Vermilion Energy Inc. Closes Acquisition of Zaza Energy France

CALGARY, Dec. 27, 2012 /CNW/ - Vermilion Energy Inc. ("Vermilion" or the 
"Company") (TSX - VET) is pleased to announce that it has completed its 
previously announced transaction with ZaZa Energy Corporation ("ZaZa") whereby 
Vermilion, through its wholly owned subsidiaries, has acquired 100% of the 
shares of ZaZa Energy France S.A.S ("ZEF") (the "Acquisition"). ZEF's 
operating interests cover approximately 24,300 acres with 100% working 
interests in the Saint Firmin, Chateaurenard, Courtenay, Chuelles, and 
Charmottes fields in the Paris Basin. Current production is approximately 
850 bbl/d of light Brent-based crude oil (approximately 27˚API). Proved plus 
probable developed producing reserves((1) )at December 31, 2012, as evaluated 
by GLJ Petroleum Consultants Ltd. ("GLJ"), were estimated to be approximately 
6.3 million boe with a reserve life index of over 20 years, reflecting the low 
decline rates of the acquired assets. 
Taking into consideration an effective date for the Acquisition of October 1, 
2012 and customary closing adjustments, Vermilion paid approximately US$76 
million cash at closing of the Acquisition, including working capital. 
Resulting acquisition metrics reflect a cash cost of approximately US$90,000 
per boe/d and US$12.26 per boe of proved plus probable developed producing 
Vermilion continues to maintain considerable financial flexibility after 
closing of the Acquisition with more than $500 million of remaining borrowing 
The acquired assets offer a strong fit with our current French operations, and 
the transaction is well aligned with our strategic objective to consolidate 
assets within our core operating areas. The Acquisition further strengthens 
Vermilion's position as the leading oil producer in France and increases 
Vermilion's Brent-based weighting to approximately 45% of consolidated 
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, the broader European region and 
Australia. Vermilion is targeting annual 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's Board of Directors has approved a 5.3% increase in the 
monthly cash dividend to $0.20 CDN per share from the current level of $0.19 
CDN per share. The increase is expected to become effective for the January 
2013 dividend payable on February 15, 2013((3)). This marks our third increase 
since initiating a dividend ten years ago. Vermilion has never reduced its 
dividend.Vermilion believes it is well positioned to continue to provide 
shareholders with steady growth and reliable and growing dividends. 
Management and directors of Vermilion hold approximately 8% of the 
outstanding shares and are dedicated to consistently delivering superior 
rewards for all its stakeholders. Vermilion trades on the Toronto Stock 
Exchange under the symbol VET and over-the-counter in the United States under 
the symbol VEMTF. Vermilion has initiated the process with the NYSE Euronext 
for a secondary listing of the Company's common shares on the NYSE Euronext's 
New York Stock Exchange ("NYSE"). Listing will be subject to fulfilling all of 
the listing requirements of the NYSE. Pending receipt of all applicable 
exchange and regulatory approvals, the Company expects its common shares will 
be listed on the NYSE during the first quarter of 2013 under the ticker symbol 
((1)) Estimated proved plus probable developed producing reserves attributable 
to the Acquisition as evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") in a 
report dated November 13, 2012 with an effective date of December 31, 2012. 
((2)) Fund flows from operations and net debt 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 noncash 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. 
((3)) In accordance with applicable corporate law requirements (including 
solvency tests), formal declaration and payment of the January 2013 dividend 
remains subject to final Board of Director approval prior to its declaration 
on or about January 15, 2013. 
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. 
Certain statements included or incorporated by reference in this news 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: 

    --  estimated reserves attributable to the fields acquired in the
    --  strategic objectives; and
    --  the effective date of the dividend increase.

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 
    --  the ability of Vermilion to obtain equipment, services and
        supplies in a timely manner to carry out its activities in
    --  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;
    --  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
    --  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
    --  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.

Lorenzo Donadeo, President & CEO; Anthony Marino, Executive VP & COO;  Curtis 
W. Hicks, C.A., Executive VP & CFO; and/or Dean Morrison,  Director - Investor 
Relations TEL (403) 269-4884 | IR TOLL FREE 1-866-895-8101 

SOURCE: Vermilion Energy Inc.

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CO: Vermilion Energy Inc.
ST: Alberta

-0- Dec/27/2012 12:00 GMT

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