----

| TABLE OF CONTENTS                                               |
|-----------------------------------------------------------------|
|                                                            |   |
| GLOSSARY OF TERMS                                               | 4 |
|                                                            | Conventions | 6 |
|                                                            | Abbreviations | 6 |
|                                                            | Conversion | 6 |
| SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS               | 7 |
| PRESENTATION OF OIL AND GAS RESERVES AND PRODUCTION INFORMATION | 8 |
| NON-GAAP MEASURES                                               | 8 |
| VERMILION ENERGY INC.                                           | 9 |
|                                                            | General | 9 |
|                                                            | Organizational Structure of the Company | 9 |
|                                                            | Summary Description of the Business | 10 |
|                                                            | History of Vermilion | 10 |
| NARRATIVE DESCRIPTION OF THE BUSINESS                           | 11 |
|                                                            | Stated Business Objectives | 11 |
|                                                            | Description of Properties | 11 |
| STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION    | 13 |
|                                                            | Reserves and Future Net Revenue | 13 |
|                                                            | Reconciliations of Changes in Reserves | 16 |
|                                                            | Undeveloped Reserves | 20 |
|                                                            | Timing of Initial Undeveloped Reserves Assignment | 20 |
|                                                            | Future Development Costs | 21 |
|                                                            | Oil and Gas Properties and Wells | 22 |
|                                                            | Costs Incurred | 22 |
|                                                            | Exploration and Development Activities | 23 |
|                                                            | Properties with No Attributed Reserves | 24 |
|                                                            | Abandonment and Reclamation Costs | 24 |
|                                                            | Tax Information | 25 |
|                                                            | Production Estimates | 25 |
|                                                            | Production History | 26 |
|                                                            | Marketing | 28 |
| ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY INC.         | 29 |
|                                                            | Management | 29 |
|                                                            | Common Shares | 30 |
|                                                            | Cash Dividends | 30 |
|                                                            | Dividend Reinvestment Plan | 31 |
|                                                            | Shareholder Rights Plan | 32 |
| AUDIT COMMITTEE MATTERS                                         | 35 |
|                                                            | Audit Committee Charter | 35 |
|                                                            | Composition of the Audit Committee | 35 |
|                                                            | External Audit Service Fees | 36 |
| MARKET FOR PRICE RANGE AND TRADING VOLUME OF SECURITIES         | 36 |
| CREDIT RATINGS                                                  | 36 |
| CONFLICTS OF INTEREST                                           | 37 |
| INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS      | 37 |
| LEGAL PROCEEDINGS                                               | 37 |
| MATERIAL CONTRACTS                                              | 38 |
| INTERESTS OF EXPERTS                                            | 38 |
| TRANSFER AGENT AND REGISTRAR                                    | 38 |
|                                                            |   |   |

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| RISK FACTORS                                                                                                | 38                                                            |
|-------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                                                                                        | Reserve Estimates                                             | 38 |
|                                                                                                        | Volatility of Oil and Natural Gas Prices                      | 39 |
|                                                                                                        | Changes in Legislation                                        | 39 |
|                                                                                                        | Government Regulations                                        | 39 |
|                                                                                                        | Competition                                                   | 39 |
|                                                                                                        | Operational Matters                                           | 40 |
|                                                                                                        | Environmental Concerns                                        | 40 |
|                                                                                                        | Kyoto Protocol                                                | 40 |
|                                                                                                        | Debt Service                                                  | 40 |
|                                                                                                        | Delay in Cash Dividends                                       | 40 |
|                                                                                                        | Changes in Income Tax Laws                                    | 41 |
|                                                                                                        | Depletion of Reserves                                         | 41 |
|                                                                                                        | Net Asset Value                                               | 41 |
|                                                                                                        | Variations in Interest Rates and Foreign Exchange Rates       | 41 |
|                                                                                                        | Increase in Operating Costs or Decline in Production Level    | 41 |
|                                                                                                        | Acquisition Assumptions                                       | 41 |
|                                                                                                        | Failure to Realize Anticipated Benefits of Prior Acquisitions | 42 |
|                                                                                                        | Additional Financing                                          | 42 |
|                                                                                                        | Potential Conflicts of Interest                               | 42 |
|                                                                                                        | GAAP Adjustments                                              | 42 |
|                                                                                                        | Market Accessibility                                          | 42 |
|                                                                                                        | International Financial Reporting Standards                   | 43 |
| ADDITIONAL INFORMATION                                                                                      | 43                                                            |
| SCHEDULE "A" REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (FORM 51-101F2) | 44                                                            |
| SCHEDULE "B" REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE (FORM 51-101F3)                   | 45                                                            |
| SCHEDULE "C" AUDIT COMMITTEE TERMS OF REFERENCE                                                             | 46                                                            |

----

----

----

| Oil and Natural Gas Liquids |
|-----------------------------|
| Bbl                         | Barrel |
| Mbbl                        | thousand barrels |
| Bbl/d                       | barrels per day |
| NGL                         | natural gas liquids |
| Natural Gas                 |
| Mcf                         | thousand cubic feet |
| MMcf                        | million cubic feet |
| Mcf/d                       | thousand cubic feet per day |
| MMcf/d                      | million cubic feet per day |
| MMBtu                       | million British Thermal Units |
| Other                       |
| API                         | American Petroleum Institute |
| °API                   | An indication of the specific gravity of crude oil measured on the API gravity scale. |
|                        | Liquid petroleum with a specified gravity of 28 °API or higher is generally referred to as light crude oil. |
| boe                         | barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for 6 (unless otherwise stated) Mcf of natural gas (this conversion factor is an industry accepted norm and is not based on either energy content or current prices) |
| $M                          | thousand dollars |
| $MM                         | million dollars |
| Mboe                        | 1,000 barrels of oil equivalent |
| MMboe                       | million barrels of oil equivalent |
| WTI                         | West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for crude oil of |
|                        | standard grade. |

| To Convert From | To           | Multiply By |
|-----------------|--------------|-------------|
| Mcf             | Cubic metres | 28.174      |
| Cubic metres    | Cubic feet   | 35.494      |
| Bbls            | Cubic metres | 0.159       |
| Cubic metres    | Bbls oil     | 6.290       |
| Feet            | Metres       | 0.305       |
| Metres          | Feet         | 3.281       |
| Miles           | Kilometres   | 1.609       |
| Kilometres      | Miles        | 0.621       |
| Acres           | Hectares     | 0.405       |
| Hectares        | Acres        | 2.471       |

----

| ●   | capital expenditures; |
|---------------------|-----------------------|

| ● | business strategy and objectives; |
|---------|-----------------------------------|

| ● | reserve quantities and the discounted present value of future net cash flows from such reserves; |
|---------|--------------------------------------------------------------------------------------------------|

| ● | net revenue; |
|---------|--------------|

| ● | future production levels and rates of average annual production growth; |
|---------|-------------------------------------------------------------------------|

| ● | exploration plans; |
|---------|--------------------|

| ● | development plans; |
|---------|--------------------|

| ● | acquisition and disposition plans and the timing thereof; |
|---------|-----------------------------------------------------------|

| ●   | operating and other costs; |
|---------------------|----------------------------|

| ● | royalty rates; |
|---------|----------------|

| ● | Vermilion's additional future payment in connection with the Corrib acquisition; |
|---------|----------------------------------------------------------------------------------|

| ● | the timing of regulatory proceedings; |
|---------|---------------------------------------|

| ● | the timing of first commercial gas from the Corrib field; |
|---------|-----------------------------------------------------------|

| ● | estimate of Vermilion’s share of the expected gas rates from the Corrib field. |
|---------|--------------------------------------------------------------------------------------|

| ● | 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 oil 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; |
|---------|---------------------------------------------------------------------|

| ● | currency, exchange and interest rates; |
|---------|----------------------------------------|

| ● | future oil and gas prices; and |
|---------|--------------------------------|

| ● | Management’s expectations relating to the timing and results of development activities. |
|---------|-----------------------------------------------------------------------------------------------|

----

| ● | 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 and natural gas and market demand; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | risks and uncertainties involving geology of oil and gas deposits; |
|---------|--------------------------------------------------------------------|

| ● | risks inherent in the Company's marketing operations, including credit risk; |
|---------|------------------------------------------------------------------------------|

| ● | the uncertainty of reserves estimates and reserves life; |
|---------|----------------------------------------------------------|

| ● | 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; |
|---------|------------------------------------------------------|

| ● | fluctuations in oil and 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 development and exploration 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. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes: |
|--------|

| (1) | Vermilion Energy Ireland Limited is the Irish Branch of a Cayman Islands incorporated company. |
|-----|------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                 | 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)               | (MMcf)    | (Mbbl)      | (MMcf)              | (MMcf)   | (Mbbl) | (Mbbl) | (Mbbl) | (Mbbl) |
| Proved Developed Producing(2)(5)     |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | 13,198               | 13,198    | -           | -                   | -        | - | - | - | 13,198 | 13,198 |
| Canada                               | 6,234                | 5,286     | 21          | 20                  | 77,537   | 68,823 | 2,767 | 1,756 | 21,945 | 18,532 |
| France                               | 24,275               | 22,372    | -           | -                   | 2,481    | 2,481 | - | - | 24,689 | 22,785 |
| Ireland                              | -                    | -         | -           | -                   | -        | - | - | - | - | - |
| Netherlands                          | -                    | -         | -           | -                   | 23,567   | 23,567 | 33 | 33 | 3,961 | 3,961 |
| Total Proved Developed Producing     | 43,707               | 40,856    | 21          | 20                  | 103,585  | 94,872 | 2,800 | 1,789 | 63,793 | 58,477 |
| Proved Developed Non-Producing(2)(6) |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | -                    | -         | -           | -                   | -        | - | - | - | - | - |
| Canada                               | 329                  | 289       | -           | -                   | 8,635    | 7,944 | 96 | 65 | 1,864 | 1,678 |
| France                               | 739                  | 638       | -           | -                   | -        | - | - | - | 739 | 638 |
| Ireland                              | -                    | -         | -           | -                   | -        | - | - | - | - | - |
| Netherlands                          | -                    | -         | -           | -                   | 15,387   | 15,387 | 22 | 22 | 2,587 | 2,587 |
| Total Proved Developed Non-Producing | 1,068                | 927       | -           | -                   | 24,022   | 23,331 | 118 | 87 | 5,189 | 4,902 |
| Proved Undeveloped(2)(7)             |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | -                    | -         | -           | -                   | -        | - | - | - | - | - |
| Canada                               | 5,292                | 4,349     | -           | -                   | 28,594   | 26,861 | 751 | 580 | 10,809 | 9,406 |
| France                               | 1,296                | 1,257     | -           | -                   | -        | - | - | - | 1,296 | 1,257 |
| Ireland                              | -                    | -         | -           | -                   | 91,997   | 91,997 | - | - | 15,333 | 15,333 |
| Netherlands                          | -                    | -         | -           | -                   | -        | - | - | - | - | - |
| Total Proved Undeveloped             | 6,588                | 5,606     | -           | -                   | 120,591  | 118,859 | 751 | 580 | 27,438 | 25,996 |
| Proved(2)                            |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | 13,198               | 13,198    | -           | -                   | -        | - | - | - | 13,198 | 13,198 |
| Canada                               | 11,855               | 9,925     | 21          | 20                  | 114,766  | 103,628 | 3,614 | 2,400 | 34,618 | 29,616 |
| France                               | 26,310               | 24,267    | -           | -                   | 2,481    | 2,481 | - | - | 26,724 | 24,680 |
| Ireland                              | -                    | -         | -           | -                   | 91,997   | 91,997 | - | - | 15,333 | 15,333 |
| Netherlands                          | -                    | -         | -           | -                   | 38,954   | 38,954 | 56 | 56 | 6,548 | 6,548 |
| Total Proved                         | 51,364               | 47,390    | 21          | 20                  | 248,198  | 237,061 | 3,669 | 2,456 | 96,421 | 89,375 |
| Probable(3)                          |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | 6,500                | 6,500     | -           | -                   | -        | - | - | - | 6,500 | 6,500 |
| Canada                               | 8,701                | 7,025     | 2           | 2                   | 49,826   | 44,787 | 1,685 | 1,162 | 18,691 | 15,654 |
| France                               | 12,992               | 12,497    | -           | -                   | 74       | 74 | - | - | 13,004 | 12,509 |
| Ireland                              | -                    | -         | -           | -                   | 12,965   | 12,965 | - | - | 2,161 | 2,161 |
| Netherlands                          | -                    | -         | -           | -                   | 33,025   | 33,025 | 48 | 48 | 5,552 | 5,552 |
| Total Probable                       | 28,192               | 26,022    | 2           | 2                   | 95,890   | 90,851 | 1,732 | 1,210 | 45,908 | 42,376 |
| Proved Plus Probable(2)(3)           |                 |      |        |                |     |   |   |   |   |   |
| Australia                            | 19,698               | 19,698    | -           | -                   | -        | - | - | - | 19,698 | 19,698 |
| Canada                               | 20,556               | 16,950    | 23          | 21                  | 164,592  | 148,416 | 5,298 | 3,562 | 53,309 | 45,270 |
| France                               | 39,302               | 36,763    | -           | -                   | 2,555    | 2,555 | - | - | 39,728 | 37,189 |
| Ireland                              | -                    | -         | -           | -                   | 104,962  | 104,962 | - | - | 17,494 | 17,494 |
| Netherlands                          | -                    | -         | -           | -                   | 71,979   | 71,979 | 104 | 104 | 12,100 | 12,100 |
| Total Proved Plus Probable           | 79,556               | 73,411    | 23          | 21                  | 344,088  | 327,912 | 5,402 | 3,666 | 142,329 | 131,751 |

----

|                                 | 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                            | 685,933                                            | 586,967                                           | 513,211 | 456,874 | 412,822 | 335,159 | 285,631 | 248,771 | 220,685 | 198,789 |
| Canada                               | 566,006                                            | 446,129                                           | 369,929 | 317,506 | 279,326 | 566,006 | 446,129 | 369,929 | 317,506 | 279,326 |
| France                               | 1,352,555                                          | 977,376                                           | 770,793 | 641,512 | 553,251 | 967,569 | 711,156 | 568,216 | 477,740 | 415,338 |
| Ireland                              | -                                                  | -                                                 | - | - | - | - | - | - | - | - |
| Netherlands                          | 137,647                                            | 127,758                                           | 119,457 | 112,390 | 106,299 | 105,017 | 96,365 | 89,185 | 83,140 | 77,984 |
| Total Proved Developed Producing     | 2,742,142                                          | 2,138,230                                         | 1,773,389 | 1,528,282 | 1,351,698 | 1,973,752 | 1,539,282 | 1,276,101 | 1,099,070 | 971,436 |
| Proved Developed Non-Producing(2)(6) |                                               |                                              |   |   |   |   |   |   |   |   |
| Australia                            | -                                                  | -                                                 | - | - | - | - | - | - | - | - |
| Canada                               | 35,261                                             | 25,521                                            | 19,929 | 16,168 | 13,435 | 35,261 | 25,521 | 19,929 | 16,168 | 13,435 |
| France                               | 34,830                                             | 23,047                                            | 16,845 | 13,119 | 10,649 | 22,847 | 14,694 | 10,376 | 7,780 | 6,065 |
| Ireland                              | -                                                  | -                                                 | - | - | - | - | - | - | - | - |
| Netherlands                          | 129,476                                            | 103,363                                           | 85,412 | 72,506 | 62,875 | 93,211 | 71,570 | 57,189 | 47,180 | 39,932 |
| Total Proved Developed Non-Producing | 199,567                                            | 151,931                                           | 122,186 | 101,794 | 86,958 | 151,319 | 111,784 | 87,494 | 71,128 | 59,431 |
| Proved Undeveloped(2)(7)             |                                               |                                              |   |   |   |   |   |   |   |   |
| Australia                            | -                                                  | -                                                 | - | - | - | - | - | - | - | - |
| Canada                               | 209,918                                            | 117,108                                           | 61,410 | 26,306 | 3,294 | 209,918 | 117,108 | 61,410 | 26,306 | 3,294 |
| France                               | 82,770                                             | 51,455                                            | 34,090 | 23,369 | 16,307 | 54,293 | 32,052 | 19,885 | 12,469 | 7,662 |
| Ireland                              | 472,988                                            | 329,733                                           | 226,540 | 151,049 | 95,045 | 472,988 | 329,733 | 226,540 | 151,049 | 95,045 |
| Netherlands                          | -                                                  | -                                                 | - | - | - | - | - | - | - | - |
| Total Proved Undeveloped             | 765,676                                            | 498,296                                           | 322,040 | 200,724 | 114,646 | 737,199 | 478,893 | 307,835 | 189,824 | 106,001 |
| Proved(2)                            |                                               |                                              |   |   |   |   |   |   |   |   |
| Australia                            | 685,933                                            | 586,967                                           | 513,211 | 456,874 | 412,822 | 335,159 | 285,631 | 248,771 | 220,685 | 198,789 |
| Canada                               | 811,185                                            | 588,758                                           | 451,267 | 359,980 | 296,055 | 811,185 | 588,758 | 451,267 | 359,980 | 296,055 |
| France                               | 1,470,155                                          | 1,051,878                                         | 821,728 | 678,000 | 580,206 | 1,044,710 | 757,902 | 598,477 | 497,989 | 429,064 |
| Ireland                              | 472,988                                            | 329,733                                           | 226,540 | 151,049 | 95,045 | 472,988 | 329,733 | 226,540 | 151,049 | 95,045 |
| Netherlands                          | 267,123                                            | 231,121                                           | 204,869 | 184,896 | 169,174 | 198,228 | 167,935 | 146,374 | 130,320 | 117,916 |
| Total Proved                         | 3,707,385                                          | 2,788,456                                         | 2,217,615 | 1,830,800 | 1,553,302 | 2,862,270 | 2,129,959 | 1,671,430 | 1,360,023 | 1,136,869 |
| Probable(3)                          |                                               |                                              |   |   |   |   |   |   |   |   |
| Australia                            | 410,245                                            | 292,546                                           | 222,182 | 177,623 | 147,792 | 178,134 | 125,858 | 94,543 | 74,775 | 61,619 |
| Canada                               | 569,306                                            | 320,842                                           | 195,801 | 125,688 | 83,172 | 451,975 | 259,770 | 161,871 | 105,835 | 71,055 |
| France                               | 931,516                                            | 507,217                                           | 322,013 | 223,921 | 164,930 | 611,049 | 325,719 | 200,899 | 134,977 | 95,607 |
| Ireland                              | 131,617                                            | 95,304                                            | 70,749 | 53,666 | 41,481 | 131,617 | 95,304 | 70,749 | 53,666 | 41,481 |
| Netherlands                          | 282,993                                            | 197,317                                           | 148,138 | 117,298 | 96,538 | 167,590 | 109,627 | 78,491 | 60,053 | 48,209 |
| Total Probable                       | 2,325,676                                          | 1,413,226                                         | 958,883 | 698,196 | 533,914 | 1,540,365 | 916,278 | 606,552 | 429,307 | 317,972 |
| Proved Plus Probable(2)(3)           |                                               |                                              |   |   |   |   |   |   |   |   |
| Australia                            | 1,096,178                                          | 879,513                                           | 735,393 | 634,497 | 560,614 | 513,293 | 411,489 | 343,314 | 295,460 | 260,407 |
| Canada                               | 1,380,491                                          | 909,599                                           | 647,069 | 485,668 | 379,227 | 1,263,160 | 848,528 | 613,138 | 465,815 | 367,110 |
| France                               | 2,401,671                                          | 1,559,094                                         | 1,143,741 | 901,920 | 745,137 | 1,655,759 | 1,083,620 | 799,376 | 632,966 | 524,671 |
| Ireland                              | 604,605                                            | 425,037                                           | 297,289 | 204,716 | 136,526 | 604,605 | 425,037 | 297,289 | 204,716 | 136,526 |
| Netherlands                          | 550,116                                            | 428,438                                           | 353,007 | 302,194 | 265,712 | 365,818 | 277,562 | 224,865 | 190,373 | 166,125 |
| Total Proved Plus Probable           | 6,033,061                                          | 4,201,682                                         | 3,176,498 | 2,528,996 | 2,087,216 | 4,402,635 | 3,046,237 | 2,277,982 | 1,789,330 | 1,454,840 |

| (M$)                       | Revenue    | Royalties | OperatingCosts | CapitalDevelopmentCosts | Abandon-mentCosts |  Future NetRevenueBeforeIncomeTaxes | FutureIncomeTaxes | Future NetRevenueAfterIncomeTaxes |
|----------------------------|------------|-----------|----------------|-------------------------|-------------------|------------------------------------------|-------------------|-----------------------------------|
| Proved(2)                  |       |      |           |                    |              |                                     |              |                              |
| Australia                  | 1,281,191  | -         | 528,738        | 28,994                  | 37,527            | 685,933                                  | 350,774           | 335,159                           |
| Canada                     | 2,249,521  | 343,077   | 761,345        | 301,722                 | 32,191            | 811,185                                  | -                 | 811,185                           |
| France                     | 2,582,910  | 198,067   | 758,803        | 79,436                  | 76,450            | 1,470,155                                | 425,445           | 1,044,710                         |
| Ireland                    | 944,053    | -         | 189,347        | 260,950                 | 20,767            | 472,988                                  | -                 | 472,988                           |
| Netherlands                | 396,148    | -         | 105,701        | 10,996                  | 12,328            | 267,123                                  | 68,895            | 198,228                           |
| Total Proved               | 7,453,824  | 541,144   | 2,343,934      | 682,098                 | 179,263           | 3,707,385                                | 845,114           | 2,862,270                         |
| Proved Plus Probable(2)(3) |       |      |           |                    |              |                                     |              |                              |
| Australia                  | 1,994,404  | -         | 818,318        | 38,494                  | 41,415            | 1,096,178                                | 582,885           | 513,293                           |
| Canada                     | 3,731,380  | 599,273   | 1,158,558      | 551,660                 | 41,398            | 1,380,491                                | 117,331           | 1,263,160                         |
| France                     | 3,976,857  | 249,037   | 1,036,717      | 195,575                 | 93,858            | 2,401,671                                | 745,912           | 1,655,759                         |
| Ireland                    | 1,081,464  | -         | 195,130        | 260,962                 | 20,767            | 604,605                                  | -                 | 604,605                           |
| Netherlands                | 759,216    | -         | 171,126        | 23,836                  | 14,138            | 550,116                                  | 184,298           | 365,818                           |
| Total Proved Plus Probable | 11,543,321 | 848,309   | 3,379,848      | 1,070,527               | 211,576           | 6,033,061                                | 1,630,426         | 4,402,635                         |

----

|                                    | Net Present Value of FutureNet Revenue Before Income Taxes(Discounted at 10% Per Year) | Unit Value |
|-----------------------------------------|----------------------------------------------------------------------------------------|------------|
| Proved(2)                               | (M$)                                                                                   | ($/boe)    |
| Light and medium oil                    | 1,517,677                                                                              | 30.51      |
| Heavy oil                               | 669                                                                                    | 24.58      |
| Associated gas and non-associated gas   | 668,738                                                                                | 19.23      |
| Non-conventional oil and gas activities | 30,531                                                                                 | 6.33       |
| Total Proved                            | 2,217,615                                                                              | 24.81      |
| Proved Plus Probable(2)(3)              |                                                                                   |       |
| Light and medium oil                    | 2,193,123                                                                              | 28.44      |
| Heavy oil                               | 735                                                                                    | 24.68      |
| Associated gas and non-associated gas   | 940,828                                                                                | 19.63      |
| Non-conventional oil and gas activities | 41,812                                                                                 | 6.26       |
| Total Proved Plus Probable              | 3,176,498                                                                              | 24.11      |

|       | Light and Medium Crude Oil  | Crude Oil                          | Natural Gas                     | Natural GasNetherlands                 | Natural GasLiquids        | InflationRate          | ExchangeRate            |
|------------|-----------------------------|------------------------------------|---------------------------------|----------------------------------------|---------------------------|------------------------|-------------------------|
| Year       | WTICushingOklahoma($US/Bbl) | EdmontonPar Price40o API($Cdn/Bbl) | CromerMedium29.3o API($Cdn/Bbl) | Brent BlendFOBNorth Sea ($US/Bbl) | AECOGas Price($Cdn/MMBtu) | TTFGas Price($Cdn/Mcf) | FOBField Gate($Cdn/Bbl) | PercentPer Year | ($US/$Cdn) |
| 2010       | 79.42                       | 78.02                              | 73.81                           | 80.06                                  | 4.17                      | 7.05                   | 65.50                   | 1.8 | 0.971 |
| Forecast   |                        |                               |                            |                                   |                      |                   |                    |   |   |
| 2011       | 88.00                       | 86.22                              | 82.78                           | 88.50                                  | 4.16                      | 10.21                  | 70.71                   | 2.0 | 0.980 |
| 2012       | 89.00                       | 89.29                              | 83.04                           | 88.25                                  | 4.74                      | 9.73                   | 72.32                   | 2.0 | 0.980 |
| 2013       | 90.00                       | 90.92                              | 83.64                           | 88.50                                  | 5.31                      | 9.48                   | 73.34                   | 2.0 | 0.980 |
| 2014       | 92.00                       | 92.96                              | 84.59                           | 90.50                                  | 5.77                      | 9.70                   | 74.99                   | 2.0 | 0.980 |
| 2015       | 95.17                       | 96.19                              | 87.54                           | 93.67                                  | 6.22                      | 10.04                  | 77.60                   | 2.0 | 0.980 |
| Thereafter | 2.0%                        | 2.0%                               | 2.0%                            | 2.0%                                   | 2.0%                      | 2.0%                   | 2.0%                    | 2.0% | 0.980 |

----

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | 13,083       | 6,679                    | 19,762                    | 13,083              | 6,679 | 19,762 | - | - | - | - | - | - |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | 1,500        | 1,120                    | 2,620                     | 1,500               | 1,120 | 2,620 | - | - | - | - | - | - |
| Technical Revisions                       | 1,300        | (1,299)                  | 1                         | 1,300               | (1,299) | 1 | - | - | - | - | - | - |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (2,684)      | -                        | (2,684)                   | (2,684)             | - | (2,684) | - | - | - | - | - | - |
| At December 31, 2010                      | 13,198       | 6,500                    | 19,698                    | 13,198              | 6,500 | 19,698 | - | - | - | - | - | - |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | -            | -                        | -                         | -                   | - | - | - | - | - | 13,083 | 6,679 | 19,762 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | 1,500 | 1,120 | 2,620 |
| Technical Revisions                       | -            | -                        | -                         | -                   | - | - | - | - | - | 1,299 | (1,299) | - |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | -            | -                        | -                         | -                   | - | - | - | - | - | (2,684) | - | (2,684) |
| At December 31, 2010                      | -            | -                        | -                         | -                   | - | - | - | - | - | 13,198 | 6,500 | 19,698 |

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | 6,869        | 2,969                    | 9,838                     | 6,839               | 2,964 | 9,803 | 30 | 5 | 35 | 3,267 | 1,566 | 4,833 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | 6,113        | 5,923                    | 12,036                    | 6,113               | 5,923 | 12,036 | - | - | - | 555 | 321 | 876 |
| Technical Revisions                       | (92)         | (189)                    | (281)                     | (89)                | (186) | (275) | (3) | (3) | (6) | 313 | (203) | 110 |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (1,014)      | -                        | (1,014)                   | (1,008)             | - | (1,008) | (6) | - | (6) | (521) | - | (521) |
| At December 31, 2010                      | 11,876       | 8,703                    | 20,579                    | 11,855              | 8,701 | 20,556 | 21 | 2 | 23 | 3,614 | 1,684 | 5,298 |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | 120,465      | 56,514                   | 176,979                   | 80,552              | 36,665 | 117,217 | 39,913 | 19,849 | 59,762 | 30,214 | 13,954 | 44,168 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | 13,702       | 7,913                    | 21,615                    | 13,702              | 7,913 | 21,615 | - | - | - | 8,951 | 7,563 | 16,514 |
| Technical Revisions                       | 508          | (9,266)                  | (8,758)                   | 3,485               | (6,441) | (2,956) | (2,977) | (2,825) | (5,803) | 306 | (1,937) | (1,631) |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | (3,880)      | (5,335)                  | (9,215)                   | (90)                | (420) | (511) | (3,790) | (4,915) | (8,704) | (647) | (889) | (1,536) |
| Production                                | (16,029)     | -                        | (16,029)                  | (13,699)            | - | (13,699) | (2,330) | - | (2,330) | (4,206) | - | (4,206) |
| At December 31, 2010                      | 114,766      | 49,826                   | 164,592                   | 83,950              | 37,717 | 121,667 | 30,816 | 12,109 | 42,925 | 34,618 | 18,691 | 53,309 |

----

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | 28,447       | 14,563                   | 43,010                    | 28,447              | 14,563 | 43,010 | - | - | - | - | - | - |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | 470          | -                        | 470                       | 470                 | - | 470 | - | - | - | - | - | - |
| Technical Revisions                       | 440          | (1,571)                  | (1,131)                   | 440                 | (1,571) | (1,131) | - | - | - | - | - | - |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (3,047)      | -                        | (3,047)                   | (3,047)             | - | (3,047) | - | - | - | - | - | - |
| At December 31, 2010                      | 26,310       | 12,992                   | 39,302                    | 26,310              | 12,992 | 39,302 | - | - | - | - | - | - |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | 1,811        | 666                      | 2,477                     | 1,811               | 666 | 2,477 | - | - | - | 28,749 | 14,674 | 43,423 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | 470 | - | 470 |
| Technical Revisions                       | 1,007        | (592)                    | 415                       | 1,007               | (592) | 415 | - | - | - | 608 | (1,670) | (1,062) |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (337)        | -                        | (337)                     | (337)               | - | (337) | - | - | - | (3,103) | - | (3,103) |
| At December 31, 2010                      | 2,481        | 74                       | 2,555                     | 2,481               | 74 | 2,555 | - | - | - | 26,724 | 13,004 | 39,728 |

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Technical Revisions                       | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| At December 31, 2010                      | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | 91,991       | 12,968                   | 104,959                   | 91,991              | 12,968 | 104,959 | - | - | - | 15,332 | 2,161 | 17,493 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Technical Revisions                       | 6            | (3)                      | 3                         | 6                   | (3) | 3 | - | - | - | 1 | - | 1 |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| At December 31, 2010                      | 91,997       | 12,965                   | 104,962                   | 91,997              | 12,965 | 104,962 | - | - | - | 15,333 | 2,161 | 17,494 |

----

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | -            | -                        | -                         | -                   | - | - | - | - | - | 50 | 39 | 89 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | 13 | (11) | 2 |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Technical Revisions                       | -            | -                        | -                         | -                   | - | - | - | - | - | 6 | 20 | 26 |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | -            | -                        | -                         | -                   | - | - | - | - | - | (13) | - | (13) |
| At December 31, 2010                      | -            | -                        | -                         | -                   | - | - | - | - | - | 56 | 48 | 104 |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | 44,196       | 34,320                   | 78,516                    | 44,196              | 34,320 | 78,516 | - | - | - | 7,416 | 5,759 | 13,175 |
| Discoveries                               | 404          | 1,112                    | 1,515                     | 404                 | 1,112 | 1,515 | - | - | - | 80 | 175 | 255 |
| Extensions & Improved Recovery        | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Technical Revisions                       | 4,687        | (2,407)                  | 2,280                     | 4,687               | (2,407) | 2,280 | - | - | - | 787 | (382) | 405 |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (10,332)     | -                        | (10,332)                  | (10,332)            | - | (10,332) | - | - | - | (1,735) | - | (1,735) |
| At December 31, 2010                      | 38,954       | 33,025                   | 71,979                    | 38,954              | 33,025 | 71,979 | - | - | - | 6,548 | 5,552 | 12,100 |

| 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 PlusProbable(Mbbl) | Proved(Mbbl)        | Probable(Mbbl) | Proved PlusProbable(Mbbl) | Proved(Mbbl) | Probable(Mbbl) | Proved PlusProbable(Mbbl) |  Proved(Mbbl) |  Probable(Mbbl) | Proved PlusProbable(Mbbl) |
| At December 31, 2009                      | 48,399       | 24,211                   | 72,610                    | 48,369              | 24,206 | 72,575 | 30 | 5 | 35 | 3,317 | 1,605 | 4,922 |
| Discoveries                               | -            | -                        | -                         | -                   | - | - | - | - | - | 13 | (11) | 2 |
| Extensions & Improved Recovery        | 8,083        | 7,043                    | 15,126                    | 8,083               | 7,043 | 15,126 | - | - | - | 555 | 321 | 876 |
| Technical Revisions                       | 1,647        | (3,059)                  | (1,412)                   | 1,650               | (3,056) | (1,406) | (3) | (3) | (6) | 318 | (183) | 136 |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Production                                | (6,745)      | -                        | (6,745)                   | (6,739)             | - | (6,739) | (6) | - | (6) | (534) | - | (534) |
| At December 31, 2010                      | 51,384       | 28,195                   | 79,579                    | 51,363              | 28,193 | 79,556 | 21 | 2 | 23 | 3,670 | 1,732 | 5,402 |
|                                      | Total Gas    | Conventional Natural Gas | Coal Bed Methane          | BOE                 |
| Proved (2) Probable (3) P+P (2)(3)Factors | Proved(MMcf) | Probable(MMcf)           | Proved PlusProbable(MMcf) | Proved(MMcf)        | Probable(MMcf) | Proved PlusProbable(MMcf) | Proved(MMcf) | Probable(MMcf) | Proved PlusProbable(MMcf) |  Proved(Mboe) |  Probable(Mboe) | Proved PlusProbable(Mboe) |
| At December 31, 2009                      | 258,463      | 104,468                  | 362,931                   | 218,550             | 84,619 | 303,169 | 39,913 | 19,849 | 59,762 | 94,794 | 43,227 | 138,021 |
| Discoveries                               | 404          | 1,112                    | 1,515                     | 404                 | 1,112 | 1,515 | - | - | - | 80 | 175 | 255 |
| Extensions & Improved Recovery        | 13,702       | 7,913                    | 21,615                    | 13,702              | 7,913 | 21,615 | - | - | - | 10,921 | 8,683 | 19,604 |
| Technical Revisions                       | 6,207        | (12,268)                 | (6,060)                   | 9,185               | (9,442) | (258) | (2,977) | (2,825) | (5,803) | 3,001 | (5,288) | (2,287) |
| Acquisitions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Dispositions                              | -            | -                        | -                         | -                   | - | - | - | - | - | - | - | - |
| Economic Factors                          | (3,880)      | (5,335)                  | (9,215)                   | (90)                | (420) | (511) | (3,790) | (4,915) | (8,704) | (647) | (889) | (1,536) |
| Production                                | (26,698)     | -                        | (26,698)                  | (24,368)            | - | (24,368) | (2,330) | - | (2,330) | (11,728) | - | (11,728) |
| At December 31, 2010                      | 248,198      | 95,890                   | 344,088                   | 217,382             | 83,781 | 301,163 | 30,816 | 12,109 | 42,925 | 96,421 | 45,908 | 142,329 |

----

| Notes: |
|--------|

| (1) | "Gross Reserves" are Vermilion's working interest (operating or non-operating) share before deducting 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 “Reserves and Future Net Revenue – 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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|          | Light & Medium Oil(Mbbl) | Natural Gas(MMcf) | Coalbed Methane Gas(MMcf) | Natural Gas Liquids(Mbbl) | Total Oil Equivalent(Mboe) |
|---------------|------------------------------|-------------------|---------------------------|---------------------------|----------------------------|
|          | FirstAttributed (1)          |  Booked      | FirstAttributed (1)       |  Booked              | FirstAttributed (1)        |  Booked | FirstAttributed (1) |  Booked | FirstAttributed (1) |  Booked |
| Proved        |                         |              |                      |                      |                       |   |   |   |   |   |
| Prior to 2008 | 1,930                        | 2,734             | 425                       | 928                       | 3,386                      | 23,930 | 22 | 34 | 2,587 | 6,911 |
| 2008          | 98                           | 2,678             | 2,214                     | 2,289                     | 3,325                      | 21,009 | 121 | 128 | 1,142 | 6,689 |
| 2009          | 1,090                        | 2,034             | 99,026                    | 100,928                   | 1,152                      | 20,607 | 362 | 441 | 18,148 | 22,731 |
| 2010          | 4,627                        | 6,588             | 6,454                     | 107,633                   | 4,943                      | 12,958 | 268 | 751 | 6,795 | 27,438 |
| Probable      |                         |              |                      |                      |                       |   |   |   |   |   |
| Prior to 2008 | 3,643                        | 8,063             | 11,133                    | 20,676                    | 4,344                      | 16,928 | 365 | 808 | 6,588 | 15,138 |
| 2008          | 236                          | 8,120             | 10,254                    | 25,466                    | 2,718                      | 16,961 | 529 | 964 | 2,927 | 16,155 |
| 2009          | 2,184                        | 8,047             | 19,348                    | 34,566                    | 1,598                      | 14,374 | 324 | 754 | 5,999 | 16,958 |
| 2010          | 6,306                        | 12,417            | 8,106                     | 38,296                    | 2,435                      | 8,066 | 342 | 931 | 8,405 | 21,075 |

----

| (M$)                             | Total ProvedEstimated Using Forecast Prices and Costs |  Total Proved Plus ProbableEstimated Using Forecast Prices and Costs |
|----------------------------------|-------------------------------------------------------|---------------------------------------------------------------------------|
| Australia                        |                                                  |                                                                      |
| 2011                             | 3,900                                                 | 13,400                                                                    |
| 2012                             | 3,978                                                 | 3,978                                                                     |
| 2013                             | 4,058                                                 | 4,058                                                                     |
| 2014                             | 4,139                                                 | 4,139                                                                     |
| 2015                             | 4,221                                                 | 4,221                                                                     |
| Remainder                        | 8,698                                                 | 8,698                                                                     |
| Total for all years undiscounted | 28,994                                                | 38,494                                                                    |
| Canada                           |                                                  |                                                                      |
| 2011                             | 96,652                                                | 136,536                                                                   |
| 2012                             | 100,509                                               | 150,316                                                                   |
| 2013                             | 39,691                                                | 126,434                                                                   |
| 2014                             | 48,464                                                | 120,619                                                                   |
| 2015                             | 1,876                                                 | 2,312                                                                     |
| Remainder                        | 14,530                                                | 15,443                                                                    |
| Total for all years undiscounted | 301,722                                               | 551,660                                                                   |
| France                           |                                                  |                                                                      |
| 2011                             | 12,017                                                | 30,961                                                                    |
| 2012                             | 19,810                                                | 44,980                                                                    |
| 2013                             | 18,325                                                | 61,833                                                                    |
| 2014                             | 4,036                                                 | 31,426                                                                    |
| 2015                             | 4,116                                                 | 4,184                                                                     |
| Remainder                        | 21,133                                                | 22,192                                                                    |
| Total for all years undiscounted | 79,436                                                | 195,575                                                                   |
| Ireland                          |                                                  |                                                                      |
| 2011                             | 107,615                                               | 107,615                                                                   |
| 2012                             | 87,615                                                | 87,615                                                                    |
| 2013                             | 54,672                                                | 54,672                                                                    |
| 2014                             | 1,290                                                 | 1,290                                                                     |
| 2015                             | 1,315                                                 | 1,315                                                                     |
| Remainder                        | 8,444                                                 | 8,456                                                                     |
| Total for all years undiscounted | 260,950                                               | 260,962                                                                   |
| Netherlands                      |                                                  |                                                                      |
| 2011                             | 5,219                                                 | 5,219                                                                     |
| 2012                             | 1,849                                                 | 4,073                                                                     |
| 2013                             | 755                                                   | 11,371                                                                    |
| 2014                             | 770                                                   | 770                                                                       |
| 2015                             | 785                                                   | 785                                                                       |
| Remainder                        | 1,618                                                 | 1,618                                                                     |
| Total for all years undiscounted | 10,996                                                | 23,836                                                                    |
| Total Company                    |                                                  |                                                                      |
| 2011                             | 225,403                                               | 293,731                                                                   |
| 2012                             | 213,762                                               | 290,962                                                                   |
| 2013                             | 117,499                                               | 258,367                                                                   |
| 2014                             | 58,698                                                | 158,242                                                                   |
| 2015                             | 12,314                                                | 12,817                                                                    |
| Remainder                        | 54,422                                                | 56,407                                                                    |
| Total for all years undiscounted | 682,098                                               | 1,070,527                                                                 |

----

|                | Oil         | Natural Gas   |
|---------------------|-------------|---------------|
| Gross(1)Wells       | Net(2)Wells | Gross(1)Wells | Net(2)Wells |
| Australia           |        |          |   |   |
| Producing           | 18          | 18            | - | - |
| Non-producing       | -           | -             | - | - |
| Canada              |        |          |   |   |
| Producing           | 476         | 178           | 576 | 393 |
| Non-producing       | 180         | 57            | 99 | 67 |
| France              |        |          |   |   |
| Producing           | 217         | 190           | - | - |
| Non-producing       | 163         | 143           | - | - |
| Ireland             |        |          |   |   |
| Producing           | -           | -             | - | - |
| Non-producing       | -           | -             | 7 | 1 |
| Netherlands         |        |          |   |   |
| Producing           | -           | -             | 47 | 37 |
| Non-producing       | -           | -             | 26 | 20 |
| Total Producing     | 711         | 386           | 623 | 430 |
| Total Non-producing | 343         | 200           | 132 | 88 |

| (1) | "Gross" refers to the total wells in which Vermilion has an interest, directly or indirectly.                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | "Net" refers to the total wells in which Vermilion has an interest, directly or indirectly, multiplied by the percentage working interest owned by Vermilion, directly or indirectly, therein. |
| (3) | Well counts are based on wellbores.                                                                                                                                                            |

| (M$)        | Property Acquisition Costs | Exploration         | Development | Total   |
|-------------|----------------------------|---------------------|-------------|---------|
|        | Proved Properties          | Unproved Properties | Costs       | Costs   | Costs |
| Australia   | -                          | -                   | 499         | 50,958  | 51,457 |
| Canada      | 448                        | 97,215              | 5,126       | 140,111 | 242,900 |
| France      | 6,207                      | -                   | 411         | 48,347  | 54,965 |
| Ireland     | -                          | -                   | 187         | 78,311  | 78,498 |
| Netherlands | -                          | -                   | 377         | 10,640  | 11,017 |
| Total       | 6,655                      | 97,215              | 6,600       | 328,367 | 438,837 |

----

|            | Exploration Wells | Development Wells |
|-----------------|-------------------|-------------------|
|            | Gross(1)          | Net(2)            | Gross(1) | Net(2) |
| Australia       |              |              |   |   |
| Oil             | -                 | -                 | 3.0 | 3.0 |
| Gas             | -                 | -                 | - | - |
| Standing        | -                 | -                 | - | - |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | -                 | -                 | 3.0 | 3.0 |
| Canada          |              |              |   |   |
| Oil             | -                 | -                 | 28.0 | 18.9 |
| Gas             | -                 | -                 | 5.0 | 3.4 |
| Standing        | -                 | -                 | 22.0 | 17.7 |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | -                 | -                 | 55.0 | 40.0 |
| France          |              |              |   |   |
| Oil             | -                 | -                 | - | - |
| Gas             | -                 | -                 | - | - |
| Service         | -                 | -                 | 1.0 | 1.0 |
| Standing        | -                 | -                 | - | - |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | -                 | -                 | 1.0 | 1.0 |
| Ireland         |              |              |   |   |
| Oil             | -                 | -                 | - | - |
| Gas             | -                 | -                 | - | - |
| Standing        | -                 | -                 | - | - |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | -                 | -                 | - | - |
| Netherlands     |              |              |   |   |
| Oil             | -                 | -                 | - | - |
| Gas             | -                 | -                 | - | - |
| Standing        | 1.0               | 0.4               | - | - |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | 1.0               | 0.4               |   |   |
| Total Company   |              |              |   |   |
| Oil             | -                 | -                 | 31.0 | 21.9 |
| Gas             | -                 | -                 | 5.0 | 3.4 |
| Service         | -                 | -                 | 1.0 | 1.0 |
| Standing        | 1.0               | 0.4               | 22.0 | 17.7 |
| Dry Holes       | -                 | -                 | - | - |
| Total Completed | 1.0               | 0.4               | 59.0 | 44.0 |

| (1)   | "Gross" refers to the total wells in which Vermilion has an interest, directly or indirectly.                                                                                                 |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)             | "Net" refers to the total wells in which Vermilion has an interest, directly or indirectly, multiplied by the percentage working interest owned by Vermilion, directly or indirectly therein. |

----

|        | Undeveloped Land |
|-------------|------------------|
| Country     | Gross Acres(1)   | Net Acres(2) |
| Australia   | -                | - |
| Canada      | 258,277          | 169,905 |
| France      | 900,864          | 879,491 |
| Ireland     | 57,531           | 10,643 |
| Netherlands | 430,784          | 267,695 |
| Total       | 1,647,456        | 1,327,734 |

| (1) | "Gross" refers to the total acres in which Vermilion has an interest, directly or indirectly.                                                                                                 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | "Net" refers to the total acres in which Vermilion has an interest, directly or indirectly, multiplied by the percentage working interest owned by Vermilion, directly or indirectly therein. |

| Country     | Undiscounted (M$) | Discounted 10% (M$) |
|-------------|-------------------|---------------------|
| Australia   | 37,527            | 13,354              |
| Canada      | 32,191            | 10,551              |
| France      | 76,450            | 20,677              |
| Ireland     | 20,767            | 7,634               |
| Netherlands | 12,328            | 8,055               |
| Total       | 179,263           | 60,271              |

| Country     | Facilities Undiscounted (M$) | Discounted 10% (M$) |
|-------------|------------------------------|---------------------|
| Australia   | 210,687                      | 18,006              |
| Canada      | 154,544                      | 56,082              |
| France      | 223,196                      | 15,847              |
| Ireland     | 10,295                       | 3,253               |
| Netherlands | 161,173                      | 66,651              |
| Total       | 759,895                      | 159,839             |

----

| Country     | Undiscounted (M$) | Discounted 10% (M$) |
|-------------|-------------------|---------------------|
| Australia   | 4,485             | 3,576               |
| Canada      | 2,714             | 2,396               |
| France      | 3,867             | 3,205               |
| Ireland     | -                 | -                   |
| Netherlands | 3,687             | 3,062               |
| Total       | 14,753            | 12,239              |

|                       | Light and Medium Oil | Heavy Oil | Natural Gas | Natural Gas Liquids | BOE     |
|----------------------------|----------------------|-----------|-------------|---------------------|---------|
|                       | (Bbl/d)              | (Bbl/d)   | (Mcf/d)     | (Bbl/d)             | (Bbl/d) |
| Australia                  |                 |      |        |                |    |
| Proved                     | 6,765                | -         | -           | -                   | 6,765   |
| Proved Plus Probable       | 7,815                | -         | -           | -                   | 7,815   |
| Canada                     |                 |      |        |                |    |
| Proved                     | 3,540                | 12        | 39,062      | 1,327               | 11,389  |
| Proved Plus Probable       | 4,199                | 12        | 42,255      | 1,469               | 12,723  |
| France                     |                 |      |        |                |    |
| Proved                     | 8,001                | -         | 2,464       | -                   | 8,411   |
| Proved Plus Probable       | 8,468                | -         | 2,494       | -                   | 8,883   |
| Ireland                    |                 |      |        |                |    |
| Proved                     | -                    | -         | -           | -                   | -       |
| Proved Plus Probable       | -                    | -         | -           | -                   | -       |
| Netherlands                |                 |      |        |                |    |
| Proved                     | -                    | -         | 26,944      | 38                  | 4,528   |
| Proved Plus Probable       | -                    | -         | 30,555      | 42                  | 5,135   |
| Total Proved               | 18,305               | 12        | 68,470      | 1,365               | 31,093  |
| Total Proved Plus Probable | 20,482               | 12        | 75,304      | 1,512               | 34,556  |

----

|                                           | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended |
|------------------------------------------------|--------------------|--------------------|--------------------|--------------------|
|                                           | March 31, 2010     | June 30, 2010      | September 30, 2010 | December 31, 2010  |
| Australia                                      |               |               |               |               |
| Average Daily Production                       |               |               |               |               |
|    Light and Medium Oil (Bbl/d) | 7,094              | 6,522              | 6,225              | 9,561              |
|    Natural Gas (MMcf/d)         | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids (Bbl/d)  | -                  | -                  | -                  | -                  |
| Average Net Prices Received                    |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 83.14              | 77.76              | 77.98              | 86.23              |
|    Natural Gas ($/Mcf)          | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids ($/Bbl)  | -                  | -                  | -                  | -                  |
| Royalties                                      |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 23.42              | 6.10               | 4.85               | 20.68              |
|    Natural Gas ($/Mcf)          | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids ($/Bbl)  | -                  | -                  | -                  | -                  |
| Transportation                                 |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | -                  | -                  | -                  | -                  |
|    Natural Gas ($/Mcf)          | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids ($/Bbl)  | -                  | -                  | -                  | -                  |
| Production Costs                               |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 17.84              | 16.36              | 17.38              | 12.48              |
|    Natural Gas ($/Mcf)          | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids ($/Bbl)  | -                  | -                  | -                  | -                  |
| Netback Received                               |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 41.88              | 55.30              | 55.75              | 53.07              |
|    Natural Gas ($/Mcf)          | -                  | -                  | -                  | -                  |
|    Natural Gas Liquids ($/Bbl)  | -                  | -                  | -                  | -                  |
| Canada                                         |               |               |               |               |
| Average Daily Production                       |               |               |               |               |
|    Light and Medium Oil (Bbl/d) | 2,012              | 2,718              | 2,890              | 3,473              |
|    Natural Gas (MMcf/d)         | 46.99              | 44.24              | 42.17              | 42.33              |
|    Natural Gas Liquids (Bbl/d)  | 1,670              | 1,342              | 1,314              | 1,386              |
| Average Net Prices Received                    |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 81.38              | 75.90              | 74.19              | 81.20              |
|    Natural Gas ($/Mcf)          | 5.46               | 4.35               | 4.26               | 4.00               |
|    Natural Gas Liquids ($/Bbl)  | 67.17              | 63.26              | 61.52              | 63.29              |
| Royalties                                      |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 11.83              | 5.06               | 5.43               | 4.88               |
|    Natural Gas ($/Mcf)          | 0.73               | 0.03               | 0.27               | 0.02               |
|    Natural Gas Liquids ($/Bbl)  | 14.31              | 3.19               | 3.71               | 3.80               |
| Transportation                                 |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 2.00               | 1.76               | 1.68               | 1.47               |
|    Natural Gas ($/Mcf)          | 0.21               | 0.22               | 0.22               | 0.22               |
|    Natural Gas Liquids ($/Bbl)  | 1.79               | 2.72               | 1.43               | 2.04               |
| Production Costs                               |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 15.57              | 10.45              | 11.40              | 10.30              |
|    Natural Gas ($/Mcf)          | 1.49               | 1.44               | 1.75               | 1.89               |
|    Natural Gas Liquids ($/Bbl)  | 4.64               | 5.24               | 6.20               | 6.39               |
| Netback Received                               |               |               |               |               |
|    Light and Medium Oil ($/Bbl) | 51.98              | 58.63              | 55.68              | 64.55              |
|    Natural Gas ($/Mcf)          | 3.03               | 2.66               | 2.02               | 1.87               |
|    Natural Gas Liquids ($/Bbl)  | 46.43              | 52.11              | 50.18              | 51.06              |

----

| France                                         |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|
| Average Daily Production                       |   |   |   |   |
|    Light and Medium Oil (Bbl/d) | 7,900  | 8,397  | 8,542  | 8,539  |
|    Natural Gas (MMcf/d)         | 0.94   | 0.45   | 1.19   | 1.10   |
|    Natural Gas Liquids (Bbl/d)  | -      | -      | -      | -      |
| Average Net Prices Received                    |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 78.06  | 79.93  | 78.87  | 85.53  |
|    Natural Gas ($/Mcf)          | 9.02   | 8.94   | 9.50   | 10.93  |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Royalties                                      |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 5.33   | 5.31   | 4.90   | 5.40   |
|    Natural Gas ($/Mcf)          | (0.09) | 0.27   | 0.25   | 0.27   |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Transportation                                 |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 3.86   | 3.71   | 3.28   | 3.15   |
|    Natural Gas ($/Mcf)          | -      | -      | -      | -      |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Production Costs                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 14.65  | 13.14  | 13.71  | 13.23  |
|    Natural Gas ($/Mcf)          | 5.19   | 6.94   | 3.55   | 7.56   |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Netback Received                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 54.22  | 57.77  | 56.98  | 63.75  |
|    Natural Gas ($/Mcf)          | 3.92   | 1.73   | 5.70   | 3.10   |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Netherlands                                    |   |   |   |   |
| Average Daily Production                       |   |   |   |   |
|    Light and Medium Oil (Bbl/d) | -      | -      | -      | -      |
|    Natural Gas (MMcf/d)         | 20.97  | 31.35  | 30.32  | 30.47  |
|    Natural Gas Liquids (Bbl/d)  | 25     | 44     | 46     | 26     |
| Average Net Prices Received                    |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | -      | -      | -      | -      |
|    Natural Gas ($/Mcf)          | 6.49   | 6.18   | 7.39   | 7.97   |
|    Natural Gas Liquids ($/Bbl)  | 22.70  | 76.05  | 58.65  | 131.14 |
| Royalties                                      |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | -      | -      | -      | -      |
|    Natural Gas ($/Mcf)          | -      | -      | -      | -      |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Production Costs                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | -      | -      | -      | -      |
|    Natural Gas ($/Mcf)          | 2.26   | 1.26   | 1.56   | 2.14   |
|    Natural Gas Liquids ($/Bbl)  | -      | -      | -      | -      |
| Netback Received                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | -      | -      | -      | -      |
|    Natural Gas ($/Mcf)          | 4.23   | 4.92   | 5.83   | 5.83   |
|    Natural Gas Liquids ($/Bbl)  | 22.70  | 76.05  | 58.65  | 131.14 |
| Total                                          |   |   |   |   |
| Average Daily Production                       |   |   |   |   |
|    Light and Medium Oil (Bbl/d) | 17,006 | 17,637 | 17,658 | 21,573 |
|    Natural Gas (MMcf/d)         | 68.90  | 76.04  | 73.68  | 73.90  |
|    Natural Gas Liquids (Bbl/d)  | 1,695  | 1,386  | 1,360  | 1,412  |
| Average Net Prices Received                    |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 80.57  | 78.51  | 77.79  | 85.14  |
|    Natural Gas ($/Mcf)          | 5.82   | 5.13   | 5.64   | 5.74   |
|    Natural Gas Liquids ($/Bbl)  | 66.51  | 63.67  | 61.42  | 64.55  |
| Royalties                                      |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 14.11  | 6.67   | 5.81   | 13.53  |
|    Natural Gas ($/Mcf)          | 0.50   | 0.02   | 0.16   | 0.01   |
|    Natural Gas Liquids ($/Bbl)  | 22.37  | 18.35  | 19.49  | 19.97  |
| Transportation Costs                           |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 2.03   | 2.04   | 1.86   | 1.48   |
|    Natural Gas ($/Mcf)          | 0.15   | 0.13   | 0.13   | 0.13   |
|    Natural Gas Liquids ($/Bbl)  | 1.77   | 2.63   | 1.38   | 2.00   |
| Production Costs                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 16.08  | 13.91  | 14.62  | 12.43  |
|    Natural Gas ($/Mcf)          | 1.78   | 1.40   | 1.70   | 2.08   |
|    Natural Gas Liquids ($/Bbl)  | 4.57   | 5.07   | 5.99   | 6.27   |
| Netback Received                               |   |   |   |   |
|    Light and Medium Oil ($/Bbl) | 48.34  | 55.89  | 55.50  | 57.70  |
|    Natural Gas ($/Mcf)          | 3.39   | 3.58   | 3.65   | 3.52   |
|    Natural Gas Liquids ($/Bbl)  | 37.80  | 37.62  | 34.56  | 36.31  |

----

| Risk Management:  Oil                    | Funded Cost    | Bbl/d                             | US $/Bbl                                |
|----------------------------------------------------|----------------|-----------------------------------|-----------------------------------------|
| Collar - WTI                                       |           |                              |                                    |
| January 2011 to June 2011                          | US $1.00/bbl   | 2,400                             | $  80.00 - $107.60            |
| January 2011 to June 2011                          | US $1.00/bbl   | 2,400                             | $  75.00 - $  97.85 |
| January 2011 to December 2011                      | US $1.00/bbl   | 500                               | $  78.00 - $  96.20 |
| January 2011 to December 2011                      | US $1.00/bbl   | 500                               | $  78.00 - $  96.25 |
| July 2011 to December 2011                         | US $1.00/bbl   | 2,400                             | $  80.00 - $110.00            |
| July 2011 to December 2011                         | US $1.00/bbl   | 2,400                             | $  77.25 - $  98.50 |
| Collar – BRENT                               |           |                              |                                    |
| January 2011 to December 2011                      | US $1.00/bbl   | 1,000                             | $  77.75 - $  96.00 |
| January 2011 to December 2011                      | US $1.00/bbl   | 1,000                             | $  77.50 - $  96.00 |
| January 2011 to December 2011                      | US $0.00/bbl   | 750                               | $  77.00 - $  95.40 |
| January 2011 to December 2011                      | US $1.00/bbl   | 750                               | $  78.00 - $  98.10 |
| January 2011 to December 2011                      | US $1.00/bbl   | 500                               | $  78.00 - $100.00            |
| January 2011 to December 2011                      | US $1.00/bbl   | 500                               | $  78.00 - $100.05            |
| January 2011 to December 2011                      | US $1.00/bbl   | 500                               | $  78.00 - $100.00            |
| January 2012 to June 2012                          | US $1.00/bbl   | 750                               | $  82.00 - $105.60            |
| January 2012 to June 2012                          | US $1.00/bbl   | 750                               | $  82.00 - $104.80            |
| January 2012 to June 2012                          | US $1.00/bbl   | 750                               | $  82.00 - $106.10            |
| Call Spread – BRENT                          |           |                              |                                    |
| January 2011 to December 2011                      | US $6.08/bbl 1 | 960                               | $  65.00 - $  85.00           |
| January 2011 to December 2011                      | US $5.15/bbl 1 | 600                               | $  65.00 - $  85.00           |
| Risk Management:  Natural Gas            | Funded Cost    | GJ/d                              | $/Bbl                                   |
| SWAP – AECO                                  |           |                              |                                    |
| January 2011 to October 2011                       | $0.00/GJ       | 700                               | $    5.13           |
|  Risk Management:  Foreign Exchange |           | Notional Principal($US) Per Month | Fixed Rate($CDN / $US)                  |
| US Dollar Forward Sale                             |           |                              |                                    |
| January 2011 to December 2011                      |           | $750,000                          | $1.07                                   |
| January 2011 to December 2011                      |           | $750,000                          | $1.07                                   |

----

| DirectorsName andMunicipality ofResidence                                                                                                                                                                                            | Office Held                                        | Year FirstElected orAppointedas Director | Principal Occupation During the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lorenzo DonadeoCalgary, Alberta, Canada                                                                                                                                                                                              | President and Chief Executive Officer and Director | 1994                                     | Since 2003, President and Chief Executive Officer of Vermilion                                                                                                                                                                                                                                                                                                                                                                                         |
| W. Kenneth Davidson(2)(3)Oakville, Ontario, Canada                                                                                                                                                                                   | Director                                           | 2005                                     | Since 2000, Director of Millar Western Forest Products Ltd., a private forest products company From 2009 until February 2011, Director of Realex Properties Corp., a public real estate company                                                                                                                                                                                                                                                        |
| Claudio A. Ghersinich (2)(4)(5)Calgary, Alberta, Canada                                                                                                                                                                              | Director                                           | 1994                                     | Since 2005, President of Carrera Investments Corp., a private investment company                                                                                                                                                                                                                                                                                                                                                                       |
| Joseph F. Killi(2)(3)Calgary, Alberta, Canada                                                                                                                                                                                        | Director                                           | 1999                                     | From January 2011, Executive Chairman of Parkbridge Lifestyle Communities Inc., a private real estate company From 2005 until January 2011, Executive Chairman of Parkbridge Lifestyle Communities Inc., a public real estate company From 2005 until February 2011, Vice Chairman of Realex Properties Corp., a public real estate company Since 1993, President of Rosebridge Capital Corp. Inc., a private real estate investment company |
| Larry J. Macdonald (1)(2)(3)(4)(5)Okotoks, Alberta, Canada                                                                                                                                                                           | Director and Chairman of the Board                 | 2002                                     | Since 2003, Chairman & Chief Executive Officer and a director of  Point Energy Ltd., a private oil and gas company Since 2003, Managing Director of Northpoint Energy Ltd., a private oil and gas company                                                                                                                                                                                                                                |
| William F. Madison(2)(4)(5)Sugar Land, Texas, USA                                                                                                                                                                                    | Director                                           | 2004                                     | From 1999 to 2006, a director of Montana Tech Foundation, serving as Chairman during 2004 and 2005 Since 2007, Director of Canadian Oil Recovery and Remediation Enterprise, Inc., a public oil recovery and remediation company                                                                                                                                                                                                                       |
| Timothy R. Marchant(3)(4)(5)Calgary, Alberta, Canada                                                                                                                                                                                 | Director                                           | 2010                                     | 2009 to present, adjunct professor, Haskayne School of Business 2007 to 2009, Vice President, Middle East Business Development for BP International 2004 to 2007, President, BP Kuwait                                                                                                                                                                                                                                                            |
| Notes:(1) Chairman of the Board(2) Member of the Audit Committee(3) Member of the Governance and Human Resources Committee(4) Member of the Health, Safety and Environment Committee(5) Member of the Independent Reserves Committee |

----

| OfficersName andMunicipality of Residence        | Office Held                                          | Principal Occupation During the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------------------------|------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| John D. DonovanCalgary, Alberta, Canada          | Executive Vice President BusinessDevelopment         | Since 2005, Executive Vice President, Business Development of Vermilion                                                                                                                                                                                                                                                                                                                                                    |
| Curtis W. HicksCalgary, Alberta, Canada          | Executive Vice President and Chief Financial Officer | Since 2004, Executive Vice President and Chief Financial Officer of Vermilion                                                                                                                                                                                                                                                                                                                                              |
| G.R. (Bob) Mac DougallCalgary, Alberta, Canada   | Executive Vice President and Chief Operating Officer | Since 2006, Executive Vice President and Chief Operating Officer of Vermilion 2004 to 2006, Chief Operating Officer of Vermilion                                                                                                                                                                                                                                                                                                |
| Paul BeiqueCalgary, Alberta, Canada              | Vice PresidentCapital Markets                        | Since 2008, Vice President Capital Markets of Vermilion 2003 to 2008, Director Investor Relations of Vermilion                                                                                                                                                                                                                                                                                                                  |
| Mona JasinskiCalgary, Alberta, Canada            | Vice PresidentPeople                                 | Since 2009, Vice President People of Vermilion 2004 to 2009, HR Manager, Shell Onshore Production, North America                                                                                                                                                                                                                                                                                                                |
| Raj C. PatelCalgary, Alberta, Canada             | Vice President Marketing                             | Since 2001, Vice President, Marketing of Vermilion                                                                                                                                                                                                                                                                                                                                                                                   |
| Peter SiderBiscarrosse, France                   | Vice President European Operations                   | Since July 2009, Vice President European Operations March 2008 to July 2009, Regional General Manager, European Operations 2006 to March 2008, Managing Director of Vermilion Oil & Gas Netherlands B.V., a subsidiary of the Company 1999 to 2006, founder of four private and public oil and gas companies in Alberta including Resolution Resources, EMBO Petroleum, Newheart Oil and Gas and Breakside Energy |
| Robert J. Engbloom, Q.C.Calgary, Alberta, Canada | Corporate Secretary                                  | Since 1999, partner with Macleod Dixon LLP, a law firm                                                                                                                                                                                                                                                                                                                                                                               |

----

| Period                                          | Distribution Amount for Period per Trust Unit |
|-------------------------------------------------|-----------------------------------------------|
| As Vermilion Energy Trust                       |                                          |
| 2003 – January 22 to December 31          | $1.87                                         |
| 2004 – January to December                | $2.04                                         |
| 2005 – January to December                | $2.04                                         |
| 2006 – January to December                | $2.04                                         |
| 2007 – January to December                | $2.06                                         |
| 2008 – January to December                | $2.28                                         |
| 2009 – January to December                | $2.28                                         |
| 2010 – January to September (1)           | $1.71                                         |
| Period                                          | Dividend Amount for Period per Common Share   |
| As Vermilion Energy Inc.                        |                                          |
| 2010 – September to December (1)          | $0.57                                         |
| 2011 – January to March                   | $0.57                                         |
| Total cash dividends since January 22, 2003 (2) | $17.46                                        |

| (1) | Total cash dividends paid out in 2010 by Vermilion and the Trust to a holder of a common share who was a former holder of a Trust Unit equals $2.28. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | On March 15, 2011, the Company announced that it would pay a cash dividend of $0.19 per common share to Shareholders of record as of March 31, 2011 on April 15, 2011.  The total cash dividends since January 22, 2003 does not include the April dividend of $0.19. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a)   | evaluate a takeover bid (particularly if it includes share or trust unit consideration); |
|-----------------|------------------------------------------------------------------------------------------|

| (b)   | explore, develop and pursue alternatives which are superior to the takeover bid and which could maximize Shareholder value; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------|

| (c)   | make reasoned recommendations to the Shareholders. |
|-----------------|----------------------------------------------------|

----

| (a)   | the terms of the agreement are publicly disclosed and a copy of the agreement is publicly available; |
|-----------------|------------------------------------------------------------------------------------------------------|

| (b)   | the Shareholder who has agreed to tender voting common shares to the takeover bid (the "Lock-Up Bid") made by the other party to the agreement is permitted to terminate its obligation under the agreement in order to tender voting common shares to another takeover bid or transaction where: (i) the offer price or value of the consideration payable under the other takeover bid or transaction is greater than the price or value of the consideration per common share at which the Shareholder has agreed to deposit or tender voting common shares to the Lock-Up Bid or is equal to or greater than a specified minimum which is not more than 7% higher than the offer price under the Lock-Up Bid; and (ii) if the number of voting common shares offered to be purchased under the Lock-Up Bid is less than all of the voting common shares held by Shareholders (excluding common shares held by the offeror), the number of voting common shares offered to be purchased under the other takeover bid or transaction (at an offer price not lower than in the Lock-Up Bid) is greater than the number of voting common shares offered to be purchased under the Lock-Up Bid or is equal to or greater than a specified number which is not more than 7% higher than the number of voting common shares offered to be purchased under the Lock-Up Bid; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | no break-up fees or other penalties that exceed in the aggregate the greater of 2.5% of the price or value of the consideration payable under the Lock-Up Bid and 50% of the increase in consideration resulting from another takeover bid or transaction shall be payable by the Shareholder if the Shareholder fails to deposit or tender voting common shares to the Lock-Up Bid. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a)   | the takeover bid must be made by means of a takeover bid circular; |
|-----------------|--------------------------------------------------------------------|

| (b)   | the takeover bid is made to all holders of voting common shares as registered on the books of the Company, other than the offeror; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | the takeover bid contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified provision that no voting common shares will be taken up or paid for pursuant to the takeover bid prior to the close of business on the date which is not less than 45 days following the date of the takeover bid and only if at such date more than 50% of the voting common shares held by independent Shareholders shall have been deposited or tendered pursuant to the takeover bid and not withdrawn; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | the takeover bid contains an irrevocable and unqualified provision that unless the takeover bid is withdrawn, voting common shares may be deposited pursuant to such takeover bid at any time during the period of time between the date of the takeover bid and the date on which voting common shares may be taken up and paid for and that any voting common shares deposited pursuant to the takeover bid may be withdrawn until taken up and paid for; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | the takeover bid contains an irrevocable and unqualified provision that if, on the date on which voting common shares may be taken up and paid for, more than 50% of the voting common shares held by independent Shareholders shall have been deposited pursuant to the takeover bid and not withdrawn, the offeror will make a public announcement of that fact and the takeover bid will remain open for deposits and tenders of voting common shares for not less than ten business days from the date of such public announcement. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                       | Independent | Financially Literate | Relevant Education and Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------------------------|-------------|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| W. Kenneth Davidson(Chair) | Yes         | Yes                  | Mr. Davidson holds Bachelor of Science degrees in Mathematics and Business and a Masters in Business Administration degree.  Mr. Davidson has obtained significant financial experience and exposure to accounting including internal controls and procedures for financial reporting and complex financial issues as a director, officer or consultant to a number of companies involved in the banking and securities areas of the financial services sector.                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Claudio A. Ghersinich      | Yes         | Yes                  | Mr. Ghersinich holds a B.Sc. Civil Engineering degree from the University of Manitoba.  Mr. Ghersinich has obtained financial experience and exposure to accounting and financial issues in a role as a founder of Vermilion Resources Ltd. in 1994 and as an audit committee member of other public companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Joseph F. Killi       | Yes         | Yes                  | Mr. Killi holds a Bachelor of Science degree in Biochemistry, a Bachelor of Commerce degree and a Chartered Accountant designation.  As a Chartered Accountant, Mr. Killi attained experience in preparing, auditing, analyzing and evaluating financial statements including internal controls and procedures for financial reporting.  Mr. Killi has an understanding of the accounting principles used by the Company as well as the implications of those accounting principles on the Company's financial results.  Mr. Killi has also obtained significant financial experience and exposure to accounting and financial issues in a number of senior positions with Parkbridge Lifestyle Communities Inc., Realex Properties Corp. and Trizec Corporation and in his role as a director and audit committee member of other public and private companies. |
| Larry J. Macdonald    | Yes         | Yes                  | Mr. Macdonald holds a Bachelor of Science degree in Geology.  In 2005, Mr. Macdonald attended a financial literacy course at the University of Toronto's Rotman's School of Management in conjunction with the Institute of Corporate Directors.  In addition, Mr. Macdonald has obtained financial experience and exposure to accounting and financial issues in a number of senior officer positions with Point Energy Ltd., Pointwest Energy Inc., Westpoint Energy Inc. and Anderson Exploration Ltd. and as a director, audit committee member and officer of a number of other public and private companies as well as not-for-profit organizations.                                                                                                                                                                                                                      |
| William F. Madison         | Yes         | Yes                  | Mr. Madison holds a Bachelor of Science in Petroleum Engineering.  Mr. Madison has completed the Harvard Program for Management Development. Mr. Madison has obtained financial experience and exposure to accounting and financial issues as the Chairman of Montana Tech Foundation and as a senior executive of Marathon Oil Company and as a director, audit committee member and officer of other public and private companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

| Item              | 2010       | 2009                                  |
|-------------------|------------|---------------------------------------|
| Audit fees(1)     | $1,389,597 | $1,693,659                            |
| All other fees(2) | $22,239    | $     12,296 |

| (1) | Audit fees consisted of professional services rendered by Deloitte & Touche LLP for the audit of the Company's financial statements for the years ended December 31, 2010 and 2009, fees for the review of the quarterly financial statements and services provided in connection with statutory and regulatory filings or engagements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | For 2010, the amount reported relates to income tax compliance work and the 2009 figure relates to property tax consulting services. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| Trust Units 2010   | High   | Low    | Close  | Volume (000's) |
|--------------------|--------|--------|--------|----------------|
| January            | $34.60 | $31.57 | $32.32 | 4,498          |
| February           | $34.82 | $31.68 | $34.82 | 3,944          |
| March              | $35.81 | $34.04 | $35.39 | 4,275          |
| April              | $36.36 | $34.73 | $35.25 | 3,472          |
| May                | $35.60 | $31.25 | $33.55 | 3,939          |
| June               | $35.75 | $32.50 | $33.67 | 3,897          |
| July               | $34.91 | $32.21 | $33.10 | 2,376          |
| August             | $35.92 | $32.33 | $35.67 | 4,980          |
| September          | $36.75 | $35.51 | $36.75 | 3,167          |
| Common Shares 2010 | High   | Low    | Close  | Volume (000's) |
| September          | $38.90 | $35.15 | $38.62 | 9,286          |
| October            | $40.60 | $37.77 | $39.94 | 3,365          |
| November           | $43.20 | $38.57 | $42.02 | 4,651          |
| December           | $47.59 | $41.81 | $46.22 | 4,539          |
| Common Shares 2011 | High   | Low    | Close  | Volume (000's) |
| January            | $47.80 | $44.60 | $47.36 | 3,413          |
| February           | $52.45 | $45.87 | $51.05 | 4,523          |

----

----

----

----

----

----

----

----

| 1.   | We have prepared an evaluation of the Company’s reserves data as at December 31, 2010. The reserves data are estimates of proved reserves and probable reserves and related future net revenue as at December 31, 2010, estimated using forecast prices and costs. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The reserves data are the responsibility of the Company’s management. Our responsibility is to express an opinion on the reserves data based on our evaluation. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Those standards require that we plan and perform an evaluation to obtain reasonable assurance as to whether the reserves data are free of material misstatement.  An evaluation also includes assessing whether the reserves data are in accordance with principles and definitions in the COGE Handbook. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | The following table sets forth the estimated future net revenue (before deduction of income taxes) attributed to proved plus probable reserves, estimated using forecast prices and costs and calculated using a discount rate of 10 percent, included in the reserves data of the Company evaluated by us for the year ended December 31, 2010, and identifies the respective portions thereof that we have audited, evaluated and reviewed and reported on to the Company's board of directors: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| IndependentQualified Reserves Evaluator | Description andPreparation Date ofEvaluation Report | Location of Reserves(Country or ForeignGeographic Area) | Net Present Value of Future Net Revenue(before income taxes, 10% discount rate - $M) |
|-----------------------------------------|-----------------------------------------------------|---------------------------------------------------------|--------------------------------------------------------------------------------------|
| Audited                                 | Evaluated                                           | Reviewed                                                | Total                                                                                |
| GLJ Petroleum Consultants               | February 9, 2011                                    | Australia                                               | -                                                                                    | 735,393 | - | 735,393 |
| GLJ Petroleum Consultants               | February 9, 2011                                    | Canada                                                  | -                                                                                    | 647,069 | - | 647,069 |
| GLJ Petroleum Consultants               | February 9, 2011                                    | France                                                  | -                                                                                    | 1,143,741 | - | 1,143,741 |
| GLJ Petroleum Consultants               | February 9, 2011                                    | Ireland                                                 | -                                                                                    | 297,289 |   | 297,289 |
| GLJ Petroleum Consultants               | February 9, 2011                                    | Netherlands                                             | -                                                                                    | 353,007 | - | 353,007 |
| TOTAL                                   |                                                |                                                    |                                                                                 | 3,176,498 |   | 3,176,498 |

| 5.   | In our opinion, the reserves data respectively evaluated by us have, in all material respects, been determined and are in accordance with the COGE Handbook. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | We have no responsibility to update our reports referred to in paragraph 4 for events and circumstances occurring after their respective preparation dates. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Because the reserves data are based on judgements regarding future events, actual results will vary and the variations may be material. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| “Jodi L. Anhorn”       |   |   |
|----------------------------------------------|--------|--------|
| Jodi L. Anhorn, M.Sc., P.Eng. Vice President |   |

----

|   | (a) | reviewed the Company's procedures for providing information to the independent qualified reserves evaluators; |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (b) | met with the independent qualified reserves evaluators to determine whether any restrictions affected the ability of the independent qualified reserves evaluators to report without reservation; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | reviewed the reserves data with Management and the independent qualified reserves evaluators. |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | (a) | the content and filing with securities regulatory authorities of Form 51-101F1 containing reserves data and other oil and gas information; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | the filing of Form 51-101F2 which is the report of the independent qualified reserves evaluators on the reserves data; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the content and filing of this report. |
|--------|-----|----------------------------------------|

----

| I.   | PURPOSE |
|----------------|---------|

| A.   | The financial information that will be provided to the Shareholders and others; |
|----------------|---------------------------------------------------------------------------------|

| B.   | The systems of internal controls, management and the Board of Directors have established; |
|----------------|-------------------------------------------------------------------------------------------|

| C.   | All audit processes; |
|----------------|----------------------|

| II.   | COMPOSITION AND OPERATIONS |
|-----------------|----------------------------|

| A.   | The Committee shall be composed of not fewer than three directors and not more than five directors, all of whom are independent1 directors of Vermilion. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B.   | All Committee members shall be “financially literate”2 and at least one member shall have "accounting or related financial expertise". The Committee may include a member who is not financially literate, provided he or she attains this status within a reasonable period of time following his or her appointment and providing the Board has determined that including such member will not materially adversely affect the ability of the Committee to act independently. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C.   | The Committee shall operate in a manner that is consistent with the Committee Guidelines outlined in Tab 8 of the Board Manual. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------|

| D.   | Vermilion’s auditors shall be advised of the names of the Committee members and will receive notice of and be invited to attend meetings of the Committee, and to be heard at those meetings on matters relating to the Auditor's duties. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| E.   | The Committee has the authority to communicate with the external auditors as it deems appropriate to consider any matter that the Committee or auditors determine should be brought to the attention of the Board or Shareholders. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| F.   | The Committee shall meet at least four times each year. |
|----------------|---------------------------------------------------------|

| III.   | DUTIES AND RESPONSIBILITIES |
|------------------|-----------------------------|

| A.   | Financial Statements and Other Financial Information |
|----------------|------------------------------------------------------|

|   | The Committee will review and recommend for approval to the Board financial information that will be made publicly available. This includes: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

| i)   | Review and recommend approval of Vermilion’s annual financial statements, MD&A and press release and report to the Board of Directors before the statements are approved by the Board of Directors; |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii)   | Review and recommend approve for release Vermilion’s quarterly financial statements, MD&A and press release; |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

| iii)   | Satisfy itself that adequate procedures are in place for the review of the public disclosure of financial information extracted or derived from Vermilion’s financial statements, other than the public disclosure referred to in items (i) and (ii) above, and periodically assess the adequacy of those procedures; and |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iv)   | Review the Annual Information Form and any Prospectus/Private Placement Memorandums. |
|-----------------|--------------------------------------------------------------------------------------|

----

| 1 | Independence requirements, including those specifically for Audit Committee members, are described in the Appendix to Tab 6, Board Operating Guidelines. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | The Board has adopted the NI 52-110 definition of “financial literacy”, which is an individual who is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the issuer's financial statements. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| v)   | The appropriateness of accounting policies and financial reporting practices used by Vermilion; |
|----------------|-------------------------------------------------------------------------------------------------|

| vi)   | Any significant proposed changes in financial reporting and accounting policies and practices to be adopted by Vermilion; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

| vii)   | Any new or pending developments in accounting and reporting standards that may affect Vermilion; |
|------------------|--------------------------------------------------------------------------------------------------|

| viii)   | With management, the external auditor and, if necessary, legal counsel, any litigation, claim or contingency, including tax assessments, that could have a material effect upon the financial position of the Corporation, and the manner in which these matters may be, or have been, disclosed in the financial statements; and |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ix)   |  Accounting, tax and financial aspects of the operations of the Corporation as the Committee considers appropriate. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------|

| B.   | Risk Management, Internal Control and Information Systems |
|----------------|-----------------------------------------------------------|

| i)   | Review Vermilion’s risk management controls and policies; |
|----------------|-----------------------------------------------------------------|

| ii)   | Obtain reasonable assurance that the information systems are reliable and the systems of internal controls are properly designed and effectively implemented through discussions with and reports from management, the internal auditor and external auditor; and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii)   | Review management steps to implement and maintain appropriate internal control procedures including a review of policies. |
|------------------|---------------------------------------------------------------------------------------------------------------------------|

| C.   | External Audit |
|----------------|----------------|

| i)   | Review and recommend to the Board, for Shareholder approval, engagement and compensation of the external auditor; |
|----------------|-------------------------------------------------------------------------------------------------------------------|

| ii)   | Review the annual external audit plan, including but not limited to the following: |
|-----------------|------------------------------------------------------------------------------------|

| a)   | engagement letter; |
|----------------|--------------------|

| b)   | objectives and scope of the external audit work; |
|----------------|--------------------------------------------------|

| c)   | procedures for quarterly review of financial statements; |
|----------------|----------------------------------------------------------|

| d)   | materiality limit; |
|----------------|--------------------|

| e)   | areas of audit risk; |
|----------------|----------------------|

| f)   | staffing; |
|----------------|-----------|

| g)   | timetable; and |
|----------------|----------------|

| h)   | proposed fees. |
|----------------|----------------|

| iii)   | Meet with the external auditor to discuss Vermilion’s quarterly and annual financial statements and the auditor's report including the appropriateness of accounting policies and underlying estimates; |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iv)   | Maintain oversight the External Auditor’s work and advise the Board, including but not limited to: |
|-----------------|----------------------------------------------------------------------------------------------------------|

| a)   | The resolution of any disagreements between management and the External Auditor regarding financial reporting; |
|----------------|----------------------------------------------------------------------------------------------------------------|

| b)   | Any significant accounting or financial reporting issue; |
|----------------|----------------------------------------------------------|

| c)   | The auditors' evaluation of Vermilion's system of internal  controls, procedures and documentation; |
|----------------|---------------------------------------------------------------------------------------------------------------|

| d)   | The post audit or management letter containing any findings or recommendation of the external auditor, including management’s response thereto and the subsequent follow-up to any identified internal control weaknesses; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e)   | Any other matters the external auditor brings to the Committee’s attention; and |
|----------------|---------------------------------------------------------------------------------------|

| f)   | Assess the performance and consider the annual appointment of external auditors for recommendation to the Board ensuring that such auditors are participants in good standing pursuant to applicable regulatory laws. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| v)   | Review the auditor’s report on all material subsidiaries; and |
|----------------|---------------------------------------------------------------------|

| vi)   | Review and discuss with the external auditors all significant relationships that the external auditors and their affiliates have with Vermilion and its affiliates in order to determine the external auditors’ independence, including, without limitation: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | Requesting, receiving and reviewing, on a periodic basis, a formal written statement from the external auditors delineating all relationships that may reasonably be thought to bear on the independence of the external auditors with respect to Vermilion; |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Discussing with the external auditors any disclosed relationships or services that the external auditors believe may affect the objectivity and independence of the external auditors; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Recommending that the Board take appropriate action in response to the external auditors’ report to satisfy itself of the external auditors’ independence. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vii)   | Review and pre-approve any non-audit services to be provided by the external auditor's firm or its affiliates (including estimated fees), and consider the impact on the independence of the external audit; and |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| viii)   | Meet periodically, and at least annually, with the external auditor without management present. |
|-------------------|-------------------------------------------------------------------------------------------------|

----

| D.   | Compliance |
|----------------|------------|

| i)   | Ensure that the External Auditor’s fees are disclosed by category in the Annual Information Form in compliance with regulatory requirements; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ii)   | Disclose any specific policies or procedures has adopted for pre-approving non-audit services by the External Auditor including affirmation that they meet regulatory requirements; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii)   | Assist the Governance and Human Resources Committee with preparing Vermilion’s governance disclosure by ensuring it has current and accurate information on: |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | The independence of each Committee member relative to regulatory requirements for audit committees; |
|----------------|-----------------------------------------------------------------------------------------------------|

| b)   | The state of financial literacy of each Committee member, including the name of any member(s) currently in the process of acquiring financial literacy and when they are expected to attain this status; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | The education and experience of each Committee member relevant to his or her responsibilities as Committee member. |
|----------------|--------------------------------------------------------------------------------------------------------------------|

| iv)   | Disclose if Vermilion has relied upon any exemptions to the requirements for Audit Committees under regulatory requirements. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| E.   | Other |
|----------------|-------|

| i)   | Establish and periodically review implementation of procedures for: |
|----------------|---------------------------------------------------------------------|

| a)   | The receipt, retention and treatment of complaints received by Vermilion regarding accounting, internal accounting controls, or auditing matters; and |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | The confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; |
|----------------|------------------------------------------------------------------------------------------------------------------------|

| ii)   | Review and approve Vermilion hiring policies regarding partners, employees and former partners and employees of the present and former External Auditor; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii)   | Review insurance coverage of significant business risks and uncertainties; |
|------------------|----------------------------------------------------------------------------|

| iv)   | Review material litigation and its impact on financial reporting; |
|-----------------|-------------------------------------------------------------------|

| v)   | Review policies and procedures for the review and approval of officers’ expenses and perquisites; and |
|----------------|-------------------------------------------------------------------------------------------------------------|

| vi)   | Review the policies and practices concerning the expenses and perquisites of the Chairman, including the use of the assets of Vermilion; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| vii)   | Review with external auditors any corporate transactions in which directors or officers of Vermilion have a personal interest; and |
|------------------|------------------------------------------------------------------------------------------------------------------------------------|

| viii)   | Review the terms of reference for the Committee annually and make recommendations to the Board as required. |
|-------------------|-------------------------------------------------------------------------------------------------------------|

| IV.   | ACCOUNTABILITY |
|-----------------|----------------|

| A.   | The Committee Chair has the responsibility to make periodic reports to the Board, as requested, on financial matters relative to Vermilion. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| B.   | The Committee shall report its discussions to the Board by maintaining minutes of its meetings and providing an oral report at the next Board meeting. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

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