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Vermilion Energy Inc. (“Vermilion”, the “Company”, “We” or “Our”) (TSX, NYSE: VET) is pleased to announce that we have entered into a farm-in agreement (the “Farm-in” or the “Agreement”) with Mobil Erdgas-Erdӧl GmbH (“MEEG”) and BEB Erdgas und Erdӧl GmbH & Co.KG (‘BEB”). MEEG is 100% held by ExxonMobil and BEB is jointly held by ExxonMobil and Royal Dutch Shell.  ExxonMobil Production Deutschland GmbH (‘EMPG”) currently operates and manages both MEEG’s and BEB’s interests in the exploration licenses involved in the Farm-in. The Agreement, signed July 27th, 2015 and with an anticipated closing date of January 1, 2016, remains subject to customary conditions and regulatory approvals.

The Farm-in will provide Vermilion participating interest in 19 onshore exploration licenses in northwest Germany, comprising approximately 850,000 net acres of oil and gas rights (100% undeveloped) (the “Assets”). Under the terms of the Agreement, Vermilion will acquire the Assets (which represent 50% of MEEG’s and BEB’s current interests in these licenses) in exchange for committing to the financial carry of the remaining 50% of MEEG’s and BEB’s interests in 11 gross (6 net) exploratory wells over the next five years.  At present, approximately 75 exploratory and semi-exploratory leads and prospects have been identified in the Rotliegend, Carboniferous, Triassic and Zechstein formations on these Assets.

Eleven of the 19 licenses are currently operated by EMPG, which will transfer operatorship for the exploration phase to Vermilion. The Agreement also grants Vermilion proportional ownership to EMPG proprietary data spanning the Assets. No existing oil or gas production is being acquired by Vermilion in the Farm-in.

The Farm-in provides Vermilion with a very large, nearly contiguous land block in the heart of the North German Basin.  This basin has cumulative production of more than 2 billion barrels of oil and 34 trillion cubic feet of natural gas since its discovery, representing approximately 97% of Germany’s historical onshore production.  We believe that the Assets are prospective for both oil and natural gas.

The Farm-in follows our entry in early 2014 into the exploration and production business in Germany, a jurisdiction with a long history of oil and gas development activity, a consistent fiscal framework and low political risk.  The Farm-in is consistent with our growing European focus, and will increase our exposure to the strong fundamentals and pricing of the European natural gas market.  The Assets are a natural and synergistic expansion to our existing German and Netherlands portfolios, and share the same subsurface genre and development approach. We believe that our capability in conventional oil and gas exploration and production in onshore Europe, coupled with our track record of accretive European consolidation, positions us for future development and expansion opportunities in both Germany and the greater European region.

About Vermilion

Vermilion is an oil-leveraged producer that seeks to create value through the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia. Our business model targets annual organic production growth of 5% or more along with providing reliable and increasing dividends to investors.  Vermilion is targeting growth in production primarily through the exploitation of light oil and liquids-rich natural gas conventional resource plays in Canada and the United States, the exploration and development of high impact natural gas opportunities in the Netherlands and Germany, 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.  Vermilion pays a monthly dividend of Canadian $0.215 per share, which provides a current yield of approximately 6%.  Management and directors of Vermilion hold approximately 6% of the outstanding shares, are committed to consistently delivering superior rewards for all stakeholders, and have delivered a 20-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 (“mcf”) 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.