Exhibit 99.1



2016 ANNUAL INFORMATION FORM



For the year ended December 31, 2016



Dated February 24, 2017



NOTE: GRAPHICS NOT REQUIRED TO APPLY TO THIS PAGE






Vermilion Energy Inc.AIF for the year ended December 31, 2016


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 
|Contingent
    Resources                                            | 8 
|Prospective
    Resources                                           | 9 
|NON-GAAP MEASURES                                                   | 9 
|VERMILION
    ENERGY inc.                                           | 10
|General                                                             | 10
|Organizational Structure
    of the Company                         | 10
|DESCRIPTION
    OF THE BUSINESS                                     | 11
|Operating Segments
    and Description of Properties                | 11
|GENERAL DEVELOPMENT
    OF THE BUSINESS                             | 15
|Three Year History
    and Outlook                                  | 15
|STATEMENT
    OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION    | 18
|Reserves and Future
    Net Revenue                                 | 18
|Reconciliations of
    Changes in Reserves                          | 26
|Undeveloped Reserves                                                | 34
|Timing of Initial
    Undeveloped Reserves Assignment               | 34
|Future Development
    Costs                                        | 35
|Oil and Gas Properties
    and Wells                                | 36
|Costs Incurred                                                      | 37
|Acreage                                                             | 37
|Exploration and Development
    Activities                          | 38
|Properties with No
    Attributed Reserves                          | 39
|Tax Information                                                     | 40
|Production Estimates                                                | 41
|Production History                                                  | 42
|Marketing                                                           | 46
|DIRECTORS
    AND OFFICERS.                                         | 47
|Directors                                                           | 47
|Officers                                                            | 49
|DESCRIPTION
    OF CAPITAL STRUCUTURE.                              | 50
|Common Shares                                                       | 50
|Cash Dividends                                                      | 50
|Premium Dividend and
    Dividend Reinvestment Plan                 | 51
|Shareholder Rights
    Plan                                         | 51
|MARKET FOR
    SECURITIES                                           | 52
|AUDIT COMMITTEE
    MATTERS                                         | 53
|Audit Committee Charter                                             | 53
|Composition of the
    Audit Committee                              | 53
|External Audit Service
    Fees                                     | 53
|CONFLICTS
    OF INTEREST                                           | 54
|INTEREST OF
    MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS      | 54
|LEGAL PROCEEDINGS                                                   | 54
|MATERIAL CONTRACTS                                                  | 54
|INTERESTS
    OF EXPERTS                                            | 54
|TRANSFER AGENT
    AND REGISTRAR                                    | 54






Vermilion Energy Inc.AIF for the year ended December 31, 2016




|RISK
    FACTORS                                                                                                                              | 55
|--------------------------------------------------------------------------------------------------------------------------------------------- | --
|Reserve Estimates                                                                                                                             | 55
|Uncertainty of Contingent
    Resource Estimates                                                                                              | 55
|Uncertainty of Prospective
    Resource Estimates                                                                                             | 55
|Volatility of Oil
    and Natural Gas Prices                                                                                                  | 55
|Changes in Legislation                                                                                                                        | 56
|Government Regulations                                                                                                                        | 56
|Competition                                                                                                                                   | 56
|Operational Matters                                                                                                                           | 56
|Environmental Concerns                                                                                                                        | 57
|Kyoto Protocol                                                                                                                                | 58
|Discretionary Nature
    of Dividends                                                                                                         | 58
|Debt Service                                                                                                                                  | 58
|Changes in Income
    Tax Laws                                                                                                                | 58
|Depletion of Reserves                                                                                                                         | 58
|Net Asset Value                                                                                                                               | 58
|Volatility of Market
    Price of Common Shares                                                                                               | 58
|Variations in Interest
    Rates and Foreign Exchange Rates                                                                                   | 59
|Increase in Operating
    Costs or Decline in Production Level                                                                                | 59
|Acquisition Assumptions                                                                                                                       | 59
|Failure to Realize
    Anticipated Benefits of Prior Acquisitions                                                                             | 59
|Additional Financing                                                                                                                          | 59
|Potential Conflicts
    of Interest                                                                                                           | 60
|Accounting Adjustments                                                                                                                        | 60
|Market Accessibility                                                                                                                          | 60
|Cyber Security                                                                                                                                | 60
|ADDITIONAL
    INFORMATION                                                                                                                    | 61
|                                                                                                                                              |   
|APPENDIX A                                                                                                                                    |   
|CONTINGENT
    RESOURCES                                                                                                                      | 62
|PROSPECTIVE
    RESOURCES                                                                                                                     | 67
|                                                                                                                                              |   
|APPENDIX B                                                                                                                                    |   
|REPORT
    ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (FORM 51-101F2)                                            | 73
|REPORT
    ON contingent resources DATA and prospective resources data BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (form 51-101F2) | 74
|                                                                                                                                              |   
|APPENDIX C                                                                                                                                    |   
|REPORT
    OF MANAGEMENT AND DIRECTORS ON RESERVES DATA AND OTHER INFORMATION (FORM 51-101F3)                                                 | 76
|                                                                                                                                              |   
|APPENDIX D                                                                                                                                    |   
|TERMS
    OF REFERENCE for the AUDIT COMMITTEE                                                                                                | 77






Vermilion Energy Inc.AIF for the year ended December 31, 2016


GLOSSARY OF TERMS



In addition to terms defined elsewhere in this annual information
form, the following are defined terms used in this annual information form:

“2003 Arrangement”means
the plan of arrangement under the ABCA involving the Trust, Vermilion Resources Ltd., Clear Energy Inc. and Vermilion Acquisition
Ltd., which was completed on January 22, 2003;



“ABCA” means the Business
Corporations Act(Alberta), R.S.A. 2000, c. B-9, as amended, including the regulations promulgated thereunder;



“AGCA”means Alberta Gas
Cost Allowance;



“AIF” means this Annual
Information Form and the appendices attached hereto;



“Affiliate” when used to
indicate a relationship with a person or company, has the same meaning as set forth in the Securities Act(Alberta);



“Board of Directors” or
“board” means the board of directors of Vermilion;



“CGUs”means cash generating
units and based on management’s judgement, represents the lowest level at which there is identifiable cash inflows that
are largely independent of the cash inflows of other groups of assets or properties;



“Common Shares” means a
common share in the capital of the Company;



“Contingent Resources” are
those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established
technology or technology under development, but which are not currently considered to be commercially recoverable due to one or
more contingencies;



“Control” means, with respect
to control of a body corporate by a person, the holding (other than by way of security) by or for the benefit of that person of
securities of that body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the
body corporate (whether or not securities of any other class or classes shall or might be entitled to vote upon the happening
of any event or contingency) provided that such votes, if exercised, are sufficient to elect a majority of the board of directors
of the body corporate;



“Conversion Arrangement”
means the plan of arrangement effected on September 1, 2010 under section 193 of the ABCA pursuant to which the Trust converted
from an income trust to a corporate structure, and Unitholders exchanged their Trust Units for common shares of the Company on
a one-for-one basis and holders of exchangeable shares of VRL received 1.89344 common shares for each exchangeable share held;



“Depletion units” means
groups of assets or properties that are within a specific production area and have similar economic lives. Depletion units represent
the lowest level of disaggregation for which Vermilion accumulates costs for the purposes of calculating and recording depletion;



“Dividend” means a dividend
paid by Vermilion in respect of the common shares, expressed as an amount per common share;



“Dividend Payment Date”means
any date that Dividends are paid to Shareholders, generally being the 15th day of the calendar month following the determination
of a Dividend Record Date;



“Dividend Record Date”means
the last day of each calendar month or such other date as may be determined from time to time by the Company;



“GLJ” means GLJ Petroleum
Consultants Ltd., independent petroleum engineering consultants of Calgary, Alberta;



“GLJ Report” means the independent
engineering reserves evaluation of certain oil, NGL and natural gas interests of the Company prepared by GLJ dated February 1,
2017 and effective December 31, 2016;



“GLJ Resource Assessment”
means the independent engineering resource evaluation prepared by GLJ to assess contingent and prospective resources across all
of the Company’s key operating regions with an effective date of December 31, 2016;



“IFRS” means International
Financial Reporting Standards, as issued by the International Accounting Standards Board;



“Income Tax Act” or “Tax
Act” means the Income Tax Act (Canada), R.S.C. 1985, c. 1. (5th Supp.), as amended, including the regulations
promulgated thereunder;



4


Vermilion Energy Inc.AIF for the year ended December 31, 2016


“Meeting” means the annual
meeting of Shareholders of the Company to be held on April 28, 2017 (or, if adjourned, such other date on which the meeting is
held);



“NYSE”means New York Stock
Exchange;



“PNG” means Petroleum and
Natural Gas properties and equipment;



“PRRT” means Petroleum Resource
Rent Tax, a profit based tax levied on petroleum projects in Australia;



“Plan” means the Premium
DividendTM and Dividend Reinvestment Plan of the Company dated effective February 27, 2015, as amended or supplemented
from time to time;



“Prospective Resources”
are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations
by application of future development projects;



“Rights Plan” means the
Shareholder Rights Plan of the Company;



“Senior Unsecured Notes”
means the $225 million aggregate principal amount of five year senior unsecured notes of the Company issued February 10, 2011
and repaid on February 10, 2016;



“Shareholders”means holders
from time to time of the Company’s common shares;



“Shareholder Rights Plan Agreement”means the Shareholder Rights Plan Agreement dated September 1, 2010 between the Company and Computershare Trust Company of
Canada establishing the Rights Plan, as amended and restated as of May 1, 2013 and as amended or supplemented from time to time;



“Subsidiary” means, in relation
to any person, any body corporate, partnership, joint venture, association or other entity of which more than 50% of the total
voting power of common shares or units of ownership or beneficial interest entitled to vote in the election of directors (or members
of a comparable governing body) is owned or controlled, directly or indirectly, by such person;



“TSX” means the Toronto
Stock Exchange;



“Trust”means Vermilion
Energy Trust, an unincorporated open-ended investment trust governed by the laws of the Province of Alberta that was dissolved
and ceased to exist pursuant to the Conversion Arrangement;



“Trust Unit” means units
in the capital of the Trust;



“Unitholders” means former
unitholders of the Trust;



“Vermilion”or the“Company”means Vermilion Energy Inc. and where context allows, its consolidated business enterprise, except that a reference to “Vermilion”
prior to the date of the Conversion Arrangement means the consolidated business enterprise of the Trust, unless otherwise indicated;
and



“VRL” means Vermilion Resources
Ltd., previously a subsidiary of the corporation.

5


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Conventions



Unless otherwise indicated, references herein
to "$" or "dollars" are to Canadian dollars. All financial information herein has been presented in Canadian
dollars in accordance with IFRS.



Abbreviations



|Oil
    and Natural Gas Liquids
|-------------------------------
|bbl                            
|Mbbl                           
|bbl/d                          
|NGLs                           
|Natural
    Gas                
|Mcf                            
|MMcf                           
|Mcf/d                          
|MMcf/d                         
|MMBtu                          
|Other                          
|API                            
|°API                           
|                               
|boe                            
|M$                             
|MM$                            
|Mboe                           
|MMboe                          
|WTI                            
|TTF                            
|NBP                            



Conversion



The following table sets forth certain standard
conversions from Standard Imperial Units to the International System of Units (or metric units).



|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          

6


Vermilion Energy Inc.AIF for the year ended December 31, 2016


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS



Certain statements included or incorporated
by reference in this annual information form may constitute forward looking statements or financial outlooks under applicable
securities legislation. Such forward looking statements or information typically contain statements with words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose", or similar
words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this annual
information form may include, but are not limited to:



| | · | capital
                                         expenditures;
| | - | --------------------------------------------------------------

| | · | business
                                         strategies and objectives;
| | - | ----------------------------------------------------------------------------

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

| | · | petroleum
                                         and natural gas sales;
| | - | -------------------------------------------------------------------------

| | · | future
                                         production levels (including the timing thereof) and rates of average annual production
                                         growth, estimated contingent resources;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | exploration
                                         and development plans;
| | - | ---------------------------------------------------------------------------

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

| | · | operating
                                         and other expenses, including the payment of future dividends;
| | - | -----------------------------------------------------------------------------------------------------------------

| | · | royalty
                                         and income tax rates;
| | - | ----------------------------------------------------------------------

| | · | the
                                         timing of regulatory proceedings and approvals; and
| | - | ------------------------------------------------------------------------------------------------

| | · | the
                                         estimate of Vermilion’s share of the expected natural gas production from the Corrib
                                         field.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Such forward-looking statements or information are based on a number of assumptions all or any of which may prove to be incorrect.
In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things:



| | · | the
                                         ability of the Company to obtain equipment, services and supplies in a timely manner
                                         to carry out its activities in Canada and internationally;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         ability of the Company to market crude oil, natural gas liquids and natural gas successfully
                                         to current and new customers;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         timing and costs of pipeline and storage facility construction and expansion and the
                                         ability to secure adequate product transportation;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         timely receipt of required regulatory approvals;
| | - | ---------------------------------------------------------------------------------------------

| | · | the
                                         ability of the Company to obtain financing on acceptable terms;
| | - | ------------------------------------------------------------------------------------------------------------

| | · | foreign
                                         currency exchange rates and interest rates;
| | - | --------------------------------------------------------------------------------------------

| | · | future
                                         crude oil, natural gas liquids and natural gas prices; and
| | - | ----------------------------------------------------------------------------------------------------------

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

Although the Company believes that the expectations reflected in such forward looking statements or information are reasonable,
undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations
will prove to be correct. Financial outlooks are provided for the purpose of understanding the Company’s financial strength
and business objectives and the information may not be appropriate for other purposes. Forward looking statements or information
are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by the Company and described in the forward looking statements or information.
These risks and uncertainties include but are not limited to:



| | · | the
                                         ability of management to execute its business plan;
| | - | ------------------------------------------------------------------------------------------------

| | · | the
                                         risks of the oil and gas industry, both domestically and internationally, such as operational
                                         risks in exploring for, developing and producing crude oil, natural gas liquids and natural
                                         gas;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks
                                         and uncertainties involving geology of crude oil, natural gas liquids and natural gas
                                         deposits;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | · | the
                                         uncertainty of reserves estimates and reserves life and estimates of contingent resources
                                         and estimates of prospective resources and associated expenditures;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         uncertainty of estimates and projections relating to production, costs and expenses;
| | - | ---------------------------------------------------------------------------------------------------------------------------------

| | · | potential
                                         delays or changes in plans with respect to exploration or development projects or capital
                                         expenditures;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         Company's ability to enter into or renew leases on acceptable terms;
| | - | -----------------------------------------------------------------------------------------------------------------

| | · | fluctuations
                                         in crude oil, natural gas liquids and natural gas prices, foreign currency exchange rates
                                         and interest rates;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | health,
                                         safety and environmental risks;
| | - | --------------------------------------------------------------------------------

| | · | uncertainties
                                         as to the availability and cost of financing;
| | - | ----------------------------------------------------------------------------------------------------

| | · | the
                                         ability of the Company to add production and reserves through exploration and development
                                         activities;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | general
                                         economic and business conditions;
| | - | ----------------------------------------------------------------------------------

| | · | the
                                         possibility that government policies or laws may change or governmental approvals may
                                         be delayed or withheld;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | uncertainty
                                         in amounts and timing of royalty payments;
| | - | -----------------------------------------------------------------------------------------------

| | · | risks
                                         associated with existing and potential future law suits and regulatory actions against
                                         the Company; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | other
                                         risks and uncertainties described elsewhere in this annual information form or in the
                                         Company's other filings with Canadian securities authorities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7


Vermilion Energy Inc.AIF for the year ended December 31, 2016


The forward-looking statements or information
contained in this annual information form are made as of the date hereof and the Company undertakes no obligation to update publicly
or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless
required by applicable securities laws.



PRESENTATION OF OIL AND GAS RESERVES AND
PRODUCTION INFORMATION



All oil and natural gas reserve information
contained in this annual information form is derived from the GLJ Report and has been prepared and presented in accordance with
the Canadian Oil and Gas Evaluation Handbook (“COGEH”) and National Instrument 51-101 Standards
of Disclosure for Oil and Gas Activities ("NI 51-101"). The actual oil and natural gas reserves and future production
will be greater than or less than the estimates provided in this annual information form. The estimated future net revenue from
the production of the disclosed oil and natural gas reserves does not represent the fair market value of these reserves.



Natural gas volumes have been converted on
the basis of six thousand cubic feet of natural gas to one barrel of oil equivalent. Barrels of oil equivalent (“boe”)
may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one
barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent
a value equivalency at the wellhead.



Contingent Resources



"Contingent resources" are not, and
should not be confused with, petroleum and natural gas reserves. "Contingent resources" are defined in COGEH as those
quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established
technology or technology under development, but which are not currently considered to be commercially recoverable due to one or
more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters
or a lack of markets. It is also appropriate to classify as contingent resource the estimated discovered recoverable quantities
associated with a project in the early evaluation stage.



The primary contingencies which currently prevent
the classification of Vermilion’s contingent resource as reserves include but are not limited to:



| | · | preparation
                                         of firm development plans, including determination of the specific scope and timing of
                                         projects;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | project
                                         sanction;
| | - | ----------------------------------------------------------

| | · | access
                                         to capital markets;
| | - | -------------------------------------------------------------------

| | · | shareholder
                                         and regulatory approvals as applicable;
| | - | --------------------------------------------------------------------------------------------

| | · | access
                                         to required services and field development infrastructure;
| | - | ----------------------------------------------------------------------------------------------------------

| | · | oil
                                         and natural gas prices in Canada and internationally in jurisdictions in which Vermilion
                                         operates;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | demonstration
                                         of economic viability;
| | - | -----------------------------------------------------------------------------

| | · | future
                                         drilling program and testing results;
| | - | -------------------------------------------------------------------------------------

| | · | further
                                         reservoir delineation and studies;
| | - | -----------------------------------------------------------------------------------

| | · | facility
                                         design work;
| | - | --------------------------------------------------------------

| | · | corporate
                                         commitment;
| | - | --------------------------------------------------------------

| | · | development
                                         timing;
| | - | ------------------------------------------------------------

| | · | limitations
                                         to development based on adverse topography or other surface restrictions; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | · | the
                                         uncertainty regarding marketing and transportation of petroleum from development areas.
| | - | ------------------------------------------------------------------------------------------------------------------------------------



There is no certainty that it will be commercially
viable to produce any portion of the contingent resources or that Vermilion will produce any portion of the volumes currently
classified as contingent resources. The estimates of contingent resources involve implied assessment, based on certain estimates
and assumptions, that the contingent resources described exists in the quantities predicted or estimated and that the contingent
resources can be profitably produced in the future. The net present value of the future net revenue from the contingent resources
does not necessarily represent the fair market value of the contingent resources. Actual contingent resources (and any volumes
that may be reclassified as reserves) and future production therefrom may be greater than or less than the estimates provided
herein.



8


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Prospective Resources



“Prospective resources" are not,
and should not be confused with, petroleum and natural gas reserves. "Prospective resources" are defined in COGEH as
those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by
application of future development projects.



There is no certainty that any portion of the
prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce
any portion of the prospective resources or that Vermilion will produce any portion of the volumes currently classified as prospective
resources. The estimates of prospective resources involve implied assessment, based on certain estimates and assumptions, that
the resources described exists in the quantities predicted or estimated and that the resources can be profitably produced in the
future. The net present value of the future net revenue from the prospective resources does not necessarily represent the fair
market value of the prospective resources. The recovery and resources estimates provided herein are estimates only. Actual
prospective resources (and any volumes that may be reclassified as reserves or contingent resources) and future production from
such prospective resources may be greater than or less than the estimates provided herein.



NON-GAAP MEASURES



This annual information form includes non-GAAP
measures as further described herein. Management of the Company believes these non-GAAP measures are a useful tool in analyzing
operating performance. These measures do not have standardized meanings prescribed by GAAP and are not disclosed in Vermilion’s
audited consolidated financial statements and, therefore, may not be comparable with the calculations of similar measures for
other entities.



“Cash dividends per share” represents
actual cash dividends paid per share by the Company during the relevant periods.



9


Vermilion Energy Inc.AIF for the year ended December 31, 2016


VERMILION ENERGY INC.



General

Vermilion Energy Inc. is the successor to the Trust, following the completion of the Conversion Arrangement whereby the Trust
converted from an income trust to a corporate structure by way of a court approved plan of arrangement under the ABCA on September
1, 2010.



As at December 31, 2016, Vermilion had 503
full time employees of which 178 employees were located in its Calgary head office, 54 employees in its Canadian field offices,
152 employees in France, 60 employees in the Netherlands, 33 employees in Australia, 9 employees in the United States, 13 employees
in Germany and 4 employees in Hungary.



Vermilion Energy Inc. was incorporated on July
21, 2010 pursuant to the provisions of the ABCA for the purpose of facilitating the Conversion Arrangement.  The registered
and head office of Vermilion Energy Inc. is located at Suite 3500, 520 – 3rd Avenue S.W., Calgary, Alberta, T2P 0R3.



Organizational Structure of the Company



The following diagram shows the intercorporate
relationships among the Company and each of its material subsidiaries, where each material subsidiary was incorporated or formed
and the percentage of votes attaching to all voting securities of each material subsidiary beneficially owned directly or indirectly
by Vermilion. Reference should be made to the appropriate sections of this annual information form for a complete description
of the structure of the Company.







Note:

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

10


Vermilion Energy Inc.AIF for the year ended December 31, 2016


DESCRIPTION OF THE BUSINESS



Vermilion is an international energy producer
that seeks to create value through the acquisition, exploration, development and optimization of producing properties in North
America, Europe and Australia. Vermilion focuses on the exploitation of light oil and liquids-rich natural gas conventional resource
plays in Canada and the United States, the exploration and development of high impact natural gas opportunities in the Netherlands
and Germany, and oil drilling and workover programs in France and Australia. Vermilion also holds an 18.5% non-operated working
interest in the Corrib gas field in Ireland.



Vermilion's priorities are health and safety,
the environment, and profitability, in that order. Nothing is more important to us than the safety of the public and those who
work with us, and the protection of our natural surroundings. Vermilion has been recognized as a top decile performer amongst
Canadian publicly listed companies in governance practices, as a Climate "A" List performer by the CDP, and a Best Workplace
in the Great Place to Work® Institute's annual rankings in Canada, France, the Netherlands and Germany. Vermilion emphasizes
strategic community investment in each of our operating areas.



Operating Segments and Description of Properties(1)



Vermilion has operations in three core areas:
North America, Europe and Australia. Vermilion's business within these regions is managed at the country level through business
units which form the basis of the Company's operating segments. These operating segments, as well as a description of the material
oil and natural gas properties, facilities and installations in which Vermilion has an interest, are discussed below. For a discussion
of the competitive conditions affecting Vermilion’s business, refer to "Competition" in the Risk Factors section
of this AIF.



Canada Business Unit



Vermilion’s Canadian production is primarily
focused in three areas of Alberta: West Pembina, Slave Lake and Central Alberta and in the Northgate Region of southeast Saskatchewan.
Vermilion's main natural gas producing areas are West Pembina and Central Alberta, while Northgate, Slave Lake and the Cardium
light crude oil play in West Pembina are the main oil producing areas. West Pembina is the Company's main NGL producing area.



Vermilion holds an average 74% working interest
in 445,900 (328,500 net) acres of developed land, and an average 89% working interest in 500,300 (443,000 net) acres of undeveloped
land. Vermilion had 523 (358 net) producing natural gas wells and 611 (445 net) producing oil wells in Canada as at December 31,
2016.



Vermilion owns and operates three natural gas
plants and has an ownership interest in seven additional plants, resulting in combined gross natural gas processing capacity of
over 80 MMcf/d. In addition, Vermilion has oil processing capacity of over 25,000 bbl/d through eleven operated oil batteries
including a 15,000 bbl/d oil battery in West Pembina.



For the year ended December 31, 2016, production
in Canada averaged 84.3 MMcf/d of natural gas and 11,723 bbl/d of light crude oil, medium crude oil and NGLs. Sales of natural
gas in 2016 were $65.9 million (2015 - $72.7 million) and sales from light crude oil, medium crude oil and NGLs were $187.0 million
(2015 - $247.9 million).



During 2016, the majority of Vermilion's Canadian
exploration and development expenditures were directed to our Mannville program with activity focused in the West Pembina and
Ferrier areas of Alberta. During 2016 Vermilion drilled or participated in 20 (12.0 net) Mannville wells and production from the
Mannville play increased by 55% as compared to 2015. Vermilion plans to drill 23 (15.0 net) Mannville wells in 2017. Vermilion
expects to increase activity in its Cardium and southeast Saskatchewan plays year-over-year. The Company plans to drill or participate
in nine (6.0 net) Cardium wells and 13 (11.3 net) southeast Saskatchewan wells in 2017 as compared to two (0.2 net) Cardium wells
and seven (5.5 net) southeast Saskatchewan wells in 2016. Vermilion expects that the Mannville, Cardium and southeast Saskatchewan
assets will continue to support the Company's production growth.



The GLJ Report assigned 77,092 Mboe of total
proved reserves and 130,215 Mboe of proved plus probable reserves to Vermilion's properties located in Canada.



France Business Unit



Vermilion entered France in 1997 and has completed
three subsequent acquisitions. The Company is the largest oil producer in the country and represents approximately three-quarters
of domestic oil production. Vermilion predominately produces oil in France and the Company's oil is priced with reference to Dated
Brent.



11


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Vermilion's main producing areas in France
are located in the Aquitaine Basin which is southwest of Bordeaux, France and in the Paris Basin, located just east of Paris.
The two major fields in the Paris Basin area are Champotran and Chaunoy and the two major fields in the Aquitaine Basin are Parentis
and Cazaux. Vermilion operates 20 oil batteries and 12 single well batteries in the country. Given the legacy nature of these
assets, the throughput capability of these batteries exceeds any projected future requirements. Vermilion holds an average 96%
working interest in 218,100 (208,900 net) acres of developed land and 100% working interest in 336,600 (336,600 net) acres of
undeveloped land in the Aquitaine and Paris Basins. Vermilion had 336 (331 net) producing oil wells and three (3 net) producing
gas wells in France as at December 31, 2016.



For the year ended December 31, 2016, production
in France averaged 11,896 bbl/d of light crude oil and medium crude oil and 0.4 MMcf/d of natural gas. Sales from light crude
oil and medium crude oil in 2016 were $246.6 million (2015 - $280.5 million) and sales of natural gas were $0.3 million (2015
- $0.9 million). Natural gas sales in France have decreased significantly since 2013 following the closure of a third party processing
facility.



In 2016, Vermilion drilled four (4.0 net) wells
in the Champotran field and commenced drilling a horizontal sidetrack well in the Vulaines field, with the related completion
and tie-in activity planned for 2017. In 2017, Vermilion intends to drill its first four (4.0 net) wells in the Neocomian fields
in the Paris Basin. The Company also intends to continue its ongoing program of workovers and optimizations. By continuing to
develop its inventory in France, while minimizing declines through workovers and optimizations, Vermilion seeks to deliver moderate
production growth from its French assets.



The GLJ Report assigned 42,958 Mboe of total
proved reserves and 65,040 Mboe of proved plus probable reserves to Vermilion's properties located in France.



Netherlands Business Unit



Vermilion entered the Netherlands in 2004 and
is the country's second largest onshore natural gas producer. Vermilion's natural gas production in the Netherlands is priced
off of the TTF index.



Vermilion's Netherlands assets consist of 24
onshore concessions and two offshore concessions. Production consists solely of natural gas with a small amount of related condensate.
Vermilion’s total land position in the Netherlands covers 1,492,500 (841,500 net) acres at an average 56% working interest,
of which 95% is undeveloped. Vermilion had 54 (37 net) producing natural gas wells as at December 31, 2016.



For the year ended December 31, 2016, Vermilion's
production in the Netherlands averaged 47.8 MMcf/d of natural gas and 88 bbl/d of NGLs. Sales in 2016 of natural gas were $99.3
million (2015 - $127.3 million) and sales from NGLs were $1.4 million (2015 - $1.8 million).



Vermilion drilled two (0.9 net) wells in the
Netherlands during 2016 and the Company expects to drill two (1.0 net) exploration wells in 2017. In addition, Vermilion expects
to complete a seismic program in the Akkrum concession and execute a major turnaround at the Garijp Treatment Centre. Vermilion
expects that its inventory of potentially high-impact exploration and development opportunities in the Netherlands will continue
to support the Company's production growth in the country.



The GLJ Report assigned 10,473 Mboe of total
proved reserves and 17,733 Mboe of proved plus probable reserves to Vermilion's properties located in the Netherlands.



Germany Business Unit



Vermilion entered Germany in 2014 with the
acquisition of a 25% non-operated interest in natural gas producing assets. In December 2016, Vermilion completed an acquisition
of oil and gas producing properties that provided Vermilion with its first operated position in the country. Vermilion holds a
significant undeveloped land position in Germany as a result of a farm-in agreement the Company entered into in 2015. Vermilion's
natural gas production in Germany is priced with reference to TTF and oil production is priced with reference to Dated Brent.



Including the interests that were acquired
in December 2016, Vermilion’s producing assets in Germany consist of operated and non-operated interests in seven natural
gas fields and five oil fields. Prior to the December 2016 acquisition, Vermilion's producing assets in Germany consisted of a
25% non-operated interest in four natural gas fields. Including the wells from this acquisition, Vermilion had 141 (111 net) producing
oil wells and 20 (7 net) producing natural gas wells as at December 31, 2016.



Vermilion holds a significant land position
in northwest Germany comprised of 67,600 (25,800 net) developed acres and 2,609,300 (1,054,900 net) undeveloped acres. The Company
also holds a 0.4% equity interest in Erdgas Munster GmbH ("EGM"), a joint venture created in 1959 to jointly transport,
process, and market gas in northwest Germany. This transportation interest allows for our proportionate share of produced volumes
to be processed, blended, and transported to designated gas consumers through the EGM network of approximately 2,000 kilometres
of pipeline.



12


Vermilion Energy Inc.AIF for the year ended December 31, 2016


For the year ended December 31, 2016, production
in Germany averaged 14.9 MMcf/d of natural gas. Sales of natural gas in 2016 were $29.0 million (2015 - $41.4 million).



During 2016, Vermilion continued its ongoing
analysis of the proprietary geologic data associated with the farm-in assets. In 2017, the Company plans to invest in optimization
and other well work on the assets the Company acquired in December 2016 as well as prepare for the drilling of one (0.25 net)
well in the Dümmersee-Uchte area which is expected to be drilled in 2018.



The GLJ Report assigned 12,202 Mboe of total
proved reserves and 23,528 Mboe of proved plus probable reserves to Vermilion's properties located in Germany.



Ireland Business Unit



Vermilion acquired an 18.5% non-operating interest
in the offshore Corrib gas field located off the northwest coast of Ireland in 2009. The asset is comprised of six offshore wells,
an onshore natural gas processing facility and offshore and onshore pipeline segments. At the time of the acquisition most of
the key components of the project, with the exception of the onshore pipeline, were either complete or in the latter stages of
development. In 2011, approvals and permissions were granted for the onshore gas pipeline and tunneling commenced in December
2012. In May 2014, Vermilion announced the completion of tunnel boring operations. In September 2015, the project operator, Shell
E&P Ireland Limited, declared the project operationally ready for service. With the final regulatory consent received on December
29, 2015, gas began to flow from the Corrib project on December 30, 2015.



Production volumes at Corrib reached full plant
capacity of approximately 65 mmcf/d (10,900 boe/d) net to Vermilion at the end of Q2 2016 following recertification activities
associated with a third party gas distribution pipeline network. Production at Corrib is expected to remain stable for a period
of 12 - 18 months following the achievement of peak production volumes before starting to decline.



For the year ended December 31, 2016, production
in Ireland averaged 50.9 MMcf/d of natural gas. Sales of natural gas in 2016 were $109.2 million. There were negligible sales
in 2015 as production did not commence until December 30, 2015.



The GLJ Report assigned 16,596 Mboe of total
proved reserves and 25,061 Mboe of proved plus probable reserves to Vermilion's property located in Ireland.



Australia Business Unit



In 2005, Vermilion acquired a 60% operated
interest in the Wandoo offshore oil field and related production assets, located on Western Australia's northwest shelf. In 2007,
Vermilion acquired the remaining 40% interest in the asset. Production occurs from 18 well bores and five lateral sidetrack wells
that are tied into two platforms, Wandoo 'A' and Wandoo 'B'. Wandoo 'B' is permanently manned, houses the required production
facilities and incorporates 400,000 bbls of oil storage within the platform's concrete gravity structure. The Wandoo 'B' facilities
are capable of processing 162,000 bbl/d of total fluid to separate the oil from produced water. Vermilion's land position in the
Wandoo field is comprised of 59,600 acres (gross and net).



For the year ended December 31, 2016, Vermilion's
production in Australia averaged 6,304 bbl/d of light crude oil and medium crude oil. Sales in 2016 from light crude oil and medium
crude oil were $136.8 million (2015 - $162.8 million).



During 2015 and 2016, Vermilion drilled three
wells in Australia and does not presently expect to drill any additional Australian wells until 2019. Vermilion manages its Australian
asset and related capital investment programs to maintain stable production at levels of between 6,000 – 8,000 boe/d.



The GLJ Report assigned 12,418 Mboe of total
proved reserves and 17,068 Mboe of proved plus probable reserves to Vermilion's property located in Australia.



United States Business Unit



Vermilion entered the United States in 2014.
The Company's assets include 108,500 (97,200 net) acres of land in the Powder River basin of northeastern Wyoming, of which 96%
is undeveloped. Vermilion had 11 (9 net) producing oil wells in the United States as at December 31, 2016.



For the year ended December 31, 2016, Vermilion’s
production in the United States averaged 422 bbl/d of light crude oil, medium crude oil and NGLs and 0.2 MMcf/d of natural gas.
Sales from all commodities in 2016 were $7.3 million (2015 - $4.3 million).



13


Vermilion Energy Inc.AIF for the year ended December 31, 2016




During 2016, Vermilion continued work on its
early stage Turner Sand development in the Powder River Basin, completing two (2.0 net) wells that were drilled in 2015 and drilling
one (1.0 net) additional well in 2016. In 2017, Vermilion expects to drill three (3.0 net) wells in this play.



The GLJ Report assigned 4,076 Mboe of total
proved reserves and 11,477 Mboe of proved plus probable reserves to Vermilion's properties located in the United States.



Central and Eastern Europe (CEE) Business
Unit



Vermilion has established a CEE Business unit
with a head office in Budapest, Hungary. The CEE business unit is responsible for business development in the CEE, including managing
the exploration and development opportunities associated with the Company's land holdings in Hungary, Croatia and Slovakia.



At present, the CEE business unit does not
have any production or revenues.



Vermilion's land position in the CEE
consists of 322,100 (322,100 net) acres in Hungary, 183,000 (91,500 net) acres in Slovakia and 2.35 million (2.35
million net) acres in Croatia. Currently, Vermilion's entire land position in the CEE is undeveloped.



| | (1) | The production numbers
                                         stated refer to Vermilion's working interest share before deduction of Crown, freehold
                                         and other royalties. Reserve amounts are gross reserves, stated before deduction of royalties,
                                         as at December 31, 2016, based on forecast costs and price assumptions as evaluated in
                                         the GLJ Report.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14


Vermilion Energy Inc.AIF for the year ended December 31, 2016


GENERAL DEVELOPMENT OF THE BUSINESS



Three Year History and Outlook



The following describes the development of
Vermilion's business over the last three completed financial years. None of the acquisitions described below constituted a “significant
acquisition” within the meaning of applicable securities laws.



2014



Vermilion achieved record annual production
of 49,573 boe/d exceeding the top end of guidance targets following three upward revisions to guidance during the year. Average
annual production increased by 21% as compared to 2013. Canadian production growth was attributable to a 20% increase in average
production from the Cardium light oil resource play, a near tripling of Mannville condensate-rich gas production and the addition
of approximately 1,900 boe/d of production from southeast Saskatchewan assets that the Company acquired during the year. In addition,
full year production growth of 8% in the Netherlands and the addition of approximately 2,500 boe/d associated with German assets
Vermilion acquired during the year contributed to the increase.



As announced in 2013, Vermilion increased its
monthly dividend by 7.5% to $0.215 per share commencing with the January 2014 dividend. Vermilion maintained its monthly dividend
at $0.215 per share throughout 2014.



New Area Entries



During 2014, Vermilion successfully entered
four new areas within the Company's existing core regions following acquisitions in Germany, Southeast Saskatchewan, and the United
States as well as the receipt of a significant concession in Hungary.



In February 2014, Vermilion acquired a 25%
non-operated interest in a four-partner consortium in Germany from GDF Suez S.A. (currently known as Engie E&P Deutschland
GmbH). The assets comprised four gas producing fields across eleven production licenses characterized by a low effective annual
decline rate of approximately 11%. The acquired assets included both exploration and production licenses comprising a total of
204,000 gross acres, of which 85% was in the exploration license. The acquisition represented Vermilion's entry into Germany,
a producing region with a long history of oil and gas development activity, low political risk, and strong marketing fundamentals.
Total consideration for the acquisition was $172.9 million which was funded through existing credit facilities.



In April 2014, Vermilion completed the acquisition
of Elkhorn Resources Inc., a private southeast Saskatchewan producer. The acquisition provided Vermilion with light crude oil
producing assets located in the Northgate region of southeast Saskatchewan, approximately 57,000 net acres of land (approximately
80% undeveloped), seven oil batteries, and preferential access to 50% or greater capacity at a solution gas facility. Total consideration
comprised $180 million of cash, the assumption of approximately $43 million of debt, and the issuance of 2.8 million common shares
of Vermilion valued at approximately $205 million (based on the closing price per Vermilion common share of $72.50 on the Toronto
Stock Exchange on April 29, 2014).



In September 2014, Vermilion acquired assets
in the Powder River Basin of northeastern Wyoming for $11.1 million. The acquired assets included approximately 68,000 acres of
land (98% undeveloped) and working interest production of approximately 200 bbls/d (100% light crude oil and medium crude oil).
The land base included 53,000 net acres at an average operated working interest of 70% in a tight oil project in the Turner Sand
at a depth of approximately 1,500 metres. The acquisition provided Vermilion with a low-cost entry into the Powder River Basin
and an entry into the sizable United States exploration and production market. The Company established an office in Denver, Colorado
for its new United States business unit.



In 2014, Vermilion was awarded the Battonya
South concession in Hungary. The concession consists of 116,000 gross acres located in the southern part of the country. 
The term of the exploration license is 4 years.



Crude Oil Price Decline

Beginning in mid-2014, global crude oil prices
began a significant decline markedly changing the upstream energy environment. Vermilion took a number of actions in response
to the price environment.



In November 2014, Vermilion re-launched its
company-wide Profitability Enhancement Program ("PEP") which is focused on enhancing long-term profitability. This represented
the third installment of PEP since the Company's inception with the prior two initiatives having achieved strong results in both
the 1998 industry downturn and the financial crisis of 2008-2009. PEP focuses Vermilion's employees and contractors on increasing
revenues, and reducing capital, operating and general and administrative costs, as well as improving efficiencies where possible.



15


Vermilion Energy Inc.AIF for the year ended December 31, 2016


To preserve financial flexibility by providing
ongoing access to a modest amount of very low-cost equity capital, Vermilion amended its existing Dividend Reinvestment Plan to
include a Premium DividendTM Component. Under the Premium DividendTM Component, shares are issued at a 3.5% discount
to a calculated average market price. The shares are sold at prevailing market prices by the Plan Broker (Canaccord Genuity Corporation),
who provides participating Shareholders with a premium cash payment equal to 101.5% of their dividends, while the Plan Broker
retains the balance of the discount as its fee.





In December 2014, Vermilion announced a reduced
capital program for 2015 to support the strength of its balance sheet and the sustainability of its dividend.



Other Events



The Corrib project in Ireland continued to
progress following the completion of tunnel boring operations in May 2014. During the remainder of 2014, project operator Shell
Exploration & Production Ireland Ltd. successfully completed offshore workover and pipeline operations and outfitted the 4.9
km tunnel, including installation of flow and umbilical lines, hydro-testing and dewatering, with the final weld completed in
December 2014.



In 2014, Vermilion celebrated its 20 year anniversary
as a publicly traded company.



2015



Vermilion achieved record annual production
of 54,922 boe/d representing an increase of 11% as compared to 2014. Full-year average production was within 0.1% of guidance
as strong production results from other business units largely offset the production shortfall related to regulatory delays at
Corrib.



In 2015, Vermilion entered into a farm-in agreement
in northwest Germany. The farm-in provided Vermilion with participating interest in 18 onshore exploration licenses, comprising
approximately 850,000 net undeveloped acres in the North German Basin, in exchange for carrying 50% of the farmor's costs associated
with the drilling and testing of six net exploration wells over the following five years. The agreement also granted Vermilion
operatorship during the exploration phase for 11 of the 18 licenses as well as proportionate ownership of key proprietary data
spanning the farm-in assets.



On December 29, 2015 Vermilion announced that
Shell E&P Ireland Limited, operator of the Corrib project, received the final remaining consent required for production from
the office of Ireland's Minister for Communications, Energy and Natural Resources. Following this, natural gas began to flow from
the Corrib gas project in Ireland on December 30, 2015.



Vermilion continued to prioritize preserving
the strength of its balance sheet and increase its financial flexibility in response to the continued weak commodity price environment.
Total exploration and development ("E&D") investment for 2015 totalled $487 million, representing a nearly 30% decrease
from the prior year. Vermilion continued to focus on reducing costs through PEP and the Company increased its credit facility
capacity by $500 million during the year to $2.0 billion while also extending the term to May 2019.



2016



Vermilion achieved record annual production
of 63,526 boe/d representing an increase of 16% as compared to 2015. The increase was attributable to a full-year of Corrib production
and organic growth in the Netherlands.



The commodity price environment continued to
be extremely challenging during 2016. WTI averaged US$43.32/bbl for the year and reached an intra-year, monthly average low of
US$30.62/bbl in February 2016. To support its balance sheet and dividend in the prevailing price environment, the Company continued
to focus on further improving capital efficiencies as well as achieving cost reductions through PEP. Accordingly, in January 2016,
Vermilion announced a $285 million E&D capital budget for 2016 representing a 42% decrease from 2015. As commodity prices
continued to weaken during Q1 2016, in February 2016 Vermilion announced a further reduction in its 2016 E&D capital budget
to $235 million. In August 2016, Vermilion modestly increased its E&D capital expenditure guidance for 2016 to $240 million.
E&D capital expenditures for 2016 totalled $242.4 million, representing decreases from 2015 and 2014 of 50% and 65%, respectively.



Vermilion maintained its dividend at $0.215
per month during the year. Commencing with the October 2016 dividend payment, the Company began prorating the Premium DividendTMComponent of the Dividend Reinvestment Plan by 25%. This resulted from the continued strength in the Company's business
associated with cost reductions and capital efficiency improvements coupled with the expectation of a more stable commodity price
environment. Vermilion subsequently increased the proration factor applied to the Premium DividendTM Component to 50%
commencing with the January 2017 dividend payment. In February 2017, the Company announced a further increase in the proration
factor to 75% commencing with the April 2017 dividend payment. Subject to unexpected changes in the commodity price outlook, Vermilion
intends to discontinue the Premium DividendTM Component beginning with the July 2017 dividend payment, such that there
would be no further equity issuance under this program.



16


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Vermilion repaid the $225 million of 6.5% Senior
Unsecured Notes that came due on February 10, 2016 with funds from its credit facility. While the Company assessed opportunities
to diversify its debt structure, the credit facility represented the company’s most cost-effective method of borrowing.



Effective March 1, 2016, Mr. Lorenzo Donadeo
retired as Chief Executive Officer of Vermilion and became Chair of the Board of Directors. Mr. Anthony Marino, previously the
Company's President and Chief Operating Officer, assumed the role of President and CEO. Mr. Larry Macdonald, previously the Board
of Director's Chair, assumed the role of the newly created role of Lead Independent Director.



In December 2016, Vermilion closed an acquisition
of producing oil and gas properties in Germany from Engie E&P Deutschland GmbH (previously known as GDF Suez S.A.) for total
consideration of $45.6 million, net of acquired product inventory. The Acquisition comprised operated and non-operated interests
in five oil and three natural gas producing fields, along with an operated interest in one exploration license. Vermilion assumed
operatorship of six of the eight producing fields, with the other fields operated by ExxonMobil Production Deutschland (EMPG)
and Deutsche Erdoel AG (DEA).  Production from the acquired assets was approximately 2,000 boe/d in 2016. The acquisition
provided Vermilion with its first operated producing properties in Germany, and advanced the Company’s objective of developing
a material business unit in the country.



In June 2016, the Republic of Croatia ratified
the grant of four exploration blocks to Vermilion. The exploration blocks consisted of approximately 2.35 million gross acres
(100% working interest), with a substantial portion of the acreage located near existing crude oil and natural gas fields in northeast
Croatia. The initial five-year exploration period consists of two phases with an option to relinquish the blocks following the
initial three-year phase. In December 2016, Vermilion entered into a farm-in agreement in Slovakia with NAFTA, Slovakia's dominant
exploration and production company. The farm-in agreement grants Vermilion a 50% working interest to jointly explore 183,000 gross
acres on an existing license. The primary term of the farm-in agreement is five years.



Vermilion was awarded a position on CDP's 2016
Climate "A" List.  CDP (formerly Carbon Disclosure Project) is a London-based not-for-profit organization that
administers a global environmental disclosure system that assists in the measurement and management of corporate environmental
impacts.  Only 193 companies globally achieved Climate "A" List recognition in 2016 and Vermilion was one of only
five oil and gas companies in the world, and the only North American energy company, on the 2016 Climate "A" List. 
Vermilion has voluntarily reported emissions data to CDP for each year since 2012, recognizing the importance of measuring and
understanding the Company’s environmental impact.



Outlook



While commodity prices have increased from
the lows experienced during 2016, significant uncertainty in the commodity price environment remains. Vermilion intends to maintain
a low level of financial leverage and keep cash uses for dividends and E&D capital investment below internal cash generation.
Consistent with these objectives, in October 2016 Vermilion announced an E&D capital budget for 2017 of $295 million with
corresponding production guidance of between 69,000-70,000 boe/d. Based on the current commodity price strip, Vermilion expects
to fully fund 2017 E&D capital investment and cash dividends from fund flows from operations, with surplus cash generation
primarily directed to debt reduction.



TM denotes trademark of Canaccord
Genuity Capital Corporation.



17


Vermilion Energy Inc.AIF for the year ended December 31, 2016


STATEMENT OF RESERVES DATA AND OTHER OIL
AND GAS INFORMATION



Reserves and Future Net Revenue



The following is a summary of the oil and natural
gas reserves and the value of future net revenue of Vermilion as evaluated by GLJ in a report dated February 1, 2016 with an effective
date of December 31, 2016. Pricing used in the forecast price evaluations is set forth in the notes to the tables.



Reserves and other oil and gas information
contained in this section is effective December 31, 2016 unless otherwise stated.



All evaluations of future net revenue set forth
in the tables below are stated after overriding and lessor royalties, Crown royalties, freehold royalties, mineral taxes, direct
lifting costs, normal allocated overhead and future capital investments, including abandonment and reclamation obligations. Future
net revenues estimated by the GLJ Report do not represent the fair market value of the reserves. Other assumptions relating to
the costs, prices for future production and other matters are included in the GLJ Report. There is no assurance that the future
price and cost assumptions used in the GLJ Report will prove accurate and variances could be material.



Reserves for Australia, Canada, France, Germany,
Ireland, the Netherlands and United States are established using deterministic methodology. Total proved reserves are established
at the 90 percent probability (P90) level. There is a 90 percent probability that the actual reserves recovered will be equal
to or greater than the P90 reserves. Total proved plus probable reserves are established at the 50 percent probability (P50) level.
There is a 50 percent probability that the actual reserves recovered will be equal to or greater than the P50 reserves.



The Report on Reserves Data by Independent
Qualified Reserves Evaluator in Form 51-101F2 and the Report of Management and Directors on Oil and Gas Disclosure in Form 51-101F3
are contained in Schedules "A" and "B", respectively.



The following tables provide reserves data
and a breakdown of future net revenue by component and product type using forecast prices and costs. For Canada, the tables following
include AGCA.



The following tables may not total due to rounding.



18


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Oil and Gas Reserves - Based on Forecast Prices and Costs(1)



|                                          | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|----------------------------------------- | --------------------------------------- | -------------------- | ----------------------- | ----------------------------
|                                          | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                          | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Proved
    Developed Producing(3) (5) (6) |                                         |                      |                         |                             
|Australia                                 | 10,718                                  | 10,718               | -                       | -                           
|Canada                                    | 12,277                                  | 10,990               | -                       | -                           
|France                                    | 36,481                                  | 33,478               | -                       | -                           
|Germany                                   | 4,805                                   | 4,706                | -                       | -                           
|Ireland                                   | -                                       | -                    | -                       | -                           
|Netherlands                               | -                                       | -                    | -                       | -                           
|United
    States                         | 699                                     | 551                  | -                       | -                           
|Total
    Proved Developed Producing      | 64,980                                  | 60,443               | -                       | -                           
|                                          | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|                                          | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                          | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Proved
    Developed Producing(3) (5) (6) |                                         |                      |                         |                             
|Australia                                 | -                                       | -                    | -                       | -                           
|Canada                                    | 1,371                                   | 1,291                | 2,482                   | 2,275                       
|France                                    | -                                       | -                    | -                       | -                           
|Germany                                   | -                                       | -                    | -                       | -                           
|Ireland                                   | -                                       | -                    | -                       | -                           
|Netherlands                               | -                                       | -                    | -                       | -                           
|United
    States                         | -                                       | -                    | -                       | -                           
|                                          | 1,371                                   | 1,291                | 2,482                   | 2,275                       
|                                          | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|                                          | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                          | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Proved
    Developed Non-Producing        |                                         |                      |                         |                             
|Australia                                 | 700                                     | 700                  | -                       | -                           
|Canada                                    | 1,008                                   | 874                  | -                       | -                           
|France                                    | 1,814                                   | 1,666                | -                       | -                           
|Germany                                   | 240                                     | 230                  | -                       | -                           
|Ireland                                   | -                                       | -                    | -                       | -                           
|Netherlands                               | -                                       | -                    | -                       | -                           
|United
    States                         | -                                       | -                    | -                       | -                           
|Total
    Proved Developed Non-Producing  | 3,762                                   | 3,470                | -                       | -                           
|                                          | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|                                          | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                          | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Proved
    Developed Non-Producing        |                                         |                      |                         |                             
|Australia                                 | -                                       | -                    | -                       | -                           
|Canada                                    | -                                       | -                    | 2,536                   | 2,389                       
|France                                    | -                                       | -                    | -                       | -                           
|Germany                                   | -                                       | -                    | -                       | -                           
|Ireland                                   | -                                       | -                    | -                       | -                           
|Netherlands                               | -                                       | -                    | -                       | -                           
|United
    States                         | -                                       | -                    | -                       | -                           
|Total
    Proved Developed Non-Producing  | -                                       | -                    | 2,536                   | 2,389                       
|                                          | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|                                          | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                          | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Proved
    Undeveloped(3) (8)             |                                         |                      |                         |                             
|Australia                                 | 1,000                                   | 1,000                | -                       | -                           
|Canada                                    | 8,677                                   | 7,595                | -                       | -                           
|France                                    | 3,749                                   | 3,506                | -                       | -                           
|Germany                                   | 243                                     | 237                  | -                       | -                           
|Ireland                                   | -                                       | -                    | -                       | -                           
|Netherlands                               | -                                       | -                    | -                       | -                           
|United
    States                         | 2,470                                   | 2,019                | -                       | -                           
|Total
    Proved Undeveloped              | 16,139                                  | 14,357               | -                       | -                           



19


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                             | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|---------------------------- | --------------------------------------- | -------------------- | ----------------------- | ----------------------------
|                             | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                             | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Proved
    Undeveloped       |                                         |                      |                         |                             
|Australia                    | -                                       | -                    | -                       | -                           
|Canada                       | -                                       | -                    | 3,043                   | 2,812                       
|France                       | -                                       | -                    | -                       | -                           
|Germany                      | -                                       | -                    | -                       | -                           
|Ireland                      | -                                       | -                    | -                       | -                           
|Netherlands                  | -                                       | -                    | -                       | -                           
|United
    States            | -                                       | -                    | -                       | -                           
|Total
    Proved Undeveloped | -                                       | -                    | 3,043                   | 2,812                       
|                             | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|                             | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                             | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Proved
    (3)               |                                         |                      |                         |                             
|Australia                    | 12,418                                  | 12,418               | -                       | -                           
|Canada                       | 21,962                                  | 19,460               | -                       | -                           
|France                       | 42,044                                  | 38,650               | -                       | -                           
|Germany                      | 5,288                                   | 5,173                | -                       | -                           
|Ireland                      | -                                       | -                    | -                       | -                           
|Netherlands                  | -                                       | -                    | -                       | -                           
|United
    States            | 3,169                                   | 2,570                | -                       | -                           
|Total
    Proved             | 84,881                                  | 78,271               | -                       | -                           
|                             | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|                             | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                             | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Proved                       |                                         |                      |                         |                             
|Australia                    | -                                       | -                    | -                       | -                           
|Canada                       | 1,371                                   | 1,291                | 8,061                   | 7,476                       
|France                       | -                                       | -                    | -                       | -                           
|Germany                      | -                                       | -                    | -                       | -                           
|Ireland                      | -                                       | -                    | -                       | -                           
|Netherlands                  | -                                       | -                    | -                       | -                           
|United
    States            | -                                       | -                    | -                       | -                           
|Total
    Proved             | 1,371                                   | 1,291                | 8,061                   | 7,476                       
|                             | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|                             | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                             | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Probable
    (4)             |                                         |                      |                         |                             
|Australia                    | 4,650                                   | 4,650                | -                       | -                           
|Canada                       | 14,103                                  | 12,146               | -                       | -                           
|France                       | 21,933                                  | 20,261               | -                       | -                           
|Germany                      | 2,279                                   | 2,238                | -                       | -                           
|Ireland                      | -                                       | -                    | -                       | -                           
|Netherlands                  | -                                       | -                    | -                       | -                           
|United
    States            | 5,727                                   | 4,716                | -                       | -                           
|Total
    Probable           | 48,692                                  | 44,011               | -                       | -                           
|                             | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|                             | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                             | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Probable                     |                                         |                      |                         |                             
|Australia                    | -                                       | -                    | -                       | -                           
|Canada                       | 284                                     | 267                  | 4,677                   | 4,395                       
|France                       | -                                       | -                    | -                       | -                           
|Germany                      | -                                       | -                    | -                       | -                           
|Ireland                      | -                                       | -                    | -                       | -                           
|Netherlands                  | -                                       | -                    | -                       | -                           
|United
    States            | -                                       | -                    | -                       | -                           
|Total
    Probable           | 284                                     | 267                  | 4,677                   | 4,395                       



20


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                | Light
    Crude Oil & Medium
 Crude Oil | Heavy
    Oil        | Tight
    Oil           | Conventional
    Natural Gas
|------------------------------- | --------------------------------------- | -------------------- | ----------------------- | ----------------------------
|                                | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                | (Mbbl)                                  | (Mbbl)               | (Mbbl)                  | (Mbbl)                      
|Proved
    Plus Probable(3) (4) |                                         |                      |                         |                             
|Australia                       | 17,068                                  | 17,068               | -                       | -                           
|Canada                          | 36,065                                  | 31,606               | -                       | -                           
|France                          | 63,977                                  | 58,911               | -                       | -                           
|Germany                         | 7,567                                   | 7,411                | -                       | -                           
|Ireland                         | -                                       | -                    | -                       | -                           
|Netherlands                     | -                                       | -                    | -                       | -                           
|United
    States               | 8,896                                   | 7,286                | -                       | -                           
|Total
    Proved Plus Probable  | 133,573                                 | 122,282              | -                       | -                           
|                                | Shale
    Gas                           | Coal
    Bed Methane | Natural
    Gas Liquids | BOE                         
|                                | Gross
    (2)                           | Net
    (2)          | Gross
    (2)           | Net
    (2)                 
|                                | (MMcf)                                  | (MMcf)               | (MMcf)                  | (MMcf)                      
|Proved
    Plus Probable(3) (4) |                                         |                      |                         |                             
|Australia                       | -                                       | -                    | -                       | -                           
|Canada                          | 1,655                                   | 1,558                | 12,738                  | 11,871                      
|France                          | -                                       | -                    | -                       | -                           
|Germany                         | -                                       | -                    | -                       | -                           
|Ireland                         | -                                       | -                    | -                       | -                           
|Netherlands                     | -                                       | -                    | -                       | -                           
|United
    States               | -                                       | -                    | -                       | -                           
|Total
    Proved Plus Probable  | 1,655                                   | 1,558                | 12,738                  | 11,871                      



Notes:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth below.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | "Gross Reserves"
                                         are Vermilion's working interest (operating or non-operating) share before deduction
                                         of royalties and without including any royalty interests of Vermilion. "Net Reserves"
                                         are Vermilion's working interest (operating or non-operating) share after deduction of
                                         royalty obligations, plus Vermilion's royalty interests in reserves.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | "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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | "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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | "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.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | "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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | "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.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | "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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Net Present Value of Future Net Revenue - Based on Forecast
Prices and Costs(1)



|                                              | Before
    Deducting Future Income Taxes Discounted At | After
    Deducting Future Income Taxes Discounted At
|--------------------------------------------- | ------------------------------------------------------ | -----------------------------------------------------
|(M$)                                          | 0%                                                     | 5%                                                   
|Proved
    Developed Producing(2) (4) (5)     |                                                        |                                                      
|Australia                                     | 134,236                                                | 217,117                                              
|Canada                                        | 963,690                                                | 777,268                                              
|France                                        | 2,009,158                                              | 1,404,527                                            
|Germany                                       | 193,385                                                | 187,330                                              
|Ireland                                       | 471,720                                                | 441,671                                              
|Netherlands                                   | 76,272                                                 | 86,832                                               
|United
    States                             | 29,716                                                 | 23,345                                               
|Total
    Proved Developed Producing          | 3,878,177                                              | 3,138,090                                            
|Proved
    Developed Non-Producing(2) (4) (6) |                                                        |                                                      
|Australia                                     | 31,411                                                 | 35,177                                               
|Canada                                        | 147,607                                                | 108,964                                              
|France                                        | 87,674                                                 | 71,387                                               
|Germany                                       | 41,121                                                 | 29,470                                               
|Ireland                                       | -                                                      | -                                                    
|Netherlands                                   | 46,907                                                 | 45,115                                               
|United
    States                             | -                                                      | -                                                    
|Total
    Proved Developed Non-Producing      | 354,720                                                | 290,113                                              
|Proved
    Undeveloped(2) (7)                 |                                                        |                                                      
|Australia                                     | 34,323                                                 | 24,134                                               
|Canada                                        | 569,308                                                | 368,599                                              
|France                                        | 187,253                                                | 137,261                                              
|Germany                                       | 18,403                                                 | 11,756                                               
|Ireland                                       | 12,873                                                 | 9,337                                                
|Netherlands                                   | 10,896                                                 | 9,095                                                
|United
    States                             | 72,284                                                 | 38,191                                               
|Total
    Proved Undeveloped                  | 905,340                                                | 598,373                                              
|Proved
    (2)                                |                                                        |                                                      
|Australia                                     | 199,970                                                | 276,428                                              
|Canada                                        | 1,680,605                                              | 1,254,831                                            
|France                                        | 2,284,085                                              | 1,613,175                                            
|Germany                                       | 252,909                                                | 228,556                                              
|Ireland                                       | 484,593                                                | 451,008                                              
|Netherlands                                   | 134,075                                                | 141,042                                              
|United
    States                             | 102,000                                                | 61,536                                               
|Total
    Proved                              | 5,138,237                                              | 4,026,576                                            
|Probable
    (3)                              |                                                        |                                                      
|Australia                                     | 198,227                                                | 163,180                                              
|Canada                                        | 1,372,807                                              | 814,946                                              
|France                                        | 1,378,689                                              | 734,502                                              
|Germany                                       | 336,322                                                | 208,119                                              
|Ireland                                       | 354,566                                                | 235,805                                              
|Netherlands                                   | 162,029                                                | 137,048                                              
|United
    States                             | 270,229                                                | 147,720                                              
|Total
    Probable                            | 4,072,869                                              | 2,441,320                                            
|Proved
    Plus Probable(2) (3)               |                                                        |                                                      
|Australia                                     | 398,197                                                | 439,608                                              
|Canada                                        | 3,053,412                                              | 2,069,777                                            
|France                                        | 3,662,774                                              | 2,347,677                                            
|Germany                                       | 589,231                                                | 436,675                                              
|Ireland                                       | 839,159                                                | 686,813                                              
|Netherlands                                   | 296,104                                                | 278,090                                              
|United
    States                             | 372,229                                                | 209,256                                              
|Total
    Proved Plus Probable                | 9,211,106                                              | 6,467,896                                            



Notes:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth below.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (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.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22


Vermilion Energy Inc.AIF for the year ended December 31, 2016




| | (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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Total Future
Net Revenue (Undiscounted) Based on Forecast Prices and Costs(1)





|                                |            |           |           |             | Abandonment | Future
    Net   |                  | Future
    Net  
|------------------------------- | ---------- | --------- | --------- | ----------- | ----------- | ---------------- | ---------------- | ----------------
|                                |            |           |           | Capital     | and         | Revenue          |                  | Revenue         
|                                |            |           | Operating | Development | Reclamation | Before           | Future           | After           
|(M$)                            | Revenue    | Royalties | Costs     | Costs       | Costs       | Income
    Taxes | Income
    Taxes | Income
    Taxes
|Proved
    (2)                  |            |           |           |             |             |                  |                  |                 
|Australia                       | 1,130,774  | -         | 585,013   | 98,280      | 247,512     | 199,969          | (8,890)          | 208,859         
|Canada                          | 3,767,788  | 508,170   | 1,060,685 | 421,548     | 96,780      | 1,680,605        | 152,731          | 1,527,874       
|France                          | 3,892,917  | 309,696   | 1,017,941 | 123,472     | 157,722     | 2,284,086        | 429,361          | 1,854,725       
|Germany                         | 812,577    | 43,400    | 383,854   | 12,267      | 120,147     | 252,909          | -                | 252,909         
|Ireland                         | 755,793    | -         | 174,058   | 35,412      | 61,729      | 484,594          | -                | 484,594         
|Netherlands                     | 523,311    | 103,758   | 197,686   | 22,639      | 65,154      | 134,074          | 26,495           | 107,579         
|United
    States               | 297,606    | 83,116    | 48,860    | 60,639      | 2,991       | 102,000          | -                | 102,000         
|Total
    Proved                | 11,180,766 | 1,048,140 | 3,468,097 | 774,257     | 752,035     | 5,138,237        | 599,697          | 4,538,540       
|Proved
    Plus Probable(2) (3) |            |           |           |             |             |                  |                  |                 
|Australia                       | 1,611,584  | -         | 777,207   | 175,660     | 260,522     | 398,197          | 82,137           | 316,060         
|Canada                          | 6,601,327  | 949,111   | 1,699,340 | 774,361     | 125,102     | 3,053,413        | 515,831          | 2,537,582       
|France                          | 6,232,560  | 486,688   | 1,560,331 | 317,562     | 205,205     | 3,662,774        | 833,118          | 2,829,656       
|Germany                         | 1,534,267  | 102,937   | 592,967   | 88,681      | 160,451     | 589,231          | 87,732           | 501,499         
|Ireland                         | 1,208,966  | -         | 272,665   | 35,412      | 61,729      | 839,159          | -                | 839,159         
|Netherlands                     | 887,526    | 181,892   | 286,933   | 45,647      | 76,950      | 296,104          | 76,616           | 219,488         
|United
    States               | 888,444    | 241,131   | 130,837   | 137,814     | 6,434       | 372,229          | 94,523           | 277,706         
|Total
    Proved Plus Probable  | 18,964,674 | 1,961,759 | 5,320,280 | 1,575,137   | 896,393     | 9,211,107        | 1,689,957        | 7,521,150       



Notes:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth below.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Future Net Revenue by Product Type Based
on Forecast Prices and Costs(1)



|                                          | Future
    Net Revenue |        
|----------------------------------------- | ---------------------- | -------
|Before
    Income Taxes(2)                |                       
|(Discounted
    at 10% Per Year)          | Unit
    Value        
|Proved
    Developed Producing            | (M$)                   | ($/boe)
|Light
    crude oil & medium crude oil(3) | 1,869,323              | 28.43  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 755,799                | 16.95  
|Shale
    Gas                             | 1,928                  | 6.93   
|Coal
    Bed Methane                      | 832                    | 2.19   
|Total
    Proved Developed Producing      | 2,627,882              | 23.68  
|Proved
    Developed Non-Producing        |                        |        
|Light
    crude oil & medium crude oil(3) | 119,652                | 32.00  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 123,922                | 14.51  
|Shale
    Gas                             | -                      | -      
|Coal
    Bed Methane                      | 465                    | 1.17   
|Total
    Proved Developed Non-Producing  | 244,039                | 19.25  
|Proved
    Undeveloped                    |                        |        
|Light
    crude oil & medium crude oil(3) | 279,927                | 14.84  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 132,343                | 8.84   
|Shale
    Gas                             | -                      | -      
|Coal
    Bed Methane                      | 628                    | 1.34   
|Total
    Proved Undeveloped              | 412,898                | 12.04  
|Proved                                    |                        |        
|Light
    crude oil & medium crude oil(3) | 2,268,902              | 25.72  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 1,012,064              | 14.82  
|Shale
    Gas                             | 1,928                  | 6.97   
|Coal
    Bed Methane                      | 1,925                  | 1.53   
|Total
    Proved                          | 3,284,819              | 20.79  
|Probable                                  |                        |        
|Light
    crude oil & medium crude oil(3) | 1,044,229              | 20.31  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 590,638                | 12.22  
|Shale
    Gas                             | 357                    | 6.26   
|Coal
    Bed Methane                      | 1,920                  | 2.62   
|Total
    Probable                        | 1,637,144              | 16.28  
|Proved
    Plus Probable                  |                        |        
|Light
    crude oil & medium crude oil(3) | 3,313,131              | 23.76  
|Heavy
    Oil(3)                          | -                      | -      
|Conventional
    Natural gas(4)           | 1,602,702              | 13.70  
|Shale
    Gas                             | 2,285                  | 6.93   
|Coal
    Bed Methane                      | 3,845                  | 1.91   
|Total
    Proved Plus Probable            | 4,921,963              | 19.04  



Notes:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth below.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Other Company revenue and
                                         costs not related to a specific product type have been allocated proportionately to the
                                         specified product types. Unit values are based on Company Net Reserves. Net present value
                                         of reserves categories are an approximation based on major products.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Including solution gas and
                                         other by-products.
| | --- | --------------------------------------------------------------------------------------

| | (4) | Including by-products but
                                         excluding solution gas.
| | --- | ------------------------------------------------------------------------------------------



24


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Forecast Prices used in Estimates(1)





|           |                        |                         |               |                 | Conventional    | Conventional           |                |              |            |          
|---------- | ---------------------- | ----------------------- | ------------- | --------------- | --------------- | ---------------------- | -------------- | ------------ | ---------- | ---------
|           |                        | Light
    Crude Oil and |               | Natural
    Gas | Natural
    Gas | Natural
    Gas        | Inflation      | Exchange     | Exchange  
|           | &
    Medium Crude Oil | Crude
    Oil           | Canada        | Europe          | Liquids         | Rate                   | Rate           | Rate        
|           | WTI                    | Edmonton                | Cromer        | Brent
    Blend |                 | National
    Balancing |                |              |            |          
|           | Cushing                | Par
    Price           | Medium        | FOB             | AECO            | Point                  | FOB            |              |            |          
|           | Oklahoma               | 40 ̊
    API             | 29.3 ̊
    API | North
    Sea   | Gas
    Price   | (UK)                   | Field
    Gate | Percent      |            |          
|Year       | ($US/bbl)              | ($Cdn/bbl)              | ($Cdn/bbl)    | ($US/bbl)       | ($Cdn/MMBtu)    | ($US/MMBtu)            | ($Cdn/bbl)     | Per
    Year | ($US/$Cdn) | ($CdnEUR)
|2016       | 43.30                  | 52.95                   | 48.71         | 45.01           | 2.19            | 4.65                   | 34.50          | 1.50         | 0.76       | 1.47     
|Forecast   |                        |                         |               |                 |                 |                        |                |              |            |          
|2017       | 55.00                  | 69.33                   | 64.48         | 57.00           | 3.46            | 5.75                   | 40.40          | 2.00         | 0.75       | 1.40     
|2018       | 59.00                  | 72.26                   | 67.20         | 61.00           | 3.10            | 6.00                   | 41.41          | 2.00         | 0.78       | 1.35     
|2019       | 64.00                  | 75.00                   | 69.75         | 66.00           | 3.27            | 6.25                   | 42.94          | 2.00         | 0.80       | 1.31     
|2020       | 67.00                  | 76.36                   | 71.02         | 70.00           | 3.49            | 6.50                   | 43.77          | 2.00         | 0.83       | 1.27     
|2021       | 71.00                  | 78.82                   | 73.31         | 74.00           | 3.67            | 6.75                   | 45.24          | 2.00         | 0.85       | 1.24     
|2022       | 74.00                  | 82.35                   | 76.59         | 77.00           | 3.86            | 6.89                   | 47.30          | 2.00         | 0.85       | 1.24     
|2023       | 77.00                  | 85.88                   | 79.87         | 80.00           | 4.05            | 7.02                   | 49.25          | 2.00         | 0.85       | 1.24     
|2024       | 80.00                  | 89.41                   | 83.15         | 83.00           | 4.16            | 7.16                   | 51.23          | 2.00         | 0.85       | 1.24     
|2025       | 83.00                  | 92.94                   | 86.44         | 86.00           | 4.24            | 7.31                   | 53.42          | 2.00         | 0.85       | 1.24     
|2026       | 86.05                  | 95.61                   | 88.92         | 89.64           | 4.32            | 7.45                   | 54.80          | 2.00         | 0.85       | 1.24     
|Thereafter | +2.0%/yr               | +2.0%/yr                | +2.0%/yr      | +2.0%/yr        | +2.0%/yr        | +2.0%/yr               | +2.0%/yr       | 2.0%         | 0.850      | 1.235    





Note:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth above.
                                         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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



All forecast prices in the tables above are
provided by GLJ. For 2016, the price of crude oil in the United States is based on WTI. The benchmark price for Canadian crude
oil is Edmonton Par and Canadian natural gas is priced against AECO. The benchmark price for Australia and France crude oil is
Dated Brent. The price of our natural gas in Ireland is based on the NBP index. The price of Vermilion’s natural gas in
the Netherlands is based on the TTF day-ahead index, as determined on the Title Transfer Facility Virtual Trading Point. The price
of Vermilion’s natural gas in Germany is based on the TTF, as determined on the Title Transfer Facility Virtual Trading
Point. For the year ended December 31, 2016, the average realized sales prices before hedging were $46.89 per bbl (United States)
for WTI, $43.58 per bbl for Canadian-based crude oil, condensate and NGLs and $2.14 per Mcf for Canadian natural gas, $60.33 per
bbl (Australia), $55.42 per bbl (France) for Brent-based crude oil, $5.86 per Mcf (Ireland), $5.67 per Mcf (Netherlands), and
$5.33 per Mcf (Germany).



25


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Reconciliations of Changes in Reserves



The following tables set forth a reconciliation of the changes in Vermilion's gross light crude oil and medium crude oil, heavy
oil, tight oil, conventional natural gas, coal bed methane, shale gas and NGLs reserves as at December 31, 2016 compared to such
reserves as at December 31, 2015 based on the forecast price and cost assumptions set forth in note 3.



Reconciliation of Company Gross Reserves
by Principal Product Type - Based on Forecast Prices and Costs



|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|AUSTRALIA                          | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | 13,765                  | 3,700                        | 17,465                  | 13,765          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 700                     | 1,300                        | 2,000                   | 700             
|Technical
    Revisions            | 260                     | (350)                        | (90)                    | 260             
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | (2,307)                 | -                            | (2,307)                 | (2,307)         
|At
    December 31, 2016           | 12,418                  | 4,650                        | 17,068                  | 12,418          
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | -                       | -                            | -                       | -               
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | -               
|Technical
    Revisions            | -                       | -                            | -                       | -               
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | -               
|At
    December 31, 2016           | -                       | -                            | -                       | -               
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | -                       | -                            | -                       | 13,765          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | 700             
|Technical
    Revisions            | -                       | -                            | -                       | 260             
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | (2,307)         
|At
    December 31, 2016           | -                       | -                            | -                       | 12,418          





26


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|CANADA                             | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | 22,990                  | 14,792                       | 37,782                  | 22,971          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 620                     | 281                          | 901                     | 620             
|Technical
    Revisions            | 611                     | (1,284)                      | (673)                   | 616             
|Acquisitions                       | 206                     | 317                          | 523                     | 206             
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (15)                    | (1)                          | (16)                    | (15)            
|Production                         | (2,438)                 | -                            | (2,438)                 | (2,436)         
|At
    December 31, 2016           | 21,974                  | 14,105                       | 36,079                  | 21,962          
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 200,263                 | 138,068                      | 338,331                 | 190,111         
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 18,401                  | 20,608                       | 39,009                  | 18,401          
|Technical
    Revisions            | 27,342                  | (8,022)                      | 19,320                  | 26,058          
|Acquisitions                       | 13,078                  | 6,758                        | 19,836                  | 13,006          
|Dispositions                       | (353)                   | (132)                        | (485)                   | (353)           
|Economic
    Factors               | (1,351)                 | (612)                        | (1,963)                 | (649)           
|Production                         | (30,850)                | -                            | (30,850)                | (29,476)        
|At
    December 31, 2016           | 226,530                 | 156,668                      | 383,198                 | 217,098         
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | 14,795                  | 12,751                       | 27,546                  | 71,162          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 1,412                   | 825                          | 2,237                   | 5,099           
|Technical
    Revisions            | 2,004                   | (1,088)                      | 916                     | 7,172           
|Acquisitions                       | 1,045                   | 471                          | 1,516                   | 3,431           
|Dispositions                       | (8)                     | (3)                          | (11)                    | (67)            
|Economic
    Factors               | (31)                    | (49)                         | (80)                    | (271)           
|Production                         | (1,854)                 | -                            | (1,854)                 | (9,434)         
|At
    December 31, 2016           | 17,363                  | 12,907                       | 30,270                  | 77,092          





27


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|FRANCE                             | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | 40,721                  | 21,325                       | 62,046                  | 40,721          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 2,279                   | 314                          | 2,593                   | 2,279           
|Technical
    Revisions            | 3,445                   | 319                          | 3,764                   | 3,445           
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (47)                    | (25)                         | (72)                    | (47)            
|Production                         | (4,354)                 | -                            | (4,354)                 | (4,354)         
|At
    December 31, 2016           | 42,044                  | 21,933                       | 63,977                  | 42,044          
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 7,835                   | 1,559                        | 9,394                   | 7,835           
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | -               
|Technical
    Revisions            | (2,170)                 | (654)                        | (2,824)                 | (2,170)         
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (20)                    | (13)                         | (33)                    | (20)            
|Production                         | (163)                   | -                            | (163)                   | (163)           
|At
    December 31, 2016           | 5,482                   | 892                          | 6,374                   | 5,482           
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | -                       | -                            | -                       | 42,027          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | 2,279           
|Technical
    Revisions            | -                       | -                            | -                       | 3,083           
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | (50)            
|Production                         | -                       | -                            | -                       | (4,381)         
|At
    December 31, 2016           | -                       | -                            | -                       | 42,958          





28


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|GERMANY                            | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | -                       | -                            | -                       | -               
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 244                     | 755                          | 999                     | 244             
|Technical
    Revisions            | -                       | -                            | -                       | -               
|Acquisitions                       | 5,044                   | 1,524                        | 6,568                   | 5,044           
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | -               
|At
    December 31, 2016           | 5,288                   | 2,279                        | 7,567                   | 5,288           
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 31,500                  | 17,999                       | 49,499                  | 31,500          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | 33,249                       | 33,249                  | -               
|Technical
    Revisions            | 4,250                   | (898)                        | 3,352                   | 4,250           
|Acquisitions                       | 11,182                  | 3,934                        | 15,116                  | 11,182          
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | (5,452)                 | -                            | (5,452)                 | (5,452)         
|At
    December 31, 2016           | 41,480                  | 54,284                       | 95,764                  | 41,480          
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | -                       | -                            | -                       | 5,250           
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | 244             
|Technical
    Revisions            | -                       | -                            | -                       | 708             
|Acquisitions                       | -                       | -                            | -                       | 6,909           
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | (909)           
|At
    December 31, 2016           | -                       | -                            | -                       | 12,202          





29


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|IRELAND                            | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | -                       | -                            | -                       | -               
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | -               
|Technical
    Revisions            | -                       | -                            | -                       | -               
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | -               
|At
    December 31, 2016           | -                       | -                            | -                       | -               
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 105,821                 | 47,405                       | 153,226                 | 105,821         
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 3,714                   | 2,718                        | 6,432                   | 3,714           
|Technical
    Revisions            | 8,610                   | 721                          | 9,331                   | 8,610           
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | 57                      | (57)                         | -                       | 57              
|Production                         | (18,627)                | -                            | (18,627)                | (18,627)        
|At
    December 31, 2016           | 99,575                  | 50,787                       | 150,362                 | 99,575          
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | -                       | -                            | -                       | 17,637          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | 619             
|Technical
    Revisions            | -                       | -                            | -                       | 1,435           
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | 10              
|Production                         | -                       | -                            | -                       | (3,105)         
|At
    December 31, 2016           | -                       | -                            | -                       | 16,596          





30


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|NETHERLANDS                        | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | -                       | -                            | -                       | -               
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | -                       | -                            | -                       | -               
|Technical
    Revisions            | -                       | -                            | -                       | -               
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | -                       | -                            | -                       | -               
|Production                         | -                       | -                            | -                       | -               
|At
    December 31, 2016           | -                       | -                            | -                       | -               
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 48,199                  | 48,688                       | 96,887                  | 48,199          
|Discoveries                        | 233                     | 145                          | 378                     | 233             
|Extensions
    & Improved Recovery | 8,104                   | 8,782                        | 16,886                  | 8,104           
|Technical
    Revisions            | 20,790                  | (15,818)                     | 4,972                   | 20,790          
|Acquisitions                       | 2,654                   | 1,446                        | 4,100                   | 2,654           
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (128)                   | (59)                         | (187)                   | (128)           
|Production                         | (17,502)                | -                            | (17,502)                | (17,502)        
|At
    December 31, 2016           | 62,350                  | 43,184                       | 105,534                 | 62,350          
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | 88                      | 83                           | 171                     | 8,122           
|Discoveries                        | 1                       | 1                            | 2                       | 40              
|Extensions
    & Improved Recovery | 3                       | 7                            | 10                      | 1,353           
|Technical
    Revisions            | 17                      | (31)                         | (14)                    | 3,482           
|Acquisitions                       | 5                       | 3                            | 8                       | 447             
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (1)                     | (0)                          | (1)                     | (22)            
|Production                         | (32)                    | -                            | (32)                    | (2,949)         
|At
    December 31, 2016           | 81                      | 63                           | 144                     | 10,473          





31


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|UNITED
    STATES                  | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | 2,034                   | 3,818                        | 5,852                   | 2,034           
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 1,105                   | 1,644                        | 2,749                   | 1,105           
|Technical
    Revisions            | 178                     | 271                          | 449                     | 178             
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (4)                     | (6)                          | (10)                    | (4)             
|Production                         | (144)                   | -                            | (144)                   | (144)           
|At
    December 31, 2016           | 3,169                   | 5,727                        | 8,896                   | 3,169           
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 2,170                   | 4,378                        | 6,548                   | 2,170           
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 1,011                   | 1,578                        | 2,589                   | 1,011           
|Technical
    Revisions            | (129)                   | (460)                        | (589)                   | (129)           
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (6)                     | (15)                         | (21)                    | (6)             
|Production                         | (77)                    | -                            | (77)                    | (77)            
|At
    December 31, 2016           | 2,969                   | 5,481                        | 8,450                   | 2,969           
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | 346                     | 698                          | 1,044                   | 2,742           
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 141                     | 219                          | 360                     | 1,415           
|Technical
    Revisions            | (62)                    | (155)                        | (217)                   | 94              
|Acquisitions                       | -                       | -                            | -                       | -               
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (2)                     | (2)                          | (4)                     | (7)             
|Production                         | (11)                    | -                            | (11)                    | (168)           
|At
    December 31, 2016           | 412                     | 760                          | 1,172                   | 4,076           





32


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                   |                         | Light
    Crude Oil &        |                         |                 
|---------------------------------- | ----------------------- | ---------------------------- | ----------------------- | ----------------
|TOTAL
    COMPANY                  | Total
    Oil(4)        | Medium
    Crude Oil         | Heavy
    Oil           | Tight
    Oil   
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mbbl)          
|At
    December 31, 2015           | 79,510                  | 43,635                       | 123,145                 | 79,491          
|Discoveries                        | -                       | -                            | -                       | -               
|Extensions
    & Improved Recovery | 4,948                   | 4,294                        | 9,242                   | 4,948           
|Technical
    Revisions            | 4,492                   | (1,044)                      | 3,450                   | 4,499           
|Acquisitions                       | 5,250                   | 1,841                        | 7,091                   | 5,250           
|Dispositions                       | -                       | -                            | -                       | -               
|Economic
    Factors               | (66)                    | (32)                         | (98)                    | (66)            
|Production                         | (9,243)                 | -                            | (9,243)                 | (9,241)         
|At
    December 31, 2016           | 84,891                  | 48,694                       | 133,587                 | 84,881          
|                                   | Total
    Gas(4)        | Conventional
    Natural Gas | Coal
    Bed Methane(5) | Shale
    Gas(5)
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (MMcf)                  | (MMcf)                       | (MMcf)                  | (MMcf)          
|At
    December 31, 2015           | 395,788                 | 258,097                      | 653,885                 | 385,637         
|Discoveries                        | 233                     | 145                          | 378                     | 233             
|Extensions
    & Improved Recovery | 31,230                  | 66,935                       | 98,165                  | 31,230          
|Technical
    Revisions            | 58,693                  | (25,131)                     | 33,562                  | 57,408          
|Acquisitions                       | 26,914                  | 12,138                       | 39,052                  | 26,842          
|Dispositions                       | (353)                   | (132)                        | (485)                   | (353)           
|Economic
    Factors               | (1,448)                 | (756)                        | (2,204)                 | (746)           
|Production                         | (72,671)                | -                            | (72,671)                | (71,297)        
|At
    December 31, 2016           | 438,386                 | 311,296                      | 749,682                 | 428,954         
|                                   | Natural
    Gas Liquids | BOE                          |                         |                 
|                                   |                         |                              | Proved
    +            |                 
|Proved
    Probable P+P(1) (2)     | Proved                  | Probable                     | Probable                | Proved          
|Factors                            | (Mbbl)                  | (Mbbl)                       | (Mbbl)                  | (Mboe)          
|At
    December 31, 2015           | 15,229                  | 13,532                       | 28,761                  | 160,706         
|Discoveries                        | 1                       | 1                            | 2                       | 40              
|Extensions
    & Improved Recovery | 1,556                   | 1,051                        | 2,607                   | 11,709          
|Technical
    Revisions            | 1,959                   | (1,274)                      | 685                     | 16,233          
|Acquisitions                       | 1,050                   | 474                          | 1,524                   | 10,787          
|Dispositions                       | (8)                     | (3)                          | (11)                    | (67)            
|Economic
    Factors               | (34)                    | (51)                         | (85)                    | (340)           
|Production                         | (1,897)                 | -                            | (1,897)                 | (23,253)        
|At
    December 31, 2016           | 17,856                  | 13,730                       | 31,586                  | 175,815         



Notes:

| | (1) | "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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | "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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth above.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | For reporting purposes, “Total
                                         Oil” is the sum of Light Crude oil and Medium Crude Oil, Heavy Oil and Tight Oil.
                                         For reporting purposes, “Total Gas” is the sum of Conventional Natural Gas,
                                         Coal Bed Methane and Shale Gas.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | “Coal Bed Methane” and “Shale Gas” were considered “Unconventional Natural Gas” in previous years. NI 51-101 no longer differentiates between conventional and unconventional activities.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







33


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Undeveloped Reserves



Proved 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. These reserves have a 90% probability of being recovered. Vermilion's
current plan is to develop these reserves in the following three years. The pace of development of these reserves is influenced
by many factors, including but not limited to, the outcomes of yearly drilling and reservoir evaluations, changes in commodity
pricing, changes in capital allocations, changing technical conditions, regulatory changes and impact of future acquisitions and
dispositions. As new information becomes available these reserves are reviewed and development plans are revised accordingly.



Probable 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. These reserves have a 50% probability of being recovered. Vermilion's
current plan is to develop these reserves over the next five years. In general, development of these reserves requires additional
evaluation data to increase the probability of success to an acceptable level for Vermilion. This increases the timeline for the
development of these reserves. This timetable may be altered depending on outside market forces, changes in capital allocations
and impact of future acquisitions and dispositions.



Timing of Initial Undeveloped Reserves Assignment



Undeveloped Reserves Attributed in Current Year





|                       | Light
    Crude Oil | Conventional         |                         |                          |                   
|---------------------- | ------------------- | -------------------- | ----------------------- | ------------------------ | ------------------
|&
    Medium Crude Oil | Natural
    Gas     | Coal
    Bed Methane | Natural
    Gas Liquids | Total
    Oil Equivalent
|(Mbbl)                 | (MMcf)              | (MMcf)               | (Mbbl)                  | (Mboe)                  
|                       | First               |                      | First                   |                          | First             
|                       | Attributed
    (1)  | Booked               | Attributed
    (1)      | Booked                   | Attributed
    (1)
|Proved                 |                     |                      |                         |                          |                   
|Prior
    to 2013      | 11,370              | 23,777               | 23,698                  | 344,017                  | 4,943             
|2013                   | 4,293               | 13,007               | 38,720                  | 167,927                  | 8,191             
|2014                   | 5,614               | 15,434               | 26,111                  | 170,763                  | -                 
|2015                   | 4,182               | 15,989               | 30,963                  | 78,022                   | 333               
|2016                   | 1,411               | 16,140               | 25,023                  | 90,934                   | -                 
|Probable               |                     |                      |                         |                          |                   
|Prior
    to 2013      | 15,923              | 45,687               | 28,011                  | 161,341                  | 2,435             
|2013                   | 7,967               | 17,797               | 53,927                  | 115,066                  | 5,338             
|2014                   | 6,541               | 22,050               | 60,779                  | 163,645                  | -                 
|2015                   | 6,118               | 25,126               | 50,125                  | 122,802                  | 57                
|2016                   | 4,918               | 27,863               | 66,129                  | 167,973                  | -                 





Note:

(1)
“First Attributed” refers to reserves first attributed at year-end of the corresponding
fiscal year

34


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Future Development Costs(1)



The table below sets out the future development
costs deducted in the estimation of future net revenue attributable to total proved reserves and total proved plus probable reserves
(using forecast prices and costs).



|                                     | Total
    Proved                              | Total
    Proved Plus Probable               
|------------------------------------ | --------------------------------------------- | ---------------------------------------------
|(M$)                                 | Estimated
    Using Forecast Prices and Costs | Estimated
    Using Forecast Prices and Costs
|Australia                            |                                               |                                              
|2017                                 | 9,420                                         | 9,420                                        
|2018                                 | 6,701                                         | 6,701                                        
|2019                                 | 51,052                                        | 51,052                                       
|2020                                 | 2,993                                         | 2,993                                        
|2021                                 | 3,052                                         | 57,174                                       
|Remainder                            | 25,062                                        | 48,320                                       
|Total
    for all years undiscounted | 98,280                                        | 175,660                                      
|Canada                               |                                               |                                              
|2017                                 | 77,141                                        | 101,695                                      
|2018                                 | 90,442                                        | 126,482                                      
|2019                                 | 81,623                                        | 128,701                                      
|2020                                 | 95,424                                        | 189,622                                      
|2021                                 | 59,376                                        | 175,978                                      
|Remainder                            | 17,542                                        | 51,883                                       
|Total
    for all years undiscounted | 421,548                                       | 774,361                                      
|France                               |                                               |                                              
|2017                                 | 39,113                                        | 60,593                                       
|2018                                 | 29,528                                        | 49,613                                       
|2019                                 | 23,548                                        | 107,737                                      
|2020                                 | 6,753                                         | 40,020                                       
|2021                                 | 14,167                                        | 23,931                                       
|Remainder                            | 10,363                                        | 35,668                                       
|Total
    for all years undiscounted | 123,472                                       | 317,562                                      
|Germany                              |                                               |                                              
|2017                                 | 2,183                                         | 3,562                                        
|2018                                 | 584                                           | 3,272                                        
|2019                                 | 8,499                                         | 30,655                                       
|2020                                 | 154                                           | 6,863                                        
|2021                                 | 153                                           | 41,162                                       
|Remainder                            | 694                                           | 3,167                                        
|Total
    for all years undiscounted | 12,267                                        | 88,681                                       
|Ireland                              |                                               |                                              
|2017                                 | 1,311                                         | 1,311                                        
|2018                                 | -                                             | -                                            
|2019                                 | 1,706                                         | 1,706                                        
|2020                                 | 16,890                                        | 16,890                                       
|2021                                 | -                                             | -                                            
|Remainder                            | 15,505                                        | 15,505                                       
|Total
    for all years undiscounted | 35,412                                        | 35,412                                       
|Netherlands                          |                                               |                                              
|2017                                 | 2,200                                         | 7,790                                        
|2018                                 | 13,525                                        | 15,009                                       
|2019                                 | 604                                           | 4,838                                        
|2020                                 | 385                                           | 4,278                                        
|2021                                 | 287                                           | 8,095                                        
|Remainder                            | 5,638                                         | 5,637                                        
|Total
    for all years undiscounted | 22,639                                        | 45,647                                       
|United
    States                    |                                               |                                              
|2017                                 | 10,500                                        | 10,500                                       
|2018                                 | 18,426                                        | 36,468                                       
|2019                                 | 18,207                                        | 48,039                                       
|2020                                 | 13,506                                        | 42,806                                       
|2021                                 | -                                             | -                                            
|Remainder                            | -                                             | 1                                            
|Total
    for all years undiscounted | 60,639                                        | 137,814                                      
|Total
    Company                    |                                               |                                              
|2017                                 | 141,868                                       | 194,871                                      
|2018                                 | 159,206                                       | 237,545                                      
|2019                                 | 185,239                                       | 372,728                                      
|2020                                 | 136,105                                       | 303,472                                      
|2021                                 | 77,035                                        | 306,340                                      
|Remainder                            | 74,804                                        | 160,181                                      
|Total
    for all years undiscounted | 774,257                                       | 1,575,137                                    





35


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Note:

| | (1) | The pricing assumptions used
                                         in the GLJ Report with respect to net present value of future net revenue (forecast)
                                         as well as the inflation rates used for operating and capital costs are set forth above.
                                         See “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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Vermilion expects to source its capital expenditure
requirements from internally generated cash flow and, as appropriate, from Vermilion’s existing credit facility or equity
or debt financing. It is anticipated that costs of funding the future development costs will not impact development of its properties
or Vermilion’s reserves or future net revenue.



Oil and Gas Properties and Wells (1)
(2)



The following table sets forth the number of
wells in which Vermilion held a working interest as at December 31, 2016:





|                            | Oil              |                       | Gas               
|--------------------------- | ---------------- | --------------------- | ------------------
|Producing                   |                  | Non-Producing
    (5) |                   
|Gross
    Wells(3)          | Net
    Wells(4) |                       | Gross
    Wells(3)
|Canada                      |                  |                       |                   
|Alberta                     | 471              | 326                   |                   
|Saskatchewan                | 140              | 119                   |                   
|Total
    Canada            | 611              | 445                   |                   
|Australia                   | 18               | 18                    |                   
|France                      | 336              | 331                   |                   
|Germany                     | 141              | 111                   |                   
|Ireland                     | -                | -                     |                   
|Netherlands                 | -                | -                     |                   
|United
    States (Wyoming) | 11               | 9                     |                   
|Total
    Vermilion         | 1,117            | 914                   |                   





Notes:

| | (1) | Well
                                         counts are based on wellbores.
| | --- | ----------------------------------------------------------------------------

| | (2) | Wells
                                         for Australia and Ireland are located offshore.
| | --- | ----------------------------------------------------------------------------------------------

| | (3) | "Gross" refers to the total wells in which
Vermilion has an interest, directly or indirectly.
| | --- | ---------------------------------------------------------------------------------------------

| | (4) | "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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Non-producing wells include wells which are capable of
producing, but which are currently not producing, and are re-evaluated with respect to future commodity prices, proximity to facility
infrastructure, design of future exploration and development programs and access to capital.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Costs Incurred



The following table summarizes the capital expenditures made by
Vermilion on oil and gas properties for the year ended December 31, 2016:



|                  | Acquisition
    Costs |           
|----------------- | --------------------- | ----------
|                  | Proved                | Unproved  
|(M$)              | Properties            | Properties
|Australia         | -                     | -         
|Canada            | 13,309                | -         
|Croatia           | -                     | -         
|France            | -                     | -         
|Germany           | 48,377                | -         
|Hungary           | -                     | -         
|Ireland           | -                     | -         
|Netherlands       | 28,259                | -         
|United
    States | 5,935                 | -         
|Total             | 95,880                | -         



Acreage



The following table summarizes the acreage
for the year ended December 31, 2016:





|                  | Developed
    (1) | Undeveloped | Total         | Total      
|----------------- | ----------------- | ----------- | ------------- | -----------
|                  | Gross
    (2)     | Net
    (3) | Gross
    (2) | Net
    (3)
|Australia         | 20,164            | 20,164      | 39,389        | 39,389     
|Canada            | 445,898           | 328,530     | 500,251       | 443,116    
|Croatia           | -                 | -           | 2,348,984     | 2,348,984  
|France            | 218,110           | 208,858     | 336,595       | 336,595    
|Germany           | 67,634            | 25,798      | 2,609,304     | 1,054,905  
|Hungary           | -                 | -           | 322,142       | 322,142    
|Ireland           | 7,200             | 1,300       | -             | -          
|Netherlands       | 80,725            | 48,539      | 1,411,744     | 792,942    
|Slovakia          | -                 | -           | 183,000       | 91,500     
|United
    States | 4,368             | 4,031       | 104,128       | 93,121     
|Total             | 844,099           | 637,220     | 7,855,537     | 5,522,694  



Notes:

| | (1) | “Developed” means the acreage assigned to
productive wells based on applicable regulations.
| | --- | -------------------------------------------------------------------------------------------

| | (2) | “Gross” means the total acreage in which
Vermilion has a working interest, directly or indirectly.
| | --- | --------------------------------------------------------------------------------------------------

| | (3) | “Net” means the total acreage in which Vermilion
has a working interest, directly or indirectly, multiplied by the percentage working interest of Vermilion.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



37


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Exploration and Development Activities



The following table sets forth the number of
development and exploration wells which Vermilion completed during its 2016 financial year:





|                    | Exploration
    Wells | Development
    Wells
|------------------- | --------------------- | ---------------------
|                    | Gross
    (1)         | Net
    (2)          
|Australia           |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|Canada              |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|France              |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|Germany             |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|Ireland             |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|Netherlands         |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|United
    States   |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    
|Total
    Company   |                       |                      
|Oil                 | -                     | -                    
|Gas                 | -                     | -                    
|Dry
    Holes       | -                     | -                    
|Total
    Completed | -                     | -                    





Notes:

| | (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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Please see "Description of the Business
- Operating Segments and Description of Properties" for a general description of the Company's current and likely exploration
and development activities.



38


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Properties with No Attributed Reserves



The following table sets out Vermilion's properties with no attributed
reserves as at December 31, 2016:





|                  | Properties
    with No Attributed Reserves
|----------------- | ------------------------------------------
|Country           | Gross
    Acres (1)                       
|Australia         | 31,838                                    
|Canada            | 244,671                                   
|Croatia           | 2,348,984                                 
|France            | 229,239                                   
|Germany           | 2,565,069                                 
|Hungary           | 322,142                                   
|Ireland           | -                                         
|Netherlands       | 1,367,670                                 
|Slovakia          | 183,000                                   
|United
    States | 95,944                                    
|Total             | 7,388,557                                 



Notes:

| | (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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Vermilion
expects its rights to explore, develop and exploit approximately 71,400 (70,100 net) acres in Canada, 2,675 (2,675 net) acres
in the United States, 18,285 (18,285 net) acres in France, and 19,667 (8,845 net) acres in Germany to expire within one year,
unless the Company initiates the capital activity necessary to retain the rights. Work commitments on these lands are categorized
as seismic acquisition, geophysical studies or well commitments. No
such rights are expected to expire within one year for Australia, Croatia, Hungary, Ireland and the Netherlands. Vermilion currently
has no material work commitments in Australia, Canada and the United States. Vermilion's work commitments with respect to its
European lands held are estimated to be $15.1 million in the next year.



Vermilion’s properties with no attributed
reserves do not have any significant abandonment and reclamation costs in any country other than Canada, which has a net estimated
cost of $17.7 million.  All properties with no attributed reserves do not have high expected development or operating costs
or contractual sales obligations to produce and sell at substantially lower prices than could be realized.



39


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Tax Information



Vermilion pays current taxes in France, the
Netherlands and Australia. Corporate income taxes in France and the Netherlands apply to taxable income after eligible deductions.
In France, taxable income is taxed at 34.4%. In 2012, the France government enacted a new 3% tax on dividend distributions made
by entities subject to corporate income tax in France. The tax applies to any dividends paid on or after April 17, 2012 and is
not recovered by any tax treaties or deductible for French corporate income tax purposes. In late December 2016, the France government
passed legislation, the effect of which will exempt any dividend distributions made by Vermilion after January 1, 2017 from the
3% tax. Vermilion did not pay any dividends from its French entities in 2016. In the Netherlands, current income taxes are applied
to taxable income, after eligible deductions and a 10% uplift deduction applied to operating expenses, eligible general and administration
expenses and tax deductions for depletion and abandonment retirement obligations, at a tax rate 50%. As a function of the impact
of Vermilion’s tax pools, the Company does not presently pay current taxes in Canada, Germany, Ireland and the United States.
The Canadian segment includes holding companies that pay current taxes in foreign jurisdictions.



In Australia, current taxes include both corporate
income taxes and PRRT. Corporate income taxes are applied at a rate of approximately 30% on taxable income after eligible deductions,
which include PRRT paid. PRRT is a profit based tax applied at a rate of 40% on sales less eligible expenditures, including operating
expenses and capital expenditures.



The following table sets forth Vermilion’s tax pools as at
December 31, 2016:





|(M$)              | Oil
    and Gas Assets |     | Tax
    Losses  | Other  | Total    
|----------------- | ---------------------- | --- | --------------- | ------ | ---------
|Australia         | 276,911                | (1) | -   -           | -      | 276,911  
|Canada            | 978,949                | (1) | 489,702
    (5) | 32,503 | 1,501,154
|France            | 351,551                | (2) | 13,360
    (6)  | -      | 364,911  
|Germany           | 190,002                | (3) | 57,156
    (7)  | 20,306 | 267,464  
|Ireland           | 942,129                | (4) | 403,779
    (5) | -      | 1,345,908
|Netherlands       | 68,139                 | (3) | -   -           | -      | 68,139   
|United
    States | 34,885                 | (1) | 30,328
    (5)  | 797    | 66,010   
|Total             | 2,842,566              |     | 994,325         | 53,606 | 3,890,497





Notes:

| | (1) | Deduction calculated using
                                         various declining balance rates
| | --- | ---------------------------------------------------------------------------------------------------

| | (2) | Deduction calculated using
                                         a combination of straight-line over the assets life and unit of production method
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Deduction calculated using
                                         a unit of production method
| | --- | -----------------------------------------------------------------------------------------------

| | (4) | Deduction for current development
                                         expenditures and tax losses at 100% against taxable income
| | --- | -------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Tax losses can be carried
                                         forward at 100% against taxable income
| | --- | ---------------------------------------------------------------------------------------------------------

| | (6) | Tax losses carried forward
                                         are available to offset the first €1 million of taxable income and 50% of taxable
                                         profits in excess each taxation year
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Tax losses carried forward
                                         are available to offset the first €1 million of taxable income and 60% of taxable
                                         profits in excess each taxation year
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40


Vermilion Energy Inc.AIF for the year ended December 31, 2016






Production Estimates

The following table sets forth the volume of production estimated for the year ended December 31, 2017 as reflected in the estimates
of gross proved reserves and gross proved plus probable reserves in the GLJ Report:





|Light
    Crude Oil &          |               |               | Conventional    | Shale           | Coal
    Bed | Natural
    Gas |        
|------------------------------ | ------------- | ------------- | --------------- | --------------- | ------------ | --------------- | -------
|Medium
    Crude Oil           | Heavy
    Oil | Tight
    Oil | Natural
    Gas | Natural
    Gas | Methane      | Liquids         | BOE    
|                               | (bbl/d)       | (bbl/d)       | (bbl/d)         | (Mcf/d)         | (Mcf/d)      | (Mcf/d)         | (bbl/d)
|Australia                      |               |               |                 |                 |              |                 |        
|Proved                         | 5,791         | -             | -               | -               | -            | -               | -      
|Proved
    Plus Probable       | 5,932         | -             | -               | -               | -            | -               | -      
|Canada                         |               |               |                 |                 |              |                 |        
|Proved                         | 5,957         | -             | 4               | 81,102          | 551          | 2,623           | 6,597  
|Proved
    Plus Probable       | 6,655         | -             | 5               | 90,765          | 569          | 2,827           | 7,570  
|France                         |               |               |                 |                 |              |                 |        
|Proved                         | 12,287        | -             | -               | 1,234           | -            | -               | -      
|Proved
    Plus Probable       | 13,288        | -             | -               | 1,247           | -            | -               | -      
|Germany                        |               |               |                 |                 |              |                 |        
|Proved                         | 1,078         | -             | -               | 18,170          | -            | -               | -      
|Proved
    Plus Probable       | 1,122         | -             | -               | 19,045          | -            | -               | -      
|Ireland                        |               |               |                 |                 |              |                 |        
|Proved                         | -             | -             | -               | 57,175          | -            | -               | -      
|Proved
    Plus Probable       | -             | -             | -               | 59,025          | -            | -               | -      
|Netherlands                    |               |               |                 |                 |              |                 |        
|Proved                         | -             | -             | -               | 46,831          | -            | -               | 81     
|Proved
    Plus Probable       | -             | -             | -               | 54,155          | -            | -               | 101    
|United
    States              |               |               |                 |                 |              |                 |        
|Proved                         | 570           | -             | -               | 407             | -            | -               | 56     
|Proved
    Plus Probable       | 670           | -             | -               | 461             | -            | -               | 64     
|Total
    Proved               | 25,683        | -             | 4               | 204,919         | 551          | 2,623           | 6,734  
|Total
    Proved Plus Probable | 27,667        | -             | 5               | 224,698         | 569          | 2,827           | 7,735  





41


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Production History



The following table sets forth certain information
in respect of production, product prices received, royalties, production costs and netbacks received by Vermilion for each quarter
of its most recently completed financial year. Light crude oil and medium crude oil average net prices received in the following
table also includes immaterial amounts generated by the sale of heavy oil.



|                                                 | Three
    Months Ended | Three
    Months Ended | Three
    Months Ended | Three
    Months Ended
|------------------------------------------------ | ---------------------- | ---------------------- | ---------------------- | ----------------------
|                                                 | March
    31, 2016     | June
    30, 2016      | September
    30, 2016 | December
    31, 2016 
|Australia                                        |                        |                        |                        |                       
|Average
    Daily Production                     |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | 6,180                  | 6,083                  | 6,562                  | 6,388                 
|Conventional Natural
    Gas (MMcf/d)            | -                      | -                      | -                      | -                     
|Natural
    Gas Liquids (bbl/d)                  | -                      | -                      | -                      | -                     
|Average
    Net Prices Received                  |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 46.93                  | 61.53                  | 60.61                  | 69.05                 
|Conventional Natural
    Gas ($/Mcf)             | -                      | -                      | -                      | -                     
|Natural
    Gas Liquids ($/bbl)                  | -                      | -                      | -                      | -                     
|Royalties                                        |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -                      | -                      | -                      | -                     
|Conventional Natural
    Gas ($/Mcf)             | -                      | -                      | -                      | -                     
|Natural
    Gas Liquids ($/bbl)                  | -                      | -                      | -                      | -                     
|Production
    Costs                             |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 17.63                  | 22.08                  | 17.59                  | 26.83                 
|Conventional Natural
    Gas ($/Mcf)             | -                      | -                      | -                      | -                     
|Natural
    Gas Liquids ($/bbl)                  | -                      | -                      | -                      | -                     
|Netback
    Received                             |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 29.30                  | 39.45                  | 43.02                  | 42.22                 
|Conventional Natural
    Gas ($/Mcf)             | -                      | -                      | -                      | -                     
|Natural
    Gas Liquids ($/bbl)                  | -                      | -                      | -                      | -                     
|Canada                                           |                        |                        |                        |                       
|Average
    Daily Production                     |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | 8,231                  | 6,965                  | 6,406                  | 5,004                 
|Conventional Natural
    Gas (MMcf/d)            | 97.16                  | 87.44                  | 77.62                  | 75.12                 
|Natural
    Gas Liquids (bbl/d)                  | 4,719                  | 5,175                  | 5,026                  | 5,385                 
|Average
    Net Prices Received                  |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 38.94                  | 58.92                  | 54.38                  | 61.97                 
|Conventional Natural
    Gas ($/Mcf)             | 1.93                   | 1.34                   | 2.39                   | 3.05                  
|Natural
    Gas Liquids ($/bbl)                  | 25.32                  | 29.69                  | 32.85                  | 38.59                 
|Royalties                                        |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 4.44                   | 4.36                   | 3.33                   | 6.53                  
|Conventional Natural
    Gas ($/Mcf)             | 0.08                   | (0.06)                 | 0.14                   | 0.22                  
|Natural
    Gas Liquids ($/bbl)                  | 3.50                   | 3.22                   | 4.05                   | 5.70                  
|Transportation                                   |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 2.76                   | 2.87                   | 3.12                   | 2.84                  
|Conventional Natural
    Gas ($/Mcf)             | 0.16                   | 0.16                   | 0.18                   | 0.18                  
|Natural
    Gas Liquids ($/bbl)                  | 1.70                   | 1.39                   | 1.82                   | 1.70                  
|Production
    Costs                             |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 8.87                   | 9.10                   | 10.55                  | 9.91                  
|Conventional Natural
    Gas ($/Mcf)             | 1.44                   | 1.06                   | 0.95                   | 1.32                  
|Natural
    Gas Liquids ($/bbl)                  | 5.24                   | 4.93                   | 5.47                   | 8.94                  
|Netback
    Received                             |                        |                        |                        |                       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 22.87                  | 42.59                  | 37.38                  | 42.69                 
|Conventional Natural
    Gas ($/Mcf)             | 0.25                   | 0.18                   | 1.12                   | 1.32                  
|Natural
    Gas Liquids ($/bbl)                  | 14.88                  | 20.15                  | 21.51                  | 22.25                 





42


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|France                                           |        |        |        |       
|------------------------------------------------ | ------ | ------ | ------ | ------
|Average
    Daily Production                     |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | 12,220 | 12,326 | 11,827 | 11,220
|Conventional Natural
    Gas (MMcf/d)            | 0.44   | 0.54   | 0.42   | 0.38  
|Natural
    Gas Liquids (bbl/d)                  | -      | -      | -      | -     
|Average
    Net Prices Received                  |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 43.36  | 58.19  | 56.14  | 63.99 
|Conventional Natural
    Gas ($/Mcf)             | 1.66   | 1.58   | 1.58   | 1.55  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Royalties                                        |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 6.09   | 6.19   | 6.08   | 5.95  
|Conventional Natural
    Gas ($/Mcf)             | 0.29   | 0.39   | 0.32   | 0.36  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Transportation                                   |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 3.35   | 3.29   | 3.09   | 3.55  
|Conventional Natural
    Gas ($/Mcf)             | -      | -      | -      | -     
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Production
    Costs                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 12.84  | 10.55  | 11.06  | 10.13 
|Conventional Natural
    Gas ($/Mcf)             | 2.24   | 2.27   | 2.55   | 3.12  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Netback
    Received                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 21.08  | 38.16  | 35.91  | 44.36 
|Conventional Natural
    Gas ($/Mcf)             | (0.87) | (1.08) | (1.29) | (1.93)
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Germany                                          |        |        |        |       
|Average
    Daily Production                     |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | -      | -      | -      | -     
|Conventional Natural
    Gas (MMcf/d)            | 15.96  | 14.31  | 14.52  | 14.80 
|Natural
    Gas Liquids (bbl/d)                  | -      | -      | -      | -     
|Average
    Net Prices Received                  | -      | -      | -      | -     
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | 5.30   | 4.82   | 5.08   | 6.09  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Royalties                                        | -      | -      | -      | -     
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | 0.60   | 0.74   | 0.18   | 0.01  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Transportation                                   | -      | -      | -      | -     
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | 0.61   | 0.81   | 0.42   | 0.28  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Production
    Costs                             | -      | -      | -      | -     
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | 1.79   | 1.92   | 2.49   | 2.91  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Netback
    Received                             | -      | -      | -      | -     
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | 2.30   | 1.35   | 1.99   | 2.89  
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     







43


Vermilion Energy Inc.AIF for the year ended December 31, 2016






|Ireland                                          |       |       |       |      
|------------------------------------------------ | ----- | ----- | ----- | -----
|Average
    Daily Production                     |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | -     | -     | -     | -    
|Conventional Natural
    Gas (MMcf/d)            | 33.90 | 47.26 | 59.28 | 62.92
|Natural
    Gas Liquids (bbl/d)                  | -     | -     | -     | -    
|Average
    Net Prices Received                  | -     | -     | -     | -    
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 5.51  | 5.43  | 4.78  | 7.38 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Royalties                                        | -     | -     | -     | -    
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | -     | -     | -     | -    
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Transportation                                   | -     | -     | -     | -    
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 0.53  | 0.37  | 0.29  | 0.29 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Production
    Costs                             | -     | -     | -     | -    
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 1.18  | 1.20  | 0.86  | 0.89 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Netback
    Received                             | -     | -     | -     | -    
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 3.80  | 3.86  | 3.63  | 6.20 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Netherlands                                      |       |       |       |      
|Average
    Daily Production                     |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | -     | -     | -     | -    
|Conventional Natural
    Gas (MMcf/d)            | 53.40 | 49.18 | 47.62 | 41.15
|Natural
    Gas Liquids (bbl/d)                  | 114   | 96    | 86    | 57   
|Average
    Net Prices Received                  |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 5.55  | 5.27  | 5.27  | 6.78 
|Natural
    Gas Liquids ($/bbl)                  | 32.24 | 45.05 | 49.43 | 63.18
|Royalties                                        |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 0.09  | 0.09  | 0.07  | 0.08 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Production
    Costs                             |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 1.23  | 0.96  | 1.11  | 1.49 
|Natural
    Gas Liquids ($/bbl)                  | -     | -     | -     | -    
|Netback
    Received                             |       |       |       |      
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -     | -     | -     | -    
|Conventional Natural
    Gas ($/Mcf)             | 4.23  | 4.22  | 4.09  | 5.21 
|Natural
    Gas Liquids ($/bbl)                  | 32.24 | 45.05 | 49.43 | 63.18



44


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|United
    States                                |        |        |        |       
|------------------------------------------------ | ------ | ------ | ------ | ------
|Average Daily Production                         |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | 368    | 458    | 383    | 362   
|Conventional Natural
    Gas (MMcf/d)            | 0.26   | 0.20   | 0.20   | 0.18  
|Natural
    Gas Liquids (bbl/d)                  | 39     | 26     | 30     | 23    
|Average
    Net Prices Received                  |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 35.80  | 52.56  | 51.29  | 59.09 
|Conventional Natural
    Gas ($/Mcf)             | 0.67   | 0.37   | 0.64   | 1.93  
|Natural
    Gas Liquids ($/bbl)                  | 4.81   | 3.25   | 5.14   | 19.48 
|Royalties                                        |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 10.47  | 15.47  | 14.69  | 17.24 
|Conventional Natural
    Gas ($/Mcf)             | 0.40   | 0.18   | 0.39   | 1.72  
|Natural
    Gas Liquids ($/bbl)                  | 2.70   | 5.21   | (0.11) | 4.51  
|Transportation                                   |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | -      | -      | -      | -     
|Conventional Natural
    Gas ($/Mcf)             | -      | -      | -      | -     
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Production
    Costs                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 8.33   | 7.22   | 12.27  | 9.04  
|Conventional Natural
    Gas ($/Mcf)             | -      | -      | -      | -     
|Natural
    Gas Liquids ($/bbl)                  | -      | -      | -      | -     
|Netback
    Received                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 17.00  | 29.87  | 24.33  | 32.81 
|Conventional Natural
    Gas ($/Mcf)             | 0.27   | 0.19   | 0.25   | 0.21  
|Natural
    Gas Liquids ($/bbl)                  | 2.11   | (1.96) | 5.25   | 14.97 
|Total                                            |        |        |        |       
|Average
    Daily Production                     |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil (bbl/d) | 26,999 | 25,832 | 25,178 | 22,974
|Conventional Natural
    Gas (MMcf/d)            | 201.11 | 198.93 | 199.65 | 194.54
|Natural
    Gas Liquids (bbl/d)                  | 4,872  | 5,297  | 5,142  | 5,465 
|Average
    Net Prices Received                  |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 42.59  | 59.09  | 56.96  | 65.90 
|Conventional Natural
    Gas ($/Mcf)             | 3.76   | 3.53   | 3.98   | 5.47  
|Natural
    Gas Liquids ($/bbl)                  | 25.32  | 29.84  | 32.96  | 38.80 
|Royalties                                        |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 4.50   | 4.35   | 3.77   | 4.87  
|Conventional Natural
    Gas ($/Mcf)             | 0.11   | 0.05   | 0.09   | 0.10  
|Natural
    Gas Liquids ($/bbl)                  | 3.44   | 3.22   | 3.99   | 5.68  
|Transportation
    Costs                         |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 2.49   | 2.32   | 2.15   | 2.50  
|Conventional Natural
    Gas ($/Mcf)             | 0.22   | 0.22   | 0.19   | 0.19  
|Natural
    Gas Liquids ($/bbl)                  | 1.65   | 1.36   | 1.78   | 1.67  
|Production
    Costs                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 12.49  | 12.87  | 12.86  | 14.45 
|Conventional Natural
    Gas ($/Mcf)             | 1.37   | 1.13   | 1.08   | 1.34  
|Natural
    Gas Liquids ($/bbl)                  | 5.09   | 4.81   | 5.34   | 8.79  
|Netback
    Received                             |        |        |        |       
|Light Crude Oil and
    Medium Crude Oil ($/bbl) | 23.11  | 39.55  | 38.18  | 44.08 
|Conventional Natural
    Gas ($/Mcf)             | 2.06   | 2.13   | 2.62   | 3.84  
|Natural
    Gas Liquids ($/bbl)                  | 15.14  | 20.45  | 21.85  | 22.66 







45


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Marketing



The nature of Vermilion’s operations
results in exposure to fluctuations in commodity prices, interest rates and foreign currency exchange rates. Vermilion monitors
and, when appropriate, uses derivative financial instruments to manage its exposure to these fluctuations. All transactions of
this nature entered into by Vermilion are related to an underlying financial position or to future crude oil and natural gas production.
Vermilion does not use derivative financial instruments for speculative purposes. Vermilion has not obtained collateral or other
security to support its financial derivatives as management reviews the creditworthiness of its counterparties prior to entering
into derivative contracts.



During the normal course of business, Vermilion
may also enter into fixed price arrangements to sell a portion of its production or purchase commodities for operational use.



Vermilion’s outstanding risk management
positions as at December 31, 2016 are summarized in Supplemental Table 2: Hedges, included in the Company’s 2016 Management’s
Discussion and Analysis, dated February 24, 2017, available on SEDAR at www.sedar.com, under Vermilion’s SEDAR profile.



46


Vermilion Energy Inc.AIF for the year ended December 31, 2016


DIRECTORS AND OFFICERS



As at January 31, 2017, the directors and officers
of Vermilion, as a group, beneficially owned, or controlled or directed, directly or indirectly, 3,903,713 common shares representing
approximately 3.3% of the issued and outstanding common shares.



Set forth below is certain information respecting
the current directors and officers of Vermilion. References to Vermilion in the following tables for dates prior to the Conversion
Arrangement refer to VRL and to the Company following the date of the Conversion Arrangement.



Directors



Vermilion’s board of directors currently
consists of ten directors. The directors are nominated by the Company and elected annually by Shareholders and hold office until
the next annual meeting of Shareholders, or until their successors are elected or appointed.



|Name
    andMunicipality ofResidence                                                                                                    | Committee(s)            | Office
    Held                                                        | Year
    FirstElected or
 Appointedas Director | Principal
    Occupation During the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ---------------------------------------------------------------------- | ---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Lorenzo
                                         Donadeo
                                         Calgary, Alberta
        Canada       | (1)                     | Chairman
                                         of
        the Board | 1994                                           | Since
                                         March 1, 2016, Chairman of the Board of Vermilion
                                         March 2014 – March 1, 2016 Chief Executive Officer of Vermilion
        
        2003 –
        March 2014, President and Chief Executive Officer of Vermilion                                                                                                                                                                                                                    
|Claudio
                                         A. Ghersinich
                                         Calgary, Alberta
        Canada | (3)
    (6)             | Director                                                               | 1994                                           | Since
                                         2011, Chairman of ArPetrol Ltd., a public oil and gas company
        
        Since 2010,
        Director of Valeura Energy Inc., a public oil and gas company
        
        Since 2005,
        President of Carrera Investments Corp., a private investment company                                                                                                                                                                                                   
|Loren
                                         M. Leiker
                                         Houston, Texas
        USA            | (6)                     | Director                                                               | 2012                                           | Since
                                         2014, Director of Navitas Midstream Partners LLC
        
        Since 2012,
        Director of SM Energy, a public energy company
        
        2012 to 2015,
        Director of Midstates Petroleum, a public exploration and production company
        
        2008 to 2011,
        Senior Executive VP Exploration, EOG Resources, a public oil and gas company                                                                                                 
|Larry
                                         J. Macdonald
                                         Okotoks, Alberta
        Canada    | (2)
    (3) (4) (5) (6) | Lead
    Director                                                      | 2002                                           | Since
                                         March 1, 2016, Lead Director of Vermilion
                                         2012 to March 1, 2016, Chairman of the Board of Vermilion
                                         2012 to 2016, Chairman Northpoint Resources, a private oil and gas company
        
        Since 2003,
        Chairman & Chief Executive Officer and Director of Point Energy Ltd., a private oil and gas company
        
        2006 to 2013,
        Director of Sure Energy Inc.
|William
                                         F. Madison
                                         Sugar Land, Texas
        USA      | (5)
    (6)             | Director                                                               | 2004                                           | Since
                                         2011, Director of Montana Tech Foundation, an independent, non-profit organization
        
        Since 2007,
        Director of Canadian Oil Recovery and Remediation Enterprise, Inc., a public oil recovery and remediation company                                                                                                                                                                                                                                    
|Timothy
                                         R. Marchant
                                         Calgary, Alberta
        Canada   | (5)
    (6)             | Director                                                               | 2010                                           | Since
                                         2015, Director, Valeura Energy Inc., a public oil and gas company
                                         Since 2013, Non-Executive Director of Cub Energy Inc., a public oil and gas company
        
        Since 2009,
        Adjunct Professor of Strategy and Energy Geopolitics, Haskayne School of Business
        
        2011 to 2013,
        Executive Chair of Anatolia Energy Corp., a public oil and gas company                                          
|Anthony
                                         W. Marino
        Calgary, Alberta
        Canada                                      |                         | President
    & Chief Executive Officer and Director                   | 2016                                           | Since
                                         March 1, 2016, President and Chief Executive Officer
        March 2014
        – March 1, 2016, President and Chief Operating Officer of Vermilion
        June 2012 – March 2014, Executive Vice President and Chief Operating Officer of Vermilion
        2009 to 2012, Director, President & CEO, Baytex Energy Corporation, a public oil and gas company                                                                                                               



47


Vermilion Energy Inc.AIF for the year ended December 31, 2016








|Robert Michaleski
        Calgary, Alberta
        Canada             | (3)         | Director | 2016 | Since 2013,
        Director of United Way of Calgary and Area, a non-profit organization
        
        2012 to 2013,
        Chief Executive Officer of Pembina Pipeline Corporation, a public energy transportation company
        
        2000 to 2012,
        President and Chief Executive Officer of Pembina Pipeline Corporation
        
        Since 2012,
        Director of Essential Energy Services Ltd., a public oilfield services company
        
        Since 2003,
        Director of Coril Holdings Ltd., a private investment company
        
        Since 2000,
        Director of Pembina Pipeline Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------------------------------------------------------- | ----------- | -------- | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Sarah
    E. RaissCalgary, AlbertaCanada                              | (4)
    (5) | Director | 2014 | Since 2016, Director, Ritchie
        Bros. Auctioneers, a public heavy equipment auction company.
        
        Since 2014, Director, Loblaw
        Companies Limited, a public food distributor company
        
        Since 2011, Director, Commercial
        Metals Company, a public global, metals recycling, manufacturing, fabricating and trading company
        
        2012 to 2015, Board Chair,
        Alberta Electric Systems Operator, a not-for-profit entity responsible for the planning and operation of the Alberta Interconnected
        Electric System
        
        2012 to February 2016, Director,
        Canadian Oil Sands Limited, a public oil company
        2009 to 2014, Director, Shoppers
        Drug Mart Corporation, a public pharmacy products and services company                                                                                                                                                                                                                                                                                                                                                                                   
|Catherine
        L. Williams
        Calgary, Alberta
        Canada | (3)
    (4) | Director | 2015 | Since
        2016,Director of Enbridge
        Income Fund, an energy infrastructure asset investment vehicle
        
        Since 2015,
        Director of Enbridge Pipelines Inc., a subsidiary of Enbridge Inc., a public energy transportation company
        
        Since 2015,
        Trustee of Enbridge Commercial Trust, a subsidiary of Enbridge Inc., a public energy transportation company
        
        Since 2015,
        Director of Enbridge Income Partners GP Inc., a subsidiary of Enbridge Inc., a public energy transportation company
        
        Since 2010,
        Chair of Human Resources and Compensation Committee, Enbridge Inc., a public energy transportation company
        
        Since 2007,
        Director of Enbridge Inc., a public energy transportation company
        
        Since 2007,
        Owner and Managing Director, Options Canada Ltd., a private investment company
        
        2009 to 2014,
        Director, Alberta Investment Management Corporation, an institutional investment fund manager
        
        2009 to 2012,
        Director, Tim Hortons Inc., a publicly-traded restaurant chain in North America





Committees:



| | (1) | Chairman of the Board
| | --- | ---------------------

| | (2) | Lead Director
| | --- | -------------

| | (3) | Member of the Audit Committee
| | --- | -----------------------------

| | (4) | Member of the Governance and Human Resources Committee
| | --- | ------------------------------------------------------

| | (5) | Member of the Health, Safety and Environment Committee
| | --- | ------------------------------------------------------

| | (6) | Member of the Independent Reserves Committee
| | --- | --------------------------------------------



48


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Officers





|Name
    andMunicipality of Residence                            | Office
Held                                           | Principal
Occupation During the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------------------------------------------------------------- | ----------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Anthony W. Marino
        Calgary, Alberta
        Canada        | President &
        Chief Executive Officer           | Since March 1, 2016, President and Chief Executive Officer
        March 2014 – March 1, 2016, President and Chief Operating
        Officer of Vermilion
        June 2012 – March 2014, Executive Vice President and Chief Operating Officer of Vermilion
        2009 to 2012, Director, President & CEO, Baytex Energy Corporation, a public oil and gas company                                                                                                            
|Curtis W. Hicks
        Calgary, Alberta
        Canada          | Executive
    Vice President& Chief Financial Officer | Since
    2004, Executive Vice President and Chief Financial Officer of Vermilion                                                                                                                                                                                                                                                                                                                                                                                               
|Mona Jasinski
        Calgary, Alberta
        Canada            | Executive
    Vice PresidentPeople & Culture          | Since February 2015, Executive Vice President,
        People and Culture
        2011 to 2015, Executive Vice President People of Vermilion                                                                                                                                                                                                                                                                                                                                    
|Michael
    KaluzaCalgary, AlbertaCanada                         | Executive
    Vice President& Chief Operating Officer | Since March 1, 2016, Executive Vice President
        and Chief Operating Officer
        May 2014 – March 1, 2016, Vice President, Canada Business Unit of Vermilion
        2013 to 2014, Director Canada Business Unit of Vermilion
        2012 to 2013, Vice President, Corporate Development and Planning, Baytex Energy Corporation, a public oil and gas company
        2011 to 2012, Vice President, Planning, Baytex Energy Corporation, a public oil and gas company
|Anthony (Dion) Hatcher
        Calgary, Alberta
        Canada   | Vice
    PresidentCanada Business Unit                | Since March 1, 2016, Vice President Canada
        Business Unit
        
        May 1, 2014 to March 1, 2016, Director
        Alberta Foothills – Canada Business Unit
        
        February 2013 to May 2014, Cardium / LRG
        Development Manager
        January 2010 to February 2013 – Cardium Development Manager                                                                                                                                             
|Terry Hergott
        Calgary, Alberta
        Canada            | Vice President
        Marketing                      | Since April 2012, Vice President, Marketing
        of Vermilion
        
        1998 to 2012, Canadian Supply and Trading
        Manager, Marathon Petroleum Corp.                                                                                                                                                                                                                                                                                                           
|Gerard Schut
        Den Haag
        The Netherlands            | Vice President
        European Operations            | Since July 2012, Vice President European
        Operations of Vermilion
        
        August 2006 to May 2012, General Manager,
        Chevron Exploration and Production Netherlands, a subsidiary of Chevron Corporation, a public oil and gas company                                                                                                                                                                                                                   
|Robert J. Engbloom, Q.C.
        Calgary, Alberta
        Canada | Corporate
    Secretary                               | Since January 2015, senior partner with
        Norton Rose Fulbright Canada LLP, a law firm
        2012 to 2014, partner with and Deputy Chair of Norton Rose Fulbright Canada LLP, a law firm                                                                                                                                                                                                                                                                                



49


Vermilion Energy Inc.AIF for the year ended December 31, 2016


DESCRIPTION OF CAPITAL STRUCTURE



Common Shares



The Company is authorized to issue an unlimited number of common shares. Each common share entitles the holder to receive notice
of and to attend all meetings of Shareholders and to one vote at any such meeting. The holders of common shares are, at the discretion
of the board and subject to applicable legal restrictions, entitled to receive any dividends declared by the board on the common
shares. The holders of common shares will be entitled to share equally in any distribution of the assets of the Company upon the
liquidation, dissolution, bankruptcy or winding-up of the Company or other distribution of its assets among the Shareholders for
the purpose of winding-up the Company’s affairs.



Awards (entitling the holder thereof to
receive Common Shares) have been issued under the Vermilion Incentive Plan. See note 2 regarding equity compensation plans in
Vermilion's annual financial statements as at and for the year ended December 31, 2016 (a copy of which is available on SEDAR
at www.sedar.com under Vermilion’s SEDAR profile) for further details regarding the amount and value of such
awards.



Cash Dividends



The Company currently pays dividends on a monthly
basis. All decisions with respect to the declaration of dividends on the common shares will be made by the board on the basis
of the Company's net earnings, financial requirements and other conditions existing at such future time, planned acquisitions,
income tax payable by the Company, crude oil and natural gas prices and access to capital markets, as well as the satisfaction
of solvency tests imposed by the ABCA on corporations for the declaration and payment of dividends. It is expected that the dividends
will be "eligible dividends" for income tax purposes and thus qualify for the enhanced gross-up and tax credit regime
for certain Shareholders.



Record of Cash Dividends



The following table sets forth the amount of
cash distributions per Unit for the specified periods declared by the Trust since the completion of the 2003 Arrangement on January
22, 2003 and the cash dividends per common share for the specified periods declared by the Company since the completion of the
Conversion Arrangement on September 1, 2010. Dividends are generally paid on the 15th day of the month following the month of
declaration. Until the December 2007 distribution announcement, Vermilion had paid distributions of $0.17 per Trust Unit per month.
From the January 2008 payment date and onwards, Vermilion paid distributions of $0.19 per Trust Unit and dividends of $0.19 per
common share, in each case per month (as applicable). In January 2013, Vermilion increased its dividend to $0.20 per common share
effective for the January 2013 dividend paid in February 2013. In November 2013, Vermilion announced that its board had approved
a 7.5% increase in the monthly dividend to $0.215 per common share per month effective for the January 2014 dividend paid in February
2014. The monthly dividend was maintained at $0.215 per common share per month throughout 2015 and 2016.



|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 December                  | $2.28                                            
|2012
    – January to December                  | $2.28                                            
|2013
    – January to December                  | $2.40                                            
|2014
    – January to December                  | $2.58                                            
|2015
    – January to December                  | $2.58                                            
|2016
    – January to December                  | $2.58                                            
|2017
    – January to February                  | $0.43                                            
|Total
    cash dividends since January 22, 2003 | $32.02                                           



Note:

| | (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.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



50


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Premium DividendTM and Dividend Reinvestment
Plan



Under the Premium DividendTM and Dividend
Reinvestment Plan (the “Plan”), Eligible Shareholders who elect to participate in the Dividend Reinvestment Component
can reinvest their dividends in common shares at a discount to the Average Market Price (with no broker commissions or trading
costs), similar to our previous Dividend Reinvestment Plan (Vermilion’s Amended and Restated Dividend Reinvestment Plan
dated effective September 1, 2010 as amended effective February 27, 2014 (the “Previous DRIP”). The discount to the
Average Market Price was 3% during 2016 and effective January 1, 2017 the discount is 2%.



Under the Premium DividendTM Component,
Eligible Shareholders have the option to reinvest their dividends in common shares which are exchanged for a premium cash payment
equal to 101.5% of the reinvested dividends.  Under the Premium DividendTM Component, shares are issued at a 3.5% discount
to the Average Market Price.  The shares are sold at prevailing market prices by the Plan Broker (Canaccord Genuity Corporation),
who provides participating Shareholders with a premium cash payment equal to 101.5% of their dividends, while the Plan Broker
retains the balance of the discount as its fee.



Eligible Shareholders are not required to
participate in the Plan.  Eligible Shareholders who have not elected to participate in the Plan will continue to receive
their regular cash dividends in the usual manner.



The total cost of equity issuance to Vermilion
under the Dividend Reinvestment Component and the Premium DividendTM Component of the Plan is 2% and 3.5%, respectively,
providing Vermilion with access to a low cost source of equity capital.  The Premium DividendTM Component of the plan
was implemented as a short-term measure to maintain Vermilion's financial strength during the commodity price downturn which began
in mid-2014. Commencing with the October dividend payment, the Company began proration of the Premium DividendTM Component
of the Plan by 25%. Vermilion subsequently increased the proration factor applied to the Premium DividendTM Component
to 50% commencing with the January 2017 dividend payment. In February 2017, the Company announced a further increase in the proration
factor to 75% commencing with the April 2017 dividend payment. Subject to unexpected changes in the commodity price outlook, Vermilion
intends to discontinue the Premium DividendTM Component beginning with the July 2017 dividend payment, such that there
would be no further equity issuance under this program.



Each component of the Plan, which is
explained in greater detail in the complete Plan document available on Vermilion’s corporate website at www.vermilionenergy.com
(under the heading “Investor Relations” subheading “DRIP”), is subject to eligibility
restrictions, applicable withholding taxes, prorating as provided for in the Plan, and other limitations on the availability
of common shares to be issued or purchased in certain events. Only Canadian-resident Shareholders may participate in the
Premium DividendTMComponent of the Plan. The Dividend Reinvestment Component of the Plan is available to Canadian
residents and non-U.S. resident foreign Shareholders who meet certain eligibility criteria as set forth in the complete Plan.
U.S. resident Shareholders are not currently permitted to participate in either component of the Plan due to the requirement,
under U.S. securities regulations, to maintain a continuous shelf registration for issuance of new equity to U.S.
Shareholders.  At this time, Vermilion has not put in place the required shelf registration due to the high cost of
establishing and maintaining such a shelf registration.





TM denotes trademark of Canaccord
Genuity Capital Corporation.



Shareholder Rights Plan



Vermilion has a shareholder rights plan (the
"Shareholder Rights Plan") to ensure that, to the extent possible, all Shareholders are treated equally and fairly in
connection with any takeover bid for the Company. The Shareholder Rights Plan discourages coercive hostile takeover bids by creating
the potential that any Common Shares which may be acquired or held by such a bidder will be significantly diluted. Pursuant to
the Shareholder Rights Plan, one right (a "Right") has been issued by the Company in respect of each Common Share that
is outstanding prior to the time the Rights separate from the Common Shares (the "Separation Time"). The Separation
Time would occur at the time of an unsolicited take-over bid whereby a person acquires or attempts to acquire 20% or more of the
Company's Common Shares. Until the Separation Time, the rights are not exercisable or dilutive. The Rights do not change the manner
in which Shareholders currently trade their Common Shares and no separate Rights certificates are issued. On or after the Separation
Time, each Right would permit the holder, other than 20% acquirer, to purchase Common Shares at a substantial discount to the
prevailing market price unless the application of the Rights Plan is waived by the Board of Directors.



Vermilion initially adopted a unitholder rights
plan in 2003, which was subsequently renewed and approved by unitholders in 2006 and 2009. In conjunction with the conversion
of the Trust to a corporation on September 1, 2010, the Shareholder Rights Plan was approved and subsequently reapproved by Shareholders
in 2013 and 2016. The Shareholder Rights Plan must be reapproved at every third annual meeting of Shareholders.



The foregoing summary is qualified in its entirety
by reference to the Shareholder Rights Plan Agreement, a copy of which is available on SEDAR at www.sedar.com under Vermilion's
SEDAR profile.



51


Vermilion Energy Inc.AIF for the year ended December 31, 2016


MARKET FOR SECURITIES



The outstanding common shares of the Company
are listed and posted for trading on the TSX and the NYSE under the symbol VET. The following table sets forth the closing price
range and trading volume of the common shares on the TSX for the periods indicated:



|2016      | High   | Low    | Close  | Volume    
|--------- | ------ | ------ | ------ | ----------
|January   | $38.18 | $29.71 | $37.46 | 10,885,419
|February  | $37.80 | $31.56 | $36.80 | 8,931,986 
|March     | $42.69 | $36.53 | $38.01 | 9,440,829 
|April     | $44.21 | $34.86 | $43.15 | 14,172,944
|May       | $44.81 | $39.92 | $43.39 | 10,202,589
|June      | $47.34 | $39.31 | $41.14 | 11,331,250
|July      | $44.08 | $39.88 | $43.50 | 7,690,280 
|August    | $50.04 | $42.11 | $47.39 | 9,611,763 
|September | $51.25 | $45.35 | $50.82 | 9,974,099 
|October   | $55.26 | $50.41 | $52.60 | 9,399,239 
|November  | $55.20 | $50.83 | $54.49 | 7,402,679 
|December  | $58.98 | $54.90 | $56.49 | 6,035,617 
|2017      | High   | Low    | Close  | Volume    
|January   | $57.98 | $52.79 | $53.68 | 5,456,428 
|          |        |        |        |           

52


Vermilion Energy Inc.AIF for the year ended December 31, 2016


AUDIT COMMITTEE MATTERS



Audit Committee Charter



Vermilion has established an audit committee
(the "Audit Committee") to assist the board of directors in carrying out its oversight responsibilities with respect
to, among other things, financial reporting, internal controls and the external audit process of the Company. The Audit Committee
Terms of Reference are set out in Schedule "D" to this annual information form.



Composition of the Audit Committee



The following table sets forth the name of
each current member of the Audit Committee, whether pursuant to applicable securities legislation, such member is considered independent,
whether pursuant to applicable securities legislation, such member is considered financially literate and the relevant education
and experience of such member.



|Name                                                                           | Independent | Financially

    Literate | Relevant
    Education and Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------------------ | ----------- | ------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Catherine
                                         L. Williams
        (Chair) | Yes         | Yes                       | Ms. Williams
                                                                      has a Bachelor of Arts degree from University of Western Ontario and a Masters in Business Administration from the
                                                                      Queen’s University. Ms. Williams brings 31 years of oil and gas industry experience, with an extensive background in
                                                                      finance, mergers and acquisitions, and business management. Ms. Williams is currently the Owner and Managing Director of
                                                                      Options Canada Ltd. (since 2007) and serves as a Board member of Enbridge Inc. (since 2010) and Chairs its Human Resources
                                                                      and Compensation Committee. She was a Board member of Alberta Investment Management Corporation from 2009 to 2014 and Tim
                                                                      Hortons Inc. from 2009 to 2012. From 2003 to 2007, Ms. Williams held the role of Chief Financial Officer for Shell Canada
                                                                      Ltd., prior to which she held various positions with Shell Canada Limited, Shell Europe Oil Products, Shell Canada Oil
                                                                      Products and Shell International (1984 to 2003).
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Larry
    J. Macdonald                                                         | Yes         | Yes                       | Mr.
    Macdonald holds a Bachelor of Science degree from the University of Alberta. He has more than 46 years of experience in the
    oil and gas industry, with an extensive background in leadership, strategy and growth, finance,  exploration, corporate
    relations and marketing. Mr. Macdonald completed the Executive Management Program at the Wharton Business School at the University
    of Pennsylvania in 1993 and attended a Financial Literacy Course at the Rotman Business School at the University of Toronto
    in coordination with the Institute of Corporate Directors.  Currently, he is the Chairman and Chief Executive Officer
    (since 2003) of Point Energy Ltd., a private oil and gas exploration company.  From 2012 to 2016, he was Chairman
    of Northpoint Resources.  From 2003 to 2006, he was a Managing Director of Northpoint Energy Ltd., and from 2006
    to 2013 a director of Sure Energy Inc. Previously, he was the Chairman and Chief Executive Officer of Pointwest Energy Inc.
    and President and Chief Operating Officer of Anderson Exploration Ltd. He began his career with PanCanadian Petroleum Limited
    in 1969 (until 1977) and later worked for several exploration firms.                                                                                                                                                                                                                                                              
|Robert
    Michaleski                                                          | Yes         | Yes                       | Mr.
    Michaleski holds a Bachelor of Commerce (Honours) degree from the University of Manitoba and is a Chartered Accountant.  He
    has over 30 years of experience in various senior management and executive capacities at Pembina Pipeline Corporation. He
    was Chief Executive Officer from 2000 to 2013 and also President from 2000 to 2012. He was Vice President and Chief Financial
    Officer from 1997 to 2000, Vice President of Finance from 1992 to 1997, Controller from 1980 to 1992, and Manager of Internal
    Audit from 1978 to 1980. He has been a Director of Pembina since 2000, a Director of Essential Energy Services Ltd. since
    2012, and a Director of Coril Holdings Ltd. since 2003. He is a member of the Institute of Corporate Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



External Audit Service Fees



Prior to the commencement of any work, fees for all audit and non-audit
services provided by the Company’s auditors must be approved by the Audit Committee.



During the years ended December 31, 2016 and
2015, Deloitte LLP, the auditors of the Company, received the following fees from the Company:



|Item                      | 2016       | 2015      
|------------------------- | ---------- | ----------
|Audit
    fees(1)         | $1,545,495 | $1,560,759
|Audit-related
    fees(2) | $18,325    | $80,698   
|Tax
    fees(3)           | $57,614    | $55,020   



Notes:

| | (1) | Audit fees consisted of professional
                                         services rendered by Deloitte LLPfor the
                                         audit of the Company's financial statements for the years ended December 31, 2016 and
                                         2015.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Audit-related fees billed
                                         by Deloitte LLP for assurance and related services that are reasonably related to the
                                         performance of the audit or review of Vermilion’s financial statements, but which
                                         are not included in the audit fees.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Tax fees consist of fees for
                                         tax compliance services in various jurisdictions.
| | --- | -----------------------------------------------------------------------------------------------------------------------



53


Vermilion Energy Inc.AIF for the year ended December 31, 2016




CONFLICTS OF INTEREST



The directors and officers of Vermilion are
engaged in and will continue to engage in other activities in the oil and natural gas industry and, as a result of these and other
activities, the directors and officers of Vermilion may become subject to conflicts of interest. The ABCA provides that in the
event that a director has an interest in a contract or proposed contract or agreement, the director shall disclose his interest
in such contract or agreement and shall refrain from voting on any matter in respect of such contract or agreement unless otherwise
provided under the ABCA. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the
provisions of the ABCA.



As at the date hereof, Vermilion is not aware
of any existing or potential material conflicts of interest between Vermilion and a director or officer of Vermilion.



INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
TRANSACTIONS



No director or officer of the Company, nor
any other insider of the Company, nor their associates or affiliates has or has had, at any time within the three most recently
completed financial years ending December 31, 2016, any material interest, direct or indirect, in any transaction or proposed
transaction that has materially affected or would materially affect the Company.



LEGAL PROCEEDINGS



The Company is not party to any significant
legal proceedings as of February 24, 2017.



MATERIAL CONTRACTS



The Company has not entered into any material
contracts outside its normal course of business.



INTERESTS OF EXPERTS



As at the date hereof, principals of GLJ, the
independent engineers for the Company, personally disclosed in certificates of qualification that they neither had nor expect
to receive any common shares. The principals of GLJ and their employees (as a group) beneficially own less than one percent of
any of the Company’s securities.



Deloitte LLP is the auditor of the Company
and is independent within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Alberta.



TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Company’s
common shares is Computershare Trust Company of Canada at its principal offices in Calgary, Alberta and Toronto, Ontario.



54


Vermilion Energy Inc.AIF for the year ended December 31, 2016


RISK FACTORS



The following is a summary of certain risk
factors relating to the business of the Company. The following information is a summary only of certain risk factors and is qualified
in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this annual
information form. Additional risks and uncertainties not currently known to Vermilion that it currently views as immaterial may
also materially and adversely affect its business, financial condition and/or results of operations. Shareholders and potential
Shareholders should carefully consider the information contained herein and, in particular, the following risk factors.



Reserve Estimates



There are numerous uncertainties inherent in
estimating quantities of proved and probable reserves and future net revenues to be derived therefrom, including many factors
beyond the Company's control. The reserve and future net revenue information set forth in this annual information form represents
estimates only. The reserves and estimated future net cash flow from the Company's properties have been independently evaluated
by GLJ with an effective date of December 31, 2016. These evaluations include a number of assumptions relating to factors such
as initial production rates, production decline rates, ultimate recovery of reserves, timing and amount of capital expenditures,
marketability of production, future prices of crude oil and natural gas, operating costs, well abandonment and salvage values,
royalties and other government levies that may be imposed over the producing life of the reserves. These assumptions were based
on prices in use at the date the GLJ Report was prepared, and many of these assumptions are subject to change and are beyond the
Company's control. Actual production and cash flow derived therefrom will vary from these evaluations, and such variations could
be material.



Estimates with respect to reserves that may
be developed and produced in the future are often based upon volumetric calculations, probabilistic methods and upon analogy to
similar types of reserves, rather than upon actual production history. Estimates based on these methods generally are less reliable
than those based on actual production history. Subsequent evaluation of the same reserves based upon production history will result
in variations, which may be material, in the estimated reserves.



Reserve estimates may require revision based
on actual production experience. Such figures have been determined based upon assumed commodity prices and operating costs.



The present value of estimated future net revenue
referred to in this annual information form should not be construed as the fair market value of estimated crude oil and natural
gas reserves attributable to the Company's properties. The estimated discounted future revenue from reserves are based upon price
and cost estimates which may vary from actual prices and costs and such variance could be material. Actual future net revenue
will also be affected by factors such as the amount and timing of actual production, supply and demand for crude oil and natural
gas, curtailments or increases in consumption by purchasers and changes in governmental regulations and taxation.



Uncertainty of Contingent Resource Estimates



Information regarding quantities of contingent
resources included in the Appendix to this Annual Information Form are estimates only. References to “contingent resources”
do not constitute, and should be distinguished from, references to “reserves”. The same uncertainties inherent in
estimating quantities of reserves apply to estimating quantities of contingent resources. In addition, there are contingencies
that prevent resources from being classified as reserves. There is no certainty that it will be commercially viable to produce
any portion of the contingent resources due to one or more contingencies. Contingencies may include factors such as economic,
legal, environmental, political and regulatory matters or a lack of markets. Actual results may vary significantly from these
estimates and such variances could be material.



Uncertainty of Prospective Resource Estimates



Information regarding quantities of prospective
resources included in the Appendix to this Annual Information Form are estimates only. References to “prospective resources”
do not constitute, and should be distinguished from, references to “reserves” and “contingent resources”.
The same uncertainties inherent in estimating quantities of reserves apply to estimating quantities of prospective resources.
In addition, there are contingencies that prevent resources from being classified as reserves. There is no certainty that it will
be commercially viable to produce any portion of the prospective resources. Actual results may vary significantly from these estimates
and such variances could be material.



Volatility of Oil and Natural Gas Prices



The Company's operational results and financial
condition are dependent on the prices received for oil and natural gas production. Oil and natural gas prices have fluctuated
materially during recent years and are determined by supply and demand factors, including weather and general economic conditions
as well as conditions in other oil and natural gas regions. Any prolonged decline in oil and natural gas prices could have an
adverse effect on Vermilion's cash flow which could have the effect of decreasing dividends.



55


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Changes in Legislation



There can be no assurance that income tax laws
and government incentive programs relating to the oil and gas industry in Canada and the foreign jurisdictions in which the Company
operates, will not be changed in a manner which adversely affects the Company.



The Governments of Alberta and Saskatchewan
receive royalties on production of natural resources from lands in which they own the mineral rights. A change in the royalty
regime resulting in an increase in royalties would reduce Vermilion's net earnings and could make future capital expenditures
or Vermilion's operations uneconomic and could, in the event of a material increase in royalties, make it more difficult
to service and repay outstanding debt or impair Vermilion’s ability to declare dividends. Any material increase in royalties
would also significantly reduce the value of the Company's associated assets.



The Government of Alberta released its Royalty Review Advisory Panel Report on January 29, 2016 ("RRAP"). The RRAP recommendations
were accepted, which outlined the implementation of a Modernized Royalty Framework ("MRF") that took effect on January 1,
2017. The MRF includes royalty incentives for the efficient development of conventional crude oil, natural gas, and NGL resources,
and no changes to the royalty structure of wells drilled prior to 2017 for a 10-year period from the royalty program's implementation
date as they will continue to be governed by the previous Alberta Royalty Framework ("ARF"),. It also includes the replacement
of royalty credits/holidays on conventional wells by a revenue minus cost framework with a post-payout royalty rate based
on commodity prices, the reduction of royalty rates for mature wells, and a neutral internal rate of return for any given
play compared to the ARF. The MRF is not expected to materially impact Vermilion's financial condition.



Government Regulations



Vermilion's operations are governed by many
levels of government, including municipal, state, provincial and federal governments in Canada, France, Germany, the Netherlands,
Australia, Ireland, Hungary, Croatia, Slovakia and the United States. Vermilion is subject to laws and regulations regarding environment,
health and safety issues, lease interests, taxes and royalties, among others. Failure to comply with the applicable laws can result
in significant increases in costs, penalties and even losses of operating licences. The regulatory process involved in each of
the countries in which Vermilion operates is not uniform and regulatory regimes vary as to complexity, timeliness of access to,
and response from, regulatory bodies and other matters specific to each jurisdiction. If regulatory approvals or permits are delayed
or not obtained, there can also be delays or abandonment of projects, decreases in production and increases in costs, and Vermilion
may not be able to fully execute its strategy. Governments may also amend or create new legislation and regulatory bodies may
also amend regulations or impose additional requirements which could result in increased capital, operating and compliance costs.



Competition



Vermilion actively competes for reserve acquisitions,
exploration leases, licences and concessions and skilled industry personnel with a substantial number of other oil and gas companies,
some of which have significantly greater financial resources than Vermilion. Vermilion's competitors include major integrated
oil and natural gas companies and numerous other independent oil and natural gas companies and individual producers and operators.



Vermilion's ability to successfully bid on
and acquire additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter
into commercial arrangements with customers will be dependent upon developing and maintaining close working relationships with
its future industry partners and joint operators and its ability to select and evaluate suitable properties and to consummate
transactions in a highly competitive environment.



Operational Matters



The operation of oil and gas wells and facilities
involves a number of operating and natural hazards which may result in blowouts, environmental damage and other unexpected or
dangerous conditions resulting in damage to Vermilion and possible liability to regulators and third parties. Vermilion maintains
liability insurance, where available, in amounts consistent with industry standards. Business interruption insurance may also
be purchased for selected operations, to the extent that such insurance is commercially viable. Vermilion may become liable for
damages arising from such events against which it cannot insure or against which it may elect not to insure because of high premium
costs or other reasons. Costs incurred to repair such damage or pay such liabilities may impair Vermilion's ability to satisfy
its debt obligations or declare dividends.



Continuing production from a property, and
to some extent the marketing of production, are largely dependent upon the ability of the operator of the property. To the extent
the operator fails to perform these functions properly, revenue may be reduced. Payments from production generally flow through
the operator and there is a risk of delay and additional expense in receiving such revenues if the operator becomes insolvent.
Although satisfactory title reviews are generally conducted in accordance with industry standards, such reviews do not guarantee
or certify that a defect in the chain of title may not arise to defeat the claim of Vermilion or its subsidiaries to certain properties.
Such circumstances could impair Vermilion's ability to satisfy its debt obligations or declare dividends.



56


Vermilion Energy Inc.AIF for the year ended December 31, 2016


In addition to the usual delays in payment
by purchasers of oil and natural gas to the operators of the properties, and by the operator to Vermilion, payments between any
of such parties may also be delayed by restrictions imposed by lenders, delays in the sale or delivery of products, delays in
the connection of wells to a gathering system, blowouts or other accidents, recovery by the operator of expenses incurred in the
operation of the properties or the establishment by the operator of reserves for such expenses.



Risks and uncertainties associated with weather
conditions can shorten the winter drilling season in Canada and can impact the spring and summer drilling programs, potentially
resulting in increased costs or reduced production. Western Australia’s northwest shelf is subject to seasonal disruptions
caused by cyclones. During cyclone season (December to March) the Company may have to reduce production rates as a result of the
inability to offload to tankers due to bad weather. Cyclones may also cause production shut-ins due to the evacuation of staff
or damage to equipment on the platform.



Environmental Concerns



The oil and natural gas industry is subject
to environmental regulation pursuant to local, provincial, state and federal legislation. A breach of such legislation may result
in the imposition of fines, the issuance of clean up orders in respect of Vermilion or its assets, or the loss or suspension of
regulatory approvals. Such legislation may be changed to impose higher standards and potentially more costly obligations on Vermilion.
There can be no assurance that the Company will be able to satisfy its actual future environmental and reclamation obligations.



Vermilion expects to incur abandonment and
reclamation costs as existing oil and gas properties are abandoned and reclaimed. In 2016, expenditures beyond normal compliance
with environmental regulations were considered to be in the ordinary course of business. Vermilion does not anticipate material
expenditures beyond amounts paid in respect of normal compliance with environmental regulations in 2017.



Vermilion's exploration and production facilities
and other operations and activities in North America, Europe and Australia will emit a small amount of greenhouse gasses which
may subject Vermilion to legislation regulating emissions of greenhouse gases and which may include a requirement to reduce emissions
or emissions intensity from Vermilion's operations and facilities.  As such, Vermilion continues to evaluate and monitor
regulatory initiatives and overall trends so that it is aware of potential developments that could affect its business and operations. 
It is possible that future international, national, provincial or state emissions reduction requirements in jurisdictions that
Vermilion operates in may require further reductions of emissions or emissions intensity. The direct or indirect costs of complying
with emissions regulations may adversely affect the business of Vermilion in North America, Europe and Australia.



The Government of Alberta released its Climate
Leadership Plan which impacts all consumers and businesses that contribute to carbon emissions in Alberta. The plan includes imposing
carbon pricing that is applied on carbon emissions from heating and transportation fuels across all sectors, which started at
$20 per tonne on January 1, 2017 and moving to $30 per tonne on January 1, 2018, the phase-out of coal-fired power generation
by 2030, a cap on oil sands emissions production of 100 megatonnes, and a 45 per cent reduction in methane emissions by the oil
and gas sector by 2025. Vermilion expects the Climate Leadership Plan to increase the cost of operating its properties located
in Alberta and does not currently anticipate material impacts on its results of operations.



In October 2016, the Canadian federal government
announced a new Pan-Canadian Pricing on Carbon Pollution strategy (the "Strategy") in response to the Paris Agreement
that was ratified by Canada and other nations in October 2016. Under the Strategy, the federal government is proposing a benchmark
carbon pricing program that includes, at a minimum, a price on carbon emissions of $10 per tonne in 2018, rising by $10 per tonne
each year to $50 per tonne in 2022. The Carbon Strategy also proposes a federal backstop in the event that provincial jurisdictions
fail to meet the benchmark. As mentioned above, Alberta has already established a carbon pricing system that was referenced in
the federal announcement and therefore, currently, the Strategy is not anticipated to have a material impact on Vermilion’s
results of operations.



Vermilion was awarded a position on CDP's 2016
Climate "A" List.  CDP (formerly Carbon Disclosure Project) is a London-based not-for-profit organization that
administers a global environmental disclosure system that assists in the measurement and management of corporate environmental
impacts.  Only 193 companies globally achieved Climate "A" List recognition in 2016 and Vermilion was one of only
five oil and gas companies in the world and the only North American energy company on the 2016 list.  Vermilion has voluntarily
reported emissions data to CDP for each year since 2012, recognizing the importance of measuring and understanding the Company’s
environmental impact.



57


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Kyoto Protocol



Australia, Canada, France, Ireland, Germany
and the Netherlands are signatories to the United Nations Framework Convention on Climate Change and have all ratified the Kyoto
Protocol established thereunder. Australia, France, Ireland, Germany and the Netherlands, as Annex B parties to the Kyoto Protocol,
and Ireland, France, Germany and Netherlands as members of the European Union, are required to reduce their nation-wide emissions
of carbon dioxide, methane, nitrous oxide and other greenhouse gases. Canada formally withdrew from the Kyoto Protocol in 2012.



Discretionary Nature of Dividends



The declaration and payment (including the
amount thereof) of future cash dividends, if any, is subject to the discretion of the board of directors of the Company and may
vary depending on a variety of factors and conditions existing from time to time, including fluctuations in commodity prices,
production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens, foreign exchange
rates and the satisfaction of the liquidity and solvency tests under the ABCA for the declaration and payment of dividends. Depending
on these and other factors considered relevant to the declaration and payment of dividends by the board of directors and management
of the Company (some or all of which may be beyond the control of the board of directors and management of the Company), the Company
may change its dividend policy from time to time. Any reduction of dividends may adversely affect the market price or value of
common shares.



Debt Service



Vermilion may, from time to time, finance a
significant portion of its operations through debt. Amounts paid in respect of interest and principal on debt incurred by Vermilion
may impair Vermilion's ability to satisfy its other obligations. Variations in interest rates and scheduled principal repayments
could result in significant changes in the amount required to be applied to debt service before payment by Vermilion of its debt
obligations. Ultimately, this may result in lower levels of cash flow for the Company.



Lenders may be provided with security over
substantially all of the assets of Vermilion and its Subsidiaries. If Vermilion becomes unable to pay its debt service charges
or otherwise commits an event of default such as bankruptcy, a lender may be able to foreclose on or sell the assets of Vermilion
and/or its Subsidiaries.



Changes in Income Tax Laws



Income tax laws and administrative policies
may be changed in a manner which adversely affects the Company and/or Shareholders.



Depletion of Reserves



The Company has certain unique attributes which
differentiate it from other oil and gas industry participants. Dividends paid from cash flow generated in respect of properties,
absent commodity price increases or cost effective acquisition and development activities, may decline over time in a manner consistent
with declining production from typical crude oil, natural gas and natural gas liquids reserves. Accordingly, absent capital expenditures
or acquisitions of additional crude oil and natural gas properties, Vermilion's current production levels and reserves will decline.



Vermilion's future crude oil and natural gas
reserves and production, and therefore its cash flows, will be highly dependent on Vermilion's success in exploiting its reserve
base and acquiring additional reserves. Without reserve additions through acquisition or development activities, Vermilion's reserves
and production will decline over time as reserves are exploited.



Net Asset Value



The net asset value of the assets of the Company
from time to time will vary dependent upon a number of factors beyond the control of management, including crude oil and natural
gas prices. The trading prices of the common shares from time to time is also determined by a number of factors which are beyond
the control of management and such trading prices may be greater than the net asset value of the Company's assets.



Volatility of Market Price of Common Shares



The market price of the common shares may be
volatile. The volatility may affect the ability of Shareholders to sell the common shares at an advantageous price. Market price
fluctuations in the common shares may be due to the Company’s operating results failing to meet the expectations of securities
analysts or investors in any quarter, downward revision in securities analysts’ estimates, governmental regulatory action,
adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements
by the Corporation or its competitors, along with a variety of additional factors, including, without limitation, those set forth
under “Forward-Looking Statements” in this annual information form. In addition, the market price for securities in
the stock markets, including the TSX and NYSE, has experienced significant price and trading fluctuations in recent years. These
fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate
to changes in operating performance. These broad market fluctuations may adversely affect the market price of the common shares.



58


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Variations in Interest Rates and Foreign Exchange Rates



An increase in interest rates could result
in a significant increase in the amount the Company pays to service debt, potentially impacting dividends to Shareholders.



In addition, an increase in the exchange rate
for the Canadian dollar versus the U.S. dollar would result in the receipt by the Company of fewer Canadian dollars for its production
which may affect future dividends. The Company monitors and, when appropriate, uses derivative financial instruments to manage
its exposure to currency exchange rate risks. The increase in the exchange rate for the Canadian dollar and future Canadian/United
States exchange rates may impact future dividends and the future value of the Company's reserves as determined by independent
evaluators.



Increase in Operating Costs or Decline in
Production Level



An increase in operating costs or a decline
in Vermilion’s production level could have an adverse effect on Vermilion’s cash flow and, therefore, could reduce
dividends to Shareholders and affect the market price of the common shares. The level of production may decline at rates greater
than anticipated due to unforeseen circumstances, many of which are beyond Vermilion's control. A significant decline in production
could result in materially lower revenues and cash flow and, therefore, could reduce dividends to Shareholders and affect the
market price of the common shares.



Acquisition Assumptions



When making acquisitions, Vermilion estimates
future performance of the assets to be acquired that may prove to be inaccurate.



Acquired assets are subject to inherent risks
associated with predicting the future performance of those assets. Vermilion makes certain estimates and assumptions respecting
the economic potential of the assets it acquires which may not be realized over time. As such, assets acquired may not possess
the value Vermilion attributed to them, which could adversely impact cash flow.



Failure to Realize Anticipated Benefits
of Prior Acquisitions



Vermilion may, from time to time, complete
one or more acquisitions for various strategic reasons including to strengthen its position in the oil and natural gas industry
and to create the opportunity to realize certain benefits, including, among other things, potential cost savings. In order to
achieve the benefits of any future acquisitions, Vermilion will be dependent upon its ability to successfully consolidate functions
and integrate operations, procedures and personnel in a timely and efficient manner and to realize the anticipated growth opportunities
and synergies from combining the acquired assets and operations with those of the Company. The integration of acquired assets
and operations requires the dedication of management effort, time and resources, which may divert management's focus and resources
from other strategic opportunities and from operational matters during the process. The integration process may result in the
disruption of ongoing business and customer relationships that may adversely affect Vermilion's ability to achieve the anticipated
benefits of such prior acquisitions.



Additional Financing



Vermilion’s credit facility and any replacement
credit facility may not provide sufficient liquidity. The amounts available under Vermilion's credit facility may not be sufficient
for future operations, or Vermilion may not be able to obtain additional financing on attractive economic terms, if at all. Any
failure to obtain financing may have a material adverse effect on Vermilion's business, and dividends to Shareholders may be reduced,
suspended or eliminated.



To the extent that external sources of capital,
including the issuance of additional common shares, become limited or unavailable, Vermilion's ability to make the necessary capital
investments to maintain or expand its crude oil and natural gas reserves will be impaired. To the extent the Company is required
to use cash flow to finance capital expenditures or property acquisitions, the level of cash available that may be declared payable
as dividends will be reduced.



59


Vermilion Energy Inc.AIF for the year ended December 31, 2016


Potential Conflicts of Interest



Circumstances may arise where members of the
board of directors or officers of Vermilion are directors or officers of companies which are in competition to the interests of
Vermilion. No assurances can be given that opportunities identified by such persons will be provided to Vermilion.



Accounting Adjustments



The presentation of financial information in
accordance with IFRS requires that management apply certain accounting policies and make certain estimates and assumptions which
affect reported amounts in Vermilion’s consolidated financial statements. The accounting policies may result in non-cash
charges to net income and write-downs of net assets in the consolidated financial statements. Such non-cash charges and write-downs
may be viewed unfavourably by the market and may result in an inability to borrow funds and/or may result in a decline in the
common share price.



Lower crude oil and gas prices increase the
risk of write-downs of Vermilion’s oil and gas property investments. Under IFRS, assets are aggregated into groups known
as CGUs for impairment testing.  CGUs are reviewed for indicators that the carrying value of the CGU may exceed its recoverable
amount.  If an indication of impairment exists, the CGU’s recoverable amount is then estimated.  A CGU’s
recoverable amount is defined as the higher of the fair value less costs to sell and its value in use.  If the carrying amount
exceeds its recoverable amount an impairment loss is recorded to net earnings in the period to reduce the carrying value of the
CGU to its recoverable amount. While these impairment losses would not affect cash flow, the charge to net earnings could be viewed
unfavourably in the market.



Market Accessibility



A decline in Vermilion’s ability to market
crude oil and natural gas production could have a material adverse effect on its production levels or on the price that Vermilion
receives for production which, in turn, could reduce dividends to its Shareholders and the trading price of the common shares.



Vermilion’s business depends in part
upon the availability, proximity and capacity of natural gas gathering systems, pipelines and processing facilities. Canadian
federal and provincial, as well as United States federal and state, regulation of crude oil and natural gas production, processing
and transportation, tax and energy policies, general economic conditions, and changes in supply and demand could adversely affect
Vermilion’s ability to produce and market crude oil and natural gas. If market factors change and inhibit the marketing
of Vermilion production, overall production or realized prices may decline, which could reduce dividends to Shareholders.



Cyber Security



Vermilion manages cyber security risk by ensuring
appropriate technologies, processes and practices are effectively designed and implemented to help prevent, detect and respond
to threats as they emerge and evolve. The primary risks to Vermilion include, loss of data, destruction or corruption of data,
compromising of confidential customer or employee information, leaked information, disruption of business, theft or extortion
of funds, regulatory infractions, loss of competitive advantage and reputational damage. Vermilion relies upon a complete suite
of advanced controls as protection from such attacks including, but not limited to the following:



| | a) | Enterprise class firewall infrastructure,
                                         secure network architecture and anti-malware defense systems to protect against network
                                         intrusion, malware infection and data loss.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | Regularly conducted comprehensive third
                                         party reviews and vulnerability assessments to ensure that information technology systems
                                         are up-to-date and properly configured, to reduce security risks arising from outdated
                                         or misconfigured systems and software.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | Disaster recovery planning, ongoing
                                         monitoring of network traffic patterns to identify potential malicious activities or
                                         attacks
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Incident response processes are in place to
isolate and control potential attacks. Data backup and recovery processes are in place to minimize risk of data loss and resulting
disruption of business. Through ongoing vigilance and regular employee awareness, Vermilion has not experienced a cyber security
event of a material nature. As it is difficult to quantify the significance of such events, cyber attacks such as, security breaches
of company, customer, employee, and vendor information, as well as hardware or software corruption, failure or error, telecommunications
system failure, service provider error, intentional or unintentional personnel actions, malicious software, attempts to gain unauthorized
access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential
or otherwise protected information and the corruption of data, may in certain circumstances be material and could have an adverse
effect on Vermilion’s business, financial condition and results of operations. As result of the unpredictability of the
timing, nature and scope of disruptions from such attacks, Vermilion could potentially be subject to production downtimes, operational
delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches,
other manipulation or improper use of its systems and networks or financial losses, any of which could have a material adverse
effect on Vermilion’s competitive position, financial condition or results of operations.



60


Vermilion Energy Inc.AIF for the year ended December 31, 2016




ADDITIONAL INFORMATION



Additional information relating to the Company
may be found on SEDAR at www.sedar.com under Vermilion’s SEDAR profile. Additional information related to the remuneration
and indebtedness of the directors and officers of the Company, and the principal holders of common shares and Rights to purchase
common shares and securities authorized for issuance under the Company's equity compensation plans, where applicable, are contained
in the information circular of the Company in respect of its most recent annual meeting of Shareholders involving the election
of directors. Additional financial information is provided in the Company's audited financial statements and management's discussion
and analysis for the year ended December 31, 2016.



61


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX A

CONTINGENT RESOURCES



Summary information regarding contingent resources and net present
value of future net revenues from contingent resources are set forth below and are derived, in each case, from the GLJ Resources
Assessment. The GLJ Resources Assessment was prepared in accordance with COGEH and NI-51-101 by GLJ, an independent qualified
reserve evaluator. All contingent resources evaluated in the GLJ Resources Assessment were deemed economic at the effective date
of December 31, 2016. Contingent resources are in addition to reserves estimated in the GLJ Report.



A range of contingent resources estimates (low,
best and high) were prepared by GLJ. See notes 6 to 8 of the tables below for a description of low estimate, best estimate and
high estimate.



The GLJ Resources Assessment estimated gross
risked contingent resources with a project maturity subclass of “Development Pending” of  120.4 million boe (low
estimate) to 309.4 million boe (high estimate), with a best estimate of 198.5 million boe. Contingent resources are in addition
to reserves estimated in the GLJ Report.



The GLJ Resources Assessment estimated gross risked contingent resources
with a project maturity subclass of “Development Unclarified” of 10.7 million boe (low estimate) to 28.7 million boe
(high estimate), with a best estimate of 19.5 million boe.



An estimate of risked net present value
of future net revenue of contingent resources is preliminary in nature and is provided to assist the reader in reaching an opinion
on the merit and likelihood of the company proceeding with the required investment. It includes contingent resources that are
considered too uncertain with respect to the chance of development to be classified as reserves. There is uncertainty that the
risked net present value of future net revenue will be realized.



Summary of Risked Oil and Gas Contingent
Resources as at December 31, 2016(1) (2)- Forecast Prices and Costs(3) (4)





|                                    | Light
    Crude Oil & |         | Conventional    |         | Coal
    Bed |  | Natural
    Gas |        | BOE |        |        | Unrisked
|----------------------------------- | --------------------- | ------- | --------------- | ------- | ------------ |  | --------------- | ------ | --- | ------ | ------ | --------
|Resources                           | Medium
    Crude Oil  |         | Natural
    Gas |         | Methane      |  | Liquids         |        |     |        |        | BOE     
|Project                             |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Maturity                            | Gross                 | Net     |                 | Gross   | Net          |  | Gross           | Net    |     | Gross  | Net    |         
|Sub-Class                           | (Mbbl)                | (Mbbl)  |                 | (MMcf)  | (MMcf)       |  | (MMcf)          | (MMcf) |     | (Mbbl) | (Mbbl) |         
|Contingent
    (1C) - Low Estimate  |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Development
    Pending(10)         |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                       | -                     | -       |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                          | 13,145                | 9,681   |                 | 250,957 | 226,293      |  | 1,455           | 1,382  |     | 19,917 | 15,769 |         
|France(13)                          | 14,152                | 13,241  |                 | 969     | 969          |  | -               | -      |     | -      | -      |         
|Germany(14)                         | -                     | -       |                 | 17,317  | 15,138       |  | -               | -      |     | -      | -      |         
|Ireland                             | -                     | -       |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                     | -                     | -       |                 | 10,336  | 10,336       |  | -               | -      |     | 2      | 2      |         
|USA(16)                             | 20,581                | 17,072  |                 | 18,952  | 15,720       |  | -               | -      |     | 2,627  | 2,179  |         
|Total                               | 47,878                | 39,994  |                 | 298,531 | 268,456      |  | 1,455           | 1,382  |     | 22,546 | 17,950 |         
|Contingent
    (2C) - Best Estimate |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Development
    Pending(10)         |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                       | 2,440                 | 2,440   |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                          | 25,648                | 18,373  |                 | 389,272 | 346,617      |  | 3,534           | 3,357  |     | 29,537 | 22,869 |         
|France(13)                          | 27,543                | 25,702  |                 | 1,246   | 1,246        |  | -               | -      |     | -      | -      |         
|Germany(14)                         | -                     | -       |                 | 29,595  | 25,886       |  | -               | -      |     | -      | -      |         
|Ireland                             | -                     | -       |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                     | -                     | -       |                 | 28,521  | 28,521       |  | -               | -      |     | 6      | 6      |         
|USA(16)                             | 29,466                | 24,441  |                 | 27,811  | 23,069       |  | -               | -      |     | 3,855  | 3,197  |         
|Total                               | 85,097                | 70,956  |                 | 476,445 | 425,339      |  | 3,534           | 3,357  |     | 33,398 | 26,072 |         
|Contingent
    (3C) - High Estimate |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Development
    Pending(10)         |                       |         |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                       | 3,280                 | 3,280   |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                          | 52,590                | 37,459  |                 | 567,390 | 500,749      |  | 5,174           | 4,788  |     | 41,650 | 31,616 |         
|France(13)                          | 43,866                | 40,873  |                 | 1,609   | 1,609        |  | -               | -      |     | -      | -      |         
|Germany(14)                         | -                     | -       |                 | 54,150  | 47,382       |  | -               | -      |     | -      | -      |         
|Ireland                             | -                     | -       |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                     | -                     | -       |                 | 50,159  | 50,159       |  | -               | -      |     | 13     | 13     |         
|USA(16)                             | 42,381                | 35,152  |                 | 40,945  | 33,961       |  | -               | -      |     | 5,675  | 4,707  |         
|Total                               | 142,117               | 116,764 |                 | 714,253 | 633,860      |  | 5,174           | 4,788  |     | 47,338 | 36,336 |         









62


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|                                    | Light
    Crude Oil & |        | Conventional    |         | Coal
    Bed | Natural
    Gas |        | BOE    |        |        | Unrisked
|----------------------------------- | --------------------- | ------ | --------------- | ------- | ------------ | --------------- | ------ | ------ | ------ | ------ | --------
|Resources                           | Medium
    Crude Oil  |        | Natural
    Gas |         | Methane      | Liquids         |        |        |        |        | BOE     
|Project                             |                       |        |                 |         |              |                 |        |        |        |        |         
|Maturity                            | Gross                 | Net    |                 | Gross   | Net          |                 | Gross  | Net    | Gross  | Net    |         
|Sub-Class                           | (Mbbl)                | (Mbbl) |                 | (MMcf)  | (MMcf)       |                 | (MMcf) | (MMcf) | (Mbbl) | (Mbbl) |         
|Contingent
    (1C) - Low Estimate  |                       |        |                 |         |              |                 |        |        |        |        |         
|Development
    Unclarified(17)     |                       |        |                 |         |              |                 |        |        |        |        |         
|Australia                           | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Canada(18)                          | -                     | -      |                 | 44,744  | 39,976       |                 | -      | -      | 897    | 745    |         
|France(19)                          | 1,511                 | 1,434  |                 | -       | -            |                 | -      | -      | -      | -      |         
|Germany                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Ireland                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Netherlands                         | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|USA                                 | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Total                               | 1,511                 | 1,434  |                 | 44,744  | 39,976       |                 | -      | -      | 897    | 745    |         
|Contingent
    (2C) - Best Estimate |                       |        |                 |         |              |                 |        |        |        |        |         
|Development
    Unclarified(17)     |                       |        |                 |         |              |                 |        |        |        |        |         
|Australia                           | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Canada(18)                          | -                     | -      |                 | 75,428  | 66,726       |                 | -      | -      | 1,640  | 1,339  |         
|France(19)                          | 2,539                 | 2,410  |                 | -       | -            |                 | -      | -      | -      | -      |         
|Germany                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Ireland                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Netherlands(20)                     | -                     | -      |                 | 16,351  | 15,777       |                 | -      | -      | 32     | 16     |         
|USA                                 | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Total                               | 2,539                 | 2,410  |                 | 91,779  | 82,503       |                 | -      | -      | 1,672  | 1,355  |         
|Contingent
    (3C) - High Estimate |                       |        |                 |         |              |                 |        |        |        |        |         
|Development
    Unclarified(17)     |                       |        |                 |         |              |                 |        |        |        |        |         
|Australia                           | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Canada(18)                          | -                     | -      |                 | 103,491 | 89,867       |                 | -      | -      | 2,178  | 1,727  |         
|France(19)                          | 3,825                 | 3,632  |                 | -       | -            |                 | -      | -      | -      | -      |         
|Germany                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Ireland                             | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Netherlands(20)                     | -                     | -      |                 | 32,346  | 31,475       |                 | -      | -      | 48     | 24     |         
|USA                                 | -                     | -      |                 | -       | -            |                 | -      | -      | -      | -      |         
|Total                               | 3,825                 | 3,632  |                 | 135,837 | 121,342      |                 | -      | -      | 2,226  | 1,751  |         



63


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Summary of Risked Net Present Value of
Future Net Revenues as at December 31, 2016 - Forecast Prices and Costs (3)





|Resources
Project                      |                                           |                                          |           |           |           |           |           |           |           |        
|-------------------------------------- | ----------------------------------------- | ---------------------------------------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | -------
|Maturity
    Sub-Class                 | Before
    Income Taxes, Discounted at(5) | After
    Income Taxes, Discounted at(5)
|(M$)                                   | 0%                                        | 5%                                       | 10%       | 15%       | 20%       | 0%        | 5%        | 10%       | 15%       | 20%    
|Contingent
    (1C) - Low Estimate(6)  |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Pending(10)            |                                           |                                          |           |           |           |           |           |           |           |        
|Australia(11)                          | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Canada(12)                             | 1,469,731                                 | 806,673                                  | 468,784   | 284,859   | 179,205   | 567,431   | 315,876   | 182,036   | 107,244   | 107,244
|France(13)                             | 819,095                                   | 435,463                                  | 247,355   | 146,903   | 90,157    | 582,296   | 295,394   | 158,897   | 88,278    | 49,769 
|Germany(14)                            | 29,787                                    | 19,161                                   | 11,552    | 6,390     | 2,959     | 20,027    | 11,662    | 5,658     | 1,665     | (894)  
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(15)                        | 51,663                                    | 37,509                                   | 28,134    | 21,720    | 17,177    | 27,656    | 19,744    | 14,440    | 10,833    | 8,313  
|USA(16)                                | 875,320                                   | 424,777                                  | 223,556   | 125,266   | 73,505    | 562,210   | 269,146   | 138,253   | 74,966    | 42,140 
|Total                                  | 3,245,596                                 | 1,723,583                                | 979,381   | 585,138   | 363,003   | 2,261,816 | 1,163,377 | 633,124   | 357,778   | 206,572
|Contingent
    (2C) - Best Estimate(7) |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Pending(10)            |                                           |                                          |           |           |           |           |           |           |           |        
|Australia(11)                          | 102,151                                   | 60,643                                   | 36,438    | 22,134    | 13,559    | 26,695    | 12,642    | 5,228     | 1,407     | (483)  
|Canada(12)                             | 2,749,285                                 | 1,453,434                                | 840,871   | 519,322   | 337,021   | 2,003,094 | 1,033,233 | 579,568   | 345,415   | 215,410
|France(13)                             | 1,730,450                                 | 899,321                                  | 508,686   | 305,273   | 191,641   | 1,230,218 | 615,216   | 334,091   | 191,820   | 114,668
|Germany(14)                            | 103,451                                   | 71,870                                   | 50,479    | 35,968    | 25,990    | 74,526    | 50,615    | 34,375    | 23,449    | 16,048 
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(15)                        | 160,324                                   | 110,209                                  | 79,494    | 59,475    | 45,757    | 86,998    | 58,171    | 40,486    | 29,074    | 21,367 
|USA(16)                                | 1,561,749                                 | 736,050                                  | 390,965   | 226,282   | 139,356   | 1,007,434 | 471,250   | 247,014   | 140,765   | 85,218 
|Total                                  | 6,407,410                                 | 3,331,527                                | 1,906,933 | 1,168,454 | 753,324   | 4,428,965 | 2,241,127 | 1,240,762 | 731,930   | 452,228
|Contingent
    (3C) - High Estimate(8) |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Pending(10)            |                                           |                                          |           |           |           |           |           |           |           |        
|Australia(11)                          | 190,589                                   | 116,134                                  | 72,383    | 46,105    | 29,966    | 63,277    | 36,147    | 20,606    | 11,695    | 6,558  
|Canada(12)                             | 5,020,914                                 | 2,498,830                                | 1,392,053 | 837,248   | 532,137   | 3,660,740 | 1,782,927 | 966,824   | 563,961   | 346,457
|France(13)                             | 2,954,319                                 | 1,525,736                                | 866,518   | 524,651   | 332,885   | 2,100,039 | 1,051,087 | 577,537   | 337,293   | 205,471
|Germany(14)                            | 252,820                                   | 174,810                                  | 124,211   | 90,601    | 67,647    | 184,908   | 126,647   | 88,732    | 63,652    | 46,653 
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(15)                        | 315,718                                   | 211,894                                  | 151,407   | 113,180   | 87,473    | 171,705   | 113,248   | 79,106    | 57,702    | 43,468 
|USA(16)                                | 2,640,857                                 | 1,172,989                                | 614,674   | 358,063   | 224,065   | 1,708,970 | 754,738   | 392,026   | 226,212   | 140,202
|Total                                  | 11,375,217                                | 5,700,393                                | 3,221,246 | 1,969,848 | 1,274,173 | 7,889,639 | 3,864,794 | 2,124,831 | 1,260,515 | 788,809
|Contingent
    (1C) - Low Estimate(6)  |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Unclarified(17)        |                                           |                                          |           |           |           |           |           |           |           |        
|Australia                              | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Canada(18)                             | 81,186                                    | 32,743                                   | 13,139    | 4,876     | 1,294     | 58,404    | 22,305    | 7,967     | 2,138     | (237)  
|France(19)                             | 109,246                                   | 56,246                                   | 30,550    | 17,349    | 10,224    | 77,091    | 38,798    | 20,522    | 11,315    | 6,453  
|Germany                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(20)                        | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|USA                                    | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Total                                  | 190,432                                   | 88,989                                   | 43,689    | 22,225    | 11,518    | 135,495   | 61,103    | 28,489    | 13,453    | 6,216  
|Contingent
    (2C) - Best Estimate(7) |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Unclarified(17)        |                                           |                                          |           |           |           |           |           |           |           |        
|Australia                              | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Canada(18)                             | 149,050                                   | 60,346                                   | 25,047    | 10,046    | 3,342     | 107,851   | 41,837    | 15,842    | 5,073     | 466    
|France(19)                             | 198,194                                   | 95,437                                   | 49,664    | 27,439    | 15,881    | 140,218   | 66,266    | 33,693    | 18,135    | 10,199 
|Germany                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(20)                        | 63,974                                    | 35,129                                   | 18,879    | 9,435     | 3,747     | 34,153    | 16,587    | 6,654     | 985       | (2,320)
|USA                                    | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Total                                  | 411,218                                   | 190,912                                  | 93,590    | 46,920    | 22,970    | 282,222   | 124,690   | 56,189    | 24,193    | 8,345  
|Contingent
    (3C) - High Estimate(8) |                                           |                                          |           |           |           |           |           |           |           |        
|Development
    Unclarified(17)        |                                           |                                          |           |           |           |           |           |           |           |        
|Australia                              | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Canada(18)                             | 250,258                                   | 97,428                                   | 41,153    | 18,033    | 7,732     | 181,844   | 68,851    | 27,516    | 10,840    | 3,628  
|France(19)                             | 320,784                                   | 143,786                                  | 72,178    | 39,161    | 22,464    | 227,214   | 100,294   | 49,348    | 26,186    | 14,667 
|Germany                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Ireland                                | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Netherlands(20)                        | 176,750                                   | 94,921                                   | 54,922    | 33,238    | 20,539    | 96,181    | 48,927    | 25,901    | 13,615    | 6,587  
|USA                                    | -                                         | -                                        | -         | -         | -         | -         | -         | -         | -         | -      
|Total                                  | 747,792                                   | 336,135                                  | 168,253   | 90,432    | 50,735    | 505,239   | 218,072   | 102,765   | 50,641    | 24,882 



64


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Notes:

| | (1) | Contingent resources are
                                         defined in the COGEH as those quantities of petroleum estimated, as of a given date,
                                         to be potentially recoverable from known accumulations using established technology or
                                         technology under development, but which are not currently considered to be commercially
                                         recoverable due to one or more contingencies. There is no certainty that it will be commercially
                                         viable to produce any portion of the contingent resources or that Vermilion will produce
                                         any portion of the volumes currently classified as contingent resources. The estimates
                                         of contingent resources involve implied assessment, based on certain estimates and assumptions,
                                         that the resources described exists in the quantities predicted or estimated, as at a
                                         given date, and that the resources can be profitably produced in the future. The risked
                                         net present value of the future net revenue from the contingent resources does not represent
                                         the fair market value of the contingent resources. Actual contingent resources (and any
                                         volumes that may be reclassified as reserves) and future production therefrom may be
                                         greater than or less than the estimates provided herein.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | GLJ prepared the estimates
                                         of contingent resources shown for each property using deterministic principles and methods.
                                         Probabilistic aggregation of the low and high property estimates shown in the table might
                                         produce different total volumes than the arithmetic sums shown in the table.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The forecast price and
                                         cost assumptions utilized in the year-end 2016 reserves report were also utilized by
                                         GLJ in preparing the GLJ Resource Assessment. See ”GLJ December 31, 2016 Forecast
                                         Prices” in this AIF.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | "Gross” contingent
                                         resources are Vermilion's working interest (operating or non-operating) share before
                                         deduction of royalties and without including any royalty interests of Vermilion. "Net”
                                         contingent resources are Vermilion's working interest (operating or non-operating) share
                                         after deduction of royalty obligations, plus Vermilion's royalty interests in contingent
                                         resources.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | The risked net present
                                         value of future net revenue attributable to the contingent resources does not represent
                                         the fair market value of the contingent resources. Estimated abandonment and reclamation
                                         costs have been included in the evaluation.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | This is considered to be
                                         a conservative estimate of the quantity that will actually be recovered. It is likely
                                         that the actual remaining quantities recovered will exceed the low estimate. If probabilistic
                                         methods are used, there should be at least a 90 percent probability (P90) that the quantities
                                         actually recovered will equal or exceed the low estimate.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | This is considered to be
                                         the best estimate of the quantity that will actually be recovered. It is equally likely
                                         that the actual remaining quantities recovered will be greater or less than the best
                                         estimate. If probabilistic methods are used, there should be at least a 50 percent probability
                                         (P50) that the quantities actually recovered will equal or exceed the best estimate.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | This is considered to be
                                         an optimistic estimate of the quantity that will actually be recovered. It is unlikely
                                         that the actual remaining quantities recovered will exceed the high estimate. If probabilistic
                                         methods are used, there should be at least a 10 percent probability (P10) that the quantities
                                         actually recovered will equal or exceed the high estimate.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | The Chance of Development
                                         (CoDev) is the estimated probability that, once discovered, a known accumulation will
                                         be commercially developed. Five factors have been considered in determining the CoDev
                                         as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CoDev
                                         = Ps (Economic Factor) × Ps (Technology Factor) × Ps (Development Plan Factor)
                                         ×Ps (Development Timeframe Factor) × Ps (Other Contingency Factor) wherein
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Ps
                                         is the probability of success
| | - | -------------------------------------------------------------------------

| | · | Economic
                                         Factor – For reserves to be assessed, a project must be economic. With respect
                                         to contingent resources, this factor captures uncertainty in the assessment of economic
                                         status principally due to uncertainty in cost estimates and marketing options. Economic
                                         viability uncertainty due to technology is more aptly captured with the Technology Factor.
                                         The Economic Factor will be 1 for reserves and will often be 1 for development pending
                                         projects and for projects with a development study or pre-development study with a robust
                                         rate of return. A robust rate of return means that the project retains economic status
                                         with variation in costs and/or marketing plans over the expected range of outcomes for
                                         these variables.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Technology
                                         Factor - For reserves to be assessed, a project must utilize established technology.
                                         With respect to contingent resources, this factor captures the uncertainty in the viability
                                         of the proposed technology for the subject reservoir, namely, the uncertainty associated
                                         with technology under development. By definition, technology under development is a recovery
                                         process or process improvement that has been determined to be technically viable via
                                         field test and is being field tested further to determine its economic viability in the
                                         subject reservoir. The Technology Factor will be 1 for reserves and for established technology.
                                         For technology under development, this factor will consider different risks associated
                                         with technologies being developed at the scale of the well versus the scale of a project
                                         and technologies which are being modified or extended for the subject reservoir versus
                                         new emerging technologies which have not previously been applied in any commercial application.
                                         The risk assessment will also consider the quality and sufficiency of the test data available,
                                         the ability to reliably scale such data and the ability to extrapolate results in time.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Development
                                         Plan Factor – For reserves to be assessed, a project must have a detailed development
                                         plan. With respect to contingent resources, this factor captures the uncertainty in the
                                         project evaluation scenario. The Development Plan Factor will be 1 for reserves and high,
                                         approaching 1, for development pending projects. This factor will consider development
                                         plan detail variations including the degree of delineation, reservoir specific development
                                         and operating strategy detail (technology decision, well layouts (spacing and pad locations),
                                         completion strategy, start-up strategy, water source and disposal, other infrastructure,
                                         facility design, marketing plans etc) and the quality of the cost estimates as provided
                                         by the developer.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Development
                                         Timeframe Factor – In the case of major projects, for reserves to be assessed,
                                         first major capital spending must be initiated within 5 years of the effective date.
                                         The Development Timeframe Factor will be 1 for reserves and will often be 1 for development
                                         pending projects provided the project is planned on-stream based on the same criteria
                                         used in the assessment of reserves. With respect to contingent resources, the factor
                                         will approach 1 for projects planned on-stream with a timeframe slightly longer than
                                         the limiting reserves criteria.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Other
                                         Contingency Factor – For reserves to be assessed, all contingencies must be eliminated.
                                         With respect to contingent resources, this factor captures major contingencies, usually
                                         beyond the control of the operator, other than those captured by economic status, technology
                                         status, project evaluation scenario status and the development timeframe. The Other Contingency
                                         Factor will be 1 for reserves and for development pending projects and less than 1 for
                                         on hold. Provided all contingencies have been identified and their resolution is reasonably
                                         certain, this factor would also be 1 for development unclarified projects.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | These
                                         factors may be inter-related (dependent) and care has been taken to ensure that risks
                                         are appropriately accounted.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Project maturity subclass development pending is defined
                                         as contingent resources where resolution of the final conditions for development is being
                                         actively pursued (high chance of development).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Contingent resources for
                                         Australia have been estimated based on the continued drilling in our active core asset
                                         (see “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is $142 MM and the expected timeline is between 7 and 9 years.  The specific
                                         contingencies for these resources are corporate commitment and development timing.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (12) | Contingent resources for
                                         Canada have been estimated based on the continued drilling in our active core assets
                                         (see “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is  $1,170 MM and the expected timeline is between 1 and 12 years. 
                                         The specific contingencies for these resources are corporate commitment and development
                                         timing.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (13) | Contingent resources for
                                         France have been estimated based on the continued drilling in our active core assets
                                         (see “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is $550 MM and the expected timeline is between 3and 10 years.  The specific
                                         contingencies for these resources are corporate commitment and development timing.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (14) | Contingent resources for
                                         Germany have been estimated based on the continued drilling in our active core assets
                                         (see “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is $55 MM and the expected timeline is between 3 and 5 years.  The specific
                                         contingencies for these resources are corporate commitment and development timing.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



65


Vermilion Energy Inc.AIF for the year ended December 31, 2016




| | (15) | Contingent resources for
                                         Netherlands have been estimated based on the continued drilling in our active core assets
                                         (see “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is $34 MM and the expected timeline is between two and 10 years.  The
                                         specific contingencies for these resources are corporate commitment and development timing.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (16) | Contingent resources for
                                         USA have been estimated based on the continued drilling in our active core asset (see
                                         “Description of Properties” section of this AIF) using established recovery
                                         technologies.  The estimated cost to bring these contingent resources on commercial
                                         production is $431 MM and the expected timeline is between 4 and 12 years.  The
                                         specific contingencies for these resources are corporate commitment and development timing.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (17) | Project maturity subclass
                                         development unclarified is defined as contingent resources when the evaluation is  incomplete
                                         and there is ongoing activity to resolve any risks or uncertainties.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (18) | In Canada, GLJ has estimated
                                         an aggregate of risked unclarified best estimate contingent resources of 14.2 mmboe for
                                         the projects outlined below. Utilizing established recovery technology, the risked estimated
                                         cost to bring these resources on commercial production is an aggregate of $108 MM
                                         with an expected timeline of 4 to 15 years.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ferrier Notikewin | Based on contingencies related to corporate commitment
and development timing that is greater than 10 years, GLJ has estimated risked unclarified best estimate contingent resources
at 5.1 mmboe and the risked estimated cost to bring these resources on commercial production is  $36 MM. The expected timeline
is 11 to 15 years.
| | ----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ferrier Falher | Based on contingencies related to corporate commitment
and development timing that is greater than 10 years, GLJ has estimated risked unclarified best estimate contingent resources
at 3.8 mmboe and the risked estimated cost to bring these resources on commercial production is  $28 MM. The expected timeline
is 11 to 15 years.
| | -------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | West Pembina Glauconite | Based on contingencies related to corporate commitment
and development timing as well as economic risk related to capital and operating cost uncertainty due to limited horizontal development
in proximity to interest lands, GLJ has estimated risked unclarified best estimate contingent resources at 5.3 mmboe and the risked
estimated cost to bring these resources on commercial production is  $44 MM. The expected timeline is 4 to 10 years.
| | ----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (19) | In France, GLJ has estimated
                                         an aggregate of risked unclarified best estimate contingent resources of 2.5 mmboe for
                                         the projects outlined below. Utilizing established recovery technology, the risked estimated
                                         cost to bring these resources on commercial production is an aggregate of $36 MM
                                         with an expected timeline of 8 to 10 years.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Charmottes | Based on contingencies
                                         related to corporate commitment and development timing, along with the project still
                                         being in the pre-development study/sourcing stage related to waterflood development,
                                         GLJ has estimated risked unclarified best estimate contingent resources at 1.3 mmboe
                                         and the risked estimated cost to bring these resources on commercial production is  $29
                                         MM. The expected timeline is 8 to 10 years.
| | ---------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Chaunoy | Based on contingencies related
                                         to corporate commitment and development timing, along with a CO2 pilot project still
                                         being in the conceptual study stage, GLJ has estimated risked unclarified best estimate
                                         contingent resources at 1.2 mmboe and the risked estimated cost to bring these resources
                                         on commercial production is  $7 MM. The expected timeline is 9 to 10 years.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (20) | In the Netherlands, GLJ
                                         has estimated an aggregate of risked unclarified best estimate contingent resources of
                                         2.8 mmboe for the projects outlined below. Utilizing established recovery technology,
                                         the risked estimated to bring these resources on commercial production an aggregate of $45
                                         MM with an expected timeline of 3 to 9 years.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Netherlands East | Based on contingencies related to corporate commitment
and development timing along with proof-of-concept utilizing directional drilling and unknown deliverability from Zechstein carbonates,
GLJ has estimated risked unclarified best estimate contingent resources at 1.6 mmboe and the risked estimated cost to bring these
resources on commercial production is  $24 MM. The expected timeline is 3 to 9 years.
| | ---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Netherlands West | Based on contingencies related to corporate commitment
and development timing along with further study required regarding the deliverability of the Bunter sands, GLJ has estimated risked
unclarified best estimate contingent resources at 1.2 mmboe and the risked estimated cost to bring these resources on commercial
production is  $21 MM. The expected timeline is 5 years.
| | ---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



66


Vermilion Energy Inc.AIF for the year ended December 31, 2016


PROSPECTIVE RESOURCES



Summary information regarding prospective resources
and net present value of future net revenues from prospective resources are set forth below and are derived, in each case, from
the GLJ Resources Assessment. The GLJ Resources Assessment was prepared in accordance with COGEH and NI-51-101 by GLJ, an independent
qualified reserve evaluator. All prospective resources evaluated in the GLJ Resources Assessment were deemed economic at the effective
date of December 31, 2016. Prospective resources are in addition to reserves estimated in the GLJ Report.



A range of prospective resources estimates
(low, best and high) were prepared by GLJ. See notes 6 to 8 of the tables below for a description of low estimate, best estimate
and high estimate.



The GLJ Resources Assessment estimated gross
risked prospective resources of 45.2 million boe (low estimate) to 147.9 million boe (high estimate), with a best estimate of
89.5 million boe.



An estimate of risked net present value
of future net revenue of prospective resources is preliminary in nature and is provided to assist the reader in reaching an opinion
on the merit and likelihood of the company proceeding with the required investment. It includes prospective resources that are
considered too uncertain with respect to the chance of development and chance of discovery to be classified as reserves. There
is uncertainty that the risked net present value of future net revenue will be realized.



Summary of Risked Oil and Gas Prospective
Resources as at December 31, 2016(1) (2)- Forecast Prices and Costs(3) (4)



|                                | Light
    Crude Oil & |        | Conventional    |         | Coal
    Bed |  | Natural
    Gas |        | BOE |        |        | Unrisked
|------------------------------- | --------------------- | ------ | --------------- | ------- | ------------ |  | --------------- | ------ | --- | ------ | ------ | --------
|Resources                       | Medium
    Crude Oil  |        | Natural
    Gas |         | Methane      |  | Liquids         |        |     |        |        | BOE     
|Project                         |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Maturity                        | Gross                 | Net    |                 | Gross   | Net          |  | Gross           | Net    |     | Gross  | Net    |         
|Sub-Class                       | (Mbbl)                | (Mbbl) |                 | (MMcf)  | (MMcf)       |  | (MMcf)          | (MMcf) |     | (Mbbl) | (Mbbl) |         
|Prospective
    - Low Estimate  |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Prospect(10)                    |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                   | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                      | 185                   | 166    |                 | 95,116  | 87,039       |  | -               | -      |     | 5,458  | 4,703  |         
|France(13)                      | 3,379                 | 3,044  |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Germany(14)                     | -                     | -      |                 | 88,561  | 76,691       |  | -               | -      |     | -      | -      |         
|Ireland                         | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                 | -                     | -      |                 | 33,037  | 31,606       |  | -               | -      |     | 16     | 14     |         
|USA                             | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Total                           | 3,564                 | 3,210  |                 | 216,714 | 195,336      |  | -               | -      |     | 5,474  | 4,717  |         
|Prospective
    - Best Estimate |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Prospect(10)                    |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                   | 579                   | 579    |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                      | 2,263                 | 2,029  |                 | 170,797 | 153,565      |  | -               | -      |     | 10,195 | 8,412  |         
|France(13)                      | 9,609                 | 8,532  |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Germany(14)                     | -                     | -      |                 | 169,557 | 147,917      |  | -               | -      |     | -      | -      |         
|Ireland                         | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                 | -                     | -      |                 | 60,647  | 57,618       |  | -               | -      |     | 30     | 27     |         
|USA                             | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Total                           | 12,451                | 11,140 |                 | 401,001 | 359,100      |  | -               | -      |     | 10,225 | 8,439  |         
|Prospective
    - High Estimate |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Prospect(10)                    |                       |        |                 |         |              |  |                 |        |     |        |        |         
|Australia(11)                   | 1,462                 | 1,462  |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Canada(12)                      | 2,394                 | 2,142  |                 | 244,013 | 217,049      |  | -               | -      |     | 14,659 | 11,724 |         
|France(13)                      | 21,406                | 19,496 |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Germany(14)                     | -                     | -      |                 | 289,626 | 254,136      |  | -               | -      |     | -      | -      |         
|Ireland                         | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Netherlands(15)                 | -                     | -      |                 | 114,102 | 106,974      |  | -               | -      |     | 59     | 52     |         
|USA                             | -                     | -      |                 | -       | -            |  | -               | -      |     | -      | -      |         
|Total                           | 25,262                | 23,100 |                 | 647,741 | 578,159      |  | -               | -      |     | 14,718 | 11,776 |         



67


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Summary of Risked Net Present Value of
Future Net Revenues as at December 31, 2016 - Forecast Prices and Costs (3)



|Resources
    Project                   |                                           |                                          |           |         |         |           |           |         |         |        
|--------------------------------------- | ----------------------------------------- | ---------------------------------------- | --------- | ------- | ------- | --------- | --------- | ------- | ------- | -------
|Maturity
    Sub-Class                  | Before
    Income Taxes, Discounted at(5) | After
    Income Taxes, Discounted at(5)
|(M$)                                    | 0%                                        | 5%                                       | 10%       | 15%     | 20%     | 0%        | 5%        | 10%     | 15%     | 20%    
|Prospective
    (Pr1) -Low Estimate(6)  |                                           |                                          |           |         |         |           |           |         |         |        
|Prospect
    (10)                       |                                           |                                          |           |         |         |           |           |         |         |        
|Canada
    (12)                         | 273,867                                   | 127,001                                  | 60,110    | 27,921  | 11,751  | 198,318   | 85,907    | 35,748  | 12,466  | 1,407  
|France
    (13)                         | 151,213                                   | 75,323                                   | 38,554    | 20,217  | 10,789  | 102,347   | 48,093    | 22,638  | 10,518  | 4,652  
|Germany
    (14)                        | 155,230                                   | 65,643                                   | 24,054    | 5,229   | (3,139) | 106,234   | 38,604    | 8,125   | (4,675) | (9,585)
|Netherlands
    (15)                    | 146,420                                   | 81,758                                   | 50,537    | 34,384  | 25,278  | 75,803    | 39,394    | 21,746  | 13,088  | 8,573  
|Total                                   | 726,730                                   | 349,725                                  | 173,255   | 87,751  | 44,679  | 482,702   | 211,998   | 88,257  | 31,397  | 5,047  
|Prospective
    (Pr2) -Best Estimate(7) |                                           |                                          |           |         |         |           |           |         |         |        
|Prospect
    (10)                       |                                           |                                          |           |         |         |           |           |         |         |        
|Australia
    (11)                      | 46,694                                    | 25,575                                   | 14,527    | 8,526   | 5,152   | 18,252    | 9,659     | 5,268   | 2,957   | 1,705  
|Canada
    (12)                         | 727,622                                   | 350,852                                  | 183,676   | 102,149 | 59,257  | 528,484   | 248,071   | 122,227 | 63,175  | 33,061 
|France
    (13)                         | 517,189                                   | 263,016                                  | 143,095   | 82,612  | 50,242  | 362,550   | 176,276   | 91,520  | 50,373  | 29,196 
|Germany
    (14)                        | 572,696                                   | 240,171                                  | 105,603   | 47,332  | 20,454  | 415,985   | 166,082   | 66,349  | 24,697  | 6,525  
|Netherlands
    (15)                    | 364,314                                   | 193,047                                  | 120,340   | 83,689  | 62,715  | 195,684   | 99,659    | 59,140  | 39,348  | 28,449 
|Total                                   | 2,228,515                                 | 1,072,661                                | 567,241   | 324,308 | 197,820 | 1,520,955 | 699,747   | 344,504 | 180,550 | 98,936 
|Prospective
    (Pr3) -High Estimate(8) |                                           |                                          |           |         |         |           |           |         |         |        
|Prospect
    (10)                       |                                           |                                          |           |         |         |           |           |         |         |        
|Australia
    (11)                      | 150,518                                   | 78,083                                   | 43,242    | 25,161  | 15,218  | 62,445    | 31,968    | 17,425  | 9,981   | 5,947  
|Canada
    (12)                         | 1,110,298                                 | 500,889                                  | 256,708   | 143,539 | 85,330  | 808,440   | 354,301   | 174,070 | 92,184  | 51,196 
|France
    (13)                         | 1,550,119                                 | 742,476                                  | 388,981   | 219,441 | 131,689 | 1,098,279 | 514,614   | 263,597 | 145,437 | 85,435 
|Germany
    (14)                        | 1,215,756                                 | 520,750                                  | 240,583   | 116,696 | 57,872  | 897,478   | 370,617   | 162,227 | 72,477  | 31,319 
|Netherlands
    (15)                    | 785,423                                   | 409,343                                  | 255,631   | 178,273 | 133,629 | 425,214   | 216,893   | 132,001 | 90,034  | 66,319 
|Total                                   | 4,812,114                                 | 2,251,541                                | 1,185,145 | 683,110 | 423,738 | 3,291,856 | 1,488,393 | 749,320 | 410,113 | 240,216





Notes:

| | (1) | Prospective resources are
                                         defined in the COGEH as those quantities of petroleum estimated, as of a given date,
                                         to be potentially recoverable from unknown accumulations by application of future development
                                         projects. Prospective resources have both an associated chance of discovery (CoDis) and
                                         a chance of development (CoDev). There is no certainty that any portion of the prospective
                                         resources will be discovered. If discovered, there is no certainty that it will be commercially
                                         viable to produce any portion of the prospective resources or that Vermilion will produce
                                         any portion of the volumes currently classified as prospective resources. The estimates
                                         of prospective resources involve implied assessment, based on certain estimates and assumptions,
                                         that the resources described exists in the quantities predicted or estimated, as at a
                                         given date, and that the resources can be profitably produced in the future. The risked
                                         net present value of the future net revenue from the prospective resources does not represent
                                         the fair market value of the prospective resources. Actual prospective resources (and
                                         any volumes that may be reclassified as reserves) and future production therefrom may
                                         be greater than or less than the estimates provided herein.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | GLJ prepared the estimates
                                         of prospective resources shown for each property using deterministic principles and methods.
                                         Probabilistic aggregation of the low and high property estimates shown in the table might
                                         produce different total volumes than the arithmetic sums shown in the table.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The forecast price and
                                         cost assumptions utilized in the year-end 2016 reserves report were also utilized by
                                         GLJ in preparing the GLJ Resource Assessment. See ”GLJ December 31, 2016 Forecast
                                         Prices” in this AIF.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | "Gross” prospective
                                         resources are Vermilion's working interest (operating or non-operating) share before
                                         deduction of royalties and without including any royalty interests of Vermilion. "Net”
                                         prospective resources are Vermilion's working interest (operating or non-operating) share
                                         after deduction of royalty obligations, plus Vermilion's royalty interests in prospective
                                         resources.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | The risked net present
                                         value of future net revenue attributable to the prospective resources does not represent
                                         the fair market value of the prospective resources. Estimated abandonment and reclamation
                                         costs have been included in the evaluation.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | This is considered to be
                                         a conservative estimate of the quantity that will actually be recovered. It is likely
                                         that the actual remaining quantities recovered will exceed the low estimate. If probabilistic
                                         methods are used, there should be at least a 90 percent probability (P90) that the quantities
                                         actually recovered will equal or exceed the low estimate.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | This is considered to be
                                         the best estimate of the quantity that will actually be recovered. It is equally likely
                                         that the actual remaining quantities recovered will be greater or less than the best
                                         estimate. If probabilistic methods are used, there should be at least a 50 percent probability
                                         (P50) that the quantities actually recovered will equal or exceed the best estimate.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | This is considered to be
                                         an optimistic estimate of the quantity that will actually be recovered. It is unlikely
                                         that the actual remaining quantities recovered will exceed the high estimate. If probabilistic
                                         methods are used, there should be at least a 10 percent probability (P10) that the quantities
                                         actually recovered will equal or exceed the high estimate.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | The chance of commerciality
                                         is defined as the product of the chance of discovery and the chance of development. Chance
                                         of discovery is defined in COGEH as the estimated probability that exploration activities
                                         will confirm the existence of a significant accumulation of potentially recoverable petroleum.
                                         Chance of development is defined as the estimated probability that, once discovered,
                                         a known accumulation will be commercially developed.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Chance of Development (CoDev) is
                                         the estimated probability that, once discovered, a known accumulation will be commercially
                                         developed. Five factors have been considered in determining the CoDev as follows:
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CoDev
                                         = Ps (Economic Factor) × Ps (Technology Factor) × Ps (Development Plan Factor)
                                         ×Ps (Development Timeframe Factor) × Ps (Other Contingency Factor) wherein
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Ps
                                         is the probability of success
| | - | -------------------------------------------------------------------------



68


Vermilion Energy Inc.AIF for the year ended December 31, 2016




| | · | Economic
                                         Factor – For reserves to be assessed, a project must be economic. With respect
                                         to prospective resources, this factor captures uncertainty in the assessment of economic
                                         status principally due to uncertainty in cost estimates and marketing options. Economic
                                         viability uncertainty due to technology is more aptly captured with the Technology Factor.
                                         The Economic Factor will be 1 for reserves and will often be 1 for development pending
                                         and for projects with a development study or pre-development study with a robust rate
                                         of return. A robust rate of return means that the project retains economic status with
                                         variation in costs and/or marketing plans over the expected range of outcomes for these
                                         variables.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Technology
                                         Factor - For reserves to be assessed, a project must utilize established technology.
                                         With respect to prospective resources, this factor captures the uncertainty in the viability
                                         of the proposed technology for the subject reservoir, namely, the uncertainty associated
                                         with technology under development. By definition, technology under development is a recovery
                                         process or process improvement that has been determined to be technically viable via
                                         field test and is being field tested further to determine its economic viability in the
                                         subject reservoir. The Technology Factor will be 1 for reserves and for established technology.
                                         For technology under development, this factor will consider different risks associated
                                         with technologies being developed at the scale of the well versus the scale of a project
                                         and technologies which are being modified or extended for the subject reservoir versus
                                         new emerging technologies which have not previously been applied in any commercial application.
                                         The risk assessment will also consider the quality and sufficiency of the test data available,
                                         the ability to reliably scale such data and the ability to extrapolate results in time.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Development
                                         Plan Factor – For reserves to be assessed, a project must have a detailed development
                                         plan. With respect to prospective resources, this factor captures the uncertainty in
                                         the project evaluation scenario. The Development Plan Factor will be 1 for reserves and
                                         high, approaching 1, for development pending projects. This factor will consider development
                                         plan detail variations including the degree of delineation, reservoir specific development
                                         and operating strategy detail (technology decision, well layouts (spacing and pad locations),
                                         completion strategy, start-up strategy, water source and disposal, other infrastructure,
                                         facility design, marketing plans etc.) and the quality of the cost estimates as provided
                                         by the developer.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Development
                                         Timeframe Factor – In the case of major projects, for reserves to be assessed,
                                         first major capital spending must be initiated within 5 years of the effective date.
                                         The Development Timeframe Factor will be 1 for reserves and will often be 1 for development
                                         pending provided the project is planned on-stream based on the same criteria used in
                                         the assessment of reserves. With respect to prospective resources, the factor will approach
                                         1 for projects planned on-stream with a timeframe slightly longer than the limiting reserves
                                         criteria.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Other
                                         Contingency Factor – For reserves to be assessed, all contingencies must be eliminated.
                                         With respect to prospective resources, this factor captures major contingencies, usually
                                         beyond the control of the operator, other than those captured by economic status, technology
                                         status, project evaluation scenario status and the development timeframe. The Other Contingency
                                         Factor will be 1 for reserves and for development pending and less than 1 for on hold.
                                         Provided all contingencies have been identified and their resolution is reasonably certain,
                                         this factor would also be 1 for development unclarified.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | These
                                         factors may be inter-related (dependent) and care has been taken to ensure that risks
                                         are appropriately accounted.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Chance of Discovery (CoDis)
is defined in COGEH as the estimated probability that exploration activities will confirm the existence of a significant accumulation
of potentially recoverable petroleum. Five factors have been considered in determining the CoDis as follows:



| | · | CoDis
                                         = Ps (Source) × Ps (Timing and Migration) × Ps (Trap) ×Ps (Seal) ×
                                         Ps (Reservoir) wherein
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Ps
                                         is the probability of success
| | - | -------------------------------------------------------------------------

| | · | Source
                                         – For a significant accumulation of potentially recoverable petroleum, a viable
                                         source rock capable of generating hydrocarbons must exist. The probability of a source
                                         rock investigates stratigraphic presence and location, volumetric adequacy and organic
                                         richness of the proposed source rock. In proven hydrocarbon systems, this factor will
                                         be a 1. This factor becomes critical when looking at frontier basins.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Timing
                                         and Migration - For a significant accumulation of potentially recoverable petroleum,
                                         the source rock must reach thermal maturity to generate the hydrocarbons and have a conduit
                                         with which to fill the closures that existed at the time of migration. The probability
                                         of timing and migration investigates the movement of hydrocarbons from the source rock
                                         to the trap. This factor evaluates the pathways and/or carrier beds, including fault
                                         systems, which can transport buoyant hydrocarbons from the source kitchen to the prospect
                                         area at a time that the trap existed. This factor is often 1 in producing trends, but
                                         there is a possibility of migration shadows where the conduits do not fill a viable trap,
                                         which would decrease this factor.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Trap
                                         - For a significant accumulation of potentially recoverable petroleum, a reservoir must
                                         be present in a structural or stratigraphic closure. The trap factor looks at the definition
                                         of the geometry of the accumulation, which is determined using seismic, gravity and/or
                                         magnetic techniques and surrounding well logs to determine the probability of a significant
                                         accumulation. The risking of this includes examining data quality (e.g. 2D vs 3D seismic
                                         coverage) and potential depth conversion possibilities which give  confidence in
                                         the mapped trap. Stratigraphic trap definition is used for volumetric calculations, but
                                         it is given a 1 for this chance factor as the stratigraphic risk will be captured in
                                         seal.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Seal
                                         - For a significant accumulation of potentially recoverable petroleum, a reservoir must
                                         be sealed both on the top and laterally by a lithology that contains the hydrocarbon
                                         accumulation within the reservoir. It is also necessary that these accumulated hydrocarbons
                                         have been preserved from flushing or leakage. Factors that affect top, seat and lateral
                                         seals are fluid viscosity, bed thickness, natural continuity of sealing facies, differential
                                         permeability, fault history and reservoir pressures needed to maintain a hydrocarbon
                                         column. The probability that the accumulation is not able to be contained by the surrounding
                                         rocks is captured in this chance factor.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Reservoir
                                         - For a significant accumulation of potentially recoverable petroleum, a reservoir rock
                                         must be present and have sufficient porosity and permeability and be of a sufficient
                                         thickness to produce  quantities of mobile hydrocarbon. Under this approach, encountering
                                         wet, commercial quality and quantity sandstones would not be a failure in the reservoir
                                         category, but rather in one of the other factors. It is the reservoir along with the
                                         trap which determine the volumetrics of the accumulation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Serial
                                         multiplication of these five decimal fractions representing the five geologic chance
                                         factors can be done as they are considered independent of each other.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | GLJ has sub-classified
                                         the best estimate prospective resources by maturity status, consistent with the requirements
                                         of the COGE Handbook. These prospective resources have been sub-classified as “Prospect”
                                         which the COGE Handbook defines as a potential accumulation within a play that is sufficiently
                                         well defined to present a viable drilling target.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Prospective resources
                                         for Australia have been estimated based on development timing and reservoir risk, GLJ
                                         has estimated the CoDev at 80% and the CoDis at 60%. The corresponding chance of commerciality
                                         is 48%. Risked best estimate prospective resources have been estimated at .06 mmboe.
                                         Utilizing established recovery technology, the risked estimated cost to bring these resources
                                         on commercial production is  $17.2 MM. The expected development timeline is 8 years.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (12) | Prospective resources
                                         for Canada have been estimated based on the individual prospects outlined below. GLJ
                                         has estimated the aggregate CoDev at 86% and the aggregate CoDis at 40%. The corresponding
                                         chance of commerciality is 34%. Risked best estimate prospective resources have been
                                         estimated at an aggregate of 40.9 mmboe. Utilizing established recovery technology, the
                                         risked estimated cost to bring these resources on commercial production is an aggregate
                                         of  $621.9 MM. The expected development timeline is 2 to 20 years.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Wilrich Prospect: | Based on reservoir risk, development timing and limited
Wilrich development on the land base, GLJ has estimated the CoDev at 35% and the CoDis at 85%. The corresponding chance of commerciality
is 30%. Risked best estimate prospective resources have been estimated at 22.2 mmboe and the risked estimated cost to bring these
resources on commercial production is  $218 MM with an expected timeline of 2 to 8 years.
| | ----------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | West Pembina Glauconite Prospect: | Based on chance of discovery risk due to uncertainty
regarding threshold for reservoir quality to support commercial development of resources with horizontal drilling, along with
economic risk related to capital and operating cost uncertainty due to limited horizontal development in proximity to interest
lands and chance of development risk related to corporate commitment and development timing. GLJ has estimated the CoDev at 34%
and the CoDis at 90%. The corresponding chance of commerciality is 31%. Risked best estimate prospective resources have been estimated
at 8.4 mmboe and the risked estimated cost to bring these resources on commercial production is  $242 MM with an expected
timeline of 6 to 14 years.
| | --------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



69


Vermilion Energy Inc.AIF for the year ended December 31, 2016






| | Drayton Valley
Notikewin Prospect: | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 70% and the CoDis at 85%. The corresponding chance of commerciality is 60%. Risked best estimate prospective
resources have been estimated at 4.6 mmboe and the risked estimated cost to bring these resources on commercial production is
 $69.3 MM. The expected development timeline is 10 to 12 years.
| | ---------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Saskatchewan Prospects | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 90% and the CoDis at 80%. The corresponding chance of commerciality is 72%. Risked best estimate prospective
resources have been estimated at 3.0 mmboe and the risked estimated cost to bring these resources on commercial production is
 $63.6 MM with an expected timeline of 7 to 12 years
| | ---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ferrier Falher Prospect | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 60% and the CoDis at 90%. The corresponding chance of commerciality is 54%. Risked best estimate prospective
resources have been estimated at 2.6 mmboe and the risked estimated cost to bring these resources on commercial production is
 $24.9 MM with an expected timeline of 16 to 20 years.
| | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Utikuma Gilwood Prospect | Based on reservoir risk, development timing and limited
Gilwood development in the area, GLJ has estimated the CoDev at 60% and the CoDis at 50%. The corresponding chance of commerciality
is 30%. Risked best estimate prospective resources have been estimated at 0.2 mmboe and the risked estimated cost to bring these
resources on commercial production is  $3.2 MM with an expected timeline of 16 to 20 years.
| | ------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (13) | Prospective resources
                                         for France have been estimated based on the individual prospects outlined below. GLJ
                                         has estimated the aggregate CoDev at 52% and the aggregate CoDis at 71%. The corresponding
                                         chance of commerciality is 37%. Risked best estimate prospective resources have been
                                         estimated at an aggregate of 9.6 Utilizing established recovery technology, the risked
                                         estimated cost to bring these resources on commercial production is an aggregate of  $254.3
                                         MM. The expected development timeline is 3 to 12 years.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Rachee Prospect | Based on risk of closure and data quality along with
development timing, GLJ has estimated the CoDev at 80% and the CoDis at 80%. The corresponding chance of commerciality is 64%.
Risked best estimate prospective resources have been estimated at 3.4 mmboe and the risked estimated cost to bring these resources
on commercial production is  $125.0 MM with an expected timeline of 10 to 14 years.
| | --------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Malnoue Prospect | Based on reservoir, structure and trap risk along with
development timing, GLJ has estimated the CoDev at 70% and the CoDis at 38%. The corresponding chance of commerciality is 27%.
Risked best estimate prospective resources have been estimated at 1.4 mmboe and the risked estimated cost to bring these resources
on commercial production is  $31.6 MM with an expected timeline of 8 to 12 years.
| | ---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | West Lavergne Prospect | Based on structure risk and development timing GLJ has
estimated the CoDev at 80% and the CoDis at 70%. The corresponding chance of commerciality is 56%. Risked best estimate prospective
resources have been estimated at 1.2 mmboe and the risked estimated cost to bring these resources on commercial production is
 $6.1 MM with an expected timeline of 4 years.
| | ---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Champotran Prospect | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 80% and the CoDis at 80%. The corresponding chance of commerciality is 64%. Risked best estimate prospective
resources have been estimated at 0.7 mmboe and the risked estimated cost to bring these resources on commercial production is
 $14.6 MM with an expected timeline of 7 to 8 years.
| | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Cazaux Prospect | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 70% and the CoDis at 30%. The corresponding chance of commerciality is 21%. Risked best estimate prospective
resources have been estimated at 0.6 mmboe and the risked estimated cost to bring these resources on commercial production is
 $10.3 MM with an expected timeline of 5 to 7 years.
| | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Vulaines Prospect | Based on reservoir and structure risk along with development
timing, GLJ has estimated the CoDev at 80% and the CoDis at 40%. The corresponding chance of commerciality is 32%. Risked best
estimate prospective resources have been estimated at 0.6 mmboe and the risked estimated cost to bring these resources on commercial
production is  $12.6 MM with an expected timeline of 5 to 6 years.
| | ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Phobos Prospect | Based on reservoir, and closure risk, economic factors
and development timing, GLJ has estimated the CoDev at 50% and the CoDis at 50%. The corresponding chance of commerciality is
25%. Risked best estimate prospective resources have been estimated at 0.5 mmboe and the risked estimated cost to bring these
resources on commercial production is  $20.6 MM with an expected timeline of 9 to 10 years.
| | --------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Charmottes Prospect | Based on reservoir risk and development timing, GLJ has
estimated the CoDev at 60% and the CoDis at 50%. The corresponding chance of commerciality is 30%. Risked best estimate prospective
resources have been estimated at 0.5 mmboe and the risked estimated cost to bring these resources on commercial production is
 $18.5 MM with an expected timeline of 8 to 10 years.
| | ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Bernet Prospect | Based on risks associated with reservoir, seal and trap
along with economic factors, and development timing, GLJ has estimated the CoDev at 50% and the CoDis at 65%. The corresponding
chance of commerciality is 33%. Risked best estimate prospective resources have been estimated at 0.3 mmboe and the risked estimated
cost to bring these resources on commercial production is  $6.7 MM with an expected timeline of 5 to 6 years.
| | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Vert Le Grand Prospect | Based on reservoir and structure risk along with development
timing, GLJ has estimated the CoDev at 70% and the CoDis at 28%. The corresponding chance of commerciality is 20%. Risked best
estimate prospective resources have been estimated at 0.2 mmboe and the risked estimated cost to bring these resources on commercial
production is  $3.6 MM with an expected timeline of 3 years.
| | ---------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Pays De Born Prospect | Based on reservoir, seal and trap risk, along with economic
factors and development timing, GLJ has estimated the CoDev at 50% and the CoDis at 50%. The corresponding chance of commerciality
is 25%. Risked best estimate prospective resources have been estimated at 0.1 mmboe and the risked estimated cost to bring these
resources on commercial production is  $2.6 MM with an expected timeline of 8 to 9 years.
| | --------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



70


Vermilion Energy Inc.AIF for the year ended December 31, 2016




| | Les Genets Prospect | Based on reservoir, seal and closure risk, along with
economic factors and development timing, GLJ has estimated the CoDev at 60% and the CoDis at 16%. The corresponding chance of
commerciality is 9.6%. Risked best estimate prospective resources have been estimated at 0.1 mmboe and the risked estimated cost
to bring these resources on commercial production is  $0.9 MM with an expected timeline of 9 years.
| | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | North Acacias Prospect | Based on reservoir, seal and trap risk, along with economic
factors and development timing, GLJ has estimated the CoDev at 70% and the CoDis at 39%. The corresponding chance of commerciality
is 27%. Risked best estimate prospective resources have been estimated at 0.08 mmboe and the risked estimated cost to bring these
resources on commercial production is  $1.2 MM with an expected timeline of 6 to 7 years.
| | ---------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (14) | Prospective resources for
                                         Germany have been estimated based on the individual prospects outlined below. GLJ has
                                         estimated the aggregate CoDev at 60% and the aggregate CoDis at 41%. The corresponding
                                         chance of commerciality is 25%. Risked best estimate prospective resources have been
                                         estimated at an aggregate of 28.3 mmboe. Utilizing established recovery technology, the
                                         risked estimated cost to bring these resources on commercial production is an aggregate
                                         of 173.6MM. The expected development timeline is 2 to 15 years.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ihlow Prospect | Based on reservoir, seal and trap risk along with development
timing, GLJ has estimated the CoDev at 71%, and the CoDis at 51%. The corresponding chance of commerciality is 36%. Risked best
estimate prospective resources have been estimated at 6.6 mmboe and the risked estimated cost to bring these resources on commercial
production is  $44.7 MM with an expected timeline of 8 years.
| | -------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Wisselshorst A Prospect | Based on seal and trap risk along with development timing
, GLJ has estimated the CoDev at 90%, and the CoDis at 45%. The corresponding chance of commerciality is 41%. Risked best estimate
prospective resources have been estimated at 4.8 mmboe and the risked estimated cost to bring these resources on commercial production
is  $32.2 MM with an expected timeline of 8 years.
| | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Simonswolde South Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 71%, and the CoDis at 48%. The corresponding chance of commerciality is 34%. Risked best
estimate prospective resources have been estimated at 4.1 mmboe and the risked estimated cost to bring these resources on commercial
production is  $14.6 MM with an expected timeline of 10 years.
| | -------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Klosterseelte Prospect | Based on reservoir, seal and trap risk along with development
timing, GLJ has estimated the CoDev at 49%, and the CoDis at 49%. The corresponding chance of commerciality is 24%. Risked best
estimate prospective resources have been estimated at 2.8 mmboe and the risked estimated cost to bring these resources on commercial
production is  $12.2 MM with an expected timeline of 5 years.
| | ---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ohlendorf Prospect | Based on source and trap risk along with development
timing, GLJ has estimated the CoDev at 58%, and the CoDis at 30%. The corresponding chance of commerciality is 17%. Risked best
estimate prospective resources have been estimated at 2.4 mmboe and the risked estimated cost to bring these resources on commercial
production is  $10.1 MM with an expected timeline of 15 years.
| | ------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Wisselshorst B Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 90%, and the CoDis at 38%. The corresponding chance of commerciality is 34%. Risked best
estimate prospective resources have been estimated at 2.3 mmboe and the risked estimated cost to bring these resources on commercial
production is  $17.9 MM with an expected timeline of 11 years.
| | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Jeddeloh Prospect | Based on reservoir, seal and trap risk along with development
timing, GLJ has estimated the CoDev at 38%, and the CoDis at 31%. The corresponding chance of commerciality is 12%. Risked best
estimate prospective resources have been estimated at 2.3 mmboe and the risked estimated cost to bring these resources on commercial
production is  $18.5 MM with an expected timeline of 8 years.
| | ----------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Simonswolde North Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 62%, and the CoDis at 45%. The corresponding chance of commerciality is 28%. Risked best
estimate prospective resources have been estimated at 1.4 mmboe and the risked estimated cost to bring these resources on commercial
production is  $5.6 MM with an expected timeline of 8 years.
| | -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Uphuser Meer Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 47%, and the CoDis at 51%. The corresponding chance of commerciality is 24%. Risked best
estimate prospective resources have been estimated at 1.0 mmboe and the risked estimated cost to bring these resources on commercial
production is  $4.5 MM with an expected timeline of 9 years.
| | --------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Burgmoor Z5 Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 63%, and the CoDis at 52%. The corresponding chance of commerciality is 33%. Risked best
estimate prospective resources have been estimated at 0.7 mmboe and the risked estimated cost to bring these resources on commercial
production is  $2.8 MM with an expected timeline of 2 years.
| | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Wellie Prospect | Based on reservoir, seal and source risk along with development
timing, GLJ has estimated the CoDev at 32%, and the CoDis at 20%. The corresponding chance of commerciality is 6%. Risked best
estimate prospective resources have been estimated at 0.3 mmboe and the risked estimated cost to bring these resources on commercial
production is  $3 MM with an expected timeline of 11 years.
| | --------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Otterstedt Prospect | Based on reservoir, seal and trap risk along with development
timing , GLJ has estimated the CoDev at 46%, and the CoDis at 34%. The corresponding chance of commerciality is 16%. Risked best
estimate prospective resources have been estimated at 0.3 mmboe and the risked estimated cost to bring these resources on commercial
production is  $3.2 MM with an expected timeline of 14 years..
| | ------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Widdernhausen East Prospect | Based on reservoir, seal and trap risk along with development
timing, GLJ has estimated the CoDev at 32%, and the CoDis at 44%. The corresponding chance of commerciality is 14%. Risked best
estimate prospective resources have been estimated at 0.3 mmboe and the risked estimated cost to bring these resources on commercial
production is  $2.1 MM with an expected timeline of 12 years.
| | --------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ostervesede Prospect | Based on reservoir and seal risk along with development
timing, GLJ has estimated the CoDev at 23%, and the CoDis at 25%. The corresponding chance of commerciality is 6%. Risked best
estimate prospective resources have been estimated at 0.1 mmboe and the risked estimated cost to bring these resources on commercial
production is  $0.7 MM with an expected timeline of 11years.
| | -------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (15) | Prospective resources for
                                         Netherlands have been estimated based on the factors outlined below. GLJ has estimated
                                         the aggregate CoDev at 40% and the aggregate CoDis at 30%. The corresponding chance of
                                         commerciality is 12%. Risked best estimate prospective resources have been estimated
                                         at an aggregate of 10.1 mmboe. Utilizing established recovery technology, the risked
                                         estimated cost to bring these resources on commercial production is an aggregate of 88.2
                                         MM with an expected timeline of 2 to 12 years.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



71


Vermilion Energy Inc.AIF for the year ended December 31, 2016




Prospective resources for Netherlands
East have been estimated based on the individual areas outlined below. GLJ has estimated the aggregate CoDev at 25% and the aggregate
CoDis at 44%. The corresponding chance of commerciality is 11%. Risked best estimate prospective resources have been estimated
at an aggregate of 8.0 mmboe and the risked estimated cost to bring these resources on commercial production is an aggregate of 66.3
MM with an expected timeline of 2 to 12 years.



| | · | Chance
                                         of discovery provided for 111 prospective reservoir targets across 92 prospective locations.
                                         Risk primarily associated with presence of reservoir and seal as region proven to have
                                         adequate source, migration and timing to charge target reservoirs.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Chance
                                         of development risked to account for company commitment and development timing, anticipated
                                         timing for permitting in respective licenses and distance to export (i.e. pipeline/facility
                                         requirements to transport gas to sales point). Chance of development is also a function
                                         of prospect size.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | 92
                                         prospects summed probabilistically across 13 development groups to appropriately allocate
                                         required infrastructure capital across multiple prospective targets within reasonable
                                         proximity. As probabilistic summation of the groups resulted in strong economic indicators,
                                         no further minimum economic field size calculations were applied as they were considered
                                         to have nominal impact.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Prospective resources for Netherlands
West have been estimated based on the factors outlined below. GLJ has estimated the aggregate CoDev at 65% and the aggregate CoDis
at 28%. The corresponding chance of commerciality is 18%. Risked best estimate prospective resources have been estimated at an
aggregate of 2.1 mmboe and the risked estimated cost to bring these resources on commercial production is an aggregate of$ 21.8
MM with an expected timeline of 2 to 9 years.



| | · | Chance
                                         of discovery provided for 10 prospective reservoir targets across 11 prospective locations.
                                         Risk primarily associated with presence of reservoir and seal as region proven to have
                                         adequate source, migration and timing to charge target reservoirs.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Chance
                                         of development risked to account for company commitment and development timing, anticipated
                                         timing for permitting in respective licenses and distance to export (i.e. pipeline/facility
                                         requirements to transport gas to sales point). Chance of development is also a function
                                         of prospect size.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | 11
                                         prospects summed probabilistically across 3 development groups to appropriately allocate
                                         required infrastructure capital across multiple prospective targets within reasonable
                                         proximity. As probabilistic summation of the groups resulted in strong economic indicators
                                         no further minimum economic field size calculations were applied as they were considered
                                         to have nominal impact.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



72


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX BREPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (FORM 51-101F2)



To the Board of Directors of Vermilion Energy Inc. (the "Company"):



| | 1. | We have evaluated the Company’s
                                         reserves data as at December 31, 2016. The reserves data are estimates of proved reserves
                                         and probable reserves and related future net revenue as at December 31, 2016, 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. | We carried out our evaluation in accordance
                                         with standards set out in the Canadian Oil and Gas Evaluation Handbook as amended from
                                         time to time (the "COGE Handbook") maintained by the Society of Petroleum Evaluation
                                         Engineers (Calgary Chapter).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | 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 presented in the COGE
                                         Handbook.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | The following table shows the net present
                                         value of 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 for the year
                                         ended December 2016, and identifies the respective portions thereof that we have evaluated
                                         and reported on to the Company's board of directors:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|                              |                       | Location
    of Reserves | Net
    Present Value of Future Net Revenue      
|----------------------------- | --------------------- | ------------------------ | -------------------------------------------------
|Independent
    Qualified     | Effective
    Date of | (Country
    or Foreign  | (before
    income taxes, 10% discount rate - M$)
|Reserves
    Evaluator        | Evaluation
    Report | Geographic
    Area)     | Audited                                          
|GLJ
    Petroleum Consultants | December
    31, 2015 | Australia                | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | Canada                   | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | France                   | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | Germany                  | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | Ireland                  | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | Netherlands              | -                                                
|GLJ
    Petroleum Consultants | December
    31, 2015 | USA                      | -                                                
|Total                         |                       |                          | -                                                





| | 6. | In our opinion, the reserves data evaluated
                                         by us have, in all material respects, been determined and are in accordance with the
                                         COGE Handbook, consistently applied. We express no opinion on the reserves data that
                                         we reviewed but did not audit or evaluate.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | We have no responsibility to update
                                         our reports referred to in paragraph 5 for events and circumstances occurring after the
                                         effective date of our reports.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Because the reserves data are based
                                         on judgements regarding future events, actual results will vary and the variations may
                                         be material.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



EXECUTED as to our reports referred to above:



GLJ Petroleum Consultants Ltd., Calgary, Alberta, Canada, February
1, 2017



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



73


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX B - PART 2

REPORT ON CONTINGENT RESOURCES DATA AND PROSPECTIVE
RESOURCES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR

OR AUDITOR (FORM 51-101F2)



To the board
of directors of Vermilion Energy Inc. (the "Company"):



| | 1. | We have evaluated the Company's contingent
                                         resources data and prospective resources data as at December 31, 2016. The contingent
                                         resources data and prospective resources data are risked estimates of volume of contingent
                                         resources and prospective resources and related risked net present value of future net
                                         revenue as at December 31, 2016, estimated using forecast prices and costs.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | The contingent resources data and prospective
                                         resources data are the responsibility of the Company's management. Our responsibility
                                         is to express an opinion on the contingent resources data and prospective resources data
                                         based on our evaluation.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | We carried out our evaluation in accordance
                                         with standards set out in the Canadian Oil and Gas Evaluation Handbook as amended from
                                         time to time (the "COGE Handbook") maintained by the Society of Petroleum Evaluation
                                         Engineers (Calgary Chapter).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Those standards require that we plan
                                         and perform an evaluation to obtain reasonable assurance as to whether the contingent
                                         resources data and prospective resources data are free of material misstatement. An evaluation
                                         also includes assessing whether the contingent resources data and prospective resources
                                         data are in accordance with principles and definitions presented in the COGE Handbook.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | The following tables set forth the
                                         risked volume and risked net present value of future net revenue of contingent resources
                                         and prospective resources (before deduction of income taxes) attributed to contingent
                                         resources and prospective resources, estimated using forecast prices and costs and calculated
                                         using a discount rate of 10 percent, included in the Company's statement prepared in
                                         accordance with Form 51-101F1 and identifies the respective portions of the contingent
                                         resources data and prospective resources data that we have evaluated and reported on
                                         to the Company's board of directors:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Contingent
    Resources                              |                               |                       |                                              |         |                                     |           |          
|----------------------------------------------------- | ----------------------------- | --------------------- | -------------------------------------------- | ------- | ----------------------------------- | --------- | ---------
|                                                      |                               |                       |                                              |         | Net
    Present Value of Future Net
|                                                      |                               |                       | Location of
    Resources                    |         | Revenue
    (before income taxes,  
|                                                      | Independent                   |                       | Other than Reserves                          | Risked  | 10%
    discount rate - M$)        
|                                                      | Qualified
    Reserves        | Effective
    Date of | (Country or
    Foreign                      | Volume  |                                     |           |          
|Classification                                        | Evaluator
    or Auditor      | Evaluation
    Report | Geographic
    Area)                         | (Mboe)  | Audited                             | Evaluated | Total    
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | Australia                                    | 2,440   | -                                   | 36,438    | 36,438   
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | Canada                                       | 120,653 | -                                   | 840,871   | 840,871  
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | France                                       | 27,751  | -                                   | 508,686   | 508,686  
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | Germany                                      | 4,933   | -                                   | 50,479    | 50,479   
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | Ireland                                      | -       | -                                   | -         | -        
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | Netherlands                                  | 4,760   | -                                   | 79,494    | 79,494   
|Development
    Pending Contingent Resources (2C)     | GLJ
    Petroleum Consultants | December
    31, 2016 | USA                                          | 37,956  | -                                   | 390,965   | 390,965  
|Total                                                 |                               |                       |                                              | 198,493 | -                                   | 1,906,933 | 1,906,933
|                                                      |                               |                       |                                              |         |                                     |           |          
|                                                      | Independent
    Qualified     |                       | Location
    of ResourcesOther than Reserves | Risked  |                                     |           |          
|                                                      | Reserves
    Evaluator or     | Effective
    Date of | (Country
    or Foreign                      | Volume  |                                     |           |          
|Classification                                        | Auditor                       | Evaluation
    Report | Geographic
    Area)                         | (Mboe)  |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | Australia                                    | -       |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | Canada                                       | 14,211  |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | France                                       | 2,539   |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | Germany                                      | -       |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | Ireland                                      | -       |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | Netherlands                                  | 2,757   |                                     |           |          
|Development
    Unclarified Contingent Resources (2C) | GLJ
    Petroleum Consultants | December
    31, 2016 | USA                                          | -       |                                     |           |          
|Total                                                 |                               |                       |                                              | 19,507  |                                     |           |          



74


Vermilion Energy Inc.AIF for the year ended December 31, 2016




|Prospective
    Resources          |                               |                       |                                              |        |  |  | 
|---------------------------------- | ----------------------------- | --------------------- | -------------------------------------------- | ------ |  |  | 
|                                   | Independent
    Qualified     |                       | Location
    of ResourcesOther than Reserves | Risked |  |  | 
|                                   | Reserves
    Evaluator or     | Effective
    Date of | (Country
    or Foreign                      | Volume |  |  | 
|Classification                     | Auditor                       | Evaluation
    Report | Geographic
    Area)                         | (Mboe) |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | Australia                                    | 579    |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | Canada                                       | 40,924 |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | France                                       | 9,609  |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | Germany                                      | 28,260 |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | Ireland                                      | -      |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | Netherlands                                  | 10,138 |  |  | 
|Prospect
    Prospective Resources | GLJ
    Petroleum Consultants | December
    31, 2016 | USA                                          | -      |  |  | 
|Total                              |                               |                       |                                              | 89,510 |  |  | 



| | 6. | In our opinion, the contingent resources data and prospective
resources data respectively evaluated by us have, in all material respects, been determined and are in accordance with the COGE
Handbook, consistently applied. We express no opinion on the contingent resources data and prospective resources that we reviewed
but did not audit or evaluate.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | We have no responsibility to update
                                         our reports referred to in paragraph 5 for events and circumstances occurring after the
                                         effective date of our reports.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Because the contingent resources data
                                         and prospective resources data are based on judgments regarding future events, actual
                                         results will vary and the variations may be material.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



EXECUTED as to our reports referred to above:



GLJ Petroleum Consultants Ltd., Calgary, Alberta, Canada, February
1, 2017



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



75


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX CREPORT OF MANAGEMENT AND DIRECTORS ON RESERVES DATA AND OTHER INFORMATION (FORM 51-101F3)



Terms to which a meaning is ascribed in
National Instrument 51-101 have the same meaning herein.



Management of Vermilion Energy Inc. (the "Company")
are responsible for the preparation and disclosure, or arranging for the preparation and disclosure of information with respect
to the Company's oil and gas activities in accordance with securities regulatory requirements. This information includes reserves
data, and includes contingent resources data and prospective resources data, which are estimates of proved reserves and probable
reserves and related future net revenue as at December 31, 2016, estimated using forecast prices and costs.



Independent qualified reserves evaluators have
evaluated the Company's reserves data, contingent resources data and prospective resources data. The report of the independent
qualified reserves evaluators is presented in Schedule A to the Annual Information Form of the Company for the year ended December
31, 2016.



The Independent Reserves Committee of the Board
of Directors of the Company has:



| | (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, contingent
                                         resources data and prospective resources data with Management and the independent qualified
                                         reserves evaluators.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Independent Reserves Committee of the Board
of Directors has reviewed the Company's procedures for assembling and reporting other information associated with oil and gas
activities and has reviewed that information with Management. The Board of Directors has, on the recommendation of the Audit and
Independent Reserves Committees, approved:



| | (a) | the content and filing with securities
                                         regulatory authorities of Form 51-101F1 containing reserves data, contingent resources
                                         data and prospective resources 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.
| | --- | -------------------------------------------------------------------------------



Because the reserves data,
contingent resources data and prospective resources data are based on judgements regarding future events, actual results will
vary and the variations may be material.



|“Anthony
    Marino”                                                      | 
|------------------------------------------------------------------------- | 
|Anthony Marino,
    President & Chief Executive Officer                   | 
|                                                                          | 
|“Curtis
    Hicks”                                                        | 
|Curtis W. Hicks, Executive Vice President and
    Chief Financial Officer | 
|                                                                          | 
|“Lorenzo
    Donadeo”                                                     | 
|Lorenzo Donadeo,
    Director and Chairman of the Board                   | 
|                                                                          | 
|“Claudio
    A. Ghersinich”                                               | 
|Claudio A. Ghersinich, Director                                           | 



February 24, 2017



76


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX DTERMS OF REFERENCE FOR THE AUDIT COMMITTEE

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



The primary function of the Audit
Committee (the "Committee") is to assist the Board in fulfilling its oversight responsibilities with respect to the
Company’s accounting and financing reporting processes and the audit of the Company’s financial statements, including
oversight of:



| | A. | the integrity of the Company’s
                                         financial statements;
| | -- | ---------------------------------------------------------------------------------------------



| | B. | the Company’s compliance
                                         with legal and regulatory requirements;
| | -- | ---------------------------------------------------------------------------------------------------------



| | C. | the independent auditors’
                                         qualifications and independence;
| | -- | ---------------------------------------------------------------------------------------------------



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



| | E. | the Company’s systems
                                         of disclosure controls and internal controls regarding finance, accounting, legal compliance
                                         and ethics, which management and the Board have established;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | the performance of the Company’s
                                         audit processes; and
| | -- | ----------------------------------------------------------------------------------------------



| | G. | such other matters required
                                         by applicable laws and rules of any stock exchange on which the Company’s shares
                                         are listed for trading.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



While the Committee has the responsibilities
and powers set forth in its terms of reference, it is not the duty of the Committee to prepare financial statements, plan or conduct
audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance
with International Financial Reporting Standards and applicable rules and regulations. Primary responsibility for the financial
reporting, information systems, risk management, and disclosure controls and internal controls of the Company is vested in management.



| | 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 “independent”1under the requirements or guidelines for audit committee service under applicable
                                         securities laws and rules of any stock exchange on which the Company’s shares are
                                         listed for trading.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | All Committee members shall
                                         be "financially literate,"2 and at least one member shall have "accounting
                                         or related financial expertise" as such terms are interpreted by the Board in its
                                         business judgment in light of, and in accordance with, the requirements or guidelines
                                         for audit committee service under applicable securities laws and rules of any stock exchange
                                         on which the Company’s shares are listed for trading. 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. | No Committee member shall
                                         serve on the audit committees of more than two other public issuers without prior determination
                                         by the Board that such simultaneous service would not impair the ability of such member
                                         to serve effectively on the Committee.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | E. | The Company'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.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | F. | The Committee may request
                                         any officer or employee of the Company, or the Company’s legal counsel, or any
                                         external or internal auditors to attend a meeting of the Committee to provide such pertinent
                                         information as the Committee requests or to meet with any members of, or consultants
                                         to the Committee. The Committee has the authority to communicate directly with the internal
                                         and 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.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | G. | The Committee shall have
                                         the authority to select, retain, terminate and approve the fees and other retention terms
                                         of special independent legal counsel and other consultants or advisers to advise the
                                         Committee, as it deems necessary or appropriate, at the Company’s expense.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------










| | 1 | Committee members
                                         must be “independent”, as defined in Sections 1.4 and 1.5 of National Instrument
                                         52-110 and ‘‘independent’’ under the requirements of Rule 10A-3
                                         of the Securities Exchange Act of 1934, as amended, and Section 303A.06 of the NYSE Listed
                                         Company Manual.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2 | The Board has
                                         adopted the NI 52-110 definition of "financial literacy", which is an
                                         individual 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.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



77


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX DTERMS OF REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)





| | H. | The Company shall provide
                                         for appropriate funding, as determined by the Committee, for payment of (i) compensation
                                         to the independent auditors engaged for the purpose of preparing or issuing an audit
                                         report or performing other audit review or attest services for the Company, (ii) compensation
                                         to any advisers employed by the Committee and (iii) ordinary administrative expenses
                                         of the Committee that are necessary or appropriate for carrying out its duties.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



Subject to the powers and duties
of the Board, the Committee will perform the following duties:



| | 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 the responsibility to:



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

| | ii) | review and recommend approval for
                                         release the Company's quarterly financial statements, MD&A and press releases, as
                                         well as financial information and earnings guidance provided to analysts and rating agencies;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii) | satisfy itself that adequate procedures
                                         are in place for the review of the public disclosure of financial information extracted
                                         or derived from the Company'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.
| | --- | -----------------------------------------------------------------------------------------------------------------------------



Review, and where appropriate, discuss:



| | v) | the appropriateness of critical accounting
                                         policies and financial reporting practices used by the Company;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | vi) | major issues regarding accounting
                                         principles and financial statement presentations, including any significant proposed
                                         changes in financial reporting and accounting principles, policies and practices to be
                                         adopted by the Company and major issues as to the adequacy of the Company’s internal
                                         controls and any special audit steps adopted in light of material control deficiencies;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | vii) | analyses prepared by management
                                         or the external auditor setting forth significant financial reporting issues and judgments
                                         made in connection with the preparation of the financial statements, including analyses
                                         of the effects of alternative International Financial Reporting Standards (“IFRS”)
                                         methods on the financial statements of the Company and any other opinions sought by management
                                         from an independent or other audit firm or advisor with respect to the accounting treatment
                                         of a particular item;
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | viii) | any management letter or schedule
                                         of unadjusted differences provided by the external auditor and the Company’s response
                                         to that letter and other material written communication between the external auditor
                                         and management;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ix) | any problems, difficulties or differences
                                         encountered in the course of the audit work including any disagreements with management
                                         or restrictions on the scope of the external auditor’s activities or on access
                                         to requested information and management’s response thereto;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | x) | any new or pending developments in
                                         accounting and reporting standards that may affect the Company;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------

| | xi) | the effect of regulatory and accounting
                                         initiatives, as well as any off-balance sheet structures on the financial statements
                                         of the Company and other financial disclosures;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | xii) | any reserves, accruals, provisions
                                         or estimates that may have a significant effect upon the financial statements of the
                                         Company;
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | xiii) | the use of special purpose entities
                                         and the business purpose and economic effect of off balance sheet transactions, arrangements,
                                         obligations, guarantees and other relationships of Company and their impact on the reported
                                         financial results of the Company;
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | xiv) | the use of any “pro forma”
                                         or “adjusted” information not in accordance with generally accepted accounting
                                         principles;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | xv) | any litigation, claim or contingency,
                                         including tax assessments, that could have a material effect upon the financial position
                                         of the Company, and the manner in which these matters may be, or have been, disclosed
                                         in the financial statements; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | xvi) | accounting, tax and financial aspects
                                         of the operations of the Company as the Committee considers appropriate.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------



78


Vermilion Energy Inc.AIF for the year ended December 31, 2016




APPENDIX DTERMS OF REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)



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



The Committee will review and discuss
with management, and obtain reasonable assurance that the risk management, internal control and information systems are operating
effectively to produce accurate, appropriate and timely management and financial information. This includes the responsibility
to:



| | i) | review the Company's risk management
                                         controls and policies with specific responsibility for Credit & Counterparty, Market
                                         & Financial, Political and Strategic & Repatriation risks;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | obtain reasonable assurance that
                                         the information systems are reliable and the systems of internal controls are properly
                                         designed and effectively implemented through separate and periodic 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
| | -- | --------------



The external auditor is required to
report directly to the Committee, which will review the planning and results of external audit activities and the ongoing relationship
with the external auditor. This includes:



| | i) | review and recommend to the Board,
                                         for Shareholder approval, the appointment of the external auditor;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------

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

| | a) | engagement letter between the external
                                         auditor and financial management of the Company;
| | -- | --------------------------------------------------------------------------------------------------------------------------------

| | 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) | compensation and fees to be paid
                                         by the Company to the external auditor.
| | -- | -----------------------------------------------------------------------------------------------------------------

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

| | iv) | maintain oversight of 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 the
                                         Company'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) | evaluate and assess the qualifications
                                         and performance of the external auditors for recommendation to the Board as to the appointment
                                         or reappointment of the external auditor to be proposed for approval by the Shareholders,
                                         and ensuring that such auditors are participants in good standing pursuant to applicable
                                         regulatory laws.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | v) | review the auditor's report on all
                                         material subsidiaries;
| | -- | --------------------------------------------------------------------------------------------------

| | vi) | review and discuss with the external
                                         auditors all significant relationships that the external auditors and their affiliates
                                         have with the Company 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, including
                                         a list of all relationships between the external auditor and the Company that may reasonably
                                         be thought to bear on the independence of the external auditors with respect to the Company;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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) | annually request and review a report
                                         from the external auditor regarding (a) the external auditor’s quality-control
                                         procedures, (b) any material issues raised by the most recent quality-control review,
                                         or peer review, of the external auditor, or by any inquiry or investigation by governmental
                                         or professional authorities within the preceding five years respecting one or more independent
                                         audits carried out by the firm, and (c) any steps taken to deal with any such issues;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | ix) | review the disclosure with respect
                                         to its pre-approval of audit and non-audit services provided by the external auditors;
                                         and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

79


Vermilion Energy Inc.AIF for the year ended December 31, 2016


APPENDIX DTERMS OF REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)



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



The Committee shall:

| | 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 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 the Company'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 required, if the Company
                                         has relied upon any exemptions to the requirements for committees under applicable securities
                                         laws and rules of any stock exchange on which the Company’s shares are listed for
                                         trading.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



The Committee shall:



| | i) | establish and periodically review
                                         procedures for:
| | -- | ------------------------------------------------------------------------------------------

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

| | b) | the confidential, anonymous submission
                                         by employees of concerns regarding questionable accounting or auditing matters or other
                                         matters that could negatively affect the Company, such as violations of the Code of Business
                                         Conduct and Ethics.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii) | review and approve the Company's
                                         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;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------

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

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

| | viii) | review the terms of reference for
                                         the Committee at least annually and otherwise as it deems appropriate, and recommend
                                         changes to the Board as required. The Committee shall evaluate its performance with reference
                                         to the terms of reference annually.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



| | D. | The Committee Chair has the
                                         responsibility to make periodic reports to the Board, as requested, on financial and
                                         other matters considered by the Committee relative to the Company.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

80