Vermilion Builds on Paris Basin Presence

Vermilion Energy Inc. is to take Total's stakes in six producing fields in the Paris and Aquitaine basins of France, following a deal with Total on Monday. T

Vermilion's subsidiaries, Vermilion Exploration SAS and Vermilion Pyrénées SAS, will take Total's entire stakes in the six oil and gas producing fields, increasing the company's existing interests in France.

The stakes, which will change hands for a reported $115 million (Canadian dollars).comprise stakes in Itteville at 78.7 per cent, Vert-le-Grand 90.05 per cent, Vert-le-Petit 100 per cent, La Croix Blanche at 100 per cent and Dommartin Lettrée at 57 percent. These licenses are located in the Paris basin. The sixth stake,the Vic Bilh (73 percent) license is located in southwestern France.

The fields have an existing production rate of approximately 3,500 barrels of oil equivalent a day as of 2010. Vermilion says the production equates to a cash cost of C$52,000 per barrel of oil equivalent per day.

All operatorship and production rights will be transferred to Vermilion in January 2012, while the transferring of the acreage itself is expected to be completed within 15 months.

Vermilion says that production will not be impacted by France's ban on hydraulic fracturing to explore or extract shale gas.

"These are all conventional producing assets so they're not impacted by the hydraulic fracturing ban in France," commented director of investor relations for Vermilion, Dean Morrison.

"We don't require hydraulic fracture to operate these pools, just traditional oil flood, waterflood."