907   221,938   8,594   596,255   -   596,255 Netherlands     388,643     -     114,058   12,490   38,294   223,801   71,776   152,025 Total Proved     8,529,150     558,637     2,446,054   778,571   286,811   4,459,077   851,576   3,607,500 Proved Plus Probable (2) (3)                                       Australia     1,898,680     -     902,469   107,302   36,732   852,178   448,242   403,936 Canada     4,663,789     632,948     1,026,259   748,323   46,880   2,209,380   246,025   1,963,355 France     5,000,274     309,459     1,303,425   195,458   209,392   2,982,538   890,555   2,091,984 Ireland     1,381,321     -     210,825   221,938   9,120   939,437   -   939,437 Netherlands     767,437     -     182,705   24,420   45,717   514,595   201,247   313,348 Total Proved Plus Probable     13,711,501     942,407     3,625,684   1,297,440   347,842   7,498,128   1,786,068   5,712,060                                         Table 7: Future Net Revenue by Production Group Based on Forecast Prices and Costs (8)             Future Net Revenue Before Income Taxes (a) (Discounted at 10% Per Year)       Unit Value Proved Developed Producing           (M$)       ($/boe) Light and medium oil (b)           1,848,495       37.05 Natural gas (c)           218,929       19.46 Non-conventional oil and gas activities           7,221       5.91 Total Proved Developed Producing           2,074,645       33.26 Proved Developed Non-Producing                     Light and medium oil (b)           52,002       40.53 Natural gas (c)           94,969       30.44 Non-conventional oil and gas activities           2,010       4.00 Total Proved Developed Non-Producing           148,982       30.37 Proved Undeveloped                     Light and medium oil (b)           172,789       15.91 Natural gas (c)           320,842       17.67 Non-conventional oil and gas activities           6,081       3.58 Total Proved Undeveloped           499,712       16.27 Proved                     Light and medium oil (b)           2,073,743       33.43 Natural gas (c)           634,291       19.50 Non-conventional oil and gas activities           15,305       4.47 Total Proved           2,723,339       27.79 Probable                     Light and medium oil (b)           969,797       26.39 Natural gas (c)           366,288       22.16 Non-conventional oil and gas activities           7,521       4.08 Total Probable           1,343,605       24.38 Proved Plus Probable                     Light and medium oil (b)           3,043,586       30.81 Natural gas (c)           1,000,532       20.39 Non-conventional oil and gas activities           22,826       4.33 Total Proved Plus Probable           4,066,944       26.56                       Notes to Table 7 Above: (a)  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. (b)  Including solution gas and other by-products. (c)  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, 2012 compared to such reserves as at December 31, 2011 based on the forecast price and cost assumptions set forth in Table 1 above. Table 8: Reconciliation of Company Gross Reserves by Principal Product Type - Based on Forecast Prices and Costs AUSTRALIA     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     12,697   4,800   17,497   12,697   4,800   17,497   -   -   -   -   -   - Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   2,000   2,000   -   2,000   2,000   -   -   -   -   -   - Technical Revisions     53   36   89   53   36   89   -   -   -   -   -   - Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     (95)   (20)   (115)   (95)   (20)   (115)   -   -   -   -   -   - Production     (2,328)   -   (2,328)   (2,328)   -   (2,328)   -   -   -   -   -   - At December 31, 2012     10,327   6,816   17,143   10,327   6,816   17,143   -   -   -   -   -   -       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     -   -   -   -   -   -   -   -   -   12,697   4,800   17,497 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   -   -   -   -   -   -   -   -   -   2,000   2,000 Technical Revisions     -   -   -   -   -   -   -   -   -   53   36   89 Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   (95)   (20)   (115) Production     -   -   -   -   -   -   -   -   -   (2,328)   -   (2,328) At December 31, 2012     -   -   -   -   -   -   -   -   -   10,327   6,816   17,143                                                     CANADA     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     15,972   14,038   30,010   15,953   14,035   29,988   19   3   22   3,358   1,662   5,020 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     3,568   800   4,368   3,568   800   4,368   -   -   -   489   331   820 Technical Revisions     1,395   (736)   659   1,393   (736)   657   2   -   2   169   33   202 Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     (2,803)   -   (2,803)   (2,799)   -   (2,799)   (4)   -   (4)   (451)   -   (451) At December 31, 2012     18,132   14,102   32,234   18,115   14,099   32,214   17   3   20   3,565   2,026   5,591       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     116,411   58,525   174,936   91,493   48,764   140,257   24,918   9,761   34,679   38,732   25,454   64,186 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     12,449   7,178   19,627   12,449   7,178   19,627   -   -   -   6,132   2,327   8,459 Technical Revisions     2,132   (433)   1,699   102   (2,229)   (2,127)   2,030   1,796   3,826   1,920   (775)   1,145 Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     (3,252)   384   (2,868)   -   -   -   (3,252)   384   (2,868)   (542)   64   (478) Production     (13,726)   -   (13,726)   (12,066)   -   (12,066)   (1,660)   -   (1,660)   (5,542)   -   (5,542) At December 31, 2012     114,014   65,654   179,668   91,978   53,713   145,691   22,036   11,941   33,977   40,700   27,070   67,770                                                     FRANCE     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     24,127   11,801   35,928   24,127   11,801   35,928   -   -   -   -   -   - Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     106   130   236   106   130   236   -   -   -   -   -   - Technical Revisions     1,089   268   1,357   1,089   268   1,357   -   -   -   -   -   - Acquisitions     10,836   2,064   12,900   10,836   2,064   12,900   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     (3,642)   -   (3,642)   (3,642)   -   (3,642)   -   -   -   -   -   - At December 31, 2012     32,516   14,263   46,779   32,516   14,263   46,779   -   -   -   -   -   -       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     596   19   615   596   19   615   -   -   -   24,226   11,805   36,031 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   -   -   -   -   -   -   -   -   106   130   236 Technical Revisions     1,088   5   1,093   1,088   5   1,093   -   -   -   1,271   267   1,538 Acquisitions     1,007   -   1,007   1,007   -   1,007   -   -   -   11,004   2,064   13,068 Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     (1,314)   -   (1,314)   (1,314)   -   (1,314)   -   -   -   (3,861)   -   (3,861) At December 31, 2012     1,377   24   1,401   1,377   24   1,401   -   -   -   32,746   14,266   47,012                                                     IRELAND     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     -   -   -   -   -   -   -   -   -               -   -   - Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   -   -   -   -   -   -   -   -   -   -   - Technical Revisions     -   -   -   -   -   -   -   -   -   -   -   - Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     -   -   -   -   -   -   -   -   -   -   -   - At December 31, 2012     -   -   -   -   -   -   -   -   -   -   -   -       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     91,991   12,968   104,959   91,991   12,968   104,959   -   -   -   15,332   2,161   17,493 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   -   -   -   -   -   -   -   -   -   -   - Technical Revisions     -   22,074   22,074   -   22,074   22,074   -   -   -   -   3,679   3,679 Acquisitions     -   -   -   -   -   -   -   -   -   -   -   - Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     (37)   37   -   (37)   37   -   -   -   -   (6)   6   - Production     -   -   -   -   -   -   -   -   -   -   -   - At December 31, 2012     91,954   35,079   127,033   91,954   35,079   127,033   -   -   -   15,326   5,846   21,172                                                     NETHERLANDS     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     -   -   -   -   -   -   -   -   -   51   56   107 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     -   -   -   -   -   -   -   -   -   6   4   10 Technical Revisions     -   -   -   -   -   -   -   -   -   29   (2)   27 Acquisitions     -   -   -   -   -   -   -   -   -   -   2   2 Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     -   -   -   -   -   -   -   -   -   (24)   -   (24) At December 31, 2012     -   -   -   -   -   -   -   -   -   62   61   123       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     32,768   32,740   65,508   32,768   32,740   65,508   -   -   -   5,512   5,513   11,025 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     3,333   3,633   6,966   3,333   3,633   6,966   -   -   -   562   610   1,172 Technical Revisions     12,134   (3,265)   8,869   12,134   (3,265)   8,869   -   -   -   2,052   (547)   1,505 Acquisitions     854   169   1,023   854   169   1,023   -   -   -   142   31   173 Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     -   -   -   -   -   -   -   -   -   -   -   - Production     (12,483)   -   (12,483)   (12,483)   -   (12,483)   -   -   -   (2,105)   -   (2,105) At December 31, 2012     36,606   33,277   69,883   36,606   33,277   69,883   -   -   -   6,163   5,607   11,770                                                     TOTAL COMPANY     Total Oil   Light and Medium Oil   Heavy Oil   Natural Gas Liquids Proved (2) Probable (3) P+P (2) (3) Factors     Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl)   Proved (Mbbl)   Probable (Mbbl)   Proved Plus Probable (Mbbl) At December 31, 2011     52,796   30,639   83,435   52,777   30,636   83,413   19   3   22   3,409   1,718   5,127 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     3,674   2,930   6,604   3,674   2,930   6,604   -   -   -   495   336   831 Technical Revisions     2,537   (432)   2,105   2,535   (432)   2,103   2   -   2   199   30   229 Acquisitions     10,836   2,064   12,900   10,836   2,064   12,900   -   -   -   -   2   2 Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     (95)   (20)   (115)   (95)   (20)   (115)   -   -   -   -   -   - Production     (8,773)   -   (8,773)   (8,769)   -   (8,769)   (4)   -   (4)   (476)   -   (476) At December 31, 2012     60,975   35,181   96,156   60,958   35,178   96,136   17   3   20   3,627   2,086   5,714       Total Gas   Conventional Natural Gas   Coal Bed Methane   BOE Proved (2) Probable (3) P+P (2) (3) Factors     Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (MMcf)   Probable (MMcf)   Proved Plus Probable (MMcf)   Proved (Mboe)   Probable (Mboe)   Proved Plus Probable (Mboe) At December 31, 2011     241,766   104,252   346,018   216,848   94,491   311,339   24,918   9,761   34,679   96,499   49,733   146,232 Discoveries     -   -   -   -   -   -   -   -   -   -   -   - Extensions & Improved Recovery     15,782   10,811   26,593   15,782   10,811   26,593   -   -   -   6,800   5,067   11,867 Technical Revisions     15,354   18,381   33,735   13,324   16,585   29,909   2,030   1,796   3,826   5,296   2,660   7,956 Acquisitions     1,861   169   2,030   1,861   169   2,030   -   -   -   11,146   2,095   13,241 Dispositions     -   -   -   -   -   -   -   -   -   -   -   - Economic Factors     (3,289)   421   (2,868)   (37)   37   -   (3,252)   384   (2,868)   (643)   50   (593) Production     (27,523)   -   (27,523)   (25,863)   -   (25,863)   (1,660)   -   (1,660)   (13,836)   -   (13,836) At December 31, 2012     243,951   134,034   377,985   221,915   122,093   344,008   22,036   11,941   33,977   105,262   59,605   164,867                                                     Notes to Tables 1-8 Above: (1)  "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. (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. (8)  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 "Table 1: 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 (M$)       Total Proved Estimated Using Forecast Prices and Costs       Total Proved Plus Probable Estimated Using Forecast Prices and Costs Australia                 2013       18,600       86,600 2014       3,978       3,978 2015       4,058       4,058 2016       4,139       4,139 2017       4,221       4,221 Remainder       4,306       4,306 Total for all years undiscounted       39,302       107,302 Canada                 2013       168,444       226,171 2014       108,811       257,861 2015       117,781       197,234 2016       3,236       48,677 2017       2,555       3,226 Remainder       11,442       15,154 Total for all years undiscounted       412,269       748,323 France                 2013       18,221       35,211 2014       32,149       66,161 2015       6,586       50,914 2016       5,797       13,353 2017       5,879       5,879 Remainder       23,941       23,941 Total for all years undiscounted       92,573       195,458 Ireland                 2013       84,404       84,404 2014       75,313       75,313 2015       45,674       45,674 2016       16,547       16,547 2017       -       - Remainder       -       - Total for all years undiscounted       221,938       221,938 Netherlands                 2013       4,234       2,842 2014       408       2,632 2015       416       11,515 2016       424       424 2017       433       433 Remainder       6,574       6,574 Total for all years undiscounted       12,490       24,420 Total Company                 2013       293,903       435,228 2014       220,659       405,945 2015       174,515       309,394 2016       30,143       83,140 2017       13,088       13,759 Remainder       46,263       49,975 Total for all years undiscounted       778,571       1,297,440                   Vermilion expects to source its capital expenditure requirements from internally generated cash flow and, as appropriate, from the existing credit facility or equity 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, 2012 (the "GLJ Resources Assessment"). All contingent and prospective resources evaluated in the GLJ Resources Assessment were deemed economic at the effective date of December 31, 2012. 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 Resources Assessment. The GLJ 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 Resources as at December 31, 2012 (1) - Forecast Prices and Costs (2) (9)   Gross   Gross   Net   Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources Oil and NGLs P+P (Mbbl)   Low (Mbbl) Best (Mbbl) High (Mbbl) Low (Mbbl) Best (Mbbl) High (Mbbl) Low (Mbbl) Best (Mbbl) High (Mbbl) Low (Mbbl) Best (Mbbl) High (Mbbl) Australia 17,143   2,650 6,800 10,800 - -             - 2,650 6,800 10,800 - - - Canada 37,825   33,118 52,774 70,961 1,843 107,438 273,092 28,596 44,534 57,903 1,628 84,979 208,046 France 46,779   6,425 16,995 25,496 - -             - 6,138 16,013 24,019 - - - Ireland -   - - - - -             - - - - - - - Netherlands 123   - - - - - - - - - - - - Total 101,870   42,193 76,569 107,257 1,843 107,438 273,092 37,384 67,347 92,722 1,628 84,979 208,046                                 Gross   Gross   Net   Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources Natural Gas P+P (MMcf)   Low (MMcf) Best (MMcf) High (MMcf) Low (MMcf) Best (MMcf) High (MMcf) Low (MMcf) Best (MMcf) High (MMcf) Low (MMcf) Best (MMcf) High (MMcf) Australia 0   - - - - - - - - - - - - Canada 179,668   235,714 483,135 696,279 46,638 851,884 1,607,204 221,905 453,008 644,338 44,314 795,494 1,490,947 France 1,401   9,060 11,518 14,448 - -             - 9,060 11,518 14,448 - -             - Ireland 127,033   5,336 11,357 36,381 - -             - 5,336 11,357 36,381 - -             - Netherlands 69,883   - -             - - -             - - -             - - -             - Total 377,985   250,110 506,010 747,108 46,638 851,884 1,607,204 236,301 475,883 695,167 44,314 795,494 1,490,947                                 Gross   Gross   Net   Reserves   Contingent Resources Prospective Resources Contingent Resources Prospective Resources Total Oil Equivalent P+P (Mboe)   Low (Mboe) Best (Mboe) High (Mboe) Low (Mboe) Best (Mboe) High (Mboe) Low (Mboe) Best (Mboe) High (Mboe) Low (Mboe) Best (Mboe) High (Mboe) Australia 17,143   2,650 6,800 10,800 - -             - 2,650 6,800 10,800 - -             - Canada 67,770   72,403 133,295 187,009 9,617 249,418 540,959 65,580 120,035 165,293 9,013 217,562 456,538 France 47,012   7,935 18,915 27,904 - -             - 7,648 17,933 26,427 - -             - Ireland 21,172   889 1,893 6,064 - -             - 889 1,893 6,064 - -             - Netherlands 11,770   - -             - - -             - - -             - - -             - Total 164,867   83,877 160,903 231,777 9,617 249,418 540,959 76,767 146,661 208,584 9,013 217,562 456,538 Table 11: Summary of Net Present Value of Future Net Revenues as at December 31, 2012 - Forecast Prices and Costs (2) Contingent Resources Before Income Taxes, Discounted at (% per year) (8) (M$) 0% 5% 8% 10% Low Estimate (C1) (5)         Australia 61,997 42,959 34,570 29,925 Canada 1,712,572 916,122 639,548 505,146 France 407,270 254,130 196,928 167,539 Ireland 11,326 7,172 5,525 4,668 Netherlands - - - - Total Low Estimate 2,193,165 1,220,383 876,571 707,278 Best Estimate (C2) (6)         Australia 425,329 313,355 263,812 236,225 Canada 3,406,612 1,888,778 1,362,746 1,106,275 France 1,048,302 596,063 443,433 368,654 Ireland 56,139 26,608 16,563 11,774 Netherlands - - - - Total Best Estimate 4,936,382 2,824,804 2,086,554 1,722,928 High Estimate (C3) (7)         Australia 851,871 623,288 523,927 469,059 Canada 5,305,454 2,945,112 2,149,158 1,764,334 France 1,831,541 1,014,848 761,127 639,965 Ireland 288,983 107,560 57,142 35,814 Netherlands - - - - Total High Estimate 8,277,849 4,690,808 3,491,354 2,909,172           Prospective Resources Before Income Taxes, Discounted at (% per year) (8) (M$) 0% 5% 8% 10% Low Estimate (Pr1) (5)         Australia - - - - Canada 143,088 73,319 50,068 39,096 France - - - - Ireland - - - - Netherlands - - - - Total Low Estimate 143,088 73,319 50,068 39,096 Best Estimate (Pr2) (6)         Australia - - - - Canada 4,766,626 1,963,420 1,152,054 800,693 France - - - - Ireland - - - - Netherlands - - - - Total Best Estimate 4,766,626 1,963,420 1,152,054 800,693 High Estimate (Pr3) (7)         Australia - - - - Canada 21,714,243 10,061,738 6,736,117 5,263,776 France - - - - Ireland - - - - Netherlands - - - - Total High Estimate 21,714,243 10,061,738 6,736,117 5,263,776 Notes to Table 10-11 Above: (1)  The contingent resource assessments were prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and NI 51-101. Contingent resource is defined in the Canadian Oil and Gas Evaluation Handbook 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. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. (2)  The forecast price and cost assumptions utilized in the year-end 2012 reserves report were also utilized by GLJ in preparing the contingent resource assessments. See "GLJ December 31, 2012 Forecast Prices" in this news release. (3)  Proved plus probable gross reserve volumes are based on the year-end 2012 reserves report. (4)  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. Gross means the Company's working interest share in the resources before deducting royalties. Net means the Company's working interest share in the resources after deduction of royalties. (5)  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. (6)  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. (7)  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. (8)  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. (9) "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. 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, the broader European region and Australia. Vermilion is targeting annual 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 currently pays a monthly dividend of Canadian $0.20 per month per share.  Management and directors of Vermilion hold approximately 8% of the outstanding shares and are dedicated to consistently delivering superior rewards for all its stakeholders. Vermilion trades on the Toronto Stock Exchange under the symbol VET and over-the-counter in the United States under the symbol VEMTF. Vermilion has initiated the process with the NYSE Euronext for a secondary listing of the Company's common shares on the NYSE Euronext's New York Stock Exchange ("NYSE"). Listing will be subject to fulfilling all of the listing requirements of the NYSE. Pending receipt of all applicable exchange and regulatory approvals, the Company expects its common shares will be listed on the NYSE during the first quarter of 2013 under the ticker 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.For further information: <p> </p> <p> Anthony Marino, Executive VP & COO; Curtis W. Hicks, C.A., Executive VP & CFO and/or Dean N. Morrison, Director Investor Relations </p> <p> TEL (403) 269-4884   |   IR TOLL FREE 1-866-895-8101   |   <a href="mailto:investor_relations@vermilionenergy.com">investor_relations@vermilionenergy.com</a>   |   <a href="http://www.vermilionenergy.com">www.vermilionenergy.com</a> </p>