Vermilion enters into farm-in agreement in Germany

Vermilion Energy Inc. (TSX, NYSE: VET) has entered into a farm-in 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) operates and manages both MEEG's and BEB's interests in the exploration licenses involved in the farm-in. The agreement, signed July 27, and with an anticipated closing date of Jan. 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 (six 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 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 onshore production. 


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