Exhibit 99.2











1


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




ABBREVIATIONS



|bbl(s) | barrel(s)                                                                                                                                                                                             
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|mbbls  | thousand
    barrels                                                                                                                                                                                  
|bbls/d | barrels
    per day                                                                                                                                                                                   
|mcf    | thousand
    cubic feet                                                                                                                                                                               
|mmcf   | million
    cubic feet                                                                                                                                                                                
|bcf    | billion
    cubic feet                                                                                                                                                                                
|mcf/d  | thousand
    cubic feet per day                                                                                                                                                                       
|mmcf/d | million
    cubic feet per day                                                                                                                                                                        
|GJ     | gigajoules                                                                                                                                                                                            
|MWh    | megawatt
    hour                                                                                                                                                                                     
|boe    | barrel
    of oil equivalent, including: crude oil, natural gas liquids and natural gas (converted on the basis of one boe for                                                                        
|       | six
    mcf of natural gas)                                                                                                                                                                           
|mboe   | thousand
    barrel of oil equivalent                                                                                                                                                                 
|mmboe  | million
    barrel of oil equivalent                                                                                                                                                                  
|boe/d  | barrel
    of oil equivalent per day                                                                                                                                                                  
|NGLs   | natural
    gas liquids                                                                                                                                                                               
|WTI    | West
    Texas Intermediate, the reference price paid for crude oil of standard grade in U.S. dollars at Cushing, Oklahoma                                                                            
|AECO   | the
    daily average benchmark price for natural gas at the AECO ‘C’ hub in southeast Alberta                                                                                                        
|TTF    | the
    price for natural gas in the Netherlands, quoted in MWh of natural gas per hour per day, at the Title Transfer Facility Virtual
    Trading Point operated by Dutch TSO Gas Transport Services
|$M     | thousand
    dollars                                                                                                                                                                                  
|$MM    | million
    dollars                                                                                                                                                                                   
|PRRT   | Petroleum
    Resource Rent Tax, a profit based tax levied on petroleum projects in Australia                                                                                                         





2


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




DISCLAIMER



Certain statements
included or incorporated by reference in this document 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 document
may include, but are not limited to: capital expenditures; business strategies and objectives; estimated reserve quantities and
the discounted present value of future net cash flows from such reserves; petroleum and natural gas sales; future production levels
(including the timing thereof) and rates of average annual production growth; estimated contingent resources and prospective resources;
exploration and development plans; acquisition and disposition plans and the timing thereof; operating and other expenses, including
the payment and amount of future dividends; royalty and income tax rates; the timing of regulatory proceedings and approvals;
and the timing of first commercial natural gas 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 Vermilion
to obtain equipment, services and supplies in a timely manner to carry out its activities in Canada and internationally; the ability
of Vermilion 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 Vermilion 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 exploration and development activities.



Although Vermilion
believes that the expectations reflected in such forward looking statements and information are reasonable, undue reliance should
not be placed on forward looking statements because Vermilion can give no assurance that such expectations will prove to be correct.
Financial outlooks are provided for the purpose of understanding Vermilion’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 Vermilion 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 Vermilion's marketing operations, including credit risk; the uncertainty of reserves estimates
and reserves life and estimates of resources and associated expenditures; the uncertainty of estimates and projections relating
to production and associated expenditures; potential delays or changes in plans with respect to exploration or development projects;
Vermilion'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 Vermilion to add production and reserves through exploration and development
activities; 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 Vermilion; and other risks and uncertainties described elsewhere in this document or in Vermilion's other filings
with Canadian securities regulatory authorities.



The forward looking
statements or information contained in this document are made as of the date hereof and Vermilion 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.



All oil and natural
gas reserve information contained in this document has been prepared and presented in accordance with National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities. The actual oil and natural gas reserves and future production will be greater
than or less than the estimates provided in this document. 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 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.



Financial data contained within this
document are reported in Canadian dollars, unless otherwise stated.

3


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






MANAGEMENT’S
DISCUSSION AND ANALYSIS



The following is
Management’s Discussion and Analysis (“MD&A”), dated February 27, 2014, of Vermilion Energy Inc.’s
(“Vermilion”, “we”, “our”, “us” or the “Company”) operating and financial
results as at and for the three months and year ended December 31, 2013 compared with the corresponding periods in the prior year.



This discussion
should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2013 and 2012,
together with the accompanying notes. Additional information relating to Vermilion, including its Annual Information Form, is
available on SEDAR at www.sedar.com or on Vermilion’s website at www.vermilionenergy.com.



The audited consolidated
financial statements for the year ended December 31, 2013 and comparative information have been prepared in Canadian dollars,
except where another currency has been indicated, and in accordance with International Financial Reporting Standards (“IFRS”
or, alternatively, “GAAP”) as issued by the International Accounting Standards Board.



This MD&A includes
references to certain financial measures which do not have standardized meanings prescribed by IFRS. As such, these financial
measures are considered additional GAAP or non-GAAP financial measures and therefore are unlikely to be comparable with similar
financial measures presented by other issuers. These additional GAAP and non-GAAP financial measures include:



| | • | Fund
                                         flows from operations: This additional GAAP financial measure is calculated as cash flows
                                         from operating activities before changes in non-cash operating working capital and asset
                                         retirement obligations settled. We analyze fund flows from operations both on a consolidated
                                         basis and on a business unit basis in order to assess the contribution of each business
                                         unit to our ability to generate cash necessary to pay dividends, repay debt, fund asset
                                         retirement obligations and make capital investments
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Netbacks:
                                         These non-GAAP financial measures are per boe and per mcf measures used in the analysis
                                         of operational activities. We assess netbacks both on a consolidated basis and on a business
                                         unit basis in order to compare and assess the operational and financial performance of
                                         each business unit versus other business units and third party crude oil and natural
                                         gas producers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For a full description
of these and other non-GAAP financial measures and a reconciliation of these measures to their most directly comparable GAAP measures,
please refer to “ADDITIONAL AND NON-GAAP FINANCIAL MEASURES”.



VERMILION’S
BUSINESS



Vermilion is a Calgary,
Alberta based international oil and gas producer focused on the acquisition, development and optimization of producing properties
in Western Canada, Europe, and Australia. We manage our business through our Calgary head office and our international business
unit offices.



This MD&A separately
discusses each of our business units in addition to our corporate segment.



| | • | Canada
                                         business unit: Includes revenues and expenditures related directly to our assets in Alberta.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

| | • | France
                                         business unit: Relates to our operations in France in the Paris and Aquitaine Basins.
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| | • | Australia
                                         business unit: Relates to our operations in the Wandoo offshore crude oil field.
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | • | Netherlands
                                         business unit: Relates to our operations in the Netherlands.
| | - | -----------------------------------------------------------------------------------------------------------------

| | • | Ireland
                                         business unit: Relates to our 18.5% non-operated interest in the offshore Corrib natural
                                         gas field.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Corporate:
                                         Includes expenditures related to our global hedging program, financing expenses, and
                                         general and administration expenses, primarily incurred in Canada and not directly related
                                         to the operations of a specific business unit.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Prior to December
31, 2013, Vermilion combined the operating and financial results of the Canada business unit and the Corporate segment and presented
the combined results as Canada.



4


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




NEW COUNTRY ENTRY



In November, 2013,
we announced an agreement to acquire a 25% contractual participation interest in a four-partner consortium in Germany from GDF
Suez S.A. The acquisition was subsequently completed in February of 2014, and will enable us to participate in the exploration
and development, production and transportation of natural gas from the assets held by the consortium. The assets are comprised
of four gas producing fields across eleven production licenses and are characterized by a low effective decline rate of approximately
16% annually. The acquired assets are expected to contribute approximately 2,300 boe/d of production in 2014, and include both
exploration and production licenses that comprise a total of 204,000 gross acres, of which 85% is in the exploration license.
The acquisition represents Vermilion’s entry into the German exploration and production business, a producing region with
a long history of oil and gas development activity, low political risk, and strong marketing fundamentals. The acquisition provides
us with entry into this sizable market, in the form of free cash flow generating, low-decline assets with near-term development
inventory in addition to longer-term, low-permeability gas prospectivity. Entry into Germany is in keeping with our European focus,
and will increase our exposure to the strong fundamentals and pricing of European natural gas markets. We believe that our conventional
and unconventional expertise, coupled with new access to proprietary technical data, will position us strongly for future development
and expansion opportunities in both Germany and the greater European region.



2013 REVIEW AND
2014 GUIDANCE



On November 7, 2013,
concurrent with our release of 2014 guidance and our announcement of the dividend increase, we updated our 2013 capital expenditure
guidance to $530 million. This represented an increase of approximately $45 million from our original guidance of $485 million.
The increase was attributable primarily to the impact of a weaker Canadian dollar as compared to foreign exchange rates at the
time of our original guidance, a delay in the timing of rig arrival for our Australian drill program (originally anticipated to
occur in late 2012), and minor additions to our capital work scope during 2013 (such as the addition of the Champotran southern
extension well in France). The difference between 2013 guidance of $530 million and 2013 actual capital expenditures of $543 million
was largely due to increased Cardium activity partially offset by activity delays in the Netherlands.



Following both the
first and second quarters, we increased our original production guidance of 39,000-40,500 boe/d to guidance of 39,500-40,500 boe/d
and 40,500-41,000 boe/d, respectively. The guidance increases were primarily driven by better-than-expected results from our capital
program.



The following table
summarizes our 2013 actual results compared to guidance and our 2014 guidance:



|                           |                       | Date | Capital
    Expenditures ($MM) | Production
    (boe/d)
|-------------------------- | --------------------- | ---- | ------------------------------ | ----------------------
|2013
    Guidance          | November
    14, 2012 | 485  | 39,000
    to 40,500          
|2013
    Guidance - Update | May
    1, 2013       | 485  | 39,500
    to 40,500          
|2013
    Guidance - Update | August
    1, 2013    | 485  | 40,500
    to 41,000          
|2013
    Guidance - Update | November
    7, 2013  | 530  | 40,500
    to 41,000          
|2013
    Actual            | February
    27, 2014 | 543  | 41,005                        
|2014
    Guidance          | November
    7, 2013  | 555  | 45,000
    to 46,000          



SHAREHOLDER
RETURN



Vermilion
strives to provide investors with reliable and growing dividends in addition to sustainable, global production growth. The following
table, as of December 31, 2013, reflects our trailing one, three, and five year performance:



|Total
    return(1)                                                 | Trailing
    One Year | Trailing
    Three Year | Trailing
    Five Year
|------------------------------------------------------------------- | --------------------- | ----------------------- | ----------------------
|Dividends
    per Vermilion share                                   | $2.40                 | $6.96                   | $11.52                
|Capital
    appreciation per Vermilion share                        | $10.38                | $16.13                  | $37.16                
|Total
    return per Vermilion share                                | 24.6%                 | 50.0%                   | 193.3%                
|Annualized
    total return per Vermilion share                     | 24.6%                 | 14.5%                   | 24.0%                 
|Annualized
    total return on the S&P TSX High Income Energy Index | 13.8%                 | (6.1%)                  | 5.9%                  



(1)The
above table includes non-GAAP financial measures which may not be comparable to other companies. Please see the “ADDITIONAL
AND NON-GAAP FINANCIAL MEASURES” section.



5


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




CONSOLIDATED
RESULTS OVERVIEW



|                      |                                               | Three
    Months Ended |              | %
    change |  |               | Year
    Ended |  | %
    change
|--------------------- | --------------------------------------------- | ---------------------- | ------------ | ------------ |  | ------------- | -------------- |  | ------------
|                      |                                               | Dec
    31,            | Sept
    30, | Dec
    31,  |  | Q4/13
    vs. | Q4/13
    vs.  |  |             
|                      |                                               | 2013                   | 2013         | 2012         |  | Q3/13         | Q4/12          |  |             
|Production            |                                               |                        |              |              |  |               |                |  |             
|                      | Crude
    oil (bbls/d)                        | 26,039                 | 26,664       | 23,699       |  | (2%)          | 10%            |  |             
|                      | NGLs
    (bbls/d)                             | 1,761                  | 1,945        | 1,176        |  | (9%)          | 50%            |  |             
|                      | Natural
    gas (mmcf/d)                      | 78.96                  | 77.41        | 68.34        |  | 2%            | 16%            |  |             
|                      | Total
    (boe/d)                             | 40,960                 | 41,510       | 36,265       |  | (1%)          | 13%            |  |             
|                      | Build
    (draw) in inventory (bbl)           | (10,192)               | 18,946       | 259,481      |  |               |                |  |             
|Financial
    metrics |                                               |                        |              |              |  |               |                |  |             
|                      | Fund
    flows from operations ($M)           | 163,660                | 165,645      | 141,737      |  | (1%)          | 15%            |  |             
|                      | Per
    share ($/basic share)                 | 1.61                   | 1.63         | 1.43         |  | (1%)          | 13%            |  |             
|                      | Net
    earnings ($M)                         | 101,510                | 67,796       | 56,914       |  | 50%           | 78%            |  |             
|                      | Per
    share ($/basic share)                 | 1.00                   | 0.67         | 0.58         |  | 49%           | 72%            |  |             
|                      | Cash
    flows from operating activities ($M) | 177,003                | 158,236      | 99,907       |  | 12%           | 77%            |  |             
|                      | Net
    debt ($M)                             | 749,685                | 700,286      | 677,231      |  | 7%            | 11%            |  |             
|                      | Cash
    dividends ($/share)                  | 0.60                   | 0.60         | 0.57         |  | -             | 5%             |  |             
|Activity              |                                               |                        |              |              |  |               |                |  |             
|                      | Capital
    expenditures ($M)                 | 148,478                | 135,661      | 157,035      |  | 9%            | (5%)           |  |             
|                      | Acquisitions
    ($M)                         | 29,103                 | 7,586        | 209,254      |  |               |                |  |             
|                      | Gross
    wells drilled                       | 21.00                  | 21.00        | 26.00        |  |               |                |  |             
|                      | Net
    wells drilled                         | 16.65                  | 16.26        | 17.70        |  |               |                |  |             



Operational review



| | • | Recorded
                                         average production of 41,005 boe/d during 2013, reflecting production growth in all of
                                         our producing regions and year-over-year consolidated production growth of 8%. Production
                                         growth was achieved through continued development in the Cardium and Mannville plays
                                         in Canada, production additions from the 2013 drilling programs in France and Australia,
                                         and incremental production in the Netherlands from our Q4 2013 acquisition.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Activity
                                         during the year included capital expenditures of $542.7 million and acquisitions of $36.7
                                         million. The majority of the capital expenditures related to continued development of
                                         the Cardium and Mannville plays in Canada, successful drilling campaigns in France and
                                         Australia, and tunneling in Ireland. In addition, during Q4 2013, Vermilion completed
                                         a small acquisition in the Netherlands for $27.5 million which included nine operated
                                         onshore concessions (six in production or development and three exploration) and a non-operated
                                         interest in one offshore concession.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Financial review



Net earnings

| | • | For
                                         the three months and year ended December 31, 2013, consolidated net earnings was $101.5
                                         million ($1.00/basic share) and $327.6 million ($3.24/basic share), an increase of 78%
                                         and 72% versus the same periods in 2012.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | The
                                         year-over-year increases resulted primarily from higher production in all our producing
                                         business units, draws in inventory during the year, stronger Canadian pricing for crude
                                         oil and natural gas, unrealized foreign exchange gains, and an impairment recovery. These
                                         increases were partially offset by increased current income taxes as a result of increased
                                         taxable income combined with tax provisions recorded for tax assessments in France.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Net
                                         earnings for Q4 2013 increased by approximately 50% versus Q3 2013. The quarter-over-quarter
                                         increase occurred despite relatively consistent operating results due to increased unrealized
                                         foreign exchange gains and the aforementioned impairment recovery, partially offset by
                                         increased equity based compensation and deferred tax expense.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Unrealized
                                         foreign exchange gains of $22.3 million and $52.0 million for the three months and year
                                         ended December 31, 2013 were the result of the Euro strengthening significantly versus
                                         the Canadian dollar and the resulting impact on our Euro denominated financial assets.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | The
                                         impairment recovery recognized during Q4 2013 of $47.4 million related to impairment
                                         charges previously recognized in 2011 and 2012. The impairment recovery resulted from
                                         increased proved and probable reserves of natural gas and natural gas liquids, due primarily
                                         to the successful application of horizontal drilling and multi-stage fracturing technology
                                         to the previously impaired cash generating unit.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Cash flows from
operating activities

| | • | Increased
                                         cash flow from operating activities by 42% year-over year. This increase resulted from
                                         increased production in all of Vermilion’s producing regions, stronger Canadian
                                         pricing for crude oil and natural gas, and timing differences pertaining to working capital.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Increased
                                         cash flow from operating activities for Q4 2013 by 77% as compared to Q4 2012. 
                                         The year-over-year increase was primarily the result of higher production in all our
                                         producing business units, increases in all relevant commodity prices, timing differences
                                         pertaining to working capital, and the absence of a large build in inventory which occurred
                                         in Q4 2012.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Fund flows from
operations

| | • | Generated
                                         fund flows from operations of $667.5 million ($6.61/basic share) during 2013, an increase
                                         of 20% year-over-year. This increase in fund flows from operations resulted from increased
                                         production in all of Vermilion’s producing regions coupled with stronger Canadian
                                         pricing for crude oil and natural gas.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Net debt

| | • | Maintained
                                         a strong balance sheet with closing net debt of $749.7 million, representing 1.1 times
                                         fund flows from operations. The year-over-year increase in net debt was primarily a result
                                         of our aforementioned acquisition in the Netherlands coupled with current year development
                                         capital expenditures in Ireland.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dividends

| | • | Paid
                                         a dividend of $0.20 per common share per month during 2013 and in November 2013 announced
                                         a 7.5% increase in the monthly dividend to $0.215 per common share per month (effective
                                         for the January 2014 dividend paid on February 17, 2014). This was our second consecutive
                                         annual dividend increase.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




COMMODITY PRICES



|                                           | Three
    Months Ended |              | %
    change |  |               | Year
    Ended |  | %
    change
|------------------------------------------ | ---------------------- | ------------ | ------------ |  | ------------- | -------------- |  | ------------
|                                           | Dec
    31,            | Sept
    30, | Dec
    31,  |  | Q4/13
    vs. | Q4/13
    vs.  |  |             
|                                           | 2013                   | 2013         | 2012         |  | Q3/13         | Q4/12          |  |             
|Average
    reference prices               |                        |              |              |  |               |                |  |             
|WTI
    (US $/bbl)                         | 97.46                  | 105.82       | 88.18        |  | (8%)          | 11%            |  |             
|Edmonton
    Sweet index (US $/bbl)        | 82.53                  | 101.10       | 84.86        |  | (18%)         | (3%)           |  |             
|Dated
    Brent (US $/bbl)                 | 109.27                 | 110.37       | 110.02       |  | (1%)          | (1%)           |  |             
|AECO
    ($/GJ)                            | 3.35                   | 2.31         | 3.05         |  | 45%           | 10%            |  |             
|TTF
    ($/GJ)                             | 10.65                  | 9.94         | 9.78         |  | 7%            | 9%             |  |             
|TTF
    (€/GJ)                             | 7.45                   | 7.20         | 7.58         |  | 3%            | (2%)           |  |             
|Average
    realized prices ($/boe)        |                        |              |              |  |               |                |  |             
|Canada                                     | 61.10                  | 63.56        | 58.80        |  | (4%)          | 4%             |  |             
|France                                     | 112.84                 | 107.08       | 102.26       |  | 5%            | 10%            |  |             
|Netherlands                                | 67.88                  | 61.44        | 60.96        |  | 10%           | 11%            |  |             
|Australia                                  | 124.63                 | 120.95       | 115.22       |  | 3%            | 8%             |  |             
|Consolidated                               | 86.04                  | 86.10        | 78.40        |  | -             | 10%            |  |             
|Production
    mix (% of production)       |                        |              |              |  |               |                |  |             
|%
    priced with reference to WTI         | 25%                    | 24%          | 25%          |  |               |                |  |             
|%
    priced with reference to AECO        | 17%                    | 17%          | 14%          |  |               |                |  |             
|%
    priced with reference to TTF         | 15%                    | 14%          | 17%          |  |               |                |  |             
|%
    priced with reference to Dated Brent | 43%                    | 45%          | 44%          |  |               |                |  |             



Reference prices



| | • | Dated
                                         Brent remained relatively consistent from Q3 2013 to Q4 2013 while WTI and the Edmonton
                                         Sweet index decreased by 8% and 18%, respectively. The decreases in WTI and the Edmonton
                                         Sweet index were attributable to refinery outages and increasing supply.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | AECO
                                         increased 45% from Q3 2013 to Q4 2013 as a result of strong winter demand  for natural
                                         gas in North America.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | TTF
                                         in Canadian dollar terms increased by 7% from Q3 2013 to Q4 2013, benefiting from the
                                         strengthening of the Euro.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Realized prices



| | • | Our
                                         consolidated realized price remained relatively consistent quarter-over-quarter at $86.04/boe.
                                         While North American crude oil pricing decreased in Q4 2013, the impact of this decrease
                                         was mostly offset by higher pricing for our Canadian and Netherlands natural gas production
                                         and continued strong pricing for our crude oil production in Australia.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Our
                                         consolidated realized price increased by 5% for 2013 as compared to 2012. This increase
                                         was primarily due to stronger North American crude oil and natural gas pricing coupled
                                         with foreign exchange benefits resulting from the weakening of the Canadian dollar versus
                                         both the Euro and the US dollar.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





FUND FLOWS
FROM OPERATIONS



|                                            | Three
    Months Ended |         |                   | Year
    Ended
|------------------------------------------- | ---------------------- | ------- | ----------------- | --------------
|                                            | Dec
    31, 2013       |         | Sept
    30, 2013 |               
|                                            | $M                     | $/boe   |                   | $M            
|Petroleum
    and natural gas sales         | 325,108                | 86.04   |                   | 327,185       
|Royalties                                   | (17,616)               | (4.66)  |                   | (18,730)      
|Petroleum
    and natural gas revenues      | 307,492                | 81.38   |                   | 308,455       
|Transportation
    expense                  | (9,081)                | (2.40)  |                   | (6,549)       
|Operating
    expense                       | (48,140)               | (12.74) |                   | (46,246)      
|General
    and administration              | (13,954)               | (3.69)  |                   | (12,033)      
|Corporate
    income taxes                  | (43,065)               | (11.40) |                   | (46,453)      
|PRRT                                        | (17,173)               | (4.55)  |                   | (15,649)      
|Interest
    expense                        | (10,049)               | (2.66)  |                   | (10,109)      
|Realized
    loss on derivative instruments | (1,300)                | (0.34)  |                   | (4,765)       
|Realized
    foreign exchange (loss) gain   | (1,294)                | (0.34)  |                   | (1,227)       
|Realized
    other income (expense)         | 224                    | 0.06    |                   | 221           
|Fund
    flows from operations              | 163,660                | 43.32   |                   | 165,645       



8


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






The following
table shows a reconciliation of the change in fund flows from operations:



|($M)                                                | Q4/13
    vs. Q3/13 | Q4/13
    vs. Q4/12 | 2013
    vs. 2012
|--------------------------------------------------- | ------------------- | ------------------- | -----------------
|Fund
    flows from operations - Comparative period | 165,645             | 141,737             | 557,728          
|Sales
    volume variance:                          |                     |                     |                  
|Canada                                              | 4,476               | 13,090              | 38,747           
|France                                              | (15,471)            | 12,675              | 60,108           
|Netherlands                                         | 8,324               | 4,113               | 4,215            
|Australia                                           | (3,984)             | 26,888              | 26,091           
|Pricing
    variance on sold volumes:               |                     |                     |                  
|WTI                                                 | (10,805)            | 6,136               | 25,464           
|AECO                                                | 3,696               | 665                 | 13,592           
|Dated
    Brent                                     | 7,942               | 16,230              | 10,688           
|TTF                                                 | 3,745               | 4,078               | 11,827           
|Changes
    in:                                     |                     |                     |                  
|Realized
    derivatives                            | 3,465               | 259                 | 5,655            
|Royalties                                           | 1,114               | (5,678)             | (15,852)         
|Operating
    expense                               | (1,894)             | (4,506)             | (16,601)         
|Transportation                                      | (2,532)             | (3,623)             | (4,811)          
|Interest                                            | 60                  | (2,393)             | (10,597)         
|General
    and administration                      | (1,921)             | (5,066)             | (6,137)          
|Realized
    other income                           | 3                   | (22)                | 8,525            
|Realized
    foreign exchange                       | (67)                | (3,753)             | (4,670)          
|Corporate
    income taxes                          | 3,388               | (21,595)            | (39,951)         
|PRRT                                                | (1,524)             | (15,575)            | 3,505            
|Fund
    flows from operations - Current Period     | 163,660             | 163,660             | 667,526          



Fund flows
from operations for Q4 2013 was approximately 1% ($2.0 million) lower than Q3. This slight decrease occurred as a result of declines
in the Edmonton Sweet index, which was partially offset by increased pricing for natural gas and for our crude oil production
in Australia.



Fund flows
from operations for the three months and year ended December 31, 2013 was approximately 15% ($21.9 million) and 20% ($109.8 million)
higher, respectively, than the same periods in 2012. These increases were primarily the result of higher production in all our
producing business units, large draws in inventory during the quarter and full year periods, and increases in all relevant commodity
prices. These increases were partially offset by increased current income taxes as a result of increased taxable income combined
with tax provisions recorded for tax assessments in France.



Fluctuations
in fund flows from operations (and correspondingly net earnings and cash flows from operating activities) may occur as a result
of changes in commodity prices and costs to produce petroleum and natural gas. In addition, fund flows from operations may be
highly affected by the timing of crude oil shipments in Australia and France. When crude oil inventory is built up, the related
operating expense, royalties, and depletion expense are deferred and carried as inventory on our balance sheet. When the crude
oil inventory is subsequently drawn down, the related expenses are recognized in fund flows from operations.



9


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




CANADA
BUSINESS UNIT



Overview

| | • | Production
                                         and assets focused in Alberta at West Pembina near Drayton Valley, Slave Lake and Central
                                         Alberta.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Potential
                                         for three significant resource plays sharing the same surface infrastructure in the West
                                         Pembina region:
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Cardium
                                         light oil (1,800m depth) - in development phase
| | - | ------------------------------------------------------------------------------------------------

| | - | Mannville
                                         condensate-rich gas (2,400 - 2,700m depth) - in development phase
| | - | --------------------------------------------------------------------------------------------------------------------

| | - | Duvernay
                                         liquids-rich gas (3,200m depth) - in appraisal phase
| | - | ------------------------------------------------------------------------------------------------------

| | • | Canadian
                                         cash flows are fully tax-sheltered for the foreseeable future.
| | - | ----------------------------------------------------------------------------------------------------------------



Operational review



|                                |                               | Three
    Months Ended |              | %
    change |       |               | Year
    Ended |  | %
    change
|------------------------------- | ----------------------------- | ---------------------- | ------------ | ------------ | ----- | ------------- | -------------- |  | ------------
|                                |                               | Dec
    31,            | Sept
    30, | Dec
    31,  |       | Q4/13
    vs. | Q4/13
    vs.  |  |             
|Canada
    business unit        | 2013                          | 2013                   | 2012         |              | Q3/13 | Q4/12         |                |  | 2013        
|Production                      |                               |                        |              |              |       |               |                |  |             
|                                | Crude
    oil (bbls/d)        | 8,719                  | 7,969        | 7,983        |       | 9%            | 9%             |  |             
|                                | NGLs
    (bbls/d)             | 1,699                  | 1,897        | 1,106        |       | (10%)         | 54%            |  |             
|                                | Natural
    gas (mmcf/d)      | 41.43                  | 43.40        | 31.41        |       | (5%)          | 32%            |  |             
|                                | Total
    (boe/d)             | 17,322                 | 17,099       | 14,323       |       | 1%            | 21%            |  |             
|Production
    mix (% of total) |                               |                        |              |              |       |               |                |  |             
|                                | Crude
    oil                 | 50%                    | 47%          | 56%          |       |               |                |  |             
|                                | NGLs                          | 10%                    | 11%          | 8%           |       |               |                |  |             
|                                | Natural
    gas               | 40%                    | 42%          | 36%          |       |               |                |  |             
|Activity                        |                               |                        |              |              |       |               |                |  |             
|                                | Capital
    expenditures ($M) | 77,245                 | 62,270       | 82,844       |       | 24%           | (7%)           |  |             
|                                | Acquisitions
    ($M)         | 1,603                  | 7,586        | -            |       |               |                |  |             
|                                | Gross
    wells drilled       | 21.00                  | 21.00        | 26.00        |       |               |                |  |             
|                                | Net
    wells drilled         | 16.65                  | 16.26        | 17.70        |       |               |                |  |             



Production

| | • | Production
                                         in Canada increased by 1% quarter-over-quarter and by 13% year-over-year.
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | • | Year-over-year
                                         increase was largely attributable to continued development in the Cardium, supplemented
                                         by Mannville wells brought on production during the year.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Activity
review

| | • | Vermilion
                                         drilled 21 (16.6 net) wells during Q4 2013.
| | - | ----------------------------------------------------------------------------------------------

| | • | In
                                         2013, Vermilion drilled 69 (57.2 net) wells.
| | - | ----------------------------------------------------------------------------------------



Cardium

| | - | In
                                         the Cardium, we drilled 19 (15.6 net) wells and brought 16 gross operated wells on production
                                         during Q4 2013. Eight of the wells drilled during Q4 2013 were long reach wells (four
                                         1.5-mile, three 2-mile, and one 2.3-mile long well).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Since
                                         2009, we have drilled or participated in 238 (170.9 net) wells in the Cardium.
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | - | Average
                                         well costs, normalized on a per section basis, are approximately $3.0 million per section
                                         (2009 - $5.0 million per section).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Per
                                         boe operating costs are less than $5.25/boe for operated production.
| | - | -----------------------------------------------------------------------------------------------------------------

| | - | In
                                         2014, we plan to drill or participate in 36 (30.3 net) Cardium wells.
| | - | -----------------------------------------------------------------------------------------------------------------

| | - | Cardium
                                         expenditures are expected to represent approximately 60% of planned Canadian development
                                         expenditures in 2014.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mannville

| | - | During
                                         Q4 2013, in the Mannville, we drilled two (1.0 net) wells and brought 1.2 net wells on
                                         production. In 2013, we drilled and placed on production six (3.7 net) Mannville wells.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | In
                                         2014, we plan to drill eight (5.7 net) Mannville wells.
| | - | ---------------------------------------------------------------------------------------------------

| | - | Mannville
                                         expenditures are expected to represent approximately 20% of planned Canadian development
                                         expenditures in 2014.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Duvernay

| | - | To
                                         date, we have drilled three vertical stratigraphic test wells, which confirmed our placement
                                         inside the condensate-rich window.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | In
                                         2014, we plan to drill two horizontal Duvernay wells, the first of which is currently
                                         in progress.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Financial review



|                             |                                        | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|---------------------------- | -------------------------------------- | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|Canada
    business unit     | Dec
    31,                            | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|($M
    except as indicated) | 2013                                   | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|                             | Sales                                  | 97,367                 | 100,000     | 77,476       |               | (3%)          | 26%            |  |             
|                             | Royalties                              | (11,039)               | (11,156)    | (7,401)      |               | (1%)          | 49%            |  |             
|                             | Transportation
    expense             | (4,102)                | (3,272)     | (1,922)      |               | 25%           | 113%           |  |             
|                             | Operating
    expense                  | (13,218)               | (12,770)    | (14,514)     |               | 4%            | (9%)           |  |             
|                             | General
    and administration         | (2,478)                | (2,675)     | (1,765)      |               | (7%)          | 40%            |  |             
|                             | Fund
    flows from operations         | 66,530                 | 70,127      | 51,874       |               | (5%)          | 28%            |  |             
|Netbacks
    ($/boe)         |                                        |                        |             |              |               |               |                |  |             
|                             | Sales                                  | 61.10                  | 63.56       | 58.80        |               | (4%)          | 4%             |  |             
|                             | Royalties                              | (6.93)                 | (7.09)      | (5.62)       |               | (2%)          | 23%            |  |             
|                             | Transportation
    expense             | (2.57)                 | (2.08)      | (1.46)       |               | 24%           | 76%            |  |             
|                             | Operating
    expense                  | (8.29)                 | (8.12)      | (11.01)      |               | 2%            | (25%)          |  |             
|                             | General
    and administration         | (1.60)                 | (2.04)      | (1.34)       |               | (22%)         | 19%            |  |             
|                             | Fund
    flows from operations netback | 41.71                  | 44.23       | 39.37        |               | (6%)          | 6%             |  |             
|Reference
    prices         |                                        |                        |             |              |               |               |                |  |             
|                             | WTI
    (US $/bbl)                     | 97.46                  | 105.82      | 88.18        |               | (8%)          | 11%            |  |             
|                             | Edmonton
    Sweet index (US $/bbl)    | 82.53                  | 101.10      | 84.86        |               | (18%)         | (3%)           |  |             
|                             | AECO
    ($/GJ)                        | 3.35                   | 2.31        | 3.05         |               | 45%           | 10%            |  |             



Sales

| | - | The
                                         realized price for our crude oil production in Canada is directly linked to WTI but is
                                         subject to market conditions in Western Canada. These market conditions can result in
                                         fluctuations in the pricing differential, as reflected by the Edmonton Sweet index price.
                                         The realized price of our NGLs in Canada is based on product specific differentials pertaining
                                         to trading hubs in the U.S. The realized price of our natural gas in Canada is based
                                         on the AECO spot price in Canada.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         decrease in sales per boe for Q4 2013 as compared to Q3 2013 was primarily the result
                                         of 18% lower Edmonton Sweet index pricing, partially offset by a 45% increase in the
                                         AECO reference price.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         increase in sales per boe for the three months and year ended December 31, 2013 as compared
                                         to the same periods in 2012 was primarily the result of a 10% and 33% increase, respectively,
                                         in the AECO reference price.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Royalties

| | - | Royalty
                                         expense as a percentage of sales was consistent quarter-over-quarter.
| | - | ----------------------------------------------------------------------------------------------------------------------

| | - | The
                                         increase in royalty expense as a percentage of sales from 10% to 11% for the three months
                                         and year ended December 31, 2013 as compared to the same periods in 2012 was the result
                                         of the timing of placing Cardium wells on production due to the associated royalty incentive
                                         on initial production volumes.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Transportation

| | - | Transportation
                                         expense relates to the delivery of crude oil and natural gas production to major pipelines
                                         where legal title transfers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Transportation
                                         expense per boe increased for the three months and year ended December 31, 2013 compared
                                         to the same periods in 2012 as a result of increased crude oil production subject to
                                         transportation costs.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operating
expense

| | - | Operating
                                         expense per boe was lower for the year ended December 31, 2013 as operating expense remained
                                         relatively stable while production increased by 13% year-over-year.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Operating
                                         expense for Q4 2013 was lower than Q4 2012 as the 2012 period operating expense included
                                         higher turnaround activity and downhole work.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General
and administration

| | - | Year-over-year,
                                         general and administration expense per boe remained steady. Fluctuations in the presented
                                         quarters relates primarily to the timing of expenditures.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 

11


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




FRANCE
BUSINESS UNIT



Overview

| | • | Entered
                                         France in 1997 and completed three subsequent acquisitions, including two in 2012.
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | • | Largest
                                         independent oil producer by volume.
| | - | ------------------------------------------------------------------------------------

| | • | Producing
                                         assets include large conventional fields with high working interests located in the Aquitaine
                                         and Paris Basins with an identified inventory of workover, infill drilling, and secondary
                                         recovery opportunities.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Production
                                         is characterized by Brent-based crude pricing and low base decline rates.
| | - | -----------------------------------------------------------------------------------------------------------------------------



Operational review



|                                |                                 | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|------------------------------- | ------------------------------- | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|                                | Dec
    31,                     | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|France
    business unit        | 2013                            | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|Production                      |                                 |                        |             |              |               |               |                |  |             
|                                | Crude
    oil (bbls/d)          | 11,131                 | 11,625      | 9,843        |               | (4%)          | 13%            |  |             
|                                | Natural
    gas (mmcf/d)        | -                      | 5.23        | 3.91         |               | (100%)        | (100%)         |  |             
|                                | Total
    (boe/d)               | 11,131                 | 12,496      | 10,495       |               | (11%)         | 6%             |  |             
|Inventory
    (mbbls)           |                                 |                        |             |              |               |               |                |  |             
|                                | Opening
    crude oil inventory | 226                    | 202         | 246          |               |               |                |  |             
|                                | Adjustments                     | -                      | -           | -            |               |               |                |  |             
|                                | Crude
    oil production        | 1,024                  | 1,069       | 906          |               |               |                |  |             
|                                | Crude
    oil sales             | (981)                  | (1,045)     | (798)        |               |               |                |  |             
|                                | Closing
    crude oil inventory | 269                    | 226         | 354          |               |               |                |  |             
|Production
    mix (% of total) |                                 |                        |             |              |               |               |                |  |             
|                                | Crude
    oil                   | 100%                   | 93%         | 94%          |               |               |                |  |             
|                                | Natural
    gas                 | -                      | 7%          | 6%           |               |               |                |  |             
|Activity                        |                                 |                        |             |              |               |               |                |  |             
|                                | Capital
    expenditures ($M)   | 31,899                 | 23,664      | 20,958       |               | 35%           | 52%            |  |             
|                                | Acquisitions
    ($M)           | -                      | -           | 74,947       |               |               |                |  |             
|                                | Gross
    wells drilled         | -                      | -           | -            |               |               |                |  |             
|                                | Net
    wells drilled           | -                      | -           | -            |               |               |                |  |             



Production

| | • | Quarter-over-quarter
                                         production decrease of 11% and year-over-year production growth of 8%.
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | • | Q4
                                         2013 vs. Q3 2013 decrease was mainly due to our gas production being shut-in at Vic Bihl.
                                         In late September 2013, the third party Lacq processing facility, which processed our
                                         Vic Bihl production of approximately 700 boe/d, was permanently shut in. As a result,
                                         our Vic Bihl gas production has been temporarily shut in while preparations to transfer
                                         an alternative facility are completed. We expect approximately 140 boe/d will be back
                                         on-stream in Q3, with the remainder not anticipated to be back on production until late-2015.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Year-over-year
                                         growth driven by production from our five-well drilling program in Champotran, which
                                         was brought on late in the second quarter, and production additions from the ZaZa acquisition
                                         at the end of 2012.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | The
                                         five wells drilled in 2013 produced at an average rate per well of 250 bbls/d with minimal
                                         water during the fourth quarter of 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Production
                                         remained predominately weighted to Brent crude at approximately 95% of production for
                                         2013, and 100% in Q4 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Activity review

| | • | During
                                         Q4 2013, we converted a previous producing well to an injection well to add additional
                                         injection capacity to our waterflood program at Champotran.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | During
                                         Q4 2013, we also completed a number of workovers, pipeline and facility integrity projects,
                                         and prepared for our 2014 capital program.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | In
                                         2013, we started increasing our France-based technical staff to identify and execute
                                         additional investment opportunities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | In
                                         2013, we completed a successful five-well drilling campaign in the Champotran field,
                                         adding significant production, reserves, and confirming 20 potential future drilling
                                         locations.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | In
                                         2014, we are planning a nine-well drilling program in the Champotran, Cazaux, Parentis,
                                         and Tamaris fields. In addition, we are planning an estimated 18-well workover program.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2


Financial review



|                             |                                        | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|---------------------------- | -------------------------------------- | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|France
    business unit     | Dec
    31,                            | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|($M
    except as indicated) | 2013                                   | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|                             | Sales                                  | 110,757                | 120,574     | 87,702       |               | (8%)          | 26%            |  |             
|                             | Royalties                              | (6,577)                | (7,574)     | (4,537)      |               | (13%)         | 45%            |  |             
|                             | Transportation
    expense             | (4,622)                | (2,713)     | (1,854)      |               | 70%           | 149%           |  |             
|                             | Operating
    expense                  | (15,524)               | (14,599)    | (13,699)     |               | 6%            | 13%            |  |             
|                             | General
    and administration         | (5,080)                | (4,964)     | (4,779)      |               | 2%            | 6%             |  |             
|                             | Current
    income taxes               | (28,024)               | (31,717)    | (13,335)     |               | (12%)         | 110%           |  |             
|                             | Fund
    flows from operations         | 50,930                 | 59,007      | 49,498       |               | (14%)         | 3%             |  |             
|Netbacks
    ($/boe)         |                                        |                        |             |              |               |               |                |  |             
|                             | Sales                                  | 112.84                 | 107.08      | 102.26       |               | 5%            | 10%            |  |             
|                             | Royalties                              | (6.70)                 | (6.73)      | (5.29)       |               | -             | 27%            |  |             
|                             | Transportation
    expense             | (4.71)                 | (2.41)      | (2.16)       |               | 95%           | 118%           |  |             
|                             | Operating
    expense                  | (15.82)                | (12.97)     | (15.97)      |               | 22%           | (1%)           |  |             
|                             | General
    and administration         | (5.18)                 | (4.41)      | (5.57)       |               | 17%           | (7%)           |  |             
|                             | Current
    income taxes               | (28.55)                | (28.17)     | (15.55)      |               | 1%            | 84%            |  |             
|                             | Fund
    flows from operations netback | 51.88                  | 52.39       | 57.72        |               | (1%)          | (10%)          |  |             
|Reference
    prices         |                                        |                        |             |              |               |               |                |  |             
|                             | Dated
    Brent (US $/bbl)             | 109.27                 | 110.37      | 110.02       |               | (1%)          | (1%)           |  |             



Sales

| | - | Crude
                                         oil production in France is priced with reference to Dated Brent.
| | - | ----------------------------------------------------------------------------------------------------------------

| | - | Sales
                                         for the three months and year ended December 31, 2013 increased versus the same periods
                                         in 2012, despite a decrease in the Dated Brent reference price, due to an increase in
                                         sold volumes resulting from new production brought on from the 2013 drilling campaign
                                         in addition to the weakening of the Canadian dollar.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Royalties

| | - | Royalties
                                         in France relate to two components: RCDM (levied on units of production and not subject
                                         to changes in commodity prices) and R31 (based on a percentage of revenue).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         increase in royalties expense for the three months and year ended December 31, 2013 versus
                                         the same periods in 2012 was primarily the result of increased R31 royalties associated
                                         with incremental production from our Q4 2012 acquisition as well as production from wells
                                         drilled during our 2013 drilling campaign.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Transportation

| | - | Transportation
                                         expense in France pertains to the shipments of crude oil by tanker from the Aquitaine
                                         Basin to third party refineries.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         increase in transportation expense per boe for the three months and year ended December
                                         31, 2013 versus the comparable periods resulted from an increased number of shipments
                                         from the Aquitaine Basin.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operating
expense

| | - | The
                                         increase in operating expense per boe from Q3 to Q4 2013 was primarily the result of
                                         lower production. Overall operating expense was 6% higher from Q3 to Q4 2013 primarily
                                         as a result of higher electricity prices.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | On
                                         a year-over-year basis, operating expense per boe increased by 6% largely as a result
                                         of the foreign exchange impact of a weakening Canadian dollar versus the Euro. Overall
                                         operating expense increased by 22% year-over-year due to the aforementioned foreign exchange
                                         impacts and increased activity associated with higher production.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General
and administration

| | - | General
                                         and administration expense per boe for the three months and year ended December 31, 2013
                                         increased versus the same periods in 2012 due to additional staffing levels, including
                                         staff from our Q4 2012 acquisition as well as additional technical staff to support our
                                         growing operational activities in France.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Current
income taxes

| | - | The
                                         year-over-year increase in current income taxes for the three months and year ended December
                                         31, 2013 as compared to the same periods in 2012 was the result of the increase in fund
                                         flows from operations combined with provisions recognized relating to tax assessments
                                         from tax authorities for prior period tax positions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




NETHERLANDS
BUSINESS UNIT



Overview

| | • | Entered
                                         the Netherlands in 2004.
| | - | -------------------------------------------------------------------------

| | • | Second
                                         largest onshore gas producer by volume.
| | - | ---------------------------------------------------------------------------------------

| | • | Interests
                                         includes 16 licenses in the northeast region, 5 licenses in the central region, and 2
                                         offshore licenses.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Licenses
                                         include more than 780,000 net acres of undeveloped land.
| | - | ----------------------------------------------------------------------------------------------------------

| | • | High
                                         impact natural gas drilling and development with royalty-free production.
| | - | -----------------------------------------------------------------------------------------------------------------------

| | • | Natural
                                         gas produced in the Netherlands is priced off the TTF index, which receives a significant
                                         premium over North American gas prices.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operational review



|                              |                               | Three
    Months Ended |              | %
    change |       |               | Year
    Ended |  | %
    change
|----------------------------- | ----------------------------- | ---------------------- | ------------ | ------------ | ----- | ------------- | -------------- |  | ------------
|                              |                               | Dec
    31,            | Sept
    30, | Dec
    31,  |       | Q4/13
    vs. | Q4/13
    vs.  |  |             
|Netherlands
    business unit | 2013                          | 2013                   | 2012         |              | Q3/13 | Q4/12         |                |  | 2013        
|Production                    |                               |                        |              |              |       |               |                |  |             
|                              | NGLs
    (bbls/d)             | 62                     | 48           | 70           |       | 29%           | (11%)          |  |             
|                              | Natural
    gas (mmcf/d)      | 37.53                  | 28.78        | 33.03        |       | 30%           | 14%            |  |             
|                              | Total
    (boe/d)             | 6,318                  | 4,845        | 5,574        |       | 30%           | 13%            |  |             
|Activity                      |                               |                        |              |              |       |               |                |  |             
|                              | Capital
    expenditures ($M) | 15,698                 | 8,316        | 8,118        |       | 89%           | 93%            |  |             
|                              | Acquisitions
    ($M)         | 27,500                 | -            | -            |       |               |                |  |             
|                              | Gross
    wells drilled       | -                      | -            | -            |       |               |                |  |             
|                              | Net
    wells drilled         | -                      | -            | -            |       |               |                |  |             



Production

| | • | Achieved
                                         record annual production with 5,967 boe/d.
| | - | --------------------------------------------------------------------------------------------

| | • | Quarter-over-quarter
                                         production growth of 30% and year-over-year production growth of 4%.
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | • | Q4
                                         2013 vs. Q3 2013 increase in production was mainly attributable to completion of the
                                         retrofit of the Middenmeer Treatment Centre and the associated volumes processed through
                                         the 35 mmcf/d facility.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Activity

| | • | In
                                         October 2013, we acquired additional operating interests in nine operated onshore concessions
                                         (six in production or development and three exploration) and a non-operated interest
                                         in one offshore concession in the Netherlands for approximately $27.5 million.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Four
                                         of the onshore concessions are located in the northeastern part of the Netherlands, adjacent
                                         to or in close proximity to our existing concessions. The remaining onshore licenses
                                         provide new opportunities for Vermilion in the central region of the Netherlands.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Production
                                         from the acquired assets is expected to average approximately 400 boe/d in 2014. The
                                         production is comprised of 99% natural gas.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         acquisition also added 2.4(1)mmboe of proved plus probable
                                         reservesand 298,500 net acres of land, of which approximately 98% is currently
                                         undeveloped.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | We
                                         are currently planning and preparing for a six-well drilling program in the Netherlands
                                         in 2014. The drilling program will include our first new well on the lands acquired in
                                         October 2013.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Subsequent
                                         to year-end 2013, we were awarded the Ijsselmuiden exploration concession consisting
                                         of approximately 110,500 net undeveloped acres, increasing our total position in the
                                         country to over 800,000 net undeveloped acres.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Estimated
                                         proved plus probable reserves attributable to the assets as evaluated by GLJ in a report
                                         dated September 16, 2013, with an effective date of December 31, 2012.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2


Financial review



|                              |                                        | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|----------------------------- | -------------------------------------- | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|Netherlands
    business unit | Dec
    31,                            | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|($M
    except as indicated)  | 2013                                   | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|                              | Sales                                  | 39,451                 | 27,382      | 31,260       |               | 44%           | 26%            |  |             
|                              | Operating
    expense                  | (6,179)                | (5,209)     | (5,713)      |               | 19%           | 8%             |  |             
|                              | General
    and administration         | (1,553)                | (333)       | (625)        |               | 366%          | 148%           |  |             
|                              | Current
    income taxes               | (8,267)                | (6,810)     | (1,102)      |               | 21%           | 650%           |  |             
|                              | Fund
    flows from operations         | 23,452                 | 15,030      | 23,820       |               | 56%           | (2%)           |  |             
|Netbacks
    ($/boe)          |                                        |                        |             |              |               |               |                |  |             
|                              | Sales                                  | 67.88                  | 61.44       | 60.96        |               | 10%           | 11%            |  |             
|                              | Operating
    expense                  | (10.63)                | (11.69)     | (11.14)      |               | (9%)          | (5%)           |  |             
|                              | General
    and administration         | (2.67)                 | (0.75)      | (1.22)       |               | 256%          | 119%           |  |             
|                              | Current
    income taxes               | (14.22)                | (15.28)     | (2.15)       |               | (7%)          | 561%           |  |             
|                              | Fund
    flows from operations netback | 40.36                  | 33.72       | 46.45        |               | 20%           | (13%)          |  |             
|Reference
    prices          |                                        |                        |             |              |               |               |                |  |             
|                              | TTF
    ($/GJ)                         | 10.65                  | 9.94        | 9.78         |               | 7%            | 9%             |  |             
|                              | TTF
    (€/GJ)                         | 7.45                   | 7.20        | 7.58         |               | 3%            | (2%)           |  |             



Sales

| | - | As
                                         of January 1, 2013, the price of our natural gas in the Netherlands is based on the TTF
                                         day-ahead index, as determined on the Title Transfer Facility Virtual Trading Point operated
                                         by Dutch TSO Gas Transport Services, plus various fees. GasTerra, a state owned entity,
                                         continues to purchase all of the natural gas we produce in the Netherlands. Prior to
                                         2013, the natural gas price we received in the Netherlands was calculated using a formula
                                         based on the trailing average of Dated Brent and natural gas prices from European trading
                                         hubs.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         increase in sales per boe for the three months and year ended December 31, 2013 versus
                                         the comparable periods was due to the strengthening of the Euro against the Canadian
                                         dollar, resulting in translation to higher Canadian dollar TTF reference prices.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Royalties
and transportation expense

| | - | Our
                                         production in the Netherlands is not subject to royalties or transportation expense as
                                         gas is sold at the plant gate.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operating
expense

| | - | Operating
                                         expense per boe for Q4 2013 was lower than Q3 2013 and Q4 2012 as a result of increased
                                         production volumes on largely fixed operating expense.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Overall
                                         operating expense for the three months and year ended December 31, 2013 versus the same
                                         periods in 2012 increased primarily as a result of the stronger Euro versus the Canadian
                                         dollar.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General
and administration

| | - | Fluctuations
                                         in general and administration expense per boe for the quarters presented were driven
                                         by the timing of expenditures and partner recoveries. The increase for Q4 2013 was primarily
                                         driven by the aforementioned acquisition during the quarter.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | On
                                         a year-over-year basis, the increase in general and administration expense was primarily
                                         the result of increased technical staffing in the Netherlands in support of the development
                                         of our inventory of undeveloped acreage in addition to the aforementioned acquisition.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Current
income taxes

| | - | Current
                                         income taxes in the Netherlands apply to taxable income after eligible deductions at
                                         an effective tax rate of approximately 46%.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Current
                                         income taxes per boe increased for the three months and year ended December 31, 2013
                                         as compared to the same periods in 2012 due to a change in deductions for asset retirement
                                         obligations and depletion recorded during the 2012 period as compared to 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






AUSTRALIA
BUSINESS UNIT



Overview

| | • | Entered
                                         Australia in 2005.
| | - | -------------------------------------------------------------------

| | • | Hold
                                         title to a 100% working interest in Wandoo field, located approximately 80km northwest
                                         of Australia.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Production
                                         is operated from two off-shore platforms, and originates from 21 producing well bores.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------

| | • | Wells
                                         are located 600m below the sea bed with 500 to 3,000 plus meter horizontal lengths.
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | • | Contracted
                                         crude oil production is priced with reference to Dated Brent.
| | - | -----------------------------------------------------------------------------------------------------------------



Operational review



|                            |                                 | Three
    Months Ended |              | %
    change |       |               | Year
    Ended |  | %
    change
|--------------------------- | ------------------------------- | ---------------------- | ------------ | ------------ | ----- | ------------- | -------------- |  | ------------
|                            |                                 | Dec
    31,            | Sept
    30, | Dec
    31,  |       | Q4/13
    vs. | Q4/13
    vs.  |  |             
|Australia
    business unit | 2013                            | 2013                   | 2012         |              | Q3/13 | Q4/12         |                |  | 2013        
|Production                  |                                 |                        |              |              |       |               |                |  |             
|                            | Crude
    oil (bbls/d)          | 6,189                  | 7,070        | 5,873        |       | (12%)         | 5%             |  |             
|Inventory
    (mbbls)       |                                 |                        |              |              |       |               |                |  |             
|                            | Opening
    crude oil inventory | 183                    | 187          | 117          |       |               |                |  |             
|                            | Crude
    oil production        | 569                    | 650          | 540          |       |               |                |  |             
|                            | Crude
    oil sales             | (622)                  | (654)        | (389)        |       |               |                |  |             
|                            | Closing
    crude oil inventory | 130                    | 183          | 268          |       |               |                |  |             
|Activity                    |                                 |                        |              |              |       |               |                |  |             
|                            | Capital
    expenditures ($M)   | 8,420                  | 5,880        | 25,257       |       | 43%           | (67%)          |  |             
|                            | Gross
    wells drilled         | -                      | -            | -            |       |               |                |  |             
|                            | Net
    wells drilled           | -                      | -            | -            |       |               |                |  |             



Production

| | • | Quarter-over-quarter
                                         production decreased by 12% and year-over-year production growth of 2%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| | • | Q4
                                         2013 production impacted by planned shutdown in October for platform maintenance and
                                         due to impacts from Cyclone Christine in late December.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Production
                                         volumes are managed to meet customer demands and long term supply agreements, and we
                                         continue to plan to produce between 6,000 and 8,000 bbls/d.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | 2013
                                         production reflects strong well results, more than offsetting natural declines, and we
                                         continue to produce the wells at restricted rates below their demonstrated productive
                                         capacity.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Activity
review

| | • | Drilled
                                         two sidetracks off existing wells during the first half of 2013, including the longest
                                         horizontal section to date at Wandoo at 3,400 metres.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | In
                                         Q4 2013, efforts were focused on facilities repairs and engineering studies.
| | - | ------------------------------------------------------------------------------------------------------------------------

| | • | In
                                         2014, planned activities include ongoing facilities maintenance, enhancement and refurbishment
                                         along with preparation and permitting activities in advance of our planned 2015 drilling
                                         program.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2


Financial review



|                             |                                        | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|---------------------------- | -------------------------------------- | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|Australia
    business unit  | Dec
    31,                            | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|($M
    except as indicated) | 2013                                   | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|                             | Sales                                  | 77,533                 | 79,229      | 44,795       |               | (2%)          | 73%            |  |             
|                             | Operating
    expense                  | (13,219)               | (13,668)    | (9,708)      |               | (3%)          | 36%            |  |             
|                             | General
    and administration         | (1,442)                | (1,414)     | (619)        |               | 2%            | 133%           |  |             
|                             | PRRT                                   | (17,173)               | (15,649)    | (1,598)      |               | 10%           | 975%           |  |             
|                             | Corporate
    income taxes             | (6,210)                | (7,666)     | (6,774)      |               | (19%)         | (8%)           |  |             
|                             | Fund
    flows from operations         | 39,489                 | 40,832      | 26,096       |               | (3%)          | 51%            |  |             
|Netbacks
    ($/boe)         |                                        |                        |             |              |               |               |                |  |             
|                             | Sales                                  | 124.63                 | 120.95      | 115.22       |               | 3%            | 8%             |  |             
|                             | Operating
    expense                  | (21.25)                | (20.86)     | (24.97)      |               | 2%            | (15%)          |  |             
|                             | General
    and administration expense | (2.32)                 | (2.16)      | (1.59)       |               | 7%            | 46%            |  |             
|                             | PRRT                                   | (27.60)                | (23.89)     | (4.11)       |               | 16%           | 572%           |  |             
|                             | Corporate
    income taxes             | (9.98)                 | (11.70)     | (17.42)      |               | (15%)         | (43%)          |  |             
|                             | Fund
    flows from operations netback | 63.48                  | 62.34       | 67.13        |               | 2%            | (5%)           |  |             
|Reference
    prices         |                                        |                        |             |              |               |               |                |  |             
|                             | Dated
    Brent (US $/bbl)             | 109.27                 | 110.37      | 110.02       |               | (1%)          | (1%)           |  |             



Sales

| | - | Our
                                         production in Australia currently receives a premium to Dated Brent. This premium, coupled
                                         with the weakening of the Canadian dollar versus the US dollar, resulted in an increase
                                         in sales per boe despite slight declines in Dated Brent.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Royalties
and transportation expense

| | - | Our
                                         production in Australia is not subject to royalties or transportation expense as crude
                                         oil is sold directly from the Wandoo B platform.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operating
expense

| | - | Operating
                                         expense per boe for the three months and year ended December 31, 2013 was relatively
                                         consistent with the three months ended September 30, 2013 and the year ended December
                                         31, 2012.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         year-over-year decrease in operating expense per boe was primarily the result of an increase
                                         in produced volumes resulting in lower fixed operating expense per bbl.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General
and administration

| | - | The
                                         increase in general and administration expense for the three months and year ended December
                                         31, 2013 as compared to the same periods in 2012 was primarily the result of increased
                                         staffing expenditures to support operational requirements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



PRRT and
corporate income taxes

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

| | - | PRRT
                                         for Q4 2013 was significantly higher than Q4 2012 as the 2012 period included higher
                                         capital expenditures, which related to preparation for the 2013 Australian drilling campaign.
                                         The expenditures relating to the drilling campaign, which were primarily incurred during
                                         Q1 2013, resulted in a decrease in PRRT for the year ended December 31, 2013 as compared
                                         to the same period in 2012.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






IRELAND
BUSINESS UNIT



Overview

| | • | 18.5%
                                         non-operating interest in the offshore Corrib gas field located approximately 83km off
                                         the northwest coast of Ireland.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Project
                                         comprises six offshore wells, both offshore and onshore pipeline segments as well as
                                         a natural gas processing facility.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Acquired
                                         interest on July 30, 2009 for cash consideration of $136.8 million. Pursuant to the terms
                                         of the acquisition agreement, Vermilion made an additional payment to the vendor of $134.3
                                         million (US$135 million) at the end of 2012.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Production
                                         from Corrib is expected to increase Vermilion’s volumes by approximately 58 mmcf/d
                                         (9,700 boe/d) once the field reaches peak production.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | The
                                         Corrib field is expected to constitute 95% of Ireland’s natural gas production
                                         and approximately 60% to 65% of Ireland’s domestic gas consumption.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Operational and
financial review



|                          |                                | Three
    Months Ended |             | %
    change |               |               | Year
    Ended |  | %
    change
|------------------------- | ------------------------------ | ---------------------- | ----------- | ------------ | ------------- | ------------- | -------------- |  | ------------
|Ireland
    business unit | Dec
    31,                    | Sept
    30,           | Dec
    31, |              | Q4/13
    vs. | Q4/13
    vs. |                |  | Dec
    31, 
|($M)                      | 2013                           | 2013                   | 2012        |              | Q3/13         | Q4/12         |                |  | 2013        
|                          | Transportation
    expense     | (357)                  | (564)       | (1,682)      |               | (37%)         | (79%)          |  |             
|                          | General
    and administration | (482)                  | (313)       | (341)        |               | 54%           | 41%            |  |             
|                          | Fund
    flows from operations | (839)                  | (877)       | (2,023)      |               | (4%)          | (59%)          |  |             
|Activity                  |                                |                        |             |              |               |               |                |  |             
|                          | Capital
    expenditures       | 14,472                 | 35,028      | 18,093       |               | (59%)         | (20%)          |  |             



Activity
review

| | • | Various
                                         onshore and offshore activities have progressed over 2013, including umbilical lays to
                                         the offshore wells, onshore pipelining in segments that are not within the tunnel, construction
                                         of the tunnel boring machine reception site and gas plant pre-commissioning, in addition
                                         to the tunneling process.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | To
                                         date, the land-based onshore pipeline is complete (approximately 5km), and there is approximately
                                         1.4km of the 4.9km tunnel beneath Sruwaddacon Bay remaining to be tunneled.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Tunneling
                                         operations were re-started on November 3, 2013 after being suspended following an industrial
                                         accident, which resulted in a fatality at the project worksite on September 8, 2013.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Onshore
                                         pipelining, offshore umbilical lays, seismic processing and workover activities for our
                                         Corrib project were not impacted by the suspension.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Based
                                         on an early review of our deterministic schedule for remaining construction and commissioning
                                         activities, we revised our expectations for timing of first gas to approximately mid-2015
                                         from earlier expectations for start-up at the end of 2014 or early 2015.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Following
                                         successful subsea well operations conducted on one of the production wells during the
                                         third quarter of 2013, we increased our peak production estimate at Corrib from 54 mmcf/d
                                         (9,000 boe/d) to approximately 58 mmcf/d (approximately 9,700 boe/d) net to Vermilion.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Transportation
expense

| | • | Transportation
                                         expense in Ireland relates to payments under a ship or pay agreement related to the Corrib
                                         project. Required payments under this agreement were lower year-over-year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




CORPORATE



Overview

| | • | Our
                                         Corporate segment includes costs related to our global hedging program, financing expenses,
                                         and general and administration expenses, primarily incurred in Canada and not directly
                                         related to the operations of our business units.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Financial review



|                                          | Three
    Months Ended |              |             | Year
    Ended
|----------------------------------------- | ---------------------- | ------------ | ----------- | --------------
|                                          | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                      | 2013                   | 2013         | 2012        |               
|General
    and administration            | (2,919)                | (2,334)      | (759)       |               
|Current
    income taxes                  | (564)                  | (260)        | (259)       |               
|Interest
    expense                      | (10,049)               | (10,109)     | (7,656)     |               
|Realized
    loss on derivatives          | (1,300)                | (4,765)      | (1,559)     |               
|Realized
    foreign exchange (loss) gain | (1,294)                | (1,227)      | 2,459       |               
|Realized
    other income (expense)       | 224                    | 221          | 246         |               
|Fund
    flows from operations            | (15,902)               | (18,474)     | (7,528)     |               



General
and administration

| | - | On
                                         a year-over-year basis, general and administration expense incurred in the Corporate
                                         segment was lower as a result of an increase in the staff involved in the operational
                                         activity of our business units.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Current
income taxes

| | - | Taxes
                                         in our corporate segment relates to holding companies that pay current taxes in foreign
                                         jurisdictions.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest
expense

| | - | Interest
                                         expense is incurred on our senior unsecured notes and on borrowings under our revolving
                                         credit facility. The increase in the 2013 periods versus the 2012 periods is due to increased
                                         borrowings under our revolving credit facility.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Hedging

| | - | The
                                         nature of our operations results in exposure to fluctuations in commodity prices, interest
                                         rates and foreign currency exchange rates. We monitor and, when appropriate, use derivative
                                         financial instruments to manage our exposure to these fluctuations. All transactions
                                         of this nature entered into are related to an underlying financial position or to future
                                         crude oil and natural gas production. We do not use derivative financial instruments
                                         for speculative purposes. We have elected not to designate any of our derivative financial
                                         instruments as accounting hedges and thus account for changes in fair value in net earnings
                                         at each reporting period. We have not obtained collateral or other security to support
                                         our financial derivatives as we review the creditworthiness of our counterparties prior
                                         to entering into derivative contracts.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Our
                                         hedging philosophy is to hedge solely for the purposes of risk mitigation. Our approach
                                         is to hedge centrally to manage our global risk (typically with an outlook of 12 to 18
                                         months) with a goal of securing pricing for up to 50% of net of royalty volumes through
                                         a portfolio of forward collars, swaps, and physical fixed price arrangements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | We
                                         believe that our hedging philosophy and approach increases the stability of revenues,
                                         cash flows and future dividends while also assisting us in the execution of our capital
                                         and development plans.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                         realized loss in the fourth quarter and full year 2013 relate primarily to payments on
                                         our crude oil derivatives. In the current quarter, these payments were offset partially
                                         by realized gains on our natural gas derivative instruments while over the full year,
                                         these payments were further offset by realized gains on our crude oil derivatives during
                                         Q2 2013.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | A
                                         listing of derivative positions as at December 31, 2013 is included in “Supplemental
                                         Table 2”.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Other
income

| | - | In
                                         2012, other expense included $8.5 million of expense relating to transfer taxes resulting
                                         from our acquisition of certain working interests in the Paris and Aquitaine Basins in
                                         France.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




FINANCIAL
PERFORMANCE REVIEW



|                                    |         |  |  |  |  |           | Year
    Ended
|----------------------------------- | ------- |  |  |  |  | --------- | --------------
|                                    |         |  |  |  |  |           | Dec
    31,   
|($M
    except per share)           |         |  |  |  |  | 2013      | 2012          
|Total
    assets                    |         |  |  |  |  | 3,708,719 | 3,076,257     
|Long-term
    debt                  |         |  |  |  |  | 990,024   | 642,022       
|Petroleum
    and natural gas sales |         |  |  |  |  | 1,273,835 | 1,083,103     
|Net
    earnings                    |         |  |  |  |  | 327,641   | 190,622       
|Net
    earnings per share          |         |  |  |  |  |           |               
|                                    | Basic   |  |  |  |  |           | 3.24          
|                                    | Diluted |  |  |  |  |           | 3.20          
|Cash
    dividends ($/share)        |         |  |  |  |  | 2.40      | 2.28          



|                                    |         | Three
    Months Ended
|----------------------------------- | ------- | ----------------------
|                                    |         | Dec
    31,           
|($M
    except per share)           | 2013    | 2013                  
|Petroleum
    and natural gas sales | 325,108 | 327,185               
|Net
    earnings                    | 101,510 | 67,796                
|Net
    earnings per share          |         |                       
|                                    | Basic   | 1.00                  
|                                    | Diluted | 0.98                  





The following
table shows a reconciliation of the change in net earnings:



|($M)                                                  | Q4/13
    vs. Q3/13 | Q4/13
    vs. Q4/12 | 2013
    vs. 2012
|----------------------------------------------------- | ------------------- | ------------------- | -----------------
|Net
    earnings - Comparative period                 | 67,796              | 56,914              | 190,622          
|Changes
    in:                                       |                     |                     |                  
|Fund
    flows from operations                        | (1,985)             | 21,923              | 109,798          
|Equity
    based compensation                         | (8,427)             | (2,722)             | (13,741)         
|Unrealized
    gain or loss on derivative instruments | 4,971               | (3,524)             | (640)            
|Unrealized
    foreign exchange gain or loss          | 18,058              | 8,417               | 56,378           
|Unrealized
    other income                           | (146)               | 284                 | (231)            
|Accretion                                             | (313)               | (408)               | (1,525)          
|Depletion
    and depreciation                        | (4,868)             | (17,052)            | (26,443)         
|Deferred
    tax                                      | (20,976)            | (9,722)             | (54,468)         
|Gain
    on acquisition                               | -                   | -                   | (45,309)         
|Impairment
    (recovery)                             | 47,400              | 47,400              | 113,200          
|Net
    earnings - Current Period                     | 101,510             | 101,510             | 327,641          



The fluctuations
in net earnings from quarter-to-quarter and from year-to-year are caused by changes in both cash and non-cash charges. Cash charges
are reflected in fund flows from operations and include: sales, royalties, operating expenses, transportation, general and administration
expense, current tax expense, interest expense, realized gains and losses on derivative instruments, and realized foreign exchange
gains and losses. Non-cash charges include: equity based compensation expense, unrealized gains and losses on derivative instruments,
unrealized foreign exchange gains and losses, accretion, depletion and depreciation expense, and deferred taxes. In addition,
non-cash charges may also include non-recurring charges resulting from acquisitions or charges resulting from impairment or impairment
recoveries.



20


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Equity based
compensation expense

Equity based compensation
expense relates to non-cash compensation expense attributable to long-term incentives granted to directors, officers and employees
under the Vermilion Incentive Plan (“VIP”). The expense is recognized over the vesting period based on the grant date
fair value of awards, adjusted for the ultimate number of awards that actually vest as determined by the Company’s achievement
of performance conditions.



Fluctuations in
equity based compensation expense primarily result from revisions in the future performance conditions related to the VIP estimated
forfeiture rates, and the overall number of VIP outstanding. In general, future performance conditions and estimated forfeiture
rates are revised during the fourth quarter as information becomes more readily available relating to the Company’s performance
during the fiscal year.



Equity based compensation
expense increased in 2013 as compared to 2012 as a result of the revision of future performance condition assumptions in both
Q4 2012 and Q4 2013. Equity based compensation expense was higher for Q3 2013 as compared to Q4 2013 as the revision of performance
condition assumptions was partially offset by an increase in the estimated forfeiture rate, from 5.37% to 6.61%.



Unrealized
gain or loss on derivative instruments

Unrealized gain
or loss on derivative instruments arise as a result of changes in forecasted future commodity prices. As Vermilion uses derivative
instruments to manage the commodity price exposure of our future crude oil and natural gas production, we will normally recognize
unrealized gains on derivative instruments when forecasted future commodity prices decline and vise-versa.



In the three months
and year ended December 31, 2013, Vermilion recognized an unrealized gain on derivative instruments of $1.3 million and $5.1 million,
respectively. These unrealized gains on derivative instruments were primarily the result of the reversal of unrealized losses
on contracts settled during the respective periods. As at December 31, 2013, Vermilion had a net current derivative liability
position of $1.3 million relating primarily to crude oil derivative instruments for the first half of 2014.



Unrealized
foreign exchange gain or loss

As a result of Vermilion’s
international operations, Vermilion conducts business in currencies other than the Canadian dollar and has monetary assets and
liabilities (including cash, receivables, payables, derivative assets and liabilities, and intercompany loans) denominated in
such currencies. Vermilion’s exposure to foreign currencies includes the U.S. Dollar, the Euro and the Australian Dollar.



Unrealized foreign
exchange gains and losses are the result of translating monetary assets and liabilities held in non-functional currencies to the
respective functional currencies of Vermilion and its subsidiaries. Unrealized foreign exchange primarily results from the translation
of Euro denominated financial assets. As such, an appreciation in the Euro against the Canadian dollar will result in an unrealized
foreign exchange gain, and vice versa.



During the three
months and year ended December 31, 2013, the Euro strengthened significantly versus the Canadian dollar resulting in unrealized
foreign exchange gains of $22.3 million and $52.0 million, respectively.



Accretion

Fluctuations in
accretion expense are primarily the result of changes in the balance of asset retirement obligations. The increase in accretion
expense for 2013 as compared to 2012 was primarily the result of accretion on new wells drilled during 2013 and on wells acquired
in an acquisition in France late in 2012.



Depletion
and depreciation

Fluctuations in
depletion and depreciation expense are primarily the result of changes in produced crude oil and natural gas volumes. For the
three months and year ended December 31, 2013, production as compared to the same periods in 2012 increased by 13% and 8%, respectively,
resulting in higher depletion and depreciation expense of 26% and 9%, respectively.



Deferred tax

Deferred tax expense
arises primarily as a result of changes in the accounting basis and tax basis for capital assets and asset retirement obligations
and fluctuations in tax losses. The year-over-year increase in deferred tax expense resulted primarily from an increase in the
temporary differences relating to asset retirement obligations. For accounting purposes, asset retirement obligations decreased
due to a change in discount and inflation rates while there was no corresponding decrease in the tax basis.



21


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Impairment
(recovery)

During Q1 2012,
we recorded impairment losses of $65.8 million pertaining to our conventional deep gas and shallow coal bed methane natural gas
plays in Canada. These impairment charges were the result of significant declines in the forward pricing assumptions for natural
gas in Canada.



In 2013, we recognized
a recovery of a portion of the impairment charges previously recorded.  The impairment recovery resulted from increased proved
and probable reserves of natural gas and natural gas liquids, due primarily to the successful application of horizontal drilling
and multi-stage fracturing technology to the previously impaired cash generating unit.



Gain on acquisition

During the
2012 period, we recognized a gain on acquisition of $45.3 million and other expense of $8.5 million relating to transfer taxes
resulting from our acquisition of certain working interests in the Paris and Aquitaine Basins in France. The gain on acquisition
arose as a result of the increase in the fair value of the acquired petroleum and natural gas reserves from the time when the
acquisition was negotiated to the acquisition date. The increase resulted from a change in the underlying commodity price forecasts
used to determine the fair value of the acquired reserves.



TAXES



Corporate
income tax rates

Vermilion
pays corporate income taxes in France, the Netherlands, and Australia. In addition, Vermilion pays PRRT in Australia. PRRT is
a profit based tax applied at a rate of 40% on sales less operating expenses, capital expenditures, and other eligible expenditures.
PRRT is deductible in the calculation of taxable income in Australia.



Taxable income was subject to
corporate income tax at the following rates:



|Jurisdiction | 2013  | 2012 
|------------ | ----- | -----
|Canada       | 25.0% | 25.0%
|France       | 38.0% | 36.1%
|Netherlands  | 46.0% | 46.0%
|Australia    | 30.0% | 30.0%
|Ireland      | 25.0% | 25.0%



France tax legislation

In December 2013,
the France government enacted corporate tax legislation that will lead to increases in current tax for companies operating in
France, including a temporary surtax of 10.7% (with the surtax levied as a percent of base corporate income tax payable). The
new surtax rate is applicable for companies which have annual revenue in excess of €250 million and effectively increases the
statutory rate applicable to our French operations to 38.0%, with retrospective application to January 1, 2013.  The surtax
is only applicable to tax years ending up to December 30, 2015 and as a result our French operations tax rate will decrease to
34.4% for the tax year 2015.



In addition, the
legislation adds a new test to the existing rules governing interest deductions for related party financing.  Under the legislation,
interest deductions would be allowed only if the French borrower demonstrates that the lender is subject to corporate tax on interest
income that equals 25% or more of the corporate tax that would otherwise be due under French tax rules.  This legislation,
among other changes, may reduce the effectiveness of our existing international corporate financing structures and could result
in a reduction of certain eligible deductions in our French operating companies.



Tax assessments

As at December
31, 2013, Income Taxes Payable includes a provision relating to tax assessments from tax authorities for prior period tax positions.
We have determined the provision based on our best estimate of the amount required to settle the tax assessments and we have classified
the provision as a current liability. The amounts ultimately paid and the timing of settlement could differ from our best estimate
and, therefore, could have an impact on future net earnings and cash flows.



22


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Tax pools

As at December 31, 2013, we had
the following tax pools:



|($M)        | Oil
    & Gas Assets |     |  | Tax
    Losses(4) | Other | Total    
|----------- | -------------------- | --- |  | ----------------- | ----- | ---------
|Canada      | 856,023              | (1) |  | 385,105           | 8,110 | 1,249,238
|France      | 388,549              | (2) |  | 12,144            | -     | 400,693  
|Netherlands | 61,868               | (3) |  | -                 | -     | 61,868   
|Australia   | 217,069              | (1) |  | -                 | -     | 217,069  
|Ireland     | 844,761              | (4) |  | 272,201           | -     | 1,116,962
|Total       | 2,368,270            |     |  | 669,450           | 8,110 | 3,045,830



(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) 	Development expenditures
and losses are deductible at 100% against taxable income



FINANCIAL
POSITION REVIEW



Balance
sheet strategy

We believe
that our balance sheet supports our defined growth initiatives and our focus is on managing and maintaining a conservative balance
sheet. To ensure that our balance sheet continues to support our defined growth initiatives, we regularly review whether forecasted
fund flows from operations is sufficient to finance planned capital expenditures, dividends, and abandonment and reclamation expenditures.
To the extent that forecasted fund flows from operations is not expected to be sufficient to fulfill such expenditures, we will
evaluate our ability to finance any excess with debt (including borrowing using the unutilized capacity of our existing revolving
credit facility) or issue equity.



To ensure
that we maintain a conservative balance sheet, we monitor the ratio of net debt to fund flows from operations and typically strive
to maintain a ratio of near 1.0. In a commodity price environment where prices trend higher, we may target a lower ratio and conversely,
in a lower commodity price environment, the acceptable ratio may be higher. At times, we will use our balance sheet to finance
acquisitions and, in these situations, we are prepared to accept a higher ratio in the short term but will implement a strategy
to reduce the ratio to acceptable levels within a reasonable period of time, usually considered to be no more than 12 to 24 months.
This plan could potentially include an increase in hedging activities, a reduction in capital expenditures, an issuance of equity
or the utilization of excess fund flows from operations to reduce outstanding indebtedness.



Long-term
debt

Our long-term
debt consists of our revolving credit facility and our senior unsecured notes. The applicable annual interest rates and the balances
recognized on our balance sheet are as follows:



|                              | Annual
    Interest Rate |             |  | As
    At
|----------------------------- | ------------------------ | ----------- |  | ---------
|                              | Dec
    31,              | Dec
    31, |  |          
|($M)                          | 2013                     | 2012        |  |          
|Revolving
    credit facility | 3.3%                     | 3.3%        |  |          
|Senior
    unsecured notes    | 6.5%                     | 6.5%        |  |          
|Long-term
    debt            | 4.2%                     | 4.7%        |  |          



23


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Revolving
Credit Facility

Our revolving credit
facility bears interest at rates applicable to demand loans plus applicable margins. The following table outlines the terms of
our revolving credit facility:



|                                  | As
    At         
|--------------------------------- | ------------------
|                                  | Dec
    31,       
|                                  | 2013              
|Total
    facility amount         | $1.20
    billion 
|Amount
    drawn                  | $766.9
    million
|Letters
    of credit outstanding | $8.1
    million  
|Facility
    maturity date        | 31-May-16         



In addition, the
revolving credit facility is subject to the following covenants:



|                                                          |       | Year
    Ended
|--------------------------------------------------------- | ----- | --------------
|                                                          |       | Dec
    31,   
|Financial
    covenant                                    | Limit | 2013          
|Consolidated
    total debt to consolidated EBITDA        | 4.0   | 1.06          
|Consolidated
    total senior debt to consolidated EBITDA | 3.0   | 0.82          



Our covenants include
financial measures defined within our revolving credit facility agreement that are not defined under GAAP. These financial measures
are defined by our revolving credit facility agreement as follows:



| | • | Consolidated
                                         total debt: Includes all amounts classified as “Long-term debt” on our balance
                                         sheet.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Consolidated
                                         total senior debt: Defined as consolidated total debt excluding unsecured and subordinated
                                         debt.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Consolidated
                                         EBITDA: Defined as consolidated net earnings before interest, income taxes, depreciation,
                                         accretion and certain other non-cash items.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Vermilion was in
compliance with its financial covenants for all periods presented.



Senior Unsecured
Notes

We have outstanding
senior unsecured notes that are senior unsecured obligations and rank pari passu with all our other present and future unsecured
and unsubordinated indebtedness. The following table outlines the terms of these notes:



|Total
    issued amount | $225.0
    million   
|----------------------- | ---------------------
|Interest                | 6.5%
    per annum   
|Issued
    date         | February
    10, 2011
|Maturity
    date       | February
    10, 2016



We may redeem all
or part of the notes at fixed redemption prices plus in each case, accrued and unpaid interest, if any, to the applicable redemption
date. The notes were initially recognized at fair value net of transaction costs and are subsequently measured at amortized cost
using an effective interest rate of 7.1%.



24


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Net debt

Net debt
is reconciled to its most directly comparable GAAP measure, long-term debt, as follows:



|                                                    | As
    At  
|--------------------------------------------------- | -----------
|                                                    | Dec
    31,
|($M)                                                | 2013       
|Long-term
    debt                                  | 990,024    
|Current
    liabilities                             | 347,444    
|Current
    assets                                  | (587,783)  
|Net
    debt                                        | 749,685    
|                                                    |            
|Ratio
    of net debt to fund flows from operations | 1.1        



Long-term
debt as at December 31, 2013 increased to $990.0 million from $642.0 million as at December 31, 2012 as a result of increased
borrowings on the revolving credit facility. Additional borrowings were used to fund current year development capital expenditures
in Ireland and also reflect borrowings in anticipation of the closing of our acquisition in Germany. In Ireland, development activities
related to tunneling, onshore pipelining, offshore umbilical-laying and offshore seismic acquisition activities.



As our acquisition
in Germany did not close prior to year-end, borrowings on our revolving credit facility during the fourth quarter of 2013 were
largely held as cash and cash equivalents, which increased $287.4 million to $389.6 million as at December 31, 2013. As a result,
the increase to net debt was limited to $72.5 million as compared to the $348.0 million increase in long-term debt.



Overall,
we continue to maintain a strong financial position, with a net debt to fund flows from operations of 1.1.



Shareholders’
capital

During the
year ended December 31, 2013, we maintained monthly dividends at $0.20 per share and declared dividends totalled $242.6 million.
In November of 2013, we announced a 7.5% increase in the monthly dividend to $0.215 per common share per month (effective for
the January 2014 dividend and paid on February 17, 2014). This dividend increase is our second consecutive annual increase.



The following
table outlines our dividend payment history:



|Date                                  | Monthly
    dividend per unit or share
|------------------------------------- | --------------------------------------
|January
    2003 to December 2007     | $0.17                                 
|January
    2008 to December 2012     | $0.19                                 
|January
    2013 to December 31, 2013 | $0.20                                 
|Beginning
    January 2014            | $0.215                                



As at December
31, 2013, there were 1.7 million VIP awards outstanding. As at February 27, 2014, there were 102.3 million shares outstanding.



Our policy
with respect to dividends is to be conservative and maintain a low ratio of dividends to fund flows from operations. During low
price commodity cycles, we will initially maintain dividends and allow the ratio to rise. Should low commodity price cycles remain
for an extended period of time, we will evaluate the necessity of changing the level of dividends, taking into consideration capital
development requirements, debt levels and acquisition opportunities.



Over the
next two years, we anticipate that Corrib, Cardium and other exploration and development activities will require significant capital
investment. Although we currently expect to be able to maintain our current dividend, fund flows from operations may not be sufficient
during this period to fund cash dividends, capital expenditures and asset retirement obligations. We will evaluate our ability
to finance any shortfalls with debt, issuances of equity or by reducing some or all categories of expenditures to ensure that
total expenditures do not exceed available funds.



The following
table reconciles the change in shareholders’ capital:



|                                                                  | Number
    of Shares ('000s) |         | Amount
    ($M)
|----------------------------------------------------------------- | ---------------------------- | ------- | ---------------
|Balance
    as at December 31, 2012                               |                              | 99,135  |                
|Issuance
    of shares pursuant to the dividend reinvestment plan |                              | 1,402   |                
|Vesting
    of equity based awards                                |                              | 1,372   |                
|Share-settled
    dividends on vested equity based awards         |                              | 202     |                
|Shares
    issued pursuant to the bonus plan                      |                              | 12      |                
|Balance
    as at December 31, 2013                               |                              | 102,123 |                



25


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






CONTRACTUAL OBLIGATIONS AND
COMMITMENTS



As at December 31, 2013, we had
the following contractual obligations and commitments:



|($M)                                                     | Less
    than 1 year | 1
    - 3 years | 3
    - 5 years | After
    5 years | Total    
|-------------------------------------------------------- | -------------------- | --------------- | --------------- | ----------------- | ---------
|Long-term
    debt                                       | 13,406               | 1,008,148       | -               | -                 | 1,021,554
|Operating
    lease obligations                          | 12,881               | 19,189          | 15,565          | 26,466            | 74,101   
|Ship
    or pay agreement relating to the Corrib project | 6,157                | 10,300          | 8,354           | 35,745            | 60,556   
|Purchase
    obligations                                 | 25,775               | 18,456          | 15              | -                 | 44,246   
|Drilling
    and service agreements                      | 13,648               | 16,152          | -               | -                 | 29,800   
|Total
    contractual obligations and commitments        | 71,867               | 1,072,245       | 23,934          | 62,211            | 1,230,257





ASSET
RETIREMENT OBLIGATIONS



As at December
31, 2013, asset retirement obligations were $326.2 million compared to $371.1 million as at December 31, 2012.



The increase
in asset retirement obligations is largely attributable to an overall decrease in the inflation rates applied to the abandonment
obligations.



RISKS
AND UNCERTAINTIES



Crude oil
and natural gas exploration, production, acquisition and marketing operations involve a number of risks and uncertainties including
financial risks and uncertainties. These include fluctuations in commodity prices, exchange rates and interest rates as well as
uncertainties associated with reserve and resource volumes, sales volumes and government regulatory and income tax regime changes.
These and other related risks and uncertainties are discussed in additional detail below.



Commodity prices

Our operational
results and financial condition is dependent on the prices received for crude oil and natural gas production. Crude oil and natural
gas prices have fluctuated significantly during recent years and are determined by supply and demand factors, including weather
and general economic conditions as well as conditions in other crude oil and natural gas producing regions.



Exchange rates

Much of our
revenue stream is priced in U.S. dollars and as such an increase in the strength of the Canadian dollar relative to the U.S. dollar
may result in the receipt of fewer Canadian dollars with respect to our production. In addition, we incur expenses and capital
costs in U.S. dollars, Euros and Australian dollars and accordingly, the Canadian dollar equivalent of these expenditures as reported
in our financial results is impacted by the prevailing foreign currency exchange rates at the time the transaction occurs. We
monitor risks associated with exchange rates and, when appropriate, uses derivative financial instruments to manage our exposure
to these risks.



Production and sales volumes

The operation
of crude oil and natural 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 us and possible liability to third parties.
We maintain 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. We 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 materially impact our financial
results.

Continuing
production from a property, and to some extent the marketing of produced volumes, is 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 our claim to certain properties.
Such circumstances could negatively affect our financial results.



An increase
in operating costs or a decline in our production level could have an adverse effect on our financial results. The level of production
may decline at rates greater than anticipated due to unforeseen circumstances, many of which are beyond our control. A significant
decline in production could result in materially lower revenues.



26


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Interest rates

An increase
in interest rates could result in a significant increase in the amount we pay to service debt.



Reserve volumes

Our reserve
volumes and related reserve values support the carrying value of our crude oil and natural gas assets on the consolidated balance
sheets and provide the basis to calculate the depletion of those assets. There are numerous uncertainties inherent in estimating
quantities of reserves and future net revenues to be derived therefrom, including many factors beyond our control. These 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, NGLs and natural gas, operating
expenses, well abandonment and salvage values, royalties and any government levies that may be imposed over the producing life
of the reserves. These assumptions were based on estimated prices in use at the date the evaluation was prepared, and many of
these assumptions are subject to change and are beyond our control. Actual production and income derived therefrom will vary from
these evaluations, and such variations could be material.



Asset retirement obligations

Our asset
retirement obligations are based on environmental regulations and estimates of future costs and the timing of expenditures. Changes
in environmental regulations, the estimated costs associated with reclamation activities and the related timing may impact our
financial position and results of operations.



Government regulation and income
tax regime

Our operations
are governed by many levels of government, including municipal, state, provincial and federal governments, in Canada, France,
the Netherlands, Australia and Ireland. We are 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 we
operate 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 and decreases in production and increases in costs, potentially resulting in us being unable
to fully execute our 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.



There can
be no assurance that income tax laws and government incentive programs relating to the crude oil and natural gas industry in Canada
and the foreign jurisdictions in which we operate, will not be changed in a manner which adversely affects the results of our
operations.



A change
in the royalty regime resulting in an increase in royalties would reduce our net earnings and could make future capital expenditures
or our operations uneconomic and could, in the event of a material increase in royalties, make it more difficult to service and
repay outstanding debt. Any material increase in royalties would also significantly reduce the value of the associated assets.



27


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




FINANCIAL RISK MANAGEMENT



To mitigate
the aforementioned risks whenever possible, we seek to hire personnel with experience in specific areas. In addition, we provide
continued training and development to staff to further develop their skills. When appropriate, we use third party consultants
with relevant experience to augment our internal capabilities with respect to certain risks.



We consider
our commodity price risk management program as a form of insurance that protects our cash flow and rate of return. The primary
objective of the risk management program is to support our dividends and our internal capital development program. The level of
commodity price risk management that occurs is highly dependent on the amount of debt that is carried. When debt levels are higher,
we will be more active in protecting our cash flow stream through our commodity price risk management strategy.



When executing
our commodity price risk management programs, we use derivative financial instruments encompassing over-the-counter financial
structures as well as fixed/collar structures to economically hedge a part of our physical crude oil and natural gas production.
We have strict controls and guidelines in relation to these activities and contract principally with counterparties that have
investment grade credit ratings.



CRITICAL
ACCOUNTING ESTIMATES



The preparation
of financial statements in accordance with IFRS requires management to make estimates, judgments and assumptions that affect reported
assets, liabilities, revenues and expenses, gains and losses, and disclosures of any possible contingencies. These estimates and
assumptions are developed based on the best available information which management believed to be reasonable at the time such
estimates and assumptions were made. As such, these assumptions are uncertain at the time estimates are made and could change,
resulting in a material impact on our consolidated financial statements or financial performance. Estimates are reviewed by management
on an ongoing basis, and as a result, certain estimates may change from period to period due to the availability of new information.
Additionally, as a result of the unique circumstances of each jurisdiction in which we operate, the critical accounting estimates
may affect one or more jurisdictions.



The following discussion
outlines what management believes to be the most critical accounting policies involving the use of estimates and assumptions.



Depletion and
depreciation

We classify our
assets into depletion units, which are groups of assets or properties that are within a specific production area and have similar
economic lives. The depletion units represent the lowest level of disaggregation for which we accumulate costs for the purposes
of calculating and recording depletion and depreciation.



The net carrying
value of each depletion unit is depleted using the unit of production method by reference to the ratio of production in the period
to the total proven and probable reserves, taking into account the future development costs necessary to bring the applicable
reserves into production. As a result, depletion and depreciation charges are based on estimates of total proven and probable
reserves that we expect to recover in the future. The reserve estimates are reviewed annually by management or when material changes
occur to the underlying assumptions.



Asset retirement
obligations

Our estimate
of asset retirement obligations are based on past experience and current economic factors which management believes are reasonable.
The estimates include assumptions of environmental regulations, legal requirements, technological advances, inflation and the
timing of expenditures, all of which impact our measurement of the present value of the obligations. Due to these estimates, the
actual cost of the obligation may change from period to period due to new information being available. Several or all of these
estimates are subject to change and such changes could have a material impact on our financial position and net earnings.



Assessment of
impairments

Impairment tests
are performed at the level of the cash generating unit (“CGU”), which are determined based on management’s judgment
of the lowest level at which there are identifiable cash inflows which are largely independent of the cash inflows of other groups
of assets or properties. The factors used to determine CGUs vary by country due to the unique operating and geographic circumstances
in each jurisdiction. However, in general, we will assess the following factors in determining whether a group of assets generate
largely independent cash inflows: geographic proximity of the assets within a group to one another, geographic proximity of the
group of assets to other groups of assets, homogeneity of the production from the group of assets and the sharing of infrastructure
used to process or transport production.



The calculation
of the recoverable amount of CGUs is based on market factors as well as estimates of reserves and future costs required to develop
reserves. Our reserves estimates and the related future cash flows are subject to measurement uncertainty, and the impact on the
consolidated financial statements in future periods could be material. Considerable judgment is used in determining the recoverable
amount of petroleum and natural gas assets, including determining the quantity of reserves, the time horizon to develop and produce
such reserves and the estimated revenues and expenditures from such production.

28


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






Taxes

Tax interpretations,
regulations and legislation in the various jurisdictions in which we operate are subject to change. Such changes can affect the
timing of the reversal of temporary tax differences, the tax rates in effect when such differences reverse and our ability to
use tax losses and other credits in the future. The determination of deferred tax amounts recognized in the consolidated financial
statements was based on management’s assessment of the tax positions, including consideration of their technical merits
and communications with tax authorities. The effect of a change in income tax rates or legislation on tax assets and liabilities
is recognized in net earnings in the period in which the change is enacted.



OFF BALANCE
SHEET ARRANGEMENTS



We have certain
lease agreements that are entered into in the normal course of operations, all of which are operating leases and accordingly no
asset or liability value has been assigned to the consolidated balance sheet as at December 31, 2013.



We have not entered
into any guarantee or off balance sheet arrangements that would materially impact our financial position or results of operations.



ACCOUNTING
PRONOUNCEMENTS NOT YET ADOPTED



The impact
of the adoption of the following pronouncements are currently being evaluated, but are not expected to have a material impact
on Vermilion’s consolidated financial statements:



IFRIC
21 “Levies”

On May 20,
2013, IASB issued guidance on IFRIC 21, which provides guidance on accounting for levies in accordance with the requirements of
IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The interpretation defines a levy as an outflow from an entity
imposed by a government in accordance with legislation and confirms that a liability for a levy is recognized only when the triggering
event specified in the legislation occurs. The interpretation is effective for annual periods beginning on or after January 1,
2014.



IAS 36
“Impairment of Assets”

On May 29,
2013, the IASB issued amendments to IAS 36 "Impairment of Assets" which reduce the circumstances in which the recoverable
amount of CGUs is required to be disclosed and clarify the disclosures required when an impairment loss has been recognized or
reversed in the period. This amendment is effective for annual periods beginning on or after January 1, 2014.



IFRS 9
“Financial Instruments”

The IASB
has undertaken a three-phase project to replace IAS 39, “Financial Instruments: Recognition and Measurement”. The
new standard replaces the current multiple classification and measurement models for financial assets and liabilities with a single
model that has only two classification categories: amortized cost and fair value. In February of 2014, the IASB confirmed that
the mandatory effective date of IFRS 9 shall be January 1, 2018.



HEALTH,
SAFETY AND ENVIRONMENT



We are committed
to ensuring we conduct our activities in a manner that will protect the health and safety of our employees, contractors and the
public.  Our health, safety and environment vision is to fully integrate health, safety and environment into our business,
where our culture is recognized as a model by industry and stakeholders, resulting in a workplace free of incidents. Our mantra
is HSE: Everywhere. Everyday. Everyone.



We maintain health,
safety and environmental practices and procedures that comply or exceed regulatory requirements and industry standards. 
It is a condition of employment that our personnel work safely and in accordance with established regulations and procedures.



In 2013, we remained
committed to the principles of the Responsible Canadian EnergyTM program set out by the Canadian Association of Petroleum
Producers.  Responsible Canadian EnergyTM is an association-wide performance reporting program to demonstrate progress
in environmental, health, safety, and social performance.



29


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




We continued our
commitment to reduce impacts to land, water and air, as policies and procedures demonstrating leadership in these areas, were
maintained and further developed in 2013.  Examples of our accomplishments during the year included:



| | - | Receiving
                                         a National Ecology award in France for our tomato greenhouse partnership;
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | - | Clear
                                         priorities around 5 key focus areas of HSE Culture, Communication and Knowledge Management,
                                         Technical Safety Management, Incident Prevention and Operational Stewardship & Sustainability;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Completed
                                         a detailed, corporate wide HSE perception survey to ensure organizational engagement,
                                         define areas of strength and identify areas to focus on;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Reducing
                                         long-term environmental liabilities through decommissioning, abandoning and reclaiming
                                         well leases and facilities;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Continuous
                                         auditing and management inspections;
| | - | ----------------------------------------------------------------------------------------

| | - | Development,
                                         communication and measurement against leading and lagging HSE key performance indicators;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------

| | - | Further
                                         enhancement of our competency and training programs;
| | - | -----------------------------------------------------------------------------------------------------

| | - | Managing
                                         our waste products by reducing, recycling and recovering; and
| | - | ---------------------------------------------------------------------------------------------------------------

| | - | Continuing
                                         risk management efforts in addition to detailed emergency-response planning.
| | - | --------------------------------------------------------------------------------------------------------------------------------



We are a member
of several organizations concerned with environment, health and safety, including numerous regional co-operatives and synergy
groups.  In the area of stakeholder relations, we work to build long-term relationships with environmental stakeholders and
communities.



CORPORATE
GOVERNANCE



We are committed
to a high standard of corporate governance practices, a dedication that begins at the Board level and extends throughout the Company.
We believe good corporate governance is in the best interest of our shareholders, and that successful companies are those that
deliver growth and a competitive return along with a commitment to the environment, to the communities where they operate and
to their employees.



We comply
with the objectives and guidelines relating to corporate governance adopted by the Canadian Securities Administrators and the
Toronto Stock Exchange. In addition, the Board monitors and considers the implementation of corporate governance standards proposed
by various regulatory and non-regulatory authorities in Canada. A discussion of corporate governance policies will be provided
in our Management Proxy Circular, which will be filed on SEDAR (www.sedar.com) and mailed to all shareholders on April 8, 2014.



A summary of the significant differences
between the governance practices of the Company and those required of U.S. domestic companies under the New York Stock Exchange
listing standards can be found in the Governance section of the Company’s website at http://www.vermilionenergy.com/about/governance.cfm.



DISCLOSURE CONTROLS AND PROCEDURES



Our officers have
established and maintained disclosure controls and procedures and evaluated the effectiveness of these controls in conjunction
with our filings.



As of December 31,
2013, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded and certified that our disclosure controls
and procedures are effective.



INTERNAL CONTROL OVER FINANCIAL
REPORTING



A company's
internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.



30


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




The Chief
Executive Officer and the Chief Financial Officer of Vermilion have assessed the effectiveness of Vermilion’s internal control
over financial reporting as defined in Rule 13a-15 under the US Securities Exchange Act of 1934 and as defined in Canada by National
Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings. The Chief Executive Officer and the
Chief Financial Officer of Vermilion have concluded that Vermilion’s internal control over financial reporting was effective
as of December 31, 2013. The effectiveness of Vermilion’s internal control over financial reporting as of December 31, 2013
has been audited by Deloitte LLP, as reflected in their report included in the 2013 audited annual financial statements filed
with the US Securities and Exchange Commission. No changes were made to Vermilion’s internal control over financial reporting
during the year ending December 31, 2013, that have materially affected, or are reasonably likely to materially affect, the internal
controls over financial reporting.

31


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Supplemental
Table 1: Netbacks



The following
table includes financial statement information on a per unit basis by business unit. Natural gas sales volumes have been converted
on a basis of six thousand cubic feet of natural gas to one barrel of oil equivalent.



|                                          | Three
    Months Ended Dec 31, 2013 |                 | Year
    Ended Dec 31, 2013 |  |                | Three
    Months Ended Dec 31, 2012 |         | Year
    Ended Dec 31, 2012
|----------------------------------------- | ----------------------------------- | --------------- | --------------------------- |  | -------------- | ----------------------------------- | ------- | ---------------------------
|                                          | Oil
    & NGLs                      | Natural
    Gas | Total                       |  | Oil
    & NGLs | Natural
    Gas                     | Total   |                            
|                                          | $/bbl                               | $/mcf           | $/boe                       |  | $/bbl          | $/mcf                               | $/boe   |                            
|Canada                                    |                                     |                 |                             |  |                |                                     |         |                            
|Sales                                     | 86.87                               | 3.70            | 61.10                       |  | 89.78          | 3.40                                | 61.14   |                            
|Royalties                                 | (10.67)                             | (0.21)          | (6.93)                      |  | (10.42)        | (0.17)                              | (6.55)  |                            
|Transportation                            | (3.57)                              | (0.18)          | (2.57)                      |  | (2.64)         | (0.17)                              | (1.96)  |                            
|Operating                                 | (10.50)                             | (0.83)          | (8.29)                      |  | (9.24)         | (1.42)                              | (8.93)  |                            
|Operating
    netback                     | 62.13                               | 2.48            | 43.31                       |  | 67.48          | 1.64                                | 43.70   |                            
|General
    and administration            |                                     |                 | (1.60)                      |  |                |                                     | (2.24)  |                            
|Fund
    flows from operations netback    | 41.71                               |                 |                             |  | 41.46          |                                     |         | 39.37                      
|France                                    |                                     |                 |                             |  |                |                                     |         |                            
|Sales                                     | 112.84                              | -               | 112.84                      |  | 108.55         | 10.20                               | 106.26  |                            
|Royalties                                 | (6.70)                              | -               | (6.70)                      |  | (6.57)         | (0.29)                              | (6.34)  |                            
|Transportation                            | (4.71)                              | -               | (4.71)                      |  | (3.08)         | -                                   | (2.93)  |                            
|Operating                                 | (15.82)                             | -               | (15.82)                     |  | (16.04)        | (1.52)                              | (15.70) |                            
|Operating
    netback                     | 85.61                               | -               | 85.61                       |  | 82.86          | 8.39                                | 81.29   |                            
|General
    and administration            |                                     |                 | (5.18)                      |  |                |                                     | (4.61)  |                            
|Current
    income taxes                  |                                     |                 | (28.55)                     |  |                |                                     | (22.16) |                            
|Fund
    flows from operations netback    | 51.88                               |                 |                             |  | 54.52          |                                     |         | 57.72                      
|Netherlands                               |                                     |                 |                             |  |                |                                     |         |                            
|Sales                                     | 111.00                              | 11.24           | 67.88                       |  | 100.49         | 10.61                               | 64.08   |                            
|Operating                                 | -                                   | (1.79)          | (10.63)                     |  | -              | (1.59)                              | (9.47)  |                            
|Operating
    netback                     | 111.00                              | 9.45            | 57.25                       |  | 100.49         | 9.02                                | 54.61   |                            
|General
    and administration            |                                     |                 | (2.67)                      |  |                |                                     | (1.25)  |                            
|Current
    income taxes                  |                                     |                 | (14.22)                     |  |                |                                     | (15.67) |                            
|Fund
    flows from operations netback    | 40.36                               |                 |                             |  | 37.69          |                                     |         | 46.45                      
|Australia                                 |                                     |                 |                             |  |                |                                     |         |                            
|Sales                                     | 124.63                              | -               | 124.63                      |  | 119.38         | -                                   | 119.38  |                            
|Operating                                 | (21.25)                             | -               | (21.25)                     |  | (20.62)        | -                                   | (20.62) |                            
|PRRT
    (1)                              | (27.60)                             | -               | (27.60)                     |  | (22.59)        | -                                   | (22.59) |                            
|Operating
    netback                     | 75.78                               | -               | 75.78                       |  | 76.17          | -                                   | 76.17   |                            
|General
    and administration            |                                     |                 | (2.32)                      |  |                |                                     | (2.30)  |                            
|Corporate
    income taxes                |                                     |                 | (9.98)                      |  |                |                                     | (12.67) |                            
|Fund
    flows from operations netback    | 63.48                               |                 |                             |  | 61.20          |                                     |         | 67.13                      
|Total
    Company                         |                                     |                 |                             |  |                |                                     |         |                            
|Sales                                     | 106.00                              | 7.29            | 86.04                       |  | 104.46         | 6.83                                | 83.83   |                            
|Realized
    hedging loss                 |                                     |                 | (0.34)                      |  |                |                                     | (0.47)  |                            
|Royalties                                 | (6.55)                              | (0.11)          | (4.66)                      |  | (6.33)         | (0.10)                              | (4.47)  |                            
|Transportation                            | (3.13)                              | (0.14)          | (2.40)                      |  | (2.16)         | (0.23)                              | (1.90)  |                            
|Operating                                 | (15.11)                             | (1.28)          | (12.74)                     |  | (14.69)        | (1.50)                              | (12.84) |                            
|PRRT
    (1)                              | (6.69)                              | -               | (4.55)                      |  | (5.52)         | -                                   | (3.72)  |                            
|Operating
    netback                     | 74.52                               | 5.76            | 61.35                       |  | 75.76          | 5.00                                | 60.43   |                            
|General
    and administration            |                                     |                 | (3.69)                      |  |                |                                     | (3.28)  |                            
|Interest
    expense                      |                                     |                 | (2.66)                      |  |                |                                     | (2.51)  |                            
|Realized
    foreign exchange (loss) gain | (0.34)                              |                 |                             |  | (0.12)         |                                     |         | 0.81                       
|Other
    income (expense)                | 0.06                                |                 |                             |  | 0.07           |                                     |         | 0.08                       
|Corporate
    income taxes(1)             |                                     |                 | (11.40)                     |  |                |                                     | (10.65) |                            
|Fund
    flows from operations netback    | 43.32                               |                 |                             |  | 43.94          |                                     |         | 46.07                      



(1)Vermilion
considers Australian PRRT to be an operating item and accordingly has included PRRT in the calculation of operating netbacks.
Current income taxes presented above excludes PRRT.

32


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Supplemental
Table 2: Hedges



The following table summarizes Vermilion’s
outstanding risk management positions as at December 31, 2013:



|                                      | Note | Daily
    Volume | Strike
    Price(s)      
|------------------------------------- | ---- | ---------------- | -------------------------
|Crude
    Oil                         |      |                  |                          
|WTI
    - Collar                      |      |                  |                          
|January
    2014 - March 2014         |      | 1,000
    bbl/d  | 97.50
    - 104.69 USD $ 
|WTI
    - Swap                        |      |                  |                          
|January
    2014 - March 2014         |      | 500
    bbl/d    | 101.22
    USD $         
|January
    2014 - March 2014         | (1)  | 250
    bbl/d    | 105.45
    USD $         
|January
    2014 - June 2014          |      | 250
    bbl/d    | 100.05
    USD $         
|January
    2014 - June 2014          | (2)  | 1,000
    bbl/d  | 100.07
    USD $         
|Dated
    Brent - Collar              |      |                  |                          
|January
    2014 - March 2014         |      | 2,500
    bbl/d  | 104.00
    - 110.46 USD $
|January
    2014 - June 2014          |      | 1,250
    bbl/d  | 103.20
    - 110.24 USD $
|April
    2014 - June 2014            |      | 1,000
    bbl/d  | 105.00
    - 115.00 USD $
|April
    2014 - September 2014       |      | 1,000
    bbl/d  | 105.00
    - 112.00 USD $
|April
    2014 - December 2014        |      | 1,000
    bbl/d  | 106.00
    - 110.73 USD $
|Dated
    Brent - Swap                |      |                  |                          
|January
    2014 - March 2014         |      | 2,000
    bbl/d  | 107.80
    USD $         
|January
    2014 - June 2014          |      | 1,000
    bbl/d  | 107.25
    USD $         
|January
    2014 - June 2014          | (2)  | 1,500
    bbl/d  | 110.32
    USD $         
|April
    2014 - June 2014            |      | 1,250
    bbl/d  | 109.74
    USD $         
|January
    2014 - December 2014      |      | 500
    bbl/d    | 108.28
    USD $         
|MSW
    - Fixed Price Sale (Physical) |      |                  |                          
|January
    2014 - March 2014         |      | 1,000
    bbl/d  | 93.37
    CAD $          
|April
    2014 - June 2014            |      | 1,000
    bbl/d  | 92.85
    CAD $          
|Canadian
    Natural Gas              |      |                  |                          
|AECO
    - Collar                     |      |                  |                          
|January
    2014 - December 2014      |      | 10,000
    GJ/d  | 3.18
    - 3.81 CAD $    
|AECO
    - Swap                       |      |                  |                          
|January
    2014 - December 2014      |      | 5,000
    GJ/d   | 3.71
    CAD $           
|AECO
    - Collar (Physical)          | (3)  |                  |                          
|April
    2012 - March 2014           |      | 5,500
    GJ/d   | 2.60
    - 3.78 CAD $    
|June
    2012 - March 2014            |      | 3,000
    GJ/d   | 2.30
    - 3.75 CAD $    
|European
    Natural Gas              |      |                  |                          
|TTF
    - Swap                        |      |                  |                          
|January
    2014 - March 2014         |      | 16,200
    GJ/d  | 7.88
    EUR €           
|Electricity                           |      |                  |                          
|AESO
    - Swap                       |      |                  |                          
|January
    2014 - December 2014      |      | 7.2
    MWh/d    | 54.75
    CAD $          
|AESO
    - Swap (Physical)            |      |                  |                          
|January
    2013 - December 2015      |      | 72.0
    MWh/d   | 53.17
    CAD $          



(1)Prior
to the expiration of this swap, the counterparty has the option to extend the swap to June 30, 2014 at the contracted volume and
price.

(2)Prior
to the expiration of this swap, the counterparty has the option to extend the swap to December 31, 2014 at the contracted volume
and price.

(3)Physical
AECO collars have a funded cost of $0.10/GJ.

33


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




Supplemental
Table 3: Capital expenditures



|                                                  | Three
    Months Ended |              |             | Year
    Ended
|------------------------------------------------- | ---------------------- | ------------ | ----------- | --------------
|By
    classification                             | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                              | 2013                   | 2013         | 2012        |               
|Drilling
    and development                      | 147,929                | 135,110      | 151,157     |               
|Dispositions                                      | -                      | -            | -           |               
|Exploration
    and evaluation                    | 549                    | 551          | 5,878       |               
|Capital
    expenditures                          | 148,478                | 135,661      | 157,035     |               
|Property
    acquisition                          | 1,603                  | 7,586        | -           |               
|Corporate
    acquisition                         | 27,500                 | -            | 74,947      |               
|Payment
    of amount due pursuant to acquisition | -                      | -            | 134,307     |               
|Acquisitions                                      | 29,103                 | 7,586        | 209,254     |               
|                                                  |                        |              |             |               
|                                                  | Three
    Months Ended |              |             | Year
    Ended
|By
    category                                   | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                              | 2013                   | 2013         | 2012        |               
|Land                                              | 2,676                  | (4,450)      | 462         |               
|Seismic                                           | 1,942                  | 5,284        | 3,963       |               
|Drilling
    and completion                       | 68,993                 | 63,590       | 76,774      |               
|Production
    equipment and facilities           | 63,420                 | 47,665       | 64,232      |               
|Recompletions                                     | 3,309                  | 15,650       | 5,040       |               
|Other                                             | 8,138                  | 7,922        | 6,564       |               
|Dispositions                                      | -                      | -            | -           |               
|Capital
    expenditures                          | 148,478                | 135,661      | 157,035     |               
|Acquisitions                                      | 29,103                 | 7,586        | 209,254     |               
|Total
    capital expenditures and acquisitions   | 177,581                | 143,247      | 366,289     |               
|                                                  |                        |              |             |               
|                                                  | Three
    Months Ended |              |             | Year
    Ended
|By
    country                                    | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                              | 2013                   | 2013         | 2012        |               
|Canada                                            | 78,848                 | 69,856       | 82,844      |               
|France                                            | 31,899                 | 23,664       | 95,905      |               
|Netherlands                                       | 43,198                 | 8,316        | 8,118       |               
|Australia                                         | 8,420                  | 5,880        | 25,257      |               
|Ireland                                           | 14,472                 | 35,028       | 152,400     |               
|Corporate                                         | 744                    | 503          | 1,765       |               
|Total
    capital expenditures and acquisitions   | 177,581                | 143,247      | 366,289     |               

34


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2








Supplemental
Table 4: Production



|             |                               | Q4/13  | Q3/13  | Q2/13  | Q1/13  | Q4/12  | Q3/12  | Q2/12  | Q1/12  | Q4/11  | Q3/11  | Q2/11  | Q1/11 
|------------ | ----------------------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------
|Canada       |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 8,719  | 7,969  | 8,885  | 7,966  | 7,983  | 7,322  | 7,757  | 7,574  | 6,591  | 4,526  | 3,856  | 3,801 
|             | NGLs
    (bbls/d)             | 1,699  | 1,897  | 1,725  | 1,335  | 1,106  | 1,204  | 1,321  | 1,302  | 1,246  | 1,305  | 1,353  | 1,285 
|             | Natural
    gas (mmcf/d)      | 41.43  | 43.40  | 43.69  | 41.04  | 31.41  | 35.54  | 41.32  | 41.83  | 43.96  | 42.94  | 43.30  | 43.31 
|             | Total
    (boe/d)             | 17,322 | 17,099 | 17,892 | 16,140 | 14,323 | 14,449 | 15,965 | 15,848 | 15,163 | 12,987 | 12,426 | 12,304
|             | %
    of consolidated         | 43%    | 41%    | 42%    | 41%    | 40%    | 40%    | 40%    | 40%    | 41%    | 38%    | 35%    | 36%   
|France       |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 11,131 | 11,625 | 10,390 | 10,330 | 9,843  | 9,767  | 9,931  | 10,270 | 7,819  | 7,946  | 8,273  | 8,411 
|             | Natural
    gas (mmcf/d)      | -      | 5.23   | 4.19   | 4.21   | 3.91   | 3.39   | 3.57   | 3.48   | 0.94   | 0.97   | 0.88   | 1.02  
|             | Total
    (boe/d)             | 11,131 | 12,496 | 11,088 | 11,032 | 10,495 | 10,333 | 10,526 | 10,850 | 7,976  | 8,108  | 8,419  | 8,582 
|             | %
    of consolidated         | 27%    | 30%    | 26%    | 29%    | 29%    | 28%    | 27%    | 28%    | 22%    | 23%    | 24%    | 25%   
|Netherlands  |                               |        |        |        |        |        |        |        |        |        |        |       
|             | NGLs
    (bbls/d)             | 62     | 48     | 50     | 96     | 70     | 41     | 84     | 72     | 66     | 64     | 54     | 46    
|             | Natural
    gas (mmcf/d)      | 37.53  | 28.78  | 38.52  | 36.91  | 33.03  | 34.59  | 33.74  | 35.08  | 34.58  | 33.15  | 33.77  | 29.96 
|             | Total
    (boe/d)             | 6,318  | 4,845  | 6,470  | 6,248  | 5,574  | 5,806  | 5,707  | 5,919  | 5,829  | 5,589  | 5,682  | 5,039 
|             | %
    of consolidated         | 15%    | 12%    | 15%    | 16%    | 15%    | 16%    | 15%    | 15%    | 16%    | 16%    | 16%    | 15%   
|Australia    |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 6,189  | 7,070  | 7,363  | 5,287  | 5,873  | 5,958  | 6,970  | 6,648  | 7,686  | 7,992  | 8,692  | 8,309 
|             | %
    of consolidated         | 15%    | 17%    | 17%    | 14%    | 16%    | 16%    | 18%    | 17%    | 21%    | 23%    | 25%    | 24%   
|Consolidated |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil & NGLs (bbls/d) | 27,800 | 28,609 | 28,413 | 25,014 | 24,875 | 24,292 | 26,063 | 25,866 | 23,408 | 21,833 | 22,228 | 21,852
|             | %
    of consolidated         | 68%    | 69%    | 66%    | 65%    | 69%    | 66%    | 67%    | 66%    | 64%    | 63%    | 63%    | 64%   
|             | Natural
    gas (mmcf/d)      | 78.96  | 77.41  | 86.40  | 82.16  | 68.34  | 73.52  | 78.63  | 80.39  | 79.48  | 77.06  | 77.95  | 74.29 
|             | %
    of consolidated         | 32%    | 31%    | 34%    | 35%    | 31%    | 34%    | 33%    | 34%    | 36%    | 37%    | 37%    | 36%   
|             | Total
    (boe/d)             | 40,960 | 41,510 | 42,813 | 38,707 | 36,265 | 36,546 | 39,168 | 39,265 | 36,654 | 34,676 | 35,219 | 34,234
|             |                               |        |        |        |        |        |        |        |        |        |        |        |       
|2013         | 2012                          | 2011   | 2010   | 2009   | 2008   |        |        |        |        |        |       
|Canada       |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 8,387  | 7,659  | 4,701  | 2,778  | 2,137  | 2,620  |        |        |        |        |        |       
|             | NGLs
    (bbls/d)             | 1,666  | 1,232  | 1,297  | 1,427  | 1,518  | 1,551  |        |        |        |        |        |       
|             | Natural
    gas (mmcf/d)      | 42.39  | 37.50  | 43.38  | 43.91  | 47.85  | 51.15  |        |        |        |        |        |       
|             | Total
    (boe/d)             | 17,117 | 15,142 | 13,227 | 11,524 | 11,629 | 12,696 |        |        |        |        |        |       
|             | %
    of consolidated         | 41%    | 40%    | 38%    | 36%    | 37%    | 38%    |        |        |        |        |        |       
|France       |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 10,873 | 9,952  | 8,110  | 8,347  | 8,246  | 8,514  |        |        |        |        |        |       
|             | Natural
    gas (mmcf/d)      | 3.40   | 3.59   | 0.95   | 0.92   | 1.05   | 1.17   |        |        |        |        |        |       
|             | Total
    (boe/d)             | 11,440 | 10,550 | 8,269  | 8,501  | 8,421  | 8,710  |        |        |        |        |        |       
|             | %
    of consolidated         | 28%    | 28%    | 23%    | 26%    | 27%    | 27%    |        |        |        |        |        |       
|Netherlands  |                               |        |        |        |        |        |        |        |        |        |        |       
|             | NGLs
    (bbls/d)             | 64     | 67     | 58     | 35     | 23     | 24     |        |        |        |        |        |       
|             | Natural
    gas (mmcf/d)      | 35.42  | 34.11  | 32.88  | 28.31  | 21.06  | 27.23  |        |        |        |        |        |       
|             | Total
    (boe/d)             | 5,967  | 5,751  | 5,538  | 4,753  | 3,533  | 4,562  |        |        |        |        |        |       
|             | %
    of consolidated         | 15%    | 15%    | 16%    | 15%    | 11%    | 14%    |        |        |        |        |        |       
|Australia    |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil (bbls/d)        | 6,481  | 6,360  | 8,168  | 7,354  | 7,812  | 6,773  |        |        |        |        |        |       
|             | %
    of consolidated         | 16%    | 17%    | 23%    | 23%    | 25%    | 21%    |        |        |        |        |        |       
|Consolidated |                               |        |        |        |        |        |        |        |        |        |        |       
|             | Crude
    oil & NGLs (bbls/d) | 27,471 | 25,270 | 22,334 | 19,941 | 19,735 | 19,483 |        |        |        |        |        |       
|             | %
    of consolidated         | 67%    | 67%    | 63%    | 62%    | 63%    | 60%    |        |        |        |        |        |       
|             | Natural
    gas (mmcf/d)      | 81.21  | 75.20  | 77.21  | 73.14  | 69.96  | 79.55  |        |        |        |        |        |       
|             | %
    of consolidated         | 33%    | 33%    | 37%    | 38%    | 37%    | 40%    |        |        |        |        |        |       
|             | Total
    (boe/d)             | 41,005 | 37,803 | 35,202 | 32,132 | 31,395 | 32,741 |        |        |        |        |        |       

35


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2






Supplemental
Table 5: Segmented Financial Results



|                                            | Three
    Months Ended December 31, 2013
|------------------------------------------- | ----------------------------------------
|($M)                                        | Canada                                  
|Oil
    and gas sales to external customers | 97,367                                  
|Royalties                                   | (11,039)                                
|Revenue
    from external customers         | 86,328                                  
|Transportation
    expense                  | (4,102)                                 
|Operating
    expense                       | (13,218)                                
|General
    and administration              | (2,478)                                 
|Corporate
    income taxes                  | -                                       
|PRRT                                        | -                                       
|Interest
    expense                        | -                                       
|Realized
    loss on derivative instruments | -                                       
|Realized
    foreign exchange loss          | -                                       
|Realized
    other income                   | -                                       
|Fund
    flows from operations              | 66,530                                  



|                                            | Year
    Ended December 31, 2013
|------------------------------------------- | --------------------------------
|($M)                                        | Canada                          
|Total
    assets                            | 1,212,056                       
|Drilling
    and development                | 232,858                         
|Exploration
    and evaluation              | 8,339                           
|Oil
    and gas sales to external customers | 382,005                         
|Royalties                                   | (40,891)                        
|Revenue
    from external customers         | 341,114                         
|Transportation
    expense                  | (12,254)                        
|Operating
    expense                       | (55,804)                        
|General
    and administration              | (12,979)                        
|Corporate
    income taxes                  | -                               
|PRRT                                        | -                               
|Interest
    expense                        | -                               
|Realized
    loss on derivative instruments | -                               
|Realized
    foreign exchange loss          | -                               
|Realized
    other income                   | -                               
|Fund
    flows from operations              | 260,077                         



36


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




ADDITIONAL
AND NON-GAAP FINANCIAL MEASURES



This MD&A
includes references to certain financial measures which do not have standardized meanings prescribed by IFRS. As such, these financial
measures are considered additional GAAP or non-GAAP financial measures and therefore are unlikely to be comparable with similar
measures presented by other issuers.



Fund flows
from operations:We define fund flows from operations as cash flows from operating activities before changes in non-cash operating
working capital and asset retirement obligations settled. Management believes that by excluding the temporary impact of changes
in non-cash operating working capital, fund flows from operations provides a measure of our ability to generate cash (that is
not subject to short-term movements in non-cash operating working capital) necessary to pay dividends, repay debt, fund asset
retirement obligations and make capital investments. As we have presented fund flows from operations in the “Segmented Information”
note of our audited consolidated financial statements for the year ended December 31, 2013, we consider fund flows from operations
to be an additional GAAP financial measure.



Free cash
flow:Represents fund flows from operations in excess of capital expenditures.  We consider free cash flow to be a key
measure as it is used to determine the funding available for investing and financing activities, including payment of dividends,
repayment of long-term debt, reallocation to existing business units, and deployment into new ventures.



Net dividends:We define net dividends as dividends declared less proceeds received for the issuance of shares pursuant to the dividend reinvestment
plan. Management monitors net dividends and net dividends as a percentage of fund flows from operations to assess our ability
to pay dividends.



Payout:We
define payout as net dividends plus drilling and development, exploration and evaluation, dispositions and asset retirement obligations
settled. Management uses payout to assess the amount of cash distributed back to shareholders and re-invested in the business
for maintaining production and organic growth.



Fund flows from
operations (excluding Corrib) and Payout (excluding Corrib):Management excludes expenditures relating to the Corrib project
in assessing fund flows from operations (an additional GAAP financial measure) and payout in order to assess our ability to generate
cash and finance organic growth from our current producing assets.



Net debt:We
define net debt as the sum of long-term debt and working capital. Management uses net debt, and the ratio of net debt to fund
flows from operations, to analyze our financial position and leverage. Please refer to the preceding “Net Debt”
section for a reconciliation of the net debt non-GAAP financial measure.



Diluted shares
outstanding:Is the sum of shares outstanding at the period end plus outstanding awards under the VIP, based on current estimates
of future performance factors and forfeiture rates.



Cash dividends
per share:Represents cash dividends declared per share.



Netbacks:Per
boe and per mcf measures used in the analysis of operational activities.



Total returns:Includes cash dividends per share and the change in Vermilion’s share price on the Toronto Stock Exchange.



37


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




The following tables
reconcile fund flows from operations, net dividends, payout, and diluted shares outstanding to their most directly comparable
GAAP measures as presented in our financial statements.



|                                                  |          | Three
    Months Ended |              |             | Year
    Ended
|------------------------------------------------- | -------- | ---------------------- | ------------ | ----------- | --------------
|                                                  |          | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                              | 2013     | 2013                   | 2012         |             |               
|Cash
    flows from operating activities          | 177,003  | 158,236                | 99,907       |             |               
|Changes
    in non-cash operating working capital | (18,769) | 4,671                  | 33,406       |             |               
|Asset
    retirement obligations settled          | 5,426    | 2,738                  | 8,424        |             |               
|Fund
    flows from operations                    | 163,660  | 165,645                | 141,737      |             |               
|Expenses
    related to Corrib                    | 839      | 876                    | 2,023        |             |               
|Fund
    flows from operations (excluding Corrib) | 164,499  | 166,521                | 143,760      |             |               



|                                                                  |          | Three
    Months Ended |              |             | Year
    Ended
|----------------------------------------------------------------- | -------- | ---------------------- | ------------ | ----------- | --------------
|                                                                  |          | Dec
    31,            | Sept
    30, | Dec
    31, |               
|($M)                                                              | 2013     | 2013                   | 2012         |             |               
|Dividends
    declared                                            | 61,208   | 61,003                 | 56,435       |             |               
|Issuance
    of shares pursuant to the dividend reinvestment plan | (18,775) | (19,354)               | (18,468)     |             |               
|Net
    dividends                                                 | 42,433   | 41,649                 | 37,967       |             |               
|Drilling
    and development                                      | 147,929  | 135,110                | 151,157      |             |               
|Dispositions                                                      | -        | -                      | -            |             |               
|Exploration
    and evaluation                                    | 549      | 551                    | 5,878        |             |               
|Asset
    retirement obligations settled                          | 5,426    | 2,738                  | 8,424        |             |               
|Payout                                                            | 196,337  | 180,048                | 203,426      |             |               
|Payout
    relating to Corrib                                     | (14,472) | (35,028)               | (18,092)     |             |               
|Payout
    (excluding Corrib)                                     | 181,865  | 145,020                | 185,334      |             |               



|                                                  | As
    At  
|------------------------------------------------- | -----------
|                                                  | Dec
    31,
|('000s
    of shares)                             | 2013       
|Shares
    outstanding                            | 102,123    
|Potential
    shares issuable pursuant to the VIP | 2,746      
|Diluted
    shares outstanding                    | 104,869    



38


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2




CORPORATE INFORMATION



|DIRECTORS
        
        Larry J. Macdonald 1,
        2, 3, 4, 5
        Chairman & CEO, Point
        Energy Ltd.
        Calgary, Alberta
        
        W. Kenneth Davidson 2,
        3
        Toronto, Ontario
        
        Lorenzo Donadeo
        Calgary, Alberta
        
        Claudio A. Ghersinich
        2, 5
        Executive Director, Carrera
        Investments Corp.
        Calgary, Alberta
        
        Joseph F. Killi 2,
        3
        Chairman, Parkbridge
        Lifestyle Communities Inc.
        Vice Chairman, Realex Properties Corp.
        Calgary, Alberta
        Loren M. Leiker 5
        Houston, Texas
        William F. Madison 2,
        4, 5
        Sugar Land, Texas
        Timothy R. Marchant 3, 4, 5
        Calgary, Alberta
        
        1Chairman
        of the Board
        2	Audit Committee
        3	Governance and Human Resources Committee
        4	Health, Safety and Environment Committee
        5	Independent Reserves Committee
        
        ANNUAL GENERAL
        MEETING
        May 2, 2014
        10:00 AM MST
        The Ballroom
        Metropolitan Centre
        333 - 4th Avenue S.W.
        Calgary, Alberta | OFFICERS
        AND KEY PERSONNELCANADALorenzo Donadeo, P.Eng.Chief Executive Officer
        
        Anthony Marino, P.Eng.
        President & COO
        John D. Donovan, FCA
        Executive Vice President
        Business Development
        
        Curtis W. Hicks, CA
        Executive Vice President
        & CFO
        
        Mona Jasinski, M.B.A.,
        C.H.R.P.
        Executive Vice President
        People
        Terry Hergott, CMA
        Vice President Marketing
        
        Daniel
        Goulet, P.Eng.
        Director
        Corporate HSE
        
        Michael
        Kaluza, P.Eng.
        Director
        Canada Business Unit
        
        Dean
        N. Morrison, CFA
        Director
        Investor Relations
        
        Mike
        Prinz
        Director
        Information Technology
        
        Jenson
        Tan, P.Eng.
        Director
        New Ventures
        Robert (Bob) J. Engbloom, LL.B
        Corporate
        Secretary
        
        EUROPE
        
        Gerard
        Schut, P.Eng.
        Vice
        President European Operations
        
        Darcy
        Kerwin, P.Eng.
        Managing
        Director
        France
        Business Unit
        
        Neil
        Wallace
        Managing
        Director
        Netherlands
        Business Unit
        
        AUSTRALIA
        
        Bruce
        D. Lake, P.Eng.
        Managing
        Director
        Australia
        Business Unit | AUDITORS
                                                  
        Deloitte LLP
        Calgary, Alberta
        
        BANKERS
        
        Bank of Montreal
        Calgary, Alberta
        Canadian Imperial Bank
        of Commerce
        Calgary, Alberta
        Royal Bank of Canada
        Calgary, Alberta
        
        The Bank of Nova Scotia
        Calgary, Alberta
        
        The Toronto-Dominion
        Bank
        Calgary, Alberta
        National Bank of Canada
        Calgary, Alberta 
        Alberta Treasury Branches
        Calgary, Alberta
        Wells Fargo Bank N.A., London Branch
        London, England
        HSBC Bank Canada
        Calgary, Alberta
        JPMorgan Chase Bank, N.A., Toronto Branch
        Toronto, Ontario
        
        La Caisse Centrale Desjardins
        du Québec
        Montréal, Quebec
        Citibank N.A., Canadian Branch
        Citibank Canada
        Calgary, Alberta
        EVALUATION ENGINEERS
        
        GLJ Petroleum Consultants Ltd.
        Calgary, Alberta
        
        LEGAL COUNSEL
        
        Norton Rose Fullbright Canada LLP
        Calgary, Alberta
        
        TRANSFER AGENT
        Computershare Trust Company of Canada
        
        STOCK EXCHANGE LISTINGS
        
        The Toronto Stock Exchange (“VET”)
        The
        New York Stock Exchange (“VET”)
        
        INVESTOR
        RELATIONS
        
        Dean Morrison, Director Investor Relations
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



39


Vermilion Energy Inc.2013 Management's Discussion and Analysis - Exhibit 99.2