**EXHIBIT
      99.1**










Vermilion logo














**ANNUAL
      INFORMATION FORM**




**FOR
      THE YEAR ENDED**




**DECEMBER
      31, 2006**




March
      30, 2007










**TABLE
      OF CONTENTS**





GLOSSARY
                OF
                TERMS
            1Conventions
            4Abbreviations
            4Conversion
            4SPECIAL
                NOTE
                REGARDING FORWARD LOOKING STATEMENTS
            5PRESENTATION
                OF OIL AND GAS RESERVES AND PRODUCTION INFORMATION
            6NON-GAAP
                MEASURES
            6VERMILION
                ENERGY TRUST
            7General
            7Organizational
                Structure of the Trust
            7Summary
                Description of the Business
            8History
                of
                Vermilion
            9Significant
                Acquisition
            9NARRATIVE
                DESCRIPTION OF THE BUSINESS
            10Stated
                Business
                Objectives
            10Description
                of
                Properties
            10STATEMENT
                OF
                RESERVES DATA AND OTHER OIL AND GAS INFORMATION
            11Reserves
                and
                Future Net Revenue
            11Reconciliation
                of Changes in Reserves and Future Net Revenue****
            16Undeveloped
                Reserves
            19Future
                Development Costs
            19Oil
                and Gas
                Properties and Wells
            20Costs
                Incurred
            20Exploration
                and
                Development Activities
            20Properties
                with
                No Attributed Reserves
            21Abandonment
                and
                Reclamation Costs
            21Tax
                Horizon
            22Production
                Estimates
            22Production
                History
            22Marketing
            24ADDITIONAL
                INFORMATION RESPECTING VERMILION ENERGY TRUST
            25Trust
                Units
            25Special
                Voting
                Rights
            25Unitholders'
                Limited Liability
            25Issuance
                of
                Trust Units
            26Cash
                Distributions
            26Redemption
                Right
            26Non-Resident
                Unitholders
            27Meetings
                of
                Unitholders
            27Trustee
            27Delegation
                of
                Authority, Administration and Trust Governance
            28Amendments
                to
                the Trust Indenture
            28Takeover
                Bid
            28Termination
                of
                the Trust
            28Reporting
                to
                Unitholders
            29Distribution
                Reinvestment and Optional Trust Unit Purchase Plan
            29Unitholder
                Rights Plan
            29ADDITIONAL
                INFORMATION RESPECTING VERMILION RESOURCES LTD
            33Management
                of
                Vermilion
            33


-
          ii -


**TABLE
      OF CONTENTS (Continued)**





AUDIT
                COMMITTEE MATTERS
            35Audit
                Committee
                Charter
            35Composition
                of
                the Audit Committee
            35External
                Audit
                Service Fees
            35Vermilion
                Share
                Capital
            36Voting
                and
                Exchange Trust Agreement
            39Support
                Agreement
            41Notes
            42Royalty
                Agreement
            43MARKET
                FOR
                PRICE RANGE AND TRADING VOLUME OF SECURITIES
            43CONFLICTS
                OF
                INTEREST
            44INTEREST
                OF
                MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
            44LEGAL
                PROCEEDINGS
            44MATERIAL
                CONTRACTS
            44INTERESTS
                OF
                EXPERTS
            44TRANSFER
                AGENT AND REGISTRAR
            44RISK
                FACTORS
            44Reserve
                Estimates
            44Volatility
                of
                Oil and Natural Gas Prices
            44Changes
                in
                Legislation
            45Competition
            45Operational
                Matters
            45Environmental
                Concerns
            45Kyoto
                Protocol
            46Debt
                Service
            46Delay
                in Cash
                Distributions
            46Taxation
                of
                Vermilion
            46Changes
                in
                Income Tax Laws
            47Depletion
                of
                Reserves
            48Net
                Asset
                Value
            48Return
                of
                Capital
            48Nature
                of Trust
                Units
            48Unitholders
                Limited Liability
            48Statutory
                Remedies
            49Variations
                in
                Interest Rates and Foreign Exchange Rates
            49Mutual
                Fund
                Trust Status
            49Increase
                in
                Operating Costs or Decline in Production Level
            50Acquisition
                Assumptions
            50Additional
                Financing
            50Potential
                Conflicts of Interest
            50GAPP
                Adjustments
            50Market
                Accessibility
            51


ADDITIONAL
                INFORMATION
            51SCHEDULE
                "A"
            REPORT
                ON
                RESERVES DATA BY INDEPENDENT QUALIFIED
                RESERVES EVALUATOR (FORM 51-101F2)
            52SCHEDULE
                "B"
            REPORT
                OF
                MANAGEMENT AND DIRECTORS ON OIL AND
                GAS
                DISCLOSURE (FORM 51-101F3)
            53SCHEDULE
                "C"
            AUDIT
                COMMITTEE TERMS OF REFERENCE
            54


-
            iii -








**GLOSSARY
      OF
      TERMS**




The
      following are
      defined terms used in this Annual Information Form:




" **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




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




" **Arrangement** "
      means the plan of
      arrangement under the ABCA involving the Trust, Vermilion, Clear and Vermilion
      Acquisition Ltd.,
      which was
      completed on January 22, 2003;




" **Aventura** "
      means Aventura
      Energy Inc., a corporation incorporated pursuant to the ABCA;




" **Aventura
      Shares** "
      means the common
      shares of Aventura;




" **board
      of
      directors** "
      or " **board** "
      means the board
      of directors of Vermilion;




**"Clear"** means
      Clear Energy
      Inc., a publicly traded oil and natural gas exploration and production
      company;




" **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;




" **Current
      Market Price of a Trust Unit** "
      means, in respect
      of a Trust Unit on any date, the weighted average trading price of the Trust
      Units on the TSX on that date and the nine trading days preceding that date,
      or,
      if the Trust Units are not then listed on the TSX,
      on such other
      stock exchange or automated quotation system on which the Trust Units are listed
      or quoted, as the case may be, as may be selected by the board of directors
      of
      Vermilion for such purpose; provided, however, that if in the opinion of the
      board of directors of Vermilion the public distribution or trading activity
      of
      Trust Units for that period does not result in a weighted
      average
      trading price which reflects the fair market value of a Trust Unit, then the
      Current Market Price of a Trust Unit shall
      be determined
      by the board of directors of Vermilion, in good faith and in its sole
      discretion, and provided further that any such
      selection,
      opinion or determination by such board of directors shall be conclusive and
      binding and for the purposes of this definition,
      the
      weighted average trading price shall be determined by dividing (a) the aggregate
      dollar trading value of all Trust Units
      sold on the
      TSX (or other stock exchange or automated quotation system, if applicable)
      over
      the applicable ten trading days
      by (b) the
      total number of Trust Units sold on such stock exchange or system during such
      period;




" **Distributable
      Cash** "
      means all amounts
      available for distribution during any applicable period to holders of Trust
      Units;




" **Distribution** "
      means a
      distribution paid by the Trust in respect of the Trust Units, expressed as
      an
      amount per Trust Unit;




" **Distribution
      Payment Date"** means
      any date that
      Distributable Cash is distributed to Unitholders, generally being the 15th
      day of
      the
      calendar month following any Distribution Record Date;




" **Distribution
      Record Date** "
      means the last
      day of each calendar month or such other date as may be determined from time
      to time
      by the Trustee, except that December 31 shall in all cases be a Distribution
      Record Date;




" **DRIP
      Plan** "
      means the
      Distribution Reinvestment and Optional Trust Unit Purchase Plan adopted by
      the
      Trust;




" **Exchangeable
      Shares** "
      means the Series
      A exchangeable shares in the capital of Vermilion;




" **Exchangeable
      Share Provisions** "
      means the rights,
      privileges, restrictions and conditions attaching to the Exchangeable Shares;







*2006
              Annual Information Form - Vermilion Energy Trust*
            1





" **Exchange
      Ratio** "
      means the
      exchange ratio used to determine the number of Trust Units a holder of
      Exchangeable Shares is entitled to receive upon an exchange of Exchangeable
      Shares which, in respect of each Exchangeable Share, was initially equal to
      one
      upon completion of the Arrangement, and shall be cumulatively adjusted
      thereafter by: (a) increasing the Exchange Ratio on
      each
      Distribution Payment Date by an amount, rounded to the nearest five (5) decimal
      places, equal to a fraction having as its numerator
      the
      product of the Exchange Ratio immediately prior to the applicable Distribution
      Payment Date and the Distribution, expressed
      as an
      amount per Trust Unit, paid on that Distribution Payment Date, and having as
      its
      denominator the Current Market
      Price of a
      Trust Unit on the last business day prior to that Distribution Payment Date;
      and
      (b) decreasing the Exchange Ratio
      on each
      record date for the payment of dividends to holders of Exchangeable Shares
      by
      Vermilion, if any, by an amount, rounded to the nearest five (5) decimal places,
      equal to a fraction having as its numerator the amount of the dividend payable
      to holders
      of
      Exchangeable Shares, expressed as an amount per Exchangeable Share, and having
      as its denominator the Current Market
      Price of a
      Trust Unit on the date that is the last business day prior to that dividend
      record date. The Exchange Ratio shall also
      be adjusted in
      the event of certain other reorganizations or distributions in respect of the
      Trust Units as necessary on an economic
      equivalency basis as further described in the Exchangeable Share
      Provisions;




**"Glacier"** means
      Glacier
      Energy Limited, a private oil and natural gas exploration and producing
      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 Trust prepared by
      GLJ dated
      February 27, 2007 and effective December 31, 2006;




" **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;




" **Insolvency
      Event** "
      means the
      institution by Vermilion of any proceeding to be adjudicated to be a bankrupt
      or
      insolvent or to be wound
      up, or the
      consent of Vermilion to the institution of bankruptcy, dissolution, insolvency
      or winding-up proceedings against it, or the filing of a petition, answer or
      consent seeking dissolution or winding-up under any bankruptcy, insolvency
      or
      analogous laws, including without limitation the *Companies
      Creditors' Arrangement Act* (Canada)
      and the *Bankruptcy
      and
      Insolvency Act* (Canada),
      and the
      failure by Vermilion to contest in good faith any such proceedings commenced
      in
      respect of Vermilion within fifteen (15) days of becoming aware thereof, or
      the
      consent by Vermilion to the filing of any such petition or to the appointment
      of a
      receiver, or the making by Vermilion of a general assignment for the benefit
      of
      creditors, or the admission in writing by Vermilion
      of its
      inability to pay its debts generally as they become due, or Vermilion not being
      permitted, pursuant to solvency requirements
      of
      applicable law, to redeem any retracted Exchangeable Shares pursuant to the
      Exchangeable Share Provisions;




" **Meeting** "
      means the annual
      and special meeting of Unitholders of the Trust to be held on May 4, 2007 (or,
      if adjourned, such other
      date on which
      the meeting is held);




" **Non-Resident** "
      means (a) a
      Person who is not a resident of Canada for the purposes of the Tax Act; or
      (b) a
      partnership that is not
      a Canadian
      partnership for the purposes of the Tax Act;




" **Notes** "
      means the
      unsecured, subordinated notes issued by Vermilion under the
      Arrangement;




" **Partnership** "
      means Vermilion
      Resources, the partners of which are Vermilion and its wholly-owned subsidiary
      1209963 Alberta Ltd.;




" **Permitted
      Investments** "
      means (a)
      obligations issued or guaranteed by the government of Canada or any province
      of
      Canada or
      any agency or
      instrumentality thereof, (b) term deposits, guaranteed investment certificates,
      certificates of deposit or bankers' acceptances
      of or
      guaranteed by any Canadian chartered bank or other financial institutions the
      short-term debt or deposits of which
      have been
      rated at least A or the equivalent by Standard & Poor's Corporation, Moody's
      Investors Service, Inc. or Dominion
      Bond
      Rating Service Limited, and (c) commercial paper rated at least A or the
      equivalent by Dominion Bond Rating Service
      Limited, in
      each case maturing within 180 days after the date of acquisition;




" **Pro
      Rata
      Share** "
      of any particular
      amount in respect of a Unitholder at any time shall be the product obtained
      by
      multiplying the number of Trust Units that are owned by that Unitholder at
      that
      time by the quotient obtained when such a number is divided by the
      total number of
      all Trust Units that are issued and outstanding at that time;


*2006
                Annual Information Form - Vermilion Energy Trust*
              2
 
  " **Royalty** "
      means the royalty
      granted under the Royalty Agreement commencing February 1, 2003, entitling
      the
      Trust to approximately
      99%
      of the net cash flow generated from the present and future oil and natural
      gas
      interests, rights and related tangibles
      of the
      Partnership after certain costs, expenditures and deductions;




" **Royalty
      Agreement** "
      means the amended
      royalty agreement between the Partnership, Vermilion, 1209963 Alberta Ltd.
      and
      the Trust
      dated January
      22, 2003 providing for the creation of the Royalty;




" **Special
      Voting Right** "
      means the special
      voting right of the Trust, issued and certified under the Trust Indenture for
      the time being
      outstanding
      and entitled to the benefits and subject to the limitations set forth
      therein;




" **Subsequent
      Investment** "
      means those
      investments which the Trust is permitted to make pursuant to the Trust
      Indenture;




" **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 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;




" **Support
      Agreement** "
      means the support
      agreement entered into between the Trust and Vermilion Acquisition Ltd. (prior
      to its amalgamation
      with
      Vermilion) on January 16, 2003;




" **Trust** "
      means Vermilion
      Energy Trust, a trust established under the laws of Alberta pursuant to the
      Trust Indenture;




" **Trustee** "
      means
      Computershare Trust Company of Canada, the initial trustee of the Trust, or
      such
      other trustee, from time to time,
      of the
      Trust;




" **Trust
      Indenture** "
      means the amended
      and restated trust indenture dated as of January 15, 2003 between Computershare
      Trust Company
      of Canada
      and Vermilion;




" **Trust
      Subsidiary** "
      means Vermilion
      Resources Ltd., 1209963 Alberta Ltd., 1209974 Alberta Ltd., Vermilion Rep
      S.A.S., Vermilion
      Resources
      (Partnership), Vermilion Oil & Gas Netherlands B.V. and Vermilion Oil &
Gas Australia Pty Ltd.;




" **Trust
      Unit** "
      or " **Unit** "
      means a unit of
      the Trust issued by the Trust;




" **Trust
      Unit
      Award Plan** "
      means the Trust
      Unit Award Incentive Plan of the Trust;




" **TSX** "
      means TSX Inc.,
      carrying on business as the Toronto Stock Exchange;




" **Unitholder
      Rights Plan Agreement** "
      means the
      Unitholder Rights Plan Agreement dated May 5, 2006 between the Trust and
      Computershare Trust Company of Canada establishing the Unitholder Rights Plan
      of
      the Trust;




" **Unitholders** "
      means holders
      from time to time of the Trust Units;




" **Unit
      Rights
      Incentive Plan** "
      means the Unit
      Rights Incentive Plan of the Trust;




" **Verenex** "
      means Verenex
      Energy Inc., a publicly traded oil and natural gas exploration and production
      company;




" **Vermilion** "
      means Vermilion
      Resources Ltd.;




" **Voting
      and
      Exchange Agreement Trustee** "
      means
      Computershare Trust Company of Canada, the initial trustee under the Voting
      and
      Exchange Trust Agreement, or such other trustee, from time to time appointed
      thereunder; and




" **Voting
      and
      Exchange Trust Agreement** "
      means the voting
      and exchange trust agreement entered into on January 16, 2003 between
      the Trust,
      Vermilion Acquisition Ltd. (prior to its amalgamation with Vermilion) and the
      Voting and Exchange Agreement Trustee.




*2006
                Annual Information Form - Vermilion Energy Trust*
              3
 
  **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 generally accepted accounting principles
      in
      Canada.




**Abbreviations**




***Oil
                and ***Natural
                Gas Liquids******Bbl
            BarrelBbls
            BarrelsMbbls
            thousand
                barrelsBbls/d
            barrels
                per
                dayNGLs
            natural
                gas
                liquidsGJ
            GigajouleGJ/d
            gigajoule
                per
                day







***Natural
                Gas***Mcf
            thousand
                cubic feetMmcf
            million
                cubic
                feetBcf
            billion
                cubic
                feetMcf/d
            thousand
                cubic feet per dayMmcf/d
            million
                cubic
                feet per dayMMBTU
            million
                British Thermal Units







***Other***AECO-C
            Intra-Alberta
                Nova Inventory Transfer Price (NIT net price)API
            American
                Petroleum Institute°API
            An
                indication of the specific gravity of crude oil measured on the API
                gravity scale. Liquid
                petroleum with a specified gravity of 28 °API or higher is generally
                referred to as light crude oilARTC
            Alberta
                Royalty Tax CreditBOE
            barrel
                of oil
                equivalent of natural gas and crude oil on the basis of 1 BOE for
                6
                (unless otherwise stated)Mcf
                of
                natural gas (this conversion factor is an industry accepted norm
                and is
                not based on eitherenergy
                content or current prices)BOE/D
            barrel
                of oil
                equivalent per daym3
            cubic
                metresMBOE
            1,000
                barrels
                of oil equivalentmmboe
            million
                barrels of oil equivalentWTI
            West
                Texas
                Intermediate, the reference price paid in U.S. dollars at Cushing,
                Oklahoma for crude oil ofstandard
                gradeMW/h
            Megawatts
                per
                hour




**Conversion**




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




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








*2006
              Annual Information Form - Vermilion Energy Trust*
            4





**SPECIAL
      NOTE REGARDING FORWARD LOOKING STATEMENTS**




Certain
      statements
      included or incorporated by reference in this annual information form may
      constitute forward-looking statements
      under
      applicable securities legislation. 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 strategy and objectives, reserve
      quantities and the discounted present
      value of
      future net cash flows from such reserves, net revenue, future production levels,
      exploration plans, development plans, acquisition and disposition plans and
      the
      timing thereof, operating and other costs, and royalty rates.




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


•the
        ability of the Trust to obtain equipment, services
        and supplies in a timely manner to carry out its activities in Canada and internationally;


•  the
      ability of the
      Trust to market oil and natural gas successfully to current and new customers; •the
        timing and
        costs of pipeline and storage facility construction and expansion and the
        ability to secure adequate product transportation;
 •  the
        timely receipt
        of required regulatory approvals;


•  the
      ability of the
      Trust to obtain financing on acceptable terms;


•  currency,
      exchange
      and interest rates; and


•  future
      oil and gas
      prices.




Although
      the Trust
      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 Trust can give
      no
      assurance that such expectations
      will
      prove to be correct. 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
      Trust 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 and natural gas and market demand;


•  risks
      and
      uncertainties involving geology of oil and gas deposits;


•  risks
      inherent in
      the Trust's marketing operations, including credit risk;


•  the
      uncertainty of
      reserves estimates and reserves life;


•  the
      uncertainty of
      estimates and projections relating to production, costs and
      expenses;


•  potential
      delays or
      changes in plans with respect to exploration or development projects or capital
      expenditures;


•  the
      Trust's ability
      to enter into or renew leases;


•  fluctuations
      in oil
      and gas prices, foreign currency exchange rates and interest rates;


•  health,
      safety and
      environmental risks;


•  uncertainties
      as to
      the availability and cost of financing;


•  the
      ability of the
      Trust to add production and reserves through development and exploration
      activities;


•  general
      economic
      and business conditions;


•  the
      possibility
      that government policies or laws may change or governmental approvals may be
      delayed or withheld;


•  uncertainty
      in
      amounts and timing of royalty payments;


•  risks
      associated
      with existing and potential future law suits and regulatory actions against
      the
      Trust; and


•other
      risks and uncertainties described elsewhere in
      this annual information form or in the Trust's other filings with Canadian securities
      authorities.




The
      forward-looking
      statements or information contained in this annual information form are made
      as
      of the date hereof and the Trust 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.




*2006
                Annual Information Form - Vermilion Energy Trust*
              5
 
  **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 *Standard
      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. The Trust
      has adopted the standard of 6 Mcf:1 boe when converting natural gas to barrels
      of oil
      equivalent. Boes may be misleading, particularly if used in isolation. A boe
      conversion ratio of 6 Mcf:1 boe is based on an energy
      equivalency
      conversion method primarily applicable at the burner tip and does not represent
      a value equivalency at the wellhead.




**NON-GAAP
      MEASURES**




In
      this annual
      information form the Trust uses the terms "cash flow", “adjusted cash flow”,
      "funds flow from operations" and “distributable
      cash” to refer to the amount of cash available for distribution to Unitholders
      and as indicators of financial performance. "Cash flow", "adjusted cash flow",
      "funds flow from operations" and “distributable cash” are not measures recognized
      by
      Canadian generally accepted accounting principles ("GAAP") and do not have
      standardized meanings prescribed by GAAP. Therefore, "cash flow", "adjusted
      cash
      flow", "funds flow from operations" and “distributable cash” of the Trust may
      not be
      comparable to similar measures presented by other issuers, and investors are
      cautioned that "cash flow", "adjusted cash flow" "funds
      flow from
      operations" and “distributable cash” should not be construed as alternatives to
      net earnings, cash flow from operating
      activities or other measures of financial performance calculated in accordance
      with GAAP. All references to "cash flow",
      "adjusted
      cash flow", "funds flow from operations" and “distributable cash” are based on
      cash flow before changes in non- cash
      working
      capital related to operating activities and site restoration expenditures,
      as
      presented in the consolidated financial statements of the Trust. **The
      actual
      amount of cash that is distributed cannot be assured and future distributions
      may** **vary.** The
      Trust uses such
      terms as an indicator of financial performance because such terms are commonly
      utilized by investors
      to
      evaluate royalty trusts and income funds in the oil and gas sector. The Trust
      believes that such terms are useful supplemental
      measures as they provide investors with information of what cash is available
      for distribution from the Trust to Unitholders
      in such
      periods.




*2006
                Annual Information Form - Vermilion Energy Trust*
              6
 
  **VERMILION
      ENERGY TRUST**




**General**




Vermilion
      Energy
      Trust is an open-end unincorporated investment trust governed by the laws of
      the
      Province of Alberta and formed
      on December
      16, 2002 pursuant to the Trust Indenture. The head and principal office of
      the
      Trust is located at Suite
      2800, 400 -
      4 th Avenue, S.W.,
      Calgary, Alberta, T2P 0J4.




**Organizational
      Structure of the Trust**




The
      following diagram describes the intercorporate relationships among the Trust
      and
      each of its material subsidiaries (and Verenex
      Energy
      Inc.) as at December 31, 2006, where each principal subsidiary was incorporated
      or formed, the percentage of votes attaching to all voting securities of each
      subsidiary beneficially owned by Vermilion, as well as the flow of cash from
      the
      oil and
      gas properties
      held by such subsidiaries to the Trust, and from the Trust to the Unitholders.
      Reference should be made to the
      appropriate
      sections of this annual information form for a complete description of the
      structure of the Trust.







**Notes:**


(1) The
      Unitholders own
      100% of the Trust Units.


(2) Cash
      distributions
      are made to Unitholders monthly based on the Trust's cash flow.


(3) Cash
        flow
        represents payments made by Vermilion to the Trust in respect of principal
        and
        interest payments on the Notes. In addition to such payments, dividends
        may also
        be paid on the common shares of Vermilion.


(4) Cash
      flow represents
      payments made by the Partnership under the Royalty Agreement.


(5) The
      Trust will invest
      funds raised through any subsequent issuance of Trust Units in additional
      securities of Vermilion to enable Vermilion to make capitalexpenditures.
      In
      addition, the Trust may reinvest a portion of the income received from Vermilion
      as well as any repayments of principal on the Notes insecurities
      of
      Vermilion to enable Vermilion to make capital expenditures.


*2006
                Annual Information Form - Vermilion Energy Trust*
              7
 
  **Summary
      Description of the Business**




***Vermilion
      Energy Trust***




The
      Trust was
      established to acquire and hold, directly and indirectly, interests in petroleum
      and natural gas properties. Cash flow
      from the
      properties is flowed from Vermilion to the Trust by way of interest payments
      and
      principal repayments on the Notes and
      dividends
      declared on the common shares of Vermilion, and from the Partnership to the
      Trust by way of royalty payments under the Royalty Agreement. Under the terms
      of
      the Trust Indenture, the Trust is also entitled to:




(a)
            acquire
                or
                invest in securities of Vermilion and in the securities of any other
                entity including without limitation, bodiescorporate,
                partnerships or trusts, and borrowing funds or otherwise obtaining
                credit
                for that purpose;




(b)
            acquire
                royalties in respect of Canadian resource properties as defined in
                the Tax
                Act and making any deferred royaltypurchase
                payments which may be required with respect to such royalties; provided
                however that in no event shall the Trustinvest
                in any
                royalties which constitute an interest in land or a covenant running
                with
                the properties with respect to whichsuch
                royalties relate;


(c)
              of
                  any part
                  of the property of the Trust, including, without limitation, any
                  securities of Vermilion;


(d)
            temporarily
                hold cash and investments for the purposes of paying the expenses
                and the
                liabilities of the Trust, making other Permitted Investments as
                contemplated by the Trust Indenture, paying amounts payable by the
                Trust
                in connection with theredemption
                of
                any Trust Units, and making distributions to Unitholders;
                and


(e)
              costs,
                  fees
                  and expenses associated with the foregoing purposes or incidental
                  thereto.


The
      Trustee is
prohibited
      from acquiring any investment which would result in the Trust not being
      considered either a "unit trust" or
      a "mutual fund
      trust" for purposes of the Tax Act.




The
      Trustee may
      declare payable to the Unitholders all or any part of the net income of the
      Trust. It is currently anticipated that the only income to be received by the
      Trust will be from the interest received on the principal amount of Notes,
      royalty income pursuant
      to the
      Royalty Agreement, and dividends on the common shares of Vermilion. The Trust
      currently makes monthly cash
      distributions
      to Unitholders of the interest income earned from the Notes, income earned
      under
      the Royalty Agreement and dividends
      received
      on the common shares of Vermilion, after expenses, if any, and any cash
      redemptions of Trust Units.




Unitholders
      receive
      monthly distributions of the cash flow generated by Vermilion and distributed
      to
      Unitholders through the Trust. The Trust currently employs a strategy which:
      (i)
      provides Unitholders with a competitive annual cash on cash yield through
      monthly
      cash distributions, (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 Trust through
      the
      development of growth opportunities that are intended to provide long-term
      stable cash flows and be accretive to the existing Unitholders. The Trust intends
      to finance
      acquisitions through bank financing and the issuance of additional Trust Units
      from treasury, while maintaining prudent
      leverage.




***Vermilion
      Resources Ltd.***




Vermilion
      Resources
      Ltd. was incorporated under the ABCA on November 23, 1993. On January 1, 2003,
      Vermilion amalgamated
      with
      its wholly-owned subsidiary, 973675 Alberta Ltd. and on January 15, 2003,
      Vermilion amalgamated with its wholly-owned
      subsidiaries, Big Sky Resources Inc., Vermilion Gas Marketing Inc. and 962134
      Alberta Ltd. On January 22, 2003, Vermilion
      was
      amalgamated with Vermilion Acquisition Ltd. pursuant to the Arrangement. Where
      the information in this annual information
      form is
      as of a date prior to January 22, 2003, the terms "Vermilion" or "Vermilion
      Resources Ltd." shall refer to Vermilion
      Resources
      Ltd. prior to its amalgamation with Vermilion Acquisition Ltd. under the
      Arrangement.




The
      Trust is the
      sole holder of Vermilion common shares. Certain former shareholders of Vermilion
      own Exchangeable Shares of
      Vermilion in
      accordance with the elections made by such holders under the Arrangement.
      Vermilion continues to carry on an oil and natural gas business similar to
      that
      carried on by Vermilion prior to the Arrangement becoming
      effective.




The
      head office of
      Vermilion is located at Suite 2800, 400 - 4 th Avenue S.W.,
      Calgary, Alberta, T2P 0J4 and its registered office is
      located at Suite
      3700, 400 - 3 rd Avenue S.W.,
      Calgary, Alberta, T2P 4H2.




*2006
                Annual Information Form - Vermilion Energy Trust*
              8
 
  **History
      of
      Vermilion**




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




On
      January 15, 2003
      the shareholders of Vermilion approved the reorganization of Vermilion by way
      of
      a plan of arrangement under the ABCA into Vermilion Energy Trust and Clear
      Energy Inc. The Arrangement was completed on January 22, 2003 and resulted
      in
      former Vermilion shareholders and option holders owning all of the issued and
      outstanding common shares of Clear and
      all of the
      issued and outstanding Trust Units, and the Trust owning all of the issued
      and
      outstanding common shares of Vermilion.




Following
      the
      completion of the Arrangement, Vermilion completed certain transactions with
      Aventura pursuant to which Vermilion
      transferred all of its 40% participating interest in, and operatorship of,
      the
      Central Block onshore Trinidad to Aventura in exchange for Aventura Shares.
      Vermilion also acquired from Aventura a 25% gross overriding royalty which
      was
      held by Aventura
      on certain
      of Vermilion's non-operated interests and properties located in Bottrel, Alberta
      for cash consideration of $6.3 million.




On
      May 6, 2004 all
      the Aventura Shares were acquired by BG Canada Ltd. on the basis of $5.10 per
      share pursuant to a take- over
      bid for an
      aggregate consideration of $228 million. As a result of the completion of the
      acquisition of Aventura by BG Canada
      Ltd.,
      Vermilion received an aggregate $165 million for its Aventura
      Shares.




On
      May 19, 2004
      Vermilion closed the acquisition of certain oil and gas producing properties
      in
      the Netherlands for $80.5 million (effective
      January
      1, 2004). Vermilion acquired 5,900 BOE/D of predominantly onshore producing
      gas
      properties. The acquisition
      added
      14.3 mmboe of proved (P90) reserves and 17.4 mmboe of proved plus probable
      (P50)
      reserves to Vermilion.




On
      June 29, 2004
      Vermilion completed the formation and initial financing of an international
      exploration company, Verenex. Verenex's mandate included the acceleration of
      Vermilion's exploration efforts in France. As part of a series of transactions, Vermilion
      exchanged
      an interest in certain exploration lands in France together with a gross
      overriding royalty on certain of Vermilion's
      non-operated interests and properties located in Bottrel, Alberta for common
      shares of Verenex. In an initial public financing in June of 2004, Verenex
      raised over $30 million, of which Vermilion subscribed for $5 million. In
      December 2005, Verenex
      completed a
      bought deal financing raising $26.1 million of which Vermilion subscribed for
      $10 million. In December of 2006, Verenex completed a bought deal financing
      raising $33.2 million of which Vermilion subscribed for $7.5 million. Vermilion holds
      approximately 45% of the Verenex common shares outstanding as of March 30,
      2007.




In
      June 2004
      Vermilion entered into a joint venture agreement with Glacier, covering the
      development of coal bed methane and shallow
      gas on
      lands held by the Trust in Central Alberta. Pursuant to the joint venture
      agreement, the Trust sold 50% of the Trust's
      working
      interest in the coal bed methane and shallow gas rights on over 40,000 acres
      of
      land in exchange for 5.4 million common shares of Glacier. On December 7, 2005
      Vermilion completed the acquisition of the remaining Glacier shares not held
      by
      Vermilion for total consideration of $91.6 million, including $4.6 million
      of
      debt. The acquisition enabled the Trust to control its central
      Alberta
      coalbed methane and shallow gas program.




On
      March 31, 2005
      Vermilion closed the acquisition of certain oil producing properties in
      Australia for $95.0 million (effective January
      1, 2005).
      Vermilion acquired 4,800 BOE/D of offshore producing oil
      properties.




On
      July 10, 2006,
      Vermilion closed the acquisition of a company owning oil properties in France
      for $126.6 million. See “Significant
      Acquisition - France Acquisition”.




As
      at March 16,
      2007 Vermilion had 247 full time employees of which 110 employees were located
      in its head office, 25 employees
      in its
      Canadian field offices, 87 employees in France, 15 employees in the Netherlands
      and 10 employees in Australia.




**Significant
      Acquisition**




***France
      Acquisition***




On
      July 10, 2006
      the Trust, through its France subsidiary acquired an 89.886% interest in Esso
      Rep, from Esso SAF, a subsidiary
      of Exxon
      Mobil Corporation. On July 12, 2006 the Trust acquired the remaining 10.114%
      interest in Esso Rep from another
      party
      resulting in an ownership interest of 100%.







*2006
              Annual Information Form - Vermilion Energy Trust*
            9





Results
      of
      operations are included in the consolidated results from that date. The
      aggregate purchase price, exclusive of the acquired
      working
      capital deficiency, was $126.6 million consisting of cash of $123.1 million
      and
      a current payable of $3.5 million. Subsequent
      to the
      date of acquisition, Esso Rep was renamed Vermilion Emeraude Rep SAS. The
      transaction added approximately
      3,900
      BOE/D of light oil production. This transaction was not a significant
      acquisition as contemplated in National Instrument
      51-102,
      Continuous Disclosure Obligations.




**NARRATIVE
      DESCRIPTION OF THE BUSINESS**




**Stated
      Business Objectives**




Vermilion
      is
      actively engaged in the business of oil and natural gas exploitation,
      development, acquisition and production in Canada, France, the Netherlands
      and
      Australia. Vermilion's business plan is to maximize returns to the Trust from
      its oil and natural
      gas
      properties and related assets. Where possible, Vermilion 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 Trust'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, 2006, based on forecast cost and price assumptions
      as evaluated in the GLJ Report.




***Canada
      Assets***




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




In
      Canada,
      Vermilion holds an average working interest of 69.35% in 286,629 (198,780 net)
      acres of developed land, 405 (285 net) producing natural gas wells and 305
      (206
      net) producing oil wells as at December 31, 2006. Vermilion operates two natural gas
      plants and has an ownership interest in a third, resulting in combined gross
      processing capacity of over 75 Mmcf/d. In addition,
      Vermilion
      has treating capacity of over 13,000 Bbls/d of oil in four oil
      batteries.




For
      the year ended
      December 31, 2006, production in Canada averaged approximately 41.0 Mmcf/d
      of
      natural gas and 4,011 Bbls/d
      of oil and
      NGLs.




The
      GLJ Report
      assigned 30,842 MBOE of total proven reserves and 45,143 MBOE of proved plus
      probable reserves to Vermilion's
      properties located in Canada as at December 31, 2006.




*2006
                Annual Information Form - Vermilion Energy Trust*
              10
 
  ***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. Vermilion holds an 85% working interest in 130,753 acres
      of
      developed land in the Aquitaine and Paris Basins. Vermilion had 204
      (180 net)
      producing oil wells in France as at December 31, 2006.




Vermilion's
      production in France for the fourth quarter of 2006 averaged approximately
      9,629
      Bbls/d of oil and 1.3 Mmcf/d of natural
      gas.




The
      GLJ Report
      assigned 34,534 MBOE of total proven reserves and 49,995 MBOE of proved plus
      probable reserves to Vermilion's
      properties located in France.




***Netherlands
      Assets***




Vermilion's
      Netherlands assets consist of six 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 gas treatment
      centres.
      Vermilion holds an approximate 64% working interest over the six concessions
      in
      456,675 (293,095 net) acres
      of developed
      land and 55 (44 net) producing gas wells as at December 31, 2006.




For
      the year ended
      December 31, 2006, Vermilion's production in the Netherlands averaged 31 Bbls/d
      of NGLs and 29.5 Mmcf/d of
      natural
      gas.




The
      GLJ Report
      assigned 9,387 MBOE of total proven reserves and 12,940 MBOE of proven plus
      probable reserves to Vermilion's
      properties located in the Netherlands.




***Australia
      Assets***




Vermilion's
      Australia assets consist of a 60% operated interest in an offshore field located
      on Western Australia's northwest shelf.
      Production
      consists solely of oil. Vermilion holds a 60% working interest in the Wandoo
      block, which comprises of 241.1 square
      kilometres
      and is considered a production license. All acreage therefore is classified
      as
      producing.




For
      the year ended
      December 31, 2006, Vermilion's production in the Australia averaged 3,815 Bbls/d
      of oil.




The
      GLJ Report
      assigned 11,569 MBOE of total proven reserves and 15,107 MBOE of proven plus
      probable reserves to Vermilion's
      properties located in Australia.




**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.
      Pricing used
      in the forecast and constant price evaluations is set forth in the notes to
      the
      tables.




Information
      contained in this section is effective December 31, 2006 unless otherwise
      stated. The reserves information was prepared
      on
      February 27, 2007.




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. **It
      should
      not be assumed that the discounted future net production** **revenue
      estimated by the GLJ Report represents 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.**










*2006
              Annual Information Form - Vermilion Energy Trust*
            11





Reserves
      for Canada, France, the Netherlands and Australia 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.




Vermilion
      accounts
      for its investment in Verenex using the equity method and therefore the reserves
      of Verenex are not included in
      the tables
      below, except to the extent of Vermilion’s working interest.




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 and constant prices and costs. For Canada, the tables following include
      Alberta Gas Cost Allowance (AGCA).




The
      following tables may not total due to rounding.




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




**Light
                and Medium Oil**
            
            **Natural
              Gas**
            
            
            ****Natural
                Gas**Liquids**
            
            
            **BOEs****Gross****(1****)**
            
            
            **Net****(1)**
            
            
            **Gross****(1)**
            
            
            **Net****(1)**
            
            
            **Gross****(1)**
            
            
            **Net****(1)**
            
            
            **Gross****(1)**
            
            
            **Net****(1)****(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(MBOE**
            **)**
            
            **(MBOE**
            **)**Proved
                Developed Producing(2)(5)Canada
            
            
            7,699
            
            
            7,110
            
            
            77,927
            
            
            62,503
            
            
            2,857
            
            
            1,865
            
            
            23,544
            
            
            19,392France
            
            
            31,070
            
            
            27,976
            
            
            2,331
            
            
            2,203
            
            
            -
            
            
            -
            
            
            31,458
            
            
            28,343Netherlands
            
            
            -
            
            
            -
            
            
            56,681
            
            
            56,681
            
            
            86
            
            
            86
            
            
            9,532
            
            
            9,532Australia
            
            
            10,532
            
            
            10,532
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            10,532
            
            
            10,532Total
            
            
            49,301
            
            
            45,618
            
            
            136,939
            
            
            121,387
            
            
            2,942
            
            
            1,951
            
            
            75,066
            
            
            67,799Proved
                Developed Non-Producing(2)(6)Canada
            
            
            85
            
            
            78
            
            
            11,887
            
            
            10,145
            
            
            196
            
            
            129
            
            
            2,262
            
            
            1,897France
            
            
            1,027
            
            
            894
            
            
            73
            
            
            73
            
            
            -
            
            
            -
            
            
            1,039
            
            
            906Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            1,140
            
            
            1,140
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,140
            
            
            1,140Total
            
            
            2,251
            
            
            2,111
            
            
            11,959
            
            
            10,218
            
            
            196
            
            
            129
            
            
            4,441
            
            
            3,943Proved
                Undeveloped(2)(7)Canada
            
            
            268
            
            
            228
            
            
            27,338
            
            
            23,526
            
            
            58
            
            
            35
            
            
            4,882
            
            
            4,185France
            
            
            2,183
            
            
            2,093
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            2,183
            
            
            2,093Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
            
            
            2,451
            
            
            2,321
            
            
            27,338
            
            
            23,526
            
            
            58
            
            
            35
            
            
            7,065
            
            
            6,278Total
                Proved(2)Canada
            
            
            8,052
            
            
            7,416
            
            
            117,152
            
            
            96,174
            
            
            3,111
            
            
            2,030
            
            
            30,688
            
            
            25,474France
            
            
            34,280
            
            
            30,963
            
            
            2,403
            
            
            2,276
            
            
            -
            
            
            -
            
            
            34,680
            
            
            31,342Netherlands
            
            
            -
            
            
            -
            
            
            56,681
            
            
            56,681
            
            
            86
            
            
            86
            
            
            9,532
            
            
            9,532Australia
            
            
            11,671
            
            
            11,671
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            11,671
            
            
            11,671Total
            
            
            54,003
            
            
            50,050
            
            
            176,236
            
            
            155,131
            
            
            3,197
            
            
            2,116
            
            
            86,571
            
            
            78,020Total
                Probable(3)Canada
            
            
            1,997
            
            
            1,817
            
            
            63,112
            
            
            51,693
            
            
            1,658
            
            
            1,071
            
            
            14,174
            
            
            11,503France
            
            
            15,369
            
            
            13,654
            
            
            530
            
            
            501
            
            
            -
            
            
            -
            
            
            15,457
            
            
            13,738Netherlands
            
            
            -
            
            
            -
            
            
            20,668
            
            
            20,668
            
            
            33
            
            
            33
            
            
            3,478
            
            
            3,478Australia
            
            
            3,707
            
            
            3,707
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,707
            
            
            3,707Total
            
            
            21,073
            
            
            19,178
            
            
            84,311
            
            
            72,863
            
            
            1,691
            
            
            1,104
            
            
            36,816
            
            
            32,426Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            10,049
            
            
            9,232
            
            
            180,264
            
            
            147,867
            
            
            4,769
            
            
            3,101
            
            
            44,862
            
            
            36,978France
            
            
            49,648
            
            
            44,617
            
            
            2,934
            
            
            2,777
            
            
            -
            
            
            -
            
            
            50,137
            
            
            45,080Netherlands
            
            
            -
            
            
            -
            
            
            77,349
            
            
            77,349
            
            
            118
            
            
            118
            
            
            13,010
            
            
            13,010Australia
            
            
            15,379
            
            
            15,379
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            15,379
            
            
            15,379Total
            
            
            75,076
            
            
            69,228
            
            
            260,547
            
            
            227,993
            
            
            4,887
            
            
            3,219
            
            
            123,388
            
            
            110,446








*2006
              Annual Information Form - Vermilion Energy Trust*
            12





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




**Before
                Deducting Income Taxes Discounted At**
            
            **After
                Deducting Income Taxes Discounted At****(M$)**
            
            
            **0**
            **%**
            
            **5**
            **%**
            
            **10**
            **%**
            
            **15**
            **%**
            
            **20**
            **%**
            
            **0**
            **%**
            
            **5**
            **%**
            
            **10**
            **%**
            
            **15**
            **%**
            
            **20**
            **%**Proved
                Developed Producing(2)(5)Canada
            
            
            610,968
            
            
            467,567
            
            
            383,090
            
            
            327,463
            
            
            287,936
            
            
            610,968
            
            
            467,567
            
            
            383,090
            
            
            327,463
            
            
            287,936France
            
            
            1,213,306
            
            
            867,155
            
            
            684,422
            
            
            571,605
            
            
            494,576
            
            
            890,017
            
            
            651,675
            
            
            522,720
            
            
            441,292
            
            
            384,608Netherlands
            
            
            204,697
            
            
            172,517
            
            
            150,358
            
            
            134,103
            
            
            121,607
            
            
            154,150
            
            
            129,875
            
            
            112,861
            
            
            100,231
            
            
            90,448Australia
            
            
            438,349
            
            
            361,130
            
            
            306,397
            
            
            266,188
            
            
            235,696
            
            
            224,440
            
            
            183,631
            
            
            154,946
            
            
            134,014
            
            
            118,230Total
            
            
            2,467,320
            
            
            1,868,369
            
            
            1,524,267
            
            
            1,299,359
            
            
            1,139,815
            
            
            1,879,575
            
            
            1,432,748
            
            
            1,173,617
            
            
            1,003,000
            
            
            881,222Proved
                Developed Non-Producing(2)(6)Canada
            
            
            38,733
            
            
            28,589
            
            
            22,472
            
            
            18,391
            
            
            15,476
            
            
            38,733
            
            
            28,589
            
            
            22,472
            
            
            18,391
            
            
            15,476France
            
            
            37,341
            
            
            29,269
            
            
            23,739
            
            
            19,773
            
            
            16,816
            
            
            27,092
            
            
            21,678
            
            
            17,824
            
            
            14,981
            
            
            12,741Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            54,545
            
            
            44,073
            
            
            37,070
            
            
            32,131
            
            
            28,479
            
            
            30,873
            
            
            24,767
            
            
            20,727
            
            
            17,895
            
            
            15,816Total
            
            
            130,619
            
            
            101,931
            
            
            83,281
            
            
            70,295
            
            
            60,771
            
            
            96,698
            
            
            75,034
            
            
            61,023
            
            
            51,267
            
            
            44,033Proved
                Undeveloped(2)(7)Canada
            
            
            48,691
            
            
            26,119
            
            
            11,743
            
            
            2,288
            
            
            (4,102
            )
            
            48,691
            
            
            26,119
            
            
            11,743
            
            
            2,288
            
            
            (4,102
            )France
            
            
            102,677
            
            
            69,988
            
            
            52,173
            
            
            40,829
            
            
            32,982
            
            
            74,487
            
            
            51,838
            
            
            39,174
            
            
            30,935
            
            
            25,141Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
            
            
            151,368
            
            
            96,107
            
            
            63,916
            
            
            43,117
            
            
            28,880
            
            
            123,178
            
            
            77,957
            
            
            50,917
            
            
            33,223
            
            
            21,039Total
                Proved(2)Canada
            
            
            698,391
            
            
            522,275
            
            
            417,304
            
            
            348,141
            
            
            299,309
            
            
            698,391
            
            
            522,275
            
            
            417,304
            
            
            348,141
            
            
            299,309France
            
            
            1,353,324
            
            
            966,412
            
            
            760,335
            
            
            632,207
            
            
            544,375
            
            
            981,868
            
            
            715,786
            
            
            570,890
            
            
            479,005
            
            
            414,955Netherlands
            
            
            204,697
            
            
            172,517
            
            
            150,358
            
            
            134,103
            
            
            121,607
            
            
            154,150
            
            
            129,875
            
            
            112,861
            
            
            100,231
            
            
            90,448Australia
            
            
            492,895
            
            
            405,203
            
            
            343,467
            
            
            298,319
            
            
            264,175
            
            
            278,986
            
            
            227,703
            
            
            192,016
            
            
            166,145
            
            
            146,709Total
            
            
            2,749,307
            
            
            2,066,407
            
            
            1,671,464
            
            
            1,412,770
            
            
            1,229,466
            
            
            2,113,395
            
            
            1,595,639
            
            
            1,293,071
            
            
            1,093,522
            
            
            951,421Total
                Probable(3)Canada
            
            
            251,550
            
            
            147,743
            
            
            95,917
            
            
            65,966
            
            
            46,882
            
            
            251,550
            
            
            147,743
            
            
            95,917
            
            
            65,966
            
            
            46,882France
            
            
            626,980
            
            
            369,298
            
            
            249,981
            
            
            182,358
            
            
            139,447
            
            
            441,052
            
            
            263,971
            
            
            180,551
            
            
            132,609
            
            
            101,854Netherlands
            
            
            124,616
            
            
            78,274
            
            
            53,558
            
            
            39,062
            
            
            29,861
            
            
            85,214
            
            
            54,294
            
            
            37,416
            
            
            27,354
            
            
            20,897Australia
            
            
            138,293
            
            
            86,625
            
            
            59,017
            
            
            43,139
            
            
            33,335
            
            
            79,534
            
            
            49,109
            
            
            33,205
            
            
            24,107
            
            
            18,630Total
            
            
            1,141,439
            
            
            681,940
            
            
            458,473
            
            
            330,525
            
            
            249,525
            
            
            857,350
            
            
            515,117
            
            
            347,089
            
            
            250,036
            
            
            188,263Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            949,941
            
            
            670,018
            
            
            513,221
            
            
            414,107
            
            
            346,191
            
            
            949,941
            
            
            670,018
            
            
            513,221
            
            
            414,107
            
            
            346,191France
            
            
            1,980,304
            
            
            1,335,710
            
            
            1,010,316
            
            
            814,565
            
            
            683,822
            
            
            1,393,053
            
            
            954,753
            
            
            729,708
            
            
            592,343
            
            
            499,475Netherlands
            
            
            329,313
            
            
            250,791
            
            
            203,916
            
            
            173,166
            
            
            151,468
            
            
            225,189
            
            
            173,960
            
            
            142,458
            
            
            121,262
            
            
            106,001Australia
            
            
            631,187
            
            
            491,827
            
            
            402,485
            
            
            341,457
            
            
            297,510
            
            
            363,004
            
            
            278,825
            
            
            226,453
            
            
            191,313
            
            
            166,267Total
            
            
            3,890,745
            
            
            2,748,346
            
            
            2,129,938
            
            
            1,743,295
            
            
            1,478,991
            
            
            2,931,187
            
            
            2,077,556
            
            
            1,611,840
            
            
            1,319,025
            
            
            1,117,934




***Total
      Future Net Revenue (Undiscounted) - Based on Constant Prices and
      Costs*** ***(8)***




**Future
                Net**
            
            
            
            
            
            **Future
                Net****Abandonment**
            
            
            **Revenue**
            
            
            
            
            
            **Revenue****Capital**
            
            
            **and**
            
            
            **Before**
            
            
            
            
            
            **After****Operating**
            
            
            **Development**
            
            
            **Reclamation**
            
            
            **Income**
            
            
            **Income**
            
            
            **Income****(****M$)**
            
            
            **Revenue**
            
            
            **Royalties**
            
            
            **Costs**
            
            
            **Costs**
            
            
            **Costs**
            
            
            **Taxes**
            
            
            **Taxes**
            
            
            **Taxes**Total
                Proved(2)Canada
            
            
            1,443,637
            
            
            210,720
            
            
            423,523
            
            
            83,499
            
            
            27,505
            
            
            698,391
            
            
            -
            
            
            698,391France
            
            
            2,132,347
            
            
            203,214
            
            
            477,362
            
            
            61,992
            
            
            36,454
            
            
            1,353,324
            
            
            371,456
            
            
            981,868Netherlands
            
            
            450,510
            
            
            -
            
            
            211,308
            
            
            24,279
            
            
            10,226
            
            
            204,697
            
            
            50,547
            
            
            154,150Australia
            
            
            772,520
            
            
            -
            
            
            257,328
            
            
            9,277
            
            
            13,020
            
            
            492,895
            
            
            213,909
            
            
            278,986Total
            
            
            4,799,014
            
            
            413,934
            
            
            1,369,521
            
            
            179,048
            
            
            87,205
            
            
            2,749,306
            
            
            635,912
            
            
            2,113,394Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            2,048,411
            
            
            316,932
            
            
            595,745
            
            
            153,511
            
            
            32,283
            
            
            949,941
            
            
            -
            
            
            949,941France
            
            
            3,098,841
            
            
            310,525
            
            
            631,914
            
            
            134,075
            
            
            42,022
            
            
            1,980,304
            
            
            587,251
            
            
            1,393,053Netherlands
            
            
            622,643
            
            
            -
            
            
            247,781
            
            
            34,725
            
            
            10,824
            
            
            329,313
            
            
            104,124
            
            
            225,189Australia
            
            
            1,017,919
            
            
            -
            
            
            360,984
            
            
            12,727
            
            
            13,020
            
            
            631,187
            
            
            268,183
            
            
            363,004Total
            
            
            6,787,813
            
            
            627,457
            
            
            1,836,424
            
            
            335,038
            
            
            98,149
            
            
            3,890,745
            
            
            959,558
            
            
            2,931,187








*2006
              Annual Information Form - Vermilion Energy Trust*
            13





***Future
      Net Revenue by Production Group - Based on Constant Prices and
      Costs*** ***(8)***




**(M$)**
            
            
            **Production
                Group**
            
            
            **Future
                Net Revenue**
              **Before
                Income Taxes**
              **(Discounted
                at 10% Per Year**
            **)**Total
                Proved(2)
            
            
            Light
                and medium crude oil
            
            
            1,282,497Associated
                gas and non-associated gas
            
            
            390,687Total
                Proved
                Plus Probable(2)(3)
            
            
            Light
                and medium crude oil
            
            
            1,615,501Associated
                gas and non-associated gas
            
            
            516,368




***Oil
      and
      Gas Reserves - Based on Forecast Prices and Costs*** ***(9)***




**Light
                and Medium Oil**
            
            
            
            
            **Natural
                Gas**
            
            
            **Natural
                Gas**
            
            
            **Liquids**
            
            
            
            
            
            **BOEs****Gross(1)**
            
            
            **Net****(1)**
            
            
            **Gross(1)**
            
            
            **Net****(1)**
            
            
            **Gross(1)**
            
            
            **Net****(1)**
            
            
            **Gross(1)**
            
            
            **Net****(1)****(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(MBOE**
            **)**
            
            **(MBOE**
            **)**Proved
                Developed Producing(2)(5)Canada
            
            
            7,618
            
            
            7,031
            
            
            79,027
            
            
            63,477
            
            
            2,887
            
            
            1,889
            
            
            23,677
            
            
            19,499France
            
            
            30,962
            
            
            27,875
            
            
            2,331
            
            
            2,203
            
            
            -
            
            
            -
            
            
            31,351
            
            
            28,242Netherlands
            
            
            -
            
            
            -
            
            
            55,815
            
            
            55,815
            
            
            84
            
            
            84
            
            
            9,387
            
            
            9,387Australia
            
            
            10,532
            
            
            10,532
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            10,532
            
            
            10,532Total
            
            
            49,112
            
            
            45,438
            
            
            137,172
            
            
            121,495
            
            
            2,972
            
            
            1,973
            
            
            74,946
            
            
            67,660Proved
                Developed Non-Producing(2)(6)Canada
            
            
            83
            
            
            76
            
            
            11,911
            
            
            10,168
            
            
            198
            
            
            130
            
            
            2,266
            
            
            1,901France
            
            
            988
            
            
            860
            
            
            72
            
            
            72
            
            
            -
            
            
            -
            
            
            1,000
            
            
            872Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            1,037
            
            
            1,037
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,037
            
            
            1,037Total
            
            
            2,108
            
            
            1,972
            
            
            11,983
            
            
            10,240
            
            
            198
            
            
            130
            
            
            4,303
            
            
            3,809Proved
                Undeveloped(2)(7)Canada
            
            
            268
            
            
            228
            
            
            27,432
            
            
            23,607
            
            
            59
            
            
            36
            
            
            4,899
            
            
            4,199France
            
            
            2,183
            
            
            2,093
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            2,183
            
            
            2,093Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
            
            
            2,451
            
            
            2,321
            
            
            27,432
            
            
            23,607
            
            
            59
            
            
            36
            
            
            7,082
            
            
            6,292Total
                Proved(2)Canada
            
            
            7,970
            
            
            7,335
            
            
            118,370
            
            
            97,252
            
            
            3,144
            
            
            2,055
            
            
            30,842
            
            
            25,599France
            
            
            34,133
            
            
            30,828
            
            
            2,403
            
            
            2,275
            
            
            -
            
            
            -
            
            
            34,534
            
            
            31,207Netherlands
            
            
            -
            
            
            -
            
            
            55,815
            
            
            55,815
            
            
            84
            
            
            84
            
            
            9,387
            
            
            9,387Australia
            
            
            11,569
            
            
            11,569
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            11,569
            
            
            11,569Total
            
            
            53,672
            
            
            49,731
            
            
            176,587
            
            
            155,342
            
            
            3,228
            
            
            2,139
            
            
            86,331
            
            
            77,761Total
                Probable(3)Canada
            
            
            1,981
            
            
            1,801
            
            
            63,875
            
            
            52,357
            
            
            1,674
            
            
            1,084
            
            
            14,301
            
            
            11,611France
            
            
            15,373
            
            
            13,685
            
            
            530
            
            
            501
            
            
            -
            
            
            -
            
            
            15,462
            
            
            13,768Netherlands
            
            
            -
            
            
            -
            
            
            21,119
            
            
            21,119
            
            
            34
            
            
            34
            
            
            3,554
            
            
            3,554Australia
            
            
            3,538
            
            
            3,538
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,538
            
            
            3,538Total
            
            
            20,893
            
            
            19,023
            
            
            85,524
            
            
            73,977
            
            
            1,708
            
            
            1,118
            
            
            36,855
            
            
            32,471Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            9,951
            
            
            9,136
            
            
            182,244
            
            
            149,609
            
            
            4,818
            
            
            3,139
            
            
            45,143
            
            
            37,210France
            
            
            49,507
            
            
            44,512
            
            
            2,933
            
            
            2,776
            
            
            -
            
            
            -
            
            
            49,995
            
            
            44,975Netherlands
            
            
            -
            
            
            -
            
            
            76,934
            
            
            76,934
            
            
            118
            
            
            118
            
            
            12,940
            
            
            12,940Australia
            
            
            15,107
            
            
            15,107
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            15,107
            
            
            15,107Total
            
            
            74,564
            
            
            68,755
            
            
            262,111
            
            
            229,319
            
            
            4,936
            
            
            3,257
            
            
            123,186
            
            
            110,232








*2006
              Annual Information Form - Vermilion Energy Trust*
            14





***Net
      Present Values of Future Net Revenue - Based on Forecast Prices and
      Costs*** ***(9)***




**Before
                Deducting Income Taxes Discounted At**
            
            **After
                Deducting Income Taxes Discounted At****(M$)**
            
            
            **0**
            **%**
            
            **5**
            **%**
            
            **10**
            **%**
            
            **15**
            **%**
            
            **20**
            **%**
            
            **0**
            **%**
            
            **5**
            **%**
            
            **10**
            **%**
            
            **15**
            **%**
            
            **20**
            **%**Proved
                Developed Producing(2)(5)Canada
            
            
            713,707
            
            
            538,360
            
            
            437,521
            
            
            372,314
            
            
            326,572
            
            
            713,707
            
            
            538,360
            
            
            437,521
            
            
            372,314
            
            
            326,572France
            
            
            1,196,471
            
            
            836,189
            
            
            655,143
            
            
            546,740
            
            
            473,971
            
            
            877,941
            
            
            631,083
            
            
            503,364
            
            
            424,871
            
            
            371,002Netherlands
            
            
            173,403
            
            
            153,052
            
            
            137,430
            
            
            125,041
            
            
            114,966
            
            
            134,452
            
            
            117,534
            
            
            104,617
            
            
            94,423
            
            
            86,173Australia
            
            
            380,670
            
            
            320,594
            
            
            276,354
            
            
            242,966
            
            
            217,143
            
            
            144,837
            
            
            121,867
            
            
            104,652
            
            
            91,564
            
            
            81,423Total
            
            
            2,464,251
            
            
            1,848,195
            
            
            1,506,448
            
            
            1,287,061
            
            
            1,132,652
            
            
            1,870,937
            
            
            1,408,844
            
            
            1,150,154
            
            
            983,172
            
            
            865,170Proved
                Developed Non-Producing(2)(6)Canada
            
            
            57,738
            
            
            41,298
            
            
            31,983
            
            
            26,011
            
            
            21,855
            
            
            57,738
            
            
            41,298
            
            
            31,983
            
            
            26,011
            
            
            21,855France
            
            
            35,044
            
            
            27,396
            
            
            22,205
            
            
            18,502
            
            
            15,751
            
            
            25,431
            
            
            20,369
            
            
            16,763
            
            
            14,102
            
            
            12,078Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            50,080
            
            
            41,006
            
            
            34,861
            
            
            30,457
            
            
            27,154
            
            
            22,662
            
            
            18,470
            
            
            15,628
            
            
            13,592
            
            
            12,069Total
            
            
            142,862
            
            
            109,700
            
            
            89,049
            
            
            74,970
            
            
            64,760
            
            
            105,831
            
            
            80,137
            
            
            64,374
            
            
            53,705
            
            
            46,002Proved
                Undeveloped(2)(7)Canada
            
            
            90,940
            
            
            55,715
            
            
            33,652
            
            
            19,229
            
            
            9,454
            
            
            90,940
            
            
            55,715
            
            
            33,652
            
            
            19,229
            
            
            9,454France
            
            
            104,448
            
            
            68,333
            
            
            50,082
            
            
            38,873
            
            
            31,256
            
            
            75,796
            
            
            50,805
            
            
            37,810
            
            
            29,629
            
            
            23,968Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Australia
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
            
            
            195,388
            
            
            124,047
            
            
            83,734
            
            
            58,102
            
            
            40,710
            
            
            166,736
            
            
            106,520
            
            
            71,462
            
            
            48,858
            
            
            33,422Total
                Proved(2)Canada
            
            
            862,384
            
            
            635,373
            
            
            503,156
            
            
            417,554
            
            
            357,881
            
            
            862,384
            
            
            635,373
            
            
            503,156
            
            
            417,554
            
            
            357,881France
            
            
            1,335,963
            
            
            931,918
            
            
            727,429
            
            
            604,114
            
            
            520,979
            
            
            969,488
            
            
            692,879
            
            
            549,143
            
            
            460,452
            
            
            399,500Netherlands
            
            
            173,403
            
            
            153,052
            
            
            137,430
            
            
            125,041
            
            
            114,966
            
            
            134,452
            
            
            117,534
            
            
            104,617
            
            
            94,423
            
            
            86,173Australia
            
            
            430,750
            
            
            361,600
            
            
            311,215
            
            
            273,423
            
            
            244,297
            
            
            194,917
            
            
            162,873
            
            
            139,513
            
            
            122,021
            
            
            108,577Total
            
            
            2,802,500
            
            
            2,081,943
            
            
            1,679,230
            
            
            1,420,132
            
            
            1,238,123
            
            
            2,161,241
            
            
            1,608,659
            
            
            1,296,429
            
            
            1,094,450
            
            
            952,131Total
                Probable(3)Canada
            
            
            380,209
            
            
            216,265
            
            
            139,163
            
            
            96,538
            
            
            70,187
            
            
            380,209
            
            
            216,265
            
            
            139,163
            
            
            96,538
            
            
            70,187France
            
            
            669,472
            
            
            369,944
            
            
            242,770
            
            
            173,984
            
            
            131,471
            
            
            470,122
            
            
            264,898
            
            
            175,942
            
            
            127,045
            
            
            96,451Netherlands
            
            
            113,698
            
            
            73,119
            
            
            50,842
            
            
            37,483
            
            
            28,860
            
            
            79,657
            
            
            51,681
            
            
            36,039
            
            
            26,549
            
            
            20,381Australia
            
            
            121,020
            
            
            79,272
            
            
            55,265
            
            
            40,794
            
            
            31,612
            
            
            54,314
            
            
            35,419
            
            
            24,566
            
            
            18,044
            
            
            13,922Total
            
            
            1,284,399
            
            
            738,600
            
            
            488,040
            
            
            348,800
            
            
            262,130
            
            
            984,302
            
            
            568,263
            
            
            375,710
            
            
            268,176
            
            
            200,941Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            1,242,593
            
            
            851,637
            
            
            642,319
            
            
            514,092
            
            
            428,068
            
            
            1,242,593
            
            
            851,637
            
            
            642,319
            
            
            514,092
            
            
            428,068France
            
            
            2,005,435
            
            
            1,301,862
            
            
            970,199
            
            
            778,099
            
            
            652,450
            
            
            1,408,272
            
            
            932,198
            
            
            703,130
            
            
            568,177
            
            
            478,659Netherlands
            
            
            287,100
            
            
            226,172
            
            
            188,272
            
            
            162,523
            
            
            143,826
            
            
            201,143
            
            
            159,860
            
            
            133,456
            
            
            115,113
            
            
            101,571Australia
            
            
            551,770
            
            
            440,872
            
            
            366,479
            
            
            314,218
            
            
            275,909
            
            
            247,635
            
            
            196,984
            
            
            162,903
            
            
            138,988
            
            
            121,507Total
            
            
            4,086,899
            
            
            2,820,543
            
            
            2,167,270
            
            
            1,768,932
            
            
            1,500,253
            
            
            3,099,643
            
            
            2,140,679
            
            
            1,641,808
            
            
            1,336,370
            
            
            1,129,805


***Total
      Future Net Revenue (Undiscounted) Based on Forecast Prices and
      Costs*** ***(9)***




**Future
                Net**
            
            
            
            
            
            **Future
                Net****Abandonment**
            
            
            **Revenue**
            
            
            
            
            
            **Revenue****Capital**
            
            
            **and**
            
            
            **Before**
            
            
            
            
            
            **After****Operating**
            
            
            **Development**
            
            
            **Reclamation**
            
            
            **Income**
            
            
            **Income**
            
            
            **Income****(M$)**
            
            
            **Revenue**
            
            
            **Royalties**
            
            
            **Costs**
            
            
            **Costs**
            
            
            **Costs**
            
            
            **Taxes**
            
            
            **Taxes**
            
            
            **Taxes**Total
                Proved(2)Canada
            
            
            1,775,773
            
            
            261,950
            
            
            527,994
            
            
            86,101
            
            
            37,343
            
            
            862,384
            
            
            -
            
            
            862,384France
            
            
            2,264,236
            
            
            218,695
            
            
            585,602
            
            
            69,399
            
            
            54,577
            
            
            1,335,963
            
            
            366,475
            
            
            969,488Netherlands
            
            
            441,955
            
            
            -
            
            
            228,984
            
            
            27,844
            
            
            11,724
            
            
            173,403
            
            
            38,951
            
            
            134,452Australia
            
            
            749,728
            
            
            -
            
            
            292,433
            
            
            9,322
            
            
            17,224
            
            
            430,750
            
            
            235,833
            
            
            194,917Total
            
            
            5,231,691
            
            
            480,644
            
            
            1,635,013
            
            
            192,666
            
            
            120,868
            
            
            2,802,550
            
            
            641,259
            
            
            2,161,241Total
                Proved
                Plus Probable(2)(3)Canada
            
            
            2,632,026
            
            
            405,628
            
            
            778,651
            
            
            157,114
            
            
            48,029
            
            
            1,242,593
            
            
            -
            
            
            1,242,593France
            
            
            3,373,336
            
            
            341,776
            
            
            811,965
            
            
            144,898
            
            
            69,262
            
            
            2,005,435
            
            
            597,163
            
            
            1,408,272Netherlands
            
            
            618,185
            
            
            -
            
            
            279,749
            
            
            38,289
            
            
            13,047
            
            
            287,100
            
            
            85,957
            
            
            201,143Australia
            
            
            1,010,562
            
            
            -
            
            
            426,966
            
            
            12,841
            
            
            18,986
            
            
            551,770
            
            
            304,135
            
            
            247,635Total
            
            
            7,634,109
            
            
            747,414
            
            
            2,297,330
            
            
            353,142
            
            
            149,324
            
            
            4,086,899
            
            
            987,255
            
            
            3,099,644








*2006
              Annual Information Form - Vermilion Energy Trust*
            15





***Future
      Net Revenue by Production Group Based on Forecast Prices and
      Costs*** ***(9)***




**(M$)**
            
            
            **Production
                Group**
            
            
            **Future
                Net Revenue**
              **Before
                Income Taxes**
              **(Discounted
                at 10% Per Year**
            **)**Total
                Proved(2)
            
            
            Light
                and medium crude oil
            
            
            1,213,658Associated
                gas and non-associated gas
            
            
            467,731Total
                Proved
                Plus Probable(2)(3)
            
            
            Light
                and medium crude oil
            
            
            1,536,184Associated
                gas and non-associated gas
            
            
            633,580




**Notes:**


(1) "Gross
          Reserves" are
          Vermilion's working interest (operating or non-operating) share before
          deducting
          of royalties and without including any royalty interests of Vermilion.
          "Net
          Reserves" are Vermilion's working interest (operating or non-operating)
          share
          after deduction of royalty obligations, plus Vermilion's royalty interests
          in
          reserves.
 (2) "Proved"
          reserves
          are those reserves that can be estimated with a high degree of certainty
          to be
          recoverable. It is likely that the actual remaining quantities recovered
          will
          exceed the estimated proved reserves.
 (3) "Probable"
          reserves
          are those additional reserves that are less certain to be recovered than
          proved
          reserves. It is equally likely that the actual remaining quantities recovered
          will be greater or less than the sum of the estimated proved plus probable
          reserves.
 (4) "Developed"
          reserves
          are those reserves that are expected to be recovered from existing wells
          and
          installed facilities or, if facilities have not been installed, that would
          involve a low expenditure (e.g. when compared to the cost of drilling a
          well) to
          put the reserves on production.
 (5) "Developed
          Producing" reserves are those reserves that are expected to be recovered
          from
          completion intervals open at the time of the estimate. These reserves may
          be
          currently producing or, if shut-in, they must have previously been on
          production, and the date of resumption of production must be known with
          reasonable certainty.
 (6) "Developed
          Non-Producing" reserves are those reserves that either have not been on
          production, or have previously been on production, but are shut in, and
          the date
          of resumption of production is unknown.
 (7) "Undeveloped"
          reserves are those reserves expected to be recovered from known accumulations
          where a significant expenditure (for example, when compared to the cost
          of
          drilling a well) is required to render them capable of production. They
          must
          fully meet the requirements of the reserves classification (proved, probable,
          possible) to which they are assigned.
 (8) The
          product prices
          used in the constant price and cost evaluations in the GLJ Report were
          as
          follows:


Oil:
            
            $
            67.58
            
            
            Cdn/Bbl
                Light, Sweet Crude at Edmonton
            
            
            Gas:
            
            $
            6.07
            
            
            Cdn/mmbtu
                AECO-C SpotPentanes
                Plus:
            
            $
            71.55
            
            
            Cdn/Bbl
                at Edmonton
            
            
            Propane:
            
            $
            43.25
            
            
            Cdn/Bbl
                at EdmontonButane:
            
            $
            54.06
            
            
            Cdn/Bbl
                at Edmonton
            
            
            Netherlands
                Gas:
            
            $
            7.84
            
            
            Cdn/McfWandoo
                Crude:
            
            $
            66.19
            
            
            Cdn/Bbl




(9)
            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 below. The Natural Gas Liquids 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.




**Natural
                Gas**
            
            
            **Natural
                Gas**
            
            
            **Inflation**
            
            
            **Exchange****Light
                and Medium Crude Oil**
            
            
            **Crude
                Oil**
            
            
            **Crude
                Oil**
            
            
            **Natural
                Gas**
            
            
            **Netherlands**
            
            
            **Liquids**
            
            
            **Rate**
            
            
            **Rate****Edmonton**
            
            
            **Cromer**
            
            
            **Brent
                Blend**
            
            
            **Australia**
            
            
            
            
            
            **Wellhead**
            
            
            **FOB****WTI
                Cushing**
            
            
            **Par
                Price**
            
            
            **Medium**
            
            
            **FOB**
            
            
            **Wandoo**
            
            
            **AECO**
            
            
            **Gas**
            
            
            **Field****Oklahoma**
            
            
            **40****o****API**
            
            
            **29.3****o****API**
            
            
            **North
                Sea**
            
            
            **Field**
            
            
            **Gas
                Price**
            
            
            **Price**
            
            
            **Gate**
            
            
            **Percent****Year**
            
            
            **($US/Bbl**
            **)**
            
            **($Cdn/Bbl**
            **)**
            
            **($Cdn/Bbl**
            **)**
            
            **($US/Bbl**
            **)**
            
            **($US/Bbl**
            **)**
            
            **($Cdn/mmbtu**
            **)**
            
            **($Cdn/Mcf**
            **)**
            
            **($Cdn/Bbl**
            **)**
            
            **Per
                Year**
            
            
            **($US/$Cdn**
            **)**Forecast2007
            
            
            62.00
            
            
            70.25
            
            
            61.25
            
            
            60.50
            
            
            57.75
            
            
            7.20
            
            
            8.33
            
            
            57.67
            
            
            2.0
            
            
            0.872008
            
            
            60.00
            
            
            68.00
            
            
            59.25
            
            
            58.50
            
            
            55.75
            
            
            7.45
            
            
            7.86
            
            
            54.33
            
            
            2.0
            
            
            0.872009
            
            
            58.00
            
            
            65.75
            
            
            57.25
            
            
            56.50
            
            
            53.75
            
            
            7.75
            
            
            7.60
            
            
            52.58
            
            
            2.0
            
            
            0.872010
            
            
            57.00
            
            
            64.50
            
            
            56.00
            
            
            55.50
            
            
            52.75
            
            
            7.80
            
            
            7.40
            
            
            51.58
            
            
            2.0
            
            
            0.872011
            
            
            57.00
            
            
            64.50
            
            
            56.00
            
            
            55.50
            
            
            52.75
            
            
            7.85
            
            
            7.34
            
            
            51.58
            
            
            2.0
            
            
            0.87




**Reconciliations
      of Changes in Reserves and Future Net Revenue**




The
      following table
      sets forth a reconciliation of the changes in Vermilion's company net (after
      royalties paid) light and medium crude
      oil,
      associated and non-associated gas (combined) reserves as at December 31, 2006
      against such reserves as at December
      31, 2005
      based on the forecast price and cost assumptions set forth in note 9 under
      the
      heading "Statement of Reserves
      Data and
      Other Information - Reserves and Future Net Revenue".







*2006
              Annual Information Form - Vermilion Energy Trust*
            16





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




**Light
              and Medium Oil**
            
            
            **Associated
              and Non-Associated Gas**
            
            
            **Natural
              Gas Liquids****Net
              Proved**
            
            
            
            
            
            **Net
              Proved**
            
            
            
            
            
            **Net
              Proved****Net**
            
            
            **Net**
            
            
            **Plus**
            
            
            **Net**
            
            
            **Net**
            
            
            **Plus**
            
            
            **Net**
            
            
            **Net**
            
            
            **Plus****Proved**
            
            
            **Probable**
            
            
            **Probable**
            
            
            **Proved**
            
            
            **Probable**
            
            
            **Probable**
            
            
            **Proved**
            
            
            **Probable**
            
            
            **Probable****(Mbbl)**
            
            
            **(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mmcf**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mbbl**
            **)**
            
            **(Mbbl**
            **)****CANADA**At
                December
                31, 2005
            
            
            7,738
            
            
            1,747
            
            
            9,485
            
            
            91,244
            
            
            50,786
            
            
            142,029
            
            
            2,293
            
            
            1,294
            
            
            3,588Extensions
            
            
            -
            
            
            -
            
            
            -
            
            
            7,378
            
            
            4,495
            
            
            11,873
            
            
            3
            
            
            12
            
            
            15Infill
                Drilling
            
            
            -
            
            
            -
            
            
            -
            
            
            1,417
            
            
            906
            
            
            2,323
            
            
            50
            
            
            34
            
            
            84Improved
                Recovery
            
            
            -
            
            
            -
            
            
            -
            
            
            2,169
            
            
            887
            
            
            3,056
            
            
            36
            
            
            17
            
            
            53Technical
                Revisions
            
            
            257
            
            
            24
            
            
            281
            
            
            3,402
            
            
            (5,893
            )
            
            (2,491
            )
            
            5
            
            
            (247
            )
            
            (241
            )Discoveries
            
            
            -
            
            
            -
            
            
            -
            
            
            590
            
            
            193
            
            
            783
            
            
            -
            
            
            -
            
            
            -Acquisitions
            
            
            218
            
            
            30
            
            
            248
            
            
            2,244
            
            
            1,691
            
            
            3,935
            
            
            9
            
            
            1
            
            
            10Dispositions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (709
            )
            
            (709
            )
            
            -
            
            
            (28
            )
            
            (28
            )Production
            
            
            (878
            )
            
            -
            
            
            (878
            )
            
            (11,191
            )
            
            -
            
            
            (11,191
            )
            
            (341
            )
            
            -
            
            
            (341
            )At
                December
                31, 2006
            
            
            7,335
            
            
            1,801
            
            
            9,136
            
            
            97,252
            
            
            52,357
            
            
            149,610
            
            
            2,055
            
            
            1,084
            
            
            3,139**FRANCE**At
                December
                31, 2005
            
            
            21,532
            
            
            9,883
            
            
            31,414
            
            
            2,138
            
            
            423
            
            
            2,561
            
            
            -
            
            
            -
            
            
            -Extensions
            
            
            107
            
            
            (107
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Infill
                Drilling
            
            
            59
            
            
            40
            
            
            99
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Improved
                Recovery
            
            
            1,746
            
            
            (135
            )
            
            1,611
            
            
            72
            
            
            15
            
            
            87
            
            
            -
            
            
            -
            
            
            -Technical
                Revisions
            
            
            402
            
            
            (195
            )
            
            206
            
            
            444
            
            
            63
            
            
            508
            
            
            -
            
            
            -
            
            
            -Discoveries
            
            
            211
            
            
            -
            
            
            211
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Acquisitions
            
            
            9,413
            
            
            4,200
            
            
            13,613
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dispositions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
            
            
            (2,641
            )
            
            
            
            
            (2,641
            )
            
            (379
            )
            
            -
            
            
            (379
            )
            
            -
            
            
            -
            
            
            -At
                December
                31, 2006
            
            
            30,828
            
            
            13,685
            
            
            44,512
            
            
            2,275
            
            
            501
            
            
            2,776
            
            
            -
            
            
            -
            
            
            -**NETHERLANDS**At
                December
                31, 2005
            
            
            -
            
            
            -
            
            
            -
            
            
            65,180
            
            
            18,782
            
            
            83,962
            
            
            99
            
            
            30
            
            
            129Extensions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,522
            
            
            1,522
            
            
            -
            
            
            3
            
            
            3Improved
                Recovery
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Technical
                Revisions
            
            
            -
            
            
            -
            
            
            -
            
            
            77
            
            
            816
            
            
            893
            
            
            (1
            )
            
            1
            
            
            1Discoveries
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Acquisitions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dispositions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
            
            
            -
            
            
            -
            
            
            -
            
            
            (9,442
            )
            
            -
            
            
            (9,442
            )
            
            (15
            )
            
            -
            
            
            (15
            )At
                December
                31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            55,815
            
            
            21,119
            
            
            76,934
            
            
            84
            
            
            34
            
            
            118**AUSTRALIA**At
                December
                31, 2005
            
            
            12,405
            
            
            3,792
            
            
            16,197
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Extensions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Improved
                Recovery
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Technical
                Revisions
            
            
            614
            
            
            (254
            )
            
            360
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Discoveries
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Acquisitions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dispositions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
            
            
            (1,450
            )
            
            -
            
            
            (1,450
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -At
                December
                31, 2006
            
            
            11,569
            
            
            3,538
            
            
            15,107
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -**TOTAL
                VERMILION**At
                December
                31, 2005
            
            
            41,674
            
            
            15,422
            
            
            57,096
            
            
            158,562
            
            
            69,991
            
            
            228,553
            
            
            2,393
            
            
            1,324
            
            
            3,717Extensions
            
            
            107
            
            
            (107
            )
            
            -
            
            
            7,378
            
            
            6,017
            
            
            13,395
            
            
            3
            
            
            15
            
            
            18Infill
                Drilling
            
            
            59
            
            
            40
            
            
            99
            
            
            1,417
            
            
            906
            
            
            2,323
            
            
            50
            
            
            34
            
            
            84Improved
                Recovery
            
            
            1,746
            
            
            (135
            )
            
            1,611
            
            
            2,241
            
            
            902
            
            
            3,143
            
            
            36
            
            
            17
            
            
            53Technical
                Revisions
            
            
            1,272
            
            
            (425
            )
            
            847
            
            
            3,923
            
            
            (5,014
            )
            
            (1,091
            )
            
            5
            
            
            (245
            )
            
            (241
            )Discoveries
            
            
            211
            
            
            -
            
            
            211
            
            
            590
            
            
            193
            
            
            783
            
            
            -
            
            
            -
            
            
            -Acquisitions
            
            
            9,631
            
            
            4,229
            
            
            13,860
            
            
            2,244
            
            
            1,691
            
            
            3,935
            
            
            9
            
            
            1
            
            
            10Dispositions
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (709
            )
            
            (709
            )
            
            -
            
            
            (28
            )
            
            (28
            )Production
            
            
            (4,968
            )
            
            -
            
            
            (4,968
            )
            
            (21,013
            )
            
            -
            
            
            (21,013
            )
            
            (355
            )
            
            -
            
            
            (355
            )At
                December
                31, 2006
            
            
            49,731
            
            
            19,024
            
            
            68,755
            
            
            155,342
            
            
            73,978
            
            
            229,319
            
            
            2,140
            
            
            1,118
            
            
            3,257




The
      following table
      sets forth changes between future net revenue estimates attributable to net
      proved reserves as at December 31, 2006 against such reserves as at December
      31,
      2005 based on the constant price and cost assumptions set forth in note 8 under
      the heading "Statement of Reserves Data and Other Information - Reserves and
      Future Net Revenue".


*2006
                Annual Information Form - Vermilion Energy Trust*
              17
 
  ***Reconciliation
      of Changes in Net Present Values of Future Net Revenue Discounted at 10% -
      Based
      on Constant Prices*** ***and
      Costs***


**After
                Tax 2006****(M$)****Canada**Estimated
                Future Net Revenue at December 31, 2005
            
            
            660,091Sales
                and
                Transfers of Oil and Gas Produced, Net of Production Costs and
                Royalties
            
            
            (123,312
            )Net
                Change in
                Prices, Production Costs and Royalties Related to Future
                Production
            
            
            (203,545
            )Development
                Costs during the Period
            
            
            74,500Changes
                in
                Estimated Future Development Costs
            
            
            (79,627
            )Extensions
                and Improved Recovery
            
            
            15,641Discoveries
            
            
            1,158Acquisitions
                of Reserves
            
            
            4,351Dispositions
                of Reserves
            
            
            -Accretion
                of
                Discount
            
            
            66,009Net
                Change in
                Income Taxes
            
            
            -Technical
                Reserves Revisions
            
            
            13,560All
                Other
                Changes
            
            
            (11,522
            )Estimated
                Future Net Revenue at December 31, 2006
            
            
            417,304**France**Estimated
                Future Net Revenue at December 31, 2005
            
            
            383,538Sales
                and
                Transfers of Oil and Gas Produced, Net of Production Costs and
                Royalties
            
            
            (185,386
            )Net
                Change in
                Prices, Production Costs and Royalties Related to Future
                Production
            
            
            (24,288
            )Development
                Costs during the Period
            
            
            38,000Changes
                in
                Estimated Future Development Costs
            
            
            (27,784
            )Extensions
                and Improved Recovery
            
            
            2,200Discoveries
            
            
            4,708Acquisitions
                of Reserves
            
            
            319,319Dispositions
                of Reserves
            
            
            -Accretion
                of
                Discount
            
            
            56,409Net
                Change in
                Income Taxes
            
            
            (23,891
            )Technical
                Reserves Revisions
            
            
            7,414All
                Other
                Changes
            
            
            20,651Estimated
                Future Net Revenue at December 31, 2006
            
            
            570,890**Netherlands**Estimated
                Future Net Revenue at December 31, 2005
            
            
            123,301Sales
                and
                Transfers of Oil and Gas Produced, Net of Production Costs and
                Royalties
            
            
            (50,555
            )Net
                Change in
                Prices, Production Costs and Royalties Related to Future
                Production
            
            
            (24,004
            )Development
                Costs during the Period
            
            
            2,300Changes
                in
                Estimated Future Development Costs
            
            
            686Extensions
                and Improved Recovery
            
            
            -Discoveries
            
            
            -Acquisitions
                of Reserves
            
            
            -Dispositions
                of Reserves
            
            
            -Accretion
                of
                Discount
            
            
            18,495Net
                Change in
                Income Taxes
            
            
            7,752Technical
                Reserves Revisions
            
            
            189All
                Other
                Changes
            
            
            34,697Estimated
                Future Net Revenue at December 31, 2006
            
            
            112,861**Australia**Estimated
                Future Net Revenue at December 31, 2005
            
            
            216,508Sales
                and
                Transfers of Oil and Gas Produced, Net of Production Costs and
                Royalties
            
            
            (58,632
            )Net
                Change in
                Prices, Production Costs and Royalties Related to Future
                Production
            
            
            13,867Development
                Costs during the Period
            
            
            7,800Changes
                in
                Estimated Future Development Costs
            
            
            (7,069
            )Extensions
                and Improved Recovery
            
            
            -Discoveries
            
            
            -Acquisitions
                of Reserves
            
            
            -Dispositions
                of Reserves
            
            
            -Accretion
                of
                Discount
            
            
            36,069Net
                Change in
                Income Taxes
            
            
            (24,065
            )Technical
                Reserves Revisions
            
            
            1,804All
                Other
                Changes
            
            
            5,733Estimated
                Future Net Revenue at December 31, 2006
            
            
            192,016








*2006
              Annual Information Form - Vermilion Energy Trust*
            18





**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 two 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.




**Future
      Development Costs**




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







**Total
                Proved**
            
            
            **Total
                Proved**
            
            
            **Total
                Proved Plus Probable****Estimated
                Using**
            
            
            **Estimated
                Using**
            
            
            **Estimated
                Using****(M$)**
            
            
            **Constant
                Prices and Costs**
            
            
            **Forecast
                Prices and Costs**
            
            
            **Forecast
                Prices and Costs****Canada**2007
            
            
            28,088
            
            
            28,088
            
            
            62,0112008
            
            
            34,302
            
            
            34,988
            
            
            62,3282009
            
            
            15,162
            
            
            15,774
            
            
            24,8152010
            
            
            447
            
            
            475
            
            
            4752011
            
            
            443
            
            
            479
            
            
            762Remainder
            
            
            5,057
            
            
            6,296
            
            
            6,724Total
                for all
                years undiscounted
            
            
            83,499
            
            
            86,101
            
            
            157,114Total
                for all
                years discounted at 10% per year
            
            
            71,030
            
            
            72,515
            
            
            135,993**France**2007
            
            
            20,154
            
            
            20,154
            
            
            34,5252008
            
            
            14,124
            
            
            14,406
            
            
            56,6952009
            
            
            3,757
            
            
            3,909
            
            
            18,7102010
            
            
            1,760
            
            
            1,868
            
            
            1,8682011
            
            
            2,625
            
            
            2,841
            
            
            2,868Remainder
            
            
            19,573
            
            
            26,222
            
            
            30,232Total
                for all
                years undiscounted
            
            
            61,992
            
            
            69,399
            
            
            144,898Total
                for all
                years discounted at 10% per year
            
            
            43,547
            
            
            45,486
            
            
            107,662**Netherlands**2007
            
            
            4,118
            
            
            4,118
            
            
            14,5632008
            
            
            -
            
            
            -
            
            
            -2009
            
            
            -
            
            
            -
            
            
            -2010
            
            
            -
            
            
            -
            
            
            -2011
            
            
            7,086
            
            
            7,670
            
            
            7,670Remainder
            
            
            13,076
            
            
            16,056
            
            
            16,056Total
                for all
                years undiscounted
            
            
            24,279
            
            
            27,844
            
            
            38,289Total
                for all
                years discounted at 10% per year
            
            
            13,261
            
            
            14,684
            
            
            24,644**Australia**2007
            
            
            7,832
            
            
            7,832
            
            
            7,8322008
            
            
            682
            
            
            695
            
            
            4,2142009
            
            
            764
            
            
            795
            
            
            7952010
            
            
            -
            
            
            -
            
            
            -2011
            
            
            -
            
            
            -
            
            
            -Remainder
            
            
            -
            
            
            -
            
            
            -Total
                for all
                years undiscounted
            
            
            9,277
            
            
            9,322
            
            
            12,841Total
                for all
                years discounted at 10% per year
            
            
            8,660
            
            
            8,696
            
            
            11,746




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


*2006
                Annual Information Form - Vermilion Energy Trust*
              19
 
  **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, 2006:




**Oil**
            
            **Natu****ral
                Gas****Gross(1****)**
            
            
            **Net(2)**
            
            
            **Gross(1)**
            
            
            **Net(2)****Wells**
            
            
            **Wells**
            
            
            **Wells**
            
            
            **Wells****Canada**Producing
            
            
            305
            
            
            206
            
            
            405
            
            
            285Non-producing
            
            
            57
            
            
            39
            
            
            166
            
            
            117**France**Producing
            
            
            204
            
            
            180
            
            
            -
            
            
            -Non-producing
            
            
            161
            
            
            130
            
            
            -
            
            
            -**Netherlands**Producing
            
            
            -
            
            
            -
            
            
            55
            
            
            44Non-producing
            
            
            -
            
            
            -
            
            
            10
            
            
            6**Australia**Producing
            
            
            16
            
            
            10
            
            
            -
            
            
            -Non-producing
            
            
            -
            
            
            -
            
            
            -
            
            
            -**Total**Producing
            
            
            525
            
            
            398
            
            
            460
            
            
            329Non-producing
            
            
            218
            
            
            144
            
            
            176
            
            
            123


**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 indirectly,
        therein.




**Costs
      Incurred**




The
      following table
      summarizes the capital expenditures made by Vermilion on oil and natural gas
      properties for the year ended December
      31,
      2006.







**(M$)**
            
            
            **Corporate
                Acquisition**
            
            
            **Property
              Acquisition Costs**
            
            
            **Exploration
                Costs**
            
            
            **Development
                Costs****Proved**
            
            
            **Unproved****Properties**
            
            
            **Properties**Canada
            
            
            -
            
            
            26,435
            
            
            -
            
            
            24
            
            
            84,758France
            
            
            169,445
            
            
            -
            
            
            -
            
            
            1,927
            
            
            37,992Netherlands
            
            
            -
            
            
            -
            
            
            -
            
            
            513
            
            
            3,160Australia
            
            
            -
            
            
            -
            
            
            -
            
            
            90
            
            
            8,475Total
            
            
            169,445
            
            
            26,435
            
            
            -
            
            
            2,554
            
            
            134,385




**Exploration
      and Development Activities**




Vermilion
      did not
      drill any exploratory wells in 2006. The following table sets forth the number
      of development wells which Vermilion
      completed
      during its 2006 financial year:




****Development**Wells****Gross(1)**
            
            
            **Net(2)****Canada**Oil
                Wells
            
            
            -
            
            
            -Gas
                Wells
            
            
            44
            
            
            28.1Standing
            
            
            34
            
            
            24.3Dry
                Holes
            
            
            3
            
            
            1.7Total
                Completed Wells
            
            
            81
            
            
            54.1**France**Oil
                Wells
            
            
            5
            
            
            4.2Gas
                Wells
            
            
            -
            
            
            -Standing
            
            
            -
            
            
            -Dry
                Holes
            
            
            -
            
            
            -Total
                Completed Wells
            
            
            5
            
            
            4.2








*2006
              Annual Information Form - Vermilion Energy Trust*
            20





****Development**Wells****Gross(1)**
            
            
            **Net(2)****Netherlands**Oil
                Wells
            
            
            -
            
            
            -Gas
                Wells
            
            
            -
            
            
            -Standing
                Dry
                Holes
            
            
            --
            
            
            --Total
                Completed Wells
            
            
            -
            
            
            -**Australia**Oil
                Wells
            
            
            -
            
            
            -Gas
                Wells
            
            
            -
            
            
            -Standing
            
            
            -
            
            
            -Dry
                Holes
            
            
            -
            
            
            -Total
                Completed Wells
            
            
            -
            
            
            -**Total
                Vermilion**Oil
                Wells
            
            
            5
            
            
            4.2Gas
                Wells
            
            
            44
            
            
            28.1Standing
            
            
            34
            
            
            24.3Dry
                Holes
            
            
            3
            
            
            1.7Total
                Completed Wells
            
            
            86
            
            
            58.3


**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
      has
      initially budgeted $155 million for its 2007 capital program in Canada, France,
      the Netherlands and Australia. The funds will be used to drill wells to develop
      reserves in its Canadian key areas of Drayton Valley, Slave Lake, Central
      Alberta, and in
      France, the
      Netherlands and Australia. A portion of the capital will be allocated to
      workovers, production optimization, and maintenance
      capital
      in each country.




**Properties
      with No Attributed Reserves**




The
      following table
      sets out Vermilion's undeveloped land as at December 31, 2006:




**Undev****eloped
                Land****Country**
            **Gross
                Acres****(1)**
            **Net
                Acres****(2)**Canada
            301,149
            197,627France
            1,135,683
            274,530Netherlands
            208,808
            121,872Australia
            -
            -Total
            1,659,640
            608,029


**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 35,000 net acres in
      Canada and 85,513 net acres in France to expire within one year. In the
      Netherlands and Australia, no rights expire within one year.




**Abandonment
      and Reclamation Costs**




Vermilion
      has
      estimated its abandonment costs by determining amounts for facility
      decommissioning and reclamation costs (including
      salvage)
      by area in Canada, France, the Netherlands and Australia. 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 764 in Canada, 375 in France, 56 in the Netherlands
      and
      10 in Australia.




*2006
              Annual Information Form - Vermilion Energy Trust*
            21





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







**Country**
            
            
            **Undiscounted
                (M$**
            **)**
            
            **Discounted
                10% (M$**
            **)**Canada
            
            
            37,343
            
            
            11,168France
            
            
            54,577
            
            
            12,063Netherlands
            
            
            11,724
            
            
            6,234Australia
            
            
            17,224
            
            
            4,378Total
                Proved
            
            
            120,868
            
            
            33,843




In
      estimating the future net revenue, it is important to note that future costs
      associated with abandonment of surface facilities, well
      site
      reclamation, pipeline abandonments and reclamation costs are estimated by
      management of the Trust as:




**Country**
            
            
            **Facilities
                Undiscounted (M$**
            **)**
            
            **Discounted
                10% (M$**
            **)**Canada
            
            
            9,117
            
            
            2,735France
            
            
            111,963
            
            
            13,721Netherlands
            
            
            83,750
            
            
            25,722Australia
            
            
            37,841
            
            
            8,190Total
                Proved
            
            
            253,701
            
            
            49,230




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$**
            **)**Canada
            
            
            3,015
            
            
            2,643France
            
            
            1,982
            
            
            1,790Netherlands
            
            
            2,292
            
            
            1,924Australia
            
            
            -
            
            
            -Total
                Proved
            
            
            7,289
            
            
            6,358




Vermilion
      has set
      aside a reclamation fund to help cover these future costs which amounted to
      $56.4 million as at December 31, 2006.
      Vermilion
      anticipates making quarterly contributions to that fund based on the estimated
      level necessary to fund future obligations. This estimate is reviewed regularly
      and adjusted as determined necessary. In addition to quarterly contributions, Vermilion
      contributes one-time payments to the fund as its cash resources permit and
      as
      are considered appropriate.




**Tax
      Horizon**




As
      a
      result of the Trust's tax efficient structure, annual taxable income in Canada
      is transferred from its operating entities to the Trust
      and from the
      Trust to the Unitholders. This is primarily accomplished through the deduction
      of the royalties on underlying oil
      and gas
      properties held by its operating subsidiaries. Therefore, it can be expected
      that no income tax liability would be incurred
      by the
      Trust in Canada for as long as the organization maintains its current tax
      structure. In France, the Trust is currently
      taxable,
      subject to a 35% corporate tax rate after eligible deductions. In the
      Netherlands, the Trust is currently taxable, subject
      to an
      approximate 41% corporate tax rate after eligible deductions. In Australia,
      the
      Trust is currently taxable, subject to an
      approximate 30%
      corporate tax rate after eligible deductions. Please see page 47 “Changes in
      Income Tax Laws” for discussion
      of
      possible changes to the taxation of the Trust.




**Production
      Estimates**




The
      following table
      sets forth the volume of production estimated for the first year as reflected
      in
      the estimates of future net revenue:




**Light
                and Medium Oil**
            
            
            **Natural
                Gas**
            
            
            **Natural
                Gas Liquids**
            
            
            **BOE****(Mbbls)**
            
            
            **(Mmcf**
            **)**
            
            **(Mbbls**
            **)**
            
            **(MBOE**
            **)**Canada
            
            
            889
            
            
            15,444
            
            
            442
            
            
            3,905France
            
            
            3,610
            
            
            375
            
            
            -
            
            
            3,673Netherlands
            
            
            -
            
            
            8,776
            
            
            13
            
            
            1,476Australia
            
            
            1,657
            
            
            -
            
            
            -
            
            
            1,657Total
                Proved
            
            
            6,156
            
            
            24,595
            
            
            455
            
            
            10,711




**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:





*2006
              Annual Information Form - Vermilion Energy Trust*
            22





**Three
                Months Ended**
            
            
            **Three
                Months Ended**
            
            
            **Three
                Months Ended**
            
            
            **Three
                Months Ended****March
                31, 2006**
            
            
            **June
                30, 2006**
            
            
            **September
                30, 2006**
            
            
            **December
                31, 2006****Canada**Average
                Daily
                ProductionLight
                and
                Medium Oil (Bbl/d)
            
            
            2,934
            
            
            2,802
            
            
            2,888
            
            
            2,629Natural
                Gas
                (Mmcf/d)
            
            
            40.56
            
            
            40.74
            
            
            40.69
            
            
            42.0Natural
                Gas
                Liquids (Bbl/d)
            
            
            1,225
            
            
            1,291
            
            
            1,154
            
            
            1,123Average
                Net
                Prices ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            68.09
            
            
            78.82
            
            
            80.36
            
            
            63.11Natural
                Gas
                ($/Mcf)
            
            
            8.74
            
            
            6.67
            
            
            6.10
            
            
            7.23Natural
                Gas
                Liquids ($/Bbl)
            
            
            58.55
            
            
            65.94
            
            
            67.22
            
            
            54.71RoyaltiesLight
                and
                Medium Oil ($/Bbl)
            
            
            9.57
            
            
            11.49
            
            
            11.33
            
            
            9.19Natural
                Gas
                ($/Mcf)
            
            
            1.98
            
            
            1.02
            
            
            1.05
            
            
            1.60Natural
                Gas
                Liquids ($/Bbl)
            
            
            18.39
            
            
            20.25
            
            
            22.76
            
            
            17.98TransportationLight
                and
                Medium Oil ($/Bbl)
            
            
            0.10
            
            
            0.26
            
            
            0.56
            
            
            0.21Natural
                Gas
                ($/Mcf)
            
            
            0.21
            
            
            0.14
            
            
            0.17
            
            
            0.22Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
                CostsLight
                and
                Medium Oil ($/Bbl)
            
            
            12.99
            
            
            10.50
            
            
            12.64
            
            
            16.74Natural
                Gas
                ($/Mcf)
            
            
            1.15
            
            
            1.55
            
            
            1.31
            
            
            1.68Natural
                Gas
                Liquids ($/Bbl)
            
            
            8.70
            
            
            6.39
            
            
            8.21
            
            
            7.38Netback
                ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            45.43
            
            
            56.57
            
            
            55.83
            
            
            36.97Natural
                Gas
                ($/Mcf)
            
            
            5.40
            
            
            3.96
            
            
            3.57
            
            
            3.73Natural
                Gas
                Liquids ($/Bbl)
            
            
            31.46
            
            
            39.30
            
            
            36.25
            
            
            29.35**France**Average
                Daily
                ProductionLight
                and
                Medium Oil (Bbl/d)
            
            
            5,580
            
            
            5,780
            
            
            9,254
            
            
            9,629Natural
                Gas
                (Mmcf/d)
            
            
            1.45
            
            
            1.36
            
            
            1.30
            
            
            1.27Natural
                Gas
                Liquids (Bbl/d)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Average
                Net
                Prices ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            75.09
            
            
            79.44
            
            
            71.77
            
            
            63.27Natural
                Gas
                ($/Mcf)
            
            
            7.65
            
            
            7.64
            
            
            8.05
            
            
            7.81Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -RoyaltiesLight
                and
                Medium Oil ($/Bbl)
            
            
            5.57
            
            
            5.74
            
            
            4.91
            
            
            6.85Natural
                Gas
                ($/Mcf)
            
            
            0.25
            
            
            0.29
            
            
            0.25
            
            
            0.26Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -TransportationLight
                and
                Medium Oil ($/Bbl)
            
            
            3.33
            
            
            3.62
            
            
            2.34
            
            
            2.13Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
                CostsLight
                and
                Medium Oil ($/Bbl)
            
            
            6.34
            
            
            5.35
            
            
            7.59
            
            
            7.98Natural
                Gas
                ($/Mcf)
            
            
            2.91
            
            
            3.07
            
            
            3.33
            
            
            2.13Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Netback
                ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            59.85
            
            
            64.73
            
            
            56.93
            
            
            46.31Natural
                Gas
                ($/Mcf)
            
            
            4.49
            
            
            4.28
            
            
            4.47
            
            
            5.42Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -**Netherlands**Average
                Daily
                ProductionLight
                and
                Medium Oil (Bbl/d)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                (Mmcf/d)
            
            
            35.14
            
            
            27.80
            
            
            25.06
            
            
            29.99Natural
                Gas
                Liquids (Bbl/d)
            
            
            13
            
            
            12
            
            
            7
            
            
            93Average
                Net
                Prices ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                ($/Mcf)
            
            
            8.05
            
            
            8.54
            
            
            8.81
            
            
            8.88Natural
                Gas
                Liquids ($/Bbl)
            
            
            64.33
            
            
            71.40
            
            
            74.90
            
            
            62.16RoyaltiesLight
                and
                Medium Oil ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
                CostsLight
                and
                Medium Oil ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                ($/Mcf)
            
            
            1.57
            
            
            2.02
            
            
            2.27
            
            
            1.44Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Netback
                ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                ($/Mcf)
            
            
            6.48
            
            
            6.52
            
            
            6.54
            
            
            7.44Natural
                Gas
                Liquids ($/Bbl)
            
            
            64.33
            
            
            71.40
            
            
            74.90
            
            
            62.16








*2006
              Annual Information Form - Vermilion Energy Trust*
            23





**Three
                Months Ended**
            
            
            **Three
                Months Ended**
            
            
            **Three
                Months Ended**
            
            
            **Three
                Months Ended****March
                31, 2006**
            
            
            **June
                30, 2006**
            
            
            **September
                30, 2006**
            
            
            **December
                31, 2006****Australia**Average
                Daily
                ProductionLight
                and
                Medium Oil (Bbl/d)
            
            
            3,630
            
            
            3,917
            
            
            3,933
            
            
            3,775Natural
                Gas
                (Mmcf/d)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids (Bbl/d)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Average
                Net
                Prices ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            81.48
            
            
            85.58
            
            
            91.16
            
            
            73.16Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -RoyaltiesLight
                and
                Medium Oil ($/Bbl)
            
            
            27.69
            
            
            27.26
            
            
            22.39
            
            
            24.85Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -TransportationLight
                and
                Medium Oil ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Production
                CostsLight
                and
                Medium Oil ($/Bbl)
            
            
            9.99
            
            
            11.00
            
            
            13.78
            
            
            17.09Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Netback
                ReceivedLight
                and
                Medium Oil ($/Bbl)
            
            
            43.80
            
            
            47.32
            
            
            54.99
            
            
            31.22Natural
                Gas
                ($/Mcf)
            
            
            -
            
            
            -
            
            
            -
            
            
            -Natural
                Gas
                Liquids ($/Bbl)
            
            
            -
            
            
            -
            
            
            -
            
            
            -




**Marketing**




Vermilion
      is party
      to certain derivative financial instruments, such as crude oil, natural gas
      and
      power contracts. Vermilion has entered
      into these
      contracts for economic hedging purposes only in order to protect its cash flow
      on future sales from the potential
      adverse
      impact of fluctuations in oil, gas and power prices. The contracts reduce the
      fluctuations in sales revenues and power
      costs by
      establishing fixed prices or a trading range on a portion of its oil and gas
      sales and power costs. All of the economic
      hedges
      below are arranged with counter parties representing major financial (banking)
      institutions with AA to AAA credit
      ratings
      thereby reducing counter party credit risk exposure.




Contracts
      outstanding in respect of economic hedging transactions are as
      follows:




**Risk
                Management: Oil**
            
            
            **Funded
                Cost**
            
            
            **bbls/d**
            
            **$**
            **US/bbl**Collar
                -
                WTI2007
            
            $
            US1.00/bbl
            
            
            500
            
            $
            60.00
                - $77.30Q1
                2007
            
            
            costless
            
            
            250
            
            $
            58.00
                - $83.85Q1
                2007
            
            $
            US0.11/bbl
            
            
            250
            
            $
            65.00
                - $90.00Q1
                2007
            
            $
            US0.06/bbl
            
            
            500
            
            $
            70.00
                - $90.00Q2
                2007
            
            $
            US0.50/bbl
            
            
            500
            
            $
            61.70
                - $90.00Put2007
            
            $
            US1.27/bbl
            
            
            250
            
            $
            57.05Collar
                -
                BRENTQ3
                2007
            
            $
            US0.88/bbl
            
            
            500
            
            $
            60.00
                - $90.00Q4
                2007
            
            $
            US0.70/bbl
            
            
            500
            
            $
            60.00
                - $89.00Call
                Spread -
                BRENT2009
                -
                2011
            
            $
            US5.73/bbl
            
            
            700
            
            $
            65.00
                - $85.00**Risk
                Management: Natural Gas**
            
            
            **Funded
                Cost**
            
            
            **GJ/d**
            
            
            **C$/GJ**CollarQ2
                2007
            
            $
            0.35/GJ
            
            
            2,500
            
            $
            6.50
                - $7.85Q2
                2007
            
            $
            0.25/GJ
            
            
            2,500
            
            $
            6.25
                - $7.96April
                -
                October 2007
            
            $
            0.02/GJ
            
            
            2,500
            
            $
            6.50
                - $9.00PutQ1
                2007
            
            $
            0.34/GJ
            
            
            4,000
            
            $
            6.37Q1
                2007
            
            $
            0.34/GJ
            
            
            3,000
            
            $
            6.60Q1
                2007
            
            $
            0.34/GJ
            
            
            3,000
            
            $
            6.44








*2006
              Annual Information Form - Vermilion Energy Trust*
            24





**ADDITIONAL
      INFORMATION RESPECTING VERMILION ENERGY TRUST**




**Trust
      Units**




An
      unlimited number
      of Trust Units may be created and issued pursuant to the Trust Indenture. Each
      Trust Unit shall entitle the holder
      thereof to
      one vote at any meeting of the holders of Trust Units and represents an equal
      fractional undivided beneficial interest in any distribution from the Trust
      (whether of net income, net realized capital gains or other amounts) and in
      any
      net assets of the Trust in the event of termination or winding-up of the Trust.
      All Trust Units outstanding from time to time shall be entitled to equal shares
      of any distributions by the Trust, and in the event of termination or winding-up
      of the Trust, in any net assets
      of the
      Trust. All Trust Units shall rank among themselves equally and rateably without
      discrimination, preference or priority.
      Each
      Trust Unit is transferable, subject to compliance with applicable Canadian
      securities laws, is not subject to any conversion
      or
      pre-emptive rights and entitles the holder thereof to require the Trust to
      redeem any or all of the Trust Units held by such
      holder (see
      "Redemption Right") and to one vote at all meetings of Unitholders for each
      Trust Unit held.




The
      Trust Units do
      not represent a traditional investment and should not be viewed by investors
      as
      "shares" in either Vermilion or the
      Trust. As
      holders of Trust Units in the Trust, the Unitholders will not have the statutory
      rights normally associated with ownership
      of shares
      of a corporation including, for example, the right to bring "oppression" or
      "derivative" actions. The price per Trust
      Unit will be
      a function of anticipated distributable income from Vermilion and the ability
      of
      Vermilion to effect long term growth
      in the value
      of the Trust. The market price of the Trust Units will be sensitive to a variety
      of market conditions including, but not limited to, interest rates, commodity
      prices and the ability of the Trust to acquire additional assets. Changes in
      market conditions
      may
      adversely affect the trading price of the Trust Units.




**Special
      Voting Rights**




In
      order to allow
      the Trust flexibility in pursuing corporate acquisitions, the Trust Indenture
      allows for the creation of Special Voting
      Rights which
      will enable the Trust to provide voting rights to holders of Exchangeable Shares
      and, in the future, to holders of
      other
      exchangeable shares that may be issued by Vermilion or other subsidiaries of
      the
      Trust in connection with other exchangeable
      share
      transactions.




An
      unlimited number
      of Special Voting Rights may be created and issued pursuant to the Trust
      Indenture. Holders of Special Voting Rights shall not be entitled to any
      distributions of any nature whatsoever from the Trust and shall be entitled
      to
      attend at meetings
      of
      Unitholders and to such number of votes at meetings of Unitholders as may be
      prescribed by the board of directors of
      Vermilion in the
      resolution authorizing the issuance of any Special Voting Rights. Except for
      the
      right to attend and vote at meetings
      of the
      Unitholders, the Special Voting Rights shall not confer upon the holders thereof
      any other rights.




Under
      the terms of
      the Voting and Exchange Trust Agreement, the Trust has issued a Special Voting
      Right to the Voting and Exchange
      Trust
      Agreement Trustee for the benefit of every Person who holds Exchangeable
      Shares.




**Unitholders'
      Limited Liability**




The
      Trust Indenture
      provides that no Unitholder, in its capacity as such, shall incur or be subject
      to any liability in contract or in tort in connection with the Trust or its
      obligations or affairs and, in the event that a court determines Unitholders
      are
      subject to any such liabilities, the liabilities will be enforceable only
      against, and will be satisfied only out of the Trust's assets. Pursuant to
      the
      Trust Indenture, the Trust will indemnify and hold harmless each Unitholder
      from
      any cost, damages, liabilities, expenses, charges
      or losses
      suffered by a Unitholder from or arising as a result of such Unitholder not
      having such limited liability.




The
      Trust Indenture
      provides that all contracts signed by or on behalf of the Trust must contain
      a
      provision to the effect that such obligation
      will not
      be binding upon Unitholders personally. Notwithstanding the terms of the Trust
      Indenture, Unitholders may not be
      protected from
      liabilities of the Trust to the same extent a shareholder is protected from
      the
      liabilities of a corporation. Personal
      liability
      may also arise in respect of claims against the Trust (to the extent that claims
      are not satisfied by the Trust) that do
      not arise under
      contracts, including claims in tort, claims for taxes and possibly certain
      other
      statutory liabilities. The possibility
      of any
      personal liability to Unitholders of this nature arising is considered unlikely
      in view of the fact that the sole activity
      of the
      Trust is to hold securities, and all of the business operations are carried
      on
      by Vermilion, directly or indirectly.




The
      activities of
      the Trust and its subsidiary, Vermilion, will be conducted, upon the advice
      of
      counsel, in such a way and in such jurisdictions as to avoid as far as possible
      any material risk of liability to the Unitholders for claims against the Trust
      including by obtaining appropriate insurance, where available, for the
      operations of Vermilion and having contracts signed by or on behalf of the
      Trust
      include a provision that such obligations are not binding upon Unitholders
      personally.








*2006
              Annual Information Form - Vermilion Energy Trust*
            25





The *Income
      Trusts
      Liability Act* (Alberta)
      creates a
      statutory limitation on the liability of unitholders of Alberta income trusts
      such as
      the Trust. The
      Act provides that a Unitholder will not be, as a beneficiary, liable for any
      act, default, obligation or liability of the trustee
      that arises
      after the legislation comes into effect.




**Issuance
      of
      Trust Units**




The
      Trust Indenture
      provides that Trust Units, including rights, warrants and other securities
      to
      purchase, to convert into or to exchange into Trust Units, may be created,
      issued, sold and delivered on such terms and conditions and at such times as
      the
      Trustee, upon the recommendation of the board of directors of Vermilion may
      determine. The Indenture also provides that Vermilion
      may
      authorize the creation and issuance of debentures, notes and other evidences
      of
      indebtedness of the Trust which debentures,
      notes
      or other evidences of indebtedness may be created and issued from time to time
      on such terms and conditions
      to such
      persons and for such consideration as Vermilion may determine.




**Cash
      Distributions**




The
      Trustee may
      declare payable to the Unitholders all or any part of the net income of the
      Trust earned from interest income on the
      Notes, from the
      income generated under the Royalty Agreement and from any dividends paid on
      the
      common shares of Vermilion,
      less all
      expenses and liabilities of the Trust due and accrued and which are chargeable
      to the net income of the Trust. In
      addition,
      Unitholders may, at the discretion of the board of directors of Vermilion,
      receive distributions in respect of prepayments
      of
      principal on the Notes made by Vermilion to the Trust before the maturity of
      the
      Notes. It is anticipated however, that
      the Trust may
      reinvest a portion of the repayments of principal on the Notes to make capital
      expenditures to develop the business
      of
      Vermilion with a view to enhancing Vermilion's cash flow from
      operations.




Cash
      distributions
      will be made on the 15th day of each month to Unitholders of record on the
      immediately preceding Distribution Record
      Date.




***Record
      of Cash Distributions***




The
      following table
      sets forth the amount of monthly cash distributions per Trust Unit paid by
      the
      Trust since the completion of the Arrangement on January 22, 2003. Distributions
      are generally paid on the 15th day of the month following the month of declaration.




**Period**
            
            
            **Distribution
                Amount for Period per Trust Unit**2003
                -
                January 22 to December 31
            
            $
            1.872004
                -
                January to December
            
            $
            2.042005
                -
                January to December
            
            $
            2.042006
                -
                January to December
            
            $
            2.042007
                -
                January to February
            
            $
            0.34Total
                Cash
                Distribution since January 22, 2003(1)
            
            $
            8.33


**Note:**


(1)On
      March 15, 2007, the Trust announced that it would pay a cash distribution of
      $0.17 per Trust Unit to Unitholders of record as of March 30, 2007 on April
      13,
      2007 (the “March Distribution”). The Total Cash Distribution since January 22,
      2003 does not include the March Distribution.




**Redemption
      Right**




Trust
      Units are
      redeemable at any time on demand by the holders thereof upon delivery to the
      Trust of the certificate or certificates
      representing such Trust Units, accompanied by a duly completed and properly
      executed notice requiring redemption. Upon
      receipt of the
      notice to redeem Trust Units by the Trust, the holder thereof shall only be
      entitled to receive a price per Trust Unit
      (the "Market
      Redemption Price") equal to the lesser of: (a) 90% of the "market price" (as
      defined in the Trust Indenture) of the
      Trust Units on
      the principal market on which the Trust Units are quoted for trading during
      the
      10 trading day period commencing
      immediately after the date on which the Trust Units are tendered to the Trust
      for redemption; and (b) the closing market
      price on the
      principal market on which the Trust Units are quoted for trading on the date
      that the Trust Units are so tendered
      for
      redemption.




The
      aggregate
      Market Redemption Price payable by the Trust in respect of any Trust Units
      surrendered for redemption during any
      calendar month
      shall be satisfied by way of a cash payment on the last day of the following
      month. In certain circumstances, the
      aggregate
      Market Redemption Price payable by the Trust may be satisfied by distributing
      notes having an aggregate principal
      amount
      equal to the aggregate Market Redemption Price of the Trust Units tendered
      for
      redemption.





*2006
              Annual Information Form - Vermilion Energy Trust*
            26





It
      is anticipated
      that this redemption right will not be the primary mechanism for holders of
      Trust Units to dispose of their Trust Units.
      Notes which
      may be distributed in specie to holders of Trust Units in connection with a
      redemption will not be listed on any
      stock exchange
      and no market is expected to develop in such notes.




**Non-Resident
      Unitholders**




It
      is in the best
      interest of Unitholders that the Trust qualifies as a "unit trust" and a "mutual
      fund trust" under the Tax Act. Certain provisions
      of the
      Tax Act require that the Trust not be established nor maintained primarily
      for
      the benefit of Non-Residents. Accordingly,
      in
      order to comply with such provisions, the Trust Indenture contains restrictions
      on the ownership of Trust Units by Unitholders who are Non-Residents. In this
      regard, the Trust shall, among other things, take all necessary steps to monitor
      the ownership
      of the
      Trust Units to carry out such intentions. If at any time the Trust becomes
      aware
      that the beneficial owners of 50%
      or more of the
      Trust Units then outstanding are or may be Non-Residents or that such a
      situation is imminent, the Trust shall
      take such
      action as may be necessary to carry out such intentions.




**Meetings
      of
      Unitholders**




The
      Trust Indenture
      provides that meetings of Unitholders must be called and held for, among other
      matters, the election or removal
      of the
      Trustee, the appointment or removal of the auditors of the Trust, the approval
      of amendments to the Trust Indenture
      (except
      as described under "Amendments to the Trust Indenture"), the sale of the
      property of the Trust as an entirety or
      substantially as
      an entirety, and the commencement of winding-up the affairs of the Trust.
      Meetings of Unitholders will be called
      and held
      annually for, among other things, the election of the directors of Vermilion
      and
      the appointment of the auditors of the
      Trust.




A
      meeting of
      Unitholders may be convened at any time and for any purpose by the Trustee
      and
      must be convened, except in certain
      circumstances, if requisitioned by the holders of not less than 5% of the Trust
      Units then outstanding by a written requisition.
      A
      requisition must, among other things, state in reasonable detail the business
      purpose for which the meeting is to be
      called.




Unitholders
      may
      attend and vote at all meetings of Unitholders either in person or by proxy
      and
      a proxyholder need not be a Unitholder.
      Two
      persons present in person or represented by proxy and representing in the
      aggregate at least 5% of the votes attaching
      to all
      outstanding Trust Units shall constitute a quorum for the transaction of
      business at all such meetings. For the purposes
      of
      determining such quorum, the holders of any issued Special Voting Rights who
      are
      present at the meeting shall be regarded as representing outstanding Trust
      Units
      equivalent in number to the votes attaching to such Special Voting
      Rights.




The
      Trust Indenture
      contains provisions as to the notice required and other procedures with respect
      to the calling and holding of meetings
      of
      Unitholders in accordance with the requirements of applicable laws.




**Trustee**




Computershare
      Trust
      Company of Canada is the trustee of the Trust. The Trustee is responsible for,
      among other things, accepting
      subscriptions for Trust Units and issuing Trust Units pursuant thereto and
      maintaining the books and records of the Trust
      and providing
      timely reports to holders of Trust Units. The Trust Indenture provides that
      the
      Trustee shall exercise its powers and carry out its functions thereunder as
      Trustee honestly, in good faith and in the best interests of the Trust and,
      in connection
      therewith, shall exercise that degree of care, diligence and skill that a
      reasonably prudent trustee would exercise in comparable
      circumstances.




The
      term of the
      Trustee's appointment is until the annual meeting of Unitholders to be held
      in
      2009. In 2009, the Unitholders shall, at the annual meeting of the Unitholders,
      re-appoint, or appoint a successor to the Trustee for an additional three year term,
      and thereafter, the Unitholders shall reappoint or appoint a successor to the
      Trustee at the annual meeting of Unitholders three years following the
      reappointment or appointment of the successor to the Trustee. The Trustee may
      also be removed by Special Resolution of the Unitholders. Such resignation
      or
      removal becomes effective upon the acceptance or appointment of a successor
      trustee.


*2006
                Annual Information Form - Vermilion Energy Trust*
              27
 
  **Delegation
      of Authority, Administration and Trust Governance**




The
      board of
      directors of Vermilion has generally been delegated the significant management
      decisions of the Trust. In particular,
      the
      Trustee has delegated to Vermilion responsibility for any and all matters
      relating to the following: (a) an Offering; (b) ensuring compliance with all
      applicable laws, including in relation to an Offering; (c) all matters relating
      to the content of any Offering
      Documents,
      the accuracy of the disclosure contained therein, and the certification thereof;
      (d) all matters concerning the terms
      of, and
      amendment from time to time of the material contracts of the Trust; (e) all
      matters concerning any underwriting or agency agreement providing for the sale
      of Trust Units or rights to Trust Units; (f) all matters relating to the
      redemption of Trust Units;
      (g) all
      matters relating to the voting rights on any investments in the Trust Fund
      or
      any Subsequent Investments; and (h) all matters
      relating to
      the specific powers and authorities as set forth in the Trust
      Indenture.




**Amendments
      to the Trust Indenture**




The
      Trust Indenture
      may be amended or altered from time to time by Special Resolution.




The
      Trustee may,
      without the approval of any of the Unitholders, amend the Trust Indenture for
      the purpose of:




(a)
            ensuring
                the
                Trust's continuing compliance with applicable laws or requirements
                of any
                governmental agency or authority ofCanada
                or of
                any province;




(b)
            ensuring
                that
                the Trust will satisfy the provisions of each of subsections 108(2)
                and
                132(6) of the Tax Act as from time totime
                amended
                or replaced;




(c)  ensuring
      that such
      additional protection is provided for the interests of Unitholders as the
      Trustee may consider expedient;




(d)
            removing
                or
                curing any conflicts or inconsistencies between the provisions of
                the
                Trust Indenture or any supplementalindenture
                and
                any other agreement of the Trust or any offering document pursuant
                to
                which securities of the Trust areissued
                with
                respect to the Trust, or any applicable law or regulation of any
                jurisdiction, provided that in the opinion of theTrustee
                the
                rights of the Trustee and of the Unitholders are not prejudiced thereby;
                or




(e)
            curing,
                correcting or rectifying any ambiguities, defective or inconsistent
                provisions, errors, mistakes or omissions, provided that in the opinion
                of
                the Trustee the rights of the Trustee and of the Unitholders are
                not
                prejudiced thereby.




**Takeover
      Bid**




The
      Trust Indenture
      contains provisions to the effect that if a takeover bid is made for the Trust
      Units and not less than 90% of the
      Trust Units
      (other than Trust Units held at the date of the takeover bid by or on behalf
      of
      the offeror or associates or affiliates of
      the offeror) are
      taken up and paid for by the offeror, the offeror will be entitled to acquire
      the Trust Units held by Unitholders who
      did not accept
      the takeover bid, on the terms offered by the offeror.




**Termination
      of the Trust**




The
      Unitholders may
      vote to terminate the Trust at any meeting of the Unitholders duly called for
      that purpose, subject to the following: (a) a vote may only be held if requested
      in writing by the holders of not less than 20% of the outstanding Trust Units; (b)
      a
      quorum of 50% of the issued and outstanding Trust Units is present in person
      or
      by proxy; and (c) the termination must be approved
      by Special
      Resolution of Unitholders.




Unless
      the Trust is
      earlier terminated or extended by vote of the Unitholders, the Trustee shall
      commence to wind up the affairs of
      the Trust on
      December 31, 2099. In the event that the Trust is wound up, the Trustee will
      sell and convert into money the property
      of the
      Trust in one transaction or in a series of transactions at public or private
      sale and do all other acts appropriate to liquidate
      the
      property of the Trust, and shall in all respects act in accordance with the
      directions, if any, of the Unitholders in respect
      of
      termination authorized pursuant to the Special Resolution authorizing the
      termination of the Trust. Notwithstanding anything
      herein
      contained, in no event shall the Trust be wound up until the Royalty shall
      have
      been disposed of, and under no circumstances
      shall
      any Unitholder come into any possession of any interest in the Royalty. After
      paying, retiring or discharging or
      making provision
      for the payment, retirement or discharge of all known liabilities and
      obligations of the Trust and providing for indemnity against any other
      outstanding liabilities and obligations, the Trustee shall distribute the
      remaining part of the proceeds of
      the sale of the
      assets together with any cash forming part of the property of the Trust among
      the Unitholders in accordance with
      their Pro Rata
      Share.


*2006
                Annual Information Form - Vermilion Energy Trust*
              28
 
  **Reporting
      to Unitholders**




The
      financial
      statements of the Trust are audited annually by an independent recognized firm
      of chartered accountants. The audited financial statements of the Trust,
      together with the report of such chartered accountants, are mailed by the
      Trustee to Unitholders and the unaudited interim financial statements of the
      Trust are mailed to Unitholders as prescribed by applicable securities
      legislation. The year-end of the Trust is December 31.




The
      Trust is
      subject to the continuous disclosure obligations under applicable securities
      legislation.




**Distribution
      Reinvestment and Optional Trust Unit Purchase Plan**




The
      Trust has
      established the DRIP Plan. The DRIP Plan is only available to registered
      Unitholders who are residents of Canada.




Under
      the DRIP
      Plan, registered Unitholders may, at their option, reinvest their cash
      distributions to purchase additional Trust Units (the "DRIP Units") by directing
      the Plan Agent (as defined below) to apply Distributions on their existing
      Trust
      Units to the purchase
      of DRIP
      Units or by making optional cash payments (the "Cash Payment Option").
      Computershare Trust Company of Canada
      in its
      capacity as plan agent (the "Plan Agent") will apply Cash Distributions towards
      the purchase of DRIP Units from the
      Trust, subject
      to certain limitations either from treasury or at the discretion of Vermilion
      through the facilities of the TSX. DRIP
      Units will be
      acquired either at the average market price at which DRIP Units 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 Distribution. Under
      the Cash
      Payment
      Option, a registered Unitholder may, through the Plan Agent purchase additional
      DRIP Units having a value of up to
      $5,000 per
      month. Participants in the DRIP Plan will also receive additional distributions
      of Trust Units equal to 5% of the DRIP
      Units
      purchased with their Distributions or under the Cash Payment Option, as
      applicable (the "Bonus Units under the DRIP
      Plan"). The
      aggregate number of DRIP Units that may be issued under the Cash Payment Option
      in any fiscal year of the Trust
      will be
      limited to 2% of the number of Trust Units issued and outstanding at the start
      of such fiscal year. Participants will not
      have to pay any
      brokerage fees or service charges in connection with the purchase of DRIP
      Units.




Registered
      Unitholders 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 5 business days prior to a Distribution
      Record Date,
      will have
      effect for the distribution to be made on the following Distribution Payment
      Date. Thereafter, distributions to those Unitholders
      will be
      in cash. The Trust 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 participants. The Trust is not required
      to issue Trust Units into any jurisdiction
      where
      that issuance would be illegal.




**Unitholder
      Rights Plan**




The
      Trust currently
      has in place a Unitholder rights plan (the "Rights Plan") that came into effect
      on May 5, 2006. The objectives of
      the Rights Plan
      are to ensure, to the extent possible, that all Unitholders are treated equally
      and fairly in connection with any takeover
      bid for
      the Trust. 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 Unitholders 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 the Board of Directors
      believes
      is insufficient for the directors to:




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


ii.
      explore,
      develop and pursue alternatives which are superior to the takeover bid and
      which
      could maximize Unitholder value
      and;


iii.
      make reasoned
      recommendations to the Unitholders.








*2006
              Annual Information Form - Vermilion Energy Trust*
            29





The
      Rights Plan
      discourages discriminatory, coercive or unfair takeovers of the Trust 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 Unitholder value in the event an unsolicited takeover bid is made
      for
      all or a portion of the outstanding Trust
      Units of the
      Trust. As set forth in detail below, the Rights Plan discourages coercive
      hostile takeover bids by creating the potential
      that any
      Trust Units 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 Trust Units who are not related to the bidder will be
      entitled to exercise rights issued to them under the Rights Plan and to acquire
      Trust Units 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 Trust
      Units of the
      Trust all Unitholders 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
      Trust, to secure the continuance of
      management or
      the directors in their respective offices or to deter fair offers for the Trust
      Units of the Trust.




***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 Unitholder Rights Plan Agreement.
      A copy
      of the Unitholder 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 Unitholders
      of
      the Trust in 2009 unless the term of the Unitholder Rights Plan Agreement is
      extended beyond such date by resolution of Unitholders at such
      meeting.




***Issue
      of Rights***




One
      right (a
      "Right") has been issued by the Trust pursuant to the Unitholder Rights Plan
      Agreement in respect of each Trust Unit
      of the Trust
      outstanding at the close of business on May 5, 2006 (the "Record Time"). One
      Right will also be issued for each
      additional
      Trust Unit issued after the Record Time and prior to the earlier of the
      Separation Time (as defined below) or the Expiration
      Time (as
      defined below).




***Rights
      Exercise Privilege***




The
      Rights will
      separate from the voting units 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 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 Trust 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 Trust 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 Trust Units 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
      Trust Unit until the Rights separate from
      the underlying
      Trust Units and become exercisable or until the exercise of the Rights. The
      issuance of the Rights will not change
      the manner
      in which Unitholders currently trade their Trust Units.


*2006
                Annual Information Form - Vermilion Energy Trust*
              30
 
  ***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 Unitholder
      whereby the Unitholder agrees to deposit or tender voting 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
      Unitholder who
      has agreed to tender voting 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 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 share at which the
      Unitholder has agreed to deposit or tender voting 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 shares
      offered to be purchased under the Lock- Up
      Bid is less than
      all of the voting units held by Unitholders (excluding Trust Units held by
      the
      offeror), the number of voting units
      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 units
      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
      units 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 Unitholder
          if
          the Unitholder fails to deposit or tender voting units 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 Trust Units issued from and after
      the effective
      date (the "Effective Date") of the Unitholder Rights Plan Agreement (being
      the
      later of the date of the Unitholder
      Rights
      Plan Agreement and the receipt by the Trust of all regulatory approvals with
      respect to the Unitholder Rights Plan
      Agreement).
      Rights are also attached to Trust Units outstanding on the Effective Date,
      although certificates issued prior to the
      Effective Date
      will not bear such a legend. Unitholders 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 Trust Units
      and will not be exercisable or transferable
      separately from the Trust Units. From and after the Separation Time, the Rights
      will become exercisable, will be evidenced
      by Rights
      Certificates and will be transferable separately from the Trust
      Units.




***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 units as registered on the books of the Trust,
      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 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 units held by independent
        Unitholders 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 units 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 units may be taken up and paid for and that any voting units
        deposited pursuant to the takeover
        bid may be
        withdrawn until taken up and paid for; and
  *2006
                  Annual Information Form - Vermilion Energy Trust*
                31
  (e) the
        takeover bid
        contains an irrevocable and unqualified provision that if, on the date on
        which
        voting units may be taken up and paid for, more than 50% of the voting units
        held by independent Unitholders 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 units 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 units on terms
      which the Board of Directors considers fair to all Unitholders. 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 units 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
      units of the Trust 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 units,
      the Board of Directors may, prior to the occurrence of a Flip-in Event that
      would occur by reason of an acquisition of voting units 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 units, 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 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 will 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 Trust. 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
      Unitholders as are considered appropriate.




***Amendment***




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


*2006
                Annual Information Form - Vermilion Energy Trust*
              32
 
  **ADDITIONAL
      INFORMATION RESPECTING VERMILION RESOURCES LTD.**




**Management
      of Vermilion**




Vermilion
      has a
      board of directors currently consisting of six individuals. The directors are
      elected by the Trust at the direction of Unitholders
      by
      ordinary resolution, and hold office until the Meeting.




As
      at March 15,
      2007 the directors and officers of Vermilion, as a group, beneficially owned,
      directly or indirectly, 821,567 Trust Units
      representing
      approximately 1.25% of the issued and outstanding Trust Units, as well as an
      aggregate of 3,814,628 Exchangeable
      Shares. Assuming all Exchangeable Shares were exchanged for Trust Units, using
      the Exchange Ratio of 1.49084,
      the
      directors and executive officers would hold 6,508,567 Trust Units, representing
      9.02% of then issued and outstanding
      Trust
      Units.




The
      following table
      sets forth certain information respecting the directors and officers of
      Vermilion.







**Year
                First****Elected****Name
                and**
            
            
            
            **or
                Appointed****Municipality
                of Residence**
            
            **Office
                Held**
            
            **as
                Director**
            
            **Principal
                Occupation During the Past Five Years**Lorenzo
                Donadeo Calgary, Alberta
            
            President
                andChief
                ExecutiveOfficer
                and
                Director
            
            1994
            
            Since
                2003,
                President and Chief Executive Officer of Vermilion;from
                2000 to
                2003 Vice President and Chief Operating Officer ofVermilion.W.
                Kenneth Davidson(2)(3)Oakville,
                Ontario
            
            Director
            
            2005
            
            Since
                2002,
                Director of Millar Western Forest Products Ltd.; from1996
                to 2001,
                Co-Chief Executive Officer of Gordon CapitalCorporation,
                an investment banking firm.Claudio
                A.
                Ghersinich Calgary, Alberta
            
            Director
            
            1994
            
            Since
                2005,
                Executive Director of Carrera Investments Corp., aprivate
                investment company; from 2003 to 2005, Executive VicePresident,
                Business Development of Vermilion; from 2000 to2003
                Executive Vice President, New Ventures of Vermilion.Joseph
                F.
                Killi(2)(3)Calgary,
                Alberta
            
            Director
            
            1999
            
            Since
                2005,
                Chairman of Parkbridge Lifestyle Communities Inc.,a
                public real
                estate company; from 1998 to 2005 Chief ExecutiveOfficer
                of
                Parkbridge Lifestyle Communities Inc.; from 1993 topresent,
                President of Rosebridge Capital Corp. Inc., a private realestate
                investment company and from 2006 to present, Vice-Chairman
                of
                Realex Properties Corp. Inc., a public real estatecompany.Larry
                J.
                Macdonald(1)(2)(3)(4)(5)Calgary,
                Alberta
            
            Director
                andChairman
                of
                theBoard
            
            2002
            
            Since
                2003
                Chief Executive Officer, Point Energy Ltd., a privateoil
                and gas
                company; from 2000 to 2003 Chairman and ChiefExecutive
                Officer, Pointwest Energy Inc., a private oil and gascompany.William
                F.
                Madison(2)(4)(5)Sugar
                Land,
                Texas
            
            Director
            
            2004
            
            From
                1999 to
                2006, a director of Montana Tech Foundation,serving
                as
                Chairman during 2004 and 2005. From 1965 to 2000Mr.
                Madison
                worked in increasingly senior positions withMarathon
                Oil
                Company, a public oil and gas company, where heretired
                as
                Senior Vice President Worldwide Production.John
                D.
                Donovan Calgary, Alberta
            
            Executive
                VicePresident
                Business Development
            
            N/A
            
            Since
                2005,
                Executive Vice President, Business Development ofVermilion;
                from 2002 to 2005 Senior Vice President of Harrison Lovegrove, oil
                and gas
                consultants; from 1978 to 2002, variouspositions
                with ConocoPhillips, a public oil and gas
                company.








*2006
              Annual Information Form - Vermilion Energy Trust*
            33





**Year
                First****Elected****Name
                and**
            
            
            
            **or
                Appointed****Municipality
                of Residence**
            
            **Office
                Held**
            
            **as
                Director**
            
            **Principal
                Occupation During the Past Five Years**Curtis
                W.
                Hicks Calgary, Alberta
            
            Executive
                Vice President and Chief Financial Officer
            
            N/A
            
            Since
                2004
                Executive Vice President and Chief Financial Officerof
                Vermilion;
                from 2003 to 2004 Vice President, Finance andChief
                Financial Officer of Vermilion; from 2000 to 2003, Vice President
                Finance
                and Chief Financial Officer of NAL Oil & GasTrust,
                a
                public oil and gas trust.G.R.
                (Bob)
                Mac Dougall Calgary, Alberta
            
            Executive
                Vice President andChief
                OperatingOfficer
            
            N/A
            
            Since
                2006
                Executive Vice President and Chief Operating Officerof
                Vermilion;
                from 2004 to 2006, Chief Operating Officer of Vermilion; from 1999
                to
                2004, General Manager of productionand
                operations of Chevron Texaco Western Canada producingoil
                and gas
                properties.Keith
                D.
                Hartman Calgary, Alberta
            
            Vice
                President Exploitation
            
            N/A
            
            Since
                2006,
                Vice President Exploitation of Vermilion; from 2004to
                2006,
                Director of Exploitation of Vermilion; from 2001 to 2004,Project
                Manager and Manager of Production Optimization ofChevron
                Texaco Western Canada producing oil and gasproperties.Raj
                C. Patel
                Calgary, Alberta
            
            Vice
                President Marketing
            
            N/A
            
            Since
                2001,
                Vice President, Marketing of Vermilion.Daniel
                Goulet
                Biscarosse, France
            
            Diréctéur
                Generalof
                Vermilion
                REPS.A.S.
            
            N/A
            
            Since
                2003,
                Diréctéur General of Vermilion REP S.A.S., asubsidiary
                of
                the Trust; from 2000 to 2003, Production andEngineering
                Manager of Vermilion REP S.A.S.Peter
                Sider
                Harlingen, Netherlands
            
            ManagingDirector,
                VermilionNetherlands
            
            N/A
            
            Since
                2006,
                Managing Director of Vermilion Oil & GasNetherlands
                B.V., a subsidiary of the Trust; from 1999 to 2006founder
                of
                four private and public oil and gas companies inAlberta
                including Resolution Resources, EMBO Petroleum,Newheart
                Oil
                and Gas and Breakside Energy.Bruce
                D. Lake
                Perth, Australia
            
            ManagingDirector,
                VermilionAustralia
            
            N/A
            
            Since
                2005,
                Managing Director of Vermilion Oil & Gas AustraliaPty
                Ltd., a
                subsidiary of the Trust; from 1996 to 2005, OperationsManager
                for
                Apache Energy Limited’s Australian oil and gasoperations.Charles
                W.
                Berard Calgary, Alberta
            
            Corporate
                Secretary
            
            N/A
            
            Partner
                at
                Macleod Dixon LLP, Barristers &
Solicitors.




**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








*2006
              Annual Information Form - Vermilion Energy Trust*
            34





**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 Trust.
      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**
            
            **Inde-****pendent**
            
            **Financially****Literate**
            
            **Relevant
                Education and Experience**W.
                Kenneth Davidson(Chair)
            
            Yes
            
            Yes
            
            Mr.
                Davidson
                holds Bachelor of Science degrees in Mathematics and Business anda
                Masters in
                Business Administration degree. Mr. Davidson has obtained significantfinancial
                experience and exposure to accounting including internal controls
                andprocedures
                for financial reporting and complex financial issues as a director,
                officeror
                consultant
                to a number of companies involved in the banking and securities areasof
                the
                financial services sector.Joseph
                F.
                Killi
            
            Yes
            
            Yes
            
            Mr.
                Killi
                holds a Bachelor of Science degree, a Bachelor of Commerce degree
                and aChartered
                Accountant designation. As a Chartered Accountant, Mr. Killi attainedexperience
                in
                preparing, auditing, analyzing and evaluating financial statements
                including internal controls and procedures for financial reporting.
                Mr.
                Killi has anunderstanding
                of the accounting principles used by the Trust as well as theimplications
                of those accounting principles on the Trust's financial results.
                Mr. Killihas
                also
                obtained significant financial experience and exposure to accounting
                andfinancial
                issues in a number of senior positions with Parkbridge LifestyleCommunities
                Inc., Rosebridge Capital Corp. Inc. and Trizec Corporation and in
                hisrole
                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 2005, Mr. Macdonaldattended
                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 asa
                director,
                audit committee member and officer of a number of other public andprivate
                companies as well as not-for-profit organizations.William
                F.
                Madison
            
            Yes
            
            Yes
            
            Mr.
                Madison
                holds a Bachelor of Science in Petroleum Engineering. Mr. Madisonattended
                the
                Harvard Program for Management Development. Mr. Madison hasobtained
                financial experience and exposure to accounting and financial issues
                as
                theChairman
                of
                Montana Tech Foundation and as a senior executive of Marathon OilCompany
                and
                as a director, audit committee member and officer of other public
                andprivate
                companies.




**External
      Audit Service Fees**




During
      the years ended December 31, 2006 and 2005, Deloitte & Touche LLP, the
      auditors of the Trust, received the following fees
      from the
      Trust:







**Item**
            
            
            **2006**
            
            
            **2005**Audit
                fees(1)
            
            $
            1,075,057
            
            $
            545,737Audit
                related
                fees(2)
            
            $
            107,563
            
            $
            154,565Tax
                fees(3)
            
            $
            -
            
            $
            -


*2006
                Annual Information Form - Vermilion Energy Trust*
              35
 
  Notes:


(1) Audit
      fees
      consisted of professional services rendered by Deloitte & Touche LLP for the
      audit of the Trust's financial statements for the years endedDecember
      31, 2006 and 2005, fees for the review of the quarterly financial statements
      and
      services provided in connection with statutory and regulatory filings or
      engagements.


(2) Audit
      related
      fees are for assurance and related services reasonably related to the
      performance of the audit or review of the annual financial statements andare not reported under the heading "Audit Fees".


(3) Tax
        fees were
        for tax compliance, tax advice and tax planning.


**Vermilion
      Share Capital**




Vermilion
      is
      authorized to issue an unlimited number of common shares and an unlimited number
      of exchangeable shares issuable
      in series,
      of which an unlimited number of Series A Exchangeable Shares are authorized.
      The
      Trust is the sole holder of
      the issued and
      outstanding shares of Vermilion, other than the Exchangeable
      Shares.




***Common
      Shares***




Each
      common share
      will entitle its holder to receive notice of and to attend all meetings of
      the
      shareholders of Vermilion and to one
      vote at such
      meetings. The holders of common shares will be, at the discretion of the board
      of directors of Vermilion and subject
      to
      applicable legal restrictions, and subject to certain preferences of holders
      of
      Exchangeable Shares, entitled to receive any
      dividends
      declared by the board of directors on the common shares to the exclusion of
      the
      holders of Exchangeable Shares, subject
      to the
      proviso that no dividends shall be paid on the common shares unless all declared
      dividends on the outstanding Exchangeable Shares have been paid in full. The
      holders of common shares will be entitled to share equally in any distribution of
      the
      assets of Vermilion upon the liquidation, dissolution, bankruptcy or winding-up
      of Vermilion or other distribution of its assets
      among its
      shareholders for the purpose of winding-up its affairs. Such participation
      is
      subject to the rights, privileges, restrictions
      and
      conditions attaching to the Exchangeable Shares and any other shares having
      priority over the common shares.




***Exchangeable
      Shares***




Each
      Exchangeable
      Share will have economic rights (including the right to have the Exchange Ratio
      adjusted to account for distributions
      paid
      to Unitholders) and voting attributes (through the benefit of the Special Voting
      Right granted to the Voting and Exchange
      Trust
      Agreement Trustee) as set forth in the Exchangeable Share Provisions. In
      addition, holders of Exchangeable Shares will have the right to receive Trust
      Units at any time in exchange for their Exchangeable Shares, on the basis of
      the Exchange
      Ratio in
      effect at the time of the exchange. Fractional Trust Units will not be delivered
      on any exchange of Exchangeable
      Shares
      and the Voting and Exchange Trust Agreement. In the event that the Exchange
      Ratio in effect at the time of an exchange would otherwise entitle a holder
      of
      Exchangeable Shares to a fractional Trust Unit, the number of Trust Units to
      be
      delivered will be rounded down to the nearest whole number of Trust Units.
      Holders of Exchangeable Shares will not receive cash
      distributions
      from the Trust. Rather, the Exchange Ratio will be adjusted to account for
      distributions paid to Unitholders in the manner described below. Holders of
      Exchangeable Shares may receive dividends from Vermilion at the discretion
      of
      the directors
      of
      Vermilion.




The
      initial
      Exchange Ratio upon the completion of the Arrangement was equal to one. On
      each
      Distribution Payment Date, the Exchange
      Ratio will
      be increased, on a cumulative basis, in respect of the Distribution on such
      date
      by an amount which assumes
      the
      reinvestment of such Distribution in Trust Units at the then-prevailing Current
      Market Price of a Trust Unit. The Exchange
      Ratio will
      be decreased in respect of any dividends paid on the Exchangeable Shares by
      an
      amount of such dividend divided
      by the
      then-prevailing Current Market Price of a Trust Unit.




Ranking




The
      Exchangeable
      Shares will rank rateably with shares of any other series of exchangeable shares
      of Vermilion and prior to any common
      shares of
      Vermilion and any other shares ranking junior to the Exchangeable Shares with
      respect to the payment of dividends,
      if any,
      that have been declared and the distribution of assets in the event of the
      liquidation, dissolution or winding-up of
      Vermilion.




Dividends




Holders
      of
      Exchangeable Shares will be entitled to receive cash dividends if, as and when
      declared by the board of directors of Vermilion.
      Vermilion anticipates that it may from time to time declare dividends on the
      Exchangeable Shares up to but not exceeding
      any cash
      distributions on the Trust Units into which such Exchangeable Shares are
      exchangeable. In the event that any such dividends are paid, the Exchange Ratio
      will be correspondingly reduced to reflect such dividends.


*2006
                Annual Information Form - Vermilion Energy Trust*
              36
 
  Certain
      Restrictions




Vermilion
      will not,
      without obtaining the approval of the holders of the Exchangeable Shares as
      set
      forth below under the subheading
      "Amendment and Approval":




(a)
            pay
                any
                dividend on the common shares or any other shares ranking junior
                to the
                Exchangeable Shares, other than stock dividends payable in common
                shares
                or any other shares ranking junior to the Exchangeable
                Shares;




(b)
            redeem,
                purchase or make any capital distribution in respect of the common
                shares
                or any other shares ranking junior to theExchangeable
                Shares;




(c)
            redeem
                or
                purchase any other shares of Vermilion ranking equally with the
                Exchangeable Shares with respect to thepayment
                of
                dividends or on any liquidation distribution;
                or




(d)
            amend
                the
                articles or by-laws of Vermilion in any manner that would affect
                the
                rights or privileges of the holders ofExchangeable
                Shares.




The
      above
      restrictions in (a), (b) and (c) shall not apply if all declared dividends
      on
      the outstanding Exchangeable Shares shall have
      been paid in
      full.




Liquidation
      or
      Insolvency of Vermilion




In
      the event of the
      liquidation, dissolution or winding-up of Vermilion or any other proposed
      distribution of the assets of Vermilion among its shareholders for the purpose
      of winding up its affairs, a holder of Exchangeable Shares will be entitled
      to
      receive from Vermilion,
      in
      respect of each such Exchangeable Share, that number of Trust Units equal to
      the
      Exchange Ratio as at the effective
      date of
      such event.




Upon
      the occurrence
      of such an event, the Trust and Trust Subsidiary will each have the overriding
      right to purchase all but not less than all of the Exchangeable Shares then
      outstanding (other than Exchangeable Shares held by the Trust or any subsidiary
      of the Trust) at a purchase price per Exchangeable Share to be satisfied by
      the
      issuance or delivery, as the case may be, of that number of Trust Units equal
      to
      the Exchange Ratio at such time and, upon the exercise of this right, the
      holders thereof will be obligated to sell such Exchangeable Shares to the Trust
      or Trust Subsidiary, as applicable. This right may be exercised by either the
      Trust or Trust Subsidiary.




Upon
      the occurrence
      of an Insolvency Event, the Voting and Exchange Trust Agreement Trustee on
      behalf of the holders of the Exchangeable
      Shares
      will have the right to require the Trust or Trust Subsidiary to purchase any
      or
      all of the Exchangeable Shares then outstanding and held by such holders at
      a
      purchase price per Exchangeable Share to be satisfied by the issuance or
      delivery, as the case may be, of that number of Trust Units equal to the
      Exchange Ratio at such time, as described under the subheading
      "Voting
      and Exchange Trust Agreement- Optional Exchange Right".




Automatic
      Exchange Right on Liquidation of the Trust




The
      Voting and
      Exchange Trust Agreement provides that in the event of a Trust liquidation
      event, as described below, the Trust or Trust Subsidiary will be deemed to
      have
      purchased all outstanding Exchangeable Shares and each holder of Exchangeable
      Shares will be deemed to have sold their Exchangeable Shares immediately prior
      to such Trust liquidation event at a purchase price
      per
      Exchangeable Share to be satisfied by the issuance or delivery, as the case
      may
      be, of that number of Trust Units equal
      to the
      Exchange Ratio at such time. "Trust liquidation event" means:




(a)
            any
                determination by the Trust to institute voluntary liquidation, dissolution
                or winding-up proceedings in respect of the Trust or to effect any
                other
                distribution of assets of the Trust among the Unitholders for the
                purpose
                of winding up its affairs; or




(b)
            the
                earlier
                of, the Trust's receiving notice of and the Trust's otherwise becoming
                aware of, any threatened or instituted claim,suit,
                petition or other proceedings with respect to the involuntary liquidation,
                dissolution or winding up of the Trust or toeffect
                any
                other distribution of assets of the Trust among the Unitholders for
                the
                purpose of winding up its affairs in eachcase
                where
                the Trust has failed to contest in good faith such proceeding within
                30
                days of becoming aware thereof.


*2006
                Annual Information Form - Vermilion Energy Trust*
              37
 
  Retraction
      of
      Exchangeable Shares by Holders and Retraction Call Right




Subject
      to the
      Retraction Call Right of the Trust and Trust Subsidiary described below, a
      holder of Exchangeable Shares will be entitled
      at any
      time to require Vermilion to redeem any or all of the Exchangeable Shares held
      by such holder for a retraction price (the "Retraction Price") per Exchangeable
      Share equal to the value of that number of Trust Units equal to the Exchange Ratio
      as at the date of redemption (the "Retraction Date"), to be satisfied by the
      delivery of such number of Trust Units. Fractional
      Trust
      Units will not be delivered. Any amount payable on account of the Retraction
      Price that includes a fractional Trust
      Unit will be
      rounded down to the nearest whole number of Trust Units. Holders of the
      Exchangeable Shares may request redemption by presenting to Vermilion or the
      transfer agent for the Exchangeable Shares a certificate or certificates
      representing the number of Exchangeable Shares the holder desires to have
      redeemed, together with a duly executed retraction request and such
      other
      documents as may be reasonably required to effect the redemption of the
      Exchangeable Shares. Subject to extension
      as
      described below, the redemption will become effective on the Retraction Date,
      which will be seven business days after the date on which Vermilion or the
      transfer agent receives the retraction notice. Unless otherwise requested by
      the
      holder and
      agreed to by
      Vermilion, the Retraction Date will not occur on such seventh business day
      if
      such day would occur between any
      Distribution
      Record Date and the Distribution Payment Date that corresponds to such
      Distribution Record Date. In this case, the
      Retraction Date
      will instead occur on such Distribution Payment Date. The reason for this is
      to
      ensure that the Exchange Ratio
      used in
      connection with such redemption is increased to account for the
      Distribution.




When
      a holder
      requests Vermilion to redeem the Exchangeable Shares, the Trust and Trust
      Subsidiary will have an overriding right
      (the
      "Retraction Call Right") to purchase on the Retraction Date all but not less
      than all of the Exchangeable Shares that the holder
      has
      requested Vermilion to redeem at a purchase price per Exchangeable Share equal
      to the Retraction Price, to be satisfied by the delivery of that number of
      Trust
      Units equal to the Exchange Ratio at such time. At the time of a Retraction
      Request by a holder of Exchangeable Shares, Vermilion will immediately notify
      the Trust and Trust Subsidiary. The Trust or Trust
      Subsidiary
      must then advise Vermilion within two business days as to whether the Retraction
      Call Right will be exercised. A
      holder may revoke
      his or her Retraction Request at any time prior to the close of business on
      the
      last business day immediately
      preceding the Retraction Date, in which case the holder's Exchangeable Shares
      will neither be purchased by the Trust or Trust Subsidiary nor be redeemed
      by
      Vermilion. If the holder does not revoke his or her Retraction Request, the Exchangeable
      Shares
      that the holder has requested Vermilion to redeem will on the Retraction Date
      be
      purchased by the Trust or Trust Subsidiary or redeemed by Vermilion, as the
      case
      may be, in each case at a purchase price per Exchangeable Share equal to the
      Retraction Price. In addition, a holder of Exchangeable Shares may elect to
      instruct the Voting and Exchange Trust Agreement
      Trustee
      to exercise the optional exchange right (the "Optional Exchange Right") to
      require the Trust or Trust Subsidiary
      to
      acquire such holder's Exchangeable Shares in circumstances where neither the
      Trust nor Trust Subsidiary have exercised the Retraction Call Right. See "Voting
      and Exchange Trust Agreement-Optional Exchange Right".




The
      Retraction Call
      Right may be exercised by either the Trust or Trust Subsidiary. If, as a result
      of solvency provisions of applicable law, Vermilion is not permitted to redeem
      all Exchangeable Shares tendered by a retracting holder, Vermilion will redeem
      only those Exchangeable Shares tendered by the holder as would not be contrary
      to such provisions of applicable law. The
      holder of any
      Exchangeable Shares not redeemed by Vermilion will be deemed to have required
      the Trust to purchase such unretracted
      Exchangeable Shares in exchange for Trust Units on the Retraction Date pursuant
      to the Optional Exchange Right. See
      "Voting and
      Exchange Trust Agreement- Optional Exchange Right".




Redemption
      of
      Exchangeable Shares




Subject
      to
      applicable law and the Redemption Call Right of the Trust and Trust Subsidiary,
      Vermilion:




(a)
            will,
                on the
                tenth anniversary of the Effective Date, subject to extension of
                such date
                by the board of directors of Vermilion (the "Automatic Redemption
                Date"),
                redeem all but not less than all of the then outstanding Exchangeable
                Shares for aredemption
                price per Exchangeable Share equal to the value of that number of
                Trust
                Units equal to the Exchange Ratio asat
                the last
                business day prior to that Redemption Date (as that term is defined
                below)
                (the "Redemption Price"), to besatisfied
                by
                the delivery of such number of Trust Units;
                and




(b)
            may,
                at any
                time when the aggregate number of issued and outstanding Exchangeable
                Shares is less than 500,000 (otherthan
                Exchangeable Shares held by the Trust and its subsidiaries and as
                such
                shares may be adjusted from time to time)(the
                "De
                Minimus Redemption Date" and, collectively with the Automatic Redemption
                Date, a "Redemption Date"), redeemall
                but not
                less than all of the then outstanding Exchangeable Shares for the
                Redemption Price per Exchangeable Share(unless
                contested in good faith by the
                Trust).


*2006
                Annual Information Form - Vermilion Energy Trust*
              38
 
  Vermilion
      will, at
      least 45 days prior to any Redemption Date, provide the registered holders
      of
      the Exchangeable Shares with written
      notice of
      the prospective redemption of the Exchangeable Shares by Vermilion.




The
      Trust and Trust
      Subsidiary will have the right (the "Redemption Call Right"), notwithstanding
      a
      proposed redemption of the Exchangeable
      Shares
      by Vermilion on the applicable Redemption Date, pursuant to the Exchangeable
      Share Provisions, to purchase
      on any
      Redemption Date all but not less than all of the Exchangeable Shares then
      outstanding (other than Exchangeable
      Shares
      held by the Trust or its subsidiaries) in exchange for the Redemption Price
      per
      Exchangeable Share and, upon
      the exercise
      of the Redemption Call Right, the holders of all of the then outstanding
      Exchangeable Shares will be obliged to sell
      all such
      shares to the Trust or Trust Subsidiary, as applicable. If either the Trust
      or
      Trust Subsidiary exercises the Redemption
      Call
      Right, then Vermilion's right to redeem the Exchangeable Shares on the
      applicable Redemption Date will terminate.
      The
      Redemption Call Right may be exercised by either the Trust or Trust
      Subsidiary.




Voting
      Rights




Except
      as required
      by applicable law, the holders of the Exchangeable Shares are not entitled
      as
      such to receive notice of or attend
      any meeting
      of the shareholders of Vermilion or to vote at any such meeting. Holders of
      Exchangeable Shares will have the
      notice and
      voting rights respecting meetings of the Trust that are provided in the Voting
      and Exchange Trust Agreement. See
      "Voting and
      Exchange Trust Agreement - Voting Rights".




Amendment
      and
      Approval




The
      rights,
      privileges, restrictions and conditions attaching to the Exchangeable Shares
      may
      be changed only with the approval of
      the holders
      thereof. Any such approval or any other approval or consent to be given by
      the
      holders of the Exchangeable Shares
      will be
      sufficiently given if given in accordance with applicable law and subject to
      a
      minimum requirement that such approval
      or consent
      be evidenced by a resolution passed by not less than two-thirds of the votes
      cast thereon (other than shares beneficially
      owned
      by the Trust, or any of its subsidiaries and other affiliates) at a meeting of
      the holders of the Exchangeable Shares
      duly called
      and held at which holders of at least 5% of the then outstanding Exchangeable
      Shares are present in person or
      represented by
      proxy. In the event that no such quorum is present at such meeting within
      one-half hour after the time appointed therefore, then the meeting will be
      adjourned to such place and time (not less than ten days later) as may be determined
      at the
      original meeting and the holders of Exchangeable Shares present in person or
      represented by proxy at the adjourned
      meeting
      will constitute a quorum thereat and may transact the business for which the
      meeting was originally called. At the
      adjourned
      meeting, a resolution passed by the affirmative vote of not less than two-thirds
      of the votes cast thereon (other than shares beneficially owned by the Trust
      or
      any of its subsidiaries and other affiliates) will constitute the approval
      or
      consent of
      the holders of
      the Exchangeable Shares.




Actions
      by the
      Trust under the Support Agreement and the Voting and Exchange Trust
      Agreement




Under
      the
      Exchangeable Share Provisions, Vermilion will agree to take all such actions
      and
      do all such things as are necessary or
      advisable to
      perform and comply with its obligations under, and to ensure the performance
      and
      compliance by the Trust with its
      obligations
      under, the Support Agreement and the Voting and Exchange Trust
      Agreement.




Non-Resident
      and
      Tax-Exempt Holders




Exchangeable
      Shares
      will not be issued to persons who are Non-Residents or who are exempt from
      tax
      under Part I of the Tax Act.




**Voting
      and
      Exchange Trust Agreement**




***Voting
      Rights***




In
      accordance with
      the Voting and Exchange Trust Agreement, the Trust will issue a Special Voting
      Right to Computershare Trust Company of Canada, the Voting and Exchange Trust
      Agreement Trustee, for the benefit of the holders (other than the Trust and
      Trust Subsidiary) of the Exchangeable Shares. The Special Voting Right will
      carry a number of votes, exercisable at any meeting at which Unitholders are
      entitled to vote, equal to the number of Trust Units (rounded down to the
      nearest whole number) into which the Exchangeable Shares are then exchangeable
      multiplied by the number of votes to which the holder of one
      Trust Unit is
      then entitled. With respect to any written consent sought from the Unitholders,
      each vote attached to the Special
      Voting
      Right will be exercisable in the same manner as set forth above.


*2006
                Annual Information Form - Vermilion Energy Trust*
              39
 
  Each
      holder of an
      Exchangeable Share on the record date for any meeting at which Unitholders
      are
      entitled to vote will be entitled
      to
      instruct the Voting and Exchange Trust Agreement Trustee to exercise that number
      of votes attached to the Special Voting Right which relate to the Exchangeable
      Shares held by such holder. The Voting and Exchange Trust Agreement Trustee will
      exercise each vote attached to the Special Voting Right only as directed by
      the
      relevant holder and, in the absence of instructions
      from a
      holder as to voting, will not exercise such votes.




The
      Voting and
      Exchange Trust Agreement Trustee will send to the holders of the Exchangeable
      Shares the notice of each meeting
      at which
      the Unitholders are entitled to vote, together with the related meeting
      materials and a statement as to the manner
      in which the
      holder may instruct the Voting and Exchange Trust Agreement Trustee to exercise
      the votes attaching to the Special Voting Right, at the same time as the Trust
      sends such notice and materials to the Unitholders. The Voting and Exchange
      Trust
      Agreement Trustee will also send to the holders copies of all information
      statements, interim and annual financial
      statements, reports and other materials sent by the Trust to the Unitholders
      at
      the same time as such materials are sent to the Unitholders. To the extent
      such
      materials are provided to the Voting and Exchange Trust Agreement Trustee by
      the
      Trust, the Voting and Exchange Trust Agreement Trustee will also send to the
      holders all materials sent by third parties to Unitholders, including dissident
      proxy circulars and tender and exchange offer circulars, as soon as possible
      after such materials are first sent to
      Unitholders.




All
      rights of a
      holder of Exchangeable Shares to exercise votes attached to the Special Voting
      Right will cease upon the exchange of all such holder's Exchangeable Shares
      for
      Trust Units. With the exception of administrative changes for the purpose
      of adding
      covenants for the protection of the holders of the Exchangeable Shares, making
      necessary amendments or curing
      ambiguities
      or clerical errors (in each case provided that the board of directors of Trust
      Subsidiary and Vermilion are of the opinion
      that such
      amendments are not prejudicial to the interests of the holders of the
      Exchangeable Shares), the Voting and Exchange
      Trust
      Agreement may not be amended without the approval of the holders of the
      Exchangeable Shares.




***Optional
      Exchange Right***




Upon
      the occurrence
      and during the continuance of:




(a)  an
      Insolvency
      Event; or




(b)  circumstances
      in
      which the Trust or Trust Subsidiary may exercise a Call Right, but elect not
      to
      exercise such Call Right;




a
      holder of
      Exchangeable Shares will be entitled to instruct the Trustee to exercise the
      Optional Exchange Right with respect to any
      or all of the
      Exchangeable Shares held by such holder, thereby requiring the Trust or Trust
      Subsidiary to purchase such Exchangeable
      Shares
      from the holder. Immediately upon the occurrence of (i) an Insolvency Event,
      (ii) any event which will, with the
      passage of time
      or the giving of notice, become an Insolvency Event, or (iii) the election
      by
      the Trust and Trust Subsidiary not to exercise a Call Right which is then
      exercisable by the Trust and Trust Subsidiary, Vermilion, the Trust or Trust
      Subsidiary will give
      notice thereof
      to the Trustee. As soon as practicable thereafter, the Trustee will then notify
      each affected holder of Exchangeable
      Shares
      (who has not already provided instructions respecting the exercise of the
      Optional Exchange Right) of such
      event or
      potential event and will advise such holder of its rights with respect to the
      Optional Exchange Right.




The
      purchase price
      payable by the Trust or Trust Subsidiary for each Exchangeable Share to be
      purchased under the Optional Exchange
      Right will
      be satisfied by the issuance of that number of Trust Units equal to the Exchange
      Ratio as at the last business
      day prior
      to the day of closing of the purchase and sale of such Exchangeable Share under
      the Exchange Right (the "Exchange
      Price").




If,
      as a result of
      solvency provisions of applicable law, Vermilion is unable to redeem all of
      a
      holder's Exchangeable Shares which such holder is entitled to have redeemed
      in
      accordance with the Exchangeable Share Provisions, the holder will be deemed
      to have exercised the Optional Exchange Right with respect to the unredeemed
      Exchangeable Shares and the Trust or Trust
      Subsidiary
      will be required to purchase such shares from the holder in the manner set
      forth
      above.


*2006
                Annual Information Form - Vermilion Energy Trust*
              40
 
  **Support
      Agreement**




***The
      Trust Support Obligation***




Under
      the Support
      Agreement, the Trust will agree that:




(a)
            the
                Trust
                will take all actions and do all things necessary to ensure that
                Vermilion
                is able to pay to the holders of theExchangeable
                Shares the Liquidation Amount in the event of a liquidation, dissolution
                or winding-up of Vermilion, theRetraction
                Price in the event of the giving of a Retraction Request by a holder
                of
                Exchangeable Shares, or the RedemptionPrice
                in the
                event of a redemption of Exchangeable Shares by Vermilion;
                and




(b)
            the
                Trust
                will not vote or otherwise take any action or omit to take any action
                causing the liquidation, dissolution orwinding-up
                of
                Vermilion.




The
      Support
      Agreement will also provide that the Trust will not issue or distribute to
      the
      holders of all or substantially all of the outstanding
      Trust
      Units:




(a)  additional
      Trust
      Units or securities convertible into Trust Units;




(b)  rights,
      options or
      warrants for the purchase of Trust Units; or




(c)  units
      or securities
      of the Trust other than Trust Units, evidences of indebtedness of the Trust
      or
      other assets of the Trust;




unless
      the same or
      an equivalent distribution is made to holders of Exchangeable Shares, an
      equivalent change is made to the Exchangeable
      Shares, or the approval of Vermilion and holders of Exchangeable Shares has
      been
      obtained.




In
      addition, the
      Trust may not subdivide, reduce, consolidate, reclassify or otherwise change
      the
      terms of the Trust Units unless an
      equivalent
      change is made to the Exchangeable Shares or the approval of the holders of
      Exchangeable Shares has been obtained.




In
      the event of any
      proposed takeover bid, or similar transaction affecting the Trust Units and
      supported by the Trust, the Trust will
      use reasonable
      efforts to take all actions necessary or desirable to enable holders of
      Exchangeable Shares to participate in such transaction to the same extent and
      on
      an economically equivalent basis as the Unitholders.




The
      Support
      Agreement also provides that, as long as any outstanding Exchangeable Shares
      are
      owned by any person or entity other
      than the
      Trust or any of its respective subsidiaries and other affiliates, the Trust
      will, unless approval to do otherwise is obtained from the holders of
      Exchangeable Shares, remain the direct or indirect beneficial owner collectively
      of more than 50% of
      all of the
      issued and outstanding voting securities of Vermilion, provided that the Trust
      will not be in violation of this obligation if a party acquires all or
      substantially all of the assets of the Trust. With the exception of
      administrative changes for the purpose of adding
      covenants
      for the protection of the holders of the Exchangeable Shares, making certain
      necessary amendments or curing ambiguities
      or
      clerical errors (in each case provided that the board of directors of Vermilion
      and the Trustee are of the opinion that such amendments are not prejudicial
      to
      the interests of the holders of the Exchangeable Shares), the Support Agreement may
      not be amended without the approval of the holders of the Exchangeable
      Shares.




Under
      the Support
      Agreement, the Trust will agree to not exercise any voting rights attached
      to
      the Exchangeable Shares owned by
      it or any of its
      subsidiaries and other affiliates on any matter considered at meetings of
      holders of Exchangeable Shares (including
      any
      approval sought from such holders in respect of matters arising under the
      Support Agreement).




***Delivery
      of Trust Units***




The
      Trust will
      agree to make such filings and seek such regulatory consents and approvals
      as
      are necessary so that the Trust Units
      issuable upon
      the exchange of Exchangeable Shares will be issued in compliance with applicable
      securities laws in Canada
      and may be
      traded freely on the TSX or such other exchange on which the Trust Units may
      be
      listed, quoted or posted for
      trading from
      time to time.


*2006
                Annual Information Form - Vermilion Energy Trust*
              41
 
  **Notes**




The
      following
      summary of the material attributes and characteristics of the Notes does not
      purport to be complete and is qualified in
      its entirety by
      reference to the provisions of a note indenture (the "Note Indenture") dated
      January 16, 2003 and made between
      Vermilion
      Acquisition Ltd. (prior to its amalgamation with Vermilion under the
      Arrangement) and Computershare Trust Company
      of Canada,
      as trustee (the "Note Trustee"), which contains a complete statement of such
      attributes and characteristics. The
      Notes have been
      issued under the Note Indenture.




***Terms
      and Issue of Notes***




Pursuant
      to the
      Arrangement, Notes were issued to the Trust and to former holders of common
      shares and options of Vermilion. Notes
      issued to
      such former holders were transferred by such holders to the Trust in return
      for
      Trust Units. As a result, the Trust holds
      all of the
      issued and outstanding Notes.




The
      Notes are
      unsecured and bear interest from the date of issue at 13% per annum. Interest
      will be payable for each month during
      the term on
      the 15 th day of the month
      following such month. The first interest payment was due on March 15, 2003
      for
      the period
      commencing
      on the Effective Date and ending on February 28, 2003.




Although
      pursuant
      to the terms of the Note Indenture Vermilion is permitted to make payments
      against the principal amount of the Notes outstanding from time to time without
      notice or bonus, Vermilion is not required to make any payment in respect of principal
      until
      December 31, 2028, subject to the terms of any secured financing and subject
      to
      extension in the limited circumstances
      provided in the Note Indenture.




In
      contemplation of
      the possibility that Notes may be distributed to Unitholders upon the redemption
      of their Trust Units, the Note Indenture
      provides
      that if persons other than the Trust (the "Non-Fund Holders") own Notes having
      an aggregate principal amount
      in excess of
      $1,000,000, either the Trust or the Non-Fund Holders shall be entitled, among
      other things, to require the Note Trustee to exercise the powers and remedies
      available under the Note Indenture upon an event of default and, with the Trust,
      the Non-Fund Holders may provide consents, waivers or directions relating
      generally to the variance of the Note Indenture and
      the rights of
      noteholders. The Note Indenture will allow the Trust flexibility to delay
      payments of interest or principal otherwise
      due to it
      while payment is made to other noteholders, and to allow other noteholders
      to be
      paid out before the Trust. Any
      delayed
      payments will be due 5 days after demand.




Principal
      and
      interest on the Notes will be payable in lawful money of Canada directly to
      the
      holders of Notes at their address set forth
      in the
      register of holders of Notes.




***Ranking***




The
      Notes will be
      unsecured debt obligations of Vermilion and will rank *pari
      passu* with
      all other
      unsecured indebtedness of Vermilion,
      but
      subordinate to all secured debt.




***Events
      of Default***




The
      Note Indenture
      will provide that any of the following shall constitute an Event of Default:
      (a)
      default in payment of the principal
      of the
      Notes when required; (b) the failure to pay all of the interest obligations
      on
      the Notes for a period of three months; (c) if Vermilion has defaulted and
      a
      demand for payment has been made under any material instrument, indenture or
      document evidencing
      indebtedness of more than $5 million and Vermilion has failed to remedy such
      default within applicable curative periods;
      (d)
      certain events of winding-up, liquidation, bankruptcy, insolvency, receivership
      or seizure; (e) default in the observance
      or
      performance of any other covenant or condition of the Note Indenture and
      continuance of such default for a period of
      30 days after
      notice in writing has been given by the Note Trustee to Vermilion specifying
      such default and requiring Vermilion to
      rectify the
      same; (f) Vermilion ceasing to carry on its business; and (g) material default
      by Vermilion under material agreements
      if
      property is liable to forfeiture or termination.


*2006
                Annual Information Form - Vermilion Energy Trust*
              42




**Royalty
      Agreement**




Coincident
      with the
      Arrangement becoming effective, the Partnership and the Trust entered into
      the
      Royalty Agreement pursuant to
      which the
      Partnership granted the Royalty to the Trust. As owner of the Royalty, the
      Trust
      is entitled to cash distributions of approximately
      99%
      of the cash flow from all present and future oil and gas properties and related
      tangibles owned by the Partnership after certain costs, expenditures and
      deductions which include 99% of: (i) all amounts of interest and principal payable
      by
      Vermilion on account of or in respect of its credit facilities (ii) specified
      amounts of interest and principal payable by Vermilion
      on
      account of or in respect of its indebtedness to the Trust; (iii) the
      Partnership's share of operating costs and capital expenditures; (iv) amounts
      required to be paid to certain reserves; (v) general and administrative
      expenses; and (vi) acquisition costs
      of future oil
      and gas properties and related tangibles. Such cash distributions are to be
      paid
      on or about the 15th day of the second
      month
      following the month to which the distribution relates.




From
      time to time upon notice from the Partnership, the Trust has an obligation
      (the
      "Deferred Purchase Price Obligation") to pay the
      Partnership, as
      additional consideration for the Royalty, such portion of the acquisition cost
      of future oil and gas properties and capital expenditures including amounts
      borrowed by Vermilion to fund such costs and expenditures as may be designated by
      the
      Partnership. The Trust's obligation to pay amounts as a Deferred Purchase Price
      Obligation is subject to it having available
      funds
      from certain designated sources.




The
      Partnership is entitled to make farmouts or other similar dispositions of
      specific interests in any part of the properties subject to
      the Royalty, and
      upon the farmee or other participant earning its interest pursuant to the
      farmout or other disposition, the Royalty
      shall
      burden only the working interest retained by or reserved to the Partnership.
      Any
      net proceeds from the sale of properties subject to the Royalty shall be
      allocated to the Trust as to 99% of the net proceeds after being reduced by
      the
      credit facilities
      applicable to the properties. The remaining 1% and all amounts allocated to
      tangibles and miscellaneous interests shall be
      allocated to the
      Partnership.




Under
      the Royalty Agreement, the Trust is obligated to reimburse the Partnership
      in
      respect of 99% of certain non-deductible crown royalties paid by the
      Partnership; and the Partnership shall be entitled to set off such amounts
      reimbursable to it against payments
      to the
      Trust on account of the Royalty.




The
      Royalty does not constitute an interest in land. Except upon the insolvency
      of
      the Partnership, the Trust is not entitled to take its share of production
      in
      kind or to separately sell or market its share of petroleum
      substances.




**MARKET
      FOR
      PRICE RANGE AND TRADING VOLUME OF SECURITIES**




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




**2006**
            
            
            **High**
            
            
            **Low**
            
            
            **Volume
                (000's**
            **)**January
            
            $
            31.07
            
            $
            29.55
            
            
            3,061February
            
            $
            31.21
            
            $
            26.51
            
            
            4,230March
            
            $
            33.27
            
            $
            30.40
            
            
            5,332April
            
            $
            34.16
            
            $
            31.75
            
            
            3,693May
            
            $
            35.27
            
            $
            30.10
            
            
            3,728June
            
            $
            34.59
            
            $
            29.10
            
            
            3,806July
            
            $
            35.79
            
            $
            32.21
            
            
            3,010August
            
            $
            36.59
            
            $
            34.03
            
            
            2,740September
            
            $
            35.70
            
            $
            32.10
            
            
            4,200October
            
            $
            37.99
            
            $
            30.40
            
            
            4,465November
            
            $
            34.70
            
            $
            29.56
            
            
            8,258December
            
            $
            35.62
            
            $
            32.94
            
            
            2,680**2007**
            
            
            **High**
            
            
            **Low**
            
            
            **Volume
                (000's**
            **)**January
            
            $
            35.18
            
            $
            30.33
            
            
            4,664February
            
            $
            34.19
            
            
            31.00
            
            
            3,705March
                1 to
                15
            
            $
            32.15
            
            
            30.55
            
            
            1,747








*2006
              Annual Information Form - Vermilion Energy Trust*
            43





**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, neither the Trust nor Vermilion is aware of any existing or potential
      material conflicts of interest between the
      Trust and
      Vermilion and a director or officer of Vermilion.




**INTEREST
      OF
      MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS**




Neither
      the Trustee, Vermilion nor any director or officer of Vermilion, nor any other
      insider of the Trust, or Vermilion, nor any associate or affiliate of any one
      of
      them has or has had, at any time since the year ended December 31, 2006, any
      material interest, direct or indirect, in any transaction or proposed
      transaction that has materially affected or would materially affect the Trust
      or Vermilion.




**LEGAL
      PROCEEDINGS**




The
      Trust is not
      party to any significant legal proceedings as of March 30, 2007.




**MATERIAL
      CONTRACTS**




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




**INTERESTS
      OF EXPERTS**




As
      at the date
      hereof, principals of GLJ, the independent engineers for the Trust, personally
      disclosed in certificates of qualification
      that
      they neither had nor expected to receive any of the outstanding Trust
      Units.




**TRANSFER
      AGENT AND REGISTRAR**




The
      transfer agent
      and registrar for the Trust Units 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 Vermilion and the
      Trust. 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. Unitholders
      and
      potential Unitholders should consider carefully
      the
      information contained herein and, in particular, the following risk
      factors.




**Reserve
      Estimates**




The
      reserve and
      recovery information contained in the GLJ Report is only an estimate and the
      actual production and ultimate reserves
      from the
      properties may be greater or less than the estimates prepared by
      GLJ.




**Volatility
      of Oil and Natural Gas Prices**




The
      Trust's
      operational results and financial condition will be dependent on the prices
      received by Vermilion for oil and natural gas
      production. Oil
      and natural gas prices have fluctuated widely 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 ability to
      satisfy its obligations under the Notes and
      on amounts, if
      any, payable by the Partnership to the Trust under the Royalty Agreement thereby
      decreasing the amount of Distributable
      Cash
      to be distributed to Unitholders.




*2006
                Annual Information Form - Vermilion Energy Trust*
              44
 
  **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 Trust operates, will not be changed in a
      manner which adversely affects Unitholders. This includes, but is not limited
      to
      the status of mutual fund trusts and the resource allowance.




**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.




The
      oil and gas
      industry is highly competitive. Vermilion's competitors for the acquisition,
      exploration, production and development
      of oil
      and natural gas properties, and for capital to finance such activities, include
      companies that have greater financial
      and
      personnel resources available to them than Vermilion.




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




**Operational
      Matters**




The
      operation of
      oil and gas wells and facilities involves a number of operating and natural
      hazards which may result in blowouts, environmental
      damage and other unexpected or dangerous conditions resulting in damage to
      Vermilion and possible liability to 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 available. 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 obligations under the Notes or reduce the amount receivable
      by
      the Trust from the Partnership under
      the Royalty
      Agreement.




Continuing
      production from a property, and to some extent the marketing of production
      therefrom, 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
      obligations under the Notes or reduce the amount receivable by the Trust from
      the Partnership under the Royalty Agreement.




**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. Although the Trust has established a reclamation
      fund
      for the purpose of funding its currently estimated future environmental and
      reclamation obligations
      based
      on its current knowledge, there can be no assurance that the Trust will be
      able
      to satisfy its actual future environmental
      and
      reclamation obligations.








*2006
              Annual Information Form - Vermilion Energy Trust*
            45





**Kyoto
      Protocol**




Canada,
      France and
      Netherlands are signatories to the United Nations Framework Convention on
      Climate Change and all have ratified
      the Kyoto
      Protocol established thereunder. Canada, France and Netherlands, as Annex B
      parties to the Kyoto Protocol, and
      France and
      Netherlands as a party to the European Union Regional Integration Organization,
      are required to set legally binding
      targets to
      reduce nation-wide emissions of carbon dioxide, methane, nitrous oxide and
      other
      so-called "greenhouse gasses".




Vermilion's
      exploration and production facilities and other operations and activities in
      Canada, France, Netherlands and Australia will
      emit a small
      amount of greenhouse gasses which may subject Vermilion to legislation
      regulating emissions of greenhouse gases
      and which may
      include a requirement to reduce emissions or emissions intensity from
      Vermilion's operations and facilities. The
      direct or
      indirect costs of complying with emissions regulations may adversely affect
      the
      business of Vermilion in Canada, France,
      the
      Netherlands and Australia.




**Debt
      Service**




Vermilion
      may, from
      time to time, finance a significant portion of its operations through debt
      (other than the Notes). Amounts paid
      in respect of
      interest and principal on debt incurred by Vermilion may impair Vermilion's
      ability to satisfy its obligations under the Notes or reduce the amount received
      by the Trust under the Royalty Agreement. 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
      obligations under the Notes or the Royalty Agreement. Ultimately, this may
      result in lower levels of Distributable Cash
      for the
      Trust.




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




**Delay
      in
      Cash Distributions**




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.




**Taxation
      of
      Vermilion**




Vermilion
      is
      subject to taxation in each taxation year on its income for the year, after
      deducting interest paid to the Trust pursuant to the Note Indenture and after
      deducting payments, if any, made to the Trust with respect to the Royalty
      Agreement. During the period that Exchangeable Shares issued by Vermilion are
      outstanding, a portion of the cash flow from operations will be subject to
      tax
      to the extent that there are not sufficient resource pool deductions, capital
      cost allowance or utilization of prior years non-capital losses to reduce
      taxable income to zero. Vermilion intends to deduct, in computing its income
      for
      tax purposes, the full
      amount
      available for deduction in each year associated with the income tax resource
      pools, undepreciated capital cost ("UCC")
      and
      non-capital losses carried forward from Vermilion, if any, plus resource pools
      and UCC created by capital expenditures
      of
      Vermilion. If there are not sufficient resource pools, UCC and non-capital
      losses carried forward or other deductions to shelter the income of Vermilion,
      then cash taxes may be payable by Vermilion. In addition, there can be no assurance
      that
      taxation authorities will not seek to challenge the amount of interest expense.
      If such a challenge were to succeed
      against
      Vermilion, it could materially adversely affect the amount of Distributable
      Cash
      available.




Further,
      interest
      on the Notes accrues at the Trust level for income tax purposes whether or
      not
      actually paid. The Trust Indenture
      provides
      that an amount equal to the taxable income of the Trust will be distributed
      each
      year to Unitholders in order to reduce
      the Trust's
      taxable income to zero. Where interest payments on the Notes are due but not
      paid in whole or in part, the Trust
      Indenture
      provides that any additional amount necessary to be distributed to Unitholders
      may be distributed in the form of Units
      rather than
      in cash. Unitholders will be required to include such additional amount in
      income even though they do not receive
      a cash
      distribution.


*2006
                Annual Information Form - Vermilion Energy Trust*
              46
 
  **Changes
      in
      Income Tax Laws**




Income
      tax laws and
      administrative policies regarding mutual fund trusts may be changed in a manner
      which adversely affects the
      Trust and/or
      the Unitholders.




On
      December 21,
      2006 the Minister of Finance (Canada) released draft legislation to implement
      proposals originally announced on
      October 31, 2006
      relating to the taxation of certain distributions from certain "specified
      investment flow-through" ("SIFT") trusts
      and SIFT
      partnerships (the "October 31 Proposals"). The October 31 Proposals would impose
      a tax at the trust level on distributions of certain income from SIFT trusts
      (which could include the Trust) and partnerships at a rate of tax comparable
      to
      the combined federal and provincial corporate tax and to treat such
      distributions as dividends to the Unitholder. Existing SIFT trusts
      will have a
      four-year transition period, and subject to the qualifications below, will
      not
      be subject to the October 31 Proposals
      until
      January 1, 2011. Assuming the October 31 Proposals are enacted in their current
      form, the implementation of such legislation would be expected to result in
      adverse tax consequences to the Trust and certain Unitholders (including most particularly
      Unitholders that are tax exempt trusts (such as Exempt Plans) and non-residents
      of Canada) and may impact cash distributions
      from
      the Trust.




Pursuant
      to the
      October 31 Proposals, commencing January 1, 2011 (provided the Trust only
      experiences "normal growth" and no "undue expansion" before then) certain
      distributions from the Trust which would have otherwise have been taxed as
      ordinary income
      generally
      will be characterized as dividends in addition to being subject to tax at
      corporate rates at the Trust level. Returns
      of capital
      generally are (and under the October 31, 2006 Proposal will continue to be)
      tax-deferred for Unitholders who are
      resident in
      Canada for purposes of the Tax Act (and reduce such Unitholder's adjusted cost
      base in the Trust Unit for purposes
      of the Tax
      Act). Distributions, whether of income or capital to a Unitholder who is not
      resident in Canada for purposes of the Tax Act, or that is a partnership that
      is
      not a "Canadian partnership" for purposes of the Tax Act, generally will be
      subject to
      Canadian
      withholding tax.




The
      proposals
      provide that there is no intention to inhibit "normal growth" of a SIFT during
      the transition period, but "undue expansion" could result in the transition
      period being "revisited" presumably with the loss of the benefit to the SIFT
      of
      that transitional
      period. As a result, the adverse tax consequences associated with the October
      31
      Proposals could be realized by the
      Trust sooner
      than January 1, 2011. On December 15, 2006, the Department of Finance (Canada)
      issued guidelines on the meaning
      of "normal
      growth" in this context. Specifically, the Department of Finance stated that
      "normal growth" would include equity
      growth
      within certain "safe harbour" limits, measured by reference to a SIFT trust's
      market capitalization as of the end of trading
      on October
      31, 2006 (which would include the SIFT's issued and outstanding publicly traded
      trust units and not any convertible
      debt,
      options or other interests convertible into or exchangeable for trust units).
      Those safe harbour limits are 40% for
      the period from
      November 1, 2006 to December 31, 2007, and 20% for each calendar 2008, 2009
      and
      2010. Moreover, these
      limits are
      cumulative, so that any unused limit for a period carries over into the
      subsequent period. Additional details of the Department
      of
      Finance's guidelines include the following:




(a)
            new
                equity
                for these purposes includes units and debt that is convertible into
                units
                (and may include other substitutes forequity
                if
                attempts are made to develop such
                substitutes);




(b)
            replacing
                debt that was outstanding as of October 31, 2006 with new equity,
                whether
                by a conversion into trust units ofconvertible
                debentures or otherwise, will not be considered growth for these
                purposes
                and will therefore not affect the safeharbour
                limits; and




(c)
            the
                exchange
                for trust units, of exchangeable shares that were outstanding on
                October
                31, 2006 will not be considered growth for those purposes and will
                therefore not affect the safe harbour where the issuance of the trust
                units is made insatisfaction
                of the exercise of the exchange right by a person other than the
                SIFT.




The
      Trust's market
      capitalization as of the close of trading on October 31, 2006, having regard
      only to its issued and outstanding publicly-traded Trust Units, was
      approximately $2,375 million, which means the Trust's "safe harbour" equity
      growth amount for the
      period ending
      December 31, 2007 is approximately $950 million and for each of calendar 2008,
      2009 and 2010 is an additional
      approximately $475 million (in any case, not including equity, including
      convertible debentures, issued to replace debt that
      was
      outstanding on October 31, 2006).




While
      these
      guidelines are such that it is unlikely they would affect the Trust's ability to
      raise the capital required to maintain and grow
      its existing
      operations in the ordinary course during the transition period, they could
      adversely affect the cost of raising capital
      and the
      Trust's ability to undertake more significant acquisitions.




*2006
                Annual Information Form - Vermilion Energy Trust*
              47
 
  It
      is not known at
      this time when the October 31 Proposals will be enacted by Parliament, if at
      all, or whether the October 31 Proposals
      will be
      enacted in the form currently proposed. If the October 31 proposals are enacted,
      there can be no assurance that
      the Trust will
      be able to reorganize its legal and tax structure to substantially mitigate
      the
      expected impact.




**Depletion
      of Reserves**




The
      Trust has
      certain unique attributes which differentiate it from other oil and gas industry
      participants. Distributions of Distributable
      Cash
      in respect of properties, absent commodity price increases or cost effective
      acquisition and development activities,
      will
      decline over time in a manner consistent with declining production from typical
      oil, natural gas and natural gas liquids reserves. Vermilion will not be
      reinvesting cash flow in the same manner as other industry participants.
      Accordingly, absent
      capital
      injections or acquisitions of additional oil and gas properties, Vermilion's
      initial 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 Trust 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 Trust Units 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 Trust's
      assets.




**Return
      of
      Capital**




Trust
      Units will
      have no value when reserves from the underlying assets of the Trust can no
      longer be economically produced and,
      as a result,
      cash distributions do not represent a "yield" in the traditional sense as they
      represent both return of capital and return
      on
      investment.




**Nature
      of
      Trust Units**




The
      Trust Units do
      not represent a traditional investment in the oil and natural gas sector and
      should not be viewed by investors as shares in Vermilion. The Trust Units
      represent a fractional interest in the Trust. As holders of Trust Units,
      Unitholders will not have the statutory rights normally associated with
      ownership of shares of a corporation including, for example, the right to bring "oppression"
      or
      "derivative" actions. The Trust's sole assets will be its shares in Vermilion,
      the Notes, the Royalty Agreement and
      other
      investments in securities. The price per Trust Unit is a function of anticipated
      Distributable Cash, the underlying assets of the Trust and management's ability
      to effect long-term growth in the value of the Trust. The market price of the
      Trust Units will be
      sensitive to a
      variety of market conditions including, but not limited to, interest rates
      and
      the ability of the Trust to acquire suitable
      oil and
      natural gas properties. Changes in market conditions may adversely affect the
      trading price of the Trust Units.




The
      Trust Units are
      not "deposits" within the meaning of the *Canada
      Deposit
      Insurance Corporation Act* (Canada)
      and are
      not insured
      under the
      provisions of that Act or any other legislation. Furthermore, the Trust is
      not a
      trust company and, accordingly, is
      not registered
      under any trust and loan company legislation as it does not carry on or intend
      to carry on the business of a trust company.




**Unitholders
      Limited Liability**




The
      Trust Indenture
      provides that no Unitholders will be subject to any liability in connection
      with
      the Trust or its obligations and affairs
      and, in the
      event that a court determines Unitholders are subject to any such liabilities,
      the liabilities will be enforceable only
      against, and
      will be satisfied only out of the Trust's assets. Pursuant to the Trust
      Indenture, the Trust will indemnify and hold harmless each Unitholder from
      any
      costs, damages, liabilities, expenses, charges and losses suffered by a
      Unitholder resulting from
      or arising out
      of such Unitholder not having such limited liability.




The
      Trust Indenture
      provides that all written instruments signed by or on behalf of the Trust must
      contain a provision to the effect that
      such
      obligation will not be binding upon Unitholders personally. Personal liability
      may also arise in respect of claims against the Trust that do not arise under
      contracts, including claims in tort, claims for taxes and possibly certain
      other
      statutory liabilities. The
      possibility of
      any personal liability of this nature arising is considered
      unlikely.


*2006
                Annual Information Form - Vermilion Energy Trust*
              48
 
  In
      addition, the *Income
      Trust
      Liability Act* (Alberta)
      provides
      that the beneficiary of a trust that is (a) created by a trust instrument
      governed by the laws of Alberta, and (b) a reporting issuer as defined in the *Securities
      Act* (Alberta),
      is not
      liable as a beneficiary for
      any act,
      default, obligation or liability of the trustee.




The
      operations of
      the Trust will be conducted, upon the advice of counsel, in such a way and
      in
      such jurisdictions as to avoid as far
      as possible any
      material risk of liability on the Unitholders for claims against the
      Trust.




**Statutory
      Remedies**




The
      Trust is not a
      legally recognized entity within the relevant definitions of the *Bankruptcy
      and
      Insolvency Act* (Canada),
      the *Companies'
      Creditors Arrangement Act* (Canada)
      and in
      some cases, the *Winding
      Up and
      Restructuring Act* (Canada).
      As a
      result, in the event a restructuring of the Trust was necessary, the Trust
      would
      not be able to access the remedies available thereunder. In the event of a
      restructuring, a holder of Trust Units may be in a different position that
      a
      holder of unsecured indebtedness
      of a
      corporation.




**Variations
      in Interest Rates and Foreign Exchange Rates**




An
      increase in
      interest rates could result in a significant increase in the amount the Trust
      pays to service debt, potentially impacting
      Distributions to Unitholders.




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




**Mutual
      Fund
      Trust Status**




It
      is intended that
      the Trust continue to qualify as a mutual fund trust for the purposes of the
      Income Tax Act (Canada) (the "Tax Act").
      The Trust
      may not, however, always be able to satisfy any future requirement for the
      maintenance of mutual fund trust status.
      Should the
      status of the Trust as a mutual fund trust be lost or successfully challenged
      by
      a relevant tax authority, certain adverse
      consequences may arise for the Trust and Unitholders. Some of the significant
      consequences of losing mutual fund trust
      status are as
      follows:




•
            By
                virtue of
                its status as a mutual fund trust, the Trust has been accepted for
                registration as a "registered investment" forregistered
                retirement savings plans ("RRSPs"), registered retirement income
                funds
                ("RRIFs"), deferred profit sharing plansand
                registered education savings plans (“RESPs”) (collectively, "Exempt
                Plans"). As such, Trust Units are qualified investments for Exempt
                Plans
                and if the Trust's status as a "registered investment" is revoked
                in any
                year by virtue ofceasing
                to be
                a "mutual fund trust", the Trust Units would remain as qualified
                investments for Exempt Plans until the end ofthe
                year
                following such year.




•
            Where
                at the
                end of any month an Exempt Plan holds Trust Units that are not qualified
                investments, the Exempt Plan must,in
                respect of
                that month, pay a tax under Part XI.1 of the Tax Act equal to 1 percent
                of
                the fair market value of the TrustUnits
                at the
                time such Trust Units were acquired by the Exempt Plan. An RRSP or
                RRIF
                holding Trust Units that are notqualified
                investments would become taxable on income attributable to the Trust
                Units
                while they are not qualifiedinvestments
                (including the entire amount of any capital gain arising on a disposition
                of the non-qualified investment). RESPswhich
                hold
                Trust Units that are not qualified investments may have their registration
                revoked by the Canada Customs andRevenue
                Agency.




•
            The
                Trust
                would be taxed on certain types of income distributed to Unitholders,
                including income generated by the royalty held by the Trust. Payment
                of
                this tax may have adverse consequences for some Unitholders, particularly
                Unitholders that are not residents of Canada and residents of Canada
                that
                are otherwise exempt from Canadian income
                tax.


•
              The
                  Trust
                  would cease to be eligible for the capital gains refund mechanism
                  available under the Tax Act.


•
            Trust
                Units
                held by Unitholders that are not residents of Canada would become
                taxable
                Canadian property. These non-resident
                holders would be subject to Canadian income tax on any gains realized
                on a
                disposition of Trust Units held bythem.


*2006
                Annual Information Form - Vermilion Energy Trust*
              49
 
  In
      addition, the
      Trust may take certain measures in the future to the extent the Trust believes
      such measures are necessary to ensure
      the Trust
      maintains its status as a mutual fund trust. These measures could be adverse
      to
      certain holders of Trust Units.




**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 distributions to Unitholders and affect the market price of the
      Trust Units. 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 distributions to Unitholders and affect the market price of the Trust
      Units.




**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 Distributable
      Cash.




**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
      distributions
      to Unitholders may be reduced, suspended or eliminated.




To
      the extent that
      external sources of capital, including the issuance of additional Trust Units,
      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 Trust is required to use cash flow to finance capital expenditures
      or
      property acquisitions, the level of cash
      available for
      distribution 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.




**GAAP
      Adjustments**




Canadian
      Generally
      Accepted Accounting Principles ("GAAP") require 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 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 Trust Unit price.




Lower
      oil and gas
      prices increase the risk of write-downs of Vermilion’s oil and gas property
      investments. Under GAAP, the net capitalized
      cost of
      oil and gas properties may not exceed a "ceiling limit" that is based, in part,
      upon estimated future net cash flows
      from
      reserves. If the net capitalized costs exceed this limit, Vermilion must charge
      the amount of the excess against earnings.
      If oil
      and natural gas prices decline, Vermilion’s net capitalized cost may exceed this
      ceiling, ultimately resulting in a charge against its earnings. While these
      write-downs would not affect cash flow, the charge to earnings could be viewed unfavourably
      in the
      market.




*2006
                Annual Information Form - Vermilion Energy Trust*
              50
 
  **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 distributions to its
      Unitholders and the trading
      price of
      the Trust Units.




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 distributions to Unitholders.




**ADDITIONAL
      INFORMATION**




Additional
      information relating to the Trust may be found on SEDAR at www.sedar.com .
      Additional
      information related to the remuneration
      and
      indebtedness of the directors and officers of VRL, and the principal holders
      of
      Trust Units and Rights to purchase
      Trust
      Units and securities authorized for issuance under the Trust's equity
      compensation plans, where applicable, are contained in the information circular
      of the Trust in respect of its most recent annual meeting of Unitholders.
      Additional financial information
      is
      provided in the Trust's audited financial statements and management's discussion
      and analysis for the year ended December
      31,
      2006.


*2006
                Annual Information Form - Vermilion Energy Trust*
              51
 
  **SCHEDULE
      "A"** **REPORT
      ON
      RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR (FORM
      51-101F2)**




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




1.
            We
                have
                prepared an evaluation of the Company’s reserves data as at December 31,
                2006. The reserves data consist of the
                following:




(a) (i)
      proved and proved plus probable oil and gas reserves estimated as at December
      31, 2006, using forecast prices
      and costs;
      and




(ii)
      the related
      estimated future net revenue; and




(b) 
(i)
        proved oil and gas reserves estimated as at December 31, 2006, using constant
        prices and costs; and


(ii)
      the
      related estimated future net revenue.




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 reservesdata
                are free
                of material misstatement. An evaluation also includes assessing whether
                the reserves data are in accordancewith
                principles and definitions in the COGE
                Handbook.




4.
            The
                following
                table sets forth the estimated future net revenue (before deduction
                of
                income taxes) attributed to proved plusprobable
                reserves, estimated using forecast prices and costs and calculated
                using a
                discount rate of 10 percent, included inthe
                reserves
                data of the Company evaluated by us for the year ended December 31,
                2006,
                and identifies the respectiveportions
                thereof that we have audited, evaluated and reviewed and reported
                on to
                the Company's board of directors:







**Location
                of****Description
                and**
            
            
            **Reserves**
            
            
            
            
            
            **Net
                Present Value of Future Net Revenue****Independent**
            
            
            **Preparation
                Date of**
            
            
            **(Country
                or Foreign**
            
            
            **(before
              income****taxes, 10% discount rate - $M****)****Qualified
                Reserves Evaluator**
            
            
            **Evaluation
                Report**
            
            
            **Geographic
                Area**
            **)**
            
            **Audited**
            
            
            **Evaluated**
            
            
            **Reviewed**
            
            
            **Total**GLJ
                Petroleum
                Consultants
            
            
            February
                17, 2007
            
            
            Australia
            
            
            -
            
            $
            366,479
            
            
            -
            
            $
            366,479GLJ
                Petroleum
                Consultants
            
            
            February
                17, 2007
            
            
            Canada
            
            
            -
            
            $
            644,890
            
            
            -
            
            $
            644,890GLJ
                Petroleum
                Consultants
            
            
            February
                17, 2007
            
            
            France
            
            
            -
            
            $
            970,199
            
            
            -
            
            $
            970,199GLJ
                Petroleum
                Consultants
            
            
            February
                17, 2007
            
            
            Netherlands
            
            
            -
            
            $
            188,272
            
            
            -
            
            $
            188,272TOTAL
            
            
            
            
            
            
            
            
            -
            
            $
            2,169,840
            
            
            -
            
            $
            2,169,840




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




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




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




EXECUTED
      as to our
      report referred to above:




GLJ
      Petroleum
      Consultants Ltd., Calgary, Alberta, Canada, February 27, 2007






*“Jodi
                L.
                Anhorri"*Jodi
                L.
                Anhorn, M.Sc., P. Eng.
                VP Corporate Evaluations







*2006
                Annual Information Form - Vermilion Energy Trust*
              52


**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 Trust (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 consist of the
      following:




(a)  (i)
      proved and
      proved plus probable oil and gas reserves estimated as at December 31, 2006
      using forecast prices and
      costs;
      and




(ii)
      the related
      estimated future net revenue; and




(b)  (i)
      proved oil and
      gas reserves estimated as at December 31, 2006 using constant prices and costs;
      and




(ii)
      the related
      estimated future net revenue.




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,
      2006.




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 the reserves data and other
      oil
      and gas information;




(b)  the
      filing of 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.







*“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*“William
                F. Madison”*William
                F.
                Madison, DirectorMarch
                23,
                2007








*2006
              Annual Information Form - Vermilion Energy Trust*
            53





**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 unitholders and others;




**B.**  the
      systems of
      internal controls, management and the Board of Directors have established;
      and




**C.**  all
      audit
      processes.




**D.** Primary
          responsibility for the financial reporting, information systems, risk management
          and internal controls Vermilion
          Energy
          Trust (“Vermilion” or the “Trust”) 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 independent**1******directors
                of
                Vermilion.




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




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




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




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




**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;




(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 OSC definition of “financial literacy”, which is an individual who
      has the ability to read and understand a set of financialstatements that
      present a breadth and level of complexity of accounting issues that are
      generally comparable to the breadth and complexity of the issues that can
      reasonably be expected to be raised by the issuer's financial
      statements.








*2006
              Annual Information Form - Vermilion Energy Trust*
            54





**TERMS
      OF
      REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)**




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.




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;
      and




vii)
      any new or
      pending developments in accounting and reporting standards that may affect
      Vermilion.




**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
      the
      Trust’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 unitholder 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 the Trust'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.




v)
      review the auditor’s report on all material subsidiaries;








*2006
              Annual Information Form - Vermilion Energy Trust*
            55





**TERMS
      OF
      REFERENCE FOR THE AUDIT COMMITTEE (CONTINUED)**




vi) 
review
      and receive assurances on the independence of the external auditor;




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




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




**D.** **Compliance**


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 has adopted for pre-approving non-audit services
      by the External Auditor including affirmation that they meet regulatory
      requirements;




iii)
      Assist the
      Governance and Human Resources Committee with preparing the Trust’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 the
      Trust 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 the Trust 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 the Trust’s hiring policies regarding partners, employees and former
      partners and employees of the present and former External Auditor;




iii)
      review
      insurance coverage of significant business risks and uncertainties;




iv)
      review the
      Trust’s Reclamation Fund (the “Fund”)


a)  approve
      fund
      managers and monitor performance; and


b)  review
      the forecast
      of costs and funding requirements and approve of contributions to the
      Fund.




v)
      review material litigation and its impact on financial reporting;




vi)
      review policies
      and procedures for the review and approval of officers’ expenses and
      perquisites; and




vii)
      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
                the Trust.




**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.




*2006
                Annual Information Form - Vermilion Energy Trust*
              56






















2800,
                400 -
                4thAvenue
                S.W.Calgary,
                AlbertaT2P
                0J3403.269-4884
                tel - 403.264.6306 faxinvestor_relations@vermilionenergy.com


*2006
                Annual Information Form - Vermilion Energy Trust*
              57