CALGARY, Oct. 1, 2013 /PRNewswire/ – Vermilion Energy Inc. (“Vermilion”, “We”
or “Our”) (TSX, NYSE: VET) is pleased to announce that it has entered
into a definitive purchase and sale agreement with Northern Petroleum
Plc. (“Northern”) whereby Vermilion, through its wholly-owned
subsidiary, will acquire 100% of the shares of Northern Petroleum
Nederland B.V. (“NPN”) (the “Acquisition”). NPN is the Netherlands
subsidiary of UK-based Northern. The purchase price, which is subject
to customary closing adjustments (including working capital and cash
flows between the effective and closing dates), is $27.5 million.
Vermilion will also grant Northern minority net profit participation
rights on select license interests included in the Acquisition. The
Acquisition has an effective date of January 1, 2013, and remains
subject to customary conditions and receipt of all necessary regulatory
approvals. The Acquisition is anticipated to close before the end of
October, 2013, and will be funded with existing credit facilities.

The Acquisition includes interests in nine concessions, including six
onshore licences in production or development, three onshore
exploration licenses, and one offshore production license (“P12”) in
the Netherlands (the “Assets”). The interests in the Drenthe IIIb,
Drenthe IV, Oosterwolde, and Zuid Friesland III licenses are located in
the northeastern region of the Netherlands in close proximity to
Vermilion’s existing concessions. The remaining five onshore licenses
include interests in Andel V, Engelen, Papekop, Utrecht, and Waalwijk,
which are located in the southwestern region of the Netherlands.

All of the Assets to be acquired will be operated by Vermilion following
closing of the Acquisition, with the exception of the offshore license
P12, in which Vermilion will hold a 23.6% non-operated interest. The
Assets cover approximately 298,500 net acres, of which approximately 98
percent is currently undeveloped. Production from the Assets is
expected to average approximately 600 boe per day in 2013, comprised of
99% natural gas that is expected to produce an operating netback
in-line with Vermilion’s operating netback for natural gas in the
Netherlands. Proved plus probable reserves have been estimated for
Vermilion by GLJ Petroleum Consultants Ltd. (“GLJ”) to be approximately
2.3⁽¹⁾ million boe as of the effective date of the purchase.

Disregarding any value attributable to undeveloped land, acquisition
metrics are estimated at $46,000 per boe per day and $11.74 per boe of
proved plus probable reserves. Using Vermilion’s second quarter 2013
Netherland’s operating netback for natural gas of $54.72 per boe⁽²⁾ as a proxy and estimated 2013 production levels, the cost of the
Acquisition is approximately 2.3 times estimated 2013 operating cash
flow. Upon closing of the Acquisition, Vermilion will continue to
maintain considerable financial flexibility, with approximately $700
million of remaining borrowing capacity and a net debt-to-fund flows
from operations⁽²⁾ ratio of approximately 1.1 times.

The Acquisition increases our undeveloped land base in the Netherlands
to more than 780,000 net acres. Vermilion has identified several
development opportunities on the Assets that increase the already
significant inventory of investment projects on our existing
Netherlands asset base. The Assets enhance our position as the second
largest natural gas producer onshore in the Netherlands, and offer a
strong fit with our current operations. We believe this Acquisition is
well aligned with our strategic objective to expand our exposure to
European commodity markets.

About Vermilion

Vermilion is an oil-leveraged producer that adheres to a value creation
strategy through the execution of full cycle exploration and production
programs focused on the acquisition, exploration, development and
optimization of producing properties in Western Canada, Europe and
Australia. Our business model targets annual organic production growth
of approximately 5% along with providing reliable and growing
dividends. Vermilion is targeting growth in production primarily
through the exploitation of conventional resource plays in Western
Canada, including Cardium light oil and liquids rich natural gas, the
exploration and development of high impact natural gas opportunities in
the Netherlands and through drilling and workover programs in France
and Australia. Vermilion also holds an 18.5% working interest in the
Corrib gas field in Ireland. In addition, Vermilion pays a monthly
dividend of Canadian $0.20 per share, which provides a current yield in
excess of 4%. Management and directors of Vermilion hold approximately
8% of the outstanding shares and are dedicated to consistently
delivering superior rewards for all stakeholders, featuring an 18-year
history of market outperformance. Vermilion trades on the Toronto Stock
Exchange and the New York Stock Exchange under the symbol VET.

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

(1)	Estimated proved plus probable reserves attributable to the Assets as evaluated by GLJ in a report dated September 16, 2013, with an effective date of December 31, 2012.
(2)	Fund flows from operations, net debt and netbacks are non-GAAP (as defined herein) measures that do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS” or, alternatively, “GAAP”) and therefore may not be comparable with the calculations of similar measures for other entities. “Fund flows from operations” represents cash flows from operating activities before changes in non-cash operating working capital and asset retirement obligations settled. Management considers fund flows from operations and fund flows from operations per share to be key measures as they demonstrate Vermilion’s ability to generate the cash necessary to pay dividends, repay debt, fund asset retirement obligations and make capital investments. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, fund flows from operations provides a useful measure of Vermilion’s ability to generate cash that is not subject to short-term movements in non-cash operating working capital. “Net debt” is the sum of long-term debt and working capital as presented in Vermilion’s consolidated balance sheets. Net debt is used by management to analyze the financial position and leverage of Vermilion. The most directly comparable GAAP measure is long-term debt. “Netbacks” are per boe and per mcf measures used in operational and capital allocation decisions. For relevant operating netback related disclosures please refer to the reconciliation contained on page 27 of management’s discussion and analysis contained in Vermilion’s Second Quarter 2013 Financial Report for the six months ended June 30, 2013 available on SEDAR or at the company’s website (www.vermilionenergy.com).

DISCLAIMER

Certain statements included or incorporated by reference in this press
release 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 press
release may include, but are not limited to:

• anticipated closing date, sources of funds and anticipated acquisition
  metrics;
• post-closing debt levels, remaining borrowing capacity, and net debt to
  funds flow ratio;
• anticipated 2013 average production levels and anticipated netbacks from
  the Assets;
• natural gas weighting of 2013 production;
• development plans and strategic objectives;
• the timing of regulatory proceedings and approvals and closing of the
  Acquisition;
• post-closing working interests in the Assets;

Statements relating to reserves are deemed to be forward-looking
statements as they involve the implied assessment, based on certain
estimates and assumptions, that the reserves described exist in the
quantities predicted or estimated, and can be profitably produced in
the future. Such forward-looking statements or information are based on a number of
assumptions all or any of which may prove to be incorrect. In addition
to any other assumptions identified in this document, assumptions have
been made regarding, among other things:

• satisfaction of all conditions to the proposed Acquisition and receipt
  of all necessary regulatory approvals.
• the ability of Vermilion to obtain equipment, services and supplies in a
  timely manner to carry out planned development activities;
• the ability of Vermilion 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;
• currency, exchange and interest rates;
• future oil and natural gas prices; and
• Management’s expectations relating to the timing and results of
  development activities.

Although Vermilion 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
Vermilion 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 Vermilion and described in the
forward looking statements or information. These risks and
uncertainties include but are not limited to:

• the ability of management to execute its business plan;
• the risks of the oil and gas industry, both domestically and
  internationally, such as operational risks in exploring for, developing
  and producing crude oil and natural gas and market demand;
• risks and uncertainties involving geology of oil and natural gas
  deposits;
• risks inherent in Vermilion’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 proposed
  acquisitions, exploration or development projects or capital
  expenditures;
• Vermilion’s ability to enter into or renew leases;
• fluctuations in oil and natural gas prices, foreign currency exchange
  rates and interest rates;
• health, safety and environmental risks;
• uncertainties as to the availability and cost of financing;
• the ability of Vermilion to add production and reserves through
  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 Vermilion; and
• other risks and uncertainties described elsewhere in this document or in
  Vermilion’s other filings with Canadian securities regulatory
  authorities.

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

SOURCE Vermilion Energy Inc.