EXHIBIT 99.1



VERMILION ENERGY INC.



ANNUAL INFORMATION FORM



For the Year Ended December 31, 2012





Dated March 8, 2013















|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



TABLE OF CONTENTS



|GLOSSARY OF TERMS                                               | 4 
|--------------------------------------------------------------- | --
|Conventions                                                     | 6 
|Abbreviations                                                   | 6 
|Conversion                                                      | 6 
|SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS               | 7 
|PRESENTATION OF OIL AND GAS RESERVES AND PRODUCTION INFORMATION | 8 
|Contingent Resources                                            | 8 
|Prospective Resources                                           | 9 
|NON-GAAP MEASURES                                               | 9 
|VERMILION ENERGY inc.                                           | 9 
|General                                                         | 9 
|Organizational Structure of the Company                         | 10
|Summary Description of the Business                             | 10
|History of Vermilion                                            | 11
|NARRATIVE DESCRIPTION OF THE BUSINESS                           | 12
|Business Objectives                                             | 12
|Description of Properties                                       | 12
|STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION    | 14
|Reserves and Future Net Revenue                                 | 14
|Reconciliations of Changes in Reserves                          | 18
|Undeveloped Reserves                                            | 22
|Timing of Initial Undeveloped Reserves Assignment               | 22
|Future Development Costs                                        | 23
|Oil and Gas Properties and Wells                                | 24
|Costs Incurred                                                  | 24
|Exploration and Development Activities                          | 25
|Properties with No Attributed Reserves                          | 26
|Contingent and Prospective Resources                            | 26
|Abandonment and Reclamation Costs                               | 28
|Tax Information                                                 | 29
|Production Estimates                                            | 29
|Production History                                              | 30
|Marketing                                                       | 32
|ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY INC.         | 33
|Management                                                      | 33
|Common Shares                                                   | 34
|Cash Dividends                                                  | 34
|Dividend Reinvestment Plan                                      | 35
|Shareholder Rights Plan                                         | 36
|AUDIT COMMITTEE MATTERS                                         | 39
|Audit Committee Charter                                         | 39
|Composition of the Audit Committee                              | 39
|External Audit Service Fees                                     | 40
|MARKET FOR PRICE RANGE AND TRADING VOLUME OF SECURITIES         | 40
|CREDIT RATINGs                                                  | 40
|CONFLICTS OF INTEREST                                           | 41
|INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS      | 41
|LEGAL PROCEEDINGS                                               | 41
|MATERIAL CONTRACTS                                              | 41
|INTERESTS OF EXPERTS                                            | 42
|TRANSFER AGENT AND REGISTRAR                                    | 42



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



|RISK FACTORS                                                                                   | 42
|---------------------------------------------------------------------------------------------- | --
|Reserve Estimates                                                                              | 42
|Uncertainty of Contingent Resource Estimates                                                   | 42
|Uncertainty of Prospective Resource Estimates                                                  | 43
|Volatility of Oil and Natural Gas Prices                                                       | 43
|Changes in Legislation                                                                         | 43
|Government Regulations                                                                         | 43
|Competition                                                                                    | 43
|Operational Matters                                                                            | 44
|Environmental Concerns                                                                         | 44
|Kyoto Protocol and Carbon Tax                                                                  | 44
|Discretionary Nature of Dividends                                                              | 45
|Debt Service                                                                                   | 45
|Changes in Income Tax Laws                                                                     | 45
|Depletion of Reserves                                                                          | 45
|Net Asset Value                                                                                | 45
|Volatility of Market Price of Common Shares                                                    | 46
|Variations in Interest Rates and Foreign Exchange Rates                                        | 46
|Increase in Operating Costs or Decline in Production Level                                     | 46
|Acquisition Assumptions                                                                        | 46
|Failure to Realize Anticipated Benefits of Prior Acquisitions                                  | 46
|Additional Financing                                                                           | 47
|Potential Conflicts of Interest                                                                | 47
|Accounting Adjustments                                                                         | 47
|Market Accessibility                                                                           | 47
|ADDITIONAL INFORMATION                                                                         | 47
|                                                                                               |   
|SCHEDULE "A"                                                                                   |   
|REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (FORM 51-101F2) | 48
|SCHEDULE "B"                                                                                   |   
|REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE (FORM 51-101F3)                   | 50
|SCHEDULE "C"                                                                                   |   
|AUDIT COMMITTEE TERMS OF REFERENCE                                                             | 51



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



GLOSSARY OF TERMS



The following are defined terms used in
this annual information form:



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



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



“AGCA”means Alberta
Gas Cost Allowance;



“AIF” means Annual Information
Form;



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



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



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



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



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



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



“Conversion Arrangement”
means the plan of arrangement effected on September 1, 2010 under section 193 of the ABCA pursuant to which the Trust converted
from an income trust to a corporate structure;



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



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



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



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



“DRIP Plan” means the
Dividend Reinvestment Plan adopted by the Company;



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



“GLJ Report” means the
independent engineering evaluation of certain oil, NGL and natural gas interests of the Company prepared by GLJ dated February
14, 2013 and effective December 31, 2012;



“IFRS” means International
Financial Reporting Standards;



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



“Meeting” means the annual
meeting of Shareholders of the Company to be held on May 1, 2013 (or, if adjourned, such other date on which the meeting is held);



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
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“NYSE”means New York
Stock Exchange;



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



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



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



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



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



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



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



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



“TSX” means the Toronto
Stock Exchange;



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



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



“Unitholders” means former
unitholders of the Trust;



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



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



“ZEF” means Zaza Energy
France S.A.S.



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Conventions



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



Abbreviations



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



Conversion



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



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



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS



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



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

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

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

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

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

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

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

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

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

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

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

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



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



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

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

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

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

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

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

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

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



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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



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



PRESENTATION OF OIL AND GAS RESERVES AND
PRODUCTION INFORMATION



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



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



Vermilion retained GLJ to conduct an independent
resource evaluation to assess contingent and prospective resources across all of the Company’s key operating regions with
an effective date of December 31, 2012 (the "GLJ Resources Assessment"). All contingent and prospective resources evaluated
in the GLJ Resources Assessment were deemed economic at the effective date of December 31, 2012.



The estimates of volumes of, and the net
present value of the future net revenue attributable to, contingent resources and prospective resources in this annual information
form are derived from the GLJ Resources Assessment. The GLJ Resources Assessment was prepared in accordance with COGEH and NI 51-101
by GLJ, an independent qualified reserve evaluator.



A range of contingent and prospective resources
estimates (low, best and high) were prepared by GLJ. See notes 5 to 8 of the tables in the section entitled “Contingent and
Prospective Resources” for a description of low estimate, best estimate and high estimate.



Contingent Resources



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



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



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

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

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

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

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

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

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

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

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

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

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

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



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



8









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Prospective Resources



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



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



NON-GAAP MEASURES



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



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



“Netbacks” are per unit of production
measures used in operational and capital allocation decisions.



“Net dividends” is calculated
as dividends declared for a given period less proceeds received by Vermilion pursuant to the dividend reinvestment plan. Dividends
both before and after the dividend reinvestment plan are reviewed by management and are assessed as a percentage of fund flows
from operations to analyze how much of the cash that is generated by Vermilion is being used to fund dividends.



VERMILION ENERGY INC.



General



Vermilion Energy Inc. is the successor to
the Trust, following the completion of the conversion of the Trust from an income trust to a corporate structure by way of a court
approved plan of arrangement under the ABCA on September 1, 2010. Pursuant to the Conversion Arrangement, Unitholders exchanged
their Trust Units for common shares of the Company on a one-for-one basis and holders of exchangeable shares of VRL received 1.89344
common shares for each exchangeable share held.



References to “Vermilion” prior
to the date of the Conversion Arrangement are generally references to the consolidated business enterprise of the Trust prior to
the date of the Conversion Arrangement, whose business the Company is a successor to as a result of the Conversion Arrangement,
as accounted for by “continuity-of-interest” accounting.



Vermilion Energy Inc. was incorporated on
July 21, 2010 pursuant to the provisions of the ABCA for the purpose of facilitating the Conversion Arrangement.  On January
1, 2013, Vermilion Energy Inc. completed amalgamations with two of its wholly-owned subsidiaries, 1209974 Alberta Ltd. and Vermilion
Resources Ltd.  Vermilion Energy Inc. was the resulting entity upon completion of the amalgamations.  The registered
and head office of Vermilion Energy Inc. is located at Suite 3500, 520 – 3rd Avenue S.W., Calgary, Alberta, T2P 0R3.



9









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Organizational Structure of the Company



The following diagram describes the intercorporate
relationships among the Company and each of its material subsidiaries, after giving effect to the amalgamations effective January
1, 2013, where each principal subsidiary was incorporated or formed and the percentage of votes attaching to all voting securities
of each subsidiary beneficially owned directly or indirectly by Vermilion. Reference should be made to the appropriate sections
of this annual information form for a complete description of the structure of the Company.







Note:

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



Summary Description of the Business



Vermilion Energy Inc.



The Company is actively engaged in the business
of oil and natural gas exploitation, development, acquisition and production in Australia, Canada, France, Ireland and the Netherlands.
The Company’s business plan is to expand its portfolio of organic growth opportunities and pursue its strategic plan that
targets modest average annual production growth while maintaining a reliable and growing dividend. Vermilion continues to develop
new growth initiatives which target the identification and capture of meaningful unconventional resource related exploration exposure
in Canada, Europe and Australia. Where possible, the Company will seek to expand its reserve base through the selective addition
of high-quality, long-life reserves with low risk development opportunities.



Shareholders receive monthly dividends of
the cash flow generated by Vermilion as declared payable by the board of directors of the Company. The Company currently employs
a strategy which: (i) provides Shareholders with a competitive annual cash-on-cash yield through monthly cash dividends, (ii) ensures
that Vermilion's existing assets are maintained at a level that provides sustainable ongoing cash flow, and (iii) continues
to expand the business of the Company through the development of growth opportunities that are intended to provide long-term stable
cash flows and be accretive to the existing Shareholders. The Company intends to finance acquisitions through bank financing and,
when necessary, the issuance of additional common shares from treasury, while maintaining prudent leverage.



10









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



History of Vermilion



The following describes the development
of Vermilion's business over the last three completed financial years.



On September 1, 2010, Vermilion converted
from an income trust to a dividend paying corporation. Approval was granted from the Trust’s Unitholders to the Conversion
Arrangement at a special meeting of Unitholders of the Trust held on August 31, 2010.



On February 10, 2011, Vermilion issued $225.0
million of senior unsecured notes at par. The notes bear interest at a rate of 6.5% per annum and will mature on February 10, 2016.
As direct senior unsecured obligations of Vermilion, the notes rank pari passu with all other present and future unsecured and
unsubordinated indebtedness of the Company. Vermilion may, at its option, prior to February 10, 2014, redeem up to 35% of the notes
with net proceeds of equity offerings by the Company at a redemption price equal to 106.5% of the principal amount of the notes
to be redeemed, plus accrued and unpaid interest, if any, to the applicable redemption date. Subsequently, Vermilion may, on or
after February 10, 2014, 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.



On November 28, 2011, Vermilion completed
an equity financing of 5,370,000 common shares at a price of $49.00 per common share for gross proceeds of approximately $263 million
including the partial exercise of the underwriters’ over-allotment option. The net proceeds were used to reduce a certain
amount of outstanding indebtedness under the Company’s credit facility, partially fund the Company's development capital
program and prospective acquisitions as well as for general purposes.



During 2011, Vermilion completed property
acquisitions of various strategic properties that complement existing assets within Vermilion’s core areas. The net cost
of these property acquisitions to Vermilion was approximately $50.9 million, of which $38.8 million related to acquisitions in
Canada and $12.1 million related to acquisitions in the Netherlands. None of the property acquisitions constituted a “significant
acquisition” within the meaning of applicable securities laws.



On January 24, 2012, Vermilion announced
that the Company, through its wholly-owned subsidiaries, acquired certain working interests in six producing fields located in
the Paris and Aquitaine basins in France. Taking into consideration an effective date of January 1, 2011 and customary closing
adjustments, Vermilion paid approximately $106 million cash at closing. Vermilion financed this acquisition indirectly through
proceeds received from the November 2011 equity issuance. The acquisition did not constitute a “significant acquisition”
within the meaning of applicable securities laws.



On November 14, 2012, Vermilion announced
that the board of directors approved an increase to its monthly dividend by 5.3% to $0.20 per share from $0.19 per share. The increase
became effective for the January 2013 dividend paid on February 15, 2013. The dividend increase represents Vermilion’s second
increase since initiating a dividend ten years ago. Also, on November 14, 2012 Vermilion announced that it had initiated the process
with the NYSE Euronext for a secondary listing of the Company's common shares on the NYSE Euronext's New York Stock Exchange, subject
to fulfilling all of the listing requirements of the NYSE. Pending receipt of all applicable exchange and regulatory approvals,
the Company expects its common shares will be listed on the NYSE during the first quarter of 2013 under the ticker symbol "VET".



On December 27, 2012, Vermilion announced
that the Company, through its wholly-owned subsidiaries, acquired 100% of the shares of Zaza Energy France S.A.S. (“ZEF”).
Pursuant to the acquisition, Vermilion acquired operating interests covering approximately 24,300 acres with 100% working interests
in the Saint Firmin, Chateaurenard, Courtenay, Chuelles, and Charmottes fields in the Paris Basin. Taking into consideration an
effective date for the acquisition of October 1, 2012 and customary closing adjustments, Vermilion paid approximately $75 million
cash at closing including working capital. Vermilion financed this acquisition through its bank revolving credit facility. The
acquisition did not constitute a “significant acquisition” within the meaning of applicable securities laws.



On December 31, 2012, pursuant to the terms
of the acquisition agreement whereby Vermilion acquired an 18.5% non-operating working interest in the offshore Corrib gas field,
Vermilion made an additional payment to the vendor of $134 million (US$135 million).



In order to consolidate its Canadian subsidiaries,
on January 1, 2013, Vermilion amalgamated with two of its wholly-owned subsidiaries, 1209974 Alberta Ltd. and Vermilion Resources
Ltd. Vermilion Energy Inc. was the resulting entity upon completion of the amalgamations. As a result of the forgoing amalgamations,
Vermilion became the managing partner of Vermilion Resources.



As at January 31, 2013, Vermilion had 375
full time employees of which 183 employees were located in its Calgary head office, 35 employees in its Canadian field offices,
107 employees in France, 17 employees in the Netherlands and 33 employees in Australia.



11









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



NARRATIVE DESCRIPTION OF THE BUSINESS



Business Objectives



The Company is actively engaged in the business
of oil and natural gas exploitation, development, acquisition and production in Australia, Canada, France, Ireland and the Netherlands.
The Company’s business plan is to expand its portfolio of organic growth opportunities and pursue its strategic plan that
targets modest average annual production growth while maintaining a reliable and growing dividend. Vermilion continues to develop
new growth initiatives which target the identification and capture of meaningful unconventional resource related exploration exposure
in Canada, Europe and Australia. Where possible, the Company will seek to expand its reserve base through the selective addition
of high-quality, long-life reserves with low risk development opportunities.



In reviewing potential participations or
acquisitions, Vermilion will consider a number of factors, including: (a) the present value of the future revenue from such
properties from the proved producing, total proved and proved plus probable reserves; (b) the amount of potential for additional
reservoir development; (c) whether sufficient infrastructure exists in the prospect to provide for increased activity; (d) the
cost of any potential development; (e) investments in properties that exhibit medium to long life reserves and stable production
base; and (f) the ability of Vermilion to enhance the value of acquired properties through additional exploitation efforts
and additional development drilling. The board of directors of Vermilion may, in its discretion, approve asset or corporate acquisitions
or investments that do not conform to these guidelines based upon the board's consideration of the qualitative aspects of the subject
properties including risk profile, technical upside, reserve life, asset quality and the Company's business prospects.



Description of Properties



The following is a description of the oil
and natural gas properties, plants, facilities and installations in which Vermilion has an interest and that are material to Vermilion's
operations and exploration activities. The production numbers stated refer to Vermilion's working interest share before deduction
of Crown, freehold and other royalties. Reserve amounts are stated, before deduction of royalties, as at December 31, 2012, based
on forecasted costs and price assumptions as evaluated in the GLJ Report.



Canada Assets



Vermilion’s production in Canada is
located primarily in three areas, all of which are in Alberta: Drayton Valley, Slave Lake and Central Alberta. Vermilion's main
gas producing areas are Drayton Valley and Central Alberta, while Slave Lake and the Cardium light oil play in Drayton Valley are
the main oil producing areas.



Vermilion holds an average working interest
of 69% in 387,016 (267,715 net) acres of developed land, 518 (348 net) producing natural gas wells and 380 (243 net) producing
oil wells as at December 31, 2012. Vermilion operates five natural gas plants and has an ownership interest in five additional
plants, resulting in combined gross processing capacity of over 89 MMcf/d. In addition, Vermilion has capacity of over 20,500 bbl/d
of oil in five operated oil batteries including a 15,000 bbl/d oil battery that handles Cardium production. The 15,000 bbl/d oil
battery commenced operations August 1, 2011 and as of December 2012 was processing approximately 7,885 bbl/d of oil which represents
94% of Vermilion's total Cardium oil production.



Risks and uncertainties associated with
weather conditions can shorten the winter drilling season and can impact the spring and summer drilling programs, potentially resulting
in increased costs or reduced production.



For a discussion of the competitive conditions
affecting Vermilion’s business, refer to "Competition" in the Risk Factors section of this AIF.



For the year ended December 31, 2012, production
in Canada averaged approximately 37.5 MMcf/d of natural gas and 8,891 bbl/d of oil and NGL. Sales of natural gas in 2012 were approximately
$34.6 million (2011 - $60.6 million) and sales from oil and NGLs were approximately $269.6 million (2011 - $199.2 million).



The GLJ Report assigned 40,700 Mboe of total
proved reserves and 67,770 Mboe of proved plus probable reserves to Vermilion's properties located in Canada.



12









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



France Assets



Vermilion's main producing areas in France
are located in the Aquitaine Basin which is southwest of Bordeaux, France and in the Paris Basin, located just east of Paris. Vermilion's
assets in France are primarily oil producing properties. The two major fields in the Paris Basin area are Champotran and Chaunoy.
The two major fields in the Aquitaine Basin are Parentis and Cazaux. In January, 2012 Vermilion, through its wholly-owned subsidiaries,
acquired certain working interests in six producing fields located in the Paris and Aquitaine basins in France. Pursuant to the
acquisition, Vermilion acquired the remaining working interests in three fields in which it previously held interests (Itteville,
Vert Le Grand and Vic Bihl) and working interests in three new fields (Vert Le Petit and La Croix Blanche at 100% working interest
and Dommartin-Lettrée at 56% working interest). Effective October 1, 2012 Vermilion, through its wholly owned subsidiaries,
acquired 100% of the shares of ZEF and operating interests covering approximately 24,300 acres with 100% working interests in the
Saint Firmin, Chateaurenard, Courtenay, Chuelles, and Charmottes fields in the Paris Basin.  Vermilion now operates 13 oil
batteries with current producing capacities of 14,159 bbl/d. Vermilion holds 96% working interest in 226,610 (217,358 net) acres
of developed land in the Aquitaine and Paris Basins. Vermilion had 317 (312 net) producing oil wells in France as at December 31,
2012.



Risks and uncertainties associated with
well approvals can impact the drilling programs, potentially resulting in delays or reduced production.



For a discussion of the competitive conditions
affecting Vermilion business, refer to "Competition" in the Risk Factors section of this AIF.



For the year ended December 31, 2012, production
in France averaged approximately 9,952 bbl/d of oil and 3.6 MMcf/d of natural gas. Sales from oil in 2012 were approximately $374.2
million (2011 - $319.9 million) and sales from natural gas were approximately $14.2 million (2011 - $4.2 million).



The GLJ Report assigned 32,746 Mboe of total
proved reserves and 47,012 Mboe of proved plus probable reserves to Vermilion's properties located in France.



Netherlands Assets



Vermilion's Netherlands assets consist of
eight onshore concessions and one offshore concession located in the northern part of the country. Production consists solely of
natural gas with a small amount of related condensate. The assets include three operated gas treatment centres that have a combined
total capacity of 240 MMcf/d. Vermilion holds an approximate 74% working interest over the nine concessions in 49,337 (36,517 net)
acres of developed land and 57 (43 net) producing gas wells as at December 31, 2012.



Risks and uncertainties associated with
drilling and production permits can impact drilling programs and production timing, potentially resulting in increased costs or
reduced production.



For a discussion of the competitive conditions
affecting Vermilion’s business, refer to "Competition" in the Risk Factors section of this AIF.



For the year ended December 31, 2012, Vermilion's
production in the Netherlands averaged 67 bbl/d of NGLs and 34.1 MMcf/d of natural gas. Sales in 2012 of natural gas were approximately
$121.1 million (2011 - $114.2 million) and sales from NGLs were approximately $2.4 million (2011 - $2.0 million).



The GLJ Report assigned 6,163 Mboe of total
proved reserves and 11,770 Mboe of proved plus probable reserves to Vermilion's properties located in the Netherlands.



Australia Assets



Vermilion's Australia assets consist of
a 100% operated interest in an offshore oil field located on Western Australia's northwest shelf. The platform has a current producing
capacity of 162,000 bbl/d of total fluid. Vermilion holds a 100% working interest in the Wandoo block, which is comprised of 59,553
acres and is considered a production license. All acreage therefore is classified as producing.



Western Australia’s northwest shelf
is subject to seasonal disruptions caused by cyclones. During cyclone season (December to March) the Company may have to reduce
production rates at its offshore facilities as a result of the inability to offload to tankers due to bad weather. Cyclones may
also cause production shut-ins due to the evacuation of staff or damage to equipment on the platform.



For a discussion of the competitive conditions
affecting Vermilion’s business, refer to "Competition" in the Risk Factors section of this AIF.



For the year ended December 31, 2012, Vermilion's
production in Australia averaged 6,360 bbl/d of oil. Sales in 2012 from oil were approximately $267.0 million (2011 - $331.4 million).



13









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------





The GLJ Report assigned 10,327 Mboe of total
proved reserves and 17,143 Mboe of proved plus probable reserves to Vermilion's property located in Australia.



Ireland Assets



Vermilion holds an 18.5% non-operating interest
in the offshore Corrib gas field located off the northwest coast of Ireland. Production from Corrib is expected to increase Vermilion’s
volumes by approximately 55 MMcf (9,000 boe/d) once the field reaches peak production. Vermilion acquired its 18.5% working interest
in the project on July 30, 2009, comprised of seven offshore wells, both offshore and onshore pipeline segments as well as a natural
gas processing facility. At the time of the acquisition most of the key components of the project, with the exception of the onshore
pipeline, were either complete or in the latter stages of development. In 2011, approvals and permissions were granted for the
onshore gas pipeline and tunneling commenced on December 16, 2012. Vermilion expects to continue to invest capital in this project
over the next two years with approximately $85 million budgeted for 2013.  The project is anticipated to produce first gas
toward the end of 2014 and reach peak production levels by mid-2015.



The GLJ Report assigned 15,326 Mboe of total
proved reserves and 21,172 Mboe of proved plus probable reserves to Vermilion's property located in Ireland.



STATEMENT OF RESERVES DATA AND OTHER OIL
AND GAS INFORMATION



Reserves and Future Net Revenue



The following is a summary of the oil and
natural gas reserves and the value of future net revenue of Vermilion as evaluated by GLJ in a report dated February 14, 2013 with
an effective date of December 31, 2012. Pricing used in the forecast price evaluations is set forth in the notes to the tables.



Reserves and other oil and gas information
contained in this section is effective December 31, 2012 unless otherwise stated.



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



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



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



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



The following tables may not total due to
rounding.



14









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------





Oil and Gas Reserves - Based on Forecast
Prices and Costs(8)



|                                           |  | Light and Medium Oil |        |  | Heavy Oil   |  |        | Natural Gas   |  |  | Natural Gas Liquids |  |  | BOE           |   
|------------------------------------------ |  | -------------------- | ------ |  | ----------- |  | ------ | ------------- |  |  | ------------------- |  |  | ------------- | --
|                                           |  | Gross
    (1)        |        |  | Net
    (1) |  |        | Gross
    (1) |  |  | Net
    (1)         |  |  | Gross
    (1) |   
|                                           |  | (Mbbl)               |        |  | (Mbbl)      |  |        | (Mbbl)        |  |  | (Mbbl)              |  |  | (MMcf)        |   
|Proved Developed Producing
    (2) (5)     |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | 10,327 |  |             |  | 10,327 |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 9,521  |  |             |  | 7,890  |               |  |  | 17                  |  |  |               | 16
|France                                     |  |                      | 30,898 |  |             |  | 28,962 |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Proved Developed Producing           |  |                      | 50,746 |  |             |  | 47,179 |               |  |  | 17                  |  |  |               | 16
|Proved Developed Non-Producing
    (2) (6) |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 549    |  |             |  | 478    |               |  |  | -                   |  |  |               | - 
|France                                     |  |                      | 602    |  |             |  | 576    |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Proved Developed Non-Producing       |  |                      | 1,151  |  |             |  | 1,054  |               |  |  | -                   |  |  |               | - 
|Proved Undeveloped
    (2) (7)             |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 8,045  |  |             |  | 7,172  |               |  |  | -                   |  |  |               | - 
|France                                     |  |                      | 1,017  |  |             |  | 984    |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Proved Undeveloped                   |  |                      | 9,062  |  |             |  | 8,157  |               |  |  | -                   |  |  |               | - 
|Proved (2)                                 |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | 10,327 |  |             |  | 10,327 |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 18,115 |  |             |  | 15,540 |               |  |  | 17                  |  |  |               | 16
|France                                     |  |                      | 32,516 |  |             |  | 30,522 |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Proved                               |  |                      | 60,959 |  |             |  | 56,389 |               |  |  | 17                  |  |  |               | 16
|Probable (3)                               |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | 6,815  |  |             |  | 6,815  |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 14,099 |  |             |  | 11,888 |               |  |  | 3                   |  |  |               | 3 
|France                                     |  |                      | 14,263 |  |             |  | 13,392 |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Probable                             |  |                      | 35,177 |  |             |  | 32,095 |               |  |  | 3                   |  |  |               | 3 
|Proved Plus Probable
    (2) (3)           |  |                      |        |  |             |  |        |               |  |  |                     |  |  |               |   
|Australia                                  |  |                      | 17,143 |  |             |  | 17,143 |               |  |  | -                   |  |  |               | - 
|Canada                                     |  |                      | 32,214 |  |             |  | 27,428 |               |  |  | 20                  |  |  |               | 19
|France                                     |  |                      | 46,779 |  |             |  | 43,914 |               |  |  | -                   |  |  |               | - 
|Ireland                                    |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Netherlands                                |  |                      | -      |  |             |  | -      |               |  |  | -                   |  |  |               | - 
|Total Proved Plus Probable                 |  |                      | 96,136 |  |             |  | 88,484 |               |  |  | 20                  |  |  |               | 19





15









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Net Present Values of Future Net Revenue
- Based on Forecast Prices and Costs(8)



|                                           |  | Before
    Deducting Future Income Taxes Discounted At |           |  | After
    Deducting Future Income Taxes Discounted At | 
|------------------------------------------ |  | ------------------------------------------------------ | --------- |  | ----------------------------------------------------- | 
|(M$)                                       |  | 0%                                                     |           |  | 5%                                                    | 
|Proved Developed
    Producing (2) (5)     |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | 494,122   |  |                                                       | 
|Canada                                     |  |                                                        | 720,151   |  |                                                       | 
|France                                     |  |                                                        | 1,840,380 |  |                                                       | 
|Ireland                                    |  |                                                        | -         |  |                                                       | 
|Netherlands                                |  |                                                        | 95,859    |  |                                                       | 
|Total Proved Developed Producing           |  |                                                        | 3,150,512 |  |                                                       | 
|Proved Developed
    Non-Producing (2) (6) |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | -         |  |                                                       | 
|Canada                                     |  |                                                        | 58,017    |  |                                                       | 
|France                                     |  |                                                        | 36,048    |  |                                                       | 
|Ireland                                    |  |                                                        | -         |  |                                                       | 
|Netherlands                                |  |                                                        | 127,942   |  |                                                       | 
|Total Proved Developed Non-Producing       |  |                                                        | 222,007   |  |                                                       | 
|Proved Undeveloped
    (2) (7)             |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | -         |  |                                                       | 
|Canada                                     |  |                                                        | 427,998   |  |                                                       | 
|France                                     |  |                                                        | 62,306    |  |                                                       | 
|Ireland                                    |  |                                                        | 596,255   |  |                                                       | 
|Netherlands                                |  |                                                        | -         |  |                                                       | 
|Total Proved Undeveloped                   |  |                                                        | 1,086,558 |  |                                                       | 
|Proved (2)                                 |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | 494,122   |  |                                                       | 
|Canada                                     |  |                                                        | 1,206,166 |  |                                                       | 
|France                                     |  |                                                        | 1,938,734 |  |                                                       | 
|Ireland                                    |  |                                                        | 596,255   |  |                                                       | 
|Netherlands                                |  |                                                        | 223,801   |  |                                                       | 
|Total Proved                               |  |                                                        | 4,459,077 |  |                                                       | 
|Probable (3)                               |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | 358,056   |  |                                                       | 
|Canada                                     |  |                                                        | 1,003,214 |  |                                                       | 
|France                                     |  |                                                        | 1,043,805 |  |                                                       | 
|Ireland                                    |  |                                                        | 343,183   |  |                                                       | 
|Netherlands                                |  |                                                        | 290,794   |  |                                                       | 
|Total Probable                             |  |                                                        | 3,039,051 |  |                                                       | 
|Proved Plus Probable
    (2) (3)           |  |                                                        |           |  |                                                       | 
|Australia                                  |  |                                                        | 852,178   |  |                                                       | 
|Canada                                     |  |                                                        | 2,209,380 |  |                                                       | 
|France                                     |  |                                                        | 2,982,538 |  |                                                       | 
|Ireland                                    |  |                                                        | 939,437   |  |                                                       | 
|Netherlands                                |  |                                                        | 514,595   |  |                                                       | 
|Total Proved Plus Probable                 |  |                                                        | 7,498,128 |  |                                                       | 



Total Future Net Revenue (Undiscounted)
Based on Forecast Prices and Costs(8)



|(M$)                             |  | Revenue |            |  | Royalties |  |         | Operating
    Costs |  |  | Capital
    Development Costs |  |  | Abandonment
    and Reclamation Costs |           |  | Future
    Net Revenue Before Income Taxes |  |         | Future
    Income Taxes |  |  | Future
    Net Revenue After Income Taxes | 
|-------------------------------- |  | ------- | ---------- |  | --------- |  | ------- | ------------------- |  |  | ----------------------------- |  |  | ------------------------------------- | --------- |  | ------------------------------------------ |  | ------- | ----------------------- |  |  | ----------------------------------------- | 
|Proved (2)                       |  |         |            |  |           |  |         |                     |  |  |                               |  |  |                                       |           |  |                                            |  |         |                         |  |  |                                           | 
|Australia                        |  |         | 1,124,862  |  |           |  | -       |                     |  |  | 561,774                       |  |  |                                       | 39,302    |  |                                            |  | 29,665  |                         |  |  | 494,122                                   | 
|Canada                           |  |         | 2,654,946  |  |           |  | 350,011 |                     |  |  | 650,972                       |  |  |                                       | 412,269   |  |                                            |  | 35,528  |                         |  |  | 1,206,166                                 | 
|France                           |  |         | 3,377,006  |  |           |  | 208,626 |                     |  |  | 962,343                       |  |  |                                       | 92,573    |  |                                            |  | 174,730 |                         |  |  | 1,938,734                                 | 
|Ireland                          |  |         | 983,693    |  |           |  | -       |                     |  |  | 156,907                       |  |  |                                       | 221,938   |  |                                            |  | 8,594   |                         |  |  | 596,255                                   | 
|Netherlands                      |  |         | 388,643    |  |           |  | -       |                     |  |  | 114,058                       |  |  |                                       | 12,490    |  |                                            |  | 38,294  |                         |  |  | 223,801                                   | 
|Total Proved                     |  |         | 8,529,150  |  |           |  | 558,637 |                     |  |  | 2,446,054                     |  |  |                                       | 778,571   |  |                                            |  | 286,811 |                         |  |  | 4,459,077                                 | 
|Proved Plus Probable
    (2) (3) |  |         |            |  |           |  |         |                     |  |  |                               |  |  |                                       |           |  |                                            |  |         |                         |  |  |                                           | 
|Australia                        |  |         | 1,898,680  |  |           |  | -       |                     |  |  | 902,469                       |  |  |                                       | 107,302   |  |                                            |  | 36,732  |                         |  |  | 852,178                                   | 
|Canada                           |  |         | 4,663,789  |  |           |  | 632,948 |                     |  |  | 1,026,259                     |  |  |                                       | 748,323   |  |                                            |  | 46,880  |                         |  |  | 2,209,380                                 | 
|France                           |  |         | 5,000,274  |  |           |  | 309,459 |                     |  |  | 1,303,425                     |  |  |                                       | 195,458   |  |                                            |  | 209,392 |                         |  |  | 2,982,538                                 | 
|Ireland                          |  |         | 1,381,321  |  |           |  | -       |                     |  |  | 210,825                       |  |  |                                       | 221,938   |  |                                            |  | 9,120   |                         |  |  | 939,437                                   | 
|Netherlands                      |  |         | 767,437    |  |           |  | -       |                     |  |  | 182,705                       |  |  |                                       | 24,420    |  |                                            |  | 45,717  |                         |  |  | 514,595                                   | 
|Total Proved Plus Probable       |  |         | 13,711,501 |  |           |  | 942,407 |                     |  |  | 3,625,684                     |  |  |                                       | 1,297,440 |  |                                            |  | 347,842 |                         |  |  | 7,498,128                                 | 



16









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Future Net Revenue by Production Group
Based on Forecast Prices and Costs(8)



|                                        |  | Future Net Revenue Before Income Taxes (1) (Discounted at 10% Per Year) |           |  | Unit Value | 
|--------------------------------------- |  | ----------------------------------------------------------------------- | --------- |  | ---------- | 
|Proved Developed Producing              |  |                                                                         | (M$)      |  |            | 
|Light and medium oil (2)                |  |                                                                         | 1,848,495 |  |            | 
|Natural gas (3)                         |  |                                                                         | 218,929   |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 7,221     |  |            | 
|Total Proved Developed Producing        |  |                                                                         | 2,074,645 |  |            | 
|Proved Developed Non-Producing          |  |                                                                         |           |  |            | 
|Light and medium oil (2)                |  |                                                                         | 52,002    |  |            | 
|Natural gas (3)                         |  |                                                                         | 94,969    |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 2,010     |  |            | 
|Total Proved Developed Non-Producing    |  |                                                                         | 148,982   |  |            | 
|Proved Undeveloped                      |  |                                                                         |           |  |            | 
|Light and medium oil (2)                |  |                                                                         | 172,789   |  |            | 
|Natural gas (3)                         |  |                                                                         | 320,842   |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 6,081     |  |            | 
|Total Proved Undeveloped                |  |                                                                         | 499,712   |  |            | 
|Proved                                  |  |                                                                         |           |  |            | 
|Light and medium oil (2)                |  |                                                                         | 2,073,743 |  |            | 
|Natural gas (3)                         |  |                                                                         | 634,291   |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 15,305    |  |            | 
|Total Proved                            |  |                                                                         | 2,723,339 |  |            | 
|Probable                                |  |                                                                         |           |  |            | 
|Light and medium oil (2)                |  |                                                                         | 969,797   |  |            | 
|Natural gas (3)                         |  |                                                                         | 366,288   |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 7,521     |  |            | 
|Total Probable                          |  |                                                                         | 1,343,605 |  |            | 
|Proved Plus Probable                    |  |                                                                         |           |  |            | 
|Light and medium oil (2)                |  |                                                                         | 3,043,586 |  |            | 
|Natural gas (3)                         |  |                                                                         | 1,000,532 |  |            | 
|Non-conventional oil and gas activities |  |                                                                         | 22,826    |  |            | 
|Total Proved Plus Probable              |  |                                                                         | 4,066,944 |  |            | 



Notes:

| | (1) | Other company revenue and costs not related to a specific production group have been allocated
proportionately to production groups. Unit values are based on Company Net Reserves. Net present values of reserves categories
are an approximation based on major products.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Including solution gas and other by-products.
| | --- | ---------------------------------------------

| | (3) | Including by-products but excluding solution gas.
| | --- | -------------------------------------------------



17









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Forecast Prices used in Estimates(8)



|           |  | Light
    and Medium Crude Oil     |       |   | Crude
    Oil                                                                                                                                                                                                                                                                             |  |       | Natural
    Gas Canada            |  |  | Natural
    Gas France                  |   |  | Natural
    Gas Netherlands     |        |   | Natural
    Gas Liquids           |  |      | Inflation
    Rate       |  |  | Exchange
    Rate             |  
|---------- |  | ---------------------------------- | ----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | --------------------------------- |  |  | --------------------------------------- | - |  | ------------------------------- | ------ | - | --------------------------------- |  | ---- | ------------------------ |  |  | ----------------------------- | -
|Year       |  | WTI
    Cushing Oklahoma ($US/bbl) |       |   | Edmonton Par
                                                                                                                                                                                                                                                     Price 40oAPI ($Cdn/bbl) |  |       | Cromer Medium 29.3oAPI ($Cdn/bbl) |  |  | Brent
    Blend FOB North Sea ($US/bbl) |   |  | AECO
    Gas Price ($Cdn/MMBtu) |        |   | National
    Balancing Point (UK) |  |      | Gas
    Price ($Cdn/Mcf) |  |  | FOB
    Field Gate ($Cdn/bbl) |  
|2012       |  |                                    | 94.10 |   |                                                                                                                                                                                                                                                                                           |  | 86.86 |                                   |  |  | 81.56                                   |   |  |                                 | 111.60 |   |                                   |  | 2.45 |                          |  |  | 9.37                          |  
|Forecast   |  |                                    |       |   |                                                                                                                                                                                                                                                                                           |  |       |                                   |  |  |                                         |   |  |                                 |        |   |                                   |  |      |                          |  |  |                               |  
|2013       |  |                                    | 90.00 |   |                                                                                                                                                                                                                                                                                           |  | 85.00 |                                   |  |  | 79.90                                   |   |  |                                 | 105.00 |   |                                   |  | 3.38 |                          |  |  | 9.13                          |  
|2014       |  |                                    | 92.50 |   |                                                                                                                                                                                                                                                                                           |  | 91.50 |                                   |  |  | 84.18                                   |   |  |                                 | 102.50 |   |                                   |  | 3.83 |                          |  |  | 9.32                          |  
|2015       |  |                                    | 95.00 |   |                                                                                                                                                                                                                                                                                           |  | 94.00 |                                   |  |  | 86.48                                   |   |  |                                 | 102.50 |   |                                   |  | 4.28 |                          |  |  | 9.76                          |  
|2016       |  |                                    | 97.50 |   |                                                                                                                                                                                                                                                                                           |  | 96.50 |                                   |  |  | 88.78                                   |   |  |                                 | 102.50 |   |                                   |  | 4.72 |                          |  |  | 10.25                         |  
|2017       |  |                                    | 97.50 |   |                                                                                                                                                                                                                                                                                           |  | 96.50 |                                   |  |  | 88.78                                   |   |  |                                 | 100.00 |   |                                   |  | 4.95 |                          |  |  | 10.00                         |  
|Thereafter |  |                                    | 2.0   | % |                                                                                                                                                                                                                                                                                           |  | 2.0   | %                                 |  |  | 2.0                                     | % |  |                                 | 2.0    | % |                                   |  | 2.0  | %                        |  |  | 2.0                           | %



All forecast prices in the table above provided
by GLJ. For 2012, the price of Vermilion’s natural gas in the Netherlands was based on pricing established by GasTerra, a
state owned entity which purchases all natural gas produced by Vermilion in the Netherlands. For 2012, the natural gas price in
the Netherlands was calculated using a trailing average of Dated Brent and the natural gas prices from European trading hubs. France
natural gas production was benchmarked to National Balancing Point (UK).  The benchmark price for Australia and France crude
oil was Dated Brent. The benchmark price for Canadian crude oil was Edmonton Par and Canadian natural gas was priced against AECO.
For the year ended December 31, 2012, the average realized sales prices before hedging were $117.03 per bbl (Australia) and $107.67
per bbl (France) for Brent-based crude oil, $82.84 per bbl for Canadian-based crude oil and NGLs, $9.81 per Mcf for European natural
gas and $2.52 per Mcf for Canadian natural gas.



Reconciliations of Changes in Reserves



The following tables set forth a reconciliation
of the changes in Vermilion's gross light and medium crude oil, heavy oil and associated and non-associated gas (combined) reserves
as at December 31, 2012 compared to such reserves as at December 31, 2011 based on the forecast price and cost assumptions set
forth in note 8 under the heading "Statement of Reserves Data and Other Oil and Gas Information – Forecast Prices used
in Estimates".



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



|AUSTRALIA                                      |  | Total
    Oil     |        |   | Light
    and Medium Oil |  |       | Heavy
    Oil                   |  |  | Natural
    Gas Liquids |  
|---------------------------------------------- |  | ----------------- | ------ | - | ------------------------ |  | ----- | ------------------------------- |  |  | ----------------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |        |   | Probable
    (Mbbl)      |  |       | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       |  
|At December 31, 2011                           |  |                   | 12,697 |   |                          |  | 4,800 |                                 |  |  | 17,497                  |  
|Discoveries                                    |  |                   | -      |   |                          |  | -     |                                 |  |  | -                       |  
|Extensions & Improved Recovery                 |  |                   | -      |   |                          |  | 2,000 |                                 |  |  | 2,000                   |  
|Technical Revisions                            |  |                   | 53     |   |                          |  | 36    |                                 |  |  | 89                      |  
|Acquisitions                                   |  |                   | -      |   |                          |  | -     |                                 |  |  | -                       |  
|Dispositions                                   |  |                   | -      |   |                          |  | -     |                                 |  |  | -                       |  
|Economic Factors                               |  |                   | (95    | ) |                          |  | (20   | )                               |  |  | (115                    | )
|Production                                     |  |                   | (2,328 | ) |                          |  | -     |                                 |  |  | (2,328                  | )
|At December 31, 2012                           |  |                   | 10,327 |   |                          |  | 6,816 |                                 |  |  | 17,143                  |  



|                                               |  | Total
    Gas     |   |  | Conventional
    Natural Gas |  |   | Coal
    Bed Methane            |  |  | BOE               | 
|---------------------------------------------- |  | ----------------- | - |  | ---------------------------- |  | - | ------------------------------- |  |  | ----------------- | 
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |   |  | Probable
    (MMcf)          |  |   | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) | 
|At December 31, 2011                           |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Discoveries                                    |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Extensions & Improved Recovery                 |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Technical Revisions                            |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Acquisitions                                   |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Dispositions                                   |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Economic Factors                               |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|Production                                     |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 
|At December 31, 2012                           |  |                   | - |  |                              |  | - |                                 |  |  | -                 | 



18









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



|CANADA                                         |  | Total
    Oil     |        |   | Light
    and Medium Oil |  |        | Heavy
    Oil                   |  |  | Natural
    Gas Liquids |  
|---------------------------------------------- |  | ----------------- | ------ | - | ------------------------ |  | ------ | ------------------------------- |  |  | ----------------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |        |   | Probable
    (Mbbl)      |  |        | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       |  
|At December 31, 2011                           |  |                   | 15,972 |   |                          |  | 14,038 |                                 |  |  | 30,010                  |  
|Discoveries                                    |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Extensions & Improved Recovery                 |  |                   | 3,568  |   |                          |  | 800    |                                 |  |  | 4,368                   |  
|Technical Revisions                            |  |                   | 1,395  |   |                          |  | (736   | )                               |  |  | 659                     |  
|Acquisitions                                   |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Dispositions                                   |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Economic Factors                               |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Production                                     |  |                   | (2,803 | ) |                          |  | -      |                                 |  |  | (2,803                  | )
|At December 31, 2012                           |  |                   | 18,132 |   |                          |  | 14,102 |                                 |  |  | 32,234                  |  



|                                               |  | Total
    Gas     |         |   | Conventional
    Natural Gas |  |        | Coal
    Bed Methane            |  |  | BOE               |  
|---------------------------------------------- |  | ----------------- | ------- | - | ---------------------------- |  | ------ | ------------------------------- |  |  | ----------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |         |   | Probable
    (MMcf)          |  |        | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) |  
|At December 31, 2011                           |  |                   | 116,411 |   |                              |  | 58,525 |                                 |  |  | 174,936           |  
|Discoveries                                    |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Extensions & Improved Recovery                 |  |                   | 12,449  |   |                              |  | 7,178  |                                 |  |  | 19,627            |  
|Technical Revisions                            |  |                   | 2,132   |   |                              |  | (433   | )                               |  |  | 1,699             |  
|Acquisitions                                   |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Dispositions                                   |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Economic Factors                               |  |                   | (3,252  | ) |                              |  | 384    |                                 |  |  | (2,868            | )
|Production                                     |  |                   | (13,726 | ) |                              |  | -      |                                 |  |  | (13,726           | )
|At December 31, 2012                           |  |                   | 114,014 |   |                              |  | 65,654 |                                 |  |  | 179,668           |  



|FRANCE                                         |  | Total
    Oil     |        |   | Light
    and Medium Oil |  |        | Heavy
    Oil                   |  |  | Natural
    Gas Liquids |  
|---------------------------------------------- |  | ----------------- | ------ | - | ------------------------ |  | ------ | ------------------------------- |  |  | ----------------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |        |   | Probable
    (Mbbl)      |  |        | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       |  
|At December 31, 2011                           |  |                   | 24,127 |   |                          |  | 11,801 |                                 |  |  | 35,928                  |  
|Discoveries                                    |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Extensions & Improved Recovery                 |  |                   | 106    |   |                          |  | 130    |                                 |  |  | 236                     |  
|Technical Revisions                            |  |                   | 1,089  |   |                          |  | 268    |                                 |  |  | 1,357                   |  
|Acquisitions                                   |  |                   | 10,836 |   |                          |  | 2,064  |                                 |  |  | 12,900                  |  
|Dispositions                                   |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Economic Factors                               |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Production                                     |  |                   | (3,642 | ) |                          |  | -      |                                 |  |  | (3,642                  | )
|At December 31, 2012                           |  |                   | 32,516 |   |                          |  | 14,263 |                                 |  |  | 46,779                  |  



|                                               |  | Total
    Gas     |        |   | Conventional
    Natural Gas |  |    | Coal
    Bed Methane            |  |  | BOE               |  
|---------------------------------------------- |  | ----------------- | ------ | - | ---------------------------- |  | -- | ------------------------------- |  |  | ----------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |        |   | Probable
    (MMcf)          |  |    | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) |  
|At December 31, 2011                           |  |                   | 596    |   |                              |  | 19 |                                 |  |  | 615               |  
|Discoveries                                    |  |                   | -      |   |                              |  | -  |                                 |  |  | -                 |  
|Extensions & Improved Recovery                 |  |                   | -      |   |                              |  | -  |                                 |  |  | -                 |  
|Technical Revisions                            |  |                   | 1,088  |   |                              |  | 5  |                                 |  |  | 1,093             |  
|Acquisitions                                   |  |                   | 1,007  |   |                              |  | -  |                                 |  |  | 1,007             |  
|Dispositions                                   |  |                   | -      |   |                              |  | -  |                                 |  |  | -                 |  
|Economic Factors                               |  |                   | -      |   |                              |  | -  |                                 |  |  | -                 |  
|Production                                     |  |                   | (1,314 | ) |                              |  | -  |                                 |  |  | (1,314            | )
|At December 31, 2012                           |  |                   | 1,377  |   |                              |  | 24 |                                 |  |  | 1,401             |  



19









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



|IRELAND                                        |  | Total
    Oil     |   |  | Light
    and Medium Oil |  |   | Heavy
    Oil                   |  |  | Natural
    Gas Liquids | 
|---------------------------------------------- |  | ----------------- | - |  | ------------------------ |  | - | ------------------------------- |  |  | ----------------------- | 
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |   |  | Probable
    (Mbbl)      |  |   | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       | 
|At December 31, 2011                           |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Discoveries                                    |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Extensions & Improved Recovery                 |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Technical Revisions                            |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Acquisitions                                   |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Dispositions                                   |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Economic Factors                               |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Production                                     |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|At December 31, 2012                           |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 



|                                               |  | Total
    Gas     |        |   | Conventional
    Natural Gas |  |        | Coal
    Bed Methane            |  |  | BOE               | 
|---------------------------------------------- |  | ----------------- | ------ | - | ---------------------------- |  | ------ | ------------------------------- |  |  | ----------------- | 
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |        |   | Probable
    (MMcf)          |  |        | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) | 
|At December 31, 2011                           |  |                   | 91,991 |   |                              |  | 12,968 |                                 |  |  | 104,959           | 
|Discoveries                                    |  |                   | -      |   |                              |  | -      |                                 |  |  | -                 | 
|Extensions & Improved Recovery                 |  |                   | -      |   |                              |  | -      |                                 |  |  | -                 | 
|Technical Revisions                            |  |                   | -      |   |                              |  | 22,074 |                                 |  |  | 22,074            | 
|Acquisitions                                   |  |                   | -      |   |                              |  | -      |                                 |  |  | -                 | 
|Dispositions                                   |  |                   | -      |   |                              |  | -      |                                 |  |  | -                 | 
|Economic Factors                               |  |                   | (37    | ) |                              |  | 37     |                                 |  |  | -                 | 
|Production                                     |  |                   | -      |   |                              |  | -      |                                 |  |  | -                 | 
|At December 31, 2012                           |  |                   | 91,954 |   |                              |  | 35,079 |                                 |  |  | 127,033           | 



|NETHERLANDS                                    |  | Total
    Oil     |   |  | Light
    and Medium Oil |  |   | Heavy
    Oil                   |  |  | Natural
    Gas Liquids | 
|---------------------------------------------- |  | ----------------- | - |  | ------------------------ |  | - | ------------------------------- |  |  | ----------------------- | 
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |   |  | Probable
    (Mbbl)      |  |   | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       | 
|At December 31, 2011                           |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Discoveries                                    |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Extensions & Improved Recovery                 |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Technical Revisions                            |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Acquisitions                                   |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Dispositions                                   |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Economic Factors                               |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|Production                                     |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 
|At December 31, 2012                           |  |                   | - |  |                          |  | - |                                 |  |  | -                       | 



|                                               |  | Total
    Gas     |         |   | Conventional
    Natural Gas |  |        | Coal
    Bed Methane            |  |  | BOE               |  
|---------------------------------------------- |  | ----------------- | ------- | - | ---------------------------- |  | ------ | ------------------------------- |  |  | ----------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |         |   | Probable
    (MMcf)          |  |        | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) |  
|At December 31, 2011                           |  |                   | 32,768  |   |                              |  | 32,740 |                                 |  |  | 65,508            |  
|Discoveries                                    |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Extensions & Improved Recovery                 |  |                   | 3,333   |   |                              |  | 3,633  |                                 |  |  | 6,966             |  
|Technical Revisions                            |  |                   | 12,134  |   |                              |  | (3,265 | )                               |  |  | 8,869             |  
|Acquisitions                                   |  |                   | 854     |   |                              |  | 169    |                                 |  |  | 1,023             |  
|Dispositions                                   |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Economic Factors                               |  |                   | -       |   |                              |  | -      |                                 |  |  | -                 |  
|Production                                     |  |                   | (12,483 | ) |                              |  | -      |                                 |  |  | (12,483           | )
|At December 31, 2012                           |  |                   | 36,606  |   |                              |  | 33,277 |                                 |  |  | 69,883            |  



20









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



|TOTAL
    COMPANY                              |  | Total
    Oil     |        |   | Light
    and Medium Oil |  |        | Heavy
    Oil                   |  |  | Natural
    Gas Liquids |  
|---------------------------------------------- |  | ----------------- | ------ | - | ------------------------ |  | ------ | ------------------------------- |  |  | ----------------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (Mbbl) |        |   | Probable
    (Mbbl)      |  |        | Proved
    Plus Probable (Mbbl) |  |  | Proved
    (Mbbl)       |  
|At December 31, 2011                           |  |                   | 52,796 |   |                          |  | 30,639 |                                 |  |  | 83,435                  |  
|Discoveries                                    |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Extensions & Improved Recovery                 |  |                   | 3,674  |   |                          |  | 2,930  |                                 |  |  | 6,604                   |  
|Technical Revisions                            |  |                   | 2,537  |   |                          |  | (432   | )                               |  |  | 2,105                   |  
|Acquisitions                                   |  |                   | 10,836 |   |                          |  | 2,064  |                                 |  |  | 12,900                  |  
|Dispositions                                   |  |                   | -      |   |                          |  | -      |                                 |  |  | -                       |  
|Economic Factors                               |  |                   | (95    | ) |                          |  | (20    | )                               |  |  | (115                    | )
|Production                                     |  |                   | (8,773 | ) |                          |  | -      |                                 |  |  | (8,773                  | )
|At December 31, 2012                           |  |                   | 60,975 |   |                          |  | 35,181 |                                 |  |  | 96,156                  |  



|                                               |  | Total
    Gas     |         |   | Conventional
    Natural Gas |  |         | Coal
    Bed Methane            |  |  | BOE               |  
|---------------------------------------------- |  | ----------------- | ------- | - | ---------------------------- |  | ------- | ------------------------------- |  |  | ----------------- | -
|Proved
    (2) Probable (3) P+P (2) (3)Factors |  | Proved
    (MMcf) |         |   | Probable
    (MMcf)          |  |         | Proved
    Plus Probable (MMcf) |  |  | Proved
    (MMcf) |  
|At December 31, 2011                           |  |                   | 241,766 |   |                              |  | 104,252 |                                 |  |  | 346,018           |  
|Discoveries                                    |  |                   | -       |   |                              |  | -       |                                 |  |  | -                 |  
|Extensions & Improved Recovery                 |  |                   | 15,782  |   |                              |  | 10,811  |                                 |  |  | 26,593            |  
|Technical Revisions                            |  |                   | 15,354  |   |                              |  | 18,381  |                                 |  |  | 33,735            |  
|Acquisitions                                   |  |                   | 1,861   |   |                              |  | 169     |                                 |  |  | 2,030             |  
|Dispositions                                   |  |                   | -       |   |                              |  | -       |                                 |  |  | -                 |  
|Economic Factors                               |  |                   | (3,289  | ) |                              |  | 421     |                                 |  |  | (2,868            | )
|Production                                     |  |                   | (27,523 | ) |                              |  | -       |                                 |  |  | (27,523           | )
|At December 31, 2012                           |  |                   | 243,951 |   |                              |  | 134,034 |                                 |  |  | 377,985           |  



Notes:

| | (1) | "Gross Reserves" are Vermilion's working interest (operating or non-operating) share
before deduction of royalties and without including any royalty interests of Vermilion. "Net Reserves" are Vermilion's
working interest (operating or non-operating) share after deduction of royalty obligations, plus Vermilion's royalty interests
in reserves.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | "Proved" reserves are those reserves that can be estimated with a high degree of certainty
to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | "Probable" reserves are those additional reserves that are less certain to be recovered
than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum
of the estimated proved plus probable reserves.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | "Developed" reserves are those reserves that are expected to be recovered from existing
wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared
to the cost of drilling a well) to put the reserves on production.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | "Developed Producing" reserves are those reserves that are expected to be recovered from
completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have
previously been on production, and the date of resumption of production must be known with reasonable certainty.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | "Developed Non-Producing" reserves are those reserves that either have not been on production,
or have previously been on production, but are shut in, and the date of resumption of production is unknown.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | "Undeveloped" reserves are those reserves expected to be recovered from known accumulations
where a significant expenditure (for example, when compared to the cost of drilling a well) is required to render them capable
of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they
are assigned.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | The pricing assumptions used in the GLJ Report with respect to net values of future net revenue
(forecast) as well as the inflation rates used for operating and capital costs are set forth above. See “Forecast Prices
used in Estimates”. The NGL price is an aggregate of the individual natural gas liquids prices used in the Total Proved plus
Probable evaluation. GLJ is an independent qualified reserves evaluator appointed pursuant to NI 51-101.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Undeveloped Reserves



Proved undeveloped reserves are those reserves
expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost of drilling
a well) is required to render them capable of production. These reserves have a 90% probability of being recovered. Vermilion's
current plan is to develop these reserves in the following three years. This timetable may be altered depending on outside market
forces, changes in capital allocations and impact of future acquisitions and dispositions.



Probable undeveloped reserves are those
reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost
of drilling a well) is required to render them capable of production. These reserves have a 50% probability of being recovered.
Vermilion's current plan is to develop these reserves over the next five years. In general, development of these reserves requires
additional evaluation data to increase the probability of success to an acceptable level for Vermilion. This increases the timeline
for the development of these reserves. This timetable may be altered depending on outside market forces, changes in capital allocations
and impact of future acquisitions and dispositions.



Timing of Initial Undeveloped Reserves
Assignment



Undeveloped Reserves Attributed in
Current Year



|              |  | Light
    & Medium Oil (Mbbl) |       |  | Natural
    Gas (MMcf) |  |        | Coalbed
    Methane Gas (MMcf) |  |  | Natural
    Gas Liquids (Mbbl) |  |  | Total
    Oil Equivalent (Mboe) |        
|------------- |  | ----------------------------- | ----- |  | ---------------------- |  | ------ | ------------------------------ |  |  | ------------------------------ |  |  | ------------------------------- | -------
|              |  | FirstAttributed (1)           |       |  | Booked                 |  |        | FirstAttributed (1)            |  |  | Booked                         |  |  | FirstAttributed (1)             |        
|Proved        |  |                               |       |  |                        |  |        |                                |  |  |                                |  |  |                                 |        
|Prior to 2010 |  |                               | 1,090 |  |                        |  | 2,034  |                                |  |  | 99,026                         |  |  |                                 | 100,928
|2010          |  |                               | 4,627 |  |                        |  | 6,588  |                                |  |  | 6,454                          |  |  |                                 | 107,633
|2011          |  |                               | 3,365 |  |                        |  | 8,127  |                                |  |  | 6,246                          |  |  |                                 | 114,422
|2012          |  |                               | 3,378 |  |                        |  | 9,062  |                                |  |  | 10,998                         |  |  |                                 | 121,962
|Probable      |  |                               |       |  |                        |  |        |                                |  |  |                                |  |  |                                 |        
|Prior to 2010 |  |                               | 2,184 |  |                        |  | 8,047  |                                |  |  | 19,348                         |  |  |                                 | 34,566 
|2010          |  |                               | 6,306 |  |                        |  | 12,417 |                                |  |  | 8,106                          |  |  |                                 | 38,296 
|2011          |  |                               | 5,707 |  |                        |  | 15,734 |                                |  |  | 11,191                         |  |  |                                 | 47,687 
|2012          |  |                               | 3,910 |  |                        |  | 17,536 |                                |  |  | 8,714                          |  |  |                                 | 75,358 



Note:

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



22









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Future Development Costs



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



|(M$)                             |  | Total
    Proved Estimated Using Forecast Prices and Costs |         |  | Total
    Proved Plus Probable Estimated Using Forecast Prices and Costs | 
|-------------------------------- |  | ---------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------ | 
|Australia                        |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 18,600  |  |                                                                          | 
|2014                             |  |                                                            | 3,978   |  |                                                                          | 
|2015                             |  |                                                            | 4,058   |  |                                                                          | 
|2016                             |  |                                                            | 4,139   |  |                                                                          | 
|2017                             |  |                                                            | 4,221   |  |                                                                          | 
|Remainder                        |  |                                                            | 4,306   |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 39,302  |  |                                                                          | 
|Canada                           |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 168,444 |  |                                                                          | 
|2014                             |  |                                                            | 108,811 |  |                                                                          | 
|2015                             |  |                                                            | 117,781 |  |                                                                          | 
|2016                             |  |                                                            | 3,236   |  |                                                                          | 
|2017                             |  |                                                            | 2,555   |  |                                                                          | 
|Remainder                        |  |                                                            | 11,442  |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 412,269 |  |                                                                          | 
|France                           |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 18,221  |  |                                                                          | 
|2014                             |  |                                                            | 32,149  |  |                                                                          | 
|2015                             |  |                                                            | 6,586   |  |                                                                          | 
|2016                             |  |                                                            | 5,797   |  |                                                                          | 
|2017                             |  |                                                            | 5,879   |  |                                                                          | 
|Remainder                        |  |                                                            | 23,941  |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 92,573  |  |                                                                          | 
|Ireland                          |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 84,404  |  |                                                                          | 
|2014                             |  |                                                            | 75,313  |  |                                                                          | 
|2015                             |  |                                                            | 45,674  |  |                                                                          | 
|2016                             |  |                                                            | 16,547  |  |                                                                          | 
|2017                             |  |                                                            | -       |  |                                                                          | 
|Remainder                        |  |                                                            | -       |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 221,938 |  |                                                                          | 
|Netherlands                      |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 4,234   |  |                                                                          | 
|2014                             |  |                                                            | 408     |  |                                                                          | 
|2015                             |  |                                                            | 416     |  |                                                                          | 
|2016                             |  |                                                            | 424     |  |                                                                          | 
|2017                             |  |                                                            | 433     |  |                                                                          | 
|Remainder                        |  |                                                            | 6,574   |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 12,490  |  |                                                                          | 
|Total Company                    |  |                                                            |         |  |                                                                          | 
|2013                             |  |                                                            | 293,903 |  |                                                                          | 
|2014                             |  |                                                            | 220,659 |  |                                                                          | 
|2015                             |  |                                                            | 174,515 |  |                                                                          | 
|2016                             |  |                                                            | 30,143  |  |                                                                          | 
|2017                             |  |                                                            | 13,088  |  |                                                                          | 
|Remainder                        |  |                                                            | 46,263  |  |                                                                          | 
|Total for all years undiscounted |  |                                                            | 778,571 |  |                                                                          | 



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



23









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Oil and Gas Properties and Wells



The following table sets forth the number
of wells in which Vermilion held a working interest as at December 31, 2012:



|                    |  | Oil             |     |  | Oil           |  |     | Natural Gas     |  |  | Natural Gas   | 
|------------------- |  | --------------- | --- |  | ------------- |  | --- | --------------- |  |  | ------------- | 
|                    |  | Gross Wells (1) |     |  | Net Wells (2) |  |     | Gross Wells (1) |  |  | Net Wells (2) | 
|Australia           |  |                 |     |  |               |  |     |                 |  |  |               | 
|Producing           |  |                 | 19  |  |               |  | 19  |                 |  |  | -             | 
|Non-producing       |  |                 | -   |  |               |  | -   |                 |  |  | -             | 
|Canada              |  |                 |     |  |               |  |     |                 |  |  |               | 
|Producing           |  |                 | 380 |  |               |  | 243 |                 |  |  | 518           | 
|Non-producing       |  |                 | 123 |  |               |  | 75  |                 |  |  | 154           | 
|France              |  |                 |     |  |               |  |     |                 |  |  |               | 
|Producing           |  |                 | 317 |  |               |  | 312 |                 |  |  | -             | 
|Non-producing       |  |                 | 169 |  |               |  | 167 |                 |  |  | -             | 
|Ireland             |  |                 |     |  |               |  |     |                 |  |  |               | 
|Producing           |  |                 | -   |  |               |  | -   |                 |  |  | -             | 
|Non-producing       |  |                 | -   |  |               |  | -   |                 |  |  | 6             | 
|Netherlands         |  |                 |     |  |               |  |     |                 |  |  |               | 
|Producing           |  |                 | -   |  |               |  | -   |                 |  |  | 57            | 
|Non-producing       |  |                 | -   |  |               |  | -   |                 |  |  | 19            | 
|Total Producing     |  |                 | 716 |  |               |  | 574 |                 |  |  | 575           | 
|Total Non-producing |  |                 | 292 |  |               |  | 242 |                 |  |  | 179           | 



Notes:

| | (1) | "Gross" refers to the total wells in which Vermilion
has an interest, directly or indirectly.
| | --- | ---------------------------------------------------------------------------------------------

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

| | (3) | Well counts are based on wellbores.
| | --- | -----------------------------------



Costs Incurred



The following table summarizes the capital
expenditures made by Vermilion on oil and natural gas properties for the year ended December 31, 2012:



|            |  | Acquisition Costs |         |  |                     | 
|----------- |  | ----------------- | ------- |  | ------------------- | 
|(M$)        |  | Proved Properties |         |  | Unproved Properties | 
|Australia   |  |                   | -       |  |                     | 
|Canada      |  |                   | 69      |  |                     | 
|France      |  |                   | 169,597 |  |                     | 
|Ireland     |  |                   | -       |  |                     | 
|Netherlands |  |                   | -       |  |                     | 
|Total       |  |                   | 169,666 |  |                     | 



Note:

(1)Includes
costs of acquiring undeveloped lands.



24









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Exploration and Development Activities



The following table sets forth the number
of development and exploration wells which Vermilion completed during its 2012 financial year:



|                |  | Exploration Wells |     |  | Development Wells | 
|--------------- |  | ----------------- | --- |  | ----------------- | 
|                |  | Gross (1)         |     |  | Net (2)           | 
|Australia       |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | -   |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | -   |  |                   | 
|Canada          |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | -   |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | -   |  |                   | 
|France          |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | -   |  |                   | 
|Service         |  |                   | -   |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | -   |  |                   | 
|Ireland         |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | -   |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | -   |  |                   | 
|Netherlands     |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | 2.0 |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | 2.0 |  |                   | 
|Total Company   |  |                   |     |  |                   | 
|Oil             |  |                   | -   |  |                   | 
|Gas             |  |                   | 2.0 |  |                   | 
|Service         |  |                   | -   |  |                   | 
|Standing        |  |                   | -   |  |                   | 
|Dry Holes       |  |                   | -   |  |                   | 
|Total Completed |  |                   | 2.0 |  |                   | 



Notes:

| | (1) | "Gross" refers to the total wells in which
Vermilion has an interest, directly or indirectly.
| | --- | ---------------------------------------------------------------------------------------------

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



Vermilion has currently budgeted $485 million
for its 2013 capital program in Australia, Canada, France, Ireland and the Netherlands. The funds will be used for drilling wells
to develop reserves in its Canadian Cardium play and liquids-rich gas wells in Drayton Valley. The Company is also planning to
drill wells in Australia, France and the Netherlands. A portion of the capital will be allocated to workovers, production optimization,
and maintenance capital in each country.



25











|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Properties with No Attributed Reserves



The following table sets out Vermilion's
undeveloped land as at December 31, 2012:



|            |  | Undeveloped Land |          
|----------- |  | ---------------- | ---------
|Country     |  | Gross Acres (1)  |          
|Australia   |  |                  | -        
|Canada      |  |                  | 507,711  
|France      |  |                  | 362,985  
|Ireland     |  |                  | -        
|Netherlands |  |                  | 598,166  
|Total       |  |                  | 1,468,862



Notes:

| | (1) | "Gross" refers to the total acres in which Vermilion
has an interest, directly or indirectly.
| | --- | ---------------------------------------------------------------------------------------------

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



Vermilion expects its rights to
explore, develop and exploit approximately 9,496 net acres in Canada and 77,094 net acres in France to expire within one year
unless the Company initiates the capital activity necessary to retain the rights. The lands are not material to the Company
and it does not intend to conduct any work to maintain the land.  In the Netherlands, Ireland and Australia, no such
rights expire within one year.



Contingent and Prospective Resources



The GLJ Resources Assessment estimated contingent
resources of 83.9 million boe (low estimate) to 231.8 million boe (high estimate), with a best estimate of 160.9 million boe, and
prospective resources of 9.6 million boe (low estimate) to 541.0 million boe (high estimate), with a best estimate of 249.4 million
boe. Contingent and prospective resources are in addition to reserves estimated in the GLJ Report.



Summary information regarding contingent
and prospective resources and net present values of future net revenues from contingent and prospective resources are set forth
below.



Company
Resources as at December 31, 2012(1)- Forecast Prices and Costs(2) (9)



|                 |  | Gross      |         |  | Gross                    |  |        | Net                       | 
|---------------- |  | ---------- | ------- |  | ------------------------ |  | ------ | ------------------------- | 
|                 |  | Reserves   |         |  | Contingent
    Resources |  |        | Prospective
    Resources | 
|Oil and
    NGLs |  | P+P (Mbbl) |         |  | Low (Mbbl)               |  |        | Best (Mbbl)               | 
|Australia        |  |            | 17,143  |  |                          |  | 2,650  |                           | 
|Canada           |  |            | 37,825  |  |                          |  | 33,118 |                           | 
|France           |  |            | 46,779  |  |                          |  | 6,425  |                           | 
|Ireland          |  |            | -       |  |                          |  | -      |                           | 
|Netherlands      |  |            | 123     |  |                          |  | -      |                           | 
|Total            |  |            | 101,870 |  |                          |  | 42,193 |                           | 



|            |  | Gross      |         |  | Gross                    |  |         | Net                       | 
|----------- |  | ---------- | ------- |  | ------------------------ |  | ------- | ------------------------- | 
|            |  | Reserves   |         |  | Contingent
    Resources |  |         | Prospective
    Resources | 
|Natural Gas |  | P+P (MMcf) |         |  | Low (MMcf)               |  |         | Best (MMcf)               | 
|Australia   |  |            | 0       |  |                          |  | -       |                           | 
|Canada      |  |            | 179,668 |  |                          |  | 235,714 |                           | 
|France      |  |            | 1,401   |  |                          |  | 9,060   |                           | 
|Ireland     |  |            | 127,033 |  |                          |  | 5,336   |                           | 
|Netherlands |  |            | 69,883  |  |                          |  | -       |                           | 
|Total       |  |            | 377,985 |  |                          |  | 250,110 |                           | 



|                         |  | Gross      |         |  | Gross                    |  |        | Net                       | 
|------------------------ |  | ---------- | ------- |  | ------------------------ |  | ------ | ------------------------- | 
|                         |  | Reserves   |         |  | Contingent
    Resources |  |        | Prospective
    Resources | 
|Total
    Oil Equivalent |  | P+P (Mboe) |         |  | Low (Mboe)               |  |        | Best (Mboe)               | 
|Australia                |  |            | 17,143  |  |                          |  | 2,650  |                           | 
|Canada                   |  |            | 67,770  |  |                          |  | 72,403 |                           | 
|France                   |  |            | 47,012  |  |                          |  | 7,935  |                           | 
|Ireland                  |  |            | 21,172  |  |                          |  | 889    |                           | 
|Netherlands              |  |            | 11,770  |  |                          |  | -      |                           | 
|Total                    |  |            | 164,867 |  |                          |  | 83,877 |                           | 



26











|Vermilion Energy Inc. | AIF for the year ended December 31, 2012 – Exhibit 99.1
|--------------------- | -------------------------------------------------------



Summary
of Net Present Value of Future Net Revenues as at December 31, 2012 - Forecast Prices and Costs (2)



|Contingent Resources   |  | Before Income Taxes, Discounted at (% per year) (8) |          
|---------------------- |  | --------------------------------------------------- | ---------
|(M$)                   |  | 0%                                                  |          
|Low Estimate (C1) (5)  |  |                                                     |          
|Australia              |  |                                                     | 61,997   
|Canada                 |  |                                                     | 1,712,572
|France                 |  |                                                     | 407,270  
|Ireland                |  |                                                     | 11,326   
|Netherlands            |  |                                                     | -        
|Total Low Estimate     |  |                                                     | 2,193,165
|Best Estimate (C2) (6) |  |                                                     |          
|Australia              |  |                                                     | 425,329  
|Canada                 |  |                                                     | 3,406,612
|France                 |  |                                                     | 1,048,302
|Ireland                |  |                                                     | 56,139   
|Netherlands            |  |                                                     | -        
|Total Best Estimate    |  |                                                     | 4,936,382
|High Estimate (C3) (7) |  |                                                     |          
|Australia              |  |                                                     | 851,871  
|Canada                 |  |                                                     | 5,305,454
|France                 |  |                                                     | 1,831,541
|Ireland                |  |                                                     | 288,983  
|Netherlands            |  |                                                     | -        
|Total High Estimate    |  |                                                     | 8,277,849



|Prospective Resources   |  | Before Income Taxes, Discounted at (% per year) (8) |           
|----------------------- |  | --------------------------------------------------- | ----------
|(M$)                    |  | 0%                                                  |           
|Low Estimate (Pr1) (5)  |  |                                                     |           
|Australia               |  |                                                     | -         
|Canada                  |  |                                                     | 143,088   
|France                  |  |                                                     | -         
|Ireland                 |  |                                                     | -         
|Netherlands             |  |                                                     | -         
|Total Low Estimate      |  |                                                     | 143,088   
|Best Estimate (Pr2) (6) |  |                                                     |           
|Australia               |  |                                                     | -         
|Canada                  |  |                                                     | 4,766,626 
|France                  |  |                                                     | -         
|Ireland                 |  |                                                     | -         
|Netherlands             |  |                                                     | -         
|Total Best Estimate     |  |                                                     | 4,766,626 
|High Estimate (Pr3) (7) |  |                                                     |           
|Australia               |  |                                                     | -         
|Canada                  |  |                                                     | 21,714,243
|France                  |  |                                                     | -         
|Ireland                 |  |                                                     | -         
|Netherlands             |  |                                                     | -         
|Total High Estimate     |  |                                                     | 21,714,243



27







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Notes:



| | (1) | The
                                                                                                                                     contingent
                                                                                                                                     resource
                                                                                                                                     assessments
                                                                                                                                     were
                                                                                                                                     prepared
                                                                                                                                     in
                                                                                                                                     accordance
                                                                                                                                     with
                                                                                                                                     the
                                                                                                                                     definitions,
                                                                                                                                     standards
                                                                                                                                     and
                                                                                                                                     procedures
                                                                                                                                     contained
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     Canadian
                                                                                                                                     Oil
                                                                                                                                     and
                                                                                                                                     Gas
                                                                                                                                     Evaluation
                                                                                                                                     Handbook
                                                                                                                                     and
                                                                                                                                     NI
                                                                                                                                     51-101.
                                                                                                                                     Contingent
                                                                                                                                     resource
                                                                                                                                     is
                                                                                                                                     defined
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     Canadian
                                                                                                                                     Oil
                                                                                                                                     and
                                                                                                                                     Gas
                                                                                                                                     Evaluation
                                                                                                                                     Handbook
                                                                                                                                     as
                                                                                                                                     those
                                                                                                                                     quantities
                                                                                                                                     of
                                                                                                                                     petroleum
                                                                                                                                     estimated
                                                                                                                                     to
                                                                                                                                     be
                                                                                                                                     potentially
                                                                                                                                     recoverable
                                                                                                                                     from
                                                                                                                                     known
                                                                                                                                     accumulations
                                                                                                                                     using
                                                                                                                                     established
                                                                                                                                     technology
                                                                                                                                     or
                                                                                                                                     technology
                                                                                                                                     under
                                                                                                                                     development,
                                                                                                                                     but
                                                                                                                                     which
                                                                                                                                     do
                                                                                                                                     not
                                                                                                                                     currently
                                                                                                                                     qualify
                                                                                                                                     as
                                                                                                                                     reserves
                                                                                                                                     or
                                                                                                                                     commercially
                                                                                                                                     recoverable
                                                                                                                                     due
                                                                                                                                     to
                                                                                                                                     one
                                                                                                                                     or
                                                                                                                                     more
                                                                                                                                     contingencies.
                                                                                                                                     Contingencies
                                                                                                                                     may
                                                                                                                                     include
                                                                                                                                     factors
                                                                                                                                     such
                                                                                                                                     as
                                                                                                                                     economic,
                                                                                                                                     legal,
                                                                                                                                     environmental,
                                                                                                                                     political
                                                                                                                                     and
                                                                                                                                     regulatory
                                                                                                                                     matters
                                                                                                                                     or
                                                                                                                                     a
                                                                                                                                     lack
                                                                                                                                     of
                                                                                                                                     markets. Prospective resource is defined in the Canadian Oil and Gas Evaluation Handbook are those quantities of petroleum
                                                                                                                                     estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future
                                                                                                                                     development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is
                                                                                                                                     no certainty that it will be commercially viable to produce any portion of the resources.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
                                                                                                                                     forecast
                                                                                                                                     price
                                                                                                                                     and
                                                                                                                                     cost
                                                                                                                                     assumptions
                                                                                                                                     utilized
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     year-end
                                                                                                                                     2012
                                                                                                                                     reserves
                                                                                                                                     report
                                                                                                                                     were
                                                                                                                                     also
                                                                                                                                     utilized
                                                                                                                                     by
                                                                                                                                     GLJ
                                                                                                                                     in
                                                                                                                                     preparing
                                                                                                                                     the
                                                                                                                                     contingent
                                                                                                                                     resource and prospective resource assessments.

                                                                                                                                     See
                                                                                                                                     ”GLJ
                                                                                                                                     December
                                                                                                                                     31,
                                                                                                                                     2012
                                                                                                                                     Forecast
                                                                                                                                     Prices”
                                                                                                                                     in
                                                                                                                                     this
                                                                                                                                     Annual
                                                                                                                                     Information
                                                                                                                                     Form.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Proved
                                                                                                                                     plus
                                                                                                                                     probable
                                                                                                                                     gross
                                                                                                                                     reserve
                                                                                                                                     volumes
                                                                                                                                     are
                                                                                                                                     based
                                                                                                                                     on
                                                                                                                                     the
                                                                                                                                     year-end
                                                                                                                                     2012
                                                                                                                                     reserves
                                                                                                                                     report.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | GLJ
                                                                                                                                     prepared
                                                                                                                                     the
                                                                                                                                     estimates
                                                                                                                                     of
                                                                                                                                     contingent
                                                                                                                                     and
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     shown
                                                                                                                                     for
                                                                                                                                     each
                                                                                                                                     property
                                                                                                                                     using
                                                                                                                                     deterministic
                                                                                                                                     principles
                                                                                                                                     and
                                                                                                                                     methods.
                                                                                                                                     Probabilistic
                                                                                                                                     aggregation
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     low
                                                                                                                                     and
                                                                                                                                     high
                                                                                                                                     property
                                                                                                                                     estimates
                                                                                                                                     shown
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     table
                                                                                                                                     might
                                                                                                                                     produce
                                                                                                                                     different
                                                                                                                                     total
                                                                                                                                     volumes
                                                                                                                                     than
                                                                                                                                     the
                                                                                                                                     arithmetic
                                                                                                                                     sums
                                                                                                                                     shown
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     table.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Low
                                                                                                                                     estimate
                                                                                                                                     is
                                                                                                                                     considered
                                                                                                                                     to
                                                                                                                                     be
                                                                                                                                     a
                                                                                                                                     conservative
                                                                                                                                     estimate
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     quantity
                                                                                                                                     of
                                                                                                                                     contingent
                                                                                                                                     (C1)
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     (Pr1)
                                                                                                                                     resources
                                                                                                                                     that
                                                                                                                                     will
                                                                                                                                     actually
                                                                                                                                     be
                                                                                                                                     recovered.
                                                                                                                                     It
                                                                                                                                     is
                                                                                                                                     likely
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     remaining
                                                                                                                                     quantities
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     exceed
                                                                                                                                     the
                                                                                                                                     low
                                                                                                                                     estimate.
                                                                                                                                     Those
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     at
                                                                                                                                     the
                                                                                                                                     low
                                                                                                                                     end
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     estimate
                                                                                                                                     range
                                                                                                                                     have
                                                                                                                                     the
                                                                                                                                     highest
                                                                                                                                     degree
                                                                                                                                     of
                                                                                                                                     certainty
                                                                                                                                     -
                                                                                                                                     a
                                                                                                                                     90%
                                                                                                                                     confidence
                                                                                                                                     level
                                                                                                                                     -
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     quantities
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     be
                                                                                                                                     equal
                                                                                                                                     or
                                                                                                                                     exceed
                                                                                                                                     the
                                                                                                                                     estimate.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Best
                                                                                                                                     estimate
                                                                                                                                     is
                                                                                                                                     considered
                                                                                                                                     to
                                                                                                                                     be
                                                                                                                                     the
                                                                                                                                     best
                                                                                                                                     estimate
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     quantity
                                                                                                                                     of
                                                                                                                                     contingent
                                                                                                                                     (C2)
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     (Pr2)
                                                                                                                                     resources
                                                                                                                                     that
                                                                                                                                     will
                                                                                                                                     actually
                                                                                                                                     be
                                                                                                                                     recovered.
                                                                                                                                     It
                                                                                                                                     is
                                                                                                                                     equally
                                                                                                                                     likely
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     remaining
                                                                                                                                     quantities
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     be
                                                                                                                                     greater
                                                                                                                                     or
                                                                                                                                     less
                                                                                                                                     than
                                                                                                                                     the
                                                                                                                                     best
                                                                                                                                     estimate.
                                                                                                                                     Those
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     that
                                                                                                                                     fall
                                                                                                                                     within
                                                                                                                                     the
                                                                                                                                     best
                                                                                                                                     estimate
                                                                                                                                     have
                                                                                                                                     a
                                                                                                                                     50%
                                                                                                                                     confidence
                                                                                                                                     level
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     quantities
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     be
                                                                                                                                     equal
                                                                                                                                     or
                                                                                                                                     exceed
                                                                                                                                     the
                                                                                                                                     estimate.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | High
                                                                                                                                     estimate
                                                                                                                                     is
                                                                                                                                     considered
                                                                                                                                     to
                                                                                                                                     be
                                                                                                                                     an
                                                                                                                                     optimistic
                                                                                                                                     estimate
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     quantity
                                                                                                                                     of
                                                                                                                                     contingent
                                                                                                                                     (C3)
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     (Pr3)
                                                                                                                                     resources
                                                                                                                                     that
                                                                                                                                     will
                                                                                                                                     actually
                                                                                                                                     be
                                                                                                                                     recovered.
                                                                                                                                     It
                                                                                                                                     is
                                                                                                                                     unlikely
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     remaining
                                                                                                                                     quantities
                                                                                                                                     of
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     meet
                                                                                                                                     or
                                                                                                                                     exceed
                                                                                                                                     the
                                                                                                                                     high
                                                                                                                                     estimate.
                                                                                                                                     Those
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     at
                                                                                                                                     the
                                                                                                                                     high
                                                                                                                                     end
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     estimate
                                                                                                                                     range
                                                                                                                                     have
                                                                                                                                     a
                                                                                                                                     lower
                                                                                                                                     degree
                                                                                                                                     of
                                                                                                                                     certainty
                                                                                                                                     -
                                                                                                                                     a
                                                                                                                                     10%
                                                                                                                                     confidence
                                                                                                                                     level
                                                                                                                                     -
                                                                                                                                     that
                                                                                                                                     the
                                                                                                                                     actual
                                                                                                                                     quantities
                                                                                                                                     recovered
                                                                                                                                     will
                                                                                                                                     equal
                                                                                                                                     or
                                                                                                                                     exceed
                                                                                                                                     the
                                                                                                                                     estimate.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | The
                                                                                                                                     net
                                                                                                                                     present
                                                                                                                                     value
                                                                                                                                     of
                                                                                                                                     future
                                                                                                                                     net
                                                                                                                                     revenue
                                                                                                                                     attributable
                                                                                                                                     to
                                                                                                                                     the
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources
                                                                                                                                     does
                                                                                                                                     not
                                                                                                                                     necessarily
                                                                                                                                     represent
                                                                                                                                     the
                                                                                                                                     fair
                                                                                                                                     market
                                                                                                                                     value
                                                                                                                                     of
                                                                                                                                     the
                                                                                                                                     contingent
                                                                                                                                     or
                                                                                                                                     prospective
                                                                                                                                     resources.
                                                                                                                                     Estimated
                                                                                                                                     abandonment
                                                                                                                                     and
                                                                                                                                     reclamation
                                                                                                                                     costs
                                                                                                                                     have
                                                                                                                                     been
                                                                                                                                     included
                                                                                                                                     in
                                                                                                                                     the
                                                                                                                                     evaluation.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | "Gross”
                                                                                                                                                        Reserves
                                                                                                                                                        or
                                                                                                                                                        Contingent
                                                                                                                                                        Resources
                                                                                                                                                        or
                                                                                                                                                        Prospective
                                                                                                                                                        Resources
                                                                                                                                                        are
                                                                                                                                                        Vermilion's
                                                                                                                                                        working
                                                                                                                                                        interest
                                                                                                                                                        (operating
                                                                                                                                                        or
                                                                                                                                                        non-operating)
                                                                                                                                                        share
                                                                                                                                                        before
                                                                                                                                                        deduction
                                                                                                                                                        of
                                                                                                                                                        royalties
                                                                                                                                                        and
                                                                                                                                                        without
                                                                                                                                                        including
                                                                                                                                                        any
                                                                                                                                                        royalty
                                                                                                                                                        interests
                                                                                                                                                        of
                                                                                                                                                        Vermilion.
                                                                                                                                                        "Net”
                                                                                                                                                        Reserves
                                                                                                                                                        or
                                                                                                                                                        Contingent
                                                                                                                                                        Resources
                                                                                                                                                        or
                                                                                                                                                        Prospective
                                                                                                                                                        Resources
                                                                                                                                                        are
                                                                                                                                                        Vermilion's
                                                                                                                                                        working
                                                                                                                                                        interest
                                                                                                                                                        (operating
                                                                                                                                                        or
                                                                                                                                                        non-operating)
                                                                                                                                                        share
                                                                                                                                                        after
                                                                                                                                                        deduction
                                                                                                                                                        of
                                                                                                                                                        royalty
                                                                                                                                                        obligations,
                                                                                                                                                        plus
                                                                                                                                                        Vermilion's
                                                                                                                                                        royalty
                                                                                                                                                        interests
                                                                                                                                                        in
                                                                                                                                                        Reserves
                                                                                                                                                        or
                                                                                                                                                        Contingent
                                                                                                                                                        Resources
                                                                                                                                                        or
                                                                                                                                                        Prospective
                                                                                                                                                        Resources.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Abandonment
and Reclamation Costs



Vermilion
has estimated its abandonment costs by determining amounts for facility decommissioning and reclamation costs (including salvage)
by area in Australia, Canada, France, Ireland and the Netherlands. As well, Vermilion has determined abandonment costs (including
salvage) and reclamation costs per well, by area and applied this amount to its net wells in each of the countries. The number
of net wells to be abandoned is 1,208 in Canada, 568 in France, 61 in the Netherlands, 20 in Australia and one in Ireland.



The
total amount of costs including future drilling locations, net of salvage, as estimated in the GLJ Report, is set forth in the
following table:



|Country     |  | Undiscounted
    (M$) |         |  | Discounted
    10% (M$) | 
|----------- |  | --------------------- | ------- |  | ----------------------- | 
|Australia   |  |                       | 29,665  |  |                         | 
|Canada      |  |                       | 35,528  |  |                         | 
|France      |  |                       | 174,730 |  |                         | 
|Ireland     |  |                       | 8,594   |  |                         | 
|Netherlands |  |                       | 38,294  |  |                         | 
|Total       |  |                       | 286,811 |  |                         | 



Costs
associated with abandonment of surface facilities, well site reclamation, pipeline abandonments, non-producing wells and reclamation
costs, not including downhole costs listed above, were estimated by management of the Company as:



|Country     |  | Facilities
    Undiscounted (M$) |         |  | Discounted
    10% (M$) | 
|----------- |  | -------------------------------- | ------- |  | ----------------------- | 
|Australia   |  |                                  | 137,466 |  |                         | 
|Canada      |  |                                  | 92,753  |  |                         | 
|France      |  |                                  | 65,796  |  |                         | 
|Ireland     |  |                                  | 20,101  |  |                         | 
|Netherlands |  |                                  | 91,529  |  |                         | 
|Total       |  |                                  | 407,645 |  |                         | 



In
the next three years, as estimated in the GLJ Report, Vermilion expects to pay abandonment and reclamation costs of:



|Country     |  | Undiscounted
    (M$) |        |  | Discounted
    10% (M$) | 
|----------- |  | --------------------- | ------ |  | ----------------------- | 
|Australia   |  |                       | -      |  |                         | 
|Canada      |  |                       | 1,753  |  |                         | 
|France      |  |                       | 3,175  |  |                         | 
|Ireland     |  |                       | -      |  |                         | 
|Netherlands |  |                       | 9,426  |  |                         | 
|Total       |  |                       | 14,354 |  |                         | 



28







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Tax
Information



Vermilion
pays current taxes in France, the Netherlands and Australia. Corporate income taxes in France and the Netherlands apply to taxable
income after eligible deductions. In France, taxable income is taxed at a rate of approximately 34.4%, plus an additional profit
tax of 1.7% levied from 2012 to 2014 if annual gross revenues exceed 250 million Euros. In the Netherlands, taxable income is
taxed at a rate of approximately 46%. As a function of the impact of Vermilion’s Canadian tax pools, the Company does not
presently pay current taxes in Canada. The Canadian segment includes holding companies that pay current taxes in foreign jurisdictions.



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





|(M$)        |  | Oil
    and Gas Assets |           |     | Tax
    Losses (4) |  |         | Other |  |  | Total  | 
|----------- |  | ---------------------- | --------- | --- | ------------------ |  | ------- | ----- |  |  | ------ | 
|Australia   |  |                        | 220,641   | (1) |                    |  | -       |       |  |  | -      | 
|Canada      |  |                        | 802,741   | (1) |                    |  | 418,927 |       |  |  | 19,062 | 
|France      |  |                        | 289,430   | (2) |                    |  | 35,059  |       |  |  | -      | 
|Ireland     |  |                        | 670,841   | (4) |                    |  | 186,724 |       |  |  | -      | 
|Netherlands |  |                        | 30,475    | (3) |                    |  | -       |       |  |  | -      | 
|Total       |  |                        | 2,014,128 |     |                    |  | 640,710 |       |  |  | 19,062 | 



Notes:

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

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

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

| | (4) | Development
                                                                                                                                 expenditures
                                                                                                                                 and
                                                                                                                                 losses
                                                                                                                                 are
                                                                                                                                 deductible
                                                                                                                                 at
                                                                                                                                 100%
                                                                                                                                 against
                                                                                                                                 taxable
                                                                                                                                 income.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Production
Estimates



The
following table sets forth the volume of production estimated for the year 2013 as reflected in the estimates of gross proved
reserves and gross proved plus probable reserves:



|                               |  | Light
    and Medium Oil |        |  | Heavy
    Oil |  |   | Natural
    Gas |  |  | Natural
    Gas Liquids |  |  | BOE     |      
|------------------------------ |  | ------------------------ | ------ |  | ------------- |  | - | --------------- |  |  | ----------------------- |  |  | ------- | -----
|                               |  | (bbl/d)                  |        |  | (bbl/d)       |  |   | (Mcf/d)         |  |  | (bbl/d)                 |  |  | (boe/d) |      
|Australia                      |  |                          |        |  |               |  |   |                 |  |  |                         |  |  |         |      
|Proved                         |  |                          | 5,561  |  |               |  | - |                 |  |  | -                       |  |  |         | -    
|Proved Plus Probable           |  |                          | 7,971  |  |               |  | - |                 |  |  | -                       |  |  |         | -    
|Canada                         |  |                          |        |  |               |  |   |                 |  |  |                         |  |  |         |      
|Proved                         |  |                          | 6,926  |  |               |  | 9 |                 |  |  | 37,017                  |  |  |         | 1,294
|Proved Plus Probable           |  |                          | 8,559  |  |               |  | 9 |                 |  |  | 40,342                  |  |  |         | 1,414
|France                         |  |                          |        |  |               |  |   |                 |  |  |                         |  |  |         |      
|Proved                         |  |                          | 10,172 |  |               |  | - |                 |  |  | 3,774                   |  |  |         | -    
|Proved Plus Probable           |  |                          | 10,645 |  |               |  | - |                 |  |  | 3,838                   |  |  |         | -    
|Ireland                        |  |                          |        |  |               |  |   |                 |  |  |                         |  |  |         |      
|Proved                         |  |                          | -      |  |               |  | - |                 |  |  | -                       |  |  |         | -    
|Proved Plus Probable           |  |                          | -      |  |               |  | - |                 |  |  | -                       |  |  |         | -    
|Netherlands                    |  |                          |        |  |               |  |   |                 |  |  |                         |  |  |         |      
|Proved                         |  |                          | -      |  |               |  | - |                 |  |  | 33,970                  |  |  |         | 58   
|Proved Plus Probable           |  |                          | -      |  |               |  | - |                 |  |  | 42,666                  |  |  |         | 72   
|Total Proved                   |  |                          | 22,659 |  |               |  | 9 |                 |  |  | 74,760                  |  |  |         | 1,352
|Total Proved
    Plus Probable |  |                          | 27,176 |  |               |  | 9 |                 |  |  | 86,845                  |  |  |         | 1,487



29







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Production
History



The
following table sets forth certain information in respect of production, product prices received, royalties, production costs
and netbacks received by Vermilion for each quarter of its most recently completed financial year. Vermilion had no production
from its Ireland assets in 2012. Light and medium oil average net prices received in the following table also includes immaterial
amounts generated by the sale of heavy oil.



|                                 |  | Three
    Months Ended |        |  | Three
    Months Ended |  |        | Three
    Months Ended |  |  | Three
    Months Ended | 
|-------------------------------- |  | ---------------------- | ------ |  | ---------------------- |  | ------ | ---------------------- |  |  | ---------------------- | 
|                                 |  | March
    31, 2012     |        |  | June
    30, 2012      |  |        | September
    30, 2012 |  |  | December
    31, 2012  | 
|Australia                        |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Average Daily Production         |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and
    Medium Oil (bbl/d) |  |                        | 6,648  |  |                        |  | 6,970  |                        |  |  | 5,958                  | 
|Natural Gas (MMcf/d)             |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural
    Gas Liquids (bbl/d)  |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Average Net Prices Received      |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 156.43 |  |                        |  | 129.94 |                        |  |  | 114.44                 | 
|Natural Gas ($/Mcf)              |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Royalties (1)                    |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural Gas ($/Mcf)              |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Production Costs                 |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 23.27  |  |                        |  | 21.68  |                        |  |  | 24.62                  | 
|Natural Gas ($/Mcf)              |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Netback Received                 |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 133.16 |  |                        |  | 108.26 |                        |  |  | 89.82                  | 
|Natural Gas ($/Mcf)              |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | -      |  |                        |  | -      |                        |  |  | -                      | 
|Canada                           |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Average Daily Production         |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    (bbl/d) |  |                        | 7,574  |  |                        |  | 7,757  |                        |  |  | 7,322                  | 
|Natural Gas (MMcf/d)             |  |                        | 41.83  |  |                        |  | 41.32  |                        |  |  | 35.54                  | 
|Natural
    Gas Liquids (bbl/d)  |  |                        | 1,302  |  |                        |  | 1,321  |                        |  |  | 1,204                  | 
|Average Net Prices Received      |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 91.78  |  |                        |  | 84.02  |                        |  |  | 83.40                  | 
|Natural Gas ($/Mcf)              |  |                        | 2.15   |  |                        |  | 2.13   |                        |  |  | 2.52                   | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | 76.65  |  |                        |  | 63.44  |                        |  |  | 61.92                  | 
|Royalties                        |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 8.96   |  |                        |  | 8.75   |                        |  |  | 7.90                   | 
|Natural Gas ($/Mcf)              |  |                        | 0.04   |  |                        |  | -      |                        |  |  | 0.06                   | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | 22.36  |  |                        |  | 16.96  |                        |  |  | 14.16                  | 
|Transportation                   |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 1.75   |  |                        |  | 2.20   |                        |  |  | 1.96                   | 
|Natural Gas ($/Mcf)              |  |                        | 0.17   |  |                        |  | 0.16   |                        |  |  | 0.15                   | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | 1.76   |  |                        |  | 1.69   |                        |  |  | 1.69                   | 
|Production Costs                 |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 10.75  |  |                        |  | 9.51   |                        |  |  | 10.75                  | 
|Natural Gas ($/Mcf)              |  |                        | 1.53   |  |                        |  | 1.49   |                        |  |  | 1.59                   | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | 8.63   |  |                        |  | 7.52   |                        |  |  | 8.85                   | 
|Netback Received                 |  |                        |        |  |                        |  |        |                        |  |  |                        | 
|Light and Medium Oil
    ($/bbl) |  |                        | 70.32  |  |                        |  | 63.56  |                        |  |  | 62.79                  | 
|Natural Gas ($/Mcf)              |  |                        | 0.41   |  |                        |  | 0.48   |                        |  |  | 0.72                   | 
|Natural
    Gas Liquids ($/bbl)  |  |                        | 43.90  |  |                        |  | 37.27  |                        |  |  | 37.22                  | 



30







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



|France                           |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|Average Daily Production         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and
    Medium Oil (bbl/d) |  |  | 10,270 |  |  |  | 9,931  |  |  |  | 9,767  |  |  |  | 9,843  | 
|Natural Gas (MMcf/d)             |  |  | 3.48   |  |  |  | 3.57   |  |  |  | 3.39   |  |  |  | 3.91   | 
|Natural
    Gas Liquids (bbl/d)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Average Net Prices Received      |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 107.67 |  |  |  | 105.96 |  |  |  | 107.49 |  |  |  | 104.78 | 
|Natural Gas ($/Mcf)              |  |  | 9.13   |  |  |  | 12.60  |  |  |  | 9.96   |  |  |  | 11.47  | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Royalties                        |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 5.80   |  |  |  | 5.87   |  |  |  | 5.63   |  |  |  | 5.56   | 
|Natural Gas ($/Mcf)              |  |  | 0.21   |  |  |  | 0.26   |  |  |  | 0.28   |  |  |  | 0.27   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Transportation                   |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 2.83   |  |  |  | 2.21   |  |  |  | 1.99   |  |  |  | 2.32   | 
|Natural Gas ($/Mcf)              |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Production Costs                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 15.36  |  |  |  | 15.45  |  |  |  | 12.21  |  |  |  | 16.73  | 
|Natural Gas ($/Mcf)              |  |  | 2.35   |  |  |  | 1.61   |  |  |  | 3.44   |  |  |  | 1.00   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Netback Received                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 83.68  |  |  |  | 82.43  |  |  |  | 87.66  |  |  |  | 80.17  | 
|Natural Gas ($/Mcf)              |  |  | 6.57   |  |  |  | 10.73  |  |  |  | 6.24   |  |  |  | 10.20  | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Netherlands                      |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Average Daily Production         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    (bbl/d) |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Natural Gas (MMcf/d)             |  |  | 35.08  |  |  |  | 33.74  |  |  |  | 34.59  |  |  |  | 33.03  | 
|Natural
    Gas Liquids (bbl/d)  |  |  | 72     |  |  |  | 84     |  |  |  | 41     |  |  |  | 70     | 
|Average Net Prices Received      |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Natural Gas ($/Mcf)              |  |  | 9.75   |  |  |  | 9.55   |  |  |  | 9.44   |  |  |  | 10.08  | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 108.25 |  |  |  | 94.74  |  |  |  | 94.66  |  |  |  | 98.89  | 
|Production Costs                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Natural Gas ($/Mcf)              |  |  | 1.29   |  |  |  | 1.78   |  |  |  | 1.22   |  |  |  | 1.88   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Netback Received                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | -      |  |  |  | -      |  |  |  | -      |  |  |  | -      | 
|Natural Gas ($/Mcf)              |  |  | 8.46   |  |  |  | 7.77   |  |  |  | 8.22   |  |  |  | 8.20   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 108.25 |  |  |  | 94.74  |  |  |  | 94.66  |  |  |  | 98.89  | 
|Total                            |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Average Daily Production         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    (bbl/d) |  |  | 24,492 |  |  |  | 24,658 |  |  |  | 23,047 |  |  |  | 23,699 | 
|Natural Gas (MMcf/d)             |  |  | 80.39  |  |  |  | 78.63  |  |  |  | 73.52  |  |  |  | 68.34  | 
|Natural
    Gas Liquids (bbl/d)  |  |  | 1,374  |  |  |  | 1,405  |  |  |  | 1,245  |  |  |  | 1,176  | 
|Average Net Prices Received      |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 115.99 |  |  |  | 102.39 |  |  |  | 102.58 |  |  |  | 98.69  | 
|Natural Gas ($/Mcf)              |  |  | 5.77   |  |  |  | 5.79   |  |  |  | 6.12   |  |  |  | 7.15   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 78.30  |  |  |  | 65.32  |  |  |  | 63.00  |  |  |  | 62.23  | 
|Royalties                        |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 5.20   |  |  |  | 5.83   |  |  |  | 4.57   |  |  |  | 5.18   | 
|Natural Gas ($/Mcf)              |  |  | 0.03   |  |  |  | 0.01   |  |  |  | 0.04   |  |  |  | 0.08   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 21.19  |  |  |  | 15.94  |  |  |  | 13.70  |  |  |  | 13.48  | 
|Transportation Costs             |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 1.73   |  |  |  | 1.80   |  |  |  | 1.37   |  |  |  | 1.59   | 
|Natural Gas ($/Mcf) (2)          |  |  | 0.36   |  |  |  | 0.36   |  |  |  | 0.35   |  |  |  | 0.35   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 1.67   |  |  |  | 1.59   |  |  |  | 1.64   |  |  |  | 1.75   | 
|Production Costs                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 16.08  |  |  |  | 14.43  |  |  |  | 15.59  |  |  |  | 15.47  | 
|Natural Gas ($/Mcf)              |  |  | 1.46   |  |  |  | 1.62   |  |  |  | 1.50   |  |  |  | 1.98   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 8.18   |  |  |  | 7.06   |  |  |  | 8.56   |  |  |  | 13.84  | 
|Netback Received                 |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Light and Medium Oil
    ($/bbl) |  |  | 92.98  |  |  |  | 80.33  |  |  |  | 81.05  |  |  |  | 76.45  | 
|Natural Gas ($/Mcf)              |  |  | 3.92   |  |  |  | 3.80   |  |  |  | 4.23   |  |  |  | 4.74   | 
|Natural
    Gas Liquids ($/bbl)  |  |  | 47.26  |  |  |  | 40.73  |  |  |  | 39.10  |  |  |  | 33.16  | 



Notes:



| | (1) | As
                                                                                                                                     a
                                                                                                                                     result
                                                                                                                                     of
                                                                                                                                     Vermilion’s
                                                                                                                                     adoption
                                                                                                                                     of
                                                                                                                                     IFRS,
                                                                                                                                     Vermilion
                                                                                                                                     no
                                                                                                                                     longer
                                                                                                                                     includes
                                                                                                                                     PRRT
                                                                                                                                     within
                                                                                                                                     royalties.
                                                                                                                                     Under
                                                                                                                                     IFRS,
                                                                                                                                     Vermilion
                                                                                                                                     accounts
                                                                                                                                     for
                                                                                                                                     PRRT
                                                                                                                                     as
                                                                                                                                     an
                                                                                                                                     income
                                                                                                                                     tax
                                                                                                                                     and
                                                                                                                                     accordingly,
                                                                                                                                     royalty
                                                                                                                                     netbacks
                                                                                                                                     exclude
                                                                                                                                     PRRT.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
                                                                                                                                     Ireland
                                                                                                                                     transportation
                                                                                                                                     costs
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Marketing



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



During
the normal course of business, Vermilion may enter into fixed price arrangements to sell a portion of its production or purchase
commodities for operational use. Vermilion does not apply fair value accounting on these contracts as they were entered into and
continue to be held for the sale of production or operational use in accordance with the Company’s expected requirements.



The
following table summarizes Vermilion’s outstanding risk management positions as at December 31, 2012:



|Risk
    Management - Oil        |  | Funded
    Cost (US $/bbl) |      |  | bbls/d |  |       | Strike
    Price(s) US $/bbl | 
|-------------------------------- |  | -------------------------- | ---- |  | ------ |  | ----- | ---------------------------- | 
|Swap
    - WTI                   |  |                            |      |  |        |  |       |                              | 
|January
    2013 - June 2013(1)  |  |                            | -    |  |        |  | 1,000 |                              | 
|January
    2013 - December 2013 |  |                            | -    |  |        |  | 2,000 |                              | 
|Collar
    - WTI                 |  |                            |      |  |        |  |       |                              | 
|January
    2013 - March 2013    |  |                            | -    |  |        |  | 650   |                              | 
|April
    2013 - June 2013       |  |                            | -    |  |        |  | 250   |                              | 
|Collar
    - Dated Brent         |  |                            |      |  |        |  |       |                              | 
|January
    2013 - March 2013    |  |                            | -    |  |        |  | 1,550 |                              | 
|January
    2013 - March 2013    |  |                            | 1.00 |  |        |  | 250   |                              | 
|January
    2013 - June 2013     |  |                            | -    |  |        |  | 2,000 |                              | 
|January
    2013 - December 2013 |  |                            | -    |  |        |  | 3,500 |                              | 
|April
    2013 - June 2013       |  |                            | -    |  |        |  | 250   |                              | 
|July
    2013 - December 2013    |  |                            | -    |  |        |  | 500   |                              | 



|Risk
    Management - Natural Gas |  | Funded
    Cost ($/GJ) |      |  | GJ/d |  |       | Strike
    Price(s) $/GJ | 
|--------------------------------- |  | ---------------------- | ---- |  | ---- |  | ----- | ------------------------ | 
|Collar
    - AECO (Physical)      |  |                        |      |  |      |  |       |                          | 
|April
    2012 - March 2014       |  |                        | 0.10 |  |      |  | 5,500 |                          | 
|June
    2012 - March 2014        |  |                        | 0.10 |  |      |  | 3,000 |                          | 



Note:



| | (1) | The
                                                                                                                                                          counterparties
                                                                                                                                                          to
                                                                                                                                                          the
                                                                                                                                                          swaps
                                                                                                                                                          have
                                                                                                                                                          the
                                                                                                                                                          option
                                                                                                                                                          on
                                                                                                                                                          June
                                                                                                                                                          28,
                                                                                                                                                          2013
                                                                                                                                                          to
                                                                                                                                                          extend
                                                                                                                                                          the
                                                                                                                                                          swap
                                                                                                                                                          to
                                                                                                                                                          December
                                                                                                                                                          31,
                                                                                                                                                          2013
                                                                                                                                                          at
                                                                                                                                                          the
                                                                                                                                                          contracted
                                                                                                                                                          volume
                                                                                                                                                          and
                                                                                                                                                          price.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



From
time to time Vermilion enters into new risk management positions. Information regarding outstanding risk management positions
is available on Vermilion’s website at www.vermilionenergy.com/ir/hedging.cfm.



32







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



ADDITIONAL
INFORMATION RESPECTING VERMILION ENERGY INC.



Management



Vermilion
has a board of directors currently consisting of eight individuals. The directors are nominated by the Company and elected annually
at the direction of Shareholders by ordinary resolution, and hold office until the next meeting of Shareholders (unless otherwise
ceasing to act as a director prior to such meeting). As at February 28, 2013, the directors and officers of Vermilion, as a group,
beneficially owned, or controlled or directed, directly or indirectly, 4,162,364 common shares representing approximately 4.2%
of the issued and outstanding common shares.



The
following table sets forth certain information respecting the current directors and officers of Vermilion. References to Vermilion
in the following table for dates prior to the Conversion Arrangement refer to VRL and to the Company following the date of the
Conversion Arrangement.



|Directors
        Name
        and
        Municipality
        of
        Residence                    |  | Office
    Held                                        |  | Year
                                                                       First
        Elected
        orAppointed
        as
        Director |  | Principal
    Occupation During the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Lorenzo
        Donadeo
        Calgary,
        Alberta, Canada                                        |  | President and Chief Executive Officer and
    Director |  | 1994                                                                                                                                              |  | Since
        2003, President and Chief Executive Officer of Vermilion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|W.
        Kenneth Davidson
        (2)
        (3)
        Oakville,
        Ontario, Canada           |  | Director                                               |  | 2005                                                                                                                                              |  | Since
        2000, Director of Millar Western Forest Products Ltd., a private forest products company
        
        2009
        to February 2011, Director of Realex Properties Corp., a public real estate company                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Claudio
        A. Ghersinich
        (2)
        (4) (5)
        Calgary,
        Alberta, Canada      |  | Director                                               |  | 1994                                                                                                                                              |  | Since
        2005, President of Carrera Investments Corp., a private investment company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Joseph
        F. Killi
        (2)
        (3)
        Calgary,
        Alberta, Canada                |  | Director                                               |  | 1999                                                                                                                                              |  | Since
        2008, President and Chief Executive Officer and director of Wilmington Capital Management Inc., a public investment company.
        
        January
        2011 to December 2011, Executive Chairman of Parkbridge Lifestyle Communities Inc., a private real estate company
        
        2005
        to January 2011, Executive Chairman of Parkbridge Lifestyle Communities Inc., a public real estate company
        
        2005
        to February 2011, Vice Chairman of Realex Properties Corp., a public real estate company
        
        Since
        1993, President of Rosebridge Capital Corp. Inc., a private real estate investment company
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Loren
        M. Leiker
        (5)
        Houston,
        Texas, USA                                 |  | Director                                               |  | 2012                                                                                                                                              |  | Since
        2011, Director for SM Energy and Midstates Petroleum
        
        2008
        to 2011, Senior Executive VP Exploration, EOG Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Larry
        J. Macdonald
        (1)
        (2) (3) (4) (5)
        Okotoks,
        Alberta, Canada |  | Director and Chairman of the Board                     |  | 2002                                                                                                                                              |  | Since
        2003, Chairman & Chief Executive Officer and a director of Point Energy Ltd., a private oil and gas company
        
        Since
        2003, Managing Director of Northpoint Energy Ltd., a private oil and gas company                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|William
        F. Madison
        (2)
        (4) (5)
        Sugar
        Land, Texas, USA           |  | Director                                               |  | 2004                                                                                                                                              |  | Since 2007, Director of Canadian Oil Recovery
    and Remediation Enterprise, Inc., a public oil recovery and remediation company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                        |  |                                                        |  |                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Timothy
        R. Marchant
        (3)
        (4) (5)
        Calgary,
        Alberta, Canada        |  | Director                                               |  | 2010                                                                                                                                              |  | Since
        December 2011, Executive Chair or Anatolia Energy Corp., a public oil and gas company
        
        2009
        to present, Adjunct Professor of Strategy and Energy Geopolitics, Haskayne School of Business
        
        2007
        to 2009, Vice President, Middle East Business Development for BP International                                                                                                                                                                                                                                                                                                                                           





Notes:

(1)Chairman of the Board

(2)Member of the Audit Committee

(3)Member of the Governance and Human Resources Committee

(4)Member of the Health, Safety and Environment Committee

(5)Member of the Independent Reserves Committee







33







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------







|Officers
        Name
        and
        Municipality
        of Residence |  | Office
    Held                                          |  | Principal
    Occupation During the Past Five Years                                                                                                                                                                                                                            
|--------------------------------------------------------------------------- |  | -------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|John
        D. Donovan
        Calgary,
        Alberta, Canada            |  | Executive Vice President Business Development            |  | Since
        2005, Executive Vice President, Business Development of Vermilion                                                                                                                                                                                                
|Curtis
        W. Hicks
        Calgary,
        Alberta, Canada            |  | Executive Vice President and Chief Financial
    Officer |  | Since
        2004, Executive Vice President and Chief Financial Officer of Vermilion                                                                                                                                                                                          
|Anthony
        Marino
        Calgary,
        Alberta, Canada             |  | Executive Vice President and Chief Operating
    Officer |  | Since
        May 2012, Executive Vice President and Chief Operating Officer of Vermilion
        
        2009
        to 2012, Director, President & CEO, Baytex Energy Corporation
        
        2004
        to 2008, Chief Operating Officer, Baytex Energy Corporation
|                                                                            |  |                                                          |  |                                                                                                                                                                                                                                                                                
|Mona
        Jasinski
        Calgary,
        Alberta, Canada              |  | Executive Vice President People                          |  | Since
        2011, Executive Vice President People of Vermilion
        
        2009
        to 2011, Vice President People of Vermilion
        
        2004
        to 2009, HR Manager, Shell Onshore Production, North America                                          
|                                                                            |  |                                                          |  |                                                                                                                                                                                                                                                                                
|Terry
        Hergott
        Calgary,
        Alberta, Canada              |  | Vice President Marketing                                 |  | Since
        April 2012, Vice President, Marketing of Vermilion
        
        1996
        to 2012, Canadian Supply & Trading Manager,Marathon Petroleum Corp.                                                                                                             
|                                                                            |  |                                                          |  |                                                                                                                                                                                                                                                                                
|Gerard
        Schut
        Den
        Haag, The Netherlands              |  | Vice President European Operations                       |  | Since
        July 2012, Vice President European Operations
        
        August
        2006 to May 2012, General Manager, Chevron Exploration and Production Netherlands                                                                                                  
|                                                                            |  |                                                          |  |                                                                                                                                                                                                                                                                                
|Robert
        J. Engbloom, Q.C.
        Calgary,
        Alberta, Canada   |  | Corporate Secretary                                      |  | Since
        January 1, 2012, partner with and Deputy Chair of Norton Rose Canada LLP, a law firm
        
        1999
        to 2011, partner with Macleod Dixon LLP, a law firm                                                                                           



Common
Shares



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



Cash
Dividends



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



34







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Record
of Cash Dividends



The
following table sets forth the amount of per period cash distributions per Unit declared by the Trust since the completion of
the 2003 Arrangement on January 22, 2003 and the per period cash dividends per common share declared by the Company since the
completion of the Conversion Arrangement on September 1, 2010. Dividends are generally paid on the 15th day of the month following
the month of declaration. Until the December 14, 2007 distribution announcement, Vermilion had paid distributions of $0.17 per
Trust Unit per month. From the January 15, 2008 payment date and onwards, Vermilion had paid distributions/dividends of $0.19
per Trust Unit /common share per month. In January 2013, Vermilion increased its dividend payments to $0.20 per share from $0.19
per share. The increase became effective for the January 2013 dividend paid on February 15, 2013.



|Period                               |  | Distribution
    Amount for Period per Trust Unit |     
|------------------------------------ |  | ------------------------------------------------- | ----
|As Vermilion Energy Trust            |  |                                                   |     
|2003 – January 22 to
    December 31 |  | $                                                 | 1.87
|2004 – January to December           |  | $                                                 | 2.04
|2005 – January to December           |  | $                                                 | 2.04
|2006 – January to December           |  | $                                                 | 2.04
|2007 – January to December           |  | $                                                 | 2.06
|2008 – January to December           |  | $                                                 | 2.28
|2009 – January to December           |  | $                                                 | 2.28
|2010 – January to September (1)      |  | $                                                 | 1.71



|Period                                          |  | Dividend
    Amount for Period per Common Share |      
|----------------------------------------------- |  | ----------------------------------------------- | -----
|As Vermilion Energy Inc.                        |  |                                                 |      
|2010 – September to December
    (1)            |  | $                                               | 0.57 
|2011 – January to December                      |  | $                                               | 2.28 
|2012 – January to December                      |  | $                                               | 2.28 
|2013 – January
    to February                  |  | $                                               | 0.40 
|Total cash dividends
    since January 22, 2003 |  | $                                               | 21.85



Note:

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



Dividend
Reinvestment Plan



The
Company has established a DRIP Plan. The DRIP Plan is only available to registered Shareholders who are residents of Canada.



Under
the DRIP Plan, registered Shareholders may, at their option, reinvest their cash dividends to purchase additional common shares
(the "DRIP common shares") by directing the Plan Agent (as defined below) to apply dividends on their existing common
shares to the purchase of DRIP common shares. Computershare Trust Company of Canada in its capacity as plan agent (the "Plan
Agent") will apply cash dividends towards the purchase of DRIP common shares from the Company, subject to certain limitations
either from treasury or at the discretion of Vermilion through the facilities of the TSX. DRIP common shares will be acquired
either at the average market price at which DRIP common shares are acquired through the facilities of the TSX or from treasury
based on the weighted average of the previous 10 days of trading prior to the applicable dividend. Participants in the DRIP
Plan will also receive additional dividends of common shares equal to 5% of the DRIP common shares purchased with their dividends.
Participants will not have to pay any brokerage fees or service charges in connection with the purchase of DRIP common shares.



Registered
Shareholders may, after electing to participate in the DRIP Plan, terminate their participation in the DRIP Plan by written notice
to the Plan Agent. That notice, if actually received no later than five (5) business days prior to a Dividend Record Date, will
have effect for the dividend to be made on the following Dividend Payment Date. Thereafter, dividends to those Shareholders will
be in cash. The Company may amend, suspend or terminate the DRIP Plan in its sole discretion, provided that any amendment to the
DRIP Plan must be approved by the TSX and that any amendment, modification or suspension shall have no retroactive effect if it
would prejudice the interests of the participants. The Company is not required to issue common shares into any jurisdiction where
the issuance would be contrary to applicable laws.



35







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Shareholder
Rights Plan



A
unitholder rights plan was first implemented in 2003 in conjunction with the 2003 Arrangement. At each of the annual and special
meetings of holders of Trust Units held in 2006 and 2009, the unitholders rights plan was renewed and approved by holders of the
Trust Units. In conjunction with the Conversion Arrangement, the Rights Plan for the Company was approved. The objectives of the
Rights Plan are to ensure, to the extent possible, that all Shareholders are treated equally and fairly in connection with any
takeover bid for the Company. Takeover bids may be structured to be coercive or may be initiated at a time when the board of directors
of Vermilion will have a difficult time preparing an adequate response to the offer. Accordingly, such offers do not always result
in Shareholders receiving equal or fair treatment or full or maximum value for their investment. Under current Canadian securities
legislation, a takeover bid is required to remain open for 35 days, a period of time which may be insufficient for the directors
to:



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



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



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



The
Rights Plan discourages discriminatory, coercive or unfair takeovers of the Company and gives the board of directors of Vermilion
time if, in the circumstances, the board of directors determines it is appropriate to take such time, to pursue alternatives to
maximize Shareholder value in the event an unsolicited takeover bid is made for all or a portion of the outstanding common shares
of the Company. As set forth in detail below, the Rights Plan discourages coercive hostile takeover bids by creating the potential
that any common shares which may be acquired or held by such a bidder will be significantly diluted. The potential for significant
dilution to the holdings of such a bidder can occur as the Rights Plan provides that all holders of common shares who are not
related to the bidder will be entitled to exercise rights issued to them under the Rights Plan and to acquire common shares at
a substantial discount to prevailing market prices. The bidder or the persons related to the bidder will not be entitled to exercise
any Rights under the Rights Plan. Accordingly, the Rights Plan will encourage potential bidders to make takeover bids by means
of a Permitted Bid (as defined below) or to approach the board of directors of Vermilion to negotiate a mutually acceptable transaction.
The Permitted Bid provisions of the Rights Plan are designed to ensure that, in any takeover bid for outstanding common shares
of the Company, all Shareholders are treated equally and are given adequate time to properly assess such takeover bid on a fully-informed
basis.



The
Rights Plan was not proposed in response to, or in anticipation of, any pending, threatened or proposed acquisition or takeover
bid. The board of directors did not adopt the Rights Plan to prevent a takeover of the Company, to secure the continuance of management
or the directors of the Company in their respective offices or to deter fair offers for the Common Shares of the Company.



Summary
of the Plan



The
following summary of terms of the Rights Plan is qualified in its entirety by reference to the text of the Shareholder Rights
Plan Agreement. A copy of the Shareholder Rights Plan Agreement will be available in its entirety upon request at the head office
of Vermilion during normal business hours.



Term



The
Rights Plan will remain in effect until termination of the annual meeting of Shareholders of the Company in 2013 unless the term
of the Shareholder Rights Plan Agreement is extended beyond such date by resolution of Shareholders.



Issue
of Rights



One
right (a "Right") has been issued by the Company pursuant to the Shareholder Rights Plan Agreement in respect of each
common share of the Company outstanding at the close of business on September 1, 2010 (the "Record Time"). One Right
will also be issued for each additional common share issued after the Record Time and prior to the earlier of the Separation Time
(as defined below) or the date that a majority of the Shareholders vote against the continued existence of the Shareholder Rights
Plan Agreement.



36







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Rights
Exercise Privilege



The
Rights will separate from the voting common shares to which they are attached and become exercisable at the time (the "Separation
Time") which is 10 trading days following the date a person becomes an Acquiring Person (as defined below) or announces an
intention to make a takeover bid that is not an acquisition pursuant to a takeover bid permitted by the Rights Plan (a "Permitted
Bid").



Any
transaction or event in which a person (an "Acquiring Person"), including associates and affiliates and others acting
in concert, acquires (other than pursuant to an exemption available under the Rights Plan or a Permitted Bid) Beneficial Ownership
(as defined in the Rights Plan) of 20% or more of the voting securities of the Company is referred to as a "Flip-in Event".
Any Rights held by an Acquiring Person on or after the earlier of the Separation Time or the first date of public announcement
by the Company or an Acquiring Person that an Acquiring Person has become such, will become void and the Rights (other than those
held by the Acquiring Person) will permit the holder to purchase common shares at a substantial discount to their prevailing market
price at the time.



The
issuance of the Rights is not dilutive and will not affect reported earnings or cash flow per common share until the Rights separate
from the underlying common shares and become exercisable or until the exercise of the Rights. The issuance of the Rights will
not change the manner in which Shareholders currently trade their common shares.



Permitted
Lock-Up Agreement



A
person will not become an Acquiring Person by virtue of having entered into an agreement (a "Permitted Lock-Up Agreement")
with a Shareholder whereby the Shareholder agrees to deposit or tender voting common shares to a takeover bid made by such person,
provided that the agreement meets certain requirements including:



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



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



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



Certificates
and Transferability



Prior
to the Separation Time, the Rights will be evidenced by a legend imprinted on certificates for common shares issued from and after
the effective date (the "Effective Date") of the Shareholder Rights Plan Agreement (being the later of the date of the
Shareholder Rights Plan Agreement and the receipt by the Company of all regulatory approvals with respect to the Shareholder Rights
Plan Agreement). Rights are also attached to common shares outstanding on the Effective Date, although certificates issued prior
to the Effective Date will not bear such a legend. Shareholders are not required to return their certificates in order to have
the benefit of the Rights. Prior to the Separation Time, Rights will trade together with the Company common shares and will not
be exercisable or transferable separately from the common shares. From and after the Separation Time, the Rights will become exercisable,
will be evidenced by Rights Certificates and will be transferable separately from the common shares.



37







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Permitted
Bid Requirements



The
requirements of a "Permitted Bid" include the following:



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



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



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



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



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



The
Rights Plan allows for a competing Permitted Bid (a "Competing Permitted Bid") to be made while a Permitted Bid is in
existence. A Competing Permitted Bid must satisfy all of the requirements of a Permitted Bid except that it may expire on the
same date as the Permitted Bid, subject to the requirement that it be outstanding for a minimum period of 35 days.



Waiver
and Redemption



If
a potential offeror does not desire to make a Permitted Bid, it can negotiate with, and obtain the prior approval of, the board
of directors to make a takeover bid by way of a takeover bid circular sent to all holders of voting common shares on terms which
the board of directors considers fair to all Shareholders. In such circumstances, the board of directors may waive the application
of the Rights Plan thereby allowing such bid to proceed without dilution to the offeror. Any waiver of the application of the
Rights Plan in respect of a particular takeover bid shall also constitute a waiver of any other takeover bid which is made by
means of a takeover bid circular to all holders of voting common shares while the initial takeover bid is outstanding. The board
of directors may also waive the application of the Rights Plan in respect of a particular Flip-in Event that has occurred through
inadvertence, provided that the Acquiring Person that inadvertently triggered such Flip-in Event reduces its beneficial holdings
to less than 20% of the outstanding voting common shares of the Company within 14 days or such earlier or later date as may be
specified by the board. With the prior consent of the holders of voting common shares, the board of directors may, prior to the
occurrence of a Flip-in Event that would occur by reason of an acquisition of voting common shares otherwise than pursuant to
the foregoing, waive the application of the Rights Plan to such Flip-in Event.



The
board of directors may, with the prior consent of the holders of voting common shares, at any time prior to the occurrence of
a Flip-in Event, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per
Right. Rights are deemed to be redeemed following completion of a Permitted Bid, a Competing Permitted Bid or a takeover bid in
respect of which the board of directors has waived the application of the Rights Plan.



Exemptions
for Investment Advisors



Investment
advisors (for client accounts), trust companies (acting in their capacity as trustees or administrators), statutory bodies whose
business includes the management of funds (for employee benefit plans, pension plans, or insurance plans of various public bodies)
and administrators or trustees of registered pension plans or funds acquiring greater than 20% of the voting common shares are
exempted from triggering a Flip-in Event, provided they are not making, either alone or jointly or in concert with any other person,
a takeover bid.



Board
of Directors



The
adoption of the Rights Plan does not in any way lessen or affect the duty of the board of directors to act honestly and in good
faith with a view to the best interests of the Company. The board of directors, when a takeover bid or similar offer is made,
will continue to have the duty and power to take such actions and make such recommendations to Shareholders as are considered
appropriate.



38







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Amendment



The
Company may, with the prior approval of Shareholders (or the holders of Rights if the Separation Time has occurred), supplement,
amend, vary or delete any of the provisions of the Shareholder Rights Plan Agreement. The Company may make amendments to the Shareholder
Rights Plan Agreement at any time to correct any clerical or typographical error or, subject to confirmation at the next meeting
of Shareholders, make amendments which are required to maintain the validity of the Shareholder Rights Plan Agreement due to changes
in any applicable legislation, regulations or rules.



AUDIT
COMMITTEE MATTERS



Audit
Committee Charter



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



Composition
of the Audit Committee



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



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



39







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



External
Audit Service Fees



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



During
the years ended December 31, 2012 and 2011, Deloitte LLP, the auditors of the Company, received the following fees from the Company:



|Item                  |  | 2012 |           |  | 2011 |  
|--------------------- |  | ---- | --------- |  | ---- | -
|Audit fees(1)         |  | $    | 1,298,619 |  |      | $
|Audit-related fees(2) |  | $    | 74,375    |  |      | $
|Tax fees(3)           |  |      | -         |  |      | $
|All other fees(4)     |  |      | -         |  |      | $



Notes:

| | (1) | Audit
                                                                                                                                 fees
                                                                                                                                 consisted
                                                                                                                                 of
                                                                                                                                 professional
                                                                                                                                 services
                                                                                                                                 rendered
                                                                                                                                 by
                                                                                                                                 Deloitte
                                                                                                                                 LLPfor
                                                                                                                                 the
                                                                                                                                 audit
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company's
                                                                                                                                 financial
                                                                                                                                 statements
                                                                                                                                 for
                                                                                                                                 the
                                                                                                                                 years
                                                                                                                                 ended
                                                                                                                                 December
                                                                                                                                 31,
                                                                                                                                 2012
                                                                                                                                 and
                                                                                                                                 2011.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Audit-related
                                                                                                                                 fees
                                                                                                                                 consist
                                                                                                                                 of
                                                                                                                                 fees
                                                                                                                                 for
                                                                                                                                 the
                                                                                                                                 review
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 quarterly
                                                                                                                                 financial
                                                                                                                                 statements,
                                                                                                                                 services
                                                                                                                                 provided
                                                                                                                                 in
                                                                                                                                 connection
                                                                                                                                 with
                                                                                                                                 statutory
                                                                                                                                 and
                                                                                                                                 regulatory
                                                                                                                                 filings
                                                                                                                                 or
                                                                                                                                 engagements
                                                                                                                                 and
                                                                                                                                 fees
                                                                                                                                 for
                                                                                                                                 review
                                                                                                                                 services
                                                                                                                                 related
                                                                                                                                 to
                                                                                                                                 non-routine
                                                                                                                                 regulatory
                                                                                                                                 filings
                                                                                                                                 such
                                                                                                                                 as
                                                                                                                                 short-form
                                                                                                                                 prospectus
                                                                                                                                 and
                                                                                                                                 business
                                                                                                                                 acquisition
                                                                                                                                 reports.
                                                                                                                                 Fees
                                                                                                                                 also
                                                                                                                                 include
                                                                                                                                 services
                                                                                                                                 related
                                                                                                                                 to
                                                                                                                                 review
                                                                                                                                 of
                                                                                                                                 accounting
                                                                                                                                 research
                                                                                                                                 in
                                                                                                                                 regards
                                                                                                                                 to
                                                                                                                                 the
                                                                                                                                 adoption
                                                                                                                                 of
                                                                                                                                 IFRS.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Tax
                                                                                                                                 fees
                                                                                                                                 consist
                                                                                                                                 of
                                                                                                                                 fees
                                                                                                                                 for
                                                                                                                                 tax
                                                                                                                                 compliance
                                                                                                                                 services,
                                                                                                                                 tax
                                                                                                                                 advice
                                                                                                                                 and
                                                                                                                                 tax
                                                                                                                                 planning.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | All
                                                                                                                                 other
                                                                                                                                 fees
                                                                                                                                 consist
                                                                                                                                 of
                                                                                                                                 fees
                                                                                                                                 related
                                                                                                                                 to
                                                                                                                                 translation
                                                                                                                                 services.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



MARKET
FOR PRICE RANGE AND TRADING VOLUME OF SECURITIES



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



|2012      |  | High |       |  | Low |   |       | Close |  |   | Volume | 
|--------- |  | ---- | ----- |  | --- | - | ----- | ----- |  | - | ------ | 
|January   |  | $    | 47.86 |  |     | $ | 44.26 |       |  | $ | 46.00  | 
|February  |  | $    | 49.47 |  |     | $ | 44.64 |       |  | $ | 48.65  | 
|March     |  | $    | 49.40 |  |     | $ | 45.84 |       |  | $ | 46.01  | 
|April     |  | $    | 48.12 |  |     | $ | 44.88 |       |  | $ | 47.90  | 
|May       |  | $    | 48.48 |  |     | $ | 41.44 |       |  | $ | 43.48  | 
|June      |  | $    | 46.21 |  |     | $ | 41.27 |       |  | $ | 45.97  | 
|July      |  | $    | 48.00 |  |     | $ | 44.85 |       |  | $ | 46.75  | 
|August    |  | $    | 47.71 |  |     | $ | 44.22 |       |  | $ | 44.91  | 
|September |  | $    | 47.01 |  |     | $ | 44.25 |       |  | $ | 46.20  | 
|October   |  | $    | 48.27 |  |     | $ | 44.93 |       |  | $ | 47.75  | 
|November  |  | $    | 50.54 |  |     | $ | 46.27 |       |  | $ | 50.54  | 
|December  |  | $    | 51.97 |  |     | $ | 49.37 |       |  | $ | 51.97  | 



|2013     |  | High |       |  | Low |   |       | Close |  |   | Volume | 
|-------- |  | ---- | ----- |  | --- | - | ----- | ----- |  | - | ------ | 
|January  |  | $    | 52.50 |  |     | $ | 50.26 |       |  | $ | 51.16  | 
|February |  | $    | 53.39 |  |     | $ | 50.55 |       |  | $ | 53.37  | 



Awards
(entitling the holder thereof to receive common shares) have been issued under the Vermilion Incentive Plan. See the note regarding
equity compensation plans in Vermilion's annual financial statements for further details regarding the amount and value of such
awards.



CREDIT
RATINGS



The
following information relating to the Company's credit ratings is provided as it relates to the Company's financing costs, liquidity
and operations.  Specifically, credit ratings affect the Company's ability to obtain short-term and long-term financing and
the cost of such financing.  Additionally, the ability of the Company to engage in certain collateralized business activities
on a cost effective basis depends on the Company's credit ratings.  A reduction in the current rating on the Company's debt
by its rating agencies, particularly a downgrade below current ratings, or a negative change in the Company's ratings outlook
could adversely affect the Company's cost of financing and its access to sources of liquidity and capital.  In addition,
changes in credit ratings may affect the Company's ability to, and the associated costs of, (i) entering into ordinary course
derivative or hedging transactions and may require the Company to post additional collateral under certain of its contracts, and
(ii) entering into and maintaining ordinary course contracts with customers and suppliers on acceptable terms.





The Senior
Unsecured Notes have a rating of BB (low)/Stable from DBRS Limited ("DBRS") and BB- from Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies (Canada) Corporation ("S&P").





40







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------





DBRS
rates long-term debt instruments by rating categories ranging from a high of "AAA" to a low of "D". All rating
categories other than AAA and D also contain subcategories "(high)" and "(low)". The absence of either a "(high)"
or "(low)" designation indicates the rating is in the middle of the category. A rating of "BB" is characterized
by DBRS to be speculative, non-investment-grade credit quality. The capacity for the payment of financial obligations is uncertain
and vulnerable to future events. The "BB" category is the fifth highest of the ten available categories.



S&P
rates long-term debt instruments by rating categories ranging from a high of "AAA" to a low of "D". The ratings
from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating
categories. An obligation rated "BB" is characterized as less vulnerable to nonpayment than other speculative issues.
However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions, which could
lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. The "BB" category is the
fifth highest of the ten available categories.



Vermilion
Rating



DBRS
Limited has provided a corporate credit rating of Vermilion of “BB (low”). A rating of “BB” is characterized
by DBRS Limited to be speculative, non-investment-grade credit quality. The capacity for the payment of financial obligations
is uncertain and vulnerable to future events.



S&P
has assigned a corporate credit rating of Vermilion of “BB-” with a stable outlook. An obligor rated “BB”
is characterized by S&P as less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing
uncertainties and exposure to adverse business, financial or economic conditions, which could lead to the obligor’s inadequate
capacity to meet its financial commitments. The plus (+) or minus (-) modifiers indicate the relative standing within the assigned
category. In addition, S&P may add a rating outlook of “positive”, “negative” or “stable”
which assesses the potential direction of a long-term credit rating over the intermediate term (typically six months to two years).



Credit
ratings are intended to provide investors with an independent measure of the credit quality of an issuer of securities. The credit
ratings accorded to the Senior Unsecured Notes and the Company are not recommendations to purchase, hold or sell such securities
and are not a comment upon the market price of the Company's securities or their suitability for a particular investor. There
is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn
entirely by a rating agency in the future if, in its judgment, circumstances so warrant. A revision or withdrawal of a credit
rating could have a material adverse effect on the pricing or liquidity of the Senior Unsecured Notes or the Common Shares in
any secondary markets. Vermilion does not undertake any obligation to maintain the ratings or to advise holders of the Senior
Unsecured Notes or the Common Shares of any change in ratings. Each agency's rating should be evaluated independently of any other
agency's rating.



CONFLICTS
OF INTEREST



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



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



INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS



No
director or officer of the Company, nor any other insider of the Company, nor their associates or affiliates has or has had, at
any time within the three most recently completed financial years ending December 31, 2012, any material interest, direct or indirect,
in any transaction or proposed transaction that has materially affected or would materially affect the Company.



LEGAL
PROCEEDINGS



The
Company is not party to any significant legal proceedings as of March 8, 2013.



MATERIAL
CONTRACTS



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



41







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



INTERESTS
OF EXPERTS



As
at the date hereof, principals of GLJ, the independent engineers for the Company, personally disclosed in certificates of qualification
that they neither had nor expect to receive any common shares. The principals of GLJ and their employees (as a group) beneficially
own less than one percent of any of the Company’s securities. Deloitte LLP is the auditor of the Company and is independent
within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta.



TRANSFER
AGENT AND REGISTRAR



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



RISK
FACTORS



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



Reserve
Estimates



There
are numerous uncertainties inherent in estimating quantities of proved and probable reserves and future net revenues to be derived
therefrom, including many factors beyond the Company's control. The reserve and future net revenue information set forth in this
annual information form represents estimates only. The reserves and estimated future net cash flow from the Company's properties
have been independently evaluated by GLJ with an effective date of December 31, 2012. These evaluations include a number of assumptions
relating to factors such as initial production rates, production decline rates, ultimate recovery of reserves, timing and amount
of capital expenditures, marketability of production, future prices of crude oil and natural gas, operating costs, well abandonment
and salvage values, royalties and other government levies that may be imposed over the producing life of the reserves. These assumptions
were based on prices in use at the date the GLJ Report was prepared, and many of these assumptions are subject to change and are
beyond the Company's control. Actual production and cash flow derived therefrom will vary from these evaluations, and such variations
could be material.



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



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



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



Uncertainty
of Contingent Resource Estimates



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



42







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Uncertainty
of Prospective Resource Estimates



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



Volatility
of Oil and Natural Gas Prices



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



Changes
in Legislation



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



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



Government
Regulations



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



Competition



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



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



43







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Operational
Matters



The
operation of oil and gas wells and facilities involves a number of operating and natural hazards which may result in blowouts,
environmental damage and other unexpected or dangerous conditions resulting in damage to Vermilion and possible liability to third
parties. Vermilion will 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.
Vermilion may become liable for damages arising from such events against which it cannot insure or against which it may elect
not to insure because of high premium costs or other reasons. Costs incurred to repair such damage or pay such liabilities may
impair Vermilion's ability to satisfy its debt obligations or declare dividends.



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



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



Environmental
Concerns



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



Kyoto
Protocol and Carbon Tax



Australia,
Canada, France, Ireland and the Netherlands are signatories to the United Nations Framework Convention on Climate Change and have
all ratified the Kyoto Protocol established thereunder. Australia, France, Ireland and the Netherlands, as Annex B parties to
the Kyoto Protocol, and Ireland, France and Netherlands as members of the European Union, are required to reduce their nation-wide
emissions of carbon dioxide, methane, nitrous oxide and other greenhouse gases. Canada formally withdrew from the Kyoto Protocol
effective 2012. The Canadian federal government has indicated an intention to regulate the emissions of greenhouse gases from
a range of industries and has outlined a number of policies to reduce the greenhouse gas emissions intensity of regulated facilities
(the "Federal Plan"). The Federal Plan also includes proposed requirements to be implemented by the Canadian federal
government which would govern the emission of industrial air pollutants. Certain of the proposed requirements include fixed emissions
caps, an emissions credit trading system, and several options from which companies can choose to meet their greenhouse gas emissions
reduction targets. At present, the status of its proposals is unclear. The Canadian federal government has repeatedly stated that
it intends to align Canada's greenhouse gas emissions reduction policies with those of the United States, and it is willing to
wait until the United States has developed its framework before implementing any policies in Canada. As such, it is unclear when,
or in what form, the Federal Plan will be implemented.



On
July 1 2012, the Australian government established a carbon price for emissions of the following greenhouse gases – carbon
dioxide, methane, nitrous oxide and certain perfluorocarbons attributable to aluminium smelting. The price is levied per tonne
of carbon dioxide equivalent (CO2e) emissions1. The carbon price is fixed at AUD$23 per tonne of CO2e in 2012 / 2013,
AUD$24.15 in 2013 / 2014 and AUD$25.40 in 2014 / 2015. From July 1, 2015, the price will be set by the market. A price ceiling
will be in place from July 1, 2015 to June 30, 2018, and will be initially set at AUD$20 above the expected international price.
The price ceiling will then rise in real terms at five percent per year. The carbon price applies where direct CO2e emissions
exceed a threshold of 25,000 tonnes per annum. After June 30, 2018, the price ceiling will no longer exist and the price will
be dictated entirely by the market. Vermilion continues to evaluate and monitor emissions in Australia and expects costs to be
approximately AUD$1.5 million per year.



44







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



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



| | (1) | The
                                                                                                                                      carbon
                                                                                                                                      dioxide
                                                                                                                                      (CO2)
                                                                                                                                      equivalent
                                                                                                                                      of
                                                                                                                                      any
                                                                                                                                      greenhouse
                                                                                                                                      gas
                                                                                                                                      is
                                                                                                                                      the
                                                                                                                                      amount
                                                                                                                                      of
                                                                                                                                      carbon
                                                                                                                                      dioxide
                                                                                                                                      that
                                                                                                                                      would
                                                                                                                                      cause
                                                                                                                                      the
                                                                                                                                      same
                                                                                                                                      amount
                                                                                                                                      of
                                                                                                                                      global
                                                                                                                                      warming.
                                                                                                                                      For
                                                                                                                                      example;
                                                                                                                                      methane
                                                                                                                                      has
                                                                                                                                      a
                                                                                                                                      global
                                                                                                                                      warming
                                                                                                                                      effect
                                                                                                                                      21
                                                                                                                                      times
                                                                                                                                      stronger
                                                                                                                                      than
                                                                                                                                      CO2.
                                                                                                                                      Therefore
                                                                                                                                      1
                                                                                                                                      tonne
                                                                                                                                      of
                                                                                                                                      methane
                                                                                                                                      is
                                                                                                                                      equivalent
                                                                                                                                      to
                                                                                                                                      21
                                                                                                                                      tonnes
                                                                                                                                      of
                                                                                                                                      CO2.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Discretionary
Nature of Dividends



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



Debt
Service



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



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



Changes
in Income Tax Laws



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



Depletion
of Reserves



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



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



Net
Asset Value



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



45







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Volatility
of Market Price of Common Shares



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



Variations
in Interest Rates and Foreign Exchange Rates



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



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



Increase
in Operating Costs or Decline in Production Level



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



Acquisition
Assumptions



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



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



Failure
to Realize Anticipated Benefits of Prior Acquisitions



Vermilion
has completed several acquisitions since December 31, 2010 that were completed to strengthen its position in the oil and natural
gas industry and to create the opportunity to realize certain benefits, including, among other things, potential cost savings.
In order to achieve the benefits of these and future acquisitions, Vermilion will be dependent upon its ability to successfully
consolidate functions and integrate operations, procedures and personnel in a timely and efficient manner and to realize the anticipated
growth opportunities and synergies from combining the acquired assets and operations with those of the Company. The integration
of acquired assets and operations requires the dedication of management effort, time and resources, which may divert management's
focus and resources from other strategic opportunities and from operational matters during the process. The integration process
may result in the disruption of ongoing business and customer relationships that may adversely affect Vermilion's ability to achieve
the anticipated benefits of such prior acquisitions.



46







|Vermilion
    Energy Inc. | AIF
    for the year ended December 31, 2012 – Exhibit 99.1
|------------------------- | -----------------------------------------------------------



Additional
Financing



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



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



Potential
Conflicts of Interest



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



Accounting
Adjustments



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



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



Market
Accessibility



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



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



ADDITIONAL
INFORMATION



Additional
information relating to the Company may be found on SEDAR atwww.sedar.com.
Additional information related to the remuneration and indebtedness of the directors and officers of the Company, and the principal
holders of common shares and Rights to purchase common shares and securities authorized for issuance under the Company's equity
compensation plans, where applicable, are contained in the information circular of the Company in respect of its most recent annual
meeting of Shareholders involving the election of directors. Additional financial information is provided in the Company's audited
financial statements and management's discussion and analysis for the year ended December 31, 2012.



47









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



SCHEDULE
"A"

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



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



| | 1. | We
                                                                                                                          have
                                                                                                                          evaluated
                                                                                                                          the
                                                                                                                          Company’s
                                                                                                                          reserves
                                                                                                                          data
                                                                                                                          as at
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012.
                                                                                                                          The
                                                                                                                          reserves
                                                                                                                          data
                                                                                                                          are
                                                                                                                          estimates
                                                                                                                          of proved
                                                                                                                          reserves
                                                                                                                          and
                                                                                                                          probable
                                                                                                                          reserves
                                                                                                                          and
                                                                                                                          related
                                                                                                                          future
                                                                                                                          net
                                                                                                                          revenue
                                                                                                                          as at
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012,
                                                                                                                          estimated
                                                                                                                          using
                                                                                                                          forecast
                                                                                                                          prices
                                                                                                                          and
                                                                                                                          costs.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



We
carried out our evaluation in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook (the "COGE
Handbook") prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Canadian Institute
of Mining, Metallurgy & Petroleum (Petroleum Society).



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



| | 4. | The
                                                                                                                          following
                                                                                                                          table
                                                                                                                          sets
                                                                                                                          forth
                                                                                                                          the
                                                                                                                          estimated
                                                                                                                          future
                                                                                                                          net
                                                                                                                          revenue
                                                                                                                          (before
                                                                                                                          deduction
                                                                                                                          of income
                                                                                                                          taxes)
                                                                                                                          attributed
                                                                                                                          to proved
                                                                                                                          plus
                                                                                                                          probable
                                                                                                                          reserves,
                                                                                                                          estimated
                                                                                                                          using
                                                                                                                          forecast
                                                                                                                          prices
                                                                                                                          and
                                                                                                                          costs
                                                                                                                          and
                                                                                                                          calculated
                                                                                                                          using
                                                                                                                          a discount
                                                                                                                          rate
                                                                                                                          of 10
                                                                                                                          percent,
                                                                                                                          included
                                                                                                                          in the
                                                                                                                          reserves
                                                                                                                          data
                                                                                                                          of the
                                                                                                                          Company
                                                                                                                          evaluated
                                                                                                                          by us
                                                                                                                          for
                                                                                                                          the
                                                                                                                          year
                                                                                                                          ended
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012,
                                                                                                                          and
                                                                                                                          identifies
                                                                                                                          the
                                                                                                                          respective
                                                                                                                          portions
                                                                                                                          thereof
                                                                                                                          that
                                                                                                                          we have
                                                                                                                          audited,
                                                                                                                          evaluated
                                                                                                                          and
                                                                                                                          reviewed
                                                                                                                          and
                                                                                                                          reported
                                                                                                                          on to
                                                                                                                          the
                                                                                                                          Company's
                                                                                                                          board
                                                                                                                          of directors:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Independent
    Qualified |  | Description
    and Preparation |  | Location of
    Reserves(Country or Foreign |  | Net
    Present Value of Future Net Revenue(before income taxes, 10% discount rate - M$) |  
|------------------------- |  | ------------------------------- |  | ------------------------------------------- |  | ---------------------------------------------------------------------------------------- | -
|Reserves
    Evaluator    |  | Date
    of Evaluation Report   |  | Geographic
    Area)                        |  | Audited                                                                                  |  
|GLJ Petroleum Consultants |  | February 14, 2013               |  | Australia                                   |  |                                                                                          | -
|GLJ Petroleum Consultants |  | February 14, 2013               |  | Canada                                      |  |                                                                                          | -
|GLJ Petroleum Consultants |  | February 14, 2013               |  | France                                      |  |                                                                                          | -
|GLJ Petroleum Consultants |  | February 14, 2013               |  | Ireland                                     |  |                                                                                          | -
|GLJ Petroleum Consultants |  | February 14, 2013               |  | Netherlands                                 |  |                                                                                          | -
|Total                     |  |                                 |  |                                             |  |                                                                                          | -



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



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



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



EXECUTED
as to our reports referred to above:



GLJ
Petroleum Consultants Ltd., Calgary, Alberta, Canada, February 14, 2013



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



48











|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



REPORT
ON RESOURCES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR



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



| | 1. | We
                                                                                                                          have
                                                                                                                          evaluated
                                                                                                                          the
                                                                                                                          Company’s
                                                                                                                          resources
                                                                                                                          data
                                                                                                                          as at
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012.
                                                                                                                          The
                                                                                                                          resources
                                                                                                                          data
                                                                                                                          are
                                                                                                                          estimates
                                                                                                                          of low,
                                                                                                                          best
                                                                                                                          and
                                                                                                                          high
                                                                                                                          estimates
                                                                                                                          of contingent
                                                                                                                          resources
                                                                                                                          and
                                                                                                                          prospective
                                                                                                                          resources
                                                                                                                          and
                                                                                                                          related
                                                                                                                          future
                                                                                                                          net
                                                                                                                          revenue
                                                                                                                          as at
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012,
                                                                                                                          estimated
                                                                                                                          using
                                                                                                                          forecast
                                                                                                                          prices
                                                                                                                          and
                                                                                                                          costs.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



We
carried out our evaluation in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook (the "COGE
Handbook") prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Canadian Institute
of Mining, Metallurgy & Petroleum (Petroleum Society).



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



| | 4. | The
                                                                                                                          following
                                                                                                                          table
                                                                                                                          sets
                                                                                                                          forth
                                                                                                                          the
                                                                                                                          estimated
                                                                                                                          future
                                                                                                                          net
                                                                                                                          revenue
                                                                                                                          of the
                                                                                                                          Company
                                                                                                                          (before
                                                                                                                          deduction
                                                                                                                          of income
                                                                                                                          taxes)
                                                                                                                          attributed
                                                                                                                          to best
                                                                                                                          estimate
                                                                                                                          contingent
                                                                                                                          resources
                                                                                                                          and
                                                                                                                          prospective
                                                                                                                          resources
                                                                                                                          estimated
                                                                                                                          using
                                                                                                                          forecast
                                                                                                                          prices
                                                                                                                          and
                                                                                                                          costs
                                                                                                                          and
                                                                                                                          calculated
                                                                                                                          using
                                                                                                                          a discount
                                                                                                                          rate
                                                                                                                          of 10
                                                                                                                          percent,
                                                                                                                          evaluated
                                                                                                                          by us
                                                                                                                          for
                                                                                                                          the
                                                                                                                          year
                                                                                                                          ended
                                                                                                                          December
                                                                                                                          31,
                                                                                                                          2012,
                                                                                                                          and
                                                                                                                          identifies
                                                                                                                          the
                                                                                                                          respective
                                                                                                                          portions
                                                                                                                          thereof
                                                                                                                          that
                                                                                                                          we have
                                                                                                                          audited,
                                                                                                                          evaluated
                                                                                                                          and
                                                                                                                          reviewed
                                                                                                                          and
                                                                                                                          reported
                                                                                                                          on to
                                                                                                                          the
                                                                                                                          Company's
                                                                                                                          board
                                                                                                                          of directors:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Contingent
Resources

|Independent
    Qualified Reserves |  | Description
    and Preparation |  | Location of
    Reserves(Country or
    Foreign Geographic) |  | Net
    Present Value of Future Net Revenue(before
    income taxes, 10% discount rate - M$) |  
|---------------------------------- |  | ------------------------------- |  | ----------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | -
|Evaluator                          |  | Date
    of Evaluation Report   |  | Area                                                        |  | Audited                                                                                      |  
|GLJ Petroleum Consultants          |  | February 14, 2013               |  | Australia                                                   |  |                                                                                              | -
|GLJ Petroleum Consultants          |  | February 14, 2013               |  | Canada                                                      |  |                                                                                              | -
|GLJ Petroleum Consultants          |  | February 14, 2013               |  | France                                                      |  |                                                                                              | -
|GLJ Petroleum Consultants          |  | February 14, 2013               |  | Ireland                                                     |  |                                                                                              | -
|Total                              |  |                                 |  |                                                             |  |                                                                                              | -



Prospective
Resources

|Independent
    Qualified Reserves |  | Description
    and Preparation |  | Location of
    Reserves(Country or
    Foreign Geographic |  | Net
    Present Value of Future Net Revenue(before
    income taxes, 10% discount rate – M$) |  
|---------------------------------- |  | ------------------------------- |  | ---------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | -
|Evaluator                          |  | Date
    of Evaluation Report   |  | Area)                                                      |  | Audited                                                                                      |  
|GLJ
    Petroleum Consultants      |  | February
    14, 2013           |  | Canada                                                     |  |                                                                                              | -
|Total                              |  |                                 |  |                                                            |  |                                                                                              | -



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



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



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



| | 8. | These
                                                                                                                          resource
                                                                                                                          estimates
                                                                                                                          are
                                                                                                                          not
                                                                                                                          classified
                                                                                                                          as reserves
                                                                                                                          at this
                                                                                                                          time,
                                                                                                                          pending
                                                                                                                          further
                                                                                                                          reservoir
                                                                                                                          delineation,
                                                                                                                          project
                                                                                                                          application,
                                                                                                                          facility
                                                                                                                          and
                                                                                                                          reservoir
                                                                                                                          design
                                                                                                                          work.
                                                                                                                          Contingent
                                                                                                                          resources
                                                                                                                          entail
                                                                                                                          commercial
                                                                                                                          risk
                                                                                                                          not
                                                                                                                          applicable
                                                                                                                          to reserves,
                                                                                                                          which
                                                                                                                          have
                                                                                                                          not
                                                                                                                          been
                                                                                                                          included
                                                                                                                          in the
                                                                                                                          net
                                                                                                                          present
                                                                                                                          valuation.
                                                                                                                          Prospective
                                                                                                                          resources
                                                                                                                          entail
                                                                                                                          discovery
                                                                                                                          risk
                                                                                                                          and
                                                                                                                          commercial
                                                                                                                          risk
                                                                                                                          not
                                                                                                                          applicable
                                                                                                                          to reserves,
                                                                                                                          neither
                                                                                                                          of which
                                                                                                                          have
                                                                                                                          been
                                                                                                                          included
                                                                                                                          in the
                                                                                                                          net
                                                                                                                          present
                                                                                                                          valuation.
                                                                                                                          There
                                                                                                                          is no
                                                                                                                          certainty
                                                                                                                          that
                                                                                                                          it will
                                                                                                                          be commercially
                                                                                                                          viable
                                                                                                                          to produce
                                                                                                                          any
                                                                                                                          portion
                                                                                                                          of the
                                                                                                                          resources.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



EXECUTED
as to our report referred to above:



GLJ
Petroleum Consultants Ltd., Calgary, Alberta, Canada, February 14, 2013



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



49











|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



SCHEDULE
"B"

REPORT
OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE (FORM 51-101F3)



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



Management
of Vermilion Energy Inc. (the "Company") are responsible for the preparation and disclosure, or arranging for the preparation
and disclosure of information with respect to the Company's oil and gas activities in accordance with securities regulatory requirements.
This information includes reserves data, which are estimates of proved reserves and probable reserves and related future net revenue
as at December 31, 2012, estimated using forecast prices and costs.



Independent
qualified reserves evaluators have evaluated the Company's reserves data. The report of the independent qualified reserves evaluators
is presented in Schedule A to the Annual Information Form of the Company for the year ended December 31, 2012.



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



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



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



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



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



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



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



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



Because
the reserves data are based on judgements regarding future events, actual results will vary and the variations may be material.
However, any variations should be consistent with the fact that reserves are categorized according to the probability of their
recovery.



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



50









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



SCHEDULE
"C"

TERMS
OF REFERENCE FOR THE AUDIT COMMITTEE



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



The
primary function of the Audit Committee (the “Committee”) is to assist the Board in fulfilling its oversight responsibilities
by reviewing:



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



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



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



Primary
responsibility for the financial reporting, information systems, risk management and internal controls of Vermilion Energy Inc.
(“Vermilion”) is vested in management and is overseen by the Board.



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



| | A. | The
                                                                                                                                      Committee
                                                                                                                                      shall
                                                                                                                                      be
                                                                                                                                      composed
                                                                                                                                      of
                                                                                                                                      not
                                                                                                                                      fewer
                                                                                                                                      than
                                                                                                                                      three
                                                                                                                                      directors
                                                                                                                                      and
                                                                                                                                      not
                                                                                                                                      more
                                                                                                                                      than
                                                                                                                                      five
                                                                                                                                      directors,
                                                                                                                                      all
                                                                                                                                      of
                                                                                                                                      whom
                                                                                                                                      are
                                                                                                                                      independent1directors
                                                                                                                                      of
                                                                                                                                      Vermilion.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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



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



| | III. | Duties
                                                                                                                                                              and
                                                                                                                                                              Responsibilities
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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

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

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

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



|
|

---

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

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



51









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



SCHEDULE
"C"

TERMS
OF REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)



Review
and discuss:



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

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

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

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

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



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



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



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

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

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



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



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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



52









|Vermilion Energy Inc. | AIF for the year ended December 31, 2012
|--------------------- | ----------------------------------------



SCHEDULE
"C"

TERMS
OF REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)



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



The
Committee shall:



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

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

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

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

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

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

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



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



The
Committee shall:



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

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

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

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

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

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

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

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

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

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



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



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



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



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