Cardium Player Vermilion Energy Inc. Provides Updates on Planned 2012 Capital Program

Vermilion Energy Inc. announced that its Board of Directors has approved an initial capital program for 2012 of approximately $375 million. With the Company’s recently announced signing of a purchase and sale agreement to acquire approximately 2,200 boe/d of high quality production in France (the “France Asset Acquisition”) and the current economic and political instabilities in certain regions around the globe, Vermilion’s management and Board of Directors has elected to enter 2012 with a capital program designed to retain financial flexibility and ensure the continued strength of Vermilion’s balance sheet.

The approved $375 million capital program will target Vermilion’s higher margin projects focused on oil and high netback European gas in addition to approximately $92 million earmarked for the ongoing development of the Corrib natural gas project. Taking into consideration the approved $375 million capital program, the France Asset Acquisition and the final US$135 million Corrib acquisition payment due in December 2012 (the “Corrib Payment”), Vermilion currently anticipates total capital expenditures of approximately $630 million in 2012.

Total Capital Expenditures

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Total Development Capital by Category

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The Canadian capital program of approximately $128 million includes an estimated $110 million of predominantly Cardium related drilling activity, representing approximately 55% of all planned exploration and development related expenditures in 2012. The program envisages the drilling of approximately 20 (net) new Cardium wells in 2012 in addition to expenditures on related facilities and equipment, other drilling, land maintenance and various smaller non-operations related capital activities.

Expenditures in France are estimated at approximately $45 million related to an annual workover and optimization program, facilities construction and subsurface maintenance in addition to other capital activities including capital pertaining to the France Asset Acquisition.

In the Netherlands, Vermilion anticipates spending approximately $27 million related to a three well drilling program comprised of two development wells and one exploration well, in addition to expenditures related to permitting activities and ongoing lease and facility construction and maintenance.

Australia capital expenditures are estimated at approximately $83 million in 2012 related to a two to three well drilling program and certain non-recurring facility maintenance activities to replace critical long-life components that will extend the current operational life of the platform.

Combined with the recently announced France Asset Acquisition, the approved $375 million capital program is anticipated to deliver growth in crude oil production and higher netback European gas production of approximately 10%, respectively, offset to some extent by declines in lower margin Canadian gas production resulting in overall production growth in the range of 6% to 8% in 2012. As a result, the Company is currently targeting 2012 average annual production volumes of between 37,000 and 38,000 boe/d levered nearly 83% to crude oil pricing, including Vermilion’s Netherland’s gas production which is priced against a basket of primarily crude based heating products. Vermilion’s anticipated 2012 production volumes will be weighted approximately 63% to crude oil of which approximately 70% will be crude oil priced directly to Brent.

In planning the $375 million capital program, Vermilion has staged its activity to enable additional, predominantly Cardium focused, capital activities to be undertaken in 2012, subject to Board of Directors approval, should Vermilion management’s current assessment of the stability in global economic conditions improve during the course of the year.

“Vermilion believes in taking a long-term and fiscally conservative approach to its business activities, an approach that has served us well in the past,” stated Lorenzo Donadeo, President and CEO of Vermilion. “With the volatility of commodity prices in recent months stemming from continued uncertainty regarding the fiscal stability of many regions and the significant level of Vermilion’s fixed capital commitments in 2012, we have elected to take a measured approach to spending for 2012. This budget will provide for continued growth while ensuring a strong and flexible balance sheet to support our business through the final stages of development of our Corrib offshore gas project in Ireland. This spending plan keeps us on track to achieve our stated objective of 50,000 boe/d in 2015, which represents an approximate 40% increase from average 2011 production volumes.”

2011 Operational Performance

Vermilion remains on track to achieve full year 2011 average production guidance of 35,000 to 36,000 boe/d, an approximate 10% increase over 2010, and exit with production volumes for the month of December 2011 of more than 37,000 boe/d. The Company remained active in its key Cardium play during 2011 by drilling or participating in nearly 50 net wells and anticipates exiting 2011 with related production volumes of more than 6,000 boe/d. By the end of 2011, Vermilion will have drilled or participated in approximately 70 net Cardium wells in total with a remaining inventory of approximately 300 net locations to support continued growth in operated production volumes to between 10,000 and 12,000 boe/d over the next two to three years.