TSX Commentary

Vermilion Energy Trust (VET.UN): $34.20 – Positive Drilling Results in the Netherlands
Outperform, Average Risk, Price Target: $35.00 (prev. $34.00)
Vermilion announced results from its four-well drilling campaign in the Netherlands. Two development wells have access to existing infrastructure and are expected to be brought on at a combined rate of 15 mmcf/d net to Vermilion and add 2,000 boe/d to 2010 production. Two other wells require production permitting, pipeline construction and regulatory approvals, and are expected to be brought on by early to mid-2011. With the success of the program, management expects 2010 production to come in at the high end of its guidance range of 29-31,000 boe/d. An additional 30 prospects have been identified and the permitting process for four to six new wells has commenced for drilling in 2011. Near-term newsflow for Vermilion should include initial results from its Cardium drilling program in the West Pembina area, which should be reported along with Q4/09 results on March 3. RBC CM expects results to be positive given the success of other operators (Berens, Bonterra, Vero) in the area. Due to the successful drilling results, RBC CM increased its target on Vermilion to $35 and maintain our Outperform rating.