I want to remind everyone that this conference is being recorded today, Monday, March 3, 2008 at 11:00 am Eastern Time. I would now like to turn the conference over to Mr. Lorenzo Donadeo, President and Chief Executive Officer, please go ahead sir.

Thank you Operator, good morning ladies and gentlemen. I am Lorenzo Donadeo, Vermilion’s President and CEO and joining me today are Curtis Hicks, our Executive Vice President and Chief Financial Officer, Bob Mc Dougall, Executive Vice President and Chief Operating Officer and Paul Beique, Director of Investor Relations. Today we reported results for the fourth quarter and year ended December 31, 2007. A strong production, high oil prices and lower current taxes resulted in the Trust’s strongest quarter on record. I’d like to comment on a few items from our press release. Fourth quarter production increased by 12% on a year over year basis. Prior volumes were led by acquisition gains in Australia and drilling and work over gains in Canada. For the full year, our production averaged 31,325 boes per day very near to the mid point of our guidance numbers for 2007. Unflows from operations rose to a record $l.73 per unit in the fourth quarter compared to $1.36 per unit in the third quarter. Reported by increased production volumes, higher oil prices and lower corporate taxes. Current taxes were $9.5 million lower in the fourth quarter compared to the third contributing approximately $0.13 per unit to the quarterly difference. The reduction in fourth quarter taxes reflects the impact of the Aquitaine Maritime Project as well as a number of initiatives of which we obtained certainty over the last quarter. Distribution in the fourth quarter represented 28% of funds from operations and only 20% net of our DRIP program. Total spending including net distributions and capital expenditures represented 63% of funds from operations in the fourth quarter and 73% for the full year. This represents the lowest total payout among our peer group of conventional energy trusts. Our strategy to maintain total spending within the limits of funds…

Thank you ladies and gentlemen we will now conduct the question and answer session. (Operator’s instructions.) Your first question comes from Gorden Tait of BMO Capital Markets please go ahead. Gorden Tait – BMO Capital Markets: Good morning, looking at your CAPEX program for this year, you said 182 million and you have 50 million at about 27% going to Australia, what is the break down of the balance of that sort of by region?

In Canada, we’ve got about 58 million in the budget, France 61 million and Netherlands is another 8 million. Gorden Tait – BMO Capital Markets: Okay and then just a question on the EOR activity you mentioned with some of your large original place oil fields, what sort of activity are you looking at? Are you looking at CO2 for instance pilots in any of those fields?

Yes, right now we are going through a screening process, evaluating the reservoirs against what recovery methods would work for each reservoir. Basically, the short answer is we are looking at all of the opportunities and trying to figure out which one is best. But, CO2 is one that we are closely looking at and in France, especially given the announcement that TOTAL has made to move foreword with the pilot for Vieux-Viel. We are also looking at hydrocarbon miscible flood as well. That’s one of the other opportunities that seem to be ranking very high on the valuation. Gorden Tait – BMO Capital Markets: Okay, thanks.

Your next question comes from Jonathan Fleming of Cormark Securities please go ahead. Jonathan Fleming – Cormark Securities: Hi guys, just two questions on the finding cost. First did those numbers you quoted include future development costs or not. Maybe I just missed that part. The second piece of the puzzle, do you expect a step-up in finding cost going forward or is that just this year’s results in serendipity and next year we expect numbers to come significantly down?

On the first point, we are going to be providing some of the FDC cost, these are with all future development costs, we will be providing those later to some of the analyst and then they will be in our AIF at the end of March as well. Regarding the F&D costs, yes our hope is that they’re obviously going to come down at $25 they are probably higher and we think they will come down. I think it is important as I mentioned is that we operate…they tried to do an apples to apples comparison with an international company so like a domestic company just because some of the cost structure is a little bit higher but you have to do it in the context of what’s the recycle ratio looking like. We have probably top deciles ratio so we can afford a little bit higher F&D cost because we’re getting much stronger net backs than I think most of our peers. Jonathan Fleming – Cormark Securities: Okay that makes some sense, thanks guys.

Your next call is from the line of Harry Levant of Income Trust Research please proceed. Harry Levant – Income Trust Research: Good morning, tremendous looking numbers, congratulations. I was just wondering about a question on Verenex, which seems to have some very substantial production numbers associated with it. I wondered if you could comment on their financial arrangements in Libya and are they a typical EMP model or do they earn a royalty override. Maybe just some clarification, if you could on that.

I wouldn’t say I am an expert on it. The way it works is once the fields are discovered, once a field is discovered and becomes commercially viable costs up to that point are spent 100% between Verenex and their partner Medco so that would be a 50/50. Once a field becomes commercially viable then the government steps alongside of you and they pay 50% of the capital cost to develop the field and then Verenex and their partners pay the other 25% each. At the end of the day, Verenex pays 25% of the capital cost and net to them, they get about 6.8% of the total production and that would be free of any royalties and free of any taxes. It sounds skinny but when you start to run the models, this thing generates when you get it up to like 100,000 barrels a day type production levels, it starts generating numbers. Its cash flow is approaching $100 million a year. That’s generally how the royalty system works there and I think I’d probably guide you to go to the Verenex web page and they’ve probably got a lot more color on that. Harry Levant – Income Trust Research: Yes thank you very much. The numbers are very substantial that’s for sure. I was wondering you had made a very clear strategic decision some time ago to move international and if I am correct here, sort of more international now in production in Canadian which was clearly a good move in retrospect. You looked back at Canada and some of the critical issues and taxation is an issue, et cetera that have unfolded here, how do you see this market in relation to the other jurisdictions that you operate in in terms of offering value?

We struggle with that a bit to be honest with you. We think that there’s value in some of the unconventional stuff in Canada. The conventional stuff is getting tougher, there are smaller pools and harder to find. We think there’s good value internationally but it’s getting to be a competitive world all over so going forward I think the soverign well funds have moved in and you’re not seeing them just internationally, you are seeing them here in Canada as well, the NOCs. I think you are going to have to pick your spots and you are going to have to be a bit of a niche player and leverage off of your strengths and we think we are positioned for that. We think that there’s going to be good value internationally; we think we want a lever off of our strengths internationally and at the same time on the unconventional place, I think those areas in Canada that we like here. Harry Levant – Income Trust Research: Okay and just one more question, a bit more specific on hedging and 4x exposure I guess, commodity hedging and 4x. Have both your commodity hedge appear to be kind of moving to an un-hedged position, sort of looking forward as it would appear to me.

I think that’s fair comment. In this environment, we feel again with the strength of our balance sheet, we feel good about being un-hedged. Where you might see us get maybe a little bit more aggressive on the hedging side of things is if we lever up to finance an acquisition where we feel maybe the balance sheet gets a little bit exposed and you want to protect it, we may do some more hedging. For now, we feel comfortable with where we are. Harry Levant – Income Trust Research: Okay and then just on the 4x side on your statements, the numbers kind of a combination of the translation game off the balance sheet numbers.

The lion’s share of that is related to some real long-term issues, our asset retirement obligation and our future income tax calculation. Both of those got a long life, if you will, and we have to do a 4x calc every time we get a balance sheet reporting period. You get some foreign exchange moving around on us but for the most part, it is unrealized. Harry Levant – Income Trust Research: Okay, that’s what I thought. Thanks very kindly for the information I appreciate it.

Your next question comes from Roger Serin of TD Newcrest please proceed.

Good morning guys, just a couple of quick questions. Given the tax recovery that occurred in the fourth quarter, are you pretty much done as far as your back to regular run rate taxation?

Yes, I think that’s a fair assessment, Roger. We had the Accutane Merateem on the second half of the year-impacted taxes. We’re working on a couple of other things that came to fruition. A lot of them would be one time positive impacts so if you went back to a more basic run rate that would be a good assumption having said that, we continue to work our opportunities on that front as we do all of our assets and hopefully we can generate some more value through the tax link.

With the CAPEX in Australia does that show up, does it help you in ’08 or is that really a ’09 story?

From the capital perspective, that would be a ’09 story and it will get deducted from a per unit of production basis, so you won’t see a major hit. What it will help though is it will significantly reduce the royalties that we pay in Australia that we pay in the second half because we get a full deduction for our capital against the royalty calculation. You might see our royalty calcs go, I don’t know if it will go to zero but it will be low for the second half of the year. We won’t include that in our calculations until we actually get that program off the ground so you will see sort of more typical royalties in Australia through the first half for sure and maybe even Q3 depending on when that program gets off the ground.

Okay and a couple of other quick questions. Canadian $58 million CAPEX allocation roughly between oil and gas?

We’ve probably got 6 million focused on oil assets and the remaining are gas split between Great Valley and CBM.

Okay and the last question, the focus you have in the Netherlands for future drilling, obviously you are going to do the work and come up with it. Is it mostly aspiration and if so do you have a structure farm out JD that you are looking at or are you going to drill some wells first before you look at how to leverage off that?

I’d say, yes we want to do all the work on it first. We are working up all the prospects right now of doing a fair amount of work, then we are going to rank them all, and then from there we will look at the risks and decide whether we want to bring in partners. We’ve got people that are very interested if we want to bring them in. We’re not sure we want to; we’re taxable in country so generally in Netherlands once you get good seismic data the risk goes down fairly dramatically and a lot of these fields are more extensions or step outs sort of off setting leveraging off of existing fields and then there are some that are more stand alone. We are just going to look at them all and then decide how we want to pursue it but it’s fair to say that we probably would be open to maybe taking more of the risk ourselves on some of these just because we are taxable.

Great, thanks a lot and that’s it for me.

Mr. Donadeo, there are no further questions at this time please continue.

Thank you Operator and I’d like to thank you all for participating in our conference call and look forward to another strong year for Vermilion, thank you.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating, please disconnect your line.