Greetings, and welcome to the Vermilion Energy Inc. Fourth Quarter and Full Year 2012 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lorenzo Donadeo, President and Chief Executive Officer for Vermilion Energy Inc. Thank you, sir. You may begin.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today to discuss our fourth quarter and full year 2012 financial and operating results and the highlights of our 2012 reserves and resources report. I'm Lorenzo Donadeo, President and CEO of Vermilion. Joining me here today are Curtis Hicks, Executive Vice President and CFO; Dean Morrison, our Director of Investor Relations. And joining us from Australia, where he's visiting our assets, on the telephone is Tony Marino, the Executive Vice President and Chief Operating Officer. Earlier this morning, we announced the solid financial results underscored by strong production and reserves growth in 2012. Fund flows from operations for the fourth quarter and full year were $142 million, or $1.43 per share, and $558 million, or $5.69 per share, both strongly ahead of analyst consensus. The significant 18% increase in full year fund flows from operations in 2012 was driven by strong growth in annual production of 7% and our significant exposure to high netback Brent-based crude and European gas production. The premium per Dated Brent over WTI averaged more than USD 17 per barrel in 2012. And when combined with the premium to Brent we received for our Australian production, Vermilion's realized pricing for our international oil production, which comprises 43% of our volumes, contributed significantly to the strength of our fund flows from operations in 2012. European natural gas pricing also remains robust. In 2012, we received an average price of $9.70 per mcf for our European gas compared to an average realized price of $2.52 per mcf for AECO-based natural gas in Canada. Supported by the diversified pricing of our global commodity and the solid performance of our operations, we elected to increase our dividend in 2013 to $0.20 per share per month, beginning…

[Operator Instructions] Our first question comes from the line of Greg Pardy with RBC.

Three quick ones for me. I guess first, just with Corrib, I know you've used to -- I think you mentioned that you'd kicked off tunneling on December 16. Just wondering if you can provide a little bit of color around that because I thought the original timing was maybe October or November, but could be off? Secondly, just curious at how much gas you got shut-in in the Western Canada? And then the third is, what kind of a program have you got set up for Morocco this year?

Tony, can you maybe deal with those, please?

Sure, okay. First, on Corrib, the tunneling was very close to on schedule. We started tunneling December 16. We originally have predicted that we would probably be tunneling either late November or early December. So I don't think in any significant way different than the schedule. The -- Greg, your second question again was?

Yes, just how much gas have you got shut-in in Western Canada?

Okay. We averaged about 10 million of shut-in during the second half period when we had it shut-in. And currently, we've got almost all that back on. The third question was on Morocco, and we don't really plan very significant expenditures this year. We're going to have some minor fieldwork and total spending probably over the course of the year of less than $0.5 million.

Okay. And just the selection in terms of going into Morocco, what did you find most attractive, appealing about it right now?

Yes. I'll maybe deal with that one, Tony. Really, when we initiated our new growth efforts back about 2.5 years ago, we sort of set 2 sort of objectives. We wanted to sort of focus on nearer-term growth in Canada through our Canadian new growth efforts. And internationally, what we were trying to do was capture large opportunities that would be transformational opportunities upon success for the corporation, but we wanted to do it in a low cost way. So we went in and we were trying to focus in and around our current operating areas, so we did some regional mapping across Europe and sort of the surrounding area. We extended it into Southern Europe. And of the only areas that we liked outside of Europe, I think Europe proper, we saw sort of Northern Morocco, and we had followed the Silurian shale play that had extended back into Morocco. And we were able to capture a very large position there of over 2.3 million acres for very low capital commitment. So we look at that as really creating an option value for our stakeholders. We don't see ourselves investing a lot of capital over the next several years, really technical work to try and work up the play. And if with success, like I say, you could bring in third-party money to spend risk capital. And then with success, you could have transformational reserves for the corporation that you could use to either monetize or create additional value for the company.

Okay. And it is oil, right?

It could be either, either oil or gas, yes. The thing that we're encouraged by is that there's a lot of interest right now in Morocco. There's been recent activity, both offshore and onshore. And then we are offsetting a big EOG block in that area. And there seems to be a lot of interest right now. And so we've gotten in there for a very low cost.

Our next question comes from the line of Dirk Lever with AltaCorp Capital.

I'm wondering if you could touch on the debottlenecking in the Netherlands? And I know that you were up against capacity there, and how much will that increase your capacity? And the second question really relates to the statement of changes in cash flow. Maybe you could highlight, and I'm probably not scribbling down fast enough, the difference between corporate acquisitions and payment of the amount due pursuant to acquisition?

Tony, why don't you start with the first, and then we'll get Curtis to deal with the second?

On Garijp, we have a 42% interest in that gathering system. And the impact net to our in-force for production for '13 would be about 600 BOEs a day as a result of that debottlenecking.

Okay. And when would you expect that to be online for you?

About the beginning of the second quarter.

And, Dirk, it's Curtis. With respect to the statement of changes, we reflect these property acquisitions, which was the Total deal that we announced in January of 2012. Corporate acquisition net of cash acquired was the ZaZa deal that we announced late in the year. And then payment of amount pursuant to acquisition, that's the USD 135 million that we had to pay Marathon as our second installment on Corrib.

Our next question comes from the line of Gordon Tait with BMO Capital Markets.

I have a couple of questions on the Cardium. You've now completed your 15,000 barrel a day attrite, so can we assume that there's no need for more infrastructure? That sounds like that's within the guidance of what you expect to achieve in peak production? And then secondly, you've already dropped the well costs there by about 40%. You said you're going to be drilling some more of these long-reach horizontals. Does that mean that there's some room to even see those well costs come down further?

Thanks, Gord. Tony, can you please...

Yes, certainly. Well, first of all, I'll start with the well costs. With the -- our current plan of ultimately drilling some 2-mile long wells, I do think that on a per-section basis, the well cost can come down further. That's -- the longer reach wells are probably one of the main ways that we're going to be able to further reduce the cost of each well. There are some others, potential for water recycling among other things. So with these initiatives, I do think that we'll probably see a reduction to well costs. The first question about the need for further capitalization of the processing capacity, I don't expect that we will have to do that. We can have some significant growth for the next 2 to 3 years with the capacity that we already have in place.

All right. And then switching to France and Australia. In the inventory build in those areas in Q4, so we -- could we see a drawdown of those inventories as early as Q1 or could it be the next 3 months or would it take 6 months? How long usually do you draw the inventory builds down?

Yes, Gord. Really, like with respect to Australia, you can see some pretty big swings because we sell, we co-load that production. And we can sell it in loads of up to 300,000 barrels, sometimes a bit more. So -- and really, the fact that we've built it fairly significantly at the end of the year was just a function of timing of when we're able to get a tanker in there to move some crude. So we do expect to move a fair bit of crude in Australia in Q1. And so I would, based on what we're forecasting today, we'd expect to see some sort of a drawdown there. And again, France, the loads are smaller than what we do in Australia. But again, the build is strictly a function of the timing of getting tankers into the Ambes Terminal. And based on the shipments that we've got planned for Q1, we'd expect to see somewhat of a draw there as well. So -- but obviously, timing of coordinating those tankers has a significant influence on inventory volumes.

Okay. And just last question on the Duvernay, I don't know if it's too early to say yet, but is your long-term plan there to develop that, say, with a partner or to sell it or even develop it by yourself, you have sort of a strategy in place at this point?

Yes. I think, Gord, we've sort of accumulated that position as part of our new growth efforts to sort of drive growth starting once after Corrib comes on sort of starting in 2017, so we will be looking to develop that over that timeline. How we do that is something that we'll be evaluating as we go through the process. At some point in time, we may bring in a partner depending on our need for capital and the stage of development. So early days, but we're not taking anything off the table and in terms of how we develop that, how we approach it. If you can get attractive metrics, I think bringing in a partner may make sense, but we don't really want to prejudge it at this point in time.

[Operator Instructions] Our next question comes from the line of Travis Wood with TD Securities.

Yes, 4 questions. They're all associated with Australia. I just wanted to know if the rig has arrived to start the program. And has the first well been spud? And then with that, do you continue to plan to do a 2-well program through this year? And then just with the cyclone season, and the forecasts that looked to be a little lighter than expected, have you felt any of the impact of cyclone season so far in this year?

Tony?

Okay, Travis. The rig is here. We have started the first well. We are going to do a 2-well program. And even though it is, let's say, a somewhat lighter cyclone season, we did have 1 cyclone shutdown that we have been through.

Our next question comes from the line of Cristina Lopez with Macquarie.

This is more of a strategies question related to acquisitions. You had previously talked about the acquisition market internationally. Is that something that you're still considering? If so, is it really more tuck-ins in line with what you've done in France over the course of 2012? Or are you continuing to look beyond those borders?

Yes, Cristina. We're basically -- we're looking quite strongly internationally. We're looking at a number of opportunities domestically as well. Our focus is still sort of in and around our focus areas of Europe, Australia and Canada. So it could be tuck-ins in those areas or it could be sort of expansions within those focus areas, but not really looking to go beyond those at this point in time. And there's a number of opportunities that seem to be coming out, both internationally and domestically. And so our BD group is very busy right now. There's a lot of opportunities, and we're trying to be fairly selective and fairly patient through this process, and really looking for opportunistic, value-creating opportunities that would be incremental to our current, fairly robust long-range plans.

And domestically, you had previously talked about them being more oil-weighted transactions. Is that still the case or are you doing or looking at liquids-rich gas opportunities in addition to oil-weighted ones?

Right now, in Canada, we're mainly focused on the oil side. And internationally, we're looking at both oil and gas just because of the stronger pricing.

And then with Morocco, do you have to do any seismic work in the next couple of years? Is that part of your work commitment as a whole?

Tony, do you want to speak to that?

Yes, in -- we've established the work commitment only for the first year of the reconnaissance contract. And that involves some reprocessing, but no new data acquisition.

[Operator Instructions] Mr. Donadeo, it appears we have no further questions at this time. I would now like to turn the floor back over to you for closing comments.

Great. Well, thank you, operator. And thank you, everybody, for attending the conference call this morning. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.