Good morning; my name is Candice and I will be your conference operator today. At this time I would like to welcome everyone to the Vermilion Energy Inc. Third Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After our speakers' remarks there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Lorenzo Donadeo, you may begin your conference.

Thank you, operator, and good morning, ladies and gentlemen and thank you for joining us today. I'm Lorenzo Donadeo, President and CEO of Vermilion. Joining me today are Curtis Hicks, Executive Vice President and CFO; Tony Marino, Executive Vice President and Chief Operating Officer; and Dean Morrison our Director of Investor Relations. 2013 represented another strong year of European expansion and robust operational performance. In October we closed a strategic acquisition in the Netherlands that when combined with the addition of three significant new concessions over the last year marks a significant expansion of our Netherlands' business unit. Yesterday we announced a further acquisition in Germany that symbolizes a key new country entry for us as we continue to expand our European presence. And today we released 2014 production and capital guidance and our Q3, 2013 financial and operating results where we reported average production of 41,510 BOE per day for the third quarter and record nine-month production of 41,020 BOE per day. Thus far in 2013, we have achieved organic growth across all of our business units and better than expected results from our capital program. Our strong operational performance continues to provide us with the flexibility to manage the composition of our produced volumes and has enabled us to increase guidance following both the first and second quarters. Including a minor contribution of production from our recent Netherlands acquisition, we are now expecting our 2013 average production to be at the upper end of our guidance range of 40,500 to 41,000 BOE per day. Today we also updated our 2013 capital guidance from the original $485 million to an estimated $530 million. This increase is primarily due to the foreign exchange impact of a weaker Canadian dollar than at the time of original guidance, the delay of the…

Christina Lopez – Macquarie: Hi, gentlemen; I just have a number of quick questions, one with respect to Corrib with production coming on mid-2015. Would you then expect to reach peak production of 9,700 by exit of 2015 then or would it come on sooner than that?

Christina, the ramp up we think would be pretty fast. We'd probably hit that peak within three months. Christina Lopez – Macquarie: Perfect, this may be for you as well, Tony, is on the Duvernay well. What are you expecting cost on this well to -- or I guess on both of the wells that you're planning for late this year into 2014 to come in at?

Taken all the way through drill complete equip tie-in, including micro size at this point that we extend to run, those wells would be in the range of about $15 million gross apiece. Of course, that number is a lot higher than we would see in a development phase because of the evaluation that we're doing on the first two wells. Ultimately, we believe that we can achieve a $10 million cost or perhaps lower than that. Christina Lopez – Macquarie: Any indication at this point as to where you expect liquid yields to come in? I know it's very early and you just have the strat tests but just curious if you have sort of expectations at this point?

Yes the land position that we have is positioned throughout the liquids-rich, the condensate rich window. The first couple of wells that we're going to drill on the locations we're planning are on the [Ebison] and what we call the Pembina blocks that we have. We'll perhaps be a little bit, just because of the location of the wells, the use of available micro size monitoring wells would be probably a little bit toward the lower end of what we would typically see in our land position but nonetheless I would expect meaningful condensate. That's just how our land is positioned. Really we have we think virtually no land that is positioned outside of the liquids-rich window.

Yes and I think, just add to that, I mean I think, as Tony stated, like we've got three vertical wells that we're going to be using as the monitoring wells and they happen to be located closer to the leaner edge of the window but we think as we get smarter on how we drill and complete these with addition of the micro size and we see ourselves moving more in the liquids-rich part of the window going forward. Christina Lopez – Macquarie: Well, that's actually quite helpful; thank you. One of the other questions I have is with respect to the full-year production number, getting to the top end of your guidance. With the Netherlands gas production expected to be back on stream in Q4 and given the success of your French infill drilling program and then as well as Canada getting through sort of the weather issues that always seem to plague Q3, it seems like you can easily sort of get through those numbers. Is there some sort of turnarounds or shut ins that we are not accounting for in those Q4 numbers?

No, no. Christina Lopez – Macquarie: More than I'm not accounting for?

No there really isn't any particular planned downturn that's greater than normal during Q4. All four business units are growing. In fact, I would expect all four to grow 2012 to 2013, 2013 to 2014. We do have some well deliverability and facility capacity that we're not necessarily utilizing in Q4 and this is part of our plan to produce ratable growth so it is true we'd be capable of producing at higher rates in a couple of the business units than what we are currently guiding to for Q4 or what we intend to produce in Q4. And that is really a conscious decision on our part to have ratable operational programs and production performance. Christina Lopez – Macquarie: And then I've got one last question before I stop monopolizing the call. With respect to your acquisition in Germany, do you see this again as a bit of a toe hold where you can then consolidate the interests in this play itself, as you've done in the past, both in France and Australia?

No absolutely, this is a very strategic entry for Vermilion into Germany. We've always liked Germany. We've always had our eye on Germany. As we've stated in our releases today, it's a basin that produces probably several fold times the production in both France and the Netherlands or primarily in France, but there isn't a lot of intermediate well financed producers in Germany and we believe that over time there's opportunities there for companies our size to consolidate interest and grow the business there. Christina Lopez – Macquarie: Excellent, thank you.

Yes. Good morning, guys. You'd think this was planned with my next question but on Germany do you see any potential for some shallow oil production based on the data that you've collected through the due diligence process?

Yes, Travis, there are a couple of shallower zones that have some potential in the area. It isn't the main focus of what we've sought to acquire there. I think more broadly in Germany there is the potential for us to ultimately get into oil production as well. The licenses that we have bought into there are primarily gas. They have potential in a number, gas potential in a number of horizons beyond just the ones that are producing today and there are additional exploratory prospects on the lands that we've acquired, again primarily for gas. There may be some shallower potential for oil. Generally that oil potential I think would be in other areas that we might get into in the future.

And can you help me understand how the data collection process works in Germany? Is part of the idea of acquiring a non-opt lower in interest stake, does that give you better access to data or are the players who are not currently active in the fields, are they able to get the same access to well data and resource data as active players?

That's a good question that you ask there. Germany is quite a bit different with respect to data availability. You find in North America that this data is very readily attainable, typically at pretty low cost, by all the industry participants by potential participants here and, in fact, that's probably one thing that makes it so competitive in North America. In Europe in general and probably even more so in Germany, particularly the data is harder to get. We do see as one significant advantage of this acquisition that we do get data from this particular northwestern region in Germany more broadly. It is going to -- it gives us a start in the country, increases our focus in the country and through various potential business development activities, we would expect to start to amass more and more data over the entire country and it's a necessity to build a business there and this gives us a start in doing it. And has Germany itself, have they changed the way that data is becoming available? Is it easier than it was today than two years ago and are they -- is there anything in the works to make it more readily available?

And has Germany itself, have they changed the way that data is becoming available? Is it easier than it was today than two years ago and are they -- is there anything in the works to make it more readily available?

To my knowledge it's no more readily available than it was two years ago and I'm not aware of any changes by the government to make it more readily available in the future. I think you have to be a participant in the industry and build that data knowledge and experience over time.

Okay. Great, that's all for me.

Gordon Tait – BMO Capital Markets: Good morning. You've covered a lot of the areas where I had some questions. Maybe just one more on the German acquisition, Exxon is the operator there, so I presume that they're in control of the development of the exploration license and I was just wonder -- if that's correct I just wondered if you know what their plans are. Is it priority? Are they going to put more money into it so you can sort of see how new wells progress?

Exxon Mobil is the operator. We're quite happy to be in there with them as the operator. We think they do an excellent job on the areas that are important to us, on [HSE], on good high quality assessment of the potential of the blocks. They do plan activity. We -- in fact, there's an exploratory well that will be spudded late this year, probably finished in the first part of next year. There are some provisions in these agreements to allow companies, non-operating parties, to propose activities and there are some sole, what are there called sole risk provisions in the event that some of the other parties don't want to go along with that. Gordon Tait – BMO Capital Markets: So you could -- it would be like going penalty or something here. You could go ahead and they would presumably have to sit on the sidelines and wait till you recoup your capital costs?

Yes it's somewhat analogous to the non-consent provisions that you would see in Canada or the US. There are some variations and that's probably why they use a different term for it, this sole risk term, not necessarily penalties. It could result in a non-participating party to after that be unable to proceed with capital investment in the specific type of project or the specific area that the other parties would be going sole risk. So there is this type of provision that allows some degree of direction by the non-operating parties. All that said, we're quite happy with Exxon Mobil operating. We've got a great deal of confidence in them. It's our understanding that the four participants, the four entities participating in these licenses are quite cooperative and consult with each other a great deal in deciding what to do on the lands. So actually it's not something that we would anticipate being a major factor in our -- this type of provision. We wouldn't expect to be a major factor in our direction and participation on those lands going forward. Gordon Tait – BMO Capital Markets: All right thanks and then just one question on the Duvernay, you have a pretty big land position there. Even at $10 million a well, that -- those are pretty big numbers. If you intend to develop that yourself if you like the results you're getting, is it something you would look to bring partners in to help you develop?

Yes I mean our view on the Duvernay, I mean we are getting more I guess positive on the play. When you look at sort of some of the recent news in terms of Encana coming out and doing a full assessment of all, of their 28 resource plays and ranking the Duvernay near the top, Chevron has done a major acquisition to consolidate in the Duvernay. Shell has had 12 rigs going in the Duvernay. There's been some great results by some of our peers in the Duvernay in terms of condensate production. So we're getting more positive on the play. Our view on it is to start and drill these initial wells and get a sense of where the opportunity lies and then over time it will give us a better assessment of how we want to go forward, whether we want to bring in a joint venture partner for part of the play, maybe sell off part of the play to fund other parts of the play that we like but the nice thing is is that we control the whole 320 odd sections and they're 100%. They are across the liquids-rich window and so I think, as we develop it and we get a better sense of what's there, then we can -- we have a lot of optionality how we move forward but there's a good chance we'll probably at some point in time consider some of those other options. Gordon Tait – BMO Capital Markets: All right thanks.

Thank you.

(Operator instructions)

Good morning, guys.

Good morning.

I'll start off with a more general question on your international assets. Now over the last few years you've been more focused on acquisitions rather than exploration and as you look ahead into 2016, you probably have a lot more cash flow to work with, given that the Corrib project starts up, and now you've got about a million acres in Netherlands and Germany so do you see a big step up in exploration activity going forward? And if that's the case, then what does that mean for longer-term CapEx spending trends?

Okay, Pavan, the profile that we put in place already, this applies to 2013, it applies to 2014. It will apply in 2015 and for a long time after that, is a ramp up of CapEx in these international units. We do it because the rates of return on the projects are very, very high and they tend to pay out pretty fast. They work quite well within our self funded growth and income model. There's a whole -- when we try to characterize these by type of activity and risk, there's actually an entire spectrum ranging from very, very low risk, development projects to extensional drilling to extensional drilling to new pool exploratory drilling. There's a large number of projects in each of these categories. We would probably be -- we're going to be directing our activities primarily to the low-risk end of the spectrum, development low risk extensional occasionally new pool exploration and in doing that we do think that, as we ramp up these programs, were going to see over the long-term a big increase in production rates from the Netherlands, fairly large increases from France and hopefully over time we will be able to develop the same type of business in Germany. So Corrib will, of course, give us a huge swing in free cash flow when it comes on but even prior to Corrib we've already embarked on a program of increased investment turning each of these business units, including Canada and to a lesser extent Australia. Australia is primarily a stable asset but turning each of them into a growth business while still generating more and more FFO and in fact over time more and more free cash flow because that's the nature of the investment projects that we have in each of those units. They are high rate of return and they fit into this free cash flow growth and income model.

Thanks for that and maybe on somewhat of a related topic now following the acquisition in Germany you were active in about five international areas and now when you look across companies generally when companies get more diversified they eventually run into execution issues. Now, as you become a bigger Company yourself and become more diversified, do you worry about encountering some of those same issues? And, if so, how do you plan to address these issues?

It's another good question that you ask there as well but the answer really is we're cognizant of the challenges that you have in running a diverse business with units in each country. We have experience that we've built up over a period of 17 years now internationally in developing individual businesses around the world and coordinating them centrally from Calgary. So first of all, I think our experience allows us to do it. Secondly, we're aware of the challenges that exist there. Thirdly, the way we're structured and we've moved even more so in this direction over the past few years, is to have in terms of operations independently functioning business units in each of those countries. Each of those business units has the technical and non-technical human resources that they need to execute their piece of the growth and income model. They've got the capabilities to identify the investment opportunities in each of the countries and this is the way that we get the maximum ultimately it becomes a question of the human creativity and that's how we maximize the creativity and the capability and the effectiveness of the people in each country by allowing them to independently run those businesses while coordinated from Calgary and this ultimately is what makes it possible. I'd point out further that a number of these businesses, France, Netherlands, Ireland and now Germany are concentrated in a very close geographic area in that European core and that makes --that has further advantages in being able to organizationally execute the model that we're following. And the final point is that, while this diversified set of operations yes is a challenge, it is in fact well worth it because of the diversification that we get in our revenue sources not being perfectly correlated with…

Thanks for that; it is very helpful.

Good morning, gentlemen. Just curious, in Germany obviously that represents a bit of a beachhead for you in country and I am wondering if you can maybe elaborate a little bit on a few points. Firstly, from a resource perspective what are the play types in particular that attract you as you think ahead? Secondly, can you multistage frac, those assets prospectively, and then thirdly, maybe just a quick few words on the pricing dynamics as you look ahead from potential competitive threats for other sources of gas or maybe there's opportunities in that regard as well. Thanks.

Okay, first of all, in the types of the production, the existing productions from a series of conventional horizons in Germany, they're similar to reservoirs that we produce from in the Netherlands primarily in the Zechstein carbonates. There is potential in some of the -- there is production and potential in some of the sandstones as well but the existing production is all conventional. There are -- in addition, there are a number of new fault block, new pool targets. We think that we'll be drilled over time in those same rocks. We think there's potential for improved recovery over time due to increased use of compression to lower abandonment pressures and drive up recovery factors in the existing zones and there are tighter rocks. In particular, I would point to low permeability plastics in the carboniferous zone that we think are prospective. I think your second question was it about fracturing? \: Patrick Bryden – Scotiabank: Yes is it possible to multi-stage fracture tighter rocks? What's the regulatory status of that?

In the zones that we're producing in at present there's no need for fracturing. They're permeable. We tend to have quite conventional businesses really in all of our European countries at this point. Longer term in the other horizons a couple of other horizons, one of which I mentioned, technically I would say these are probably amenable to horizontal multi-stage fracs, potentially even the use of vertical wells in some of them with multi-stage fracs and fracturing is a challenge in every country in the world I would say practically outside of North America or at least in the big majority of the countries in Europe. It's our understanding that there is not an explicit ban on hydraulic fracturing in Germany at present. We know that it has to be carefully explained and permitted whenever it is attempted to be applied because, as you can probably guess, there are concerns I guess across the continent about fracturing so to apply it I think would take a medium to long-term effort to have the operation accepted on the individual wells where we might want to do it. In other words, it's all conventional today. There are low permeability targets and they would represent a longer-term probably educational effort.

Okay. Great and then maybe just as a follow-up to that, that pricing dynamics there you feel pretty comfortable like in the Netherlands that enjoy good pricing there on the gas side?

Yes I think it's a great market. The gas in the Netherlands and in Germany is all ultimately linked to TTF, the Netherlands price, and actually the entire European market is quite well tied together without a great deal of variation in pricing throughout Western Europe. It's a strong price. There's a forward that can be hedged into. It's flat at a very high level in the range of probably $10.50 per MMBTU and we actually fundamentally think it's a very, very strong market in Europe.

Yes I mean we're quite bullish on European gas pricing, Pat, as you know. I mean you said there was a recent study done on European pricing and maybe one of your competitors that sort of the summary of some of the key points is that there's been increasing declines out of the U.K. North Sea that have really forced the import of more Russian and Norwegian gas and their market share of the European markets moved from about 42% and it's going to be moving up to about 52% of the European market supply. And, in addition to that, Russia is just entering into some new gas purchase arrangement with China where they're building a pipeline into China and they're going to be using that as leverage against Europe. When you couple that with sort of the option of landing new gas supplies into Europe using LNG, the displaced volumes you're going to have to displace are LNG cargos that are going to Asia. Those cargos are driven off of long-term pricing structures because of the investment required and the alternative [landed] price into Europe to offset the displacement in Asia would imply about a $13 an MCF landed cost into Europe. So I think the long and the short of this particular research piece was saying that pricing in Europe has got upward pressure to it. It's currently in the $10.50 range but they were saying that it could move upwards to the $13 range so we're quite bullish. We're quite happy at the $10 range but we think that there's some upside to that.

Okay. Appreciate that and then maybe just last question from me as you look at prospectively your Duvernay wells if they come in and you see what you want to see, and you turn your attention to the idea of lowering costs and trying to commercialize eventually, do you have a sense for how you think that might compete for capital versus the Cardium and your Mannville program as you see commodity prices today?

Well, it will ultimately depend on the liquid yield. That's really what will drive the economics and then if we can -- depending on the liquid yield we get, the quantity yield in particular, that will really as we get smarter on that play, we'll be able to make better assessments but I think if you get in the range of probably 100 barrels a million, 70 to 100 barrels a million, I think you can drive some pretty strong returns. And then if you can optimize those returns with a joint venture structure, then I think you can really get some pretty juiced up returns that will be very, very well with some of our existing inventory.

Perfect. That's great. Thank you very much.

Thank you.

And we have no further questions at this time. I'll turn the call back to our presenters.