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<SEC-DOCUMENT>0000950142-04-002319.txt : 20040702
<SEC-HEADER>0000950142-04-002319.hdr.sgml : 20040702
<ACCEPTANCE-DATETIME>20040701183204
ACCESSION NUMBER:		0000950142-04-002319
CONFORMED SUBMISSION TYPE:	40FR12G
PUBLIC DOCUMENT COUNT:		65
FILED AS OF DATE:		20040702

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VERMILION ENERGY TRUST
		CENTRAL INDEX KEY:			0001293135
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A0
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		40FR12G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-50832
		FILM NUMBER:		04896539

	BUSINESS ADDRESS:	
		STREET 1:		2800, 400-4TH AVENUE SW
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P 0J4
		BUSINESS PHONE:		403-269-4884

	MAIL ADDRESS:	
		STREET 1:		2800, 400-4TH AVENUE SW
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P 0J4
</SEC-HEADER>
<DOCUMENT>
<TYPE>40FR12G
<SEQUENCE>1
<FILENAME>form_40-f.txt
<DESCRIPTION>REGISTRATION STATEMENT
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 40-F

[Check one]

            [X]    REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF
                   THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

            [_]    ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF
                   THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended                   Commission File Number
                         -----------                               -------------


                             VERMILION ENERGY TRUST
- --------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                                       N/A
- --------------------------------------------------------------------------------
         (Translation of Registrant's name into English (if applicable))


                                     ALBERTA
- --------------------------------------------------------------------------------
        (Province or other jurisdiction of incorporation or organization)


                                      1311
- --------------------------------------------------------------------------------
    (Primary Standard Industrial Classification Code Number (if applicable))


                                       N/A
- --------------------------------------------------------------------------------
             (I.R.S. Employer Identification Number (if applicable))


  2800, 400 - 4TH AVENUE S.W., CALGARY, ALBERTA, CANADA T2P 0J4 (403) 269-4884
- --------------------------------------------------------------------------------
   (Address and telephone number of Registrant's principal executive offices)


              NATIONAL CORPORATE RESEARCH, LTD., 225 WEST 34TH ST.,
               SUITE 910, NEW YORK, NEW YORK 10122 (212) 947-7200
- --------------------------------------------------------------------------------
            (Name, address (including zip code) and telephone number
        (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

                                                   Name of each exchange
        Title of each class                         on which registered
        -------------------                        ---------------------
               N/A                                           N/A


Securities registered or to be registered pursuant to Section 12(g) of the Act.


                                   TRUST UNITS
- --------------------------------------------------------------------------------
                                (Title of Class)


- --------------------------------------------------------------------------------
                                (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                       N/A
- --------------------------------------------------------------------------------
                                (Title of Class)

<PAGE>

For annual reports, indicate by check mark the information filed with this Form:

   [_]  Annual information form        [_]  Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.  NOT APPLICABLE.

Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the file number assigned to
the Registrant in connection with such Rule.

                       [_] Yes 82-_________    No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.

                             [_] Yes       [X] No


<PAGE>


       COMPLIANCE WITH AUDITOR INDEPENDENCE AND RECONCILIATION REQUIREMENT

The Registrant's financial statements have been reconciled to U.S. GAAP as
required by Form 40-F under the Exchange Act. Such reconciliation is set forth
for the year ending December 31, 2003 and for the year ending December 31, 2002
in Exhibit 99.3.


                  UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A.       UNDERTAKING

The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.

B.       CONSENT TO SERVICE OF PROCESS

A Form F-X signed by the Registrant and its agent for service of process is
being filed with the Commission together with this Registration Statement on
Form 40-F.

Any change to the name or address of the agent for service for service of
process of the Registrant shall be communicated promptly to the Securities and
Exchange Commission by an amendment to the Form F-X referencing the file number
of the Registrant.


                           FORWARD LOOKING STATEMENTS

This Registration Statement contains or incorporates by reference forward
looking statements. All statements other than statements of historical fact
included or incorporated by reference in this Registration Statement that
address activities, events or developments that we expect or anticipate may or
will occur in the future are forward looking statements.

Such forward looking statements are subject to risks, uncertainties and other
factors, many of which are beyond our control, including: changes to prices;
changes to reserves; results of exploration, development and acquisitions;
government approvals; economic and political risks; competition; operating
hazards; fluctuations in foreign exchange and interest rates; and integration of
acquired businesses.

These and additional factors are described in more detail under the heading
"Risk Factors" in the Annual Information Forms for the fiscal years ended
December 31, 2003 and December 31, 2002 filed herewith as Exhibits 99.1 and
99.2, respectively. Events or circumstances could cause our actual results to
differ materially from those estimated or projected and expressed in, or implied
by, these forward looking statements.


<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.

                                          VERMILION ENERGY TRUST
                                          (the Registrant)


                                          By /s/ Curtis W. Hicks
                                             -------------------------------
                                             Name:  Curtis W. Hicks
                                             Title: Vice President, Finance
                                                    and Chief Financial Officer


                                          Date: June 30, 2004


<PAGE>


                                  EXHIBIT INDEX


         The following exhibits have been filed as part of the Registration
Statement:

- --------------------------------------------------------------------------------
  EXHIBIT NUMBER                         DESCRIPTION
- --------------------------------------------------------------------------------

      23.1           Consent of Independent Engineers Gilbert Lausten Jung
                     Associates Ltd.

      23.2           Consent of Independent Registered Charterd Accountants
                     Deloitte & Touche LLP

      99.1           Renewal Annual Information Form for the year ended
                     December 31, 2003

      99.2           Initial Annual Information Form for the year ended
                     December 31, 2002

      99.3           Financial Statements of the Registrant for the years
                     ended December 31, 2003 and 2002

      99.4           Recent Developments Statement

      99.5           First Quarter Report, Unaudited Interim Operating and
                     Financial Results for the quarter ended March 31, 2004

      99.6           Management's Discussion and Analysis of Registrant's
                     Operating and Financial Results for the quarter ended
                     March 31, 2004

      99.7           Year-End Results for the fiscal year ended December
                     31, 2003

      99.8           Third Quarter Report, Unaudited Interim Operating and
                     Financial Results for the nine months ended
                     September 30, 2003

      99.9           Second Quarter Report, Unaudited Interim Operating and
                     Financial Results for the six months ended June 30, 2003

      99.10          First Quarter Report, Unaudited Interim Operating and
                     Financial Results for the quarter ended March 31, 2003

      99.11          Proxy Authorization Form for the Annual and Special
                     Meeting of Trust Unitholders to be held on May 18, 2004

      99.12          Notice of Annual and Special Meeting of Shareholders
                     and Information Circular in respect of the Annual and
                     Special Meeting of Unitholders held on May 18, 2004

      99.13          Final Short Form Prospectus for distribution of
                     5,500,000 Trust Units dated November 28, 2003

      99.14          Underwriting Agreement relating to the offering of
                     5,500,000 Units of the Registrant dated November 19,
                     2003

      99.15          Form 52-109F2, CEO and CFO Certification of Interim
                     Filings for the interim period ending March 31, 2004

      99.16          Corporate Governance Guidelines dated May 15, 2003

      99.17          Material Change Report of the Registrant dated March
                     19, 2004

      99.18          Press Release of the Registrant dated May 20, 2004

      99.19          Press Release of the Registrant dated May 19, 2004

      99.20          Press Release of the Registrant dated May 14, 2004

      99.21          Press Release of the Registrant dated May 6, 2004

      99.22          Press Release of the Registrant dated April 30, 2004

      99.23          Press Release of the Registrant dated April 21, 2004 -
                     Vermilion Energy Trust Announces Cash Distribution

      99.24          Press Release of the Registrant dated April 15, 2004

      99.25          Press Release of the Registrant dated April 5, 2004

<PAGE>

- --------------------------------------------------------------------------------
  EXHIBIT NUMBER                         DESCRIPTION
- --------------------------------------------------------------------------------

      99.26          Press Release of the Registrant dated March 22, 2004 -
                     Aventura Enters into an Agreement with BG Group

      99.27          Press Release of the Registrant dated March 22, 2004 -
                     Vermilion Energy Trust Announces Cash Distribution

      99.28          Press Release of the Registrant dated March 15, 2004

      99.29          Press Release of the Registrant dated March 10, 2004

      99.30          Press Release of the Registrant dated February 19, 2004

      99.31          Press Release of the Registrant dated February 18, 2004

      99.32          Press Release of the Registrant dated February 13, 2004

      99.33          Press Release of the Registrant dated January 15, 2004

      99.34          Press Release of the Registrant dated December 18, 2003

      99.35          Press Release of the Registrant dated December 15, 2003

      99.36          Press Release of the Registrant dated December 10, 2003

      99.37          Press Release of the Registrant dated November 19, 2003

      99.38          Press Release of the Registrant dated November 14, 2003

      99.39          Press Release of the Registrant dated November 13, 2003

      99.40          Press Release of the Registrant dated November 5, 2003

      99.41          Press Release of the Registrant dated October 22, 2003

      99.42          Press Release of the Registrant dated October 15, 2003

      99.43          Press Release of the Registrant dated September 19, 2003

      99.44          Press Release of the Registrant dated September 15, 2003
                     - Discussions with Potential Acquirer

      99.45          Press Release of the Registrant dated September 15,
                     2003 - Vermilion Energy Trust Announces Exchangeable
                     Share Ratio

      99.46          Press Release of the Registrant dated August 20, 2003

      99.47          Press Release of the Registrant dated August 15, 2003

      99.48          Press Release of the Registrant dated August 6, 2003

      99.49          Press Release of the Registrant dated July 22, 2003

      99.50          Press Release of the Registrant dated July 15, 2003

      99.51          Press Release of the Registrant dated June 19, 2003

      99.52          Press Release of the Registrant dated June 13, 2003

      99.53          Press Release of the Registrant dated June 11, 2003

      99.54          Press Release of the Registrant dated May 20, 2003

      99.55          Press Release of the Registrant dated May 15, 2003

      99.56          Press Release of the Registrant dated April 21, 2003

<PAGE>

- --------------------------------------------------------------------------------
  EXHIBIT NUMBER                         DESCRIPTION
- --------------------------------------------------------------------------------

      99.57          Press Release of the Registrant dated April 15, 2003

      99.58          Press Release of the Registrant dated March 20, 2003

      99.59          Press Release of the Registrant dated March 14, 2003

      99.60          Press Release of the Registrant dated March 10, 2003

      99.61          Press Release of the Registrant dated March 3, 2003 -
                     New Appointments and Valuations

      99.62          Press Release of the Registrant dated March 3, 2003 -
                     TSX Listing, Share Consolidation, Operational Update
                     and Technical Team Reorganization



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>2
<FILENAME>ex23_1form40-f.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
                                                                    EXHIBIT 23.1
                                                                    ------------



[GRAPHIC OMITTED]  Gilbert Laustsen Jung
                   Associates Ltd.   Petroleum Consultants
                   4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4H2
                   (403) 266-9500    Fax (403) 262-1855







                        CONSENT OF INDEPENDENT ENGINEERS






We hereby consent to the use of and reference to our name and our reports, and
the inclusion of information derived from our reports, evaluating Vermilion
Energy Trust's petroleum and natural gas reserves as at December 31, 2002 and
2003, in the registration statement on Form 40-F of Vermilion Energy Trust.

                                           Yours very truly,

                                           GILBERT LAUSTSEN JUNG
                                           ASSOCIATES LTD.


                                           ORIGINALLY SIGNED BY


                                           Keith M. Braaten, P. Eng.
                                           Vice-President



Dated: May 20, 2004
Calgary, Alberta


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<FILENAME>ex23_2form40-f.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
                                                                    EXHIBIT 23.2
                                                                    ------------




             CONSENT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS


We consent to the use in this registration statement of Vermilion Energy Trust
on Form 40-f (formerly Vermilion Resources Ltd.) of our report dated February
11, 2004, (which audit report expresses an unqualified opinion and includes an
explanatory paragraph referring to our separate reporting on the consolidated
financial statements which excludes note 17 to the consolidated financial
statements) appearing in this registration statement.


(signed) "Deloitte & Touche LLP"
REGISTERED CHARTERED ACCOUNTANTS


Calgary, Alberta
July 2, 2004



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>ex99_1form40-f.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
                                                                    EXHIBIT 99.1
                                                                    ------------





                                 [LOGO OMITTED]


                               V E R M I L I O N
                                  ENERGY TRUST


                         RENEWAL ANNUAL INFORMATION FORM
                      FOR THE YEAR ENDED DECEMBER 31, 2003






                                 April 20, 2004


<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

GLOSSARY OF TERMS..............................................................1
         Conventions...........................................................4
         Abbreviations.........................................................4
         Other    .............................................................4
         Conversion............................................................5
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS..............................5
VERMILION ENERGY TRUST.........................................................5
         General  .............................................................5
         Organizational Structure of the Trust.................................6
         Summary Description of the Business...................................7
         History of Vermilion..................................................8
         Significant Acquisitions and Significant Dispositions.................9
NARRATIVE DESCRIPTION OF THE BUSINESS.........................................10
         Stated Business Objectives...........................................10
         Description of Properties............................................10
         Petroleum and Natural Gas Reserves...................................12
         Marketing............................................................24
ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY TRUST......................24
         Trust Units..........................................................24
         Special Voting Rights................................................25
         Unitholders Limited Liability........................................25
         Issuance of Trust Units..............................................25
         Cash Distributions...................................................25
         Redemption Right.....................................................26
         Non-Resident Unitholders.............................................27
         Meetings of Unitholders..............................................27
         Exercise of Voting Rights Attached to Shares of Vermilion............27
         Trustee  ............................................................28
         Delegation of Authority, Administration and Trust Governance.........28
         Liability of the Trustee.............................................28
         Amendments to the Trust Indenture....................................29
         Takeover Bid.........................................................29
         Termination of the Trust.............................................29
         Reporting to Unitholders.............................................30
         Distribution Reinvestment and Optional Trust Unit Purchase Plan......30
         Unitholder Rights Plan...............................................31
ADDITIONAL INFORMATION RESPECTING VERMILION RESOURCES LTD.....................33
         Management of Vermilion..............................................33
         Vermilion Share Capital..............................................35
         Voting and Exchange Trust Agreement..................................39
         Support Agreement....................................................40
         Notes    ............................................................41
         Royalty Agreement....................................................42
         Management's discussion and analysis.................................43
MARKET FOR, PRICE RANGE AND TRADING VOLUME OF SECURITIES......................43
CONFLICTS OF INTEREST.........................................................43
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS....................43
LEGAL PROCEEDINGS.............................................................44
MATERIAL CONTRACTS............................................................44
INTERESTS OF EXPERTS..........................................................44
TRANSFER AGENT AND REGISTRAR..................................................44
RISK FACTORS..................................................................44
         Reserve Estimates....................................................44


                                      -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)


         Volatility of Oil and Natural Gas Prices.............................44
         Changes in Legislation...............................................44
         Investment Eligibility...............................................45
         Operational Matters..................................................45
         Environmental Concerns...............................................45
         Kyoto Protocol.......................................................45
         Debt Service.........................................................46
         Delay in Cash Distributions..........................................46
         Taxation of Vermilion................................................46
         Depletion of Reserves................................................46
         Net Asset Value......................................................47
         Return of Capital....................................................47
         Nature of Trust Units................................................47
         Unitholders Limited Liability........................................47
         Accounting Write-Downs as a Result of GAAP...........................47
         Variations in Interest Rates and Foreign Exchange Rates..............48
         Mutual Fund Trust Status.............................................48
ADDITIONAL INFORMATION........................................................49
         Schedule "A" Report on reserves data by independent qualified
           reserves evaluator (form 51-101F2)
         Schedule "B" Report of management and directors on reserves
           data and other information




                                      -ii-

<PAGE>
                                        1


                                GLOSSARY OF TERMS

The following are defined terms used in this Annual Information Form:

"ABCA" means the BUSINESS CORPORATIONS ACT (Alberta), R.S.A. 2000, c. B-9, as
amended, including the regulations promulgated thereunder;

"AFFILIATE" when used to indicate a relationship with a person or company, has
the same meaning as set forth in the SECURITIES ACT (Alberta);

"ARRANGEMENT" means the plan of arrangement under the ABCA involving the trust,
Vermilion, Clear energy Inc. and Vermilion acquisition Ltd.

"AVENTURA" means Aventura Energy Inc., a corporation incorporated pursuant to
the ABCA;

"AVENTURA SHARES" means the common shares of Aventura;

"BOARD OF DIRECTORS" or "BOARD" means the board of directors of Vermilion;

"CONTROL" means, with respect to control of a body corporate by a person, the
holding (other than by way of security) by or for the benefit of that person of
securities of that body corporate to which are attached more than 50% of the
votes that may be cast to elect directors of the body corporate (whether or not
securities of any other class or classes shall or might be entitled to vote upon
the happening of any event or contingency) provided that such votes, if
exercised, are sufficient to elect a majority of the board of directors of the
body corporate;

"CURRENT MARKET PRICE OF A TRUST UNIT" means, in respect of a Trust Unit on any
date, the weighted average trading price of the Trust Units on the TSX on that
date and the nine trading days preceding that date, or, if the Trust Units are
not then listed on the TSX, on such other stock exchange or automated quotation
system on which the Trust Units are listed or quoted, as the case may be, as may
be selected by the board of directors of Vermilion for such purpose; provided,
however, that if in the opinion of the board of directors of Vermilion the
public distribution or trading activity of Trust Units for that period does not
result in a weighted average trading price which reflects the fair market value
of a Trust Unit, then the Current Market Price of a Trust Unit shall be
determined by the board of directors of Vermilion, in good faith and in its sole
discretion, and provided further that any such selection, opinion or
determination by such board of directors shall be conclusive and binding and for
the purposes of this definition, the weighted average trading price shall be
determined by dividing (a) the aggregate dollar trading value of all Trust Units
sold on the TSX (or other stock exchange or automated quotation system, if
applicable) over the applicable ten trading days by (b) the total number of
Trust Units sold on such stock exchange or system during such period;

"DISTRIBUTABLE CASH" means all amounts available for distribution during any
applicable period to holders of Trust Units;

"DISTRIBUTION" means a distribution paid by the Trust in respect of the Trust
Units, expressed as an amount per Trust Unit;

"DISTRIBUTION PAYMENT DATE" means any date that Distributable Cash is
distributed to Unitholders, generally being the 15th day of the calendar month
following any Distribution Record Date;

"DISTRIBUTION RECORD DATE" means the last day of each calendar month or such
other date as may be determined from time to time by the Trustee, except that
December 31 shall in all cases be a Distribution Record Date;

"DRIP PLAN" means the Distribution Reinvestment and Optional Trust Unit Purchase
Plan adopted by the Trust;

"EXCHANGEABLE SHARES" means the Series A exchangeable shares in the capital of
Vermilion;

"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares;

<PAGE>
                                       2


"EXCHANGE RATIO" means the exchange ratio used to determine the number of Trust
Units a holder of Exchangeable Shares is entitled to receive upon an exchange of
Exchangeable Shares which, in respect of each Exchangeable Share, was initially
equal to one upon completion of the Arrangement, and shall be cumulatively
adjusted thereafter by: (a) increasing the Exchange Ratio on each Distribution
Payment Date by an amount, rounded to the nearest five (5) decimal places, equal
to a fraction having as its numerator the product of the Exchange Ratio
immediately prior to the applicable Distribution Payment Date and the
Distribution, expressed as an amount per Trust Unit, paid on that Distribution
Payment Date, and having as its denominator the Current Market Price of a Trust
Unit on the last business day prior to that Distribution Payment Date; and (b)
decreasing the Exchange Ratio on each record date for the payment of dividends
to holders of Exchangeable Shares by Vermilion, if any, by an amount, rounded to
the nearest five (5) decimal places, equal to a fraction having as its numerator
the amount of the dividend payable to holders of Exchangeable Shares, expressed
as an amount per Exchangeable Share, and having as its denominator the Current
Market Price of a Trust Unit on the date that is the last business day prior to
that dividend record date. The Exchange Ratio shall also be adjusted in the
event of certain other reorganizations or distributions in respect of the Trust
Units as necessary on an economic equivalency basis as further described in the
Exchangeable Share Provisions;

"GLJ" means Gilbert Laustsen Jung Associates Ltd., independent petroleum
engineering consultants of Calgary, Alberta;

"GLJ REPORT" means the independent engineering evaluation of certain oil, NGL
and natural gas interests of the Trust and Aventura prepared by GLJ dated April
20, 2004 and effective January 1, 2004.

"INCOME TAX ACT" or "TAX ACT" means the INCOME TAX ACT (Canada), R.S.C. 1985, c.
1. (5th Supp), as amended, including the regulations promulgated thereunder;

"INSOLVENCY EVENT" means the institution by Vermilion of any proceeding to be
adjudicated to be a bankrupt or insolvent or to be wound up, or the consent of
Vermilion to the institution of bankruptcy, dissolution, insolvency or
winding-up proceedings against it, or the filing of a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the COMPANIES CREDITORS'
ARRANGEMENT ACT (Canada) and the BANKRUPTCY AND INSOLVENCY ACT (Canada), and the
failure by Vermilion to contest in good faith any such proceedings commenced in
respect of Vermilion within fifteen (15) days of becoming aware thereof, or the
consent by Vermilion to the filing of any such petition or to the appointment of
a receiver, or the making by Vermilion of a general assignment for the benefit
of creditors, or the admission in writing by Vermilion of its inability to pay
its debts generally as they become due, or Vermilion not being permitted,
pursuant to solvency requirements of applicable law, to redeem any retracted
Exchangeable Shares pursuant to the Exchangeable Share Provisions;

"NON-RESIDENT" means (a) a Person who is not a resident of Canada for the
purposes of the Tax Act; or (b) a partnership that is not a Canadian partnership
for the purposes of the Tax Act;

"NOTES" means the unsecured, subordinated notes issued by Vermilion under the
Arrangement;

"PARTNERSHIP" means Vermilion Resources, the partners of which are Vermilion and
its wholly-owned subsidiary, 764031 Alberta Ltd.;

"PERMITTED INVESTMENTS" means (a) obligations issued or guaranteed by the
government of Canada or any province of Canada or any agency or instrumentality
thereof, (b) term deposits, guaranteed investment certificates, certificates of
deposit or bankers' acceptances of or guaranteed by any Canadian chartered bank
or other financial institutions the short-term debt or deposits of which have
been rated at least A or the equivalent by Standard & Poor's Corporation,
Moody's Investors Service, Inc. or Dominion Bond Rating Service Limited, and (c)
commercial paper rated at least A or the equivalent by Dominion Bond Rating
Service Limited, in each case maturing within 180 days after the date of
acquisition;

"PRO RATA SHARE" of any particular amount in respect of a Unitholder at any time
shall be the product obtained by multiplying the number of Trust Units that are
owned by that Unitholder at that time by the quotient obtained when such a
number is divided by the total number of all Trust Units that are issued and
outstanding at that time;

<PAGE>
                                       3


"ROYALTY" means the royalty granted under the Royalty Agreement commencing
February 1, 2003, entitling the Trust to approximately 99% of the net cash flow
generated from the present and future oil and natural gas interests, rights and
related tangibles of the Partnership after certain costs, expenditures and
deductions;

"ROYALTY AGREEMENT" means the royalty agreement between the Partnership,
Vermilion, 764031 Alberta Ltd. and the Trust dated January 22, 2003 providing
for the creation of the Royalty;

"SPECIAL VOTING RIGHT" means the special voting right of the Trust, issued and
certified under the Trust Indenture for the time being outstanding and entitled
to the benefits and subject to the limitations set forth therein;

"SUBSEQUENT INVESTMENT" means those investments which the Trust is permitted to
make pursuant to the Trust Indenture;

"SUBSIDIARY" means, in relation to any person, any body corporate, partnership,
joint venture, association or other entity of which more than 50% of the total
voting power of shares or units of ownership or beneficial interest entitled to
vote in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by such person;

"SUPPORT AGREEMENT" means the support agreement entered into between the Trust
and Vermilion Acquisition Ltd. (prior to its amalgamation with Vermilion) on
January 16, 2003;

"TRUST" means Vermilion Energy Trust, a trust established under the laws of
Alberta pursuant to the Trust Indenture;

"TRUSTEE" means Computershare Trust Company of Canada, the initial trustee of
the Trust, or such other trustee, from time to time, of the Trust;

"TRUST INDENTURE" means the amended and restated trust indenture dated as of
January 15, 2003 between Computershare Trust Company of Canada and Vermilion;

"TRUST SUBSIDIARY" means Vermilion Resources Ltd., 764031 Alberta Ltd.,
Vermilion Rep S.A., Vermilion Resources (Partnership), Aventura Energy Inc.

"TRUST UNIT" or "UNIT" means a unit of the Trust issued by the Trust;

"TSX" means TSX Inc., carrying on business as the Toronto Stock Exchange;

"UNITHOLDER RIGHTS PLAN" means the trust unitholder rights plan adopted by the
Trust pursuant to the Unitholders Rights Plan Agreement;

"UNITHOLDER RIGHTS PLAN AGREEMENT" means the trust unitholder rights plan
agreement between the Trust and Computershare Trust Company of Canada dated
January 16, 2003 to establish the Unitholder Rights Plan;

"UNITHOLDERS" means holders from time to time of the Trust Units;

"UNIT RIGHTS INCENTIVE PLAN" means the Unit Rights Incentive Plan of the Trust;

"VERMILION" means Vermilion Resources Ltd.;

"VOTING AND EXCHANGE AGREEMENT TRUSTEE" means Computershare Trust Company of
Canada, the initial trustee under the Voting and Exchange Trust Agreement, or
such other trustee, from time to time appointed thereunder; and

<PAGE>
                                       4


"VOTING AND EXCHANGE TRUST AGREEMENT" means the voting and exchange trust
agreement entered into on January 16, 2003 between the Trust, Vermilion
Acquisition Ltd. (prior to its amalgamation with Vermilion) and the Voting and
Exchange Agreement Trustee.

CONVENTIONS

Unless otherwise indicated, references herein to "$" or "dollars" are to
Canadian dollars. All financial information herein has been presented in
Canadian dollars in accordance with generally accepted accounting principles in
Canada.

<TABLE>
<CAPTION>
ABBREVIATIONS

                OIL AND NATURAL GAS LIQUIDS                             NATURAL GAS

<S>            <C>                             <C>             <C>
 Bbl           Barrel                          Mcf             thousand cubic feet
 Bbls          Barrels                         Mmcf            million cubic feet
 Mbbls         thousand barrels                Bcf             billion cubic feet
 Bbls/d        barrels per day                 Mcf/d           thousand cubic feet per day
 NGLs          natural gas liquids             Mmcf/d          million cubic feet per day
 GJ            Gigajoule                       MMBTU           million British Thermal Units
 GJ/d          gigajoule per day
</TABLE>

OTHER

AECO-C        Intra-Alberta Nova Inventory Transfer Price (NIT net price)

API           American Petroleum Institute

(degree)API   an indication of the specific gravity of crude oil measured on
              the API gravity scale. Liquid petroleum with a specified gravity
              of 28 (degree)API or higher is generally referred to as light
              crude oil

ARTC          Alberta Royalty Tax Credit

BOE           barrel of oil equivalent of natural gas and crude oil on the
              basis of 1 BOE for 6 (unless otherwise stated) Mcf of natural
              gas (this conversion factor is an industry accepted norm and is
              not based on either energy content or current prices)

BOE/D         barrel of oil equivalent per day

m3            cubic metres

MBOE          1,000 barrels of oil equivalent

WTI           West Texas Intermediate, the reference price paid in U.S. dollars
              at Cushing, Oklahoma for crude oil of standard grade

MW/h          Megawatts per hour



<PAGE>
                                       5


CONVERSION

The following table sets forth certain standard conversion from Standard
Imperial Units to the International System of Units (or metric units).

            TO CONVERT FROM            TO                        MULTIPLY BY
            Mcf                        Cubic metres              28.174
            Cubic metres               Cubic feet                35.494
            Bbls                       Cubic metres              0.159
            Cubic metres               Bbls oil                  6.290
            Feet                       Metres                    0.305
            Metres                     Feet                      3.281
            Miles                      Kilometres                1.609
            Kilometres                 Miles                     0.621
            Acres                      Hectares                  0.405
            Hectares                   Acres                     2.471


                SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual information form contains forward-looking statements. All statements
other than statements of historical fact contained in this annual information
form are forward-looking statements, including, without limitation, statements
regarding the future financial position, business strategy, proposed
acquisition, budgets, litigation, projected costs and plans and objectives of or
involving the Trust or Vermilion. Many of these statements can be identified by
looking for words such as "believe", "expects", "will", "intends", '"projects",
"anticipates", "estimates", "continues" or similar words. The Trust and
Vermilion believe the expectations reflected in such forward-looking statements
are reasonable but no assurance can be given that these expectations will prove
to be correct and such forward-looking statements included, or incorporated by
reference, in this annual information form should not be unduly relied upon. A
discussion of the risk factors that could affect future results and could cause
results to differ materially from those expressed in the forward-looking
statements contained herein is included in this annual information form under
"Risk Factors".

The forward-looking statements contained herein are expressly qualified in their
entirety by this cautionary statement. Such forward-looking statements are made
as of the date of this annual information form and neither the Trust nor
Vermilion undertakes any obligation to publicly update or revise such
forward-looking statements to reflect new information, subsequent events or
otherwise.

                             VERMILION ENERGY TRUST

GENERAL

Vermilion Energy Trust is an open-end unincorporated investment trust governed
by the laws of the Province of Alberta and created pursuant to the Trust
Indenture. The head and principal office of the Trust is located at Suite 2800,
400 - 4th Avenue, S.W., Calgary, Alberta, T2P 0J4.

The Trust was formed on December 16, 2002 pursuant to the Trust Indenture, as
amended and restated on January 15, 2003. As a result of the the Arrangement,
former holders of common shares of Vermilion received Units or Exchangeable
Shares, or a combination thereof, in accordance with the elections made by such
holders, and Vermilion become a subsidiary of the Trust. See "General
Development of the Business of the Trust and Vermilion - Significant
Acquisitions and Significant Dispositions - The Arrangement".

<PAGE>
                                       6


ORGANIZATIONAL STRUCTURE OF THE TRUST

The following diagram describes the intercorporate relationships among the Trust
and its subsidiaries as at December 31, 2003, the percentage of votes attaching
to all voting securities of each subsidiary beneficially owned by Vermilion, as
well as the flow of cash from the oil and gas properties held by such
subsidiaries to the Trust, and from the Trust to the Unitholders. Reference
should be made to the appropriate sections of this annual information form for a
complete description of the structure of the Trust.

                               ------------------
                               | Unitholders(1) |
                               -----------------
                                        |
                                        |
                             Cash Distributions (2)
                                        |
                                        |
                                        /\
                                       /  \
                                      /    \
                                     /      \
                                    /        \
                                   /          \
                                  /  Vermilion \
                                 / Energy Trust \
           _________________\   /                \
           |                /  /__________________\
           |                      /_\           |
           |                       |            |
           |                       |            |
           |            Flux de tresorerie    Placement
           |                       |            |
           |                       |            |
           |                       |           /_\
           |                 ---------------------        -------------------
           |           _____ |     Vermilion     | ______ |    Exchangeable  |
           |          |      |   Resources Ltd.  |        |    Shareholders  |
           |          |      --------------------- \      -------------------|
           |          |       |               |     \
           |          |       |               |      \
  cash flow (4)       |       |               |       \
           |          |       |               |        \
           |          |       |               |         \
           |          |       |               |          \
           |          |       |               |           \
           |          |      100%            100%         72,2%
           |          |       |               |              \
           |          |       |               |               \
           |          |    ---------------  --------------   --------------
           |          |    |    764031   |  | Vermilion  |   |  Aventura   |
           |        95.32% | Alberta Ltd.|  |  REP S.A.  |   | Energy, Inc.|
           |          |    |  (Alberta)  |  |  (France)  |   |  (Alberta)  |
           |          |    --------------   --------------   --------------
           |          |      |
           |          |      |
           |          |   4.68%
           |          |      |
           |          |      |
           |    -------------------------
           |___ |  Vermilion Resources  |
                |     (Partnership)     |
                ------------------------


NOTES:

(1)      The Unitholders own 100% of the equity of the Trust.

(2)      Cash distributions are made to Unitholders monthly based on the Trust's
         cash flow.

(3)      Cash flow represents payments made by Vermilion to the Trust in respect
         of principal and interest payments on the Notes. In addition to such
         payments, dividends may also be paid on the common shares of Vermilion.

(4)      Cash flow represents payments made by the Partnership under the Royalty
         Agreement.

(5)      The Trust will invest funds raised through any subsequent issuance of
         Trust Units in additional securities of Vermilion to enable Vermilion
         to make capital expenditures. In addition, the Trust may reinvest a
         portion of the income received from Vermilion as well as any repayments
         of principal on the Notes in securities of Vermilion to enable
         Vermilion to make capital expenditures.

<PAGE>
                                       7


SUMMARY DESCRIPTION OF THE BUSINESS

VERMILION ENERGY TRUST

The Trust was established to acquire and hold, directly and indirectly,
interests in petroleum and natural gas properties. Cash flow from the properties
is flowed from Vermilion to the Trust by way of interest payments and principal
repayments on the Notes and dividends declared on the common shares of
Vermilion, and from the Partnership to the Trust by way of royalty payments
under the Royalty Agreement. Under the terms of the Trust Indenture, the Trust
is also entitled to:

         (a)      acquire or invest in securities of Vermilion and in the
                  securities of any other entity including without limitation,
                  bodies corporate, partnerships or trusts, and borrowing funds
                  or otherwise obtaining credit for that purpose;

         (b)      acquire royalties in respect of Canadian resource properties
                  as defined in the Tax Act and making any deferred royalty
                  purchase payments which may be required with respect to such
                  royalties; provided however that in no event shall the Trust
                  invest in any royalties which constitute an interest in land
                  or a covenant running with the properties with respect to
                  which such royalties relate;

         (c)      dispose of any part of the property of the Trust, including,
                  without limitation, any securities of Vermilion;

         (d)      temporarily hold cash and investments for the purposes of
                  paying the expenses and the liabilities of the Trust, making
                  other Permitted Investments as contemplated by the Trust
                  Indenture, paying amounts payable by the Trust in connection
                  with the redemption of any Trust Units, and making
                  distributions to Unitholders; and

         (e)      pay costs, fees and expenses associated with the foregoing
                  purposes or incidental thereto.

The Trustee is prohibited from acquiring any investment which (a) would result
in the cost amount to the Trust of all "foreign property" (as defined in the Tax
Act) which is held by the Trust to exceed the amount prescribed by section 5000
of the Tax Regulations or (b) would result in the Trust not being considered
either a "unit trust" or a "mutual fund trust" for purposes of the Tax Act.

The Trustee may declare payable to the Unitholders all or any part of the net
income of the Trust. It is currently anticipated that the only income to be
received by the Trust will be from the interest received on the principal amount
of Notes, royalty income pursuant to the Royalty Agreement, and dividends on the
common shares of Vermilion. The Trust currently makes monthly cash distributions
to Unitholders of the interest income earned from the Notes, income earned under
the Royalty Agreement and dividends received on the common shares of Vermilion,
after expenses, if any, and any cash redemptions of Trust Units.

Unitholders receive monthly distributions of the cash flow generated by
Vermilion and distributed to Unitholders through the Trust. The Trust currently
employs a strategy which: (i) provides Unitholders with a competitive annual
cash on cash yield through monthly cash distributions, (ii) ensures that
Vermilion's existing assets are maintained at a level that provides sustainable
ongoing cash flow, and (iii) continues to expand the business of the Trust
through the development of growth opportunities that are intended to provide
long-term stable cash flows and be accretive to the existing Unitholders. The
Trust intends to finance acquisitions through bank financing and the issuance of
additional Trust Units from treasury, while maintaining prudent leverage.



VERMILION RESOURCES LTD.

Vermilion Resources Ltd. was incorporated under the ABCA on November 23, 1993.
On January 1, 2003, Vermilion amalgamated with its wholly-owned subsidiary,
973675 Alberta Ltd. and on January 15, 2003, Vermilion

<PAGE>
                                       8


amalgamated with its wholly-owned subsidiaries, Big Sky Resources Inc.,
Vermilion Gas Marketing Inc. and 962134 Alberta Ltd. On January 22, 2003,
Vermilion was amalgamated with Vermilion Acquisition Ltd. pursuant to the
Arrangement. Where the information in this annual information form is as of a
date prior to January 22, 2003, the terms "Vermilion" or "Vermilion Resources
Ltd." shall refer to Vermilion Resources Ltd. prior to its amalgamation with
Vermilion Acquisition Ltd. under the Arrangement.

The Trust is the sole holder of Vermilion common shares. Certain former
shareholders of Vermilion own Exchangeable Shares in accordance with the
elections made by such holders under the Arrangement. Vermilion continues to
carry on an oil and natural gas business similar to that carried on by Vermilion
prior to the Arrangement becoming effective. Vermilion owns, directly or
indirectly, all of the assets that were owned by Vermilion prior to the
Arrangement becoming effective, other than certain exploration assets that were
conveyed to Clear Energy Inc. under the Arrangement, and certain Trinidad assets
that were transferred to Aventura following the Arrangement becoming effective.
See "General Development of the Business of the Trust and Vermilion -
Significant Acquisitions and Significant Dispositions".

The head office of Vermilion is located at Suite 2800, 400 - 4th Avenue S.W.,
Calgary, Alberta, T2P 0J4 and its registered office is located at Suite 3700,
400 - 3rd Avenue S.W., Calgary, Alberta, T2P 4H2.

HISTORY OF VERMILION

The following describes the development of Vermilion's business over the last
three years.

On May 22, 2001, Vermilion increased its ownership in Aventura through
participation in a private placement of special warrants. In conjunction with
the private placement Vermilion also received finance options and finance
warrants.

On March 21, 2002, Vermilion closed the acquisition of Artemis Energy Limited, a
private company whose principal assets were natural gas producing properties,
for total consideration of $31 million, including $9.1 million of debt. The
acquisition gave Vermilion a new core property located in the Mikwan area of
Alberta.

On June 21, 2002, Vermilion signed an agreement to purchase a 40% participating
interest in, and operatorship of the Central Block onshore Trinidad, for total
consideration of $66.3 million, including the assumption of $19 million of debt.

On October 17, 2002, Vermilion increased its ownership in Aventura through
participation in a private placement of common shares for an aggregate cost of
$6.0 million

On January 15, 2003 the shareholders of Vermilion approved the reorganization of
Vermilion by way of a plan of arrangement under the ABCA into Vermilion Energy
Trust and Clear Energy Inc., a publicly traded oil and gas exploration company.
The Arrangement, completed on January 22, 2003, resulted in former Vermilion
shareholders and optionholders owning all of the issued and outstanding common
shares of Clear Energy Inc. and all of the issued and outstanding Trust Units,
and the Trust owning all of the issued and outstanding common shares of
Vermilion. See "Significant Acquisitions and Significant Dispositions - The
Arrangement".

Following the completion of the Arrangement, Vermilion completed certain
transactions with Aventura pursuant to which Vermilion transferred all of its
Trinidad interests to Aventura in exchange for Aventura Shares, thereby
increasing Vermilion's ownership interest in Aventura to 72.2%. Vermilion also
acquired from Aventura a 25% gross overriding royalty which was held by Aventura
on certain of Vermilion's non-operated interests and properties located in
Bottrel, Alberta for cash consideration of $6.3 million. See "Significant
Acquisitions and Significant Dispositions - Transactions with Aventura Energy
Inc."

As at March 31, 2004 Vermilion had 132 full time employees of which 63 were
located in head office, 26 in Canadian field offices and 43 in France.

<PAGE>
                                       9


SIGNIFICANT ACQUISITIONS AND SIGNIFICANT DISPOSITIONS

THE ARRANGEMENT

Under the terms of the Arrangement, Vermilion was reorganized into the Trust and
Clear Energy Inc., which resulted in certain oil and gas exploration assets
being transferred to Clear Energy Inc. These assets included oil and gas
properties in the Peace River Arch area of Alberta which, at the time of the
Arrangement, produced approximately 1,610 BOE/D, together with certain
undeveloped landholdings in the southern foothills region of Alberta and in
Saskatchewan.

Pursuant to the Arrangement, the outstanding common shares and options of
Vermilion were exchanged for an aggregate of 51.5 million Trust Units. Also, as
part of the Arrangement, Vermilion issued an aggregate of 6.0 million
Exchangeable Shares to former holders of common shares in accordance with
elections made by such holders under the Arrangement. Each Exchangeable Share is
exchangeable into that number of Trust Units as calculated pursuant to the
Exchange Ratio at the time of such exchange. Upon completion of the Arrangement,
the Trust held all of the issued and outstanding Notes.

TRANSACTIONS WITH AVENTURA ENERGY INC.

In conjunction with the Arrangement, Vermilion entered into an agreement with
Aventura whereby Vermilion agreed to complete the following transactions with
Aventura (collectively, the "Aventura Transactions"):

         (a)      the acquisition by Aventura of all the outstanding common
                  shares of Vermilion (Barbados) Ltd., a subsidiary of Vermilion
                  for consideration consisting of an aggregate of 212.1 million
                  Aventura Shares, at a price of $0.35 per Aventura Share, for
                  aggregate consideration of $74.2 million; and

         (b)      the acquisition by Vermilion from Aventura of a 25% gross
                  overriding royalty currently held by Aventura on certain of
                  Vermilion's non-operated interests and properties located in
                  Bottrel, Alberta for cash consideration of $6.3 million.

The Aventura Transactions were completed on January 22, 2003. As a result of the
completion of the Aventura Transactions, Vermilion increased its ownership
interest in Aventura to 322.7 million Aventura Shares representing 72.2% of the
issued and outstanding Aventura Shares. In March 2003, Aventura completed a
consolidation of its issued and outstanding common shares on the basis of one
new common share for each ten common shares issued and outstanding. As a result,
Vermilion's 72.2% ownership interest in Aventura has been consolidated into 32.3
million common shares. In addition, Aventura's common shares commenced trading
on the TSX in March 2003 under the symbol AVR.

PROPOSED TRANSACTIONS

On February 19, 2004, Vermilion announced the signing of an agreement to
purchase 5,900 boe per day of production, 14.3 mmboe of proved (P90) reserves
and 17.4 mmboe of proved plus (P50) reserves in the Netherlands by its wholly
owned subsidiary, Vermilion Oil & Gas Netherlands B.V. ("Vermilion Netherlands")
for Euro 48.3 million (Cdn $80.5 million) effective January 1, 2004. The
transaction is subject to normal government and regulatory approvals and is
expected to close in May, 2004.

During 2003, Vermilion and Aventura entered into discussions with a potential
acquirer of Aventura. On March 22, 2004, an offer was made to acquire all of the
issued and outstanding shares of Aventura for $5.10 per share. The transaction
is expected to close in early May 2004 at which time the Trust would receive a
cash payment of approximately $165 million that would initially be used to
reduce outstanding debt and eventually be applied toward the future acquisition
of cash-flow generating properties.

On April 5, 2004, Vermilion announced that a newly formed wholly-owned
subsidiary, Verenex Energy Inc. ("Verenex"), had entered into an agreement with
Prairie Fire Oil & Gas Ltd. ("Prairie Fire"), a capital pool corporation
formerly listed on the TSX Venture Exchange, whereby Verenex will amalgamate
with Prairie Fire. Verenex was established by Vermilion to accelerate its
exploration program in France and to pursue international

<PAGE>
                                       10


exploration and acquisition opportunities. To fund its capital program, Verenex
intends to conduct an equity financing. Upon completion of the amalgamation and
financing, it is anticipated that Vermilion will own approximately 50% of the
shares of Verenex. The transaction is subject to regulatory approvals, the
approval of Prairie Fire's minority shareholders and completion of the equity
financing. Completion of the transaction is targeted for early June 2004.
Verenex's management team will be led by James D. McFarland, a former director
of Vermilion.


                      NARRATIVE DESCRIPTION OF THE BUSINESS

STATED BUSINESS OBJECTIVES

Vermilion is actively engaged in the business of oil and natural gas
exploitation, development, acquisition and production in Canada, France and
Trinidad. Vermilion's business plan is to maximize returns to the Trust from its
oil and natural gas properties and related assets. Where possible, Vermilion
will seek to expand its reserve base through the selective addition of
high-quality, long-life reserves with low risk development opportunities.

In reviewing potential participations or acquisitions, Vermilion will consider a
number of factors, including: (a) the present value of the future revenue from
such properties from the proved producing, total proved and established
reserves; (b) the amount of potential for additional reservoir development; (c)
whether sufficient infrastructure exists in the prospect to provide for
increased activity; (d) the cost of any potential development; (e) investments
in properties that exhibit medium to long life reserves and stable production
base; and (f) the ability of Vermilion to enhance the value of acquired
properties through additional exploitation efforts and additional development
drilling. The board of directors of Vermilion may, in its discretion, approve
asset or corporate acquisitions or investments that do not conform to these
guidelines based upon the board's consideration of the qualitative aspects of
the subject properties including risk profile, technical upside, reserve life,
asset quality and the Trust's business prospects.

DESCRIPTION OF PROPERTIES

The following is a description of the oil and natural gas properties, plants,
facilities and installations in which Vermilion has an interest and that are
material to Vermilion's operations and exploration activities. The production
numbers stated refer to Vermilion's working interest share before deduction of
Crown, freehold and other royalties. Reserve amounts are stated, before
deduction of royalties, at December 31, 2003, based on forecast cost and price
assumptions as evaluated in the GLJ Report. See "Narrative Description of the
Business - Petroleum and Natural Gas Reserves".

CANADA ASSETS

The Trust's production in Canada is located in six areas, all in Alberta:
Drayton Valley, Slave Lake, Athabasca, Southern Foothills, Central Alberta and
Peace River. The Trust's main producing area is Drayton Valley, while Slave Lake
is the main oil producing area. Athabasca, Central Alberta and Peace River are
mainly gas and Southern Foothills is primarily a non-operated project area.

Vermilion holds an average working interest of 69.5% in 259,895 (180,686 net)
acres of developed land, 331 (234 net) producing natural gas wells and 302 (204
net) producing oil wells at December 31, 2003. Vermilion operates two natural
gas plants and has an ownership interest in a third, resulting in combined gross
processing capacity of over 75 Mmcf/d. In addition, Vermilion has treating
capacity of over 13,000 Bbls/d of oil in four oil batteries.

For the year ended December 31, 2003, production in Canada averaged 60.0Mmcf/d
of natural gas and 6,678Bbls/d of oil and NGLs.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2004 consists of 34,598 MBOE of total proven reserves and 46,633 MBOE
of proved plus probable reserves.

<PAGE>
                                       11


FRANCE ASSETS

Vermilion's main producing area in France is located in the Aquitaine Basin
which is southwest of Bordeaux, France. The Paris Basin, located just east of
Paris, France is primarily an oil producing area. The area contains five
producing fields and one main oil battery at Vaudoy. The South Aquitaine area is
the only non-operated producing property that Vermilion holds in France.
Vermilion holds a 100% working interest in 37,855 acres of developed land in the
Aquitaine and Paris basins and a 30.2% working interest in 8,320 (2,512 net)
acres of developed land and 126 (114 net) net producing oil wells at December
31, 2003.

For the year ended December 31, 2003, Vermilion's production in France averaged
6,018 Bbls/d of oil and 1.5 mmcf/d of natural gas.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2004 consists of 28,682 MBOE of total proven reserves and 38,989 MBOE
of proved plus probable reserves.

TRINIDAD

As part of the reorganization of Vermilion, separate from the Arrangement,
Vermilion's 40% working interest in the Central Block in Trinidad was acquired
by Aventura. As a result of the completion of this transaction, Vermilion owns
72.2% of the outstanding Aventura Shares. The purpose of this transaction was to
consolidate the Trinidad property working interest into one international entity
and allow for further maturity of these growth assets to be fully realized by
Unitholders. All capital expenditures commitments are held by Aventura with no
funding obligations remaining with Vermilion.

GENERAL DEVELOPMENT OF THE BUSINESS OF AVENTURA

Aventura is an internationally focused public energy company engaged in the
exploration, development and production of oil and gas. Aventura's current asset
portfolio is a 65% working interest in the central block Trinidad The assets are
contained in the Central Block onshore permit where Trinidad's government oil
and gas operating corporation, Petroleum Company of Trinidad Tobago Limited
("Petrotrin"), has a 35% working interest alongside Aventura's interest. For the
year ended December 31, 2003, the average production from Aventura's interest in
Trinidad was approximately 2,377 BOE/D, and 23 BOE/D from it's assets in
Argentina. In 2003, Aventura sold all of its operations in Saskatchewan and
Argentina to focus on its opportunities in Trinidad. (see also PROPOSED
TRANSACTIONS)

TRINIDAD - CENTRAL BLOCK

The Central Block is an exploration block covering 111 square kilometres in the
centre of the onshore Trinidad Southern basin. Aventura has participated in the
drilling of four wells in the central block since it commenced operations in the
country.

The Carapal Ridge -1 well was drilled and tested in 2001. After the installation
of production facilities and a pipeline to Petrotrin facilities, the well was
placed on production in December 2002. For 2003, production from this well
averaged 2,377 BOE/D, with production rates restricted by available gas markets.

The second well, Corsan -1, was also drilled in 2001 and has been suspended for
completion at a later date. In 2003, Aventura participated in the drilling of
two wells. The saunders -1 well was drilled and has suspended pending further
evaluation to determine the potential effectiveness of a stimulation program.
Subsequent to the saunders -1 well, Aventura drilled the Baraka -1 exploration
well. The Baraka -1 well tested commercial gas and is currently shut -in pending
the installation of tie- in facilities.

 The GLJ Report indicates that Aventura's interest in the Central Block at
January 1, 2004 consists of 44,499 of total proven reserves and 67,772 of
established reserves.

<PAGE>
                                       12


STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION

RESERVES AND FUTURE NET REVENUE

The following is a summary of the oil and natural gas reserves and the value of
future net revenue of Vermilion as evaluated by GLJ. Pricing used in the
forecast and constant price evaluations is set forth in the notes to the tables.

Information contained in this section is effective December 31, 2003 unless
otherwise stated. Reserves information with respect to Canada and France was
prepared on January 31, 2004 and April 20, 2004 with respect to Trinidad.

All evaluations of future net production revenue set forth in the tables below
are stated after overriding and lessor royalties, Crown royalties, freehold
royalties, mineral taxes, direct lifting costs, normal allocated overhead and
future capital investments. It should not be assumed that the discounted future
net production revenue estimated by the GLJ Report represents the fair market
value of the reserves. Other assumptions relating to the costs, prices for
future production and other matters are included in the GLJ Report. There is no
assurance that the future price and cost assumptions used in the GLJ Report will
prove accurate and variances could be material.

Reserves for Canada and France are established using deterministic methodology.
Reserves for Trinidad are determined by probabilistic methodology due to the
reserve size and data available. Total Proved Reserves are established at the 90
percent probability (P90) level. There is a 90 percent probability that the
actual reserves recovered will be equal to or greater than the P90 reserves.
Total Proved Plus Probable Reserves are established at the 50 percent
probability (P50) level. There is a 50 percent probability that the actual
reserves recovered will be equal to or greater than the P50 reserves. Trinidad
reserves are reported at Aventura's 65% interest, of which Vermilion owns 72.2%.


   [Charts summarizing net revenue for oil and natural gas reserves omitted.]





<PAGE>
                                       13


                          RECONCILIATION OF COMPANY NET
                       RESERVES BY PRINCIPAL PRODUCT TYPE
                     BASED ON FORECAST PRICES AND COSTS (9)


The following table sets forth a reconciliation of the changes in Vermilion's
light and medium crude oil, associated and non-associated gas (combined)
reserves as at December 31, 2003 against such reserves as at December 31,2002.


            [Chart showing reconciliation of net reserves omitted.]


<PAGE>
                                       14


The following table sets forth changes between future net revenue estimates
attributable to net proved reserves as at December 31, 2003 against such
reserves as at December 31, 2002.


      RECONCILIATION OF CHANGES IN NET PRESENT VALUES OF FUTURE NET REVENUE
                                DISCOUNTED AT 10%
                     BASED ON CONSTANT PRICES AND COSTS (8)


<TABLE>
<CAPTION>
                                                                                                        (M$)
<S>                                                                                               <C>
CANADA
    Estimated Future Net Revenue at December 31, 2002                                                679,864
      Sales and Transfers of Oil and Gas Produced, Net of Production Costs and Royalties           (130,492)
      Net Change in Prices, Production Costs and Royalties Related to Future Production            (121,994)
      Development Costs During the Period                                                             28,997
      Changes in Estimated Future Development Costs                                                 (14,932)
      Extensions and Improved Recovery                                                                 9,119
      Discoveries                                                                                          -
      Acquisitions of Reserves                                                                             -
      Dispositions of Reserves                                                                      (18,384)
      Technical Reserves Revisions                                                                  (43,343)
      Accretion of Discount                                                                           67,986
      Net Change in Income Taxes                                                                           -
      All Other Changes                                                                                5,798
    Estimated Future Net Revenue at December 31, 2003                                                462,620

FRANCE
    Estimated Future Net Revenue at December 31, 2002                                                247,147
      Sales and Transfers of Oil and  Gas Produced, Net of Production Costs and Royalties           (47,002)
      Net Change in Prices, Production Costs and Royalties Related to Future Production            (153,147)
      Development Costs during the Period                                                             28,353
      Changes in Estimated Future Development Costs                                                 (16,369)
      Extensions and Improved Recovery                                                                11,939
      Discoveries                                                                                          -
      Acquisitions of Reserves                                                                             -
      Dispositions of Reserves                                                                             -
      Technical Reserves Revisions                                                                     7,478
      Accretion of Discount                                                                           36,863
      Net Change in Income Taxes                                                                      32,997
      All Other Changes                                                                               28,588
    Estimated Future Net Revenue at December 31, 2003                                                176,848

TRINIDAD
    Estimated Future Net Revenue at December 31, 2002                                                 62,419
      Sales and Transfers of Oil and  Gas Produced, Net of Production Costs and Royalties            (8,793)

      Net Change in Prices, Production Costs and Royalties Related to Future Production                3,439
      Development Costs during the Period                                                             13,460
      Changes in Estimated Future Development Costs                                                 (15,821)
      Extensions and Improved Recovery                                                                     -
      Discoveries                                                                                     22,639
      Acquisitions of Reserves                                                                             -
      Dispositions of Reserves                                                                             -
      Technical Reserves Revisions                                                                    81,626
      Accretion of Discount                                                                           11,683
      Net Change in Income Taxes                                                                    (61,940)
      All Other Changes                                                                                2,466
    Estimated Future Net Revenue at December 31, 2003                                                111,178
</TABLE>

NOTES:

1.   "Gross Reserves" are Vermilion's working interest (operating or
     non-operating) share before deducting of royalties and without including
     any royalty interests of the company. "Net Reserves" are the company's
     working interest (operating or non-operating) share after deduction of
     royalty obligations, plus the company's royalty interests in reserves.

2.   "Proved" reserves are those reserves that can be estimated with a high
     degree of certainty to be recoverable. It is likely that the actual
     remaining quantities recovered will exceed the estimated proved reserves.

3.   "Probable" reserves are those additional reserves that are less certain to
     be recovered than proved reserves. It is equally likely that the actual
     remaining quantities recovered will be greater or less than the sum of the
     estimated proved plus probable reserves.

4.   "Developed" reserves are those reserves that are expected to be recovered
     from existing wells and installed facilities or, if facilities have not
     been installed, that would involve a low expenditure (e.g. when compared to
     the cost of drilling a well) to put the reserves on production.

<PAGE>
                                       15


5.   "Developed Producing" reserves are those reserves that are expected to be
     recovered from completion intervals open at the time of the estimate. These
     reserves may be currently producing or, if shut-in, they must have
     previously been on production, and the date of resumption of production
     must be known with reasonable certainty.

6.   "Developed Non-Producing" reserves are those reserves that either have not
     been on production, or have previously been on production, but are shut in,
     and the date of resumption of production is unknown.

7.   "Undeveloped" reserves are those reserves expected to be recovered from
     known accumulations where a significant expenditure (for example, when
     compared to the cost of drilling a well) is required to render them capable
     of production. They must fully meet the requirements of the reserves
     classification (proved, probable, possible) to which they are assigned.

8.   The product prices used in the constant price and cost evaluations in the
     GLJ Report were as follows: OIL - $40.81Cdn/Bbl Light, Sweet Crude at
     Edmonton GAS - $ 6.09 Cdn/mmbtu AECO-C Spot PENTANES PLUS - $41.31Cdn/Bbl
     at Edmonton PROPANE - $29.81 Cdn/Bbl at Edmonton BUTANE - $31.81 Cdn/Bbl at
     Edmonton TRINIDAD GAS $1.56 Cdn/mcf

9.   The pricing assumptions used in the GLJ Report with respect to net values
     of future net revenue (forecast) as well as the inflation rates used for
     operating and capital costs are set forth below. The Natural Gas Liquids
     price is an aggregate of the individual natural gas liquids prices used in
     the Total Proved + Probable evaluation. GLJ is an independent qualified
     reserves evaluator appointed pursuant to NI 51-101.

<TABLE>
<CAPTION>
                                                                                 Natural Gas   Natural Gas   Inflation   Exchange
                 Light and Medium Crude Oil          Crude Oil    Natural Gas     Trinidad       Liquids        Rate      Rate
            ------------------------------------   ------------   -----------    -----------   ----------    ---------   --------

                WTI       EDMONTON     CROMER      BRENT BLEND
              CUSHING    PAR PRICE     MEDIUM       CRUDE OIL      AECO GAS       WELLHEAD     FOB FIELD
             OKLAHOMA     400 API     29.30 API     FOB NORTH        PRICE       GAS PRICE       GATE
            ($US/BBL)    ($CDN/BBL)   ($CDN/BBL)   SEA ($USBBL)   ($CDN/MMBTU)    $CDN/MCF     ($CDN/BBL)      %/YEAR    $US/$CDN
            ---------    ----------   ----------   ------------   ------------   ---------     ----------      ------    --------
<C>         <C>          <C>          <C>          <C>            <C>            <C>           <C>           <C>         <C>
Year

Forecast

2003
2004          29.00         37.75        31.75         27.50          5.85           1.56          28.92         1.5        .75
2005          26.00         33.75        28.75         24.50          5.15           1.56          24.89         1.5        .75
2006          25.00         32.50        28.50         23.50          5.00           1.41          23.81         1.5        .75
2007          25.00         32.50        28.50         23.50          5.00           1.40          23.89         1.5        .75
2008          25.00         32.50        28.50         23.50          5.00           1.33          23.84         1.5        .75
Thereafter    25.00         32.50        28.50         23.50          5.00           1.33          23.82         1.5        .75
</TABLE>


UNDEVELOPED RESERVES

The following table is based on forecast evaluations and sets forth the net
volumes of proved undeveloped reserves that were attributed for each of
Vermilion's product types for Canada and France for the most recent five
financial years and in the aggregate before that time.

<TABLE>
<CAPTION>
                             LIGHT AND MEDIUM OIL       NATURAL GAS        NATURAL GAS LIQUIDS          BOE'S
                                    (MBBL)                 (MMCF)                 (MBBL)                (MBBL)
                             --------------------  ---------------------  ---------------------  --------------------
<S>                          <C>                   <C>                    <C>                    <C>
Aggregate prior to 1999               -                      -                      -                     -
1999                                1,359                    -                      -                   1,359
2000                                1,360                  1,829                   120                  1,785
2001                                1,466                    133                     5                  1,493
2002                                4,366                 17,305                   497                  7,748
2003                                2,738                 14,852                   568                  5,782
</TABLE>


UNDEVELOPED RESERVES

The following table is based on forecast evaluations and sets forth the net
volumes of proved undeveloped reserves that were attributed for each of
Vermilion's product types for Trinidad for the most recent five financial years
and in the aggregate before that time.

<TABLE>
<CAPTION>
                             LIGHT AND MEDIUM OIL       NATURAL GAS        NATURAL GAS LIQUIDS          BOE'S
                                    (MBBL)                 (MMCF)                 (MBBL)                (MBBL)
                             --------------------  ---------------------  ---------------------  --------------------
<S>                          <C>                   <C>                    <C>                    <C>
Aggregate prior to 1999               -                      -                      -                     -
1999                                  -                      -                      -                     -
2000                                  -                      -                      -                     -
2001                                  -                      -                      -                     -
2002                                  -                   48,457                  1,773                 9,849
2003                                  -                    3,501                      0                   548
</TABLE>

<PAGE>
                                       16


Proven undeveloped reserves are those reserves expected to be recovered from
known accumulations where a significant expenditure (for example, when compared
to the cost of drilling a well) is required to render them capable of
production. These reserves have a 90% probability of being recovered.

Vermilion's current plan is to develop these reserves in the following 2 years.
This timetable may be altered depending on outside market forces, changes in
capital allocations and impact of future acquisitions and dispositions.

The following table is based on forecast evaluations and sets forth the net
volumes of probable undeveloped reserves that were attributed for each of
Vermilion's product types for Canada and France for the most recent five
financial years and in the aggregate before such time:

<TABLE>
<CAPTION>
                             LIGHT AND MEDIUM OIL       NATURAL GAS        NATURAL GAS LIQUIDS          BOE'S
                                    (MBBL)                 (MMCF)                 (MBBL)                (MBBL)
                             --------------------  ---------------------  ---------------------  --------------------
<S>                          <C>                   <C>                    <C>                    <C>
Aggregate prior to 1999               -                      -                      -                     -
1999                                  -                      -                      -                     -
2000                                  -                      -                      -                     -
2001                                  -                      -                      -                     -
2002                                6,197                 10,172                   339                  8,231
2003                                7,384                  8,410                   325                  9,111
</TABLE>

The following table is based on forecast evaluations and sets forth the net
volumes of probable undeveloped reserves that were attributed for each of
Vermilion's product types for Trinidad for the most recent five financial years
and in the aggregate before such time:

<TABLE>
<CAPTION>
                             LIGHT AND MEDIUM OIL       NATURAL GAS        NATURAL GAS LIQUIDS          BOE'S
                                    (MBBL)                 (MMCF)                 (MBBL)                (MBBL)
                             --------------------  ---------------------  ---------------------  --------------------
<S>                          <C>                   <C>                    <C>                    <C>
Aggregate prior to 1999               -                      -                      -                     -
1999                                  -                      -                      -                     -
2000                                  -                      -                      -                     -
2001                                  -                      -                      -                     -
2002                                  -                   64,793                  2,393                 13,192
2003                                  -                  106,577                  3,762                 21,525
</TABLE>


Probable undeveloped reserves are those reserves expected to be recovered from
known accumulations where a significant expenditure (for example, when compared
to the cost of drilling a well) is required to render them capable of
production. These reserves have a 50% probability of being recovered.

Vermilion's current plan is to develop these reserves in over the next 5 years.
In general, development of these reserves requires additional evaluation data to
increase the probability of success to an acceptable level for Vermilion. This
increases the timeline for the development of these reserves. This timetable may
be altered depending on outside market forces, changes in capital allocations
and impact of future acquisitions and dispositions.

<TABLE>
<CAPTION>
                            FUTURE DEVELOPMENT COSTS

                                                                                    TOTAL PROVED
                                                TOTAL PROVED      TOTAL PROVED     PLUS PROBABLE
                                              ESTIMATED USING   ESTIMATED USING   ESTIMATED USING
                                              CONSTANT PRICES   FORECAST PRICES   FORECAST PRICES
                                                 AND COSTS         AND COSTS         AND COSTS
                                                    (M$)              (M$)              (M$)
                                              ---------------   ---------------   ---------------
<S>                                           <C>               <C>               <C>
CANADA
2004                                               21,279            21,279            33,856
2005                                                3,152             3,199            12,046
2006                                                  424               437             4,769
2007                                                  383               400               453
2008                                                 -                 -                  318
Remainder                                           2,470             2,603             3,241
                                              ---------------   ---------------   ---------------
Total for all years undiscounted                   27,708            27,918            54,683
                                              ---------------   ---------------   ---------------
Total for all years discounted at 10%/year         24,724            24,785            48,374
                                              ===============   ===============   ===============

FRANCE
2004                                               20,450            20,450            32,855
2005                                               14,390            14,606            28,207
2006                                                5,678             5,850            14,091
</TABLE>

<PAGE>
                                       17


<TABLE>
<S>                                           <C>               <C>               <C>
2007                                                  378               395             8,761
2008                                                  243               258               258
Remainder                                             655               723               723
                                              ---------------   ---------------   ---------------
Total for all years undiscounted                   41,794            42,282            84,895
                                              ---------------   ---------------   ---------------
Total for all years discounted at 10%/year         37,208            37,587            73,691
                                              ===============   ===============   ===============

TRINIDAD
2004                                                    0                 0                 0
2005                                                3,477             3,477             3,477
2006                                                2,925             2,969             4,421
2007                                                    0                 0                 0
2008                                                    0                 0                 0
Remainder                                          10,401            11,747            15,520
                                              ---------------   ---------------   ---------------
Total for all years undiscounted                   16,803            18,193            23,418
                                              ---------------   ---------------   ---------------
Total for all years discounted at 10%/year          9,619            10,159            12,716
                                              ===============   ===============   ===============
</TABLE>

Vermilion expects to source its capital expenditure requirements from internally
generated cashflow and as appropriate from debt or equity financing. It is
anticipated that costs of funding the future development costs will not impact
development of its properties. In Trinidad, Vermilion and Aventura entered into
discussions with a potential acquirer of Aventura. (see PROPOSED TRANSACTIONS)
Should the acquisition close, the acquirer of Aventura would be responsible for
the future capital expenditure costs in Trinidad.

OIL AND GAS PROPERTIES AND WELLS

The following table sets forth the number of wells in which Vermilion held a
working interest as at December 31, 2003:

<TABLE>
<CAPTION>
                                                     OIL                             NATURAL GAS
                                      -----------------------------------  ---------------------------------
                                          GROSS(1)           NET(2)            GROSS(1)           NET(2)
                                           WELLS              WELLS             WELLS             WELLS
                                      ----------------  -----------------  ----------------  ---------------
<S>                                         <C>                <C>               <C>               <C>
ALBERTA
     Producing                              302                204               331               234
     Non-producing                           71                 50                60                43
FRANCE
     Producing                              126                114                 -                 -
     Non-producing                           21                 13                 -                 -
TRINIDAD
     Producing                                -                  -                 1              0.65
     Non-producing                            1               0.65                 2                1.3
TOTAL
     Producing                              428                318               332             234.65
     Non-producing                           93              63.65                62               44.3
</TABLE>

NOTES:

(1)  "Gross" refers to the total wells in which Vermilion has an interest,
     directly or indirectly.

(2)  "Net" refers to the total wells in which Vermilion has an interest,
     directly or indirectly, multiplied by the percentage working interest owned
     by Vermilion, directly or indirectly, therein.

COSTS INCURRED

The following table summarizes the capital expenditures made by Vermilion on oil
and natural gas properties for the year ended December 31, 2003.

<TABLE>
<CAPTION>
                           PROPERTY ACQUISITION COSTS          EXPLORATION COSTS    DEVELOPMENT COSTS
                                     (M$)                            (M$)                 (M$)
                    -----------------------------------------  -----------------    -----------------
                    PROVED PROPERTIES    UNPROVED PROPERTIES
                    -----------------    -------------------
<S>                 <C>                  <C>                   <C>                  <C>
Canada                      -                     -                 5,819               27,692
France                      -                     -                   -                 30,469
Trinidad                    -                     -                15,586                  -
                    -----------------    -------------------   -----------------    -----------------
Total                       -                     -                21,405               58,161
                    =================    ===================   =================    =================
</TABLE>

<PAGE>
                                       18


EXPLORATION AND DEVELOPMENT ACTIVITIES

The following table sets forth the number of exploratory and development wells,
which Vermilion completed during its 2003 financial year:

                                  EXPLORATORY WELLS           DEVELOPMENT WELLS
                                  -----------------           -----------------
                                 GROSS(1)     NET(2)         GROSS(1)     NET(2)
                                 --------     ------         --------     ------
Canada
     Oil Wells                     -            -               -            -
     Gas Wells                     14          7.3              5           3.1
     Dry Holes                     1           0.5              3           1.5
                                 --------     ------         --------     ------
     Total Completed Wells         15          7.8              8           4.6
                                 ========     ======         ========     ======
France
     Oil Wells                     1            1               1            1
     Gas Wells                     -            -               -            -
     Dry Holes                     -            -               -            -
                                 --------     ------         --------     ------
     Total Completed Wells         1            1               1            1
                                 ========     ======         ========     ======
Trinidad
     Oil Wells                     1          0.65              -            -
     Gas Wells                     1          0.65              -            -
     Dry Holes                     -            -               -            -
                                 --------     ------         --------     ------
     Total Completed Wells         2           1.3              -            -
                                 ========     ======         ========     ======
Total Vermilion
     Oil Wells                     2          1.65              1            1
     Gas Wells                     15         7.95              5           3.1
     Dry Holes                     1           0.5              3           1.5
                                 --------     ------         --------     ------
     Total Completed Wells         18         10.1              9           5.6
                                 ========     ======         ========     ======


Vermilion has initially budgeted $45 million for its 2004 apital program in
Canada and France. The funds will be used to drill wells to develop reserves in
its key areas of Drayton Valley, Slave Lake, Athabasca and Central Alberta and
the Paris basin. A portion of the capital will be allocated to workovers,
production optimization, and maintenance capital.


PROPERTIES WITH NO ATTRIBUTED RESERVES

The following table sets out Vermilion's undeveloped land as at December 31,
2003

                                                 UNDEVELOPED LAND
                                     -------------------------------------
AREA                                 GROSS ACRES(1)           NET ACRES(1)
- ----                                 --------------           ------------

Alberta                                    504,129              375,303
France                                   1,102,312              699,855
Trinidad                                    26,250               17,063
                                     --------------           ------------
Total                                    1,632,691            1,092,221
                                     ==============           ============

NOTES:
(1)  "Gross" refers to the total acres in which Vermilion has an interest,
     directly or indirectly.

(2)  "Net" refers to the total acres in which Vermilion has an interest,
     directly or indirectly, multiplied by the percentage working interest owned
     by Vermilion, directly or indirectly therein.


ABANDONMENT AND RECLAMATION COSTS

Vermilion has estimated its abandonment costs by determining amounts for
facility decommissioning and reclamation costs (including salvage) by area in
both Canada and France. As well Vermilion has determined abandonment costs
(including salvage) and reclamation costs per well, by area and applied this
amount to its net wells in each of Canada and France. The GLJ report includes
amounts for abandonment and reclamation costs in Trinidad. As there are only
four wells in Trinidad and the amounts included for abandonment and reclamation
are not considered material, such costs are not included in the abandonment
tables below for Vermilion.


<PAGE>
                                       19


The number of net wells to be abandoned is 668 in Canada and 204 in France.

The total amount of costs net of salvage is set forth in the following table.

        COUNTRY            UNDISCOUNTED (M$)      DISCOUNTED 10% (M$)
        -------            -----------------      -------------------
        Canada                   33,726                  5,425
        France                   39,233                  1,703


In estimating the future net revenue it is important to note that facilities
costs and non-producing wells in France were excluded from the abandonment
calculation totalling:

                           FACILITIES                    NON-PRODUCING
             ----------------------------------   -----------------------------
             UNDISCOUNTED ($M)   DISCOUNTED 10%   UNDISCOUNTED   DISCOUNTED 10%
             -----------------   --------------   ------------   --------------
Canada            7,248               190
France           20,713               411            8,174             2,145


In the next three years, Vermilion expects to pay:


        COUNTRY            UNDISCOUNTED (M$)       DISCOUNTED 10% (M$)
        -------            -----------------       -------------------
        Canada                    873                     668
        France                     59                      45


Vermilion has set aside a reclamation fund to help cover these future costs. It
is currently funded at $0.20 per producing boe.

TAX HORIZON

As a result of the Trust's tax efficient structure, annual taxable income in
Canada is transferred from its operating entities to Vermilion Energy Trust, and
from the Trust to its Unitholders. This is primarily accomplished through the
deduction of the royalties on underlying oil and gas properties held by its
operating subsidiaries. Therefore, it can be expected that no income tax
liability would be incurred by the Trust in Canada for as long as the
organization maintains this corporate tax structure. In France, the Trust is
currently taxable, subject to a 35.4% corporate tax rate after eligible
deductions.

PRODUCTION ESTIMATES

The following table sets forth the volume of production estimated for 2004:

<TABLE>
<CAPTION>
                   LIGHT AND MEDIUM OIL     NATURAL GAS     NATURAL GAS LIQUIDS       BOE
                          (MBBL)              (MMCF)              (MBBL)            (MBBL)
<S>                       <C>                 <C>                   <C>              <C>
Canada                    1,540               21,801                855              6,029
France                    2,577                  466                 -               2,655
Trinidad                    -                  4,600                115                882
                          -----               ------                ---              -----
Total Trust               4,117               26,867                970              9,566
                          =====               ======                ===              =====
</TABLE>

PRODUCTION HISTORY

The following table sets forth certain information in respect of production,
product prices received, royalties, production costs and netbacks received by
Vermilion for each quarter of its most recently completed financial year:


<PAGE>
                                       20

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED  THREE MONTHS ENDED   THREE MONTHS ENDED   THREE MONTHS ENDED
                                       MARCH 31, 2003       JUNE 30, 2003     SEPTEMBER 30, 2003    DECEMBER 31, 2003
                                     ------------------  ------------------   ------------------   ------------------
<S>                                         <C>                 <C>                <C>                 <C>
Canada
     Average Daily Production
       Light and Medium Oil (bbl/d)         5,049               5,184              4,530               2,220
       Natural Gas (mcf/d)                  65.42               62.67              57.62               54.28
       Natural Gas Liquids (bbl/d)          1,956               2,111              1,867               1,808
                                     ------------------  ------------------   ------------------   ------------------
     Average Net Prices Received
       Light and Medium Oil ($/bbl)         42.90               41.08              42.45               44.61
       Natural Gas ($/mcf)                   6.45                6.25               5.66                5.57
       Natural Gas Liquids ($/bbl)          41.09               35.06              32.38               35.36
                                     ------------------  ------------------   ------------------   ------------------
     Royalties
       Light and Medium Oil ($/bbl)         10.80                8.44               7.90                8.06
       Natural Gas ($/mcf)                   1.82                2.16               1.86                1.69
       Natural Gas Liquids ($/bbl)          12.70               10.33               9.97               11.18
                                     ------------------  ------------------   ------------------   ------------------
     Production Costs
       Light and Medium Oil ($/bbl)          6.13                5.62               7.19                8.20
       Natural Gas ($/mcf)                   0.68                0.86               0.91                1.07
       Natural Gas Liquids ($/bbl)           6.13                5.62               7.19                8.20
                                     ------------------  ------------------   ------------------   ------------------
     Netback Received
       Light and Medium Oil ($/bbl)         25.97               27.02              27.36               28.35
       Natural Gas ($/mcf)                   3.95                3.23               2.89                2.81
       Natural Gas Liquids ($/bbl)          22.26               19.11              15.22               15.98
                                     ==================  ==================   ==================   ==================
France
     Average Daily Production
       Light and Medium Oil (bbl/d)         5,987               6,107              5,824               6,155
       Natural Gas (mcf/d)                   1.42                1.36               1.59                1.69
       Natural Gas Liquids (bbl/d)            -                   -                  -                   -
     Average Net Prices Received
       Light and Medium Oil ($/bbl)         36.16               28.65              30.16               33.00
       Natural Gas ($/mcf)                   5.71                4.66               4.92                4.75
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Royalties
       Light and Medium Oil ($/bbl)          4.99                4.04               4.47                4.97
       Natural Gas ($/mcf)                   0.25                0.24               0.25                0.24
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Production Costs
       Light and Medium Oil ($/bbl)          6.80                6.69               6.57                6.48
       Natural Gas ($/mcf)                   2.37                2.65               2.88               0.73
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Netback Received
       Light and Medium Oil ($/bbl)         24.37               17.92              19.12               21.55
       Natural Gas ($/mcf)                   3.09                1.77               1.79                3.78
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ==================  ==================   ==================   ==================
Trinidad
     Average Daily Production
       Light and Medium Oil ($/bbl)           342                 305                359                 340
       Natural Gas ($/mcf)                  11.63               11.46              13.27               13.13
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Average Net Prices Received
       Light and Medium Oil ($/bbl)         42.44               38.10              36.07               36.58
       Natural Gas ($/mcf)                   1.69                1.52               1.52                1.56
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Royalties
       Light and Medium Oil ($/bbl)          5.14                3.29               5.50                4.73
       Natural Gas ($/mcf)                   0.19                0.16               0.13                0.14
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Production Costs
       Light and Medium Oil ($/bbl)           -                   -                  -                   -
       Natural Gas ($/mcf)                   0.36                0.73               0.56                0.43
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ------------------  ------------------   ------------------   ------------------
     Netback Received
       Light and Medium Oil ($/bbl)         37.30               34.81              30.57               31.85
       Natural Gas ($/mcf)                   1.14                0.63               0.83                0.99
       Natural Gas Liquids ($/bbl)            -                   -                  -                   -
                                     ==================  ==================   ==================   ==================
</TABLE>

<PAGE>
                                       21


MARKETING

Vermilion is party to certain financial instruments, such as crude oil and
natural gas contracts and foreign currency forward contracts. Vermilion has
entered into these contracts for hedging purposes only in order to protect its
cash flow on future sales from the potential adverse impact of fluctuations in
oil and gas prices and in the U.S./Canadian dollar exchange rate. The contracts
reduce the fluctuations in sales revenues by establishing fixed prices or a
trading range on a portion of its oil and gas sales. All of the future sales
contracts described below are arranged with counter parties representing major
financial (banking) institutions with AA to AAA credit ratings thereby reducing
counter party credit risk exposure.

Contracts outstanding in respect of hedging transactions which Vermilion will
assume are as follows:

OIL HEDGING                       WTI                           Brent
Fixed Price Swaps        bbls/d        US$/bbl          bbls/d        US$/bbl
                       ---------------------------------------------------------
2004                      2,250         24.35            2,250         22.93
2005                      1,500         24.80            1,500         23.37
                       ---------------------------------------------------------

GAS HEDGING                                              Floor        Ceiling
Costless Collars                        GJ/d            Cdn$/GJ       Cdn$/GJ
                                   ---------------------------------------------
Q1 2004                                19,148            4.99           8.70
Q2 2004                                17,500            4.71           6.64
Q3 2004                                17,500            4.71           6.64
Q4 2004                                 5,897            4.71           6.64
                                   ---------------------------------------------
2004 Average                           14,993            4.80           7.30
                                   ---------------------------------------------


Vermilion has also put in place currency-conversion hedges for the Canadian-U.S.
dollar of US$2.7 million per month, covering the majority of its oil hedge
position for 2004 at approximately US$0.71 per Canadian dollar.

            ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY TRUST

TRUST UNITS

An unlimited number of Trust Units may be created and issued pursuant to the
Trust Indenture. Each Trust Unit shall entitle the holder thereof to one vote at
any meeting of the holders of Trust Units and represents an equal fractional
undivided beneficial interest in any distribution from the Trust (whether of net
income, net realized capital gains or other amounts) and in any net assets of
the Trust in the event of termination or winding-up of the Trust. All Trust
Units outstanding from time to time shall be entitled to equal shares of any
distributions by the Trust, and in the event of termination or winding-up of the
Trust, in any net assets of the Trust. All Trust Units shall rank among
themselves equally and rateably without discrimination, preference or priority.
Each Trust Unit is transferable, subject to compliance with applicable Canadian
securities laws, is not subject to any conversion or pre-emptive rights and
entitles the holder thereof to require the Trust to redeem any or all of the
Trust Units held by such holder (see "Redemption Right") and to one vote at all
meetings of Unitholders for each Trust Unit held.

The Trust Units do not represent a traditional investment and should not be
viewed by investors as "shares" in either Vermilion or the Trust. As holders of
Trust Units in the Trust, the Unitholders will not have the statutory rights
normally associated with ownership of shares of a corporation including, for
example, the right to bring "oppression" or "derivative" actions. The price per
Trust Unit will be a function of anticipated distributable income from Vermilion
and the ability of Vermilion to effect long term growth in the value of the
Trust. The market price of the Trust Units will be sensitive to a variety of
market conditions including, but not limited to, interest rates, commodity
prices and the ability of the Trust to acquire additional assets. Changes in
market conditions may adversely affect the trading price of the Trust Units.


<PAGE>
                                       22


SPECIAL VOTING RIGHTS

In order to allow the Trust flexibility in pursuing corporate acquisitions, the
Trust Indenture allows for the creation of Special Voting Rights which will
enable the Trust to provide voting rights to holders of Exchangeable Shares and,
in the future, to holders of other exchangeable shares that may be issued by
Vermilion or other subsidiaries of the Trust in connection with other
exchangeable share transactions.

An unlimited number of Special Voting Rights may be created and issued pursuant
to the Trust Indenture. Holders of Special Voting Rights shall not be entitled
to any distributions of any nature whatsoever from the Trust and shall be
entitled to attend at meetings of Unitholders and to such number of votes at
meetings of Unitholders as may be prescribed by the board of directors of
Vermilion in the resolution authorizing the issuance of any Special Voting
Rights. Except for the right to attend and vote at meetings of the Unitholders,
the Special Voting Rights shall not confer upon the holders thereof any other
rights.

Under the terms of the Voting and Exchange Trust Agreement, the Trust has issued
a Special Voting Right to the Voting and Exchange Trust Agreement Trustee for
the benefit of every Person who holds Exchangeable Shares.

UNITHOLDERS LIMITED LIABILITY

The Trust Indenture provides that no Unitholder, in its capacity as such, shall
incur or be subject to any liability in contract or in tort in connection with
the Trust or its obligations or affairs and, in the event that a court
determines Unitholders are subject to any such liabilities, the liabilities will
be enforceable only against, and will be satisfied only out of the Trust's
assets. Pursuant to the Trust Indenture, the Trust will indemnify and hold
harmless each Unitholder from any cost, damages, liabilities, expenses, charges
or losses suffered by a Unitholder from or arising as a result of such
Unitholder not having such limited liability.

The Trust Indenture provides that all contracts signed by or on behalf of the
Trust must contain a provision to the effect that such obligation will not be
binding upon Unitholders personally. Notwithstanding the terms of the Trust
Indenture, Unitholders may not be protected from liabilities of the Trust to the
same extent a shareholder is protected from the liabilities of a corporation.
Personal liability may also arise in respect of claims against the Trust (to the
extent that claims are not satisfied by the Trust) that do not arise under
contracts, including claims in tort, claims for taxes and possibly certain other
statutory liabilities. The possibility of any personal liability to Unitholders
of this nature arising is considered unlikely in view of the fact that the sole
activity of the Trust is to hold securities, and all of the business operations
are carried on by Vermilion, directly or indirectly.

The activities of the Trust and its subsidiary, Vermilion, will be conducted,
upon the advice of counsel, in such a way and in such jurisdictions as to avoid
as far as possible any material risk of liability to the Unitholders for claims
against the Trust including by obtaining appropriate insurance, where available,
for the operations of Vermilion and having contracts signed by or on behalf of
the Trust include a provision that such obligations are not binding upon
Unitholders personally.

ISSUANCE OF TRUST UNITS

The Trust Indenture provides that Trust Units, including rights, warrants and
other securities to purchase, to convert into or to exchange into Trust Units,
may be created, issued, sold and delivered on such terms and conditions and at
such times as the Trustee, upon the recommendation of the board of directors of
Vermilion may determine. The Indenture also provides that Vermilion may
authorize the creation and issuance of debentures, notes and other evidences of
indebtedness of the Trust which debentures, notes or other evidences of
indebtedness may be created and issued from time to time on such terms and
conditions to such persons and for such consideration as Vermilion may
determine.

CASH DISTRIBUTIONS

The Trustee may declare payable to the Unitholders all or any part of the net
income of the Trust earned from interest income on the Notes, from the income
generated under the Royalty Agreement and from any dividends paid on the common
shares of Vermilion, less all expenses and liabilities of the Trust due and
accrued and which are

<PAGE>
                                       23


chargeable to the net income of the Trust. In addition, Unitholders may, at the
discretion of the board of directors of Vermilion, receive distributions in
respect of prepayments of principal on the Notes made by Vermilion to the Trust
before the maturity of the Notes. It is anticipated however, that the Trust may
reinvest a portion of the repayments of principal on the Notes to make capital
expenditures to develop the business of Vermilion with a view to enhancing
Vermilion's cash flow from operations.

Cash distributions will be made on the 15th day of each month to Unitholders of
record on the immediately preceding Distribution Record Date. Commencing
February 2003, the Trust declared monthly distributions equal to $0.17 per unit
for a total of $1.87 per unit.

REDEMPTION RIGHT

Trust Units are redeemable at any time on demand by the holders thereof upon
delivery to the Trust of the certificate or certificates representing such Trust
Units, accompanied by a duly completed and properly executed notice requiring
redemption. Upon receipt of the notice to redeem Trust Units by the Trust, the
holder thereof shall only be entitled to receive a price per Trust Unit (the
"Market Redemption Price") equal to the lesser of: (a) 90% of the "market price"
of the Trust Units on the principal market on which the Trust Units are quoted
for trading during the 10 trading day period commencing immediately after the
date on which the Trust Units are tendered to the Trust for redemption; and (b)
the closing market price on the principal market on which the Trust Units are
quoted for trading on the date that the Trust Units are so tendered for
redemption.

For the purposes of this calculation, "market price" will be an amount equal to
the simple average of the closing price of the Trust Units for each of the
trading days on which there was a closing price; provided that, if the
applicable exchange or market does not provide a closing price but only provides
the highest and lowest prices of the Trust Units traded on a particular day, the
market price shall be an amount equal to the simple average of the average of
the highest and lowest prices for each of the trading days on which there was a
trade; and provided further that if there was trading on the applicable exchange
or market for fewer than five of the 10 trading days, the market price shall be
the simple average of the following prices established for each of the 10
trading days: the average of the last bid and last ask prices for each day on
which there was no trading; the closing price of the Trust Units for each day
that there was trading if the exchange or market provides a closing price; and
the average of the highest and lowest prices of the Trust Units for each day
that there was trading, if the market provides only the highest and lowest
prices of Trust Units traded on a particular day. The closing market price shall
be: an amount equal to the closing price of the Trust Units if there was a trade
on the date; an amount equal to the average of the highest and lowest prices of
the Trust Units if there was trading and the exchange or other market provides
only the highest and lowest prices of Trust Units traded on a particular day;
and the average of the last bid and last ask prices if there was no trading on
the date.

The Market Redemption Price payable by the Trust in respect of any Trust Units
tendered for redemption during any calendar month shall be satisfied by way of a
cash payment on the last day of the following month. The entitlement of
Unitholders to receive cash upon the redemption of their Trust Units is subject
to the limitation that the total amount payable by the Trust in respect of such
Trust Units and all other Trust Units tendered for redemption in the same
calendar month and in any preceding calendar month during the same year shall
not exceed $250,000 provided that, the Trust may, in its sole discretion, waive
such limitation in respect of any calendar month. If this limitation is not so
waived, the Market Redemption Price payable by the Trust in respect of Trust
Units tendered for redemption in such calendar month shall be paid on the last
day of the following month as follows: (a) firstly, by the Trust distributing
Notes having an aggregate principal amount equal to the aggregate Market
Redemption Price of the Trust Units tendered for redemption, and (b) secondly,
to the extent that the Trust does not hold Notes having a sufficient principal
amount outstanding to effect such payment, by the Trust issuing its own
promissory notes to the Unitholders who exercised the right of redemption having
an aggregate principal amount equal to any such shortfall, which promissory
notes, (herein referred to as "Redemption Notes") shall have terms and
conditions substantially identical to those of the Notes.

If at the time Trust Units are tendered for redemption by a Unitholders, the
outstanding Trust Units are not listed for trading on the TSX and are not traded
or quoted on any other stock exchange or market which Vermilion considers, in
its sole discretion, provides representative fair market value price for the
Trust Units or trading of the outstanding Trust Units is suspended or halted on
any stock exchange on which the Trust Units are listed for trading or, if not so

<PAGE>
                                       24


listed, on any market on which the Trust Units are quoted for trading, on the
date such Trust Units are tendered for redemption or for more than five trading
days during the 10 trading day period, commencing immediately after the date
such Trust Units were tendered for redemption then such Unitholders shall,
instead of the Market Redemption Price, be entitled to receive a price per Trust
Unit (the "Appraised Redemption Price") equal to 90% of the fair market value
thereof as determined by Vermilion as at the date on which such Trust Units were
tendered for redemption. The aggregate Appraised Redemption Price payable by the
Trust in respect of Trust Units tendered for redemption in any calendar month
shall be paid on the last day of the third following month by, at the option of
the Trust: (a) a cash payment; or (b) a distribution of Notes and/or Redemption
Notes as described above.

It is anticipated that this redemption right will not be the primary mechanism
for holders of Trust Units to dispose of their Trust Units. Notes or Redemption
Notes which may be distributed in specie to Unitholders in connection with a
redemption will not be listed on any stock exchange and no market is expected to
develop in such Notes or Redemption Notes. Notes and Redemption Notes may not be
qualified investments for trusts governed by registered retirement savings
plans, registered retirement income funds, deferred profit sharing plans and
registered education savings plans.

NON-RESIDENT UNITHOLDERS

It is in the best interest of Unitholders that the Trust qualify as a "unit
trust" and a "mutual fund trust" under the Tax Act. Certain provisions of the
Tax Act require that the Trust not be established nor maintained primarily for
the benefit of Non-Residents. Accordingly, in order to comply with such
provisions, the Trust Indenture contains restrictions on the ownership of Trust
Units by Unitholders who are Non-Residents. In this regard, the Trust shall,
among other things, take all necessary steps to monitor the ownership of the
Trust Units to carry out such intentions. If at any time the Trust becomes aware
that the beneficial owners of 50% or more of the Trust Units then outstanding
are or may be Non-Residents or that such a situation is imminent, the Trust
shall take such action as may be necessary to carry out such intentions.

MEETINGS OF UNITHOLDERS

The Trust Indenture provides that meetings of Unitholders must be called and
held for, among other matters, the election or removal of the Trustee, the
appointment or removal of the auditors of the Trust, the approval of amendments
to the Trust Indenture (except as described under "Amendments to the Trust
Indenture"), the sale of the property of the Trust as an entirety or
substantially as an entirety, and the commencement of winding-up the affairs of
the Trust. Meetings of Unitholders will be called and held annually for, among
other things, the election of the directors of Vermilion and the appointment of
the auditors of the Trust.

A meeting of Unitholders may be convened at any time and for any purpose by the
Trustee and must be convened, except in certain circumstances, if requisitioned
by the holders of not less than 5% of the Trust Units then outstanding by a
written requisition. A requisition must, among other things, state in reasonable
detail the business purpose for which the meeting is to be called.

Unitholders may attend and vote at all meetings of Unitholders either in person
or by proxy and a proxyholder need not be a Unitholder. Two persons present in
person or represented by proxy and representing in the aggregate at least 5% of
the votes attaching to all outstanding Trust Units shall constitute a quorum for
the transaction of business at all such meetings. For the purposes of
determining such quorum, the holders of any issued Special Voting Rights who are
present at the meeting shall be regarded as representing outstanding Trust Units
equivalent in number to the votes attaching to such Special Voting Rights.

The Trust Indenture contains provisions as to the notice required and other
procedures with respect to the calling and holding of meetings of Unitholders in
accordance with the requirements of applicable laws.

EXERCISE OF VOTING RIGHTS ATTACHED TO SHARES OF VERMILION

The Trust Indenture prohibits the Trustee from voting the shares of Vermilion
with respect to (a) the election of directors of Vermilion, (b) the appointment
of auditors of Vermilion or (c) the approval of Vermilion's financial
statements, except in accordance with an Ordinary Resolution adopted at an
annual meeting of Unitholders.

<PAGE>
                                       25


The Trustee is also prohibited from voting the shares to authorize:

         (a)      any sale, lease or other disposition of, or any interest in,
                  all or substantially all of the assets of Vermilion, except in
                  conjunction with an internal reorganization of the direct or
                  indirect assets of Vermilion as a result of which either
                  Vermilion or the Trust has the same interest, whether direct
                  or indirect, in the assets as the interest, whether direct or
                  indirect, that it had prior to the reorganization;

         (b)      any statutory amalgamation of Vermilion with any other
                  corporation, except in conjunction with an internal
                  reorganization as referred to in paragraph (a) above;

         (c)      any statutory arrangement involving Vermilion except in
                  conjunction with an internal reorganization as referred to in
                  paragraph (a) above;

         (d)      any amendment to the articles of Vermilion to increase or
                  decrease the minimum or maximum number of directors; or

         (e)      any material amendment to the articles of Vermilion to change
                  the authorized share capital or amend the rights, privileges,
                  restrictions and conditions attaching to any class of
                  Vermilion's shares in a manner which may be prejudicial to the
                  Trust;

without the approval of the Unitholders by Special Resolution at a meeting of
Unitholders called for that purpose.

TRUSTEE

Computershare Trust Company of Canada is the initial trustee of the Trust. The
Trustee is responsible for, among other things, accepting subscriptions for
Trust Units and issuing Trust Units pursuant thereto and maintaining the books
and records of the Trust and providing timely reports to holders of Trust Units.
The Trust Indenture provides that the Trustee shall exercise its powers and
carry out its functions thereunder as Trustee honestly, in good faith and in the
best interests of the Trust and, in connection therewith, shall exercise that
degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances.

The initial term of the Trustee's appointment is until the third annual meeting
of Unitholders. The Unitholders shall, at the third annual meeting of the
Unitholders, re-appoint, or appoint a successor to the Trustee for an additional
three year term, and thereafter, the Unitholders shall reappoint or appoint a
successor to the Trustee at the annual meeting of Unitholders three years
following the reappointment or appointment of the successor to the Trust. The
Trustee may also be removed by Special Resolution of the Unitholders. Such
resignation or removal becomes effective upon the acceptance or appointment of a
successor trustee.

DELEGATION OF AUTHORITY, ADMINISTRATION AND TRUST GOVERNANCE

The board of directors of Vermilion has generally been delegated the significant
management decisions of the Trust. In particular, the Trustee has delegated to
Vermilion responsibility for any and all matters relating to the following: (a)
an Offering; (b) ensuring compliance with all applicable laws, including in
relation to an Offering; (c) all matters relating to the content of any Offering
Documents, the accuracy of the disclosure contained therein, and the
certification thereof; (d) all matters concerning the terms of, and amendment
from time to time of the material contracts of the Trust; (e) all matters
concerning any underwriting or agency agreement providing for the sale of Trust
Units or rights to Trust Units; (f) all matters relating to the redemption of
Trust Units; (g) all matters relating to the voting rights on any investments in
the Trust Fund or any Subsequent Investments; and (h) all matters relating to
the specific powers and authorities as set forth in the Trust Indenture.

LIABILITY OF THE TRUSTEE

The Trustee, its directors, officers, employees, shareholders and agents and all
of their successors and assigns shall not be liable to any Unitholders or any
other person, in tort, contract or otherwise, in connection with any matter
pertaining to the Trust or the property of the Trust, arising from the exercise
by the Trustee of any powers,

<PAGE>
                                       26


authorities or discretion conferred under the Trust Indenture, including,
without limitation, any action taken or not taken in good faith in reliance on
any documents that are, prima facie properly executed, any depreciation of, or
loss to, the property of the Trust incurred by reason of the sale of any asset,
any inaccuracy in any evaluation provided by any other appropriately qualified
person, any reliance on any such evaluation, any action or failure to act of
Vermilion, or any other person to whom the Trustee has, with the consent of
Vermilion, delegated any of its duties hereunder, or any other action or failure
to act (including failure to compel in any way any former trustee to redress any
breach of trust or any failure by Vermilion to perform its duties under or
delegated to it under the Trust Indenture or any other contract), unless such
liabilities arise out of the gross negligence, wilful default or fraud of the
Trustee or any of its directors, officers, employees or shareholders. If the
Trustee has retained an appropriate expert, adviser or legal counsel with
respect to any matter connected with its duties under the Trust Indenture, the
Trustee may act or refuse to act based on the advice of such expert, adviser or
legal counsel, and the Trustee shall not be liable for and shall be fully
protected from any loss or liability occasioned by any action or refusal to act
based on the advice of any such expert, adviser or legal counsel. In the
exercise of the powers, authorities or discretion conferred upon the Trustee
under the Trust Indenture, the Trustee is and shall be conclusively deemed to be
acting as Trustee of the assets of the Trust and shall not be subject to any
personal liability for any debts, liabilities, obligations, claims, demands,
judgments, costs, charges or expenses against or with respect to the Trust or
the property of the Trust Fund. In addition, the Trust Indenture contains other
customary provisions limiting the liability of the Trustee.

AMENDMENTS TO THE TRUST INDENTURE

The Trust Indenture may be amended or altered from time to time by Special
Resolution.

The Trustee may, without the approval of any of the Unitholders, amend the Trust
Indenture for the purpose of:

         (a)      ensuring the Trust's continuing compliance with applicable
                  laws or requirements of any governmental agency or authority
                  of Canada or of any province;

         (b)      ensuring that the Trust will satisfy the provisions of each of
                  subsections 108(2) and 132(6) of the Tax Act as from time to
                  time amended or replaced;

         (c)      ensuring that such additional protection is provided for the
                  interests of Unitholders as the Trustee may consider
                  expedient;

         (d)      removing or curing any conflicts or inconsistencies between
                  the provisions of the Trust Indenture or any supplemental
                  indenture and any other agreement of the Trust or any offering
                  document pursuant to which securities of the Trust are issued
                  with respect to the Trust, or any applicable law or regulation
                  of any jurisdiction, provided that in the opinion of the
                  Trustee the rights of the Trustee and of the Unitholders are
                  not prejudiced thereby; or

         (e)      curing, correcting or rectifying any ambiguities, defective or
                  inconsistent provisions, errors, mistakes or omissions,
                  provided that in the opinion of the Trustee the rights of the
                  Trustee and of the Unitholders are not prejudiced thereby.

TAKEOVER BID

The Trust Indenture contains provisions to the effect that if a takeover bid is
made for the Trust Units and not less than 90% of the Trust Units (other than
Trust Units held at the date of the takeover bid by or on behalf of the offeror
or associates or affiliates of the offeror) are taken up and paid for by the
offeror, the offeror will be entitled to acquire the Trust Units held by
Unitholders who did not accept the takeover bid, on the terms offered by the
offeror.

TERMINATION OF THE TRUST

The Unitholders may vote to terminate the Trust at any meeting of the
Unitholders duly called for that purpose, subject to the following: (a) a vote
may only be held if requested in writing by the holders of not less than 20% of

<PAGE>
                                       27


the outstanding Trust Units; (b) a quorum of 50% of the issued and outstanding
Trust Units is present in person or by proxy; and (c) the termination must be
approved by Special Resolution of Unitholders.

Unless the Trust is earlier terminated or extended by vote of the Unitholders,
the Trustee shall commence to wind-up the affairs of the Trust on December 31,
2099. In the event that the Trust is wound-up, the Trustee will sell and convert
into money the property of the Trust in one transaction or in a series of
transactions at public or private sale and do all other acts appropriate to
liquidate the property of the Trust, and shall in all respects act in accordance
with the directions, if any, of the Unitholders in respect of termination
authorized pursuant to the Special Resolution authorizing the termination of the
Trust. Notwithstanding anything herein contained, in no event shall the Trust be
wound up until the Royalty shall have been disposed of, and under no
circumstances shall any Unitholder come into any possession of any interest in
the Royalty. After paying, retiring or discharging or making provision for the
payment, retirement or discharge of all known liabilities and obligations of the
Trust and providing for indemnity against any other outstanding liabilities and
obligations, the Trustee shall distribute the remaining part of the proceeds of
the sale of the assets together with any cash forming part of the property of
the Trust among the Unitholders in accordance with their Pro Rata Share.

REPORTING TO UNITHOLDERS

The financial statements of the Trust are audited annually by an independent
recognized firm of chartered accountants. The audited financial statements of
the Trust, together with the report of such chartered accountants, are mailed by
the Trustee to Unitholders and the unaudited interim financial statements of the
Trust are mailed to Unitholders as prescribed by applicable securities
legislation. The year end of the Trust is December 31.

The Trust is subject to the continuous disclosure obligations under all
applicable securities legislation.

DISTRIBUTION REINVESTMENT AND OPTIONAL TRUST UNIT PURCHASE PLAN

The Trust has established the DRIP Plan. The DRIP Plan is only available to
Unitholders who are residents of Canada.

Under the DRIP Plan, Unitholders may, at their option, reinvest their cash
distributions to purchase additional Trust Units (the "DRIP Units") by directing
the Plan Agent (as defined below) to apply Distributions on their existing Trust
Units to the purchase of DRIP Units or by making optional cash payments (the
"Cash Payment Option"). Computershare Trust Company of Canada in its capacity as
plan agent (the "Plan Agent") will apply Cash Distributions towards the purchase
of DRIP Units from the Trust, subject to certain limitations either from
treasury or at the discretion of Vermilion through the facilities of the TSX.
Drip Units will be acquired either at the average market price at which DRIP
Units are acquired through the facilities of the TSX or from treasury based on
the weighted average of the previous 10 days of trading prior to the applicable
Distribution. Under the Cash Payment Option, a Unitholder may, through the Plan
Agent purchase additional DRIP Units having a value of up to $5,000 per month.
Participants in the DRIP Plan will also receive additional distributions of
Trust Units equal to 5% of the DRIP Units purchased with their Distributions or
under the Cash Payment Option, as applicable (the "Bonus Units under the DRIP
Plan"). The aggregate number of DRIP Units that may be issued under the Cash
Payment Option in any fiscal year of the Trust will be limited to 2% of the
number of Trust Units issued and outstanding at the start of such fiscal year.
Participants will not have to pay any brokerage fees or service charges in
connection with the purchase of DRIP Units.

Unitholders may, after electing to participate in the DRIP Plan, terminate their
participation in the DRIP Plan by written notice to the Plan Agent. That notice,
if actually received no later than 5 business days prior to a Distribution
Record Date, will have effect for the distribution to be made on the following
Distribution Payment Date. Thereafter, distributions to those Unitholders will
be in cash. The Trust may amend, suspend or terminate the DRIP Plan in its sole
discretion provided that any amendment to the DRIP Plan must be approved by the
TSX and that any amendment, modification or suspension shall have no retroactive
effect if it would prejudice the interests of participants. The Trust is not
required to issue Trust Units into any jurisdiction where that issuance would be
illegal.

<PAGE>
                                       28


UNITHOLDER RIGHTS PLAN

Pursuant to the Unitholder Rights Plan Agreement, the Trust has put in place a
unitholder rights plan. The previous shareholder rights plan of Vermilion was
terminated under the Arrangement.

The following description of the Unitholder Rights Plan is qualified in its
entirety by reference to the full text of the Unitholder Rights Plan agreement,
a copy of which is available on request at the head office of Vermilion during
normal business hours.

PURPOSE

The purpose of the Unitholder Rights Plan is to afford both the Unitholders and
Vermilion sufficient time to evaluate and respond to an unsolicited offer made
for the Trust Units. Further, the Unitholder Rights Plan is intended to assist
in ensuring that all Unitholders have an equal opportunity to participate in any
takeover bid.

Vermilion is not aware of any interest by any third party in acquiring control
of Vermilion at this time.

BACKGROUND

Under current provincial securities legislation, a takeover bid would generally
involve an offer to acquire the Trust Units of the Trust where the Trust Units
subject to the offer to acquire, together with Trust Units already owned by the
bidder and certain related parties, aggregate 20% or more of the outstanding
Trust Units. Current legislation only requires that a takeover bid remain open
for acceptance for not less than 35 days and that any securities deposited may
be withdrawn only during the 10 days following the date of the bid. In addition,
such legislation does not require that a bid be made for all securities of a
particular class and the bidder may in a single transaction or series of
transactions acquire control of an entity pursuant to one or more private
agreements at a permissible premium to the then current market price, without an
offer being required to be made to all other securityholders of the entity. In
addition, the bidder may make "creeping acquisitions" of securities by slowly
accumulating shares through stock exchange transactions which may result, over
time, in the acquisition of control without the payment of fair value for
control of the entity or the sharing of the control premium among all
securityholders.

The Unitholder Rights Plan is designed to encourage any bidder to provide all
Unitholders with equal treatment in a takeover and full value for their
investment in the Trust Units of the Trust.

SUMMARY OF THE UNITHOLDER RIGHTS PLAN

The following is a summary of the principal terms of the Unitholder Rights Plan
which is qualified in its entirety by the actual text of the Unitholder Rights
Plan agreement.

ISSUE OF RIGHTS

On the Effective Date, one right (a "Right") shall be issued and attached to
each of the outstanding Trust Units and will attach to each Trust Unit of the
Trust that is subsequently issued. Initially, certificates representing Trust
Units of the Trust also represent the Rights.

RIGHTS EXERCISE PRIVILEGE

The Rights will separate from the Trust Units of the Trust and will be
exercisable, subject to action by Vermilion, 10 trading days (the "Separation
Time") after a person has acquired, or commences a takeover bid to acquire, 20%
or more of the Trust Units, other than by an acquisition pursuant to a takeover
bid permitted by the Unitholders Rights Plan (a "Permitted Bid"). The
acquisition by any person (an "Acquiring Person") of 20% or more of the Trust
Units, other than by way of a Permitted Bid, is referred to as a "Flip-in
Event". Any Rights held by an Acquiring Person will become void upon the
occurrence of a Flip-in Event. In the absence of action by Vermilion and 10 days
after the occurrence of a Flip-in Event, each Right (other than those held by
the Acquiring Person), will permit the purchase of that number of Trust Units
having an aggregate market price (as defined in the Unitholders Rights Plan)

<PAGE>
                                       29


equal to twice the exercise price for an amount in cash equal to the exercise
price (which the Unitholders Rights Plan currently sets at $35).
The issue of the Rights is not initially dilutive. However, holders of Rights
not exercising their Rights upon the occurrence of a Flip-in Event may suffer
substantial dilution.

CERTIFICATES AND TRANSFERABILITY

After the Separation Time, the Rights will be evidenced by Rights certificates
which will be transferable and traded separately from the Trust Units of the
Trust.

PERMITTED BID REQUIREMENTS

The requirements for a Permitted Bid include the following:

         (a)      the takeover bid must be made for all Units to all holders of
                  Trust Units, other than the Acquiring Person and provide that,
                  subject to the conditions of the Takeover Bid, the Offeror
                  will take up and pay for all Units validly tendered without
                  pro-rating;

         (b)      the takeover bid must contain, and the take-up and payment for
                  securities tendered or deposited is subject to, an irrevocable
                  and unqualified provision that no Trust Units will be taken up
                  or paid for pursuant to any takeover bid prior to the close of
                  business on the date which is not less than 45 days following
                  the date of the takeover bid and only if at such date more
                  than 50% of the Trust Units held by independent Unitholders
                  shall have been deposited or tendered pursuant to the takeover
                  bid and not withdrawn;

         (c)      the takeover bid contains an irrevocable and unqualified
                  provision that unless the takeover bid is withdrawn, Trust
                  Units may be deposited pursuant to such takeover bid at any
                  time during the period of time between the date of the
                  takeover bid and the date on which Trust Units may be taken up
                  and paid for and that any Trust Units deposited pursuant to
                  the takeover bid may be withdrawn until taken up and paid for;
                  and

         (d)      the takeover bid must contain an irrevocable and unqualified
                  provision that if, on the date on which Trust Units may be
                  taken up and paid for, more than 50% of the Trust Units held
                  by independent Unitholders shall have been deposited pursuant
                  to the takeover bid and not withdrawn, the Acquiring Person
                  will make a public announcement of that fact and the takeover
                  bid will remain open for deposits and tenders of Trust Units
                  for not less than 10 Business Days from the date of such
                  public announcement.

The Unitholder Rights Plan allows for a competing Permitted Bid (a "Competing
Permitted Bid") to be made while a Permitted Bid is in existence. A Competing
Permitted Bid must satisfy all the requirements of a Permitted Bid (subject to
certain exceptions).

WAIVER AND REDEMPTION

Vermilion may, prior to a Flip-in Event, waive the dilutive effects of the
Unitholder Rights Plan in respect of a particular Flip-in Event resulting from a
takeover bid made by way of a takeover bid circular to all holders of the Trust
Units of the Trust, in which event such waiver would be deemed also to be a
waiver in respect of any other Flip-in Event occurring under a takeover bid made
by way of a takeover bid circular to all holders of the Trust Units of the Trust
prior to the expiry of the takeover bid in respect of which the waiver is
granted. Vermilion may also waive the Unitholder Rights Plan in respect of a
particular Flip-in Event that has occurred through inadvertence, provided that
the Acquiring Person that inadvertently triggered such Flip-in Event reduces its
beneficial holdings to less than 20% of the outstanding Trust Units of the Trust
within 10 days or such other period as may be specified by Vermilion.

<PAGE>
                                       30


At any time prior to the occurrence of a Flip-in Event, Vermilion may at its
option redeem all, but not less than all, of the outstanding Rights at a price
of $0.00001 per Right.

GRANDFATHER PROVISIONS

The Unitholder Rights Plan exempts from the definition of Acquiring Person any
person who is the beneficial owner, as defined in the Unitholder Rights Plan, of
more than 20% of the outstanding Trust Units determined as at the Effective Date
provided that such person does not after the Effective Date become the
beneficial owner of additional Trust Units constituting 1.0% or more of the
outstanding Trust Units of the Trust other than pursuant to a Permitted Bid, a
Competing Permitted Bid or certain other exempt provisions.

           ADDITIONAL INFORMATION RESPECTING VERMILION RESOURCES LTD.

MANAGEMENT OF VERMILION

Vermilion has a board of directors currently consisting of five individuals. The
directors are elected by the Trust at the direction of Unitholders by ordinary
resolution, and hold office until the next annual meeting of the Trust, which is
anticipated to be held in May 18, 2004.

As at March 31, 2004, the directors and officers of Vermilion, as a group,
beneficially owned, directly or indirectly, 2,472,732 Trust Units representing
approximately 4.1% of the issued and outstanding Trust Units, as well as an
aggregate of 4,488,951 Exchangeable Shares. Assuming all Exchangeable Shares
were exchanged for Trust Units, using the Exchange Ratio of 1.16656, the
directors and executive officers would hold 7,709,363 Trust Units, representing
11.8% of then issued and outstanding Trust Units.

The following table sets forth certain information respecting the directors and
officers of Vermilion.

<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE        OFFICE HELD         DIRECTOR      THE PAST FIVE YEARS
- -----------------------------   -----------------  ---------------   ----------------------------------------------
<S>                             <C>                <C>               <C>
Lorenzo Donadeo                 President and            1994        Since  January   2003,   President  and  Chief
Calgary, Alberta                Chief Executive                      Executive    Officer   of   Vermilion;    Vice
                                Officer and                          President  and  Chief  Operating   Officer  of
                                Director                             Vermilion  from December 2000 to January 2003;
                                                                     since   February,    1995,    Executive   Vice
                                                                     President of Vermilion.

Claudio Ghersinich              Executive Vice           1994        Since January 2003,  Executive Vice President,
Calgary, Alberta                President,                           Business  Development of Vermilion;  Executive
                                Business                             Vice  President,  New  Ventures  of  Vermilion
                                Development and                      from  December  2000 to  January  2003;  since
                                Director                             February,  1995,  Executive  Vice President of
                                                                     Vermilion.

Jeffrey Boyce(1)(2)(3)(4)       Director                 1994        Since  January   2003,   President  and  Chief
Calgary, Alberta                                                     Executive  Officer of Clear  Energy  Inc.,  an
                                                                     oil   and   gas   company;   President,  Chief
                                                                     Executive  Officer  of  Vermilion from 1994 to
                                                                     January 2003.

Joseph Killi(1)(3)              Director                 1999        President of  Rosebridge  Capital Corp Inc., a
Calgary, Alberta                                                     real estate investment and advisory company.
</TABLE>

<PAGE>
                                       31


<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE        OFFICE HELD         DIRECTOR      THE PAST FIVE YEARS
- -----------------------------   -----------------  ---------------   ----------------------------------------------
<S>                             <C>                <C>               <C>
Larry Macdonald(1)(2)(3)(4)(5)  Director                 2002        Chief  Executive  Officer,  Point Energy Inc.,
Calgary, Alberta                                                     an oil and gas company,  from 2003 to present;
                                                                     Chairman   and   Chief   Executive    Officer,
                                                                     Pointwest  Energy  Inc.  from  2000  to  2003;
                                                                     President   and   Chief   Operating   Officer,
                                                                     Anderson Exploration Ltd., from 1992 to 1999.

Curtis Hicks                    Vice President,           -          Since March 2003 Vice  President,  Finance and
Calgary, Alberta                Finance and                          Chief  Financial  Officer of  Vermilion;  Vice
                                Chief Financial                      President  Finance and Chief Financial Officer
                                Officer                              of NAL Oil & Gas Trust from  November  2000 to
                                                                     February  2003;   Chief   Executive   Officer,
                                                                     Caravan  Oil & Gas Ltd.  from  August  1998 to
                                                                     November 2000.

Doug Reynolds                   Vice President,           -          Since  April  2002,  Vice  President,  Land of
Calgary, Alberta                Land                                 Vermilion;  from  February 2000 to April 2002,
                                                                     Senior  Landman and Land Manager for Foothills
                                                                     N.E.  B.C.  and  Hamburg  Areas at  Burlington
                                                                     Resources  Canada  Ltd.;  from October 1998 to
                                                                     February  2000,  Senior  Landman  on the  East
                                                                     Coast  for  ExxonMobil  Canada  Energy;   from
                                                                     October 1997 to January 2000,  Petroleum  Land
                                                                     Consultant for various corporations.

Raj Patel                       Vice President,           -          Since January 2001, Vice President,  Marketing
Calgary, Alberta                Marketing                            of Vermilion;  from September 1996 to December
                                                                     2000, President of Access Energy Management.

Paul Weevers                    Vice President,           -          Since May 2002, Vice President,  Production of
Calgary, Alberta                Production                           Vermilion;  from May 2001 to May 2002, Manager
                                                                     South  Production  at Apache  Canada Ltd.  and
                                                                     from  January  2001  to  May  2001   Reservoir
                                                                     Engineer   for  Apache   Canada   Ltd.;   Vice
                                                                     President,  Production  for Cabre  Exploration
                                                                     Ltd.  from  February  2000  to  January  2001;
                                                                     Independent    Engineering   Consultant   from
                                                                     December 1998 to February 2000.

Daniel Goulet                   Directeur                 -          Since  February  2003  Directeur   General  of
Biscarosse, France              General of                           Vermilion    REP   S.A.;    Production    and
                                Vermilion REP                        Engineering  Manager  of  Vermilion  REP S.A.
                                S.A.                                 from August 2000 to January 2003;   In-Country
                                                                     Operations Manager for PanAfrican  Energy from
                                                                     1997 to 2000.
</TABLE>

<PAGE>
                                       32


<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE        OFFICE HELD         DIRECTOR      THE PAST FIVE YEARS
- -----------------------------   -----------------  ---------------   ----------------------------------------------
<S>                             <C>                <C>               <C>
Charles Berard                  Corporate                 -          Partner at Macleod  Dixon  LLP,  Barristers  &
Calgary, Alberta                Secretary                            Solicitors.
</TABLE>

NOTES:
(1)      Member of the Audit Committee
(2)      Member of the Health, Safety and Environment Committee
(3)      Member of the Governance and Human Resources Committee
(4)      Member of the Independent Reserves Committee
(5)      Lead Director


VERMILION SHARE CAPITAL

Vermilion is authorized to issue an unlimited number of common shares and an
unlimited number of exchangeable shares issuable in series, of which an
unlimited number of Series A Exchangeable Shares are authorized. The Trust is
the sole holder of the issued and outstanding shares of Vermilion, other than
the Exchangeable Shares.

COMMON SHARES

Each common share will entitle its holder to receive notice of and to attend all
meetings of the shareholders of Vermilion and to one vote at such meetings. The
holders of common shares will be, at the discretion of the board of directors of
Vermilion and subject to applicable legal restrictions, and subject to certain
preferences of holders of Exchangeable Shares, entitled to receive any dividends
declared by the board of directors on the common shares to the exclusion of the
holders of Exchangeable Shares, subject to the proviso that no dividends shall
be paid on the common shares unless all declared dividends on the outstanding
Exchangeable Shares have been paid in full. The holders of common shares will be
entitled to share equally in any distribution of the assets of Vermilion upon
the liquidation, dissolution, bankruptcy or winding-up of Vermilion or other
distribution of its assets among its shareholders for the purpose of winding-up
its affairs. Such participation is subject to the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares and any other
shares having priority over the common shares.

EXCHANGEABLE SHARES

Each Exchangeable Share will have economic rights (including the right to have
the Exchange Ratio adjusted to account for distributions paid to Unitholders)
and voting attributes (through the benefit of the Special Voting Right granted
to the Voting and Exchange Trust Agreement Trustee) as set forth in the
Exchangeable Share Provisions. In addition, holders of Exchangeable Shares will
have the right to receive Trust Units at any time in exchange for their
Exchangeable Shares, on the basis of the Exchange Ratio in effect at the time of
the exchange. Fractional Trust Units will not be delivered on any exchange of
Exchangeable Shares and the Voting and Exchange Trust Agreement. In the event
that the Exchange Ratio in effect at the time of an exchange would otherwise
entitle a holder of Exchangeable Shares to a fractional Trust Unit, the number
of Trust Units to be delivered will be rounded down to the nearest whole number
of Trust Units. Holders of Exchangeable Shares will not receive cash
distributions from the Trust. Rather, the Exchange Ratio will be adjusted to
account for distributions paid to Unitholders in the manner described below.
Holders of Exchangeable Shares may receive dividends from Vermilion at the
discretion of the directors of Vermilion.

The initial Exchange Ratio upon the completion of the Arrangement was equal to
one. On each Distribution Payment Date, the Exchange Ratio will be increased, on
a cumulative basis, in respect of the Distribution on such date by an amount
which assumes the reinvestment of such Distribution in Trust Units at the
then-prevailing Current Market Price of a Trust Unit. The Exchange Ratio will be
decreased in respect of any dividends paid on the Exchangeable Shares by an
amount of such dividend divided by the then-prevailing Current Market Price of a
Trust Unit.

<PAGE>
                                       33


RANKING

The Exchangeable Shares will rank rateably with shares of any other series of
exchangeable shares of Vermilion and prior to any common shares of Vermilion and
any other shares ranking junior to the Exchangeable Shares with respect to the
payment of dividends, if any, that have been declared and the distribution of
assets in the event of the liquidation, dissolution or winding-up of Vermilion.

DIVIDENDS

Holders of Exchangeable Shares will be entitled to receive cash dividends if, as
and when declared by the board of directors of Vermilion. Vermilion anticipates
that it may from time to time declare dividends on the Exchangeable Shares up to
but not exceeding any cash distributions on the Trust Units into which such
Exchangeable Shares are exchangeable. In the event that any such dividends are
paid, the Exchange Ratio will be correspondingly reduced to reflect such
dividends.

CERTAIN RESTRICTIONS

Vermilion will not, without obtaining the approval of the holders of the
Exchangeable Shares as set forth below under the subheading "Amendment and
Approval":

         (a)      pay any dividend on the common shares or any other shares
                  ranking junior to the Exchangeable Shares, other than stock
                  dividends payable in common shares or any other shares ranking
                  junior to the Exchangeable Shares;

         (b)      redeem, purchase or make any capital distribution in respect
                  of the common shares or any other shares ranking junior to the
                  Exchangeable Shares;

         (c)      redeem or purchase any other shares of Vermilion ranking
                  equally with the Exchangeable Shares with respect to the
                  payment of dividends or on any liquidation distribution; or

         (d)      amend the articles or by-laws of Vermilion in any manner that
                  would affect the rights or privileges of the holders of
                  Exchangeable Shares.

The above restrictions in (a), (b) and (c) shall not apply if all declared
dividends on the outstanding Exchangeable Shares shall have been paid in full.

LIQUIDATION OR INSOLVENCY OF VERMILION

In the event of the liquidation, dissolution or winding-up of Vermilion or any
other proposed distribution of the assets of Vermilion among its shareholders
for the purpose of winding up its affairs, a holder of Exchangeable Shares will
be entitled to receive from Vermilion, in respect of each such Exchangeable
Share, that number of Trust Units equal to the Exchange Ratio as at the
effective date of such event.

Upon the occurrence of such an event, the Trust and Trust Subsidiary will each
have the overriding right to purchase all but not less than all of the
Exchangeable Shares then outstanding (other than Exchangeable Shares held by the
Trust or any subsidiary of the Trust) at a purchase price per Exchangeable Share
to be satisfied by the issuance or delivery, as the case may be, of that number
of Trust Units equal to the Exchange Ratio at such time and, upon the exercise
of this right, the holders thereof will be obligated to sell such Exchangeable
Shares to the Trust or Trust Subsidiary, as applicable. This right may be
exercised by either the Trust or Trust Subsidiary.

Upon the occurrence of an Insolvency Event, the Voting and Exchange Trust
Agreement Trustee on behalf of the holders of the Exchangeable Shares will have
the right to require the Trust or Trust Subsidiary to purchase any or all of the
Exchangeable Shares then outstanding and held by such holders at a purchase
price per Exchangeable Share to be satisfied by the issuance or delivery, as the
case may be, of that number of Trust Units equal to the Exchange Ratio at such
time, as described under the subheading "Voting and Exchange Trust Agreement-
Optional Exchange Right".

<PAGE>
                                       34


AUTOMATIC EXCHANGE RIGHT ON LIQUIDATION OF THE TRUST

The Voting and Exchange Trust Agreement provides that in the event of a Trust
liquidation event, as described below, the Trust or Trust Subsidiary will be
deemed to have purchased all outstanding Exchangeable Shares and each holder of
Exchangeable Shares will be deemed to have sold their Exchangeable Shares
immediately prior to such Trust liquidation event at a purchase price per
Exchangeable Share to be satisfied by the issuance or delivery, as the case may
be, of that number of Trust Units equal to the Exchange Ratio at such time.
"Trust liquidation event" means:

         (a)      any determination by the Trust to institute voluntary
                  liquidation, dissolution or winding-up proceedings in respect
                  of the Trust or to effect any other distribution of assets of
                  the Trust among the Unitholders for the purpose of winding up
                  its affairs; or

         (b)      the earlier of, the Trust's receiving notice of and the
                  Trust's otherwise becoming aware of, any threatened or
                  instituted claim, suit, petition or other proceedings with
                  respect to the involuntary liquidation, dissolution or winding
                  up of the Trust or to effect any other distribution of assets
                  of the Trust among the Unitholders for the purpose of winding
                  up its affairs in each case where the Trust has failed to
                  contest in good faith such proceeding within 30 days of
                  becoming aware thereof.

RETRACTION OF EXCHANGEABLE SHARES BY HOLDERS AND RETRACTION CALL RIGHT

Subject to the Retraction Call Right of the Trust and Trust Subsidiary described
below, a holder of Exchangeable Shares will be entitled at any time to require
Vermilion to redeem any or all of the Exchangeable Shares held by such holder
for a retraction price (the "Retraction Price") per Exchangeable Share equal to
the value of that number of Trust Units equal to the Exchange Ratio as at the
date of redemption (the "Retraction Date"), to be satisfied by the delivery of
such number of Trust Units. Fractional Trust Units will not be delivered. Any
amount payable on account of the Retraction Price that includes a fractional
Trust Unit will be rounded down to the nearest whole number of Trust Units.
Holders of the Exchangeable Shares may request redemption by presenting to
Vermilion or the transfer agent for the Exchangeable Shares a certificate or
certificates representing the number of Exchangeable Shares the holder desires
to have redeemed, together with a duly executed retraction request and such
other documents as may be reasonably required to effect the redemption of the
Exchangeable Shares. Subject to extension as described below, the redemption
will become effective on the Retraction Date, which will be seven business days
after the date on which Vermilion or the transfer agent receives the retraction
notice. Unless otherwise requested by the holder and agreed to by Vermilion, the
Retraction Date will not occur on such seventh business day if such day would
occur between any Distribution Record Date and the Distribution Payment Date
that corresponds to such Distribution Record Date. In this case, the Retraction
Date will instead occur on such Distribution Payment Date. The reason for this
is to ensure that the Exchange Ratio used in connection with such redemption is
increased to account for the Distribution.

When a holder requests Vermilion to redeem the Exchangeable Shares, the Trust
and Trust Subsidiary will have an overriding right (the "Retraction Call Right")
to purchase on the Retraction Date all but not less than all of the Exchangeable
Shares that the holder has requested Vermilion to redeem at a purchase price per
Exchangeable Share equal to the Retraction Price, to be satisfied by the
delivery of that number of Trust Units equal to the Exchange Ratio at such time.
At the time of a Retraction Request by a holder of Exchangeable Shares,
Vermilion will immediately notify the Trust and Trust Subsidiary. The Trust or
Trust Subsidiary must then advise Vermilion within two business days as to
whether the Retraction Call Right will be exercised. A holder may revoke his or
her Retraction Request at any time prior to the close of business on the last
business day immediately preceding the Retraction Date, in which case the
holder's Exchangeable Shares will neither be purchased by the Trust or Trust
Subsidiary nor be redeemed by Vermilion. If the holder does not revoke his or
her Retraction Request, the Exchangeable Shares that the holder has requested
Vermilion to redeem will on the Retraction Date be purchased by the Trust or
Trust Subsidiary or redeemed by Vermilion, as the case may be, in each case at a
purchase price per Exchangeable Share equal to the Retraction Price. In
addition, a holder of Exchangeable Shares may elect to instruct the Voting and
Exchange Trust Agreement Trustee to exercise the optional exchange right (the
"Optional Exchange Right") to require the Trust or Trust Subsidiary to acquire
such holder's Exchangeable Shares in

<PAGE>
                                       35


circumstances where neither the Trust nor Trust Subsidiary have exercised the
Retraction Call Right. See "Voting and Exchange Trust Agreement-Optional
Exchange Right".

The Retraction Call Right may be exercised by either the Trust or Trust
Subsidiary. If, as a result of solvency provisions of applicable law, Vermilion
is not permitted to redeem all Exchangeable Shares tendered by a retracting
holder, Vermilion will redeem only those Exchangeable Shares tendered by the
holder as would not be contrary to such provisions of applicable law. The holder
of any Exchangeable Shares not redeemed by Vermilion will be deemed to have
required the Trust to purchase such unretracted Exchangeable Shares in exchange
for Trust Units on the Retraction Date pursuant to the Optional Exchange Right.
See "Voting and Exchange Trust Agreement- Optional Exchange Right".

REDEMPTION OF EXCHANGEABLE SHARES

Subject to applicable law and the Redemption Call Right of the Trust and Trust
Subsidiary, Vermilion:

         (a)      will, on the tenth anniversary of the Effective Date, subject
                  to extension of such date by the board of directors of
                  Vermilion (the "Automatic Redemption Date"), redeem all but
                  not less than all of the then outstanding Exchangeable Shares
                  for a redemption price per Exchangeable Share equal to the
                  value of that number of Trust Units equal to the Exchange
                  Ratio as at the last business day prior to that Redemption
                  Date (as that term is defined below) (the "Redemption Price"),
                  to be satisfied by the delivery of such number of Trust Units;
                  and

         (b)      may, at any time when the aggregate number of issued and
                  outstanding Exchangeable Shares is less than 500,000 (other
                  than Exchangeable Shares held by the Trust and its
                  subsidiaries and as such shares may be adjusted from time to
                  time) (the "De Minimus Redemption Date" and, collectively with
                  the Automatic Redemption Date, a "Redemption Date"), redeem
                  all but not less than all of the then outstanding Exchangeable
                  Shares for the Redemption Price per Exchangeable Share (unless
                  contested in good faith by the Trust).

Vermilion will, at least 45 days prior to any Redemption Date, provide the
registered holders of the Exchangeable Shares with written notice of the
prospective redemption of the Exchangeable Shares by Vermilion.

The Trust and Trust Subsidiary will have the right (the "Redemption Call
Right"), notwithstanding a proposed redemption of the Exchangeable Shares by
Vermilion on the applicable Redemption Date, pursuant to the Exchangeable Share
Provisions, to purchase on any Redemption Date all but not less than all of the
Exchangeable Shares then outstanding (other than Exchangeable Shares held by the
Trust or its subsidiaries) in exchange for the Redemption Price per Exchangeable
Share and, upon the exercise of the Redemption Call Right, the holders of all of
the then outstanding Exchangeable Shares will be obliged to sell all such shares
to the Trust or Trust Subsidiary, as applicable. If either the Trust or Trust
Subsidiary exercises the Redemption Call Right, then Vermilion's right to redeem
the Exchangeable Shares on the applicable Redemption Date will terminate. The
Redemption Call Right may be exercised by either the Trust or Trust Subsidiary.

VOTING RIGHTS

Except as required by applicable law, the holders of the Exchangeable Shares are
not entitled as such to receive notice of or attend any meeting of the
shareholders of Vermilion or to vote at any such meeting. Holders of
Exchangeable Shares will have the notice and voting rights respecting meetings
of the Trust that are provided in the Voting and Exchange Trust Agreement. See
"Voting and Exchange Trust Agreement - Voting Rights".

AMENDMENT AND APPROVAL

The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be changed only with the approval of the holders
thereof. Any such approval or any other approval or consent to be given by the
holders of the Exchangeable Shares will be sufficiently given if given in
accordance with applicable law and subject to a minimum requirement that such
approval or consent be evidenced by a resolution passed by not less than
two-thirds of the votes cast thereon (other than shares beneficially owned by
the Trust, or any of its subsidiaries and other

<PAGE>
                                       36


affiliates) at a meeting of the holders of the Exchangeable Shares duly called
and held at which holders of at least 5% of the then outstanding Exchangeable
Shares are present in person or represented by proxy. In the event that no such
quorum is present at such meeting within one-half hour after the time appointed
therefor, then the meeting will be adjourned to such place and time (not less
than ten days later) as may be determined at the original meeting and the
holders of Exchangeable Shares present in person or represented by proxy at the
adjourned meeting will constitute a quorum thereat and may transact the business
for which the meeting was originally called. At the adjourned meeting, a
resolution passed by the affirmative vote of not less than two-thirds of the
votes cast thereon (other than shares beneficially owned by the Trust or any of
its subsidiaries and other affiliates) will constitute the approval or consent
of the holders of the Exchangeable Shares.

ACTIONS BY THE TRUST UNDER THE SUPPORT AGREEMENT AND THE VOTING AND EXCHANGE
TRUST AGREEMENT

Under the Exchangeable Share Provisions, Vermilion will agree to take all such
actions and do all such things as are necessary or advisable to perform and
comply with its obligations under, and to ensure the performance and compliance
by the Trust with its obligations under, the Support Agreement and the Voting
and Exchange Trust Agreement.

NON-RESIDENT AND TAX-EXEMPT HOLDERS

Exchangeable Shares will not be issued to persons who are Non-Residents or who
are exempt from tax under Part I of the Tax Act.

VOTING AND EXCHANGE TRUST AGREEMENT

VOTING RIGHTS

In accordance with the Voting and Exchange Trust Agreement, the Trust will issue
a Special Voting Right to Computershare Trust Company of Canada, the Voting and
Exchange Trust Agreement Trustee, for the benefit of the holders (other than the
Trust and Trust Subsidiary) of the Exchangeable Shares. The Special Voting Right
will carry a number of votes, exercisable at any meeting at which Unitholders
are entitled to vote, equal to the number of Trust Units (rounded down to the
nearest whole number) into which the Exchangeable Shares are then exchangeable
multiplied by the number of votes to which the holder of one Trust Unit is then
entitled. With respect to any written consent sought from the Unitholders, each
vote attached to the Special Voting Right will be exercisable in the same manner
as set forth above.

Each holder of an Exchangeable Share on the record date for any meeting at which
Unitholders are entitled to vote will be entitled to instruct the Voting and
Exchange Trust Agreement Trustee to exercise that number of votes attached to
the Special Voting Right which relate to the Exchangeable Shares held by such
holder. The Voting and Exchange Trust Agreement Trustee will exercise each vote
attached to the Special Voting Right only as directed by the relevant holder
and, in the absence of instructions from a holder as to voting, will not
exercise such votes.

The Voting and Exchange Trust Agreement Trustee will send to the holders of the
Exchangeable Shares the notice of each meeting at which the Unitholders are
entitled to vote, together with the related meeting materials and a statement as
to the manner in which the holder may instruct the Voting and Exchange Trust
Agreement Trustee to exercise the votes attaching to the Special Voting Right,
at the same time as the Trust sends such notice and materials to the
Unitholders. The Voting and Exchange Trust Agreement Trustee will also send to
the holders copies of all information statements, interim and annual financial
statements, reports and other materials sent by the Trust to the Unitholders at
the same time as such materials are sent to the Unitholders. To the extent such
materials are provided to the Voting and Exchange Trust Agreement Trustee by the
Trust, the Voting and Exchange Trust Agreement Trustee will also send to the
holders all materials sent by third parties to Unitholders, including dissident
proxy circulars and tender and exchange offer circulars, as soon as possible
after such materials are first sent to Unitholders.

All rights of a holder of Exchangeable Shares to exercise votes attached to the
Special Voting Right will cease upon the exchange of all such holder's
Exchangeable Shares for Trust Units. With the exception of administrative
changes for the purpose of adding covenants for the protection of the holders of
the Exchangeable Shares, making

<PAGE>
                                       37


necessary amendments or curing ambiguities or clerical errors (in each case
provided that the board of directors of Trust Subsidiary and Vermilion are of
the opinion that such amendments are not prejudicial to the interests of the
holders of the Exchangeable Shares), the Voting and Exchange Trust Agreement may
not be amended without the approval of the holders of the Exchangeable Shares.

OPTIONAL EXCHANGE RIGHT

Upon the occurrence and during the continuance of:

         (c)      an Insolvency Event; or

         (d)      circumstances in which the Trust or Trust Subsidiary may
                  exercise a Call Right, but elect not to exercise such Call
                  Right;

a holder of Exchangeable Shares will be entitled to instruct the Trustee to
exercise the Optional Exchange Right with respect to any or all of the
Exchangeable Shares held by such holder, thereby requiring the Trust or Trust
Subsidiary to purchase such Exchangeable Shares from the holder. Immediately
upon the occurrence of (i) an Insolvency Event, (ii) any event which will, with
the passage of time or the giving of notice, become an Insolvency Event, or
(iii) the election by the Trust and Trust Subsidiary not to exercise a Call
Right which is then exercisable by the Trust and Trust Subsidiary, Vermilion,
the Trust or Trust Subsidiary will give notice thereof to the Trustee. As soon
as practicable thereafter, the Trustee will then notify each affected holder of
Exchangeable Shares (who has not already provided instructions respecting the
exercise of the Optional Exchange Right) of such event or potential event and
will advise such holder of its rights with respect to the Optional Exchange
Right.

The purchase price payable by the Trust or Trust Subsidiary for each
Exchangeable Share to be purchased under the Optional Exchange Right will be
satisfied by the issuance of that number of Trust Units equal to the Exchange
Ratio as at the last business day prior to the day of closing of the purchase
and sale of such Exchangeable Share under the Exchange Right (the "Exchange
Price").

If, as a result of solvency provisions of applicable law, Vermilion is unable to
redeem all of a holder's Exchangeable Shares which such holder is entitled to
have redeemed in accordance with the Exchangeable Share Provisions, the holder
will be deemed to have exercised the Optional Exchange Right with respect to the
unredeemed Exchangeable Shares and the Trust or Trust Subsidiary will be
required to purchase such shares from the holder in the manner set forth above.

SUPPORT AGREEMENT

THE TRUST SUPPORT OBLIGATION

Under the Support Agreement, the Trust will agree that:

         (a)      the Trust will take all actions and do all things necessary to
                  ensure that Vermilion is able to pay to the holders of the
                  Exchangeable Shares the Liquidation Amount in the event of a
                  liquidation, dissolution or winding-up of Vermilion, the
                  Retraction Price in the event of the giving of a Retraction
                  Request by a holder of Exchangeable Shares, or the Redemption
                  Price in the event of a redemption of Exchangeable Shares by
                  Vermilion; and

         (b)      the Trust will not vote or otherwise take any action or omit
                  to take any action causing the liquidation, dissolution or
                  winding-up of Vermilion.

The Support Agreement will also provide that the Trust will not issue or
distribute to the holders of all or substantially all of the outstanding Trust
Units:

         (a)      additional Trust Units or securities convertible into Trust
                  Units;

         (b)      rights, options or warrants for the purchase of Trust Units;
                  or

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                                       38


         (c)      units or securities of the Trust other than Trust Units,
                  evidences of indebtedness of the Trust or other assets of the
                  Trust;

unless the same or an equivalent distribution is made to holders of Exchangeable
Shares, an equivalent change is made to the Exchangeable Shares, or the approval
of Vermilion and holders of Exchangeable Shares has been obtained.

In addition, the Trust may not subdivide, reduce, consolidate, reclassify or
otherwise change the terms of the Trust Units unless an equivalent change is
made to the Exchangeable Shares or the approval of the holders of Exchangeable
Shares has been obtained.

In the event of any proposed takeover bid, or similar transaction affecting the
Trust Units and supported by the Trust, the Trust will use reasonable efforts to
take all actions necessary or desirable to enable holders of Exchangeable Shares
to participate in such transaction to the same extent and on an economically
equivalent basis as the Unitholders.

The Support Agreement also provides that, as long as any outstanding
Exchangeable Shares are owned by any person or entity other than the Trust or
any of its respective subsidiaries and other affiliates, the Trust will, unless
approval to do otherwise is obtained from the holders of Exchangeable Shares,
remain the direct or indirect beneficial owner collectively of more than 50% of
all of the issued and outstanding voting securities of Vermilion, provided that
the Trust will not be in violation of this obligation if a party acquires all or
substantially all of the assets of the Trust. With the exception of
administrative changes for the purpose of adding covenants for the protection of
the holders of the Exchangeable Shares, making certain necessary amendments or
curing ambiguities or clerical errors (in each case provided that the board of
directors of Vermilion and the Trustee are of the opinion that such amendments
are not prejudicial to the interests of the holders of the Exchangeable Shares),
the Support Agreement may not be amended without the approval of the holders of
the Exchangeable Shares.

Under the Support Agreement, the Trust will agree to not exercise any voting
rights attached to the Exchangeable Shares owned by it or any of its
subsidiaries and other affiliates on any matter considered at meetings of
holders of Exchangeable Shares (including any approval sought from such holders
in respect of matters arising under the Support Agreement).

DELIVERY OF TRUST UNITS

The Trust will agree to make such filings and seek such regulatory consents and
approvals as are necessary so that the Trust Units issuable upon the exchange of
Exchangeable Shares will be issued in compliance with applicable securities laws
in Canada and may be traded freely on the TSX or such other exchange on which
the Trust Units may be listed, quoted or posted for trading from time to time.

NOTES

The following summary of the material attributes and characteristics of the
Notes does not purport to be complete and is qualified in its entirety by
reference to the provisions of a note indenture (the "Note Indenture") dated
January 16, 2003 and made between Vermilion Acquisition Ltd. (prior to its
amalgamation with Vermilion under the Arrangement) and Computershare Trust
Company of Canada, as trustee (the "Note Trustee"), which contains a complete
statement of such attributes and characteristics. The Notes have been issued
under the Note Indenture.

TERMS AND ISSUE OF NOTES

Pursuant to the Arrangement, Notes were issued to the Trust and to former
holders of common shares and options of Vermilion. Notes issued to such former
holders were transferred by such holders to the Trust in return for Trust Units.
As a result, the Trust holds all of the issued and outstanding Notes.

The Notes are unsecured and bear interest from the date of issue at 13% per
annum. Interest will be payable for each month during the term on the 15th day
of the month following such month. The first interest payment will be due on
March 15, 2003 for the period commencing on the Effective Date and ending on
February 28, 2003.

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                                       39


Although pursuant to the terms of the Note Indenture Vermilion is permitted to
make payments against the principal amount of the Notes outstanding from time to
time without notice or bonus, Vermilion is not required to make any payment in
respect of principal until December 31, 2028, subject to the terms of any
secured financing and subject to extension in the limited circumstances provided
in the Note Indenture.

In contemplation of the possibility that Notes may be distributed to Unitholders
upon the redemption of their Trust Units, the Note Indenture provides that if
persons other than the Trust (the "Non-Fund Holders") own Notes having an
aggregate principal amount in excess of $1,000,000, either the Trust or the
Non-Fund Holders shall be entitled, among other things, to require the Note
Trustee to exercise the powers and remedies available under the Note Indenture
upon an event of default and, with the Trust, the Non-Fund Holders may provide
consents, waivers or directions relating generally to the variance of the Note
Indenture and the rights of noteholders. The Note Indenture will allow the Trust
flexibility to delay payments of interest or principal otherwise due to it while
payment is made to other noteholders, and to allow other noteholders to be paid
out before the Trust. Any delayed payments will be due 5 days after demand.

Principal and interest on the Notes will be payable in lawful money of Canada
directly to the holders of Notes at their address set forth in the register of
holders of Notes.

RANKING

The Notes will be unsecured debt obligations of Vermilion and will rank PARI
PASSU with all other unsecured indebtedness of Vermilion, but subordinate to all
secured debt.

EVENTS OF DEFAULT

The Note Indenture will provide that any of the following shall constitute an
Event of Default: (a) default in payment of the principal of the Notes when
required; (b) the failure to pay all of the interest obligations on the Notes
for a period of three months; (c) if Vermilion has defaulted and a demand for
payment has been made under any material instrument, indenture or document
evidencing indebtedness of more than $5 million and Vermilion has failed to
remedy such default within applicable curative periods; (d) certain events of
winding-up, liquidation, bankruptcy, insolvency, receivership or seizure; (e)
default in the observance or performance of any other covenant or condition of
the Note Indenture and continuance of such default for a period of 30 days after
notice in writing has been given by the Note Trustee to Vermilion specifying
such default and requiring Vermilion to rectify the same; (f) Vermilion ceasing
to carry on its business; and (g) material default by Vermilion under material
agreements if property is liable to forfeiture or termination.

ROYALTY AGREEMENT

Coincident with the Arrangement becoming effective, the Partnership and the
Trust entered into the Royalty Agreement pursuant to which the Partnership
granted the Royalty to the Trust. As owner of the Royalty, the Trust is entitled
to cash distributions of approximately 99% of the cash flow from all present and
future oil and gas properties and related tangibles owned by the Partnership
after certain costs, expenditures and deductions which include 99% of: (i) all
amounts of interest and principal payable by Vermilion on account of or in
respect of its credit facilities (ii) specified amounts of interest and
principal payable by Vermilion on account of or in respect of its indebtedness
to the Trust; (iii) the Partnership's share of operating costs and capital
expenditures; (iv) amounts required to be paid to certain reserves; (v) general
and administrative expenses; and (vi) acquisition costs of future oil and gas
properties and related tangibles. Such cash distributions are to be paid on or
about the 15th day of the second month following the month to which the
distribution relates.

From time to time upon notice from the Partnership, the Trust has an obligation
(the "Deferred Purchase Price Obligation") to pay the Partnership, as additional
consideration for the Royalty, such portion of the acquisition cost of future
oil and gas properties and capital expenditures including amounts borrowed by
Vermilion to fund such costs and expenditures as may be designated by the
Partnership. The Trust's obligation to pay amounts as a Deferred Purchase Price
Obligation is subject to it having available funds from certain designated
sources.

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                                       40


The Partnership is entitled to make farmouts or other similar dispositions of
specific interests in any part of the properties subject to the Royalty, and
upon the farmee or other participant earning its interest pursuant to the
farmout or other disposition, the Royalty shall burden only the working interest
retained by or reserved to the Partnership. Any net proceeds from the sale of
properties subject to the Royalty (to the extent allocable to petroleum and
natural gas rights) shall be allocated to the Trust as to 99%. The remaining 1%
and all amounts allocated to tangibles and miscellaneous interests shall be
allocated to the Partnership.

Under the Royalty Agreement, the Trust is obligated to reimburse the Partnership
in respect of 99% of certain non-deductible crown royalties paid by the
Partnership; and the Partnership shall be entitled to set off such amounts
reimbursable to it against payments to the Trust on account of the Royalty.

The Royalty does not constitute an interest in land. Except upon the insolvency
of the Partnership, the Trust is not entitled to take its share of production in
kind or to separately sell or market its share of petroleum substances.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

The Trust's Management's Discussion and Analysis relating to the Trust's
consolidated financial statements for the fiscal years ended December 31, 2003
and 2002, which is contained on pages 25 to 39 of the Trust's 2003 annual
report, is incorporated by reference.


      MARKET FOR, PRICE RANGE AND TRADING VOLUME OF SECURITIES

The outstanding Trust Units of the Trust are listed and posted for trading on
the TSX under the symbol VET.UN. The following table sets forth the closing
price range and trading volume of the Trust Units as reported by the TSX for the
periods indicated:

PERIOD                          HIGH               LOW            VOLUME (000's)
- --------------                 ------            -------          --------------
2003

First Quarter                  $12.85            $11.20               40,097
Second Quarter                 $13.70            $12.05               18,532
Third Quarter                  $15.25            $13.50               15,585
Fourth Quarter                 $15.35            $14.15               15,406,

2004

January                        $16.79            $15.34                7,705
February                       $17.90            $15.85                6,491
March                          $18.46            $17.86                5,398


                              CONFLICTS OF INTEREST

The directors and officers of Vermilion are engaged in and will continue to
engage in other activities in the oil and natural gas industry and, as a result
of these and other activities, the directors and officers of Vermilion may
become subject to conflicts of interest. The ABCA provides that in the event
that a director has an interest in a contract or proposed contract or agreement,
the director shall disclose his interest in such contract or agreement and shall
refrain from voting on any matter in respect of such contract or agreement
unless otherwise provided under the ABCA. To the extent that conflicts of
interest arise, such conflicts will be resolved in accordance with the
provisions of the ABCA.

As at the date hereof, neither the Trust nor Vermilion is aware of any existing
or potential material conflicts of interest between the Trust and Vermilion and
a director or officer of Vermilion.

           INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Neither the Trustee, Vermilion nor any director or officer of Vermilion, nor any
other insider of the Trust, or Vermilion, nor any associate or affiliate of any
one of them has or has had, at any time since the year ended

<PAGE>
                                       41


December 31, 2003, any material interest, direct or indirect, in any transaction
or proposed transaction that has materially affected or would materially affect
the Trust or Vermilion.

                                LEGAL PROCEEDINGS

 The Trust is not party to any legal proceedings as of the date of this filing.

                               MATERIAL CONTRACTS

The Trust has not entered into any material contracts outside its normal course
of business.

                              INTERESTS OF EXPERTS

As at the date hereof, the partners and associates of Deloitte & Touche LLP, the
auditors of the Trust, as a group, did not beneficially own any of the
outstanding Trust Units.

As at the date hereof, principals of GLJ, the independent engineers for the
Trust, personally disclosed in certificates of qualification that they neither
had nor expected to receive any of the outstanding Trust Units.

                          TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Trust Units is Computershare Trust
Company of Canada at its principal offices in Calgary, Alberta and Toronto,
Ontario.

                                  RISK FACTORS

The following is a summary of certain risk factors relating to the business of
Vermilion and the Trust. The following information is a summary only of certain
risk factors and is qualified in its entirety by reference to, and must be read
in conjunction with, the detailed information appearing elsewhere in this annual
information form. Unitholders and potential Unitholders should consider
carefully the information contained herein and, in particular, the following
risk factors.

RESERVE ESTIMATES

The reserve and recovery information contained in the GLJ Report is only an
estimate and the actual production and ultimate reserves from the properties may
be greater or less than the estimates prepared by GLJ.

VOLATILITY OF OIL AND NATURAL GAS PRICES

The Trust's operational results and financial condition, will be dependent on
the prices received by Vermilion for oil and natural gas production. Oil and
natural gas prices have fluctuated widely during recent years and are determined
by supply and demand factors, including weather and general economic conditions
as well as conditions in other oil and natural gas regions. Any decline in oil
and natural gas prices could have an adverse effect on Vermilion's ability to
satisfy its obligations under the Notes and on amounts, if any, payable by the
Partnership to the Trust under the Royalty Agreement thereby decreasing the
amount of Distributable Cash to be distributed to holders of Trust Units.

CHANGES IN LEGISLATION

There can be no assurance that income tax laws and government incentive programs
relating to the oil and gas industry, such as the status of mutual fund trusts
and the resource allowance, will not be changed in a manner which adversely
affects Unitholders.

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                                       42


INVESTMENT ELIGIBILITY

If the Trust ceases to qualify as a mutual fund trust, the Trust Units will
cease to be qualified investments for registered retirement savings plans,
registered retirement income funds, deferred profit sharing plans and registered
education savings plans ("Exempt Plans") which will have adverse tax
consequences to Exempt Plans or their annuitants or beneficiaries. Notes or
Redemption Notes acquired on a redemption of Trust Units may not be qualified
investments for Exempt Plans.

OPERATIONAL MATTERS

The operation of oil and gas wells involves a number of operating and natural
hazards which may result in blowouts, environmental damage and other unexpected
or dangerous conditions resulting in damage to Vermilion and possible liability
to third parties. Vermilion will maintain liability insurance, where available,
in amounts consistent with industry standards. Business interruption insurance
may also be purchased for selected facilities, to the extent that such insurance
is available. Vermilion may become liable for damages arising from such events
against which it cannot insure or against which it may elect not to insure
because of high premium costs or other reasons. Costs incurred to repair such
damage or pay such liabilities may impair Vermilion's ability to satisfy its
obligations under the Notes or reduce the amount receivable by the Trust from
the Partnership under the Royalty Agreement.

Continuing production from a property, and to some extent the marketing of
production therefrom, are largely dependent upon the ability of the operator of
the property. To the extent the operator fails to perform these functions
properly, revenue may be reduced. Payments from production generally flow
through the operator and there is a risk of delay and additional expense in
receiving such revenues if the operator becomes insolvent. Although satisfactory
title reviews are generally conducted in accordance with industry standards,
such reviews do not guarantee or certify that a defect in the chain of title may
not arise to defeat the claim of Vermilion or its subsidiaries to certain
properties. Such circumstances could impair Vermilion's ability to satisfy its
obligations under the Notes or reduce the amount receivable by the Trust from
the Partnership under the Royalty Agreement.

ENVIRONMENTAL CONCERNS

The oil and natural gas industry is subject to environmental regulation pursuant
to local, provincial and federal legislation. A breach of such legislation may
result in the imposition of fines or issuance of clean up orders in respect of
Vermilion or its assets. Such legislation may be changed to impose higher
standards and potentially more costly obligations on Vermilion. Although the
Trust has established a reclamation fund for the purpose of funding its
currently estimated future environmental and reclamation obligations based on
its current knowledge, there can be no assurance that the Trust will be able to
satisfy its actual future environmental and reclamation obligations.

KYOTO PROTOCOL

Canada, France and Trinidad and Tobago are signatories to the United Nations
Framework Convention on Climate Change and both have ratified the Kyoto Protocol
established thereunder. Canada and France, as Annex B parties to the Kyoto
Protocol, and France as a party to the European Union Regional Integration
Organization, are required to set legally binding targets to reduce nation-wide
emissions of carbon dioxide, methane, nitrous oxide and other so-called
"greenhouse gasses".

Vermilion's exploration and production facilities and other operations and
activities in Canada and France will emit a small amount of greenhouse gasses
which may subject Vermilion to legislation regulating emissions of greenhouse
gases and which may include a requirement to reduce emissions or emissions
intensity from Vermilion's operations and facilities. The direct or indirect
costs of complying with emissions regulations may adversely affect the business
of Vermilion in Canada and France.

Trinidad and Tobago is not an Annex B party to the Kyoto Protocol is therefore
not required under the Kyoto Protocol to set legally binding targets to regulate
greenhouse gas emissions.

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                                       43


DEBT SERVICE

Vermilion may, from time to time, finance a significant portion of its
operations through debt (other than the Notes). Amounts paid in respect of
interest and principal on debt incurred by Vermilion may impair Vermilion's
ability to satisfy its obligations under the Notes or reduce the amount received
by the Trust under the Royalty Agreement. Variations in interest rates and
scheduled principal repayments could result in significant changes in the amount
required to be applied to debt service before payment by Vermilion of its
obligations under the Notes or the Royalty Agreement. Ultimately, this may
result in lower levels of Distributable Cash for the Trust.

Lenders will be provided with security over substantially all of the assets of
Vermilion its Subsidiaries and the Trust. If Vermilion becomes unable to pay its
debt service charges or otherwise commits an event of default such as
bankruptcy, a lender may foreclose on or sell the assets of Vermilion its
Subsidiaries and the Trust.

DELAY IN CASH DISTRIBUTIONS

In addition to the usual delays in payment by purchasers of oil and natural gas
to the operators of the properties, and by the operator to Vermilion, payments
between any of such parties may also be delayed by restrictions imposed by
lenders, delays in the sale or delivery of products, delays in the connection of
wells to a gathering system, blowouts or other accidents, recovery by the
operator of expenses incurred in the operation of the properties or the
establishment by the operator of reserves for such expenses.

TAXATION OF VERMILION

Vermilion is subject to taxation in each taxation year on its income for the
year, after deducting interest paid to the Trust pursuant to the Note Indenture
and after deducting payments, if any, made to the Trust with respect to the
Royalty Agreement. During the period that Exchangeable Shares issued by
Vermilion are outstanding, a portion of the cash flow from operations will be
subject to tax to the extent that there are not sufficient resource pool
deductions, capital cost allowance or utilization of prior years non-capital
losses to reduce taxable income to zero. Vermilion intends to deduct, in
computing its income for tax purposes, the full amount available for deduction
in each year associated with the income tax resource pools, undepreciated
capital cost ("UCC") and non-capital losses carried forward from Vermilion, if
any, plus resource pools and UCC created by capital expenditures of Vermilion.
If there are not sufficient resource pools, UCC and non-capital losses carried
forward or other deductions to shelter the income of Vermilion, then cash taxes
may be payable by Vermilion. In addition, there can be no assurance that
taxation authorities will not seek to challenge the amount of interest expense.
If such a challenge were to succeed against Vermilion, it could materially
adversely affect the amount of Distributable Cash available.

Further, interest on the Notes accrues at the Trust level for income tax
purposes whether or not actually paid. The Trust Indenture provides that an
amount equal to the taxable income of the Trust will be distributed each year to
Unitholders in order to reduce the Trust's taxable income to zero. Where
interest payments on the Notes are due but not paid in whole or in part, the
Trust Indenture provides that any additional amount necessary to be distributed
to Unitholders may be distributed in the form of Units rather than in cash.
Unitholders will be required to include such additional amount in income even
though they do not receive a cash distribution.

DEPLETION OF RESERVES

The Trust has certain unique attributes which differentiate it from other oil
and gas industry participants. Distributions of Distributable Cash in respect of
properties, absent commodity price increases or cost effective acquisition and
development activities, will decline over time in a manner consistent with
declining production from typical oil, natural gas and natural gas liquids
reserves. Vermilion will not be reinvesting cash flow in the same manner as
other industry participants. Accordingly, absent capital injections or
acquisitions of additional oil and gas properties, Vermilion's initial
production levels and reserves will decline.

Vermilion's future oil and natural gas reserves and production, and therefore
its cash flows, will be highly dependent on Vermilion's success in exploiting
its reserve base and acquiring additional reserves. Without reserve additions
through acquisition or development activities, Vermilion's reserves and
production will decline over time as reserves are exploited.

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                                       44


NET ASSET VALUE

The net asset value of the assets of the Trust from time to time will vary
dependent upon a number of factors beyond the control of management, including
oil and gas prices. The trading prices of the Trust Units from time to time is
also determined by a number of factors which are beyond the control of
management and such trading prices may be greater than the net asset value of
the Trust's assets.

RETURN OF CAPITAL

Trust Units will have no value when reserves from the underlying assets of the
Trust can no longer be economically produced and, as a result, cash
distributions do not represent a "yield" in the traditional sense as they
represent both return of capital and return on investment.

NATURE OF TRUST UNITS

The Trust Units do not represent a traditional investment in the oil and natural
gas sector and should not be viewed by investors as shares in Vermilion. The
Trust Units represent a fractional interest in the Trust. As holders of Trust
Units, Unitholders will not have the statutory rights normally associated with
ownership of shares of a corporation including, for example, the right to bring
"oppression" or "derivative" actions. The Trust's sole assets will be its shares
in Vermilion, the Notes, the Royalty Agreement and other investments in
securities. The price per Trust Unit is a function of anticipated Distributable
Cash, the underlying assets of the Trust and management's ability to effect
long-term growth in the value of the Trust. The market price of the Trust Units
will be sensitive to a variety of market conditions including, but not limited
to, interest rates and the ability of the Trust to acquire suitable oil and
natural gas properties. Changes in market conditions may adversely affect the
trading price of the Trust Units.

The Trust Units are not "deposits" within the meaning of the CANADA DEPOSIT
INSURANCE CORPORATION ACT (Canada) and are not insured under the provisions of
that Act or any other legislation. Furthermore, the Trust is not a trust company
and, accordingly, is not registered under any trust and loan company legislation
as it does not carry on or intend to carry on the business of a trust company.

UNITHOLDERS LIMITED LIABILITY

The Trust Indenture provides that no Unitholders will be subject to any
liability in connection with the Trust or its obligations and affairs and, in
the event that a court determines Unitholders are subject to any such
liabilities, the liabilities will be enforceable only against, and will be
satisfied only out of the Trust's assets. Pursuant to the Trust Indenture, the
Trust will indemnify and hold harmless each Unitholder from any costs, damages,
liabilities, expenses, charges and losses suffered by a Unitholder resulting
from or arising out of such Unitholder not having such limited liability.

The Trust Indenture provides that all written instruments signed by or on behalf
of the Trust must contain a provision to the effect that such obligation will
not be binding upon Unitholders personally. Personal liability may also arise in
respect of claims against the Trust that do not arise under contracts, including
claims in tort, claims for taxes and possibly certain other statutory
liabilities. The possibility of any personal liability of this nature arising is
considered unlikely.

The operations of the Trust will be conducted, upon the advice of counsel, in
such a way and in such jurisdictions as to avoid as far as possible any material
risk of liability on the Unitholders for claims against the Trust.

ACCOUNTING WRITE-DOWNS AS A RESULT OF GAAP

Canadian Generally Accepted Accounting Principles ("GAAP") require that
management apply certain accounting policies and make certain estimates and
assumptions which affect reported amounts in the consolidated financial
statements of the Trust. The accounting policies may result in non-cash charges
to net income and write-downs of net assets in the financial statements. Such
non-cash charges and write-downs may be viewed unfavourably by the capital
markets and result in an inability to borrow funds and/or may result in a
decline in the Trust Unit price.

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                                       45


Emerging GAAP surrounding hedge accounting may result in non-cash charges
against net income as a result of changes in the fair market value of hedging
instruments. A decrease in the fair market value of the hedging instruments as
the result of fluctuations in commodity prices and foreign exchange rates may
result in a write-down of net assets and a non-cash charge against net income.
Such write-downs and non-cash charges may be temporary in nature if the fair
market value subsequently increases.

VARIATIONS IN INTEREST RATES AND FOREIGN EXCHANGE RATES

Variations in interest rates could result in a significant change in the amount
the Trust pays to service debt, potentially impacting distributions to
Unitholders.

In addition, the exchange rate for the Canadian dollar versus the U.S. dollar
has increased significantly over the last 12 months, resulting in the receipt by
the Trust of fewer Canadian dollars for its production which may affect future
distributions. VRL has initiated certain hedges to mitigate these risks. The
increase in the exchange rate for the Canadian dollar and future Canadian/United
States exchange rates may impact future distributions and the future value of
the Trust's reserves as determined by independent evaluators.

MUTUAL FUND TRUST STATUS

It is intended that the Trust continue to qualify as a mutual fund trust for the
purposes of the Income Tax Act (Canada) (the "Tax Act"). The Trust may not,
however, always be able to satisfy any future requirement for the maintenance of
mutual fund trust status. Should the status of the Trust as a mutual fund trust
be lost or successfully challenged by a relevant tax authority, certain adverse
consequences may arise for the Trust and Unitholders. Some of the significant
consequences of losing mutual fund trust status are as follows:

         o        By virtue of its status as a mutual fund trust, the Trust has
                  been accepted for registration as a "registered investment"
                  for registered retirement savings plans ("RRSPs"), registered
                  retirement income funds ("RRIFs"), and deferred profit sharing
                  plans (collectively, "Exempt Plans"). As such, Trust Units are
                  qualified investments for Exempt Plans as well as registered
                  education savings plans ("RESPs") and if the Trust's status as
                  a "registered investment" is revoked in any year by virtue of
                  ceasing to be a "mutual fund trust" the Trust Units would
                  remain as qualified investments for Exempt Plans and RESPs
                  until the end of the year following such year.

         o        Where at the end of any month an Exempt Plan or a RESP holds
                  Trust Units that are not qualified investments, the Exempt
                  Plan or RESP must, in respect of that month, pay a tax under
                  Part XI.1 of the Tax Act equal to 1 percent of the fair market
                  value of the Trust Units at the time such Trust Units were
                  acquired by the Exempt Plan or RESP. An RRSP or RRIF holding
                  Trust Units that are not qualified investments would become
                  taxable on income attributable to the Trust Units while they
                  are not qualified investments (including the entire amount of
                  any capital gain arising on a disposition of the non-qualified
                  investment). RESPs which hold Trust Units that are not
                  qualified investments may have their registration revoked by
                  the Canada Customs and Revenue Agency.

         o        Trust Units would become foreign property for registered
                  pension plans upon the Trust ceasing to be a mutual fund
                  trust. If the Trust's "registered investment" status is
                  revoked by virtue of it ceasing to be a mutual fund trust,
                  then the Trust Units would also become foreign property for
                  Exempt Plans.

         o        The Trust would be taxed on certain types of income
                  distributed to Unitholders, including income generated by the
                  royalty held by the Trust. Payment of this tax may have
                  adverse consequences for some Unitholders, particularly
                  Unitholders that are not residents of Canada and residents of
                  Canada that are otherwise exempt from Canadian income tax.

         o        The Trust would cease to be eligible for the capital gains
                  refund mechanism available under the Tax Act.

<PAGE>
                                       46


         o        Trust Units held by Unitholders that are not residents of
                  Canada would become taxable Canadian property. These
                  non-resident holders would be subject to Canadian income tax
                  on any gains realized on a disposition of Trust Units held by
                  them.

In addition, the Trust may take certain measures in the future to the extent the
Trust believes such measures are necessary to ensure the Trust maintains its
status as a mutual fund trust. These measures could be adverse to certain
holders of Trust Units.

                             ADDITIONAL INFORMATION

Additional information relating to the Trust may be found on SEDAR at
WWW.SEDAR.COM. Additional information related to the remuneration and
indebtedness of the directors and officers of VRL, and the principal holders of
Trust Units and Rights to purchase Trust Units and securities authorized for
issuance under the Trust's equity compensation plans, where applicable, are
contained in the information circular of the Trust in respect of its most recent
annual meeting of Unitholders. Additional financial information is provided in
the Trust's audited financial statements and management's discussion and
analysis for the year ended December 31, 2003.



<PAGE>
                                       47



                                  SCHEDULE "A"

                             REPORT ON RESERVES DATA
                                       BY
                         INDEPENDENT QUALIFIED RESERVES
                              EVALUATOR OR AUDITOR


To the board of directors of Vermilion Energy Trust (the "Company"):

1.       We have prepared an evaluation of the Company's reserves data as at
         January 1, 2004. The reserves data consist of the following:

              (a)  (i)  proved and proved plus probable oil and gas
                        reserves estimated as at January 1, 2004, using
                        forecast prices and costs; and

                   (ii) the related estimated future net revenue; and

              (b)  (i)  proved oil and gas reserves estimated as at January 1,
2004, using constant prices and costs; and

                   (ii) the related estimated future net revenue.

2.       The reserves data are the responsibility of the Company's management.
         Our responsibility is to express an opinion on the reserves data based
         on our evaluation.

              We carried out our evaluation in accordance with standards set out
              in the Canadian Oil and Gas Evaluation Handbook (the "COGE
              Handbook") prepared jointly by the Society of Petroleum Evaluation
              Engineers (Calgary Chapter) and the Canadian Institute of Mining,
              Metallurgy & Petroleum (Petroleum Society).

3.       Those standards require that we plan and perform an evaluation to
         obtain reasonable assurance as to whether the reserves data are free of
         material misstatement. An evaluation also includes assessing whether
         the reserves data are in accordance with principles and definitions in
         the COGE Handbook.

4.       The following table sets forth the estimated future net revenue (before
         deduction of income taxes) attributed to proved plus probable reserves,
         estimated using forecast prices and costs and calculated using a
         discount rate of 10 percent, included in the reserves data of the
         Company evaluated by us for the year ended December 31, 2003, and
         identifies the respective portions thereof that we have audited,
         evaluated and reviewed and reported on to the Company's board of
         directors:

<TABLE>
<CAPTION>
                                LOCATION OF
                                 RESERVES
           DESCRIPTION AND      (COUNTRY OR
         PREPARATION DATE OF      FOREIGN          NET PRESENT VALUE OF FUTURE NET REVENUE - $MM
              EVALUATION        GEOGRAPHIC         (BEFORE   INCOME  TAXES,   10%  DISCOUNT RATE)
                                               ----------------------------------------------------
                REPORT             AREA)        AUDITED         EVALUATED      REVIEWED       TOTAL
         --------------------   ------------    -------         ---------      --------      ------
         <S>                    <C>             <C>             <C>            <C>           <C>
           January 31, 2004       Canada          $0            $431.3           $0          $431.3
           January 31, 2004       France          $0            $209.2           $0          $209.2
            April 20, 2004       Trinidad         $0            $171.8           $0          $171.8
                                   Total          $0            $812.3           $0          $812.3
</TABLE>

5.       In our opinion, the reserves data respectively evaluated by us have, in
         all material respects, been determined and are in accordance with the
         COGE Handbook.

<PAGE>
                                       48


6.       We have no responsibility to update this evaluation for events and
         circumstances occurring after the preparation dates.

7.       Because the reserves data are based on judgements regarding future
         events, actual results will vary and the variations may be material.



Executed as to our report referred to above:



Gilbert Laustsen Jung Associates Ltd.,                     Dated  APRIL 20, 2004
Calgary, Alberta, Canada


/s/ Keith M. Braaten

Keith M. Braaten


<PAGE>
                                       49



                                  SCHEDULE "B"
                       REPORT OF MANAGEMENT AND DIRECTORS
                     ON RESERVES DATA AND OTHER INFORMATION
                                 (FORM 51-101F3)

TERMS TO WHICH A MEANING IS ASCRIBED IN NATIONAL INSTRUMENT 51-101 HAVE THE SAME
MEANING HEREIN.

Management of Vermilion Energy Trust (the "Company") are responsible for the
preparation and disclosure, or arranging for the preparation and disclosure of
information with respect to the Company's oil and gas activities in accordance
with securities regulatory requirements. This information includes reserves
data, which consist of the following:

         (a)      (i)      Proved and Proved plus probable oil and gas reserves
                           estimated as at December 31, 2003 using forecast
                           prices and costs; and

                  (ii)     the related estimated future net revenue; and

         (b)      (i)      Proved oil and gas reserves estimated as at December
                           31, 2003 using constant prices and costs; and

                  (ii)     the related estimated future net revenue.

Independent qualified reserves evaluators have evaluated and reviewed the
Company's reserves data. The report of the independent qualified reserves
evaluators is presented in Schedule A to the Annual Information Form of the
Company for the year ended December 31, 2003.

The Reserves Committee of the Board of Directors of the Company has:

         (c)      reviewed the Company's procedures for providing information to
                  the independent qualified reserves evaluators;

         (d)      met with the independent qualified reserves evaluator(s) to
                  determine whether any restrictions affected the ability of the
                  independent qualified reserves evaluators to report without
                  reservation; and

         (e)      reviewed the reserves data with Management and the independent
                  qualified reserves evaluators.

The Reserves Committee of the Board of Directors has reviewed the Company's
procedures for assembling and reporting other information associated with oil
and gas activities and has reviewed that information with Management. The Board
of Directors has, on the recommendation of the Audit and Reserves Committee,
approved:

         (f)      the content and filing with securities regulatory authorities
                  of the reserves data and other oil and gas information;

         (g)      the filing of the report of the independent qualified reserves
                  evaluator(s) on the reserves data; and

         (h)      the content and filing of this report.

<PAGE>
                                       50


Because the reserves data are based on judgements regarding future events,
actual results will vary and the variations may be material.

                "Lorenzo Donadeo"
          -------------------------------------------------
                 President and Chief Executive Officer


                "Curtis Hicks"
          -------------------------------------------------
                 V.P. Finance and CFO


                "Claudio Ghersinich"
          -------------------------------------------------
                 Director


                "Jeff Boyce"
          -------------------------------------------------
                 Director


April 20, 2004



Additional copies of this annual information form may be obtained from
Vermilion. Please contact:

         Vermilion Energy Trust
         c/o Vermilion Resources Ltd.
         2800, 400-4th Avenue S.W.
         Calgary, Alberta  T2P 0J4

         Telephone:        (403) 269-4884
         Fax:              (403) 269-6767
         Toll Free:        1-866-895-8101



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>ex99_2form40-f.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
                                                                    EXHIBIT 99.2
                                                                    ------------





                               [GRAPHIC OMITTED]
                        [LOGO - VERMILION ENERGY TRUST]



                         INITIAL ANNUAL INFORMATION FORM
                      FOR THE YEAR ENDED DECEMBER 31, 2002




                                 April 11, 2003



<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE


GLOSSARY OF TERMS..............................................................1
         Conventions...........................................................4
         Abbreviations.........................................................4
         Other    .............................................................4
         Conversion............................................................4
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS..............................5
VERMILION ENERGY TRUST.........................................................5
         General  .............................................................5
         Organizational Structure of the Trust.................................5
         Summary Description of the Business...................................6
GENERAL DEVELOPMENT OF THE BUSINESS OF  THE TRUST AND VERMILION................8
         History of the Corporation............................................8
         Significant Acquisitions and Significant Dispositions.................9
NARRATIVE DESCRIPTION OF THE BUSINESS.........................................10
         Stated Business Objectives...........................................10
         Description of Properties............................................10
         Canada Assets........................................................10
         France Assets........................................................12
         Trinidad ............................................................13
         Petroleum and Natural Gas Reserves...................................14
         Landholdings.........................................................19
         Oil and Gas Wells....................................................20
         Reconciliation of Reserves...........................................20
         Production History and Prices Received...............................21
         Drilling Activity....................................................23
         Marketing............................................................23
         Capital Expenditures.................................................24
ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY TRUST......................25
         Trust Units..........................................................25
         Special Voting Rights................................................25
         Unitholders Limited Liability........................................26
         Issuance of Trust Units..............................................26
         Cash Distributions...................................................26
         Redemption Right.....................................................26
         Non-Resident Unitholders.............................................28
         Meetings of Unitholders..............................................28
         Exercise of Voting Rights Attached to Shares of Vermilion............28
         Trustee  ............................................................29
         Delegation of Authority, Administration and Trust Governance.........29
         Liability of the Trustee.............................................29
         Amendments to the Trust Indenture....................................30
         Takeover Bid.........................................................30
         Termination of the Trust.............................................30
         Reporting to Unitholders.............................................31
         Distribution Reinvestment and Optional Trust Unit Purchase Plan......31
         Unitholder Rights Plan...............................................31
ADDITIONAL INFORMATION RESPECTING VERMILION RESOURCES LTD.....................34
         Management of Vermilion..............................................34
         Vermilion Share Capital..............................................39
         Voting and Exchange Trust Agreement..................................43
         Support Agreement....................................................44
         Notes    ............................................................45
         Royalty Agreement....................................................46

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)
                                                                            PAGE


SELECTED CONSOLIDATED FINANCIAL INFORMATION...................................47
MANAGEMENT'S DISCUSSION AND ANALYSIS..........................................48
         Liquidity and Capital Resources......................................49
         Production...........................................................51
         Capital Expenditures.................................................52
         Cash Flow Netbacks...................................................53
         Crude Oil Marketing..................................................53
         Natural Gas Marketing................................................54
         Revenue  54
         Royalties............................................................55
         Lifting Costs........................................................55
         Debt and Interest Expense............................................56
         General and Administrative Expenses..................................56
         Depletion and Depreciation Expense...................................56
         Taxes    ............................................................57
         Risk Management......................................................57
         Currency Risk........................................................57
         Environment, Health and Safety.......................................57
MARKET FOR SECURITIES.........................................................58
RISK FACTORS..................................................................58
         Reserve Estimates....................................................59
         Volatility of Oil and Natural Gas Prices.............................59
         Changes in Legislation...............................................59
         Investment Eligibility...............................................59
         Operational Matters..................................................59
         Environmental Concerns...............................................59
         Kyoto Protocol.......................................................60
         Debt Service.........................................................60
         Delay in Cash Distributions..........................................60
         Taxation of Vermilion................................................60
         Depletion of Reserves................................................61
         Net Asset Value......................................................61
         Return of Capital....................................................61
         Nature of Trust Units................................................61
         Unitholders Limited Liability........................................61
ADDITIONAL INFORMATION........................................................62

Schedule A - CONSOLIDATED FINANCIAL STATEMENTS
Schedule B - PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>

                                GLOSSARY OF TERMS

The following are defined terms used in this Annual Information Form:

"ABCA" means the BUSINESS CORPORATIONS ACT (Alberta), R.S.A. 2000, c. B-9, as
amended, including the regulations promulgated thereunder;

"AFFILIATE" when used to indicate a relationship with a person or company, has
the same meaning as set forth in the SECURITIES ACT (Alberta);

"AVENTURA" means Aventura Energy Inc., a corporation incorporated pursuant to
the ABCA;

"AVENTURA SHARES" means the common shares of Aventura;

"BOARD OF DIRECTORS" or "BOARD" means the board of directors of Vermilion;

"CONTROL" means, with respect to control of a body corporate by a person, the
holding (other than by way of security) by or for the benefit of that person of
securities of that body corporate to which are attached more than 50% of the
votes that may be cast to elect directors of the body corporate (whether or not
securities of any other class or classes shall or might be entitled to vote upon
the happening of any event or contingency) provided that such votes, if
exercised, are sufficient to elect a majority of the board of directors of the
body corporate;

"CURRENT MARKET PRICE OF A TRUST UNIT" means, in respect of a Trust Unit on any
date, the weighted average trading price of the Trust Units on the TSX on that
date and the nine trading days preceding that date, or, if the Trust Units are
not then listed on the TSX, on such other stock exchange or automated quotation
system on which the Trust Units are listed or quoted, as the case may be, as may
be selected by the board of directors of Vermilion for such purpose; provided,
however, that if in the opinion of the board of directors of Vermilion the
public distribution or trading activity of Trust Units for that period does not
result in a weighted average trading price which reflects the fair market value
of a Trust Unit, then the Current Market Price of a Trust Unit shall be
determined by the board of directors of Vermilion, in good faith and in its sole
discretion, and provided further that any such selection, opinion or
determination by such board of directors shall be conclusive and binding and for
the purposes of this definition, the weighted average trading price shall be
determined by dividing (a) the aggregate dollar trading value of all Trust Units
sold on the TSX (or other stock exchange or automated quotation system, if
applicable) over the applicable ten trading days by (b) the total number of
Trust Units sold on such stock exchange or system during such period;

"DISTRIBUTABLE CASH" means all amounts available for distribution during any
applicable period to holders of Trust Units;

"DISTRIBUTION" means a distribution paid by the Trust in respect of the Trust
Units, expressed as an amount per Trust Unit;

"DISTRIBUTION PAYMENT DATE" means any date that Distributable Cash is
distributed to Unitholders, generally being the 15th day of the calendar month
following any Distribution Record Date;

"DISTRIBUTION RECORD DATE" means the last day of each calendar month or such
other date as may be determined from time to time by the Trustee, except that
December 31 shall in all cases be a Distribution Record Date;

"DRIP PLAN" means the Distribution Reinvestment and Optional Trust Unit Purchase
Plan adopted by the Trust;

"EXCHANGE RATIO" means the exchange ratio used to determine the number of Trust
Units a holder of Exchangeable Shares is entitled to receive upon an exchange of
Exchangeable Shares which, in respect of each Exchangeable Share, was initially
equal to one upon completion of the Arrangement, and shall be cumulatively
adjusted thereafter by: (a) increasing the Exchange Ratio on each Distribution
Payment Date by an amount, rounded to the nearest five (5) decimal places, equal
to a fraction having as its numerator the product of the Exchange Ratio
immediately prior to the applicable Distribution Payment Date and the
Distribution, expressed as an amount per Trust Unit, paid on

<PAGE>

                                      -2-


that Distribution Payment Date, and having as its denominator the Current Market
Price of a Trust Unit on the last business day prior to that Distribution
Payment Date; and (b) decreasing the Exchange Ratio on each record date for the
payment of dividends to holders of Exchangeable Shares by Vermilion, if any, by
an amount, rounded to the nearest five (5) decimal places, equal to a fraction
having as its numerator the amount of the dividend payable to holders of
Exchangeable Shares, expressed as an amount per Exchangeable Share, and having
as its denominator the Current Market Price of a Trust Unit on the date that is
the last business day prior to that dividend record date. The Exchange Ratio
shall also be adjusted in the event of certain other reorganizations or
distributions in respect of the Trust Units as necessary on an economic
equivalency basis as further described in the Exchangeable Share Provisions;

"EXCHANGEABLE SHARES" means the Series A exchangeable shares in the capital of
Vermilion;

"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares;

"GLJ" means Gilbert Laustsen Jung Associates Ltd., independent petroleum
engineering consultants of Calgary, Alberta;

"GLJ REPORT" means the independent engineering evaluation of certain oil, NGL
and natural gas interests of Vermilion prepared by GLJ dated March 20, 2003 and
effective January 1, 2003;

"INCOME TAX ACT" or "TAX ACT" means the INCOME TAX ACT (Canada), R.S.C. 1985, c.
1. (5th Supp), as amended, including the regulations promulgated thereunder;

"INSOLVENCY EVENT" means the institution by Vermilion of any proceeding to be
adjudicated to be a bankrupt or insolvent or to be wound up, or the consent of
Vermilion to the institution of bankruptcy, dissolution, insolvency or
winding-up proceedings against it, or the filing of a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the COMPANIES CREDITORS'
ARRANGEMENT ACT (Canada) and the BANKRUPTCY AND INSOLVENCY ACT (Canada), and the
failure by Vermilion to contest in good faith any such proceedings commenced in
respect of Vermilion within fifteen (15) days of becoming aware thereof, or the
consent by Vermilion to the filing of any such petition or to the appointment of
a receiver, or the making by Vermilion of a general assignment for the benefit
of creditors, or the admission in writing by Vermilion of its inability to pay
its debts generally as they become due, or Vermilion not being permitted,
pursuant to solvency requirements of applicable law, to redeem any retracted
Exchangeable Shares pursuant to the Exchangeable Share Provisions;

"NON-RESIDENT" means (a) a Person who is not a resident of Canada for the
purposes of the Tax Act; or (b) a partnership that is not a Canadian partnership
for the purposes of the Tax Act;

"NOTES" means the unsecured, subordinated notes issued by Vermilion under the
Arrangement;

"PARTNERSHIP" means Vermilion Resources, the partners of which are Vermilion and
its wholly-owned subsidiary, 764031 Alberta Ltd.;

"PERMITTED INVESTMENTS" means (a) obligations issued or guaranteed by the
government of Canada or any province of Canada or any agency or instrumentality
thereof, (b) term deposits, guaranteed investment certificates, certificates of
deposit or bankers' acceptances of or guaranteed by any Canadian chartered bank
or other financial institutions the short-term debt or deposits of which have
been rated at least A or the equivalent by Standard & Poor's Corporation,
Moody's Investors Service, Inc. or Dominion Bond Rating Service Limited, and (c)
commercial paper rated at least A or the equivalent by Dominion Bond Rating
Service Limited, in each case maturing within 180 days after the date of
acquisition;

"PRO RATA SHARE" of any particular amount in respect of a Unitholder at any time
shall be the product obtained by multiplying the number of Trust Units that are
owned by that Unitholder at that time by the quotient obtained when such a
number is divided by the total number of all Trust Units that are issued and
outstanding at that time;

<PAGE>

                                      -3-


"ROYALTY" means the royalty granted under the Royalty Agreement commencing
February 1, 2003, entitling the Trust to approximately 99% of the net cash flow
generated from the present and future oil and natural gas interests, rights and
related tangibles of the Partnership after certain costs, expenditures and
deductions;

"ROYALTY AGREEMENT" means the royalty agreement between the Partnership and the
Trust dated January 22, 2003 providing for the creation of the Royalty;

"SPECIAL VOTING RIGHT" means the special voting right of the Trust, issued and
certified under the Trust Indenture for the time being outstanding and entitled
to the benefits and subject to the limitations set forth therein;

"SUBSEQUENT INVESTMENT" means those investments which the Trust is permitted to
make pursuant to the Trust Indenture;

"SUPPORT AGREEMENT" means the support agreement entered into between the Trust
and Vermilion Acquisition Ltd. (prior to its amalgamation with Vermilion) on
January 16, 2003;

"SUBSIDIARY" means, in relation to any person, any body corporate, partnership,
joint venture, association or other entity of which more than 50% of the total
voting power of shares or units of ownership or beneficial interest entitled to
vote in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by such person;

"TRUST" means Vermilion Energy Trust, a trust established under the laws of
Alberta pursuant to the Trust Indenture;

"TRUST INDENTURE" means the amended and restated trust indenture dated as of
January 15, 2003 between Computershare Trust Company of Canada and Vermilion;

"TRUST UNIT" or "UNIT" means a unit of the Trust issued by the Trust;

"TRUSTEE" means Computershare Trust Company of Canada, the initial trustee of
the Trust, or such other trustee, from time to time, of the Trust;

"TSX" means TSX Inc., carrying on business as the Toronto Stock Exchange;

"UNIT RIGHTS INCENTIVE PLAN" means the Unit Rights Incentive Plan of the Trust;

"UNITHOLDER RIGHTS PLAN" means the trust unitholder rights plan adopted by the
Trust pursuant to the Unitholders Rights Plan Agreement;

"UNITHOLDER RIGHTS PLAN AGREEMENT" means the trust unitholder rights plan
agreement between the Trust and Computershare Trust Company of Canada dated
January 16, 2003 to establish the Unitholder Rights Plan;

"UNITHOLDERS" means holders from time to time of the Trust Units;

"VERMILION" means Vermilion Resources Ltd.;

"VOTING AND EXCHANGE TRUST AGREEMENT" means the voting and exchange trust
agreement entered into on January 16, 2003 between the Trust, Vermilion
Acquisition Ltd. (prior to its amalgamation with Vermilion) and the Voting and
Exchange Agreement Trustee; and

"VOTING AND EXCHANGE AGREEMENT TRUSTEE" means Computershare Trust Company of
Canada, the initial trustee under the Voting and Exchange Trust Agreement, or
such other trustee, from time to time appointed thereunder.

<PAGE>

                                      -4-


CONVENTIONS

Unless otherwise indicated, references herein to "$" or "dollars" are to
Canadian dollars. All financial information herein has been presented in
Canadian dollars in accordance with generally accepted accounting principles in
Canada.

ABBREVIATIONS

        OIL AND NATURAL GAS LIQUIDS                        NATURAL GAS

Bbl       Barrel                         Mcf       thousand cubic feet
Bbls      Barrels                        Mmcf      million cubic feet
Mbbls     thousand barrels               Bcf       billion cubic feet
Bbls/d    barrels per day                Mcf/d     thousand cubic feet per day
NGLs      natural gas liquids            Mmcf/d    million cubic feet per day
GJ        Gigajoule                      MMBTU     million British Thermal Units
GJ/d      gigajoule per day

OTHER

AECO-C          Intra-Alberta Nova Inventory Transfer Price (NIT net price)
API             American Petroleum Institute
(degree)API     an indication of the specific gravity of crude oil measured on
                the API gravity scale. Liquid petroleum with a specified gravity
                of 28 (degree)API or higher is generally referred to as light
                crude oil
ARTC            Alberta Royalty Tax Credit
BOE             barrel of oil equivalent of natural gas and crude oil on the
                basis of 1 BOE for 6 (unless otherwise stated) Mcf of natural
                gas (this conversion factor is an industry accepted norm and is
                not based on either energy content or current prices)
BOE/D           barrel of oil equivalent per day
m3              cubic metres
MBOE            1,000 barrels of oil equivalent
WTI             West Texas Intermediate,  the reference price paid in U.S.
                dollars at Cushing, Oklahoma for crude oil of standard grade
MW/h            Megawatts per hour

CONVERSION

The following table sets forth certain standard conversions from Standard
Imperial Units to the International System of Units (or metric units).

TO CONVERT FROM            TO                        MULTIPLY BY
Mcf                        Cubic metres              28.174
Cubic metres               Cubic feet                35.494
Bbls                       Cubic metres              0.159
Cubic metres               Bbls oil                  6.290
Feet                       Metres                    0.305
Metres                     Feet                      3.281
Miles                      Kilometres                1.609
Kilometres                 Miles                     0.621
Acres                      Hectares                  0.405
Hectares                   Acres                     2.471

<PAGE>

                                      -5-


                SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual information form contains forward-looking statements. All statements
other than statements of historical fact contained in this annual information
form are forward-looking statements, including, without limitation, statements
regarding the future financial position, business strategy, proposed
acquisition, budgets, litigation, projected costs and plans and objectives of or
involving the Trust or Vermilion. Many of these statements can be identified by
looking for words such as "believe", "expects", "will", "intends", '"projects",
"anticipates", "estimates", "continues" or similar words. The Trust and
Vermilion believe the expectations reflected in such forward-looking statements
are reasonable but no assurance can be given that these expectations will prove
to be correct and such forward-looking statements included, or incorporated by
reference, in this annual information form should not be unduly relied upon. A
discussion of the risk factors that could affect future results and could cause
results to differ materially from those expressed in the forward-looking
statements contained herein is included in this annual information form under
"Risk Factors".

The forward-looking statements contained herein are expressly qualified in their
entirety by this cautionary statement. Such forward-looking statements are made
as of the date of this annual information form and neither the Trust nor
Vermilion undertakes any obligation to publicly update or revise such
forward-looking statements to reflect new information, subsequent events or
otherwise.

                             VERMILION ENERGY TRUST

GENERAL

Vermilion Energy Trust is an open-end unincorporated investment trust governed
by the laws of the Province of Alberta and created pursuant to the Trust
Indenture. The head and principal office of the Trust is located at Suite 2800,
400 - 4th Avenue, S.W., Calgary, Alberta, T2P 0J4.

The Trust was formed on December 16, 2002 pursuant to the Trust Indenture, as
amended and restated on January 15, 2003. As a result of the completion of a
plan of arrangement involving the Trust, Vermilion, Clear Energy Inc., and
Vermilion Acquisition Ltd. (the "Arrangement"), former holders of common shares
of Vermilion received Units of the Trust or Exchangeable Shares of Vermilion, or
a combination thereof, in accordance with the elections made by such holders,
and Vermilion become a subsidiary of the Trust. See "General Development of the
Business of the Trust and Vermilion - Significant Acquisitions and Significant
Dispositions - The Arrangement".

ORGANIZATIONAL STRUCTURE OF THE TRUST

The following diagram describes the intercorporate relationships among the Trust
and its subsidiaries following completion of the Arrangement as well as the flow
of cash from the oil and gas properties held by such subsidiaries to the Trust,
and from the Trust to the Unitholders. Reference should be made to the
appropriate sections of this Annual Information Form for a complete description
of the structure of the Trust.

<PAGE>

                                      -6-


                               ------------------
                               | Unitholders(1) |
                               -----------------
                                        |
                                        |
                             Cash Distributions (2)
                                        |
                                        |
                                        /\
                                       /  \
                                      /    \
                                     /      \
                                    /        \
                                   /          \
                                  /  Vermilion \
                                 / Energy Trust \
           _________________\   /                \
           |                /  /__________________\
           |                      /_\           |
           |                       |            |
           |                       |            |
           |                cash flow (3)    investment (5)
           |                       |            |
           |                       |            |
           |                       |           /_\
           |                 ---------------------        -------------------
           |           _____ |     Vermilion     | ______ |    Exchangeable  |
           |          |      |   Resources Ltd.  |        |    Shareholders  |
           |          |      --------------------- \      -------------------|
           |          |       |               |     \
           |          |       |               |      \
  cash flow (4)       |       |               |       \
           |          |       |               |        \
           |          |       |               |         \
           |          |       |               |          \
           |          |       |               |           \
           |          |      100%            100%         72.2%
           |          |       |               |              \
           |          |       |               |               \
           |          |    ---------------  --------------   --------------
           |          |    |    764031   |  | Vermilion  |   |  Aventura   |
           |        95.32% | Alberta Ltd.|  |  REP S.A.  |   | Energy, Inc.|
           |          |    |  (Alberta)  |  |  (France)  |   |  (Alberta)  |
           |          |    --------------   --------------   --------------
           |          |      |
           |          |      |
           |          |   4.68%
           |          |      |
           |          |      |
           |    -------------------------
           |___ |  Vermilion Resources  |
                |     (Partnership)     |
                ------------------------


NOTES:
(1)      The holders of Units own 100% of the equity of the Trust.
(2)      Cash distributions are made to Unitholders monthly based on the Trust's
         cash flow.
(3)      Cash flow represents payments made by Vermilion to the Trust in respect
         of principal and interest payments on the Notes. In addition to such
         payments, dividends may also be paid on the common shares of Vermilion.
(4)      Cash flow represents payments made by the Partnership under the Royalty
         Agreement.
(5)      The Trust will invest funds raised through any subsequent issuance of
         Trust Units in additional securities of Vermilion to enable Vermilion
         to make capital expenditures. In addition, the Trust may reinvest a
         portion of the income received from Vermilion as well as any repayments
         of principal on the Notes in securities of Vermilion to enable
         Vermilion to make capital expenditures.

SUMMARY DESCRIPTION OF THE BUSINESS

VERMILION ENERGY TRUST

Vermilion Energy Trust was established to acquire and hold, directly and
indirectly, interests in petroleum and natural gas properties. Cash flow from
the properties is flowed from Vermilion to the Trust by way of interest payments
and principal repayments on the Notes and dividends declared on the common
shares of Vermilion, and

<PAGE>

                                      -7-


from the Partnership to the Trust by way of royalty payments under the Royalty
Agreement. Under the terms of the Trust Indenture, the Trust is also entitled
to:

         (a)      acquire or invest in securities of Vermilion and in the
                  securities of any other entity including without limitation,
                  bodies corporate, partnerships or trusts, and borrowing funds
                  or otherwise obtaining credit for that purpose;

         (b)      acquire royalties in respect of Canadian resource properties
                  as defined in the Tax Act and making any deferred royalty
                  purchase payments which may be required with respect to such
                  royalties; provided however that in no event shall the Trust
                  invest in any royalties which constitute an interest in land
                  or a covenant running with the properties with respect to
                  which such royalties relate;

         (c)      dispose of any part of the property of the Trust, including,
                  without limitation, any securities of Vermilion;

         (d)      temporarily hold cash and investments for the purposes of
                  paying the expenses and the liabilities of the Trust, making
                  other Permitted Investments as contemplated by the Trust
                  Indenture, paying amounts payable by the Trust in connection
                  with the redemption of any Trust Units, and making
                  distributions to Unitholders; and

         (e)      pay costs, fees and expenses associated with the foregoing
                  purposes or incidental thereto.

The Trustee is prohibited from acquiring any investment which (a) would result
in the cost amount to the Trust of all "foreign property" (as defined in the Tax
Act) which is held by the Trust to exceed the amount prescribed by section 5000
of the Tax Regulations or (b) would result in the Trust not being considered
either a "unit trust" or a "mutual fund trust" for purposes of the Tax Act.

The Trustee may declare payable to the Unitholders all or any part of the net
income of the Trust. It is currently anticipated that the only income to be
received by the Trust will be from the interest received on the principal amount
of Notes, royalty income pursuant to the Royalty Agreement, and dividends on the
common shares of Vermilion. The Trust will make monthly cash distributions to
Unitholders of the interest income earned from the Notes, income earned under
the Royalty Agreement and dividends received on the common shares of Vermilion,
after expenses, if any, and any cash redemptions of Trust Units.

VERMILION RESOURCES LTD.

Vermilion Resources Ltd. was incorporated under the ABCA on November 23, 1993.
On January 1, 2003, Vermilion amalgamated with its wholly-owned subsidiary,
973675 Alberta Ltd. and on January 15, 2003, Vermilion amalgamated with its
wholly-owned subsidiaries, Big Sky Resources Inc., Vermilion Gas Marketing Inc.
and 962134 Alberta Ltd. On January 22, 2003, Vermilion was amalgamated with
Vermilion Acquisition Ltd. pursuant to the Arrangement. Where the information in
this Annual Information Form is as of a date prior to January 22, 2003, the
terms "Vermilion" or "Vermilion Resources Ltd." shall refer to Vermilion
Resources Ltd. prior to its amalgamation with Vermilion Acquisition Ltd. under
the Arrangement.

The Trust is the sole common shareholder of Vermilion. Certain former
shareholders of Vermilion own Exchangeable Shares in accordance with the
elections made by such holders under the Arrangement. Vermilion continues to
carry on an oil and natural gas business similar to that carried on by Vermilion
prior to the Arrangement becoming effective. Vermilion owns, directly or
indirectly, all of the assets that were owned by Vermilion prior to the
Arrangement becoming effective, other than certain exploration assets that were
conveyed to Clear Energy Inc. under the Arrangement, and certain Trinidad assets
that were transferred to Aventura following the Arrangement becoming effective.
See "General Development of the Business of the Trust and Vermilion -
Significant Acquisitions and Significant Dispositions".

<PAGE>

                                      -8-


The head office of Vermilion is located at Suite 2800, 400 - 4th Avenue S.W.,
Calgary, Alberta, T2P 0J4 and its registered office is located at Suite 3700,
400 - 3rd Avenue S.W., Calgary, Alberta, T2P 4H2.

                     GENERAL DEVELOPMENT OF THE BUSINESS OF
                             THE TRUST AND VERMILION

HISTORY OF THE CORPORATION

The following describes the development of Vermilion's business over the last
three years.

On April 7, 2000, Vermilion purchased the majority non-operated working interest
in a light crude oil producing property operated by Vermilion at Utikuma. The
assets acquired consisted of 1,172 BOE/d of primarily light oil production,
15,158 net acres of land and an increased interest in three facilities,
including the main Utikuma oil battery operated by Vermilion.

On August 10, 2000, Vermilion closed the acquisition of Big Sky Resources Inc.,
a private company whose principal assets were natural gas producing properties,
for total consideration of $33.2 million, including $8.4 million of debt. The
acquisition gave the Corporation a new core property located in the Mastin Lake
area of Alberta and extended the core property of Utikuma.

On December 21, 2000, Vermilion closed a private placement issuing from treasury
500,000 flow-through common shares at $10.75 per flow through common share for
gross proceeds of $5,375,000. Vermilion renounced to the purchasers of the
flow-through common shares 100% of the subscription proceeds as Canadian
Exploration Expense. Proceeds from the issue were used to facilitate the
expansion of Vermilion's ongoing exploration activities.

On March 21, 2002, Vermilion closed the acquisition of Artemis Energy Limited, a
private company whose principal assets were natural gas producing properties,
for total consideration of $31 million, including $9.1 million of debt. The
acquisition gave Vermilion a new core property located in the Mikwan area of
Alberta.

On May 22, 2001, Vermilion increased its ownership in Aventura through
participation in a private placement of special warrants. In conjunction with
the private placement Vermilion also received finance options and finance
warrants.

On June 21, 2002, Vermilion signed an agreement to purchase a 40% participating
interest in, and operatorship of the Central Block onshore Trinidad, for total
consideration of $66.3 million, including $19 million of debt.

On October 17, 2002, Vermilion increased its ownership in Aventura through
participation in a private placement of common shares for an aggregate cost of
$6,000,000.

The concept of reorganizing Vermilion into two entities, one being a trust and
the other, an oil and gas exploration company, had been considered by the board
of directors of Vermilion in the past and was reviewed again at the board's
annual planning session in 2002. In 2000 and 2001, a large number of companies
similar in size to Vermilion were acquired or merged thus reducing the number of
oil and gas producers in Vermilion's peer group. Prior to and during this
period, oil and gas royalty trusts became increasingly popular, and along with
start-up companies with proven management teams, attracted significant amounts
of capital. These investment vehicles, together with other market factors,
resulted in investors seeking opportunities to invest in either very high growth
vehicles or vehicles which would provide an income stream and thereby reduce
perceived risk. Consequently, these investors demonstrated less interest in
companies such as Vermilion thus creating new market dynamics. The higher
relative valuations of these vehicles above other oil and gas producers, along
with slowing growth of Vermilion, led to the board's decision to review its
business plan. In conjunction with the contemplated reorganization, the concept
of moving Vermilion's Trinidad interest into Aventura was also reviewed as it
was felt that a single entity containing all of the Trinidad assets would be
more efficient and attain greater acceptance and recognition by the marketplace
with the Trust holding, indirectly, the majority of the shares.

<PAGE>

                                      -9-


After an extensive review of the current market conditions, trading levels of
what would be comparable oil and gas trusts, Vermilion's business prospects, the
suitability of Vermilion's assets for an oil and gas trust structure, and
Vermilion's requirements for future equity capital to fund its growth, as well
as many other factors, the board of directors concluded that the best
alternative available for maximizing shareholder value would be the
recommendation to divide Vermilion into an oil and gas trust and an exploration
company and move all of the Trinidad assets to Aventura.

On January 15, 2003 the shareholders of Vermilion approved the reorganization of
Vermilion by way of a plan of arrangement under the ABCA into Vermilion Energy
Trust and Clear Energy Inc., a publicly traded oil and gas exploration company.
The Arrangement, completed on January 22, 2003, resulted in former Vermilion
shareholders and optionholders owning all of the issued and outstanding common
shares of Clear Energy Inc. and all of the issued and outstanding Trust Units,
and the Trust owning all of the issued and outstanding common shares of
Vermilion. See "Significant Acquisitions and Significant Dispositions - The
Arrangement".

Following the completion of the Arrangement, Vermilion completed certain
transactions with Aventura pursuant to which Vermilion transferred all of its
Trinidad interests to Aventura in exchange for Aventura Shares, thereby
increasing Vermilion's ownership interest in Aventura to 72.4%. Vermilion also
acquired from Aventura a 25% gross overriding royalty which was held by Aventura
on certain of Vermilion's non-operated interests and properties located in
Bottrel, Alberta for cash consideration of $6,312,000. See "Significant
Acquisitions and Significant Dispositions - Transactions with Aventura Energy
Inc."

SIGNIFICANT ACQUISITIONS AND SIGNIFICANT DISPOSITIONS

THE ARRANGEMENT

Under the terms of the Arrangement, Vermilion was reorganized into the Trust and
Clear Energy Inc., which resulted in certain oil and gas exploration assets
being transferred to Clear Energy Inc. These assets included oil and gas
properties in the Peace River Arch area of Alberta which produced approximately
1,610 BOE/D, together with certain undeveloped landholdings in the southern
foothills region of Alberta and in Saskatchewan.

Pursuant to the Arrangement, the outstanding common shares and options of
Vermilion were exchanged for an aggregate of 51,480,467 Trust Units. Also, as
part of the Arrangement, Vermilion issued an aggregate of 6,000,000 Exchangeable
Shares to former holders of common shares in accordance with elections made by
such holders under the Arrangement. Each Exchangeable Share is exchangeable into
Trust Units at any time. Upon completion of the Arrangement, the Trust held all
of the issued and outstanding Notes of Vermilion.

As holders of Trust Units after the Arrangement, Unitholders receive monthly
distributions of the cash flow generated by Vermilion and distributed to
Unitholders through the Trust. The Trust will employ a strategy to provide
Unitholders with a competitive annual cash on cash yield by making monthly cash
distributions to such Unitholders, ensure that Vermilion's existing assets are
maintained at a level that ensures ongoing cash flow is sustained, and continue
to expand the business of the Trust through the development of growth
opportunities that will provide long-term stable cash flows and be accretive to
the existing Unitholders. The Trust intends to finance acquisitions through bank
financing and the issuance of additional Trust Units from treasury, maintaining
prudent leverage.

The Trust will make cash distributions to holders of Trust Units from the
interest income received from Vermilion and from royalties received under the
Royalty Agreement, net of administrative expenses. In addition, Unitholders may,
at the discretion of the board of directors of Vermilion, receive distributions
in respect of prepayments of principal on the Notes made by Vermilion to the
Trust before the maturity of the Notes, and in respect of dividends on the
common shares of Vermilion.

TRANSACTIONS WITH AVENTURA ENERGY INC.

In conjunction with the Arrangement, Vermilion entered into an agreement with
Aventura whereby Vermilion agreed to complete the following transactions with
Aventura (the "Aventura Transactions"):

<PAGE>

                                      -10-


         (a)      the acquisition by Aventura of all the outstanding common
                  shares of Vermilion (Barbados) Ltd., a subsidiary of Vermilion
                  for consideration consisting of an aggregate of 212,059,512
                  Aventura Shares, at a price of $0.35 per Aventura Share, for
                  aggregate consideration of $74,220,829; and

         (b)      the acquisition by Vermilion from Aventura of a 25% gross
                  overriding royalty currently held by Aventura on certain of
                  Vermilion's non-operated interests and properties located in
                  Bottrel, Alberta for cash consideration of $6,312,000.

The Aventura Transactions were completed on January 22, 2003. As a result of the
completion of the Aventura Transactions, Vermilion increased its ownership
interest in Aventura to 322,715,899 Aventura Shares representing 72.4% of the
issued and outstanding Aventura Shares. In March 2003, Aventura completed a
consolidation of its issued and outstanding common shares on the basis of one
new common share for each ten common shares issued and outstanding. As a result,
Vermilion's 72.4% ownership interest in Aventura has been consolidated into
32,271,590 common shares. In addition, Aventura's common shares commenced
trading on the TSX in March 2003 under the symbol AVR.

                      NARRATIVE DESCRIPTION OF THE BUSINESS

STATED BUSINESS OBJECTIVES

Vermilion is actively engaged in the business of oil and natural gas
exploitation, development, acquisition and production in Canada, France and
Trinidad. Vermilion's business plan is to maximize returns to the Trust from its
oil and natural gas properties and related assets. Where possible, Vermilion
will seek to expand its reserve base through the selective addition of
high-quality, long-life reserves with low risk development opportunities.

In reviewing potential participations or acquisitions, Vermilion will rely on a
number of factors, including: (a) the present value of the future revenue from
such properties from the proved producing, total proved and established
reserves; (b) the amount of potential for additional reservoir development; (c)
whether sufficient infrastructure exists in the prospect to provide for
increased activity; (d) the cost of any potential development; (e) investments
in properties that exhibit medium to long life reserves and stable production
base; and (f) the ability of Vermilion to enhance the value of acquired
properties through additional exploitation efforts and additional development
drilling. The board of directors of Vermilion may, in its discretion, approve
asset or corporate acquisitions or investments that do not conform to these
guidelines based upon the board's consideration of the qualitative aspects of
the subject properties including risk profile, technical upside, reserve life
and asset quality.

DESCRIPTION OF PROPERTIES

The following is a description of the oil and natural gas properties, plants,
facilities and installations in which Vermilion has an interest and that are
material to Vermilion's operations and exploration activities. The production
numbers stated refer to Vermilion's working interest share before deduction of
Crown, freehold and other royalties. Reserve amounts are stated, before
deduction of royalties, at January 1, 2003, based on escalating cost and price
assumptions as evaluated in the GLJ Report. See "Narrative Description of the
Business - Petroleum and Natural Gas Reserves".

CANADA ASSETS

CHIP LAKE, ALBERTA (DRAYTON VALLEY)

Vermilion's main producing area is located in the Chip Lake area which is
approximately 70 kilometres northwest of Drayton Valley, Alberta.

Vermilion holds an average working interest of 74.4% in 98,240 (73,116 net)
acres of developed land, 131 (98.6 net) producing natural gas wells and 94 (59.2
net) producing oil wells at December 31, 2002. Vermilion operates two natural
gas plants and has an ownership interest in a third, resulting in combined gross
processing capacity of over 75 Mmcf/d. In addition, Vermilion has treating
capacity of over 5,000 Bbls/d of oil in three oil batteries.

<PAGE>

                                      -11-


For the year ended December 31, 2002, production from the Chip Lake area
averaged 32.0 Mmcf/d of natural gas and 2,701 Bbls/d of oil and NGLs.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 23,398 MBOE of total proven reserves and 28,750 MBOE
of established reserves.

UTIKUMA, ALBERTA (SLAVE LAKE)

Vermilion's main oil producing area is located in the Utikuma area which is
approximately 85 kilometres northwest of Slave Lake, Alberta.

Vermilion holds an average working interest of 72.1% in 37,280 (26,870 net)
acres of developed land, 173 (126.7 net) producing oil wells and four (4.0 net)
producing gas wells at December 31, 2002. Vermilion operates a treating facility
with capacity of over 8,000 Bbls/d of oil.

For the year ended December 31, 2002, production from the Utikuma area averaged
3,822 Bbls/d of oil and NGLs and 0.9 Mmcf/d of natural gas.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 11,228 MBOE of total proven reserves and 12,973 MBOE
of established reserves.

MASTIN LAKE, ALBERTA (ATHABASCA)

The Mastin Lake area is approximately 100 kilometres northeast of Edmonton,
Alberta and consists mainly of natural gas production. Vermilion initially
acquired its interest in the Mastin Lake area through the acquisition of Big Sky
Resources Inc. on August 10, 2000.

Vermilion holds an average working interest of 61.1% in 60,800 (42,025 net)
acres of developed land, 96 (77.0 net) producing gas wells and two (1.0 net)
producing oil wells at December 31, 2002.

For the year ended December 31, 2002, production from the Mastin Lake area
averaged 7.7 Mmcf/d of natural gas.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 1,729 MBOE of total proven reserves and 2,441 MBOE
of established reserves.

SOUTHERN FOOTHILLS, ALBERTA

The Southern Foothills area, located just west of Calgary is primarily a
non-operated project area.

Vermilion holds an average working interest of 28.5% in 16,485 (4,705 net) acres
of developed land, 29 (8.4 net) producing gas wells and three (3.0 net)
producing oil wells at December 31, 2002.

For the year ended December 31, 2002, Vermilion's production from the Southern
Foothills area averaged 5.1 Mmcf/d of natural gas and 305 Bbls/d of oil and
NGLs.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 2,010 MBOE of total proven reserves and 2,524 MBOE
of established reserves.

MIKWAN, ALBERTA (CENTRAL ALBERTA)

The Mikwan area, located east of Red Deer, Alberta consists mainly of natural
gas production. Vermilion initially acquired its interest in this area through
the acquisition of Artemis Energy Limited on March 21, 2002.

Vermilion holds an average working interest of 73.9% in 39,410 (29,128 net)
acres of developed land, 61 (41.3 net) producing gas wells and four (2.4 net)
producing oil wells at December 31, 2002.

<PAGE>

                                      -12-


For the year ended December 31, 2002, production from the Mikwan area averaged
7.2 Mmcf/d of natural gas and 140 Bbls/d of oil and NGLs.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 3,086 MBOE of total proven reserves and 3,590 MBOE
of established reserves.

PEACE RIVER, ALBERTA

The Peace River area, located southwest of Peace River, Alberta, consists mainly
of natural gas and associated natural gas liquids production.

Vermilion holds an average working interest of 63.1% in 7,680 (4,842 net) acres
of developed land, six (4.4 net) producing gas wells and one (0.1 net) producing
oil wells at December 31, 2002.

For the year ended December 31, 2002, production from the Peace River area
averaged 16.6 Mmcf/d of natural gas and 701 Bbls/d of NGLs.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 1,890 MBOE of total proven reserves and 2,177 MBOE
of established reserves.

FRANCE ASSETS

AQUITAINE BASIN

Vermilion's main producing area in France is located in the Aquitaine Basin
which is southwest of Bordeaux, France.

Vermilion holds a 100% working interest in 25,120 acres of developed land and 73
(73.0 net) producing oil wells at December 31, 2002.

For the year ended December 31, 2002, Vermilion's production from the Aquitaine
Basin averaged 3,354 Bbls/d of oil.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 18,861 MBOE of total proven reserves and 23,234 MBOE
of established reserves.

PARIS BASIN

The Paris Basin, located just east of Paris, France is primarily an oil
producing area. The area contains five producing fields and one main oil battery
at Vaudoy.

Vermilion holds a 100% working interest in 12,735 acres of developed land and 32
(32.0) net producing oil wells at December 31, 2002. Vermilion purchased
approximately 1,000 Bbls/d of production in 1997 and drilling activity over the
last five years has brought production to its current levels.

For the year ended December 31, 2002, production from the Paris Basin averaged
2,446 Bbls/d of oil.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 8,324 MBOE of total proven reserves and 10,670 MBOE
of established reserves.

OTHER FRANCE

The South Aquitaine area is the only non-operated producing property that
Vermilion holds in France.

<PAGE>

                                      -13-


Vermilion holds an average working interest of 30.2% in 8,320 (2,512 net) acres
of developed land, and 21 (5.7 net) producing oil wells at December 31, 2002.

For the year ended December 31, 2002, production from South Aquitaine area
averaged 253 Bbls/d of oil and 1.3 Mmcf/d of natural gas.

The GLJ Report indicates that Vermilion's interest in these properties at
January 1, 2003 consists of 1,893 MBOE of total proven reserves and 2,196 MBOE
of established reserves.

TRINIDAD

AVENTURA TRANSACTION

As part of the reorganization of Vermilion, separate from the Arrangement,
Vermilion's 40% working interest in the Central Block in Trinidad was acquired
by Aventura. As a result of the completion of this transaction, Vermilion owns
72.4% of the outstanding Aventura Shares. The purpose of this transaction was to
consolidate the Trinidad property working interest into one international entity
and allow for further maturity of these growth assets to be fully realized by
unitholders. All capital expenditures commitments are held by Aventura with no
funding obligations remaining with Vermilion.

The Trinidad assets are contained in the Central Block onshore permit where
Petroleum Company of Trinidad Tobago Limited ("Petrotrin") (Trinidad's
government oil and gas operating corporation) has a 35% working interest
alongside the combined 65% working interest of Vermilion and Aventura. A natural
gas discovery well was drilled in April 2001 and completed in October 2001
(Carapal Ridge - 1) testing the Karamat and Herrera formations. The well tested
five representative intervals and no hydrocarbon water contact existed.
Construction work was completed on a 12-kilometer 10 inch natural gas pipeline
for a six month production test for Carapal Ridge - 1 during December 2002 and
initial production from the well began December 12, 2002 at a rate of 20 mmcf/d.
In 2003, the Petrotrin/Aventura joint venture selected two Central Block
exploration well locations targeting the middle Miocene Herrera formation, one
on the southwestern extension of the Carapal Ridge feature and the other on the
CO40 prospect. Plans are to complete the two well drilling program by the second
quarter of 2003. To date, Aventura has identified six separate prospects on the
Central Block and has plans for a 3D seismic program in 2003 to assist in
identifying future drilling potential.

GENERAL DEVELOPMENT OF THE BUSINESS OF AVENTURA

Aventura is an internationally focused public energy company engaged in the
exploration, development and production of oil and gas. Aventura's asset
portfolio includes interests in an exploration block in Trinidad, two
exploration blocks and two exploitation/exploration blocks in Argentina and oil
production from the Weyburn area in Saskatchewan and gas override in the Bottrel
area of Alberta. In 2002, Aventura averaged 258 BOE/D in Canada and 15 BOE/D in
Argentina. For the short production period in December 2002, the average
production from Aventura's 25% working interest in Trinidad was approximately
400 BOE/D. In January 2003, Aventura sold all of its Canadian operations to
focus on international opportunities. Aventura continues to actively seek
additional opportunities in Trinidad.

         TRINIDAD - CENTRAL BLOCK

The Central Block is a highly prospective exploration block covering 111 square
kilometres in the centre of the onshore Trinidad Southern basin. During 2000, 75
square kilometres of 3D seismic covering the central and eastern portion of the
block was acquired and processed. On the basis of this seismic, 2D seismic
acquired by Exxon in the early 1990's, surface geochemistry and an integrated
geological/geophysical interpretation, two drilling locations were selected by
the operator, Carapal Ridge-1 and Corosan-1.

Carapal Ridge-1 was spudded on April 8, 2001 with operations completed,
following an extensive testing program, on October 17, 2001, at a gross cost of
US $6.1 million. The well was completed with 534 feet of perforations within the
937 foot hydrocarbon column, large diameter tubing was installed, and is
currently being produced into a

<PAGE>

                                      -14-


recently completed 10" pipeline to Petrotrin facilities. Corosan-1 was spudded
on June 15, 2001 with testing operations completed on November 18, 2001, at a
gross cost of US $4.5 million. The well has been suspended for completion at a
later date.

PETROLEUM AND NATURAL GAS RESERVES

The following tables, based on the GLJ Report, summarize the oil, NGLs and
natural gas reserves attributable to the oil and natural gas properties of
Vermilion and the present value of future net revenue for such reserves using
escalated and constant price assumptions and costs as indicated. No estimate of
salvage and abandonment costs was included in the GLJ Report.

ALL EVALUATIONS OF FUTURE NET PRODUCTION REVENUE SET FORTH IN THE TABLES BELOW
ARE STATED PRIOR TO THE PROVISION FOR INCOME TAXES, BUT AFTER OVERRIDING AND
LESSOR ROYALTIES, CROWN ROYALTIES, FREEHOLD ROYALTIES, MINERAL TAXES, DIRECT
LIFTING COSTS, NORMAL ALLOCATED OVERHEAD AND FUTURE CAPITAL INVESTMENTS. IT
SHOULD NOT BE ASSUMED THAT THE DISCOUNTED FUTURE NET PRODUCTION REVENUE
ESTIMATED BY THE GLJ REPORT REPRESENTS THE FAIR MARKET VALUE OF THE RESERVES.
OTHER ASSUMPTIONS RELATING TO THE COSTS, PRICES FOR FUTURE PRODUCTION AND OTHER
MATTERS ARE INCLUDED IN THE GLJ REPORT. THERE IS NO ASSURANCE THAT THE FUTURE
PRICE AND COST ASSUMPTIONS USED IN THE GLJ REPORT WILL PROVE ACCURATE AND
VARIANCES COULD BE MATERIAL.

RESERVES FOR CANADA AND FRANCE ARE ESTABLISHED USING DETERMINISTIC METHODOLOGY
WITH RISKED PROBABLE RESERVES ASSUMED TO BE ONE-HALF OF THE PROBABLE RESERVES.
RESERVES FOR TRINIDAD ARE DETERMINED BY PROBABILISTIC METHODOLOGY DUE TO THE
RESERVE SIZE AND DATA AVAILABLE. TOTAL PROVED PLUS PROBABLE RESERVES ARE
ESTABLISHED AT THE 50 PERCENT PROBABILITY (P50) LEVEL. THERE IS A 50 PERCENT
PROBABILITY THAT THE ACTUAL RESERVES RECOVERED WILL BE EQUAL TO OR GREATER THAN
THE P50 RESERVES. AS DEFINED, THESE P50 RESERVES ARE RISKED AND NO ADJUSTMENT IS
MADE BETWEEN THE PROVED PLUS PROBABLE AND THE PROVED PLUS RISKED PROBABLE
RESERVES.

<TABLE>
<CAPTION>
                                                SUMMARY OF RESERVES - CORPORATE
                                                       JANUARY 1, 2003
                                            (BASED ON ESCALATING PRICE ASSUMPTIONS)(9)


                                                                                                CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                     DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1)  NET(2)  UNDISC.      YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- -------  ---------    ----       ----      ----
<S>                             <C>      <C>     <C>       <C>        <C>      <C>    <C>        <C>         <C>       <C>
Proved Producing                36,244   30,604  235,833   194,910    8,845    6,920  1,095,321    660,708   615,485   560,077
Proved Nonproducing              5,941    4,627   37,721    30,757    1,389      978    190,883     96,010    85,890    73,383
                                ------   ------  -------   -------   ------   ------  ---------  ---------   -------   -------
Total Proved                    42,185   35,231  273,554   225,667   10,234    7,898  1,286,204    756,718   701,375   633,460
Probable                        17,954   15,128  238,763   203,574    8,819    7,251    908,837    335,062   289,206   236,718
                                ------   ------  -------   -------   ------   ------  ---------  ---------   -------   -------
Total Proved Plus Probable      60,139   50,359  512,317   429,241   19,053   15,149  2,195,041  1,091,780   990,581   870,178
Less: Risked Probable            8,977    7,564   35,157    27,695    1,298      889    248,476     85,629    74,024    60,889
                                ------   ------  -------   -------   ------   ------  ---------  ---------   -------   -------
Proved Plus Risked Probable(8)  51,162   42,795  477,160   401,546   17,755   14,260  1,946,565  1,006,151   916,557   809,289
                                ======   ======  =======   =======   ======   ======  =========  =========   =======   =======
Less: Non Controlling Interest       0        0   59,551    52,401    2,191    1,928    134,415     57,324    49,988    41,402
Proved Plus Risked Probables    51,162   42,795  417,609   349,145   15,564   12,332  1,812,150    948,827   866,569   767,887
                                ======   ======  =======   =======   ======   ======  =========  =========   =======   =======
</TABLE>

<PAGE>

                                      -15-


<TABLE>
<CAPTION>
                                                  SUMMARY OF RESERVES - CANADA
                                                         JANUARY 1, 2003
                                           (BASED ON ESCALATING PRICE ASSUMPTIONS)(9)


                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1)  NET(2)  UNDISC.      YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- -------  -------      ----       ----      ----
<S>                             <C>      <C>     <C>       <C>        <C>      <C>    <C>        <C>        <C>        <C>
Proved Producing                13,143   11,530  109,680    84,229    4,238   2,863   620,979    399,612    376,434    347,675
Proved Nonproducing                588      515   34,220    27,714    1,389     978   106,919     59,689     54,265     47,443
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Total Proved                    13,731   12,045  143,900   111,943    5,627   3,841   727,898    459,301    430,699    395,118
Probable                         4,113    3,672   69,100    54,451    2,597   1,779   325,358    116,004    101,806     85,875
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Total Proved Plus Probable      17,844   15,717  213,000   166,394    8,224   5,620 1,053,256    575,305    532,505    480,993
Less: 50% Probable               2,056    1,836   34,550    27,225    1,298     889   159,777     57,655     50,643     42,754
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Proved Plus Risked Probable(8)  15,788   13,881  178,450   139,169    6,926   4,731   893,479    517,650    481,862    438,239
                                ======   ======  =======   =======    =====   ===== =========    =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                SUMMARY OF RESERVES - FRANCE
                                                      JANUARY 1, 2003
                                           (BASED ON ESCALATING PRICE ASSUMPTIONS)(9)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                               ------------------------------------------------------ ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                               ----------------   ----------------    --------------- ----------------------------------------
DESCRIPTION                    GROSS(1)  NET(2)   GROSS(1)  NET(2)    GROSS(1) NET(2)  UNDISC.     10%        12%        15%
- -----------                    -------- -------   -------  -------    -------- ------ -------      ---        ---        ---
<S>                             <C>      <C>       <C>       <C>       <C>      <C>   <C>        <C>        <C>        <C>
Proved Producing                23,101   19,074    3,743     2,893        0       0   219,360    143,316    134,926    124,469
Proved Nonproducing              5,353    4,112        0         0        0       0    80,616     33,859     29,299     23,799
                                ------   ------    -----     -----     -----    ----  -------    -------    -------    -------
Total Proved                    28,454   23,186    3,743     2,893        -       -   299,976    177,175    164,225    148,268
Probable                        13,841   11,456    1,215       939        0       0   177,398     55,949     46,763     36,270
                                ------   ------    -----     -----     -----    ----  -------    -------    -------    -------
Total Proved Plus Probable      42,295   34,642    4,958     3,832        0       0   477,374    233,124    210,988    184,538
Less: 50% Probable               6,920    5,728      607       469        0       0    88,699     27,974     23,381     18,135
                                ------   ------    -----     -----     -----    ----  -------    -------    -------    -------
Proved Plus Risked Probable(8)  35,375   28,914    4,351     3,363        0       0   388,675    205,150    187,607    166,403
                                ======   ======    =====     =====     =====    ====  =======    =======    =======    =======
</TABLE>

<PAGE>

                                      -16-


<TABLE>
<CAPTION>
                                              SUMMARY OF RESERVES - TRINIDAD (65%)
                                                      JANUARY 1, 2003
                                           (BASED ON ESCALATING PRICE ASSUMPTIONS)(9)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1)  NET(2)  UNDISC.      YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- -------  -------      ----       ----      ----
<S>                             <C>      <C>     <C>       <C>       <C>      <C>     <C>        <C>        <C>        <C>
Proved Producing                     0        0  122,410   107,788    4,607   4,057   254,982    117,780    104,125     87,933
Proved Nonproducing                  0        0    3,501     3,043        0       0     3,348      2,462      2,326      2,141
                              --------  -------  -------   -------   ------   -----   -------    -------    -------    -------
Total Proved                         0        0  125,911   110,831    4,607   4,057   258,330    120,242    106,451     90,074
Risked Probable                      0        0  168,448   148,184    6,222   5,472   406,081    163,109    140,637    114,573
                              --------  -------  -------   -------   ------   -----   -------    -------    -------    -------
Proved Plus Risked Probable(8)       0        0  294,359   259,015   10,829   9,529   664,411    283,351    247,088    204,647
                              ========  =======  =======   =======   ======   =====   =======    =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                 SUMMARY OF RESERVES - CORPORATE
                                                          JANUARY 1, 2003
                                             (BASED ON CONSTANT PRICE ASSUMPTIONS)(10)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1)  NET(2)  UNDISC.      YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- -------  -------      ----       ----      ----
<S>                            <C>      <C>     <C>       <C>       <C>      <C>     <C>       <C>        <C>        <C>
Proved Producing               37,112   31,149  236,188   194,864    8,860    6,897  1,810,879 1,021,291    944,609    851,616
Proved Nonproducing             5,956    4,593   38,095    30,797    1,407      971   313,545    169,667    153,931    134,368
                               ------   ------  -------   -------   ------   ------  --------- ---------  ---------  ---------
Total Proved                   43,068   35,742  274,283   225,661   10,267    7,868  2,124,424 1,190,958  1,098,540    985,984
Probable                       18,085   15,173  238,637   203,354    8,810    7,231  1,282,572   490,306    426,920    353,903
                               ------   ------  -------   -------   ------   ------  --------- ---------  ---------  ---------
Total Proved Plus Probable     61,153   50,915  512,920   429,015   19,077   15,099  3,406,996 1,681,264  1,525,460  1,339,887
Less:  Risked Probable          9,042    7,586   35,094    27,597    1,294      879   406,630    150,478    131,707    110,206
                               ------   ------  -------   -------   ------   ------  --------- ---------  ---------  ---------
Proved Plus Risked Probable(8) 52,111   43,329  477,826   401,418   17,783   14,220  3,000,366 1,530,786  1,393,753  1,229,681
                               ======   ======  =======   =======   ======   ======  ========= =========  =========  =========
Less: Non Controlling Interest      0        0   59,551    52,336    2,191    1,926    154,857    67,009     58,575     48,675
Proved Plus Risked Probable    52,111   43,329  418,275   349,082   15,592   12,294  2,845,509 1,463,777  1,335,178  1,181,006
                               ======   ======  =======   =======   ======   ======  ========= =========  =========  =========
</TABLE>

<PAGE>

                                      -17-


<TABLE>
<CAPTION>
                                                 SUMMARY OF RESERVES - CANADA
                                                        JANUARY 1, 2003
                                             (BASED ON CONSTANT PRICE ASSUMPTIONS)(10)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1) NET(2)  UNDISC.       YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- ------ ---------      ----       ----      ----
<S>                             <C>      <C>     <C>       <C>        <C>     <C>    <C>         <C>        <C>        <C>
Proved Producing                13,331   11,510  110,035    84,471    4,253   2,851   947,688    584,331    546,810    500,480
Proved Nonproducing                592      510   34,594    27,762    1,407     971   164,712     95,533     87,513     77,404
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Total Proved                    13,923   12,020  144,629   112,233    5,660   3,822 1,112,400    679,864    634,323    577,884
Probable                         4,151    3,639   68,974    54,256    2,588   1,759   455,545    166,411    146,235    123,454
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Total Proved Plus Probable      18,074   15,659  213,603   166,489    8,248   5,581 1,567,945    846,275    780,558    701,338
Less:  50% Probable              2,075    1,819   34,487    27,128    1,294     879   225,186     82,910     72,895     61,568
                                ------   ------  -------   -------    -----   ----- ---------    -------    -------    -------
Proved Plus Risked Probable(8)  15,999   13,840  179,116   139,361    6,954   4,702 1,342,759    763,365    707,663    639,770
                                ======   ======  =======   =======    =====   ===== =========    =======    =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                   SUMMARY OF RESERVES - FRANCE
                                                         JANUARY 1, 2003
                                             (BASED ON CONSTANT PRICE ASSUMPTIONS)(10)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1) NET(2)    UNDISC.     YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- ------  ---------     ----       ----      ----
<S>                             <C>      <C>       <C>      <C>         <C>     <C>  <C>         <C>        <C>        <C>
Proved Producing                23,781   19,639    3,743    2,893        0        0    564,997   296,801    273,509    245,724
Proved Nonproducing              5,364    4,083        0        0        0        0    145,715    71,828     64,237     54,952
                                ------   ------   ------   ------    -----    -----  ---------   -------    -------    -------
Total Proved                    29,145   23,722    3,743    2,893        0        0    710,712   368,629    337,746    300,676
Probable                        13,934   11,534    1,215      939        0        0    362,888   135,136    117,623     97,275
                                ------   ------   ------   ------    -----    -----  ---------   -------    -------    -------
Total Proved Plus Probable      43,079   35,256    4,958    3,832        0        0  1,073,600   503,765    455,369    397,951
Less:  50% Probable              6,967    5,767      607      469        0        0    181,444    67,568     58,811     48,637
                                ------   ------   ------   ------    -----    -----  ---------   -------    -------    -------
Proved Plus Risked Probable(8)  36,112   29,489    4,351    3,363        0        0    892,156   436,197    396,558    349,314
                                ======   ======   ======   ======    =====    =====  =========   =======    =======    =======
</TABLE>

<PAGE>

                                      -18-


<TABLE>
<CAPTION>
                                               SUMMARY OF RESERVES - TRINIDAD (65%)
                                                          JANUARY 1, 2003
                                             (BASED ON CONSTANT PRICE ASSUMPTIONS)(10)

                                                                                               CUMULATIVE CASH FLOW
                                            WORKING INTEREST RESERVES                                 ($000s)
                              ------------------------------------------------------  ----------------------------------------
                                     OIL               GAS               NGLS
                                    MBBLS              MMCF              MBBLS                    DISCOUNTED AT:
                              -----------------  -----------------  ----------------  ----------------------------------------
                                                                                                   10%/       12%/      15%/
DESCRIPTION                   GROSS(1)   NET(2)  GROSS(1)   NET(2)  GROSS(1) NET(2)    UNDISC.     YEAR       YEAR      YEAR
- -----------                   --------  -------  --------  -------  -------- ------  ---------     ----       ----      ----
<S>                             <C>      <C>     <C>       <C>       <C>     <C>       <C>       <C>       <C>      <C>
Proved Producing                     0        0  122,410   107,500    4,607   4,046    298,194   140,159   124,290  105,412
Proved Nonproducing                  0        0    3,501     3,035        0       0      3,118     2,306     2,181    2,012
                                ------   ------  -------   -------   ------   -----    -------   -------   -------  -------
Total Proved                         0        0  125,911   110,535    4,607   4,046    301,312   142,465   126,471  107,424
Risked Probable                      0        0  168,448   148,159    6,222   5,472    464,139   188,759   163,062  133,174
                                ------   ------  -------   -------   ------   -----    -------   -------   -------  -------
Proved Plus Risked Probable(8)       0        0  294,359   258,694   10,829   9,518    765,451   331,224   289,533  240,598
                                ======   ======  =======   =======   ======   =====    =======   =======   =======  =======
</TABLE>


NOTES:
(1)      "Gross" reserves are defined as the total remaining recoverable
         reserves owned, directly and indirectly, by Vermilion before deduction
         of any royalties.
(2)      "Net" reserves are defined as those accruing, directly and indirectly,
         to Vermilion after Crown and freehold royalties have been deducted.
(3)      "Proved" reserves are those reserves estimated as recoverable with a
         high degree of certainty under current technology and existing economic
         conditions in the case of constant price and cost analyses and
         anticipated economic conditions in the case of escalated price and cost
         analyses, from that portion of a reservoir which can be reasonably
         evaluated as economically productive on the basis of analysis of
         drilling, geological, geophysical and engineering data, including the
         reserves to be obtained by enhanced recovery processes demonstrated to
         be economic and technically successful in the subject reservoir.
(4)      "Proved Producing" reserves are those Proved reserves that are actually
         on production and could be recovered from existing wells or facilities
         or, if facilities have not been installed, that would involve a small
         investment relative to cash flow. In multi-well pools involving a
         competitive situation, reserves may be subdivided into producing and
         non-producing reserves in order to reflect allocation of reserves to
         specific wells and their respective development status.
(5)      "Proved Non-Producing" reserves are those proved reserves that are not
         classified as producing. (6) "Proved Undeveloped" reserves are those
         proved reserves which are expected to be recovered from new
         wells on undrilled acreage, or from existing wells where a relatively
         major expenditure is required for recompletion. Reserves on undrilled
         acreage shall be limited to those drilling units offsetting productive
         units, which are reasonably certain of production when drilled. Proved
         reserves for other undrilled units can be claimed only where it can be
         demonstrated with certainty that there is continuity of production from
         the existing productive formation.
(7)      "Probable" reserves are those reserves which analysis of drilling,
         geological, geophysical and engineering data does not demonstrate to be
         proved, but where such analysis suggests the likelihood of their
         existence and future recovery under current technology and existing or
         anticipated economic conditions. Probable additional reserves to be
         obtained by the application of enhanced recovery processes will be the
         increased recovery over and above that estimated in the proved category
         which can be realistically estimated for the pool on the basis of
         enhanced recovery process which can be reasonably expected to be
         instituted in the future.
(8)      "Proved Plus Risked Probable" reserves are the sum of the total proved
         reserves and the risk adjusted probable reserves. Reserves for Canada
         and France are established using deterministic methodology with risked
         probable reserves assumed to be one-half of the probable reserves.
         Reserves for Trinidad are determined by probabilistic methodology due
         to the reserve size and data available. Total Proved Plus Probable
         reserves are established at the 50 percent probability (P50) level.
         There is a 50 percent probability that the actual reserves recovered
         will be equal to or greater than the P50 reserves. As defined, these
         (P50) reserves are risked and no adjustment is made between the Proved
         Plus Probable and the Proved Plus Risked Probable reserves.
(9)      The escalating cost and price assumptions assume the continuance of
         current laws and regulations and increases in wellhead selling prices,
         and take into account inflation with respect to future operating
         capital costs. In the GLJ Report operating costs are assumed to
         escalate at 1.5% per annum. Crude oil and natural gas base case prices
         as forecast by GLJ effective January 1, 2003 are as follows:


<PAGE>

                                      -19-


<TABLE>
<CAPTION>
                                                         GLJ REPORT
                                                    ESCALATING PRICE FORECAST
                                                    EFFECTIVE JANUARY 1, 2003


                                                                ALBERTA NATURAL GAS LIQUIDS
                                                        -------------------------------------------     ALBERTA
                                                                                           EDMONTON      PLANT
           EXCHANGE                                       SPEC     EDMONTON    EDMONTON    PENTANES      GATE       AECO-C
             RATE      WTI(1)   PAR PRICE(2)   BRENT     ETHANE     PROPANE     BUTANE       PLUS       GAS(3)      SPOT(4)
   YEAR    $US/$CDN    $US/BBL    $CDN/BBL    $US/BBL   $CDN/BBL   $CDN/BBL    $CDN/BBL    $CDN/BBL     $/MMBTU     $/MMBTU
   ----    --------    -------    --------    -------   --------   --------    --------    --------     -------     -------
   <S>       <C>        <C>         <C>        <C>        <C>        <C>        <C>         <C>          <C>         <C>
   2003      0.650      25.50       38.50      24.00      18.75      24.75      27.25       39.50        5.65        5.40
   2004      0.660      22.00       32.50      20.50      16.75      19.75      21.50       33.00        5.00        4.80
   2005      0.670      21.00       30.50      19.50      15.75      19.50      20.50       31.00        4.70        4.50
   2006      0.670      21.00       30.50      19.50      16.25      19.50      20.50       31.00        4.85        4.65
   2007      0.680      21.25       30.50      19.75      16.25      19.50      20.50       31.00        4.85        4.65
   2008      0.680      21.75       31.00      20.25      16.25      19.75      21.00       31.50        4.85        4.65
   2009      0.680      22.00       31.50      20.50      16.25      20.25      21.50       32.00        4.85        4.65
   2010      0.680      22.25       32.00      20.75      16.25      20.50      22.00       32.50        4.90        4.70
   2011      0.680      22.50       32.50      21.00      16.50      20.75      22.50       33.00        4.95        4.75
   2012      0.680      23.00       33.00      21.50      17.00      21.00      23.00       33.50        5.05        4.85
   2013      0.680      23.25       33.50      21.75      17.00      21.50      23.50       34.00        5.10        4.90
  2014+      0.680    +1.5%/yr    +1.5%/yr    +1.5%/yr  +1.5%/yr   +1.5%/yr    +1.5%/yr    +1.5%/yr    1.5% /yr.   1.5%/yr.
</TABLE>

         NOTES:

         (1)   West Texas Intermediate Crude Oil landed at Cushing, Oklahoma.
         (2)   Equivalent price for Light Sweet Crude Oil (40(degree) API,
               0.3%S) at Edmonton, Alberta.
         (3)   Gas reference price represents the average of all system and
               direct (spot and firm) sales. The plant gate price represents the
               price before raw gas gathering and processing charges are
               deducted.
         (4)   Weighted average one month price.

(10)     Product prices used in the constant price evaluation were based on
         GLJ's constant price forecast, being Cdn. $49.29/Bbl for oil and
         $6.02/mcf for AECO-C natural gas, France Brent of US$ 30.21/bbl and
         Trinidad US$21.75/bbl and US$1.05/mcf. The constant price assumptions
         assume the continuance of current laws, regulations and operating costs
         in effect on the date of the GLJ Report. Product prices were not
         escalated beyond 2002. In addition, operating and capital costs have
         not been increased on an inflationary basis.
(11)     82% of Vermilion's total Proved reserves, excluding Trinidad, are
         currently on production.
(12)     The GLJ Report estimates the future capital expenditures necessary to
         achieve the estimated present worth of future net cash flows based on
         escalating costs from Proved and Probable Reserves to be an aggregate
         of $231.1 million, of which $75.4 million is to be expended in 2003 and
         $37.9 million is to be expended in 2004 (or based on constant costs: an
         aggregate of $216.0 million of which $75.4 million is to be expended in
         2003 and $37.8 million is to be expended in 2004).
(13)     The extent and character and all factual data supplied by Vermilion to
         GLJ were accepted by GLJ as represented. The crude oil and natural gas
         reserve calculations and any projections upon which the GLJ Report is
         based were determined in accordance with generally accepted evaluation
         practices. No field inspection was conducted. Salvage values for
         facilities, well abandonment and lease clean-up costs have not been
         included in the GLJ Report.
(14)     Present value of future net production revenue numbers include ARTC.
         Eligibility for ARTC is subject to determination.


LANDHOLDINGS

The following table sets out Vermilion's landholdings as at December 31, 2002.

<TABLE>
<CAPTION>
                                           DEVELOPED                   UNDEVELOPED                    TOTAL
                                       ---------------------     -----------------------      ----------------------
AREA                                   GROSS(1)       NET(2)      GROSS(1)        NET(2)       GROSS(1)       NET(2)
- ----                                   --------      -------     ---------     ---------      ---------    ---------
<S>                                    <C>           <C>         <C>           <C>            <C>          <C>
Alberta                                259,895       180,686       691,672       531,815        956,904      713,437
Saskatchewan                                 -             -       157,148       156,516        157,148      156,516
France                                  46,175        40,367     1,102,312       699,855      1,148,487      740,222
Trinidad                                 1,600         1,040        26,250        17,063         27,850       18,103
                                       -------       -------     ---------     ---------      ---------    ---------
Total                                  307,670       222,093     1,977,382     1,405,249      2,290,389    1,628,278
                                       =======       =======     =========     =========      =========    =========
</TABLE>

NOTES:
(1)  "Gross" refers to the total acres in which Vermilion has an interest,
     directly or indirectly.
(2)  "Net" refer to the total acres in which Vermilion has an interest, directly
     or indirectly, multiplied by the percentage working interest owned by
     Vermilion, directly or indirectly, therein.

<PAGE>

                                      -20-


OIL AND GAS WELLS

The following table sets forth the number and status of wells in which Vermilion
had a working interest, directly or indirectly, as at December 31, 2002, which
are producing or which Vermilion considers to be capable of production:

<TABLE>
<CAPTION>
                                         PRODUCING WELLS                                 SHUT-IN WELLS(1)
                           -------------------------------------------     -------------------------------------------
                                CRUDE OIL              NATURAL GAS              CRUDE OIL              NATURAL GAS
                           -------------------     -------------------     -------------------     -------------------
CANADA                     GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)
- ------                     --------     ------     --------     ------     --------     ------     --------     ------
<S>                          <C>         <C>         <C>         <C>         <C>          <C>         <C>         <C>
ALBERTA
Drayton Valley                94          59.2       131          98.6        27          21.0        23          15.6
Southern Foothills             3           3.0        29           8.4         0           0.0         1           0.3
Athabasca                      2           1.0        96          77.0         0           0.0        39          26.6
Peace River Arch               1           0.1         6           4.4         1           0.0         3           3.0
Slave Lake                   173         126.7         4           4.0        75          52.8         2           0.4
Central Alberta                4           2.4        61          41.3         0           0.0        18          12.6
                             ---         -----       ---         -----       ---          ----        --          ----
Total                        277         192.4       327         233.7       103          73.8        86          58.5
                             ===         =====       ===         =====       ===          ====        ==          ====


                                         PRODUCING WELLS                                 SHUT-IN WELLS(1)
                           -------------------------------------------     -------------------------------------------
                                CRUDE OIL              NATURAL GAS              CRUDE OIL              NATURAL GAS
                           -------------------     -------------------     -------------------     -------------------
FRANCE                     GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)
- ------                     --------     ------     --------     ------     --------     ------     --------     ------
AQUITAINE BASIN
Parentis                       54          54.0         -           -          13          13.0         -           -
Lugos                          12          12.0         -           -          10          10.0         -           -
Mothes                          5           5.0         -           -           2           2.0         -           -
Lucats-Cabeil                   2           2.0         -           -           7           7.0         -           -
Ledeuix                         -           -           -           -           -           -           -           -
PARIS BASIN
Saucede                         -           -           -           -           -           -           -           -
Champotran                     13          13.0         -           -           4           4.0         -           -
Bremonderie                     1           1.0         -           -           1           1.0         -           -
Donnemarie                      1           1.0         -           -           4           4.0         -           -
Vulaines                       10          10.0         -           -           0           0.0         -           -
Malnoue                         7           7.0         -           -           1           1.0         -           -
SOUTH AQUITAINE                21           5.7         -           -          18           4.9         1         1.0
                              ---         -----       ---         -----       ---          ----        --         ---
Total                         126         110.7         -           -          60          46.9         1         1.0
                              ===         =====       ===         =====       ===          ====        ==         ===


                                         PRODUCING WELLS                                 SHUT-IN WELLS(1)
                           -------------------------------------------     -------------------------------------------
                                CRUDE OIL              NATURAL GAS              CRUDE OIL              NATURAL GAS
                           -------------------     -------------------     -------------------     -------------------
TRINIDAD                   GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)     GROSS(2)     NET(3)
- --------                   --------     ------     --------     ------     --------     ------     --------     ------
Central Block                 -           -          1.0         0.65         -           -          1.0         0.65
                             ===         ===         ===         ====        ===         ===         ===         ====
</TABLE>

NOTES:
(1)      "Shut-in" wells means wells which have encountered and are capable of
         producing crude oil or natural gas but which are not producing due to
         lack of available transportation facilities, available markets or other
         reasons. Shut-in wells in which Vermilion has an interest are located
         no further than 10 kilometres from existing pipelines.
(2)      "Gross" wells are the total number of wells in which Vermilion has an
         interest, directly or indirectly.

(3)      "Net" wells are the aggregate of the numbers obtained by multiplying
         each gross well by Vermilion's percentage working interest therein.

RECONCILIATION OF RESERVES

The following tables provide a reconciliation of Vermilion estimated reserves
from December 31, 2001 to December 31, 2002:

<PAGE>

                                      -21-


<TABLE>
<CAPTION>
                                                                                      TOTAL PROVED PLUS RISKED
                                        TOTAL PROVED             RISKED PROBABLES               PROBABLES
                                        ------------             ----------------     ------------------------
<S>                                         <C>                           <C>                         <C>
OIL (MSTB)
   OPENING BALANCE:                         44,347.2                      7,282.9                     51,630.1
     Drilling Additions:                       904.4                      1,311.0                      2,215.4
     Other Additions:                          360.7                        210.7                        571.4
     Technical Revisions:                    (408.5)                       (13.6)                      (422.1)
     Acquisition                             1,078.0                        186.2                      1,264.2
     Disposition:                                0.0                          0.0                          0.0
     Production:                           (4,096.8)                          0.0                    (4,096.8)
   CLOSING BALANCE                          42,185.0                      8,977.2                     51,162.2

MARKETABLE GAS (BCF)
   OPENING BALANCE:                            201.8                         97.8                        299.6
     Drilling Additions:                        19.3                          5.2                         24.5
     Other Additions:                            1.0                          0.2                          1.2
     Technical Revisions:                     (14.9)                        (5.4)                       (20.3)
     Acquisition                                92.3                        105.9                        198.2
     Disposition:                                0.0                          0.0                          0.0
     Production:                              (26.0)                          0.0                       (26.0)
   CLOSING BALANCE                             273.5                        203.7                        477.2

NATURAL GAS LIQUIDS (MBBL):
   OPENING BALANCE                           7,362.4                      3,543.5                     10,905.9
     Drilling Additions:                       777.4                        199.1                        976.5
     Other Additions:                            8.6                          3.8                         12.4
     Technical Revisions:                    (179.0)                      (108.8)                      (287.8)
     Acquisition                             3,179.7                      3,882.8                      7,062.5
     Disposition:                                0.0                          0.0                          0.0
     Production:                             (915.1)                          0.0                      (915.1)
   CLOSING BALANCE                          10,234.0                      7,520.4                     17,754.4
</TABLE>


PRODUCTION HISTORY AND PRICES RECEIVED

The following table sets forth certain historical information in respect of
production and product prices received in respect of Vermilion's oil and natural
gas properties for the periods indicated.

<TABLE>
<CAPTION>
                                              THREE MONTHS       THREE MONTHS       THREE MONTHS       THREE MONTHS
                                                 ENDED               ENDED              ENDED              ENDED
                                           DECEMBER 31, 2002  SEPTEMBER 30, 2002    JUNE 30, 2002     MARCH 31, 2002
                                           -----------------  ------------------    -------------     --------------
<S>                                               <C>                <C>                <C>                <C>
Average Daily Volumes
   Crude oil (Bbls/d)                             11,891             11,325             10,611             11,058
   Natural gas liquids (Bbls/d)                    2,385              2,438              2,690              2,519
   Natural gas (Mmcf/d)                            72.25              70.35              74.53              68.13
                                                  ------             ------             ------             ------
   Total BOE (6:1)                                26,317             25,489             25,722             24,932
                                                  ------             ------             ------             ------

Average Net Product Prices Received
   Crude oil ($/Bbls)                              36.59              38.11              33.97              36.27
   Natural gas liquids ($/Bbls)                    33.44              32.91              29.35              22.92
   Natural gas ($/Mcf)                              5.41               3.56               4.34               3.80
                                                  ------             ------             ------             ------
</TABLE>

<PAGE>

                                      -22-


<TABLE>
<CAPTION>
                                              THREE MONTHS       THREE MONTHS       THREE MONTHS       THREE MONTHS
                                                 ENDED               ENDED              ENDED              ENDED
                                           DECEMBER 31, 2002  SEPTEMBER 30, 2002    JUNE 30, 2002     MARCH 31, 2002
                                           -----------------  ------------------    -------------     --------------
<S>                                              <C>                <C>                <C>                <C>
   Total ($/BOE) (6:1)                            34.43              29.90              29.67              28.79
                                                 ------             ------             ------             ------
Average Royalties Paid(1)
   Crude oil ($/Bbls)                              6.66               6.47               5.57               5.58
   Natural gas liquids ($/Bbls)                   10.15               9.14               9.68               8.71
   Natural gas ($/Mcf)                             1.32               0.78               1.13               1.02
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                             7.56               5.90               6.59               6.13
                                                 ------             ------             ------             ------
Average Operating Expenses(1)(2)
   Crude oil ($/Bbls)                              5.77               5.83               6.04               4.87
   Natural gas liquids ($/Bbls)                    5.77               5.83               6.04               4.87
   Natural gas ($/Mcf)                             0.79               0.45               0.54               0.48
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                             5.29               4.39               4.69               3.97
                                                 ------             ------             ------             ------
Average Netback Received
   Crude oil ($/Bbls)                             24.16              25.81              22.36              25.82
   Natural gas liquids ($/Bbls)                   17.52              17.94              13.63               9.34
   Natural gas ($/Mcf)                             3.30               2.33               2.67               2.30
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                            21.58              19.61              18.39              18.69
                                                 ------             ------             ------             ------

                                              THREE MONTHS       THREE MONTHS       THREE MONTHS       THREE MONTHS
                                                 ENDED               ENDED              ENDED              ENDED
                                           DECEMBER 31, 2001  SEPTEMBER 30, 2001    JUNE 30, 2001     MARCH 31, 2001
                                           -----------------  ------------------    -------------     --------------
Average Daily Volumes
   Crude oil (Bbls/d)                            11,816             11,869             11,428             11,227
   Natural gas liquids (Bbls/d)                   1,752              1,671              1,869              1,625
   Natural gas (Mmcf/d)                           58.70              54.24              51.16              52.74
                                                 ------             ------             ------             ------
   Total BOE (6:1)                               23,351             22,580             21,824             21,642
                                                 ------             ------             ------             ------
Average Net Product Prices Received
   Crude oil ($/Bbls)                             31.01              34.19              37.46              36.93
   Natural gas liquids ($/Bbls)                   22.67              30.05              40.89              45.13
   Natural gas ($/Mcf)                             3.89               3.41               6.22               8.17
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                            27.17              28.38              37.69              42.46
                                                 ------             ------             ------             ------
Average Royalties Paid(1)
   Crude oil ($/Bbls)                              5.17               6.38               6.67               6.54
   Natural gas liquids ($/Bbls)                    7.21              10.34              15.39              16.64
   Natural gas ($/Mcf)                             1.05               1.02               1.84               2.20
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                             5.80               6.58               9.12              10.01
                                                 ------             ------             ------             ------
Average Operating Expenses(1)(2)
   Crude oil ($/Bbls)                              5.09               4.96               4.54               4.99
   Natural gas liquids ($/Bbls)                    5.09               4.96               4.54               4.99
   Natural gas ($/Mcf)                             0.50               0.49               0.47               0.45
                                                 ------             ------             ------             ------
</TABLE>

<PAGE>

                                      -23-


<TABLE>
<CAPTION>
                                              THREE MONTHS       THREE MONTHS       THREE MONTHS       THREE MONTHS
                                                 ENDED               ENDED              ENDED              ENDED
                                           DECEMBER 31, 2001  SEPTEMBER 30, 2001    JUNE 30, 2001     MARCH 31, 2001
                                           -----------------  ------------------    -------------     --------------
<S>                                              <C>                <C>                <C>                <C>
   Total ($/BOE) (6:1)                             4.20               4.14               3.87               4.06
                                                 ------             ------             ------             ------
Average Netback Received
   Crude oil ($/Bbls)                             20.75              22.85              26.25              25.40
   Natural gas liquids ($/Bbls)                   10.37              14.75              20.96              23.50
   Natural gas ($/Mcf)                             2.34               1.90               3.91               5.52
                                                 ------             ------             ------             ------
   Total ($/BOE) (6:1)                            17.17              17.66              24.70              28.39
                                                 ------             ------             ------             ------
</TABLE>
NOTES:
(1)      Average royalties paid, net of ARTC, and average operating expenses
         allocated to the individual products based on the proportionate product
         volumes.
(2)      Operating Expenses include all costs relating to lifting, gathering,
         transporting and processing.

DRILLING ACTIVITY

The following table summarizes Vermilion's drilling results on Vermilion's oil
and natural gas properties for the years ended December 31, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                -----------------------------------------------------------
                                                           2002                               2001
                                                -------------------------          ------------------------
                                                GROSS(2)           NET(3)          GROSS(2)          NET(3)
                                                --------           ------          --------          ------
<S>                                                <C>              <C>               <C>             <C>
Oil Wells                                          14               11.2              24              22.0
Natural Gas Wells                                  40               34.6              44              36.9
Dry Holes                                          15               13.2              26              22.3
                                                   --               ----              --              ----
Total                                              69               59.0              94              81.2
                                                   ==               ====              ==              ====
</TABLE>
NOTES:
(1)      Wells are classified according to the designation assigned to them for
         regulatory purposes. Wells in which oil or natural gas is found but not
         in sufficient quantities to be "capable of production" are classified
         as dry wells.
(2)      "Gross" refers to the total number of wells in which Vermilion has an
         interest.
(3)      "Net" refers to the total number of wells in which Vermilion has an
         interest, multiplied by the percentage working interest owned by
         Vermilion therein.

MARKETING

Vermilion is party to certain financial instruments, such as crude oil and
natural gas contracts and foreign currency forward contracts. Vermilion has
entered into these contracts for hedging purposes only in order to protect its
cash flow on future sales from the potential adverse impact of fluctuations in
oil and gas prices and in the U.S./Canadian dollar exchange rate. The contracts
reduce the fluctuations in sales revenues by establishing fixed prices or a
trading range on a portion of its oil and gas sales. All of the future sales
contracts described below are arranged with counter parties representing major
financial (banking) institutions with AA to AAA credit ratings thereby reducing
counter party credit risk exposure.

Contracts outstanding in respect of hedging transactions which Vermilion will
assume are as follows:

<PAGE>

                                      -24-


<TABLE>
<CAPTION>
       EXPOSURE              VOLUME HEDGED                     PRICING (1)                            TERM
   -----------------       ----------------          --------------------------------        -----------------
   <S>                     <C>                       <C>                                     <C>
          Gas                6,000 GJ/d                     $3.96 per GJ (Cdn) AECO-C        Nov. 02 - Mar. 03
                            22,000 GJ/d              $4.47 - 4.70 per GJ (Cdn) AECO-C        Nov. 02 - Oct. 03
                            12,500 GJ/d              $5.16 - 5.52 per GJ (Cdn) AECO-C        Dec. 02 - Mar. 03
                            10,000 GJ/d              $5.02 - 6.05 per GJ (Cdn) AECO-C        Apr. 03 - Oct. 03
                             7,500 GJ/d              $4.75 - 7.97 per GJ (Cdn) AECO-C        Nov. 03 - Mar. 04
          Oil              2,950 bbls/d                       $24.74 (US) WTI per Bbl            Calendar 2003
                           2,600 bbls/d               $23.24 (US) dated Brent per Bbl            Calendar 2003
                           1,500 bbls/d                       $24.07 (US) WTI per Bbl            Calendar 2004
                           1,750 bbls/d               $22.74 (US) dated Brent per Bbl            Calendar 2004
     Power Hedges                2 MW/h                         $91.00 (Cdn) per MW/h            Calendar 2003
   Foreign Exchange            $750,000                       Cdn/USD FX Swap $1.6000            Calendar 2003
                               $750,000                       Cdn/USD FX Swap $1.5901            Calendar 2003
                               $750,000                       Cdn/USD FX Swap $1.5910            Calendar 2003
                               $500,000                       Cdn/USD FX Swap $1.5725            Calendar 2003
                               $500,000                       Cdn/USD FX Swap $1.5800            Calendar 2003
                               $250,000                       Cdn/USD FX Swap $1.5800            Calendar 2003
                               $250,000                       Cdn/USD FX Swap $1.5808            Calendar 2003
                               $330,000                       Cdn/USD FX Swap $1.5900            Calendar 2003
</TABLE>
NOTE:
(1)   Represents weighted average of numerous contracts

CAPITAL EXPENDITURES

The following table summarizes the capital expenditures incurred in respect of
Vermilion's oil and natural gas properties during the periods indicated.

<TABLE>
<CAPTION>
                                      TWELVE             THREE           THREE           THREE            THREE
                                      MONTHS             MONTHS          MONTHS          MONTHS           MONTHS
                                       ENDED              ENDED           ENDED          ENDED            ENDED
                                    DECEMBER 31,      DECEMBER 31,    SEPTEMBER 30,     JUNE 30,         MARCH 31,
                                        2002              2002             2002           2002             2002
($000's)                                 $                 $                $               $                $
                                      -------            ------          -------         ------           ------
<S>                                    <C>                <C>              <C>            <C>              <C>
Land & Seismic                         15,861             6,028            3,879          3,811            2,143
Exploration drilling                   16,738             5,553            5,839          1,233            4,113
Development expenditures               80,713            23,035           24,669         11,204           21,805
Property acquisition                   23,433                 -           19,703          1,606            2,124
Corporate acquisition                  97,334                 -           66,348              -           30,986
                                      -------            ------          -------         ------           ------
Total                                 234,079            34,616          120,438         17,854           61,171
                                      =======            ======          =======         ======           ======
</TABLE>

<PAGE>

                                      -25-


<TABLE>
<CAPTION>
                                      TWELVE             THREE             THREE           THREE            THREE
                                      MONTHS             MONTHS           MONTHS           MONTHS           MONTHS
                                       ENDED              ENDED            ENDED           ENDED            ENDED
                                    DECEMBER 31,      DECEMBER 31,     SEPTEMBER 30,       JUNE 30,        MARCH 31,
                                        2002              2002             2002             2002             2002
                                         $                 $                 $               $                $
                                     -------            ------            ------           ------           ------
<S>                                  <C>                <C>               <C>              <C>              <C>
Land & Seismic                        28,865             6,333             7,302            6,754            8,476
Exploration drilling                  18,362             4,304             4,064            3,003            6,991
Development expenditures             113,468            23,568            37,505           28,671           23,724
Property acquisitions                  2,194               262               977              627              328
Corporate acquisition                      -                 -                 -                -                -
                                     -------            ------            ------           ------           ------
Total                                162,889            34,467            49,848           39,055           39,519
                                     =======            ======            ======           ======           ======
</TABLE>


            ADDITIONAL INFORMATION RESPECTING VERMILION ENERGY TRUST

TRUST UNITS

An unlimited number of Trust Units may be created and issued pursuant to the
Trust Indenture. Each Trust Unit shall entitle the holder thereof to one vote at
any meeting of the holders of Trust Units and represents an equal fractional
undivided beneficial interest in any distribution from the Trust (whether of net
income, net realized capital gains or other amounts) and in any net assets of
the Trust in the event of termination or winding-up of the Trust. All Trust
Units outstanding from time to time shall be entitled to equal shares of any
distributions by the Trust, and in the event of termination or winding-up of the
Trust, in any net assets of the Trust. All Trust Units shall rank among
themselves equally and rateably without discrimination, preference or priority.
Each Trust Unit is transferable, subject to compliance with applicable Canadian
securities laws, is not subject to any conversion or pre-emptive rights and
entitles the holder thereof to require the Trust to redeem any or all of the
Trust Units held by such holder (see "Redemption Right") and to one vote at all
meetings of Unitholders for each Trust Unit held.

The Trust Units do not represent a traditional investment and should not be
viewed by investors as "shares" in either Vermilion or the Trust. As holders of
Trust Units in the Trust, the Unitholders will not have the statutory rights
normally associated with ownership of shares of a corporation including, for
example, the right to bring "oppression" or "derivative" actions. The price per
Trust Unit will be a function of anticipated distributable income from Vermilion
and the ability of Vermilion to effect long term growth in the value of the
Trust. The market price of the Trust Units will be sensitive to a variety of
market conditions including, but not limited to, interest rates, commodity
prices and the ability of the Trust to acquire additional assets. Changes in
market conditions may adversely affect the trading price of the Trust Units.

SPECIAL VOTING RIGHTS

In order to allow the Trust flexibility in pursuing corporate acquisitions, the
Trust Indenture allows for the creation of Special Voting Rights which will
enable the Trust to provide voting rights to holders of Exchangeable Shares and,
in the future, to holders of other exchangeable shares that may be issued by
Vermilion or other subsidiaries of the Trust in connection with other
exchangeable share transactions.

An unlimited number of Special Voting Rights may be created and issued pursuant
to the Trust Indenture. Holders of Special Voting Rights shall not be entitled
to any distributions of any nature whatsoever from the Trust and shall be
entitled to attend at meetings of Unitholders and to such number of votes at
meetings of Unitholders as may be prescribed by the board of directors of
Vermilion in the resolution authorizing the issuance of any Special Voting
Rights. Except for the right to attend and vote at meetings of the Unitholders,
the Special Voting Rights shall not confer upon the holders thereof any other
rights.

<PAGE>

                                      -26-


Under the terms of the Voting and Exchange Trust Agreement, the Trust has issued
a Special Voting Right to the Voting and Exchange Trust Agreement Trustee for
the benefit of every Person who holds Exchangeable Shares.

UNITHOLDERS LIMITED LIABILITY

The Trust Indenture provides that no Unitholder, in its capacity as such, shall
incur or be subject to any liability in contract or in tort in connection with
the Trust or its obligations or affairs and, in the event that a court
determines Unitholders are subject to any such liabilities, the liabilities will
be enforceable only against, and will be satisfied only out of the Trust's
assets. Pursuant to the Trust Indenture, the Trust will indemnify and hold
harmless each Unitholder from any cost, damages, liabilities, expenses, charges
or losses suffered by a Unitholder from or arising as a result of such
Unitholder not having such limited liability.

The Trust Indenture provides that all contracts signed by or on behalf of the
Trust must contain a provision to the effect that such obligation will not be
binding upon Unitholders personally. Notwithstanding the terms of the Trust
Indenture, Unitholders may not be protected from liabilities of the Trust to the
same extent a shareholder is protected from the liabilities of a corporation.
Personal liability may also arise in respect of claims against the Trust (to the
extent that claims are not satisfied by the Trust) that do not arise under
contracts, including claims in tort, claims for taxes and possibly certain other
statutory liabilities. The possibility of any personal liability to Unitholders
of this nature arising is considered unlikely in view of the fact that the sole
activity of the Trust is to hold securities, and all of the business operations
are carried on by Vermilion, directly or indirectly.

The activities of the Trust and its subsidiary, Vermilion, will be conducted,
upon the advice of counsel, in such a way and in such jurisdictions as to avoid
as far as possible any material risk of liability to the Unitholders for claims
against the Trust including by obtaining appropriate insurance, where available,
for the operations of Vermilion and having contracts signed by or on behalf of
the Trust include a provision that such obligations are not binding upon
Unitholders personally.

ISSUANCE OF TRUST UNITS

The Trust Indenture provides that Trust Units, including rights, warrants and
other securities to purchase, to convert into or to exchange into Trust Units,
may be created, issued, sold and delivered on such terms and conditions and at
such times as the Trustee, upon the recommendation of the board of directors of
Vermilion may determine. The Indenture also provides that Vermilion may
authorize the creation and issuance of debentures, notes and other evidences of
indebtedness of the Trust which debentures, notes or other evidences of
indebtedness may be created and issued from time to time on such terms and
conditions to such persons and for such consideration as Vermilion may
determine.

CASH DISTRIBUTIONS

The Trustee may declare payable to the Unitholders all or any part of the net
income of the Trust earned from interest income on the Notes, from the income
generated under the Royalty Agreement and from any dividends paid on the common
shares of Vermilion, less all expenses and liabilities of the Trust due and
accrued and which are chargeable to the net income of the Trust. In addition,
Unitholders may, at the discretion of the board of directors of Vermilion,
receive distributions in respect of prepayments of principal on the Notes made
by Vermilion to the Trust before the maturity of the Notes. It is anticipated
however, that the Trust may reinvest a portion of the repayments of principal on
the Notes to make capital expenditures to develop the business of Vermilion with
a view to enhancing Vermilion's cash flow from operations.

Cash distributions will be made on the 15th day of each month to Unitholders of
record on the immediately preceding Distribution Record Date.

REDEMPTION RIGHT

Trust Units are redeemable at any time on demand by the holders thereof upon
delivery to the Trust of the certificate or certificates representing such Trust
Units, accompanied by a duly completed and properly executed notice

<PAGE>

                                      -27-


requiring redemption. Upon receipt of the notice to redeem Trust Units by the
Trust, the holder thereof shall only be entitled to receive a price per Trust
Unit (the "Market Redemption Price") equal to the lesser of: (a) 90% of the
"market price" of the Trust Units on the principal market on which the Trust
Units are quoted for trading during the 10 trading day period commencing
immediately after the date on which the Trust Units are tendered to the Trust
for redemption; and (b) the closing market price on the principal market on
which the Trust Units are quoted for trading on the date that the Trust Units
are so tendered for redemption.

For the purposes of this calculation, "market price" will be an amount equal to
the simple average of the closing price of the Trust Units for each of the
trading days on which there was a closing price; provided that, if the
applicable exchange or market does not provide a closing price but only provides
the highest and lowest prices of the Trust Units traded on a particular day, the
market price shall be an amount equal to the simple average of the average of
the highest and lowest prices for each of the trading days on which there was a
trade; and provided further that if there was trading on the applicable exchange
or market for fewer than five of the 10 trading days, the market price shall be
the simple average of the following prices established for each of the 10
trading days: the average of the last bid and last ask prices for each day on
which there was no trading; the closing price of the Trust Units for each day
that there was trading if the exchange or market provides a closing price; and
the average of the highest and lowest prices of the Trust Units for each day
that there was trading, if the market provides only the highest and lowest
prices of Trust Units traded on a particular day. The closing market price shall
be: an amount equal to the closing price of the Trust Units if there was a trade
on the date; an amount equal to the average of the highest and lowest prices of
the Trust Units if there was trading and the exchange or other market provides
only the highest and lowest prices of Trust Units traded on a particular day;
and the average of the last bid and last ask prices if there was no trading on
the date.

The Market Redemption Price payable by the Trust in respect of any Trust Units
tendered for redemption during any calendar month shall be satisfied by way of a
cash payment on the last day of the following month. The entitlement of
Unitholders to receive cash upon the redemption of their Trust Units is subject
to the limitation that the total amount payable by the Trust in respect of such
Trust Units and all other Trust Units tendered for redemption in the same
calendar month and in any preceding calendar month during the same year shall
not exceed $250,000 provided that, the Trust may, in its sole discretion, waive
such limitation in respect of any calendar month. If this limitation is not so
waived, the Market Redemption Price payable by the Trust in respect of Trust
Units tendered for redemption in such calendar month shall be paid on the last
day of the following month as follows: (a) firstly, by the Trust distributing
Notes having an aggregate principal amount equal to the aggregate Market
Redemption Price of the Trust Units tendered for redemption, and (b) secondly,
to the extent that the Trust does not hold Notes having a sufficient principal
amount outstanding to effect such payment, by the Trust issuing its own
promissory notes to the Unitholders who exercised the right of redemption having
an aggregate principal amount equal to any such shortfall, which promissory
notes, (herein referred to as "Redemption Notes") shall have terms and
conditions substantially identical to those of the Notes.

If at the time Trust Units are tendered for redemption by a Unitholders, the
outstanding Trust Units are not listed for trading on the TSX and are not traded
or quoted on any other stock exchange or market which Vermilion considers, in
its sole discretion, provides representative fair market value price for the
Trust Units or trading of the outstanding Trust Units is suspended or halted on
any stock exchange on which the Trust Units are listed for trading or, if not so
listed, on any market on which the Trust Units are quoted for trading, on the
date such Trust Units are tendered for redemption or for more than five trading
days during the 10 trading day period, commencing immediately after the date
such Trust Units were tendered for redemption then such Unitholders shall,
instead of the Market Redemption Price, be entitled to receive a price per Trust
Unit (the "Appraised Redemption Price") equal to 90% of the fair market value
thereof as determined by Vermilion as at the date on which such Trust Units were
tendered for redemption. The aggregate Appraised Redemption Price payable by the
Trust in respect of Trust Units tendered for redemption in any calendar month
shall be paid on the last day of the third following month by, at the option of
the Trust: (a) a cash payment; or (b) a distribution of Notes and/or Redemption
Notes as described above.

It is anticipated that this redemption right will not be the primary mechanism
for holders of Trust Units to dispose of their Trust Units. Notes or Redemption
Notes which may be distributed in specie to Unitholders in connection with a
redemption will not be listed on any stock exchange and no market is expected to
develop in such Notes or Redemption Notes. Notes and Redemption Notes may not be
qualified investments for trusts governed by registered

<PAGE>

                                      -28-


retirement savings plans, registered retirement income funds, deferred profit
sharing plans and registered education savings plans.

NON-RESIDENT UNITHOLDERS

It is in the best interest of Unitholders that the Trust qualify as a "unit
trust" and a "mutual fund trust" under the Tax Act. Certain provisions of the
Tax Act require that the Trust not be established nor maintained primarily for
the benefit of Non-Residents. Accordingly, in order to comply with such
provisions, the Trust Indenture contains restrictions on the ownership of Trust
Units by Unitholders who are Non-Residents. In this regard, the Trust shall,
among other things, take all necessary steps to monitor the ownership of the
Trust Units to carry out such intentions. If at any time the Trust becomes aware
that the beneficial owners of 50% or more of the Trust Units then outstanding
are or may be Non-Residents or that such a situation is imminent, the Trust
shall take such action as may be necessary to carry out such intentions.

MEETINGS OF UNITHOLDERS

The Trust Indenture provides that meetings of Unitholders must be called and
held for, among other matters, the election or removal of the Trustee, the
appointment or removal of the auditors of the Trust, the approval of amendments
to the Trust Indenture (except as described under "Amendments to the Trust
Indenture"), the sale of the property of the Trust as an entirety or
substantially as an entirety, and the commencement of winding-up the affairs of
the Trust. Meetings of Unitholders will be called and held annually for, among
other things, the election of the directors of Vermilion and the appointment of
the auditors of the Trust.

A meeting of Unitholders may be convened at any time and for any purpose by the
Trustee and must be convened, except in certain circumstances, if requisitioned
by the holders of not less than 5% of the Trust Units then outstanding by a
written requisition. A requisition must, among other things, state in reasonable
detail the business purpose for which the meeting is to be called.

Unitholders may attend and vote at all meetings of Unitholders either in person
or by proxy and a proxyholder need not be a Unitholder. Two persons present in
person or represented by proxy and representing in the aggregate at least 5% of
the votes attaching to all outstanding Trust Units shall constitute a quorum for
the transaction of business at all such meetings. For the purposes of
determining such quorum, the holders of any issued Special Voting Rights who are
present at the meeting shall be regarded as representing outstanding Trust Units
equivalent in number to the votes attaching to such Special Voting Rights.

The Trust Indenture contains provisions as to the notice required and other
procedures with respect to the calling and holding of meetings of Unitholders in
accordance with the requirements of applicable laws.

EXERCISE OF VOTING RIGHTS ATTACHED TO SHARES OF VERMILION

The Trust Indenture prohibits the Trustee from voting the shares of Vermilion
with respect to (a) the election of directors of Vermilion, (b) the appointment
of auditors of Vermilion or (c) the approval of Vermilion's financial
statements, except in accordance with an Ordinary Resolution adopted at an
annual meeting of Unitholders.

The Trustee is also prohibited from voting the shares to authorize:

         (a)      any sale, lease or other disposition of, or any interest in,
                  all or substantially all of the assets of Vermilion, except in
                  conjunction with an internal reorganization of the direct or
                  indirect assets of Vermilion as a result of which either
                  Vermilion or the Trust has the same interest, whether direct
                  or indirect, in the assets as the interest, whether direct or
                  indirect, that it had prior to the reorganization;

         (b)      any statutory amalgamation of Vermilion with any other
                  corporation, except in conjunction with an internal
                  reorganization as referred to in paragraph (a) above;

<PAGE>

                                      -29-


         (c)      any statutory arrangement involving Vermilion except in
                  conjunction with an internal reorganization as referred to in
                  paragraph (a) above;

         (d)      any amendment to the articles of Vermilion to increase or
                  decrease the minimum or maximum number of directors; or

         (e)      any material amendment to the articles of Vermilion to change
                  the authorized share capital or amend the rights, privileges,
                  restrictions and conditions attaching to any class of
                  Vermilion's shares in a manner which may be prejudicial to the
                  Trust;

without the approval of the Unitholders by Special Resolution at a meeting of
Unitholders called for that purpose.

TRUSTEE

Computershare Trust Company of Canada is the initial trustee of the Trust. The
Trustee is responsible for, among other things, accepting subscriptions for
Trust Units and issuing Trust Units pursuant thereto and maintaining the books
and records of the Trust and providing timely reports to holders of Trust Units.
The Trust Indenture provides that the Trustee shall exercise its powers and
carry out its functions thereunder as Trustee honestly, in good faith and in the
best interests of the Trust and, in connection therewith, shall exercise that
degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances.

The initial term of the Trustee's appointment is until the third annual meeting
of Unitholders. The Unitholders shall, at the third annual meeting of the
Unitholders, re-appoint, or appoint a successor to the Trustee for an additional
three year term, and thereafter, the Unitholders shall reappoint or appoint a
successor to the Trustee at the annual meeting of Unitholders three years
following the reappointment or appointment of the successor to the Trust. The
Trustee may also be removed by Special Resolution of the Unitholders. Such
resignation or removal becomes effective upon the acceptance or appointment of a
successor trustee.

DELEGATION OF AUTHORITY, ADMINISTRATION AND TRUST GOVERNANCE

The board of directors of Vermilion has generally been delegated the significant
management decisions of the Trust. In particular, the Trustee has delegated to
Vermilion responsibility for any and all matters relating to the following: (a)
an Offering; (b) ensuring compliance with all applicable laws, including in
relation to an Offering; (c) all matters relating to the content of any Offering
Documents, the accuracy of the disclosure contained therein, and the
certification thereof; (d) all matters concerning the terms of, and amendment
from time to time of the material contracts of the Trust; (e) all matters
concerning any underwriting or agency agreement providing for the sale of Trust
Units or rights to Trust Units; (f) all matters relating to the redemption of
Trust Units; (g) all matters relating to the voting rights on any investments in
the Trust Fund or any Subsequent Investments; and (h) all matters relating to
the specific powers and authorities as set forth in the Trust Indenture.

LIABILITY OF THE TRUSTEE

The Trustee, its directors, officers, employees, shareholders and agents and all
of their successors and assigns shall not be liable to any Unitholders or any
other person, in tort, contract or otherwise, in connection with any matter
pertaining to the Trust or the property of the Trust, arising from the exercise
by the Trustee of any powers, authorities or discretion conferred under the
Trust Indenture, including, without limitation, any action taken or not taken in
good faith in reliance on any documents that are, prima facie properly executed,
any depreciation of, or loss to, the property of the Trust incurred by reason of
the sale of any asset, any inaccuracy in any evaluation provided by any other
appropriately qualified person, any reliance on any such evaluation, any action
or failure to act of Vermilion, or any other person to whom the Trustee has,
with the consent of Vermilion, delegated any of its duties hereunder, or any
other action or failure to act (including failure to compel in any way any
former trustee to redress any breach of trust or any failure by Vermilion to
perform its duties under or delegated to it under the Trust Indenture or any
other contract), unless such liabilities arise out of the gross negligence,
wilful default or fraud of the Trustee or any of its directors, officers,
employees or shareholders. If the Trustee has retained an appropriate expert,
adviser or legal counsel with respect to any matter connected with its duties
under the Trust Indenture, the

<PAGE>

                                      -30-


Trustee may act or refuse to act based on the advice of such expert, adviser or
legal counsel, and the Trustee shall not be liable for and shall be fully
protected from any loss or liability occasioned by any action or refusal to act
based on the advice of any such expert, adviser or legal counsel. In the
exercise of the powers, authorities or discretion conferred upon the Trustee
under the Trust Indenture, the Trustee is and shall be conclusively deemed to be
acting as Trustee of the assets of the Trust and shall not be subject to any
personal liability for any debts, liabilities, obligations, claims, demands,
judgments, costs, charges or expenses against or with respect to the Trust or
the property of the Trust Fund. In addition, the Trust Indenture contains other
customary provisions limiting the liability of the Trustee.

AMENDMENTS TO THE TRUST INDENTURE

The Trust Indenture may be amended or altered from time to time by Special
Resolution.

The Trustee may, without the approval of any of the Unitholders, amend the Trust
Indenture for the purpose of:

         (a)      ensuring the Trust's continuing compliance with applicable
                  laws or requirements of any governmental agency or authority
                  of Canada or of any province;

         (b)      ensuring that the Trust will satisfy the provisions of each of
                  subsections 108(2) and 132(6) of the Tax Act as from time to
                  time amended or replaced;

         (c)      ensuring that such additional protection is provided for the
                  interests of Unitholders as the Trustee may consider
                  expedient;

         (d)      removing or curing any conflicts or inconsistencies between
                  the provisions of the Trust Indenture or any supplemental
                  indenture and any other agreement of the Trust or any offering
                  document pursuant to which securities of the Trust are issued
                  with respect to the Trust, or any applicable law or regulation
                  of any jurisdiction, provided that in the opinion of the
                  Trustee the rights of the Trustee and of the Unitholders are
                  not prejudiced thereby; or

         (e)      curing, correcting or rectifying any ambiguities, defective or
                  inconsistent provisions, errors, mistakes or omissions,
                  provided that in the opinion of the Trustee the rights of the
                  Trustee and of the Unitholders are not prejudiced thereby.

TAKEOVER BID

The Trust Indenture contains provisions to the effect that if a takeover bid is
made for the Trust Units and not less than 90% of the Trust Units (other than
Trust Units held at the date of the takeover bid by or on behalf of the offeror
or associates or affiliates of the offeror) are taken up and paid for by the
offeror, the offeror will be entitled to acquire the Trust Units held by
Unitholders who did not accept the takeover bid, on the terms offered by the
offeror.

TERMINATION OF THE TRUST

The Unitholders may vote to terminate the Trust at any meeting of the
Unitholders duly called for that purpose, subject to the following: (a) a vote
may only be held if requested in writing by the holders of not less than 20% of
the outstanding Trust Units; (b) a quorum of 50% of the issued and outstanding
Trust Units is present in person or by proxy; and (c) the termination must be
approved by Special Resolution of Unitholders.

Unless the Trust is earlier terminated or extended by vote of the Unitholders,
the Trustee shall commence to wind-up the affairs of the Trust on December 31,
2099. In the event that the Trust is wound-up, the Trustee will sell and convert
into money the property of the Trust in one transaction or in a series of
transactions at public or private sale and do all other acts appropriate to
liquidate the property of the Trust, and shall in all respects act in accordance
with the directions, if any, of the Unitholders in respect of termination
authorized pursuant to the Special Resolution authorizing the termination of the
Trust. Notwithstanding anything herein contained, in no event shall the Trust be
wound up until the Royalty shall have been disposed of, and under no
circumstances shall any Unitholder come into

<PAGE>

                                      -31-


any possession of any interest in the Royalty. After paying, retiring or
discharging or making provision for the payment, retirement or discharge of all
known liabilities and obligations of the Trust and providing for indemnity
against any other outstanding liabilities and obligations, the Trustee shall
distribute the remaining part of the proceeds of the sale of the assets together
with any cash forming part of the property of the Trust among the Unitholders in
accordance with their Pro Rata Share.

REPORTING TO UNITHOLDERS

The financial statements of the Trust will be audited annually by an independent
recognized firm of chartered accountants. The audited financial statements of
the Trust, together with the report of such chartered accountants, will be
mailed by the Trustee to Unitholders and the unaudited interim financial
statements of the Trust will be mailed to Unitholders within the periods
prescribed by securities legislation. The year end of the Trust shall be
December 31.

The Trust will be subject to the continuous disclosure obligations under all
applicable securities legislation.

DISTRIBUTION REINVESTMENT AND OPTIONAL TRUST UNIT PURCHASE PLAN

The Trust has established the DRIP Plan. The DRIP Plan is only available to
Unitholders who are residents of Canada.

Under the DRIP Plan, Unitholders may, at their option, reinvest their cash
distributions to purchase additional Trust Units (the "DRIP Units") by directing
the Plan Agent (as defined below) to apply Distributions on their existing Trust
Units to the purchase of DRIP Units or by making optional cash payments (the
"Cash Payment Option"). Computershare Trust Company of Canada (the "Plan Agent")
will apply Cash Distributions towards the purchase of DRIP Units from the Trust,
subject to certain limitations either from treasury or at the discretion of
Vermilion through the facilities of the TSX. Drip Units will be acquired either
at the average market price at which DRIP Units are acquired through the
facilities of the TSX or from treasury based on the weighted average of the
previous 10 days of trading prior to the applicable Distribution. Under the Cash
Payment Option, a Unitholder may, through the Plan Agent purchase additional
DRIP Units having a value of up to $5,000 per month. Participants in the DRIP
Plan will also receive additional distributions of Trust Units equal to 5% of
the DRIP Units purchased with their Distributions or under the Cash Payment
Option, as applicable (the "Bonus Units under the DRIP Plan"). The aggregate
number of DRIP Units that may be issued under the Cash Payment Option in any
fiscal year of the Trust will be limited to 2% of the number of Trust Units
issued and outstanding at the start of such fiscal year. Participants will not
have to pay any brokerage fees or service charges in connection with the
purchase of DRIP Units.

Unitholders may, after electing to participate in the DRIP Plan, terminate their
participation in the DRIP Plan by written notice to the Plan Agent. That notice,
if actually received no later than 5 business days prior to a Distribution
Record Date, will have effect for the distribution to be made on the following
Distribution Payment Date. Thereafter, distributions to those Unitholders will
be in cash. The Trust may amend, suspend or terminate the DRIP Plan in its sole
discretion provided that any amendment to the DRIP Plan must be approved by the
TSX and that any amendment, modification or suspension shall have no retroactive
effect if it would prejudice the interests of participants. The Trust is not
required to issue Trust Units into any jurisdiction where that issuance would be
illegal.

UNITHOLDER RIGHTS PLAN

Pursuant to a Unitholder Rights Plan Agreement entered into between the Trust
and Computershare Trust Company of Canada on January 16, 2003, the Trust has put
in place a unitholder rights plan. The previous shareholder rights plan of
Vermilion was terminated under the Arrangement.

The following description of the Unitholder Rights Plan is qualified in its
entirety by reference to the full text of the Unitholder Rights Plan agreement,
a copy of which is available on request at the head office of Vermilion during
normal business hours.

<PAGE>

                                      -32-


PURPOSE

The purpose of the Unitholder Rights Plan is to afford both the Unitholders and
Vermilion sufficient time to evaluate and respond to an unsolicited offer made
for the Trust Units. Further, the Unitholder Rights Plan is intended to assist
in ensuring that all Unitholders have an equal opportunity to participate in any
takeover bid.

Vermilion is not aware of any interest by any third party in acquiring control
of Vermilion at this time.

BACKGROUND

Under current provincial securities legislation, a takeover bid would generally
involve an offer to acquire the Trust Units of the Trust where the Trust Units
subject to the offer to acquire, together with Trust Units already owned by the
bidder and certain related parties, aggregate 20% or more of the outstanding
Trust Units. Current legislation only requires that a takeover bid remain open
for acceptance for not less than 35 days and that any securities deposited may
be withdrawn only during the 10 days following the date of the bid. In addition,
such legislation does not require that a bid be made for all securities of a
particular class and the bidder may in a single transaction or series of
transactions acquire control of an entity pursuant to one or more private
agreements at a permissible premium to the then current market price, without an
offer being required to be made to all other securityholders of the entity. In
addition, the bidder may make "creeping acquisitions" of securities by slowly
accumulating shares through stock exchange transactions which may result, over
time, in the acquisition of control without the payment of fair value for
control of the entity or the sharing of the control premium among all
securityholders.
The Unitholder Rights Plan is designed to encourage any bidder to provide all
Unitholders with equal treatment in a takeover and full value for their
investment in the Trust Units of the Trust.

SUMMARY OF THE UNITHOLDER RIGHTS PLAN

The following is a summary of the principal terms of the Unitholder Rights Plan
which is qualified in its entirety by the actual text of the Unitholder Rights
Plan agreement.

         ISSUE OF RIGHTS

On the Effective Date, one right (a "Right") shall be issued and attached to
each of the outstanding Trust Units and will attach to each Trust Unit of the
Trust that is subsequently issued. Initially, certificates representing Trust
Units of the Trust also represent the Rights.

         RIGHTS EXERCISE PRIVILEGE

The Rights will separate from the Trust Units of the Trust and will be
exercisable, subject to action by Vermilion, 10 trading days (the "Separation
Time") after a person has acquired, or commences a takeover bid to acquire, 20%
or more of the Trust Units, other than by an acquisition pursuant to a takeover
bid permitted by the Unitholders Rights Plan (a "Permitted Bid"). The
acquisition by any person (an "Acquiring Person") of 20% or more of the Trust
Units, other than by way of a Permitted Bid, is referred to as a "Flip-in
Event". Any Rights held by an Acquiring Person will become void upon the
occurrence of a Flip-in Event. In the absence of action by Vermilion and 10 days
after the occurrence of a Flip-in Event, each Right (other than those held by
the Acquiring Person), will permit the purchase of that number of Trust Units
having an aggregate market price (as defined in the Unitholders Rights Plan)
equal to twice the exercise price for an amount in cash equal to the exercise
price (which the Unitholders Rights Plan currently sets at $35).

The issue of the Rights is not initially dilutive. However, holders of Rights
not exercising their Rights upon the occurrence of a Flip-in Event may suffer
substantial dilution.

<PAGE>

                                      -33-


         CERTIFICATES AND TRANSFERABILITY

After the Separation Time, the Rights will be evidenced by Rights certificates
which will be transferable and traded separately from the Trust Units of the
Trust.

         PERMITTED BID REQUIREMENTS

The requirements for a Permitted Bid include the following:

         (a)      the takeover bid must be made for all Units to all holders of
                  Trust Units, other than the Acquiring Person and provide that,
                  subject to the conditions of the Takeover Bid, the Offeror
                  will take up and pay for all Units validly tendered without
                  pro-rating;

         (b)      the takeover bid must contain, and the take-up and payment for
                  securities tendered or deposited is subject to, an irrevocable
                  and unqualified provision that no Trust Units will be taken up
                  or paid for pursuant to any takeover bid prior to the close of
                  business on the date which is not less than 45 days following
                  the date of the takeover bid and only if at such date more
                  than 50% of the Trust Units held by independent Unitholders
                  shall have been deposited or tendered pursuant to the takeover
                  bid and not withdrawn;

         (c)      the takeover bid contains an irrevocable and unqualified
                  provision that unless the takeover bid is withdrawn, Trust
                  Units may be deposited pursuant to such takeover bid at any
                  time during the period of time between the date of the
                  takeover bid and the date on which Trust Units may be taken up
                  and paid for and that any Trust Units deposited pursuant to
                  the takeover bid may be withdrawn until taken up and paid for;
                  and

         (d)      the takeover bid must contain an irrevocable and unqualified
                  provision that if, on the date on which Trust Units may be
                  taken up and paid for, more than 50% of the Trust Units held
                  by independent Unitholders shall have been deposited pursuant
                  to the takeover bid and not withdrawn, the Acquiring Person
                  will make a public announcement of that fact and the takeover
                  bid will remain open for deposits and tenders of Trust Units
                  for not less than 10 Business Days from the date of such
                  public announcement.

The Unitholder Rights Plan allows for a competing Permitted Bid (a "Competing
Permitted Bid") to be made while a Permitted Bid is in existence. A Competing
Permitted Bid must satisfy all the requirements of a Permitted Bid (subject to
certain exceptions).

         WAIVER AND REDEMPTION

Vermilion may, prior to a Flip-in Event, waive the dilutive effects of the
Unitholder Rights Plan in respect of a particular Flip-in Event resulting from a
takeover bid made by way of a takeover bid circular to all holders of the Trust
Units of the Trust, in which event such waiver would be deemed also to be a
waiver in respect of any other Flip-in Event occurring under a takeover bid made
by way of a takeover bid circular to all holders of the Trust Units of the Trust
prior to the expiry of the takeover bid in respect of which the waiver is
granted. Vermilion may also waive the Unitholder Rights Plan in respect of a
particular Flip-in Event that has occurred through inadvertence, provided that
the Acquiring Person that inadvertently triggered such Flip-in Event reduces its
beneficial holdings to less than 20% of the outstanding Trust Units of the Trust
within 10 days or such other period as may be specified by Vermilion.

At any time prior to the occurrence of a Flip-in Event, Vermilion may at its
option redeem all, but not less than all, of the outstanding Rights at a price
of $0.00001 per Right.

<PAGE>

                                      -34-


         GRANDFATHER PROVISIONS

The Unitholder Rights Plan exempts from the definition of Acquiring Person any
person who is the beneficial owner, as defined in the Unitholder Rights Plan, of
more than 20% of the outstanding Trust Units determined as at the Effective Date
provided that such person does not after the Effective Date become the
beneficial owner of additional Trust Units constituting 1.0% or more of the
outstanding Trust Units of the Trust other than pursuant to a Permitted Bid, a
Competing Permitted Bid or certain other exempt provisions.

           ADDITIONAL INFORMATION RESPECTING VERMILION RESOURCES LTD.

MANAGEMENT OF VERMILION

Vermilion has a board of directors currently consisting of 6 individuals. The
directors are elected by the Trust at the direction of Unitholders by ordinary
resolution, and hold office until the next annual meeting of the Trust, which is
anticipated to be held in 2004.

As at March 31, 2003, the directors and officers of Vermilion, as a group,
beneficially owned, directly or indirectly, 1,897,829 Trust Units representing
approximately 4% of the issued and outstanding Trust Units, as well as an
aggregate of 4,893,240 Exchangeable Shares. Assuming all Exchangeable Shares
were exchanged for Trust Units, using the exchange ratio of 1.01352, the
directors and executive officers would hold 6,857,226 Trust Units, representing
12% of the issued and outstanding Trust Units.

The following table sets forth certain information respecting the directors and
officers of Vermilion.

<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE       OFFICE HELD          DIRECTOR      THE PAST FIVE YEARS
- ---------------------------     ---------------    ---------------   ----------------------------------------------
<S>                             <C>                      <C>         <C>
Lorenzo Donadeo                 President and            1994        Since  January   2003,   President  and  Chief
Calgary, Alberta                Chief Executive                      Executive    Officer   of   Vermilion;    Vice
                                Officer and                          President  and  Chief  Operating   Officer  of
                                Director                             Vermilion  from December 2000 to January 2003;
                                                                     since   February,    1995,    Executive   Vice
                                                                     President of Vermilion

Claudio A. Ghersinich           Executive Vice           1994        Since January 2003,  Executive Vice President,
Calgary, Alberta                President,                           Business  Development of Vermilion;  Executive
                                Business                             Vice  President,  New  Ventures  of  Vermilion
                                Development and                      from  December  2000 to  January  2003;  since
                                Director                             February,  1995,  Executive  Vice President of
                                                                     Vermilion

Jeffrey S. Boyce(1)(2)(3)(4)    Director                 1994        Since  January   2003,   President  and  Chief
Calgary, Alberta                                                     Executive   Officer  of  Clear   Energy  Inc.;
                                                                     President,    Chief   Executive   Officer   of
                                                                     Vermilion from 1994 to January 2003.

Joseph F. Killi(1)(3)           Director                 1999        President of  Rosebridge  Capital  Corporation
Calgary, Alberta                                                     Inc.
</TABLE>

<PAGE>

                                      -35-


<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE       OFFICE HELD          DIRECTOR      THE PAST FIVE YEARS
- ---------------------------     ---------------    ---------------   ----------------------------------------------
<S>                             <C>                      <C>         <C>
James D. McFarland(2)(4)        Director                 2002        Managing Director,  Southern Pacific Petroleum
Brisbane, Australia                                                  N.L.,  Brisbane  Australia  from April 1999 to
                                                                     present;   President   and   Chief   Operating
                                                                     Officer, Husky Oil Limited from 1995 to 1998.

Larry J.                        Director                 2002        Chairman   and   Chief   Executive    Officer,
Macdonald(1)(2)(3)(4)(5)                                             Pointwest  Energy  Inc.  from 2000 to present;
Calgary, Alberta                                                     Chairman   and   Chief   Executive    Officer,
                                                                     Westpoint  Energy Inc. from 1999 to 2000;  and
                                                                     President   and   Chief   Operating    Officer
                                                                     Anderson Exploration Ltd. from 1992 to 1999.

Curtis W. Hicks                 Vice President,     Not applicable   Since  March 2003 Vice  President  Finance and
Calgary, Alberta                Finance and                          Chief  Financial  Officer of  Vermilion;  Vice
                                Chief Financial                      President  Finance and Chief Financial Officer
                                Officer                              of NAL Oil & Gas Trust from  November  2000 to
                                                                     February  2003;   Chief   Executive   Officer,
                                                                     Caravan  Oil & Gas Ltd.  from  August  1998 to
                                                                     November  2000;  Treasurer,   Canadian  Hunter
                                                                     Exploration  Ltd.  from January 1998 to August
                                                                     1998.

Doug W. Reynolds                Vice President,     Not applicable   Since  April  2002,  Vice  President,  Land of
Calgary, Alberta                Land                                 Vermilion;  from  February 2000 to April 2002,
                                                                     Senior  Landman and Land Manager for Foothills
                                                                     N.E.  B.C.  and  Hamburg  Areas at  Burlington
                                                                     Resources  Canada  Ltd.;  from October 1998 to
                                                                     February  2000,  Senior  Landman  on the  East
                                                                     Coast  for  ExxonMobil  Canada  Energy;   from
                                                                     October 1997 to January 2000,  Petroleum  Land
                                                                     Consultant for various corporations.

Raj L. Patel                    Vice President,     Not applicable   Since January 2001, Vice President,  Marketing
Calgary, Alberta                Marketing                            of Vermilion;  from September 1996 to December
                                                                     2000,   President  Access  Energy  Management;
                                                                     from  January  1994 to  August  1996,  Manager
                                                                     Marketing for Penzoil Canada Inc.
</TABLE>

<PAGE>

                                      -36-


<TABLE>
<CAPTION>
                                                      DATE FIRST
                                                       ELECTED
           NAME AND                                OR APPOINTED AS   PRINCIPAL OCCUPATION DURING
  MUNICIPALITY OF RESIDENCE       OFFICE HELD          DIRECTOR      THE PAST FIVE YEARS
- ---------------------------     ---------------    ---------------   ----------------------------------------------
<S>                             <C>                      <C>         <C>
Paul J. Weevers                 Vice President,     Not applicable   Since May 2002, Vice President,  Production of
Calgary, Alberta                Production                           Vermilion;  from May 2001 to May 2002, Manager
                                                                     South  Production  at Apache  Canada Ltd.  and
                                                                     from  January  2001  to  May  2001   Reservoir
                                                                     Engineer   for  Apache   Canada   Ltd.;   Vice
                                                                     President,  Production  for Cabre  Exploration
                                                                     Ltd.  from  February  2000  to  January  2001;
                                                                     Independent    Engineering   Consultant   from
                                                                     December   1998   to   February   2000;   Vice
                                                                     President,   Production  at  Pioneer   Natural
                                                                     Resources  Canada Ltd.  from  December 1997 to
                                                                     December 1998.

Martin E. Robert                Vice President      Not applicable   Since    February    2003    Vice    President
Calgary, Alberta                Engineering &                        Engineering and  International  Operations and
                                International                        President  Directeur General of Vermilion REP
                                Operations;                          S.A.;  Directeur  General  of  Vermilion  REP
                                President                            S.A.  from July 1997 to January  2003;  Senior
                                Directeur                            Engineer,  Acquisitions  at NAL Resources Ltd.
                                General of                           from 1994 to 1997.
                                Vermilion REP
                                S.A.

Daniel Goulet                   Directeur           Not applicable   Since  February  2003  Directeur   General  of
Biscarosse, France              General of                           Vermilion    REP   S.A.;    Production    and
                                Vermilion REP                        Engineering  Manager  of  Vermilion  REP S.A.
                                S.A.;                                from August 2000 to January  2003;  In-Country
                                                                     Operations  Manager for PanAfrican Energy from
                                                                     1997 to 2000.

Charles W. Berard               Corporate           Not applicable   Partner at Macleod  Dixon  LLP,  Barristers  &
Calgary, Alberta                Secretary                            Solicitors.
</TABLE>

NOTES:
(1)      Audit Committee
(2)      Health, Safety and Environment Committee
(3)      Governance and Human Resources Committee
(4)      Independent Reserves Committee
(5)      Lead Director

The following is a brief description of the directors and officers of Vermilion.

LORENZO DONADEO, PRESIDENT & CHIEF EXECUTIVE OFFICER

Mr. Donadeo brings over 20 years of industry experience to Vermilion. He has an
extensive background in acquisitions, production and field operations, property
exploitation and gas marketing. He was employed as District Exploitation
Engineer and Manager, Natural Gas Marketing with Encor Energy from 1989 to 1991.
Prior to his involvement in Vermilion, he was co-founder of Vista Nuova Energy
Inc. Mr. Donadeo co-founded Vermilion with Mr. Boyce and Mr. Ghersinich. Mr.
Donadeo holds an honours degree in mechanical engineering from the University of
Alberta.

<PAGE>

                                      -37-


CLAUDIO A. GHERSINICH, EXECUTIVE VICE PRESIDENT, BUSINESS DEVELOPMENT

Mr. Ghersinich brings over 22 years of industry experience to Vermilion. Since
1995, he has been involved in development of Vermilion Resources Ltd. from a
start up to its current size. He has been responsible for business development
activities of the Company along with overseeing the administrative and human
resource functions at Vermilion. Mr. Ghersinich co-founded Vermilion with Mr.
Boyce and Mr. Donadeo. Prior to his involvement in Vermilion he was co-founder
of Vista Nuova Energy Inc. He was also a founder of Olympia Energy Ventures Ltd.
Mr. Ghersinich holds a civil engineering degree from the University of Manitoba.

JEFFREY S. BOYCE, DIRECTOR

Mr. Boyce is the former President, Chief Executive Officer and co-founder of
Vermilion, as well as co-founder of Aventura Energy Inc. Mr. Boyce has more than
22 years experience in oil and gas, primarily in corporate planning,
negotiating, and developing land and exploration strategies. This previous
experience included senior positions at International Pedco Energy, Opinac
Exploration, Amoco Canada and Dome Petroleum Ltd. Mr. Boyce is also a director
of Collicutt Hanover Services and is the President, Chief Executive Officer and
a director of Clear Energy Inc. Mr. Boyce holds an Education Diploma in Business
from Durham College and holds a Professional Landman Accreditation (P. Land).

JOSEPH F. KILLI, DIRECTOR

Mr. Killi is the President of Rosebridge Capital Corp. Inc. in Calgary, Alberta.
His real estate experience spans over 20 years, 17 of which were with Trizec
Corporation Ltd., where he last held the position of Executive Vice President,
Chief Financial Officer and Chief Operating Officer until late 1993. He has an
extensive background in all aspects of finance, including tax-oriented
structures and debt placements in Canada, the U.S. and the Euro-markets,
valuations, acquisitions, dispositions and workouts. Mr. Killi is a chartered
accountant and holds a Bachelor of Science degree in biochemistry from Loyola
College and a Bachelor of Commerce degree from Concordia University.

JAMES D. MCFARLAND, DIRECTOR

Mr. McFarland is currently the Managing Director of Southern Pacific Petroleum
N.L. headquartered in Brisbane. Mr. McFarland has 30 years of experience in the
oil and gas industry, most recently with Southern Pacific Petroleum N.L. and
Husky Oil Limited following a long career with Imperial Oil Limited and other
ExxonMobil affiliates in Canada, United States, United Kingdom and Western
Europe. Mr. McFarland graduated from Queen's University at Kingston, Ontario in
1970 with a Bachelor of Science degree with first class honours in chemical
engineering. He obtained his Master of Science degree in petroleum engineering
from the University of Alberta in 1974. In 1981, he completed the executive
development program at Cornell University in Ithaca, New York.

LARRY J. MACDONALD, DIRECTOR

Mr. Macdonald is currently the Chairman and Chief Executive Officer of Pointwest
Energy Inc. a private Canadian oil and gas development company. Mr. Macdonald
has over 30 years of industry experience in Western Canada. Mr. Macdonald has
recently chaired the Board of the Southern Alberta Institute of Technology and
the United Way of Calgary, Alberta Canada and area. Mr. Macdonald is also on the
board of directors of Clear Energy Inc. and Creststreet Financial Management
Limited. Mr. Macdonald holds a Bachelor of Science in Geology from the
University of Alberta.

CURTIS W. HICKS, VICE PRESIDENT FINANCE AND CHIEF FINANCIAL OFFICER

Mr. Hicks brings more than 19 years of industry experience, primarily in the
financial area of oil and gas operations, as well as property and corporate
acquisitions. VP Finance and CFO with ELAN Energy Inc. from 1983 to 1997 when
ELAN was sold for more than $700 million. Chief Executive Officer of Caravan Oil
& Gas Ltd. from 1998 to 2000 when Caravan was sold for $40 million. Mr. Hicks
has spent the past two years as VP Finance and CFO with

<PAGE>

                                      -38-


NAL Resources, which managed NAL Oil & Gas Trust as one of its clients. Mr.
Hicks is a Chartered Accountant and holds a Bachelor of Commerce degree
(Honours) from the University of Saskatchewan.

DOUG W. REYNOLDS, VICE PRESIDENT, LAND

Mr. Reynolds brings over 23 years of industry experience as a Professional
Landman to Vermilion. Mr. Reynolds has an extensive background in all areas of
land management specializing in land negotiations and asset acquisitions. Mr.
Reynolds land experience includes Western Canada, offshore Eastern Canada, the
United States and internationally. Previous companies include Burlington
Resources Canada Ltd., Exxon Mobil Canada, ELAN Energy Inc., ICG Resources Ltd.
and Norcen Energy Resources Limited. In addition, he was President of a
successful Land Consulting company where he negotiated land deals and provided
strategic recommendations for several clients. Mr. Reynolds holds a Bachelor of
Arts degree from the University of Calgary.

RAJ L. PATEL, VICE PRESIDENT, MARKETING

Mr. Patel brings to Vermilion over twenty-one years of oil and gas industry
experience. He has extensive experience in natural gas marketing, crude oil and
liquids marketing, price risk management, process engineering and plant
operations. Prior to joining Vermilion, Mr. Patel held senior marketing
positions with two large exploration and production companies. Most recently, he
had an established consulting company providing oil and gas marketing services
to various small and mid-cap companies where he marketed approximately 120
MMcf/d of gas and 22,000 BPD of crude oil and liquids. Mr. Patel is currently a
member of APEGGA. Mr. Patel holds a Bachelor's degree in chemical engineering
from M.F. University of Baroda and a masters degree in chemical engineering from
the University of Calgary.

PAUL J. WEEVERS, VICE PRESIDENT, PRODUCTION

Mr. Weevers has over 20 years of industry experience with a variety of junior to
senior sized producers. His background includes production engineering, field
operations, reservoir engineering and evaluations. Mr. Weevers is a registered
Professional Engineer in Alberta and British Columbia with a Bachelor of Science
degree in Chemical Engineering. He also holds an MBA from the University of
Calgary.

MARTIN E. ROBERT, VICE PRESIDENT ENGINEERING, & INTERNATIONAL OPERATIONS;
PRESIDENT DIRECTEUR GENERAL OF VERMILION REP S.A.

Mr. Robert brings over 15 years of domestic and international experience in the
oil and gas industry. He has extensive experience in drilling and completions,
project management and field and well evaluations. He has been responsible for
management of daily operations in Canada, Russia and France. For six years prior
to this appointment, Mr. Robert was General Manager for Vermilion REP S.A. in
France. Mr. Robert holds a Bachelor of Science degree in chemical engineering
from Queen's University.

DANIEL GOULET, DIRECTEUR GENERAL OF VERMILION REP SA

In addition to a Masters degree in Chemical Engineering, Mr. Goulet brings 15
years of domestic and international experience in oil and gas in Canada, Gabon
and France. He held senior positions in reservoir, production and operations
engineering at PanCanadian Petroleum Limited and was in-country Operations
Manager in Gabon for PanAfrican Energy. Mr. Goulet was recently promoted to
General Manager following three years as Operations and Engineering Manager of
Vermilion REP S.A. in France.

CHARLES W. BERARD, CORPORATE SECRETARY

Mr. Berard is a partner in the law firm Macleod Dixon LLP and practices in the
corporate/commercial area. He has extensive experience in Canadian oil and gas,
mining, and other commercial transactions, as well as going public, mergers and
acquisitions, and debt financing. Mr. Berard's practice has a significant
international component as he has been previously involved in resource
transactions in many countries worldwide. In addition to being a director of
Clear Energy Inc., Mr. Berard is also a director on several other TSX and TSX
Venture Exchange companies and

<PAGE>

                                      -39-


several private resource and technology companies. Mr. Berard holds a Bachelor
of Engineering degree from McGill University, a Bachelor of Civil Law degree and
a Bachelor of Laws degree, both from the University of Ottawa.

VERMILION SHARE CAPITAL

Vermilion is authorized to issue an unlimited number of common shares and an
unlimited number of exchangeable shares issuable in series, of which an
unlimited number of Series A Exchangeable Shares are authorized. The Trust is
the sole holder of the issued and outstanding shares of Vermilion.

COMMON SHARES

Each common share will entitle its holder to receive notice of and to attend all
meetings of the shareholders of Vermilion and to one vote at such meetings. The
holders of common shares will be, at the discretion of the board of directors of
Vermilion and subject to applicable legal restrictions, and subject to certain
preferences of holders of Exchangeable Shares, entitled to receive any dividends
declared by the board of directors on the common shares to the exclusion of the
holders of Exchangeable Shares, subject to the proviso that no dividends shall
be paid on the common shares unless all declared dividends on the outstanding
Exchangeable Shares have been paid in full. The holders of common shares will be
entitled to share equally in any distribution of the assets of Vermilion upon
the liquidation, dissolution, bankruptcy or winding-up of Vermilion or other
distribution of its assets among its shareholders for the purpose of winding-up
its affairs. Such participation is subject to the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares and any other
shares having priority over the common shares.

EXCHANGEABLE SHARES

Each Exchangeable Share will have economic rights (including the right to have
the Exchange Ratio adjusted to account for distributions paid to Unitholders)
and voting attributes (through the benefit of the Special Voting Right granted
to the Voting and Exchange Trust Agreement Trustee) as set forth in the
Exchangeable Share Provisions. In addition, holders of Exchangeable Shares will
have the right to receive Trust Units at any time in exchange for their
Exchangeable Shares, on the basis of the Exchange Ratio in effect at the time of
the exchange. Fractional Trust Units will not be delivered on any exchange of
Exchangeable Shares and the Voting and Exchange Trust Agreement. In the event
that the Exchange Ratio in effect at the time of an exchange would otherwise
entitle a holder of Exchangeable Shares to a fractional Trust Unit, the number
of Trust Units to be delivered will be rounded down to the nearest whole number
of Trust Units. Holders of Exchangeable Shares will not receive cash
distributions from the Trust. Rather, the Exchange Ratio will be adjusted to
account for distributions paid to Unitholders in the manner described below.
Holders of Exchangeable Shares may receive dividends from Vermilion at the
discretion of the directors of Vermilion.

The initial Exchange Ratio upon the completion of the Arrangement was equal to
one. On each Distribution Payment Date, the Exchange Ratio will be increased, on
a cumulative basis, in respect of the Distribution on such date by an amount
which assumes the reinvestment of such Distribution in Trust Units at the
then-prevailing Current Market Price of a Trust Unit. The Exchange Ratio will be
decreased in respect of any dividends paid on the Exchangeable Shares by an
amount of such dividend divided by the then-prevailing Current Market Price of a
Trust Unit.

RANKING

The Exchangeable Shares will rank rateably with shares of any other series of
exchangeable shares of Vermilion and prior to any common shares of Vermilion and
any other shares ranking junior to the Exchangeable Shares with respect to the
payment of dividends, if any, that have been declared and the distribution of
assets in the event of the liquidation, dissolution or winding-up of Vermilion.

<PAGE>

                                      -40-


DIVIDENDS

Holders of Exchangeable Shares will be entitled to receive cash dividends if, as
and when declared by the board of directors of Vermilion. Vermilion anticipates
that it may from time to time declare dividends on the Exchangeable Shares up to
but not exceeding any cash distributions on the Trust Units into which such
Exchangeable Shares are exchangeable. In the event that any such dividends are
paid, the Exchange Ratio will be correspondingly reduced to reflect such
dividends.

CERTAIN RESTRICTIONS

Vermilion will not, without obtaining the approval of the holders of the
Exchangeable Shares as set forth below under the subheading "Amendment and
Approval":

         (a)      pay any dividend on the common shares or any other shares
                  ranking junior to the Exchangeable Shares, other than stock
                  dividends payable in common shares or any other shares ranking
                  junior to the Exchangeable Shares;

         (b)      redeem, purchase or make any capital distribution in respect
                  of the common shares or any other shares ranking junior to the
                  Exchangeable Shares;

         (c)      redeem or purchase any other shares of Vermilion ranking
                  equally with the Exchangeable Shares with respect to the
                  payment of dividends or on any liquidation distribution; or

         (d)      amend the articles or by-laws of Vermilion in any manner that
                  would affect the rights or privileges of the holders of
                  Exchangeable Shares.

The above restrictions in (a), (b) and (c) shall not apply if all declared
dividends on the outstanding Exchangeable Shares shall have been paid in full.

LIQUIDATION OR INSOLVENCY OF VERMILION

In the event of the liquidation, dissolution or winding-up of Vermilion or any
other proposed distribution of the assets of Vermilion among its shareholders
for the purpose of winding up its affairs, a holder of Exchangeable Shares will
be entitled to receive from Vermilion, in respect of each such Exchangeable
Share, that number of Trust Units equal to the Exchange Ratio as at the
effective date of such event.

Upon the occurrence of such an event, the Trust and Trust Subsidiary will each
have the overriding right to purchase all but not less than all of the
Exchangeable Shares then outstanding (other than Exchangeable Shares held by the
Trust or any subsidiary of the Trust) at a purchase price per Exchangeable Share
to be satisfied by the issuance or delivery, as the case may be, of that number
of Trust Units equal to the Exchange Ratio at such time and, upon the exercise
of this right, the holders thereof will be obligated to sell such Exchangeable
Shares to the Trust or Trust Subsidiary, as applicable. This right may be
exercised by either the Trust or Trust Subsidiary.

Upon the occurrence of an Insolvency Event, the Voting and Exchange Trust
Agreement Trustee on behalf of the holders of the Exchangeable Shares will have
the right to require the Trust or Trust Subsidiary to purchase any or all of the
Exchangeable Shares then outstanding and held by such holders at a purchase
price per Exchangeable Share to be satisfied by the issuance or delivery, as the
case may be, of that number of Trust Units equal to the Exchange Ratio at such
time, as described under the subheading "Voting and Exchange Trust Agreement-
Optional Exchange Right".

AUTOMATIC EXCHANGE RIGHT ON LIQUIDATION OF THE TRUST

The Voting and Exchange Trust Agreement provides that in the event of a Trust
liquidation event, as described below, the Trust or Trust Subsidiary will be
deemed to have purchased all outstanding Exchangeable Shares and each holder of
Exchangeable Shares will be deemed to have sold their Exchangeable Shares
immediately prior to

<PAGE>

                                      -41-


such Trust liquidation event at a purchase price per Exchangeable Share to be
satisfied by the issuance or delivery, as the case may be, of that number of
Trust Units equal to the Exchange Ratio at such time. "Trust liquidation event"
means:

         (a)      any determination by the Trust to institute voluntary
                  liquidation, dissolution or winding-up proceedings in respect
                  of the Trust or to effect any other distribution of assets of
                  the Trust among the Unitholders for the purpose of winding up
                  its affairs; or

         (b)      the earlier of, the Trust's receiving notice of and the
                  Trust's otherwise becoming aware of, any threatened or
                  instituted claim, suit, petition or other proceedings with
                  respect to the involuntary liquidation, dissolution or winding
                  up of the Trust or to effect any other distribution of assets
                  of the Trust among the Unitholders for the purpose of winding
                  up its affairs in each case where the Trust has failed to
                  contest in good faith such proceeding within 30 days of
                  becoming aware thereof.

RETRACTION OF EXCHANGEABLE SHARES BY HOLDERS AND RETRACTION CALL RIGHT

Subject to the Retraction Call Right of the Trust and Trust Subsidiary described
below, a holder of Exchangeable Shares will be entitled at any time to require
Vermilion to redeem any or all of the Exchangeable Shares held by such holder
for a retraction price (the "Retraction Price") per Exchangeable Share equal to
the value of that number of Trust Units equal to the Exchange Ratio as at the
date of redemption (the "Retraction Date"), to be satisfied by the delivery of
such number of Trust Units. Fractional Trust Units will not be delivered. Any
amount payable on account of the Retraction Price that includes a fractional
Trust Unit will be rounded down to the nearest whole number of Trust Units.
Holders of the Exchangeable Shares may request redemption by presenting to
Vermilion or the transfer agent for the Exchangeable Shares a certificate or
certificates representing the number of Exchangeable Shares the holder desires
to have redeemed, together with a duly executed retraction request and such
other documents as may be reasonably required to effect the redemption of the
Exchangeable Shares. Subject to extension as described below, the redemption
will become effective on the Retraction Date, which will be seven business days
after the date on which Vermilion or the transfer agent receives the retraction
notice. Unless otherwise requested by the holder and agreed to by Vermilion, the
Retraction Date will not occur on such seventh business day if such day would
occur between any Distribution Record Date and the Distribution Payment Date
that corresponds to such Distribution Record Date. In this case, the Retraction
Date will instead occur on such Distribution Payment Date. The reason for this
is to ensure that the Exchange Ratio used in connection with such redemption is
increased to account for the Distribution.

When a holder requests Vermilion to redeem the Exchangeable Shares, the Trust
and Trust Subsidiary will have an overriding right (the "Retraction Call Right")
to purchase on the Retraction Date all but not less than all of the Exchangeable
Shares that the holder has requested Vermilion to redeem at a purchase price per
Exchangeable Share equal to the Retraction Price, to be satisfied by the
delivery of that number of Trust Units equal to the Exchange Ratio at such time.
At the time of a Retraction Request by a holder of Exchangeable Shares,
Vermilion will immediately notify the Trust and Trust Subsidiary. The Trust or
Trust Subsidiary must then advise Vermilion within two business days as to
whether the Retraction Call Right will be exercised. A holder may revoke his or
her Retraction Request at any time prior to the close of business on the last
business day immediately preceding the Retraction Date, in which case the
holder's Exchangeable Shares will neither be purchased by the Trust or Trust
Subsidiary nor be redeemed by Vermilion. If the holder does not revoke his or
her Retraction Request, the Exchangeable Shares that the holder has requested
Vermilion to redeem will on the Retraction Date be purchased by the Trust or
Trust Subsidiary or redeemed by Vermilion, as the case may be, in each case at a
purchase price per Exchangeable Share equal to the Retraction Price. In
addition, a holder of Exchangeable Shares may elect to instruct the Voting and
Exchange Trust Agreement Trustee to exercise the optional exchange right (the
"Optional Exchange Right") to require the Trust or Trust Subsidiary to acquire
such holder's Exchangeable Shares in circumstances where neither the Trust nor
Trust Subsidiary have exercised the Retraction Call Right. See "Voting and
Exchange Trust Agreement-Optional Exchange Right".

The Retraction Call Right may be exercised by either the Trust or Trust
Subsidiary. If, as a result of solvency provisions of applicable law, Vermilion
is not permitted to redeem all Exchangeable Shares tendered by a retracting
holder, Vermilion will redeem only those Exchangeable Shares tendered by the
holder as would not be contrary to

<PAGE>

                                      -42-


such provisions of applicable law. The holder of any Exchangeable Shares not
redeemed by Vermilion will be deemed to have required the Trust to purchase such
unretracted Exchangeable Shares in exchange for Trust Units on the Retraction
Date pursuant to the Optional Exchange Right. See "Voting and Exchange Trust
Agreement- Optional Exchange Right".

REDEMPTION OF EXCHANGEABLE SHARES

Subject to applicable law and the Redemption Call Right of the Trust and Trust
Subsidiary, Vermilion:

         (a)      will, on the tenth anniversary of the Effective Date, subject
                  to extension of such date by the board of directors of
                  Vermilion (the "Automatic Redemption Date"), redeem all but
                  not less than all of the then outstanding Exchangeable Shares
                  for a redemption price per Exchangeable Share equal to the
                  value of that number of Trust Units equal to the Exchange
                  Ratio as at the last business day prior to that Redemption
                  Date (as that term is defined below) (the "Redemption Price"),
                  to be satisfied by the delivery of such number of Trust Units;
                  and

         (b)      may, at any time when the aggregate number of issued and
                  outstanding Exchangeable Shares is less than 500,000 (other
                  than Exchangeable Shares held by the Trust and its
                  subsidiaries and as such shares may be adjusted from time to
                  time) (the "De Minimus Redemption Date" and, collectively with
                  the Automatic Redemption Date, a "Redemption Date"), redeem
                  all but not less than all of the then outstanding Exchangeable
                  Shares for the Redemption Price per Exchangeable Share (unless
                  contested in good faith by the Trust).

Vermilion will, at least 45 days prior to any Redemption Date, provide the
registered holders of the Exchangeable Shares with written notice of the
prospective redemption of the Exchangeable Shares by Vermilion.

The Trust and Trust Subsidiary will have the right (the "Redemption Call
Right"), notwithstanding a proposed redemption of the Exchangeable Shares by
Vermilion on the applicable Redemption Date, pursuant to the Exchangeable Share
Provisions, to purchase on any Redemption Date all but not less than all of the
Exchangeable Shares then outstanding (other than Exchangeable Shares held by the
Trust or its subsidiaries) in exchange for the Redemption Price per Exchangeable
Share and, upon the exercise of the Redemption Call Right, the holders of all of
the then outstanding Exchangeable Shares will be obliged to sell all such shares
to the Trust or Trust Subsidiary, as applicable. If either the Trust or Trust
Subsidiary exercises the Redemption Call Right, then Vermilion's right to redeem
the Exchangeable Shares on the applicable Redemption Date will terminate. The
Redemption Call Right may be exercised by either the Trust or Trust Subsidiary.

VOTING RIGHTS

Except as required by applicable law, the holders of the Exchangeable Shares are
not entitled as such to receive notice of or attend any meeting of the
shareholders of Vermilion or to vote at any such meeting. Holders of
Exchangeable Shares will have the notice and voting rights respecting meetings
of the Trust that are provided in the Voting and Exchange Trust Agreement. See
"Voting and Exchange Trust Agreement - Voting Rights".

AMENDMENT AND APPROVAL

The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be changed only with the approval of the holders
thereof. Any such approval or any other approval or consent to be given by the
holders of the Exchangeable Shares will be sufficiently given if given in
accordance with applicable law and subject to a minimum requirement that such
approval or consent be evidenced by a resolution passed by not less than
two-thirds of the votes cast thereon (other than shares beneficially owned by
the Trust, or any of its subsidiaries and other affiliates) at a meeting of the
holders of the Exchangeable Shares duly called and held at which holders of at
least 5% of the then outstanding Exchangeable Shares are present in person or
represented by proxy. In the event that no such quorum is present at such
meeting within one-half hour after the time appointed therefor, then the meeting
will be adjourned to such place and time (not less than ten days later) as may
be determined at the original meeting and the holders of Exchangeable Shares
present in person or represented by proxy at the adjourned meeting will

<PAGE>

                                      -43-


constitute a quorum thereat and may transact the business for which the meeting
was originally called. At the adjourned meeting, a resolution passed by the
affirmative vote of not less than two-thirds of the votes cast thereon (other
than shares beneficially owned by the Trust or any of its subsidiaries and other
affiliates) will constitute the approval or consent of the holders of the
Exchangeable Shares.

ACTIONS BY THE TRUST UNDER THE SUPPORT AGREEMENT AND THE VOTING AND EXCHANGE
TRUST AGREEMENT

Under the Exchangeable Share Provisions, Vermilion will agree to take all such
actions and do all such things as are necessary or advisable to perform and
comply with its obligations under, and to ensure the performance and compliance
by the Trust with its obligations under, the Support Agreement and the Voting
and Exchange Trust Agreement.

NON-RESIDENT AND TAX-EXEMPT HOLDERS

Exchangeable Shares will not be issued to persons who are Non-Residents or who
are exempt from tax under Part I of the Tax Act.

VOTING AND EXCHANGE TRUST AGREEMENT

VOTING RIGHTS

In accordance with the Voting and Exchange Trust Agreement, the Trust will issue
a Special Voting Right to Computershare Trust Company of Canada, the Voting and
Exchange Trust Agreement Trustee, for the benefit of the holders (other than the
Trust and Trust Subsidiary) of the Exchangeable Shares. The Special Voting Right
will carry a number of votes, exercisable at any meeting at which Unitholders
are entitled to vote, equal to the number of Trust Units (rounded down to the
nearest whole number) into which the Exchangeable Shares are then exchangeable
multiplied by the number of votes to which the holder of one Trust Unit is then
entitled. With respect to any written consent sought from the Unitholders, each
vote attached to the Special Voting Right will be exercisable in the same manner
as set forth above.

Each holder of an Exchangeable Share on the record date for any meeting at which
Unitholders are entitled to vote will be entitled to instruct the Voting and
Exchange Trust Agreement Trustee to exercise that number of votes attached to
the Special Voting Right which relate to the Exchangeable Shares held by such
holder. The Voting and Exchange Trust Agreement Trustee will exercise each vote
attached to the Special Voting Right only as directed by the relevant holder
and, in the absence of instructions from a holder as to voting, will not
exercise such votes.

The Voting and Exchange Trust Agreement Trustee will send to the holders of the
Exchangeable Shares the notice of each meeting at which the Unitholders are
entitled to vote, together with the related meeting materials and a statement as
to the manner in which the holder may instruct the Voting and Exchange Trust
Agreement Trustee to exercise the votes attaching to the Special Voting Right,
at the same time as the Trust sends such notice and materials to the
Unitholders. The Voting and Exchange Trust Agreement Trustee will also send to
the holders copies of all information statements, interim and annual financial
statements, reports and other materials sent by the Trust to the Unitholders at
the same time as such materials are sent to the Unitholders. To the extent such
materials are provided to the Voting and Exchange Trust Agreement Trustee by the
Trust, the Voting and Exchange Trust Agreement Trustee will also send to the
holders all materials sent by third parties to Unitholders, including dissident
proxy circulars and tender and exchange offer circulars, as soon as possible
after such materials are first sent to Unitholders.

All rights of a holder of Exchangeable Shares to exercise votes attached to the
Special Voting Right will cease upon the exchange of all such holder's
Exchangeable Shares for Trust Units. With the exception of administrative
changes for the purpose of adding covenants for the protection of the holders of
the Exchangeable Shares, making necessary amendments or curing ambiguities or
clerical errors (in each case provided that the board of directors of Trust
Subsidiary and Vermilion are of the opinion that such amendments are not
prejudicial to the interests of the holders of the Exchangeable Shares), the
Voting and Exchange Trust Agreement may not be amended without the approval of
the holders of the Exchangeable Shares.

<PAGE>

                                      -44-


OPTIONAL EXCHANGE RIGHT

Upon the occurrence and during the continuance of:

         (a)      an Insolvency Event; or

         (b)      circumstances in which the Trust or Trust Subsidiary may
                  exercise a Call Right, but elect not to exercise such Call
                  Right;

a holder of Exchangeable Shares will be entitled to instruct the Trustee to
exercise the Optional Exchange Right with respect to any or all of the
Exchangeable Shares held by such holder, thereby requiring the Trust or Trust
Subsidiary to purchase such Exchangeable Shares from the holder. Immediately
upon the occurrence of (i) an Insolvency Event, (ii) any event which will, with
the passage of time or the giving of notice, become an Insolvency Event, or
(iii) the election by the Trust and Trust Subsidiary not to exercise a Call
Right which is then exercisable by the Trust and Trust Subsidiary, Vermilion,
the Trust or Trust Subsidiary will give notice thereof to the Trustee. As soon
as practicable thereafter, the Trustee will then notify each affected holder of
Exchangeable Shares (who has not already provided instructions respecting the
exercise of the Optional Exchange Right) of such event or potential event and
will advise such holder of its rights with respect to the Optional Exchange
Right.

The purchase price payable by the Trust or Trust Subsidiary for each
Exchangeable Share to be purchased under the Optional Exchange Right will be
satisfied by the issuance of that number of Trust Units equal to the Exchange
Ratio as at the last business day prior to the day of closing of the purchase
and sale of such Exchangeable Share under the Exchange Right (the "Exchange
Price").

If, as a result of solvency provisions of applicable law, Vermilion is unable to
redeem all of a holder's Exchangeable Shares which such holder is entitled to
have redeemed in accordance with the Exchangeable Share Provisions, the holder
will be deemed to have exercised the Optional Exchange Right with respect to the
unredeemed Exchangeable Shares and the Trust or Trust Subsidiary will be
required to purchase such shares from the holder in the manner set forth above.

SUPPORT AGREEMENT

THE TRUST SUPPORT OBLIGATION

Under the Support Agreement, the Trust will agree that:

         (a)      the Trust will take all actions and do all things necessary to
                  ensure that Vermilion is able to pay to the holders of the
                  Exchangeable Shares the Liquidation Amount in the event of a
                  liquidation, dissolution or winding-up of Vermilion, the
                  Retraction Price in the event of the giving of a Retraction
                  Request by a holder of Exchangeable Shares, or the Redemption
                  Price in the event of a redemption of Exchangeable Shares by
                  Vermilion; and

         (b)      the Trust will not vote or otherwise take any action or omit
                  to take any action causing the liquidation, dissolution or
                  winding-up of Vermilion.

The Support Agreement will also provide that the Trust will not issue or
distribute to the holders of all or substantially all of the outstanding Trust
Units:

         (a)      additional Trust Units or securities convertible into Trust
                  Units;

         (b)      rights, options or warrants for the purchase of Trust Units;
                  or

         (c)      units or securities of the Trust other than Trust Units,
                  evidences of indebtedness of the Trust or other assets of the
                  Trust;

<PAGE>

                                      -45-


unless the same or an equivalent distribution is made to holders of Exchangeable
Shares, an equivalent change is made to the Exchangeable Shares, or the approval
of Vermilion and holders of Exchangeable Shares has been obtained.

In addition, the Trust may not subdivide, reduce, consolidate, reclassify or
otherwise change the terms of the Trust Units unless an equivalent change is
made to the Exchangeable Shares or the approval of the holders of Exchangeable
Shares has been obtained.

In the event of any proposed takeover bid, or similar transaction affecting the
Trust Units and supported by the Trust, the Trust will use reasonable efforts to
take all actions necessary or desirable to enable holders of Exchangeable Shares
to participate in such transaction to the same extent and on an economically
equivalent basis as the Unitholders.

The Support Agreement also provides that, as long as any outstanding
Exchangeable Shares are owned by any person or entity other than the Trust or
any of its respective subsidiaries and other affiliates, the Trust will, unless
approval to do otherwise is obtained from the holders of Exchangeable Shares,
remain the direct or indirect beneficial owner collectively of more than 50% of
all of the issued and outstanding voting securities of Vermilion, provided that
the Trust will not be in violation of this obligation if a party acquires all or
substantially all of the assets of the Trust. With the exception of
administrative changes for the purpose of adding covenants for the protection of
the holders of the Exchangeable Shares, making certain necessary amendments or
curing ambiguities or clerical errors (in each case provided that the board of
directors of Vermilion and the Trustee are of the opinion that such amendments
are not prejudicial to the interests of the holders of the Exchangeable Shares),
the Support Agreement may not be amended without the approval of the holders of
the Exchangeable Shares.

Under the Support Agreement, the Trust will agree to not exercise any voting
rights attached to the Exchangeable Shares owned by it or any of its
subsidiaries and other affiliates on any matter considered at meetings of
holders of Exchangeable Shares (including any approval sought from such holders
in respect of matters arising under the Support Agreement).

DELIVERY OF TRUST UNITS

The Trust will agree to make such filings and seek such regulatory consents and
approvals as are necessary so that the Trust Units issuable upon the exchange of
Exchangeable Shares will be issued in compliance with applicable securities laws
in Canada and may be traded freely on the TSX or such other exchange on which
the Trust Units may be listed, quoted or posted for trading from time to time.

NOTES

The following summary of the material attributes and characteristics of the
Notes does not purport to be complete and is qualified in its entirety by
reference to the provisions of a note indenture (the "Note Indenture") dated
January 16, 2003 and made between Vermilion Acquisition Ltd. (prior to its
amalgamation with Vermilion under the Arrangement) and Computershare Trust
Company of Canada, as trustee (the "Note Trustee"), which contains a complete
statement of such attributes and characteristics. The Notes have been issued
under the Note Indenture.

TERMS AND ISSUE OF NOTES

Pursuant to the Arrangement, Notes were issued to the Trust and to former
holders of Common Shares and Options of Vermilion. Notes issued to such former
holders were transferred by such holders to the Trust in return for Trust Units.
As a result, the Trust holds all of the issued and outstanding Notes.

The Notes are be unsecured and bear interest from the date of issue at 13% per
annum. Interest will be payable for each month during the term on the 15th day
of the month following such month. The first interest payment will be due on
March 15, 2003 for the period commencing on the Effective Date and ending on
February 28, 2003.

<PAGE>

                                      -46-


Although pursuant to the terms of the Note Indenture Vermilion is permitted to
make payments against the principal amount of the Notes outstanding from time to
time without notice or bonus, Vermilion is not required to make any payment in
respect of principal until December 31, 2028, subject to the terms of any
secured financing and subject to extension in the limited circumstances provided
in the Note Indenture.

In contemplation of the possibility that Notes may be distributed to Unitholders
upon the redemption of their Trust Units, the Note Indenture provides that if
persons other than the Trust (the "Non-Fund Holders") own Notes having an
aggregate principal amount in excess of $1,000,000, either the Trust or the
Non-Fund Holders shall be entitled, among other things, to require the Note
Trustee to exercise the powers and remedies available under the Note Indenture
upon an event of default and, with the Trust, the Non-Fund Holders may provide
consents, waivers or directions relating generally to the variance of the Note
Indenture and the rights of noteholders. The Note Indenture will allow the Trust
flexibility to delay payments of interest or principal otherwise due to it while
payment is made to other noteholders, and to allow other noteholders to be paid
out before the Trust. Any delayed payments will be due 5 days after demand.

Principal and interest on the Notes will be payable in lawful money of Canada
directly to the holders of Notes at their address set forth in the register of
holders of Notes.

RANKING

The Notes will be unsecured debt obligations of Vermilion and will rank PARI
PASSU with all other unsecured indebtedness of Vermilion, but subordinate to all
secured debt.

EVENTS OF DEFAULT

The Note Indenture will provide that any of the following shall constitute an
Event of Default: (a) default in payment of the principal of the Notes when
required; (b) the failure to pay all of the interest obligations on the Notes
for a period of three months; (c) if Vermilion has defaulted and a demand for
payment has been made under any material instrument, indenture or document
evidencing indebtedness of more than $5 million and Vermilion has failed to
remedy such default within applicable curative periods; (d) certain events of
winding-up, liquidation, bankruptcy, insolvency, receivership or seizure; (e)
default in the observance or performance of any other covenant or condition of
the Note Indenture and continuance of such default for a period of 30 days after
notice in writing has been given by the Note Trustee to Vermilion specifying
such default and requiring Vermilion to rectify the same; (f) Vermilion ceasing
to carry on its business other than as contemplated in this Information
Circular; and (g) material default by Vermilion under material agreements if
property is liable to forfeiture or termination.

ROYALTY AGREEMENT

Coincident with the Arrangement becoming effective, the Partnership and the
Trust entered into the Royalty Agreement pursuant to which the Partnership
granted the Royalty to the Trust. As owner of the Royalty, the Trust is
entitled, as of February 1, 2003, to cash distributions of approximately 99% of
the cash flow from all present and future oil and gas properties and related
tangibles owned by the Partnership after certain costs, expenditures and
deductions which include 99% of: (i) all amounts of interest and principal
payable by Vermilion on account of or in respect of its credit facilities (ii)
specified amounts of interest and principal payable by Vermilion on account of
or in respect of its indebtedness to the Trust; (iii) the Partnership's share of
operating costs and capital expenditures; (iv) amounts required to be paid to
certain reserves; (v) general and administrative expenses; and (vi) acquisition
costs of future oil and gas properties and related tangibles. Such cash
distributions are to be paid on or about the 15th day of the second month
following the month to which the distribution relates.

From time to time upon notice from the Partnership, the Trust has an obligation
(the "Deferred Purchase Price Obligation") to pay the Partnership, as additional
consideration for the Royalty, such portion of the acquisition cost of future
oil and gas properties and capital expenditures including amounts borrowed by
Vermilion to fund such costs and expenditures as may be designated by the
Partnership. The Trust's obligation to pay amounts as a Deferred Purchase Price
Obligation is subject to it having available funds from certain designated
sources.

<PAGE>

                                      -47-


The Partnership is entitled to make farmouts or other similar dispositions of
specific interests in any part of the properties subject to the Royalty, and
upon the farmee or other participant earning its interest pursuant to the
farmout or other disposition, the Royalty shall burden only the working interest
retained by or reserved to the Partnership. Any net proceeds from the sale of
properties subject to the Royalty (to the extent allocable to petroleum and
natural gas rights) shall be allocated to the Trust as to 99%. The remaining 1%
and all amounts allocated to tangibles and miscellaneous interests shall be
allocated to the Partnership.

Under the Royalty Agreement, the Trust is obligated to reimburse the Partnership
in respect of 99% of certain non-deductible crown royalties paid by the
Partnership; and the Partnership shall be entitled to set off such amounts
reimbursable to it against payments to the Trust on account of the Royalty.

The Royalty does not constitute an interest in land. Except upon the insolvency
of the Partnership, the Trust is not entitled to take its share of production in
kind or to separately sell or market its share of petroleum substances.

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth selected consolidated financial information with
respect to each of the last five completed financial quarters of the
Corporation.

<TABLE>
<CAPTION>
($000's EXCEPT SHARE AND PER SHARE AMOUNTS)
                                             2002            2001            2000           1999            1998
                                       ---------------------------------------------------------------------------
<S>                                    <C>              <C>             <C>            <C>             <C>
Petroleum and natural gas sales        $   287,540      $   274,899     $   234,653    $   108,443     $    55,660
Total petroleum and natural gas
sales, net of royalties                    226,208          211,155         179,123         86,719          45,151
Net earnings                                41,322           65,743          61,449         20,008           3,438
Net earnings per share
     Basic                                    0.74             1.21            1.17           0.40            0.07
Cash flow from operations                  157,365          152,885         138,151         55,349          19,621
Cash flow from operations per share
     Basic                                    2.82             2.81            2.63           1.12            0.42
Total book value of assets                 811,711          605,779         489,703        303,343         264,713
Total long-term debt                       193,025          101,053         101,619         95,539          93,903
Shareholders' equity                   $   324,308      $   279,043     $   213,439    $   149,053     $   123,757
Shares outstanding at period end        55,866,918       55,014,302      54,489,920     51,360,293      49,188,517
Share price at period end                   $11.20           $10.00           $8.00          $4.45           $2.85
</TABLE>


<PAGE>

                                      -48-


The following table sets forth selected consolidated financial information with
respect to each of the last eight completed financial quarters of the
Corporation.

<TABLE>
<CAPTION>
                         SELECTED QUARTERLY INFORMATION

                                               3 MONTHS ENDED    3 MONTHS ENDED    3 MONTHS ENDED     3 MONTHS ENDED
($000's EXCEPT SHARE AND PER SHARE AMOUNTS)    MARCH 31, 2002    JUNE 30, 2002     SEPT. 30, 2002     DEC. 31, 2002
<S>                                                <C>               <C>                <C>               <C>
Total petroleum and natural gas sales, net         $50,855           $54,016            $56,291           $65,046
of royalties
Net earnings                                        10,406             9,369              7,741            13,806
Net earnings per share
     Basic                                            0.19              0.17               0.14              0.24
     Diluted                                          0.18              0.17               0.14              0.24
Cash flow from operations                           32,796            33,327             36,210            55,032
Cash flow from operations per share
     Basic                                            0.59              0.60               0.65              0.98
     Diluted                                          0.58              0.58               0.64              0.97


                                               3 MONTHS ENDED    3 MONTHS ENDED    3 MONTHS ENDED     3 MONTHS ENDED
($000's EXCEPT SHARE AND PER SHARE AMOUNTS)    MARCH 31, 2001    JUNE 30, 2001     SEPT. 30, 2001     DEC. 31, 2001
Total petroleum and natural gas sales, net         $63,207           $56,738            $45,292           $45,918
of royalties
Net earnings                                        23,615            22,279             11,949             7,900
Net earnings per share
     Basic                                            0.44              0.41               0.21              0.15
     Diluted                                          0.42              0.40               0.21              0.14
Cash flow from operations                           50,054            42,137             31,127            29,567
Cash flow from operations per share
     Basic                                            0.92              0.78               0.57              0.54
     Diluted                                          0.89              0.76               0.55              0.51
</TABLE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Vermilion continued growing production in 2002, increasing average daily volumes
15%. A discovery in the Peace River Arch area came on stream in the fourth
quarter of 2001 and production from the area averaged 3,473 boe/d for the full
year of 2002. Vermilion acquired Artemis Energy Limited ("Artemis") in the first
quarter of 2002, and this acquisition contributed production which averaged
1,345 boe/d for the year. On July 30, 2002, Vermilion closed the acquisition of
a 40% interest in, and operatorship of, the Central Block, onshore Trinidad.
This interest has since been sold to Vermilion's subsidiary Aventura Energy Inc.
("Aventura") (See below discussed). The Carapal Ridge 1 well in the Central
Block, which was drilled in 2001, commenced production on December 12, 2002 with
estimated current production volumes for Aventura's 65% interest at 2,500 boe/d.

Vermilion achieved record cash flow in 2002 of $157.4 million ($2.82 per share).

On January 22, 2003, Vermilion reorganized itself into Vermilion Energy Trust
("Trust") and Clear Energy Inc. ("Clear"). Vermilion's Board of Directors
concluded that this realignment was in the best interests of shareholders and
both shareholders and optionholders approved the reorganization at a special
meeting held on January 15, 2003. The Trust maintained 94% of the mature
producing assets of Vermilion while Clear, an exploration-focused producer,
acquired certain natural gas weighted assets and undeveloped lands. In addition,
Vermilion entered into an agreement with majority-controlled Aventura whereby
Vermilion sold 100% of its shares in Vermilion (Barbados) Ltd. which held
Vermilion's Trinidad assets, to Aventura in consideration of 212.1 million
common shares of Aventura at a deemed price of $0.35 per share. Vermilion now
owns 72.4% of Aventura.

<PAGE>

                                      -49-


HIGHLIGHTS

                                                     2002        2001      2000
                                                   -----------------------------
Revenues ($m)                                      287,540     274,899   234,653
Net earnings ($m)                                   41,322      65,743    61,449
     Per  share ($)                                   0.74        1.21      1.17
Cash flow ($m)                                     157,365     152,885   138,151
     Per share ($)                                    2.82        2.81      2.63
Return on shareholders' equity (%)                    13.7        26.7      33.9
WTI (US$/bbl)                                        25.83       25.94     30.19
AECO (Cdn$/GJ)                                        3.86        5.20      5.29
Realized price ($/boe)                               30.75       33.69     34.96
Controllable costs ($/boe) (1)                        5.60        4.96      4.73
Cash flow netback ($/boe)                            16.83       18.74     20.58

NOTES:
(1)  Comprised of lifting costs and G&A


Oil prices were strong for most of 2002. Early in the year, WTI was in the US
$20 range, but since March, 2002 has remained in the US $25-$30 range. Gas
prices were relatively soft in comparison to oil prices throughout 2002, but
strengthened considerably in the fourth quarter.

PRODUCTION/SHARE

                                                     2002        2001      2000
                                                   -----------------------------
Production (boe/d)                                  25,619      22,354    18,341
Production per share (boe/d) (1)                       427         383       310

NOTES:
(1)  Per million diluted shares outstanding


PROVEN RESERVES/SHARE

                                                     2002        2001      2000
                                                   -----------------------------
Proven reserves (mboe) (1)                          98,011      80,252    88,113
Proven reserves (boe/diluted share)                   1.63        1.37      1.49

NOTES:
(1)  Includes Aventura's share of proven reserves in Trinidad.


Vermilion continued to grow its production on a per share basis, success that
can be attributed to its efficient use of capital and a balanced inventory of
projects with low, medium and high risk. Vermilion's growth in 2002 was financed
primarily through internally generated cash flow from operations combined with
additional bank indebtedness, a strategy that provided value growth for
investors. Equity as a method of financing was used sparingly over the past two
years.

LIQUIDITY AND CAPITAL RESOURCES

Vermilion maintained a strong balance sheet and expanded its bank loan
facilities to $270 million resulting in unutilized debt capacity of $83 million
at December 31, 2002. In 2002, Vermilion maintained its ratios for
debt-to-cash-flow and interest coverage at levels that will enable it to use
low-cost leverage to expand its business in 2003 given the right opportunities.


<PAGE>

                                      -50-


                                                    2002        2001      2000
                                                 -------------------------------
Debt and working capital ($m)                     $186,769    $119,681  $106,045
Bank facility ($m) (1)                            $270,000    $250,000  $215,000
Unutilized bank facility ($m)                      $83,231    $130,319  $108,955

Debt-to-cash flow ratio (2)                           1.19        0.78      0.77
Debt-to-equity ratio                                  0.58        0.43      0.50
                                                 -------------------------------

NOTES:

(1)  Re-negotiated to $260 million in January 2003 in connection with the
     reorganization into the Trust.
(2)  Includes working capital


Vermilion's on-going need for capital will be both short-term and long-term in
nature. Short-term working capital will be required to finance accounts
receivable, drilling deposits and other similar short-term assets. Short term
capital will also be used from time to time to fund cash distributions and to
maintain consistent monthly cash distributions to Unitholders of the Trust.
However, the acquisition and development of petroleum and natural gas properties
requires large amounts of long-term capital. There are essentially four methods
of financing the capital needs of Vermilion, namely, debt, equity, internally
generated cash and farmout arrangements.

Early in 2003, Vermilion negotiated the terms of an amended credit facility with
its banking syndicate to provide a $260 Million credit facility. The facility
structure is comprised of a one-year revolving period with a one-year term to
follow with a final settlement payment required at the end of the second year.
There are no stated repayment terms with this facility and no principal
repayments required. Vermilion may use the available portion of the bank line
for both short-term and long-term capital requirements. The credit facility is
to be reviewed at least annually. Vermilion anticipates that it may prudently
use increased amounts of debt as the cash flow stream of its assets supports the
debt capacity. Vermilion will manage debt levels with strict debt to cash flow
guidelines.

In respect of equity financing, there is an active market for the financing of
Canadian resource trusts. Accordingly, it is expected that any acquisition of
producing properties will be financed through the issuance of additional Trust
Units combined with additional bank indebtedness.

Crude oil and natural gas prices may change significantly due to factors not
controllable by Vermilion. The table below provides a summary of estimated
sensitivities to price fluctuations for pro forma production levels and expenses
for the year ended December 31, 2002.

<TABLE>
<CAPTION>
                                                          CASH AVAILABLE FOR
                                                          DISTRIBUTIONS PER
                                                               UNIT AND          CASH AVAILABLE
                                                         EXCHANGEABLE SHARES   FOR DISTRIBUTIONS
                                                         -------------------   -----------------
<S>                                                             <C>                <C>
Change in crude oil price by Cdn. $1.00 per Bbl                 $0.02              $1,000,000
Change in natural gas price by Cdn. $0.10 per Mcf               $0.01                $800,000
</TABLE>

All of Vermilion 's expenditures are subject to the effects of inflation and
prices received for the product sold are not readily adjustable to cover any
increase in expenses resulting from inflation. Vermilion has no control over
government intervention or taxation levels in the oil and gas industry.

Vermilion has established a reclamation fund to fund the payment of
environmental and final site restoration costs for its assets. The reclamation
fund will be funded by Vermilion and owned by the Trust. Annual contributions,
less current year site reclamation and abandonment costs, are such that
currently estimated future environmental and reclamation obligations associated
with the properties will be funded after 20 years. The contribution rate has
been estimated at $0.20 per BOE of proven reserves.

<PAGE>

                                      -51-


Vermilion intends to maintain an insurance program consistent with industry
practice to protect against losses due to accidental destruction of assets, well
blowouts, pollution and other business interruptions. Vermilion believes it is
in substantial compliance, in all material respects, with current environmental
legislation and regularly works with governmental environmental agencies to
maintain this level of compliance.

Vermilion will use financial instruments to reduce corporate risk in certain
situations under the guidelines of a well defined risk management policy. The
policy defines specific areas of risk including, but not limited to, commodity
exposure, interest rate changes, environmental risk, insurance coverage and
reservoir risk. Vermilion's strategy for crude oil production is to hedge
existing production at the discretion of management, to help guarantee a return,
to protect a minimum cash distribution, and to facilitate financings when
concluding a business transaction.

PRODUCTION

In 2002, Vermilion continued to record quarterly increases in production, both
from drilling success, and acquisitions which more than offset production
declines.

2002 QUARTERLY PRODUCTION SUMMARY (BOE/D)

<TABLE>
<CAPTION>
                                                THREE MONTHS      THREE MONTHS      THREE MONTHS      THREE MONTHS
                                              ENDED MARCH 31,    ENDED JUNE 30,   ENDED SEPTEMBER    ENDED DECEMBER
                                                    2002              2002            30, 2002          31, 2002
                                              -----------------------------------------------------------------------
<S>                                                 <C>               <C>               <C>               <C>
CANADA
Crude oil & NGLs                                     7,481             7,484             7,741             7,968
Natural gas                                         11,213            12,223            11,434            11,494
                                              -----------------------------------------------------------------------
                                                    18,694            19,707            19,175            19,462
                                              -----------------------------------------------------------------------
FRANCE
Crude oil                                            6,096             5,817             6,022             6,271
Natural gas                                            142               198               292               252
                                              -----------------------------------------------------------------------
                                                     6,238             6,015             6,314             6,523
                                              -----------------------------------------------------------------------
TRINIDAD
NGLs                                                     -                 -                 -                37
Natural gas                                              -                 -                 -               295
                                              -----------------------------------------------------------------------
                                                         -                 -                 -               332
                                              -----------------------------------------------------------------------
Total Combined                                      24,932            25,722            25,489            26,317
                                              =======================================================================
</TABLE>

2001 QUARTERLY PRODUCTION SUMMARY (BOE/D)

<TABLE>
<CAPTION>
                                                THREE MONTHS      THREE MONTHS      THREE MONTHS      THREE MONTHS
                                              ENDED MARCH 31,    ENDED JUNE 30,   ENDED SEPTEMBER    ENDED DECEMBER
                                                    2001              2001            30, 2001          31, 2001
                                              -----------------------------------------------------------------------
<S>                                                 <C>               <C>               <C>               <C>
CANADA
Crude oil & NGLs                                     7,017             7,011             7,312             7,278
Natural gas                                          8,623             8,392             8,913             9,665
                                              -----------------------------------------------------------------------
                                                    15,640            15,403            16,225            16,943
                                              -----------------------------------------------------------------------
FRANCE
Crude oil                                            5,835             6,286             6,228             6,290
Natural gas                                            167               135               127               118
                                              -----------------------------------------------------------------------
                                                     6,002             6,421             6,355             6,408
                                              -----------------------------------------------------------------------
                                                    21,642            21,824            22,580            23,351
                                              =======================================================================
</TABLE>

Vermilion achieved a 15% increase in production, averaging 25,619 boe/d in 2002
compared with 22,354 boe/d in 2001. In Canada, production grew 20% as a result
of Vermilion's successful exploration program in the Peace River

<PAGE>

                                      -52-


Arch and the production acquired in the Artemis acquisition. In France,
Vermilion's drilling focus on the Paris Basin was rewarded with further
production gains.

<TABLE>
<CAPTION>
                                      2002                                     2001                        2000
                     -----------------------------------------------------------------------------------------------
                         OIL&NGLS         GAS        AVERAGE       OIL&NGLs        GAS        AVERAGE       AVERAGE
                     -----------------------------------------------------------------------------------------------
                          (bbls/d)     (mmcf/d)       (boe/d)      (bbls/d)     (mmcf/d)       (boe/d)       (boe/d)
                     -----------------------------------------------------------------------------------------------
<S>                        <C>           <C>          <C>           <C>           <C>          <C>           <C>
CANADA
NORTHERN DISTRICT
Peace River Arch              701        16.63         3,473            47         2.53           469             -
Utikuma                     3,822         0.95         3,980         4,137         0.70         4,254         3,446
Mastin Lake                     -         7.67         1,278            10        10.17         1,705           556
                     -----------------------------------------------------------------------------------------------
Total                       4,523        25.25         8,731         4,194        13.40         6,428         4,002
                     -----------------------------------------------------------------------------------------------
SOUTHERN DISTRICT
Chip Lake                   2,701        31.98         8,031         2,638        32.81         8,106         7,015
Southern Foothills            305         5.10         1,155           322         7.20         1,522         1,729
Central Alberta               140         7.23         1,345             -            -             -             -
                     -----------------------------------------------------------------------------------------------
Total                       3,146        44.31        10,531         2,960        40.01         9,628         8,744
                     -----------------------------------------------------------------------------------------------
Total Canada                7,669        69.56        19,262         7,154        53.41        16,056        12,746
                     -----------------------------------------------------------------------------------------------
FRANCE
Aquitaine Basin             3,354            -         3,354         3,589            -         3,589         3,672
Paris Basin                 2,446            -         2,446         2,295            -         2,295         1,442
Other                         253         1.32           473           278         0.82           414           481
                     -----------------------------------------------------------------------------------------------
Total France                6,053         1.32         6,273         6,162         0.82         6,298         5,595
                     -----------------------------------------------------------------------------------------------
TRINIDAD
Total Trinidad                  9         0.45            84             -            -             -             -
                     -----------------------------------------------------------------------------------------------
Total Combined             13,731        71.33        25,619        13,316        54.23        22,354        18,341
                     -----------------------------------------------------------------------------------------------
</TABLE>

CAPITAL EXPENDITURES

Vermilion's capital program in 2002 included the acquisition of Artemis as well
as a 40% participating interest in, and operatorship of, the onshore Central
Block permit in Trinidad. The acquisition of Artemis for $31 million added a new
operated core gas property which averaged 1,345 boe/d for the year. The interest
in the permit in Trinidad, purchased for $66 million, which subsequent to year
end was sold to Vermilion's subsidiary, Aventura, included two gas discoveries
with total proved reserves of 25.6 mmboe.

In Canada, Vermilion continued to expand in the Chip Lake area, drilling 28
wells, in a continuing effort to diversify away from the traditional Rock Creek
targets and work towards establishing a significant inventory of shallower
prospects for the Cardium, Belly River and potentially Edmonton Sand horizons.
Vermilion was active in the Central Alberta area (previously Mikwan) during the
last half of the year drilling 13 wells with a 92% success rate.

Vermilion drilled two wells in France and undertook extensive workovers as well
on several Dogger wells drilled in late 2001 which added 600 boe/d of
sustainable production. Vermilion also succesfully re-completed Malnoue 109, a
well damaged when originally drilled, resulting in incremental production.
Evaluation of 190 kilometres of 2D seismic at Champotran in the Paris Basin has
led to nine new drilling locations.

<PAGE>

                                      -53-


CAPITAL EXPENDITURES ($000's)

<TABLE>
<CAPTION>
                                                                      2002              2001              2000
                                                                ------------------------------------------------
<S>                                                               <C>               <C>               <C>
Land                                                              $   9,914         $  19,626         $   6,340
Seismic                                                               5,947             9,239             3,694
Drilling & completion                                                61,849            86,706            60,106
Production equipment & facilities                                    16,443            28,305            16,508
Workovers                                                            11,829            11,091             6,008
Capitalized exploration administration                                3,248             2,469             1,861
                                                                ------------------------------------------------
                                                                    109,230           157,436            94,517
Drilling & development expenditures                                  23,433             2,194            36,779
Property acquisitions                                                97,334                 -            32,725
Corporate acquisitions                                                4,082             3,259             1,517
                                                                ------------------------------------------------
Other                                                              $234,079          $162,889          $165,538
                                                                ------------------------------------------------

FUNDING OF CAPITAL PROGRAM                                             2002              2001              2000
                                                                ------------------------------------------------
Cash flow                                                          $157,365          $152,885          $138,151
Debt, working capital & other                                        72,771            10,143             8,608
Equity                                                                3,943             (139)            18,779
                                                                ------------------------------------------------
                                                                   $234,079          $162,889          $165,538
                                                                ------------------------------------------------
</TABLE>

Vermilion's drilling and property acquisitions as well as the Artemis
acquisition were funded primarily by cash flow from operations. Vermilion added
to its debt with the acquisition of Trinidad, and exited the year at $187
million of total debt plus working capital.

CASH FLOW NETBACKS

Cash flow reached a record high of $157.4 million in 2002, up 3% from $152.9
million in 2001. The increase in cash flow resulted mainly from a 15% increase
in production. This was offset by a decline in the average wellhead price
realized. This was primarily due to a 26% decline in average AECO natural gas
prices. WTI was down only slightly from prior years and Brent prices actually
increased slightly from 2001.

<TABLE>
<CAPTION>
CASH FLOW                                                   2002
($/boe)                                 -----------------------------------------
                                        THREE     THREE       THREE        THREE
                                        MONTHS    MONTHS      MONTHS       MONTHS
                                        ENDED     ENDED        ENDED        ENDED
                                        MARCH      JUNE      SEPTEMBER    DECEMBER      YEAR ENDED DECEMBER 31
                                          31        30          30           31         2002       2001      2000
                                        --------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>          <C>           <C>       <C>       <C>
Oil & gas revenues                       27.68     29.80     31.07        35.51         31.15     34.01     37.51
Oil hedging gains (losses)                1.11     (0.13)    (1.17)       (1.08)        (0.40)    (0.32)    (2.55)
Royalties (net of ARTC)                  (6.13)    (6.59)    (5.90)       (7.56)        (6.56)    (7.81)    (8.27)
Production expenses                      (3.97)    (4.69)    (4.39)       (5.29)        (4.60)    (4.07)    (3.75)
                                        --------------------------------------------------------------------------
Operating netback                        18.69     18.39     19.61        21.58         19.59     21.81     22.94
General & administrative                 (1.05)    (1.15)    (0.99)       (0.84)        (1.00)    (0.89)    (0.99)
Interest                                 (0.44)    (0.48)    (0.77)       (0.68)        (0.60)    (0.67)    (1.25)
Current & capital taxes                  (2.54)    (2.54)    (2.45)        2.64         (1.17)    (1.51)    (0.43)
Marketing, foreign exchange & other      (0.04)     0.02      0.03         0.03          0.01      0.00      0.31
                                        --------------------------------------------------------------------------
Cash flow/boe                            14.62     14.24     15.43        22.73         16.83     18.74     20.58
                                        --------------------------------------------------------------------------
</TABLE>

CRUDE OIL MARKETING

Essentially all of Vermilion's crude production is of a premium, light and sweet
quality. The average density of Vermilion's Canadian oil production is
approximately 420 API, and the oil produced in France is 330 API. Demand for
premium-quality low-sulfur oil is particularly strong in North America and
abroad, driven by product specifications that are increasingly stringent. As a
result, Vermilion realizes significantly higher netbacks than many Canadian
producers whose crude oil mix is typically more sour and heavier. In 2002,
Vermilion received an average

<PAGE>

                                      -54-


wellhead price, before hedging, of US$25.19/bbl compared to the WTI benchmark
average of US$25.83/bbl. In France, average realized oil prices US$22.39/bbl
compared to the Dated Brent price of US$24.98/bbl.

Vermilion markets the majority of its Canadian production at the lease level on
varying-term contracts that capture premiums over spot prices. By selling oil at
the lease level, Vermilion's costs of carrying inventory and delivering oil to
downstream markets are minimized. Looking ahead, Vermilion plans to
significantly increase sales to Canadian refiners in Western Canada and Ontario,
as well as to U.S. refiners in the Mid-West, Rockies and Pacific Northwest. This
strategy will enable Vermilion to maximize revenues as production grows. In
France, Vermilion sells oil production is sold from properties it operates to a
European refiner on a one-year term contract. The price received for this oil is
based on Dated Brent less a marketing differential. Oil production from
partner-operated properties in France, which is only 253 bbls/d, is sold to the
operator on a long-term contract.

Contracts for sales of NGLs are one-year terms based on spot-price postings less
negotiated differentials. Going forward, Vermilion may sell NGLs with its
natural gas, or separate it out, depending on economics and Vermilion's
operational flexibility.

NATURAL GAS MARKETING

Canadian natural gas prices declined in 2002, but remained relatively strong
with Vermilion realizing an average price of $4.30/mcf. Natural gas production
in 2002 increased 32% to 71 mmcf/d.

Since 1998, there have been three major capacity additions to export pipelines
connecting the Western Canadian Basin to the North American Market. With export
pipeline capacity exceeding available supply, Alberta spot prices in 2002 were
very strong compared with those realized in export markets. This relative
strength in domestic gas prices is expected to continue for several years. In
2002 and over the next several years, Vermilion expects to sell approximately
90% of its natural gas production on Alberta short-term indices and only a small
percentage under fixed-price contracts. Vermilion will continue to sell the 10%
balance to three aggregators. As a result, Vermilion is very well positioned to
capitalize on the projected continuation of strong domestic prices for natural
gas. Vermilion continues to effectively manage its receipt transportation costs
by closely matching supply to capacity and holding no export pipeline capacity,
other than through the aggregator contracts.

Vermilion will maintain a flexible sales program to take advantage of future
opportunities to diversify its market and pricing mix. This may include, but
will not be limited to, exposure to the markets in California, the U.S.
Mid-West, the northeastern U.S. and various power markets--without committing to
export pipeline capacity.

REVENUE

Revenues increased 5% to $287.5 million from $274.9 million in 2001 due to a 15%
increase in production, offset by an 8% reduction in realized commodity prices.
While 2002 commodity prices were excellent, they were down from the prices
realized in 2001. Oil prices stayed fairly consistent to prices realized in
2001. The WTI price average was down less than 1% to US$25.83/bbl from
US$25.94/bbl in 2001. Brent was up slightly to US$24.98/bbl from US$24.44/bbl in
2001. Natural gas prices on the other hand were down sharply in approximately
2002 to AECO Cdn$3.86/GJ from AECO Cdn$5.20/GJ in 2001. In 2002, Vermilion
hedged an average of 5,600 bbls/d at an average price of US$25.00/bbl. This
reflects Vermilion's philosophy of hedging a component of its production over a
time frame of two to three years as insurance to protect its base capital budget
for development and maintenance. In 2002, hedging reduced Vermilion's realized
prices for crude oil and NGLs by $0.40/boe.

Vermilion has applied the same philosophy for 2003, hedging 5,550 bbls/d of
production at an average price of US$24.74/bbl. The prices and volumes hedged
are very similar to Vermilion's 2002 program.

<PAGE>

                                      -55-


AVERAGE REALIZED PRICE (1)

                                                 2002         2001        2000
  ------------------------------------------------------------------------------
  CANADA
  Crude oil ($/bbl)                             $ 39.55      $ 39.02     $ 44.23
  NGLs ($/bbl)                                  $ 29.61      $ 34.58     $ 33.05
  Natural Gas ($/mcf)                           $  4.30      $  5.34     $  5.58
  ------------------------------------------------------------------------------
  FRANCE
  Crude oil ($/bbl)                             $ 35.16      $ 32.32     $ 38.52
  Natural Gas ($/mcf)                           $  4.24      $  5.23     $  4.40
  ------------------------------------------------------------------------------
  COMBINED
  Crude oil ($/bbl)                             $ 37.19      $ 35.45     $ 41.11
  NGLs ($/bbl)                                  $ 29.61      $ 34.58     $ 33.05
  Natural gas ($/mcf)                           $  4.29      $  5.34     $  5.55
  ------------------------------------------------------------------------------

NOTES:
(1)      Excludes hedging costs


ROYALTIES

Total royalties, net of ARTC, decreased approximately $2.4 million to $61.3
million in 2002 from $63.7 million in 2001. The decrease in 2002 is attributable
to overall lower commodity prices in Canada. In Canada, royalties calculated as
a percentage of revenue were lower because of reduced commodity prices in 2002
compared with 2001. Royalties were $6.56/boe in 2002 compared with $7.81/boe in
2001.

In France, a flat production tax (RCDM) in the range of $3.00/bbl is the largest
component of Vermilion's royalty payment. As commodity prices increase (Brent
was the lone commodity price to increase over 2001), the effective royalty rate
decreases. This explains the slight decrease in rates (as a percentage of
revenue) as the Brent price increased in 2002 compared with 2001. Additional
benefits are achieved under this system when a new pool is discovered, and the
RCDM rate drops to approximately $1.50/bbl.

                                                 2002         2001        2000
                                              ----------------------------------
CANADA
Oil & NGLs royalties, net of ARTC ($m)         $ 23,810     $ 24,749    $ 23,319
Percent of oil & NGLs revenue (%)                  24.1         25.5        28.5
Natural gas royalties, net of ARTC ($m)        $ 27,638     $ 29,730    $ 23,231
Percent of natural gas revenue (%)                 25.2         28.5        29.1
FRANCE
Oil royalties ($m)                             $  9,773     $  9,198    $  8,900
Percent of oil revenue (%)                         12.5         12.8        12.4
Natural gas royalties ($m)                          110     $     67    $     80
Percent of natural gas revenue (%)                  5.4          4.3         5.2
                                              ----------------------------------

LIFTING COSTS

Workovers in the fourth quarter and increased processing costs in the Peace
River Arch area for a full year contributed to an increase in lifting costs in
2002 compared with the previous year. Lifting costs on a consolidated basis were
$4.60/boe in 2002 compared with $4.07/boe in 2001. Higher expenses for
electrical power in Canada and France also contributed to an increase in lifting
costs.

<PAGE>

                                      -56-


                                          2002     2001      2000    2002/2001
                                                                      % Change
                                        --------------------------------------
CANADA
Oil & NGLs ($/bbl)                       $5.26    $4.72     $3.62       11.4
Natural gas ($/mcf)                      $0.53    $0.43     $0.34       23.3
                                        --------------------------------------
FRANCE
Oil & natural gas ($/boe)                $6.40    $5.43     $5.92       17.9
                                        --------------------------------------

DEBT AND INTEREST EXPENSE

Average debt in 2002 increased over 2001 primarily due to the Trinidad
acquisition. However, a significant decrease of 1.8% in the average prime rate
in 2002 (4.2% in 2002 compared to 6.0% in 2001), accounts for the relatively
small increase in interest expense in 2002 to $6.3 million from $6.1 million in
2001. Continued growth in production and cash flow enabled Vermilion to expand
its loan facility to $270 million in 2002.

                                               2002         2001         2000
- --------------------------------------------------------------------------------
Debt at year-end ($m)                         $193,025     $101,053     $101,619
Total credit facility ($m)                    $270,000     $250,000     $215,000
Interest expense ($m)                         $  6,286     $  6,072     $  9,972
Cost of borrowing (%)                            4.3          5.4          7.1
Amortization of arrangement fees (%)             0.5          0.6          1.3
Average cost of debt (%)                         4.8          6.0          8.4
Average prime rate (%)                           4.2          6.0          7.2
- --------------------------------------------------------------------------------

GENERAL AND ADMINISTRATIVE EXPENSES

Continued growth in Vermilion's operations and number of employees is reflected
in increased gross and net general and administrative (G&A) expenses. G&A costs
were $1.00/boe in 2002 compared with $0.89 in 2001. Salaries and benefits,
consultants and rent were the three main categories contributing to the
increase. They are symptomatic of a growing company and correlate to the
increase in revenues, production and capital expenditures in the year.

                                2002               2001             2000
                            ($M)    ($/BOE)    ($m)   ($/boe)    ($m)   ($/boe)
- --------------------------------------------------------------------------------
Gross G & A                $18,478    $1.97  $15,288    $1.87  $12,004    $1.80
Recoveries                  (5,838)   (0.62)  (5,524)   (0.68)  (3,526)   (0.53)
- --------------------------------------------------------------------------------
                            12,640     1.35    9,764     1.19    8,478     1.27
Capitalized G & A           (3,248)   (0.35)  (2,469)   (0.30)  (1,861)   (0.28)
- --------------------------------------------------------------------------------
Net G & A                  $ 9,392    $1.00  $ 7,295    $0.89  $ 6,617    $0.99
- --------------------------------------------------------------------------------

DEPLETION AND DEPRECIATION EXPENSE

Vermilion's depletion and depreciation expense increased 78% in 2002. Increased
production and the downward reserve revision that took effect in the fourth
quarter of 2001 contributed to the increase. While the reserve revision happened
in 2001, it was forward looking and occurred in the fourth quarter. This
revision is reflected in the full year for 2002, accounting for the large
increase.

Vermilion provides for expected future costs associated with site restoration
and abandonment of facilities and wells in its depletion and depreciation
provision. At year-end 2002, the estimated future site restoration costs to be
accrued over the life of the remaining proven reserves were $36.9 million, up
from $35.7 million in 2001.

Year ended December 31                               2002       2001       2000
- --------------------------------------------------------------------------------
Depletion and depreciation expense ($m)           $94,737     $53,271    $31,797
Depletion and depreciation expense ($/boe)        $ 10.13     $  6.52    $  4.74
- --------------------------------------------------------------------------------

<PAGE>

                                      -57-


TAXES

Vermilion's 2002 tax provision of $32.1 million, comprised of current, capital
and future taxes, resulted in an effective tax rate of 43.6%. This compares with
a $44.7 million tax provision and a 40.5% effective corporate tax rate in 2001.
The increase in rates is a result of increased foreign exchange amounts in
future income taxes arising from the dramatic rise in the Euro relative to the
Canadian dollar as at December 31, 2002.

Vermilion's existing tax pools and current capital program were sufficient to
keep cash taxes in the year to $11.0 million. This is consistent with the $12.3
million incurred in 2001. At December 31, 2002, Vermilion had approximately
$289,543,000 (2001 - $220,900,000) of tax deductions for Canadian income tax
purposes; approximately $74,281,000 (2001 - $70,500,000) of tax deductions for
French income tax purposes and approximately $29,013,000 of tax deductions for
Trinidad income tax purposes.

RISK MANAGEMENT

Crude oil and natural gas exploration, production, acquisition and marketing
operations involve a number of business risks. These risks include fluctuations
in commodity prices, exchange rates, interest rates, exploration uncertainties,
product demand, transportation restrictions and governmental regulatory changes.

Vermilion considers its risk management program as a form of insurance that
protects its cash flow and rate of return. The primary objective of the risk
management program--an integral part of the Vermilion's five-year business
plan--is to maintain Vermilion's distributions and its internal capital
development program. Maintenance of a strong financial position and a stable
cash flow stream through the development of long-life reserves is key to
mitigating business risks.

To manage the adverse impact of significant movements in commodity prices,
exchange rates and interest rates, Vermilion uses over-the-counter financial
structures as well as fixed/collar structures as a part of physical natural gas
sales. Vermilion has strict controls and guidelines in place and enacts
transactions only with counter parties that have high credit ratings.

CURRENCY RISK

Vermilion's primary exposure to currency risk comes from a revenue stream in
Canada and France that is denominated in U.S. dollars. Vermilion's exposure to
fluctuations in the Euro is limited primarily to reinvestment and repatriation
of funds, and forward-sale contracts can be used to mitigate these risks. The
remaining cash flow from Vermilion's French operations is reinvested within
France, creating a natural hedge to the working capital and cash flow stream
when they are converted to Euros.

ENVIRONMENT, HEALTH AND SAFETY

Vermilion remains committed to conducting its activities in an environmentally
responsible manner, protecting the health and safety of its employees and the
public in every country in which it operates. It is a condition of employment
that Vermilion personnel work safely and in accordance with established
regulations and procedures.

In 2002, Vermilion remained committed to the principles set out by the Canadian
Association of Petroleum Producers (CAPP) Environment, Health and Safety
Stewardship Program. The voluntary initiative promotes continual improvement in
the areas of environment, health and safety performance supplemented by progress
reports to stakeholders.

Vermilion continued its commitment to protect land, water and air as policies
and procedures demonstrating leadership in the area were maintained and further
developed in 2002. Examples of accomplishments during 2002 included:

- -    reducing long term environmental liabilities through decommissioning,
     abandonment and reclamation of well leases and facilities;

<PAGE>

                                      -58-


- -    monitoring of long-term liabilities through regular inspections;

- -    continued reductions in flaring and greenhouse gas emissions;

- -    minimizing waste products by reducing, recycling and recovering; and

- -    continuous risk management efforts with detailed emergency response
     planning;

Vermilion is a member of several organizations concerned with environment,
health and safety, including the Western Canadian Air Shed and numerous area
co-operatives.

In the area of stakeholder relations, Vermilion works to build long-term
relationships with environmental stakeholders and community.

NEW ACCOUNTING PRONOUNCEMENTS

In December 2001, the Canadian Institute of Chartered Accounts (CICA) issued
Accounting Guideline 13, "Hedging Relationships" (AcG-13). AcG-13 establishes
certain conditions for when hedge accounting may be applied. The guideline is
effective for fiscal years beginning on or after July 1, 2003. Adoption of
AcG-13 is not expected to have a material impact on our financial position or
results of operations.

In September 2002, the CIBC approved Section 3063, "Impairment of Long-Lived
Assets" (s.3063). S.3063 establishes standards for the recognition, measurement
and disclosure of the impairment of long-lived assets, and applies to long-lived
assets held for use. An impairment loss is recognized when the carrying amount
of a long-lived asset is not recoverable and exceeds its fair value. The new
Section is effective for fiscal years beginning on or after April 1, 2003.
Adoption of this Section is not expected to have a material impact on our
financial position or results of operations.

In December 2002, the CICA approved Section 3110, "Asset Retirement Obligations"
(S.3110). S.3110 requires liability recognition for retirement obligations
associated with our property, plant and equipment. These obligations are
initially measured at fair value, which is the discounted future value of the
liability. This fair value is capitalized as part of the cost of the related
asset and amortized to expense over its useful life. The liability accretes
until we expect to settle the retirement obligation. S.3110 is effective for
fiscal years beginning on or after January 1, 2004. The total impact on our
financial statements has not yet been determined.

The following standards and revisions issued by the CICA do not impact
Vermilion:

o        Amendments to S.3025 - "Impaired Loans", effective for asset
         foreclosures on or after May 1, 2003.

o        Section 3475 - "Disposal of Long-Lived Assets and Discounted
         Operations", effective for disposal activities initiated by commitments
         to plans on or after May 1, 2003.

                              MARKET FOR SECURITIES

The outstanding Trust Units of the Trust are listed and posted for trading on
the TSX under the symbol VET.UN.

                                  RISK FACTORS

The following is a summary of certain risk factors relating to the business of
Vermilion and the Trust. The following information is a summary only of certain
risk factors and is qualified in its entirety by reference to, and must be read
in conjunction with, the detailed information appearing elsewhere in this annual
information form. Unitholders and potential Unitholders should consider
carefully the information contained herein and, in particular, the following
risk factors.

<PAGE>

                                      -59-


RESERVE ESTIMATES

The reserve and recovery information contained in the GLJ Report is only an
estimate and the actual production and ultimate reserves from the properties may
be greater or less than the estimates prepared by GLJ.

VOLATILITY OF OIL AND NATURAL GAS PRICES

The Trust's operational results and financial condition, will be dependent on
the prices received by Vermilion for oil and natural gas production. Oil and
natural gas prices have fluctuated widely during recent years and are determined
by supply and demand factors, including weather and general economic conditions
as well as conditions in other oil and natural gas regions. Any decline in oil
and natural gas prices could have an adverse effect on Vermilion's ability to
satisfy its obligations under the Notes and on amounts, if any, payable by the
Partnership to the Trust under the Royalty Agreement thereby decreasing the
amount of Distributable Cash to be distributed to holders of Trust Units.

CHANGES IN LEGISLATION

There can be no assurance that income tax laws and government incentive programs
relating to the oil and gas industry, such as the status of mutual fund trusts
and the resource allowance, will not be changed in a manner which adversely
affects Unitholders.

INVESTMENT ELIGIBILITY

If the Trust ceases to qualify as a mutual fund trust, the Trust Units will
cease to be qualified investments for registered retirement savings plans,
registered retirement income funds, deferred profit sharing plans and registered
education savings plans ("Exempt Plans") which will have adverse tax
consequences to Exempt Plans or their annuitants or beneficiaries. Notes or
Redemption Notes acquired on a redemption of Trust Units may not be qualified
investments for Exempt Plans.

OPERATIONAL MATTERS

The operation of oil and gas wells involves a number of operating and natural
hazards which may result in blowouts, environmental damage and other unexpected
or dangerous conditions resulting in damage to Vermilion and possible liability
to third parties. Vermilion will maintain liability insurance, where available,
in amounts consistent with industry standards. Business interruption insurance
may also be purchased for selected facilities, to the extent that such insurance
is available. Vermilion may become liable for damages arising from such events
against which it cannot insure or against which it may elect not to insure
because of high premium costs or other reasons. Costs incurred to repair such
damage or pay such liabilities may impair Vermilion's ability to satisfy its
obligations under the Notes or reduce the amount receivable by the Trust from
the Partnership under the Royalty Agreement.

Continuing production from a property, and to some extent the marketing of
production therefrom, are largely dependent upon the ability of the operator of
the property. To the extent the operator fails to perform these functions
properly, revenue may be reduced. Payments from production generally flow
through the operator and there is a risk of delay and additional expense in
receiving such revenues if the operator becomes insolvent. Although satisfactory
title reviews are generally conducted in accordance with industry standards,
such reviews do not guarantee or certify that a defect in the chain of title may
not arise to defeat the claim of Vermilion or its subsidiaries to certain
properties. Such circumstances could impair Vermilion's ability to satisfy its
obligations under the Notes or reduce the amount receivable by the Trust from
the Partnership under the Royalty Agreement.

ENVIRONMENTAL CONCERNS

The oil and natural gas industry is subject to environmental regulation pursuant
to local, provincial and federal legislation. A breach of such legislation may
result in the imposition of fines or issuance of clean up orders in respect of
Vermilion or its assets. Such legislation may be changed to impose higher
standards and potentially more costly obligations on Vermilion. Although the
Trust has established a reclamation fund for the purpose of funding

<PAGE>

                                      -60-


its currently estimated future environmental and reclamation obligations based
on its current knowledge, there can be no assurance that the Trust will be able
to satisfy its actual future environmental and reclamation obligations.

KYOTO PROTOCOL

Canada, France and Trinidad and Tobago are signatories to the United Nations
Framework Convention on Climate Change and both have ratified the Kyoto Protocol
established thereunder. Canada and France, as Annex B parties to the Kyoto
Protocol, and France as a party to the European Union Regional Integration
Organization, are required to set legally binding targets to reduce nation-wide
emissions of carbon dioxide, methane, nitrous oxide and other so-called
"greenhouse gasses".

Vermilion's exploration and production facilities and other operations and
activities in Canada and France will emit a small amount of greenhouse gasses
which may subject Vermilion to legislation regulating emissions of greenhouse
gases and which may include a requirement to reduce emissions or emissions
intensity from Vermilion's operations and facilities. The direct or indirect
costs of complying with emissions regulations may adversely affect the business
of Vermilion in Canada and France.

Trinidad and Tobago is not an Annex B party to the Kyoto Protocol is therefore
not required under the Kyoto Protocol to set legally binding targets to regulate
greenhouse gas emissions.

DEBT SERVICE

Vermilion may, from time to time, finance a significant portion of its
operations through debt (other than the Notes). Amounts paid in respect of
interest and principal on debt incurred by Vermilion may impair Vermilion's
ability to satisfy its obligations under the Notes or reduce the amount received
by the Trust under the Royalty Agreement. Variations in interest rates and
scheduled principal repayments could result in significant changes in the amount
required to be applied to debt service before payment by Vermilion of its
obligations under the Notes or the Royalty Agreement. Ultimately, this may
result in lower levels of Distributable Cash for the Trust.

Lenders will be provided with security over substantially all of the assets of
Vermilion its Subsidiaries and the Trust. If Vermilion becomes unable to pay its
debt service charges or otherwise commits an event of default such as
bankruptcy, a lender may foreclose on or sell the assets of Vermilion its
Subsidiaries and the Trust.

DELAY IN CASH DISTRIBUTIONS

In addition to the usual delays in payment by purchasers of oil and natural gas
to the operators of the properties, and by the operator to Vermilion, payments
between any of such parties may also be delayed by restrictions imposed by
lenders, delays in the sale or delivery of products, delays in the connection of
wells to a gathering system, blowouts or other accidents, recovery by the
operator of expenses incurred in the operation of the properties or the
establishment by the operator of reserves for such expenses.

TAXATION OF VERMILION

Vermilion is subject to taxation in each taxation year on its income for the
year, after deducting interest paid to the Trust pursuant to the Note Indenture
and after deducting payments, if any, made to the Trust with respect to the
Royalty Agreement. During the period that Exchangeable Shares issued by
Vermilion are outstanding, a portion of the cash flow from operations will be
subject to tax to the extent that there are not sufficient resource pool
deductions, capital cost allowance or utilization of prior years non-capital
losses to reduce taxable income to zero. Vermilion intends to deduct, in
computing its income for tax purposes, the full amount available for deduction
in each year associated with the income tax resource pools, undepreciated
capital cost ("UCC") and non-capital losses carried forward from Vermilion, if
any, plus resource pools and UCC created by capital expenditures of Vermilion.
If there are not sufficient resource pools, UCC and non-capital losses carried
forward or other deductions to shelter the income of Vermilion, then cash taxes
may be payable by Vermilion. In addition, there can be no assurance that
taxation authorities will not seek to challenge the amount of interest expense.
If such a challenge were to succeed against Vermilion, it could materially
adversely affect the amount of Distributable Cash available.

<PAGE>

                                      -61-


Further, interest on the Notes accrues at the Trust level for income tax
purposes whether or not actually paid. The Trust Indenture provides that an
amount equal to the taxable income of the Trust will be distributed each year to
Unitholders in order to reduce the Trust's taxable income to zero. Where
interest payments on the Notes are due but not paid in whole or in part, the
Trust Indenture provides that any additional amount necessary to be distributed
to Unitholders may be distributed in the form of Units rather than in cash.
Unitholders will be required to include such additional amount in income even
though they do not receive a cash distribution.

DEPLETION OF RESERVES

The Trust has certain unique attributes which differentiate it from other oil
and gas industry participants. Distributions of Distributable Cash in respect of
properties, absent commodity price increases or cost effective acquisition and
development activities, will decline over time in a manner consistent with
declining production from typical oil, natural gas and natural gas liquids
reserves. Vermilion will not be reinvesting cash flow in the same manner as
other industry participants. Accordingly, absent capital injections or
acquisitions of additional oil and gas properties, Vermilion's initial
production levels and reserves will decline.

Vermilion's future oil and natural gas reserves and production, and therefore
its cash flows, will be highly dependent on Vermilion's success in exploiting
its reserve base and acquiring additional reserves. Without reserve additions
through acquisition or development activities, Vermilion's reserves and
production will decline over time as reserves are exploited.

NET ASSET VALUE

The net asset value of the assets of the Trust from time to time will vary
dependent upon a number of factors beyond the control of management, including
oil and gas prices. The trading prices of the Trust Units from time to time is
also determined by a number of factors which are beyond the control of
management and such trading prices may be greater than the net asset value of
the Trust's assets.

RETURN OF CAPITAL

Trust Units will have no value when reserves from the underlying assets of the
Trust can no longer be economically produced and, as a result, cash
distributions do not represent a "yield" in the traditional sense as they
represent both return of capital and return on investment.

NATURE OF TRUST UNITS

The Trust Units do not represent a traditional investment in the oil and natural
gas sector and should not be viewed by investors as shares in Vermilion. The
Trust Units represent a fractional interest in the Trust. As holders of Trust
Units, Unitholders will not have the statutory rights normally associated with
ownership of shares of a corporation including, for example, the right to bring
"oppression" or "derivative" actions. The Trust's sole assets will be its shares
in Vermilion, the Notes, the Royalty Agreement and other investments in
securities. The price per Trust Unit is a function of anticipated Distributable
Cash, the underlying assets of the Trust and management's ability to effect
long-term growth in the value of the Trust. The market price of the Trust Units
will be sensitive to a variety of market conditions including, but not limited
to, interest rates and the ability of the Trust to acquire suitable oil and
natural gas properties. Changes in market conditions may adversely affect the
trading price of the Trust Units.

The Trust Units are not "deposits" within the meaning of the CANADA DEPOSIT
INSURANCE CORPORATION ACT (Canada) and are not insured under the provisions of
that Act or any other legislation. Furthermore, the Trust is not a trust company
and, accordingly, is not registered under any trust and loan company legislation
as it does not carry on or intend to carry on the business of a trust company.

UNITHOLDERS LIMITED LIABILITY

The Trust Indenture provides that no Unitholders will be subject to any
liability in connection with the Trust or its obligations and affairs and, in
the event that a court determines Unitholders are subject to any such
liabilities, the

<PAGE>

                                      -62-


liabilities will be enforceable only against, and will be satisfied only out of
the Trust's assets. Pursuant to the Trust Indenture, the Trust will indemnify
and hold harmless each Unitholder from any costs, damages, liabilities,
expenses, charges and losses suffered by a Unitholder resulting from or arising
out of such Unitholder not having such limited liability.

The Trust Indenture provides that all written instruments signed by or on behalf
of the Trust must contain a provision to the effect that such obligation will
not be binding upon Unitholders personally. Personal liability may also arise in
respect of claims against the Trust that do not arise under contracts, including
claims in tort, claims for taxes and possibly certain other statutory
liabilities. The possibility of any personal liability of this nature arising is
considered unlikely.

The operations of the Trust will be conducted, upon the advice of counsel, in
such a way and in such jurisdictions as to avoid as far as possible any material
risk of liability on the Unitholders for claims against the Trust.

                             ADDITIONAL INFORMATION

The Trust will provide to any person, upon request to the Corporate Secretary of
Vermilion, on behalf of the Trust:

1.       when the securities of the Trust are in the course of a distribution
         pursuant to a short form prospectus or a preliminary short form
         prospectus has been filed in respect of a proposed distribution of its
         securities:

         (a)      one copy of the Annual Information Form of the Trust, together
                  with one copy of any document, or the pertinent pages of any
                  document, incorporated by reference in the Annual Information
                  Form;

         (b)      one copy of the financial statements of Vermilion for the
                  completed financial year ended December 31, 2002, together
                  with the accompanying report of the auditors thereon, as well
                  as one copy of any interim financial statements of the Trust
                  subsequent to December 31, 2002;

         (c)      one copy of any other documents that are incorporated by
                  reference into the preliminary short form prospectus or the
                  short form prospectus that are not required under paragraphs
                  (a), (b), or (c) above; or

2.       at any time, one copy of any of the document referred to in paragraphs
         1(a), (b), and (c) above, provided that the Trust may require the
         payment of a reasonable charge if the request is made by a person who
         is not a security holder of the Trust.

Additional information related to the remuneration and indebtedness of the
directors and officers of Vermilion, and the principal holders of Trust Units,
rights to purchase Trust Units and interests of insiders in material
transactions, where applicable, will be contained in the management information
circular in respect of the next annual meeting of Unitholders of the Trust.
Additional financial information is provided in the audited financial statements
of the Trust for the year ended December 31, 2002.

Additional copies of this Annual Information Form may be obtained from
Vermilion. Please contact:

         Vermilion Energy Trust
         c/o Vermilion Resources Ltd.
         2800, 400-4th Avenue S.W.
         Calgary, Alberta  T2P 0J4

         Telephone:        (403) 269-4884
         Fax:              (403) 264-6306
         Toll Free:        1-866-895-8101


<PAGE>




                                   SCHEDULE A






CONSOLIDATED FINANCIAL STATEMENTS OF

VERMILION RESOURCES LTD.

DECEMBER 31, 2002 AND 2001



<PAGE>

Deloitte & Touche LLP
3000, 700 Second Street SW
Calgary  AB  Canada  T2P 0S7

Telephone:    +1-403-267-1700
Facsimile:    +1-403-264-2871




AUDITORS' REPORT

To the Shareholders of
VERMILION RESOURCES LTD.:

We have audited the consolidated balance sheets of VERMILION RESOURCES LTD. as
at December 31, 2002 and 2001 and the consolidated statements of earnings and
retained earnings and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2002
and 2001 and the results of its operations and its cash flows for the years then
ended in accordance with Canadian generally accepted accounting principles.





Calgary, Alberta                                 (signed) DELOITTE & TOUCHE LLP
March 7, 2003                                             Chartered Accountants


<PAGE>

VERMILION RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND 2001
(THOUSANDS OF DOLLARS)

- --------------------------------------------------------------------------------
                                                              2002        2001
                                                                $           $
                                                             -------     -------
ASSETS
CURRENT
   Cash and cash equivalents                                  32,562       6,716
   Accounts receivable                                        56,582      43,457
   Crude oil inventory                                         3,207       2,593
   Prepaid expenses and other                                  4,699       5,296
                                                             -------     -------
                                                              97,050      58,062

Deferred reorganization costs (Note 13)                        2,324          --
Deferred financing costs                                         435       1,012
Capital assets (Note 3)                                      711,902     546,705
                                                             -------     -------
                                                             811,711     605,779
                                                             =======     =======

LIABILITIES
CURRENT
   Accounts payable and accrued liabilities                   79,817      69,206
   Income and capital taxes payable                           10,977       7,484
                                                             -------     -------
                                                              90,794      76,690

Long-term debt (Note 4)                                      193,025     101,053
Provision for future site restoration (Note 3)                11,169       7,965
Future income taxes (Note 5)                                 171,094     129,698
                                                             -------     -------
                                                             466,082     315,406
                                                             -------     -------

NON-CONTROLLING INTEREST (Note 2(a))                          21,321      11,330
                                                             -------     -------

COMMITMENTS AND CONTINGENCIES (Note 12)

SHAREHOLDERS' EQUITY
   Share capital (Note 6)                                    140,557     136,146
   Retained earnings                                         183,751     142,897
                                                             -------     -------
                                                             324,308     279,043
                                                             -------     -------
                                                             811,711     605,779
                                                             =======     =======


APPROVED BY THE BOARD
(signed) Joseph F. Killi, Director
(signed) Lorenzo Donadeo, Director


<PAGE>

VERMILION RESOURCES LTD.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 2002 AND 2001
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
                                                           2002          2001
                                                             $            $
                                                         --------      --------
REVENUE
   Petroleum and natural gas revenue                      287,540       274,899
   Royalties, net of ARTC                                  61,332        63,744
                                                         --------      --------
                                                          226,208       211,155
                                                         --------      --------

EXPENSES
   Production                                              42,976        33,213
   Interest                                                 6,286         6,072
   General and administration                               9,392         7,295
   Foreign exchange                                          (741)          961
   Depletion and depreciation                              94,737        53,271
                                                         --------      --------
                                                          152,650       100,812
                                                         --------      --------
EARNINGS BEFORE INCOME TAXES AND OTHER ITEMS               73,558       110,343
                                                         --------      --------

INCOME TAXES (Note 5)
   Future                                                  21,121        32,327
   Current                                                 10,126        11,810
   Capital                                                    851           513
                                                         --------      --------
                                                           32,098        44,650
                                                         --------      --------
OTHER ITEMS
   Non-controlling interest (Note 2(a))                       138            --
   Equity in income of affiliate (Note 2(a))                   --           (50)
                                                         --------      --------
                                                              138           (50)
                                                         --------      --------
NET EARNINGS                                               41,322        65,743

RETAINED EARNINGS, BEGINNING OF YEAR                      142,897        80,474

EXCESS OF CONSIDERATION PAID OVER STATED
   VALUE OF SHARES PURCHASED (Note 6)                        (468)       (3,320)
                                                         --------      --------

RETAINED EARNINGS, END OF YEAR                            183,751       142,897
                                                         ========      ========

NET EARNINGS PER COMMON SHARE
   Basic                                                     0.74          1.21
                                                         ========      ========
   Diluted                                                   0.73          1.17
                                                         ========      ========


<PAGE>

<TABLE>
<CAPTION>
VERMILION RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002 AND 2001
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------------------------
                                                                              2002         2001
                                                                               $             $
                                                                            --------    --------
<S>                                                                         <C>         <C>
CASH PROVIDED BY (USED IN):

OPERATING
   Net earnings                                                               41,322      65,743
   Items not affecting cash:
     Depletion and depreciation                                               94,737      53,271
     Unrealized foreign exchange (gain) loss                                    (666)        933
     Amortized deferred financing charges                                        713         661
     Non-controlling interest                                                    138          --
     Equity in income of affiliate                                                --         (50)
     Future income taxes                                                      21,121      32,327
                                                                            --------    --------
   Funds generated from operations                                           157,365     152,885
   Site restoration costs incurred                                              (990)       (472)
   Changes in non-cash working capital (Note 10)                             (11,730)      3,501
                                                                            --------    --------
                                                                             144,645     155,914
                                                                            --------    --------
INVESTING
   Drilling and development of petroleum and
     natural gas properties                                                 (113,311)   (160,695)
   Acquisition of capital assets                                             (23,433)     (2,194)
   Cash acquired on corporate acquisition (Note 2(a))                             --       3,031
   Corporate acquisitions (Notes 2(b) and (c))
     Artemis                                                                 (21,915)         --
     Trinidad                                                                (65,686)         --
   Acquisition of investment (Note 2(a))                                          --      (3,520)
                                                                            --------    --------
                                                                            (224,345)   (163,378)
                                                                            --------    --------
FINANCING
   Issue of common shares for cash, net of share issue costs                   4,660       4,864
   Cash acquired on shares issued by subsidiary, net of share issue costs      8,467          --
   Repurchase of common shares for cash (Note 6)                                (717)     (5,003)
   Increase (decrease) in long-term debt                                      91,972        (566)
   Increase in deferred financing charges                                       (136)       (417)
                                                                            --------    --------
                                                                             104,246      (1,122)
                                                                            --------    --------
Foreign exchange gain (loss) on cash held in a foreign currency                1,300        (559)
                                                                            --------    --------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                                          25,846      (9,145)

CASH AND CASH EQUIVALENTS,
                                                                            --------    --------
    BEGINNING OF YEAR                                                          6,716      15,861
                                                                            --------    --------

CASH AND CASH EQUIVALENTS,
                                                                            ========    ========
   END OF YEAR                                                                32,562       6,716
                                                                            ========    ========


SUPPLEMENTARY INFORMATION - CASH PAYMENTS
   Interest paid                                                               5,647       4,974
                                                                            ========    ========
   Income taxes paid (received)                                                7,527        (667)
                                                                            ========    ========
</TABLE>

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
(TABULAR AMOUNTS IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

1.       SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements have been prepared in accordance
         with Canadian generally accepted accounting principles and include the
         accounts of the Company and its subsidiaries, all of which are
         wholly-owned, except for Aventura Energy Inc. (Note 2(a)).
         Inter-company transactions eliminate upon consolidation.

         PETROLEUM AND NATURAL GAS OPERATIONS

         The Company uses the full-cost method of accounting for petroleum and
         natural gas operations and accordingly, capitalizes all exploration and
         development costs on a country-by-country basis. These costs include
         land acquisition, geological and geophysical costs, drilling (including
         related overhead) on producing and non-producing properties and other
         carrying charges on unproven properties. Proceeds of disposition are
         applied against the cost pools with no gain or loss recognized except
         where the disposition results in a greater than 20% change in the rate
         of depletion and depreciation.

         The carrying value of the Company's petroleum and natural gas
         properties is limited to the recoverable amount as determined by
         estimating the present value of future net revenues from proven
         properties based on current prices and costs and the value of unproven
         properties at the lower of cost and net realizable value less estimated
         future site restoration costs, general and administrative expenses,
         financing costs and income taxes.

         Substantially all of the exploration, development and production
         activities of the Company are conducted jointly with others and,
         accordingly, the consolidated financial statements reflect only the
         Company's proportionate interest in such activities.

         The Company estimates its future site restoration and abandonment costs
         for its oil and gas properties on a country-by-country basis. The costs
         represent management's best estimate of the future site restoration and
         abandonment costs based upon current legislation and industry
         practices. Total estimated costs are being provided for on a
         unit-of-production basis. The annual provision included in amortization
         expense and actual future site restoration and abandonment costs are
         charged to the account as incurred.

         Amortization of these costs is done on a country-by-country basis and
         is calculated on the unit-of-production method based on estimated
         proven reserves, before royalties, as determined by independent
         engineers. The cost of significant unevaluated properties is excluded
         from the depletion and depreciation base. For purposes of depletion and
         depreciation calculations, oil and gas reserves are converted to a
         common unit of measure on the basis of their relative energy content.

         The amounts recorded for depletion and depreciation of property, plant
         and equipment and the provision for future site restoration and
         abandonment costs are based on estimates. The ceiling test calculation
         is based on estimates of proved reserves, production rates, oil and
         natural gas prices, future costs and other relevant assumptions. By
         their nature, these estimates are subject to measurement uncertainty
         and the effect on the consolidated financial statements from changes in
         such estimates in future years could be significant.

         CASH AND CASH EQUIVALENTS

         Cash and cash equivalents include monies on deposit and short-term
         investments accounted for at cost that have a maturity date of not more
         than 90 days.

<PAGE>

         FURNITURE AND EQUIPMENT

         Furniture and equipment are recorded at cost and are being amortized on
         a declining-balance basis at rates of 20% to 50% per year.

         CRUDE OIL INVENTORIES

         Inventories of crude oil, consisting of production awaiting shipment at
         the Ambes Shipping Terminal in France, are valued at lower of cost or
         net realizable value, whereas, for prior periods such inventories were
         valued at current estimated selling price net of related expenses. This
         change resulted in no significant changes to prior periods' results.

         STOCK-BASED COMPENSATION PLAN

         The Company has a stock-based compensation plan, which is described in
         Note 6. No compensation expense is recognized for these plans when
         stock options are issued to employees at prevailing market prices. Any
         consideration paid by employees or directors on the exercise of stock
         options under the employee stock option plan is recorded as share
         capital. For options issued after January 1, 2002, the fair values are
         determined and the impact on earnings is disclosed as pro forma
         information in Note 7.

         DEFERRED FINANCING COSTS

         Deferred financing costs associated with obtaining the long-term debt
         facility are amortized on a straight-line basis over the life of the
         debt obligation.

         REVENUE RECOGNITION

         Revenue associated with the sale of crude oil, natural gas and liquids
         are recorded when title passes to the customer.

         FINANCIAL INSTRUMENTS

         The Company uses financial instruments to hedge its exposure to
         fluctuations in oil, natural gas and electricity prices, foreign
         exchange rates and interest rates.

         The Company formally documents its risk management objectives and
         strategies, including the permitted use of derivative financial
         instruments. The Company utilizes derivative financial instruments to
         manage exposures to fluctuations in commodity prices, interest rates
         and foreign currency exchange rates. All transactions of this nature
         entered into by the Company are related to an underlying financial
         position or to future petroleum and natural gas production. The Company
         does not use derivative financial instruments for trading purposes.
         Costs and gains on derivative contracts are recognized in earnings in
         the same period that the transactions are settled. The fair values of
         derivative instruments are not recorded in the balance sheet.

         PER SHARE AMOUNTS

         Basic earnings per share and basic funds from operations per share are
         computed by dividing earnings and funds from operations by the weighted
         average number of common shares outstanding during the year. Diluted
         per share amounts reflect the potential dilution that could occur if
         options or warrants to purchase common shares were exercised. The
         treasury stock method is used to determine the dilutive effect of stock
         options and warrants. The treasury stock method assumes that the
         proceeds received from the "in the money" stock options are used to
         repurchase common shares at the average market price during the period.


<PAGE>

         FOREIGN CURRENCY TRANSLATION

         Foreign currency balances of foreign subsidiaries, which are considered
         to be integrated, are translated on the following basis

         o    Monetary assets and liabilities are translated at the rates of
              exchange prevailing at the balance sheet dates.

         o    Non-monetary assets, liabilities and related depreciation and
              depletion expense are translated at historical rates.

         o    Sales, other revenues, royalties and all other expenses are
              translated at the average rate of exchange during the month in
              which they are recognized.

         Any resulting foreign exchange gains and losses are included in
         earnings.

         FUTURE INCOME TAXES

         Income taxes are accounted for under the liability method of tax
         allocation, which determines future income taxes based on the
         differences between assets and liabilities reported for financial
         accounting purposes and those reported for tax purposes. Future income
         taxes are calculated using tax rates anticipated to apply in periods
         that temporary differences are expected to reverse.

2.       BUSINESS ACQUISITIONS AND INVESTMENT

         a)   Effective May 22, 2001, the Company increased its ownership in
              Aventura Energy Inc. ("Aventura") by acquiring 19,555,556 special
              warrants ("Special Warrants") at a price of $0.18 per warrant for
              total consideration of $3,520,000 through participation in a
              private placement of Special Warrants. These Special Warrants
              entitle the holder to one Aventura common share and one common
              share purchase warrant ("Purchase Warrant"). The Purchase Warrants
              entitle the holder to acquire one common share at a price of $0.25
              for a period of 12 months from closing. In addition, Aventura
              issued 2,100,000 finance warrants ("Finance Warrants") to the
              Company, which entitle the holder to acquire, at no additional
              cost, one finance option ("Finance Option"). Each Finance Option
              entitles the holder to acquire one common share and one warrant at
              a price of $0.18. Each warrant issued on exercise of the Finance
              Option will entitle the holder to acquire one common share at a
              price of $0.25 for a period of 12 months from the date of closing.

              On December 31, 2001, four officers of the Company, who own shares
              of Aventura, signed proxies which allow the Company to attend and
              vote on the officers' behalf at all meetings of the shareholders
              of Aventura, which gave the Company effective control of Aventura.
              Prior to December 31, 2001, the investment was recorded at
              original cost and adjusted for the Company's proportionate share
              of Aventura's net earnings or losses and dividends received since
              the date of acquisition. Effective December 31, 2001, the Company
              accounted for the investment by consolidating the operations of
              Aventura with their own using the purchase method of accounting as
              follows:
                                                                    ---------
                                                                         $
                                                                    ---------
              Allocation of purchase price:
                Capital assets                                         19,304
                Cash                                                    3,031
                Other current assets                                      905
                Current liabilities                                    (2,109)
                Future income taxes                                      (506)
                Site restoration                                          (50)
                                                                    ---------
                                                                       20,575

              Equity investment                                        (9,245)
              Non-controlling interest                                (11,330)
              Cash consideration                                           --
                                                                    =========

<PAGE>

              Effective May 22, 2002, the Company exercised all of its warrants
              and options in Aventura including Purchase Warrants (19,555,556
              warrants at $0.25 per warrant); Finance Options (2,100,000 options
              at $0.18 per option); and Finance Warrants (2,100,000 warrants at
              $0.25 per warrant) in exchange for 23,755,556 shares of Aventura
              at a cost of $5,791,889. This increased the Company's ownership
              position to 46.8%.

              On October 17, 2002, the Company purchased 20,000,000 shares of
              Aventura through a private placement at a price of $0.30 per share
              for an aggregate cost of $6,000,000.

              At December 31, 2002, the Company's ownership position represents
              47.4% of the shares of Aventura.

              These transactions represent an indirect acquisition of a further
              interest in Aventura from the minority shareholders. The required
              adjustment to non-controlling interest has been charged to capital
              assets.

              Subsequent to December 31, 2002, further transactions were
              completed with Aventura, which among other things resulted in an
              increase in the Company's ownership position of Aventura to 72.4%
              (see Note 13).

         b)   On February 13, 2002, the Company signed a letter agreement to
              purchase all of the outstanding shares of Artemis Energy Limited
              ("Artemis"), a private Canadian oil and gas company for total cash
              consideration of $21,915,000. The agreement closed on March 21,
              2002 at which time Artemis became a wholly-owned subsidiary of the
              Company. The acquisition of Artemis was accounted for using the
              purchase method of accounting, effective from March 21, 2002, as
              follows:

                                                                    ---------
                                                                         $
                                                                    ---------
              Allocation of purchase price:
                Capital assets                                         42,865
                Current assets                                          2,039
                Current liabilities                                    (6,511)
                Future income taxes                                   (11,195)
                Long-term debt                                         (4,600)
                Site restoration                                         (683)
                                                                    ---------

              Cash consideration                                       21,915
                                                                    =========


         c)   On June 21, 2002, the Company signed an agreement with a third
              party to purchase a 40% participating interest in, and
              operatorship of the Central Block onshore Trinidad. The Petroleum
              Company of Trinidad and Tobago Limited (Petrotrin) has a 35%
              Participating Interest in the Central Block, while the Company's
              subsidiary, Aventura holds the rights to the remaining 25%. The
              acquisition was accounted for using the purchase method of
              accounting as follows:

                                                                    ---------
                                                                         $
                                                                    ---------
              Allocation of purchase price:
                Capital assets                                         75,581
                Current assets                                            465
                Current liabilities                                    (1,127)
                Future income taxes                                    (9,233)
                                                                    ---------

              Cash consideration                                       65,686
                                                                    =========

              Subsequent to December 31, 2002, the participating interest in,
              and operatorship of the Central Block onshore Trinidad was sold to
              Aventura (Note 13).

<PAGE>

<TABLE>
<CAPTION>
3.       CAPITAL ASSETS
                                           --------------------------------------------------------
                                                                   2002
                                           --------------------------------------------------------
                                                                Accumulated
                                                                Depletion,
                                                               Depreciation
                                                                    and
                                                Cost           Amortization       Net Book Value
                                                 $                   $                  $
                                           ----------------- ------------------ -------------------
<S>                                        <C>               <C>                <C>
         Petroleum and natural gas
            properties and equipment            924,087             214,194            709,893
         Furniture and equipment                  4,787               2,778              2,009
                                           ----------------- ------------------ -------------------
                                                928,874             216,972            711,902
                                           ================= ================== ===================


<CAPTION>
                                           --------------------------------------------------------
                                                                   2001
                                           --------------------------------------------------------
                                                                Accumulated
                                                                Depletion,
                                                               Depreciation
                                                                    and
                                                Cost           Amortization       Net Book Value
                                                 $                   $                  $
                                           ----------------- ------------------ -------------------
<S>                                        <C>               <C>                <C>
         Petroleum and natural gas
            properties and equipment            669,361             124,251            545,110
         Furniture and equipment                  3,732               2,137              1,595
                                           ----------------- ------------------ -------------------
                                                673,093             126,388            546,705
                                           ================= ================== ===================
</TABLE>

         As at December 31, 2002, costs of $28,968,000 (2001 - $26,045,000) for
         undeveloped properties have been excluded from the depletion and
         depreciation calculation. During the year, the Company capitalized
         $3,248,000 (2001 - $2,469,000) of overhead costs related to exploration
         and development activities.

         The provision for future site restoration costs is recorded in the
         consolidated statement of earnings as a component of depletion and
         depreciation and on the consolidated balance sheet as a long-term
         liability. At December 31, 2002, the estimated future site restoration
         costs to be accrued over the life of the remaining proved reserves are
         $36,921,000 (2001 - $35,712,000).

4.       LONG-TERM DEBT

         At December 31, 2002, the Company had a line of credit of $270,000,000
         (2001 - $250,000,000) with a banking syndicate. Interest is payable
         based on the Company's total debt to cash flow ratio at an annual rate
         ranging from the bank's prime rate plus 0.125% to the bank's prime rate
         plus 1.5% per annum. Security for the loan facility includes a
         $400,000,000 floating charge debenture and a general security agreement
         over all of the assets of the Company. In addition, a subsidiary of the
         Company, Vermilion REP S.A., as guarantor of the Company's loan, has
         provided security over its assets in France. A working capital tranche
         of $10,000,000, included in the $270,000,000 facility, has been placed
         in France to facilitate in cash management practices.

         On January 16, 2003, the Company renegotiated its loan facility
         decreasing its line of credit to $260,000,000. The amended loan
         facility remains with the same syndicate of lenders with no change to
         the terms and security provisions. The facility structure is comprised
         of a one year revolving period with a one year term to follow with a
         final settlement payment required at the end of the second year.

         Effective January 1, 2002, the Company prospectively adopted the new
         standard for the presentation of callable debt obligations recommended
         by the CICA. The new standard relates to the presentation of debt

<PAGE>

         obligations that, by their terms, are due or callable within one year
         from the balance sheet date, even though payment may not be expected
         within that period. Under the new standard, debt obligations are
         classified based on facts existing at the balance sheet date rather
         than on expectations regarding future financing or renegotiation. As at
         December 31, 2002, there is no impact of the new standard on the
         consolidated financial statements.

5.       FUTURE INCOME TAXES

         The components of the future income tax liability at December 31, 2002
         and 2001 are as follows:

<TABLE>
<CAPTION>
                                                                                       ---------------- ----------------
                                                                                            2002             2001
                                                                                              $                $
                                                                                       ---------------- ----------------
<S>                                                                                    <C>              <C>
         Capital assets                                                                      175,861          133,375
         Provision for future site restoration                                                (4,679)          (2,866)
         Share issue costs                                                                       (88)            (811)
                                                                                       ---------------- ----------------
                                                                                             171,094          129,698
                                                                                       ================ ================

         The provision for income tax differs from the amount that would have
         been expected if the reported earnings had been subject only to the
         statutory Canadian income tax rate of 42.2% (2001 - 43.1%).

<CAPTION>
                                                                                      ----------------- ----------------
                                                                                            2002             2001
                                                                                             $                 $
                                                                                      ----------------- ----------------
<S>                                                                                    <C>              <C>
         Earnings before income taxes                                                        73,558           110,343

         Corporate tax rate                                                                  42.2%             43.1%

         Expected tax expense                                                                31,041            47,558

         Increase (decrease) in taxes resulting from
           Non-deductible crown payments                                                     18,211            20,216
           Resource allowance                                                               (17,511)          (17,702)
           Alberta Royalty Tax Credit                                                           128              (212)
           Foreign tax rate differentials *                                                  (6,558)           (2,679)
           France statutory tax rate change                                                  (1,692)           (1,078)
           Canada statutory tax rate change                                                  (1,148)           (4,013)
           Capital taxes                                                                        851               513
           Other                                                                                814             1,222
           Foreign exchange                                                                   7,962               825
                                                                                      ----------------- ----------------

         Provision for income taxes                                                          32,098            44,650
                                                                                      ================= ================
</TABLE>

         * The corporate tax rate in France is 34% (2001 - 36.2%).


         At December 31, 2002, the Company has approximately $289,543,000 (2001
         - $220,900,000) of tax deductions for Canadian income tax purposes,
         approximately $74,281,000 (2001 - $70,500,000) of tax deductions for
         French income tax purposes and approximately $29,013,000 (2001 - $Nil)
         of deductions for Trinidad income tax purposes.


<PAGE>

6.       SHARE CAPITAL

         AUTHORIZED
            Unlimited number of common shares
            Unlimited number of preferred shares

<TABLE>
<CAPTION>
         COMMON SHARES ISSUED
                                                                                      ----------------- ----------------

                                                                                           Number of          Amount
                                                                                              Shares               $
                                                                                      ----------------- ----------------
<S>                                                                                   <C>               <C>
        Balance, December 31, 2000                                                        54,489,920         132,965
           Stock options exercised for cash                                                1,153,882           4,864
           Shares acquired under normal course issuer bids                                  (629,500)         (1,683)
                                                                                      ----------------- ----------------

        BALANCE, DECEMBER 31, 2001                                                        55,014,302         136,146

           Stock options exercised for cash                                                  943,616           4,660
           Shares acquired under normal course issuer bid                                    (91,000)           (249)
                                                                                      ----------------- ----------------

        BALANCE, DECEMBER 31, 2002                                                        55,866,918         140,557
                                                                                      ================= ================
</TABLE>

Stock options

         The Company has a stock option plan under which the Board of Directors
         may grant stock options to directors, officers and employees for the
         purchase of common shares. The options are granted for a maximum term
         of five years and vest one third each year and are fully vested at the
         end of the third year. At December 31, 2002, the Company has reserved
         for issuance a total of 5,268,394 (2001 - 4,468,010) options under the
         stock option plan. The options are exercisable at prices from $3.02 to
         $11.50 and expire at various dates between 2003 and 2007.

         The following tables summarize information about the Company's stock
         options at December 31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                   ---------------------------------------------------------------------
                                                                  2002                              2001
                                                   ---------------------------------------------------------------------
                                                                        WEIGHTED                          Weighted
                                                                         AVERAGE                           Average
                                                       NUMBER OF        EXERCISE         Number of        Exercise
                                                        OPTIONS           PRICE           Options           Price
                                                                            $                                 $
                                                   ---------------------------------------------------------------------
<S>                                                <C>                 <C>           <C>                 <C>
         Balance, beginning of year                     3,378,685         6.07            4,596,367         5.22
            Granted                                     1,826,500         9.86              330,200         9.62
            Exercised                                    (943,616)        4.94           (1,153,882)        4.22
            Cancelled                                    (149,200)        7.29             (394,000)        5.67
                                                   ------------------                ------------------

         Balance, end of year                           4,112,369         7.97            3,378,685         6.07
                                                   ==================                ==================
         Exercisable, end of year                       1,171,783         5.27            1,602,653         4.94
                                                   ==================                ==================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                   -------------------------------------------------------------------------------------
                                              Options Outstanding                       Options Exercisable
                                   -------------------------------------------------------------------------------------
                                                    Average       Weighted                    Average       Weighted
                                                   Remaining      Average                    Remaining      Average
         Range of                      Number       Life in       Exercise       Number       Life in       Exercise
         Exercise Prices            Outstanding      Years         Price      Exercisable      Years         Price
                                                                     $                                         $
         ---------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>           <C>         <C>            <C>           <C>
         $3.02 -   $4.99              1,609,801       1.1           8.02         392,681        1.0           2.23
         $5.00 -   $7.99              1,630,167       2.7           6.98         680,134        0.7           6.39
         $8.00 -  $11.50                872,401       4.1           9.72          98,968        3.0           9.68
                                   ---------------                           ---------------
                                      4,112,369       3.0           7.97       1,171,783        1.3           5.27
                                   ===============                           ===============
</TABLE>

         NORMAL COURSE ISSUER BIDS

         Effective November 23, 2001, the Company commenced a normal course
         issuer bid process to purchase the Company's common shares. The bid was
         approved to purchase up to 5% of the issued and outstanding common
         shares, or 2,735,070 common shares and terminated on November 22, 2002.

         During the year ended December 31, 2002, the Company acquired 91,000
         (2001 - 629,500) common shares, under the normal course issuer bid, for
         cash consideration totalling $717,000 (2001 - $5,003,000). As the
         consideration paid was in excess of the stated value of the shares, the
         amount of the excess, totalling $468,000 (2001 - $3,320,000) was
         recorded as a reduction of retained earnings.

7.       STOCK-BASED COMPENSATION PLAN

         The Company accounts for its stock-based compensation using the
         intrinsic value of the stock options. Using intrinsic values,
         compensation costs are not recognized in the financial statements for
         share options granted to employees and directors when issued at
         prevailing market prices.

         Effective January 1, 2002, Canadian accounting standards require
         disclosure of the impact on net earnings of using the fair value method
         for stock options issued on or after January 1, 2002. If the fair value
         method had been used, the effect on the Company's 2002 net earnings
         would have been a reduction of $2,338,000 for the stock options granted
         in this period. The effect on net earnings would be a reduction of
         $0.04 per share.

         The fair value of each option granted is estimated on the date of grant
         using the Black-Scholes option-pricing model with the following
         weighted average assumptions for grants; risk-free interest rate of
         4.5%; expected lives of 5 years; and expected volatility of 50%.

         The weighted average fair market value of options granted in 2002 was
         $4.86 per option.


<PAGE>

8.       PER SHARE AMOUNTS

         The following table shows the effect of dilutive securities on the
         weighted average common shares outstanding:

<TABLE>
<CAPTION>
                                                                                      ----------------- ----------------
                                                                                            2002             2001
                                                                                      ----------------- ----------------
<S>                                                                                   <C>               <C>
        Basic
           Earnings per share                                                                $0.74             $1.21
           Funds generated from operations per share                                         $2.82             $2.81
           Weighted average number of shares outstanding (thousands)                        55,791            54,489
        Diluted
           Earnings per share                                                                $0.73             $1.17
           Funds generated from operations per share                                         $2.77             $2.71
           Weighted average number of shares outstanding (thousands)                        56,847            56,332
</TABLE>

         The number of shares used to calculate diluted earnings and funds
         generated from operations per share for the year ended December 31,
         2002, of 56,847,150 (2001 - 56,332,326) included the weighted average
         number of shares outstanding of 55,791,046 (2001 - 54,488,598) plus
         1,056,104 (2001 - 1,843,728) shares related to the dilutive effect of
         stock options.

         The diluted net earnings and funds generated from operations per share
         discussed above did not include 324,282 (2001 - 55,807) of share
         options, both on a weighted average basis, because the respective
         exercise prices exceeded the average market price of the common shares,
         as the effect would be anti-dilutive.

9.       FINANCIAL INSTRUMENTS

         RISK MANAGEMENT ACTIVITIES

         The nature of the Company's operations result in exposure to
         fluctuations in commodity prices, exchange rates and interest rates.
         The Company monitors and when appropriate, utilizes derivative
         financial instruments to manage its exposure to these risks. The
         Company is exposed to credit-related losses in the event of
         non-performance by counterparties to the financial instruments.

         The Company uses oil swap agreements to hedge anticipated sales of
         crude oil. At December 31, 2002, the Company had entered into U.S.
         dollar oil swaps with financial institutions to hedge approximately
         2,025,750 barrels (approximately 5,550 barrels per day) in 2003. The
         hedge prices average US$24.04 WTI equivalent and mature during calendar
         year 2003. At December 31, 2002, the fair value of the oil swaps
         represent a loss of approximately Cdn$7,038,328 (using an average
         exchange rate of $1.5983). The Company does not obtain collateral or
         other security to support its oil swap agreements, however any swap
         agreement executed with any of its banking syndicate members rank
         pari-passu with the security arrangement within the bank loan facility.

         As well the Company uses natural gas agreements to hedge anticipated
         sales of natural gas. At December 31, 2002, the Company had entered
         into physical gas contracts at pre-determined prices to sell 10,950,500
         GJ's (approximately 26.8 mmcf per day) at an average floor of Cdn$5.18
         and cap of Cdn$5.75 per mcf in 2003 and 675,000 GJ's (approximately 1.7
         mmcf per day) at an average floor of Cdn$5.31 and cap of Cdn$8.91 per
         mcf in 2004. At December 31, 2002, the fair value of the gas contracts
         represents a loss of approximately Cdn$9,975,230. The Company does not
         obtain collateral or other security to support its natural gas
         agreements other than parental guarantees.

         The Company has entered into a financial swap for electricity prices to
         hedge anticipated electrical needs for its Canadian production. At
         December 31, 2002, the Company had entered into an agreement with an

<PAGE>

         energy company to hedge approximately 2 MW per hour (50% of current
         electrical needs for Canadian production) at $91 per MW hour. The term
         was for three years beginning January 1, 2001, and ending December 31,
         2003. At December 31, 2002, the fair value of the agreement was a loss
         of $598,776.

         The Company has also put in place Canadian/US dollar currency
         conversion hedges covering virtually all of its oil hedge position for
         2003 at approximately US$0.63 per Canadian dollar. At December 31,
         2002, the fair value of the hedges was a loss of $150,926.

         FAIR VALUES

         The carrying values of accounts receivable, accounts payable and
         accrued liabilities and long-term debt approximated their fair values
         as at December 31, 2002 and 2001 due to the short-term nature of these
         instruments and in the case of long-term debt having variable interest
         rate which approximates market value.

10.      CASH FLOW INFORMATION

                                               --------------------------------
                                                      2002           2001
                                                        $              $
                                               --------------------------------
        Accounts receivable                          (10,620)          (133)
        Crude oil inventory                             (614)         3,425
        Prepaid expenses and other                       598         (2,494)
        Accounts payable                                (460)         3,054
        Foreign exchange                                (634)          (351)
                                               --------------------------------
        Change in non-cash working capital           (11,730)         3,501
                                               ================================


<PAGE>

11.      SEGMENTED INFORMATION

         The Company has operations principally in Canada and France. Aventura
         (see Note (2(a)) has net assets in Trinidad, Argentina and Canada. The
         Company's entire operating activities are related to exploration,
         development and production of petroleum and natural gas.

<TABLE>
<CAPTION>
                                                                                     ----------------- -----------------
                                                                                           2002              2001
                                                                                            $                 $
                                                                                     ----------------- -----------------
<S>                                                                                  <C>               <C>
         Petroleum and natural gas revenues
           Canada                                                                          208,103           201,212
           France                                                                           79,036            73,687
           Trinidad                                                                            401                --
                                                                                     ----------------- -----------------
                                                                                           287,540           274,899
                                                                                     ----------------- -----------------
         Net earnings
           Canada                                                                           24,711            45,841
           France                                                                           16,270            19,902
           Trinidad                                                                            341                --
                                                                                     ----------------- -----------------
                                                                                            41,322            65,743
                                                                                     ----------------- -----------------
         Funds generated from operations
           Canada                                                                          101,759           109,174
           France                                                                           55,250            43,711
           Trinidad                                                                            356                --
                                                                                     ----------------- -----------------
                                                                                           157,365           152,885
                                                                                     ----------------- -----------------
         Capital expenditures (including acquisitions)
           Canada                                                                          134,336           118,809
           France                                                                           25,092            44,080
           Trinidad                                                                         74,569                --
           Argentina                                                                            82                --
                                                                                     ----------------- -----------------
                                                                                           234,079           162,889
                                                                                     ----------------- -----------------
        Total assets
           Canada                                                                          497,512           401,063
           France                                                                          199,385           188,481
           Trinidad                                                                        112,605            13,981
           Argentina                                                                         2,209             2,254
                                                                                     ----------------- -----------------
                                                                                           811,711           605,779
                                                                                     ================= =================
</TABLE>

12.      COMMITMENTS AND CONTINGENCIES

         At December 31, 2002, the Company had a letter of credit outstanding
         for 2,123,615 Euro (approximately Cdn$3,500,000) in favour of the
         vendor of the properties acquired in France, which secures certain
         indemnities given to the vendor. The letter of credit expires July 2003
         and has a 10% reduction upon annual renewal.

         On September 25, 2001, the Company received a tax assessment notice
         from the Direction Generale des Impots regarding the Company's
         wholly-owned subsidiary in France, Vermilion REP. S.A. The notice
         advises that the Company is liable for a registration fee that was owed
         at the time of the purchase of the French properties in 1997, in the
         amount of $4,500,000 Euro (approximately Cdn$7,500,000), including
         interest charges for late filing. The Company disagrees with the tax
         authorities position and is in the process of challenging the
         assessment. At the present time the Company is unable to determine the
         likelihood that it will be required to pay the registration fee, and as
         such no amount has been accrued for in the consolidated financial
         statements at December 31, 2002.


<PAGE>

13.      SUBSEQUENT EVENT

         On January 15, 2003, the shareholders of the Company approved the
         reorganization of the Company by way of a plan of arrangement into
         Vermilion Energy Trust (the "Trust") and Clear Energy Inc. ("Clear"), a
         new publicly traded oil and gas exploration company. The Arrangement,
         completed on January 22, 2003, resulted in former Vermilion
         shareholders and optionholders owning all of the issued and outstanding
         common shares of Clear and all of the issued and outstanding trust
         units, and the Trust owning all of the issued and outstanding common
         shares of the Vermilion. As the ultimate ownership has not changed from
         the former Vermilion shareholders, no adjustment has been made to the
         carrying values of the assets and liabilities of the Company. Costs
         related to the reorganization and the conversion of options have been
         estimated at $8,000,000 and $16,817,000 respectively. These costs,
         including $2,324,000 incurred to December 31, 2002 which were recorded
         as deferred reorganization costs, will be recorded as expenses at the
         time of completion of the transactions.

         Following the completions of the Arrangement, the Company completed
         certain transactions with Aventura pursuant to which the Company
         transferred all of its Trinidad interests to Aventura in exchange for
         Aventura shares, thereby increasing the Company's ownership interest in
         Aventura to 72.4%. The Company also acquired from Aventura a 25% gross
         overriding royalty which was held by Aventura on certain of the
         Company's non-operated interests and properties located in Canada for
         cash consideration of $6,312,000. These transactions will be recorded
         at carrying value.


<PAGE>


                                   SCHEDULE B


COMPILATION REPORT

To the Trustee of
VERMILION ENERGY TRUST:

We have reviewed, as to compilation only, the accompanying pro forma
consolidated balance sheet of Vermilion Energy Trust as at December 31, 2002 and
the pro forma consolidated statement of earnings for the year ended December 31,
2002 which have been prepared for inclusion in the Annual Information Form of
Vermilion Energy Trust dated April 11, 2003. In our opinion, the pro forma
consolidated balance sheet as at December 31, 2002 and the pro forma
consolidated statement of earnings for the year ended December 31, 2002 have
been properly compiled to give effect to the proposed transactions and the
assumptions described in the notes thereto.




Calgary, Alberta                                 (signed) DELOITTE & TOUCHE LLP
March 7, 2003                                             Chartered Accountants


<PAGE>

<TABLE>
<CAPTION>
VERMILION ENERGY TRUST
Pro Forma Consolidated Statement of Earnings
For the Year Ended December 31, 2002
(000's, except unit and per unit amounts, unaudited)

- ----------------------------------------------------------------------------------------------------------------------
                                                 Vermilion      Clear Energy    Pro forma                 Pro forma
                                                 Resources      Inc. Assets    Adjustments            Vermilion Energy
                                                   Ltd.          (Note 2a.)      (Note 2)                   Trust
- ----------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>             <C>          <C>       <C>
Revenue:
Petroleum and natural gas revenue               $   287,540    $   (16,008)                           $     271,532
Royalties (net)                                      61,332         (5,221)                                  56,111
                                                -----------                                           -------------
                                                    226,208                                                 215,421
                                                -----------                                           -------------
Expenses:
Production                                           42,976         (1,513)                                  41,463
Interest                                              6,286                                                   6,286
General and administration                            9,392                         (882)    2(c)             8,510
Employee bonus plan                                       -                        3,529     2(d)             3,529
Foreign exchange loss (gain)                           (741)                                                   (741)
Depletion and depreciation                           94,737                       (6,537)    2(e)            88,200
                                                -----------                                           -------------
                                                    152,650                                                147,247
                                                -----------                                           -------------

Earnings before income taxes and other item          73,558                                                  68,174
Income taxes:
Future                                               21,121                        6,855     2(g)            27,976
Current                                              10,126                       (9,123)    2(g)             1,003
Capital                                                 851                          (22)    2(g)               829
                                                -----------                                           -------------
                                                     32,098                                                  29,808
Other item:
Non-controlling interest                                138                                                     138
                                                -----------                                           -------------

Net earnings for the year                       $    41,322                                           $      38,228
                                                -----------                                           -------------

Total Trust Units                                                                            2(j)        57,480,467
                                                                                                      -------------

Net earnings per Trust Unit (Note 2(j))                                                                       $0.67
                                                                                                      -------------
</TABLE>


SEE ACCOMPANYING NOTES.

<PAGE>

<TABLE>
<CAPTION>
VERMILION ENERGY TRUST
Pro Forma Consolidated Balance Sheet
As at December 31, 2002
(000's, unaudited)

- ------------------------------------------------------------------- -------------------------------------------
                                                                                                     Pro forma
                                                                                                     Vermilion
                                                   Vermilion       Pro forma          Pro forma        Energy
                                     Vermilion     Resources      Adjustments        Adjustments        Trust
                                    Energy Trust      Ltd.          (Note 2)          (Note 3)        (Note 3)
- --------------------------------------------------------------------------------------------------------------
<S>                                <C>            <C>             <C>                <C>             <C>
ASSETS

CURRENT
     Cash                          $        1     $   32,562                                         $   32,563
     Accounts receivable                   --         56,582                                             56,582
     Crude oil inventory                   --          3,207                                              3,207
     Prepaid expenses and other            --          4,699                                              4,699
                                   -------------------------                                         ----------
                                            1         97,050                                             97,051
Deferred reorganization costs                          2,324      (2,324) 2(1)                               --
Deferred financing costs                   --            435                                                435
Capital assets                             --        711,902     (19,737) 2(a)       10,595 3(a)        702,760
                                   -------------------------                                         ----------
                                   $        1     $  811,711                                         $  800,246
                                   =========================                                         ==========

LIABILITIES AND UNITHOLDERS' EQUITY

CURRENT
     Accounts payable and
         accrued liabilities       $       --   $   79,817         5,676  2(l)                       $   85,493
     Income taxes payable                  --       10,977                                               10,977
                                   -------------------------                                         ----------
                                           --       90,794                                               96,470

Long-term debt                             --      193,025                                              193,025
Provision for future site
     restoration                           --       11,169           (85) 2(f)                           11,084
Future income taxes                        --      171,094         1,970  2(g)                          173,064
                                   -------------------------                                         ----------
                                           --      466,082                                              473,643
                                   -------------------------                                         ----------
Non-controlling interest                   --       21,321                           10,595 3(a)         31,916
                                   -------------------------                                         ----------
UNITHOLDERS' EQUITY:
     Unitholders' Equity                    1      140,557        (8,174)                               132,384
     Retained earnings                     --      183,751       (21,448) 2(l)                          162,303
                                   -------------------------                                         ----------
                                            1      324,308                                              294,687
                                   -------------------------                                         ----------
                                   $        1   $  811,711                                           $  800,246
                                   =========================                                         ==========
</TABLE>


SEE ACCOMPANYING NOTES.

<PAGE>

NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

The accompanying unaudited pro forma consolidated balance sheet as at December
31, 2002 and the pro forma consolidated statement of earnings for the year ended
December 31, 2002 (the "Pro Forma Statements") have been prepared to reflect the
Plan of Arrangement, completed on January 22, 2003, (the "Arrangement") to
convert Vermilion Resources Ltd. ("Vermilion") from a corporation focused on oil
and natural gas exploration and production into two new entities: (a) Clear
Energy Inc. ("Clear") a public corporation concentrating on the exploration and
development of oil and natural gas reserves and (b) Vermilion Energy Trust (the
"Trust") a trust entity which will distribute a substantial portion of cash to
its unitholders. Vermilion Resources Ltd. ("Amalgamationco"), the corporation
resulting from the amalgamation of Vermilion and Vermilion Acquisition Ltd.
("Acquisitionco"), and a subsidiary of the Trust, will hold a working interest
in certain oil and gas properties of Vermilion.

The Pro Forma Statements include the accounts of the Trust, certain partnership
interests and its subsidiaries, all of which are wholly-owned subsidiaries
except for Aventura Energy Inc. ("Aventura").

The Pro Forma Statements have been prepared by management in accordance with
Canadian generally accepted accounting principles. The pro forma consolidated
balance sheet gives effect to the assumed transactions and assumptions described
in Notes 2 and 3 as if they had occurred at the end of the year and the pro
forma consolidated statement of earnings gives effect to the assumed
transactions and assumptions described in Note 2 and Note 3 as if they had
occurred at the beginning of the year. The Pro Forma Statements may not be
indicative of the results that actually would have occurred if the events
reflected therein had been in effect on the dates indicated or of the results
which may be obtained in the future.

Distributable cash as set out in Note 4 is not an earnings measurement
recognized by Canadian generally accepted accounting principles and is not
necessarily comparable to the measurement of distributable cash in other similar
trust entities.

Accounting policies used in the preparation of the Pro Forma Statements are
consistent with those used in the audited consolidated financial statements of
Vermilion as at and for the year ended December 31, 2002 ("Vermilion Historical
Financial Statements"). The Pro Forma Statements have been prepared from
information derived from, and should be read in conjunction with, the Vermilion
Historical Financial Statements. In the opinion of management, the Pro Forma
Statements include all necessary adjustments for a fair presentation of the
ongoing entity.

2.       PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

Under the Arrangement, Vermilion will be acquired by Acquisitionco, the
consideration being shares in Clear and units of Vermilion Energy Trust. As the
former Vermilion shareholder group will own Clear and the Trust (including its
wholly-owned subsidiary company Amalgamationco), no adjustment to carrying
values of the assets and liabilities of Vermilion is required to account for the
transactions.

The Pro Forma Statements give effect to the following assumptions and
adjustments:

a.       Under the Arrangement, a portion of Vermilion's existing lands and
         exploration assets will be transferred directly to Clear. The
         properties held within the consolidated entity of Vermilion will be
         transferred such that Clear will hold a 50% working interest in certain
         natural gas properties in the Peace River Arch area of Alberta, a 100%
         working interest in certain other exploration properties as well as
         various undeveloped landholdings. The net book value of capital assets
         of Vermilion has been allocated to Amalgamationco based on the
         historical cost of the assets. The revenue, royalties, and production
         expenses related to these properties have been eliminated from the Pro
         Forma Consolidated Statement of Earnings.

b.       Working capital balances related to the exploration assets are not
         transferred with the properties.

<PAGE>

c.       General and administrative costs of approximately $882,000 for the year
         ended December 31, 2002 will be transferred to Clear. Included in this
         amount is a Temporary Services Agreement for office space, equipment
         and other general administrative services.

d.       The Employee Bonus Plan provides for a payment of up to 2.0% of Net
         Operating Income (as defined in the Plan) for the period. The amount is
         to be settled in cash, through the issuance of Trust Units, or in a
         combination of cash and Trust Units as determined by the board of
         directors of Amalgamationco. For the purposes of these Pro forma
         Statements, it is assumed to be settled half in cash and half in Trust
         Units.

e.       The adjustment of depletion and depreciation to account for the
         transfer of the capital assets to Clear has been computed using the
         appropriate unit-of production rate for the full cost pool allocated to
         Clear based on the estimated proved petroleum and natural gas reserves
         as determined by independent reserve engineers. The cost of significant
         unevaluated properties are excluded from the depletion and depreciation
         base.

f.       The provision for site restoration and abandonment on the pro forma
         consolidated balance sheet has been adjusted based on the historical
         provisions related to the properties transferred to Clear.

g.       Future income tax has been adjusted for the other adjustments to
         earnings using the historical effective tax rate of Vermilion (December
         31, 2002 - 42.12%). The provision for Canadian current taxes would be
         eliminated under the new structure. Large corporations tax has been
         adjusted for the impact of other noted adjustments.

         The increase to the future tax liability on the pro forma consolidated
         balance sheet results from the tax basis being reduced by an amount
         greater than the reduction of net book value related to the transfer of
         the exploration assets. The increase is reduced by an increase in tax
         pools for certain of the costs of the Plan of Arrangement.

h.       The Trust will establish a reclamation fund to fund the payment of
         environmental and final site restoration costs for the assets acquired
         through the Arrangement. The reclamation fund will be funded by
         Amalgamationco and owned by the Trust. The contribution rate has been
         estimated at $0.20 per BOE of proven reserves, based on currently
         estimated future environmental and reclamation obligations.

i.       It is the intention of the Trust to reinvest 15% of cash from
         operations into capital assets.

j.       The authorized capital of the Trust consists of an unlimited number of
         Trust Units. Net earnings and distributable cash per unit (Note 4) have
         been based on the following number of shares of Vermilion:

         Common Shares as at December 31, 2002                       55,866,918
         Options exercised January 1, 2003 to closing                   267,100
         Common Shares and Exchangeable Shares exchanged for
         Trust Units                                                 56,134,018
         Options exchanged for Trust Units                            1,346,449
                                                                   ------------
         Total Trust Units                                           57,480,467
                                                                   ============


k.       Unitholders' equity, and the number of Trust Units above, includes both
         Trust Units and Exchangeable Shares issued under the Arrangement.
         Unitholders' equity also includes the exchange of options under the
         Arrangement.

l.       Costs related to the Arrangement and the conversion of options have
         been estimated at $8,000,000 and $16,817,000 respectively and the
         related income tax impact has been estimated to be $ 3,376,000 and have
         been charged to retained earnings for purposes of these Pro Forma
         Statements. These costs have not been included on the proforma
         consolidated statement of earnings because they relate to Vermilion
         prior to becoming a trust.

<PAGE>

3.       PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

As part of the reorganization of Vermilion, separate from the Arrangement,
Vermilion's existing 40% working interest in the Central Block in Trinidad will
be sold to Aventura.

The Pro Forma Statements give effect to the following assumption and adjustment.

a.       As a result of the sale to Aventura of its interest in the Central
         Block in Trinidad, Vermilion increases its equity holding in Aventura
         to approximately 72% from approximately 47% held before the sale. This
         reduces the non-controlling interest to approximately 28%. This
         represents an indirect acquisition of a further interest in Aventura
         from the minority shareholders. The required adjustment to
         non-controlling interest has been allocated to capital assets.

4.       PROFORMA DISTRIBUTABLE CASH

- --------------------------------------------------------------------------------
                                                                Pro forma
                                                             Vermilion Energy
                                                            Trust for the year
                                                            ended December 31,
                                                                   2002
- --------------------------------------------------------------------------------
Net earnings for the period                                    $      38,228
 Add (deduct):
           Depletion and depreciation                                 88,200
           Unrealized foreign exchange loss                             (666)
           Amortized deferred financing charges                          713
           Non-controlling interest                                      138
           Future income taxes                                        27,976
           Non-cash administrative expenses (Note 2(d))                1,764
                                                               -----------------
Cash generated from operations                                       156,353

 Add (deduct):
           Reclamation fund contribution (Note 2(h))                  (1,743)
           Provision for capital expenditures (Note 2(i))            (23,824)
                                                               -----------------

Distributable cash                                                   130,786
                                                               -----------------

 Total Trust Units (Note 2(j))                                    57,480,467
                                                               -----------------

 Distributable cash per Trust Unit (Note 2(j))                 $        2.28
                                                               -----------------




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>ex99_3form40-f.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>

                                                                    EXHIBIT 99.3
                                                                    ------------




FINANCIAL STATEMENTS OF

VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)

DECEMBER 31, 2003 AND 2002




<PAGE>


REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To the Unitholders of
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.):

We have audited the consolidated balance sheets of VERMILION ENERGY TRUST (the
"Trust") as at December 31, 2003 and 2002 and the consolidated statements of
earnings and accumulated earnings and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Trust as at December 31, 2003
and 2002 and the results of its operations and its cash flows for the years then
ended in accordance with Canadian generally accepted accounting principles.

On February 11, 2004, we reported separately to the unitholders of the Trust on
consolidated financial statements for the same period, prepared in accordance
with Canadian generally accepted accounting principles which excluded Note 17 on
Differences Between Canadian and United States of America Generally Accepted
Accounting Principles.



Calgary, Alberta, Canada               (signed) "Deloitte & Touche LLP"
February 11, 2004                               Registered Chartered Accountants




COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCES

The standards of the Public Company Accounting Oversight Board (United States)
for auditors require the addition of an explanatory paragraph (following the
opinion paragraph) when there are changes in accounting principles that have a
material effect on the comparability of the financial statements. As described
in Note 7 to the consolidated financial statements of Vermilion Energy Trust
(the "Trust") (formerly Vermilion Resources Ltd.), in 2002 the Trust adopted
recommendations with respect to determining stock based compensation to conform
to new recommendations of Section 3870 of the Canadian Institute of Chartered
Accountants. Our report to the unitholders of the Trust dated February 11, 2004
is expressed in accordance with Canadian reporting standards, which do not
require a reference to such changes in accounting principles in the auditors'
report when the changes are properly accounted for and adequately disclosed in
the financial statements.



Calgary, Alberta, Canada               (signed) "Deloitte & Touche LLP"
February 11, 2004                               Registered Chartered Accountants

<PAGE>

VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
(THOUSANDS OF CANADIAN DOLLARS)
- --------------------------------------------------------------------------------
                                                             2003         2002
                                                               $            $
                                                          ----------------------

ASSETS
CURRENT
   Cash and cash equivalents                                53,351        32,562
   Accounts receivable                                      39,640        56,582
   Crude oil inventory                                       3,477         3,207
   Prepaid expenses and other                                2,966         4,699
                                                          --------      --------
                                                            99,434        97,050
Reclamation fund (Note 2)                                    1,678            --
Deferred financing costs                                        --           435
Deferred reorganization costs (Note 3)                          --         2,324
Capital assets (Note 5)                                    688,144       711,902
                                                          --------      --------
                                                           789,256       811,711
                                                          ========      ========

LIABILITIES
CURRENT
   Accounts payable and accrued liabilities                 79,937        79,817
   Distributions payable to unitholders                     10,065            --
   Income and capital taxes payable                          5,372        10,977
                                                          --------      --------
                                                            95,374        90,794
Long-term debt (Note 6)                                    135,558       193,025
Provision for future site restoration (Note 5)              13,514        11,169
Future income taxes (Note 7)                               152,993       171,094
                                                          --------      --------
                                                           397,439       466,082
                                                          --------      --------

NON-CONTROLLING INTEREST (Note 4(c))                        29,598        21,321
                                                          --------      --------

COMMITMENTS, CONTINGENCIES AND
   GUARANTEES (Notes 14 and 15)

UNITHOLDERS' EQUITY
   Unitholders' capital (Note 8)                           209,379       140,557
   Exchangeable shares (Note 8)                             11,276            --
   Accumulated earnings                                    240,493       183,751
   Accumulated cash distributions                          (98,929)           --
                                                          --------      --------
                                                           362,219       324,308
                                                          --------      --------
                                                           789,256       811,711
                                                          ========      ========
APPROVED BY THE BOARD
(signed) Joseph F. Killi, Director
(signed) Lorenzo Donadeo, Director

<PAGE>

VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(THOUSANDS OF CANADIAN DOLLARS, EXCEPT FOR UNIT AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------
                                                         2003            2002
                                                          $               $
                                                    ----------------------------

REVENUE
   Petroleum and natural gas revenue                    315,572         287,540
   Royalties (net of ARTC)                               76,002          61,332
                                                    -----------     -----------
                                                        239,570         226,208
                                                    -----------     -----------

EXPENSES
   Production                                            53,493          42,976
   Interest on long-term debt                             9,179           6,286
   General and administrative                            11,931           9,392
   Reorganization costs (Note 3)                         25,628              --
   Foreign exchange loss (gain)                           4,630            (741)
   Depletion and depreciation                            95,398          94,737
                                                    -----------     -----------
                                                        200,259         152,650
                                                    -----------     -----------
EARNINGS BEFORE INCOME TAXES AND OTHER ITEM              39,311          73,558
                                                    -----------     -----------

INCOME TAXES (RECOVERY) (Note 7)
   Future                                               (23,044)         21,121
   Current                                                4,611          10,126
   Capital                                                  761             851
                                                    -----------     -----------
                                                        (17,672)         32,098
                                                    -----------     -----------
OTHER ITEM
   Non-controlling interest (Note 4(c))                     241             138
                                                    -----------     -----------

NET EARNINGS                                             56,742          41,322

ACCUMULATED EARNINGS, BEGINNING OF YEAR                 183,751         142,897

EXCESS OF CONSIDERATION PAID OVER STATED
   VALUE OF SHARES PURCHASED                                 --            (468)
                                                    -----------     -----------

ACCUMULATED EARNINGS, END OF YEAR                       240,493         183,751
                                                    ===========     ===========

NET EARNINGS PER TRUST UNIT (Note 10)
   Basic                                                   0.97            0.74
   Diluted                                                 0.96            0.73
                                                    ===========     ===========

WEIGHTED-AVERAGE TRUST UNITS OUTSTANDING
   Basic                                             58,600,290      55,791,046
   Diluted                                           59,093,044      56,847,150
                                                    ===========     ===========

<PAGE>

VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(THOUSANDS OF CANADIAN DOLLARS)
- --------------------------------------------------------------------------------
                                                              2003       2002
                                                                $          $
                                                    ----------------------------

CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN):

OPERATING
   Net earnings                                              56,742      41,322
   Items not affecting cash and cash equivalents:
     Depletion and depreciation                              95,398      94,737
     Unrealized foreign exchange loss (gain)                  4,398        (666)
     Amortized deferred financing costs                         590         713
     Non-controlling interest                                   241         138
     Trust units issued on cancellation of employee stock
       options (Note 3)                                      16,817          --
     Future income taxes (recovery)                         (23,044)     21,121
                                                           --------    --------
   Cash flow from operations                                151,142     157,365
   Site restoration costs incurred                           (2,034)       (990)
   Changes in non-cash working capital (Note 12)             14,931     (11,730)
                                                           --------    --------
                                                            164,039     144,645
                                                           --------    --------
INVESTING
   Drilling and development of petroleum and natural gas
     properties                                             (80,860)   (113,311)
   Disposition (acquisition) of capital assets                1,294     (23,433)
   Contributions to reclamation fund                         (1,678)         --
   Corporate acquisitions (Notes 4(a) and (b))
     Artemis                                                     --     (21,915)
     Trinidad                                                    --     (65,686)
                                                           --------    --------
                                                            (81,244)   (224,345)
                                                           --------    --------
FINANCING
   Issue of Trust units for cash, net of unit issue costs    80,752          --
   Cash distributions                                       (88,864)         --
   (Decrease) increase in long-term debt                    (57,467)     91,972
   Issue of Trust units pursuant to distribution
     reinvestment plan                                        6,209          --
   Issue of common shares for cash, net of share issue costs  1,201       4,660
   Cash acquired on increased investment in subsidiary          421       8,467
   Increase in deferred financing costs                        (155)       (136)
   Repurchase of common shares for cash (Note 8)                 --        (717)
                                                           --------    --------
                                                            (57,903)    104,246
                                                           --------    --------
Foreign exchange (loss) gain on cash held in foreign
   currencies                                                (4,103)      1,300
                                                           --------    --------

NET CHANGE IN CASH AND
   CASH EQUIVALENTS                                          20,789      25,846

CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR                                         32,562       6,716
                                                           --------    --------

CASH AND CASH EQUIVALENTS,
   END OF YEAR                                               53,351      32,562
                                                           ========    ========

SUPPLEMENTARY INFORMATION - CASH PAYMENTS
   Interest paid                                             10,080       5,647
                                                           ========    ========
   Income taxes paid                                          9,869       7,527
                                                           ========    ========

<PAGE>

                                                                               1
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


1.       BASIS OF PRESENTATION

         Vermilion Energy Trust (the "Trust" or "Vermilion") was established on
         January 22, 2003, under a Plan of Arrangement entered into by the
         Trust, Vermilion Resources Ltd., Clear Energy Inc., and Vermilion
         Acquisition Ltd. The Trust is an open-end unincorporated investment
         trust governed by the laws of the Province of Alberta and created
         pursuant to a trust indenture ("Trust Indenture"). Computershare Trust
         Company of Canada has been appointed trustee under the Trust Indenture.
         The beneficiaries of the Trust are the holders of Trust units.

         As a result of the completion of the Plan of Arrangement involving the
         Trust, Vermilion Resources Ltd., Clear Energy Inc., and Vermilion
         Acquisition Ltd., former holders of common shares of Vermilion
         Resources Ltd. ("Resources" or the "Company"), received units of the
         Trust or exchangeable shares of Vermilion Resources Ltd. or a
         combination thereof, in accordance with the elections made by such
         holders, and common shares of Clear Energy Inc. ("Clear") (Note 3). The
         Company became a subsidiary of the Trust. The Company is actively
         engaged in the business of oil and natural gas development, acquisition
         and production.

         Prior to the Plan of Arrangement on January 22, 2003, the consolidated
         financial statements included the accounts of the Company and its
         subsidiaries. After giving effect to the Plan of Arrangement, the
         consolidated financial statements have been prepared on a continuity of
         interests basis, which recognizes the Trust as the successor entity to
         Resources.

2.       SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements have been prepared in accordance
         with Canadian generally accepted accounting principles and include the
         accounts of the Trust and its subsidiaries on a consolidated basis, all
         of which are wholly owned, except for Aventura Energy Inc. ("Aventura")
         (Note 4(c)). Inter-company transactions eliminate upon consolidation.

<PAGE>

                                                                               2
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PETROLEUM AND NATURAL GAS OPERATIONS

         The Trust uses the full-cost method of accounting for petroleum and
         natural gas operations and accordingly, capitalizes all exploration and
         development costs on a country-by-country basis. These costs include
         land acquisition, geological and geophysical costs, drilling (including
         related overhead) on producing and non-producing properties and other
         carrying charges on unproven properties. Proceeds of disposition are
         applied against the cost pools with no gain or loss recognized except
         where the disposition results in a greater than 20% change in the rate
         of depletion and depreciation.

         The carrying value of the Trust's petroleum and natural gas properties
         is limited to the recoverable amount as determined by estimating the
         present value of future net revenues from proven properties based on
         current prices and costs plus unproven properties at the lower of cost
         and net realizable value less estimated future site restoration costs,
         general and administrative expenses, financing costs and income taxes.

         Substantially all of the exploration, development and production
         activities of the Trust are conducted jointly with others and,
         accordingly, the consolidated financial statements reflect only the
         Trust's proportionate interest in such activities.

         The Trust estimates its future site restoration and abandonment costs
         for its oil and gas properties on a country-by-country basis. The costs
         represent management's best estimate of the future site restoration and
         abandonment costs based upon current legislation and industry practices
         in each country. Total estimated costs are being provided on a
         unit-of-production basis. The annual provision included in amortization
         expense and actual future site restoration and abandonment costs are
         charged to the accumulated provision as incurred.

         Amortization of these costs is done on a country-by-country basis and
         is calculated on the unit-of-production method based on estimated
         proven reserves, before royalties, as determined by independent
         engineers. The cost of significant unevaluated properties is excluded
         from the depletion and depreciation base. For purposes of depletion and
         depreciation calculations, oil and gas reserves are converted to a
         common unit of measure on the basis of their relative energy content
         based on a conversion ratio of six thousand cubic feet of natural gas
         to a barrel of oil.

<PAGE>

                                                                               3
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PETROLEUM AND NATURAL GAS OPERATIONS (CONTINUED)

         The amounts recorded for depletion and depreciation of property, plant
         and equipment and the provision for future site restoration and
         abandonment costs are based on estimates. The ceiling test calculation
         is based on estimates of proved reserves, production rates, oil and
         natural gas prices, future costs and other relevant assumptions. By
         their nature, these estimates are subject to measurement uncertainty
         and the effect on the consolidated financial statements from changes in
         such estimates in future years could be significant.

         CASH AND CASH EQUIVALENTS

         Cash and cash equivalents include monies on deposit and short-term
         investments accounted for at cost that have a maturity date of not more
         than 90 days.

         FURNITURE AND EQUIPMENT

         Furniture and equipment are recorded at cost and are being amortized on
         a declining-balance basis at rates of 20% to 50% per year.

         CRUDE OIL INVENTORIES

         Inventories of crude oil, consisting of production awaiting shipment at
         the Ambes Shipping Terminal in France, are valued at lower of cost or
         net realizable value. Cost is determined on a weighted-average basis.

         UNIT RIGHTS INCENTIVE PLAN

         The Trust has a unit-based long-term compensation plan for employees,
         and directors of the Trust and its subsidiaries. Compensation cost is
         measured based on the intrinsic value of the award at the date of the
         grant and is recognized over the vesting period. Consideration received
         by the Trust on exercise of the units' rights is credited to
         unitholders' capital. See Note 9 for a description of the plan and
         pro-forma disclosure of the associated compensation cost.

         DEFERRED FINANCING COSTS

         Deferred financing costs associated with obtaining the long-term debt
         facility were amortized on a straight-line basis over the life of the
         related debt obligation.

<PAGE>

                                                                               4
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         REVENUE RECOGNITION

         Revenues associated with the sale of crude oil, natural gas and liquids
         are recorded when title passes to the customer.

         FINANCIAL INSTRUMENTS

         The Trust uses financial instruments to hedge its exposure to
         fluctuations in the prices of oil, natural gas and electricity, foreign
         exchange rates and interest rates.

         The Trust formally documents its risk management objectives and
         strategies, including the permitted use of derivative financial
         instruments. The Trust uses derivative financial instruments to manage
         exposures to fluctuations in commodity prices, interest rates and
         foreign currency exchange rates. All transactions of this nature
         entered into by the Trust are related to an underlying financial
         position or to future petroleum and natural gas production. The Trust
         does not use derivative financial instruments for trading purposes.
         Costs and gains on derivative contracts are recognized in earnings in
         the same period that the transactions are settled. The fair values of
         derivative instruments are not recorded in the balance sheet.

         PER UNIT AMOUNTS

         Net earnings per unit are calculated using the weighted-average number
         of units outstanding during the period, including the weighted-average
         number of exchangeable shares outstanding converted at the exchange
         ratio at the end of each period. Diluted net earnings per unit are
         calculated using the treasury stock method to determine the dilutive
         effect of unit-based compensation. The treasury stock method assumes
         that the proceeds received from the exercise of "in the money" trust
         unit rights are used to repurchase units at the average market price
         during the period.

         FOREIGN CURRENCY TRANSLATION

         Foreign currency balances of foreign subsidiaries, which are considered
         to be integrated, are translated on the following basis:

         o        Monetary assets and liabilities are translated at the rates of
                  exchange prevailing at the balance sheet dates;

         o        Non-monetary assets, liabilities and related depreciation and
                  depletion expense are translated at historical rates; and

<PAGE>

                                                                               5
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         FOREIGN CURRENCY TRANSLATION (CONTINUED)

         o        Sales, other revenues, royalties and all other expenses are
                  translated at the average rate of exchange during the month in
                  which they are recognized.

         Any resulting foreign exchange gains and losses are included in
         earnings.

         RECLAMATION FUND

         A reclamation fund has been set up by the Trust to ensure that cash is
         available to carry out future abandonment and reclamation work on
         wells, plants and facilities. Contributions are currently made on the
         basis of $0.20 per barrel of oil equivalent of production in Canada and
         France.

         INCOME TAXES

         The Trust is a taxable entity under the Income Tax Act (Canada) and is
         taxable only on income that is not distributed or distributable to the
         unitholders. As the Trust allocates all of its Canadian taxable income
         to the unitholders in accordance with the Trust Indenture, and meets
         the requirements of the Income Tax Act (Canada) applicable to the
         Trust, no provision for Canadian income tax expense has been made in
         the Trust.

         In the Trust structure, payments are made between the Company and the
         Trust that result in the transferring of taxable income from the
         Company to individual unitholders. These payments may reduce future
         income tax liabilities previously recorded by the Company that would be
         recognized as a recovery of income tax in the period incurred.

         Income taxes are calculated in the subsidiary companies using the
         liability method of accounting for income taxes. Under this method,
         income tax liabilities and assets are recognized for the estimated tax
         consequences attributable to differences between the amounts reported
         in the consolidated financial statements of the Trust and their
         respective underlying tax base, using enacted income tax rates in the
         respective tax jurisdictions. The effect of a change in income tax
         rates on future tax liabilities and assets is recognized in income in
         the period in which a change occurs.

<PAGE>

                                                                               6
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         DISTRIBUTIONS

         The Trust makes monthly distributions of its distributable cash to
         unitholders of record on the last day of each calendar month. Pursuant
         to the Trust's policy, it will pay distributions to its unitholders
         subject to satisfying its financing covenants, making loan repayments
         and, if applicable, funding future removal and site restoration
         reserves.

3.       TRANSFER OF ASSETS AND LIABILITIES PURSUANT TO THE PLAN OF
         ARRANGEMENT

         Under the Plan of Arrangement, the Company transferred to Clear, a
         portion of the Company's existing lands and exploration assets for
         common shares of Clear, which were distributed to the shareholders of
         Resources. As this was a related party transaction, assets and
         liabilities were transferred at carrying value, as follows:
                                                                      ----------
                                                                          $
                                                                      ----------

         Petroleum and natural gas assets and equipment                   19,509
         Future income tax asset                                           5,461
                                                                      ----------
         Total assets transferred                                         24,970
         Provision for site restoration and abandonment                       89
                                                                      ----------
         Net assets transferred and reduction in share capital            24,881
                                                                      ==========

         Associated with the Plan of Arrangement, the Company recorded
         transaction costs of $25.6 million, with $16.8 million related to the
         issue of Trust units in exchange for cancellation of stock options
         under the previous stock option plan of Resources and $8.8 million in
         advisory and other costs. These costs, including $2.3 million incurred
         to December 31, 2002, which were recorded as deferred reorganization
         costs, were recorded as an expense during the year ended December 31,
         2003.

<PAGE>

                                                                               7
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


4.       BUSINESS ACQUISITIONS AND INVESTMENT

         a)   On February 13, 2002, the Company signed a letter of agreement to
              purchase all of the outstanding shares of Artemis Energy Limited
              ("Artemis"), a private Canadian oil and gas company, for total
              cash consideration of $21.9 million. The agreement closed on March
              21, 2002, at which time Artemis became a wholly owned subsidiary
              of the Company. The acquisition of Artemis was accounted for using
              the purchase method of accounting, effective from March 21, 2002,
              as follows:
                                                                        --------
                                                                           $
                                                                        --------
             Allocation of purchase price:
               Capital assets                                            42,865
               Current assets                                             2,039
               Current liabilities                                       (6,511)
               Future income taxes                                      (11,195)
               Long-term debt                                            (4,600)
               Site restoration                                            (683)
                                                                        --------

             Cash consideration                                          21,915
                                                                        ========

         b)   On June 21, 2002, the Company signed an agreement with a third
              party to purchase a 40% participating interest in and operatorship
              of the Central Block onshore Trinidad. The Petroleum Company of
              Trinidad and Tobago Limited (Petrotrin) has a 35% participating
              interest in the Central Block. The acquisition was accounted for
              using the purchase method of accounting as follows:
                                                                         -------
                                                                            $
                                                                         -------
             Allocation of purchase price:
               Capital assets                                            75,581
               Current assets                                               465
               Current liabilities                                       (1,127)
               Future income taxes                                       (9,233)
                                                                         -------

             Cash consideration                                          65,686
                                                                         =======

         c)   On May 22, 2002, the Company exercised all of its warrants and
              options in Aventura including Purchase Warrants (19.6 million
              warrants at $0.25 per warrant); Finance Options (2.1 million
              options at $0.18 per option); and Finance Warrants (2.1 million
              warrants at $0.25 per warrant) in exchange for 23.8 million common
              shares of Aventura at a cost of $5.8 million. This increased the
              Trust's ownership position to 46.8%.

<PAGE>

                                                                               8
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


4.       BUSINESS ACQUISITIONS AND INVESTMENT (CONTINUED)

              On October 17, 2002, the Company purchased 20 million common
              shares of Aventura through a private placement at a price of $0.30
              per share for an aggregate cost of $6 million.

              At December 31, 2002, the Company's ownership position represented
              47.4% of the common shares of Aventura.

              On January 22, 2003, the Company sold its existing 40% working
              interest in the Central Block in Trinidad (Note 4(b)) to Aventura
              for consideration of 212.1 million common shares. As this was a
              related-party and non-monetary transaction, assets and liabilities
              were transferred at carrying value. The sale increased the
              Company's equity holding in Aventura to approximately 72% from
              approximately 47% held prior to the sale.

5.       CAPITAL ASSETS
                                           -------------------------------------
                                                           2003
                                           -------------------------------------
                                                        ACCUMULATED
                                                        DEPLETION,
                                                       DEPRECIATION
                                                            AND        NET BOOK
                                            COST       AMORTIZATION     VALUE
                                             $               $            $
                                           -------------------------------------

        Petroleum and natural gas
           properties and equipment         977,926         292,427    685,499
        Furniture and equipment               6,151           3,506      2,645
                                           -------------------------------------
                                            984,077         295,933    688,144
                                           =====================================

<PAGE>

                                                                               9
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


5.       CAPITAL ASSETS (CONTINUED)
                                           -------------------------------------
                                                           2003
                                           -------------------------------------
                                                        ACCUMULATED
                                                        DEPLETION,
                                                       DEPRECIATION
                                                            AND        NET BOOK
                                            COST       AMORTIZATION     VALUE
                                             $               $            $
                                           -------------------------------------

        Petroleum and natural gas
           properties and equipment         924,087         214,194    709,893
        Furniture and equipment               4,787           2,778      2,009
                                           -------------------------------------
                                            928,874         216,972    711,902
                                           =====================================

         As at December 31, 2003, costs of $19.7 million (2002 - $29.0 million)
         for undeveloped properties have been excluded from the depletion and
         depreciation calculation. During the year, the Trust capitalized $2.1
         million (2002 - $3.2 million) of overhead costs related to exploration
         and development activities.

         The provision for future site restoration costs is recorded in the
         consolidated statements of earnings as a component of depletion and
         depreciation and on the consolidated balance sheets as a long-term
         liability. At December 31, 2003, the estimated future site restoration
         costs to be accrued over the life of the remaining proved reserves are
         $58.1 million (2002 - $36.9 million).

6.       LONG-TERM DEBT

         As at December 31, 2003, the Trust had a credit facility consisting of
         a revolving term loan of $220 million and an operating facility of $20
         million. The revolving period under the term loan is expected to expire
         on June 30, 2004. That revolving period may be extended, at the option
         of the lenders, for a further 364 days. If the lenders convert the
         revolving credit facility to a non-revolving credit facility, the
         amounts outstanding under the facility become repayable 12 months after
         the end of the revolving period. The cost of funds borrowed under the
         credit facility is calculated by reference to a Canadian chartered
         bank's prime rate or United States' base rate or a specified adjusted
         interbank deposit rate, stamping fee or discount rate, depending on the
         form of borrowing. The average interest rate for borrowing in 2003 was
         4.5%. Security for amounts outstanding is provided by, among other
         things, floating-charge oil and gas debentures over all of the present
         and after-acquired assets of the Company. In addition, a subsidiary of
         the Trust, Vermilion REP S.A., as guarantor of the Trust's loan, has
         provided security over its assets in France.

<PAGE>

                                                                              10
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


7.       FUTURE INCOME TAXES

         The components of the future income tax liability at December 31, 2003
         and 2002 are as follows:
                                                          ----------------------
                                                              2003       2002
                                                                $          $
                                                          ----------------------

        Capital assets                                       158,155    175,861
        Provision for future site restoration                 (4,804)    (4,679)
        Share issue costs                                       (358)       (88)
                                                          ----------------------
                                                             152,993    171,094
                                                          ======================

         The provision for income tax differs from the amount that would have
         been expected if the reported earnings had been subject only to the
         statutory Canadian income tax rate of 40.75% (2002 - 42.2%), as
         follows:
                                                          ----------------------
                                                              2003       2002
                                                                $          $
                                                          ----------------------

        Earnings before income taxes                          39,311     73,558

        Canadian corporate tax rate                           40.75%     42.2%
                                                          ----------------------

        Expected tax expense                                  16,019     31,041

        (Decrease) increase in taxes resulting from:
           Income attributable to the unitholders            (33,059)         -
           Non-deductible Crown payments                      19,408     18,211
           Resource allowance                                (11,542)   (17,511)
           Alberta Royalty Tax Credit                           (325)       128
           Foreign tax rate differentials *                   (1,212)    (6,558)
           Statutory rate changes                            (13,488)    (2,840)
           Capital taxes                                         761        851
           Option conversion                                   6,853          -
           Other                                                (205)       814
           Foreign exchange                                     (882)     7,962
                                                          ----------------------
                                                          ----------------------

        (Recovery of) provision for income taxes             (17,672)    32,098
                                                          ======================

         *The corporate tax rate in France is 35.4%, and for these purposes,
          Trinidad is not significant.

<PAGE>

                                                                              11
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


7.       FUTURE INCOME TAXES (CONTINUED)

         At December 31, 2003, the Trust had approximately $226.2 million (2002
         - $289.5 million) of tax deductions for Canadian income tax purposes,
         approximately $69.7 million (2002 - $74.3 million) of tax deductions
         for French income tax purposes and approximately $31.1 million (2002 -
         $29.0 million) of deductions for income tax purposes in Trinidad.

         During the year ended December 31, 2003, reductions in Canadian
         corporate income tax rates were substantially enacted. The enacted
         rates are to be phased in over five years starting in 2003. As a
         result, the Trust's future income tax rate decreased to approximately
         36% compared with 42% in prior periods. The future income taxes
         recovery includes the impact of this rate reduction and the tax rate
         changes in France on future income taxes.

8.       UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES

         Pursuant to the Plan of Arrangement, 51.5 million units of the Trust
         and 6.0 million exchangeable shares of the Company were issued in
         exchange for all of the outstanding shares of the Company, a wholly
         owned subsidiary of the Trust, on a one-for-one basis.

         The exchangeable shares are convertible into Trust units based on the
         exchange ratio, which is adjusted monthly to reflect the distribution
         paid on the Trust units. Cash distributions are not paid on the
         exchangeable shares. During the period, 1.2 million exchangeable shares
         were converted into 1.2 million Trust units based on the exchange ratio
         at the time of conversion. At December 31, 2003, the exchange ratio was
         1.13151 Trust units per exchangeable share. On the 10th anniversary of
         the issuance of the exchangeable shares, subject to extension of such
         date by the Board of Directors of the Company, the exchangeable shares
         will be redeemed for Trust units on the basis of an exchange ratio as
         at the last business day prior to the redemption date.

         The Trust established a Distribution Reinvestment Plan ("DRIP") in
         conjunction with the Trust's transfer agent to provide the option for
         unitholders to reinvest cash distributions into additional Trust units
         issued from treasury. In 2003, the Trust issued 0.5 million units for
         proceeds of $6.2 million.

<PAGE>

                                                                              12
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


8.       UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES (CONTINUED)

<TABLE>
<CAPTION>
                                                                    ---------------------------
                                                                      NUMBER OF     AMOUNT
                                                                       SHARES          $
                                                                    ---------------------------
        <S>                                                             <C>           <C>
        COMMON SHARES OF VERMILION RESOURCES LTD.
           Balance as at December 31, 2001                              55,014,302    136,146
           Stock options exercised for cash                                943,616      4,660
           Shares acquired under normal course issuer bids                 (91,000)      (249)
                                                                    ---------------------------

           Balance as at December 31, 2002                              55,866,918    140,557
           Issued upon exercise of stock options                           267,100      1,201
                                                                    ---------------------------

           Balance, January 21, 2003, prior to Plan of Arrangement      56,134,018    141,758
           Trust units issued on cancellation of employee
             stock options (Note 3)                                      1,346,449     16,817
           Transfer of net assets to Clear Energy Inc. (Note 3)                 --    (24,881)
           Trust units issued                                          (51,480,467)  (119,739)
           Exchangeable shares issued                                   (6,000,000)   (13,955)
                                                                    ---------------------------
           Balance as at December 31, 2003                                      --         --
                                                                    ===========================



                                                                    ---------------------------
                                                                      NUMBER OF     AMOUNT
                                                                        UNITS          $
                                                                    ---------------------------
        TRUST UNITS
           Unlimited number of Trust units authorized to be issued

           Issued pursuant to Plan of Arrangement January 22, 2003      51,480,467    119,739
           Distribution reinvestment plan                                  457,905      6,209
           Issued on conversion of exchangeable shares                   1,218,920      2,679
           Trust units issued for cash                                   6,050,000     85,305
           Unit issue costs                                                      -     (4,565)
           Unit options exercised for cash                                   1,300         12
                                                                    ---------------------------
           Balance as at December 31, 2003                              59,208,592    209,379
                                                                    ===========================
</TABLE>

<PAGE>

                                                                              13
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


8.       CAPITAL AND EXCHANGEABLE SHARES (CONTINUED)

<TABLE>
<CAPTION>
                                                                    -------------------------
                                                                     NUMBER OF      AMOUNT
                                                                      SHARES           $
                                                                    -------------------------
        <S>                                                           <C>            <C>
        EXCHANGEABLE SHARES
           Issued pursuant to Plan of Arrangement January 22, 2003     6,000,000     13,955
           Exchanged for Trust units                                  (1,151,971)    (2,679)
                                                                    -------------------------
                                                                    -------------------------
           Balance as at December 31, 2003(1)                          4,848,029     11,276
                                                                    =========================
</TABLE>

         (1) Exercisable into 5.5 million Trust units at the December 31, 2003
             exchange ratio of 1.13151.

         Pursuant to the Plan of Arrangement, shareholders of the Company
         received one unit or one exchangeable share in the Trust for each
         common share held. In addition, Resources shareholders received one
         share in Clear, a separate publicly listed oil and gas company, for
         each three common shares held (Note 3).

9.       COMPENSATION PLANS

         The Trust has a unit rights incentive plan that allows the Trust to
         issue rights to acquire Trust units to directors, officers, and
         employees. The Trust is authorized to issue up to 6.0 million unit
         rights; however, the number of Trust units reserved for issuance upon
         exercise of the rights shall not at any time exceed 10% of the
         aggregate number of issued and outstanding Trust units of the Trust.
         Unit right exercise prices are equal to the market price for the Trust
         units on the date the unit rights are issued. If certain conditions are
         met, the exercise price per unit may be calculated by deducting from
         the grant price the aggregate of all distributions, on a per-unit
         basis, made by the Trust after the grant date. Rights granted under the
         plan vest over a three-year period and expire five years after the
         grant date.

<PAGE>

                                                                              14
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


9.       COMPENSATION PLANS (CONTINUED)

         The following table summarizes information about the Trust's unit
rights:

<TABLE>
<CAPTION>
                                                                       -------------------------
                                                                                YEAR ENDED
                                                                             DECEMBER 31, 2003
                                                                       -------------------------
                                                                                       WEIGHTED
                                                                                        AVERAGE
                                                                        NUMBER OF      EXERCISE
                                                                       UNIT RIGHTS       PRICE
                                                                                           $
                                                                       -------------------------
        <S>                                                              <C>             <C>
        Year Ended December 31, 2003
        Opening balance                                                         --          --
        Granted                                                          4,825,300       11.58
        Cancelled                                                         (282,300)      11.45
                                                                       -------------
                                                                       -------------
        Closing balance                                                  4,543,000       11.59
                                                                       =============
</TABLE>

<TABLE>
<CAPTION>
         A summary of the plan as at December 31, 2003 is as follows:

        ---------------------------------------------------------------------------------------
               RANGE OF                           NUMBER OF        REMAINING       NUMBER OF
          EXERCISE PRICE AT      ADJUSTED           RIGHTS        CONTRACTUAL        RIGHTS
              GRANT DATE      EXERCISE PRICE     OUTSTANDING     LIFE OF RIGHT    EXERCISABLE
                  $                  $                              (YEARS)
        ---------------------------------------------------------------------------------------
            <S>                <C>                <C>              <C>                <C>
            11.45 - 14.77      9.75 - 14.51       4,543,000        4.1 - 4.9          --
</TABLE>

         In 2002, the Company had a stock option plan under which the Board of
         Directors granted stock options to directors, officers and employees
         for the purchase of common shares of the predecessor entity. As a
         result of the Plan of Arrangement, this stock option plan was
         terminated (Note 3).

<PAGE>

                                                                              15
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


9.       COMPENSATION PLANS (CONTINUED)

         The following table summarizes information about the Company's previous
stock option plan:
<TABLE>
<CAPTION>
                                                 ------------------------------------------------
                                                         YEAR ENDED              YEAR ENDED
                                                        DECEMBER 31,            DECEMBER 31,
                                                           2003                    2002
                                                 ------------------------------------------------
                                                               WEIGHTED                 WEIGHTED
                                                               AVERAGE                  AVERAGE
                                                  NUMBER OF    EXERCISE    NUMBER OF    EXERCISE
                                                   OPTIONS      PRICE       OPTIONS      PRICE
                                                                  $                        $
                                                 ------------------------------------------------
        <S>                                        <C>           <C>        <C>           <C>
        Balance, beginning of year                  4,112,369    7.97       3,378,685     6.07
           Granted                                         --      --       1,826,500     9.86
           Exercised                                 (267,100)   4.49        (943,616)    4.94
           Cancelled                               (3,845,269)   8.12        (149,200)    7.29
                                                 -------------            ------------

        Balance, end of year                               --      --       4,112,369     7.97
                                                 =============            ============
        Exercisable, end of year                           --      --       1,171,783     5.27
                                                 =============            ============
</TABLE>

         Aventura, a publicly traded company and one of the Trust's
         subsidiaries, has a stock-based compensation plan under which officers,
         directors, consultants and employees are eligible to receive stock
         options. On December 31, 2003, 4.5 million (2002 - 2.3 million) stock
         options, equal to 10% of the issued common shares, were available for
         issuance under the plan. Options granted under the plan prior to
         February 23, 2001, have a term of five years and vest one-third on
         issue and the remaining two-thirds on the first and second anniversary
         date of the initial grant. Options issued subsequent to February 23,
         2001, vest one-third in the year following issue and one-third each
         year thereafter and are fully vested at the end of the third year. The
         exercise price of each option equals the market price of Aventura's
         common shares on the date of grant. On December 31, 2003, 2.7 million
         options (2002 - 1.3 million) were outstanding under the plan.

<PAGE>

                                                                              16
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


9.       COMPENSATION PLANS (CONTINUED)

         A summary of Aventura's stock option plan as of December 31, 2003, and
         2002 and changes during the year ended December 31, 2003 and 2002 are
         as follows:

<TABLE>
<CAPTION>
                                              --------------------------------------------------------------------
                                                             2003                                 2002
                                              --------------------------------------------------------------------
                                                                     WEIGHTED                            WEIGHTED
                                                                     AVERAGE                             AVERAGE
                                                  NUMBER OF          EXERCISE         NUMBER OF          EXERCISE
                                                   OPTIONS            PRICE            OPTIONS            PRICE
                                                                        $                                   $
                                              --------------------------------------------------------------------
        <S>                                        <C>                 <C>              <C>                <C>
        Outstanding, beginning of year             1,295,000           2.92             1,127,000          2.81
           Granted                                 1,776,000           3.99               425,000          3.20
           Exercised                                (230,000)          1.83              (151,333)         1.01
           Cancelled                                (175,000)          4.97              (105,667)         5.67
                                              ------------------                   -----------------

        Outstanding, end of year                   2,666,000           3.59             1,295,000          2.92
                                              ==================                   =================
        Exercisable, end of year                     965,000           2.89               635,000          1.86
                                              ==================                   =================
</TABLE>

<TABLE>
<CAPTION>
        ----------------------------------------------------------------------------------------------------------
                                                    OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                                              --------------------------------------------------------------------
                                                 AVERAGE           WEIGHTED                              WEIGHTED
             RANGE OF                           REMAINING           AVERAGE                              AVERAGE
             EXERCISE             NUMBER         LIFE IN           EXERCISE            NUMBER            EXERCISE
              PRICES           OUTSTANDING        YEARS              PRICE           EXERCISABLE          PRICE
                 $                                                     $                                    $
        ----------------------------------------------------------------------------------------------------------
          <S>                     <C>              <C>               <C>                 <C>               <C>
          1.00                      380,000        0.5               1.00                380,000           1.00
          3.20 - 3.65               445,000        3.7               3.28                370,000           3.20
          4.00 - 4.05             1,626,000        4.1               4.01                     --             --
          5.70                      215,000        2.5               5.70                215,000           5.70
                             -----------------                                    ------------------
                                  2,666,000                                              965,000
                             =================                                    ==================
</TABLE>

<PAGE>

                                                                              17
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


9.       COMPENSATION PLANS (CONTINUED)

         COMPENSATION COST

         The Trust and Aventura account for their unit rights incentive and
         stock option plans using the intrinsic value of the unit rights and
         stock option. Using intrinsic values, compensation costs are not
         recognized in the consolidated financial statements for unit or stock
         option rights granted to employees and directors when issued at
         prevailing market prices.

         The fair value of the unit rights cannot be determined because of the
         nature of the reducing exercise price feature. Pro-forma compensation
         cost has been determined using the excess of the unit price as at the
         date of the consolidated financial statements over the exercise price
         for unit rights issued since January 22, 2003, and outstanding as at
         the date of the consolidated financial statements.

         The fair value of each option granted under the Aventura stock option
         plan is estimated on the date of the grant using the Black-Scholes
         option-pricing model with the following weighted-average assumptions
         for grants: risk-free interest rate of 3.7%, expected lives of 5 years,
         expected volatility of 89, and no dividends paid.

         The fair value of the options granted under the previous stock option
         plan was estimated on the date of grant using the Black-Scholes
         option-pricing model with the following weighted average assumptions
         for grants: risk-free interest rate of 4.5%, expected lives of 5 years,
         and expected volatility of 50%.

         If compensation costs had been recorded on the foregoing bases for the
         year ended December 31, 2003, pro-forma net earnings would be reduced
         by $10.1 million, of which $8.3 million relates to the compensation
         costs with respect to the Trust's unit rights incentive plan (2002 -
         $2.3 million related to the previous stock option plan) and $1.8
         million with respect to the stock compensation costs related to the 72%
         interest in Aventura (2002 - $0.09 million). The pro-forma effect on
         net earnings per unit for the year ended December 31, 2003, would be a
         decrease of $0.17 per unit (2002 - $0.04) and a decrease of $0.17 per
         unit on a diluted basis (2002 - $0.04).

<PAGE>

                                                                              18
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


10.      PER UNIT AMOUNTS

         The following table shows the effect of dilutive securities on the
         weighted average Trust units outstanding:
<TABLE>
<CAPTION>
                                                                       ------------------
                                                                           2003     2002
                                                                       ------------------
      <S>                                                               <C>       <C>
      Basic
         Earnings per unit                                              $  0.97   $  0.74
         Weighted-average number of units outstanding (thousands)        58,600    55,791
      Diluted
         Earnings per unit                                              $  0.96   $  0.73
         Weighted-average number of units outstanding (thousands)        59,093    56,847
</TABLE>

         The number of units used to calculate diluted earnings per unit for the
         year ended December 31, 2003, of 59.1 million (2002 - 56.8 million)
         included the weighted-average number of units outstanding of 58.6
         million (which includes outstanding exchangeable shares as if they were
         converted at the period-end exchange ratio) (2002 - 55.8 million) plus
         0.5 million (2002 - 1.1 million) units related to the dilutive effect
         of unit rights.

         Diluted net earnings per unit discussed above did not include 138,300
         (2002 - 324,282) of unit rights that would be anti-dilutive, both on a
         weighted-average basis, because the respective exercise prices exceeded
         the average market price of the units.

11.      FINANCIAL INSTRUMENTS

         RISK MANAGEMENT ACTIVITIES

         The nature of the Trust's operations result in exposure to fluctuations
         in commodity prices, exchange rates and interest rates. The Trust
         monitors and when appropriate, uses derivative financial instruments to
         manage its exposure to these risks. The Trust is exposed to
         credit-related losses in the event of non-performance by counterparties
         to the financial instruments.

<PAGE>

                                                                              19
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


11.      FINANCIAL INSTRUMENTS (CONTINUED)

         RISK MANAGEMENT ACTIVITIES (CONTINUED)

          The Trust uses oil swap agreements to hedge anticipated sales of crude
          oil. At December 31, 2003, the Trust had entered into U.S.-dollar oil
          swaps with financial institutions to hedge approximately 1.6 million
          barrels (approximately 4,500 barrels per day) in 2004. The hedge
          prices average US$24.39 West Texas Intermediate ("WTI") equivalent and
          mature during calendar year 2004. In 2005, the Trust has entered into
          U.S.-dollar oil swaps with financial institutions to hedge
          approximately 1.1 million barrels (approximately 3,000 barrels per
          day). The hedge prices average US$24.83 WTI equivalent and mature
          during calendar year 2005. At December 31, 2003, the fair value of the
          oil swaps represent a loss of approximately Cdn$17.4 million (using an
          average exchange rate of 0.77 in 2004 and 0.76 in 2005). The Trust
          does not obtain collateral or other security to support its oil swap
          agreements as the majority of the hedges are with the banking
          syndicate. However, any swap agreement executed with any of its
          banking syndicate members rank pari-passu with the security
          arrangement within the bank loan facility.

         As well, the Trust uses natural gas agreements to hedge anticipated
         sales of natural gas. At December 31, 2003, the Trust had entered into
         physical gas contracts at pre-determined prices to sell approximately
         12.1 mmcf per day at an average floor of Cdn$5.34 per mcf and cap of
         Cdn$8.18 per MCF in 2004. At December 31, 2003, the fair value of the
         gas contracts represents a loss of approximately Cdn$0.1 million. The
         Trust does not obtain collateral or other security to support its
         natural gas agreements other than parental guarantees from parent
         companies of certain counterparties as the majority of the hedges are
         with the banking syndicate.

         The Trust has entered into a financial swap for electricity prices to
         hedge anticipated electrical needs for its Canadian production. At
         December 31, 2003, the Trust had entered into an agreement with an
         energy company to fix the price of approximately 2.5 mega watts ("MW")
         per hour at $48 per MW hour in 2004 and 2.5 MW per hour at $45.75 per
         MW hour in 2005 (60% of current estimated electrical needs for Canadian
         production). At December 31, 2003, the fair value of the agreement was
         a gain of $0.1 million.

         The Trust has also put in place Canadian/U.S. dollar currency
         conversion hedges covering the majority of its oil hedge position for
         2003 at approximately US$0.71 per Canadian dollar. At December 31,
         2003, the fair value of the hedges was a gain of $2.9 million.

<PAGE>

                                                                              20
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


11.      FINANCIAL INSTRUMENTS (CONTINUED)

         FAIR VALUES

         The carrying values of cash and cash equivalents, accounts receivable,
         accounts payable and accrued liabilities and long-term debt
         approximated their fair values as at December 31, 2003 and 2002 as a
         result of the short-term nature of these instruments and, in the case
         of long-term debt, having variable interest rates which approximate
         market value.

12.      CASH FLOW INFORMATION

         The following amounts represent the changes in non-cash working capital
         per balance sheet accounts:
                                                          ----------------------
                                                              2003        2002
                                                               $           $
                                                          ----------------------

        Accounts receivable                                 16,942     (10,620)
        Crude oil inventory                                   (270)       (614)
        Prepaid expenses and other                           1,733         598
        Accounts payable and accrued liabilities            (3,159)       (460)
        Foreign exchange                                      (315)       (634)
                                                          ----------------------
        Changes in non-cash working capital                 14,931     (11,730)
                                                          ======================

<PAGE>

                                                                              21
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


13.      SEGMENTED INFORMATION

         The Trust has operations principally in Canada and France. Aventura
         (see Note 4(c)) has net assets in Trinidad and Canada. The Trust's
         entire operating activities are related to exploration, development and
         production of petroleum and natural gas.

                                                         ----------------------
                                                            2003         2002
                                                             $            $
                                                         ----------------------
        Petroleum and natural gas revenue
           Canada                                         230,357      208,103
           France                                          73,016       79,036
           Trinidad                                        12,199          401
                                                         ----------------------
                                                          315,572      287,540
                                                         ----------------------
        Net earnings
           Canada                                          48,961       24,711
           France                                           6,816       16,270
           Trinidad                                           965          341
                                                         ----------------------
                                                           56,742       41,322
                                                         ----------------------


                                                         ----------------------
                                                            2003         2002
                                                             $            $
                                                         ----------------------
        Cash flow from operations
           Canada                                         102,574      101,759
           France                                          41,835       55,250
           Trinidad                                         6,733          356
                                                         ----------------------
                                                          151,142      157,365
                                                         ----------------------
        Capital expenditures
           Canada                                          33,511      134,336
           France                                          30,469       25,092
           Trinidad                                        15,586       74,651
                                                         ----------------------
                                                           79,566      234,079
                                                         ----------------------
        Total assets
           Canada                                         441,071      497,512
           France                                         236,426      199,385
           Trinidad                                       111,759      114,814
                                                         ----------------------
                                                          789,256      811,711
                                                         ======================

<PAGE>

                                                                              22
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


14.      COMMITMENTS AND CONTINGENCIES

         On September 25, 2001, a tax assessment notice was received from the
         Direction Generale des Impots regarding the wholly owned subsidiary in
         France, Vermilion REP S.A. The notice advised that the Trust is liable
         for a registration fee that was owed at the time of the purchase of the
         French properties in 1997, in the amount of $4.5 million Euro
         (approximately Cdn$7.5 million) including interest charges for late
         filing. The Trust disagrees with the tax authority's position and is
         challenging the assessment. The Trust cannot determine the likelihood
         that it will be required to pay the registration fee and, as such, no
         amount has been accrued for in the consolidated financial statements at
         December 31, 2003.

15.      GUARANTEES

         In the normal course of operations, the Trust executes agreements that
         provide for indemnification and guarantees to counterparties in
         transactions such as the sale of assets and operating leases.

         These indemnification and guarantees may require compensation to
         counterparties for costs and losses incurred as a result of various
         events, including breaches of representations and warranties, loss of
         or damages to property, environmental liabilities, or as a result of
         litigation that may be suffered by the counterparties.

         Certain indemnifications can extend for an unlimited period and
         generally do not provide for any limit on the maximum potential amount.
         The nature of substantially all of the indemnifications prevents the
         Trust from making a reasonable estimate of the maximum potential amount
         that might be required to pay counterparties as the agreements do not
         specify a maximum amount, and the amounts depend on the outcome of
         future contingent events, the nature and likelihood of which cannot be
         determined at this time.

16.      COMPARATIVE FIGURES

         Certain of the prior period numbers have been reclassified to conform
         with the current period presentation.

<PAGE>

                                                                              23
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES

         The consolidated financial statements of the Trust have been prepared
         in accordance with accounting principles generally accepted in Canada
         ("Canadian GAAP") which in most respects, conform to accounting
         principles generally accepted in the United States of America ("U.S.
         GAAP"). The significant differences, as they apply to the Trust, are as
         follows:



<PAGE>

                                                                              24
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         Consolidated statement of earnings in accordance with U.S. GAAP is as
         follows:

<TABLE>
<CAPTION>
                                                                  --------------------------------------
                                                                                  2003           2002
                                                                  Notes             $              $
                                                                            ----------------------------
        <S>                                                       <C>             <C>            <C>
        NET EARNINGS - CANADIAN GAAP                                              56,742         41,322
        Depreciation and depletion                                1,3,4           (1,589)        (2,881)
        Gain (loss) on derivative instruments                     2                3,264        (36,882)
        Deferred income taxes                                     1                 (927)        (1,063)
        Accretion of asset retirement obligation                  3               (1,135)            --
        Unit rights incentive plan                                6               (8,300)            --
        Deferred income taxes                                     2,4             (1,330)        15,564
                                                                            ----------------------------
        NET EARNINGS BEFORE CUMULATIVE EFFECT OF
           CHANGE IN ACCOUNTING POLICY (NET OF TAX)
           FOR U.S. GAAP                                                          46,725         16,060
        Cumulative effect of adoption of Asset
        Retirement Obligation (net of tax)                        3                2,996             --
                                                                            ----------------------------
        NET EARNINGS - U.S. GAAP                                                  49,721         16,060
                                                                            ----------------------------

        Earnings per Trust Unit for U.S. GAAP
           (before cumulative effect of change in
           accounting principle)
             Basic                                                                  0.76           0.29
             Diluted                                                                0.75           0.28

        Net earnings per Trust Unit for U.S. GAAP
             Basic                                                                  0.85           0.29
             Diluted                                                                0.84           0.28

        Weighted Average Trust Units Outstanding
             Basic                                                            58,600,290     55,791,046
             Diluted                                                          59,093,044     56,847,150

        Comprehensive income for U.S. GAAP is equal to net earnings.
</TABLE>

<PAGE>

                                                                              25
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         Consolidated balance sheet in accordance with U.S. GAAP is as follows:

<TABLE>
<CAPTION>
                                                          --------------------------------------------------
                                                                    2003                     2002
                                                          --------------------------------------------------
                                                             CDN           US          CDN          US
        Years ended December 31                             GAAP          GAAP         GAAP        GAAP
                                             Notes            $            $            $            $
                                                          --------------------------------------------------
        <S>                                  <C>           <C>           <C>          <C>          <C>
        CURRENT ASSETS
        Cash and cash equivalents                           53,351        53,351       32,562       32,562
        Accounts receivable                                 39,640        39,640       56,582       56,582
        Crude oil inventory                                  3,477         3,477        3,207        3,207
        Prepaid expenses and other                           2,966         2,966        4,699        4,699

        Other non-current assets                             1,678         1,678        2,759        2,759
        Property, plant and equipment        1,3,4         688,144       711,605      711,902      730,847
                                                          --------------------------------------------------
                                                           789,256       812,717      811,711      830,656
                                                          ==================================================

        CURRENT LIABILITIES
        Accounts payable and
            accrued liabilities                             79,937        79,937       79,817       79,817
        Distributions payable to
            unitholders                                     10,065        10,065           --           --
        Fair value of derivative
            instruments                      2                  --        14,500           --       17,764
        Income and capital taxes
            payable                                          5,372         5,372       10,977       10,977
                                                          --------------------------------------------------
                                                            95,374       109,874       90,794      108,558
        Long-term debt                                     135,558       135,558      193,025      193,025
        Provision for future site
            restoration                      3              13,514        15,586       11,169       11,169
        Future income taxes                  1,2,3,4,5     152,993       176,961      171,094      190,633

        Non-controlling interest                            29,598        29,598       21,321       21,321

        UNIT HOLDERS' EQUITY
        Unit holders' capital                4,5           209,379       208,467      140,557      139,645
        Contributed surplus                  6                  --        25,260           --           --
        Deferred compensation expense        6                  --       (16,960)          --           --
        Exchangeable shares                                 11,276        11,276           --           --
        Accumulated earnings                 1,2,3,4,5,6   240,493       216,026      183,751      166,305
        Accumulated cash distributions                     (98,929)      (98,929)          --           --
                                                          --------------------------------------------------
                                                           362,219       345,140      324,308      305,950
                                                          --------------------------------------------------
                                                           789,256       812,717      811,711      830,656
                                                          --------------------------------------------------
</TABLE>

<PAGE>

                                                                              26
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         There were no differences in the cash provided by (used in) operating,
         investing and financing activities in the consolidated statement of
         cash flows under U.S. GAAP.

         1)       INCOME TAX AND RELATED DEPRECIATION AND DEPLETION - In 2000,
         the Trust adopted the liability method to account for income taxes for
         Canadian GAAP. The change to the liability method eliminated a
         difference between Canadian and U.S. GAAP, however, in accordance with
         the recommendations of the Canadian Institute of Chartered Accountants
         ("CICA") the effect of the adoption under Canadian GAAP resulted in a
         change to retained earnings, whereas, under U.S. GAAP the deferred
         income taxes that resulted in the Canadian GAAP retained earnings
         adjustment would have been reflected in capital assets. As a result of
         the implementation method, depreciation and depletion and amortization
         expense will differ between U.S. and Canadian GAAP in subsequent years.

         The adjustment related to the U.S. GAAP difference described above is
         as follows:

                                                          ---------------------
                                                             2003       2002
                                                              $           $
                                                          ---------------------

        Depreciation and depletion                          2,276      2,519
        Deferred income tax expense                           927      1,063
        Property, plant and equipment                      (2,276)    16,415
        Deferred tax liability                               (927)   (13,027)
        Deferred tax liability                                 --     (4,436)

         2)       DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS - The Trust has
         designated, for Canadian GAAP purposes, its derivative instruments as
         hedges of anticipated revenue and expenses. In accordance with Canadian
         GAAP, payments or receipts on these contracts are recognized in
         earnings concurrently with the hedged transactions. The fair values of
         the contracts deemed to be hedges are not reflected in the consolidated
         financial statements under Canadian GAAP.

<PAGE>

                                                                              27
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         Statement of Financial Accounting Standards ("SFAS") No. 133,
         "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
         133"), as modified by SFAS No. 138 "Accounting for Certain Derivative
         Instruments and Certain Hedging Activities", establishes accounting and
         reporting standards requiring that every derivative instrument be
         recorded in the balance sheet as either an asset or liability measured
         at its fair value, and that change in the fair value be recognized
         currently in earnings unless specific hedge accounting criteria are
         met. This statement requires an entity to establish, at the inception
         of a hedge, the method it will use for assessing the effectiveness of
         the hedging derivative and the measurement approach for determining the
         ineffective aspects of the hedge. Those methods must be consistent with
         the entity's approach to managing risk. The criteria to apply hedge
         accounting under U.S. GAAP are more restrictive than under Canadian
         GAAP for the years in question.

         Management has not designated any of the held derivative instruments as
         hedges for U.S. GAAP purposes and accordingly these derivative
         instruments have been recognized on the consolidated balance sheet at
         fair value with the change in their fair value recognized in earnings.

                                                           ---------------------
                                                               2003        2002
                                                                $           $
                                                           ---------------------

        (Gain) loss on derivative instruments                (3,264)     36,882
        Deferred income tax expense                           1,330     (15,564)
        Deferred income tax liability                        (1,330)      7,496

         3)       ASSET RETIREMENT OBLIGATIONS ("ARO") - Effective January 1,
         2003, for U.S. GAAP purposes, the Trust adopted SFAS No. 143
         "Accounting for Asset Retirement Obligations" which changes the method
         of accounting for costs associated with the retirement of long-lived
         assets which an entity is legally obligated to incur. The standard
         requires entities to record the fair value of a liability for an asset
         retirement obligation in the period it is incurred and a corresponding
         increase in the carrying amount of the related long-lived asset. The
         liability accretes until the expected settlement of the retirement
         obligation.

         For U.S. GAAP, adoption of this accounting standard resulted in an
         increase in net earnings for the cumulative effect of the change of
         $2,996 (net of deferred income taxes of $2,172). In addition, the Trust
         recognized an incremental depreciation and depletion expense of $1,232
         and the Trust recognized accretion of the asset retirement obligation
         of $1,135.

<PAGE>

                                                                              28
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         The majority of the Trust's ARO relate to the abandoning of oil and gas
         wells in Canada, France and Trinidad. During 2003, the Trust's asset
         retirement obligation changed as follows:

                                                                   ------------
                                                                        $
                                                                   ------------

        ARO liability at January 1, 2003                              14,185
        Liabilities incurred during the year                           2,300
        Liabilities settled during the year                           (2,034)
        Accretion expense                                              1,135
                                                                   ------------
        ARO liability at December 31, 2003                            15,586
                                                                   ============

         Effective January 1, 2004, the Trust must adopt new Canadian accounting
         standards for accounting for asset retirement obligations which are
         expected to eliminate this difference in future years.

         The adjustment related to the U.S. GAAP difference described above is
as follows:

                                                           ---------------------
                                                               2003       2002
                                                                $           $
                                                           ---------------------

        Depreciation and depletion                           (1,114)        --
        Accretion                                            (1,135)        --
        Deferred income tax expense                           2,172         --
        ARO liability                                         5,168         --
        Capital asset                                         7,219         --
        Deferred income tax liability                        (2,172)        --

         The total future asset retirement obligation was esti
         management based on the Trust's net ownership interest in all wells and
         facilities, estimated costs to reclaim and abandon the wells and
         facilities and the estimated timing of the costs to be incurred in
         future periods. The Trust has estimated the net present value of its
         asset retirement obligations to be $15,586 as at December 31, 2004
         based on a total future liability of $85,874. These payments are
         expected to be made over the next 50 years. The Trust used a credit
         adjusted risk free rate of 8% and an inflation rate of 1.5% to
         calculate the present value of the assets retirement obligation.

<PAGE>

                                                                              29
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         4)       BUSINESS COMBINATIONS EFFECTED BY ISSUANCE OF SHARES - For
         both Canadian and U.S. GAAP, the quoted market price of the shares
         issued in a business combination is used to estimate the fair value of
         the acquired enterprise after recognizing possible effects of price
         fluctuations, quantities traded, issue costs, and similar items. The
         value of the shares is based on their market price over a reasonable
         period before and after the date the terms of the business combination
         are agreed to and announced. Prior to the implementation SFAS 141,
         business combination under U.S. GAAP, the period of time determined to
         be reasonable for assessing the market value of the shares, is
         considered to be two days before and two days after the date of
         announcement. The resulting change in the carrying value of the
         acquired assets as prescribed under U.S. GAAP resulted in changes to
         the related depreciation and depletion expense in the current and prior
         years.

         The adjustment related to the U.S. GAAP difference described above is
         as follows:

                                                          ----------------------
                                                             2003        2002
                                                              $            $
                                                          ----------------------

        Depreciation and depletion                           427           362
        Property, plant and equipment                       (427)        2,530
        Deferred income tax liability                         --        (1,610)
        Unit Holders' capital                                 --        (1,999)

         5)       FLOW-THROUGH SHARES - Canadian GAAP requires that any cost of
         deferred income taxes arising when an entity renounces the
         deductibility of expenditures to an investor in flow through shares
         should be accounted for as a cost of issuing the shares resulting in a
         reduction of share capital. Under U.S. GAAP, the proceeds from the
         issuance of flow through shares should be allocated between the
         offering of shares and the sale of tax benefits. The allocation is made
         based on the difference between the quoted price of the existing shares
         and the amount the investor pays for the shares. A liability is
         recognized for this difference. The liability is reversed when tax
         benefits are renounced and a deferred tax liability is recognized at
         that time. The difference between the amount of the deferred tax
         liability and the liability recognized on issuance is recorded as
         deferred income tax expense.

<PAGE>

                                                                              30
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         The adjustment related to the U.S. GAAP difference described above is
         as follows:

                                                           ---------------------
                                                             2003        2002
                                                              $            $
                                                           ---------------------

        Deferred income tax liability                           --      (7,962)
        Unit holders' capital                                   --       2,911
        Retained earnings                                       --       5,051

         6)       UNIT RIGHTS INCENTIVE PLAN - For Canadian GAAP purposes,
         compensation expense for rights granted under the Unit Rights Incentive
         Plan was measured based on the intrinsic value of the award at the
         grant date. For the years ended December 31, 2003 and December 31,
         2002, pro forma disclosures are included in the notes to the
         consolidated financial statements of the impact on net earnings and net
         earnings per trust unit had the Trust accounted for compensation
         expense based on the fair value of unit rights and stock options
         granted during 2003 and 2002. Only employees are eligible to receive
         options granted under this plan.

         For U.S. GAAP purposes, the Unit Rights Incentive Plan is a variable
         compensation plan as the exercise price of the unit rights is subject
         to downward revisions from time to time. Accordingly, compensation
         expense is determined as the excess of the market price of the trust
         units over the adjusted exercise price of the unit rights at each
         financial reporting date and is deferred and recognized in earnings
         over the vesting period of the unit rights. After the unit rights have
         vested, compensation expense is recognized in earnings in the period in
         which a change in the market price of the Trust units or the exercise
         price of the unit rights occurs.

         7)       CEILING TEST - The Canadian GAAP ceiling test is comparable to
         the Securities and Exchange Commission ("SEC") method using constant
         price, costs and tax legislation except that the SEC requires the
         resulting amounts to be discounted at 10%. In addition, the SEC does
         not require the inclusion of any general and administrative or interest
         expenses in the calculation. No differences resulted from the
         application of the U.S. GAAP ceiling test.

         8)       CASH FLOW - The Trust presents cash flow from operations
         before changes in non-cash working capital as a subtotal in the
         consolidated statement of cash flows. This line item would not be
         presented in a cash flow statement prepared in accordance with U.S.
         GAAP. This difference does not result in an adjustment to the financial
         results as reported under Canadian GAAP.

<PAGE>

                                                                              31
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         9)       RECENT U.S. ACCOUNTING STANDARDS

                  a)       VARIABLE INTEREST ENTITIES

                  In 2003, the Financial Accounting Standards Board ("FASB")
                  issued Interpretation No. 46, "Consolidation of Variable
                  Interest Entities" ("FIN 46"). FIN 46 provides criteria for
                  identifying variable interest entities ("VIE's") and further
                  criteria for determining what entity, if any, should
                  consolidate them. In general, VIE's are entities that either
                  do not have equity investors with voting rights or have equity
                  investors that do not provide sufficient financial resources
                  for the equity to support its activities. In December 2003,
                  the FASB issued FIN 46R to clarify some of the provisions of
                  FIN 46 and to exempt certain entities from its requirements.
                  FIN 46 is effective to the Trust beginning January 1, 2004.
                  The Trust does not expect there to be any material impact on
                  its U.S. GAAP consolidated financial statements when FIN 46R
                  is adopted.

                  b)      ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH
                  CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY

                  In 2003, the FASB issued SFAS No. 150, "Accounting for Certain
                  Financial Instruments with Characteristics of Both Liabilities
                  and Equity" ("FAS 150") which became effective for financial
                  instruments entered into or modified after May 1, 2003 and
                  otherwise effective at the beginning of the first interim
                  period beginning after June 15, 2003. FAS 150 establishes
                  standards for classifying and measuring as liabilities certain
                  financial instruments that embody obligations of the issuer
                  and have characteristics of both liabilities and equity. The
                  new standard represents a significant change in practice in
                  the accounting for a number of financial instruments,
                  including mandatorily redeemable equity instruments and
                  certain equity derivatives frequently used in connection with
                  share repurchase programs. The adoption of SFAS 150 did not
                  have a material impact on the Trust's financial position,
                  results of operations or cash flows.

<PAGE>

                                                                              32
VERMILION ENERGY TRUST
(FORMERLY VERMILION RESOURCES LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
(TABULAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS,
EXCEPT FOR UNITS AND PER UNIT AMOUNTS)
- --------------------------------------------------------------------------------


17.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES OF AMERICA GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)

         9)       RECENT U.S. ACCOUNTING STANDARDS (CONTINUED)

                  c)       REVENUE RECOGNITION

                  In December 2003, the Securities and Exchange Commission
                  issued Staff Accounting Bulletin No. 104 "Revenue Recognition"
                  ("SAB 104"), which codifies accounting guidance contained in
                  Staff Accounting Bulletin No. 101 related to multiple element
                  revenue arrangements. The changes noted in SAB 104 did not
                  have a material impact on the Trust's financial position,
                  results of operations or cash flows.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>7
<FILENAME>ex99_4form40-f.txt
<DESCRIPTION>EXHIBIT 99.4
<TEXT>
                                                                    EXHIBIT 99.4
                                                                    ------------


                               RECENT DEVELOPMENTS


On May 6, 2004, the Trust completed the sale of its interest in its subsidiary,
Aventura Energy Inc. ("Aventura"). This sale was reported in the Trust's
unaudited interim consolidated financial statements for the three months ended
March 31, 2004. As a result, the Trust has presented Aventura as a discontinued
operation in the unaudited interim consolidated financial statements for the
three months ended March 31, 2004, which included the recast consolidated
balance sheet as at December 31, 2003 reflecting the discontinued operation. The
Trust's comparative financial statements in fiscal 2004 will be recast to
reflect this discontinued operation.

The impact of reflecting Aventura's results as a discontinued operation on the
consolidated statement of earnings and accumulated earnings for the years ended
December 31, 2003 and 2002 is to include net earnings from discontinued
operations as a separate line item on the consolidated statements of earnings
and accumulated earnings. The impact on net earnings from continuing operations
is also reflected below.

<TABLE>
<CAPTION>
                                                     ----------------------------------------------------
                                                              For the year ended December 31,
                                                     ----------------------------------------------------
                                                            2003                        2002
                                                     ----------------------------------------------------
                                                            (in thousands of Canadian dollars)
                                                     ----------------------------------------------------
<S>                                                        <C>                          <C>
Revenue                                                        315,572                      287,540
Earnings before income taxes and other item                     39,311                       73,558
Income taxes (recovery)                                        (17,672)                      32,098
Other item                                                         241                          138
Net earnings from continued operations                          55,777                       40,981
Net earnings from discontinued operations                          965                          341
Net earnings                                                    56,742                       41,322

Net earnings from continuing operations per
trust unit
         Basic                                                    0.95                         0.73
         Diluted                                                  0.94                         0.72

Net earnings per trust unit
         Basic                                                    0.97                         0.74
         Diluted                                                  0.96                         0.73

Weighted average trust units outstanding
         Basic                                                  58,600                       55,791
         Diluted                                                59,093                       56,847
</TABLE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>8
<FILENAME>ex99_5form40-f.txt
<DESCRIPTION>EXHIBIT 99.5
<TEXT>
                                                                    EXHIBIT 99.5
                                                                    ------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                          PRESS RELEASE - MAY 11, 2004
                      FIRST QUARTER RESULTS, MARCH 31, 2004


Vermilion Energy Trust ("Vermilion") (TSX - VET.UN) is pleased to report
unaudited interim operating and financial results for the period ended March 31,
2004. Prior results have been restated to show Aventura Energy Inc.
("Aventura"), a 72.2% owned subsidiary as a discontinued operation in accordance
with Canadian generally accepted accounting principles. Vermilion announced the
proposed sale of Aventura on March 22, 2004 and the transaction closed on May 6,
2004. Note that Aventura did not previously contribute any cash flow or
production to the generation of the Trust distributions.

Vermilion achieved the following highlights:

FIRST QUARTER HIGHLIGHTS

>    Recorded Trust production of 21,317 boe/d, compared to 21,510 boe/d in the
     fourth quarter of 2003. First quarter production was affected by normal
     production declines, tempered by new production from wells drilled in the
     fourth quarter of 2003.

>    Maintained stable distributions of $0.17 per month, a rate that has
     remained constant since our initial distribution in March 2003. Vermilion
     anticipates that this level of distributions will be sustainable through
     2004 provided there are no significant negative changes to commodity
     prices.

>    Provided a total return to unitholders of 22.6% in the first quarter
     comprised of 19.3% in capital appreciation and 3.3% in distributions.

>    Announced the proposed sale of Aventura for $5.10 per share in cash,
     yielding gross proceeds of $228 million ($165 million net to Vermilion).
     The transaction closed May 6, 2004.

>    Announced the proposed acquisition of producing properties in the
     Netherlands for $80.5 million. Upon closing, Vermilion will be acquiring
     5,900 boe/d from predominantly onshore producing gas properties for less
     than $14,000 per boe/d and less than $5.00 per boe of proven plus probable
     reserves. The closing is anticipated to occur in May 2004.

>    Announced the formation of an international exploration company, Verenex
     Energy Inc. ("Verenex"), whose mandate will include the acceleration of
     Vermilion's exploration efforts in France. Vermilion anticipates that it
     will hold a controlling equity position in Verenex following an initial
     financing to be completed this spring.

CHANGES IN ACCOUNTING POLICY

Vermilion adopted the new Canadian accounting rules regarding hedge accounting,
unit based compensation and asset retirement obligations commencing in 2004. In
addition, as a result of the decision to sell Aventura, the Trust's investment
in Aventura was reclassified to reflect an asset held for resale. These changes
have impacted Vermilion's net earnings however; there has been no impact on the
Trust's cash flow or distributions payable to unitholders. Further details on
the impact of these accounting changes are outlined in management's discussion
and analysis of the first quarter results.

CONFERENCE CALL

Vermilion will discuss these results in a conference call to be held on
Wednesday, May 12, 2004. The conference call will begin at 10:00 a.m. EST (8:00
a.m. MST). To participate, you may call toll free 1-800-814-4857 or
1-416-640-4127 (Toronto area). The conference call will also be available on
replay by calling 1-877-289-8525 or 1-416-640-1917 (Toronto area) using pass
code 21048335 followed by the pound "#" key. The replay will be available until
midnight eastern time on Wednesday, May 19, 2004.


                                       1
- --------------------------------------------------------------------------------
<PAGE>

HIGHLIGHTS                                           CONSOLIDATED   CONSOLIDATED
                                                        MARCH 31,      MARCH 31,
(unaudited)                                                  2004           2003
- --------------------------------------------------------------------------------

FINANCIAL ($000 CDN EXCEPT UNIT AND PER UNIT AMOUNTS)

Petroleum and natural gas revenues                   $     77,610    $    87,579
Cash flow from operations                                  35,103         37,701
     Per unit, basic (1)                                     0.54           0.66
Distributions (2)                                          30,345         17,666
     Per unit                                                0.51           0.34
     % Cash flow distributed                                  86%            47%
Capital expenditures                                       16,552         18,763
Long-term debt, net of working capital                     85,656        108,142
Trust units outstanding (1)
     Basic                                             65,240,736     57,557,131
     Diluted                                           69,488,036     61,906,831
Weighted average trust units outstanding (1)
     Basic                                             65,021,836     57,410,652
     Diluted                                           65,045,645     57,606,607
Unit trading
     High                                            $      18.90    $     13.00
     Low                                             $      15.25    $     11.12
     Close                                           $      18.30    $     12.30

OPERATIONS

Production
     Crude oil (bbls/d)                                     9,927         11,378
     Natural gas liquids (bbls/d)                           2,374          1,956
     Natural gas (mcf/d)                                   54,099         78,475
     Boe/d (6:1)                                           21,317         26,413
Average selling price
     Crude oil (per bbl, including hedging)          $      35.73    $     39.34
     Crude oil (per bbl, not including hedging)             41.82          46.05
     Natural gas liquids (per bbl)                          33.14          41.09
     Natural gas (per mcf, including hedging)                6.74           5.73
     Natural gas (per mcf, not including hedging)            6.73           5.73

Netbacks per boe (6:1)
     Operations netback                                     21.61          24.17
     Cash flow netback                                      18.10          17.35
     Operating costs                                         6.16           5.45
     General and administration                      $       1.58    $      1.15

(1)  Includes trust units issuable for outstanding exchangeable shares based on
     the period end exchange ratio

(2)  Distributions are paid on issued trust units at each record date


The above table includes non-GAAP measurements, which may not be comparable to
other companies.


                                       2
- --------------------------------------------------------------------------------
<PAGE>

OPERATIONAL ACTIVITIES

In Canada, the Trust drilled seven wells (3.9 net) in the first quarter,
resulting in six gas wells (3.7 net) and one dry hole (0.2 net). Four of the gas
wells are waiting tie-in. Vermilion's drilling efforts continue to focus on
properties in the Drayton Valley region. The Trust is exploring initiatives that
could lead to higher activity levels through third party participation.

In France, Vermilion successfully drilled and completed the La Torche 2 well,
and anticipates that a scheduled fracture stimulation treatment of this well
will increase production rates to target levels exceeding 300 boe/d. A second
development well, the Champotran 23, encountered a gas-charged upper shale zone
above the target horizon that prevented the successful completion of this well.
The well has been temporarily suspended pending a review of the drilling program
and techniques, and may be re-entered later this year.

In the Netherlands, Vermilion is continuing discussions with government
representatives and anticipates receiving approval for the proposed transaction
in May. The Trust is moving forward with staffing initiatives and plans to
assume full operatorship of these properties in late 2004. In the meantime,
Vermilion and the vendor have negotiated a transition agreement that will
facilitate a smooth transition period until Vermilion is sufficiently staffed in
the Netherlands.

PRODUCTION SUMMARY (6:1)
- -------------------------------------------------------------------------------
                                              THREE MONTHS ENDED MARCH 31, 2004
                           OIL & NGLS       NATURAL GAS         TOTAL
                             (BBLS/D)          (MMCF/D)       (BOE/D)         %
- -------------------------------------------------------------------------------
VERMILION ENERGY TRUST
     Canada                     6,300             52.53        15,055        71
     France                     6,001              1.57         6,262        29
- -------------------------------------------------------------------------------
     Total                     12,301             54.10        21,317       100
- -------------------------------------------------------------------------------

First quarter production in Canada averaged 6,300 bbls/d of oil and NGL's and
52.5 mmcf/d of natural gas compared to 6,028 bbls/d of oil and NGL's and 54.3
mmcf/d of natural gas in the fourth quarter of 2003. An active fourth quarter
drilling program effectively offset natural declines. The proposed 2004 capital
program should slow our production declines this year, but acquisition(s) will
be required to replace produced reserves. We continue to evaluate domestic
acquisitions as an important part of our core strategy.

Production in France declined to 6,262 boe/d in the first quarter from 6,437
boe/d in the fourth quarter of 2003. Scheduled workovers in the second quarter,
the LaTorche 2 fracture stimulation and drilling operations in the latter part
of the year are expected to contribute to modest growth in production in France
through the year. The Trust is projecting production to average 6,400 boe/d from
France in 2004.

Production in the Netherlands is expected to average 5,900 boe/d in 2004, and is
characterized by seasonal fluctuations reflecting increased demand for natural
gas in fall and winter months. Production and cash flow from the Netherlands
will be incorporated into our disclosure beginning on the closing date of the
transaction. The full impact of these volumes will be fully reflected in the
Trust's results in the third quarter of 2004.

DRILLING ACTIVITY (# OF WELLS)
- ------------------------------------------------------------------------------
                                             THREE MONTHS ENDED MARCH 31, 2004
- ------------------------------------------------------------------------------
                                CANADA              FRANCE               TOTAL
                         GROSS   (NET)       GROSS   (NET)       GROSS   (NET)
- ------------------------------------------------------------------------------
Oil                          0    (0.0)          0    (0.0)          0    (0.0)
Gas                          6    (3.7)          0    (0.0)          6    (3.7)
Standing                     0    (0.0)          1    (1.0)          1    (1.0)
D&A                          1    (0.2)          0    (0.0)          1    (0.2)
- ------------------------------------------------------------------------------
TOTAL                        7    (3.9)          1    (1.0)          8    (4.9)
- -------------------------------------------------------------------------------


                                       3
- --------------------------------------------------------------------------------
<PAGE>

In addition to the Trust's drilling operations, Vermilion had 4 wells drilled on
its lands by third party operators through farm-out arrangements in which
Vermilion maintained an overriding royalty. Vermilion will continue to pursue
activity on its undeveloped land base by third parties as a means of creating
economic value in the form of low risk participation in areas that may not be
compatible with the Trust's capital development strategy or in areas where the
Trust lacks specific expertise.

FINANCIAL

The Trust generated cash flow of $35.1 million ($0.54 per unit) in the first
quarter of 2004, compared to $34.5 million ($0.57) in the fourth quarter of
2003. The Trust's distributions in the first quarter totalled $30.3 million or
$0.51 per unit. The year-to-date payout ratio is approximately 86% of total cash
flow. Capital expenditures in the quarter totalled $16.6 million resulting in
total debt, net of working capital of $85.7 million at the end of the quarter.
This does not include the full cash proceeds from the sale of Aventura.
Following the closing of the proposed Netherlands acquisition and the sale of
Aventura, net debt is expected to total approximately $50 million. Pro-forma
debt to annualized cash flow will be less than 0.4 times.

CAPITAL EXPENDITURES ($000's)
- -------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 2004                                         TRUST
                                                                         ASSETS
- -------------------------------------------------------------------------------
Land                                                                    $   164
Seismic                                                                      75
Drilling and completion                                                  11,950
Production equipment and facilities                                       2,770
Workovers                                                                 1,070
Other                                                                       523
- -------------------------------------------------------------------------------
                                                                        $16,552
===============================================================================

AVENTURA ENERGY INC.

On March 22, 2004 Vermilion and Aventura announced an agreement with BG Group,
whereas BG Group would acquire all the outstanding shares of Aventura for $5.10
per share in cash. Upon closing, the Trust realized net proceeds of
approximately $165 million. These proceeds initially reduced Vermilion's
outstanding debt and will ultimately be reinvested in cash flow generating
properties for the benefit of all unitholders.

VERENEX ENERGY INC.

On April 5, 2004 Vermilion announced the formation of a new international
exploration company whose mandate will include the acceleration of the
exploration efforts that Vermilion initiated in France prior to converting to a
Trust. Verenex will hold a 95% interest in five onshore exploration licenses and
a 50% interest in the offshore Aquitaine Maritime concession and Vermilion will
hold the balance of these licenses and, subject to French regulatory approval,
rights in two wells to be drilled in a concession. This new entity will allow
Vermilion unitholders to share in the upside potential of these exploration
properties without exposing them to significant exploration or capital risk.

Verenex will benefit from a strong board of directors and an independent
management team with extensive international experience. James D. (Jim)
McFarland, until recently a director of Vermilion and its affiliate Aventura,
will serve as the President & CEO. Mr. McFarland has more than 31 years of oil
and gas and senior executive experience, most recently as Managing Director of
Southern Pacific Petroleum N.L. in Brisbane, Australia. Vermilion anticipates
that its initial ownership in Verenex, which will be publicly listed, will be
approximately 50%.


                                       4
- --------------------------------------------------------------------------------
<PAGE>

OUTLOOK

With the Netherlands acquisition and the disposition of Vermilion's interest in
Aventura, the Trust will have replaced over two times its 2003 production with
added reserves, will be in a strong position to sustain the current level of
distributions, and will have balance sheet flexibility that enables the
replacement of an additional two to three years production without requiring
further dilution. Vermilion will continue to pursue domestic and international
investment opportunities.

Non-residents own approximately 29% of its issued and outstanding units of
Vermilion (not including exchangeables) and 27% if the exchangeable shares are
included. This compares to 33% and 30%, respectively, at the end of the fourth
quarter 2003. Pursuant to Vermilion's Trust Indenture, non-resident unitholders
may not own more than 50% of total outstanding trust units. The Trust will
continue to ensure that it complies with all requirements under its Trust
Indenture, including Canadian ownership requirements.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is management's discussion and analysis (MD&A) dated May 6, 2004,
of Vermilion's operating and financial results for the quarter ended March 31,
2004 compared with the corresponding period in the prior year. This discussion
should be read in conjunction with the Trust's audited consolidated financial
statements for the years ended December 31, 2003 and 2002, together with
accompanying notes, as contained in the Trust's 2003 Annual Report.

Oil and gas prices for the first quarter of 2004 remained strong in comparison
with the first quarter of 2003. The WTI reference price for oil averaged $35.15
US per bbl for the three month period, Dated Brent was $31.95 US per bbl and
AECO reference price for gas was $6.41 Cdn per mcf. This compares to $33.86 per
bbl for WTI, $31.53 per bbl for Brent and $8.33 per mcf, Cdn AECO for the first
three months of 2003. While oil prices were stronger this quarter over last, gas
prices were $1.92 Cdn AECO per mcf less than the first quarter 2003. The main
reason for the lower netbacks in the first quarter 2004 is the year over year
increase in the Cdn/US exchange rate resulting in lower realized Canadian dollar
oil prices. While the first quarter 2003 Cdn AECO prices were stronger than the
pricing in 2004, Vermilion's gas hedging in 2003 lowered our realized price to
make it very similar to 2004 pricing. In 2004, Vermilion's operating netback
equalled $21.61 per boe, down 11% over the $24.17 reported for the first three
months of 2003. The cash flow netback of $18.10 per boe for the first three
months was up 4% over the $17.35 recorded in 2003. Cash flow netbacks were
slightly stronger as 2003 netbacks included the impact of the one-time cash
costs incurred in the re-organization of Vermilion into a Trust.

Total revenues for the first quarter of 2004 were $77.6 million compared to
$87.6 million for the first quarter of 2003. Vermilion's combined crude oil &
NGL price was $40.14 per bbl for the first quarter of 2004, a decrease of 12%
over the $45.40 per bbl reported for the first quarter of 2003. The Canadian
dollar has strengthened considerably over the first quarter 2003 which accounts
for the Canadian dollar pricing decline in the first quarter 2004 as oil prices
are referenced in U.S. dollars. The natural gas price realized in the first
quarter of 2004 was $6.74 per mcf compared to $6.46 per mcf realized a year ago,
a 4% year-over-year increase. The impact of Vermilion's hedging program reduced
prices by $2.84 per boe on a combined basis for the three month period ended
March 31, 2004, compared to a hedging loss of $3.16 per boe in the first three
months of 2003.

Net earnings in the quarter increased to $7.2 million ($0.12 per unit) from a
loss of $1.2 million ($(0.02) per unit) in the first quarter 2003. Earnings in
the quarter were affected by the new accounting policies adopted in the quarter.
The most significant changes to earnings were unit compensation expense which
added an additional expense of $4.14 per boe and the loss on derivative
instruments which decreased earnings by $6.22 per boe. The loss in 2003 came as
a result of reorganization costs incurred in Vermilion's conversion to a Trust.


                                       5
- --------------------------------------------------------------------------------
<PAGE>

Vermilion continues to manage its risk exposure through prudent commodity and
currency hedging strategies. Physical and financial natural gas contracts for
13,632 GJ/d remain in place for the calendar year of 2004 with various price
structures resulting in an average floor price of $4.71/GJ. Vermilion has WTI
hedges covering 2,250 bbls/d in 2004 at US$24.35/bbl; and 1,500 bbls/d in 2005
at US$24.80/bbl. Vermilion has Brent hedges covering 2,250 bbls/d in 2004 at
US$22.93/bbl; and 1,500 bbls/d in 2005 at US$23.37/bbl.

Vermilion has Canadian/US dollar currency swaps in place covering its oil hedge
positions for 2004 of US$32.0 million in currency hedges averaging approximately
US$0.71 per CDN dollar.

Total royalties, net of ARTC, increased to $9.67 per boe or 24.0% of sales in
the first quarter of 2004, compared with $9.54 per boe, or 22.5% of sales in the
first quarter of 2003. The increase on a per boe basis is due mostly to a
decrease in volumes from quarter to quarter. In France, royalties for the most
part are calculated on a unit of production basis and do not react to price
changes.

Operating costs increased to $6.16 per boe in 2004 from $5.45 per boe in the
first quarter of 2003. In Canada, processing costs in the Peace River Arch area,
workovers designed to increase production and increased power costs resulting
from the strong gas prices in the year have contributed to the year over year
increase. Operating costs in the first quarter were 11% lower than the $6.90 per
boe reported for the fourth quarter of 2003.

General and administrative expenses for the year increased to $1.58 per boe from
$1.15 per boe in the first quarter of 2003. The increase is mainly due to a
reduction in the total costs capitalized combined with lower average production
volumes.

Interest expense decreased to $0.69 per boe for the first quarter of 2004 from
$0.95 per boe for the corresponding period in 2003 as a result of lower average
debt levels due to the December 2003 financing issue.

Depletion and depreciation expenses increased from $10.41 per boe in the first
quarter of 2003 to $10.85 per boe in 2004. The increase is due mainly to the
increased costs of finding reserves in Canada.

The Trust's current tax provision has increased to $1.24 per boe in the first
quarter of 2004 from $0.66 per boe in the first three months of 2003. The
current provision is based on an estimated $8 million tax liability in France
for the year, while in Canada, it is anticipated that there will be no current
taxes due. The recovery in future income taxes is a result of the taxable
portion of distribution payments made to unitholders. In the Trust's structure,
payments are made between the operating company and the Trust transferring both
income and future income tax liability to the unitholder. Therefore it is the
opinion of management that no cash income taxes in Canada are expected to be
paid by the operating company in the future, and as such, the future income tax
liability recorded on the balance sheet related to Canadian operations will be
recovered through earnings over time. During the period ended March 31, 2004, a
reduction in the Alberta corporate income tax rate was substantially enacted.
This reduction amounted to a recovery of future income taxes of approximately $2
million in the three months ended March 31, 2004.

A foreign exchange gain of $0.45 per boe was recorded for the first quarter of
2004 with a gain of $0.02 per boe in the first quarter of 2003. The gain is
related to the strengthening Euro and the resulting impact on working capital in
our France operations.

Capital spending for the first three months totalled $16.6 million compared to
$13.3 million spent in the first quarter of 2003. The capital for the first
quarter of 2004 was funded through cash flow and incremental bank debt and was
primarily spent on the eight wells drilled in the quarter including one drilling
operation and one completion operation in France.


                                       6
- --------------------------------------------------------------------------------
<PAGE>

Vermilion's debt (net of working capital) on March 31, 2004 was $85.7 million
including the book value of Aventura shares held as current assets. There were
no changes to Vermilion's credit facility in the first quarter. The facility
structure is comprised of a one year revolving period with a one year term to
follow with a final settlement payment required at the end of the second year.

Vermilion has established a reclamation fund to fund the payment of
environmental and site restoration costs for its assets. The reclamation fund
will be funded by Vermilion Resources and owned by the Trust. Contributions in
the first quarter totaled $0.4 million or $0.20 per boe of production in the
Trust. Contribution levels to the reclamation fund will be reviewed on a regular
basis and may be adjusted to ensure reclamation obligations associated with the
Trust's assets will be substantially funded when the costs are forecast to be
incurred.

Vermilion maintained monthly distributions at $0.17 per unit for the quarter
distributing a total of $30.3 million compared to $17.7 million for the same
period in 2003.

During the quarter over 400,000 units were issued on conversion of exchangeable
shares, unit rights exercised, bonus plan and distribution reinvestment plan.
Unitholders' capital increased during the quarter as a result of the issuance of
those units. This increase in equity was offset by cash distributions of $30.3
million in the first quarter.

CICA Accounting Guideline 13 (AcG-13), "Hedging Relationships", became effective
for fiscal years beginning on or after July 1, 2003. AcG-13 addresses the
identification, designation, documentation and effectiveness of hedging
transactions for the purposes of applying hedge accounting. It also establishes
conditions for applying or discontinuing hedge accounting. Under the new
guideline, hedging transactions must be documented and it must be demonstrated
that the hedges are sufficiently effective in order to continue hedge accounting
for positions hedged with derivatives. Vermilion is not applying hedge
accounting to its hedging relationships, electing instead to account for its
hedging activities on a mark-to-market basis. The fair value of derivatives in
the quarter resulted in a $6.22 pre-tax per boe reduction to earnings.

In the first quarter of 2004, Vermilion adopted the new CICA Handbook section
3110, "Asset Retirement Obligations." This standard focuses on the recognition
and measurement of liabilities related to legal obligations associated with the
retirement of property, plant and equipment. Under this standard, these
obligations are initially measured at fair value and subsequently adjusted for
the accretion of discount and any changes in the underlying cash flows. The
asset retirement cost is to be capitalized to the related asset and amortized
into earnings over time. The adoption of CICA Handbook section 3110 allows for
the cumulative effect of the change in accounting policy to be booked to
accumulated income with the restatement of prior period comparatives. The
adoption of the asset retirement obligation accounting policy, which has been
applied retroactively, resulted in a new line item to the income statement
called accretion expense which was $0.16 per boe in the first quarter.

The Trust has a Unit Rights Incentive Plan (the "Plan") for directors, officers
and employees. The exercise price of the rights granted may be reduced in future
periods under certain conditions. The amount of the reduction cannot be
reasonably estimated as it is dependent upon a number of factors. Therefore, it
is not possible to determine a fair value for the rights granted using a
traditional option-pricing model and compensation expense has been determined
based on the intrinsic value of the rights at the date of exercise or at the
date of the financial statements for unexercised rights. The Trust adopted the
provisions outlined in Section 3870 Stock Based Compensation of the CICA
Handbook in the period and applied the new policy retroactively. Unit
compensation expense in the quarter was $4.14 per boe.


                                       7
- --------------------------------------------------------------------------------
<PAGE>

The Trust made a strategic decision to sell its interest in Trinidad operations.
On May 6, 2004, the Trust completed the sale of the shares of its subsidiary,
Aventura, for gross proceeds of $164.6 million. As a result, the Trust realized
an estimated $63.2 million (net of tax) gain on the sale of shares, which will
be recorded in the second quarter. At March 31, 2004, Vermilion's interest in
Aventura was reflected as an asset held for sale on the balance sheet with the
consolidated earnings impact shown under discontinued operations. Accordingly
the prior years' results were re-stated in accordance with generally accepted
accounting policies. The earnings from discontinued operations in the quarter
amounted to $0.46 per boe.

The amounts recorded for depletion and depreciation of property, plant and
equipment and the provision for future site restoration and abandonment costs
are based on estimates. The ceiling test calculation is based on estimates of
proved reserves, production rates, oil and natural gas prices, future costs and
other relevant assumptions. By their nature, these estimates are subject to
measurement uncertainty, and the effect on the consolidated financial statements
from changes in such estimates in future years could be significant.

Effective January 1, 2004 the Trust adopted Accounting Guideline 16 "Oil and Gas
Accounting - Full Cost", which replaces Accounting Guideline 5 "Full Cost
Accounting in the Oil and Gas Industry". Accounting Guideline 16 ("AcG-16")
modifies how impairment is tested and is consistent with CICA section 3063
"Impairment of Long-lived Assets". Under AcG-16, impairment is recognized if the
carrying amount of the capital assets exceed the sum of the undiscounted cash
flows expected to result from the Trust's proved reserves.

If the carrying value is not fully recoverable, the amount of impairment is
measured by comparing the carrying amounts of the capital assets to an amount
equal to the estimated net present value of future cash flows from proved plus
probable reserves. This calculation incorporates risks and uncertainties in the
expected future cash flows which are discounted using a risk-free rate. Any
excess carrying value above the net present value of the future cash flows would
be recorded as a permanent impairment.

Previously, impairment was tested based on undiscounted future net revenues
using proved reserves, and providing for future general and administrative
expenses, carrying costs, and taxes. The adoption of AcG-16 had no effect on the
Trust's financial results.

Vermilion has a pipeline transportation commitment that runs to October 31,
2005, and has minimum annual payment requirements of Cdn$0.1 million.


                                       8
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
NETBACKS (6:1)

                                                                                            THREE MONTHS ENDED
                                                    THREE MONTHS ENDED MARCH 31, 2004                MAR 31/03
- --------------------------------------------------------------------------------------------------------------
                                                                                                     (Restated)
                                                    Oil &       Natural
                                                     NGLs           Gas         TOTAL                    Total
                                                    $/bbl         $/mcf         $/BOE                    $/boe
- --------------------------------------------------------------------------------------------------------------
<S>                                                <C>            <C>          <C>                      <C>
TRUST FINANCIAL INFORMATION
CANADA
Price                                              $42.30         $6.96        $42.03                   $43.23
Realized hedging gain (loss)                        (5.23)         0.01         (2.19)                   (2.36)
Royalties (net)                                    (10.16)        (2.12)       (11.64)                  (11.17)
Transportation                                      (0.05)        (0.18)        (0.65)                   (0.64)
Lifting costs                                       (7.03)        (0.86)        (5.95)                   (4.88)
- --------------------------------------------------------------------------------------------------------------
Operating netback                                  $19.83         $3.81        $21.60                   $24.18
- --------------------------------------------------------------------------------------------------------------
FRANCE
Price                                              $41.37         $5.09        $40.91                   $44.24
Realized hedging gain (loss)                        (4.59)           --         (4.39)                   (5.49)
Royalties (net)                                     (5.08)        (0.32)        (4.95)                   (4.85)
Transportation                                      (3.43)         0.00         (3.29)                   (2.66)
Lifting costs                                       (6.30)        (2.50)        (6.66)                   (7.08)
- --------------------------------------------------------------------------------------------------------------
Operating netback                                  $21.97         $2.27        $21.62                   $24.16
- --------------------------------------------------------------------------------------------------------------
TOTAL TRUST
Price                                              $41.84         $6.91        $41.71                   $43.48
Realized hedging gain (loss)                        (4.91)         0.01         (2.84)                   (3.16)
Royalties (net)                                     (7.68)        (2.07)        (9.67)                   (9.54)
Transportation                                      (1.70)        (0.17)        (1.43)                   (1.16)
Lifting costs                                       (6.67)        (0.91)        (6.16)                   (5.45)
- --------------------------------------------------------------------------------------------------------------
Operating netback                                  $20.88         $3.77        $21.61                   $24.17
- --------------------------------------------------------------------------------------------------------------
General & administrative                                                        (1.58)                   (1.15)
Reorganization costs                                                               --                    (4.06)
Interest                                                                        (0.69)                   (0.95)
Foreign exchange                                                                   --                       --
Current and capital taxes                                                       (1.24)                   (0.66)
- --------------------------------------------------------------------------------------------------------------
Cash flow netback                                                              $18.10                   $17.35
- --------------------------------------------------------------------------------------------------------------
Depletion and depreciation                                                     (10.85)                  (10.41)
Future income taxes                                                              6.52                     0.62
Deferred financing charges                                                         --                    (0.08)
Foreign exchange                                                                 0.45                     0.02
Trust units issued                                                                 --                    (7.74)
Accretion expense                                                               (0.16)                   (0.13)
Unrealized loss on derivative instruments                                       (6.22)                      --
Gain (loss) from discontinued operations                                         0.46                    (0.35)
Fair value of stock compensation                                                (4.14)                   (0.20)
- --------------------------------------------------------------------------------------------------------------
Earnings (loss) netback                                                         $4.16                   $(0.92)
==============================================================================================================
</TABLE>

The above table includes non-GAAP measurements which may not be comparable to
other companies.


                                       9
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
($000'S UNAUDITED)
                                                                  MARCH 31,             December 31,
                                                                       2004                     2003
- ----------------------------------------------------------------------------------------------------
                                                                               (Restated Notes 3,4*)
<S>                                                               <C>                      <C>
ASSETS

Current
       Cash and cash equivalents                                  $  41,245                $  44,320
       Fair value of derivative instruments (Note 14)                 2,289                       --
       Assets held for sale (Note 4)                                 94,848                   94,156
       Accounts receivable                                           39,875                   37,178
       Crude oil inventory                                            2,062                    3,477
       Prepaid expenses and other                                     4,564                    2,949
- ----------------------------------------------------------------------------------------------------
                                                                    184,883                  182,080

Deferred charges for derivative instruments (Note 14)                11,139                       --
Deposit (Note 15)                                                     7,752                       --
Reclamation fund (Note 2)                                             2,068                    1,678
Capital assets                                                      575,793                  580,260
- ----------------------------------------------------------------------------------------------------
                                                                   $781,635                $ 764,018
====================================================================================================

LIABILITIES AND UNITHOLDERS' EQUITY

Current
       Accounts payable and accrued liabilities                   $  73,362                $  78,515
       Fair value of derivative instruments (Note 14)                18,719                       --
       Liabilities related to assets held for sale (Note 4)           8,087                    8,290
       Distributions payable to unitholders                          10,137                   10,065
       Income taxes payable                                           2,418                    4,966
- ----------------------------------------------------------------------------------------------------
                                                                    112,723                  101,836

Fair value of derivative instruments (Note 14)                        6,774                       --
Long-term debt (Note 7)                                             157,816                  135,558
Asset retirement obligation (Note 3)                                 15,719                   15,570
Future income taxes                                                 132,893                  145,547
- ----------------------------------------------------------------------------------------------------
                                                                    425,925                  398,511
- ----------------------------------------------------------------------------------------------------

Unitholders' equity
       Contributed surplus (Note 9)                                  16,209                   10,100
       Unitholders' capital (Note 9)                                215,832                  209,379
       Exchangeable shares (Note 9)                                  11,192                   11,276
       Accumulated earnings                                         241,751                  233,681
       Accumulated cash distributions                              (129,274)                 (98,929)
- ----------------------------------------------------------------------------------------------------
                                                                    355,710                  365,507
- ----------------------------------------------------------------------------------------------------
                                                                  $ 781,635                $ 764,018
====================================================================================================
</TABLE>

* Prior year financial statements have been restated in accordance with
accounting changes required by changes to the Canadian Institute of Chartered
Accountants handbook.


                                       10
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
($000'S EXCEPT UNIT AND PER UNIT AMOUNTS, UNAUDITED)
                                                                                               THREE MONTHS ENDED
                                                                                      MARCH 31,         March 31,
                                                                                           2004              2003
- -----------------------------------------------------------------------------------------------------------------
                                                                                             (Restated Notes 3,4)
<S>                                                                                  <C>               <C>
Revenue:
       Petroleum and natural gas revenue                                             $   77,610       $    87,579
       Royalties (net)                                                                   18,771            20,722
- -----------------------------------------------------------------------------------------------------------------
                                                                                         58,839            66,857
- -----------------------------------------------------------------------------------------------------------------
Expenses:
       Production                                                                        11,948            11,830
       Transportation                                                                     2,765             2,520
       Accretion expense (Note 3)                                                           311               284
       Unit compensation expense (Note 9)                                                 8,039               439
       Loss on derivative instruments (Note 14)                                          14,277                --
       Interest on long-term debt                                                         1,330             2,255
       General and administrative                                                         3,058             2,505
       Reorganization costs                                                                  --            25,628
       Foreign exchange gain                                                               (876)              (54)
       Depletion and depreciation                                                        21,047            22,602
- -----------------------------------------------------------------------------------------------------------------
                                                                                         61,899            68,009
- -----------------------------------------------------------------------------------------------------------------
Loss before income taxes and discontinued operations                                     (3,060)           (1,152)

Income taxes (recovery):
       Future (Note 8)                                                                  (12,653)           (1,336)
       Current                                                                            2,199             1,284
       Capital                                                                              219               143
- -----------------------------------------------------------------------------------------------------------------
                                                                                        (10,235)               91
- -----------------------------------------------------------------------------------------------------------------
Net earnings (loss) from continuing operations                                            7,175            (1,243)
       Net earnings (loss) from discontinued operations (note 4)                            895              (763)
- -----------------------------------------------------------------------------------------------------------------
Net earnings (loss)                                                                       8,070            (2,006)
- -----------------------------------------------------------------------------------------------------------------
Accumulated earnings, beginning of period as previously reported                        240,493           183,751
Changes in accounting polices (note 3)                                                   (6,812)            3,302
- -----------------------------------------------------------------------------------------------------------------
Accumulated earnings, beginning of period, as restated                                  233,681           187,053
- -----------------------------------------------------------------------------------------------------------------
Accumulated earnings, end of period                                                  $  241,751          $185,047
=================================================================================================================

Net earnings (loss) from continuing operations per trust unit:
       Basic                                                                         $     0.11       $     (0.02)
       Diluted                                                                       $     0.11       $     (0.02)
- -----------------------------------------------------------------------------------------------------------------

Net earnings (loss) per trust unit (Note 11):
       Basic                                                                         $     0.12       $     (0.03)
       Diluted                                                                       $     0.12       $     (0.03)
- -----------------------------------------------------------------------------------------------------------------

Weighted average trust units outstanding
       Basic                                                                         65,021,836        57,410,652
       Diluted                                                                       65,045,645        57,606,607
- -----------------------------------------------------------------------------------------------------------------
</TABLE>


                                       11
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000'S EXCEPT PER UNIT AMOUNTS)
                                                                                               THREE MONTHS ENDED
                                                                                      MARCH 31,         March 31,
                                                                                           2004              2003
- -----------------------------------------------------------------------------------------------------------------
                                                                                             (Restated Notes 3,4)
<S>                                                                                   <C>              <C>
Cash and cash equivalents provided by (used in):
OPERATING
       Net earnings (loss)                                                             $  8,070        $   (2,006)
       Items not affecting cash:
           Depletion and depreciation                                                    21,047            22,602
           Amortization of deferred charges for derivative instruments                    3,288                --
           Unrealized loss of derivative instruments                                      8,777                --
           Unit compensation expense                                                      8,039               439
           Accretion expense                                                                311               284
           Unrealized foreign exchange gain                                                (881)              (54)
           Amortized deferred financing costs                                                --               192
           Trust units issued on cancellation of employee stock options                      --            16,817
           (Earnings) loss from discontinued operations                                    (895)              763
           Future income taxes (recovery)                                               (12,653)           (1,336)
- -----------------------------------------------------------------------------------------------------------------
       Cash flow from operations                                                         35,103            37,701
       Site restoration costs incurred                                                     (188)              (24)
       Changes in non-cash working capital                                              (10,356)          (35,553)
- -----------------------------------------------------------------------------------------------------------------
                                                                                         24,559             2,124
- -----------------------------------------------------------------------------------------------------------------

INVESTING
       Drilling and development of petroleum and natural gas properties                 (16,552)          (13,263)
       Deposit for petroleum and natural gas acquisitions                                (7,752)               --
       Contributions to reclamation fund                                                   (390)               --
- -----------------------------------------------------------------------------------------------------------------
                                                                                        (24,694)          (13,263)
- -----------------------------------------------------------------------------------------------------------------

FINANCING
       Increase in long-term debt                                                        22,258            17,151
       Issue of trust units for cash, net of issue costs                                  3,365                --
       Issue of common shares for cash, net of issue costs                                   --             1,201
       Distribution reinvestment plan                                                     1,074                --
       Cash distributions                                                               (30,273)           (8,808)
- ------------------------------------------------------------------------------------------------------------------
                                                                                         (3,576)            9,544
- -----------------------------------------------------------------------------------------------------------------
       Foreign exchange gain (loss) on cash held in a foreign currency                      636              (468)
- -----------------------------------------------------------------------------------------------------------------

Net change in cash and cash equivalents                                                  (3,075)           (2,063)
Cash and cash equivalents, beginning of period                                           44,320            22,524
- -----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                               $ 41,245        $   20,461
- -----------------------------------------------------------------------------------------------------------------

Cash payments
       Taxes                                                                           $     32        $   20,463
       Interest                                                                        $  1,355        $    3,280
- -----------------------------------------------------------------------------------------------------------------
</TABLE>


                                       12
- --------------------------------------------------------------------------------
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003, UNAUDITED
(000'S EXCEPT UNIT AND PER UNIT AMOUNTS)

1.   BASIS OF PRESENTATION

     Vermilion Energy Trust (the "Trust" or "Vermilion") was established on
     January 22, 2003, under a Plan of Arrangement entered into by the Trust,
     Vermilion Resources Ltd., Clear Energy Inc., and Vermilion Acquisition Ltd.
     The Trust is an open-end unincorporated investment trust governed by the
     laws of the Province of Alberta and created pursuant to a trust indenture.
     Vermilion Resources Ltd. (the "Company") is a wholly owned subsidiary of
     the Trust.

     Prior to the Plan of Arrangement on January 22, 2003, the consolidated
     financial statements included the accounts of the Company and its
     subsidiaries. After giving effect to the Plan of Arrangement, the
     consolidated financial statements have been prepared on a continuity of
     interests basis which recognizes the Trust as the successor entity to
     Vermilion Resources Ltd. The consolidated financial statements include the
     accounts of the Trust and its subsidiaries and have been prepared by
     management in accordance with Canadian generally accepted accounting
     principles on a consistent basis with the audited consolidated financial
     statements for the year ended December 31, 2003 except for the changes in
     accounting policies (Note 3) and the treatment of Aventura Energy Inc.
     ("Aventura"), a 72% owned subsidiary, as discontinued operations (Note 4).
     Certain of the significant accounting policies have been included in Note
     2. The interim consolidated financial statements should be read in
     conjunction with the Trust's 2003 Annual Report.

2.   SIGNIFICANT ACCOUNTING POLICIES

     a)   Per Unit Amounts

     Net earnings per unit are calculated using the weighted average number of
     units outstanding during the period, including the weighted average number
     of exchangeable shares outstanding converted at the exchange ratio at the
     end of each month. Diluted net earnings per unit are calculated using the
     treasury stock method to determine the dilutive effect of unit based
     compensation. The treasury stock method assumes that the proceeds received
     from the exercise of "in the money" trust unit rights are used to
     repurchase units at the average market rate during the period.

     b)   Reclamation Fund

     A reclamation fund has been set up by the Trust to ensure that cash is
     available to carry out future abandonment and reclamation work on wells,
     plants and facilities. The contributions are currently made on the basis of
     $0.20 per barrel of oil equivalent of production in Canada and France.

     c)   Income Taxes

     Income taxes are calculated using the liability method of accounting for
     income taxes. Under this method, income tax liabilities and assets are
     recognized for the estimated tax consequences attributable to differences
     between the amounts reported in the consolidated financial statements of
     the Trust and their respective tax base, using enacted income tax rates.
     The effect of a change in income tax rates on future tax liabilities and
     assets is recognized in income in the period in which the change occurs.


                                       13
- --------------------------------------------------------------------------------
<PAGE>

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     The Trust is a taxable entity under the Income Tax Act (Canada) and is
     taxable only on income that is not distributed or distributable to the
     Unitholders. As the Trust allocates all of its Canadian taxable income to
     the unitholders in accordance with the Trust Indenture, and meets the
     requirements of the Income Tax Act (Canada) applicable to the Trust, no
     provision for Canadian income tax expense has been made in the Trust.

     In the Trust structure, payments made between the Company and the Trust
     result in the transferring of taxable income from the Company to individual
     unitholders. These payments may reduce future income tax liabilities
     previously recorded by the Company which would be recognized as a recovery
     of income tax in the period incurred.

     d)   Distributions

     The Trust makes monthly distributions of its distributable cash to
     unitholders of record on the last day of each calendar month. Pursuant to
     the Trust's policy, it will pay distributions to its unitholders subject to
     retaining an appropriate distribution reserve, satisfying its financing
     covenants, making loan repayments and, if applicable, funding future
     removal and site restoration reserves.

     e)   Discontinued Operations

     On May 6, 2004, the Trust completed the sale of its subsidiary, Aventura.
     Accordingly, these consolidated financial statements include the accounts
     of the Trust and its remaining wholly-owned subsidiaries. The financial
     position and results of operations of Aventura previously reported in the
     Trust's annual audited consolidated financial statements as at and for the
     years ended December 31, 2003 and 2002 and previous unaudited interim
     consolidated financial statements have been restated and are now reported
     as discontinued operations (Note 4).

     f)   Transportation Costs

     Effective for fiscal years beginning on or after October 1, 2003, the CICA
     issued Handbook Section 1100 "Generally Accepted Accounting Principles",
     which defines the sources of GAAP that companies must use and effectively
     eliminates industry practice as a source of GAAP. In prior years, it had
     been industry practice for companies to net transportation charges against
     revenue rather than showing transportation as a separate expense on the
     consolidated statements of earnings. Beginning January 1, 2004, the Trust
     has recorded revenue gross of transportation charges and has separately
     recorded transportation as an expense on the consolidated statements of
     earnings. Prior periods have been reclassified for comparative purposes.
     This adjustment has no impact on net earnings, per trust unit calculations,
     or cash flow for the Trust.


                                       14
- --------------------------------------------------------------------------------
<PAGE>

3.   CHANGES IN ACCOUNTING POLICY

     a)   Hedging Relationships

     On January 1, 2004, the Trust adopted the amendments made to Accounting
     Guideline 13 ("AcG13") "Hedging Relationships", and EIC 128, "Accounting
     for Trading, Speculative or Non Trading Derivative Financial Instruments".
     Derivative instruments that do not qualify as a hedge under AcG13, or are
     not designated as a hedge, are recorded in the consolidated balance sheet
     as either an asset or liability with changes in fair value recognized in
     net earnings. The Trust has elected not to designate any of its price risk
     management activities in place as at and subsequent to March 31, 2004 as
     accounting hedges under AcG13 and, accordingly, will account for all these
     derivatives financial instruments using the mark-to-market accounting
     method. The impact on the Trust's consolidated financial statements at
     January 1, 2004 resulted in the recognition of financial instruments with a
     fair value of $3,386, financial instrument liabilities with a fair value of
     $17,813 and a net deferred charge of $14,427, which will be recognized into
     net earnings over the life of the associated contracts. At March 31, 2004,
     it is estimated that over the following 12 months $7,594 ($4,648, net of
     tax) will be reclassified into net earnings from deferred charges.

     As this change in policy did not require retroactive restatement, the
     effect on the March 31, 2004 statement of earnings was as follows:
     Amortization of the initial deferred charge of $3,288 is charged to revenue
     on the consolidated statement of earnings. The loss on financial
     instruments includes the fair value loss of $8,777 and settled losses of
     $5,500.

     b)   Capital Assets

     Effective January 1, 2004 the Trust adopted Accounting Guideline 16 "Oil
     and Gas Accounting - Full Cost", which replaces Accounting Guideline 5
     "Full Cost Accounting in the Oil and Gas Industry". Accounting Guideline 16
     ("AcG-16") modifies how impairment is tested and is consistent with
     Canadian Institute of Chartered Accountants ("CICA") section 3063
     "Impairment of Long-lived Assets". Under AcG-16, impairment is recognized
     if the carrying amount of the capital assets exceed the sum of the
     undiscounted cash flows expected to result from the Trust's proved
     reserves.

     If the carrying value is not fully recoverable, the amount of impairment is
     measured by comparing the carrying amounts of the capital assets to an
     amount equal to the estimated net present value of future cash flows from
     proved plus probable reserves. This calculation incorporates risks and
     uncertainties in the expected future cash flows which are discounted using
     a risk-free rate. Any excess carrying value above the net present value of
     the future cash flows would be recorded as a permanent impairment.

     Previously, impairment was tested based on undiscounted future net revenues
     using proved reserves, and providing for future general and administrative
     expenses, carrying costs, and taxes. The adoption of AcG-16 had no effect
     on the Trust's financial results.

     c)   Asset Retirement Obligations

     The Trust accounts for its asset retirement obligations under the new CICA
     Handbook, section 3110, Asset Retirement Obligations. This standard focuses
     on the recognition and measurement of liabilities related to legal
     obligations associated with the future retirement of property, plant and
     equipment. Under this standard, these obligations are initially measured at
     fair value determined as the estimated future costs discounted to the
     present value and subsequently adjusted for the accretion of the discount
     factor and any changes in the underlying cash flows. The asset retirement
     cost is capitalized to the related asset and amortized into earnings over
     time. Previously, the Trust recognized a provision for future site
     restoration based on the unit-of-production method applied to the estimated
     future liability.


                                       15
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
3.   CHANGES IN ACCOUNTING POLICY (CONTINUED)

     Consolidated Balance Sheet - as at December 31, 2003:

                                                                AS REPORTED (1)            CHANGE           AS RESTATED
                                                                -------------------------------------------------------
<S>                                                             <C>                 <C>                  <C>
     Capital Assets                                                   $ 573,042        $    7,218             $ 580,260
     Site restoration and abandonment                                    13,498           (13,498)                   --
     Asset retirement obligations                                            --            15,570               15,570
     Future Income taxes                                                143,689             1,858               145,547
     Accumulated earnings                                             $ 230,393        $    3,288             $ 233,681

     Consolidated Statement of Earnings and Accumulated
     Earnings - three months ended March 31, 2003

<CAPTION>
                                                                AS REPORTED (1)            CHANGE           AS RESTATED
                                                                -------------------------------------------------------
<S>                                                             <C>                 <C>                  <C>
     Depletion and depreciation                                       $  22,880        $     (278)            $  22,602
     Accretion                                                               --               284                   284
     Future income taxes                                                 (1,334)               (2)            $  (2,006)
</TABLE>

     (1) "As reported" amounts have been adjusted to reflect the classification
     of Aventura as discontinued operations, and the adjustment to stock
     compensation.

     There was no effect on basic and diluted net earnings per trust unit for
     the three months ended March 31, 2003.

     The total future asset retirement obligation was estimated by management
     based on the Trust's net ownership interest in all wells and facilities,
     estimated costs to reclaim and abandon the wells and facilities and the
     estimated timing of the costs to be incurred in future periods. The Trust
     has estimated the net present value of its asset retirement obligations to
     be $15,719 as at March 31, 2004 based on a total future liability of
     $86,307. These payments are expected to be made over the next 49 years. The
     Trust used a credit adjusted risk free rate of 8% and an inflation rate of
     1.5% to calculate the present value of the asset retirement obligation.

     The following table reconciles the Trust's total asset retirement
     obligation:

<TABLE>
<CAPTION>
                                                              MARCH 31, 2004       MARCH 31, 2003
     ---------------------------------------------------------------------------------------------
<S>                                                           <C>                  <C>
     Carrying amount, beginning of period                            $15,570              $14,185
     Increase in liabilities in the period                                26                  571
     Settlement of liabilities in the period                              --                   --
     Disposition of liabilities in the period                           (188)                (509)
     Accretion expense                                                   311                  284
     --------------------------------------------------------------------------------------------
     Carrying amount, end of period                                  $15,719              $14,531
     --------------------------------------------------------------------------------------------
</TABLE>

     This change in accounting policy has been applied retroactively with
     restatement of prior periods presented for comparative purposes as follows:

     d)   Trust Unit Rights Incentive Compensation

     The Trust has a Unit Rights Incentive Plan (the "Plan") for directors,
     officers and employees. The exercise price of the rights granted may be
     reduced in future periods under certain conditions as described in Note 10.
     The amount of the reduction cannot be reasonably estimated as it is
     dependent upon a number of factors. Therefore, it is not possible to
     determine a fair value for the rights granted using a traditional
     option-pricing model and unit compensation expense has been determined
     based on the intrinsic value of the rights at the date of exercise or at
     the date of the consolidated financial statements for unexercised rights.


                                       16
- --------------------------------------------------------------------------------
<PAGE>

3.   CHANGES IN ACCOUNTING POLICY (CONTINUED)

     Compensation expense associated with rights granted is deferred and
     recognized in earnings over the vesting period of the Plan with a
     corresponding increase or decrease in contributed surplus. Changes in the
     intrinsic value of unexercised rights after the vesting period are
     recognized in earnings in the period of change with a corresponding
     increase or decrease in contributed surplus. This method of determining
     compensation expense may result in large fluctuations, even recoveries, in
     compensation expense due to changes in the underlying price of the Trust
     units. Recoveries of compensation expense will only be recognized to the
     extent of previously recorded cumulative compensation expense associated
     with rights exercised or outstanding at the date of the financial
     statements.

     Consideration paid upon the exercise of the rights together with the amount
     previously recognized in contributed surplus is recorded as an increase in
     unitholders capital.

     The Trust has not incorporated an estimated forfeiture rate for rights that
     will not vest, rather, the Trust accounts for forfeitures as they occur.

     The Trust adopted the provisions outlined in Section 3870 Stock Based
     Compensation and other Stock Based Payments of the CICA Handbook in the
     period. The section requires that unit based compensation be recorded by
     the Trust.

     The decision was made to adopt the new policy retroactively for the Trust
     and Aventura resulting in a charge to accumulated earnings on the December
     2003 balance sheet of $10,100. The expense related to the period ended
     March 31, 2003 was a charge to unit compensation expense of $439. The
     impact on the three months ended March 31, 2003 for Aventura is $843 of
     compensation expense, which is included in the determination of the loss on
     discontinued operations.

4.   DISCONTINUED OPERATIONS

     On May 6, 2004, the Trust completed the sale of the shares of its
     subsidiary, Aventura, for gross proceeds of $164.6 million. As a result,
     the Trust will realize an estimated $63.2 million gain on the sale of
     shares, which will be recorded in the interim consolidated financial
     statements for the period ending June 30, 2004. This estimated gain is net
     of $14.6 of future income taxes, representing the tax related to the
     taxable portion of the capital gain on sale of the Aventura investment.

     Gross sale proceeds                                              $164,585
     Book value of investment in aventura                               86,761
     -------------------------------------------------------------------------
     Gain on sale of Aventura                                        $  77,824
     Future income taxes                                                14,639
     -------------------------------------------------------------------------
     Net gain on sale of aventura                                    $  63,185
     =========================================================================

     The proceeds will be used to repay the Trust's revolving bank facility in
     Canada.

     The Trust restated its current and prior period financial statements to
     reflect the Aventura net assets as `held for sale' and to separately
     classify the operating results of Aventura from the operating results of
     continuing operations.


                                       17
- --------------------------------------------------------------------------------
<PAGE>

4.   DISCONTINUED OPERATIONS  (CONTINUED)

     Details of the assets held for sale and the related liabilities are as
     follows:

                                            MARCH 31, 2004     DECEMBER 31, 2003
     ---------------------------------------------------------------------------
     Current assets                               $  9,627              $  8,559
     Petroleum and natural gas interests            85,221                85,597
     ---------------------------------------------------------------------------
     Total assets held for sale                     94,848                94,156
     ---------------------------------------------------------------------------

     Current liabilities                          $    974              $  1,371
     Future income taxes                             7,113                 6,919
     ---------------------------------------------------------------------------
     Total liabilities held for sale              $  8,087              $  8,290
     ---------------------------------------------------------------------------

     The net earnings (loss) from discontinued operations disclosed in the
     Consolidated Statements of Earnings and Accumulated Earnings includes
     the following:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED       THREE MONTHS ENDED
                                                               MARCH 31, 2004          MARCH 31, 2003
     -------------------------------------------------------------------------------------------------
<S>                                                       <C>                      <C>
     Revenue                                                           $2,930                  $2,953
     Earnings (loss) before income taxes                                  972                    (167)
     Income taxes                                                          77                     596
     Net earnings (loss) from discontinued operations                     895                    (763)
     ================================================================================================
</TABLE>

     The Aventura operations, which have been disclosed as assets held for sale
     and restated as discontinued operations, comprised the Trinidad segment.
     Continuing operations include the Canadian and French segments only.

5.   TRANSFER OF ASSETS AND LIABILITIES PURSUANT TO THE PLAN OF ARRANGEMENT

     Effective January 22, 2003, under the Plan of Arrangement, the Company
     transferred to Clear Energy Inc. a portion of the Company's existing lands
     and exploration assets. As this was a related party transaction, assets and
     liabilities were transferred at book value. Details are as follows:

     Petroleum and natural gas assets and equipment                     $19,509
     Future income tax asset                                              5,461
     --------------------------------------------------------------------------
     Total assets transferred                                           $24,970
     Provision for site restoration and abandonment                          89
     --------------------------------------------------------------------------
     Net assets transferred and reduction in share capital              $24,881
     ==========================================================================

     Associated with the Plan of Arrangement in the three months ended March 31,
     2003, the Company recorded transaction costs of $25.6 million, with $16.8
     million related to the issue of Trust units in exchange for cancellation of
     stock options and $8.8 million in advisory and other costs.

6.   BUSINESS  DISPOSITION AND INVESTMENT

     Effective January 22, 2003, the Company sold its existing 40% working
     interest in the Central Block in Trinidad to Aventura for consideration of
     212,059,512 common shares. As this was a related party transaction, assets
     and liabilities were transferred at book value. The sale increased the
     Company's equity holding in Aventura to approximately 72% from
     approximately 47% held prior to the sale.


                                       18
- --------------------------------------------------------------------------------
<PAGE>

7.   LONG-TERM DEBT

     At March 31, 2004, the Trust had a line of credit of $240 million with a
     banking syndicate, which has a one year revolving period with a one year
     term to follow with a final settlement payment required at the end of the
     second year. A working capital tranche of $1 million included in the $240
     million facility has been placed in France to assist cash-management
     practices.

8.   FUTURE INCOME TAXES

     During the period ended March 31, 2004, a reduction in the Alberta
     corporate income tax rate was substantially enacted. This reduction
     amounted to a recovery of future income taxes of approximately $2 million
     in the three months ended March 31, 2004.

9.   UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES

     Pursuant to the Plan of Arrangement, 51,480,467 units of the Trust and
     6,000,000 exchangeable shares of the Company were issued in exchange for
     all of the outstanding shares of the Company, a wholly owned subsidiary of
     the Trust, on a one for one basis.

     The exchangeable shares are convertible into trust units based on the
     exchange ratio, which is adjusted monthly to reflect the distribution paid
     on the trust units. Cash distributions are not paid on the exchangeable
     shares. During the period, a total of 36,177 exchangeable shares were
     converted into 41,617 trust units based on the exchange ratio at the time
     of conversion. At March 31, 2004, the exchange ratio was 1.16656 trust
     units per exchangeable share.

<TABLE>
<CAPTION>
                                                                            NUMBER OF SHARES             AMOUNT
      ---------------------------------------------------------------------------------------------------------
      COMMON SHARES OF VERMILION RESOURCES LTD.
      Balance as at December 31, 2002                                             55,866,918         $   40,557
      Issued upon exercise of stock options                                          267,100              1,201
      ---------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                      <C>
      Balance January 21, 2003, prior to Plan of Arrangement                      56,134,018         $  141,758

      Trust units issued on cancellation of employee
         stock options (Note 5)                                                    1,346,449         $   16,817
      Transfer of assets and liabilities to Clear Energy Inc. (Note 5)                    --            (24,881)
      Trust units issued                                                         (51,480,467)          (119,739)
      Exchangeable shares issued                                                  (6,000,000)           (13,955)
      ---------------------------------------------------------------------------------------------------------
                                                                                         NIL         $      NIL
      ---------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                             NUMBER OF UNITS             AMOUNT
      ---------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                      <C>
      TRUST UNITS
      Unlimited number of trust units authorized to be issued

      Issued pursuant to Plan of Arrangement January 22, 2003                     51,480,467           $119,739
      Distribution reinvestment plan                                                 457,905              6,209
      Issued on conversion of exchangeable shares                                  1,218,920              2,679
      Trust units issued for cash                                                  6,050,000             85,305
      Unit issue costs                                                                     -             (4,565)
      Unit options exercised for cash                                                  1,300                 12
      ---------------------------------------------------------------------------------------------------------
      Balance as at December 31, 2003                                             59,208,592           $209,379

      Distribution reinvestment plan                                                  67,083              1,074
      Issued on conversion of exchangeable shares                                     41,617                 84
      Unit options exercised for cash                                                260,500              2,538
      Trust units issued for bonus plan                                               49,630                826
      Transfer from contributed surplus on unit option exercise                            -              1,931
      ---------------------------------------------------------------------------------------------------------
      Balance as at march 31, 2004                                                59,627,422           $215,832
      =========================================================================================================
</TABLE>


                                       19
- --------------------------------------------------------------------------------
<PAGE>

9.    UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES (CONTINUED)

<TABLE>
<CAPTION>
                                                                            NUMBER OF SHARES      CONSIDERATION
      ---------------------------------------------------------------------------------------------------------
      EXCHANGEABLE SHARES
<S>                                                                         <C>                   <C>
      Issued pursuant to Plan of Arrangement  January 22, 2003                     6,000,000          $  13,955
      Exchanged for trust units                                                   (1,151,971)            (2,679)
      ---------------------------------------------------------------------------------------------------------
      Balance as at December 31, 2003                                              4,848,029          $  11,276
      Exchanged for trust units                                                      (36,177)               (84)
      ---------------------------------------------------------------------------------------------------------
      Balance as at March 31, 2004                                                 4,811,852          $  11,192
      ---------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                              MARCH 31, 2004       DEC 31, 2003
      CONTRIBUTED SURPLUS
      ---------------------------------------------------------------------------------------------------------
      Opening balance                                                                $10,100          $       -
      Unit compensation expense                                                        8,040             10,100
      Transfer to unitholders' capital on unit option exercise                        (1,931)                 -
      ---------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                <C>
      Ending balance                                                                 $16,209            $10,100
      ---------------------------------------------------------------------------------------------------------
</TABLE>

     As per the Plan of Arrangement, shareholders of the Company received one
     trust unit or one exchangeable share in the Company for each common share
     held. In addition, Vermilion shareholders received one share in a separate
     publicly listed oil and gas company, Clear Energy Inc. for each three
     common shares held (Note 5).

10.   TRUST UNIT RIGHTS INCENTIVE PLAN

     The Trust has a unit rights incentive plan that allows the Trust to issue
     rights to acquire trust units to directors, officers and employees. The
     Trust is authorized to issue up to 6.0 million unit rights; however, the
     number of trust units reserved for issuance upon exercise of the rights
     shall not at any time exceed 10% of the aggregate number of issued and
     outstanding trust units of the Trust. Unit right exercise prices are equal
     to the market price for the trust units on the date the unit rights are
     issued. If certain conditions are met, the exercise price per unit may be
     calculated by deducting from the grant price the aggregate of all
     distributions, on a per unit basis, made by the Trust after the grant date.
     Rights granted under the plan vest over a three year period and expire five
     years after the grant date.

     The following table summarizes information about the Trust's unit rights

<TABLE>
<CAPTION>
                                                                                                      WEIGHTED
                                                                                  NUMBER OF            AVERAGE
                                                                                UNIT RIGHTS     EXERCISE PRICE
     ---------------------------------------------------------------------------------------------------------
<S>                                                                               <C>               <C>
     Balance December 31, 2003                                                    4,543,000         $    11.59
             Granted                                                                 93,600              16.27
             Cancelled                                                             (128,800)             11.45
             Exercised                                                             (260,500)              9.74
     ---------------------------------------------------------------------------------------------------------
     Balance March 31, 2004                                                       4,247,300         $    11.81
     ---------------------------------------------------------------------------------------------------------

<CAPTION>
     A summary of the plan as at March 31, 2004 is as follows:

               RANGE OF                                       NUMBER OF           REMAINING           NUMBER OF
         EXERCISE PRICE                  ADJUSTED                RIGHTS         CONTRACTUAL              RIGHTS
          AT GRANT DATE            EXERCISE PRICE           OUTSTANDING       LIFE OF RIGHT          EXERCISABLE
          -----------------------------------------------------------------------------------------------------
                                                                                    (YEARS)
<S>                                <C>                      <C>               <C>   <C>              <C>
        $11.45 - $17.95            $9.24 - $17.95             4,247,300           3.9 - 5.0           1,359,867
</TABLE>


                                       20
- --------------------------------------------------------------------------------
<PAGE>

11.   PER UNIT AMOUNTS

      Basic per unit calculations are based on the weighted average number of
      trust units outstanding. Diluted calculations include additional trust
      units for the dilutive impact of unit rights outstanding pursuant to
      the unit rights incentive plan.

      Net earnings (loss) from operations per unit are as follows:

                                                        MARCH 31,     March 31,
                                                             2004          2003
      -------------------------------------------------------------------------
                                                                     (Restated)
      Net earnings (loss) from continuing operations
            Basic (1)                                       $0.11        $(0.02)
            Diluted (2) (3)                                 $0.11        $(0.02)
      -------------------------------------------------------------------------

      Net earnings (loss)
            Basic (1)                                       $0.12        $(0.03)
            Diluted (2) (3)                                 $0.12        $(0.03)
      -------------------------------------------------------------------------

     (1)  Basic per unit calculations are based on the weighted average number
          of trust units outstanding in 2004 of 65,021,836 for the period
          (57,410,652 trust units in 2003) which includes outstanding
          exchangeable shares converted at the period end exchange ratio.

     (2)  Diluted calculations include additional trust units in 2004 of 23,809
          for the period (195,955 additional units in 2003) for the dilutive
          impact of the unit rights incentive plan. Calculations of diluted
          units exclude 2,700 of unit rights in 2004 which would have been
          anti-dilutive. There were no adjustments to net earnings from
          operations in calculating dilutive per unit amounts.

     (3)  The unrecognized compensation cost is considered to be part of the
          assumed proceeds to purchase trust units under the treasury stock
          method.

<TABLE>
<CAPTION>
12.  SEGMENTED INFORMATION
                                                                                       MARCH 31,      March 31,
                                                                                            2004           2003
- ---------------------------------------------------------------------------------------------------------------
                                                                                                     (Restated)
<S>                                                                                    <C>             <C>
      Petroleum and natural gas revenues:
            Canada                                                                     $  58,673       $ 65,872
            France                                                                        18,937         21,707
- ---------------------------------------------------------------------------------------------------------------
                                                                                       $  77,610       $ 87,579
- ---------------------------------------------------------------------------------------------------------------
      Net earnings:
            Canada (including Aventura loss from discontinued operations
               of $895 March 2003 net earnings of $763)                                $   3,506       $ (5,320)
            France                                                                         4,564          3,314
- ---------------------------------------------------------------------------------------------------------------
                                                                                       $   8,070       $ (2,006)
- ---------------------------------------------------------------------------------------------------------------
      Funds generated from operations:
            Canada                                                                     $  25,956       $ 25,686
            France                                                                         9,147         12,015
- ---------------------------------------------------------------------------------------------------------------
                                                                                       $  35,103       $ 37,701
- ---------------------------------------------------------------------------------------------------------------
      Capital expenditures:
            Canada                                                                     $   8,506       $ 10,940
            France                                                                         8,046          2,323
- ---------------------------------------------------------------------------------------------------------------
                                                                                       $  16,552       $ 13,263
- ---------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                       MARCH 31,    December 31,
                                                                                            2004           2003
- ---------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>             <C>
      Identifiable assets:
          Canada (including Aventura assets held for sale of $94,848
             December 31, 2003 - $94,156)                                              $ 542,496       $ 527,592
          France                                                                         239,139         236,426
- ----------------------------------------------------------------------------------------------------------------
                                                                                       $ 781,635       $ 764,018
- ----------------------------------------------------------------------------------------------------------------
</TABLE>


                                       21
- --------------------------------------------------------------------------------
<PAGE>

13.   CONTINGENCIES

      On September 25, 2001, Vermilion received a tax notice from the
      Direction Generale des Impots regarding the Company's wholly owned
      subsidiary in France, Vermilion REP S.A. The notice advises that the
      Company is liable for a registration fee that was owed at the time of
      the purchase of the French properties in 1997 in the amount of 4.5
      million Euro, including interest charges for late filing. The Company
      disagrees with the tax authorities position and is in the process of
      challenging the notice. At the present time the Company is unable to
      determine the likelihood that it will be required to pay the
      registration fee, and as such, no amount has been accrued in the
      consolidated financial statements at March 31, 2004.

14.   FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

      As a means of managing commodity price volatility, the Trust has entered
      into various financial instrument agreements and physical contracts as set
      out below.
<TABLE>
<CAPTION>

      OIL HEDGING                                  WTI                             BRENT
      FIXED PRICE SWAPS                   BBLS/D           US$/BBL          BBLS/D         US$/BBL
      --------------------------------------------------------------------------------------------
<S>                                        <C>              <C>              <C>            <C>
      2004 Average                         2,250            $24.35           2,250          $22.93
      2005 Average                         1,500            $24.80           1,500          $23.37
      GAS HEDGING                                                            floor         ceiling
      Costless collars                                        gj/d           c$/gj           c$/gj
      --------------------------------------------------------------------------------------------
      Q2 2004                                               17,500           $4.71           $6.64
      Q3 2004                                               17,500           $4.71           $6.64
      Q4 2004                                                5,897           $4.71           $6.64
      --------------------------------------------------------------------------------------------
      2004 Average                                          13,632           $4.71           $6.64
      2005 Average                                              --              --              --

<CAPTION>
      CURRENCY HEDGING                                                      US$/MO        EXCHANGE
                                                                           (000'S)            RATE
      --------------------------------------------------------------------------------------------
<S>                                                                         <C>              <C>
      2004                                                                  $2,670           $0.71
</TABLE>

      As discussed in Note 3, on January 1, 2004 the fair value of all
      outstanding derivative financial instruments that are not recorded as
      accounting hedges were recorded on the consolidated balance sheet with
      an offsetting amount to deferred charges. The deferred charge is
      recognized into revenue over the life of the associated contracts.
      Changes in fair value after that time are recorded on the consolidated
      balance sheet with the associated unrealized gain or loss recorded in
      net earnings.

      The estimated fair value of all derivative financial instruments is
      based on quoted market prices or, in their absence, third party market
      indications and forecasts. Unrealized gains or losses and realized
      gains or losses are recorded as a separate element of earnings. Of the
      total deferred charge of $14,427 recorded at January 1, 2004, $3,288,
      has been recognized as a charge to revenue in the three months ended
      March 31, 2004, and the balance will be recognized as follows:

      2004     Quarter 2         $2,596
               Quarter 3         $1,966
               Quarter 4         $1,859

      2005     Quarter 1         $1,173
               Quarter 2         $1,173
               Quarter 3         $1,186
               Quarter 4         $1,186


                                       22
- --------------------------------------------------------------------------------
<PAGE>

14.   FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

      The following table presents a reconciliation of the change in the
      unrealized amounts from January 1, 2004 to March 31, 2004:

<TABLE>
<CAPTION>
                                                                       MARK-TO-MARKET        TOTAL GAIN (LOSS)
                                                                       ---------------------------------------
<S>                                                                    <C>                   <C>
      Fair value of contracts, January 1, 2004                                $14,427             $         --
      Change in fair value of contracts still outstanding
         at March 31, 2004                                                      8,777                   (8,777)
      Contract settlements realized during the period                              --                   (5,500)
      Fair value of contracts entered into during the period                       --                       --
      --------------------------------------------------------------------------------------------------------
      Fair value of contracts outstanding, end of period                      $23,204                 $(14,277)
      --------------------------------------------------------------------------------------------------------
</TABLE>

      The total realized losses recognized in net earnings for three months
      ended March 31, 2004 was $5,500 ($3,366 net of tax).

      At March 31, 2004, the mark-to-market amounts are recorded in the
      consolidated balance sheet as follows:

<TABLE>
<CAPTION>
         <S>                                                                                          <C>
         Mark-to-Market
               Current asset                                                                          $  2,289
               Current liability                                                                       (18,719)
               Long-term liability                                                                      (6,774)
         -----------------------------------------------------------------------------------------------------
         Total mark-to-market                                                                         $(23,204)
         -----------------------------------------------------------------------------------------------------
</TABLE>

15.      SUBSEQUENT EVENTS

         On February 19, 2004 Vermilion announced the acquisition of producing
         properties in the Netherlands for $80.5 million cash. The properties
         include 5,900 boe/d of production, 14.3 mmboe of proven (P90) reserves
         and 17.4 mmboe of proven plus probable (P50) reserves in the
         Netherlands, and will be purchased by its wholly-owned subsidiary,
         Vermilion Oil & Gas Netherlands B.V. ("Vermilion Netherlands"),
         effective January 1, 2004. The transaction is subject to normal
         government and regulatory approvals and is expected to close in mid to
         late May 2004.

         The Company paid a cash deposit in the amount of 4,800 Euro
         (approximately $7,752) for the purchase of these assets in the
         Netherlands. The amount is shown as a deposit on the March 31, 2004
         consolidated balance sheet.

         Vermilion announced the formation of an international exploration
         company, Verenex Energy Inc. ("Verenex"), whose mandate will include
         the acceleration of Vermilion's exploration efforts in France.
         Vermilion anticipates that it will hold a controlling equity position
         in Verenex following an initial financing planned to be completed this
         spring.

         Vermilion plans to grant to Verenex participating interests in
         approximately 820,000 acres (net to Verenex) in France in the form of
         one offshore and six onshore exploratory permits, two of which are
         pending approval by the Government of France. Vermilion will retain a
         50% interest in the offshore permit and a 5% interest in the onshore
         permits, and will continue to hold all of its producing assets in
         France.

         In addition to the France exploration lands, Vermilion will transfer a
         royalty on a producing oil and gas asset in Alberta to Verenex. Under a
         proposed services agreement, Vermilion will also provide operational
         and administrative support to Verenex in France and Canada at
         competitive rates.


                                       23
<PAGE>

16.   COMPARATIVE FIGURES

      Certain of the prior period numbers have been reclassified to conform with
      the current period presentation.


FORWARD-LOOKING INFORMATION

This report contains forward-looking financial and operational information
including earnings, cash flow, production and capital expenditure projections.
These projections are based on the Trust's expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to, future commodity prices, exchange
rates, interest rates, geological risk, reserves risk, political risk, product
demand and transportation restrictions.

NON-GAAP MEASURES:

Included in this report are references to terms commonly used in the oil and gas
industry, such as cash flow and cash flow per share. These terms are not defined
by Generally Accepted Accounting Principles. Consequently, these are referred to
as non-GAAP measures. Cash flow, as discussed in this report, appears as a
separate caption on the Company's cash flow statement and is reconciled to both
net income and cash flow from operations.

For further information please contact:

Curtis W. Hicks, C.A., VP Finance & Chief Financial Officer, or Paul Beique,
Director Investor Relations 2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 781-9449;  Fax:
         (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com  www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>9
<FILENAME>ex99_6form40-f.txt
<DESCRIPTION>EXHIBIT 99.6
<TEXT>
                                                                    EXHIBIT 99.6
                                                                    ------------


                             VERMILION ENERGY TRUST
                      FIRST QUARTER REPORT - MARCH 31, 2004
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is management's discussion and analysis (MD&A) dated May 6, 2004,
of Vermilion's operating and financial results for the quarter ended March 31,
2004 compared with the corresponding period in the prior year. This discussion
should be read in conjunction with the Trust's audited consolidated financial
statements for the years ended December 31, 2003 and 2002, together with
accompanying notes, as contained in the Trust's 2003 Annual Report.

Oil and gas prices for the first quarter of 2004 remained strong in comparison
with the first quarter of 2003. The WTI reference price for oil averaged $35.15
US per bbl for the three month period, Dated Brent was $31.95 US per bbl and
AECO reference price for gas was $6.41 Cdn per mcf. This compares to $33.86 per
bbl for WTI, $31.53 per bbl for Brent and $8.33 per mcf, Cdn AECO for the first
three months of 2003. While oil prices were stronger this quarter over last, gas
prices were $1.92 Cdn AECO per mcf less than the first quarter 2003. The main
reason for the lower netbacks in the first quarter 2004 is the year over year
increase in the Cdn/US exchange rate resulting in lower realized Canadian dollar
oil prices. While the first quarter 2003 Cdn AECO prices were stronger than the
pricing in 2004, Vermilion's gas hedging in 2003 lowered our realized price to
make it very similar to 2004 pricing. In 2004, Vermilion's operating netback
equalled $21.61 per boe, down 11% over the $24.17 reported for the first three
months of 2003. The cash flow netback of $18.10 per boe for the first three
months was up 4% over the $17.35 recorded in 2003. Cash flow netbacks were
slightly stronger as 2003 netbacks included the impact of the one-time cash
costs incurred in the re-organization of Vermilion into a Trust.

Total revenues for the first quarter of 2004 were $77.6 million compared to
$87.6 million for the first quarter of 2003. Vermilion's combined crude oil &
NGL price was $40.14 per bbl for the first quarter of 2004, a decrease of 12%
over the $45.40 per bbl reported for the first quarter of 2003. The Canadian
dollar has strengthened considerably over the first quarter 2003 which accounts
for the Canadian dollar pricing decline in the first quarter 2004 as oil prices
are referenced in U.S. dollars. The natural gas price realized in the first
quarter of 2004 was $6.74 per mcf compared to $6.46 per mcf realized a year ago,
a 4% year-over-year increase. The impact of Vermilion's hedging program reduced
prices by $2.84 per boe on a combined basis for the three month period ended
March 31, 2004, compared to a hedging loss of $3.16 per boe in the first three
months of 2003. Net earnings in the quarter increased to $7.2 million ($0.12 per
unit) from a loss of $1.2 million ($(0.02) per unit) in the first quarter 2003.
Earnings in the quarter were affected by the new accounting policies adopted in
the quarter. The most significant changes to earnings were unit compensation
expense which added an additional expense of $4.14 per boe and the loss on
derivative instruments which decreased earnings by $6.22 per boe. The loss in
2003 came as a result of reorganization costs incurred in Vermilion's conversion
to a Trust.

Vermilion continues to manage its risk exposure through prudent commodity and
currency hedging strategies. Physical and financial natural gas contracts for
13,632 GJ/d remain in place for the calendar year of 2004 with various price
structures resulting in an average floor price of $4.71/GJ. Vermilion has WTI
hedges covering 2,250 bbls/d in 2004 at US$24.35/bbl; and 1,500 bbls/d in 2005
at US$24.80/bbl. Vermilion has Brent hedges covering 2,250 bbls/d in 2004 at
US$22.93/bbl; and 1,500 bbls/d in 2005 at US$23.37/bbl.

Vermilion has Canadian/US dollar currency swaps in place covering its oil hedge
positions for 2004 of US$32.0 million in currency hedges averaging approximately
US$0.71 per CDN dollar.

Total royalties, net of ARTC, increased to $9.67 per boe or 24.0% of sales in
the first quarter of 2004, compared with $9.54 per boe, or 22.5% of sales in the
first quarter of 2003. The increase on a per boe basis is due mostly to a
decrease in volumes from quarter to quarter. In France, royalties for the most
part are calculated on a unit of production basis and do not react to price
changes.

<PAGE>

Operating costs increased to $6.16 per boe in 2004 from $5.45 per boe in the
first quarter of 2003. In Canada, processing costs in the Peace River Arch area,
workovers designed to increase production and increased power costs resulting
from the strong gas prices in the year have contributed to the year over year
increase. Operating costs in the first quarter were 11% lower than the $6.90 per
boe reported for the fourth quarter of 2003.

General and administrative expenses for the year increased to $1.58 per boe from
$1.15 per boe in the first quarter of 2003. The increase is mainly due to a
reduction in the total costs capitalized combined with lower average production
volumes.

Interest expense decreased to $0.69 per boe for the first quarter of 2004 from
$0.95 per boe for the corresponding period in 2003 as a result of lower average
debt levels due to the December 2003 financing issue.

Depletion and depreciation expenses increased from $10.41 per boe in the first
quarter of 2003 to $10.85 per boe in 2004. The increase is due mainly to the
increased costs of finding reserves in Canada.

The Trust's current tax provision has increased to $1.24 per boe in the first
quarter of 2004 from $0.66 per boe in the first three months of 2003. The
current provision is based on an estimated $8 million tax liability in France
for the year, while in Canada, it is anticipated that there will be no current
taxes due. The recovery in future income taxes is a result of the taxable
portion of distribution payments made to unitholders. In the Trust's structure,
payments are made between the operating company and the Trust transferring both
income and future income tax liability to the unitholder. Therefore it is the
opinion of management that no cash income taxes in Canada are expected to be
paid by the operating company in the future, and as such, the future income tax
liability recorded on the balance sheet related to Canadian operations will be
recovered through earnings over time. During the period ended March 31, 2004, a
reduction in the Alberta corporate income tax rate was substantially enacted.
This reduction amounted to a recovery of future income taxes of approximately $2
million in the three months ended March 31, 2004.

A foreign exchange gain of $0.45 per boe was recorded for the first quarter of
2004 with a gain of $0.02 per boe in the first quarter of 2003. The gain is
related to the strengthening Euro and the resulting impact on working capital in
our France operations.

Capital spending for the first three months totalled $16.6 million compared to
$13.3 million spent in the first quarter of 2003. The capital for the first
quarter of 2004 was funded through cash flow and incremental bank debt and was
primarily spent on the eight wells drilled in the quarter including one drilling
operation and one completion operation in France.

Vermilion's debt (net of working capital) on March 31, 2004 was $85.7 million
including the book value of Aventura shares held as current assets. There were
no changes to Vermilion's credit facility in the first quarter. The facility
structure is comprised of a one year revolving period with a one year term to
follow with a final settlement payment required at the end of the second year.

Vermilion has established a reclamation fund to fund the payment of
environmental and site restoration costs for its assets. The reclamation fund
will be funded by Vermilion Resources and owned by the Trust. Contributions in
the first quarter totaled $0.4 million or $0.20 per boe of production in the
Trust. Contribution levels to the reclamation fund will be reviewed on a regular
basis and may be adjusted to ensure reclamation obligations associated with the
Trust's assets will be substantially funded when the costs are forecast to be
incurred.

Vermilion maintained monthly distributions at $0.17 per unit for the quarter
distributing a total of $30.3 million compared to $17.7 million for the same
period in 2003.

During the quarter over 400,000 units were issued on conversion of exchangeable
shares, unit rights exercised, bonus plan and distribution reinvestment plan.
Unitholders' capital increased during the

<PAGE>

quarter as a result of the issuance of those units. This increase in equity was
offset by cash distributions of $30.3 million in the first quarter.

CICA Accounting Guideline 13 (AcG-13), "Hedging Relationships", became effective
for fiscal years beginning on or after July 1, 2003. AcG-13 addresses the
identification, designation, documentation and effectiveness of hedging
transactions for the purposes of applying hedge accounting. It also establishes
conditions for applying or discontinuing hedge accounting. Under the new
guideline, hedging transactions must be documented and it must be demonstrated
that the hedges are sufficiently effective in order to continue hedge accounting
for positions hedged with derivatives. Vermilion is not applying hedge
accounting to its hedging relationships, electing instead to account for its
hedging activities on a mark-to-market basis. The fair value of derivatives in
the quarter resulted in a $6.22 pre-tax per boe reduction to earnings.

In the first quarter of 2004, Vermilion adopted the new CICA Handbook section
3110, "Asset Retirement Obligations." This standard focuses on the recognition
and measurement of liabilities related to legal obligations associated with the
retirement of property, plant and equipment. Under this standard, these
obligations are initially measured at fair value and subsequently adjusted for
the accretion of discount and any changes in the underlying cash flows. The
asset retirement cost is to be capitalized to the related asset and amortized
into earnings over time. The adoption of CICA Handbook section 3110 allows for
the cumulative effect of the change in accounting policy to be booked to
accumulated income with the restatement of prior period comparatives. The
adoption of the asset retirement obligation accounting policy, which has been
applied retroactively, resulted in a new line item to the income statement
called accretion expense which was $0.16 per boe in the first quarter.

The Trust has a Unit Rights Incentive Plan (the "Plan") for directors, officers
and employees. The exercise price of the rights granted may be reduced in future
periods under certain conditions. The amount of the reduction cannot be
reasonably estimated as it is dependent upon a number of factors. Therefore, it
is not possible to determine a fair value for the rights granted using a
traditional option-pricing model and compensation expense has been determined
based on the intrinsic value of the rights at the date of exercise or at the
date of the financial statements for unexercised rights. The Trust adopted the
provisions outlined in Section 3870 Stock Based Compensation of the CICA
Handbook in the period and applied the new policy retroactively. Unit
compensation expense in the quarter was $4.14 per boe.

The Trust made a strategic decision to sell its interest in Trinidad operations.
On May 6, 2004, the Trust completed the sale of the shares of its subsidiary,
Aventura, for gross proceeds of $164.6 million. As a result, the Trust realized
an estimated $63.2 million (net of tax) gain on the sale of shares, which will
be recorded in the second quarter. At March 31, 2004, Vermilion's interest in
Aventura was reflected as an asset held for sale on the balance sheet with the
consolidated earnings impact shown under discontinued operations. Accordingly
the prior years' results were re-stated in accordance with generally accepted
accounting policies. The earnings from discontinued operations in the quarter
amounted to $0.46 per boe.

The amounts recorded for depletion and depreciation of property, plant and
equipment and the provision for future site restoration and abandonment costs
are based on estimates. The ceiling test calculation is based on estimates of
proved reserves, production rates, oil and natural gas prices, future costs and
other relevant assumptions. By their nature, these estimates are subject to
measurement uncertainty, and the effect on the consolidated financial statements
from changes in such estimates in future years could be significant.

Effective January 1, 2004 the Trust adopted Accounting Guideline 16 "Oil and Gas
Accounting - Full Cost", which replaces Accounting Guideline 5 "Full Cost
Accounting in the Oil and Gas Industry". Accounting Guideline 16 ("AcG-16")
modifies how impairment is tested and is consistent with CICA section 3063
"Impairment of Long-lived Assets". Under AcG-16, impairment is recognized if the
carrying amount of the capital assets exceed the sum of the undiscounted cash
flows expected to result from the Trust's proved reserves.

<PAGE>

If the carrying value is not fully recoverable, the amount of impairment is
measured by comparing the carrying amounts of the capital assets to an amount
equal to the estimated net present value of future cash flows from proved plus
probable reserves. This calculation incorporates risks and uncertainties in the
expected future cash flows which are discounted using a risk-free rate. Any
excess carrying value above the net present value of the future cash flows would
be recorded as a permanent impairment.

Previously, impairment was tested based on undiscounted future net revenues
using proved reserves, and providing for future general and administrative
expenses, carrying costs, and taxes. The adoption of AcG-16 had no effect on the
Trust's financial results.

Vermilion has a pipeline transportation commitment that runs to October 31,
2005, and has minimum annual payment requirements of Cdn$0.1 million.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>10
<FILENAME>ex99_7form40-f.txt
<DESCRIPTION>EXHIBIT 99.7
<TEXT>
                                                                    EXHIBIT 99.7
                                                                    ------------


[GRAPHIC OMITTED]
[LOGO - VIKING ENERGY TRUST]



                                  PRESS RELEASE
                  YEAR END 2003 FINANCIAL AND OPERATING RESULTS
                                FEBRUARY 23, 2004

Vermilion Energy Trust ("Vermilion" or the "Trust") (VET.UN - TSX) is pleased to
report its 2003 fourth quarter and year-end financial and operating results.
These results include the consolidated results of Aventura Energy Inc.
("Aventura"), a 72.2% owned subsidiary. Where applicable, the results have been
segregated to reflect Aventura operations and those related to the Trust, as
Aventura does not currently contribute any cash flow or production to the
generation of the Trust's distributions.

Vermilion achieved a number of milestones in 2003 including:

>   Successful conversion from an exploration and production company into an
     energy trust, effective January 22, 2003. From inception as a trust to the
     end of the year, the Trust delivered a total return of 46.5%, comprised of
     30.6% in unit price appreciation and a 15.9% pre-tax return from
     distributions. The distribution level has been maintained at a constant
     $0.17 per unit per month since inception of the Trust.

>    Delivered consolidated production of 25,342 boe/d including 22,942 boe/d
     from the Trust's operations(1).

>    Following the completion of a second significant discovery well in
     Trinidad, Vermilion entered into discussions with a potential acquirer of
     Aventura Energy Inc. Should a transaction be concluded, the Trust would
     receive a substantial cash infusion which would initially be used to reduce
     outstanding indebtedness and eventually be applied towards the future
     acquisition of cash flow generating properties.

>    Successfully drilled and completed a new producing well in the Champotran
     field in France using under balanced drilling technology, the first time
     this technology has been used in France. Cased the La Torche 2 well,
     confirming the validity of a new seismic interpretation that has
     significantly expanded the reserve potential of the Champotran - La Torche
     region.

>    Although no property acquisitions were completed in 2003, the total proved
     plus probable (P50) reserves of the Trust declined by less than 5% in 2003
     from comparable established reserves reported at year-end 2002.

>    Successfully raised $85 million in early December ($81 million net to VET)
     through the issuance of six million Trust units at a price of $14.10 per
     unit.

(1)  Although Aventura's production and financial results are consolidated in
     the financial tables, these are not included as part of distributable funds
     for the Trust's unitholders.

CONFERENCE CALL

Vermilion will discuss these results in a conference call to be held on Tuesday,
February 24, 2004. The conference call will begin at 8:00 a.m. MST (10:00 a.m.
EST). To participate, you may call toll free 1-800-814-4853 or 1-416-640-4127
(Toronto area). The conference call will also be available on replay by calling
1-877-289-8525 or 1-416-640-1917 (Toronto area) using pass code 21037128
followed by the pound "#" key. The replay will be available until midnight
eastern time on March 2, 2004.


                                       1
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
HIGHLIGHTS
                                                         THREE MONTHS ENDED                   TWELVE MONTHS ENDED
- --------------------------------------------------------------------------------------------------------------------------------
                                                     TRUST      AVENTURA                       TRUST     AVENTURA
                                                 FINANCIAL        ENERGY       DEC 31,     FINANCIAL       ENERGY       DEC 31,
(UNAUDITED)                                    INFORMATION       INC.(3)          2003   INFORMATION      INC.(3)          2003
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>          <C>          <C>             <C>        <C>
FINANCIAL ($000 CDN. EXCEPT UNIT AND PER UNIT AMOUNTS)

Petroleum and natural gas revenues              $   70,437     $   3,029    $   73,466     $ 303,776      $11,796   $   315,572
Cash flow from operations                           34,534         1,709        36,243       145,421        5,721       151,142
  Per unit, basic (1)                                 0.57            --          0.60          2.48           --          2.58
Distributions (2)                                   27,943            --        27,943        98,929           --        98,929
  Per unit                                            0.51            --          0.51          1.87           --          1.87
  % cash flow distributed                               81%           --           77%           68%           --           65%
Capital expenditures                                27,269           526        27,795        66,919       13,941        80,860
Acquisitions (dispositions)                             --            --            --         5,761       (7,055)       (1,294)
Debt, net of working capital (surplus)                  --            --            --       141,180       (9,682)      131,498
Trust units outstanding (1)
  Basic                                                                                                              64,694,185
  Diluted                                                                                                            69,237,185
Weighted average trust units outstanding (1)
  Basic                                                                                                              58,600,290
  Diluted                                                                                                            59,093,044
Unit trading
  High                                                                       $   15.60                              $     15.60
  Low                                                                        $   14.07                              $     11.12
  Close                                                                      $   15.34                              $     15.34

OPERATIONS

Production
  Crude oil (bbls/d)                                10,375           340        10,715        10,761          337        11,098
  Natural gas liquids (bbls/d)                       1,808            --         1,808         1,935           --         1,935
  Natural gas (mcf/d)                               55,965        13,127        69,092        61,476       12,378        73,854
  Boe/d (6:1)                                       21,510         2,528        24,038        22,942        2,400        25,342
Average selling price
  Crude oil (per bbl, including hedging)        $    37.72     $   36.58    $    37.69     $   36.70$     $ 38.25   $     36.74
  Crude oil (per bbl, not including hedging)         42.27         36.58         42.09         41.15        38.25         41.06
  Natural gas liquids (per bbl)                      35.36            --         35.36         35.98           --         35.98
  Natural gas (per mcf, including hedging)            5.54          1.56          4.79          5.98         1.57          5.24
  Natural gas (per mcf, not including hedging)        5.54          1.56          4.79          6.09         1.57          5.33
Netbacks per boe (6:1)
  Operations netback                                 20.45          9.42         19.29         21.25         9.34         20.12
  Cash flow netback                                  17.45          7.35         16.39         17.37         6.53         16.34
  Cash flow netback excluding
    reorganization costs                                --            --            --         18.42           --         17.29
  Operating costs                                     6.90          2.22          6.41          6.11         2.66          5.78
  General and administrative                   $      1.31     $    2.94    $     1.48     $    1.24      $  1.78   $      1.29
</TABLE>

(1)  Includes trust units issuable for outstanding exchangeable shares based on
     the period end exchange ratio
(2)  Distributions are paid on issued trust units at each record date
(3)  The Trust owns 72.2% of the outstanding shares of Aventura, necessitating
     the consolidation of the results of the Trust and Aventura

OPERATIONAL ACTIVITIES

In Canada, the Trust drilled 11 wells (5.7 net) in the fourth quarter of 2003,
resulting in 11 (5.7 net) gas wells. For the full year the Trust drilled a total
of 23 wells (12.4 net) resulting in 19 gas wells (10.4 net) and 4 dry holes (2.0
net). Most of the Trust's drilling activity has been focused in the Drayton
Valley region of central Alberta.

In France, the Trust drilled and completed the Champotran 24 well and drilled
and cased the La Torche 2 well in the fourth quarter of 2003. The Champotran 24
well is producing at a stabilized rate of approximately 300 bopd. The La Torche
2 well is currently being completed. Well logs on the La Torche 2 confirmed a
new seismic interpretation that significantly expands the areal extent of the
existing pool.


                                       2
- --------------------------------------------------------------------------------
<PAGE>

RESERVES SUMMARY

Gilbert Laustsen Jung Associates Ltd. (GLJ), independent petroleum engineering
consultants in Calgary, has prepared the 2003 year-end reserve evaluation report
for the Trust. The new report is in compliance with new regulatory compliance
initiatives(1) (National Instrument 51-101). Under the new filing guidelines,
the Trust's proved reserves, before production, have been reduced by 1.5 mmboe
(2.1%), while the proved plus probable reserves (P50) have been increased by 4.4
mmboe (5.0%) as compared to established reserves reported for January 1, 2003.
After production of 8.4 mmboe in 2003, the Trust's proved plus probable (P50)
reserves declined by approximately 4.5% to 84.6 mmboe at January 1, 2004. Based
on anticipated average production rates for 2004 of 20,500 boe/d before
acquisitions, the Trust's effective reserve life index at January 1, 2004 for
proven (P90) reserves is 8.3 years and for proven plus probable reserves (P50)
is 11.3 years.

(1)  Prior year reserve categories included proved (which included proven,
     non-producing and proven undeveloped reserves), probable and established.
     Established reserves included proved reserves plus 50% of probable
     reserves. Under the new 51-101 guidelines, proven reserves are now
     qualified as those reserves that have a 90% chance of being exceeded at the
     reported level. Proved reserves, by definition, are conservative. Nine
     times out of ten actual reserves will be greater than the proved estimate.
     Proved plus probable reserves are defined as those reserves that have a 50%
     probability of being exceeded at the reported level. They are the best
     estimate, or the most realistic case. It is equally likely that the actual
     reserves will be higher or lower than the estimate. Though not directly
     comparable, proved plus probable (P50) reserves under the new guidelines
     should be close to what previously were referred to as established
     reserves.

The summary reserve statement and reserve reconciliation statement are included
below. Note that no reserves are shown at this time for the Trust's share of
Aventura Energy Inc. as it is anticipated these assets may be divested in the
near future, and are not related to the ongoing operation of the Trust.

<TABLE>
<CAPTION>
RESERVE SUMMARY TABLE (GROSS) (AS AT JANUARY 1, 2004)

                                                                                             CUMULATIVE CASH FLOW
                                                                                               (ESCALATED PRICES)
- -----------------------------------------------------------------------------------------------------------------
                                  LIGHT &
                                   MEDIUM      NATURAL
                                      OIL           GAS       NGL'S         6:1             UNDISC.           10%
                                   (MBBLS)         (BCF)     (MBBLS)      (MBOE)           ($000'S)       ($000'S)
- -----------------------------------------------------------------------------------------------------------------
CANADA
<S>                                <C>          <C>           <C>        <C>            <C>              <C>
Proven                             11,664       109,861       4,384      34,358         $   533,662      $352,926
Proven plus probable               15,007       151,847       5,924      46,239         $   712,259      $431,336
FRANCE
Proven                             27,666         3,201          --      28,200         $   295,649      $172,507
Proven plus probable               37,710         3,809          --      38,345         $   410,946      $209,220
COMBINED
Proven                             39,330       113,062       4,384      62,558         $   829,311      $525,433
Proven plus probable               52,717       155,656       5,924      84,584         $ 1,123,205      $640,556
</TABLE>

The net present value of the reserves shown above (cumulative cash flow) are
based on GLJ's escalating price and cost scenario, are presented for comparative
purposes only and are not representative of fair market value. These values do
not include any value for the Trust's share of the reserves of Aventura Energy
Inc. A more extensive discussion of reserves will be available in the Annual
Information Form that will be filed later this spring.






                                       3
- --------------------------------------------------------------------------------
<PAGE>

RESERVE RECONCILIATION TABLE (AS AT JANUARY 1, 2004)

                                                                            P-50
                                                                           TOTAL
                                                            P-90          PROVED
                                           PROVED          TOTAL            PLUS
                                        PRODUCING         PROVED     PROBABLE(1)
- --------------------------------------------------------------------------------
OIL (MSTB):
  CANADA
     Opening Balance:                      13,143         13,731         15,787
         Drilling additions                    20            262          1,231
         Technical revisions                 (457)          (535)          (127)
         Disposition                          (63)           (63)          (154)
         Production                        (1,731)        (1,731)        (1,731)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       10,912         11,664         15,007
- --------------------------------------------------------------------------------
  FRANCE
     Opening Balance:                      23,101         28,454         35,375
         Drilling additions                   432            868             --
         Technical revisions                  770            540          4,532
         Production                        (2,197)        (2,197)        (2,197)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       22,106         27,666         37,710
- --------------------------------------------------------------------------------
  COMBINED
     Opening Balance:                      36,244         42,185         51,162
         Drilling additions                   452          1,130          1,231
         Technical revisions                  313              6          4,405
         Disposition                          (63)           (63)          (154)
         Production                        (3,928)        (3,928)        (3,928)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       33,018         39,330         52,717
- --------------------------------------------------------------------------------

MARKETABLE GAS (MMCF):
  CANADA
     Opening Balance:                     109,680        143,900        178,450
         Drilling additions                 2,700          3,360          5,560
         Technical revisions                2,945        (11,094)        (4,518)
         Disposition                       (4,420)        (4,420)        (5,760)
         Production                       (21,885)       (21,885)       (21,885)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       89,020        109,861        151,847
- --------------------------------------------------------------------------------
  FRANCE
     Opening Balance:                       3,743          3,743          4,352
         Technical revisions                   11             11             11
         Production                          (553)          (553)          (553)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                        3,201          3,201          3,809
- --------------------------------------------------------------------------------
  COMBINED
     Opening Balance:                     113,423        147,643        182,801
         Drilling additions                 2,700          3,360          5,560
         Technical revisions                2,957        (11,082)        (4,506)
         Disposition                       (4,420)        (4,420)        (5,760)
         Production                       (22,439)       (22,439)       (22,439)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       92,221        113,062        155,656
- --------------------------------------------------------------------------------

NATURAL GAS LIQUIDS (MBBL):
  CANADA
     Opening Balance:                       4,238          5,627          6,926
         Drilling additions                    39            204            156
         Technical revisions                  196           (532)          (178)
         Disposition                         (209)          (209)          (273)
         Production                          (706)          (706)          (706)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                        3,558          4,384          5,924
- --------------------------------------------------------------------------------

(1)  The opening (P50) balances, as stated, reflect "established" reserves as
     reported as of January 1, 2003. Established reserves included proved
     reserves plus 50% of the probable reserves.



                                       4
- --------------------------------------------------------------------------------
<PAGE>

                                                                            P-50
                                                                           TOTAL
                                                            P-90          PROVED
                                           PROVED          TOTAL            PLUS
                                        PRODUCING         PROVED     PROBABLE(1)
- --------------------------------------------------------------------------------
OIL EQUIVALENT (MBBL) GAS AT 6:1
  CANADA
     Opening Balance:                      35,661         43,341         52,454
         Drilling additions                   509          1,026          2,313
         Technical revisions                  230         (2,915)        (1,058)
         Disposition                       (1,009)        (1,009)        (1,386)
         Production                        (6,085)        (6,085)        (6,085)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       29,307         34,358         46,239
- --------------------------------------------------------------------------------
  FRANCE
     Opening Balance:                      23,725         29,078         36,100
         Drilling additions                   432            868             --
         Technical revisions                  771            542          4,534
         Production                        (2,289)        (2,289)        (2,289)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       22,640         28,200         38,345
- --------------------------------------------------------------------------------
  COMBINED
     Opening Balance:                      59,385         72,419         88,554
         Drilling additions                   941          1,894          2,313
         Technical revisions                1,002         (2,373)         3,476
         Disposition                       (1,009)        (1,009)        (1,386)
         Production                        (8,374)        (8,374)        (8,374)
- --------------------------------------------------------------------------------
     CLOSING BALANCE                       51,946         62,558         84,584
- --------------------------------------------------------------------------------

(1)  The opening (P50) balances, as stated, reflect "established" reserves as
     reported as of January 1, 2003. Established reserves included proved
     reserves plus 50% of the probable reserves.

<TABLE>
<CAPTION>
PRODUCTION SUMMARY (6:1)

                                  THREE MONTHS ENDED DEC 31, 2003          TWELVE MONTHS ENDED DEC 31, 2003
- -----------------------------------------------------------------------------------------------------------------
                                      Oil &     Natural                         Oil &     Natural
                                       NGLs         Gas     TOTAL                NGLs         Gas     TOTAL
                                   (BBLS/D)    (MMCF/D)   (BOE/D)            (BBLS/D)    (MMCF/D)   (BOE/D)      %
- ------------------------------------------------------------------------------------------------------------------
VERMILION ENERGY TRUST
<S>                                <C>          <C>       <C>                 <C>         <C>       <C>        <C>
     Canada                           6,028       54.27    15,073               6,678       59.96    16,671     66
     France                           6,155        1.69     6,437               6,018        1.51     6,271     25
- ------------------------------------------------------------------------------------------------------------------
     TOTAL                           12,183       55.96    21,510              12,696       61.47    22,942     91
- ------------------------------------------------------------------------------------------------------------------

AVENTURA ENERGY INC.
     Trinidad                           340       13.13     2,528                 337       12.38     2,400      9
- ------------------------------------------------------------------------------------------------------------------

CONSOLIDATED                         12,523       69.09    24,038              13,033       73.85    25,342    100
==================================================================================================================
</TABLE>

Fourth quarter production in Canada averaged 6,028 bbls/d of oil and natural gas
liquids and 54.27 mmcf/d of natural gas compared to 6,397 bbls/d and 57.62
mmcf/d in the third quarter. The drop in production was due to a combination of
natural declines and the impact of the TransCanada pipeline interruptions, which
resulted in a three-week loss of approximately 700 boe/d from the Trust's Peace
River Arch region.


                                       5
- --------------------------------------------------------------------------------
<PAGE>

In France the Trust produced 6,155 bbls/d of oil and 1.69 mmcf/d in the fourth
quarter compared with 5,825 bbls/d and 1.59 mmcf/d in the previous quarter.

<TABLE>
<CAPTION>
DRILLING ACTIVITY (# OF WELLS)
                                    THREE MONTHS ENDED DEC 31, 2003              TWELVE MONTHS ENDED DEC 31, 2003
- -----------------------------------------------------------------------------------------------------------------
                                              GROSS            (NET)                        GROSS             (NET)
<S>                                          <C>            <C>                            <C>            <C>
CANADA
     Oil                                          0            (0.0)                            0             (0.0)
     Gas                                         11            (5.7)                           19            (10.4)
     D&A                                          0            (0.0)                            4             (2.0)
- -------------------------------------------------------------------------------------------------------------------
TOTAL                                            11            (5.7)                           23            (12.4)
===================================================================================================================
FRANCE
     Oil                                          2            (2.0)                            2             (2.0)
     Gas                                          0            (0.0)                            0             (0.0)
     D&A                                          0            (0.0)                            0             (0.0)
- -------------------------------------------------------------------------------------------------------------------
TOTAL                                             2            (2.0)                            2             (2.0)
===================================================================================================================
COMBINED
     Oil                                          2            (2.0)                            2             (2.0)
     Gas                                         11            (5.7)                           19            (10.4)
     D&A                                          0            (0.0)                            4             (2.0)
- -------------------------------------------------------------------------------------------------------------------
TOTAL                                            13            (7.7)                           25            (14.4)
===================================================================================================================
</TABLE>

In addition to its own operational activity, Vermilion had 23 wells drilled on
its lands in Canada in 2003 (eight wells in the fourth quarter) through farm-out
arrangements in which Vermilion maintained either a small working interest or a
gross overriding royalty interest. The Trust will continue to pursue third party
activity on its undeveloped land base through drilling at locations that are not
compatible with Vermilion's capital development strategy. This has the potential
to create economic value in the form of overriding royalty income.

FINANCIAL

The Trust generated cash flow of $34.5 million in the fourth quarter 2003 ($0.57
per unit) compared to $34.0 million in the third quarter 2003. For 2003, the
Trust's cash flow totalled $145.4 million ($2.48 per unit). The Trust
distributed $27.9 million in the fourth quarter (80.9% of cash flow) and $98.9
million for the full year (68.0% of cash flow). Capital expenditures totalled
$27.3 million for the fourth quarter and $66.9 million for the year ended
December 31, 2003. The Trust's total debt, net of working capital (assignable to
the Trust) at year-end was $141.2 million. Vermilion successfully completed the
issue of 6.05 million units at $14.10 per unit in December 2003.




                                       6
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CAPITAL EXPENDITURES ($000'S)

                                            THREE MONTHS ENDED DEC 31, 2003      TWELVE MONTHS ENDED DEC 31, 2003
- -----------------------------------------------------------------------------------------------------------------------
                                                     AVENTURA                                  AVENTURA
                                            TRUST      ENERGY                         TRUST      ENERGY
                                           ASSETS        INC.    CONSOLIDATED        ASSETS        INC.    CONSOLIDATED
- -----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>         <C>            <C>         <C>             <C>
Land                                     $    641       $  --       $     641      $  1,520    $     --        $  1,520
Seismic                                       235          --             235         1,272          --           1,272
Drilling and completion                    18,705          --          18,705        31,695          --          31,695
Production equipment and facilities         4,212          --           4,212        11,887          --          11,887
Workovers                                     857          --             857        12,861          --          12,861
Trinidad                                        -         526             526         1,804      13,941          15,745
OTHER                                       2,619          --           2,619         5,880          --           5,880
- -----------------------------------------------------------------------------------------------------------------------
                                           27,269         526          27,795        66,919      13,941          80,860
PROPERTY ACQUISITIONS (DISPOSITIONS)            -          --              --         5,761      (7,055)         (1,294)
- -----------------------------------------------------------------------------------------------------------------------
                                         $ 27,269       $ 526       $  27,795      $ 72,680    $  6,886        $ 79,566
=======================================================================================================================
</TABLE>

AVENTURA ENERGY INC.

On September 15th, 2003 Aventura announced that it was in negotiations with a
potential acquirer of all the outstanding shares of Aventura Energy Inc. The
completion of the proposed transaction is dependent upon the parties reaching
agreement on all terms as well as satisfying a number of conditions precedent
including obtaining government and other approvals in Trinidad. These
negotiations are ongoing.

The Aventura properties continue to produce at market restricted gross rates of
approximately 20 mmcf/d of gas and 500 bop/d of associated liquids.

DISTRIBUTION TAXABILITY

Of the Trust's distributions in 2003, which amounted to $98.9 million,
unitholders will be taxed for 82.0% as other income. The balance, considered to
be a return of capital, is tax deferred and will serve to reduce unitholders
adjusted cost base of Trust units owned. The taxable amount has increased from
Vermilion's original forecast at the time it converted to a Trust due to the
higher commodity price environment experienced in 2003.

OUTLOOK

Vermilion successfully completed its first year operating as a Trust, and is
encouraged by the prospects for 2004. Along with the potential divestment of
Aventura, the Trust is working towards the monetization of some of its
exploration lands in France. These lands hold significant reserve and production
potential that may be accelerated through the establishment of a new exploration
entity. Vermilion will provide unitholders with significant exposure to the
potential value of these assets while exposing limited amounts of capital
funding from the Trust.

Vermilion continues to evaluate domestic and international acquisition
opportunities that would enhance the Trust's ability to maintain a stable
distribution policy. The Trust has established a capital expenditure program for
2004 of $45 million that can be fully funded from cash flow and existing credit
lines. Approximately $20 million of this budget is earmarked for the Trust's
operations in France. The drilling program scheduled for 2004 is similar to that
of 2003, while additional capital projects will target studies and initial
expenditures related to secondary recovery activities in both Canada and France.

Vermilion has established that non-residents own approximately 30% of its issued
and outstanding units (not including exchangeable shares) and 27% if the
exchangeable shares are included. This compares to 33% and 30%, respectively, at
the end of the third quarter. Pursuant to Vermilion's Trust Indenture,
non-resident unitholders may not own more than 50% of the total outstanding
trust units. The Trust will continue to ensure that it complies with all
requirements under its Trust Indenture, including Canadian ownership
requirements.


                                       7
- --------------------------------------------------------------------------------
<PAGE>

Vermilion announced on February 19th, 2004 the signing of an agreement to
purchase 5,900 boe/d of production, 14.3 mmboe of proven (P90) reserves and 17.4
mmboe of proven plus probable (P50) reserves in the Netherlands by its
wholly-owned subsidiary, Vermilion Oil & Gas Netherlands B.V. ("Vermilion
Netherlands") for Euro48.3 million (Cdn$80.5 million) effective January 1, 2004.
The transaction is subject to normal government and regulatory approvals and is
expected to close on or before May 1, 2004. The full details of this transaction
are included in Vermilion's February 19th press release available on our
website.

The proposed acquisition will expand the Trust's opportunity base in Western
Europe, reinforcing Vermilion's vision to be recognized as the premier Canadian
based international energy trust. The transaction also reflects Vermilion's
continuous efforts to add high quality properties at a reasonable cost.
Vermilion Netherlands will assume full operatorship of these properties,
consistent with the Trust's stated objectives, which will facilitate the control
of capital and operating costs. The Trust believes it will be able to minimize
production decline from these properties through the use of production
optimization efforts and, longer term, through future drilling. The proposed
acquisition of these high quality, high netback assets at an attractive price
demonstrates the advantage of Vermilion's commitment to a geographically
diverse, value-driven approach. The transaction will further enhance our role as
a competitive producer in Western Europe. Following this transaction, 45% of
Vermilion's production will be sourced from European operations with the balance
in Western Canada.


MANAGEMENT'S DISCUSSION AND ANALYSIS

THE TWELVE MONTHS ENDED DECEMBER 31, 2003 REPRESENTS THE FIRST YEAR OF
VERMILION'S OPERATION AS A TRUST. AS VERMILION ENERGY TRUST WAS CREATED THROUGH
THE RE-ORGANIZATION OF VERMILION RESOURCES LTD., THE HISTORICAL RESULTS OF
VERMILION RESOURCES LTD. WILL REPRESENT THE HISTORICAL RESULTS OF THE TRUST FOR
COMPARATIVE PURPOSES.

Oil and gas prices for 2003 were strong in comparison with the price levels
experienced in 2002. The WTI reference price for oil averaged $31.04 US per bbl
for the year, Dated Brent was $28.84 US per bbl and AECO reference price for gas
was $6.69 Cdn per mcf. This compares to $25.83 per bbl for WTI, $24.98 per bbl
for Dated Brent and $4.07 per mcf, Cdn AECO for 2002. These year over year price
increases are the main drivers behind the increase in netbacks in 2003 as
compared to 2002. In 2003, Vermilion's operating netback equalled $20.12 per
boe, up 3% over the $19.59 reported for 2002. The cash flow netback of $16.34
per boe for the year was down 3% over the $16.83 recorded in 2002. The 2003 cash
flow netbacks were reduced by $0.95 per boe for the year as a result of the
impact of the cash costs incurred in the re-organization of Vermilion into a
trust. The 2003 fourth quarter operating and cash flow netbacks totalled $19.29
and $16.39 per boe, respectively. These compare to 2002 fourth quarter operating
and cash flow netbacks equal to $21.58 and $22.73 per boe, respectively.

Total revenues for the year ended 2003 were $315.6 million compared to $287.5
million for the year ended 2002 and $73.5 million in the fourth quarter of 2003
compared to $83.4 million for the corresponding reporting period in 2002.
Vermilion's combined crude oil & NGL price was $40.31 per bbl for the year ended
2003, an increase of 13% over the $35.80 per bbl reported for the year ended
2002. The fourth quarter price was $41.12 per bbl compared to $38.05 per bbl a
year ago. The natural gas price realized in 2003 was $5.33 per mcf compared to
$4.29 per mcf realized a year ago, a 24% year-over-year increase. The fourth
quarter price of $4.79 per mcf was 11% less than the $5.41 per mcf for the same
period of 2002. Tempering these results was the impact of Vermilion's hedging
program, whereby prices were reduced by $2.16 per boe on a combined basis for
the year ended December 31, 2003, compared to a hedging loss of $0.40 per boe in
2002. Gas prices were reduced on average by $0.09 per mcf over the year ended
December 31, 2003, with fourth quarter prices not impacted by the Trust's
natural gas collar.


                                       8
- --------------------------------------------------------------------------------
<PAGE>

Vermilion continues to manage its risk exposure through prudent commodity and
currency hedging strategies. Physical and financial natural gas contracts for
12.1 mmcf/d remain in place for the calendar year of 2004 with various price
structures resulting in an average floor price of $5.34/mcf. Vermilion has WTI
hedges covering 2,250 bbls/d in 2004 at US$24.35/bbl; and 1,500 bbls/d in 2005
at US$24.80/bbl. Vermilion has Brent hedges covering 2,250 bbls/d in 2004 at
US$22.93/bbl; and 1,500 bbls/d in 2005 at US$23.37/bbl.

Vermilion has Canadian/US dollar currency swaps in place for 2004 of US$32.0
million at an average of approximately US$0.71 per CDN dollar.

Total royalties, net of ARTC, increased to $8.22 per boe or 22.7% of sales in
the year ended 2003, compared with $6.56 per boe, or 21.1% of sales in 2002. The
quarter over quarter amounts were $7.52 per boe in 2003 and $7.56 per boe for
the same period in 2002. The increase for the full year is due directly to the
increase in prices explained above as royalties are price sensitive in Canada
and calculated as a percentage of revenue. Fourth quarter pricing was similar
year over year and royalties were similar as well. In France, royalties for the
most part are calculated on a unit of production basis and do not react to price
changes.

Operating costs increased to $5.78 per boe in 2003 from $4.60 per boe in 2002.
Operating costs for the fourth quarter of the year were $6.41 per boe in
comparison to $5.29 for the fourth quarter of 2002. In Canada, processing costs
in the Peace River Arch area, workovers designed to increase production and
increased power costs resulting from the strong gas prices in the year have
contributed to the year over year increase. The temporary shut-in of production
at Shane also contributed to higher per unit costs as volumes were reduced. In
addition to these factors, per unit operating costs are higher in 2003 due to
the reorganization into a Trust and the impact of lower cost production
allocated to Clear Energy Inc. Fourth quarter per unit costs in 2003 reflect a
reduction in volumes due to pipeline interruptions combined with the fire at the
Granada gas plant.

In France, power costs continue to rise and the strengthening Euro also
contributed to the increase in operating costs when converted to Canadian
dollars.

General and administrative expenses for the year increased to $1.29 per boe from
$1.00 per boe in 2002. The fourth quarter number for 2003 of $1.48 is increased
over the fourth quarter 2002 number of $0.84. The increase in the fourth quarter
is due to the timing of incurring certain one time costs.

Reorganization costs of $25.6 million relate to Vermilion's decision to convert
to a trust. Included in this amount are $8.8 million in transaction costs, which
include investment banking fees as well as all accounting and legal fees,
related to the conversion. Also included is $16.8 million representing the value
of trust units issued in exchange for the cancellation of all outstanding
employee options. All of these costs were incurred in the first quarter of 2003.

Interest expense increased to $0.93 per boe for the year ended 2003 from $0.60
per boe for the corresponding period in 2002 as a result of higher average debt
levels. The quarter over quarter increase was $0.26 per boe from $0.68 per boe
in the fourth quarter of 2002 to $0.94 in 2003.

Depletion and depreciation expenses increased from $10.13 per boe in 2002 to
$10.31 per boe in 2003. The quarter over quarter numbers were $10.45 in the
fourth quarter of 2003 as compared to $10.44 a year ago. Included in depletion
and depreciation is a $1.4 million charge representing the loss on the sale of
Aventura's interest in assets in Argentina. Aventura's assets are now focused
exclusively in Trinidad.



                                       9
- --------------------------------------------------------------------------------
<PAGE>

The Trust's current tax provision has decreased to $0.58 per boe in 2003 from
$1.17 per boe in 2002. The fourth quarter provision is $0.39 per boe in 2003 and
a ($2.64) recovery in 2002 which was related to a fourth quarter revision of
estimates in France. The current provision is based on an estimated $4.6 million
tax liability in France for the year, while in Canada, it is anticipated that
there will be no current taxes due. A reduction in tax rates for Canadian
resource activities resulted in a recovery of future income taxes pushing
earnings to $56.7 million for the year ended 2003. Adding to this recovery is
the taxable portion of distribution payments made to unitholders. In the Trust's
structure, payments are made between the operating company and the Trust
transferring both income and future income tax liability to the unitholder.
Therefore it is the opinion of management that no cash income taxes in Canada
are expected to be paid by the operating company in the future, and as such, the
future income tax liability recorded on the balance sheet related to Canadian
operations will be recovered through earnings over time.

Unrealized foreign exchange loss increased to $0.48 per boe and $0.97 per boe
for the year ended 2003 and fourth quarter of 2003 respectively from a $0.07
gain in 2002 and a gain of $0.29 per boe in the fourth quarter 2002. The
increased loss relates to a loss on $US cash held in France combined with
Aventura's loss on its working capital related to its operations in Trinidad.

Capital spending for the year totalled $79.6 million including $66.9 million
invested on the Trust's asset base with the balance being Aventura's capital
program in Trinidad. This compares to $234.1 million spent in 2002, $31.0
million of which was for the corporate acquisition of Artemis Energy Limited and
$66.3 million of which was for the purchase of a 40% participating interest in,
and operatorship of the Central Block onshore Trinidad. The capital for the year
ended 2003 was funded entirely through a combination of cash flow and
incremental debt. Net proceeds totalling $81 million from an equity offering of
Trust units in December 2003 whereby the Trust issued six million units at
$14.10 per unit were used to reduce outstanding indebtedness.

Vermilion's debt (net of working capital) on December 31, 2003 was $131.5
million. During the year, Vermilion's credit facility with its banking syndicate
was amended to provide a $240 million credit facility effective December 31,
2003. The amended loan facility remains with the same syndicate of lenders with
no change to the terms and security provisions. The facility structure is
comprised of a one year revolving period with a one year term to follow with a
final settlement payment required at the end of the second year.

DISTRIBUTION TAXABILITY

Of the Trust's distributions in 2003, which amounted to $98.9 million, 82.0%
will be taxed in the unitholders hands as other income. The balance, considered
to be a return of capital, is tax deferred and will serve to reduce unitholders
adjusted cost base of Trust units owned.



                                       10
<PAGE>

<TABLE>
<CAPTION>
NETBACKS (6:1)
                                                                                                                THREE      TWELVE
                                                                                                               MONTHS      MONTHS
                                                       THREE MONTHS                      TWELVE MONTHS          ENDED       ENDED
                                            ENDED DECEMBER 31, 2003           ENDED  DECEMBER 31, 2003      DEC 31/02   DEC 31/02
                               ---------------------------------------------------------------------------------------------------
                                    Oil &       Natural                   Oil &     Natural
                                     NGLs           Gas       TOTAL        NGLs         Gas       TOTAL         Total       Total
                                    $/bbl         $/mcf       $/BOE       $/bbl       $/mcf       $/BOE         $/boe       $/boe
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>          <C>         <C>          <C>         <C>        <C>           <C>
TRUST FINANCIAL INFORMATION
CANADA
Price                              $46.06         $5.57      $38.48      $44.75       $6.12      $39.93        $35.73      $29.96
Hedging loss                        (4.22)           --       (1.69)      (4.01)      (0.11)      (2.01)        (0.98)      (0.43)
Royalties (net)                     (9.00)        (1.69)      (9.70)      (9.48)      (1.89)     (10.59)        (8.54)      (7.29)
Lifting costs                       (8.20)        (1.07)      (7.12)      (6.72)      (0.87)      (5.82)        (4.86)      (4.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $24.64         $2.81      $19.97      $24.54       $3.25      $21.51        $21.35      $18.23
- ---------------------------------------------------------------------------------------------------------------------------------
FRANCE
Price(1)                           $36.54         $4.75      $36.19      $35.49       $5.00      $35.27        $34.81      $34.82
Hedging loss                        (3.54)           --       (3.39)      (3.51)         --       (3.37)        (1.37)      (0.30)
Royalties (net)                     (4.97)        (0.24)      (4.81)      (4.62)      (0.24)      (4.49)        (4.61)      (4.32)
Lifting costs                       (6.48)        (0.73)      (6.39)      (6.63)      (2.11)      (6.88)        (6.58)      (6.40)
- ---------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $21.55         $3.78      $21.60      $20.73       $2.65      $20.53        $22.25      $23.80
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL TRUST
Price                              $41.25         $5.54      $37.79      $40.36       $6.09      $38.66        $35.51      $31.15
Hedging loss                        (3.88)           --       (2.20)      (3.77)      (0.11)      (2.38)        (1.08)      (0.40)
Royalties (net)                     (6.96)        (1.65)      (8.24)      (7.17)      (1.85)      (8.92)        (7.56)      (6.56)
Lifting costs                       (7.33)        (1.05)      (6.90)      (6.68)      (0.90)      (6.11)        (5.29)      (4.60)
- ---------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $23.08         $2.84      $20.45      $22.74       $3.23      $21.25        $21.58      $19.59
- ---------------------------------------------------------------------------------------------------------------------------------
AVENTURA FINANCIAL INFORMATION
Price                              $36.58         $1.56      $13.03      $38.25       $1.57      $13.47            --          --
Hedging loss                           --            --          --          --          --          --            --          --
Royalties (net)                     (4.74)        (0.14)      (1.39)      (4.71)      (0.15)      (1.47)           --          --
Lifting costs                          --         (0.43)      (2.22)         --       (0.52)      (2.66)           --          --
- ---------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $31.84         $0.99     $  9.42      $33.54       $0.90     $  9.34            --          --
- ---------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED
Price                              $41.12         $4.79      $35.18      $40.31       $5.33      $36.28        $35.51      $31.15
Hedging loss                        (3.77)           --       (1.96)      (3.68)      (0.09)      (2.16)        (1.08)      (0.40)
Royalties (net)                     (6.90)        (1.36)      (7.52)      (7.11)      (1.56)      (8.22)        (7.56)      (6.56)
Lifting costs                       (7.13)        (0.94)      (6.41)      (6.51)      (0.84)      (5.78)        (5.29)      (4.60)
- ---------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $23.32         $2.49      $19.29      $23.01       $2.84      $20.12        $21.58      $19.59
- ----------------------------------------------------------------------------------------------------------------------------------
General and administrative                                    (1.48)                              (1.29)        (0.84)      (1.00)
Reorganization costs                                             --                               (0.95)           --          --
Interest                                                      (0.94)                              (0.93)        (0.68)      (0.60)
Foreign exchange                                              (0.09)                              (0.03)         0.03        0.01
Current and capital taxes                                     (0.39)                              (0.58)         2.64       (1.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Cash flow netback                                            $16.39                              $16.34        $22.73      $16.83
- ---------------------------------------------------------------------------------------------------------------------------------
Depletion and depreciation                                   (10.45)                             (10.31)       (10.44)     (10.13)
Future income taxes                                            0.48                                2.49         (6.70)      (2.26)
Deferred financing charges                                    (0.12)                              (0.06)        (0.08)      (0.08)
Foreign exchange                                              (0.97)                              (0.48)         0.29        0.07
Non-controlling interest                                      (0.11)                              (0.03)        (0.10)      (0.01)
Trust units issued                                               --                               (1.82)           --          --
- ---------------------------------------------------------------------------------------------------------------------------------
Earnings netback                                            $  5.22                             $  6.13       $  5.70     $  4.42
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Price includes a $0.78 Q4 increase, $0.41 year to date increase due to
     inventory valuation at cost (GAAP) versus market


                                       11
- --------------------------------------------------------------------------------
<PAGE>

CONSOLIDATED BALANCE SHEETS
($000'S, UNAUDITED)

                                                  DECEMBER 31,      December 31,
                                                          2003              2002
- --------------------------------------------------------------------------------

ASSETS

Current
       Cash and cash equivalents                     $  53,351        $  32,562
       Accounts receivable                              39,640           56,582
       Crude oil inventory                               3,477            3,207
       Prepaid expenses and other                        2,966            4,699
- -------------------------------------------------------------------------------
                                                        99,434           97,050

Reclamation fund                                         1,678               --
Deferred financing costs                                    --              435
Deferred reorganization costs                               --            2,324
Capital assets                                         688,144          711,902
- -------------------------------------------------------------------------------
                                                      $789,256         $811,711
===============================================================================

LIABILITIES AND UNITHOLDERS' EQUITY

Current
       Accounts payable and accrued liabilities      $  79,937        $  79,817
       Distributions payable to unitholders             10,065               --
       Income taxes payable                              5,372           10,977
- -------------------------------------------------------------------------------
                                                        95,374           90,794

Long-term debt                                         135,558          193,025
Provision for future site restoration                   13,514           11,169
Future income taxes                                    152,993          171,094
- -------------------------------------------------------------------------------
                                                       397,439          466,082
- -------------------------------------------------------------------------------
Non-controlling interest                                29,598           21,321
- -------------------------------------------------------------------------------

Unitholders' Equity
       Unitholders' capital                            209,379          140,557
       Exchangeable shares                              11,276               --
       Accumulated earnings                            240,493          183,751
       Accumulated cash distributions                  (98,929)              --
- -------------------------------------------------------------------------------
                                                       362,219          324,308
- -------------------------------------------------------------------------------
                                                      $789,256         $811,711
===============================================================================



                                       12
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
($000'S, EXCEPT PER UNIT AMOUNTS, UNAUDITED)

                                                                 THREE MONTHS ENDED             TWELVE MONTHS ENDED
                                                               DEC 31        Dec 31          DEC 31         Dec 31
                                                                 2003          2002            2003           2002
- ------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>            <C>            <C>
Revenue:
       Petroleum and natural gas revenue                    $  73,466       $83,354        $315,572       $287,540
       Royalties (net)                                         16,621        18,308          76,002         61,332
- ------------------------------------------------------------------------------------------------------------------
                                                               56,845        65,046         239,570        226,208
- ------------------------------------------------------------------------------------------------------------------
Expenses:
       Production                                              14,180        12,804          53,493         42,976
       Interest                                                 2,331         1,820           9,179          6,286
       General and administrative                               3,281         2,038          11,931          9,392
       Reorganization costs                                        --            --          25,628             --
       Foreign exchange loss (gain)                             2,361          (748)          4,630           (741)
       Depletion and depreciation                              23,113        25,269          95,398         94,737
- ------------------------------------------------------------------------------------------------------------------
                                                               45,266        41,183         200,259        152,650
- ------------------------------------------------------------------------------------------------------------------

Earnings before income taxes and other item                    11,579        23,863          39,311         73,558

Income taxes (recovery):
       Future                                                  (1,054)       16,219         (23,044)        21,121
       Current                                                    651        (6,505)          4,611         10,126
       Capital                                                    204           104             761            851
- ------------------------------------------------------------------------------------------------------------------
                                                                 (199)        9,818         (17,672)        32,098
Other item:
       Non-controlling interest                                   242           237             241            138
- ------------------------------------------------------------------------------------------------------------------

Net earnings                                                   11,536        13,808          56,742         41,322
Excess of consideration paid over stated value
   of shares purchased                                             --          (128)             --           (468)
Accumulated earnings, beginning of period                     228,957       170,071         183,751        142,897
- ------------------------------------------------------------------------------------------------------------------

Accumulated earnings, end of period                          $240,493      $183,751        $240,493       $183,751
==================================================================================================================

Net earnings per trust unit:
       Basic                                                 $   0.19      $   0.25        $   0.97       $   0.74
       Diluted                                               $   0.19      $   0.24        $   0.96       $   0.73
</TABLE>


                                       13
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000'S, UNAUDITED)
                                                                       THREE MONTHS ENDED       TWELVE MONTHS ENDED
                                                                     DEC 31        Dec 31      DEC 31       Dec 31
                                                                       2003          2002        2003         2002
- ------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>            <C>        <C>          <C>
Cash and cash equivalents provided by (used in):
Operating
       Net earnings                                               $  11,536      $ 13,808   $  56,742    $  41,322
       Items not affecting cash and cash equivalents:
         Depletion and depreciation                                  23,113        25,269      95,398       94,737
         Unrealized foreign exchange loss (gain)                      2,149          (683)      4,398         (666)
         Amortized deferred financing costs                             257           184         590          713
         Non-controlling interest                                       242           237         241          138
         Trust units issued on cancellation of
            employee stock options                                       --            --      16,817           --
         Future income taxes (recovery)                              (1,054)       16,219     (23,044)      21,121
- ------------------------------------------------------------------------------------------------------------------
       Cash flow from operations                                     36,243        55,034     151,142      157,365
       Site restoration costs incurred                                 (731)         (425)     (2,034)        (990)
       Changes in non-cash working capital                           19,113       (12,474)     14,931      (11,730)
- ------------------------------------------------------------------------------------------------------------------
                                                                     54,625        42,135     164,039      144,645
- ------------------------------------------------------------------------------------------------------------------
Investing
       Disposition (acquisition) of capital assets                       --            --       1,294      (23,433)
       Drilling and development of petroleum and
         natural gas properties                                     (27,795)      (34,616)    (80,860)    (113,311)
       Corporate acquisitions                                            --            --          --      (87,601)
       Contributions to reclamation fund                             (1,123)           --      (1,678)          --
- ------------------------------------------------------------------------------------------------------------------
                                                                    (28,918)      (34,616)    (81,244)    (224,345)
- -------------------------------------------------------------------------------------------------------------------
Financing
       Issue of Trust units for cash, net of unit issue costs        80,752            --      80,752           --
       Cash distributions                                           (26,799)           --     (88,864)          --
       (Decrease) increase in long-term debt                        (59,291)       (8,390)    (57,467)      91,972
       Issue of Trust units pursuant to distribution
         reinvestment plan                                            2,858            --       6,209           --
       Increase in deferred financing charges                            --            --        (155)        (136)
       Issue of common shares for cash,
         net of share issue costs                                        --            56       1,201        4,660
       Cash acquired on increased investment in subsidiary              127         5,637         421        8,467
       Repurchase of common shares for cash                              --            --          --         (717)
- ------------------------------------------------------------------------------------------------------------------
                                                                     (2,353)      (2,697)     (57,903)     104,246
- ------------------------------------------------------------------------------------------------------------------
       Foreign exchange gain (loss) on cash held
         In foreign currencies                                       (3,533)        2,034      (4,103)       1,300
- ------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents                              19,821         6,856      20,789       25,846
Cash and cash equivalents, beginning of period                       33,530        25,706      32,562        6,716
- ------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                          $  53,351       $32,562     $53,351      $32,562
- ------------------------------------------------------------------------------------------------------------------

Cash payments:
       Interest                                                   $   2,785      $  1,125     $10,080      $ 5,647
       Taxes                                                      $     17       $      7     $ 9,869      $ 7,527
</TABLE>


                                       14
- --------------------------------------------------------------------------------
<PAGE>


FORWARD-LOOKING INFORMATION

This report contains forward-looking financial and operational information
including earnings, cash flow, production and capital expenditure projections.
These projections are based on the Trust's expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to, future commodity prices, exchange
rates, interest rates, geological risk, reserves risk, political risk, product
demand and transportation restrictions.

NON-GAAP MEASURES:

Included in this release are references to terms commonly used in the oil and
gas industry, such as cash flow and cash flow per share. These terms are not
defined by Generally Accepted Accounting Principles. Consequently, these are
referred to as non-GAAP measures. Cash flow, as discussed in this release,
appears as a separate caption on the Company's cash flow statement and is
reconciled to both net income and cash flow from operations.

For further information please contact:

Curtis W. Hicks, C.A.
VP Finance & Chief Financial Officer
or
Paul Beique, Director Investor Relations

2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 781-9449
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com





                                       15
- --------------------------------------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>11
<FILENAME>ex99_8form40-f.txt
<DESCRIPTION>EXHIBIT 99.8
<TEXT>
                                                                    EXHIBIT 99.8
                                                                    ------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



             PRESS RELEASE - FOR IMMEDIATE RELEASE NOVEMBER 10, 2003
                    THIRD QUARTER RESULTS, SEPTEMBER 30, 2003


Vermilion Energy Trust ("Vermilion") (TSX - VET.UN) is pleased to report
unaudited interim operating and financial results for the period ended September
30, 2003. These results include the consolidated results of Aventura Energy Inc.
("Aventura"), a 72.2% owned subsidiary. Where applicable, the results have been
segregated to reflect Aventura operations and those related to the Trust (the
"Trust"), as Aventura does not currently contribute any cash flow or production
to the generation of the Trust distributions.

Vermilion achieved the following highlights:

THIRD QUARTER HIGHLIGHTS

>    Achieved consolidated production of 24,661 boe/d, compared to 26,288 boe/d
     in the second quarter of 2003. Third quarter production was affected by
     normal production declines, by the temporary shut-in of the Shane
     Kiskatinaw 'D' Pool, and by operational interruptions and delays in France
     due to a windstorm in July 2003.

>    Participated in the successful efforts to resume production from the Shane
     Kiskatinaw 'D' Pool, and transferred operatorship of the pool to Clear
     Energy Inc.

>    Maintained consistent distributions of $0.17 per unit per month. Vermilion
     anticipates that it will be able to maintain its monthly distribution at
     $0.17 per unit through 2003.

>    The Trust generated cash flow of $34.0 million ($0.59 per unit) from
     production of 22,091 boe/d, consisting of 12,222 bbls/d of oil and NGL's
     and 59.2 mmcf/d of natural gas(1). This compares to a second quarter cash
     flow of $38.5 million from production of 24,073 boe/d. Current production
     for the Trust, excluding Aventura, is approximately 22,500 boe/d.

>    Continued to experience active trading, with over 15.5 million units
     changing hands in the third quarter. Since Vermilion began trading as a
     trust on January 24, 2003 almost 61 million units have been traded,
     representing a 115% turnover of the market float. Through September 30th,
     2003, the Trust provided a total return of 37% to its unitholders since
     inception, comprised of 27% in capital appreciation and 10% in
     distributions.

>    Initiated a modest drilling program in Canada and France. Vermilion began
     drilling Champotran 24, the first of three planned wells in France, in
     September 2003. Drilling and completion of the Trust's Canadian wells is
     ongoing with three wells remaining to be drilled in the fourth quarter.

>    Announced that Vermilion was in negotiations with a potential acquirer of
     the outstanding shares of Aventura. The completion of the proposed
     transaction is dependent upon the parties reaching agreement on all terms
     as well as satisfying a number of conditions precedent, including obtaining
     government and other approvals in Trinidad. These negotiations are ongoing.

(1) Although Aventura's production and financial results are consolidated in the
financial tables, these are not included as part of distributable funds for the
Trust's unitholders.

CONFERENCE CALL

Vermilion will discuss these results in a conference call to be held on
Wednesday, November 12, 2003. The conference call will begin at 10:00 a.m. EST
(8:00 a.m. MST). To participate, you may call toll free 1-800-814-3911 or
1-416-640-4127 (Toronto area). The conference call will also be available on
replay by calling 1-877-289-8525 or 1-416-640-1917 (Toronto area) using pass
code 21021476 followed by the pound "#" key. The replay will be available until
midnight eastern time on November 19, 2003.



                                       1
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
HIGHLIGHTS

                                                         THREE MONTHS ENDED                     NINE MONTHS ENDED
- ---------------------------------------------------------------------------------------------------------------------------------
                                                        Trust   Aventura                         Trust   Aventura
                                                    Financial     Energy   CONSOLIDATED      Financial     Energy    CONSOLIDATED
(Unaudited)                                       Information    Inc.(3)  SEPT 30, 2003    Information    Inc.(3)   SEPT 30, 2003
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>        <C>              <C>          <C>        <C>

FINANCIAL ($000 CDN. EXCEPT UNIT AND PER UNIT AMOUNTS)

Petroleum and natural gas revenues                   $ 70,131   $  3,048      $  73,179      $ 233,339   $  8,767     $   242,106
Cash flow from operations                              34,000      1,779         35,779        110,887      4,012         114,899
  Per unit, basic (1)                                    0.59                      0.61           1.91                       1.98
Distributions (2)                                      27,429                    27,429         70,986                     70,986
  Per unit                                               0.51                      0.51           1.36                       1.36
% cash flow distributed                                   81%                       77%            64%                        62%
Capital expenditures                                   17,884      1,014         18,898         39,650     13,415          53,065
Acquisitions (dispositions)                                --       (159)          (159)         5,761     (7,055)         (1,294)
Debt, net of working capital (surplus)                                                         200,060     (8,323)        191,737
Trust units outstanding (1)
  Basic                                                                                                                58,236,936
  Diluted                                                                                                              62,714,536
Weighted average trust units outstanding (1)
  Basic                                                                                                                57,989,679
  Diluted                                                                                                              58,376,951
Unit trading
  High                                                                                                                $     15.40
  Low                                                                                                                 $     11.12
  Close                                                                                                               $     14.95

OPERATIONS

Production
  Crude oil (bbls/d)                                   10,355        359         10,714         10,891        335          11,226
  Natural gas liquids (bbls/d)                          1,867         --          1,867          1,978         --           1,978
  Natural gas (mcf/d)                                  59,215     13,266         72,481         63,334     12,125          75,459
  Boe/d (6:1)                                          22,091      2,570         24,661         23,425      2,356          25,781
Average selling price
  Crude oil (per bbl, including hedging)             $  35.54   $  36.07      $   35.55      $   36.37   $  38.82     $     36.44
  Crude oil (per bbl, not including hedging)            39.57      36.07          39.45          40.80      38.82           40.74
  Natural gas liquids (per bbl)                         32.38         --          32.38          36.17         --           36.17
  Natural gas (per mcf, including hedging)               5.64       1.52           4.89           6.11       1.55            5.38
  Natural gas (per mcf, not including hedging)           5.64       1.52           4.89           6.25       1.55            5.50
Netbacks per boe (6:1)
  Operations netback                                    19.62       8.54          18.47          21.49       9.32           20.37
  Cash flow netback                                     16.73       7.53          15.77          17.34       6.24           16.33
  Cash flow netback excluding reorganization costs                                               18.72                      17.58
  Operating costs                                        6.38       2.89           6.02           5.86       2.82            5.59
  General and administrative                         $   1.18   $   1.66      $    1.23      $    1.21   $   1.37     $      1.23
</TABLE>

(1)  Includes trust units issuable for outstanding exchangeable shares based on
     the period end exchange ratio
(2)  Distributions are paid on issued trust units at each record date
(3)  The Trust owns 72.2% of the outstanding shares of Aventura, necessitating
     the consolidation of the results of the Trust and Aventura

OPERATIONAL ACTIVITIES

The Trust's activities in the third quarter included the drilling of nine wells
(5.1 net) of which five (3.1 net) have been cased and four (2.0 net) have been
abandoned. Of the cased wells, two have been completed and are currently on
production while the balance are pending completion and tie-in. The production
impact from the third quarter drilling program will materialize in the fourth
quarter. In mid-September the Trust began drilling the first of three scheduled
wells in France. Vermilion will drill the target zones using an underbalanced
drilling system, the first time this technique has been used on the Trust's
properties in France. Underbalanced drilling technology has proven very
effective for reservoirs that are sensitive to water damage induced by
traditional drilling methods.


                                       2
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
PRODUCTION SUMMARY (6:1)

                                   THREE MONTHS ENDED SEPT 30, 2003          NINE MONTHS ENDED SEPT 30, 2003
- ------------------------------------------------------------------------------------------------------------------
                                      Oil &     Natural                         Oil &     Natural
                                       NGLs         Gas     TOTAL                NGLs         Gas     TOTAL
                                   (BBLS/D)    (MMCF/D)   (BOE/D)            (BBLS/D)    (MMCF/D)   (BOE/D)      %
- ------------------------------------------------------------------------------------------------------------------
<S>                                  <C>          <C>      <C>                 <C>          <C>      <C>       <C>
VERMILION ENERGY TRUST
     Canada                           6,397       57.62    16,001               6,897       61.87    17,210     67
     France                           5,825        1.59     6,090               5,972        1.46     6,215     24
- ------------------------------------------------------------------------------------------------------------------
     Total                           12,222       59.21    22,091              12,869       63.33    23,425     91
- ------------------------------------------------------------------------------------------------------------------

AVENTURA ENERGY INC.
     Trinidad                           359       13.27     2,570                 335       12.13     2,356      9
- ------------------------------------------------------------------------------------------------------------------

Consolidated                         12,581       72.48    24,661              13,204       75.46    25,781    100
==================================================================================================================
</TABLE>

Third quarter production in Canada averaged 6,397 bbls/d of oil and NGL's and
57.6 mmcf/d of natural gas compared to 7,296 bbls/d and 62.7 mmcf/d in the
second quarter. Vermilion also produced 6,090 boe/d from its properties in
France, compared to 6,334 boe/d in the second quarter.

In France, production gains from workovers and production optimization programs
have largely offset normal declines. Since the beginning of the year these
workovers have added approximately 400 boe/d of stabilized production.
Currently, our France properties are producing approximately 6,200 boe/d.
Depending on the results of the drilling program in the fourth quarter, the
Trust's production volumes in France should end the year well above 2002 exit
rates of approximately 6,400 boe/d.

<TABLE>
<CAPTION>
DRILLING ACTIVITY (# OF WELLS)

                                   THREE MONTHS ENDED SEPT 30, 2003               NINE MONTHS ENDED SEPT 30, 2003
- ------------------------------------------------------------------------------------------------------------------
                                              GROSS            (NET)                        GROSS             (NET)
- ------------------------------------------------------------------------------------------------------------------
CANADA
<S>                                           <C>             <C>                           <C>             <C>
     Oil                                          0            (0.0)                            0             (0.0)
     Gas                                          5            (3.1)                            8             (4.7)
     D&A                                          4            (2.0)                            4             (2.0)
- ------------------------------------------------------------------------------------------------------------------
TOTAL                                             9            (5.1)                           12             (6.7)
==================================================================================================================
FRANCE
     Oil                                          0            (0.0)                            0             (0.0)
     Gas                                          0            (0.0)                            0             (0.0)
     D&A                                          0            (0.0)                            0             (0.0)
- ------------------------------------------------------------------------------------------------------------------
TOTAL                                             0            (0.0)                            0             (0.0)
==================================================================================================================
COMBINED
     Oil                                          0            (0.0)                            0             (0.0)
     Gas                                          5            (3.1)                            8             (4.7)
     D&A                                          4            (2.0)                            4             (2.0)
- ------------------------------------------------------------------------------------------------------------------
TOTAL                                             9            (5.1)                           12             (6.7)
==================================================================================================================
</TABLE>

In addition to its operational activity, Vermilion had 15 wells drilled on its
lands in Canada to date in 2003 (five wells in the third quarter) through
farm-out arrangements in which Vermilion maintained either a small working
interest or a gross overriding interest. The Trust will continue to pursue
activity on its undeveloped land base by third parties as a means of drilling
locations that are not compatible with Vermilion's capital development strategy
and creating economic value in the form of overriding royalty income.



                                       3
- --------------------------------------------------------------------------------
<PAGE>

FINANCIAL

The Trust generated cash flow of $34.0 million in the third quarter ($0.59 per
unit), compared to $38.5 million ($0.67 per unit) in the second quarter. The
Trust's distributions in the third quarter totalled $27.4 million or $0.51 per
unit. The Trust's year-to-date payout ratio is approximately 64% of total cash
flow. Vermilion's earnings for the third quarter were $13.3 million, bringing
year-to-date earnings to $45.2 million. Capital expenditures for the Trust in
the third quarter totalled $17.9 million. The Trust's total debt, net of working
capital (assignable to the Trust) at the end of the period was $200 million.

<TABLE>
<CAPTION>
CAPITAL EXPENDITURES ($000'S)

                                                  THREE MONTHS ENDED SEPT 30, 2003          NINE MONTHS ENDED SEPT 30, 2003
- -----------------------------------------------------------------------------------------------------------------------------------
                                                              AVENTURA                                   AVENTURA
                                                   TRUST        ENERGY                         TRUST       ENERGY
                                                  ASSETS          INC.    CONSOLIDATED        ASSETS          INC.   CONSOLIDATED
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>          <C>               <C>          <C>         <C>
Land                                            $    226      $      0        $    226      $    879     $     --        $    879
Seismic                                              (83)            0             (83)        1,037           --           1,037
Drilling and completion                            8,683             0           8,683        12,990           --          12,990
Production equipment and facilities                2,330             0           2,330         7,675           --           7,675
Workovers                                          5,439             0           5,439        12,004           --          12,004
Trinidad                                               0         1,014           1,014         1,804       13,415          15,219
Other                                              1,289             0           1,289         3,261           --           3,261
- -----------------------------------------------------------------------------------------------------------------------------------
                                                  17,884         1,014          18,898        39,650       13,415          53,065
Property acquisitions (dispositions)                   0          (159)           (159)        5,761       (7,055)         (1,294)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                $ 17,884      $    855        $ 18,739      $ 45,411     $  6,360        $ 51,771
===================================================================================================================================
</TABLE>

AVENTURA ENERGY INC.

Production from Carapal Ridge remained stable in the quarter at
market-restricted rates. The Baraka-1 well is shut-in pending tie-in and testing
in 2004. Aventura has received a certificate of environmental clearance to
tie-in the Baraka-1 well to the Carapal Ridge production facilities. The
Baraka-1 well will be tested through these facilities in 2004. Simultaneously,
the Carapal Ridge-1 well will be shut-in for pressure build-up testing, which
will enable further evaluation of this reservoir.

Aventura holds a well-developed prospect inventory on its Central Block
properties in Trinidad. The Company believes the ultimate potential recoverable
reserves from these properties could exceed 1.0 TCF of natural gas. Aventura is
developing a capital program for 2004 that would include the drilling of an
additional three exploration wells. The Company is currently surveying the
proposed well sites for 2004 and will subsequently apply for environmental
clearance. Negotiations are underway with several drilling contractors and a
tender for drilling services will be issued in the next few weeks. Aventura is
maintaining its capital planning schedule to provide a contingency plan in the
event the proposed disposition is not consummated.

OUTLOOK

Vermilion's third quarter was negatively impacted by production interruptions in
Canada and France that have since been resolved. The total third quarter loss in
production due to the shut-in of the Shane Pool in Canada and storm related
workover delays in France was approximately 900 boe/d. Current production is
approximately 22,400 boe/d, which should remain stable to year-end. The balance
of the year should benefit from ongoing drilling and tie-in activity in Canada
and France. The Trust is advancing its farm out activity, which could add
further to the value of its existing asset base. The Trust is also evaluating
several domestic and international acquisition opportunities.


                                       4
- --------------------------------------------------------------------------------
<PAGE>

In France, Vermilion was awarded 100% of the Aquitaine Maritime exploration
concession that lies in shallow offshore waters on trend with the firm's
operations in the Aquitaine Basin. Vermilion will be reviewing avenues to
capitalize on this tremendous exploration opportunity while minimizing the risk
exposure to our unitholders. The Aquitaine Maritime prospect is believed to
encompass a 200-600 million barrel structure, however, will require full seismic
coverage and the drilling of at least one well over the next two to three years.
Vermilion plans to bring in third party participants and outside sources of
capital to limit the Trust's capital exposure to this project, and believes this
prospect will eventually provide unitholders with significant capital
appreciation potential without impairing the Trust's ability to maintain its
stable distribution policy.

Vermilion has established that non-residents own approximately 33% of its issued
and outstanding units (not including exchangeables) and 30% if the exchangeable
shares are included. This compares to 39% and 35%, respectively, at the end of
the second quarter 2003. Pursuant to Vermilion's Trust Indenture, non-resident
unitholders may not own more than 50% of total outstanding trust units. The
Trust will continue to ensure that it complies with all requirements under its
Trust Indenture, including Canadian ownership requirements.

MANAGEMENT'S DISCUSSION AND ANALYSIS

THE NINE MONTHS ENDED SEPTEMBER 30, 2003 REPRESENTS THE FIRST THREE QUARTERS OF
VERMILION'S OPERATION AS A TRUST. AS VERMILION ENERGY TRUST WAS CREATED THROUGH
THE RE-ORGANIZATION OF VERMILION RESOURCES LTD., THE HISTORICAL RESULTS OF
VERMILION RESOURCES LTD. WILL REPRESENT THE HISTORICAL RESULTS OF THE TRUST FOR
COMPARATIVE PURPOSES.

Oil and gas prices for the first three quarters of 2003 were strong in
comparison with the first three quarters of 2002. The WTI reference price for
oil averaged $30.99 US per bbl for the nine month period, Dated Brent was $28.65
US per bbl and AECO reference price for gas was $7.01 Cdn per mcf. This compares
to $25.39 per bbl for WTI, $24.38 per bbl for Brent and $3.53 per mcf, Cdn AECO
for the first nine months of 2002. These year over year price increases are the
main drivers behind the increase in netbacks in 2003 as compared to 2002. In
2003, Vermilion's operating netback equalled $20.37 per boe, up 8% over the
$18.91 reported for the first nine months of 2002. The cash flow netback of
$16.33 per boe for the first nine months was up 11% over the $14.77 recorded in
2002. The 2003 third quarter operating and cash flow netbacks totalled $18.47
and $15.77 per boe, respectively. These compare to 2002 third quarter operating
and cash flow netbacks equal to $19.61 and $15.43 per boe, respectively. In
addition, the 2003 cash flow netbacks were reduced by $1.25 per boe for the year
as a result of the impact of the cash costs incurred in the re-organization of
Vermilion into a trust.

Total revenues for the first three quarters of 2003 were $242.1 million compared
to $204.2 million for the first three quarters of 2002 and $73.2 million in the
third quarter of 2003 compared to $70.7 million for the corresponding reporting
period in 2002. Vermilion's combined crude oil & NGL price was $40.06 per bbl
for the first three quarters of 2003, an increase of 14% over the $35.01 per bbl
reported for the first three quarters of 2002. The third quarter price was
$38.40 per bbl compared to $39.35 per bbl a year ago. The natural gas price
realized in the first three quarters of 2003 was $5.50 per mcf compared to $3.91
per mcf realized a year ago, a 41% year-over-year increase. The third quarter
price of $4.89 per mcf was 37% greater than the $3.56 per mcf for the same
period of 2002. Tempering these increases was the impact of Vermilion's hedging
program, whereby prices were reduced by $2.22 per boe on a combined basis for
the nine month period ended September 30, 2003, compared to a hedging loss of
$0.16 per boe in the first three quarters of 2002. Gas prices were reduced on
average by $0.12 per mcf over the first three quarters of 2003, with third
quarter prices not impacted by the Trust's natural gas collar.



                                       5
- --------------------------------------------------------------------------------
<PAGE>

Vermilion continues to manage its risk exposure through prudent commodity and
currency hedging strategies. Physical and financial natural gas contracts for
19,071 GJ/d remain in place for the calendar year of 2003 with various price
structures resulting in an average floor price of $4.80/GJ. Currently, the Trust
has hedged 10,198 GJ/d of its 2004 natural gas production with various price
structures, resulting in an average floor price of $4.71/GJ. Vermilion has WTI
hedges covering 2,950 bbls/d at US$24.74/bbl for the remainder of 2003; 2,250
bbls/d in 2004 at US$24.35/bbl; and 1,500 bbls/d in 2005 at US$24.80/bbl.
Vermilion has Brent hedges covering 2,600 bbls/d at US$23.24/bbl for the
remainder of 2003; 2,250 bbls/d in 2004 at US$22.93/bbl; and 1,500 bbls/d in
2005 at US$23.37/bbl.

Vermilion has Canadian/US dollar currency swaps in place covering its oil hedge
positions for 2003 at approximately US$0.63 per CDN dollar. For 2004 US$38.0
million in currency hedges average approximately US$0.71 per CDN dollar.

Total royalties, net of ARTC, increased to $8.44 per boe or 23.0% of sales in
the first three quarters of 2003, compared with $6.21 per boe, or 21.0% of sales
in the first three quarters of 2002. The quarter over quarter amounts were $7.77
per boe in 2003 and $5.90 per boe for the same period in 2002. The increase is
due directly to the increase in prices explained above as royalties are price
sensitive in Canada and calculated as a percentage of revenue. In France,
royalties for the most part are calculated on a unit of production basis and do
not react to price changes.

Operating costs increased to $5.59 per boe in 2003 from $4.35 per boe in the
first three quarters of 2002. Operating costs for the third quarter of the year
were $6.02 per boe in comparison to $4.39 for the third quarter of 2002. In
Canada, processing costs in the Peace River Arch area, workovers designed to
increase production and increased power costs resulting from the strong gas
prices in the year have contributed to the year over year increase. Adding to
this was the shut in wells at Shane which increased the per unit costs. In
addition to these factors, per unit operating costs are higher in 2003 due to
the impact of the reorganization into a Trust and the impact of lower cost
production allocated to Clear Energy Inc.

In France, power costs continue to rise and the strengthening Euro also
contributed to the increase in operating costs when converted to Canadian
dollars.

General and administrative expenses for the year increased to $1.23 per boe from
$1.06 per boe in the first three quarters of 2002. The third quarter number for
2003 of $1.23 is increased over the third quarter 2002 number of $0.99 by $0.24.
The increase is due to the increased costs of operating a Trust.

Reorganization costs of $25.6 million relate to Vermilion's decision to convert
to a trust. Included in this amount are $8.8 million in transaction costs, which
include investment banking fees as well as all accounting and legal fees,
related to the conversion. Also included in this amount is the value of trust
units issued in exchange for the cancellation of all outstanding employee
options. The value of the trust units issued totalled $16.8 million. All of
these costs were incurred in the first quarter of 2003.

Interest expense increased to $0.92 per boe for the first three quarters of 2003
from $0.57 per boe for the corresponding period in 2002 as a result of higher
average debt levels. The quarter over quarter increase was $0.27 per boe from
$0.77 per boe in the third quarter of 2002 to $1.04 in 2003.

Depletion and depreciation expenses increased from $10.02 per boe in the first
three quarters of 2002 to $10.27 per boe in 2003. The quarter over quarter
numbers were $10.80 in the third quarter of 2003 as compared to $10.92 a year
ago. Included in depletion and depreciation is a $1.4 million charge
representing the loss on the sale of Aventura's interest in assets in Argentina.
Aventura's assets are now focused exclusively in Trinidad.

The Trust's current tax provision has decreased to $0.64 per boe in the first
three quarters of 2003 and $0.43 in the third quarter from $2.51 per boe in the
first nine months of 2002 and $2.45 in the third quarter. The current provision
is based on an estimated $6 million tax liability in France for the year, while
in Canada, it is anticipated that there will be no current taxes due. A
reduction in tax rates for


                                       6
- --------------------------------------------------------------------------------
<PAGE>

Canadian resource activities resulted in a recovery of future income taxes,
which was recorded in the second quarter pushing earnings to $45.2 million for
the first three quarters of 2003. Adding to this recovery is the taxable portion
of distribution payments made to unitholders. In the Trust's structure, payments
are made between the operating company and the Trust transferring both income
and future income tax liability to the unitholder. Therefore it is the opinion
of management that no cash income taxes in Canada are expected to be paid by the
operating company in the future, and as such, the future income tax liability
recorded on the balance sheet related to Canadian operations will be recovered
through earnings over time.

Foreign exchange loss increased to $0.32 per boe with a gain of $0.36 per boe in
the first three quarters of 2003 and third quarter respectively from NIL in the
nine months ended 2002 and a gain of $0.03 per boe in the third quarter 2002.
The increased loss relates to a loss on working capital held in a foreign
currency in our France operations combined with Aventura's loss on its working
capital related to its operations in Trinidad.

Capital spending for the first nine months totalled $51.8 million including
$39.7 million invested on the Trust's asset base with the balance being
Aventura's capital program in Trinidad. This compares to $199.5 million spent in
the first three quarters of 2002, $31.0 million of which was for the corporate
acquisition of Artemis Energy Limited and $66.3 million of which was for the
purchase of a 40% participating interest in, and operatorship of the Central
Block onshore Trinidad. The capital for the first three quarters of 2003 was
funded entirely through cash flow and was primarily spent on facilities, tie-ins
and workovers.

Vermilion's debt (net of working capital) on September 30, 2003 was $191.7
million. During the third quarter, Vermilion's credit facility with its banking
syndicate was amended to provide a $240 million credit facility effective
September 30, 2003. The amended loan facility remains with the same syndicate of
lenders with no change to the terms and security provisions. The facility
structure is comprised of a one year revolving period with a one year term to
follow with a final settlement payment required at the end of the second year.



                                       7
<PAGE>

<TABLE>
<CAPTION>
NETBACKS (6:1)                                                                                                THREE          NINE
                                                                                                             MONTHS        MONTHS
                                                     THREE MONTHS                         NINE MONTHS         ENDED         ENDED
                                              ENDED SEPT 30, 2003                 ENDED SEPT 30, 2003    SEPT 30/02    SEPT 30/02
- ----------------------------------------------------------------------------------------------------------------------------------
                                    Oil &     Natural                   Oil &     Natural
                                     NGLs         Gas       TOTAL        NGLs         Gas       TOTAL         Total         Total
                                    $/bbl       $/mcf       $/BOE       $/bbl       $/mcf       $/boe         $/boe         $/boe
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>        <C>          <C>         <C>        <C>          <C>           <C>           <C>
TRUST FINANCIAL INFORMATION
CANADA
Price                              $43.07       $5.66      $37.59      $44.37       $6.28      $40.37        $28.56        $27.94
Hedging gain (loss)                 (3.56)         --       (1.42)      (3.95)      (0.15)      (2.11)        (1.06)        (0.23)
Royalties (net)                     (8.51)      (1.86)     (10.09)      (9.62)      (1.95)     (10.85)        (6.35)        (6.85)
Lifting costs                       (7.19)      (0.91)      (6.13)      (6.28)      (0.81)      (5.44)        (3.89)        (3.71)
- ----------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $23.81       $2.89      $19.95      $24.52       $3.37      $21.97        $17.26        $17.15
- ----------------------------------------------------------------------------------------------------------------------------------
FRANCE
Price(1)                           $33.42       $4.92      $33.25      $35.14       $5.09      $34.97        $38.71        $34.82
Hedging gain (loss)                 (3.26)         --       (3.12)      (3.51)         --       (3.38)        (1.50)         0.08
Royalties (net)                     (4.47)      (0.25)      (4.34)      (4.49)      (0.24)      (4.38)        (4.54)        (4.21)
Lifting costs                       (6.57)      (2.87)      (7.04)      (6.69)      (2.64)      (7.05)        (5.89)        (6.34)
- ----------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $19.12       $1.80      $18.75      $20.45       $2.21      $20.16        $26.78        $24.35
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL TRUST
Price                              $38.47       $5.64      $36.40      $40.09       $6.25      $38.93        $31.07        $29.63
Hedging gain (loss)                 (3.42)         --       (1.89)      (3.75)      (0.14)      (2.44)        (1.17)        (0.16)
Royalties (net)                     (6.58)      (1.81)      (8.51)      (7.24)      (1.91)      (9.14)        (5.90)        (6.21)
Lifting costs                       (6.90)      (0.96)      (6.38)      (6.47)      (0.85)      (5.86)        (4.39)        (4.35)
- ----------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $21.57       $2.87      $19.62      $22.63       $3.35      $21.49        $19.61        $18.91
- ----------------------------------------------------------------------------------------------------------------------------------
AVENTURA FINANCIAL INFORMATION
Price                              $36.07       $1.52      $12.89      $38.82       $1.55      $13.63            --            --
Hedging gain (loss)                    --          --          --          --          --          --            --            --
Royalties (net)                     (5.50)      (0.13)      (1.46)      (4.70)      (0.14)      (1.49)           --            --
Lifting costs                          --       (0.56)      (2.89)         --       (0.55)      (2.82)           --            --
- ----------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $30.57       $0.83      $ 8.54      $34.12       $0.86      $ 9.32            --            --
- ----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED
Price                              $38.40       $4.89      $33.95      $40.06       $5.50      $36.62            --            --
Hedging gain (loss)                 (3.32)         --       (1.69)      (3.66)      (0.12)      (2.22)           --            --
Royalties (net)                     (6.55)      (1.51)      (7.77)      (7.18)      (1.63)      (8.44)           --            --
Lifting costs                       (6.70)      (0.89)      (6.02)      (6.31)      (0.80)      (5.59)           --            --
- ----------------------------------------------------------------------------------------------------------------------------------
Operating netback                  $21.83       $2.49      $18.47      $22.91       $2.95      $20.37            --            --
- ----------------------------------------------------------------------------------------------------------------------------------
General and administrative                                  (1.23)                              (1.23)        (0.99)        (1.06)
Reorganization costs                                           --                               (1.25)           --            --
Interest                                                    (1.04)                              (0.92)        (0.77)        (0.57)
Foreign exchange                                                -                                   -          0.03            --
Current and capital taxes                                   (0.43)                              (0.64)        (2.45)        (2.51)
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flow netback                                          $15.77                              $16.33        $15.43        $14.77
- ----------------------------------------------------------------------------------------------------------------------------------
Depletion and depreciation                                 (10.80)                             (10.27)       (10.92)       (10.02)
Future income taxes                                          0.48                                3.12         (1.16)        (0.71)
Deferred financing charges                                  (0.03)                              (0.05)        (0.08)        (0.08)
Foreign exchange                                             0.36                               (0.32)         0.03            --
Non-controlling interest                                     0.07                                   -         (0.01)         0.01
Trust units issued                                              -                               (2.39)            -            --
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings netback                                           $ 5.85                              $ 6.42        $ 3.29        $ 3.97
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Price includes a $0.41 Q3 decrease, $0.26 year to date increase due to
     inventory valuation at cost (GAAP) versus market


                                       8
- --------------------------------------------------------------------------------
<PAGE>

CONSOLIDATED BALANCE SHEETS
($000'S, UNAUDITED)

                                                SEPTEMBER 30,     December 31,
                                                         2003             2002
- --------------------------------------------------------------------------------

ASSETS

Current
    Cash and cash equivalents                       $  33,530        $  32,562
    Accounts receivable                                37,021           56,582
    Crude oil inventory                                 4,486            3,207
    Prepaid expenses and other                          3,241            4,699
- --------------------------------------------------------------------------------
                                                       78,278           97,050

Deferred financing costs                                  257              435
Deferred reorganization costs                              --            2,324
Reclamation fund (Note 2)                                 555               --
Capital assets                                        681,775          711,902
- --------------------------------------------------------------------------------
                                                    $ 760,865        $ 811,711
================================================================================

LIABILITIES AND UNITHOLDERS' EQUITY

Current
    Accounts payable and accrued liabilities        $  61,728        $  79,817
    Distributions payable to unitholders                8,921               --
    Income taxes payable                                4,517           10,977
- --------------------------------------------------------------------------------
                                                       75,166           90,794
- --------------------------------------------------------------------------------

Long-term debt (Note 5)                               194,849          193,025
Provision for future site restoration                  12,480           11,169
Future income taxes                                   154,047          171,094
- --------------------------------------------------------------------------------
                                                      436,542          466,082
- --------------------------------------------------------------------------------
NON-CONTROLLING INTEREST                               29,307           21,321
- --------------------------------------------------------------------------------
Unitholders' Equity
    Unitholders' capital (Note 7)                     124,784          140,557
    Exchangeable shares (Note 7)                       12,261               --
    Accumulated earnings                              228,957          183,751
    Accumulated cash distributions                    (70,986)              --
- --------------------------------------------------------------------------------
                                                      295,016          324,308
- --------------------------------------------------------------------------------
                                                    $ 760,865        $ 811,711
================================================================================


                                       9

- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
($000'S, EXCEPT UNIT AND PER UNIT AMOUNTS, UNAUDITED)

                                                                 THREE MONTHS ENDED               NINE MONTHS ENDED
                                                              SEPT 30       Sept 30         SEPT 30        Sept 30
                                                                 2003          2002            2003           2002
- ------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>           <C>             <C>            <C>
Revenue:
       Petroleum and natural gas revenue                    $  73,179       $70,719        $242,106       $204,186
       Royalties (net)                                         17,631        14,428          59,381         43,024
- ------------------------------------------------------------------------------------------------------------------
                                                               55,548        56,291         182,725        161,162
- ------------------------------------------------------------------------------------------------------------------
Expenses:
       Production                                              13,658        10,289          39,313         30,172
       Interest                                                 2,450         1,997           6,848          4,466
       General and administrative                               2,793         2,313           8,650          7,354
       Reorganization costs (Note 3)                               --            --          25,628             --
       Foreign exchange loss (gain)                              (827)         (151)          2,269              7
       Depletion and depreciation                              24,497        25,614          72,285         69,468
- ------------------------------------------------------------------------------------------------------------------
                                                               42,571        40,062         154,993        111,467
- ------------------------------------------------------------------------------------------------------------------

Earnings before income taxes and other item                    12,977        16,229          27,732         49,695

Income taxes (recovery):
       Future (Note 6)                                         (1,090)        2,728         (21,990)         4,902
       Current                                                    641         5,409           3,960         16,631
       Capital                                                    303           330             557            747
- ------------------------------------------------------------------------------------------------------------------
                                                                 (146)        8,467         (17,473)        22,280
Other item:
       NON-CONTROLLING INTEREST                                  (154)           21              (1)           (99)
- ------------------------------------------------------------------------------------------------------------------

Net earnings                                                   13,277         7,741          45,206         27,514
Excess of consideration paid over stated value
   of shares purchased                                                         (340)                          (340)
Accumulated earnings, beginning of period                     215,680       162,670         183,751        142,897
- ------------------------------------------------------------------------------------------------------------------

Accumulated earnings, end of period                          $228,957      $170,071        $228,957       $170,071
==================================================================================================================

Net earnings per trust unit (Note 9):
       Basic                                              $      0.23   $      0.14     $      0.78    $      0.49
       Diluted                                            $      0.22   $      0.14     $      0.77    $      0.49

Weighted average trust units outstanding
       Basic                                               58,147,919    55,890,865      57,989,679     55,771,851
       Diluted                                             59,060,674    56,519,277      58,376,951     56,711,190
</TABLE>



                                       10
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000'S, UNAUDITED)
                                                                       THREE MONTHS ENDED         NINE MONTHS ENDED
                                                                    SEPT 30       Sept 30     SEPT 30      Sept 30
                                                                       2003          2002        2003         2002
- -------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>         <C>          <C>
Cash and cash equivalents provided by (used in):
Operating
       Net earnings                                               $  13,277     $   7,741   $  45,206    $  27,514
       Items not affecting cash and cash equivalents:
         Depletion and depreciation                                  24,497        25,614      72,285       69,468
         Unrealized foreign exchange loss (gain)                       (827)          (75)      2,249           17
         Amortized deferred financing costs                              76           181         333          529
         Non-controlling interest                                      (154)           21          (1)         (99)
         Trust units issued on cancellation of
            employee stock options                                       --            --      16,817           --
         Future income taxes                                         (1,090)        2,728     (21,990)       4,902
- -------------------------------------------------------------------------------------------------------------------
       Cash flow from operations                                     35,779        36,210     114,899      102,331
       Site restoration costs incurred                               (1,058)         (407)     (1,303)        (565)
       Changes in non-cash working capital                           22,132        17,247      (4,182)         744
- -------------------------------------------------------------------------------------------------------------------
                                                                     56,853        53,050     109,414      102,510
- -------------------------------------------------------------------------------------------------------------------
Investing
       Disposition (acquisition) of capital assets                      159       (19,703)      1,294      (23,433)
       Drilling and development of petroleum and
         natural gas properties                                     (18,898)      (34,387)    (53,065)     (78,695)
       Corporate acquisition                                             --       (65,686)         --      (87,601)
       Restricted cash held for acquisition                              --        66,348          --           --
       Contributions to reclamation fund, net                            --            --        (555)          --
- -------------------------------------------------------------------------------------------------------------------
                                                                    (18,739)      (53,428)    (52,326)    (189,729)
- -------------------------------------------------------------------------------------------------------------------
Financing
       Increase (decrease) in long-term debt                         (9,341)       14,741       1,824      100,362
       Increase in deferred charges                                    (130)          (61)       (155)        (136)
       Issue (repurchase)  of Common shares for cash, net
         of share issue costs                                            --          (365)      1,201        3,887
       Distribution reinvestment plan                                 2,380            --       3,351           --
       Cash acquired on shares issued by subsidiary,
         net of share issue costs                                        91             3         294        2,830
       Cash distributions                                           (26,671)           --     (62,065)          --
- -------------------------------------------------------------------------------------------------------------------
                                                                    (33,671)       14,318     (55,550)     106,943
- -------------------------------------------------------------------------------------------------------------------
       Foreign exchange gain (loss) on cash held
         in a foreign currency                                          206          (910)       (570)        (734)
- -------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents                               4,649        13,030         968       18,990
Cash and cash equivalents, beginning of period                       28,881        12,676      32,562        6,716
- -------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                          $  33,530       $25,706     $33,530      $25,706
===================================================================================================================

Cash payments:
       Interest                                                   $   1,790      $  2,336     $ 7,295      $ 4,522
       Taxes                                                      $ (12,470)     $    361     $ 9,852      $ 7,520
</TABLE>



                                       11
- --------------------------------------------------------------------------------
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002, UNAUDITED
(000'S, EXCEPT UNIT AND PER UNIT AMOUNTS)

1.   BASIS OF PRESENTATION

     Vermilion Energy Trust (the "Trust" or "Vermilion") was established on
     January 22, 2003, under a Plan of Arrangement entered into by the Trust,
     Vermilion Resources Ltd., Clear Energy Inc., and Vermilion Acquisition Ltd.
     The Trust is an open-end unincorporated investment trust governed by the
     laws of the Province of Alberta and created pursuant to a trust indenture.
     Vermilion Resources Ltd. (the "Company") is a wholly owned subsidiary of
     the Trust.

     Prior to the Plan of Arrangement on January 22, 2003, the consolidated
     financial statements included the accounts of the Company and its
     subsidiaries. After giving effect to the Plan of Arrangement, the
     consolidated financial statements have been prepared on a continuity of
     interests basis which recognizes the Trust as the successor entity to
     Vermilion Resources Ltd. The consolidated financial statements include the
     accounts of the Trust and its subsidiaries and have been prepared by
     management in accordance with Canadian generally accepted accounting
     principles on a consistent basis with the audited consolidated financial
     statements for the year ended December 31, 2002. The interim consolidated
     financial statements should be read in conjunction with the Trust's 2002
     Annual Information Form.

2.   SIGNIFICANT ACCOUNTING POLICIES

     a)   Unit Rights Incentive Plan

          The Trust has a unit-based long-term compensation plan for employees,
          directors and consultants of the Trust and its subsidiaries.
          Compensation cost is measured based on the intrinsic value of the
          award at the date of the grant and is recognized over the vesting
          period. Consideration received by the Trust on exercise of the units
          rights is credited to unitholders' capital. See Note 8 for a
          description of the plan and pro-forma disclosure of the associated
          compensation cost.

     b)   Per Unit Amounts

          Net earnings per unit are calculated using the weighted average number
          of units outstanding during the period, including the weighted average
          number of exchangeable shares outstanding converted at the exchange
          ratio at the end of each month. Diluted net earnings per unit are
          calculated using the treasury stock method to determine the dilutive
          effect of unit based compensation. The treasury stock method assumes
          that the proceeds received from the exercise of "in the money" trust
          unit rights are used to repurchase units at the average market rate
          during the period.

     c)   Reclamation Fund

          A reclamation fund has been set up by the Trust to ensure that cash is
          available to carry out future abandonment and reclamation work on
          wells, plants and facilities. The contributions are currently made on
          the basis of $0.20 per barrel of oil equivalent of production in
          Canada and France. Actual abandonment and reclamation work undertaken
          in the period was funded from the fund balance.


                                       12
- --------------------------------------------------------------------------------
<PAGE>


2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     d)   Income Taxes

          Income taxes are calculated using the liability method of accounting
          for income taxes. Under this method, income tax liabilities and assets
          are recognized for the estimated tax consequences attributable to
          differences between the amounts reported in the consolidated financial
          statements of the Trust and their respective tax base, using enacted
          income tax rates. The effect of a change in income tax rates on future
          tax liabilities and assets is recognized in income in the period in
          which the change occurs.

          The Trust is a taxable entity under the Income Tax Act (Canada) and is
          taxable only on income that is not distributed or distributable to the
          Unitholders. As the Trust allocates all of its Canadian taxable income
          to the Unitholders in accordance with the Trust Indenture, and meets
          the requirements of the Income Tax Act (Canada) applicable to the
          Trust, no provision for Canadian income tax expense has been made in
          the Trust.

          In the Trust structure, payments are made between the Company and the
          Trust which result in the transferring of taxable income from the
          Company to individual Unitholders. These payments may reduce future
          income tax liabilities previously recorded by the Company which would
          be recognized as a recovery of income tax in the period incurred.

     e)   Distributions

          The Trust makes monthly distributions of its distributable cash to
          Unitholders of record on the last day of each calendar month. Pursuant
          to the Trust's policy, it will pay distributions to its unitholders
          subject to retaining an appropriate distribution reserve, satisfying
          its financing covenants, making loan repayments and, if applicable,
          funding future removal and site restoration reserves.

3.   TRANSFER OF ASSETS AND LIABILITIES PURSUANT TO THE PLAN OF ARRANGEMENT

     Under the Plan of Arrangement, the Company transferred to Clear Energy Inc.
     a portion of the Company's existing lands and exploration assets. As this
     was a related party transaction, assets and liabilities were transferred at
     book value. Details are as follows:

     Petroleum and natural gas assets and equipment                    $19,509
     Future income tax asset                                             5,461
     -------------------------------------------------------------------------
     Total assets transferred                                          $24,970
     Provision for site restoration and abandonment                         89
     -------------------------------------------------------------------------
     Net assets transferred and reduction in share capital             $24,881
     =========================================================================

     Associated with the Plan of Arrangement, the Company recorded transaction
     costs of $25.6 million, with $16.8 million related to the issue of Trust
     units in exchange for cancellation of stock options and $8.8 million in
     advisory and other costs.

4.   BUSINESS  DISPOSITION AND INVESTMENT

     Effective January 22, 2003, the Company sold its existing 40% working
     interest in the Central Block in Trinidad to Aventura Energy Inc.
     ("Aventura") for consideration of 212,059,512 common shares. As this was a
     related party transaction, assets and liabilities were transferred at book
     value. The sale increases the Company's equity holding in Aventura to
     approximately 72% from approximately 47% held prior to the sale.


                                       13
- --------------------------------------------------------------------------------
<PAGE>


5.   LONG-TERM DEBT

     At September 30, 2003, the Trust had a line of credit of $240 million with
     a banking syndicate, which has a one year revolving period with a one year
     term to follow with a final settlement payment required at the end of the
     second year. A working capital tranche of $1 million included in the $240
     million facility has been placed in France to assist cash-management
     practices.

6.   FUTURE INCOME TAXES

     During the period ended September 30, 2003, reductions in corporate income
     tax rates were substantially enacted. The enacted rates are to be phased in
     over five years starting in 2003. As a result, the Trust's future income
     tax rate decreased to approximately 37 percent compared to 42 percent in
     prior periods. The future income taxes recovery recorded in the second
     quarter of 2003 includes the impact of this reduction in future income
     taxes of $13.7 million.

7.   UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES

     Pursuant to the Plan of Arrangement, 51,480,467 units of the Trust and
     6,000,000 exchangeable shares of the Company were issued in exchange for
     all of the outstanding shares of the Company, a wholly owned subsidiary of
     the Trust on a one for one basis.

     The exchangeable shares are convertible into trust units based on the
     exchange ratio, which is adjusted monthly to reflect the distribution paid
     on the trust units. Cash distributions are not paid on the exchangeable
     shares. During the period, a total of 728,364 exchangeable shares were
     converted into 739,738 trust units based on the exchange ratio at the time
     of conversion. At September 30, 2003, the exchange ratio was 1.09317 trust
     units per exchangeable share.

<TABLE>
<CAPTION>
                                                                           NUMBER OF SHARES             AMOUNT
     ----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                       <C>
     Common Shares of Vermilion Resources Ltd.
     Balance as at December 31, 2002                                             55,866,918           $140,557
     Issued upon exercise of stock options                                          267,100              1,201
     ----------------------------------------------------------------------------------------------------------
     Balance january 21, 2003, prior to  plan of arrangement                     56,134,018           $141,758
     ----------------------------------------------------------------------------------------------------------

     Trust units issued on cancellation of employee
        stock options (Note 3)                                                    1,346,449           $ 16,817
     Transfer of assets and liabilities to Clear Energy Inc. (Note 3)                     -            (24,881)
     Trust units issued                                                         (51,480,467)          (119,739)
     Exchangeable shares issued                                                  (6,000,000)           (13,955)
     ----------------------------------------------------------------------------------------------------------
                                                                                        NIL                NIL
     ----------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                            NUMBER OF UNITS             AMOUNT
     ----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                       <C>
     Trust Units
     Unlimited number of trust units authorized to be issued

     Issued pursuant to Plan of Arrangement January 22, 2003                     51,480,467           $119,739
     Distribution reinvestment plan                                                 253,937              3,351
     Issued on conversion of exchangeable shares                                    739,738              1,694
     ----------------------------------------------------------------------------------------------------------
     Balance as at September 30, 2003                                            52,474,142            124,784
     Trust units issuable on conversion of exchangeable shares                    5,762,794             12,261
     ----------------------------------------------------------------------------------------------------------
     Trust unitholders' capital as at september 30, 2003                         58,236,936           $137,045
     ----------------------------------------------------------------------------------------------------------
</TABLE>


                                       14
<PAGE>

<TABLE>
<CAPTION>
7.   UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES (CONTINUED)

                                                                           NUMBER OF SHARES      CONSIDERATION
     ---------------------------------------------------------------------------------------------------------
     EXCHANGEABLE SHARES
<S>                                                                        <C>                   <C>
     Issued pursuant to Plan of Arrangement  January 22, 2003                     6,000,000            $13,955
     Exchanged for trust units                                                     (728,364)            (1,694)
     ---------------------------------------------------------------------------------------------------------
     Balance as at september 30, 2003                                             5,271,636             12,261
     ---------------------------------------------------------------------------------------------------------
</TABLE>

     As per the Plan of Arrangement, shareholders of the Company received
     one unit or one exchangeable share in the Trust for each common share
     held. In addition, Vermilion shareholders received one share in a
     separate publicly listed oil and gas company, Clear Energy Inc. for
     each three common shares held (Note 3).

8.   TRUST UNIT RIGHTS INCENTIVE PLAN

     The Trust has a unit rights incentive plan that allows the Trust to
     issue rights to acquire trust units to directors, officers, employees
     and service providers. The Trust is authorized to issue up to 6,000,000
     unit rights, however, the number of trust units reserved for issuance
     upon exercise of the rights shall not at any time exceed 10% of the
     aggregate number of issued and outstanding trust units of the Trust.
     Unit right exercise prices are equal to the market price for the trust
     units on the date the unit rights are issued. If certain conditions are
     met, the exercise price per unit may be calculated by deducting from
     the grant price the aggregate of all distributions, on a per unit
     basis, made by the Trust after the grant date. Rights granted under the
     plan vest over a three year period and expire five years after the
     grant date.

     The Trust accounts for its unit rights incentive plan using the
     intrinsic-value of the unit rights. Using intrinsic-values,
     compensation costs are not recognized in the consolidated financial
     statements for unit rights granted to employees and directors when
     issued at prevailing market prices.

     Since the fair value of the unit rights can not be determined due to
     the nature of the reducing exercise price feature, pro-forma
     compensation cost has been determined using the excess of the unit
     price as at the date of the consolidated financial statements, over the
     exercise price for unit rights issued since January 22, 2003 as at the
     date of the consolidated interim financial statements. For the nine
     months ended September 30, 2003, net earnings would be reduced by
     $5,220,000. The effect on net earnings would be a decrease of $0.09 per
     unit. For the three months ended September 30, 2003, net earnings would
     be reduced by $3,113,000. The effect on net earnings would be a
     decrease of $0.05 per unit.

     The following table summarizes information about the Trust's unit rights

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED SEPT 30, 2003           NINE MONTHS ENDED SEPT 30, 2003
                                                             WEIGHTED                                 WEIGHTED
                                          NUMBER OF           AVERAGE             NUMBER OF            AVERAGE
                                        UNIT RIGHTS    EXERCISE PRICE           UNIT RIGHTS     EXERCISE PRICE
     ---------------------------------------------------------------------------------------------------------
<S>                                     <C>            <C>                      <C>             <C>
     Opening balance                      4,425,700          $  11.50                    --           $     --
             Granted                         69,000             14.19             4,756,000              11.54
             Cancelled                      (17,100)            11.45              (278,400)             11.45
     ---------------------------------------------------------------------------------------------------------
     Closing balance                      4,477,600          $  11.54             4,477,600           $  11.54
     =========================================================================================================
</TABLE>


                                       15
- --------------------------------------------------------------------------------
<PAGE>

9.   PER UNIT AMOUNTS

     Basic per unit calculations are based on the weighted average number of
     trust units outstanding. Diluted calculations include additional trust
     units for the dilutive impact of unit rights outstanding pursuant to
     the unit rights incentive plan.

     Net earnings from operations per unit are as follows:

                                 THREE MONTHS ENDED            NINE MONTHS ENDED
                              SEPT 30       Sept 30       SEPT 30        Sept 30
                                 2003          2002          2003           2002
     ---------------------------------------------------------------------------
     Net earnings
           Basic (1)            $0.23         $0.14         $0.78          $0.49
           Diluted (2)          $0.22         $0.14         $0.77          $0.49
     ---------------------------------------------------------------------------


     (1)  Basic per unit calculations are based on the weighted average number
          of trust units outstanding in 2003 of 57,989,679 for the period
          (55,771,851 common shares in 2002) which includes outstanding
          exchangeable shares converted at the period end exchange ratio.

     (2)  Diluted calculations include additional trust units in 2003 of 387,272
          for the period (939,339 additional shares in 2002) for the dilutive
          impact of the unit rights incentive plan (stock option plan in 2002).
          Calculations of diluted shares exclude 75,000 of unit rights in 2003
          which would have been anti-dilutive. There were no adjustments to net
          earnings from operations in calculating dilutive per unit amounts.

<TABLE>
<CAPTION>
10.  SEGMENTED INFORMATION
                                                      THREE MONTHS ENDED              NINE MONTHS ENDED
                                                   SEPT 30       Sept 30         SEPT 30        Sept 30
                                                      2003          2002            2003           2002
     --------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>             <C>             <C>
     Petroleum and natural gas revenues:
           Canada                                 $ 53,252     $  49,106       $ 179,343       $145,218
           France                                   16,879        21,613          53,593         58,968
           Trinidad                                  3,048            --           9,170              -
     --------------------------------------------------------------------------------------------------
                                                  $ 73,179     $  70,719       $ 242,106       $204,186
     --------------------------------------------------------------------------------------------------
     Net earnings:
           Canada                                 $ 11,785        $2,572       $  36,638        $14,134
           France                                    1,907         5,169           8,235         13,380
           Trinidad                                   (415)           --             333              -
     --------------------------------------------------------------------------------------------------
                                                  $ 13,277     $   7,741       $  45,206        $27,514
     --------------------------------------------------------------------------------------------------
     Cash flow from operations:
           Canada                                 $ 25,150     $  22,084       $  79,705        $64,772
           France                                    8,850        14,126          30,173         37,559
           Trinidad                                  1,779            --           5,021              -
     --------------------------------------------------------------------------------------------------
                                                  $ 35,779     $  36,210       $ 114,899       $102,331
     --------------------------------------------------------------------------------------------------
     Capital expenditures:
           Canada                                 $  8,910     $  44,387       $  20,927       $110,755
           France                                    8,941         7,232          15,785         19,141
           Trinidad/Argentina                          888        68,819          15,059         69,567
     --------------------------------------------------------------------------------------------------
                                                  $ 18,739     $ 120,438       $  51,771       $199,463
     --------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                 SEPT 30         Dec 31
                                                                                    2003           2002
     Identifiable assets:
<S>                                                                            <C>              <C>
         Canada                                                                $ 443,043        $497,512
         France                                                                  205,609         199,385
         Trinidad/Argentina                                                      112,213         114,814
     --------------------------------------------------------------------------------------------------
                                                                               $ 760,865        $811,711
     --------------------------------------------------------------------------------------------------
</TABLE>


                                       16
- --------------------------------------------------------------------------------
<PAGE>

11.  CONTINGENCIES

     On September 25, 2001, Vermilion received a tax notice from the
     Direction Generale des Impots regarding the Company's wholly owned
     subsidiary in France, Vermilion REP S.A. The notice advises that the
     Company is liable for a registration fee that was owed at the time of
     the purchase of the French properties in 1997 in the amount of 4.5
     million Euro, including interest charges for late filing. The Company
     disagrees with the tax authorities position and is in the process of
     challenging the notice. At the present time the Company is unable to
     determine the likelihood that it will be required to pay the
     registration fee, and as such, no amount has been accrued in the
     consolidated financial statements at September 30, 2003.

12.  COMMITMENTS

     The Trust realized a financial hedging loss of $10.7 million during the
     first nine months of 2003 (2002 - $1.6 million gain) related to its
     hedging activities. Physical and financial hedging contracts currently
     in place are as follows:

<TABLE>
<CAPTION>
       OIL HEDGING                                            WTI                             BRENT
       Fixed Price Swaps                             BBLS/D           US$/BBL          BBLS/D         US$/BBL
       -------------------------------------------------------------------------------------------------------
<S>                                                  <C>              <C>              <C>            <C>
       Q4 2003                                        2,950            $24.74           2,600          $23.24
       -------------------------------------------------------------------------------------------------------
       2004 Average                                   2,250            $24.35           2,250          $22.93
       2005 Average                                   1,500            $24.80           1,500          $23.37

       GAS HEDGING                                                                      FLOOR         CEILING
       Costless Collars                                                  GJ/D           C$/GJ           C$/GJ
       -------------------------------------------------------------------------------------------------------
       Q4 2003                                                         19,071           $4.80           $6.66
       -------------------------------------------------------------------------------------------------------
       Q1 2004                                                         17,500           $4.90           $8.53
       Q2 2004                                                         10,000           $4.56           $6.65
       Q3 2004                                                         10,000           $4.56           $6.65
       Q4 2004                                                          3,370           $4.56           $6.65
       -------------------------------------------------------------------------------------------------------
       2004 Average                                                    10,198           $4.71           $7.46
       2005 Average                                                        --              --              --

       CURRENCY HEDGING                                                                US$/MO        EXCHANGE
                                                                                       (000'S)           RATE
       -------------------------------------------------------------------------------------------------------
       Q4 2003                                                                         $4,080           $0.63
       2004                                                                            $3,170           $0.71
</TABLE>


13.  COMPARATIVE FIGURES

     Certain of the prior period numbers have been reclassified to conform
     with the current period presentation.


                                       17
- --------------------------------------------------------------------------------
<PAGE>

FORWARD-LOOKING INFORMATION

This report contains forward-looking financial and operational information
including earnings, cash flow, production and capital expenditure projections.
These projections are based on the Trust's expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to, future commodity prices, exchange
rates, interest rates, geological risk, reserves risk, political risk, product
demand and transportation restrictions.

NON-GAAP MEASURES:

Included in this news release are references to terms commonly used in the oil
and gas industry, such as cash flow and cash flow per share. These terms are not
defined by Generally Accepted Accounting Principles. Consequently, these are
referred to as non-GAAP measures. Cash flow, as discussed in this news release,
appears as a separate caption on the Company's cash flow statement and is
reconciled to both net income and cash flow from operations.

For further information please contact:

Curtis W. Hicks, C.A.
VP Finance & Chief Financial Officer
or
Paul Beique, Director Investor Relations

2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 781-9449
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>12
<FILENAME>ex99_9form40-f.txt
<DESCRIPTION>EXHIBIT 99.9
<TEXT>
                                                                    EXHIBIT 99.9
                                                                    ------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


              PRESS RELEASE - FOR IMMEDIATE RELEASE AUGUST 12, 2003
                      SECOND QUARTER RESULTS, JUNE 30, 2003


Vermilion Energy Trust ("Vermilion") (TSX - VET.UN) is pleased to report
unaudited interim operating and financial results for the period ended June 30,
2003. These results include the consolidated results of Aventura Energy Inc.
("Aventura"), a 72.2% owned subsidiary. Where applicable, the results have been
segregated to reflect Aventura operations and those related to the Trust (the
"Trust"), as Aventura does not currently contribute any cash flow or production
to the generation of the Trust distributions.

Vermilion achieved the following highlights:

SECOND QUARTER HIGHLIGHTS

>    Achieved consolidated production of 26,288 boe/d, compared to 26,413 boe/d
     in the first quarter of 2003. Vermilion was able to maintain production
     through a combination of successful workover programs and well optimization
     efforts.

>    Maintained consistent distributions of $0.17 per unit per month. Based on
     the strong performance in the first half of the year, the current outlook
     on pricing, and forecast results for the balance of the year, Vermilion
     anticipates that it will be able to maintain its monthly distribution at
     $0.17 per unit through 2003.

>    The Trust generated cash flow of $38.5 million ($0.67 per unit) from
     production of 24,073 boe/d, consisting of 13,403 bbls/d of oil and NGL's
     and 64.0 mmcf/d of natural gas (1). This compares to a first quarter cash
     flow of $38.4 million from production of 24,132 boe/d.

>    Witnessed the trading of nearly 20 million units from April 1st to June
     30th 2003. The Trust has seen nearly 90% of its float trade hands since
     Vermilion began trading as a trust on January 24, 2003. Capital
     appreciation in the trading value of Vermilion units of 8.9% contributed to
     a total return for its unit holders of 13.1% in the second quarter alone.

>    Participated in the drilling of two exploration wells in Trinidad through
     the Trust's ownership in Aventura. The Saunders-1 well tested as a low
     inflow oil well and it has been suspended pending further evaluation to
     determine the potential effectiveness of a stimulation program. Baraka-1
     test results indicate potential wellhead deliverability of over 35 mmcf/d
     and over 1,000 bbls/d of high quality condensate.

(1) Although Aventura's production and financial results are consolidated in the
financial tables, these are not included as part of distributable funds for the
Trust's unitholders.

CONFERENCE CALL

Vermilion will discuss these results in a conference call to be held on
Wednesday, August 13, 2003. The conference call will begin at 10:00 a.m. EST
(8:00 a.m. MST). To participate, you may call toll free 1-800-814-3911 or
1-416-640-4127 (Toronto area).

The conference call will also be available on replay by calling 1-877-289-8525
or 1-416-640-1917 (Toronto area) using pass code 21010119 followed by the pound
"#" key. The replay will be available until midnight eastern time on August 20,
2003.


                                       1
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
HIGHLIGHTS

                                                                     Three months ended                            Six months ended
                                                      Trust      Aventura  CONSOLIDATED          Trust     Aventura    CONSOLIDATED
                                                  Financial   Energy Inc.      JUNE 30,      Financial  Energy Inc.   JUNE 30, 2003
(unaudited)                                     Information            (3)         2003    Information          (3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>           <C>          <C>            <C>           <C>          <C>

FINANCIAL ($000 CDN. EXCEPT UNIT AND PER UNIT AMOUNTS)

Petroleum and natural gas revenues              $    78,274    $    2,640    $   80,914   $   163,208   $    5,719   $      168,927
Cash flow from operations                            38,489           893        39,382        76,887        2,233           79,120
  Per unit, basic (1)                                  0.67                        0.68          1.33                          1.37
Distributions (2)                                    25,891                      25,891        43,557                        43,557
  Per unit                                             0.51                        0.51          0.85                          0.85
  % cash flow distributed                               67%                         66%           57%                           55%
Capital expenditures                                  8,512         6,892        15,404        21,766       12,401           34,167
Acquisitions (dispositions)                              --            --            --         5,761       (6,896)          (1,135)
Debt, net of working capital (surplus)                                                        190,767       (7,327)         183,440
Trust units outstanding(1)
  Basic                                                                                                                  57,859,513
  Diluted                                                                                                                62,285,213
Weighted average trust units outstanding (1)
  Basic                                                                                                                  57,630,891
  Diluted                                                                                                                57,950,581
Unit trading
  High                                                                                                                  $     13.79
  Low                                                                                                                   $     11.12
  Close                                                                                                                 $     13.40

OPERATIONS

Production
  Crude oil (bbls/d)                                 11,292           305        11,597        11,164          324           11,488
  Natural gas liquids (bbls/d)                        2,111            --         2,111         2,034           --            2,034
  Natural gas (mcf/d)                                64,027        11,459        75,486        65,427       11,545           76,972
  Boe/d (6:1)                                        24,073         2,215        26,288        24,103        2,248           26,351
Average selling price
  Crude oil (per bbl, including hedging)        $     34.36    $    38.10         34.45         36.76        40.38            36.86
  Crude oil (per bbl, not including hedging)          36.74         38.10         36.77         41.38        40.38            41.35
  Natural gas liquids (per bbl)                       35.06            --         35.06         37.94           --            37.94
  Natural gas (per  mcf, including hedging)            6.22          1.52          5.51          6.33         1.61             5.62
  Natural gas (per mcf, not including hedging)         6.22          1.52          5.51          6.54         1.61             5.80
Netbacks per boe (6:1)
  Operations netback                                  20.56          8.06         19.51         22.36         9.76            21.29
  Cash flow netback                                   17.57          4.43         16.46         17.62         5.49            16.59
  Cash flow netback excl. reorg. costs                19.64         18.44
  Operating costs                                      5.79          3.75          5.62          5.62         2.78             5.38
  General and administration                    $      1.31    $     1.36          1.31          1.23         1.20             1.23
</TABLE>

(1) Includes trust units issuable for outstanding exchangeable shares based on
the period end exchange ratio

(2) Distributions are paid on issued trust units at each record date

(3) The Trust owns 72.2% of the outstanding shares of Aventura, necessitating
the consolidation of the results of the Trust and Aventura


                                       2
- --------------------------------------------------------------------------------
<PAGE>

OPERATIONAL ACTIVITIES

The Trust's activities in the second quarter were focused on workovers,
recompletions and production optimization programs. Total capital expenditures
for the quarter were only $8.5 million, however production volumes were
maintained at fairly stable levels compared to the first quarter 2003. Note that
first quarter average volumes included approximately 400 boe/d that were
transferred to Clear Energy Inc. as part of the reorganization of Vermilion into
a royalty trust, effective January 22, 2003. A total of $4.3 million was spent
on workovers and recompletions in the second quarter 2003.

<TABLE>
<CAPTION>
PRODUCTION SUMMARY (6:1)
                             Three months ended June 30, 2003          Six months ended June 30, 2003
- ---------------------------------------------------------------------------------------------------------
                               Oil &     Natural                      Oil &    Natural
                                NGLs       Gas        TOTAL            NGLs      Gas       TOTAL
                              (bbls/d)  (mmcf/d)     (BOE/D)         (bbls/d)  (mmcf/d)   (BOE/D)      %
- ---------------------------------------------------------------------------------------------------------
<S>                           <C>       <C>          <C>             <C>       <C>        <C>        <C>
VERMILION ENERGY TRUST
    Canada                      7,296     62.66       17,739           7,152     64.03    17,824      68
    France                      6,107      1.36        6,334           6,046      1.39     6,279      24
- ---------------------------------------------------------------------------------------------------------
    Total                      13,403     64.02       24,073          13,198     65.42    24,103      92
- ---------------------------------------------------------------------------------------------------------
AVENTURA ENERGY INC.
    Trinidad                      305     11.46        2,215             324     11.55     2,248       8
- ---------------------------------------------------------------------------------------------------------
CONSOLIDATED                   13,708     75.48       26,288          13,522     76.97    26,351     100
=========================================================================================================
</TABLE>

Second quarter production in Canada averaged 7,296 bbls/d of oil and NGL's and
62.7 mmcf/d of natural gas compared to 7,005 bbls/d and 65.4 mmcf/d in the first
quarter. Vermilion also produced 6,334 boe/d from its properties in France,
compared to 6,224 boe/d in the first quarter. Since the beginning of the year,
the Trust has participated in the drilling of only 3.0 wells (1.6 net). A more
active second half drilling program combined with the ongoing workover program
should maintain the stability of Vermilion's production in both Canada and
France through the second half of 2003.

In France, a selective acid stimulation of the Parentis 205 well in the
Aquitaine Basin resulted in an initial production gain of 400 bbls/d and a
stabilized gain of over 100 bbls/d. The stabilized production addition was
achieved at a cost below $7,000 per daily barrel. Based on the successful
fracture treatment of a well in the Champotran field in late 2002, two
additional fracture treatments are scheduled for wells in this Paris Basin field
in the third quarter of 2003. The working interest in these wells is 100%. A
strong program of workovers and new drills should result in stable to higher
production from France in the second half of the year.

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED JUNE 30, 2003        SIX MONTHS ENDED JUNE 30, 2003
DRILLING ACTIVITY (# OF WELLS)                GROSS             (NET)              GROSS             (NET)
- -------------------------------------------------------------------------------------------------------------
<S>                                          <C>               <C>                <C>                <C>
CANADA
    Oil                                         0                 0.0                0                  0.0
    Gas                                         2                (0.6)               3                 (1.6)
    D&A                                         0                 0.0                0                  0.0
- -------------------------------------------------------------------------------------------------------------
TOTAL                                           2                (0.6)               3                 (1.6)
=============================================================================================================
FRANCE
    Oil                                         0                 0.0                0                  0.0
    Gas                                         0                 0.0                0                  0.0
    D&A                                         0                 0.0                0                  0.0
- -------------------------------------------------------------------------------------------------------------
TOTAL                                           0                 0.0                0                  0.0
=============================================================================================================
COMBINED
    Oil                                         0                 0.0                0                  0.0
    Gas                                         2                (0.6)               3                 (1.6)
    D&A                                         0                 0.0                0                  0.0
- -------------------------------------------------------------------------------------------------------------
TOTAL                                           2                (0.6)               3                 (1.6)
=============================================================================================================
</TABLE>


                                       3
- --------------------------------------------------------------------------------
<PAGE>

In addition to its operational activity, Vermilion had 10 wells drilled on its
lands to date in 2003 (seven wells in the second quarter) through farm-out
arrangements. This additional drilling activity resulted in one oil well, one
gas well, six wells waiting on completion and two dry and abandoned. The Trust
will continue to pursue activity on its undeveloped land base by third parties
as a means of drilling locations which are not compatible with Vermilion's
capital development strategy and creating economic value in the form of
overriding royalty income.

FINANCIAL

The Trust generated cash flow of $38.5 million in the second quarter ($0.67 per
unit), compared to $38.4 million ($0.67 per unit) in the first quarter. The
Trust's distributions in the second quarter totalled $25.9 million or $0.51 per
unit, yielding a payout ratio of approximately 67% of cash flow. Vermilion's
earnings for the second quarter climbed to $32.6 million from a loss of $0.7
million in the first quarter, which was impacted by reorganization expenses,
while the Trust benefited in the second quarter from lower tax rates for the oil
and gas industry announced in the last federal budget. Capital expenditures for
the Trust in the second quarter totalled $8.5 million. The Trust's total debt,
net of working capital (assignable to the Trust) at the end of the period was
$191 million.

<TABLE>
<CAPTION>
CAPITAL EXPENDITURES ($000'S)

                                                   Three Months Ended June 30, 2003             Six Months Ended June 30, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
                                                  Trust       Aventura                        Trust        Aventura
                                                 Assets    Energy Inc.   Consolidated        Assets     Energy Inc.    Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>         <C>           <C>                <C>         <C>            <C>
Land                                           $    328       $     --       $    328       $    653       $     --        $    653
Seismic                                              66             --             66          1,120             --           1,120
Drilling and completion                           1,905             --          1,905          4,307             --           4,307
Production equipment and                          1,811             --          1,811          5,345             --           5,345
facilities
Workovers                                         4,303             --          4,303          6,565             --           6,565
Trinidad                                             --          6,892          6,892          1,804         12,401          14,205
Other                                                99             --             99          1,972             --           1,972
- ------------------------------------------------------------------------------------------------------------------------------------
                                                  8,512          6,892         15,404         21,766         12,401          34,167
Property acquisitions
(dispositions)                                       --             --             --          5,761         (6,896)         (1,135)
- ------------------------------------------------------------------------------------------------------------------------------------
                                               $  8,512       $  6,892       $ 15,404       $ 27,527       $  5,505        $ 33,032
====================================================================================================================================
</TABLE>

AVENTURA ENERGY INC.

Aventura drilled two exploration wells in Trinidad. The Company completed and
tested the Saunders-1 exploration well, located 3 km to the southwest of the
Carapal Ridge-1 discovery well during the second quarter. As reported in
Aventura's first quarter report, the lower sub-thrust target was abandoned,
however well logs and drilling data suggested a hydrocarbon column in the main
Herrera reservoir target. Test results on the potential pay zone of the
Saunders-1 indicate a low permeability reservoir with water in the lower third
of the column, while the upper two-thirds produced low rates of 32 degree API
oil and water. The well has been suspended pending further evaluation to
determine the potential effectiveness of a stimulation program.

The Baraka-1 exploration well, 3 km to the northeast of Carapal Ridge-1, has
been drilled and cased to a total depth of 9,375 feet. This well, which was
drilled on a separate structure, tested 22 mmcf/d and 660 bbls/d of 58 degree
API condensate from over 300 feet of perforations in a gross hydrocarbon column
extending over 600 feet. No signs of pressure depletion or formation water were
evident during this extended 48-hour flow test. Preliminary indications suggest
ultimate well deliverability exceeding 35 mmcf/d of natural gas and 1,000 bbls/d
of high quality condensate. With Carapal Ridge-1 and Baraka-1, Aventura has now
drilled the two largest discoveries onshore Trinidad in the last 40 years.


                                        4
- --------------------------------------------------------------------------------
<PAGE>

Aventura continues to negotiate a renewal of its short-term, 20 mmcf/d natural
gas contract with Petrotrin and is close to finalizing an agreement that will
cover sales through late 2005. Negotiations are also advancing on a potential 60
mmcf/d long-term gas contract which would begin in late 2005. These long-term
contracts will enable Aventura to provide shareholders with a positive source of
earnings and cash flow over the life of the asset. Aventura's efforts to
maximize the value of these contracts are ongoing.

OUTLOOK

Vermilion's management is pleased by the performance of the Trust's asset base
in the second quarter. Through the focused efforts of its enthusiastic staff,
production rates remained steady, despite limited capital expenditures and a
virtual absence of drilling. Activity levels are expected to pick up in the
second half of the year, with three new wells scheduled for France and eleven
new wells scheduled for Canada. The Trust also hopes to accelerate its farm out
activity, which could add further to the value of its existing asset base.

During the third quarter, the Trust's production and cash flow will be somewhat
negatively impacted by a severe storm which occurred in the Acquitaine Basin in
France and as a result of the shut-in at the Trust's Shane property as described
in a press release issued August 6, 2003. In France, production is being fully
restored after winds reached as high as 150 kilometres per hour causing
electrical line ruptures and power outages. At Shane, approximately 1,600 boe/d
has been shut-in pending resolution of a production allocation issue. These
disruptions, while important, are not permanent and will not affect the Trust's
ability to maintain distributions at the current level of $0.17 per month
through the balance of 2003.

Vermilion has established that non-residents own approximately 39% of its issued
and outstanding units (not including exchangeables) and 35% if the exchangeable
shares are included. Pursuant to Vermilion's Trust Indenture, non-resident
unitholders may not own more than 50% of total outstanding trust units. The
Trust will continue to ensure that it complies with all requirements under its
Trust Indenture, including Canadian ownership requirements.





                                       5
- --------------------------------------------------------------------------------
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

THE SIX MONTHS ENDED JUNE 30, 2003 REPRESENTS THE FIRST HALF YEAR OF VERMILION'S
OPERATION AS A TRUST. AS VERMILION ENERGY TRUST WAS CREATED THROUGH THE
RE-ORGANIZATION OF VERMILION RESOURCES LTD., THE HISTORICAL RESULTS OF VERMILION
RESOURCES LTD. WILL REPRESENT THE HISTORICAL RESULTS OF THE TRUST FOR
COMPARATIVE PURPOSES.

Oil and gas prices for the first half of 2003 were strong in comparison with the
first half of 2002. The WTI reference price for oil averaged $31.39 US per bbl
for the six month period, Dated Brent was $28.77 US per bbl and AECO reference
price for gas was $7.57 Cdn per mcf. This compares to $23.95 per bbl for WTI,
$23.09 per bbl for Brent and $3.73 per mcf, Cdn AECO for the first six months of
2002. These year over year price increases are the main drivers behind the
increase in netbacks in 2003 as compared to 2002. In 2003, Vermilion's operating
netback equalled $21.29 per boe, up 15% over the $18.53 reported for the first
six months of 2002. The cash flow netback of $16.59 per boe for the first half
was also up 15% over the $14.42 recorded in 2002. 2003 second quarter operating
and cash flow netbacks totalled $19.51 and $16.46 per boe, respectively. These
compare to 2002 second quarter operating and cash flow netbacks equal to $18.39
and $14.24 per boe, respectively. In addition, the 2003 cash flow netbacks were
reduced by $1.85 per boe for the half as a result of the impact of the cash
costs incurred in the re-organization of Vermilion into a trust.

Total revenues for the first half of 2003 were $168.9 million compared to $133.5
million for the first half of 2002 and $80.9 million in the second quarter of
2003 compared to $68.9 million for the corresponding reporting period in 2002.
Vermilion's combined crude oil & NGL price was $40.84 per bbl for the first half
of 2003, an increase of 25% over the $32.74 per bbl reported for the first half
of 2002. The second quarter price was $36.51 per bbl compared to $33.29 per bbl
a year ago. The natural gas price realized in the first half of 2003 was $5.80
per mcf compared to $4.09 per mcf realized a year ago, a 42% year-over-year
increase. The second quarter price of $5.51 per mcf was 27% greater than the
$4.34 per mcf for the same period of 2002. Tempering these increases was the
impact of Vermilion's hedging program, whereby prices were reduced by $2.47 per
boe on a combined basis for the six month period ended June 30, 2003, compared
to a hedging gain of $0.36 per boe in the first half of 2002. Gas prices were
reduced on average by $0.18 per mcf over the first half of 2003, with second
quarter prices not impacted by the Trust's natural gas collar.

Vermilion continues to manage its risk exposure through prudent commodity and
currency hedging strategies. Natural gas contracts for 22.8 mmcf/d remain in
place for the calendar year of 2003 with various price structures resulting in
an average floor price of $5.26 CDN per mcf. Currently, the Trust has hedged 5.4
mmcf/d of its 2004 natural gas production with various price structures,
resulting in an average floor price of $5.39 per mcf. On the crude oil side,
Vermilion has hedges covering 5,550 bbls/d at $24.74 US for the remainder of
2003; 4,500 bbls/d in 2004 at $24.39 US; and 1,000 bbls/d in 2005 at $24.28 US,
all referenced in WTI equivalent prices.

Vermilion has Canadian/US dollar currency hedges in place covering two-thirds of
its oil hedge positions for 2003 at approximately $1.59 US per Canadian dollar,
or $0.63 CDN per US dollar.

Total royalties, net of ARTC, increased to $8.75 per boe or 23.1% of sales in
the first half 2003, compared with $6.37 per boe, or 22.1% of sales in the first
half of 2002. The quarter over quarter numbers were $8.69 per boe in 2003 and
$6.59 per boe for the same period in 2002. The increase is due directly to the
increase in prices explained above as royalties are price sensitive in Canada
and calculated as a percentage of revenue. In France, royalties for the most
part are calculated on a unit of production basis and do not react to price
changes.

Operating costs increased to $5.38 per boe in 2003 from $4.34 per boe in the
first half of 2002. Lifting costs for the second quarter of the year were $5.62
in comparison to $4.69 for the second quarter of 2002. In Canada, processing
costs in the Peace River Arch area, workovers designed to increase production
and increased power costs resulting from the strong gas prices in the first half
have contributed to the year over year increase.


                                       6
- --------------------------------------------------------------------------------
<PAGE>

In France, power costs continue to rise and the strengthening Euro also
contributed to the increase in operating costs when converted to Canadian
dollars.

General and administrative expenses for the year increased to $1.23 per boe from
$1.10 per boe in the first half of 2002. The second quarter number for 2003 of
$1.31 is increased over the second quarter 2002 number of $1.15 by $0.16. The
increase is due to the increased costs of operating a Trust.

Reorganization costs of $25.6 million relate to Vermilion's decision to convert
to a trust. Included in this amount are $8.8 million in transaction costs, which
include investment banking fees as well as all accounting and legal fees,
related to the conversion. Also included in this amount is the value of trust
units issued in exchange for the cancellation of all outstanding employee
options. The value of the trust units issued totalled $16.8 million. All of
these costs were incurred in the first quarter of 2003.

Interest expense increased to $0.87 per boe for the first half of 2003 from
$0.46 per boe for the corresponding period in 2002 as a result of higher average
debt levels. The quarter over quarter increase was $0.42 per boe from $0.48 per
boe in the second quarter of 2002 to $0.90 in 2003.

Depletion and depreciation expenses increased from $9.56 per boe in the first
half of 2002 to $10.02 per boe in 2003. The quarter over quarter numbers were
$10.11 in the second quarter of 2003 as compared to $9.94 a year ago.

The Trust's current tax provision has decreased to $0.75 per boe in the first
half of 2003 and $0.83 in the second quarter from $2.54 per boe in the first
half of 2002 and $2.54 in the second quarter. The current provision is based on
an estimated $6 million tax liability in France for the year, while in Canada,
it is anticipated that there will be no current taxes due as a function of the
conversion to an income trust. A reduction in tax rates for Canadian resource
activities resulted in a recovery of future income taxes, which was recorded in
the second quarter pushing earnings to $32.6 million and $31.9 for the first
half. Adding to this recovery is the taxable portion of distribution payments
made to unitholders. In the Trust's structure, payments are made between the
operating company and the Trust transferring both income and future income tax
liability to the unitholder. Therefore it is the opinion of management that no
cash income taxes in Canada are expected to be paid by the operating company in
the future, and as such, the future income tax liability recorded on the balance
sheet related to Canadian operations will be recovered through earnings over
time.

Foreign exchange loss increased to $0.64 per boe and $0.99 per boe in the first
half and quarter respectively from $0.02 in the six months ended 2002 and a gain
of $0.01 per boe in the second quarter 2002. The increased loss relates to a
loss on working capital held in a foreign currency in our France operations
combined with Aventura's loss on its working capital related to its operations
in Trinidad.

Capital spending for the first half totalled $33.0 million including $5.8
million for the acquisition of a royalty interest at Bottrel, Alberta from
Aventura. This acquisition was negotiated as part of the restructuring and
occurred immediately following the creation of the Trust. This compares to $79.0
million spent in the first half of 2002, $31.0 million of which was for the
corporate acquisition of Artemis Energy Limited. The capital for the first half
of 2003 was funded entirely through cash flow and was primarily spent on
facilities, tie-ins and workovers as well as Aventura's capital program in
Trinidad.

Vermilion's debt (net of working capital) on June 30, 2003 was $183.4 million.
Early in 2003, Vermilion negotiated the terms of an amended credit facility with
its banking syndicate to provide a $260 million credit facility. The amended
loan facility remains with the same syndicate of lenders with no change to the
terms and security provisions. The facility structure is comprised of a one year
revolving period with a one year term to follow with a final settlement payment
required at the end of the second year.


                                       7
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
NETBACKS (6:1)

                                                                                                         THREE MONTHS    SIX MONTHS
                                                                                                                ENDED         ENDED
                                                                                                             JUNE 30,      JUNE 30,
                                   THREE MONTHS ENDED JUNE 30, 2003       SIX MONTHS ENDED JUNE 30, 2003         2002          2002
                                 -------------------------------------------------------------------------------------------------
                                     Oil &      Natural                    Oil &     Natural
                                      NGLs          Gas       TOTAL         NGLs         Gas       TOTAL        Total        Total
                                     $/bbl        $/mcf       $/BOE        $/bbl       $/mcf       $/BOE        $/boe        $/boe
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>          <C>         <C>          <C>         <C>        <C>           <C>
TRUST FINANCIAL INFORMATION
CANADA
Price                            $   41.66    $    6.25    $  39.23    $   44.96    $   6.57    $  41.63   $    29.14    $   27.64
Hedging gain (loss)                  (2.32)          --       (0.96)       (4.13)      (0.21)      (2.42)       (0.10)        0.18
Royalties (net)                      (8.99)       (2.16)     (11.31)      (10.13)      (1.99)     (11.20)       (7.38)       (7.11)
Lifting costs                        (5.62)       (0.86)      (5.36)       (5.87)      (0.77)      (5.12)       (3.80)       (3.62)
- -----------------------------------------------------------------------------------------------------------------------------------
Operating netback                $   24.73    $    3.23    $  21.60    $   24.83    $   3.60    $  22.89   $    17.86    $   17.09
- -----------------------------------------------------------------------------------------------------------------------------------
FRANCE
Price                            $   30.28    $    4.66    $  30.19    $   35.99    $   5.19    $  35.81   $    31.98    $   32.78
Hedging gain (loss)                  (1.63)          --       (1.57)       (3.64)       -          (3.51)       (0.24)        0.91
Royalties (net)                      (4.04)       (0.24)      (3.95)       (4.50)      (0.24)      (4.39)       (4.01)       (4.04)
Lifting costs                        (6.69)       (2.65)      (7.02)       (6.74)      (2.51)      (7.05)       (7.60)       (6.58)
- -----------------------------------------------------------------------------------------------------------------------------------
Operating netback                $   17.92    $    1.77    $  17.65    $   21.11    $   2.44    $  20.86   $    20.13    $   23.07
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL TRUST
Price                            $   36.47    $    6.22    $  36.85    $   40.85    $   6.54    $  40.11   $    29.80    $   28.88
Hedging gain (loss)                  (2.01)          --       (1.12)       (3.91)      (0.21)      (2.70)       (0.13)        0.36
Royalties (net)                      (6.73)       (2.12)      (9.38)       (7.55)      (1.95)      (9.43)       (6.59)       (6.37)
Lifting costs                        (6.11)       (0.90)      (5.79)       (6.27)      (0.81)      (5.62)       (4.69)       (4.34)
- -----------------------------------------------------------------------------------------------------------------------------------
Operating netback                $   21.62    $    3.20    $  20.56    $   23.12    $   3.57    $  22.36   $    18.39    $   18.53
- -----------------------------------------------------------------------------------------------------------------------------------
AVENTURA FINANCIAL
Price                            $   38.10    $    1.52    $  13.09    $   40.38    $   1.61    $  14.06           --           --
Hedging gain (loss)                     --           --          --           --          --          --           --           --
Royalties (net)                      (3.29)       (0.16)      (1.28)       (4.26)      (0.18)      (1.52)          --           --
Lifting costs                           --        (0.73)      (3.75)        -          (0.54)      (2.78)          --           --
- -----------------------------------------------------------------------------------------------------------------------------------
Operating netback                $   34.81    $    0.63    $   8.06    $   36.12    $   0.89    $   9.76           --           --
- -----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED
Price                            $   36.51    $    5.51    $  34.84    $   40.84    $   5.80    $  37.89   $    29.80    $   28.88
Hedging gain (loss)                  (1.96)          --       (1.02)       (3.81)      (0.18)      (2.47)       (0.13)        0.36
Royalties (net)                      (6.65)       (1.82)      (8.69)       (7.47)      (1.68)      (8.75)       (6.59)       (6.37)
Lifting costs                        (5.97)       (0.87)      (5.62)       (6.12)      (0.77)      (5.38)       (4.69)       (4.34)
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING NETBACK                $   21.93    $    2.82    $  19.51    $   23.44    $   3.17    $  21.29    $   18.39    $   18.53
- -----------------------------------------------------------------------------------------------------------------------------------
General and administrative                                    (1.31)                               (1.23)       (1.15)       (1.10)
Reorganization costs                                             --                                (1.85)          --           --
Interest                                                      (0.90)                               (0.87)       (0.48)       (0.46)
Foreign exchange                                              (0.01)                                -            0.02        (0.01)
Current and capital taxes                                     (0.83)                               (0.75)       (2.54)       (2.54)
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOW NETBACK                                          $  16.46                             $  16.59   $    14.24    $   14.42
- -----------------------------------------------------------------------------------------------------------------------------------
Depletion and depreciation                                   (10.11)                              (10.02)       (9.94)       (9.56)
Future income taxes                                            8.36                                 4.38        (0.24)       (0.47)
Deferred financing charges                                    (0.03)                               (0.05)       (0.08)       (0.08)
Foreign exchange                                              (0.99)                               (0.64)        0.01        (0.02)
Non-controlling interest                                      (0.05)                               (0.03)        0.01         0.03
Trust units issued                                               --                                (3.53)          --           --
- -----------------------------------------------------------------------------------------------------------------------------------
EARNINGS NETBACK                                           $  13.64                             $   6.70   $     4.00    $    4.32
===================================================================================================================================
</TABLE>


                                       8
- --------------------------------------------------------------------------------
<PAGE>

CONSOLIDATED BALANCE SHEETS
($000'S, UNAUDITED)
                                                    JUNE 30,        December 31,
                                                        2003               2002
- --------------------------------------------------------------------------------
ASSETS

Current
       Cash and cash equivalents                   $  28,881          $  32,562
       Accounts receivable                            41,399             56,582
       Crude oil inventory                             3,293              3,207
       PREPAID EXPENSES AND OTHER                      4,568              4,699
- --------------------------------------------------------------------------------
                                                      78,141             97,050

Deferred financing costs                                 203                435
Deferred reorganization costs                             --              2,324
Reclamation fund                                         555                 --
CAPITAL ASSETS                                       687,211            711,902
- --------------------------------------------------------------------------------
                                                   $ 766,110          $ 811,711
================================================================================

LIABILITIES AND UNITHOLDERS' EQUITY

Current
       Accounts payable and accrued liabilities    $  45,654          $  79,817
       Distributions payable to unitholders            8,163                 --
       INCOME TAXES PAYABLE                            3,573             10,977
- --------------------------------------------------------------------------------
                                                      57,390             90,794

Long-term debt (Note 5)                              204,191            193,025
Provision for future site restoration                 12,649             11,169
FUTURE INCOME TAXES                                  155,656            171,094
- --------------------------------------------------------------------------------
                                                     429,886            466,082
- --------------------------------------------------------------------------------
NON-CONTROLLING INTEREST                              29,436             21,321
- --------------------------------------------------------------------------------

Unitholders' Equity
       Unitholders' capital (Note 7)                 122,213            140,557
       Exchangeable shares (Note 7)                   12,452                 --
       Accumulated earnings                          215,680            183,751
       ACCUMULATED CASH DISTRIBUTIONS                (43,557)                --
- --------------------------------------------------------------------------------
                                                     306,788            324,308
- --------------------------------------------------------------------------------
                                                   $ 766,110          $ 811,711
================================================================================



                                       9
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
($000's, except unit and per unit amounts, unaudited)

                                                              Three Months Ended                      Six Months Ended
                                                     JUNE 30             June 30           June 30             June 30
                                                        2003                2002              2003                2002
- ----------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                <C>                 <C>                <C>
Revenue:
     Petroleum and natural gas revenue            $   80,914         $    68,854         $   168,927        $  133,467
     Royalties (net)                                  20,795              14,838              41,750            28,596
- ----------------------------------------------------------------------------------------------------------------------
                                                      60,119              54,016             127,177           104,871
- ----------------------------------------------------------------------------------------------------------------------
Expenses:
     Production                                       13,450              10,970              25,655            19,883
     Interest                                          2,208               1,300               4,398             2,469
     General and administration                        3,140               2,683               5,857             5,041
     Reorganization costs (Note 3)                        --                  --              25,628                --
     Foreign exchange loss (gain)                      2,390                 (46)              3,096               158
     Depletion and depreciation                       24,179              23,263              47,788            43,854
- ----------------------------------------------------------------------------------------------------------------------
                                                      45,367              38,170             112,422            71,405
- ----------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and other item           14,752              15,846              14,755            33,466

Income taxes (recovery):
     Future (Note 6)                                 (20,003)                554             (20,900)            2,174
     Current                                           1,873               5,658               3,319            11,222
     Capital                                             111                 280                 254               415
- ----------------------------------------------------------------------------------------------------------------------
                                                     (18,019)              6,492             (17,327)           13,811
- ----------------------------------------------------------------------------------------------------------------------
Other item:
     Non-controlling interest                            122                 (15)                153              (120)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings                                          32,649               9,369              31,929            19,775
Accumulated earnings, beginning of period            183,031             153,303             183,751           142,897
- ----------------------------------------------------------------------------------------------------------------------
Accumulated earnings, end of period               $  215,680         $   162,672         $   215,680        $  162,672
- ----------------------------------------------------------------------------------------------------------------------
Net earnings per Trust Unit:
     Basic                                        $     0.57         $      0.17         $      0.55        $     0.36
     Diluted                                      $     0.57         $      0.17         $      0.55        $     0.35
- ----------------------------------------------------------------------------------------------------------------------
Weighted Average Trust Units Outstanding
     Basic                                        57,633,556          55,835,671          57,630,891        55,714,837
     Diluted                                      57,634,749          56,911,005          57,950,581        56,782,449
======================================================================================================================
</TABLE>


                                       10
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000'S, UNAUDITED)

                                                                     Three Months Ended                  Six Months Ended
                                                              JUNE 30,         June 30,         JUNE 30,         June 30,
                                                                  2003             2002             2003             2002
- --------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>              <C>              <C>              <C>
Cash provided by (used in):
OPERATING
     Net earnings                                            $  32,649        $   9,369        $  31,929        $  19,775
     Items not affecting cash:
       Depletion and depreciation                               24,179           23,263           47,788           43,854
       Unrealized foreign exchange loss (gain)                   2,370              (20)           3,076               92
       Amortized deferred financing costs                           65              176              257              348
       Non-controlling interest                                    122              (15)             153             (120)
       Trust units issued on cancellation of
         employee stock options                                     --               --           16,817               --
       Future income taxes                                     (20,003)             554          (20,900)           2,174
- --------------------------------------------------------------------------------------------------------------------------
     Cash flow from operations                                  39,382           33,327           79,120           66,123
     Site restoration costs incurred                              (221)              --             (245)            (158)
     Changes in non-cash working capital                         2,092            5,199          (26,314)         (16,505)
- --------------------------------------------------------------------------------------------------------------------------
                                                                41,253           38,526           52,561           49,460
- --------------------------------------------------------------------------------------------------------------------------
INVESTING
     Disposition (acquisition) of capital assets                    --           (1,606)           1,135           (3,730)
     Drilling and development of petroleum and
       natural gas properties                                  (15,404)         (16,248)         (34,167)         (44,308)
     Corporate acquisition                                          --               --               --          (21,915)
     Restricted cash held for acquisition                           --          (66,348)              --          (66,348)
     Contributions to reclamation fund, net                       (150)              --             (555)              --
- --------------------------------------------------------------------------------------------------------------------------
                                                               (15,554)         (84,202)         (33,587)        (136,301)
- --------------------------------------------------------------------------------------------------------------------------
FINANCING
     Increase (decrease) in long-term debt                      (5,986)          42,271           11,165           85,621
     Increase in deferred charges                                  (25)             (75)             (25)             (75)
     Issue of Common shares for cash, net
       of share issue costs                                         --              607            1,201            4,252
     Distribution reinvestment plan                                971               --              971               --
     Cash acquired on shares issued by
       subsidiary, net of share issue costs                         --            2,777              203            2,827
     Cash distributions                                        (26,586)              --          (35,394)              --
- --------------------------------------------------------------------------------------------------------------------------
                                                               (31,626)          45,580          (21,879)          92,625
- --------------------------------------------------------------------------------------------------------------------------
     Foreign exchange gain (loss) on cash
       held in a foreign currency                                 (308)             310             (776)             176
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                 (6,235)             214           (3,681)           5,960
Cash, beginning of period                                       35,116           12,462           32,562            6,716
- --------------------------------------------------------------------------------------------------------------------------
Cash, end of period                                             28,881           12,676           28,881           12,676
==========================================================================================================================
Cash payments:
     Interest                                                $   2,225        $     795        $   5,505        $   2,186
     Taxes                                                   $   1,859        $     346        $  22,322        $   7,159
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       11
- --------------------------------------------------------------------------------
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002, UNAUDITED
(000'S, EXCEPT UNIT AND PER UNIT AMOUNTS)

1.   BASIS OF PRESENTATION

     Vermilion Energy Trust (the "Trust") was established on January 22, 2003,
     under a Plan of Arrangement entered into by the Trust, Vermilion Resources
     Ltd., Clear Energy Inc., and Vermilion Acquisition Ltd. The Trust is an
     open-end unincorporated investment trust governed by the laws of the
     Province of Alberta and created pursuant to a trust indenture. Vermilion
     Resources Ltd. (the "Company") is a wholly owned subsidiary of the Trust.

     Prior to the Plan of Arrangement on January 22, 2003, the consolidated
     financial statements included the accounts of the Company and its
     subsidiaries. After giving effect to the Plan of Arrangement, the
     consolidated financial statements have been prepared on a continuity of
     interests basis which recognizes the Trust as the successor entity to
     Vermilion Resources Ltd. The consolidated financial statements include the
     accounts of the Trust and its subsidiaries and have been prepared by
     management in accordance with Canadian generally accepted accounting
     principles on a consistent basis with the audited consolidated financial
     statements for the year ended December 31, 2002. The interim consolidated
     financial statements should be read in conjunction with the Trust`s 2002
     Annual Information Form.

2.   SIGNIFICANT ACCOUNTING POLICIES

     a)   Unit Rights Incentive Plan

          The Trust has a unit-based long-term compensation plan for employees,
          directors and consultants of the Trust and its subsidiaries.
          Compensation cost is measured based on the intrinsic value of the
          award at the date of the grant and is recognized over the vesting
          period. Consideration received by the Trust on exercise of the units
          rights is credited to unitholders' capital. See Note 8 for a
          description of the plan and pro-forma disclosure of the associated
          compensation cost.

     b)   Per Unit Amounts

          Net earnings per unit are calculated using the weighted average number
          of units outstanding during the period, including the weighted average
          number of exchangeable shares outstanding converted at the exchange
          ratio at the end of each month. Diluted net earnings per unit are
          calculated using the treasury stock method to determine the dilutive
          effect of unit based compensation. The treasury stock method assumes
          that the proceeds received from the exercise of "in the money" trust
          unit rights are used to repurchase units at the average market rate
          during the period.

     c)   Reclamation Fund

          A reclamation fund has been set up by the Trust to ensure that cash is
          available to carry out future abandonment and reclamation work on
          wells, plants and facilities. The contributions are currently made on
          the basis of $0.20 per barrel of oil equivalent of production in
          Canada and France. Actual abandonment and reclamation work undertaken
          in the period was funded from the fund balance.

     d)   IncomeTaxes

          Income taxes are calculated using the liability method of accounting
          for income taxes. Under this method, income tax liabilities and assets
          are recognized for the estimated tax consequences attributable to
          differences between the amounts reported in the consolidated financial
          statements of the Trust and their respective tax base, using enacted
          income tax rates. The effect of a change in income tax rates on future
          tax liabilities and assets is recognized in income in the period in
          which the change occurs. Temporary differences arising on acquisitions
          result in future income tax assets and liabilities.


                                       12
- --------------------------------------------------------------------------------
<PAGE>

2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          The Trust is a taxable entity under the Income Tax Act (Canada) and is
          taxable only on income that is not distributed or distributable to the
          Unitholders. As the Trust allocates all of its Canadian taxable income
          to the Unitholders in accordance with the Trust Indenture, and meets
          the requirements of the Income Tax Act (Canada) applicable to the
          Trust, no provision for Canadian income tax expense has been made in
          the Trust.

          In the Trust structure, payments are made between the Company and the
          Trust which result in the transferring of taxable income from the
          Company to individual Unitholders. These payments may reduce future
          income tax liabilities previously recorded by the Company which would
          be recognized as a recovery of income tax in the period incurred.

     e)   Distributions

          The Trust makes monthly distributions of its distributable cash to
          Unitholders of record on the last day of each calendar month. Pursuant
          to the Trust's policy, it will pay distributions to its unitholders
          subject to retaining an appropriate distribution reserve, satisfying
          its financing covenants, making loan repayments and, if applicable,
          funding future removal and site restoration reserves.

3.   TRANSFER OF ASSETS AND LIABILITIES PURSUANT TO THE PLAN OF ARRANGEMENT

     Under the Plan of Arrangement, the Company transferred to Clear Energy Inc.
     a portion of the Company's existing lands and exploration assets. As this
     was a related party transaction, assets and liabilities were transferred at
     book value. Details are as follows:

     Petroleum and natural gas assets and equipment                     $19,509
     Future income tax asset                                              5,461
     --------------------------------------------------------------------------
     Total assets transferred                                           $24,970
     Provision for site restoration and abandonment                          89
     --------------------------------------------------------------------------
     Net assets transferred and reduction in share capital              $24,881
     --------------------------------------------------------------------------

     Associated with the Plan of Arrangement, the Company recorded transaction
     costs of $25.6 million, with $16.8 million related to the issue of Trust
     units in exchange for cancellation of stock options and $8.8 million in
     advisory and other costs.

4.   BUSINESS  DISPOSITION AND INVESTMENT

     Effective January 22, 2003, the Company sold its existing 40% working
     interest in the Central Block in Trinidad to Aventura Energy Inc.
     ("Aventura") for consideration of 212,059,512 shares. As this was a related
     party transaction, assets and liabilities were transferred at book value.
     The sale increases the Company's equity holding in Aventura to
     approximately 72% from approximately 47% held prior to the sale.

5.   LONG-TERM DEBT

     At June 30, 2003, the Company had a line of credit of $260 million with a
     banking syndicate, which has a one year revolving period with a one year
     term to follow with a final settlement payment required at the end of the
     second year. A working capital tranche of $10 million included in the $260
     million facility has been placed in France to assist cash-management
     practices.

6.   FUTURE INCOME TAXES

     During the period ended June 30, 2003, reductions in corporate income tax
     rates were substantially enacted. The enacted rates are to be phased in
     over five years starting in 2003. As a result, the Trust's future income
     tax rate decreased to approximately 37 percent compared to 42 percent in
     prior periods. The future income taxes recovery recorded in the second
     quarter of 2003 includes the impact of this reduction in future income
     taxes of $13.7 million.


                                       13
- --------------------------------------------------------------------------------
<PAGE>

7.   UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES

     Pursuant to the Plan of Arrangement, 51,480,467 units of the Trust and
     6,000,000 exchangeable shares of the Company were issued in exchange for
     all of the outstanding shares of the Company on a one for one basis.

     The exchangeable shares are convertible into trust units based on the
     exchange ratio, which is adjusted monthly to reflect the distribution paid
     on the trust units. Cash distributions are not paid on the exchangeable
     shares. During the period, a total of 646,016 exchangeable shares were
     converted into 650,740 trust units. At June 30, 2003, the exchange ratio
     was 1.05507 trust units per exchangeable share.

<TABLE>
<CAPTION>
                                                                        NUMBER OF SHARES                  AMOUNT
     -----------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                            <C>
     COMMON SHARES OF VERMILION RESOURCES LTD.
     Balance as at December 31, 2002                                          55,866,918               $ 140,557
     Issued upon exercise of stock options                                       267,100                   1,201
     -----------------------------------------------------------------------------------------------------------
     Balance January 21, 2003, prior to plan of arrangement                   56,134,018               $ 141,758
     -----------------------------------------------------------------------------------------------------------

     Trust units issued on cancellation of employee
        stock options (Note 3)                                                 1,346,449               $  16,817
     Transfer of assets and liabilities to Clear Energy Inc. (Note 3)                 --                 (24,881)
     Trust units issued                                                      (51,480,467)               (119,739)
     EXCHANGEABLE SHARES ISSUED                                               (6,000,000)                (13,955)
     -----------------------------------------------------------------------------------------------------------
                                                                                     NIL                     NIL

<CAPTION>
                                                                         NUMBER OF UNITS                  AMOUNT
     -----------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                            <C>
     TRUST UNITS
     Unlimited number of trust units authorized to be issued

     Issued pursuant to Plan of Arrangement January 22, 2003                  51,480,467               $ 119,739
     Distribution reinvestment plan                                               79,478                     971
     Issued on conversion of exchangeable shares                                 650,740                   1,503
     -----------------------------------------------------------------------------------------------------------
     Balance as at June 30, 2003                                              52,210,685                 122,213
     Trust units issuable on conversion of exchangeable shares                 5,648,828                  12,452
     -----------------------------------------------------------------------------------------------------------
     Trust unitholders' capital as at June 30, 2003                           57,859,513               $ 134,665
     -----------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                        NUMBER OF SHARES           CONSIDERATION
     -----------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                            <C>
     EXCHANGEABLE SHARES

     Issued pursuant to Plan of Arrangement January 22, 2003                   6,000,000                $ 13,955
     Exchanged for trust units                                                  (646,016)                 (1,503)
     -----------------------------------------------------------------------------------------------------------
     Balance as at June 30, 2003                                               5,353,984                  12,452
     -----------------------------------------------------------------------------------------------------------
</TABLE>

     As per the Plan of Arrangement, shareholders of Vermilion Resources Ltd.
     received one unit or one exchangeable share in the Trust for each common
     share held. In addition, Vermilion shareholders received one share in a
     separate publicly listed oil and gas company, Clear Energy Inc. for each
     three common shares held (Note 3).



                                       14
- --------------------------------------------------------------------------------
<PAGE>

8.   TRUST UNIT RIGHTS INCENTIVE PLAN

     The Trust has a unit rights incentive plan that allows the Trust to issue
     rights to acquire trust units to directors, officers, employees and service
     providers. The Trust is authorized to issue up to 6,000,000 unit rights,
     however, the number of trust units reserved for issuance upon exercise of
     the rights shall not at any time exceed 10% of the aggregate number of
     issued and outstanding trust units of the Trust. Unit right exercise prices
     are equal to the market price for the trust units on the date the unit
     rights are issued. If certain conditions are met, the exercise price per
     unit may be calculated by deducting from the grant price the aggregate of
     all distributions, on a per unit basis, made by the Trust after the grant
     date. Rights granted under the plan vest over a three year period and
     expire five years after the grant date.

     The Trust accounts for its unit rights incentive plan using the
     intrinsic-value of the unit rights. Using intrinsic-values, compensation
     costs are not recognized in the consolidated financial statements for unit
     rights granted to employees and directors when issued at prevailing market
     prices.

     Since the fair value of the unit rights can not be determined due to the
     nature of the reducing exercise price feature, pro-forma compensation cost
     has been determined using the excess of the unit price as at the date of
     the consolidated financial statements, over the exercise price for unit
     rights issued since January 22, 2003 as at the date of the consolidated
     interim financial statements. For the six months ended June 30, 2003, net
     earnings would be reduced by $2,107,000. The effect on net earnings would
     be a decrease of $0.04 per unit.

     The following table summarizes information about the Trust's unit rights

                                              NUMBER OF       WEIGHTED AVERAGE
                                            UNIT RIGHTS         EXERCISE PRICE
     -------------------------------------------------------------------------
     Balance, January 22, 2003                       --               $     --
        Granted                               4,687,000                  11.50
        Cancelled                              (261,300)                 11.45
     -------------------------------------------------------------------------
     Balance, June 30, 2003                   4,425,700               $  11.50
     -------------------------------------------------------------------------


9.   PER UNIT AMOUNTS

     Basic per unit calculations are based on the weighted average number of
     trust units outstanding. Diluted calculations include additional trust
     units for the dilutive impact of unit rights outstanding pursuant to the
     unit rights incentive plan.

     Net earnings from operations per unit are as follows:

                                              JUNE 30, 2003       JUNE 30, 2002
     --------------------------------------------------------------------------
     Net earnings
       Basic (1)                                 $     0.55         $      0.36
       Diluted (2)                               $     0.55         $      0.35
     --------------------------------------------------------------------------

     (1)  Basic per unit calculations are based on the weighted average number
          of trust units outstanding in 2003 of 57,630,891 for the period
          (55,714,837 common shares in 2002) which includes outstanding
          exchangeable shares converted at the period end exchange ratio.

     (2)  Diluted calculations include additional trust units in 2003 of 319,690
          for the period (1,067,612 additional shares in 2002) for the dilutive
          impact of the unit rights incentive plan (stock option plan in 2002).
          Calculations of diluted shares exclude 43,000 of unit rights in 2003
          which would have been anti-dilutive. There were no adjustments to net
          earnings from operations in calculating dilutive per unit amounts.


                                       15
- --------------------------------------------------------------------------------
<PAGE>

10.  SEGMENTED INFORMATION
                                                    JUNE 30,         JUNE 30,
                                                        2003             2002
     ------------------------------------------------------------------------
     Petroleum and natural gas revenues:
         Canada                                   $  126,091       $   96,112
         France                                       36,714           37,355
         Trinidad                                      6,122               --
     ------------------------------------------------------------------------
                                                  $  168,927       $  133,467
     ------------------------------------------------------------------------
     Net earnings:
         Canada                                   $   24,853       $   11,563
         France                                        6,328            8,212
         Trinidad                                        748               --
     ------------------------------------------------------------------------
                                                  $   31,929       $   19,775
     ------------------------------------------------------------------------
     Cash flow from operations:
         Canada                                   $   54,555       $   42,689
         France                                       21,323           23,434
         Trinidad                                      3,242               --
     ------------------------------------------------------------------------
                                                  $   79,120       $   66,123
     ------------------------------------------------------------------------
     Capital expenditures:
         Canada                                   $   12,017       $   66,368
         France                                        6,844           11,909
         Trinidad / Argentina                         14,171              748
     ------------------------------------------------------------------------
                                                  $   33,032       $   79,025
     ------------------------------------------------------------------------


                                                    JUNE 30,     DECEMBER 31,
                                                        2003             2002
     ------------------------------------------------------------------------
     Identifiable assets:
         Canada                                   $  457,562       $  497,512
         France                                      193,922          199,385
         Trinidad / Argentina                        114,626          114,814
     ------------------------------------------------------------------------
                                                  $  766,110       $  811,711
     ------------------------------------------------------------------------

11.  CONTINGENCIES

     On September 25, 2001, Vermilion received a tax notice from the Direction
     Generale des Impots regarding the Company's wholly owned subsidiary in
     France, Vermilion REP S.A. The notice advises that the Company is liable
     for a registration fee that was owed at the time of the purchase of the
     French properties in 1997 in the amount of 4.5 million Euro, including
     interest charges for late filing. The Company disagrees with the tax
     authorities position and is in the process of challenging the notice. At
     the present time the Company is unable to determine the likelihood that it
     will be required to pay the registration fee, and as such, no amount has
     been accrued in the consolidated financial statements at June 30, 2003.




                                       16
- --------------------------------------------------------------------------------
<PAGE>

12.  COMMITMENTS

     The Trust realized a financial hedging loss of $11.8 million during the
     first six months of 2003 (2002 - $1.6 million gain) related to its hedging
     activities. Hedging contracts currently in place are as follows:

                                               REMAINING   CALENDAR    CALENDAR
                                           SIX MONTHS OF       YEAR        YEAR
                                                    2003       2004        2005
     --------------------------------------------------------------------------
     Oil Hedging Program
         Average volume - WTI (bbls/d)             2,950      2,250         500
         Average price - WTI (US$/bbl)            $24.74     $24.35      $24.20
         Average volume - Brent (bbls/d)           2,600      2,250         500
         Average price - Brent (US$/bbl)          $23.24     $22.93      $22.86
     Natural Gas Hedging Program
         Volume (mmcf/d)                            22.8        5.4          --
         Average Floor ($/mcf)                    $ 5.26     $ 5.39          --
         Average Cap ($/mcf)                      $ 6.37     $ 9.01          --
     Currency Hedges
         Amount - USD/mth (000's)                  4,080      1,000          --
         Exchange Rate                              0.63       0.71          --


13.  COMPARATIVE FIGURES

     Certain of the prior period numbers have been reclassified to conform with
     the current period presentation.


FORWARD-LOOKING INFORMATION

This report contains forward-looking financial and operational information
including earnings, cash flow, production and capital expenditure projections.
These projections are based on the Trust's expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to, future commodity prices, exchange
rates, interest rates, geological risk, reserves risk, political risk, product
demand and transportation restrictions.

NON-GAAP MEASURES:

Included in this news release are references to terms commonly used in the oil
and gas industry, such as cash flow and cash flow per share. These terms are not
defined by Generally Accepted Accounting Principles. Consequently, these are
referred to as non-GAAP measures. Cash flow, as discussed in this news release,
appears as a separate caption on the Company's cash flow statement and is
reconciled to both net income and cash flow from operations.

For further information please contact:

Curtis W. Hicks, C.A.
VP Finance & Chief Financial Officer
or
Paul Beique
Director Investor Relations

2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:  (403) 269-4884
Fax:  (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>13
<FILENAME>ex99_10form40-f.txt
<DESCRIPTION>EXHIBIT 99.10
<TEXT>
                                                                   EXHIBIT 99.10
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


               PRESS RELEASE - FOR IMMEDIATE RELEASE MAY 12, 2003
                      FIRST QUARTER RESULTS, MARCH 31, 2003

Vermilion Energy Trust (the "Trust") (TSX - VET.UN) is pleased to report
unaudited interim operating and financial results for the first quarter 2003.
These results reflect the full three months of operations and include the full
restructuring costs of the reorganization of Vermilion Resources Ltd.
("Vermilion").

On January 22, 2003, Vermilion was reorganized, by way of a Plan of Arrangement,
into Vermilion Energy Trust and Clear Energy Inc. ("Clear"). Vermilion's Board
of Directors concluded that this realignment was in the best interests of
shareholders and both shareholders and optionholders approved the reorganization
at a special meeting held on January 15, 2003. The Trust maintained 94% of the
mature producing assets of Vermilion while Clear, an exploration-focused
producer, acquired certain natural gas weighted assets and undeveloped lands. In
addition, Vermilion entered into an agreement with majority-controlled Aventura
Energy Inc. ("Aventura") whereby Vermilion sold 100% of its shares in Vermilion
(Barbados) Ltd., which held Vermilion's Trinidad assets, to Aventura in
consideration of 212.1 million common shares of Aventura at a deemed price of
$0.35 per share. Vermilion currently owns 72.2% of Aventura, which is publicly
traded on the TSX under the symbol AVR.

The Trust achieved the following highlights:

FIRST QUARTER HIGHLIGHTS

>    Successfully reorganized Vermilion Resources Ltd. into Vermilion Energy
     Trust and Clear Energy Inc. effective January 22, 2003.

>    Consolidated the interests in the Trinidad Central Block held by Aventura
     and Vermilion under Aventura, which is now 72.2% owned by the Trust.

>    Initiated distributions of $0.17 per unit per month to the Trust
     unitholders, commencing with the February distribution paid on March 14,
     2003.

>    Based on the strong performance in the first quarter and current outlook on
     pricing and forecast results for the balance of the year, the Trust
     anticipates that it will be able to maintain its monthly distribution at
     $0.17 per unit.

>    Generated cash flow of $38.4 million ($0.67 per unit) from the Trust's
     production of 24,132 boe/d, consisting of 12,992 bbls/d of oil and NGL's
     and 66.8 mmcf/d of natural gas (1).

>    Listed on the Toronto Stock Exchange under the symbol VET.UN on January 24,
     2003 and witnessed the trading of more than 26 million units to March 31,
     2003.

(1)  Although Aventura's production and financial results are consolidated in
     the financial tables, these are not included as part of distributable funds
     for the Trust's unitholders.


CONFERENCE CALL

Vermilion will discuss these results in a conference call to be held on Tuesday,
May 13, 2003. The conference call will begin at 8:30 a.m. EST (6:30 a.m. MST).
To participate, you may call toll free 1-800-814-3911 or 1-416-640-4127 (Toronto
area).

The conference call will also be available on replay by calling 1-416-640-1917
(Toronto area) or 1-877-289-8525 for all other parties, using pass code 251391
followed by the pound "#" key. The replay will be available until midnight
eastern time on May 20, 2003.


                                       1
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
HIGHLIGHTS                                                          Trust                             CONSOLIDATED
                                                                Financial            Aventura            MARCH 31,
(unaudited)                                                   Information      Energy Inc. (3)                2003
- ------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>                  <C>
FINANCIAL ($000 CDN EXCEPT UNIT AND PER UNIT AMOUNTS)

Petroleum and natural gas revenues                            $    84,934         $     3,079          $    88,013
Cash flow from operations                                          38,398               1,340               39,738
         Per unit, basic (1)                                         0.67                                     0.69
Distributions (2)                                                  17,666                                   17,666
         Per unit                                                    0.34                                     0.34
Capital expenditures                                               13,254               5,509               18,763
Acquisitions (dispositions)                                         5,761              (6,896)              (1,135)
Total assets                                                      786,762
Debt, net of working capital (surplus)                        $   193,024         $   (13,291)             179,733
Unitholders' equity                                                                                        299,059
Trust units outstanding (1)
         Basic                                                                                          57,557,131
         Diluted                                                                                        61,906,831
Weighted average trust units outstanding (1)
         Basic                                                                                          57,410,652
         Diluted                                                                                        57,606,607
Unit trading
         High                                                                                          $     13.00
         Low                                                                                           $     11.12
         Close                                                                                         $     12.30

OPERATIONS

Production
         Crude oil (bbls/d)                                        11,036                 342               11,378
         Natural gas liquids (bbls/d)                               1,956                  --                1,956
         Natural gas (mcf/d)                                       66,843              11,632               78,475
         Boe/d (6:1)                                               24,132               2,281               26,413
Average selling price
         Crude oil (per bbl, including hedging)               $     39.25         $     42.44          $     39.34
         Crude oil (per bbl, not including hedging)                 46.17               42.44                46.05
         Natural gas liquids (per bbl)                              41.09                  --                41.09
         Natural gas (per mcf, including hedging)                    6.44                1.69                 5.73

Netbacks per boe (6:1)
         Operations netback                                         24.17               11.42                23.07
         Cash flow netback                                          17.68         $      6.53                16.71
         Cash flow netback excluding reorganization costs     $     21.74                              $     20.42
</TABLE>

(1)  Includes trust units issuable for outstanding exchangeable shares based on
     the period end exchange ratio

(2)  Distributions are paid on issued trust units at each record date

(3)  The Trust owns 72.2% of the outstanding shares of Aventura, necessitating
     the consolidation of the results of the Trust and Aventura.



                                       2
- --------------------------------------------------------------------------------
<PAGE>

OPERATIONAL ACTIVITIES

While the Trust's activities in the first quarter were focused on reorganization
activities, the quarter was not without some operational highlights. The Trust
completed and tested a 100% WI well at Homeglen-Rimbey in central Alberta, which
flowed at 2.3 mmcf/d of natural gas with 30 bbls/mmcf of condensates (450
boe/d). At Drayton, the 14-34 well (100% WI) was completed and is flowing 3.5
mmcf/d of natural gas with 50-60 bbls/mmcf of condensates (750 boe/d). As part
of a waterflood optimization project at Cyn-Pem, the installation of a
high-volume downhole pump in one well (83% WI) yielded net incremental flow
rates of 330 boe/d. The Trust plans to fit a second well with a similar system
in the near future.

- --------------------------------------------------------------------------------
PRODUCTION SUMMARY (6:1)
- -------------------------------------------------------------------------------
                                              THREE MONTHS ENDED MARCH 31, 2003
                               OIL & NGLS       NATURAL GAS      TOTAL
                                 (BBLS/D)          (MMCF/D)    (BOE/D)       %
- -------------------------------------------------------------------------------
VERMILION ENERGY TRUST
     Canada                         7,005             65.42     17,908      68
     France                         5,987              1.42      6,224      23
- -------------------------------------------------------------------------------
     Total                         12,992             66.84     24,132      91
AVENTURA ENERGY INC.
     Trinidad                         342             11.63      2,281       9
- -------------------------------------------------------------------------------
CONSOLIDATED                       13,334             78.47     26,413     100
===============================================================================

First quarter production in Canada averaged 7,005 bbls/d of oil and NGL's and
65.4 mmcf/d of natural gas. Included in these production rates is production
from assets that were disposed to Clear Energy Inc. on January 22, 2003. These
properties contributed production equal to approximately 400 boe/d when averaged
over the quarter. The Trust also produced 6,224 boe/d from its properties in
France. The Trust anticipates that both the Canadian and French production
streams will remain stable in the second quarter of 2003.

In France, the Trust successfully completed its first fracture treatment in late
2002, increasing the productivity of a well in the Champotran field from 60
bbls/d to a stabilized rate of 300 bbls/d. Additional fracture treatments are
scheduled for wells in this Paris Basin field in the second quarter of 2003. The
working interest in these wells is 100%. Management is also encouraged by recent
workover success in the Vulaines field, also in the Paris Basin.

- --------------------------------------------------------------------------------
DRILLING ACTIVITY (# OF WELLS)
- -------------------------------------------------------------------------------
                                              THREE MONTHS ENDED MARCH 31, 2003
                                 CANADA              FRANCE               TOTAL
                          GROSS   (NET)       GROSS   (NET)       GROSS   (NET)
- -------------------------------------------------------------------------------
Oil                           0     0.0           0     0.0           0     0.0
Gas                           1    (1.0)          0     0.0           1    (1.0)
D&A                           0     0.0           0     0.0           0     0.0
- -------------------------------------------------------------------------------
TOTAL                         1    (1.0)          0     0.0           1    (1.0)
===============================================================================

FINANCIAL

The Trust generated cash flow of $38.4 million in the first quarter ($0.67 per
unit), net of cash expenses of $8.8 million in reorganization costs. The Trust's
distributions allocated to February and March totalled $17.7 million or $0.34
per unit. Earnings for the first quarter have been reduced by $25.6 million in
reorganization costs expensed in the first quarter. Capital expenditures for the
period totalled $13.3 million, including $5.9 million, which was spent prior to
the implementation of the reorganization on January 22, 2003. First quarter
acquisitions of $5.8 million were also completed as part of the reorganization
plan. Accordingly, of the initial $25 million capital budget for the Trust, $7.4
million was spent in the first quarter 2003. The Trust's total debt, net of
working capital (assignable to the Trust) at the end of the period was $193
million.


                                       3
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
CAPITAL EXPENDITURES ($000'S)
- --------------------------------------------------------------------------------
                                              THREE MONTHS ENDED MARCH 31, 2003
                                            TRUST      AVENTURA
                                           ASSETS   ENERGY INC.    CONSOLIDATED
- --------------------------------------------------------------------------------
Land                                      $   325       $    --         $   325
Seismic                                     1,054            --           1,054
Drilling and completion                     2,402            --           2,402
Production equipment and facilities         3,534            --           3,534
Workovers                                   2,262            --           2,262
Trinidad                                    1,804         5,509           7,313
OTHER                                       1,873            --           1,873
- --------------------------------------------------------------------------------
                                           13,254         5,509          18,763
PROPERTY ACQUISITIONS (DISPOSITIONS)        5,761        (6,896)         (1,135)
- --------------------------------------------------------------------------------
                                          $19,015       $(1,387)        $17,628
================================================================================


AVENTURA ENERGY INC.

The first of two important exploration wells to be drilled in Trinidad in 2003,
the Saunders-1 well, is nearing total depth and Aventura anticipates being able
to release information regarding this well over the next few weeks. Aventura
expects to renew its existing 20 mmcf/d short-term gas contract to cover the
next 1.5 to 2.5 years. Contract negotiations are proceeding on a high volume,
longer-term contract to ensure that Aventura has flexibility and access to
natural gas markets at competitive pricing. The original discovery well in which
Aventura has a 65% working interest, Carapal Ridge-1, continues to flow at a
market-restricted rate of 20 mmcf/d and approximately 500 bbls/d of associated
condensate.

OUTLOOK

As a result of the additional cash flow generated by strong commodity prices in
the first quarter, the Trust is positioned to accelerate the development of its
prospect inventory. In that regard, the board of directors of the Trust has
approved an increase to the 2003 capital budget to $55 million, including costs
incurred prior to the reorganization. Based on this revised budget, the Trust
expects to increase its annual average production by 600 boe/d to 23,600 boe/d.

The expanded capital program will allow for the initial development of some
longer lead-time projects including a planned waterflood in the Champotran Field
in France. This will be balanced with additional drilling and workovers that
will provide the production volume gains slated for 2003. The Trust continues to
be encouraged by the depth of its asset base and by the number of value-adding
opportunities available in the existing portfolio.

Based on the strong performance in the first quarter and the current outlook on
pricing and forecast results for the balance of the year, the Trust anticipates
that it will be able to maintain its monthly distribution at $0.17 per unit.


                                       4
- --------------------------------------------------------------------------------
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

THE THREE MONTHS ENDED MARCH 31, 2003 REPRESENTS THE FIRST QUARTER OF VERMILION
ENERGY TRUST'S (THE "TRUST") OPERATION AS A TRUST AND INCLUDE THE CONSOLIDATED
INTEREST OF AVENTURA ENERGY INC. ("AVENTURA"). AS THE TRUST WAS CREATED THROUGH
THE RE-ORGANIZATION OF VERMILION RESOURCES LTD. ("VERMILION"), THE HISTORICAL
RESULTS OF VERMILION WILL REPRESENT THE HISTORICAL RESULTS OF THE TRUST FOR
COMPARATIVE PURPOSES.

Oil and gas prices for the first quarter of 2003 were strong in comparison with
the first quarter of 2002. The WTI reference price averaged $33.86 US per bbl
for the quarter, dated Brent was $31.53 US per bbl and AECO reference price was
$8.33 Cdn per mcf. This compares to $21.64 per bbl for WTI, $21.14 per bbl for
Brent and $3.54 per mcf Cdn AECO for the first three months of 2002. Prices are
the main driver behind the increase in netbacks quarter over quarter. In 2003,
the Trust's operating netback equalled $23.07 per boe, and the cash flow netback
was $16.71. This compares to much lower netbacks in 2002, equal to $18.69 and
$14.62 for operating and cash flow netbacks, respectively. In addition, the 2003
cash flow netbacks were reduced by $3.71 per boe as a result of the impact of
the cash costs incurred in the re-organization of Vermilion into a trust.

Total revenues for the first quarter of 2003 were $88.0 million compared to
$64.6 for the first quarter 2002. The Trust's combined crude oil & NGL price was
$45.33 per bbl for the first quarter of 2003, an increase of 43% over the $31.76
per bbl reported for the first quarter of 2002. The natural gas price realized
in the first quarter 2003 was $5.73 per mcf compared to $3.80 per mcf realized a
year ago, a 51% year-over-year increase. Tempering this increase was the impact
of Vermilion's hedging program, whereby prices were reduced by $2.89 per boe on
a consolidated basis, compared to a hedging gain of $1.11 per boe in the first
quarter of 2002.

The Trust has CDN/US dollar currency hedges in place covering two-thirds of its
oil hedge positions for 2003 at approximately $1.59 US per Canadian dollar or
$0.63 CDN per US dollar.

Total royalties, net of ARTC, increased to $8.82 per boe or 24% of sales,
compared with $6.13 per boe, or 21% of sales in the first quarter 2002. This
increase is due directly to the increase in prices explained above as royalties
are calculated as a percentage of revenue. In addition, royalty rates in Canada
are price sensitive and react to changes in prices.

Operating costs increased to $5.13 per boe from $3.97 per boe in the first
quarter 2002. In Canada, processing costs in the Peace River Arch area,
scheduled workovers and increased power costs resulting from the strong gas
prices in the first quarter have contributed to the year over year increase. In
France, power costs continue to rise and the strengthening Euro also contributed
to the increase in operating costs when converted to Canadian dollars. Based on
higher power costs and currency exchange issues, we are revising our average
2003 outlook for operating costs to $5.25 per boe from $5.00.

General and administrative expenses (G&A) for the quarter increased from $2.4
million to $2.7 million. Total costs averaged $1.14 per boe in 2003, up from
$1.05 per boe (net of capitalized costs) in the first quarter of 2002. Costs in
2003 reflect the cost structure of the Trust and are representative of
anticipated costs over the balance of the year. It should be noted that a larger
portion of the 2002 G&A costs were capitalized in 2002 as compared to current
practices.

Reorganization costs of $25.6 million relate to Vermilion's decision to convert
to a trust. Included in this amount are $8.8 million in transaction costs, which
include investment banking fees as well as all accounting and legal fees related
to the conversion. Also included in the total is the value of trust units issued
in exchange for the cancellation of outstanding Vermilion employee options. The
value of the trust units issued totalled $16.8 million.

Interest expense increased to $0.84 per boe for the first quarter 2003 from
$0.44 per boe during the same period in 2002 as a result of higher average debt
levels.


                                       5
- --------------------------------------------------------------------------------
<PAGE>

Depletion and depreciation expenses increased from $9.18 per boe in the first
quarter 2002 to $9.93 per boe in the first quarter 2003.

The Trust's current tax provision has decreased to $0.67 per boe in the first
quarter 2003 from $2.54 per boe in the first quarter of 2002. The current
provision is based on an estimated $6.0 million tax liability in France for the
year, while in Canada, it is anticipated that there will be no current taxes due
as a function of the conversion to an income trust.

Net loss for the first quarter amounted to a loss of $0.7 million or $0.01 per
unit as compared to earnings of $10.4 million or $0.19 per share in the first
quarter of 2002. The year-over-year decline is attributable to the $25.6 million
in reorganization costs expensed in the first quarter.

Capital spending for the first quarter totalled $18.8 million including $7.3
million in Trinidad relating to the drilling of the Saunders-1 well. This
compares to $61.2 million spent during the first quarter 2002, $31.0 million of
which was for the corporate acquisition of Artemis Energy Limited. The capital
for the first quarter of 2003 was funded entirely through cash flow and was
primarily spent on facilities, tie-ins and workovers.

The Trust's debt (net of working capital) on March 31, 2003 was $179.7 million.
Early in 2003, the Trust negotiated the terms of an amended credit facility with
its banking syndicate to provide a $260 million credit facility. The amended
loan facility remains with the same syndicate of lenders with no change to the
terms and security provisions. The facility structure is comprised of a one year
revolving period with a one year term to follow with a final settlement payment
required at the end of the second year.




                                       6
- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
NETBACKS (6:1)
                                                 THREE MONTHS ENDED                          THREE MONTHS ENDED
                                                   MARCH 31, 2003                       DEC 31/02         MAR 31/02
                                  ----------------------------------------------        ---------------------------
                                  Oil & NGLs       Natural Gas             TOTAL            Total             Total
                                       $/bbl             $/mcf             $/BOE            $/boe             $/boe
- -------------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>                 <C>              <C>               <C>
TRUST FINANCIAL INFORMATION
CANADA
Price                                 $48.42             $6.45            $42.51           $35.73            $25.77
Oil hedging gain (loss)                (6.03)               --             (2.36)           (0.98)             0.75
Royalties (net)                       (11.33)            (1.82)           (11.09)           (8.54)            (6.82)
Lifting costs                          (6.13)            (0.68)            (4.88)           (4.86)            (3.44)
- -------------------------------------------------------------------------------------------------------------------
Operating netback                     $24.93             $3.95            $24.18           $21.35            $16.26
- -------------------------------------------------------------------------------------------------------------------
FRANCE
Price                                 $41.87             $5.71            $41.58           $34.81            $33.42
Oil hedging gain (loss)                (5.70)               --             (5.49)           (1.37)             2.18
Royalties (net)                        (4.99)            (0.25)            (4.85)           (4.61)            (4.07)
Lifting costs                          (6.80)            (2.37)            (7.08)           (6.58)            (5.58)
- -------------------------------------------------------------------------------------------------------------------
Operating netback                     $24.38             $3.09            $24.16           $22.25            $25.95
- -------------------------------------------------------------------------------------------------------------------
TOTAL TRUST
Price                                 $45.40             $6.44            $42.26           $35.51            $27.68
Oil hedging gain (loss)                (5.88)               --             (3.16)           (1.08)             1.11
Royalties (net)                        (8.41)            (1.79)            (9.48)           (7.56)            (6.13)
Lifting costs                          (6.44)            (0.72)            (5.45)           (5.29)            (3.97)
- -------------------------------------------------------------------------------------------------------------------
Operating netback                     $24.67             $3.93            $24.17           $21.58            $18.69
- -------------------------------------------------------------------------------------------------------------------
AVENTURA FINANCIAL INFORMATION
Price                                 $42.44             $1.69            $15.00       $       --        $       --
Oil hedging gain (loss)                   --                --                --               --                --
Royalties (net)                        (5.14)            (0.19)            (1.75)              --                --
Lifting costs                             --             (0.36)            (1.83)              --                --
- -------------------------------------------------------------------------------------------------------------------
Operating netback                     $37.30             $1.14            $11.42       $       --        $       --
- -------------------------------------------------------------------------------------------------------------------
CONSOLIDATED
Price                                 $45.33             $5.73            $39.91           $35.51            $27.68
Oil hedging gain (loss)                (5.73)               --             (2.89)           (1.08)             1.11
Royalties (net)                        (8.32)            (1.55)            (8.82)           (7.56)            (6.13)
Lifting costs                          (6.27)            (0.66)            (5.13)           (5.29)            (3.97)
- -------------------------------------------------------------------------------------------------------------------
Operating netback                     $25.01             $3.52            $23.07           $21.58            $18.69
- -------------------------------------------------------------------------------------------------------------------
General & administrative                                                   (1.14)           (0.84)            (1.05)
Reorganization costs                                                       (3.71)              --                --
Interest                                                                   (0.84)           (0.68)            (0.44)
Foreign exchange                                                              --             0.03             (0.04)
Current and capital taxes                                                  (0.67)            2.64             (2.54)
- -------------------------------------------------------------------------------------------------------------------
CASH FLOW NETBACK                                                         $16.71           $22.73            $14.62
- -------------------------------------------------------------------------------------------------------------------
Depletion and depreciation                                                 (9.93)          (10.44)            (9.18)
Future income taxes                                                         0.38            (6.70)            (0.72)
Deferred financing charges                                                 (0.08)           (0.08)            (0.08)
Foreign exchange                                                           (0.30)            0.28             (0.05)
Non-controlling interest                                                   (0.01)           (0.10)             0.05
Trust units issued                                                         (7.07)              --                --
- -------------------------------------------------------------------------------------------------------------------
EARNINGS NETBACK                                                          $(0.30)         $  5.69           $  4.64
- -------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       7
- --------------------------------------------------------------------------------
<PAGE>

CONSOLIDATED BALANCE SHEETS
($000'S)
                                                   MARCH 31,      December 31,
                                                        2003              2002
                                                 (UNAUDITED)          (audited)
- ------------------------------------------------------------------------------
ASSETS

Current
       Cash                                        $  35,116         $  32,562
       Accounts receivable                            45,397            56,582
       Crude oil inventory                             5,401             3,207
       PREPAID EXPENSES AND OTHER                      5,177             4,699
                                                      91,091            97,050
- --------------------------------------------------------------------------------
Deferred financing costs                                 243               435
Deferred reorganization costs                             --             2,324
Reclamation fund                                         405                --
Capital assets                                       695,023           711,902
- --------------------------------------------------------------------------------
                                                   $ 786,762         $ 811,711
================================================================================

LIABILITIES AND UNITHOLDERS' EQUITY

Current
       Accounts payable and accrued liabilities    $  50,200         $  79,817
       Distributions payable to unitholders            8,858                --
       Income taxes payable                            1,589            10,977
- --------------------------------------------------------------------------------
                                                      60,647            90,794

Long-term debt (Note 5)                              210,177           193,025
Provision for future site restoration                 11,918            11,169
Future income taxes                                  175,659           171,094
- --------------------------------------------------------------------------------
                                                     458,401           466,082
- --------------------------------------------------------------------------------
Non-controlling interest                              29,302            21,321
- --------------------------------------------------------------------------------

Unitholders' Equity
       Unitholders' capital (Note 6)                 120,007           140,557
       Exchangeable shares (Note 6)                   13,687                --
       Accumulated earnings                          183,031           183,751
       Accumulated cash distributions                (17,666)               --
- --------------------------------------------------------------------------------
                                                     299,059           324,308
- --------------------------------------------------------------------------------
                                                   $ 786,762         $ 811,711
================================================================================



                                       8
- --------------------------------------------------------------------------------
<PAGE>

CONSOLIDATED STATEMENTS OF EARNINGS AND ACCUMULATED EARNINGS
($000'S, EXCEPT UNIT AND PER UNIT AMOUNTS, UNAUDITED)

                                                         THREE MONTHS ENDED
                                                    MARCH 31,         March 31,
                                                         2003              2002
- -------------------------------------------------------------------------------
Revenue:
       Petroleum and natural gas revenue         $     88,013      $     64,613
       Royalties (net)                                 20,955            13,758
- -------------------------------------------------------------------------------
                                                       67,058            50,855
- -------------------------------------------------------------------------------
Expenses:
       Production                                      12,205             8,913
       Interest                                         2,190             1,169
       General and administration                       2,717             2,358
       Reorganization costs (Note 3)                   25,628                --
       Foreign exchange                                   706               204
       Depletion and depreciation                      23,609            20,591
- -------------------------------------------------------------------------------
                                                       67,055            33,235
- -------------------------------------------------------------------------------
Earnings before income taxes and other item                 3            17,620

Income taxes (recovery):
       Future                                            (897)            1,620
       Current                                          1,446             5,564
       Capital                                            143               135
- -------------------------------------------------------------------------------
                                                          692             7,319
- -------------------------------------------------------------------------------
Other item:
       Non-controlling interest                            31              (105)
- -------------------------------------------------------------------------------
Net earnings (loss)                                      (720)           10,406

Accumulated earnings, beginning of period             183,751           142,897
- -------------------------------------------------------------------------------
Accumulated earnings, end of period              $    183,031      $    153,303
===============================================================================

Net earnings (loss) per Trust Unit
       Basic                                     $      (0.01)     $       0.19
       Diluted                                   $      (0.01)     $       0.18
===============================================================================

Weighted Average Trust Units Outstanding
       Basic                                       57,410,652        55,592,810
       Diluted                                     57,606,607        56,684,254
===============================================================================


                                       9
- -------------------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000'S, UNAUDITED)
                                                                               THREE MONTHS ENDED
                                                                            MARCH 31,       March 31,
                                                                                 2003           2002
- ----------------------------------------------------------------------------------------------------
<S>                                                                          <C>            <C>
Cash provided by (used in):

OPERATING
       Net earnings (loss)                                                   $   (720)      $ 10,406
       Items not affecting cash:
           Depletion and depreciation                                          23,609         20,591
           Unrealized foreign exchange loss                                       706            112
           Amortized deferred financing charges                                   192            172
           Non-controlling interest                                                31           (105)
           Trust units issued on cancellation of employee stock options        16,817             --
           Future income taxes                                                   (897)         1,620
- ----------------------------------------------------------------------------------------------------
       Cash flow from operations                                               39,738         32,796
       Site restoration costs incurred                                            (24)          (158)
       Changes in non-cash working capital                                    (28,811)       (21,704)
- ----------------------------------------------------------------------------------------------------
                                                                               10,903         10,934
- ----------------------------------------------------------------------------------------------------

INVESTING
       Disposition (acquisition) of capital assets                              1,135         (2,124)
       Drilling and development of petroleum and natural gas properties       (18,763)       (28,060)
       Corporate acquisition                                                       --        (21,915)
- ----------------------------------------------------------------------------------------------------
                                                                              (17,628)       (52,099)
- ----------------------------------------------------------------------------------------------------

FINANCING
       Increase in long-term debt                                              17,151         43,350
       Issue of Common shares for cash,
           net of share issue costs                                             1,201          3,645
       Cash acquired on shares issued by subsidiary                               203             50
       Cash distributions                                                      (8,808)            --
- ----------------------------------------------------------------------------------------------------
                                                                                9,747         47,045
- ----------------------------------------------------------------------------------------------------

       Foreign exchange loss on cash held in a foreign currency                  (468)          (134)

Net increase in cash                                                            2,554          5,746
Cash, beginning of period                                                      32,562          6,716
- ----------------------------------------------------------------------------------------------------
Cash, end of period                                                          $ 35,116       $ 12,462
====================================================================================================

Cash payments
       Interest                                                              $  3,280       $  1,391
       Taxes                                                                 $ 20,463       $  6,813
- ----------------------------------------------------------------------------------------------------
</TABLE>


                                       10
- --------------------------------------------------------------------------------
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002, UNAUDITED
(000'S, EXCEPT UNIT AND PER UNIT AMOUNTS)

1.       BASIS OF PRESENTATION

         Vermilion Energy Trust (the "Trust") was established on January 22,
         2003, under a Plan of Arrangement entered into by the Trust, Vermilion
         Resources Ltd., Clear Energy Inc., and Vermilion Acquisition Ltd. The
         Trust is an open-end unincorporated investment trust governed by the
         laws of the Province of Alberta and created pursuant to a trust
         indenture. Vermilion Resources Ltd. (the "Company") is a wholly owned
         subsidiary of the Trust.

         Prior to the Plan of Arrangement on January 22, 2003, the consolidated
         financial statements include the accounts of the Company and its
         subsidiaries. After giving effect to the Plan of Arrangement, the
         consolidated financial statements have been prepared on a continuity of
         interests basis which recognizes the Trust as the successor entity to
         Vermilion Resources Ltd. The consolidated financial statements include
         the accounts of the Trust and its subsidiaries and have been prepared
         by management in accordance with Canadian generally accepted accounting
         principles on the same basis as the audited consolidated financial
         statements for the year ended December 31, 2002. The interim
         consolidated financial statements should be read in conjunction with
         the Trust`s 2002 Annual Information Form.

2.       SIGNIFICANT ACCOUNTING POLICIES

         a)       Unit Rights Incentive Plan

                  The Trust has a unit-based long-term compensation plan for
                  employees, directors and consultants of the Trust and its
                  subsidiaries. Compensation cost is measured based on the
                  intrinsic value of the award at the date of the grant and is
                  recognized over the vesting period. Any consideration received
                  by the Trust on exercise of the units rights is credited to
                  unitholders' capital. See Note 7 for a description of the plan
                  and pro-forma disclosure of the associated compensation cost.

         b)       Per Unit Amounts

                  Net earnings and cash flow from operations per unit are
                  calculated using the weighted average number of units
                  outstanding during the period, including the weighted average
                  number of exchangeable shares outstanding converted at the
                  exchange ratio at the end of each month. Diluted net earnings
                  and cash flow from operations per unit are calculated using
                  the treasury stock method to determine the dilutive effect of
                  unit based compensation. The treasury stock method assumes
                  that the proceeds received from the exercise of "in the money"
                  trust unit rights are used to repurchase units at the average
                  market rate during the period.

         c)       Reclamation Fund

                  A reclamation fund has been set up by the Trust to ensure that
                  cash is available to carry out future abandonment and
                  reclamation work on wells, plants and facilities. The
                  contributions are currently made on the basis of $0.20 per BOE
                  of production in Canada and France. Actual abandonment and
                  reclamation work undertaken in the period was funded from the
                  fund balance.


                                       11
- --------------------------------------------------------------------------------
<PAGE>

3.       TRANSFER OF ASSETS AND LIABILITIES PURSUANT TO THE PLAN OF ARRANGEMENT

         Under the Plan of Arrangement, the Company transferred to Clear Energy
         Inc. a portion of the Company's existing lands and exploration assets.
         As this was a related party transaction, assets and liabilities were
         transferred at book value. Details are as follows:

         Petroleum and natural gas assets and equipment                 $19,509
         Future income tax asset                                          5,461
         ----------------------------------------------------------------------
         Total assets transferred                                       $24,970
         Provision for site restoration and abandonment                      89
         ----------------------------------------------------------------------
         Net assets transferred and reduction in share capital          $24,881
         ----------------------------------------------------------------------

         Associated with the Plan of Arrangement, the Company recorded
         transaction costs of $25.6 million, with $16.8 million related to the
         issue of Trust units in exchange for cancellation of stock options and
         $8.8 million in advisory and other costs.

4.       BUSINESS ACQUISITION AND INVESTMENT

         Effective January 22, 2003, the Company sold its existing 40% working
         interest in the Central Block in Trinidad to Aventura Energy Inc.
         ("Aventura") for consideration of 212,059,512 shares. As this was a
         related party transaction, assets and liabilities were transferred at
         book value. The sale increases the Company's equity holding in Aventura
         to approximately 72% from approximately 47% held prior to the sale.

5.       LONG-TERM DEBT

         At March 31, 2003, the Company had a line of credit of $260,000,000
         with a banking syndicate, which has a one year revolving period with a
         one year term to follow with a final settlement payment required at the
         end of the second year. A working capital tranche of $10 million
         included in the $260 million facility has been placed in France to
         assist cash-management practices. The amended loan facility remains
         with the same syndicate of lenders with no change to the terms and
         security provisions.

6.       UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES

         Pursuant to the Plan of Arrangement, 51,480,467 units of the Trust and
         6,000,000 exchangeable shares of the Company were issued in exchange
         for all of the outstanding shares of the Company on a one for one
         basis.

         The exchangeable shares are convertible into trust units based on the
         exchange ratio, which is adjusted monthly to reflect the distribution
         paid on the trust units. Cash distributions are not paid on the
         exchangeable shares. During the period, a total of 623,792 exchangeable
         shares were converted into 627,770 trust units. At March 31, 2003, the
         exchange ratio was 1.01352.

                                                      NUMBER OF
                                                       SHARES      CONSIDERATION
         ----------------------------------------------------------------------
         EXCHANGEABLE SHARES
         Issued pursuant to Plan of Arrangement
            January 22, 2003                          6,000,000      $13,955
         Exchanged for trust units                     (623,792)        (268)
         ----------------------------------------------------------------------

         Balance as at march 31, 2003                 5,376,208      $13,687
         ----------------------------------------------------------------------


                                       12
- --------------------------------------------------------------------------------
<PAGE>

6.       UNITHOLDERS' CAPITAL AND EXCHANGEABLE SHARES (CONTINUED)

<TABLE>
<CAPTION>
                                                                        NUMBER OF UNITS                  AMOUNT
         ------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                            <C>
         TRUST UNITS
         Unlimited number of trust units authorized to be issued

         Issued pursuant to Plan of Arrangement
            January 22, 2003                                                 51,480,467                $119,739
         Issued on conversion of exchangeable shares                            627,770                     268
         ------------------------------------------------------------------------------------------------------
         Balance as at March 31, 2003                                        52,108,237                $120,007
         Trust units issuable on conversion of exchangeable shares            5,448,894                  13,687
         ------------------------------------------------------------------------------------------------------

         Trust unitholders' capital as at March 31, 2003                     57,557,131                $133,694
         ------------------------------------------------------------------------------------------------------
</TABLE>

         As per the Plan of Arrangement, shareholders of Vermilion Resources
         Ltd. received one unit or one exchangeable share in the Trust for each
         common share held. In addition, Vermilion shareholders received one
         share in a separate publicly listed oil and gas company, Clear Energy
         Inc. for each three common shares held (Note 3).

<TABLE>
<CAPTION>
                                                                       NUMBER OF SHARES                  AMOUNT
         ------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                            <C>
         COMMON SHARES OF VERMILION RESOURCES LTD.
         Balance as at December 31, 2002                                     55,866,918               $ 140,557
         Issued upon exercise of stock options                                  267,100                   1,201
         ------------------------------------------------------------------------------------------------------
         Balance January 21, 2003 prior to
            Plan of arrangement                                              56,134,018               $ 141,758
         ------------------------------------------------------------------------------------------------------

         Trust units issued on cancellation of employee
            stock options (Note 3)                                            1,346,449               $  16,817
         Transfer of assets and liabilities (Note 3)                                  -                 (24,881)
         Trust units issued                                                 (51,480,467)               (119,739)
         Exchangeable shares issued                                          (6,000,000)                (13,955)
         ------------------------------------------------------------------------------------------------------
                                                                                    NIL                     NIL
         ------------------------------------------------------------------------------------------------------
</TABLE>

7.       TRUST UNIT RIGHTS INCENTIVE PLAN

         The Trust has a unit rights incentive plan that allows the Trust to
         issue rights to acquire trust units to directors, officers, employees
         and service providers. The Trust is authorized to issue up to 6,000,000
         unit rights, however, the number of trust units reserved for issuance
         upon exercise of the rights shall not at any time exceed 10% of the
         aggregate number of issued and outstanding trust units of the Trust.
         Unit right exercise prices approximate the market price for the trust
         units on the date the unit rights are issued. If certain conditions are
         met, the exercise price per unit may be calculated by deducting from
         the grant price the aggregate of all distributions, on a per unit
         basis, made by the Trust after the grant date. Rights granted under the
         plan vest over a three year period and expire five years after the
         grant date.

         The Trust accounts for its unit rights incentive plan using the
         intrinsic-value of the unit rights. Using intrinsic-values,
         compensation costs are not recognized in the consolidated financial
         statements for unit rights granted to employees and directors when
         issued at prevailing market prices.


                                       13
- --------------------------------------------------------------------------------
<PAGE>

7.       TRUST UNIT RIGHTS INCENTIVE PLAN (CONTINUED)

         Since the fair value of the unit rights can not be determined due to
         the nature of the reducing exercise price feature, pro-forma
         compensation cost has been determined using the excess of the unit
         price over the exercise price for unit rights issued since January 1,
         2003 as at the date of the consolidated interim financial statements.
         For the three months ended March 31, 2003, net loss would be reduced by
         $439,000. The effect on net loss would be an increase of $0.01 per
         unit.

         The following table summarizes information about the Trust's unit
         rights:

                                              NUMBER OF        WEIGHTED AVERAGE
                                            UNIT RIGHTS          EXERCISE PRICE
         ----------------------------------------------------------------------
         Balance, January 22, 2003                   --                $     --
            Granted                           4,490,700                   11.47
            Cancelled                          (141,000)                  11.45
         ----------------------------------------------------------------------
         BALANCE, MARCH 31, 2003              4,349,700                $  11.47
         ----------------------------------------------------------------------


8.       PER UNIT AMOUNTS

         Basic per unit calculations are based on the weighted average number of
         trust units outstanding. Diluted calculations include additional trust
         units for the dilutive impact of unit rights outstanding pursuant to
         the unit rights incentive plan.

         Net earnings and cash flow from operations per unit are as follows:

                                            MARCH 31, 2003       MARCH 31, 2002
         -----------------------------------------------------------------------
         Net earnings
            Basic (1)                         $(0.01)                $ 0.19
            Diluted (2)                       $(0.01)                $ 0.18

         Cash flow from operations
            Basic (1)                         $ 0.69                 $ 0.59
            Diluted (2)                       $ 0.69                 $ 0.58
         -----------------------------------------------------------------------

         (1)  Basic per unit calculations are based on the weighted average
              number of trust units outstanding in 2003 of 57,410,652 for the
              period (55,592,810 common shares in 2002) which includes
              outstanding exchangeable shares converted at the period end
              exchange ratio.

         (2)  Diluted calculations include additional trust units in 2003 of
              195,955 for the period (1,091,444 additional shares in 2002) for
              the dilutive impact of the unit rights incentive plan (stock
              option plan in 2002). Calculations of diluted shares exclude
              59,700 of unit rights in 2003 which would have been anti-dilutive.
              There were no adjustments to net earnings or cash flow from
              operations in calculating dilutive per unit amounts.

9.       SEGMENTED INFORMATION
                                                   MARCH 31           MARCH 31
                                                       2003               2002
         ---------------------------------------------------------------------
         Petroleum and natural gas revenues:
             Canada                                $ 64,315           $ 44,627
             France                                  20,216             19,986
             Trinidad                                 3,482                 --
         ---------------------------------------------------------------------
                                                   $ 88,013           $ 64,613
         ---------------------------------------------------------------------

         Net earnings:
             Canada                                $ (4,937)          $  5,237
             France                                   3,314              5,169
             Trinidad                                   903                 --
         ---------------------------------------------------------------------
                                                   $   (720)          $ 10,406
         ---------------------------------------------------------------------


                                       14
- --------------------------------------------------------------------------------
<PAGE>

9.       SEGMENTED INFORMATION (CONTINUED)

         Funds generated from operations:
             Canada                                $  25,442          $  18,932
             France                                   12,015             13,864
             Trinidad                                  2,281                 --
         ----------------------------------------------------------------------
                                                   $  39,738          $  32,796
         ----------------------------------------------------------------------

         Capital expenditures:
             Canada                                $   7,992          $  54,339
             France                                    2,323              6,432
             Trinidad / Argentina                      7,313                400
         ----------------------------------------------------------------------
                                                   $  17,628          $  61,171
         ----------------------------------------------------------------------


                                                     MARCH 31       DECEMBER 31,
                                                         2003               2002
         ======================================================================
         Identifiable assets:
             Canada                                $ 474,747          $ 497,512
             France                                  201,719            199,385
             Trinidad / Argentina                    110,296            114,814
         ----------------------------------------------------------------------
                                                   $ 786,762          $ 811,711
         ----------------------------------------------------------------------

10.      CONTINGENCIES

         On September 25, 2001, Vermilion received a tax notice from the
         Direction Generale des Impots regarding the Company's wholly owned
         subsidiary in France, Vermilion REP S.A. The notice advises that the
         Company is liable for a registration fee that was owed at the time of
         the purchase of the French properties in 1997 in the amount of 4.5
         million Euro, including interest charges for late filing. The Company
         disagrees with the tax authorities position and is in the process of
         challenging the notice. At the present time the Company is unable to
         determine the likelihood that it will be required to pay the
         registration fee, and as such, no amount has been accrued for in the
         consolidated financial statements at March 31, 2003.

11.      COMMITMENTS

         The Trust realized a hedging loss of $6.9 million during the first
         three months of 2003 (2002 - $2.5 million gain) related to its oil
         hedging activities. Hedging contracts currently in place are as
         follows:
                                                        REMAINING      CALENDAR
                                                   NINE MONTHS OF          YEAR
                                                             2003          2004
         ----------------------------------------------------------------------
         Oil Hedging Program
               Average volume - WTI (bbls/d)                2,950         1,500
               Average price - WTI (US$/bbl)                24.74         24.07
               Average volume - Brent (bbls/d)              2,600         1,750
               Average price - Brent (US$/bbl)              23.24         22.74

         Natural Gas Hedging Program
               Volume (mmcf/d)                               24.7           5.4
               Average Floor ($/mcf)                         5.23          5.39
               Average Cap ($/mcf)                           6.12          9.01

12.      COMPARATIVE FIGURES

         Certain of the prior period numbers have been restated to conform with
         the current period presentation.


                                       15
- --------------------------------------------------------------------------------
<PAGE>


For further information please contact:

Curtis W. Hicks, C.A.
VP Finance & Chief Financial Officer
or
Paul Beique
Director Investor Relations

2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


FORWARD-LOOKING INFORMATION

This report contains forward-looking financial and operational information
including earnings, cash flow, production and capital expenditure projections.
These projections are based on the Trust's expectations and are subject to a
number of risks and uncertainties that could materially affect the results.
These risks include, but are not limited to, future commodity prices, exchange
rates, interest rates, geological risk, reserves risk, political risk, product
demand and transportation restrictions.



                                       16
- --------------------------------------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>14
<FILENAME>ex99_11form40-f.txt
<DESCRIPTION>EXHIBIT 99.11
<TEXT>
                                                                   EXHIBIT 99.11
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                             VERMILION ENERGY TRUST

                            PROXY AUTHORIZATION FORM

                           FOR HOLDERS OF TRUST UNITS

                  THIS PROXY AUTHORIZATION FORM IS SOLICITED BY
                   THE MANAGEMENT OF VERMILION RESOURCES LTD.
             FOR THE ANNUAL AND SPECIAL MEETING OF TRUST UNITHOLDERS
                           TO BE HELD ON MAY 18, 2004.


     The undersigned trust unitholder of Vermilion Energy Trust (the "Trust")
hereby appoints Lorenzo Donadeo of Calgary, Alberta, or failing him, Curtis
Hicks of Calgary, Alberta, with full power of substitution, or instead of either
of them, _______________________________________, as proxyholder for and on
behalf of the undersigned, to attend, act, and vote all of the trust units of
the Trust which the undersigned may be entitled to vote at the annual and
special meeting of trust unitholders of the Trust (the "Meeting") to be held on
May 18, 2004, and at any adjournment thereof, with all the powers which the
undersigned could exercise if personally present. A TRUST UNITHOLDER HAS THE
RIGHT TO APPOINT A PERSON TO ATTEND AND ACT ON HIS BEHALF AT THE MEETING OTHER
THAN ANY OF THE PERSONS DESIGNATED IN THIS PROXY AUTHORIZATION FORM. This right
may be exercised by inserting such other person's name in the blank space
provided for that purpose above or by completing another proper form of proxy
authorization form.

     Without limiting the general powers conferred by this form of proxy
authorization form, the undersigned hereby revokes any proxy previously given
and directs the person named above as proxyholder to vote at the Meeting and at
any adjournment thereof, the trust units represented by this proxy authorization
form as follows:

1.   On the resolution appointing Deloitte & Touche LLP as auditors of the Trust
     for a term expiring at the close of the next annual meeting of the
     unitholders of the Trust.

     To VOTE FOR [_]  or  WITHOLD VOTE [_]

     (AND, IF NO SPECIFICATION IS MADE, TO VOTE FOR)

2.   On the resolution electing the directors of Vermilion Resources Ltd. to
     hold office until the next annual meeting of unitholders or until their
     successors are elected or appointed.

     To VOTE FOR [_]  or  WITHOLD VOTE [_]

     (AND, IF NO SPECIFICATION IS MADE, TO VOTE FOR)

3.   On the resolution approving of the issuance of up to 6,775,000 Trust Units
     by the Trust pursuant to Vermilion Resources Ltd.'s Trust Unit Rights
     Incentive Plan.

     To VOTE FOR [_]  or  WITHOLD VOTE [_]

     (AND, IF NO SPECIFICATION IS MADE, TO VOTE FOR)

4.   In the discretion of the proxyholder in respect of any amendments or
     variation to matters identified in the Notice of Annual and Special Meeting
     included within the Proxy Statement and Information Circular of the Trust
     dated April 15, 2004 (the "Proxy Statement and Information Circular") and
     on all other matters that may properly come before the Meeting or any
     adjournment thereof.

     The full text of the resolution referred to in Item 3 is set forth in
     Schedule "A" to the Proxy Statement and Information Circular.

The trust units represented by this proxy authorization form will be voted in
the manner directed herein by the undersigned on any ballot that may be called
for. IF NO DIRECTION IS GIVEN, THE TRUST UNITS REPRESENTED BY THIS PROXY
AUTHORIZATION FORM WILL BE VOTED "FOR" ITEMS 1, 2 AND 3 ABOVE. IF ANY OTHER
BUSINESS OR AMENDMENTS OR VARIATIONS TO THE MATTERS IDENTIFIED IN THE NOTICE OF
ANNUAL AND SPECIAL MEETING INCLUDED WITH THE PROXY STATEMENT AND INFORMATION
CIRCULAR PROPERLY COME BEFORE THE MEETING, THEN DISCRETIONARY AUTHORITY IS
CONFERRED UPON THE PERSON APPOINTED IN THIS PROXY AUTHORIZATION FORM IN THE
MANNER THAT SUCH PERSON SEES FIT. The undersigned hereby agrees to ratify and
confirm all that such proxyholder may do by virtue hereof. The undersigned
hereby acknowledges receipt of the Notice of Annual and Special Meeting and the
Proxy Statement and Information Circular.

Dated __________________              __________________________________________
                                      Signature of Holder

                                      __________________________________________
                                      Name (please print) of Holder

                                      __________________________________________
                                      Name (please print) of Authorized Officer


<PAGE>


Instructions:

1.   In order for this proxy authorization form to be effective, this proxy
     authorization form must be executed by the holder of trust units or the
     attorney of such person authorized in writing or, if the holder of trust
     units is a corporation, under its corporate seal or by an officer or
     attorney thereof duly authorized, the label accompanying this proxy
     authorization form must be affixed and this proxy authorization form must
     be forwarded in the enclosed self-addressed envelope or by facsimile at
     1-866-249-7775 or 416-263-9524 or by such other method of delivery as is
     noted on the label form attached to this proxy authorization form (if
     applicable) to be received no later than 3:00 p.m. (Toronto time) on May
     14, 2004 or, if the Meeting is adjourned, by 3:00 p.m. (Toronto time) on
     the second business day prior to the date of the adjourned Meeting, or any
     further adjournment thereof. If the date is not inserted in the blank space
     provided above, this proxy authorization form shall be deemed to be dated
     on the day on which it is mailed by the Trust with the Proxy Statement and
     Information Circular.

2.   The signature of the holder of trust units should be exactly the same as
     the name appearing on the label to be affixed to this proxy authorization
     form.

3.   Persons signing as executors, administrators, trustees, etc. should so
     indicate. If the holder of trust units is a corporation, its corporate seal
     must be affixed or this proxy authorization form must be signed by an
     officer or attorney thereof duly authorized.





PLEASE MARK, DATE AND SIGN THIS PROXY AUTHORIZATION FORM AND PROMPTLY RETURN IT
USING THE ENCLOSED ENVELOPE.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>15
<FILENAME>ex99_12form40-f.txt
<DESCRIPTION>EXHIBIT 99.12
<TEXT>
                                                                   EXHIBIT 99.12
                                                                   -------------



                               [GRAPHIC OMITTED]
                         [LOGO -VERMILION ENERGY TRUST]

- --------------------------------------------------------------------------------

                                NOTICE OF MEETING

                                       AND

                              INFORMATION CIRCULAR



                                IN RESPECT OF THE


                           ANNUAL AND SPECIAL MEETING
                                 OF UNITHOLDERS



                       TO BE HELD ON TUESDAY, MAY 18, 2004





                              DATED APRIL 15, 2004

- --------------------------------------------------------------------------------

<PAGE>

                               [GRAPHIC OMITTED]
                         [LOGO -VERMILION ENERGY TRUST]


                      NOTICE OF ANNUAL AND SPECIAL MEETING


         NOTICE IS HEREBY GIVEN that an annual and special meeting (the
"Meeting") of the holders ("Unitholders") of trust units ("Trust Units") of
Vermilion Energy Trust (the "Trust") will be held at the Grand Lecture Theatre,
Metropolitan Centre, 333 - 4th Avenue S.W., Calgary, Alberta on Tuesday, May 18,
2004 at 10:00 a.m. (Calgary time) for the following purposes, which are
described in more detail in the Proxy Statement and Information Circular of the
Trust (the "Circular") accompanying this Notice, namely:

         1.       to receive the consolidated financial statements of the Trust
                  together with the Report of the Auditors thereon for the year
                  ended December 31, 2003;

         2.       to appoint auditors of the Trust for the ensuing year;

         3.       to elect the directors of Vermilion Resources Ltd. to hold
                  office until the next annual meeting of Unitholders or until
                  their successors are elected or appointed;

         4.       to consider and, if deemed advisable, to pass, with or without
                  variation, an ordinary resolution approving an increase in the
                  number of Trust Units reserved for issuance pursuant to the
                  exercise of rights granted under the Trust Unit Rights
                  Incentive Plan of the Trust; and

         5.       to transact such other business as may properly come before
                  the Meeting or any adjournment thereof.

         The full text of the resolutions for the matter referred to in Item 4
are set out in Schedule "A" to the Circular.

         Only Unitholders of record at the close of business on April 2, 2004
will be entitled to notice of and to vote at the Meeting or any adjournment
thereof, except that a transferee of Trust Units after such record date may, not
later than 10 days before the Meeting, establish the right to vote by providing
evidence of ownership of Trust Units and requesting that the transferee's name
be placed on the voting list in place of the transferor.

         IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE AND
SIGN THE ENCLOSED FORM OF PROXY AND FORWARD IT IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE, OR OTHERWISE DELIVER IT TO COMPUTERSHARE TRUST COMPANY OF CANADA AT
9TH FLOOR, 100 UNIVERSITY AVENUE, TORONTO, ONTARIO M5J 2Y1 ATTENTION: PROXY
DEPARTMENT, TO REACH THE ADDRESSEE NO LATER THAN 3:00 P.M. (TORONTO TIME) ON MAY
14, 2004 OR, IF THE MEETING IS ADJOURNED, BY 3:00 P.M. (TORONTO TIME) ON THE
SECOND BUSINESS DAY PRIOR TO THE DATE ON WHICH THE MEETING IS RECONVENED.

<PAGE>

                                      -2-


         Holders of exchangeable shares in the capital of Vermilion Resources
Ltd. ("Exchangeable Shares") of record at the close of business on April 2, 2004
will be entitled to notice of and to vote, through the mechanics for voting
provided in the voting and exchange trust agreement dated January 16, 2003 among
the Trust, Vermilion Acquisition Ltd. and Computershare Trust Company of Canada,
in its capacity as the exchangeable shares trustee, or any adjournment thereof.

         HOLDERS OF EXCHANGEABLE SHARES MAY VOTE BY SIGNING THE ENCLOSED FORM OF
VOTING INSTRUCTION FORM AND FORWARDING IT IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE, OR OTHERWISE DELIVER IT TO COMPUTERSHARE TRUST COMPANY OF CANADA,
SUITE 710, 530-8TH AVENUE S.W., CALGARY, ALBERTA, T2P 3S8 ATTENTION: PROXY
DEPARTMENT. IN ORDER TO BE VALID AND ACTED UPON AT THE MEETING, THE VOTING
INSTRUCTION FORM MUST BE RECEIVED NO LATER THAN 3:00 P.M. (CALGARY TIME) ON MAY
14, 2004.

                                          BY ORDER OF THE BOARD OF DIRECTORS OF
                                          VERMILION RESOURCES LTD.


                                          (Signed)
                                          Charles Berard
                                          Corporate Secretary
Calgary, Alberta
April 2, 2004


<PAGE>

                             VERMILION ENERGY TRUST
                    PROXY STATEMENT AND INFORMATION CIRCULAR
                             DATED APRIL 15, 2004(1)

                   QUESTIONS AND ANSWERS ON VOTING AND PROXIES


Vermilion Energy Trust (the "Trust") is holding an Annual and Special Meeting
(the "Meeting") of holders ("Unitholders") of trust units ("Trust Units") of the
Trust to be held at 10:00 a.m. in the Grand Lecture Theatre, Metropolitan
Centre, 333 - 4th Avenue S.W., Calgary, Alberta, on Tuesday, May 18, 2004.

The Trust has two types of securities that entitle holders to vote generally at
meetings of Unitholders; Trust Units and a special voting unit (the "Special
Voting Unit"). A Special Voting Unit was issued to Computershare Trust Company
of Canada in its capacity as trustee (the "Exchangeable Shares Trustee") under a
voting and exchange trust agreement dated January 16, 2003 among the Trust,
Vermilion Acquisition Ltd. and the Exchangeable Shares Trustee (the "Voting and
Exchange Trust Agreement") for the benefit of holders of Exchangeable Shares in
connection with a plan of arrangement (the "Arrangement") involving the Trust,
Vermilion Resources Ltd. ("VRL"), Clear Energy Inc. and Vermilion Acquisition
Ltd.

The Trust Units and the Special Voting Unit vote together as a single class on
all matters. However, the means by which Unitholders and holders of Exchangeable
Shares vote their Trust Units and Exchangeable Shares, respectively, is
different.

As it is important that your Trust Units or Exchangeable Shares, as the case may
be, are represented at the Meeting, please refer to the following questions and
answers which provide guidance on how to vote your securities.

IF YOU ARE A UNITHOLDER, the questions and answers from numbers 1 to 16 provide
information respecting this solicitation of proxies and guidance on how to vote
your Trust Units. In particular, if you are not a registered Unitholder, Q&A No.
16 describes the procedure to be followed to vote your Trust Units.

IF YOU ARE A HOLDER OF EXCHANGEABLE SHARES, the questions and answers in numbers
1 to 15 provide information respecting this solicitation of proxies and guidance
on how holders of Exchangeable Shares vote.

1.       WHO IS SOLICITING MY PROXY?

This Circular is furnished in connection with the solicitation by the management
of VRL on behalf of the Trust of proxies to be used at the Meeting and at any
adjournment or postponement thereof. The solicitation of proxies will be
primarily by mail and may be supplemented by telephone or other contact by
employees or agents of VRL at a nominal cost, and all costs thereof will be
borne by VRL.

2.       WHAT AM I VOTING ON?

         o        The election of the directors to the board of directors of VRL
                  (the "Board"). Although Unitholders are not shareholders of
                  VRL, they are entitled to elect the directors of VRL as if
                  they were shareholders of VRL. Holders of Exchangeable Shares
                  are shareholders of VRL. However, the terms of the
                  Exchangeable Shares do not provide the right to directly vote
                  at meetings of Unitholders. Holders of Exchangeable Shares can
                  indirectly vote for the election of directors by directing the
                  Exchangeable Shares Trustee to exercise that number of votes
                  equal to the number of Trust Units (rounded down to the
                  nearest whole number) into which the Exchangeable Shares of
                  such holder are exchangeable, as provided for in the Voting
                  and Exchange Trust Agreement.

         o        The appointment of the auditors of the Trust.

         o        The reservation for issuance of up to an additional 775,000
                  Trust Units pursuant to the exercise of rights granted under
                  the Trust Unit Rights Incentive Plan of the Trust (the
                  "Incentive Rights Plan").

Trust Units and Exchangeable Shares may be voted for or withheld from voting on
the election of directors and the appointment of auditors. Trust Units and
Exchangeable Shares may be voted for or against the reservation for issuance of
up to an additional 775,000 Trust Units pursuant to the exercise of rights
granted under the Incentive Rights Plan.

- ------------------
(1)  The information set forth in this proxy statement and information circular
     is as of March 31, 2004, except as otherwise indicated.

<PAGE>

                                      -2-


AS INDICATED ELSEWHERE IN THIS CIRCULAR, THE BOARD AND MANAGEMENT OF VRL ARE
RECOMMENDING THAT UNITHOLDERS AND HOLDERS OF EXCHANGEABLE SHARES VOTE FOR THE
ABOVE RESOLUTIONS.

3.       WHO IS ENTITLED TO VOTE?

Unitholders as of the close of business on April 2, 2004 or their duly appointed
proxies will be entitled to attend the Meeting or to register a vote. If you
have acquired Trust Units after April 2, 2004, please refer to Q&A No. 12 to
determine whether and how you may vote such Trust Units.

Shareholders of Exchangeable Shares as of the close of business on April 2, 2004
will be entitled to attend the Meeting and to vote with respect to the matters
to be considered at the Meeting in accordance with the terms and conditions of
the Voting and Exchange Trust Agreement. Shareholders of Exchangeable Shares
should refer to the voting direction which was provided to holders of
Exchangeable Shares with this proxy statement and information circular.

4.       HOW DO I VOTE?

IF YOU ARE A REGISTERED UNITHOLDER there are two ways that you can vote your
Trust Units. You may vote in person at the Meeting or you may complete and sign
the enclosed proxy form appointing the named persons or some other person you
choose to represent you and vote your Trust Units at the Meeting.

If you wish to vote in person at the Meeting, do not complete or return the
proxy form. Your vote will be taken and counted at the Meeting. Completing,
signing and returning your proxy form does not preclude you from attending the
Meeting in person.

If you do not wish to attend the Meeting or do not wish to vote in person, your
proxy will be voted for or against or withheld from voting in accordance with
your wishes as specified thereon on any ballot that may be called at the
Meeting. A PROXY MUST BE IN WRITING AND MUST BE EXECUTED BY THE UNITHOLDER OR BY
THE UNITHOLDER'S ATTORNEY AUTHORIZED IN WRITING OR, IF THE UNITHOLDER IS A
CORPORATION, BY AN OFFICER OR ATTORNEY THEREOF DULY AUTHORIZED.

If your Trust Units are in your brokerage account and therefore registered in
the name of a nominee, please see Q&A No. 16 for voting instructions.

IF YOU ARE A HOLDER OF EXCHANGEABLE SHARES, there are three ways holders of
Exchangeable Shares can vote. A holder of Exchangeable Shares may: (i) direct
the Exchangeable Shares Trustee to exercise that number of votes attached to the
Special Voting Unit equal to the number of Trust Units (rounded down to the
nearest whole number) into which the Exchangeable Shares of such holder are
exchangeable; (ii) direct the Exchangeable Shares Trustee to give a proxy to
such holder or his designee to personally exercise such votes; or (iii) give a
proxy to representatives of the management of the Trust to exercise such votes.

5.       HOW DO I ATTEND THE MEETING IN PERSON?

Unitholders and holders of Exchangeable Shares should present themselves to a
representative of Computershare Trust Company of Canada, the Trust's registrar
and transfer agent, at the Meeting. Persons who are not proxyholders,
Unitholders or holders of Exchangeable Shares may be admitted subject to the
discretion of the chairman of the Meeting and subject to any space constraints
after addressing themselves to a representative of Computershare Trust Company
of Canada. NON-REGISTERED UNITHOLDERS WISHING TO ATTEND THE MEETING SHOULD REFER
TO Q&A NO. 16.

6.       WHAT IF I SIGN THE PROXY FORM/VOTING DIRECTION ENCLOSED WITH THIS
         CIRCULAR?

IN THE CASE OF UNITHOLDERS, signing the enclosed proxy form gives authority to
Lorenzo Donadeo or Curtis Hicks, both of whom are officers of VRL, to vote your
Trust Units at the Meeting.

IN THE CASE OF HOLDERS OF EXCHANGEABLE SHARES, signing the enclosed voting
direction directs the Exchangeable Shares Trustee, Lorenzo Donadeo, Curtis Hicks
or other designated proxy to vote or abstain from voting as directed in such
voting direction.

7.       CAN I APPOINT SOMEONE OTHER THAN THESE PERSONS TO VOTE MY TRUST UNITS
         OR EXCHANGEABLE SHARES, AS THE CASE MAY BE?

YES, YOU CAN APPOINT SOMEONE OTHER THAN THESE PERSONS TO VOTE YOUR TRUST UNITS
OR EXCHANGEABLE SHARES. Write the name of the person you wish to appoint, who
need not be a Unitholder or holder of Exchangeable Shares, in the blank space
provided in the proxy form or voting direction, as the case may be.

PLEASE NOTE THAT IT IS IMPORTANT TO ENSURE THAT ANY OTHER PERSON YOU APPOINT IS
ATTENDING THE MEETING AND IS AWARE THAT HIS OR HER APPOINTMENT HAS BEEN MADE TO
VOTE YOUR SECURITIES. Persons who are appointed as such should, at the Meeting,
present

<PAGE>

                                      -3-


themselves to a representative of Computershare Trust Company of Canada.

8.       WHAT DO I DO WITH MY COMPLETED PROXY FORM/VOTING DIRECTION?

Return it to Computershare Trust Company of Canada, in the envelope provided so
that it arrives NO LATER THAN 3:00 P.M. (TORONTO TIME) ON MAY 14, 2004. All
Trust Units and Exchangeable Shares represented by properly executed proxy forms
or voting directions, as the case may be, received by Computershare Trust
Company of Canada prior to such time will be voted for or against or withheld
from voting, in accordance with your instructions as specified in the proxy form
or voting direction, as the case may be, on any matter dealt with at the
Meeting.

9.       HOW WILL MY TRUST UNITS OR EXCHANGEABLE SHARES BE VOTED IF I GIVE MY
         PROXY?

The persons named in the proxy form or voting direction, as the case may be,
must vote or withhold from voting your Trust Units or Exchangeable Shares, as
the case may be, in accordance with your directions.

In the absence of such directions, your Trust Units will be voted FOR the
matters specified in the proxy. In the absence of such directions the
Exchangeable Shares Trustee will not vote with respect to those Exchangeable
Shares.

10.      IF I CHANGE MY MIND, CAN I TAKE BACK MY PROXY OR VOTING DIRECTION ONCE
         I HAVE GIVEN IT?

Yes. A Unitholder or holder of Exchangeable Shares who has given a proxy or
voting direction, as the case may be, may revoke it by depositing an instrument
in writing (which includes another proxy form or voting direction, as the case
may be, with a later date) executed by the Unitholder or holder of Exchangeable
Shares or by its attorney authorized in writing with the Corporate Secretary,
c/o Vermilion Resources Ltd., Suite 2800, 400 - 4th Avenue S.W., Calgary,
Alberta, T2P 0J4 at any time up to and including the last business day preceding
the day of the Meeting, or any adjournment or postponement thereof, or by
depositing it with the chairman of the Meeting on the day of the Meeting, or any
adjournment or postponement thereof. A Unitholder or holder of Exchangeable
Shares may also revoke a proxy in any other manner permitted by law.

IT SHOULD BE NOTED THAT THE PARTICIPATION IN PERSON BY A UNITHOLDER IN A VOTE BY
BALLOT AT THE MEETING WILL AUTOMATICALLY REVOKE ANY PROXY WHICH HAS BEEN
PREVIOUSLY GIVEN BY THE UNITHOLDER IN RESPECT OF BUSINESS COVERED BY THAT VOTE.

11.      WHAT IF AMENDMENTS ARE MADE TO THESE MATTERS OR IF OTHER MATTERS ARE
         BROUGHT BEFORE THE MEETING?

The person named in the proxy form will have discretionary authority with
respect to amendments or variations to matters identified in the notice of the
Meeting and to other matters which may properly come before the Meeting. As of
March 31, 2004, management of VRL and the Trust know of no such amendment,
variation or other matter expected to come before the Meeting. If any other
matters properly come before the Meeting, the persons named in the proxy form
will vote on them in accordance with their best judgment.

12.      WHAT IF OWNERSHIP OF TRUST UNITS OR EXCHANGEABLE SHARES IS TRANSFERRED
         AFTER APRIL 2, 2004?

IF YOU ARE A UNITHOLDER on April 2, 2004 you are entitled to receive notice and
to vote at the Meeting, even though since that time you have disposed of your
Trust Units. If you acquired your Trust Units after April 2, 2004, you are not
entitled to receive notice of or to vote at the Meeting unless you establish,
not later than 10 days before the Meeting, the right to vote by providing
evidence of your ownership of Trust Units to Computershare Trust Company of
Canada and request that your name be placed on the voting list.

IF YOU ARE A HOLDER OF EXCHANGEABLE SHARES on April 2, 2004 you are entitled to
receive notice of and to vote such Exchangeable Shares in accordance with the
terms and conditions of the Voting and Exchange Trust Agreement and the voting
direction. If you acquired your Exchangeable Shares after April 2, 2004 you are
not entitled to receive notice of or to vote in accordance with the Voting and
Exchange Trust Agreement.

13.      HOW MANY VOTES ARE REQUIRED TO APPROVE THE MATTERS TO BE CONSIDERED AT
         THE MEETING?

The election of directors and the appointment of auditors will each be
determined by a majority of votes cast. The reservation for issuance of up to an
additional 775,000 Trust Units by the Trust pursuant to the Incentive Rights
Plan must be approved by more than 50% of votes cast. In addition, the Toronto
Stock Exchange requires this resolution be approved by

<PAGE>

                                      -4-


a majority of the votes cast at the meeting other than votes attaching to Trust
Units or Exchangeable Shares beneficially owned by insiders of the Trust and its
subsidiaries and associates of such insiders.

14.      WHO COUNTS THE VOTES?

The Trust's registrar and transfer agent, Computershare Trust Company of Canada,
counts and tabulates the votes. This is done independently of VRL to preserve
the confidentiality of individual votes. Proxies and voting directions are
referred to VRL only in cases where a Unitholder or Exchangeable Shareholder
clearly intends to communicate with management (by making a written statement on
the proxy form), in the event of a proxy contest or when it is necessary to do
so to meet the requirements of applicable law.

15.      HOW CAN I CONTACT THE REGISTRAR AND TRANSFER AGENT OR EXCHANGEABLE
         SHARES TRUSTEE?

You can contact the registrar and transfer agent or Exchangeable Shares Trustee
at:

Computershare Trust Company of Canada
Suite 710, 530 - 8th Avenue S.W.
Calgary, Alberta   T2P 3S8
Phone:            1-888-267-6555
Facsimile:        1-888-453-0330
Web site:         www.computershare.com
E-mail:           caregistryinfo@computershare.com

16.      IF MY TRUST UNITS ARE NOT REGISTERED IN MY NAME BUT ARE HELD IN THE
         NAME OF A NOMINEE (A BANK, TRUST COMPANY, SECURITIES BROKER, TRUSTEE OR
         OTHER), HOW DO I VOTE MY TRUST UNITS?

IF YOU ARE A NON-REGISTERED UNITHOLDER, THERE ARE, AS DISCUSSED BELOW, TWO WAYS
THAT YOU CAN VOTE YOUR TRUST UNITS WHICH ARE HELD BY YOUR NOMINEE. Applicable
securities laws require your nominee to seek voting instructions from you in
advance of the meeting. Accordingly, you will receive or have already received
from your nominee either a request for voting instructions or a proxy form for
the number of Trust Units you hold. Every nominee has its own mailing procedures
and provides its own signing and return instructions, which should be carefully
followed by non-registered Unitholders to ensure that their Trust Units are
voted at the Meeting. Accordingly, for your Trust Units to be voted by you,
please follow the voting instructions provided by your nominee.

However, if you wish to vote in person at the Meeting, insert your own name in
the space provided on the request for voting instructions or proxy form to
appoint yourself as proxyholder and follow the signing and return instructions
of your nominee.

Non-registered Unitholders who appoint themselves as proxyholders should, at the
Meeting, present themselves to a representative of Computershare Trust Company
of Canada.

<PAGE>

                                      - 5 -


               RELATIONSHIPS AMONG THE TRUSTEE, THE TRUST AND VRL

         The Trust is an open-end unincorporated investment trust created under
the laws of Alberta pursuant to an amended and restated trust indenture (the
"Trust Indenture") dated as of January 15, 2003 between VRL and Computershare
Trust Company of Canada (the "Trustee"), as trustee, as amended from time to
time. The Trust was formed on December 16, 2002. As a result of the completion
of the Arrangement, former holders of common shares of Vermilion Resources Ltd.
received Trust Units or Exchangeable Shares, or a combination thereof, in
accordance with the elections made by such shareholders, and VRL became a
subsidiary of the Trust.

                          INTEREST OF THE TRUSTEE, VRL
        AND THE DIRECTORS AND OFFICERS OF VRL IN MATTERS TO BE ACTED UPON

         Neither the Trustee, VRL nor any directors or officers of VRL, nor any
proposed nominee for election as a director of VRL, nor any associate or
affiliate of any one of them, has any material interest, direct or indirect, by
way of beneficial ownership of securities or otherwise, in any matter to be
acted on at the Meeting, other than the participation by such directors and
officers in the trust unit rights incentive plan of the Trust (the "Incentive
Rights Plan").

                  INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS

         Except as disclosed in this Proxy Statement and Information Circular,
neither the Trustee, VRL nor any director or officer of VRL, nor any proposed
nominee for election as a director of VRL, nor any other insider of the Trust,
or VRL, nor any associate or affiliate of any one of them has or has had, at any
time since the year ended December 31, 2003, any material interest, direct or
indirect, in any transaction or proposed transaction that has materially
affected or would materially affect the Trust or VRL.

        INDEBTEDNESS OF THE TRUSTEE AND THE DIRECTORS AND OFFICERS OF VRL

         Neither the Trustee nor any of the directors or officers of VRL, nor
any proposed nominee for election as a director of VRL, nor any associate or
affiliate of any one of them is, or was, indebted, directly or indirectly, to
the Trust or VRL at any time since the beginning of the year ended December 31,
2003.

          VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

TRUST UNITS

         As at March 31, 2004, the Trust had 59,627,422 issued and outstanding
Trust Units. Each Trust Unit entitles the holder thereof to one vote at all
meetings of Unitholders for each Trust Unit held.

EXCHANGEABLE SHARES

         As at March 31, 2004, one Special Voting Unit has been issued to the
Exchangeable Shares Trustee under the Voting and Exchange Trust Agreement in
conjunction with the issuance of Exchangeable Shares pursuant to the
Arrangement. The Special Voting Unit carries a number of votes equal to the
number of Trust Units rounded down to the nearest whole number into which the
Exchangeable Shares are then exchangeable. Each holder of Exchangeable Shares on
the April 2, 2004 is entitled to give the Exchangeable Shares Trustee voting
instructions for a number of votes equal to the number of Trust Units rounded
down to the nearest whole number into which that holder's Exchangeable Shares
are then exchangeable. As of March 31, 2004, there are 4,811,852 Exchangeable
Shares issued and outstanding and the exchange ratio is currently 1.16656 Trust
Units for each Exchangeable Share.

                                PRINCIPAL HOLDERS

         As at March 31, 2004, and to the knowledge of the directors and senior
officers of VRL no person or company beneficially owned, directly or indirectly,
or exercised control or direction over more than 10% of the issued and
outstanding Trust Units or Exchangeable Shares. As of March 31, 2004, the
directors and senior officers

<PAGE>

                                      -6-


of VRL beneficially owned, directly or indirectly, or exercised control or
direction over, 2,472,732 Trust Units representing approximately 4.1% of the
issued and outstanding Trust Units and 4,488,951 Exchangeable Shares
representing 93.3% of the issued and outstanding Exchangeable Shares. Each such
Exchangeable Share held by such director or senior officer is exchangeable into
Trust Units at the current exchange ratio of 1.16656.

                        REPORT ON EXECUTIVE COMPENSATION

         The Governance and Human Resources Committee determined the
compensation to be provided to the executive officers of VRL. VRL recognizes the
need to deliver a compensation package that recognizes top performance and the
ability to attract and retain top performers. Compensation for all of the
officers, including the Chief Executive Officer, is reviewed against prevailing
industry compensation practices for oil and gas trusts, the Trust's performance
in achieving certain goals and the Trust's performance in relation to the
performance of the Trust's peers. Standard benefits are provided to all
employees, including the executive officers. Executive compensation also
includes participation in the Incentive Rights Plan and the VRL employee trust
unit ownership and RRSP savings plan (the "Savings Plan").

         BASE SALARY: The Governance and Human Resources Committee strives to
set all executive annual salaries at a level comparable to executive officers of
comparable oil and gas trusts based upon a review of an independently prepared
compensation survey by Mercer Human Resources Consulting Limited and information
obtained through participation in the Calgary Exchange Group, an association of
small to mid-size oil and gas companies established to exchange member
information related to human resources practices.

         BONUSES: The employee bonus plan (the "Employee Bonus Plan") approved
by the Unitholders in January 2003, is a broad based plan available to all
employees including the executive officers. The Employee Bonus Plan provides
that an amount of up to 2.0% per month of net operating income calculated at the
end of each calendar month is available to be paid in bonuses pursuant to the
Employee Bonus Plan. In no event will the maximum bonus amount allocated
pursuant to the Employee Bonus Plan exceed the 2% threshold. See "Executive
Compensation - Employee Bonus Plan" for more information in respect of the
Employee Bonus Plan. As part of the Employee Bonus Plan, the board of directors
established a key employee exemplary performance program (the "KEEP") in early
2003 primarily to retain VRL's key employees while reorganizing its structure
from an equity company into an oil and gas trust. The KEEP award, which
guaranteed a certain bonus payment, was granted to such key employees in lieu of
the typical discretionary bonus. The value attributed to the KEEP award was
determined based on the individual's ability to drive VRL forward into its
conversion as a premier oil and gas trust. The KEEP is still in effect with
certain employees, including the executive officers eligible to participate,
however, the guaranteed portion has been reduced for 2004.

         INCENTIVE RIGHTS PLAN: The board of directors may grant trust unit
incentive rights ("Rights") to purchase Trust Units to directors, officers,
employees and consultants of the Trust. The Incentive Rights Plan is a key
instrument used in attracting and retaining top performing employees with the
entrepreneurial characteristics needed to further the Trust's objectives and
prospects for further growth.

         SAVINGS PLAN: The board of directors approved the Savings Plan
effective September, 2003. As an integral part of the Trust's incentive program,
the Savings Plan represents VRL's ongoing commitment to maintaining a value
driven approach - employees who think like owners, spend money that way. This is
a voluntary plan that allows all eligible employees, including the five
executive officers, to contribute a percentage of their base salary earnings to
the Savings Plan, of which VRL will match each dollar contributed by the
employee, up to a maximum of 5%. Funds contributed up to the maximum combined
contribution of 10% of the base salary are used to purchase Trust Units through
the facilities of the Toronto Stock Exchange (the "TSX"). The Trust Units
purchased through the employee and VRL contributions can be sold at any time,
provided that any Trust Units purchased with VRL contributions must have been
held for at least one year from the date of contribution.

         The Governance and Human Resources Committee believes that it has been
successful in providing VRL's executive officers with a package that combines
reasonable base compensation with additional potential short-term and long-term
financial rewards that are tied to positive operational and financial results
and increases in Unitholder value.

<PAGE>

                                      -7-


         The foregoing report is respectfully submitted to the Unitholders by
the Governance and Human Resources Committee.

         Larry J. Macdonald
         Jeffrey S. Boyce
         Joseph F. Killi

                             EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table provides a summary of compensation information for
each of the chief executive officer, chief financial officer and three most
highly compensated executive officers of VRL (collectively, the "Named Executive
Officers") for the three years ended December 31, 2003.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
                                                   Annual Compensation            Long-Term Compensation
                                    -------------------------------------------- -------------------------
                                                                                    Awards       Payout
                                                                                 ------------- -----------
                                                                                  Securities
                                                                      Other      Under Trust
                                                                     Annual          Unit
                                            Salary      Bonus(6)   Compensation   Incentive      LTIP         All Other
      NAME AND POSITION(1)           Year     ($)         ($)           ($)         Rights      Payouts    Compensation(5)
- --------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>     <C>         <C>         <C>             <C>            <C>         <C>
Lorenzo Donadeo                     2003                500,000         --          450,000        --          31,358
President and Chief Executive       2002    275,000(2)       --         --           75,000        --          27,039
Officer                             2001    245,000      55,000         --               --        --          24,696
                                            220,000
Curtis Hicks                        2003                220,000         --          300,000        --          16,182
Vice-President, Finance and Chief   2002    166,667(3)       --         --               --        --              --
Financial Officer                   2001         --          --         --               --        --              --

Claudio Ghersinich                  2003    255,000     450,000         --          360,000        --          30,773
Executive Vice-President,           2002    245,000          --         --           75,000        --          26,895
Business Development                2001    220,000      55,000         --               --        --          24,477

Martin Robert                       2003    175,333     200,000      8,847(4)       180,000        --          26,780
Vice President, Engineering and     2002    176,000          --     94,056(4)        30,000        --          18,825
International Operations            2001    170,000      35,000     97,366(4)            --        --          13,998

Raj Patel                           2003    168,500     175,000         --          150,000        --          18,229
Vice-President, Marketing           2002    160,000          --         --           20,000        --          16,686
                                    2001    139,000      50,000         --           90,000        --          15,030
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

(1)  Each Named Executive Officer receives compensation in their role as an
     officer of VRL, a subsidiary of the Trust.
(2)  Lorenzo Donadeo was appointed to the position of President and Chief
     Executive Officer effective January 22, 2003. Prior to that time, Mr.
     Donadeo held the position of Chief Operating Officer of VRL.
(3)  Curtis Hicks was appointed Vice-President, Finance and Chief Financial
     Officer of VRL on March 3, 2003. (4) Martin Robert received a foreign
     hardship allowance and cost of living allowance while an expatriate in
     France with VRL. Mr. Robert was expatriated to VRL's subsidiary office in
     France in 1997 and repatriated on January 18, 2003.
(5)  Messrs. Donadeo and Ghersenich each received a one-time payment of $330,000
     as determined by the board of directors of VRL, resulting from the key role
     that each of them played in initiating the transaction creating the Trust.
(6)  Bonuses for 2003 were paid to the Named Executive Officers, net of required
     withholdings including income taxes, approximately 50% in Trust Units and
     the balance in cash.

RIGHTS GRANTED

         The following table sets forth details with respect to Rights granted
to the Named Executive Officers during 2003 pursuant to the Incentive Rights
Plan. See "Trust Unit Incentive Rights Plan".

<PAGE>

                                      -8-


                          RIGHTS GRANTS DURING THE MOST
                        RECENTLY COMPLETED FINANCIAL YEAR

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                                                 MARKET VALUE OF
                                                                                    SECURITIES
                                             % OF TOTAL                           UNDERLYING
                                               RIGHTS             INITIAL             RIGHTS
                           RIGHTS            GRANTED TO         EXERCISE OR       ON THE DATE OF
                           GRANTED          EMPLOYEES IN        BASE PRICE            GRANT
       NAME                  (#)           FINANCIAL YEAR      ($/SECURITY)      ($/SECURITY)(1)     EXPIRATION DATE
- ----------------------------------------------------------------------------------------------------------------------
<S>                        <C>                 <C>                <C>               <C>             <C>
Lorenzo Donadeo            450,000             9.31%              $11.45            $5,152,500      January 29, 2008
- ----------------------------------------------------------------------------------------------------------------------
Curtis W. Hicks            300,000             6.20%              $11.45            $3,435,000      January 29, 2008
- ----------------------------------------------------------------------------------------------------------------------
Claudio A.                 360,000             7.44%              $11.45            $4,122,000      January 29, 2008
Ghersinich
- ----------------------------------------------------------------------------------------------------------------------
Martin Robert              180,000             3.72%              $11.45            $2,061,000      January 29, 2008
- ----------------------------------------------------------------------------------------------------------------------
Raj Patel                  150,000             3.10%              $11.45            $1,717,500      January 29, 2008
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE:

(1)  At the election of a holder of Rights, the exercise price per Right granted
     under the Incentive Rights Plan may be reduced from time to time by
     deducting from the exercise price of each Right (the "Grant Price") the
     aggregate of all distributions, on a per Trust Unit basis, made by the
     Trust after the date of grant which represent a return of more than 0.833%
     of the Trust's recorded cost of capital assets less depletion, depreciation
     and amortization charges and any future income tax liability associated
     with such capital assets at the end of each month. Provided this test has
     been met, then the entire amount of the distribution may be deducted from
     the Grant Price.


AGGREGATE RIGHTS EXERCISED AND YEAR-END VALUES

         The following table sets forth, with respect to the Named Executive
Officers, the number of Unexercised and the value of the in-the-money Rights at
December 31, 2003.

                      AGGREGATE RIGHTS EXERCISED DURING THE
                   MOST RECENTLY COMPLETED FINANCIAL YEAR AND
                        FINANCIAL YEAR-END RIGHTS VALUES

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
                                                                           UNEXERCISED           VALUE OF UNEXERCISED
                                SECURITIES           AGGREGATE                RIGHTS                 IN-THE-MONEY
                               ACQUIRED ON             VALUE                AT FY-END              RIGHTS AT FY-END
                                 EXERCISE            REALIZED                  (#)                        ($)
          NAME                      (#)                  ($)        EXERCISABLE/UNEXERCISABLE  EXERCISABLE/UNEXERCISABLE(1)
- ---------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                  <C>                 <C>                    <C>
Lorenzo Donadeo                     --                   --                   0/450,00              0/$1,750,500
- ---------------------------------------------------------------------------------------------------------------------------
Curtis W. Hicks                     --                   --                  0/300,000              0/$1,167,000
- ---------------------------------------------------------------------------------------------------------------------------
Claudio A. Ghersinich               --                   --                  0/360,000              0/$1,400,000
- ---------------------------------------------------------------------------------------------------------------------------
Martin Robert                       --                   --                  0/180,000                0/$700,200
- ---------------------------------------------------------------------------------------------------------------------------
Raj Patel                           --                   --                  0/150,000                0/$583,500
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE:

(1)  At the election of a holder of Rights, the exercise price per Right granted
     under the Incentive Rights Plan may be reduced from time to time by
     deducting from the Grant Price the aggregate of all distributions, on a per
     Trust Unit basis, made by the Trust after the date of grant which represent
     a return of more than 0.833% of the Trust's recorded cost of capital assets
     less depletion, depreciation and amortization charges and any future income
     tax liability associated with such capital assets at the end of each month.
     Provided this test has been met, then the entire amount of the distribution
     may be deducted from the Grant Price.

<PAGE>

                                      -9-


         The value of the exercisable Rights (market value of Trust Units less
the initial exercise price reduced by eligible distributions) at December 31,
2003, was based upon the closing price of $15.34 of the Trust Units on December
31, 2003, being the last day of trading of the Trust Units in 2003, as quoted by
the TSX.

REMUNERATION OF DIRECTORS

         An annual retainer of $15,000 is paid to each independent director
together with board meeting fees of $1,000 per board meeting and $1,000 per
committee meeting. In addition, the Lead Director receives an annual retainer of
$10,000 and each committee chair receives an annual retainer of $3,000. In the
year ended December 31, 2003, a total of $119,000 in fees were paid to the
independent directors of VRL.

         Directors are entitled to participate in the Incentive Rights Plan and
receive reimbursement for out of pocket expenses for attendance at meetings of
the board of directors and any committees of the board of directors. An
aggregate of 300,000 Rights were issued to directors of VRL during 2003.

INCENTIVE RIGHTS PLAN

         The board of directors of VRL and the Unitholders have approved the
Incentive Rights Plan for directors, officers, employees or consultants of VRL
which currently permits the granting of Rights to purchase up to a maximum of
6,000,000 Trust Units provided that the number of Trust Units reserved from time
to time for Rights may not be more than 10% of the aggregate number of the then
issued and outstanding Trust Units. Pursuant to the Incentive Rights Plan, the
directors of VRL may, from time to time, at their discretion, grant to service
providers of the Trust, or any of its subsidiaries, including VRL, in connection
with their employment or position, Rights to purchase Trust Units.

         The board of directors of VRL may, in its discretion, permit vested
Rights to be surrendered to the Trust unexercised in consideration for a payment
to the holder of such Rights in cash or Trust Units having a value equal to the
excess, if any, of the aggregate fair market value of the Trust Units able to be
purchased pursuant to such Rights, determined by reference to the closing price
of the Trust Units on the TSX on the trading day immediately prior to the date
of surrender of the Rights, over the aggregate exercise price of the Rights. All
Rights will be non-assignable and non-transferable.

         The term of a Right may be exercised during a period not exceeding ten
years from the date upon which the Right was granted (the "Grant Date"),
however, VRL currently limits the term to five years.

         Any Rights granted shall vest pursuant to vesting schedules determined
by the board of directors of VRL in its sole discretion. VRL's current
provisions for vesting require all rights agreements, including those provided
to directors and executive officers, to vest in thirds, with the first third
vesting one year from the date of grant. The rights agreements also provide for
the vesting period to be delayed for the same period of time extended with a
leave of absence without pay (for any reason), recognizing the recipient has
stepped away from the ability to contribute to the success of VRL during such
leave. Early vesting privileges are also provided in the event of a termination,
providing the terminated employee exercise Rights that would have normally
vested during their severance period.

         Subject to regulatory approval, the Grant Price per Right shall be
equal to the per Trust Unit closing price of the Trust Units on the TSX on the
trading day immediately preceding the Grant Date. At the election of a holder of
Rights, the Exercise Price per Right may be calculated by deducting from the
Grant Price the aggregate of all distributions, on a per Trust Unit basis, made
by the Trust after the Grant Date, provided the aggregate amount of such
distribution represents a return of more than 0.833% of the Trust's recorded
cost of capital assets less depletion, depreciation and amortization charges and
any future income tax liability associated with such capital assets at the end
of each month.

         During the year ended December 31, 2003, the Trust granted 4,825,300
Rights to purchase Trust Units at exercise prices ranging from $11.45 to $14.77
per Trust Unit.

<PAGE>

                                      -10-


         At the Meeting, securityholders will be asked to consider and, if
deemed appropriate, approve a resolution to increase the number of Trust Units
reserved for issuance pursuant to the exercise of Rights. See "Special Meeting
Matter - Amendments to the Incentive Rights Plan to Increase the Number of Trust
Units Reserved for Issuance under the Incentive Rights Plan".

EMPLOYEE BONUS PLAN

         VRL has adopted the Employee Bonus Plan. The principal purpose of the
Employee Bonus Plan is to advance the interests of the Trust and its
subsidiaries (collectively, "Vermilion") by providing for bonuses for employees
of Vermilion who are designated as participants thereunder. The Employee Bonus
Plan is intended to attract and retain such employees, make their compensation
competitive with other opportunities, provide them with an incentive to strive
to achieve the financial and business objectives of Vermilion, and align their
interests with those of the Unitholders.

         The Employee Bonus Plan is administered by the board of directors of
VRL. Under the Employee Bonus Plan, the board of directors of VRL will, on an
annual basis, assess the performance of employees and may allocate a bonus in
such amount as the board determines appropriate in its sole discretion based
upon corporate performance and the achievement of key organizational success
factors, individual value add and individual effort. In no event will the
maximum bonus amount allocated pursuant to the Employee Bonus Plan exceed 2% per
year of the net operating income of Vermilion. The payment of bonuses in any
plan year may be made in cash, Trust Units or in a combination of cash and Trust
Units as the board of directors may determine in its sole discretion. A total of
2,000,000 Trust Units are reserved for issuance pursuant to the Employee Bonus
Plan. In the event of a change of control, VRL shall terminate the Employee
Bonus Plan and pay each participant a final bonus amount determined and
allocated by the board of directors in its sole discretion out of the monthly
bonus amount accumulated within the plan at the time of the change of control.
This amount will accrue at the rate of 2% per month of the net operating income
of Vermilion for each month. For the fiscal period ended December 31, 2003, an
aggregate of 49,630 Trust Units were issued pursuant to the Employee Bonus Plan.

         The board of directors of VRL may, in its discretion, pay cash bonuses
to its employees in addition to the bonuses payable in cash and Trust Units
under the Employee Bonus Plan.

         As part of the Employee Bonus Plan, certain employees are eligible to
participate in the KEEP.

EMPLOYEE SAVINGS PLAN

         VRL has implemented the Savings Plan. Participation in the Savings Plan
is voluntary and allows eligible employees, including VRL's executive officers,
to contribute a percentage of their base salary earnings to the Savings Plan, of
which VRL will match each dollar contributed by the employee. Funds contributed
up to the maximum combined contribution of 10% of the participating employee's
base salary are used to purchase Trust Units on the TSX. The Savings Plan may
also be utilized in conjunction with the Trust's distribution reinvestment and
optional trust unit purchase plan.

EMPLOYMENT CONTRACTS

         Each of the Named Executive Officers is a party to an executive
employment agreement with VRL pursuant to which VRL will make a lump-sum payment
to the executive in the event of termination without cause, for "good reason" or
in the event of a "change of control" (as defined in the employment agreements).
The amount of the lump sum payments in respect of Messrs. Donadeo, Ghersinich
and Hicks is equal to 24 months salary together with the average of the previous
three years of bonus payments, unless such termination occurs in 2004 or 2005.
If the termination occurs in 2004, then the executive will receive the bonus
paid in 2003. If the termination occurs in 2005, then the executive shall
receive the average of the bonuses paid in 2003 and 2004. In addition, each of
such Named Executive Officers would receive the cash equivalent of 24 months of
benefits in effect as of the date the termination notice is given. In respect of
Messrs. Robert and Patel, the amount of the lump sum payment which will be made
to the executive in the event of termination without cause, for "good reason" or
in the event of a "change of control" is equal to 12 months salary, the average
of the previous three years of bonus payments as

<PAGE>

                                      -11-


calculated above and the cash equivalent of 12 months of benefits in effect as
of the date the termination notice is given.

               SECURITIES ISSUABLE UNDER EQUITY COMPENSATION PLANS

         The following table sets forth the number of Trust Units to be issued
upon exercise of outstanding Rights issued pursuant to equity compensation
plans, the weighted average exercise price of such outstanding Rights and the
number of Trust Units remaining available for future issuance under equity
compensation plans of the Trust.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                                                     NUMBER OF SECURITIES REMAINING
                                                                                     AVAILABLE FOR FUTURE ISSUANCE
                                NUMBER OF SECURITIES TO      WEIGHTED-AVERAGE        UNDER EQUITY COMPENSATION PLANS
                                BE ISSUED UPON EXERCISE     EXERCISE PRICE OF      (EXCLUDING SECURITIES REFLECTED IN
        PLAN CATEGORY            OF OUTSTANDING RIGHTS      OUTSTANDING RIGHTS              THE FIRST COLUMN)
- ----------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                        <C>                          <C>
Equity compensation plans              4,257,800                  $11.71                       1,480,400
approved by securityholders
- ----------------------------------------------------------------------------------------------------------------------

Equity compensation plans not             Nil                      Nil                            Nil
approved by securityholders
- ----------------------------------------------------------------------------------------------------------------------

Total                                  4,257,800                  $11.71                       1,480,400
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

                          RECORD OF CASH DISTRIBUTIONS

         The following table sets forth the amount of monthly cash distributions
per Trust Unit paid by the Trust since the completion of the Arrangement on
January 22, 2003. Distributions are generally paid on the 15th day of the month
following the month of declaration.


              RECORD DATE               PAYMENT DATE         DISTRIBUTION AMOUNT
              -----------               ------------         -------------------
         2003
              February 28               March 14                    $0.17
              March 31                  April 15                    $0.17
              April 30                  May 15                      $0.17
              May 30                    June 13                     $0.17
              June 30                   July 15                     $0.17
              July 31                   August 15                   $0.17
              August 29                 September 15                $0.17
              September 30              October 15                  $0.17
              October 31                November 14                 $0.17
              November 28               December 15                 $0.17
              December 31               January 14                  $0.17
         2004
              January 30                February 13                 $0.17
              February 27               March 15                    $0.17
              March 31                  April 15                    $0.17
                                                                    -----
              TOTAL CASH DISTRIBUTIONS SINCE JANUARY 24, 2003       $2.38

<PAGE>

                                      -12-


                              PERFORMANCE ANALYSIS

         The following graph illustrates changes from January 24, 2003 to
December 31, 2003 in the cumulative Unitholder return, assuming an initial $100
investment in Trust Units with all cash distributions reinvested at the record
date of such distributions, compared to the cumulative return of the TSX 300
Index and the TSX Oil and Gas Producers Sub-Index, assuming the reinvestment of
dividends, where applicable, for the comparable period.

                              [LINE GRAPH OMITTED]

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                                      24-Jan-03   31-Mar-03   30-Jun-03   30-Sep-03   31-Dec-03
- --------------------------------------------------------------------------------------------------
<S>                                    <C>         <C>         <C>         <C>         <C>
Vermilion Energy Trust                 $100.00     $107.47     $121.93     $141.01     $149.79
- --------------------------------------------------------------------------------------------------
S&P/TSX Composite Index                $100.00     $95.17      $104.77     $111.35     $123.35
- --------------------------------------------------------------------------------------------------
S&P/TSX Oil & Gas Producers Index      $100.00     $99.37      $108.76     $108.34     $120.27
- --------------------------------------------------------------------------------------------------
</TABLE>


                              CORPORATE GOVERNANCE

GENERAL

         In 1995, the TSX adopted a set of guidelines which were revised in 1999
(the "Guidelines") relating to corporate governance matters. The Guidelines
address such matters as the constitution and independence of boards of
directors, the functions to be performed by boards and their committees, and the
relationship among a corporation's board of directors, management and
shareholders. The TSX has prescribed that all companies listed on the TSX must
now annually disclose their approach to corporate governance with specific
reference to each of the Guidelines.

         Attached as Schedule "B" to this Proxy Statement and Information
Circular is a description of the Trust's corporate governance practices, which
have been established pursuant to, among other things, the terms of the Trust
Indenture. VRL is committed to a high standard of corporate governance
practices. The board of directors of VRL believes that this commitment is not
only in the best interest of Unitholders but that it also promotes effective
decision making at the board level. The board of directors of VRL is of the view
that its approach to corporate governance is appropriate and complies with the
objectives and guidelines relating to corporate governance

<PAGE>

                                      -13-


adopted by the TSX. In addition, the board of directors of VRL monitors and
considers for implementation by VRL the corporate governance standards which are
proposed and/or enforced by various Canadian regulatory authorities or which are
published by various non-regulatory organizations in Canada.

         The board of directors of VRL presently has four standing committees,
being an Audit Committee, a Governance and Human Resources Committee, a Reserves
Committee and a Health, Safety and Environment Committee. Each member of the
committees are "unrelated directors" as defined in the TSX guidelines.

MANDATE OF THE BOARD OF DIRECTORS

         Pursuant to the Trust Indenture, the board of directors has
responsibility for the stewardship of the Trust. In carrying out this mandate,
the board of directors meets regularly and a broad range of matters are
discussed and reviewed for approval. These matters include overall plans and
strategies, budgets, internal controls and management information systems, risk
management as well as interim and annual financial and operating results. The
board of directors is also responsible for the approval of all major
transactions, including equity issuances as well as for the Trust's debt and
borrowing policies. The board of directors strives to ensure that actions taken
by the Trust correspond closely with the objectives of the Unitholders. The
board of directors meets at least once annually to review in depth the Trust's
strategic plan and it reviews the Trust's resources which are required to carry
out the Trust's growth strategy and to achieve its objectives.

COMPOSITION OF THE BOARD OF DIRECTORS

         The board of directors currently consists of five directors who provide
a wide diversity of business experience. Three of the board members are
independent of management and are unrelated directors, as such terms are defined
by the guidelines of the TSX. Each of the unrelated directors is free from any
business or other relationship which could reasonably be perceived to materially
interfere with the director's ability to act with a view to the best interest of
the Trust, other than interests and relationships which arise solely as a result
of holding Trust Units or Exchangeable Shares. The members of the board of
directors have diverse backgrounds and expertise, and were selected in the
belief that the Trust benefits materially from such a broad range of experience
and talent.

MANDATE OF LEAD DIRECTOR

         The Lead Director is an unrelated director. The Lead Director is
charged with ensuring that the board of directors carries out its
responsibilities and that these responsibilities are clearly understood by all
of its members. The Lead Director also ensures that the board of directors can
function independently of management, that the necessary resources and
procedures are available or in place to support its responsibilities and that
the appropriate functions are delegated to the relevant committees. The Lead
Director is responsible for overseeing and setting agendas for meetings of the
board of directors, for the quality of information sent to directors and for the
in-camera sessions held among the independent directors at each board of
directors meeting. The Lead Director also oversees the annual performance review
of the Chief Executive Officer which is conducted by the board of directors and
the annual Chief Executive Officer succession planning matters. The Lead
Director also reviews the performance of those executive officers which report
directly to the Chief Executive Officer.

AUDIT COMMITTEE

         The Audit Committee is comprised of Messrs. Macdonald, Boyce and Killi.
The Audit Committee reviews the Trust's interim unaudited consolidated financial
statements and annual audited consolidated financial statements and certain
corporate disclosure documents including the annual information form,
management's discussion and analysis, annual and interim earnings press
releases, offering documents (including all prospectuses) and other offering
memoranda before they are approved by the board of directors. The Audit
Committee reviews and makes a recommendation to the board of directors in
respect of the appointment and compensation of the external auditor and it
monitors accounting, financial reporting, control and audit functions. The Audit
Committee meets to discuss and review the audit plans of external auditors and
it is directly responsible for overseeing the work of the external auditor with
respect to the preparing or issuing of the auditor's report or the performance
of other audit, review or attest services, including the resolution of
disagreements between management and the external auditor regarding

<PAGE>

                                      -14-


financial reporting. The Audit Committee questions the external auditor
independently of management and reviews a written statement of its independence
based on the criteria found in the recommendations of the Canadian Institute of
Chartered Accountants. The Audit Committee must be satisfied that adequate
procedures are in place for the review of the Trust's public disclosure of
financial information extracted or derived from its financial statements and it
periodically assesses the adequacy of those procedures. The Audit Committee must
approve or pre-approve, as applicable, any non-audit services to be provided to
the Trust by the external auditor. In addition, it reviews and reports to the
board of directors on the Trust's risk management policies and procedures and
reviews the internal control procedures to determine their effectiveness and to
ensure compliance with the Trust's policies and avoidance of conflicts of
interest. The Audit Committee has established procedures for dealing with
complaints or confidential submissions which come to its attention with respect
to accounting, internal accounting controls or auditing matters.

         The Audit Committee met five times in 2003.

GOVERNANCE AND HUMAN RESOURCES COMMITTEE

         The Governance and Human Resources Committee is comprised of Messrs.
Macdonald, Boyce and Killi. The Governance and Human Resources Committee is
responsible for recommending to the board of directors suitable candidates for
director positions. The selection assessment factors include diversity, age,
skills, judgment, integrity, gender, experience, profile, business prospects,
and such other factors deemed appropriate, all in the context of an assessment
of the perceived needs of the board of directors and VRL at the time. In
addition, the Governance and Human Resources Committee assists the board of
directors on corporate governance issues and in compiling the results of a
directors' questionnaire dealing with the effectiveness of the board of
directors, its members and its committees.

         The Governance and Human Resources Committee's mandate also includes
reviewing VRL's human resources policies and procedures and compensation and
incentive programs. The Governance and Human Resources Committee is responsible
for assessing senior management's performance. The Governance and Human
Resources Committee reviews the adequacy and form of directors' compensation and
makes recommendations designed to ensure that directors' compensation adequately
reflects the responsibilities of the board of directors.

         The Governance and Human Resources Committee met one time in 2003.

RESERVES COMMITTEE

         The Reserves Committee is comprised of Messrs. Macdonald and Boyce and
is responsible for ensuring that management has designed and implemented
effective reserves programs, controls and reporting systems. The Reserves
Committee's mandate also includes reviewing the independent reserves evaluation
of VRL and any public disclosure of reserves and other oil and gas information
and reviewing and approving any proposals to change the evaluating engineers.
The Reserves Committee communicates regularly with management to ensure that all
reserves evaluations and reports have been properly handled and reported.

         The Reserves Committee did not meet in 2003 as the first engineering
report for the Trust was prepared in 2004.

HEALTH, SAFETY AND ENVIRONMENT COMMITTEE

         The Health, Safety and Environment Committee is comprised of Messrs.
Macdonald and Boyce. The Health, Safety and Environment Committee is responsible
for ensuring that management has in place effective programs relating to
environment, health and safety matters, including the prevention or mitigation
of risks, conformity with industry standards and the compliance with applicable
legal requirements, and ensuring that management administers VRL's policies and
procedures on these matters. It reviews reports and, when appropriate, makes
recommendations to the board of directors on VRL's policies and procedures
related to health, safety and the environment.

         The Health, Safety and Environment Committee met one time in 2003.

<PAGE>

                                      -15-


                             SPECIAL MEETING MATTER

AMENDMENTS TO THE INCENTIVE RIGHTS PLAN TO INCREASE THE NUMBER OF TRUST UNITS
RESERVED FOR ISSUANCE UNDER THE INCENTIVE RIGHTS PLAN

         Currently, the maximum number of Trust Units reserved for issuance
under the Incentive Rights Plan is 6,000,000. The board of directors of VRL
believe it is important to issue Rights from time to time to provide a
continuing incentive to directors, officers, employees or consultants of VRL.
Pursuant to the terms of the Incentive Rights Plan, the total number of Trust
Units reserved for issuance under the Incentive Rights Plan shall not exceed 10%
of the issued and outstanding Trust Units including Trust Units issuable on the
exercise of the Exchangeable Shares. As the number of issued and outstanding
Trust Units has increased since the time the Incentive Rights Plan was first
created, the board of directors of VRL proposes that Unitholders authorize an
increase in the number of Trust Units reserved for issuance pursuant to the
exercise of Rights under the Incentive Rights Plan. It is proposed that the
number of Trust Units reserved under the Incentive Rights Plan be increased by
775,000 Trust Units. If approved, the number of Trust Units reserved for
issuance pursuant to the exercise of Rights under the Incentive Rights Plan as
amended, will be 6,775,000 which represents approximately 10% of the issued and
outstanding Trust Units (including Trust Units issuable on the exercise of the
Exchangeable Shares) as of March 31, 2004.

         The board of directors of VRL believes that it is important to provide
competitive compensation to directors, officers, employees and consultants of
VRL, including compensation in the form of Rights. The board of directors of VRL
considers the increase in the number of Trust Units reserved for issuance
pursuant to the exercise of Rights under the Incentive Rights Plan to be
appropriate.

         The board of directors of VRL have approved the ordinary resolution to
amend the Incentive Rights Plan to increase the number of Trust Units reserved
for issuance pursuant to the exercise of Rights under the Incentive Rights Plan
and recommend that the Unitholders vote in favour of the ordinary resolution to
amend the Incentive Rights Plan. The form of the resolution to be considered by
Unitholders relating to this matter of special business is set forth in Schedule
"A".

         To be approved, the ordinary resolution to amend the Incentive Rights
Plan must be passed by the affirmative votes of holders of not less than 50% of
the Trust Units represented in person or by proxy at the Meeting. In addition,
the TSX requires the ordinary resolution to amend the Incentive Rights Plan be
approved by a majority of the votes cast at the Meeting other than votes
attaching to Trust Units or Exchangeable Shares beneficially owned by the
insiders of the Trust and its subsidiaries and associates of such insiders, who
in the aggregate own 2,472,732 Trust Units and 4,488,951 Exchangeable Shares.

                             ANNUAL MEETING MATTERS

FINANCIAL STATEMENTS

         The consolidated financial statements of the Trust for the year ended
December 31, 2003 will be placed before the Unitholders at the Meeting. These
financial statements were audited by Deloitte & Touche LLP, Chartered
Accountants, of Calgary, Alberta.

ELECTION OF DIRECTORS

         VRL has a board of directors consisting of five members, all of which
shall be elected on behalf of the Unitholders.

         The persons listed in the following table will be nominated at the
Meeting. In accordance with the Trust Indenture, each director elected will hold
office until the close of the next annual meeting of Unitholders, or until his
successor is duly elected or appointed. It is the intention of the persons named
in the enclosed form of proxy to vote such proxy for the election of persons
named on the following table as directors of VRL. Management does not
contemplate that any of the nominees will be unable to serve as directors, but
if that should occur for any reason

<PAGE>

                                      -16-


prior to the Meeting, the persons named in the enclosed form of proxy shall have
the right to vote for another nominee in their discretion.

         The following table includes information about each of the nominees for
election as a director, including the number of Trust Units and Exchangeable
Shares beneficially owned, directly or indirectly, or over which control or
direction is exercised as at March 31, 2004. Each of the nominees has served as
a director of VRL since the year he first became a director.

<TABLE>
<CAPTION>
                                                                                                    NUMBER OF
                                                                           NUMBER OF TRUST      EXCHANGEABLE SHARES
   NAME AND MUNICIPALITY                                    DIRECTOR OF   UNITS BENEFICIALLY    BENEFICIALLY OWNED
       OF RESIDENCE             PRINCIPAL OCCUPATION         VRL SINCE   OWNED OR CONTROLLED       OR CONTROLLED
- --------------------------   ------------------------------ -----------  -------------------    -------------------
<S>                          <C>                               <C>              <C>                    <C>
Larry J.                     Chief   Executive    Officer,     2002             17,145                   4,486
Macdonald(1)(2)(3)(4)(5)     Point   Energy   Ltd.    from
Calgary, Alberta             September,  2003 to  present;
                             Chairman and Chief  Executive
                             Officer,   Pointwest   Energy
                             Inc.  from  2000 to  December
                             2003;   Chairman   and  Chief
                             Executive Officer,  Westpoint
                             Energy  Inc.   from  1999  to
                             2000;   and   President   and
                             Chief   Operating    Officer,
                             Anderson   Exploration   Ltd.
                             from 1992 to 1999

Jeffrey S.                   President      and      Chief     1994            631,491                 686,431
Boyce(2)(3)(4)(5)            Executive  Officer  of  Clear
Calgary, Alberta             Energy  Inc.   from   January
                             2003 to  present;  From  July
                             1994   to    January    2003,
                             President,   Chief  Executive
                             Officer of VRL

Claudio A. Ghersinich        Executive   Vice   President,     1994            932,962               1,812,906
Calgary, Alberta             Business  Development  of VRL
                             from    December    2000   to
                             present;    Executive    Vice
                             President   and  Director  of
                            VRL from February 1995 to
                             December 2000

Lorenzo Donadeo              President      and      Chief     1994            523,716               1,989,614
Calgary, Alberta             Executive   Officer   of  VRL
                             from January 2003 to present;
                             Executive Vice President and
                             Chief Operating Officer of VRL
                             from December 2000 to January
                             2003; Executive Vice President
                             and Director of VRL from
                             February 1995 to December 2000

Joseph F. Killi(2)(3)        President    of    Rosebridge     1999                 --                      --
Calgary, Alberta             Capital Corp. Inc.
</TABLE>

NOTES:
(1)  Mr. Macdonald is the Lead Director.
(2)  Member of the Audit Committee.
(3)  Member of the Governance and Human Resources Committee.
(4)  Member of the Health, Safety and Environment Committee.
(5)  Member of the Reserves Committee.

<PAGE>

                                      -17-


APPOINTMENT OF AUDITORS

         The Trust Indenture provides that Unitholders shall appoint the
auditors of the Trust at each annual meeting of Unitholders. Unitholders will be
asked at the Meeting to pass a resolution appointing Deloitte & Touche LLP as
the auditors of the Trust for a term expiring at the close of the next annual
meeting of Unitholders. Deloitte & Touche LLP were appointed the initial
auditors of the Trust on December 16, 2002 pursuant to the terms of the Trust
Indenture.

                             ADDITIONAL INFORMATION

         Copies of the Trust's most recent annual information form and any
information incorporated therein by reference, the Trust's audited consolidated
financial statements as at and for the year ended December 31, 2003 and this
Proxy Statement and Information Circular may be obtained on the SEDAR website at
WWW.SEDAR.COM or from the Vice President, Finance and Chief Financial Officer of
VRL at Suite 2800, 400 - 4th Avenue S.W., Calgary, Alberta T2P 0J4.



<PAGE>


                       SCHEDULE "A" TO THE PROXY STATEMENT
                            AND INFORMATION CIRCULAR

APPROVE AMENDMENTS TO THE TRUST UNIT RIGHTS INCENTIVE PLAN TO INCREASE THE
NUMBER OF TRUST UNITS RESERVED FOR ISSUANCE PURSUANT TO THE EXERCISE OF RIGHTS
GRANTED UNDER THE PLAN

         "BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

         (a)      the Trust Unit Rights Incentive Plan (the "Incentive Rights
                  Plan") be amended to increase the number of Trust Units
                  reserved for issuance pursuant to the exercise of rights
                  granted under the Incentive Rights Plan to 6,775,000 Trust
                  Units; and

         (b)      any director or officer of VRL be and is hereby authorized and
                  directed to execute and deliver such documents and instruments
                  and take such other actions as such director or officer may
                  determine to be necessary or advisable to implement this
                  resolution and the matters authorized hereby, and the approval
                  by such director or officer of the text of such documents or
                  instruments and the taking of such actions shall be conclusive
                  proof of the approval thereof by the Unitholders."



<PAGE>


                                       B-5

                       SCHEDULE "B" TO THE PROXY STATEMENT
                            AND INFORMATION CIRCULAR

<TABLE>
<CAPTION>
       CORPORATE GOVERNANCE GUIDELINE OF
          THE TORONTO STOCK EXCHANGE              COMPLIANCE                          COMMENTS
- ------------------------------------------------  ----------    ---------------------------------------------------------
<C>                                                  <C>        <C>
1.   The board should explicitly assume              Yes        Pursuant to the Trust Indenture, the board of
     responsibility for stewardship of the                      directors has responsibility for the stewardship of
     Company, and specifically for:                             the Trust. The board has adopted a formal mandate
                                                                setting out the board's stewardship
                                                                responsibilities. In carrying out this mandate, the
                                                                board of directors meets regularly and a broad range
                                                                of matters are discussed and reviewed for approval.
                                                                Among other things, the mandate describes the
                                                                decisions of the Trust that require prior approval
                                                                of the board, measures for receiving Unitholder
                                                                feedback and the board's expectations of management.

     (a) adoption of a strategic planning            Yes        The board participates with management in the
         process and approval of a strategic                    development and approval of the Trust's strategic
         plan which takes into account (among                   plan, which takes into account the Trust's opportunities
         other things) the opportunities and                    and risks associated with its business. The board also
         risks of the business;                                 approves all overall plans and strategies, budgets,
                                                                internal controls and management information
                                                                systems, risk management as well as interim and
                                                                annual financial and operating results. At regularly
                                                                scheduled meetings, members of the board and
                                                                management discuss a broad range of issues relevant
                                                                to the Trust's strategy.

     (b) identification of principal risks,          Yes        The board's participation in the strategic planning
         and implementing risk management                       process involves consideration of the principal risks
         systems;                                               inherent in the Trust's business. The Audit Committee
                                                                of the board of directors addresses specific risks
                                                                and risk management in its review of the Trust's
                                                                financial statements. The Health, Safety and
                                                                Environment Committee addresses specific risks and
                                                                risk management related to the Trust's environment,
                                                                health and safety activities, and compliance with
                                                                applicable rules and regulations.

     (c) succession, planning and monitoring         Yes        With the oversight of the Lead Director, the board of
         senior management;                                     directors is responsible for succession planning at
                                                                the board and senior management levels. The
                                                                Governance and Human Resources Committee reviews
                                                                compensation policies and plans, assesses the
                                                                performance of the Trust's senior management
                                                                compared with the Trust's goals, and approves the
                                                                salary and other remuneration of the Trust's
                                                                executive officers.

     (d) communication policy; and                   Yes        The Trust's communication policy provides for open
                                                                and timely disclosure of relevant information
                                                                relating to the Trust and its business and affairs.
                                                                The board reviews the Trust's annual and interim
                                                                financial statements and selected corporate
                                                                disclosure documents, including the annual
                                                                information form, information circulars and all
                                                                prospectuses before they are publicly released. The
                                                                communication policy,
</TABLE>

<PAGE>

                                                        B-2


<TABLE>
<CAPTION>
       CORPORATE GOVERNANCE GUIDELINE OF
          THE TORONTO STOCK EXCHANGE              COMPLIANCE                          COMMENTS
- ------------------------------------------------  ----------    ---------------------------------------------------------
<C>                                                  <C>        <C>
                                                                which is reviewed by the board annually, addresses
                                                                how the Trust interacts with analysts and the
                                                                public, and contains measures for avoiding selective
                                                                disclosure.

     (e) integrity of internal control and           Yes        The Audit Committee is specifically mandated to assist
         management information systems.                        the board by reviewing the effectiveness of financial
                                                                reporting, management information and internal
                                                                control systems. The Audit Committee is mandated to
                                                                meet at least four times each year. The Audit
                                                                Committee meets with the auditors independent of
                                                                management as required. The Reserves Committee is
                                                                mandated to assist the board by reviewing the
                                                                effectiveness of the engineering reserves' reports
                                                                and related significance of the reserves on the
                                                                public and financial reporting of the Trust.

2.   Majority of directors should be                 Yes        Two members of the board are "related" and the
     "unrelated", (free from conflicting                        remaining three directors are "unrelated" to the Trust
     interests).                                                as those terms are defined in the TSX guidelines.

3.   Disclose for each director whether he           Yes        Larry Macdonald, Jeffrey Boyce and Joseph Killi are
     or she is related, and how that                            unrelated to the Trust as that term is used in the TSX
     conclusion was reached.                                    guidelines. Each of these directors is independent of0
                                                                management and is free from any interest, business
                                                                or other relationship that could, or could
                                                                reasonably be perceived to, materially interfere
                                                                with their ability to act in the Trust's best
                                                                interests, and none of them has received any
                                                                material compensation from the Trust, although each
                                                                director is eligible to participate in the Trust
                                                                Unit Rights Incentive Plan. Claudio Ghersinich and
                                                                Lorenzo Donadeo are related directors as both are
                                                                senior executive officers of the Trust.

4.   Appoint a committee:

     (a) responsible for the appointment and         Yes        The board has constituted a Governance and Human
         assessment of directors; and                           Resources Committee which is responsible for
                                                                nominating new directors and assessing the board as
                                                                well as individual directors on an ongoing basis.
                                                                With respect to new directors, the full board
                                                                determines the competencies, skills and personal
                                                                qualities that the Governance and Human Resources
                                                                Committee should seek in new board members to add
                                                                value to the Trust.

     (b)  composed exclusively of outside (i.e.      Yes        All of the members of the Governance and Human
          non-management) directors, the                        Resources Committee are unrelated directors.
          majority of whom are unrelated.

5.   Implement a process for assessing               Yes        The Governance and Human Resources Committee has been
     effectiveness of the board and its                         mandated to perform assessments of the board as a
     committees and individual directors.                       whole, the committees of the board, the Lead Director
                                                                and the other individual directors on an ongoing
                                                                basis. Individual director evaluations regarding the
</TABLE>

<PAGE>

                                                        B-3

<TABLE>
<CAPTION>
       CORPORATE GOVERNANCE GUIDELINE OF
          THE TORONTO STOCK EXCHANGE              COMPLIANCE                          COMMENTS
- ------------------------------------------------  ----------    ---------------------------------------------------------
<C>                                                  <C>        <C>

                                                                effectiveness and contribution of the directors are
                                                                completed by the Governance and Human Resources
                                                                Committee on an annual basis.

6.   Provide orientation and education               Yes        New directors are provided with an orientation and
     programs for new directors.                                education program which includes written information
                                                                about the duties and obligations of directors, the
                                                                role of the board and its committees, the expected
                                                                contributions of individual directors, the business
                                                                and operations of the Trust, and opportunities for
                                                                meetings and discussion with senior management and
                                                                other directors. The details of the orientation of
                                                                each new director are tailored to that director's
                                                                individual needs and areas of interests.

7.   Examine the size of the board with a            Yes        The board of directors consists of five members. The
     view to improving effectiveness.                           board of directors is committed to reviewing the
                                                                number of directors regularly and currently
                                                                considers five directors to be appropriate for the
                                                                Trust's size and a number that facilitates effective
                                                                decision-making, as well as an appropriate mix of
                                                                backgrounds and skills for the stewardship of the
                                                                Trust.

8.   Review compensation of directors in             Yes        The Governance and Human Resources Committee reviews
     light of risks and responsibilities.                       and reports to the board of directors on compensation
                                                                issues. The board has determined that the current
                                                                compensation realistically reflects the
                                                                responsibilities of and risks involved in being a
                                                                director.

9.   Committees should generally be                  Yes        All board committees are made up of unrelated
     composed of outside directors, a majority                  directors.
     of whom are unrelated.

10.  Appoint a committee responsible for             Yes        The Governance and Human Resources Committee, which is
     approach to corporate governance issues.                   comprised solely of unrelated directors, is responsible
                                                                for governance issues and the Trust's response to
                                                                the TSX's governance guidelines or other applicable
                                                                governance rules or guidelines.

11.  (a) Develop position                                       The board  and the CEO  develop  position  descriptions
         descriptions and mandates for the                      for the  board  and the CEO and  define  the  limits to
         board and the Chief Executive  Officer                 management's responsibilities.
         (CEO), and define limits to
         management's responsibilities for:

         (i)  the board; and                         Yes        The board has ultimate responsibility for the
                                                                stewardship of the Trust.

         (ii) the Chief Executive Officer.           Yes        Day-to-day leadership and management are the
                                                                responsibility of the President and CEO and other
                                                                management, subject to the board's stewardship. The
                                                                CEO is responsible to lead and manage the Trust
                                                                within parameters established by the board of
                                                                directors and relevant committees. The CEO is also
                                                                responsible for developing and recommending
                                                                strategic plans to the
</TABLE>

<PAGE>

                                                        B-4

<TABLE>
<CAPTION>
       CORPORATE GOVERNANCE GUIDELINE OF
          THE TORONTO STOCK EXCHANGE              COMPLIANCE                          COMMENTS
- ------------------------------------------------  ----------    ---------------------------------------------------------
<C>                                                  <C>        <C>
                                                                board of directors and for involving the board of
                                                                directors in the early stages of strategy
                                                                development. Additionally, the CEO is expected to
                                                                successfully implement capital and operating plans;
                                                                report regularly to the board of directors on the
                                                                progress and results compared with the operating and
                                                                financial objectives, and initiate courses of action
                                                                for improvement; develop and maintain a sound,
                                                                effective organization structure; and ensure
                                                                progressive employee training and development
                                                                programs.

     (b) Board should approve the Chief              Yes        The corporate objectives for which the CEO is
         Executive Officer's corporate                          responsible are set by the board of directors, which,
         objectives, and assess the Chief                       with the oversight of the Lead Director, assesses the
         Executive Officer against these                        CEO against such objectives.
         objectives.

12.  Establish structures and procedures             Yes        The board has appointed Larry Macdonald, an unrelated
     to enable the board to function                            director, to act as the Lead Director of the board to
     independently of management.                               ensure the board acts independently of management
                                                                and properly discharges its responsibilities, and
                                                                the board has adopted terms of reference with
                                                                respect to the Lead Director's role. The Lead
                                                                Director ensures that the board meets on a regular
                                                                basis without management, emphasizes the boundaries
                                                                between the board's and management's
                                                                responsibilities, ensures prospective board members
                                                                understand the role and contribution of directors,
                                                                and ensures the board addresses its responsibilities
                                                                in relation to corporate governance.

     (a) Ensure an Audit Committee has a             Yes        The Audit Committee is comprised of Messrs.
         specifically defined mandate and                       Macdonald, Boyce and Killi. The Audit Committee
         direct communication channels with                     reviews the Trust's interim unaudited consolidated
         internal and external auditors.                        financial statements and annual audited consolidated
                                                                financial statements and certain corporate
                                                                disclosure documents including the annual
                                                                information form, management's discussion and
                                                                analysis, annual and interim earnings press
                                                                releases, offering documents (including all
                                                                prospectuses) and other offering memoranda before
                                                                they are approved by the board of directors. The
                                                                Committee reviews and makes a recommendation to the
                                                                board of directors in respect of the appointment and
                                                                compensation of the external auditor and it monitors
                                                                accounting, financial reporting, control and audit
                                                                functions. The Audit Committee meets to discuss and
                                                                review the audit plans of external auditors and it
                                                                is directly responsible for overseeing the work of
                                                                the external auditor with respect to the preparing
                                                                or issuing of the auditor's report or the
                                                                performance of other audit, review or attest
                                                                services, including the resolution of disagreements
                                                                between management and the external auditor
                                                                regarding financial reporting. The Committee
                                                                questions the external auditor independently of
                                                                management and
</TABLE>

<PAGE>

                                                        B-5


<TABLE>
<CAPTION>
       CORPORATE GOVERNANCE GUIDELINE OF
          THE TORONTO STOCK EXCHANGE              COMPLIANCE                          COMMENTS
- ------------------------------------------------  ----------    ---------------------------------------------------------
<C>                                                  <C>        <C>
                                                                reviews a written statement of its independence
                                                                based on the criteria found in the recommendations
                                                                of the Canadian Institute of Chartered Accountants.
                                                                The Committee must be satisfied that adequate
                                                                procedures are in place for the review of the
                                                                Trust's public disclosure of financial information
                                                                extracted or derived from its financial statements
                                                                and it periodically assesses the adequacy of those
                                                                procedures. The Audit Committee must approve or
                                                                pre-approve, as applicable, any non-audit services
                                                                to be provided to the Trust by the external auditor.
                                                                In addition, it reviews and reports to the board of
                                                                directors on the Trust's risk management policies
                                                                and procedures and reviews the internal control
                                                                procedures to determine their effectiveness and to
                                                                ensure compliance with the Trust's policies and
                                                                avoidance of conflicts of interest. The Committee
                                                                has established procedures for dealing with
                                                                complaints or confidential submissions which come to
                                                                its attention with respect to accounting, internal
                                                                accounting controls or auditing matters.

     (b)  All members of the Audit Committee         Yes        All members of the audit committee are unrelated
          should be unrelated directors and                     directors and are financially literate. The chair of
          should be financially literate. At                    the Audit Committee, Joseph Killi, is a chartered
          lease one member should have                          accountant and has accounting and financial expertise.
          financial expertise.

13.  Implement a system to enable                    Yes        In addition to the authority of committees to retain
     individual directors to engage outside                     external advisors in connection with their
     advisors at the Company's expense.                         responsibilities, individual directors may engage
                                                                outside advisors at any time (at the expense of the
                                                                Trust) to provide advice on a corporate decision or
                                                                action.
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>16
<FILENAME>ex99_13form40-f.txt
<DESCRIPTION>EXHIBIT 99.13
<TEXT>
                                                                   EXHIBIT 99.13
                                                                   -------------


NO SECURITIES REGULATORY AUTHORITY HAS EXPRESSED AN OPINION ABOUT THESE
SECURITIES AND IT IS AN OFFENCE TO CLAIM OTHERWISE. THIS SHORT FORM PROSPECTUS
CONSTITUTES A PUBLIC OFFERING OF THESE SECURITIES ONLY IN THOSE JURISDICTIONS
WHERE THEY MAY BE LAWFULLY OFFERED FOR SALE AND THEREIN ONLY BY PERSONS
PERMITTED TO SELL SUCH SECURITIES. THESE SECURITIES HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THESE SECURITIES MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO A U.S. PERSON (AS SUCH TERM IS
DEFINED IN REGULATION S UNDER THE 1933 ACT) EXCEPT IN TRANSACTIONS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND APPLICABLE STATE SECURITIES
LAWS. THIS SHORT FORM PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THESE SECURITIES WITHIN THE UNITED STATES
OF AMERICA. SEE "PLAN OF DISTRIBUTION".

                              SHORT FORM PROSPECTUS

NEW ISSUE                                                     November 28, 2003

                               [GRAPHIC OMITTED]
                        [LOGO - VERMILION ENERGY TRUST]

                                   $77,550,000
                              5,500,000 TRUST UNITS

         This short form prospectus qualifies for distribution 5,500,000 trust
units ("Trust Units") of Vermilion Energy Trust (the "Trust"). The outstanding
Trust Units are listed for trading on the Toronto Stock Exchange (the "TSX")
under the symbol "VET.UN." The TSX has conditionally approved the listing of the
Trust Units distributed under this short form prospectus subject to the Trust
fulfilling all of the listing requirements of the TSX on or before February 23,
2004. On November 27, 2003, the closing price of the Trust Units on the TSX was
$14.18 per Trust Unit. The offering price of the Trust Units offered hereunder
was determined by negotiation between Vermilion Resources Ltd. ("VRL"), on
behalf of the Trust, and CIBC World Markets Inc., BMO Nesbitt Burns Inc., RBC
Dominion Securities Inc., TD Securities Inc., National Bank Financial Inc.,
Canaccord Capital Corporation, Scotia Capital Inc. and FirstEnergy Capital Corp.
(collectively, the "Underwriters").

<TABLE>
<CAPTION>
                       ---------------------------------------------------
                                  PRICE: $14.10 PER TRUST UNIT
                       ---------------------------------------------------

                                 PRICE            UNDERWRITERS' FEE       NET PROCEEDS TO THE TRUST(1)(2)
                                 -----            -----------------       -------------------------------
<S>                           <C>                    <C>                            <C>
Per Trust Unit.........          $14.10                $0.705                         $13.395
Total Offering.........       $77,550,000            $3,877,500                     $73,672,500
</TABLE>
NOTES:

(1)   Before deducting expenses of the offering estimated to be $300,000, which
      will be paid from the general funds of the Trust.
(2)   The Trust has granted to the Underwriters an option (the "Underwriters'
      Option") to purchase up to an additional 550,000 Trust Units on the same
      terms as set forth above exercisable, in whole or in part, at any time
      until 48 hours prior to closing, which additional Trust Units are
      qualified for distribution under this prospectus. If the Underwriters'
      Option is exercised in full, the total offering, the Underwriters' Fee and
      the Net Proceeds to the Trust will be $85,305,000, $4,265,250 and
      $81,039,750, respectively.


         The Underwriters, as principals, conditionally offer the Trust Units
for sale, subject to prior sale, if, as and when issued by the Trust and
accepted by the Underwriters in accordance with the conditions contained in the
Underwriting Agreement referred to under "Plan of Distribution" and subject to
the approval of certain legal matters on behalf of the Trust by Macleod Dixon
LLP and on behalf of the Underwriters by Burnet, Duckworth & Palmer LLP.

         Subscriptions for Trust Units will be received subject to rejection or
allotment in whole or in part and the Underwriters reserve the right to close
the subscription books at any time without notice. It is expected that
certificates representing Trust Units will be available for delivery at the
closing of this offering, which is expected to occur on or about December 10,
2003, or such other date as may be agreed to by the Trust and the Underwriters
(but in no event later than December 31, 2003). It is anticipated that the
offering will close on or prior to December 31, 2003, which is the record date
for the distribution by the Trust to holders of Trust Units ("Unitholders")
payable on January 15, 2004. Accordingly, provided the offering closes on or
prior to December 31, 2003, subscribers who complete their purchase of Trust
Units from the Underwriters and continue to own such Trust Units on December 31,
2003 will be eligible to receive the distribution of the Trust payable on
January 15, 2004. THE TRUST HAS DECLARED A DISTRIBUTION OF $0.17 PER TRUST UNIT
TO BE PAID ON DECEMBER 15, 2003 TO UNITHOLDERS OF RECORD ON NOVEMBER 28, 2003.
PURCHASERS OF TRUST UNITS

<PAGE>

PURSUANT TO THIS OFFERING WILL NOT BE ELIGIBLE TO RECEIVE THE DISTRIBUTION
PAYABLE ON DECEMBER 15, 2003. See "Distributions to Unitholders". The
Underwriters may over-allot and effect transactions which stabilize or maintain
the market price of the Trust Units at levels other than those which might
otherwise prevail in the open market. See "Plan of Distribution".

         EACH OF CIBC WORLD MARKETS INC., BMO NESBITT BURNS INC. AND TD
SECURITIES INC. IS, DIRECTLY OR INDIRECTLY, A WHOLLY-OWNED SUBSIDIARY OF A
CANADIAN CHARTERED BANK (COLLECTIVELY, THE "BANKS") WHICH IS A LENDER TO VRL AND
TO WHICH VRL IS PRESENTLY INDEBTED. CONSEQUENTLY, THE TRUST MAY BE CONSIDERED TO
BE A CONNECTED ISSUER OF EACH OF THESE UNDERWRITERS FOR THE PURPOSES OF CANADIAN
SECURITIES LAWS. SEE "RELATIONSHIP BETWEEN THE TRUST'S BANKERS AND CERTAIN
UNDERWRITERS". THE NET PROCEEDS OF THE OFFERING WILL BE USED TO FUND THE TRUST'S
CAPITAL EXPENDITURE AND ACQUISITION PROGRAM AND FOR GENERAL PURPOSES. IN THE
INTERIM, THE NET PROCEEDS OF THE OFFERING WILL BE USED TO REPAY A PORTION OF THE
OUTSTANDING INDEBTEDNESS OF VRL TO SUCH BANKS. SEE "USE OF PROCEEDS".



<PAGE>

                                TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS.....................................................1
DOCUMENTS INCORPORATED BY REFERENCE............................................2
VERMILION ENERGY TRUST.........................................................3
RECENT DEVELOPMENTS............................................................4
USE OF PROCEEDS................................................................4
CONSOLIDATED CAPITALIZATION....................................................5
DETAILS OF THE OFFERING........................................................5
PLAN OF DISTRIBUTION...........................................................6
RISK FACTORS...................................................................7
RELATIONSHIP BETWEEN THE TRUST'S BANKERS AND CERTAIN UNDERWRITERS..............8
DISTRIBUTIONS TO UNITHOLDERS...................................................9
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS.....................................9
ELIGIBILITY FOR INVESTMENT....................................................12
LEGAL MATTERS.................................................................12
INTERESTS OF EXPERTS..........................................................12
AUDITORS, TRANSFER AGENT AND REGISTRAR........................................12
consent  12
PURCHASERS' STATUTORY RIGHTS..................................................13
SCHEDULE A UNAUDITED PRO FORMA FINANCIAL STATEMENTS..........................A-1
CERTIFICATE OF the TRUST.....................................................C-1
CERTIFICATE OF THE UNDERWRITERS..............................................C-2

                           FORWARD-LOOKING STATEMENTS

         Certain statements contained in this short form prospectus, and in
certain documents incorporated by reference into this short form prospectus,
constitute forward-looking statements. The use of any of the words "anticipate",
"continue", "estimate", "expect", "may", "will", "project", "should", "believe"
and similar expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially from those
anticipated in such forward-looking statements. The Trust believes the
expectations reflected in those forward-looking statements are reasonable but no
assurance can be given that these expectations will prove to be correct and such
forward-looking statements included in, or incorporated by reference into, this
short form prospectus should not be unduly relied upon. These statements speak
only as of the date of this short form prospectus or as of the date specified in
the documents incorporated by reference into this short form prospectus, as the
case may be.

         In particular, this short form prospectus, and the documents
incorporated by reference, contain forward-looking statements pertaining to the
following:

     o   the quantity of the oil and natural gas reserves;

     o   oil and natural gas production levels;

     o   projections of market prices and costs;

     o   supply and demand for oil and natural gas;

     o   expectations regarding the ability to raise capital and to continually
         add to reserves through acquisitions and development; and

     o   treatment under governmental regulatory regimes.

         The actual results could differ materially from those anticipated in
these forward-looking statements as a result of the risk factors set forth below
and elsewhere in this short form prospectus:

     o   volatility in market prices for oil and natural gas;

     o   liabilities inherent in oil and gas operations;

     o   uncertainties associated with estimating oil and natural gas reserves;

     o   competition for, among other things, capital, acquisitions of reserves,
         undeveloped lands and skilled personnel;

     o   incorrect assessments of the value of acquisitions;

     o   geological, technical, drilling and processing problems;

     o   fluctuations in foreign exchange or interest rates and stock market
         volatility;

     o   changes in income tax laws or changes in tax laws and incentive
         programs relating to the oil and gas industry and income trusts; and

     o   the other factors discussed under "Risk Factors".

         These factors should not be construed as exhaustive. The Trust
undertakes no obligation to publicly update or revise any forward-looking
statements.

        All references are to Canadian dollars unless otherwise stated.


                                       1
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

         INFORMATION HAS BEEN INCORPORATED BY REFERENCE IN THIS SHORT FORM
PROSPECTUS FROM DOCUMENTS FILED WITH SECURITIES COMMISSIONS OR SIMILAR
AUTHORITIES IN CANADA. Copies of the documents incorporated herein by reference
may be obtained on request without charge from the Corporate Secretary of VRL at
Suite 2800, 400-4th Avenue S.W., Calgary, Alberta, T2P 0J4, telephone (403)
269-4884. For the purpose of the Province of Quebec, this simplified prospectus
contains information to be completed by consulting the permanent information
record. A copy of the permanent information record may be obtained from the
Corporate Secretary of VRL at the above-mentioned address and telephone number.

         The following documents of the Trust, filed with various securities
commissions or similar authorities in the provinces of Canada, are specifically
incorporated by reference into and form an integral part of this short form
prospectus:

         1.       the Annual Information Form dated April 11, 2003 (the "AIF")
                  for the year ended December 31, 2002;

         2.       the audited consolidated financial statements of VRL for the
                  years ended December 31, 2002 and 2001, together with the
                  notes thereto and the auditors' report thereon included as
                  Schedule A to the AIF;

         3.       "Management's Discussion and Analysis" of financial results
                  and financial condition of VRL for the year ended December 31,
                  2002 included on pages 48 to 58 of the AIF;

         4.       the comparative unaudited consolidated financial statements of
                  the Trust for the nine month period ended September 30, 2003;
                  and

         5.       "Management's Discussion and Analysis" of financial results
                  and financial condition of the Trust for the nine month period
                  ended September 30, 2003.

         Any of the following documents, if filed by the Trust with the
provincial securities commissions or similar authorities in Canada after the
date of this short form prospectus and before the termination of the offering,
are deemed to be incorporated by reference in this short form prospectus:

         (a)      material change reports (except confidential material change
                  reports);

         (b)      comparative interim financial statements;

         (c)      comparative financial statements for the Trust's most recently
                  completed financial year, together with the accompanying
                  report of the auditor; and

         (d)      information circulars (excluding those portions thereof which,
                  pursuant to National Instrument No. 44-101 of the Canadian
                  Securities Administrators, are not required to be incorporated
                  by reference herein).

         Documents are not incorporated by reference to the extent their
contents are modified or superseded by a statement contained in this short form
prospectus or in any other subsequently filed document that is also incorporated
by reference in this short form prospectus.


                                       2
<PAGE>

                             VERMILION ENERGY TRUST

GENERAL

         The Trust is an open-end unincorporated investment trust governed by
the laws of the Province of Alberta and created pursuant to an amended and
restated trust indenture dated as of January 15, 2003 (the "Trust Indenture")
between Computershare Trust Company of Canada (the "Trustee") and VRL. The head
and principal office of the Trust is located at Suite 2800, 400 - 4th Avenue,
S.W., Calgary, Alberta T2P 0J4.

         The Trust was formed on December 16, 2002. As a result of the
completion of a plan of arrangement on January 22, 2003 involving the Trust,
VRL, Clear Energy Inc., and Vermilion Acquisition Ltd. (the "Arrangement"),
former holders of common shares of VRL received Trust Units or series A
exchangeable shares of VRL (the "Exchangeable Shares"), or a combination
thereof, in accordance with the elections made by such shareholders, and VRL
became a subsidiary of the Trust.

         In this prospectus, the term "Vermilion" refers to the Trust and its
direct and indirect subsidiaries on a consolidated basis, unless the context
otherwise requires.

ORGANIZATIONAL STRUCTURE OF THE TRUST

         The following diagram describes the inter-corporate relationships among
the Trust and its material subsidiaries following completion of the Arrangement
as well as the flow of cash from the oil and gas properties held by such
subsidiaries to the Trust, and from the Trust to the Unitholders.

                               ------------------
                               |   Unitholders  |
                               -----------------
                                        |
                                        |
                               Cash Distributions
                                        |
                                        |
                                        /\
                                       /  \
                                      /    \
                                     /      \
                                    /        \
                                   /          \
                                  /  Vermilion \
                                 / Energy Trust \
           _________________\   /                \
           |                /  /__________________\
           |                      /_\           |
           |                       |            |
           |                       |            |
           |                   cash flow    investment
           |                       |            |
           |                       |            |
           |                       |           /_\
           |                 ---------------------        -------------------
           |           _____ |     Vermilion     | ______ |    Exchangeable  |
           |          |      |   Resources Ltd.  |        |    Shareholders  |
           |          |      --------------------- \      -------------------|
           |          |       |               |     \
           |          |       |               |      \
       cash flow      |       |               |       \
           |          |       |               |        \
           |          |       |               |         \
           |          |       |               |          \
           |          |       |               |           \
           |          |      100%            100%         72.2%
           |          |       |               |              \
           |          |       |               |               \
           |          |    ---------------  --------------   --------------
           |          |    |    764031   |  | Vermillion |   |  Aventura   |
           |        95.32% | Alberta Ltd.|  |  REP S.A.  |   | Energy, Inc.|
           |          |    |  (Alberta)  |  |  (France)  |   |  (Alberta)  |
           |          |    --------------   --------------   --------------
           |          |      |
           |          |      |
           |          |   4.68%
           |          |      |
           |          |      |
           |    -------------------------
           |___ |  Vermilion Resources  |
                |     (Partnership)     |
                ------------------------


                                       3
<PAGE>

SUMMARY DESCRIPTION OF THE BUSINESS

VERMILION ENERGY TRUST

         The Trust was established to acquire and hold, directly and indirectly,
interests in petroleum and natural gas properties. Cash flow from the properties
is flowed from VRL to the Trust by way of interest payments and principal
repayments on unsecured subordinated notes issued by VRL and held by the Trust
(the "Notes") and dividends declared on the common shares of VRL, and from
Vermilion Resources (the "Partnership") to the Trust by way of royalty payments
under a royalty agreement among VRL, 764031 Alberta Ltd., the Partnership and
the Trust dated January 22, 2003 (the "Royalty Agreement").

         The Trustee may declare payable to the Unitholders all or any part of
the income of the Trust. It is currently anticipated that the only income to be
received by the Trust will be from the interest received on the principal amount
of Notes, royalty income pursuant to the Royalty Agreement, and dividends on the
common shares of VRL. The Trust makes monthly cash distributions to Unitholders
of the interest income earned from the Notes, income earned under the Royalty
Agreement and dividends received on the common shares of VRL, after expenses, if
any, and any cash redemptions of Trust Units.

         Cash distributions are made on the 15th day of each month to
Unitholders of record on the last calendar day of the immediately preceding
month.

VERMILION RESOURCES LTD.

         VRL was incorporated under the BUSINESS CORPORATIONS ACT (Alberta) on
November 23, 1993. On January 1, 2003, VRL amalgamated with its wholly-owned
subsidiary, 973675 Alberta Ltd. and on January 15, 2003, VRL amalgamated with
its wholly-owned subsidiaries, Big Sky Resources Inc., Vermilion Gas Marketing
Inc. and 962134 Alberta Ltd. On January 22, 2003, VRL was amalgamated with
Vermilion Acquisition Ltd. pursuant to the Arrangement.

         VRL is actively engaged in the business of oil and natural gas
exploitation, development, acquisition and production in Canada and France. VRL
is also involved in Trinidad through its 72.2% ownership of Aventura Energy Inc.
("Aventura"). Aventura does not currently contribute any cash flow or production
to the generation of the cash distributions of the Trust. For more information
regarding the business of VRL, reference should be made to the AIF.

         The Trust is the sole common shareholder of VRL. Certain former
shareholders of VRL own Exchangeable Shares in accordance with the elections
made by such holders under the Arrangement. VRL continues to carry on an oil and
natural gas business similar to that carried on by VRL prior to the Arrangement
becoming effective. VRL owns, directly or indirectly, all of the assets that
were owned by VRL prior to the Arrangement becoming effective, other than
certain exploration assets that were transferred to Clear Energy Inc. in
accordance with the Arrangement and certain other assets that were transferred
to Aventura following the Arrangement becoming effective.

         The head office of VRL is located at Suite 2800, 400 - 4th Avenue S.W.,
Calgary, Alberta T2P 0J4 and its registered office is located at Suite 3700, 400
- - 3rd Avenue S.W., Calgary, Alberta T2P 4H2.


                               RECENT DEVELOPMENTS

AVENTURA ENERGY INC.

         On September 15, 2003, the Trust and Aventura announced that they were
in discussions with a potential acquirer of Aventura. The completion of the
proposed transaction is dependent upon the parties reaching agreement on all
terms as well as satisfying a number of conditions precedent, including
obtaining government and other approvals in Trinidad.

         There is no assurance that the transaction will proceed. In the event
that a definitive agreement is concluded or the discussions are terminated, the
Trust will make a further announcement.

POTENTIAL ACQUISITIONS

         The Trust continues to evaluate potential acquisitions of all types of
petroleum and natural gas and other energy-related assets as part of its ongoing
acquisition program. The Trust is normally in the process of evaluating several
potential acquisitions at any one time which individually or together could be
material. As of the date hereof, the Trust has not reached agreement on the
price or terms of any potential material acquisitions. The Trust cannot predict
whether any current or future opportunities will result in one or more
acquisitions for the Trust.


                                 USE OF PROCEEDS

         The net proceeds from the offering of the Trust Units, after deducting
the fees of $3,877,500 to be paid by the Trust to the Underwriters and expenses
related to the offering estimated to be approximately $300,000, will be
approximately $73,372,500. In the event the Underwriters' Option is exercised in
full, the net proceeds from the offering of the Trust Units, after deducting the
fees of $4,265,250 to be paid by the Trust to the Underwriters and expenses
related to the offering estimated


                                       4
<PAGE>

to be approximately $300,000, will be approximately $80,739,750. The net
proceeds of this offering will be used to fund the Trust's capital expenditure
and acquisition program and for general purposes. In the interim, the net
proceeds will be used to repay a portion of VRL's bank indebtedness. See
"Relationship Between the Trust's Bankers and Certain Underwriters".


                           CONSOLIDATED CAPITALIZATION

         The following table sets forth the consolidated capitalization of the
Trust as at December 31, 2002 and as at September 30, 2003, both before and
after giving effect to the offering:

<TABLE>
<CAPTION>
                                                    AS AT SEPTEMBER 30, 2003        AS AT SEPTEMBER 30, 2003
                                                   BEFORE GIVING EFFECT TO THE     AFTER GIVING EFFECT TO THE
 DESCRIPTION AND AMOUNT  AS AT DECEMBER 31, 2002            OFFERING                        OFFERING
       AUTHORIZED               (AUDITED)                  (UNAUDITED)                     (UNAUDITED)
- -----------------------  ----------------------- ------------------------------  -------------------------------
<S>                       <C>                    <C>                             <C>
Long-Term Debt(1)            $193,025,000                 $194,849,000                   $121,476,500(5)
Exchangeable Shares(2)            --                       $12,261,000                     $12,261,000
                                                 (5,271,636 Exchangeable Shares) (5,271,636 Exchangeable Shares)
Common Shares(3)             $140,557,000                      --                              --
(unlimited)               (55,866,918 Common
                                Shares)
Trust Units(4)                    --                      $124,784,000                   $198,156,500(5)
(unlimited)                                         (52,474,142 Trust Units)        (57,974,142 Trust Units)
</TABLE>
NOTES:
(1)      As at September 30, 2003, the Trust had a credit facility consisting of
         a revolving term loan of $220 million and an operating facility of $20
         million. The revolving period under the revolving term loan is
         currently expected to expire on June 30, 2004. That revolving period
         may be extended, at the option of the lenders, for a further 364 days.
         If the lenders convert the revolving credit facility to a non-revolving
         credit facility, the amounts outstanding under the facility become
         repayable 12 months after the end of the revolving period. The cost of
         funds borrowed under the credit facility is calculated by reference to
         a Canadian chartered bank's prime rate or United States base rate or a
         specified adjusted interbank deposit rate, stamping fee or discount
         rate, depending on the form of borrowing. Security for amounts
         outstanding is provided by, among other things, floating charge oil and
         gas debentures over all of the present and after acquired assets of
         Vermilion.
(2)      The Exchangeable Shares are exchangeable for Trust Units on the basis
         of an exchange rate that reflects the cash distributions paid on the
         Trust Units. As of November 14, 2003, the exchange rate was 1.11834. If
         all Exchangeable Shares were exercised on November 14, 2003, there
         would be 5,892,831 additional Trust Units outstanding.
(3)      In accordance with the Arrangement, effective January 22, 2003, former
         holders of common shares of VRL who either elected, or were deemed to
         have elected to receive Trust Units, received one Trust Unit in
         exchange for each common share of VRL.
(4)      As at September 30, 2003, the Trust had issued rights to purchase
         4,477,600 Trust Units pursuant to the Trust's trust unit rights
         incentive plan.
(5)      Based on the issuance of 5,500,000 Trust Units for total proceeds of
         $77,550,000 less the Underwriters' fee of $3,877,500 and expenses of
         the offering estimated to be $300,000. In the event the Underwriters'
         Option is exercised in full, Long-Term Debt would be $114,109,250 and
         Trust Units would be $205,523,750 (58,524,142 Trust Units outstanding).


                             DETAILS OF THE OFFERING

         The offering consists of 5,500,000 Trust Units at a price of $14.10 per
Trust Unit. An additional 550,000 Trust Units may be issued if the Underwriters'
Option is exercised in full.

         An unlimited number of Trust Units may be created and issued pursuant
to the Trust Indenture. Each Trust Unit entitles the holder thereof to one vote
at any meeting of Unitholders and represents an equal fractional undivided
beneficial interest in any distribution from the Trust (whether of net income,
net realized capital gains or other amounts) and in any net assets of the Trust
in the event of termination or winding-up of the Trust. All Trust Units
outstanding from time to time shall be entitled to equal shares of any
distributions by the Trust, and in the event of termination or winding-up of the
Trust, in any net assets of the Trust. All Trust Units shall rank among
themselves equally and rateably without discrimination, preference or priority.
Each Trust Unit is transferable, subject to compliance with applicable Canadian
securities laws, is not subject to any conversion or pre-emptive rights and
entitles the holder thereof to require the Trust to redeem any or all of the
Trust Units held by such holder.

         For additional information respecting the Trust Units, including
information respecting Unitholders' limited liability, restrictions on
non-resident Unitholders, the redemption right attached to the Trust Units,
meetings of Unitholders and amendments to the Trust Indenture, see "Additional
Information Respecting Vermilion Energy Trust" at pages 25 through 34, inclusive
of the AIF, incorporated by reference herein.

         The Trust Units do not represent a traditional investment and should
not be viewed by investors as "shares" in either VRL or the Trust. As holders of
Trust Units, Unitholders do not have the statutory rights normally associated
with ownership of shares of a corporation including, for example, the right to
bring "oppression" or "derivative" actions. The market price of the Trust Units
will be sensitive to, among other things, the anticipated distributable income
from the Trust and the ability of VRL to effect long term growth in the value of
the Trust, as well as a variety of market conditions including, but not limited
to,


                                       5
<PAGE>

interest rates, commodity prices and the ability of the Trust to acquire
additional assets. Changes in market conditions may adversely affect the trading
price of the Trust Units. See "Risk Factors" in this short form prospectus and
in the AIF incorporated by reference herein.


                              PLAN OF DISTRIBUTION

         Pursuant to an underwriting agreement dated as of November 19, 2003
(the "Underwriting Agreement") among the Trust, VRL and the Underwriters, the
Trust has agreed to issue and sell an aggregate of 5,500,000 Trust Units to the
Underwriters, and the Underwriters have severally agreed to purchase such Trust
Units on December 10, 2003 or on such other date as may be agreed among the
parties to the Underwriting Agreement (but in no event later than December 31,
2003). Delivery of the Trust Units is conditional upon payment on closing of
$14.10 per Trust Unit by the Underwriters to the Trust. The Underwriting
Agreement provides that the Trust will pay the Underwriters a fee of $0.705 per
Trust Unit issued and sold by the Trust for an aggregate fee payable by the
Trust of $3,877,500, in consideration for the Underwriters' services in
connection with the offering.

         The Trust has granted to the Underwriters an option (the "Underwriters'
Option") to purchase up to an additional 550,000 Trust Units on the same terms
as this offering exercisable, in whole or in part, at any time until 48 hours
prior to closing, which additional Trust Units are qualified for distribution
under this prospectus. If the Underwriters' Option is exercised in full, the
total offering of Trust Units, the Underwriters' fee and the net proceeds to the
Trust (before deducting the expenses of the offering) will be $85,305,000,
$4,265,250 and $81,039,750, respectively.

         The terms of the offering of the Trust Units were determined by
negotiation between VRL, on behalf of the Trust, and the Underwriters. The
obligations of the Underwriters under the Underwriting Agreement are several and
may be terminated at their discretion on the basis of their assessment of the
state of the financial markets and may also be terminated upon the occurrence of
certain stated events. If an Underwriter fails to purchase the Trust Units which
it has agreed to purchase, any one or more of the other Underwriters may, but is
not obligated to, purchase such Trust Units and the remaining Underwriter or
Underwriters have the right to terminate their obligations under the
Underwriting Agreement. The Underwriters are, however, obligated to take up and
pay for all of the Trust Units if any are purchased under the Underwriting
Agreement. The Underwriting Agreement also provides that the Trust and VRL will
indemnify the Underwriters and their directors, officers, agents, employees and
shareholders against certain liabilities and expenses.

         Pursuant to applicable securities legislation, the Underwriters may
not, throughout the period of distribution under this short form prospectus, bid
for or purchase Trust Units. The foregoing restriction is subject to exceptions,
provided the bid or purchase is not engaged in for the purpose of creating
actual or apparent trading in, or raising the price of, the Trust Units. These
exceptions include a bid or purchase permitted under the bylaws and rules of the
TSX relating to market stabilization and passive market-making activities. In
connection with the offering, and subject to the foregoing, the Underwriters may
over-allot and effect transactions which stabilize or maintain the market price
of the Trust Units at levels above those which might otherwise prevail in the
open market. Such transactions, if commenced, may be discontinued at any time.

         Subscriptions for Trust Units will be received subject to rejection or
allotment in whole or in part and the right is reserved to close the
subscription books at any time without prior notice. Certificates for the Trust
Units will be available for delivery at the closing of the offering, which is
expected to occur on or about December 10, 2003.

         The TSX has conditionally approved the listing of the Trust Units
distributed under this short form prospectus subject to the Trust fulfilling all
of the listing requirements of the TSX on or before February 23, 2004.

         The Trust has agreed with the Underwriters that it will not, during the
period ending 90 days after the closing of the offering, sell or offer to sell
any Trust Units or any securities convertible into or exchangeable for Trust
Units, without the prior consent of CIBC World Markets Inc. on behalf of the
Underwriters pursuant to the Underwriting Agreement, such consent not to be
unreasonably withheld, other than the issuance of Trust Units pursuant to the
trust unit rights incentive plan of the Trust, the issuance of Trust Units
pursuant to the distribution reinvestment and optional Trust Unit purchase plan
of the Trust, the employee bonus plan of the Trust and the issuance of Trust
Units on exchange of the Exchangeable Shares of VRL.

         The Trust Units have not been and will not be registered under the 1933
Act or any state securities laws, and accordingly may not be offered or sold
within the United States or to U.S. persons (as such term is defined in
Regulation S under the 1933 Act) except in transactions exempt from the
registration requirements of the 1933 Act and applicable state securities laws.
The Underwriting Agreement permits the Underwriters to offer and resell the
Trust Units to certain qualified institutional buyers in the United States,
provided that such offers and sales are made in accordance with Rule 144A under
the 1933 Act. Moreover, the Underwriting Agreement provides that the
Underwriters will offer and sell the Trust Units outside the United States only
in accordance with Regulation S under the 1933 Act.

         In addition, until 40 days after the commencement of the offering, any
offer or sale of Trust Units offered hereby within the United States by any
dealer (whether or not participating in the offering) may violate the
registration requirements of the 1933 Act if such offer or sale is made
otherwise than in accordance with Rule 144A under the 1933 Act.


                                       6
<PAGE>

                                  RISK FACTORS

         An investment in the Trust Units is subject to certain risks. Investors
in Trust Units should carefully consider the risks described under "Risk
Factors" in the AIF and the additional risk factors set forth below.

REVISED RESERVE DISCLOSURE

         At the time the Trust files its audited consolidated financial
statements and accompanying oil and gas reserves information for the year ending
December 31, 2003, it will be subject to National Instrument 51-101 ("NI
51-101"). Among other things, NI 51-101 prescribes standards for the preparation
and disclosure of oil and gas reserves and related estimates, requires the
annual public filing of certain of those estimates and other information
pertaining to oil and gas activities, and specifies certain responsibilities of
directors of public entities. In particular, the definitions of proven reserves
and probable reserves have been modified by NI 51-101 and contain specific
quantifications of levels of certainty associated with the recoverability of
reserves. As a result, estimated probable reserves will reflect the lesser
certainty associated with the recovery of those reserves. Additionally, reserve
evaluators have been made accountable to standards contained in NI 51-101. As a
result of the implementation of NI 51-101 and its impact on reserves evaluation
and reporting, the reported quantities and estimated future net cash flow of the
existing reserves of Vermilion may be reduced.

ACCOUNTING WRITE-DOWNS AS A RESULT OF GAAP

         Canadian Generally Accepted Accounting Principles ("GAAP") require that
management apply certain accounting policies and make certain estimates and
assumptions which affect reported amounts in the consolidated financial
statements of the Trust. The accounting policies may result in non-cash charges
to net income and write-downs of net assets in the financial statements. Such
non-cash charges and write-downs may be viewed unfavourably by the capital
markets and result in an inability to borrow funds and/or may result in a
decline in the Trust Unit price.

         Emerging GAAP surrounding hedge accounting may result in non-cash
charges against net income as a result of changes in the fair market value of
hedging instruments. A decrease in the fair market value of the hedging
instruments as the result of fluctuations in commodity prices and foreign
exchange rates may result in a write-down of net assets and a non-cash charge
against net income. Such write-downs and non-cash charges may be temporary in
nature if the fair market value subsequently increases.

VARIATIONS IN INTEREST RATES AND FOREIGN EXCHANGE RATES

         Variations in interest rates could result in a significant change in
the amount the Trust pays to service debt, potentially impacting distributions
to Unitholders.

         In addition, the exchange rate for the Canadian dollar versus the U.S.
dollar has increased significantly over the last 12 months, resulting in the
receipt by the Trust of fewer Canadian dollars for its production which may
affect future distributions. VRL has initiated certain hedges to mitigate these
risks. The increase in the exchange rate for the Canadian dollar and future
Canadian/United States exchange rates may impact future distributions and the
future value of the Trust's reserves as determined by independent evaluators.

MUTUAL FUND TRUST STATUS

         It is intended that the Trust continue to qualify as a mutual fund
trust for the purposes of the INCOME TAX ACT (Canada) (the "Tax Act"). The Trust
may not, however, always be able to satisfy any future requirement for the
maintenance of mutual fund trust status. Should the status of the Trust as a
mutual fund trust be lost or successfully challenged by a relevant tax
authority, certain adverse consequences may arise for the Trust and Unitholders.
Some of the significant consequences of losing mutual fund trust status are as
follows:

         o    By virtue of its status as a mutual fund trust, the Trust has been
              accepted for registration as a "registered investment" for
              registered retirement savings plans ("RRSPs"), registered
              retirement income funds ("RRIFs"), and deferred profit sharing
              plans (collectively, "Exempt Plans"). As such, Trust Units are
              qualified investments for Exempt Plans as well as registered
              education savings plans ("RESPs") and if the Trust's status as a
              "registered investment" is revoked in any year by virtue of
              ceasing to be a "mutual fund trust" the Trust Units would remain
              as qualified investments for Exempt Plans and RESPs until the end
              of the year following such year.

         o    Where at the end of any month an Exempt Plan or a RESP holds Trust
              Units that are not qualified investments, the Exempt Plan or RESP
              must, in respect of that month, pay a tax under Part XI.1 of the
              Tax Act equal to 1 percent of the fair market value of the Trust
              Units at the time such Trust Units were acquired by the Exempt
              Plan or RESP. An RRSP or RRIF holding Trust Units that are not
              qualified investments would become taxable on income attributable
              to the Trust Units while they are not qualified investments
              (including the entire amount of any capital gain arising on a
              disposition of the non-qualified investment). RESPs which hold
              Trust Units that are not qualified investments may have their
              registration revoked by the Canada Customs and Revenue Agency.


                                       7
<PAGE>

         o    Trust Units would become foreign property for registered pension
              plans upon the Trust ceasing to be a mutual fund trust. If the
              Trust's "registered investment" status is revoked by virtue of it
              ceasing to be a mutual fund trust, then the Trust Units would also
              become foreign property for Exempt Plans.

         o    The Trust would be taxed on certain types of income distributed to
              Unitholders, including income generated by the royalty held by the
              Trust. Payment of this tax may have adverse consequences for some
              Unitholders, particularly Unitholders that are not residents of
              Canada and residents of Canada that are otherwise exempt from
              Canadian income tax.

         o    The Trust would cease to be eligible for the capital gains refund
              mechanism available under the Tax Act.

         o    Trust Units held by Unitholders that are not residents of Canada
              would become taxable Canadian property. These non-resident holders
              would be subject to Canadian income tax on any gains realized on a
              disposition of Trust Units held by them.

         In addition, the Trust may take certain measures in the future to the
extent the Trust believes such measures are necessary to ensure the Trust
maintains its status as a mutual fund trust. These measures could be adverse to
certain holders of Trust Units.

NON-RESIDENT OWNERSHIP OF TRUST UNITS

         In order for the Trust to maintain its status as a mutual fund trust
under the Tax Act, the Trust must not be established or maintained primarily for
the benefit of non-residents of Canada ("non-residents") within the meaning of
the Tax Act. The Trust Indenture provides that if at any time the Trust or VRL
becomes aware that the beneficial owners of 50% or more of the Trust Units then
outstanding are or may be non-residents or that such a situation is imminent,
the Trust, by or through VRL on the Trust's behalf, shall take such action as
may be necessary to carry out the foregoing intention. See "Additional
Information Respecting Vermilion Energy Trust - Non-Resident Unitholders" in the
AIF incorporated by reference herein.


        RELATIONSHIP BETWEEN THE TRUST'S BANKERS AND CERTAIN UNDERWRITERS

         Each of CIBC World Markets Inc., BMO Nesbitt Burns Inc. and TD
Securities Inc. is, directly or indirectly, a wholly-owned subsidiary of a
Canadian chartered bank (collectively, the "Banks") which is a lender to
Vermilion. Accordingly, the Trust may be considered to be a connected issuer to
each of these Underwriters under Canadian securities laws.

         As at October 31, 2003, VRL was indebted to the Banks in the amount of
approximately $196.9 million under certain credit facilities between VRL and the
Banks. The net proceeds of the offering will be used to fund the Trust's capital
expenditure and acquisition program and for general purposes. In the interim,
the net proceeds of the offering will be used to repay a portion of the
outstanding indebtedness of VRL to the Banks. VRL is in compliance with all
terms of the agreements governing such credit facilities. The credit facilities
are secured by a security interest and a floating charge debenture over VRL's
interests in petroleum and natural gas properties. Neither the financial
position of VRL nor the value of the security under the credit facilities has
changed substantially since the indebtedness under the credit facilities was
incurred.

         The decision to distribute the Trust Units offered hereby and the
determination of the terms of the distribution were made through negotiations
between VRL, on behalf of the Trust, and the Underwriters. The Banks did not
have any involvement in such decision or determination, but have been advised of
the issuance and the terms thereof. As a consequence of this issuance, each of
the Underwriters will receive its share of the Underwriters' fee. See "Use of
Proceeds".


                                       8
<PAGE>

                          DISTRIBUTIONS TO UNITHOLDERS

         The following table sets forth the per Trust Unit amount of monthly
cash distributions paid by the Trust since its inception.

2003
- ----
March...............................................           $0.17
April...............................................           $0.17
May.................................................           $0.17
June................................................           $0.17
July................................................           $0.17
August..............................................           $0.17
September...........................................           $0.17
October.............................................           $0.17
November............................................           $0.17
                                                             -------
TOTAL TO DATE.......................................           $1.53
                                                             =======

         THE TRUST HAS DECLARED A DISTRIBUTION OF $0.17 PER TRUST UNIT TO BE
PAID ON DECEMBER 15, 2003 TO UNITHOLDERS OF RECORD ON NOVEMBER 28, 2003.
PURCHASERS OF TRUST UNITS PURSUANT TO THIS OFFERING WILL NOT BE ELIGIBLE TO
RECEIVE THE DISTRIBUTION PAYABLE ON DECEMBER 15, 2003. However, it is
anticipated that the offering will close on or prior to December 31, 2003, which
is the record date for the distribution by the Trust to Unitholders payable on
January 15, 2004. Accordingly, provided the offering closes on or prior to
December 31, 2003, subscribers who complete their purchase of Trust Units from
the Underwriters and continue to own such Trust Units on December 31, 2003 will
be eligible to receive the distribution of the Trust payable on January 15,
2004.


         The historical distribution payments described above may not be
reflective of future distribution payments, which will be subject to review by
the board of directors of VRL taking into account the prevailing financial
circumstances of VRL at the relevant time.


                   CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

         In the opinion of Macleod Dixon LLP counsel to the Trust, and in the
opinion of Burnet, Duckworth & Palmer LLP, counsel to the Underwriters, the
following summary describes the principal Canadian federal income tax
considerations pursuant to the Tax Act and the regulations thereunder (the
"Regulations") generally applicable to a holder who acquires Trust Units
pursuant to this offering and who, for purposes of the Tax Act and all relevant
times, holds the Trust Units as capital property, is resident of Canada and
deals at arm's length with the Trust. Generally, the Trust Units will be
considered to be capital property to a holder provided the holder does not hold
the Trust Units in the course of carrying on a business of trading or dealing in
securities and has not acquired them in one or more transactions considered to
be an adventure in the nature of trade. Certain holders who might not otherwise
be considered to hold their Trust Units as capital property may, in certain
circumstances, be entitled to have them treated as capital property by making
the election permitted by subsection 39(4) of the Tax Act. This summary is not
applicable to (a) a subscriber that is a "financial institution", as defined in
the Tax Act for the purposes of the mark-to-market rules, (b) a subscriber an
interest in which would be a "tax shelter investment" as defined in the Tax Act,
or (c) a subscriber that is a "specified financial institution" as defined in
the Tax Act. Any such subscriber should consult its own tax advisor with respect
to an investment in the Trust Units.

         This summary is based upon the provisions of the Tax Act and the
Regulations in force as of the date hereof, all specific proposals to amend the
Tax Act that have been publicly announced prior to the date hereof (the
"Proposed Amendments") and counsels' understanding of the current published
administrative practices of the Canada Customs and Revenue Agency. This summary
assumes the Proposed Amendments will be enacted in the form proposed, however,
no assurance can be given that the Proposed Amendments will be enacted in the
form proposed, if at all. This summary is not exhaustive of all possible
Canadian federal income tax considerations and, except for the Proposed
Amendments, does not take into account any changes in the law, whether by
legislative, governmental or judicial action, nor does it take into account
provincial, territorial or foreign tax considerations, which may differ
significantly from those discussed herein.

         THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR
SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER OR
PROSPECTIVE HOLDER OF TRUST UNITS, AND NO REPRESENTATIONS WITH RESPECT TO THE
INCOME TAX CONSEQUENCES TO ANY HOLDER OR PROSPECTIVE HOLDER ARE MADE.
CONSEQUENTLY, HOLDERS AND PROSPECTIVE HOLDERS OF TRUST UNITS SHOULD CONSULT
THEIR OWN TAX ADVISORS FOR ADVICE WITH RESPECT TO THE TAX CONSEQUENCES TO THEM
OF ACQUIRING TRUST UNITS PURSUANT TO THIS OFFERING, HAVING REGARD TO THEIR
PARTICULAR CIRCUMSTANCES.

STATUS OF THE TRUST

         The Trust qualifies as a "unit trust" as defined in the Tax Act, and
based on representations of VRL, the Trust also qualifies as a "mutual fund
trust" as defined in the Tax Act and this summary assumes that the Trust will
also qualify on the


                                       9
<PAGE>

closing of this offering, and will continue to qualify thereafter, as a "mutual
fund trust" as defined in the Tax Act. In order to qualify as a mutual fund
trust:

         (a)      the sole undertaking of the Trust must be the investing of its
                  funds in property (other than real property or interests in
                  real property), the acquiring, holding, maintaining,
                  improving, leasing or managing of any real property (or an
                  interest in real property) that is capital property of the
                  Trust, or any combination of these activities;

         (b)      the Trust must comply on a continuous basis with certain
                  requirements relating to the qualification of the Trust Units
                  for distribution to the public, the number of Unitholders and
                  the dispersal of ownership of Trust Units; and

         (c)      the Trust cannot reasonably be considered to have been
                  established or maintained primarily for the benefit of
                  non-residents of Canada under the Tax Act.

         The Trust has certain restrictions on its activities and its powers and
certain restrictions against non-resident Unitholders, such that it is
reasonable to expect that these requirements will continue to be satisfied. If
the Trust were not to qualify as a mutual fund trust at any particular time, the
income tax considerations would be materially different in certain respects from
those described herein.

         If the Trust were to cease to qualify as a mutual fund trust, the Trust
could be required to pay tax under Part XII.2 of the Tax Act. The payment of
Part XII.2 tax by the Trust may have adverse tax consequences for certain
Unitholders.

TAXATION OF THE TRUST

         The Trust is subject to tax in each taxation year on its income or loss
for the year, computed as though it were a separate individual resident in
Canada. The taxation year of the Trust ends on December 31 of each year.

         Subject to the detailed rules in the Tax Act, the Trust is required to
include in its income for each taxation year (i) all interest in respect of the
Notes, (ii) all dividends received on the shares of VRL unless appropriate
designations are made by the Trust that will deem such dividends to have been
received by Unitholders and not to have been received by the Trust; and (iii)
amounts in respect of the Royalty Agreement, including any amounts subject to
set-off in respect of any Crown charges reimbursed by it to the Partnership.

         In computing its income, the Trust is generally entitled to deduct
reasonable administrative and other expenses incurred to earn income. The Trust
is entitled to deduct a portion of any costs incurred by it in connection with
the issuance of Trust Units. The amount of such expenses deductible by the Trust
in a taxation year is 20% of such issue expenses, pro-rated where the Trust's
taxation year is less than 365 days, to the extent such expenses were not
deductible in a previous taxation year.

         The Trust may deduct, in computing its income for a year, an amount not
exceeding 10% of any positive balance of its cumulative Canadian oil and gas
property expense ("COGPE") account at the end of that year. For this purpose,
the cost to the Trust of an oil and gas royalty that is a "Canadian resource
property" would be added to the Trust's cumulative COGPE account. Any amount
that the Trust is required, pursuant to the Royalty Agreement, to pay in a year
in respect of additional "Canadian resource properties" acquired by the
Partnership will be added to the cumulative COGPE account of the Trust. An
amount that becomes receivable by the Trust in a year as a result of a sale of a
property by the Partnership and the release of the royalty relating to that
property, will be required to be deducted in computing the Trust's cumulative
COGPE account. If the balance of the Trust's cumulative COGPE at the end of a
particular taxation year (after additions and deductions for that year) would
otherwise be a negative amount, the negative amount will be included in the
Trust's income for the year.

         In accordance with the Regulations, the Trust may deduct in computing
its income for a year a resource allowance calculated by reference to its
"adjusted resource profits". The Department of Finance has released proposals
under which Crown royalties would become deductible and the deduction for
resource allowance would be eliminated. These changes are proposed to be phased
in over a 5-year period, starting in 2003.

         The Trust may also deduct amounts which become payable by it to
Unitholders in the year, to the extent that the Trust has net income for the
year after the inclusions and deductions outlined above. An amount is considered
to have become payable to a Unitholder in a taxation year only if it is paid in
the year by the Trust or the Unitholder is entitled in that year to enforce
payment of the amount. Provided that all income of the Trust for a taxation year
(excluding capital gains which may be realized by the Trust upon a distribution
in specie of the property of the Trust in connection with a redemption of Trust
Units) net of the Trust's expenses is paid or made payable to Unitholders in the
year, as a result of the deduction from income for such distribution and the
Trust's entitlement to Capital Gains Refund (see below), it is generally
anticipated that the Trust will not have any material taxable income for
purposes of the Tax Act. However, no assurances are given in this regard.


                                       10
<PAGE>

         The excess, if any, of reimbursed Crown charges over the resource
allowance deductible by the Trust in the year is deemed to be an amount that has
become payable to the Unitholders, to the extent designated by the Trust. In
order to utilize losses from prior taxation years, the Trust may claim as a
deduction an amount that is less than the amount of its income that is paid or
payable to Unitholders in the year if it designates such amount not to have been
paid or become payable to the Unitholders. Under the Trust Indenture, net income
of the Trust for each year will be paid or made payable generally by way of cash
distributions to the Unitholders. The Trust Indenture also contemplates other
situations in which the Trust may not have sufficient cash to distribute all of
its net income by way of such cash distributions. In such circumstances, such
net income will be payable to Unitholders in the form of additional Trust Units
("Reinvested Trust Units").

         The Trust will be entitled for each taxation year to reduce (or receive
a refund in respect of) its liability, if any, for tax on its net taxable
capital gains by an amount determined under the Tax Act based on the redemption
or retraction of Trust Units during the year (the "Capital Gains Refund"). In
certain circumstances, the Capital Gains Refund for a particular taxation year
may not completely offset the Trust's tax liability on net realized capital
gains for such taxation year.

TAXATION OF UNITHOLDERS

         The income of a Unitholder from the Trust Units will generally be
considered to be income from property, and not resource income, for purposes of
the Tax Act. Any loss of the Trust for the purposes of the Tax Act cannot be
allocated to and treated as a loss of a Unitholder.

         A Unitholder will generally be required to include in computing income
for a particular taxation year of the Unitholder the portion of the net income
of the Trust for a taxation year, including taxable dividends and net taxable
capital gains, that is paid or becomes payable to the Unitholder in that
particular taxation year, whether such amount is payable in cash, additional
Trust Units, or otherwise. No amount is required to be included in income in
respect of the receipt of bonus units under the distribution reinvestment plan
("DRIP").

         Provided that appropriate designations are made by the Trust, such
portion of its net taxable capital gains and taxable dividends from VRL as are
paid or payable to a Unitholder will effectively retain their character as
taxable capital gains and taxable dividends, respectively, and will be treated
as such in the hands of the Unitholder for purposes of the Tax Act.

         The non-taxable portion of net capital gains of the Trust that is paid
or becomes payable to the Unitholder in a year will not be included in computing
the Unitholder's income for the year. Any other amount in excess of the net
income of the Trust that is paid or becomes payable by the Trust to the
Unitholder in a year will generally not be included in the Unitholder's income
for the year. However, a Unitholder is required to reduce the adjusted cost base
of the Trust Units held by such Unitholder by each amount payable to the
Unitholder otherwise than as proceeds of disposition of Trust Units (except to
the extent that the amount either was included in the income of the Unitholder
or was the Unitholder's share of the non-taxable portion of the net capital
gains of the Trust, the taxable portion of which was designated by the Trust in
respect of the Unitholder). To the extent that the adjusted cost base of a Trust
Unit is less than zero, the negative amount will be deemed to be a capital gain
of the Unitholder from a disposition of the Trust Unit at the time that the
negative amount arises.

         The cost to a Unitholder of Trust Units acquired pursuant to this
offering will equal the purchase price of the Trust Units plus the amount of any
other reasonable costs incurred in connection therewith. This cost will be
averaged with the adjusted cost base of all other Trust Units held by the
Unitholder at that time as capital property to determine the adjusted cost base
to the Unitholder of each Trust Unit. Reinvested Trust Units issued to a
Unitholder as a non-cash distribution of income will have an acquisition cost
equal to the amount of such income and which costs will be subject to cost
averaging with the cost of all other Trust Units held as capital property.
Similarly, the cost of Units acquired on the reinvestments of distributions
under the DRIP will be the amount of such reinvestment. Trust Units received as
bonus units under the DRIP will initially have a nil adjusted cost base which
will be averaged with the adjusted cost base of all other Trust Units held by
the Unitholder as capital property to determine the adjusted cost base of all
Trust Units held by the Unitholder.

         Upon the disposition or deemed disposition by a Unitholder of a Trust
Unit, the Unitholder will generally realize a capital gain (or a capital loss)
equal to the amount by which the proceeds of disposition are greater (or less)
than the aggregate of the Unitholder's adjusted cost base of the Trust Unit and
any reasonable costs of disposition.

         A redemption of Trust Units in consideration for cash or notes issued
by the Trust ("Redemption Notes") or Notes distributed to the Unitholder on the
redemption will be a disposition of such Trust Units for proceeds of disposition
equal to the cash, the fair market value of the Redemption Notes or the adjusted
cost base to the Trust of the Notes so distributed, as applicable. Where a
Unitholder that is a corporation or a trust (other than a mutual fund trust)
disposes of a Trust Unit, the Unitholder's capital loss from the disposition
will be reduced by the amount of dividends from taxable Canadian corporations
previously designated by the Trust to the Unitholder to the extent and under the
circumstances prescribed by the Tax Act. Similar rules apply where a corporation
or trust (other than a mutual fund trust) is a member of a partnership or a
beneficiary of a Trust that disposes of Trust Units.

         The cost of any Note distributed to a Unitholder by the Trust upon a
redemption of Trust Units will be equal to the fair market value of the Note at
the time of the distribution less any accrued interest thereon. Such a
Unitholder will be required to include in income interest on the Note (including
interest that had accrued to the date of the acquisition of the Note by the
Unitholder) in accordance with the provisions of the Tax Act. To the extent that
the Unitholder is required to


                                       11
<PAGE>

include in income any interest that had accrued to the date of the acquisition
of the Note, an offsetting deduction will be available.

         Generally, one-half of any capital gain (a "taxable capital gain")
realized by a Unitholder in a taxation year must be included in the income of
the Unitholder for the year, and one-half of any capital loss (an "allowable
capital loss") realized by a Unitholder in a taxation year must be deducted from
taxable capital gains realized by the Unitholder in that year. Allowable capital
losses for a taxation year in excess of taxable capital gains for that year
generally may be carried back and deducted in any of the three preceding
taxation years or carried forward and deducted in any subsequent taxation year
against net capital gains realized in such years to the extent and under the
circumstances described in the Tax Act.

         A Unitholder that throughout the relevant taxation year is a
"Canadian-controlled private corporation", as defined in the Tax Act, may be
liable to pay an additional refundable tax of 6 2/3% on certain investment
income, including certain income that was received or became receivable from the
Trust in the relevant taxation year and taxable capital gains arising from a
disposition of Trust Units.


                           ELIGIBILITY FOR INVESTMENT

         In the opinion of Macleod Dixon LLP, counsel to the Trust, and Burnet,
Duckworth & Palmer LLP, counsel to the Underwriters, based on representations of
VRL and subject to the satisfaction of the requirements discussed under
"Canadian Federal Income Tax Considerations" by the Trust, the Trust Units will,
on the date of closing, be qualified investments under the Tax Act for Exempt
Plans and will not constitute foreign property for those plans.


                                  LEGAL MATTERS

         Certain legal matters relating to this offering will be passed upon by
Macleod Dixon LLP on behalf of the Trust and Burnet, Duckworth & Palmer LLP on
behalf of the Underwriters.


                              INTERESTS OF EXPERTS

         As at the date hereof, the partners and associates of each of Macleod
Dixon LLP and Burnet, Duckworth & Palmer LLP as a group owned beneficially,
directly or indirectly, less than 1% of the outstanding Trust Units.

         As at the date hereof, the partners and associates of Deloitte & Touche
LLP, the auditors of the Trust, as a group did not beneficially own any of the
outstanding Trust Units.

         As at the date hereof, principals of Gilbert Laustsen Jung Associates
Ltd., independent petroleum consultants to the Trust, personally disclosed in
certificates of qualification that they neither had nor expected to receive any
of the outstanding Trust Units.


                     AUDITORS, TRANSFER AGENT AND REGISTRAR

         The auditors of the Trust are Deloitte & Touche LLP, Chartered
Accountants, 3000 Scotia Centre, 700 - 2nd Street S.W., Calgary, Alberta T2P
0S7.

         The transfer agent and registrar for the Trust Units is Computershare
Trust Company of Canada at its principal offices in Calgary, Alberta and
Toronto, Ontario.


                                     CONSENT

CONSENT OF DELOITTE & TOUCHE LLP

         We have read the short form prospectus of Vermilion Energy Trust (the
"Trust") dated November 28, 2003 relating to the qualification for distribution
of 5,500,000 trust units of the Trust (the "Prospectus"). We have complied with
Canadian generally accepted standards for an auditor's involvement with offering
documents.

         We consent to the incorporation by reference in the above mentioned
Prospectus of our report to shareholders of Vermilion Resources Ltd. (the
"Company") on the audited consolidated balance sheets of the Company as at
December 31, 2002 and 2001 and the consolidated statements of earnings and
retained earnings and cash flows for the years ended December 31, 2002 and 2001.
Our report is dated March 7, 2003.

Calgary, Alberta                                  (Signed) Deloitte & Touche LLP
November 28, 2003                                  Chartered Accountants


                                       12
<PAGE>

                          PURCHASERS' STATUTORY RIGHTS

         Securities legislation in certain of the provinces of Canada provides
purchasers with the right to withdraw from an agreement to purchase securities.
The right may be exercised within two business days after receipt or deemed
receipt of a prospectus and any amendment. In several of the provinces,
securities legislation further provides a purchaser with remedies for rescission
or, in some jurisdictions, damages if the prospectus and any amendment contains
a misrepresentation or is not delivered to the purchaser, provided that such
remedies for rescission or damages are exercised by the purchaser within the
time limit prescribed by the securities legislation of the purchaser's province.
The purchaser should refer to any applicable provisions of the securities
legislation of the purchaser's province for the particulars of these rights or
consult with a legal advisor.



                                       13
<PAGE>

                                   SCHEDULE A
                    UNAUDITED PRO FORMA FINANCIAL STATEMENTS



                               COMPILATION REPORT



To the Board of Directors of Vermilion Resources Ltd.


We have read the accompanying unaudited pro forma consolidated statement of
earnings of Vermilion Energy Trust (the "Trust") for the nine months ended
September 30, 2003, and have performed the following procedures.

         1.   Compared the figures in the columns captioned "Vermilion Energy
              Trust" to the unaudited interim consolidated statement of earnings
              of the Trust for the nine months ended September 30, 2003, and
              found them to be in agreement.

         2.   Made enquiries of certain officials of the Trust who have
              responsibility for financial and accounting matters about:

              (a)  the basis for determination of the pro forma adjustments; and

              (b)  whether the pro forma consolidated statement of earnings
                   complies as to form in all material respects with the various
                   securities commissions and similar regulatory authorities in
                   Canada.

              The officials:

              (a)  described to us the basis for determination of the pro forma
                   adjustments, and

              (b)  stated that the pro forma consolidated statement of earnings
                   complies as to form in all material respects with the various
                   securities commissions and similar regulator authorities in
                   Canada.

         3.   Read the notes to the pro forma consolidated statement of
              earnings, and found them to be consistent with the basis described
              to us for determination of the pro forma adjustments.

         4.   Recalculated the application of the pro forma adjustments to the
              aggregate of the amounts in the columns captioned "Vermilion
              Energy Trust", "Clear Energy Inc. Adjustments" and "Pro Forma
              Adjustments" for the nine months ended September 30, 2003, and
              found the amounts in the column captioned "Pro Forma Vermilion
              Energy Trust" to be arithmetically correct.

A pro forma financial statement is based on management assumptions and
adjustments which are inherently subjective. The foregoing procedures are
substantially less than either an audit or a review, the objective of which is
the expression of assurance with respect to management's assumptions, the pro
forma adjustments, and the application of the adjustments to the historical
financial information. Accordingly, we express no such assurance. The foregoing
procedures would not necessarily reveal matters of significance to the pro forma
consolidated statement of earnings, and we therefore make no representation
about the sufficiency of the procedures for the purposes of a reader of such
statements.


Calgary, Alberta                                  (Signed) Deloitte & Touche LLP
November 28, 2003                                 Chartered Accountants


                                      A-1
<PAGE>

<TABLE>
<CAPTION>
VERMILION ENERGY TRUST
Pro Forma Consolidated Statement of Earnings For the Nine Months ended September
30, 2003 (000's, except unit and per unit amounts, unaudited)
- ----------------------------------------------------------------------------------------------------------------


                                                                                                     PRO FORMA
                                                            CLEAR                                    VERMILION
                                            VERMILION    ENERGY INC.           PRO FORMA              ENERGY
                                             ENERGY      ADJUSTMENTS          ADJUSTMENTS              TRUST
                                              TRUST       (NOTE 2)                                   (NOTE 3)
                                           ------------ -------------- ----- -------------- ----- --------------
<S>                                          <C>           <C>         <C>        <C>       <C>     <C>
Revenue:
   Petroleum and natural gas revenue         $242,106      $(1,424)    2(a)                         $240,682
   Royalties (net)                             59,381         (464)    2(a)                           58,917
- ------------------------------------------ ------------                                           --------------
                                              182,725                                                181,765
- ------------------------------------------ ------------                                           --------------
Expenses:
   Production                                  39,313          (84)    2(a)                           39,229
   Interest                                     6,848           --                                     6,848
   General and administration                   8,650           --                                     8,650
   Reorganization costs                        25,628           --                                    25,628
   Foreign exchange loss                        2,269           --                                     2,269
   Depletion and depreciation                  72,285                              (347)    2(b)      71,938
- ------------------------------------------ ------------                                           --------------
                                              154,993                                                154,562
- ------------------------------------------ ------------                                           --------------
Earnings before income taxes and
   other item                                  27,732                                                 27,203

Income taxes:
   Future                                     (21,990)                             (212)    2(d)     (22,202)
   Current                                      3,960           --                                     3,960
   Capital                                        557           --                                       557
- ------------------------------------------ ------------                                           --------------
                                              (17,473)                                               (17,685)
Other item:
   Non-controlling interest                        (1)          --                   (2)    3(a)          (3)
- ------------------------------------------ ------------                                           --------------

- ------------------------------------------ ------------                                           --------------
Net earnings for the period                  $ 45,206                                               $ 44,891
========================================== ============                                           ==============


   Weighted average number of Total
     Trust Units  2(c)                                                                            57,989,679
- ------------------------------------------ ------------                                           --------------

   Net earnings per Trust Unit  2(c)                                                                   $0.77
================================================================================================================
</TABLE>


                                      A-2
<PAGE>

NOTES TO THE PRO FORMA CONSOLIDATED  STATEMENT OF EARNINGS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003

(UNAUDITED)


1.       BASIS OF PRESENTATION

The accompanying unaudited pro forma consolidated statement of earnings for the
nine months ended September 30, 2003 has been prepared for inclusion in the
short form prospectus of Vermilion Energy Trust ("the Trust") dated November 28,
2003. The pro forma consolidated statement of earnings for the period ended
September 30, 2003 gives effect to the following transactions as if they
occurred on January 1, 2003:

         a)   the disposition on January 22, 2003 of certain oil and gas
              properties to Clear Energy Inc. (`Clear"), a public corporation
              concentrating on the exploration and development of oil and
              natural gas reserves; and

         b)   the increase of the Trust's holding in Aventura Energy Inc.
              ("Aventura") to approximately 72% from approximately 47% on
              January 22, 2003.

The pro forma consolidated statement of earnings has been prepared by management
in accordance with Canadian generally accepted accounting principles. The pro
forma consolidated statement of earnings gives effect to the assumed
transactions and assumptions described in Note 2 and Note 3 as if they had
occurred at the beginning of the period. The pro forma consolidated statement of
earnings may not be indicative of the results that actually would have occurred
if the events reflected therein had been in effect on the dates indicated or of
the results which may be obtained in the future.

Accounting policies used in the preparation of the pro forma consolidated
statement of earnings are consistent with those used in the audited consolidated
financial statements of Vermilion Resources Ltd. ("Vermilion") for the year
ended December 31, 2002 ("Vermilion Historical Financial Statements"). The pro
forma consolidated statement of earnings has been prepared from information
derived from and should be read in conjunction with the Vermilion Historical
Financial Statements. In the opinion of management, the pro forma consolidated
statement of earnings includes all necessary adjustments for a fair presentation
of the effects of the assumptions and adjustments included in Note 2 and Note 3.

2.       PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

The pro forma consolidated statement of earnings gives effect to the following
assumptions and adjustments:

         a.       Under the Plan of Arrangement effective on January 22, 2003
                  (the "Arrangement"), a portion of the Vermilion existing lands
                  and exploration assets were transferred directly to Clear. The
                  properties held within the consolidated entity of Vermilion
                  were transferred such that Clear will hold a 50% working
                  interest in certain natural gas properties in the Peace River
                  Arch area of Alberta, a 100% working interest in certain other
                  exploration properties as well as various undeveloped
                  landholdings. The petroleum and natural gas revenue, royalties
                  and production expenses related to these properties for the
                  period from January 1, 2003 to January 22, 2003 have been
                  removed from the pro forma consolidated statement of earnings.

         b.       The adjustment of depletion and depreciation for the period
                  from January 1, 2003 to January 22, 2003 to account for the
                  disposition of assets to Clear as if it had occurred on
                  January 1, 2003 has been computed


                                      A-3
<PAGE>

                  using the appropriate unit-of production rate. The costs of
                  significant unevaluated properties are excluded from the
                  depletion and depreciation base.

         c.       The authorized capital of the Trust consists of an unlimited
                  number of Trust Units. Net earnings per unit has been based on
                  the following weighted average number of units of the Trust:

<TABLE>
<CAPTION>
                                                                  FOR THE NINE MONTHS
                                                               ENDED SEPTEMBER 30, 2003
                                                               ------------------------
                  <S>                                                   <C>
                  Weighted Average Number of Trust Units                57,989,679
</TABLE>

         Unitholders' equity, and the number of Trust Units above, includes both
         Trust Units and Exchangeable Shares issued under the Arrangement.

         d.       Future income tax has been adjusted to reflect the other
                  adjustments to earnings using the historical effective tax
                  rate of Vermilion.


3.       PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

As part of the reorganization of Vermilion, separate from the Arrangement,
Vermilion's remaining 35% working interest in the Central Block in Trinidad was
sold to Aventura for shares of Aventura.

The pro forma consolidated statement of earnings gives effect to the following
assumptions and adjustments.

         a.       Effective January 22, 2003, as a result of the sale to
                  Aventura, Vermilion increased its equity holding in Aventura
                  to approximately 72% from approximately 47% held before the
                  sale. This reduces the non-controlling interest to
                  approximately 28%. This represents an indirect acquisition of
                  a further interest in Aventura from the minority shareholders.
                  The adjustment reflects the change in the non-controlling
                  interest share of the net loss of Aventura for the period from
                  January 1, 2003 to January 22, 2003 as if the transaction had
                  occurred at January 1, 2003 rather than January 22, 2003.



                                      A-4
<PAGE>

                            CERTIFICATE OF THE TRUST

Dated:   November 28, 2003

         This short form prospectus, together with the documents incorporated
herein by reference, constitutes full, true and plain disclosure of all material
facts relating to the securities offered by this short form prospectus as
required by the securities laws of all of the provinces of Canada. For the
purpose of the Province of Quebec, this simplified prospectus, as supplemented
by the permanent information record, contains no misrepresentation that is
likely to affect the value or the market price of the securities to be
distributed.



                             VERMILION ENERGY TRUST

                          By: VERMILION RESOURCES LTD.


       (Signed) Lorenzo Donadeo                   (Signed) Curtis W. Hicks
President and Chief Executive Officer         Vice President, Finance and Chief
                                                     Financial Officer


                       On behalf of the Board of Directors


         (Signed)Jeffrey S. Boyce                  (Signed) Joseph F. Killi
                Director                                    Director



                                      C-1
<PAGE>

                         CERTIFICATE OF THE UNDERWRITERS

Dated:   November 28, 2003

         To the best of our knowledge, information and belief, this short form
prospectus, together with the documents incorporated herein by reference,
constitutes full, true and plain disclosure of all material facts relating to
the securities offered by this short form prospectus as required by the
securities laws in all of the provinces of Canada. For the purpose of the
Province of Quebec, to our knowledge, this simplified prospectus, as
supplemented by the permanent information record, contains no misrepresentation
that is likely to affect the value or the market price of the securities to be
distributed.



                             CIBC WORLD MARKETS INC.


                           (Signed) T. Timothy Kitchen

BMO NESBITT BURNS INC.    RBC DOMINION SECURITIES INC.     TD SECURITIES INC.


(Signed) Shane C. Fildes  (Signed) Robi Contrada     (Signed) Gregory B. Saksida


                          NATIONAL BANK FINANCIAL INC.


                            (Signed) David M. Vetters

CANACCORD CAPITAL CORPORATION                     SCOTIA CAPITAL INC.


  (Signed) Karl B. Staddon                      (Signed) Craig M. Langpap


                            FIRSTENERGY CAPITAL CORP.


                            (Signed) Matthew D. Joss




                                      C-2


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>17
<FILENAME>ex99_14form40-f.txt
<DESCRIPTION>EXHIBIT 99.14
<TEXT>
                                                                   EXHIBIT 99.14
                                                                   -------------



                             UNDERWRITING AGREEMENT



November 19, 2003



Vermilion Energy Trust
Vermilion Resources Ltd.
2800, 400 - 4th Avenue SW
Calgary, AB   T2P 0J4

ATTENTION:    MR. LORENZO DONADEO, PRESIDENT AND CHIEF EXECUTIVE OFFICER


Dear Sirs:

RE:      OFFERING OF UNITS OF VERMILION ENERGY TRUST
- --------------------------------------------------------------------------------

CIBC World Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc.,
TD Securities Inc., National Bank Financial Inc., Canaccord Capital Corporation,
Scotia Capital Inc. and FirstEnergy Capital Corp. (the "UNDERWRITERS")
understand that Vermilion Energy Trust (the "TRUST") proposes to issue and sell
5,500,000 Units (as herein defined) (the "FIRM UNITS").

Subject to the terms and conditions hereof, the Underwriters hereby severally,
and not jointly, agree to purchase from the Trust the Firm Units at the Closing
Time (as herein defined) in the respective percentages set forth in section 18,
and the Trust hereby agrees to issue and sell to the Underwriters at the Closing
Time all, but not less than all, of the Firm Units at the purchase price of
$14.10 per Unit.

The Trust hereby grants to the Underwriters an option (the "UNDERWRITERS'
OPTION") to purchase from the Trust, at the Underwriters' election, up to
550,000 additional Units (the "UNDERWRITERS' OPTION UNITS") exercisable at any
time, in whole or in part, until 48 hours prior to the Closing Time. In the
event and to the extent that the Underwriters exercise the Underwriters' Option,
subject to the terms and conditions hereof, the Underwriters hereby severally,
and not jointly, agree to purchase from the Trust the number of Underwriters'
Option Units as to which the Underwriters' Option shall have been exercised in
the respective percentages set forth in section 18, and the Trust hereby agrees
to issue and sell such number of Underwriters' Option Units to the Underwriters
at the purchase price of $14.10 per Unit.

1.       DEFINITIONS

In this agreement:

(a)      "ABCA" means the Business Corporations Act (Alberta), R.S.A. 2000, c. B
         9, as amended, including the regulations promulgated thereunder;

(b)      "AIF" means the initial annual information form of the Trust dated
         April 11, 2003;

(c)      "APPLICABLE SECURITIES LAWS" means all applicable Canadian securities,
         corporate and other laws, rules, regulations, notices and policies in
         the Qualifying Provinces;

<PAGE>
                                       2


(d)      "ARRANGEMENT" means the plan of arrangement under the ABCA completed on
         January 22, 2003 pursuant to which, among other things, former holders
         of common shares of Vermilion received Units or Exchangeable Shares, or
         a combination thereof, and Vermilion became a wholly-owned subsidiary
         of the Trust;

(e)      "ASC" means the Alberta Securities Commission;

(f)      "ASSETS" means the interests in oil and natural gas reserves and
         associated facilities of Vermilion and its subsidiaries as described in
         the Prospectuses;

(g)      "AVENTURA" means Aventura Energy Inc., a corporation incorporated
         pursuant to the ABCA;

(h)      "AVENTURA SHARES" means the common shares of Aventura;

(i)      "BUSINESS DAY" means a day which is not Saturday or Sunday or a legal
         holiday in the City of Calgary, Alberta;

(j)      "CLOSING DATE" means December 10, 2003 or such other date as may be
         agreed to by the Underwriters and the Trust, but in any event, not
         later than December 31, 2003;

(k)      "CLOSING TIME" means 6:15 a.m. (Calgary time) or such other time, on
         the Closing Date, as the Underwriters and the Trust may agree;

(l)      "DOCUMENTS" means, collectively, the documents incorporated by
         reference in the Prospectuses and any Supplementary Material including,
         without limitation:

         (i)      the AIF;

         (ii)     the audited consolidated financial statements of Vermilion as
                  at and for the years ended December 31, 2002 and 2001,
                  together with the notes thereto and the auditors' report
                  thereon included as Schedule A to the AIF;

         (iii)    "Management's Discussion and Analysis" of financial results
                  and financial condition of Vermilion for the year ended
                  December 31, 2002 included on pages 48 to 58 of the AIF;

         (iv)     the comparative unaudited consolidated financial statements of
                  the Trust as at and for the nine month period ended September
                  30, 2003; and

         (v)      "Management's Discussion and Analysis" of financial results
                  and financial condition of the Trust for the nine month period
                  ended September 30, 2003;

(m)      "EXCHANGE" means the Toronto Stock Exchange;

(n)      "EXCHANGEABLE SHARES" means the Series A exchangeable shares in the
         capital of Vermilion;

(o)      "GLJ" means Gilbert Laustsen Jung Associates Ltd., independent oil and
         gas reservoir engineers of Calgary, Alberta;

(p)      "GLJ REPORT" means the report prepared by GLJ dated March 20, 2003
         evaluating, effective January 1, 2003, certain crude oil, natural gas
         liquids and natural gas reserves attributable to Vermilion's
         properties;

<PAGE>
                                       3


(q)      "MATERIAL AGREEMENTS" means, collectively, the Trust Indenture, the
         Voting and Exchange Trust Agreement, the Support Agreement, the
         Vermilion Notes and the Royalty Agreement;

(r)      "MRRS PROCEDURES" means the mutual reliance review system and
         procedures provided for by National Policy 43-201 of the Canadian
         Securities Administrators relating to the Mutual Reliance Review
         System, as amended or replaced;

(s)      "NI 44-101" means National Instrument 44-101 of the Canadian Securities
         Administrators, as amended or replaced;

(t)      "OFFERED UNITS" means, collectively, the Firm Units and the
         Underwriters' Option Units;

(u)      "PARTNERSHIP" means Vermilion Resources, the partners of which are
         Vermilion and its wholly-owned subsidiary, 764031 Alberta Ltd.;

(v)      "PRELIMINARY PROSPECTUS" means the preliminary short form prospectus of
         the Trust to be dated November 21, 2003 and any amendments thereto, in
         respect of the distribution of the Offered Units, in the English and
         French languages, including the documents incorporated by reference
         therein;

(w)      "PROSPECTUS" means the (final) short form prospectus of the Trust and
         any amendments thereto, in respect of the distribution of the Offered
         Units, in the English and French languages, including the documents
         incorporated by reference therein;

(x)      "PROSPECTUSES" means, collectively, the Preliminary Prospectus and the
         Prospectus;

(y)      "PUBLIC RECORD" means all information filed after December 31, 2001 by
         or on behalf of the Trust and its predecessor entities including,
         without limitation, Vermilion, with the Securities Commissions,
         including without limitation, the Documents, the Trust Financial
         Statements, the Vermilion Financial Statements, the Prospectus, any
         Supplementary Material and any other information filed with any
         Securities Commission in compliance, or intended compliance, with any
         Applicable Securities Laws;

(z)      "QUALIFYING PROVINCES" means each of the provinces of British Columbia,
         Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New
         Brunswick, Newfoundland and Labrador and Prince Edward Island;

(aa)     "ROYALTY" means the royalty granted under the Royalty Agreement
         entitling the Trust to approximately 99% of the net cash flow generated
         from the present and future oil and natural gas interests, rights and
         related tangibles of the Partnership after certain costs, expenditures
         and deductions;

(bb)     "ROYALTY AGREEMENT" means the royalty agreement among Vermilion, 764031
         Alberta Ltd., the Partnership and the Trust dated January 22, 2003
         providing for the creation of the Royalty;

(cc)     "SECURITIES COMMISSIONS" means the securities commissions or similar
         regulatory authorities in the Qualifying Provinces;

(dd)     "SELLING DEALER GROUP" means the dealers and brokers other than the
         Underwriters who participate in the offer and sale of the Offered Units
         pursuant to this agreement;

<PAGE>
                                       4


(ee)     "SPECIAL VOTING RIGHT" means the special voting right of the Trust,
         issued and certified under the Trust Indenture for the time being
         outstanding and entitled to the benefits and subject to the limitations
         set forth therein;

(ff)     "SUBSIDIARY" has the meaning assigned thereto in the ABCA and, in
         respect of the Trust or Vermilion includes Aventura, 764031 Alberta
         Ltd., Vermilion REP S.A., Vermilion (Barbados) (2003) Limited, Slimm
         Investment BV, Vermilion Ontario Finance Ltd. and the Partnership;

(gg)     "SUPPLEMENTARY MATERIAL" means, collectively, any amendment to the
         Preliminary Prospectus or Prospectus, any amended or supplemented
         Preliminary Prospectus or Prospectus or any ancillary material,
         information, evidence, return, report, application, statement or
         document which may be filed by or on behalf of the Trust under the
         Applicable Securities Laws;

(hh)     "SUPPORT AGREEMENT" means the support agreement entered into between
         the Trust and Vermilion Acquisition Ltd. (prior to its amalgamation
         with Vermilion) on January 16, 2003;

(ii)     "TAX ACT" means the INCOME TAX ACT (Canada) and the regulations
         thereunder;

(jj)     "TRUSTEE" means Computershare Trust Company of Canada, as trustee of
         the Trust;

(kk)     "TRUST ASSETS" means, collectively, the Royalty, the Vermilion Notes,
         common shares of Vermilion and cash;

(ll)     "TRUST INDENTURE" means the amended and restated trust indenture dated
         January 15, 2003 between the Trustee and Vermilion, pursuant to which
         the Trust is governed;

(mm)     "TRUST'S AUDITORS" means Deloitte & Touche LLP, chartered accountants,
         Calgary, Alberta;

(nn)     "TRUST'S COUNSEL" means Macleod Dixon LLP or such other legal counsel
         as the Trust, with the consent of the Underwriters, may appoint;

(oo)     "TRUST FINANCIAL STATEMENTS" means the unaudited comparative
         consolidated financial statements of the Trust as at and for the nine
         months ended September 30, 2003, together with the notes thereto;

(pp)     "UNDERWRITERS' COUNSEL" means Burnet, Duckworth & Palmer LLP or such
         other legal counsel as the Underwriters, with the consent of the Trust,
         may appoint;

(qq)     "UNITED STATES" means the United States of America, its territories and
         possessions, any state of the United States and the District of
         Columbia;

(rr)     "UNITHOLDERS" means the holders from time to time of Units;

(ss)     "UNITS" means trust units of the Trust, each unit representing an equal
         fractional undivided beneficial interest in the Trust;

(tt)     "VERMILION" means Vermilion Resources Ltd., a corporation amalgamated
         under the ABCA;

(uu)     "VERMILION FINANCIAL STATEMENTS" means the audited consolidated
         financial statements of Vermilion as at and for the year ended December
         31, 2002 together with the notes thereto and the auditors' report;

<PAGE>
                                       5


(vv)     "VERMILION NOTES" means the unsecured, subordinated notes issued by
         Vermilion under the Arrangement;

(ww)     "VOTING AND EXCHANGE AGREEMENT TRUSTEE" means Computershare Trust
         Company of Canada, the initial trustee under the Voting and Exchange
         Trust Agreement; and

(xx)     "VOTING AND EXCHANGE TRUST AGREEMENT" means the voting and exchange
         trust agreement entered into on January 16, 2003 between the Trust,
         Vermilion Acquisition Ltd. (prior to its amalgamation with Vermilion)
         and the Voting and Exchange Agreement Trustee;

and "MISREPRESENTATION", "MATERIAL CHANGE" and "MATERIAL FACT" shall have the
meanings ascribed thereto under the Applicable Securities Laws of the Qualifying
Provinces, "DISTRIBUTION" means "DISTRIBUTION" or "DISTRIBUTION TO THE PUBLIC",
as the case may be, as defined under the Applicable Securities Laws of the
Qualifying Provinces and "distribute" has a corresponding meaning.

2.       UNDERWRITING FEE

In consideration for their services in underwriting the distribution of and
purchasing the Offered Units, the Trust agrees to pay the Underwriters at the
Closing Time a fee of $0.705 per Offered Unit for each Offered Unit purchased
(being an aggregate amount of $3,877,500 in respect of the Firm Units and an
aggregate amount of $387,750 in respect of the Underwriters' Option Units, if
the Underwriters' Option is exercised in full).

The foregoing fees (the "UNDERWRITING FEE") may, at the sole option of the
Underwriters, be deducted from the aggregate gross proceeds of the sale of the
Offered Units and withheld for the account of the Underwriters. For greater
certainty, the services provided by the Underwriters in connection herewith will
not be subject to the Goods and Services Tax provided for in the EXCISE TAX ACT
(Canada) and taxable supplies provided will be incidental to the exempt
financial services provided. However, in the event that Canada Customs and
Revenue Agency determines that Goods and Services Tax provided for in the EXCISE
TAX ACT (Canada) is exigible on the Underwriting Fee, the Trust agrees to pay
the amount of Goods and Services Tax forthwith upon the request of the
Underwriters. The Trust also agrees to pay the Underwriters' expenses as set
forth in section 10.

3.       QUALIFICATION FOR SALE

(a)      The Trust represents and warrants to the Underwriters that it is
         eligible to use the prompt offering qualification system described in
         NI 44-101 and the simplified prospectus rules of the Securities Act
         (Quebec) for the distribution of the Offered Units.

(b)      The Trust shall:

         (i)      not later than November 21, 2003, have prepared and filed the
                  Preliminary Prospectus (in the English and French languages)
                  and other documents required under the Applicable Securities
                  Laws with the Securities Commissions and designated the ASC as
                  the principal regulator; and

         (ii)     have obtained not later than November 24, 2003 a preliminary
                  MRRS decision document from the ASC dated not later than
                  November 21, 2003, evidencing that a receipt has been issued
                  for the Preliminary Prospectus in each Qualifying Province;

<PAGE>
                                       6


         (iii)    forthwith after any comments with respect to the Preliminary
                  Prospectus have been received from the Securities Commissions,
                  but not later than December 3, 2003 (or such later date as may
                  be agreed to in writing by the Trust, Vermilion and the
                  Underwriters), have:

                  (A)      prepared and filed the Prospectus (in the English and
                           French languages) and other documents required under
                           the Applicable Securities Laws with the Securities
                           Commissions; and

                  (B)      obtained a final MRRS decision document from the ASC,
                           evidencing that a receipt has been issued for the
                           Prospectus in each Qualifying Province, or otherwise
                           obtained a receipt for the Prospectus from each of
                           the Securities Commissions;

                           and otherwise fulfilled all legal requirements to
                           enable the Offered Units to be offered and sold to
                           the public in each of the Qualifying Provinces
                           through the Underwriters or any other investment
                           dealer or broker registered in the applicable
                           Qualifying Province; and

         (iv)     until the completion of the distribution of the Offered Units,
                  promptly take all additional steps and proceedings that from
                  time to time may be required under the Applicable Securities
                  Laws in each Qualifying Province to continue to qualify the
                  Offered Units for distribution or, in the event that the
                  Offered Units have, for any reason, ceased to so qualify, to
                  again qualify the Offered Units for distribution.

(c)      Prior to the filing of the Prospectuses and, during the period of
         distribution of the Offered Units, prior to the filing with any
         Securities Commissions of any Supplementary Material, the Trust shall
         have allowed the Underwriters and the Underwriters' counsel to
         participate fully in the preparation of, and to approve the form of,
         such documents and to have reviewed any documents incorporated by
         reference therein.

(d)      During the period from the date hereof until completion of the
         distribution of the Offered Units, the Trust shall allow the
         Underwriters to conduct all due diligence which they may reasonably
         require in order to fulfil their obligations as underwriters and in
         order to enable the Underwriters responsibly to execute the
         certificates required to be executed by them in the Prospectuses or in
         any Supplementary Material.

(e)      The Trust shall take or cause to be taken all such other steps and
         proceedings, including fulfilling all legal, regulatory and other
         requirements, as required under Applicable Securities Laws to qualify
         the Offered Units for distribution to the public in the Qualifying
         Provinces.

4.       DELIVERY OF PROSPECTUS AND RELATED DOCUMENTS

The Trust shall deliver or cause to be delivered without charge to the
Underwriters and the Underwriters' counsel the documents set out below at the
respective times indicated:

(a)      prior to or contemporaneously, as nearly as practicable, with the
         filing with the Securities Commissions of each of the Preliminary
         Prospectus and the Prospectus:

<PAGE>
                                       7


         (i)      copies of the Preliminary Prospectus and the Prospectus, each
                  in the English and French languages, signed as required by the
                  Applicable Securities Laws of the Qualifying Provinces; and

         (ii)     copies of any documents incorporated by reference therein
                  which have not previously been delivered to the Underwriters;

(b)      as soon as they are available, copies of any Supplementary Material, in
         the English and French languages, as required, signed as required by
         the Applicable Securities Laws and including, in each case, copies of
         any documents incorporated by reference therein which have not been
         previously delivered to the Underwriters;

(c)      prior to the filing of the Prospectus with the Securities Commissions,
         a "comfort letter" from each of the Trust's and Vermilion's auditors,
         dated the date of the Prospectus, addressed to the Underwriters and
         reasonably satisfactory in form and substance to the Underwriters and
         the Underwriters' counsel, to the effect that they have carried out
         certain procedures performed for the purposes of comparing certain
         specified financial information and percentages appearing in the
         Prospectus and the documents incorporated therein by reference with
         indicated amounts in the financial statements or accounting records of
         each of the Trust and Vermilion and have found such information and
         percentages to be in agreement, which comfort letter shall be based on
         each of the Trust's and Vermilion's auditors review having a cut off
         date of not more than two Business Days prior to the date of the
         Prospectus;

(d)      at the respective times of delivery to the Underwriters of the
         Preliminary Prospectus and the Prospectus, the Trust shall deliver to
         the Underwriters:

         (i)      an opinion of local counsel in Quebec, addressed to the
                  Underwriters and the Underwriters' counsel and dated at the
                  date of the filing of the Preliminary Prospectus and the
                  Prospectus, respectively, in form acceptable to the
                  Underwriters and the Underwriters' counsel, acting reasonably,
                  to the effect that, except for information in the Prospectus
                  translated by each of the Trust's and Vermilion's auditors,
                  the French language version of such document (including
                  information incorporated by reference therein) is in all
                  material respects a complete and proper translation of the
                  English language versions thereof and is not susceptible to
                  any materially different interpretation with respect to any
                  material matter contained therein; and

         (ii)     an opinion from each of the Trust's and Vermilion's auditors,
                  addressed to the Underwriters and the Underwriters' counsel
                  and dated the date of the filing of the Preliminary Prospectus
                  and the Prospectus, respectively, in form acceptable to the
                  Underwriters and the Underwriters' counsel, acting reasonably,
                  to the effect that the information excepted from the opinion
                  of counsel referred to in subsection 4(d)(i) in the French
                  language version of such document (including information
                  incorporated by reference therein) is in all material respects
                  a complete and proper translation of the information contained
                  in the English language versions thereof and is not
                  susceptible to any materially different interpretation with
                  respect to any material matter contained therein.

Opinions and comfort letters similar to the foregoing shall be provided to the
Underwriters with respect to any Supplementary Material and any other relevant
document at the time the same is presented to the Underwriters for their
signature or, if the Underwriters' signature is not required, at the time the
same is

<PAGE>
                                       8


filed. All such letters shall be in form and substance acceptable to the
Underwriters and the Underwriters' counsel, acting reasonably.

The deliveries referred to in subsections 4(a) and (b) shall also constitute the
Trust's consent to the use by the Underwriters and other members of the Selling
Dealer Group of the Documents, the Prospectuses and any Supplementary Material
in connection with the offering and sale of the Offered Units.

5.       COMMERCIAL COPIES

(a)      The Trust shall, as soon as possible but in any event not later than
         noon (local time at the place of delivery) on the Business Day
         following the date of the filing of the Preliminary Prospectus or the
         Prospectus, as the case may be, with the Securities Commissions and no
         later than noon (local time) on the first Business Day after the
         execution of any Supplementary Material in connection with the
         Prospectuses cause to be delivered to the Underwriters, without charge,
         commercial copies of the Preliminary Prospectus, the Prospectus or such
         Supplementary Material (in both English and French languages as
         required by applicable law) in such numbers and in such cities as the
         Underwriters may reasonably request by oral or written instructions to
         the Trust or the printer thereof given no later than the time when the
         Trust authorizes the printing of the commercial copies of such
         documents.

(b)      The Trust shall cause to be provided to the Underwriters such number of
         copies of any documents incorporated by reference in the Preliminary
         Prospectus, the Prospectus or any Supplementary Materials as the
         Underwriters may reasonably request.

6.       MATERIAL CHANGE

(a)      During the period of distribution of the Offered Units, the Trust and
         Vermilion will promptly inform the Underwriters of the full particulars
         of:

         (i)      any material change (actual, anticipated or threatened) in or
                  affecting the business, operations, capital, properties,
                  assets, liabilities (absolute, accrued, contingent or
                  otherwise), condition (financial or otherwise) or results of
                  operations of the Trust or Vermilion, or their respective
                  subsidiaries (taken as a whole);

         (ii)     any change in any material fact contained or referred to in
                  the Preliminary Prospectus, the Prospectus or any
                  Supplementary Material; and

         (iii)    the occurrence of a material fact or event, which, in any such
                  case, is, or may be, of such a nature as to:

                  (A)      render the Preliminary Prospectus, the Prospectus or
                           any Supplementary Material untrue, false or
                           misleading in any material respect;

                  (B)      result in a misrepresentation in the Preliminary
                           Prospectus, the Prospectus or any Supplementary
                           Material; or

                  (C)      result in the Preliminary Prospectus, the Prospectus
                           or any Supplementary Material not complying in any
                           material respect with the Applicable Securities Laws,

<PAGE>
                                       9


         provided that if the Trust or Vermilion are uncertain as to whether a
         material change, change, occurrence or event of the nature referred to
         in this paragraph has occurred, the Trust and Vermilion shall promptly
         inform the Underwriters of the full particulars of the occurrence
         giving rise to the uncertainty and shall consult with the Underwriters
         as to whether the occurrence is of such nature.

(b)      During the period of distribution of the Offered Units, the Trust and
         Vermilion shall promptly inform the Underwriters of the full
         particulars of:

         (i)      any request of any Securities Commission for any amendment to
                  the Preliminary Prospectus, the Prospectus or any other part
                  of the Public Record or for any additional information;

         (ii)     the issuance by any Securities Commission or similar
                  regulatory authority, the Exchange or any other competent
                  authority of any order to cease or suspend trading of any
                  securities of the Trust or Vermilion or of the institution or
                  threat of institution of any proceedings for that purpose; and

         (iii)    the receipt by the Trust or Vermilion of any communication
                  from any Securities Commission or similar regulatory
                  authority, the Exchange or any other competent authority
                  relating to the Preliminary Prospectus, the Prospectus, any
                  other part of the Public Record or the distribution of the
                  Offered Units.

(c)      The Trust and Vermilion will promptly comply to the reasonable
         satisfaction of the Underwriters and the Underwriters' counsel with
         Applicable Securities Laws with respect to any material change, change,
         occurrence or event of the nature referred to in subsections 6(a) or
         (b) above and the Trust and Vermilion will prepare and file promptly at
         the Underwriters' request any amendment to the Prospectus or
         Supplementary Material as may be required under Applicable Securities
         Laws; provided that the Trust and Vermilion shall have allowed the
         Underwriters and the Underwriters' counsel to participate fully in the
         preparation of any Supplementary Material, to have reviewed any other
         documents incorporated by reference therein and conduct all due
         diligence investigations which the Underwriters may reasonably require
         in order to fulfill their obligations as underwriters and in order to
         enable the Underwriters responsibly to execute the certificate required
         to be executed by them in, or in connection with, any Supplementary
         Material, such approval not to be unreasonably withheld and to be
         provided in a timely manner. The Trust shall further promptly deliver
         to each of the Underwriters and the Underwriters' counsel a copy of
         each Supplementary Material in the English and French languages as
         filed with the Securities Commissions, and of opinions and letters with
         respect to each such Supplementary Material substantially similar to
         those referred to in section 4 above.

(d)      During the period of distribution of the Offered Units, the Trust will
         promptly provide to the Underwriters, for review by the Underwriters
         and the Underwriters' counsel, prior to filing or issuance:

         (i)      any financial statement of the Trust or Vermilion;

         (ii)     any proposed document, including without limitation any
                  amendment to the AIF, new annual information form, material
                  change report, interim report, or information circular, which
                  may be incorporated, or deemed to be incorporated, by
                  reference in the Prospectus; and

<PAGE>
                                       10


         (iii)    any press release of the Trust,

         and provide to the Underwriters, for review by the Underwriters and the
         Underwriters' counsel any draft or final report with respect to the
         crude oil, natural gas liquids and natural gas reserves, or value,
         attributable to the Assets prepared by GLJ or any other independent
         engineer as soon as practicable following receipt thereof by the Trust
         or Vermilion.

7.       REPRESENTATIONS AND WARRANTIES OF THE TRUST AND VERMILION

(a)      Each delivery of the Prospectus pursuant to section 4 above shall
         constitute a joint and several representation and warranty to the
         Underwriters by each of the Trust and Vermilion (and each of the Trust
         and Vermilion hereby acknowledges that each of the Underwriters is
         relying on such representations and warranties in entering into this
         agreement) that:

         (i)      all of the information and statements (other than any
                  information or statement relating solely to the Underwriters
                  and furnished to the Trust by the Underwriters expressly for
                  inclusion in the Preliminary Prospectus, Prospectus or any
                  Supplementary Material) contained in the Preliminary
                  Prospectus, the Prospectus or any Supplementary Material, as
                  applicable, including, without limitation, the documents
                  incorporated by reference, as the case may be:

                  (A)      are at the respective dates of such documents, true
                           and correct in all material respects;

                  (B)      contain no misrepresentation; and

                  (C)      constitute full, true and plain disclosure of all
                           material facts relating to the Trust, Vermilion and
                           the Offered Units;

         (ii)     the Preliminary Prospectus, the Prospectus, or any
                  Supplementary Material, as applicable, including, without
                  limitation, the documents incorporated by reference, as the
                  case may be, complies in all material respects with the
                  Applicable Securities Laws, including without limitation NI
                  44-101 and the simplified prospectus rules of the SECURITIES
                  ACT (Quebec); and

         (iii)    except as is disclosed in the Public Record, there has been no
                  intervening material change (actual, proposed or prospective,
                  whether financial or otherwise), from the date of the
                  Preliminary Prospectus, the Prospectus and any Supplementary
                  Material to the time of delivery thereof, in the business,
                  operations, capital, properties, assets, liabilities
                  (absolute, accrued, contingent or otherwise), condition
                  (financial or otherwise) or results of operations, or
                  ownership of the Trust, Vermilion or their subsidiaries (taken
                  as a whole).

(b)      In addition to the representations and warranties contained in
         subsection (a) hereof, each of the Trust and Vermilion jointly and
         severally represents and warrants to the Underwriters, and acknowledges
         that each of the Underwriters is relying upon such representations and
         warranties in entering into this agreement, that:

         (i)      the Trust has been properly created and organized and is a
                  valid and subsisting trust under the laws of the Province of
                  Alberta and has all requisite trust authority and power to
                  carry on its activities as described in the Prospectuses
                  including, without limitation, to

<PAGE>
                                       11


                  perform its obligations under the Material Agreements to which
                  it is a party and to own and administer its properties and
                  assets including, without limitation, the Trust Assets;

         (ii)     each of Vermilion and its subsidiaries has been duly
                  incorporated, or in the case of the non-corporate subsidiaries
                  formed, and organized and is valid and subsisting in good
                  standing under the laws of its jurisdiction of incorporation
                  or formation, as the case may be, and has all requisite
                  authority and power to carry on its business as described in
                  the Prospectuses and to own, lease and operate its properties
                  and assets as described in the Prospectuses including, without
                  limitation, to perform its obligations under the Material
                  Agreements to which it is a party;

         (iii)    each of Vermilion and its subsidiaries is qualified to carry
                  on business and is validly subsisting under the laws of each
                  jurisdiction in which it carries on its business and the Trust
                  is qualified to carry on its activities including, without
                  limitation, owning the Trust Assets in each jurisdiction where
                  it carries on such activities;

         (iv)     with the exception of Aventura, 764031 Alberta Ltd., Vermilion
                  REP S.A., Vermilion (Barbados) (2003) Limited, Slimm
                  Investment BV, Vermilion Ontario Finance Ltd. and the
                  Partnership, neither the Trust nor Vermilion has any
                  subsidiaries (as defined in the ABCA), and neither the Trust
                  nor Vermilion is "affiliated" with or a "holding corporation"
                  of any body corporate (within the meaning of those terms in
                  the ABCA);

         (v)      the Trust is a "unit trust" and a "mutual fund trust" under
                  the Tax Act and the Trust shall at all times conduct its
                  affairs so as to continue to qualify as a "unit trust" and a
                  "mutual fund trust", including by limiting its activities to
                  investing the property of the Trust in the Trust Assets and
                  other property in which a "mutual fund trust" is permitted by
                  the Tax Act to invest, and will not carry on any other
                  business;

         (vi)     all of the issued and outstanding securities of Vermilion,
                  764031 Alberta Ltd., Vermilion (Barbados) (2003) Limited,
                  Slimm Investment BV, Vermilion Ontario Finance Ltd., and
                  Vermilion REP S.A., and all of the equity and voting interests
                  of the Partnership are fully paid and non-assessable and
                  (other than 5,269,266 Exchangeable Shares of Vermilion)
                  legally and beneficially owned by the Trust in the case of
                  Vermilion, by Vermilion in the case of 764031 Alberta Ltd.,
                  Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
                  Vermilion Ontario Finance Ltd. and Vermilion REP S.A., and by
                  Vermilion and 764031 Alberta Ltd. in the case of the
                  Partnership, free and clear of all mortgages, liens, charges,
                  pledges, security interests, encumbrances, claims or demands
                  whatsoever and (other than the holders of the 5,269,266
                  Exchangeable Shares who are entitled to receive Units on
                  exchange or retraction thereof) no person holds any securities
                  convertible into or exchangeable for issued or unissued shares
                  of Vermilion, 764031 Alberta Ltd., Vermilion REP S.A.,
                  Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
                  Vermilion Ontario Finance Ltd. or the Partnership or has any
                  agreement, warrant, option, right or privilege (whether
                  pre-emptive or contractual) being or capable of becoming an
                  agreement, warrant, option or right for the acquisition of any
                  unissued or issued securities of Vermilion, 764031 Alberta
                  Ltd., Vermilion REP S.A., Vermilion (Barbados) (2003) Limited,
                  Slimm Investment BV, Vermilion Ontario Finance Ltd. or the
                  Partnership;

         (vii)    the Trust has full power and authority to issue the Firm Units
                  and the Underwriters' Option Units and to grant the
                  Underwriters' Option and, at the Closing Date, the Firm Units
                  and the Underwriters' Option Units will be duly and validly
                  authorized, allotted and

<PAGE>
                                       12


                  reserved for issuance and, upon receipt of the purchase price
                  therefor, will be duly and validly issued as fully paid and
                  non-assessable;

         (viii)   neither the Trust nor Vermilion is in default or breach of,
                  and the execution and delivery of, and the performance of and
                  compliance with the terms of this agreement by the Trust and
                  Vermilion and the transactions contemplated hereby does not
                  and will not result in any breach of, or constitute a default
                  under, and does not and will not create a state of facts
                  which, after notice or lapse of time or both, would result in
                  a breach of or constitute a default under, the Trust
                  Indenture, any term or provision of the articles or by-laws of
                  Vermilion or resolutions of the Trust or Vermilion, or any
                  indenture, mortgage, note, contract, agreement (written or
                  oral), instrument, lease or other document including, without
                  limitation, any Material Agreement to which the Trust or
                  Vermilion is a party or by which any of the Trust or Vermilion
                  is bound, or any judgment, decree, order, statute, rule or
                  regulation applicable to the Trust or Vermilion, which default
                  or breach might reasonably be expected to materially adversely
                  affect the business, operations, capital, properties, assets,
                  liabilities (absolute, accrued, contingent or otherwise),
                  condition (financial or otherwise) or results of operations of
                  the Trust, Vermilion and their subsidiaries (taken as a
                  whole);

         (ix)     each of the Trust and Vermilion has full trust or corporate
                  power and authority to enter into this agreement and to
                  perform its obligations set out herein and this agreement has
                  been duly authorized, executed and delivered by the Trust and
                  Vermilion and this agreement is a legal, valid and binding
                  obligation of the Trust and Vermilion enforceable against the
                  Trust and Vermilion in accordance with its terms subject to
                  the general qualifications set forth in the opinion of the
                  Trust's counsel in section 12(a)(viii);

         (x)      there has not been any material change in the capital, assets,
                  liabilities or obligations (absolute, accrued, contingent or
                  otherwise) of the Trust or Vermilion from the position set
                  forth in the Trust Financial Statements except as contemplated
                  by the Prospectuses and there has not been any adverse
                  material change in the business, operations, capital,
                  properties, assets, liabilities (absolute, accrued, contingent
                  or otherwise), condition (financial or otherwise) or results
                  of operations of the Trust, Vermilion and their subsidiaries
                  (taken as a whole) since December 31, 2002 except as disclosed
                  in the Prospectuses; and since that date there have been no
                  material facts, transactions, events or occurrences which
                  could materially adversely affect the business, operations,
                  capital, properties, assets, liabilities (absolute, accrued,
                  contingent or otherwise), condition (financial or otherwise)
                  or results of operations of the Trust, Vermilion and their
                  subsidiaries (taken as a whole) which have not been disclosed
                  in the Prospectuses;

         (xi)     the Trust Financial Statements fairly present, in accordance
                  with generally accepted accounting principles in Canada,
                  consistently applied, the financial position and condition,
                  the results of operations, cash flows and the other
                  information purported to be shown therein of the Trust and
                  Vermilion as at the dates thereof and for the periods then
                  ended and reflect all assets, liabilities and obligations
                  (absolute, accrued, contingent or otherwise) of the Trust and
                  Vermilion as at the dates thereof required to be disclosed by
                  generally accepted accounting principles in Canada, and
                  include all adjustments necessary for a fair presentation;

         (xii)    the Vermilion Financial Statements fairly present, in all
                  material respects, in accordance with generally accepted
                  accounting principles in Canada, consistently applied, the
                  financial position and condition, the results of operations,
                  cash flows and the other

<PAGE>
                                       13


                  information purported to be shown therein of Vermilion as at
                  the dates thereof and for the periods then ended and reflect
                  all assets, liabilities and obligations (absolute, accrued,
                  contingent or otherwise) of Vermilion as at the dates thereof
                  required to be disclosed by generally accepted accounting
                  principles in Canada, and include all adjustments necessary
                  for a fair presentation;

         (xiii)   the pro forma financial statements, including the notes
                  thereto, of the Trust contained in the Prospectuses and
                  incorporated by reference therein have been prepared in
                  accordance with Canadian generally accepted accounting
                  principles, consistently applied, have been prepared and
                  presented in accordance with Applicable Securities Laws, and
                  include all adjustments necessary for a fair presentation; the
                  assumptions contained in such pro forma financial statements
                  are suitably supported and consistent with the financial
                  results of the Trust and Vermilion, and such statements
                  provide a reasonable basis for the compilation of the pro
                  forma financial statements and such pro forma financial
                  statements, accurately reflect such assumptions;

         (xiv)    no authorization, approval or consent of any court or
                  governmental authority or agency is required to be obtained by
                  the Trust or Vermilion in connection with the sale and
                  delivery of the Offered Units hereunder, except such as may be
                  required under the Applicable Securities Laws;

         (xv)     there are no actions, suits, proceedings or inquiries pending
                  or (as far as the Trust or Vermilion are aware) threatened
                  against or affecting the Trust, Vermilion or their
                  subsidiaries at law or in equity or before or by any federal,
                  provincial, municipal or other governmental department,
                  commission, board, bureau, agency or instrumentality which in
                  any way materially adversely affects, or may in any way
                  materially adversely affect, the business, operations,
                  capital, properties, assets, liabilities (absolute, accrued,
                  contingent or otherwise), condition (financial or otherwise)
                  or results of operations of the Trust or Vermilion (taken as a
                  whole) or which affects or may affect the distribution of the
                  Offered Units;

         (xvi)    each of the Trust, Vermilion and their subsidiaries has
                  conducted and is conducting its business in all material
                  respects in compliance with all applicable laws, rules and
                  regulations of each jurisdiction in which it carries on
                  business and holds all material licences, registrations and
                  qualifications in all jurisdictions in which it carries on
                  business necessary to carry on its business as now conducted
                  and as contemplated to be conducted in the Prospectuses,
                  including, without limitation, performing its obligations
                  under the Material Agreements, if any, to which it is a party
                  except where such non-compliance or lack of license,
                  registration or qualification, in aggregate, would not have a
                  material adverse affect on the capital, assets, liabilities
                  (absolute, accrued, contingent or otherwise), business,
                  operations or condition (financial or otherwise) or the
                  results of the operations of the Trust or Vermilion (taken as
                  a whole);

         (xvii)   each of the Material Agreements is properly described as to
                  parties, dates, terms, conditions and amendments thereto, each
                  of such agreements is a legal, valid and binding obligation of
                  the respective parties thereto enforceable against such
                  parties in accordance with its terms subject to the general
                  qualifications set forth in the opinion of counsel in section
                  12(a)(viii) and each of the Trust and Vermilion, as
                  applicable, are in compliance with the terms of such Material
                  Agreements except where such non-compliance, in aggregate,
                  would not have a material adverse affect on the capital,
                  assets, liabilities (absolute accrued, contingent or
                  otherwise), business, operations or condition (financial

<PAGE>
                                       14


                  or otherwise) or the results of the operations of the Trust or
                  Vermilion (taken as a whole) and neither the Trust nor
                  Vermilion is aware of any default or breach of a material
                  nature under any of such Material Agreements by any other
                  party thereto;

         (xviii)  the information and statements set forth in the Public Record
                  to the extent incorporated by reference in the Prospectuses
                  were true, correct, and complete and did not contain any
                  misrepresentation, as of the date of such information or
                  statements;

         (xix)    the authorized capital of the Trust consists of an unlimited
                  number of Units and an unlimited number of Special Voting
                  Rights of which 52,544,594 Units and one Special Voting Right
                  (5,269,266 votes) are issued and outstanding;

         (xx)     no person holds any securities convertible into or
                  exchangeable for Units or Special Voting Rights or has any
                  agreement, warrant, option, right or privilege being or
                  capable of becoming an agreement, warrant, option or right for
                  the acquisition of any unissued Units or Special Voting Rights
                  or other securities of the Trust except for: up to 4,477,600
                  Units issuable pursuant to the Trust's trust unit rights
                  incentive plan; 5,892,831 Units (including adjustments for
                  distributions) issuable on the exchange of 5,269,266
                  outstanding Exchangeable Shares; Units issuable pursuant to
                  the Trust's distribution reinvestment and optional trust unit
                  purchase plan; and up to 2,000,000 Units issuable pursuant to
                  the Trust's employee bonus plan;

         (xxi)    no Securities Commission, stock exchange or similar regulatory
                  authority has issued any order preventing or suspending
                  trading in any securities of the Trust and no proceedings,
                  investigations or inquiries for such purpose are pending or
                  contemplated or (as far as the Trust or Vermilion are aware)
                  threatened;

         (xxii)   Computershare Trust Company of Canada at its principal office
                  in the cities of Calgary and Toronto, is the duly appointed
                  registrar and transfer agent of the Trust with respect to its
                  Units;

         (xxiii)  the minute books of the Trust, Vermilion and their
                  subsidiaries are true and correct and at the Closing Date will
                  contain the minutes of all meetings and all resolutions of the
                  trustee and of the directors, shareholders and Unitholders of
                  the Trust, Vermilion and their subsidiaries;

         (xxiv)   other than as provided for in this agreement, neither the
                  Trust, Vermilion nor any of their subsidiaries has incurred
                  any obligation or liability (absolute, accrued, contingent or
                  otherwise) for brokerage fees, finder's fees, agent's
                  commission or other similar forms of compensation with respect
                  to the transactions contemplated herein;

         (xxv)    the issued and outstanding Units are listed and posted for
                  trading on the Exchange;

         (xxvi)   the Trust is a "reporting issuer" in the provinces of Alberta,
                  British Columbia, Newfoundland and Labrador, Nova Scotia,
                  Ontario, Prince Edward Island, Quebec and Saskatchewan within
                  the meaning of the Applicable Securities Laws in such
                  provinces and has equivalent status in the provinces of
                  Manitoba and New Brunswick and is not in default of any
                  requirement of the Applicable Securities Laws in any material
                  respect;

         (xxvii)  the definitive form of certificates for the Units is in due
                  and proper form under the laws governing the Trust and in
                  compliance with the requirements of the Exchange;

<PAGE>
                                       15


         (xxviii) the Trust and Vermilion have made available to GLJ, prior to
                  the issuance of the GLJ Report, for the purpose of preparing
                  the GLJ Report, all information requested by GLJ, which
                  information does not contain any material misrepresentation.
                  Neither the Trust nor Vermilion has any knowledge of a
                  material adverse change in any production, cost, price (except
                  for changes in commodity prices), reserves or other relevant
                  information provided to GLJ since the date that such
                  information was so provided. Each of the Trust and Vermilion
                  believes that the GLJ Report reasonably presents the quantity
                  and pre tax present worth values of the oil and gas reserves
                  attributable to the crude oil, natural gas liquids and natural
                  gas properties evaluated in such reports as at January 1, 2003
                  based upon information available at the time such reserves
                  information was prepared, and the Trust and Vermilion believe
                  that at the date of such report, such report did not (and as
                  of the date hereof, except as may be attributable to changes
                  in commodity prices and production since the date of such
                  report, does not) overstate the aggregate quantity or pre tax
                  present worth values of such reserves or the estimated monthly
                  production volumes therefrom;

         (xxix)   neither the Trust nor Vermilion is aware of any defects,
                  failures or impairments in the title of Vermilion or any of
                  its subsidiaries to the Assets, whether or not an action,
                  suit, proceeding or inquiry is pending or threatened or
                  whether or not discovered by any third party, which in
                  aggregate could have a material adverse effect on: (A) the
                  quantity and pre tax present worth values of the Assets; (B)
                  the current production volumes of Vermilion on a consolidated
                  basis; or (C) the current cash flow of Vermilion;

         (xxx)    to the knowledge of the Trust and Vermilion, the Trust has
                  good and marketable title to the Trust Assets, free and clear
                  of all liens, charges, encumbrances and security interests of
                  any nature or kind, all as described in the Prospectuses;

         (xxxi)   Vermilion has the necessary power and authority to execute and
                  deliver the Prospectuses on behalf of the Trust and all
                  requisite action has been taken by Vermilion to authorize the
                  execution and delivery by it of the Prospectuses on behalf of
                  the Trust;

         (xxxii)  the attributes and characteristics of the Offered Units
                  conform in all material respects to the attributes and
                  characteristics thereof described in the Prospectuses;

         (xxxiii) with such exceptions as are not material to the Trust and
                  Vermilion (taken as a whole), each of the Trust and Vermilion
                  has duly and on a timely basis filed all tax returns required
                  to be filed by it, has paid all taxes due and payable by it
                  and has paid all assessments and reassessments and all other
                  taxes, governmental charges, penalties, interest and other
                  fines due and payable by it and which were claimed by any
                  governmental authority to be due and owing and adequate
                  provision has been made for taxes payable for any completed
                  fiscal period for which tax returns are not yet required and
                  there are no agreements, waivers, or other arrangements
                  providing for an extension of time with respect to the filing
                  of any tax return or payment of any tax, governmental charge
                  or deficiency by the Trust or Vermilion and to the best of the
                  knowledge, information and belief of the Trust and Vermilion
                  there are no actions, suits, proceedings, investigations or
                  claims threatened or pending against the Trust or Vermilion in
                  respect of taxes, governmental charges or assessments or any
                  matters under discussion with any governmental authority
                  relating to taxes, governmental charges or assessments
                  asserted by any such authority;

<PAGE>
                                       16


         (xxxiv)  Vermilion is the beneficial owner of 32,271,590 Aventura
                  Shares, which represent, to the best of its knowledge,
                  information and belief, 72.2% of the outstanding Aventura
                  Shares, and to the best of its knowledge, information and
                  belief, all of such shares have been duly and validly issued
                  and are fully paid and non-assessable and all such shares are
                  held by Vermilion free and clear of all mortgages, liens,
                  charges, pledges, security interests, encumbrances, claims or
                  demands whatsoever and no person has any agreement, warrant,
                  option, right or privilege (whether pre-emptive or
                  contractual) being or capable of becoming an agreement,
                  warrant, option or right for the acquisition of any of such
                  Aventura Shares;

         and each of the Trust and Vermilion covenants and agrees that:

         (xxxv)   provided the Closing Time occurs on or before December 31,
                  2003, the Trust shall pay on the Firm Units, and, if issued,
                  on the Underwriters' Option Units, and the holders thereof
                  will be entitled to receive on or about January 15, 2004 the
                  distribution payable to Unitholders of record on December 31,
                  2003.

8.       INDEMNITY

(a)      Each of the Trust and Vermilion, jointly and severally, shall indemnify
         and save the Underwriters, and each of the Underwriters' agents,
         directors, officers, shareholders and employees harmless against and
         from all liabilities, claims, demands, losses (other than losses of
         profit in connection with the distribution of the Offered Units), costs
         (including, without limitation, legal fees and disbursements on a full
         indemnity basis), damages and expenses to which the Underwriters, or
         any of the Underwriters' agents, directors, officers, shareholders or
         employees may be subject or which the Underwriters, or any of the
         Underwriters' agents, directors, officers, shareholders or employees
         may suffer or incur, whether under the provisions of any statute or
         otherwise, in any way caused by, or arising directly or indirectly from
         or in consequence of:

         (i)      any information or statement contained in the Preliminary
                  Prospectus, the Prospectus, any Supplementary Material or in
                  any other document or material filed or delivered pursuant
                  hereto (other than any information or statement relating
                  solely to the Underwriters and furnished to the Trust by the
                  Underwriters expressly for inclusion in the Preliminary
                  Prospectus, Prospectus or any Supplementary Material) which is
                  or is alleged to be untrue or any omission or alleged omission
                  to provide any information or state any fact (other than any
                  information or fact relating solely to the Underwriters) the
                  omission of which makes or is alleged to make any such
                  information or statement untrue or misleading in light of the
                  circumstances in which it was made;

         (ii)     any misrepresentation or alleged misrepresentation (except a
                  misrepresentation which is based upon information relating
                  solely to the Underwriters and furnished to the Trust by the
                  Underwriters expressly for inclusion in the Preliminary
                  Prospectus, Prospectus or any Supplementary Material)
                  contained in the Preliminary Prospectus, the Prospectus, any
                  Supplementary Materials or in any other document or any other
                  part of the Public Record filed by or on behalf of the Trust;

         (iii)    any prohibition or restriction of trading in the securities of
                  the Trust or any prohibition or restriction affecting the
                  distribution of the Offered Units imposed by any competent
                  authority if such prohibition or restriction is based on any
                  misrepresentation or alleged misrepresentation of a kind
                  referred to in subsection 8(a)(ii);

<PAGE>
                                       17


         (iv)     any order made or any inquiry, investigation (whether formal
                  or informal) or other proceeding commenced or threatened by
                  any one or more competent authorities (not based upon the
                  activities or the alleged activities of the Underwriters or
                  their banking or Selling Dealer Group members, if any)
                  prohibiting, restricting, relating to or materially affecting
                  the trading or distribution of the Offered Units; or

         (v)      any breach of, default under or non-compliance by the Trust or
                  Vermilion with any requirements of the Applicable Securities
                  Laws, the by-laws, rules or regulations of the Exchange or any
                  representation, warranty, term or condition of this agreement
                  or in any certificate or other document delivered by or on
                  behalf of the Trust or Vermilion hereunder or pursuant hereto;

         provided, however, no party who has engaged in any fraud, wilful
         misconduct, fraudulent misrepresentation or negligence shall be
         entitled, to the extent that the liabilities, claims, losses, costs,
         damages or expenses were caused by such activity, to claim
         indemnification from any person who has not engaged in such fraud,
         wilful misconduct, fraudulent misrepresentation or negligence (provided
         that, for greater certainty, the foregoing shall not disentitle an
         Underwriter from claiming indemnification hereunder to the extent that
         the negligence, if any, relates to the Underwriter's failure to conduct
         adequate "due diligence").

(b)      If any claim contemplated by subsection 8(a) shall be asserted against
         any of the persons or corporations in respect of which indemnification
         is or might reasonably be considered to be provided for in such
         paragraphs, such person or corporation (the "INDEMNIFIED PERSON") shall
         notify the Trust and Vermilion (collectively the "INDEMNIFYING
         PARTIES") (provided that failure to so notify the Indemnifying Parties
         of the nature of such claim in a timely fashion shall relieve the
         Indemnifying Parties of liability hereunder only if and to the extent
         that such failure materially prejudices the Indemnifying Parties'
         ability to defend such claim) as soon as possible of the nature of such
         claim and the Indemnifying Parties shall be entitled (but not required)
         to assume the defence of any suit brought to enforce such claim,
         provided however, that the defence shall be through legal counsel
         selected by the Indemnifying Parties and acceptable to the Indemnified
         Person acting reasonably and that no settlement may be made by the
         Indemnifying Parties or the Indemnified Person without the prior
         written consent of the other, such consent not to be unreasonably
         withheld. The Indemnified Person shall have the right to retain its own
         counsel in any proceeding relating to a claim contemplated by
         subsection 8(a) if:

         (i)      the Indemnified Person has been advised by counsel that there
                  may be a reasonable legal defense available to the Indemnified
                  Person which is different from or additional to a defense
                  available to an Indemnifying Party and that representation of
                  the Indemnified Person and any one or more of the Indemnifying
                  Parties by the same counsel would be inappropriate due to the
                  actual or potential differing interests between them (in which
                  case the Indemnifying Parties shall not have the right to
                  assume the defense of such proceedings on the Indemnified
                  Person's behalf);

         (ii)     the Indemnifying Parties shall not have taken the defense of
                  such proceedings and employed counsel within ten (10) days
                  after notice has been given to the Indemnifying Parties of
                  commencement of such proceedings; or

         (iii)    the employment of such counsel has been authorized by the
                  Indemnifying Parties in connection with the defense of such
                  proceedings;

<PAGE>
                                       18


         and, in any such event, the reasonable fees and expenses of such
         Indemnified Person's counsel (on a solicitor and his client basis)
         shall be paid by the Indemnifying Parties, provided that the
         Indemnifying Parties shall not, in connection with any one such action
         or separate but substantially similar or related actions in the same
         jurisdiction arising out of the same general allegations or
         circumstances, be liable for the fees and expenses of more than one
         separate law firm (in addition to any local counsel) for all such
         Indemnified Persons.

(c)      Each of the Indemnifying Parties hereby waives its rights to recover
         contribution from the Underwriters with respect to any liability of the
         Indemnifying Party by reason of or arising out of any misrepresentation
         in the Preliminary Prospectus, the Prospectus, any Supplementary
         Material or any other part of the Public Record provided, however, that
         such waiver shall not apply in respect of liability caused or incurred
         by reason of any misrepresentation which is based upon information
         relating solely to the Underwriters contained in such document and
         furnished to the Trust by the Underwriters expressly for inclusion in
         the Preliminary Prospectus, the Prospectus or any Supplementary
         Material.

(d)      If any legal proceedings shall be instituted against an Indemnifying
         Party in respect of the Preliminary Prospectus, the Prospectus, any
         Supplementary Material or any other part of the Public Record or the
         Offered Units or if any regulatory authority or stock exchange shall
         carry out an investigation of an Indemnifying Party in respect of the
         Preliminary Prospectus, the Prospectus, any Supplementary Material or
         any other part of the Public Record or the Offered Units and, in either
         case, any Indemnified Person is required to testify, or respond to
         procedures designed to discover information, in connection with or by
         reason of the services performed by the Underwriters hereunder, the
         Indemnified Persons may employ their own legal counsel and the
         Indemnifying Parties shall pay and reimburse the Indemnified Persons
         for the reasonable fees, charges and disbursements (on a full indemnity
         basis) of such legal counsel, the other expenses reasonably incurred by
         the Indemnified Persons in connection with such proceedings or
         investigation and a fee at the normal per diem rate for any director,
         officer or employee of the Underwriters involved in the preparation for
         or attendance at such proceedings or investigation.

(e)      The rights and remedies of the Indemnified Persons set forth in
         sections 8 and 9 hereof are to the fullest extent possible in law
         cumulative and not alternative and the election by any Underwriter or
         other Indemnified Person to exercise any such right or remedy shall not
         be, and shall not be deemed to be, a waiver of any other rights and
         remedies.

(f)      The Indemnifying Parties hereby acknowledge that the Underwriters are
         acting as agents for the Underwriters' respective agents, directors,
         officers, shareholders and employees under this section 8 and under
         section 9 with respect to all such agents, directors, officers,
         shareholders and employees.

(g)      The Indemnifying Parties waive any right they may have of first
         requiring an Indemnified Person to proceed against or enforce any other
         right, power, remedy or security or claim or to claim payment from any
         other person before claiming under this indemnity. It is not necessary
         for an Indemnified Person to incur expense or make payment before
         enforcing such indemnity.

(h)      The rights of indemnity contained in this section 8 shall not apply if
         the Indemnifying Parties have complied with the provisions of sections
         3, 4 and 5 and the person asserting any claim contemplated by this
         section 8 was not provided with a copy of the Prospectus or any
         amendment to the Prospectus or other document which corrects any
         misrepresentation or alleged misrepresentation which is the basis of
         such claim and which was required, under Applicable Securities Laws, to
         be delivered to such person by the Underwriters.

<PAGE>
                                       19


(i)      If the Indemnifying Parties have assumed the defense of any suit
         brought to enforce a claim hereunder, the Indemnified Person shall
         provide the Indemnifying Parties copies of all documents and
         information in its possession pertaining to the claim, take all
         reasonable actions necessary to preserve its rights to object to or
         defend against the claim, consult and reasonably cooperate with the
         Indemnifying Parties in determining whether the claim and any legal
         proceeding resulting therefrom should be resisted, compromised or
         settled and reasonably cooperate and assist in any negotiations to
         compromise or settle, or in any defense of, a claim undertaken by the
         Indemnifying Parties.

9.       CONTRIBUTION

In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this agreement is due in accordance
with its terms but is, for any reason, held by a court to be unavailable from
one or more of the Indemnifying Parties on grounds of policy or otherwise, the
Indemnifying Parties and the party or parties seeking indemnification shall
contribute to the aggregate liabilities, claims, demands, losses (other than
losses of profit in connection with the distribution of the Offered Units),
costs (including, without limitation, legal fees and disbursements on a full
indemnity basis), damages and expenses to which they may be subject or which
they may suffer or incur:

(a)      in such proportion as is appropriate to reflect the relative benefit
         received by the Indemnifying Parties on the one hand, and by the
         Underwriters on the other hand, from the offering of the Offered Units;
         or

(b)      if the allocation provided by subsection 9(a) above is not permitted by
         applicable law, in such proportion as is appropriate to reflect not
         only the relative benefits referred to in subsection 9(a) above but
         also to reflect the relative fault of the Underwriters on the one hand,
         and the Indemnifying Parties, on the other hand, in connection with the
         statements, commissions or omissions or other matters which resulted in
         such liabilities, claims, demands, losses, costs, damages or expenses,
         as well as any other relevant equitable considerations.

The relative benefits received by the Indemnifying Parties, on the one hand, and
the Underwriters, on the other hand, shall be deemed to be in the same
proportion that the total proceeds of the offering received by the Indemnifying
Parties (net of fees but before deducting expenses) bear to the fees received by
the Underwriters. In the case of liability arising out of the Preliminary
Prospectus, the Prospectus, any Supplementary Material or any other part of the
Public Record, the relative fault of the Indemnifying Parties, on the one hand,
and of the Underwriters, on the other hand, shall be determined by reference,
among other things, to whether the misrepresentation or alleged
misrepresentation, order, inquiry, investigation or other matter or thing
referred to in section 8 relates to information supplied or which ought to have
been supplied by, or steps or actions taken or done on behalf of or which ought
to have been taken or done on behalf of, one or more of the Indemnifying Parties
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such misrepresentation or
alleged misrepresentation, order, inquiry, investigation or other matter or
thing referred to in section 8.

The amount paid or payable by an Indemnified Person as a result of liabilities,
claims, demands, losses (other than losses of profit in connection with the
distribution of the Offered Units), costs, damages and expenses (or claims,
actions, suits or proceedings in respect thereof) referred to above shall,
without limitation, include any legal or other expenses reasonably incurred by
the Indemnified Person in connection with investigating or defending such
liabilities, claims, demands, losses, costs, damages and expenses (or claims,
actions, suits or proceedings in respect thereof) whether or not resulting in
any action, suit, proceeding or claim.

<PAGE>
                                       20


Each of the Indemnifying Parties and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this agreement were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the immediately
preceding paragraphs. The rights to contribution provided in this section 9
shall be in addition to, and without prejudice to, any other right to
contribution which the Underwriters or other Indemnified Persons may have.

Any liability of the Underwriters under this section 9 shall be limited to the
amount actually received by the Underwriters under section 2.

10.      EXPENSES

Whether or not the transactions contemplated herein shall be completed, all of
the Trust's, Vermilion's and all third party costs and expenses (including
applicable goods and services tax) of or incidental to the transactions
contemplated hereby including, without limitation, those relating to the
distribution of the Offered Units shall be borne by the Trust including, without
limitation, all costs and expenses of or incidental to the preparation, filing,
reproduction (including the commercial copies thereof) and translation of the
Preliminary Prospectus, the Prospectus, any Supplementary Material and the
"greensheet" and the delivery thereof to the Underwriters, the fees and expenses
of the Trust's counsel, the fees and expenses of agent counsel retained by the
Trust or the Trust's counsel, the fees and expenses of the Trust's transfer
agent, auditors, engineers and other outside consultants, the reasonable fees
and disbursements of the Underwriters' counsel, the out-of-pocket expenses of
the Underwriters, all stock exchange listing fees, the cost of preparing record
books for all of the parties to this agreement and their respective counsel and
all other third party and Trust and Vermilion costs and expenses relating to
this transaction.

11.      TERMINATION

(a)      The Underwriters, or any of them, may, without liability, terminate
         their obligations hereunder, by written notice to the Trust, in the
         event that after the date hereof and at or prior to the Closing Time:

         (i)      any order to cease or suspend trading in any securities of the
                  Trust or Vermilion or prohibiting or restricting the
                  distribution of any of the Offered Units, is made, or
                  proceedings are announced, commenced or threatened for the
                  making of any such order, by any securities commission or
                  similar regulatory authority, the Exchange or any other
                  competent authority, and has not been rescinded, revoked or
                  withdrawn;

         (ii)     there should occur or commence, or be announced or threatened,
                  any inquiry, action, suit, investigation or other proceeding
                  (whether formal or informal); or any order is issued by any
                  governmental authority or exchange; or any law or regulation
                  is promulgated, changed or announced; or any change or
                  proposed change in the income tax laws of Canada or the
                  interpretation or administration thereof occurs or is
                  announced or threatened; which in the opinion of the
                  Underwriters or any one of them, acting reasonably, is
                  expected to adversely affect the trading in or the
                  distribution of the Offered Units or any other securities of
                  the Trust or would be expected to have a material adverse
                  effect on the market price or value of the Units or other
                  securities of the Trust;

         (iii)    there shall have occurred any adverse change, as determined by
                  the Underwriters or any one of them in their sole discretion,
                  acting reasonably, in the senior management of Vermilion, or
                  in the business, operations, capital or condition (financial
                  or otherwise),

<PAGE>
                                       21


                  business prospects, properties, assets, liabilities or
                  obligations (absolute, accrued, contingent or otherwise) of
                  the Trust or Vermilion which in the Underwriters' opinion,
                  could reasonably be expected to have a significant adverse
                  effect on the market price or value of the Offered Units or
                  the investment quality or marketability of the Offered Units;

         (iv)     there should develop, occur or come into effect or existence
                  any event, action, state, condition or major financial
                  occurrence of national or international consequence, any law
                  or regulation, or any other occurrence of any nature
                  whatsoever, which, in the sole opinion of the Underwriters or
                  any one of them, acting reasonably, seriously adversely
                  affects, or involves, or will seriously adversely affect, or
                  involve, the financial markets or the business, operations or
                  affairs of the Trust or Vermilion (taken as a whole);

         (v)      the Underwriters shall become aware of any adverse material
                  change with respect to the Trust, Vermilion or any of their
                  subsidiaries (taken as a whole) which had not been publicly
                  disclosed or disclosed in writing to the Underwriters at or
                  prior to the date hereof which, in the sole opinion of the
                  Underwriters or any one of them, could reasonably be expected
                  to have a significant adverse effect on the market price or
                  value of the Offered Units or the investment quality or
                  marketability of the Offered Units; or

         (vi)     the Trust or Vermilion shall be in breach or default under or
                  non compliance with any representation, warranty, term or
                  condition of this agreement, in any material respect.

(b)      The Underwriters, or any of them, may exercise any or all of the rights
         provided for in subsection 11(a) or section 12 or 16 notwithstanding
         any material change, change, event or state of facts and (except where
         the Underwriter purporting to exercise any of such rights is in breach
         of its obligations under this agreement) notwithstanding any act or
         thing taken or done by the Underwriters or any inaction by the
         Underwriters, whether before or after the occurrence of any material
         change, change, event or state of facts including, without limitation,
         any act of the Underwriters related to the offering or continued
         offering of the Offered Units for sale and any act taken by the
         Underwriters in connection with any amendment to the Prospectus
         (including the execution of any amendment or any other Supplementary
         Material) and the Underwriters shall only be considered to have waived
         or be estopped from exercising or relying upon any of their rights
         under or pursuant to subsection 11(a) or section 12 or 16 if such
         waiver or estoppel is in writing and specifically waives or estops such
         exercise or reliance.

(c)      Any termination pursuant to the terms of this agreement shall be
         effected by notice in writing delivered to the Trust, provided that no
         termination shall discharge or otherwise affect any obligation of the
         Trust or Vermilion under section 8, 9, 10 or 16. The rights of the
         Underwriters to terminate their obligations hereunder are in addition
         to, and without prejudice to, any other remedies they may have.

(d)      If an Underwriter elects to terminate its obligation to purchase the
         Offered Units as aforesaid, whether the reason for such termination is
         within or beyond the control of the Trust or Vermilion, the liability
         of the Trust or Vermilion hereunder shall be limited to the indemnity
         referred to in section 8, the contribution rights referred to in
         section 9 and the payment of expenses referred to in section 10
         provided, however, an Underwriter shall not be entitled to the payment
         of expenses referred to in section 10 if an Underwriter is in breach of
         or default under or non-compliance with any representation, warranty,
         term or condition of this agreement, in any material respect.

<PAGE>
                                       22


12.      CLOSING DOCUMENTS

The obligations of the Underwriters hereunder, as to the Offered Units to be
purchased at the Closing Time shall be conditional upon all representations and
warranties and other statements of the Trust and Vermilion herein being, at and
as of the Closing Time, true and correct in all material respects, the Trust and
Vermilion having performed in all material respects, at the Closing Time, all of
their obligations hereunder theretofore to be performed, the Underwriters due
diligence review not revealing any material adverse information or fact which is
not currently generally known to the public which would, in the Underwriters'
reasonable opinion, seriously adversely affect the value or market price of the
Units or the investment quality or marketability of the Units and the
Underwriters receiving at the Closing Time:

(a)      favourable legal opinions of the Trust's counsel and the Underwriters'
         counsel addressed to the Underwriters, in form and substance reasonably
         satisfactory to the Underwriters, with respect to such matters as the
         Underwriters may reasonably request relating to the offering of the
         Offered Units, the Trust and Vermilion and the transactions
         contemplated hereby, including, without limitation, that:

         (i)      the Trust is valid and existing as a trust under the laws of
                  the Province of Alberta and having the Trustee as its trustee;

         (ii)     the Trust has the capacity and power to own and lease its
                  properties and assets and to conduct its business as described
                  in the Prospectuses;

         (iii)    each of Vermilion, 764031 Alberta Ltd., Vermilion REP S.A. and
                  Aventura has been duly incorporated, is validly subsisting and
                  has all requisite corporate power and authority to carry on
                  its business as now conducted by it and to own its properties
                  and assets and is qualified to carry on business under the
                  laws of the jurisdictions where it carries on a material
                  portion of its business;

         (iv)     the Partnership has been duly formed and organized and is
                  validly subsisting as a partnership under the laws of the
                  Province of Alberta and has all requisite partnership power
                  and authority to carry on its business as now conducted by it
                  and to own its properties and assets and is qualified to carry
                  on business under the laws of the jurisdictions where it
                  carries on a material portion of its business;

         (v)      the Trust is the registered and beneficial holder of all
                  issued and outstanding shares of Vermilion (other than
                  5,269,266 Exchangeable Shares of Vermilion), all of which have
                  been duly authorized and validly issued as fully paid and
                  non-assessable;

         (vi)     Vermilion is the registered and beneficial holder of all
                  issued and outstanding shares of 764031 Alberta Ltd.,
                  Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
                  Vermilion Ontario Finance Ltd. and Vermilion REP S.A. and is
                  the beneficial holder of 32,271,590 Aventura Shares, all of
                  which have been duly authorized and validly issued as fully
                  paid and non-assessable;

         (vii)    Vermilion and 764031 Alberta Ltd. are collectively the
                  registered and beneficial holders of all issued and
                  outstanding equity and voting interests of the Partnership,
                  all of which have been duly authorized and validly issued as
                  fully paid and non-assessable;

         (viii)   each of the Trust and Vermilion has all necessary trust or
                  corporate power and authority to enter into this agreement and
                  to perform its obligations set out herein, and this

<PAGE>
                                       23


                  agreement has been duly authorized, executed and delivered by
                  the Trust and Vermilion, respectively, and constitutes a
                  legal, valid and binding obligation of each of the Trust and
                  Vermilion enforceable against the Trust and Vermilion in
                  accordance with its terms except that the validity, binding
                  effect and enforceability of the terms of agreements and
                  documents are subject to the qualification that such validity,
                  binding effect and enforceability may be limited by:

                  (A)      applicable bankruptcy, insolvency, moratorium,
                           reorganization or other laws affecting creditors'
                           rights generally;

                  (B)      equitable remedies, including the remedies of
                           specific performance and injunctive relief, being
                           available only in the discretion of the applicable
                           court;

                  (C)      the statutory and inherent powers of a court to grant
                           relief from forfeiture, to stay execution of
                           proceedings before it and to stay executions on
                           judgments;

                  (D)      the applicable laws regarding limitations of actions;

                  (E)      enforceability of provisions which purport to sever
                           any provision which is prohibited or unenforceable
                           under applicable law without affecting the
                           enforceability or validity of the remainder of such
                           document would be determined only in the discretion
                           of the court;

                  (F)      enforceability of the provisions exculpating a party
                           from liability or duty otherwise owed by it may be
                           limited under applicable law; and

                  (G)      that rights to indemnity, contribution and waiver
                           under the documents may be limited or unavailable
                           under applicable law;

         (ix)     the execution and delivery of this agreement and the
                  fulfilment of the terms hereof by each of the Trust and
                  Vermilion, and the performance of and compliance with the
                  terms of this agreement by the Trust and Vermilion does not
                  and will not result in a breach of, or constitute a default
                  under, and does not create a state of facts which, after
                  notice or lapse of time or both, will result in a breach of or
                  constitute a default under, any applicable laws or any term or
                  provision of the Trust Indenture, the articles or by-laws of
                  Vermilion or resolutions of the Unitholders or the directors
                  or shareholders of the Trust or Vermilion, as applicable, or
                  any mortgage, note, indenture, contract, agreement (written or
                  oral), instrument, lease or other document to which the Trust
                  or Vermilion is a party or by which it is bound, of which such
                  counsel is aware including, without limitation, the Material
                  Agreements;

         (x)      the form of the definitive certificate representing the Units
                  has been approved and adopted by the Trust and complies with
                  all legal requirements (including all applicable requirements
                  of the Exchange) relating thereto;

         (xi)     the Offered Units have been duly and validly created, allotted
                  and issued as fully paid and non-assessable Units of the
                  Trust;

         (xii)    the Trust and the attributes of the Offered Units conform in
                  all material respects with the description thereof contained
                  in the Prospectuses;

<PAGE>
                                       24


         (xiii)   the Offered Units are eligible investments as set out under
                  the heading "Eligibility for Investment" in the Prospectuses;

         (xiv)    all necessary documents have been filed, all necessary
                  proceedings have been taken and all legal requirements have
                  been fulfilled as required under the Applicable Securities
                  Laws of each of the Qualifying Provinces in order to qualify
                  the Offered Units for distribution and sale to the public in
                  each of such Qualifying Provinces by or through investment
                  dealers and brokers duly registered under the applicable laws
                  of such provinces who have complied with the relevant
                  provisions of such Applicable Securities Laws;

         (xv)     the Trust is a "reporting issuer" not in default of any
                  requirement of the Securities Act (Alberta) and the
                  regulations thereunder and has a similar status under the
                  Applicable Securities Laws of each of the other Qualifying
                  Provinces;

         (xvi)    each of the Trust and Vermilion have the necessary power and
                  authority to execute and deliver the Prospectuses and all
                  necessary action has been taken by each of the Trust and
                  Vermilion to authorize the execution and delivery by it of the
                  Prospectuses and the filing thereof, as the case may be, in
                  each of the Qualifying Provinces in accordance with Applicable
                  Securities Laws;

         (xvii)   subject to the qualifications set out therein, the statements
                  in the Prospectus under the heading "Canadian Federal Income
                  Tax Considerations" constitute a fair summary of the principal
                  Canadian federal income tax consequences arising under the Tax
                  Act to persons referred to therein who hold Offered Units;

         (xviii)  all laws of the Province of Quebec relating to the use of the
                  French language have been complied with in connection with the
                  sale of the Offered Units to purchasers in the Province of
                  Quebec;

         (xix)    the Offered Units are conditionally listed and, upon
                  notification to the Exchange of the issuance and sale thereof,
                  will be posted for trading on the Exchange;

         (xx)     the authorized and issued capital of the Trust;

         (xxi)    Computershare Trust Company of Canada, at its principal
                  offices in Calgary and Toronto has been duly appointed the
                  transfer agent and registrar for the Trust Units (including
                  the Offered Units);

         and as to all other legal matters, including compliance with Applicable
         Securities Laws in any way connected with the issuance, sale and
         delivery of the Offered Units as the Underwriters may reasonably
         request.

         It is understood that the respective counsel may rely on the opinions
         of local counsel acceptable to them as to matters governed by the laws
         of jurisdictions other than where they are qualified to practice law,
         and on certificates of officers of the Trust, Vermilion, the transfer
         agent and the Trust's and Vermilion's auditors as to relevant matters
         of fact. It is further understood that the Underwriters' counsel may
         rely on the opinion of the Trust's counsel as to matters which
         specifically relate to the Trust, Vermilion and the Units, including
         the issuance of the Offered Units;

<PAGE>
                                       25


(b)      a certificate of each of the Trust and Vermilion dated the Closing
         Date, addressed to the Underwriters and signed on behalf of the Trust
         and Vermilion by the Chief Executive Officer and Chief Financial
         Officer of Vermilion or such other officers or directors of Vermilion
         satisfactory to the Underwriters, acting reasonably, certifying that:

         (i)      each of the Trust and Vermilion has complied with and
                  satisfied in all material respects all terms and conditions of
                  this agreement on its part to be complied with or satisfied at
                  or prior to the Closing Time, as applicable;

         (ii)     the representations and warranties of the Trust and Vermilion
                  set forth in this agreement are true and correct in all
                  material respects at the Closing Time, as if made at such
                  time;

         (iii)    no event of a nature referred to in subsection 11(a)(i), (ii)
                  or (iii) has occurred or to the knowledge of such officer is
                  pending, contemplated or threatened; and

         (iv)     such officer has no reason to believe that a distribution will
                  not be declared and paid to Unitholders of record on or about
                  December 31, 2003;

         and the Underwriters shall have no knowledge to the contrary;

(c)      a comfort letter of each of the Trust's and Vermilion's auditors,
         addressed to the Underwriters and dated the Closing Date, as
         applicable, satisfactory in form and substance to the Underwriters,
         acting reasonably, bringing the information contained in the comfort
         letter or letters referred to in subsection 4(c) up to the Closing
         Time, as applicable, which comfort letter shall be not more than two
         Business Days prior to the Closing Date;

(d)      evidence satisfactory to the Underwriters that the Offered Units have
         been conditionally listed on the Exchange not later than the close of
         business on the last Business Day preceding the Closing Date and shall
         be posted for trading as at the opening of business on the Closing
         Date; and

(e)      such other certificates and documents as the Underwriters may request,
         acting reasonably.

13.      DELIVERIES

The sale of the Firm Units and, if applicable, the Underwriters' Option Units,
shall be completed at the Closing Time at the offices of the Trust's counsel in
Calgary, Alberta or at such other place as the Trust and the Underwriters may
agree. Subject to the conditions set forth in section 12, the Underwriters, on
the Closing Date, shall deliver to the Trust by wire or inter-bank transfer of
immediately available funds payable to or to the order of the Trust, the sum of
$14.10 for each of the Offered Units purchased by the Underwriters, net of the
Underwriting Fee, against delivery by the Trust of:

(a)      the opinions, certificates and documents referred to in section 12; and

(b)      definitive certificates representing, in the aggregate, all of the Firm
         Units and, if applicable, the Underwriters' Option Units, registered in
         the name of CDS & Co or in such name or names as the CIBC World Markets
         Inc. shall notify the Trust in writing not less than 24 hours prior to
         the Closing Time.

<PAGE>
                                       26


14.      RESTRICTIONS ON OFFERINGS

The Trust agrees that, prior to 90 days after the Closing Date, it shall not,
directly or indirectly, sell or offer to sell any Units, or otherwise issue,
lend, transfer or dispose of any securities exchangeable, convertible or
exercisable into Units or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Units, whether any such transaction is settled by delivery of Units
or other such securities, in cash or otherwise, or announce any intention to do
any of the foregoing, without the prior consent of CIBC World Markets Inc., on
behalf of the Underwriters, which consent may not be unreasonably withheld;
provided that the foregoing will not restrict the Trust from issuing rights
pursuant to the Trust's trust unit rights incentive plan described in the
Prospectuses, issuing Units pursuant to rights to purchase Units outstanding
under such plan on the date hereof, issuing Units pursuant to the Trust's
distribution reinvestment and optional purchase plan, issuing Units pursuant to
the Exchangeable Shares or issuing Units pursuant to the Trust's employee bonus
plan, in each case subject to the limitations, if any, in section 7(b)(xx).

15.      NOTICES

Any notice or other communication to be given hereunder shall, in the case of
notice to be given to the Trust or Vermilion, be addressed to Vermilion,
Attention: Lorenzo Donadeo, President and Chief Executive Officer, at the above
address, Fax No. (403) 269-4880 with a copy to:

         Macleod Dixon LLP
         Canterra Tower
         3700, 400 - 3rd Avenue SW
         Calgary, Alberta   T2P 4H2

         Attention:     Kent D. Kufeldt
         Fax No.:       (403) 264-5973

and, in the case of notice to be given to the Underwriters, be addressed to:

         CIBC World Markets Inc.
         900, 855 - 2nd Street SW
         Calgary, Alberta   T2P 4J7

         Attention:     Brian D. Heald
         Fax No.:       (403) 260 0524

         BMO Nesbitt Burns Inc.
         1400, 421 - 7th Avenue SW
         Calgary, Alberta  T2P 4K9

         Attention:     Shane C. Fildes
         Fax No.:       (403) 515-1535

<PAGE>
                                       27


         RBC Dominion Securities Inc.
         Suite 1100, Bankers Hall West
         888 - 3rd Street SW
         Calgary, Alberta   T2P 5C5

         Attention:     Robi Contrada
         Fax No.:       (403) 299-6900

         TD Securities Inc.
         800 Home Oil Tower
         324 - 8th Avenue SW
         Calgary, Alberta   T2P 2Z2

         Attention:     Gregory B. Saksida
         Fax No.:       (403) 292-2776

         National Bank Financial Inc.
         2000, 855 - 2nd Street SW
         Calgary, Alberta   T2P 4J8

         Attention:     David M. Vetters
         Fax No.:       (403) 265-0543

         Canaccord Capital Corporation
         4th Floor, 409 - 8th Avenue SW
         Calgary, Alberta   T2P 1E3

         Attention:     Karl B. Staddon
         Fax No.:       (403) 508-3810

         Scotia Capital Inc.
         2000, 700 - 2nd Street SW
         Calgary, Alberta   T2P 2W1

         Attention:     Eric McFadden
         Fax No.:       (403) 298-4099

         FirstEnergy Capital Corp.
         1600, 333 - 7th Avenue SW
         Calgary, Alberta   T2P 2Z1

         Attention:     Matthew D. Joss
         Fax No.:       (403) 262-0688


<PAGE>
                                       28


and a copy to:

         Burnet, Duckworth & Palmer LLP
         1400, 350 - 7th Avenue SW
         Calgary, Alberta   T2P 3N9

         Attention:     William S. Maslechko
         Fax No.:       (403) 260-0337

or to such other address as the party may designate by notice given to the
other. Each communication shall be personally delivered to the addressee or sent
by facsimile transmission to the addressee, and:

(a)      a communication which is personally delivered shall, if delivered
         before 4:00 p.m. (local time at the place of delivery) on a Business
         Day, be deemed to be given and received on that day and, in any other
         case be deemed to be given and received on the first Business Day
         following the day on which it is delivered; and

(b)      a communication which is sent by facsimile transmission shall, if sent
         on a Business Day before 4:00 p.m. (local time at the place of
         receipt), be deemed to be given and received on that day and, in any
         other case, be deemed to be given and received on the first Business
         Day following the day on which it is sent.

16.      CONDITIONS

All terms, covenants and conditions of this agreement to be performed by the
Trust and Vermilion shall be construed as conditions, and any breach or failure
to comply with any material terms and conditions which are for the benefit of
the Underwriters shall entitle the Underwriters to terminate their obligations
to purchase the Offered Units, by written notice to that effect given to the
Trust prior to the Closing Time. The Underwriters may waive in whole or in part
any breach of, default under or non compliance with any representation,
warranty, term or condition hereof, or extend the time for compliance therewith,
without prejudice to any of their rights in respect of any other representation,
warranty, term or condition hereof or any other breach of, default under or non
compliance with any other representation, warranty, term or condition hereof,
provided that any such waiver or extension shall be binding on the Underwriters
only if the same is in writing.

17.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

All representations, warranties, terms and conditions herein (including, without
limitation, those contained in section 7) or contained in certificates or
documents submitted pursuant to or in connection with the transactions
contemplated herein shall survive the payment by the Underwriters for the
Offered Units, the termination of this agreement and the distribution of the
Offered Units pursuant to the Prospectus and shall continue in full force and
effect for the benefit of the Underwriters regardless of any investigation by or
on behalf of the Underwriters with respect thereto.

18.      SEVERAL LIABILITY OF UNDERWRITERS

The Underwriters' rights and obligations under this agreement are several and
not joint and several including, without limitation, that:

(a)      each of the Underwriters shall be obligated to purchase only the
         percentage of the total number of Offered Units set forth opposite
         their names set forth in this section 18;

<PAGE>
                                       29


(b)      if one of the Underwriters does not purchase its applicable percentage
         of the total number of Offered Units and the aggregate amount of such
         Offered Units which such defaulting Underwriter or Underwriters agreed
         but failed to purchase is more than 7.5% of the aggregate amount of the
         Offered Units to be purchased on such date, each of the other
         Underwriters who shall be willing and able to purchase its own
         applicable percentage of the total number of Offered Units shall be
         relieved of its obligations hereunder on submission to the Trust of
         reasonable evidence of its ability and willingness to fulfil its
         obligations hereunder at the Closing Time, provided that,
         notwithstanding the provisions of paragraph (b) of this section 18, the
         Underwriters who shall be willing and able to purchase their applicable
         percentage of the total number of Offered Units shall have the right,
         but not the obligation, to purchase the total number of Offered Units;
         and

(c)      if one or more of the Underwriters does not purchase its applicable
         percentage of the total number of Offered Units and the aggregate
         amount of such Offered Units which such defaulting Underwriter or
         Underwriters agreed but failed to purchase is equal to or less than
         7.5% of the aggregate amount of the Offered Units to be purchased on
         such date, the non-defaulting Underwriters shall be obligated
         severally, in the proportions that the respective percentages set forth
         opposite their names set forth in this section 18 bear to the aggregate
         of the percentages set forth opposite the names of all such
         non-defaulting Underwriters, to purchase the Offered Units with such
         defaulting Underwriter or Underwriters agreed but failed to purchase at
         such time.

The applicable percentage of the total number of Offered Units which each of the
Underwriters shall be separately obligated to purchase is as follows:

                CIBC World Markets Inc.                        25%
                BMO Nesbitt Burns Inc.                         15%
                RBC Dominion Securities Inc.                   15%
                TD Securities Inc.                             15%
                National Bank Financial Inc.                   10%
                Canaccord Capital Corporation                 7.5%
                Scotia Capital Inc.                           7.5%
                FirstEnergy Capital Corp.                       5%
                                                            --------
                                                              100%
                                                            ========


Nothing in this agreement shall obligate the Trust to sell the Underwriters less
than all of the Firm Units or shall relieve any Underwriter in default from
liability to the Trust, Vermilion or any non defaulting Underwriter in respect
of the defaulting Underwriter's default hereunder. In the event of a termination
by the Trust or Vermilion of their obligations under this agreement, there shall
be no further liability on the part of the Trust or Vermilion to the
Underwriters except in respect of any liability which may have arisen or may
thereafter arise under section 8, 9 or 10.

19.      AUTHORITY TO BIND UNDERWRITERS

The Trust and Vermilion shall be entitled to and shall act on any notice,
waiver, extension or communication given by or on behalf of the Underwriters by
CIBC World Markets Inc., which shall represent the Underwriters and which shall
have the authority to bind the Underwriters in respect of all matters hereunder,
except in respect of any settlement under section 8 or 9, any matter referred to
in section 11 or any agreement under section 18. While not affecting the
foregoing, CIBC World Markets Inc. shall consult with the other Underwriters
with respect to any such notice, waiver, extension or other communication.

<PAGE>
                                       30


20.      UNDERWRITERS COVENANTS

(a)      Each of the Underwriters covenants and agrees with the Trust that it
         will:

         (i)      conduct activities in connection with the proposed offer and
                  sale of the Offered Units in compliance with all the
                  Applicable Securities Laws and cause a similar covenant to be
                  contained in any agreement entered into with any Selling
                  Dealer Group established in connection with the distribution
                  of the Offered Units;

         (ii)     not solicit subscriptions for the Offered Units, trade in
                  Offered Units or otherwise do any act in furtherance of a
                  trade of Offered Units outside of the Qualifying Provinces or,
                  subject to subsection 20(c), in other jurisdictions outside of
                  Canada;

         (iii)    use all reasonable efforts to complete the distribution of the
                  Offered Units as soon as possible; and

         (iv)     as soon as reasonably practicable after the Closing Date
                  provide the Trust with a breakdown of the number of Offered
                  Units sold in each of the Qualifying Provinces and, upon
                  completion of the distribution of the Offered Units, provide
                  to the Trust notice to that effect, if required by Applicable
                  Securities Laws.

(b)      For the purposes of this section 20, the Underwriters shall be entitled
         to assume that the Offered Units may be lawfully offered for sale and
         sold in the Qualifying Provinces if the final MRRS decision document
         has been issued evidencing that a receipt for the Prospectus has been
         issued by the Securities Commissions, provided the Underwriters do not
         have actual knowledge, and have not been notified in writing by the
         Trust or Vermilion, of any circumstances that would legally prohibit
         such distribution.

(c)      The Underwriters shall be entitled to offer the Offered Units to
         certain purchasers in the United States in accordance with the terms
         set out in SCHEDULE "A" attached hereto, which terms, and the
         representations, warranties and covenants set out in such Schedule,
         shall be deemed to be incorporated by reference into this agreement.

(d)      No Underwriter will be liable to the Trust under this section 20 with
         respect to a default by any of the other Underwriters but will be
         liable to the Trust only for its own default.

21.      SEVERANCE

If one or more of the provisions contained herein shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
agreement, but this agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions had never been contained herein.

22.      RELATIONSHIP BETWEEN THE TRUST, VERMILION AND THE UNDERWRITERS

The Trust and Vermilion: (i) acknowledge and agree that the Underwriters have
certain statutory obligations as registrants under the Applicable Securities
Laws and have fiduciary relationships with their clients; (ii) acknowledge and
agree that the Underwriters are neither the agents of the Trust or Vermilion nor
otherwise fiduciaries of the Trust or Vermilion; and (iii) consent to the
Underwriters acting hereunder while continuing to act for their clients. To the
extent that the Underwriters' statutory obligations as registrants under the
Applicable Securities Laws or fiduciary relationships with their clients
conflicts with

<PAGE>
                                       31


their obligations hereunder the Underwriters shall be entitled to fulfil their
statutory obligations as registrants under the Applicable Securities Laws and
their duties to their clients. Nothing in this agreement shall be interpreted to
prevent the Underwriters from fulfilling their statutory obligations as
registrants under the Applicable Securities Laws or to act as a fiduciary of
their clients.

23.      STABILIZATION

In connection with the distribution of the Offered Units, the Underwriters may
over-allot or effect transactions which stabilize or maintain the market price
of the Units at levels other than those which might otherwise prevail in the
open market, but in each case only as permitted by applicable law. Such
stabilizing transactions, if any, may be discontinued at any time.

24.      GOVERNING LAW

This agreement shall be governed by and construed in accordance with the laws of
the Province of Alberta and the laws of Canada applicable therein. Each of the
Trust and Vermilion and the Underwriters hereby attorn to the non exclusive
jurisdiction of the courts of the Province of Alberta.

25.      TIME OF THE ESSENCE

Time shall be of the essence of this agreement.

26.      COUNTERPART EXECUTION

This agreement may be executed in one or more counterparts each of which so
executed shall constitute an original and all of which together shall constitute
one and the same agreement. Delivery of counterparts may be effected by
facsimile transmission.

27.      CONTRACTUAL OBLIGATIONS OF TRUST

The parties hereto acknowledge that the obligations of the Trust hereunder shall
not be personally binding upon the Trustee, or any of the unitholders of the
Trust and that any recourse against the Trust, the Trustee or any unitholder in
any manner in respect of any indebtedness, obligation or liability of the Trust
arising hereunder or arising in connection herewith or from the matters to which
this agreement relates, if any, including without limitation claims based on
negligence or otherwise tortuous behaviour, shall be limited to, and satisfied
only out of, the Trust Fund, as defined in the Trust Indenture, as amended from
time to time.

28.      FURTHER ASSURANCES

Each party to this agreement covenants agrees that, from time to time, it will,
at the request of the requesting party, execute and deliver all such documents
and do all such other acts and things as any party hereto, acting reasonably,
may from time to time request be executed or done in order to better evidence or
perfect or effectuate any provision of this agreement or of any agreement or
other document executed pursuant to this agreement or any of the respective
obligations intended to be created hereby or thereby.

29.      USE OF PROCEEDS

Each of Vermilion and the Trust hereby covenant and agree to use the net
proceeds of the sale of the Units hereunder in accordance with the disclosure in
the Prospectus.

<PAGE>
                                       32


30.      DISTRIBUTIONS

The Trust agrees that, provided the Closing Date occurs on or prior to December
31, 2003, it shall not prior to the Closing Date declare or pay or establish a
record date for any distributions to Unitholders of the Trust prior to the
Closing Date, other than the regular monthly distribution of $0.17 per Unit
which is payable on December 15, 2003 to Unitholders of record on November 28,
2003. The Trust agrees that it is a material term of this agreement and the
determination of the purchase price of the Offered Units that the distribution
to be paid to Unitholders of record on December 31, 2003 be paid on the Firm
Units and, if applicable, the Underwriters' Option Units. Accordingly, the Trust
agrees that if for any reason the condition referred to in subsection 12(e) is
not satisfied (other than as a result of the Closing Date not occurring on or
before December 31, 2003 as a result of a default by the Underwriters
hereunder), the Trust shall, at the Underwriters' election, reduce the purchase
price for the Firm Units and, if applicable, the Underwriters' Option Units by
the amount of the distribution referred to above (and the amount of any other
distribution declared after the date hereof and before the Closing Time) and the
Underwriters shall have the right to postpone the Closing Time for such period,
not exceeding ten Business Days, in order that the required changes in the
Prospectuses and in any other documents or arrangements may be effected.




<PAGE>
                                       33


31.      ENTIRE AGREEMENT

It is understood that the terms and conditions of this agreement supersede any
previous verbal or written agreement between the Underwriters and the Trust or
Vermilion.

If the foregoing is in accordance with your understanding and is agreed to by
you, please confirm your acceptance by signing the enclosed copies of this
letter at the place indicated and by returning the same to CIBC World Markets
Inc.

                                     CIBC WORLD MARKETS INC.


                                     (signed) "T. Timothy Kitchen"


<PAGE>
                                       34


<PAGE>


                                        BMO NESBITT BURNS INC.


                                        (signed) "Shane C. Fildes"



                                        RBC DOMINION SECURITIES INC.


                                        (signed) "Robi Contrada"



                                        TD SECURITIES INC.


                                        (signed) "Gregory B. Saksida"



                                        NATIONAL BANK FINANCIAL INC.


                                        (signed) "David M. Vetters"



                                        CANACCORD CAPITAL CORPORATION


                                        (signed) "Karl B. Staddon"



                                        SCOTIA CAPITAL INC.


                                        (signed) "Craig M. Langpap"



                                        FIRSTENERGY CAPITAL CORP.


                                        (signed) "Matthew D. Joss"


<PAGE>
                                       35



ACCEPTED AND AGREED to as of
the 19th day of November, 2003.

VERMILION ENERGY TRUST,                         VERMILION RESOURCES LTD.
by Vermilion Resources Ltd.


(signed) "Lorenzo Donadeo"                      (signed) "Lorenzo Donadeo"


(signed) "Curtis W. Hicks"                      (signed) "Curtis W. Hicks"


<PAGE>


                  SCHEDULE "A" to the underwriting agreement among CIBC World
                  Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities
                  Inc., TD Securities Inc., Canaccord Capital Corporation,
                  Scotia Capital Inc., FirstEnergy Capital Corp., Vermilion
                  Energy Trust and Vermilion Resources Ltd. made as of November
                  19, 2003

                            U.S. SELLING RESTRICTIONS

         Capitalized terms used but not defined in this Schedule "A" shall have
the meaning ascribed thereto in the underwriting agreement (the "UNDERWRITING
AGREEMENT") to which this Schedule "A" is attached.

1.       For the purpose of this Schedule "A", the following terms shall have
         the meanings indicated:

         (a)      "DIRECTED SELLING EFFORTS" means directed selling efforts as
                  that term is defined in Regulation S. Without limiting the
                  foregoing, but for greater clarity in this Schedule "A", it
                  means, subject to the exclusions from the definition of
                  directed selling efforts contained in Regulation S, any
                  activity undertaken for the purpose of, or that could
                  reasonably be expected to have the effect of, conditioning the
                  market in the United States for the Securities, and includes
                  the placement of any advertisement in a publication with a
                  "general circulation in the United States" that refers to the
                  offering of the Securities;

         (b)      "FOREIGN ISSUER" means a foreign issuer as that term is
                  defined in Regulation S. Without limiting the foregoing, but
                  for greater clarity in this Schedule "A", it means any issuer
                  that is (a) the government of any country, or of any political
                  subdivision of a country, other than the United States; or (b)
                  a corporation or other organization incorporated under the
                  laws of any country other than the United States, except an
                  issuer meeting the following conditions: (1) more than 50
                  percent of the outstanding voting securities of such issuer
                  are directly or indirectly owned of record by residents of the
                  United States; and (2) any of the following: (i) the majority
                  of the executive officers or directors are United States
                  citizens or residents, (ii) more than 50 percent of the assets
                  of the issuer are located in the United States, or (iii) the
                  business of the issuer is administered principally in the
                  United States;

         (c)      "GENERAL SOLICITATION" and "GENERAL ADVERTISING" means
                  "general solicitation" and "general advertising",
                  respectively, as used in Rule 502(c) of Regulation D,
                  including, without limitation, advertisements, articles,
                  notices or other communication published in any newspaper,
                  magazine or similar media or broadcast over television or
                  radio, or any seminar or meeting whose attendees had been
                  invited by general solicitation or general advertising;

         (d)      "QUALIFIED INSTITUTIONAL BUYER" means a "qualified
                  institutional buyer" as defined in Rule 144A;

         (e)      "REGULATION D" means Regulation D adopted by the SEC under the
                  U.S. Securities Act;

         (f)      "REGULATION S" means Regulation S adopted by the SEC under the
                  U.S. Securities Act;

         (g)      "RULE 144A" means Rule 144A adopted by the SEC under the U.S.
                  Securities Act;

         (h)      "SEC" means the United States Securities and Exchange
                  Commission;

<PAGE>
                                       2


         (i)      "SECURITIES" means the Offered Units;

         (j)      "SELLING DEALER GROUP" means dealers or brokers other than the
                  Underwriters and their U.S. affiliates who participate in the
                  offer and sale of Securities pursuant to the Underwriting
                  Agreement;

         (k)      "SUBSTANTIAL U.S. MARKET INTEREST" means "substantial U.S.
                  market interest" as that term is defined in Regulation S;

         (l)      "UNITED STATES" means the United States of America, its
                  territories and possessions, any state of the United States,
                  and the District of Columbia;

         (m)      "U.S. EXCHANGE ACT" means the United States Securities
                  Exchange Act of 1934, as amended;

         (n)      "U.S. PERSON" means a "U.S. PERSON" as that term is defined in
                  Regulation S; and

         (o)      "U.S. SECURITIES ACT" means the United States Securities Act
                  of 1933, as amended.

2.       Each Underwriter, its U.S. affiliates and each member of the Selling
         Dealer Group acknowledges that the Securities have not been and will
         not be registered under the U.S. Securities Act, and have not been and
         will not be offered or sold within the United States or to, or for the
         account or benefit of, U.S. Persons, except pursuant to the exemption
         from the registration requirements of the U.S. Securities Act provided
         by Rule 144A. Each Underwriter agrees that it, its U.S. affiliates and
         each member of the Selling Dealer Group will offer and sell the
         Securities only in accordance with Rule 903 of Regulation S or in
         accordance with the restrictions set forth in paragraphs 3 and 4 of
         this Schedule "A". Accordingly, no Underwriter, its U.S. affiliates or
         any Selling Dealer Group member, or any persons acting on their behalf
         have engaged or will engage in any Directed Selling Efforts.

         Each Underwriter acknowledges that it has not entered and will not
         enter into any contractual arrangement with respect to the distribution
         of the Securities, except (i) with its affiliates, (ii) with members of
         the Selling Dealer Group in accordance with this paragraph 2 or (iii)
         otherwise with the prior written consent of the Trust.

3.       Each Underwriter represents, warrants and covenants to the Trust that,
         in connection with all sales of the Securities in the United States or
         to, or for the account of, a U.S. Person:

         (a)      its U.S. affiliates are duly registered brokers or dealers
                  with the SEC and are members of, and in good standing with,
                  the National Association of Securities Dealers, Inc. on the
                  date such representation is given;

         (b)      all offers and sales of the Securities in the United States
                  will be effected by CIBC World Markets Corp. (the "U.S.
                  PLACEMENT AGENT") in accordance with all applicable U.S.
                  broker-dealer requirements;

         (c)      the U.S. Placement Agent is a Qualified Institutional Buyer;

         (d)      it has not used and will not use any written material other
                  than the Prospectuses together with the Preliminary U.S.
                  Private Placement Memorandum and the U.S. Private Placement
                  Memorandum (all such documents, the "OFFERING DOCUMENTS"), and
                  each

<PAGE>
                                       3


                  offeree of the Securities in the United States has been sent a
                  copy of the Offering Documents;

         (e)      neither it nor its representatives nor the U.S. Placement
                  Agent has used, and none of such persons will use, any form of
                  General Solicitation or General Advertising in connection with
                  the offer or sale of the Securities in the United States or to
                  U.S. persons;

         (f)      it will solicit, and will cause the U.S. Placement Agent to
                  solicit, offers for the Securities in the United States only
                  from, and will offer the Securities only to, persons it
                  reasonably believes to be Qualified Institutional Buyers in
                  accordance with Rule 144A. It also agrees that it will solicit
                  offers for the Securities only from, and will offer the
                  Securities only to, persons that in purchasing such Securities
                  will be deemed to have represented and agreed as provided in
                  paragraphs (4)(a) through (d) below (to the extent such
                  representations are applicable to the purchaser concerned);

         (g)      it will inform, and cause the U.S. Placement Agent to inform,
                  all purchasers of the Securities in the United States that the
                  Securities have not been and will not be registered under the
                  U.S. Securities Act and are being sold to them without
                  registration under the U.S. Securities Act in reliance on Rule
                  144A;

         (h)      at least one business day prior to closing, it shall cause the
                  U.S. Placement Agent to provide Computershare Trust Company of
                  Canada with a list of all purchasers of the Securities in the
                  United States; and

         (i)      at closing it, together with the U.S. Placement Agent, will
                  provide a certificate, substantially in the form of Exhibit I
                  to this Schedule A.

4.       It is understood and agreed by the Underwriters that the Securities may
         be offered and resold by the Underwriters and members of the Selling
         Dealer Group in the United States pursuant to the provisions of Rule
         144A to persons who are, or are reasonably believed by them to be,
         Qualified Institutional Buyers in transactions meeting the requirements
         of Rule 144A and in compliance with any applicable state securities
         laws of the United States, provided that prior to any such sale each
         purchaser shall have been provided with the Offering Documents and by
         purchasing Securities, each purchaser shall be deemed to have
         represented and warranted for the benefit of the Trust and the
         Underwriters that:

         (a)      it is a Qualified Institutional Buyer and acknowledges that
                  the sale of Securities to it is being made in reliance on Rule
                  144A, and it is acquiring such Securities for its own account
                  or for the account of one or more Qualified Institutional
                  Buyers with respect to which it exercises sole investment
                  discretion;

         (b)      it understands and acknowledges that the Securities will not
                  be and have not been registered under the Securities Act or
                  the securities laws of any state of the United States, and are
                  therefore "restricted securities" within the meaning of the
                  Rule 144, and that if in the future it shall decide to resell,
                  pledge or otherwise transfer such Securities, the same may be
                  resold, pledged or otherwise transferred only (A) to the
                  Trust, (B) in the United States, in accordance with Rule 144A
                  to a person it reasonably believes is a Qualified
                  Institutional Buyer that purchases for its own account or for
                  the account of a Qualified Institutional Buyer and to whom
                  notice is given that the offer, sale or transfer is being made
                  in reliance on Rule 144A, (C) outside the United States, in
                  accordance with Rule 904 of Regulation S and in compliance
                  with applicable local laws and regulations,

<PAGE>
                                       4


                  (D) in a transaction exempt from registration under the U.S.
                  Securities Act pursuant to Rule 144 and in compliance with any
                  applicable state securities laws of the United States, or (E)
                  in a transaction that does not require registration under the
                  U.S. Securities Act or any applicable United States state
                  securities laws, and it has furnished to the Trust an opinion
                  of counsel of recognized standing reasonably satisfactory to
                  the Trust to that effect;

         (c)      it understands that all Securities sold in the United States
                  as part of this offering will bear a legend to the following
                  effect:

                           "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                           REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
                           1933, AS AMENDED (THE "SECURITIES ACT") OR STATE
                           SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
                           SUCH SECURITIES, AGREES FOR THE BENEFIT OF VERMILION
                           ENERGY TRUST THAT SUCH SECURITIES MAY BE OFFERED,
                           SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO VERMILION
                           ENERGY TRUST, (B) OUTSIDE THE UNITED STATES IN
                           ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
                           SECURITIES ACT, (C) INSIDE THE UNITED STATES IN
                           ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT,
                           (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
                           THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER,
                           OR (E) PURSUANT TO ANOTHER EXEMPTION FROM
                           REGISTRATION AFTER PROVIDING A LEGAL OPINION
                           SATISFACTORY TO VERMILION ENERGY TRUST.

                           A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED
                           FROM COMPUTERSHARE TRUST COMPANY OF CANADA UPON
                           DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
                           DECLARATION, IN A FORM SATISFACTORY TO COMPUTERSHARE
                           TRUST COMPANY OF CANADA AND VERMILION ENERGY TRUST,
                           TO THE EFFECT THAT THE SALE OF THE SECURITIES
                           REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH
                           RULE 904 OF REGULATION S UNDER THE SECURITIES ACT."

                  If the Securities are being sold in compliance with the
                  requirements of Rule 904 of Regulation S, the legend may be
                  removed by providing a declaration to Computershare Trust
                  Company of Canada to the following effect (or as the Trust may
                  prescribe from time to time):

                           "The undersigned (A) acknowledges that the sale of
                           the securities to which this declaration relates is
                           being made in reliance on Rule 904 of Regulation S
                           under the U.S. Securities Act of 1933, as amended,
                           and (B) certifies that (1) it is not an "affiliate"
                           (as defined in Rule 405 under the Securities Act, as
                           amended) of Vermilion Energy Trust, (2) the offer of
                           such securities was not made to a person in the
                           United States and either (a) at the time the buy
                           order was originated, the buyer was outside the
                           United States, or the seller and any person acting on
                           its behalf

<PAGE>
                                       5


                           reasonably believe that the buyer was outside the
                           United States or (b) the transaction was executed on
                           or through the facilities of the Toronto Stock
                           Exchange and neither the seller nor any person acting
                           on its behalf knows that the transaction has been
                           prearranged with a buyer in the United States and (3)
                           neither the seller nor any person acting on its
                           behalf engaged in any directed selling efforts in
                           connection with the offer and sale of such
                           securities. Terms used herein have the meanings given
                           to them by Regulation S."

                  If the Securities are being sold under Rule 144 of the U.S.
                  Securities Act, the legend may be removed by delivery to
                  Computershare Trust Company of Canada of an opinion of counsel
                  of recognized standing and reasonably satisfactory to the
                  Trust, to the effect that such legend is no longer required
                  under the U.S. Securities Act or state securities laws; and

(d)      it understands and acknowledges that it is making the representations
         and warranties and agreements contained herein with the intent that
         they may be relied upon by the Trust and the Underwriters in
         determining its eligibility or (if applicable) the eligibility of
         others on whose behalf it is contracting hereunder to purchase the
         Securities.

5.       At the closing, CIBC World Markets Inc., together with the U.S.
         Placement Agent, will provide a certificate, substantially in the form
         of Exhibit I to this Schedule "A", relating to the manner of the offer
         and sale of the Securities in the United States.

6.       The Trust represents, warrants and agrees that (i) none of the Trust,
         its subsidiaries or any person acting on its or their behalf including,
         without limitation Vermilion, have engaged or will engage in any
         directed selling efforts (within the meaning of Regulation S) with
         respect to the Securities; (ii) none of the Trust, its subsidiaries or
         any person acting on its or their behalf including, without limitation
         Vermilion, have offered or will offer to sell any of the Securities by
         means of any form of general solicitation or general advertising (as
         those terms are used in Regulation D); (iii) it is a Foreign Issuer and
         reasonably believes that there is no Substantial U.S. Market Interest
         in the Securities; (iv) it is not required to register as an
         "investment company" pursuant to the provisions of the U.S. Investment
         Company Act of 1940; (v) at the date hereof, the Securities are not (A)
         part of a class listed on a national securities exchange in the United
         States, (B) quoted in an automated inter-dealer system in the United
         States, or (C) convertible or exchangeable at an effective conversion
         premium (calculated as specified in paragraph (a)(6) of Rule 144A) of
         less than 10% for securities so listed or quoted; and (vi) for so long
         as any of the Securities are outstanding and are "restricted
         securities" within the meaning of Rule 144(a)(3) under the U.S.
         Securities Act, it shall either: (A) furnish to the SEC all information
         required to be furnished in accordance with Rule 12g3-2(b) under the
         U.S. Exchange Act; (B) file reports and other information with the SEC
         under Section 13 or 15(d) of the U.S. Exchange Act; or (C) provide to
         any holder of Securities and any prospective purchaser of Securities
         designated by such holder, upon the request of such holder, the
         information required to be provided by paragraph (d)(4) of Rule 144A

<PAGE>


                                    EXHIBIT 1
                            UNDERWRITERS' CERTIFICATE

         In connection with the private placement of trust units (the
"Securities") of Vermilion Energy Trust (the "Trust") with one or more U.S.
institutional investors (the "U.S. Purchasers"), the undersigned CIBC World
Market Inc., on behalf of the several underwriters (the "Underwriters") referred
to in the Underwriting Agreement, dated as of November 19, 2003, among the
Trust, Vermilion Resources Ltd. and the Underwriters (the "Underwriting
Agreement"), and its U.S. affiliate who has signed below in its capacity as
placement agent in the United States for the Underwriters (the "U.S. Placement
Agent"), do hereby certify that:

         (a)      the U.S. Placement Agent is a duly registered broker-dealer
                  with the United States Securities and Exchange Commission and
                  is a member of, and in good standing with, the National
                  Association of Securities Dealers, Inc. on the date hereof;

         (b)      all offers and sales of the Securities in the United States
                  have been effected by the U.S. Placement Agent in accordance
                  with all applicable U.S. broker-dealer requirements;

         (c)      in connection with offers and sales of the Securities in the
                  United States, we have not used and will not use any written
                  material other than the Prospectuses together with a United
                  States covering memorandum relating to the offering in the
                  United States (all such documents, the "Offering Documents"),
                  and each offeree of the Securities in the United States has
                  been sent a copy of each of the Offering Documents;

         (d)      immediately prior to transmitting the Offering Documents to
                  such offerees, we had reasonable grounds to believe and did
                  believe that each offeree was a Qualified Institutional Buyer
                  as defined in Rule 144A under the UNITED STATES SECURITIES ACT
                  OF 1933, as amended (the "U.S. Securities Act") and, on the
                  date hereof, we continue to believe that each U.S. Purchaser
                  is a Qualified Institutional Buyer as defined in Rule 144A
                  under the U.S. Securities Act;

         (e)      neither we nor our representatives have utilized, and neither
                  we nor our representatives will utilize, any form of general
                  solicitation or general advertising (as those terms are used
                  in Regulation D under the U.S. Securities Act); and

         (f)      the offering of the Securities in the United States has been
                  conducted by us in accordance with the Underwriting Agreement.

         Terms used in this certificate have the meanings given to them in the
Underwriting Agreement unless otherwise defined herein.

Dated:  _____________________, 2003


CIBC WORLD MARKETS INC.                         CIBC WORLD MARKETS CORP.


By: /s/                                         By: /s/
    -------------------------------                -----------------------------
    Name:                                          Name:
    Title:                                         Title:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>18
<FILENAME>ex99_15form40-f.txt
<DESCRIPTION>EXHIBIT 99.15
<TEXT>
                                                                   EXHIBIT 99.15
                                                                   -------------



                                 FORM 52-109FT2

            CERTIFICATION OF INTERIM FILINGS DURING TRANSITION PERIOD

We LORENZO DONADEO, PRESIDENT AND CHIEF EXECUTIVE OFFICER AND CURTIS HICKS, VICE
PRESIDENT FINANCE AND CHIEF FINANCIAL OFFICER, CERTIFY THAT:

1.       We have reviewed the interim filings (as this term is defined in
         Multilateral Instrument 52-109 CERTIFICATION OF DISCLOSURE IN ISSUER'S
         ANNUAL AND INTERIM FILINGS) of Vermilion Energy Trust, (the issuer) for
         the interim period ending MARCH 31, 2004.

2.       Based on our knowledge, the interim filings do not contain any untrue
         statement of a material fact or omit to state a material fact required
         to be stated or that is necessary to make a statement not misleading in
         light of the circumstances under which it was made, with respect to the
         period covered by the interim filings; and

3.       Based on our knowledge, the interim financial statements together with
         the other financial information included in the interim filings fairly
         present in all material respects the financial condition, results of
         operations and cash flows of the issuer, as of the date and for the
         periods presented in the interim filings.



Date:    May 14, 2004



/s/ Lorenzo Donadeo
Lorenzo Donadeo
President & Chief Executive Officer



/s/ Curtis W. Hicks
Curtis W. Hicks
VP Finance & Chief Financial Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>19
<FILENAME>ex99_16form40-f.txt
<DESCRIPTION>EXHIBIT 99.16
<TEXT>
                                                                   EXHIBIT 99.16
                                                                   -------------



                                 [LOGO OMITTED]



                               V E R M I L I O N

                                  ENERGY TRUST




                                [GRAPHIC OMITTED]



                        CORPORATE GOVERNANCE GUIDELINES

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               DOES
                                             VERMILION
   CORPORATE GOVERNANCE GUIDELINES             ALIGN                                            COMMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                <C>
1. The board should explicitly assume           YES             The board has adopted a formal mandate setting out the board's
responsibility for stewardship of the                           stewardship responsibilities. Among other things, the mandate
Company, and specifically for:                                  describes the decisions of the Trust that require prior approval
                                                                of the board, measures for receiving shareholder feedback and
                                                                the board's expectations of management.
- ----------------------------------------------------------------------------------------------------------------------------------
a) Adoption of a strategic planning             YES             The board participates with management in the development and
process and approval of a strategic plan                        approval of the Trust's strategic plan, which takes into account
which takes into account (among other                           the Trust's opportunities and risks associated with its business.
things) the opportunities and risks of                          The board also approves all business plans, corporate policies,
the business.                                                   financings and capital and operating budgets. At regularly
                                                                scheduled meetings, members of the board and management discuss
                                                                a broad range of issues relevant to the Trust's strategy.
- ----------------------------------------------------------------------------------------------------------------------------------
b) Identification of principal risks, and       YES             The board's participation in the strategic planning process
implementing risk management systems.                           involves consideration of the principal risks inherent in the
                                                                Trust's business. The Audit Committee of the board of directors
                                                                addresses specific risks and risk management in its review of
                                                                the Trust's financial statements. The Environment, Health &
                                                                Safety Committee addresses specific risks and risk management
                                                                related to the Trust's environment, health and safety
                                                                activities, and compliance with applicable rules and
                                                                regulations.
- ----------------------------------------------------------------------------------------------------------------------------------
c) Succession, planning and monitoring          YES             The board of directors is responsible for succession planning
senior management.                                              at the board and senior management levels. The Governance and
                                                                Human Resources Committee reviews compensation policies and
                                                                plans, assesses the performance of the Trust's senior management
                                                                compared with the Trust's goals, and approves the salary and
                                                                other remuneration of the Trust's executive officers.
- ----------------------------------------------------------------------------------------------------------------------------------
d) Communication policy.                        YES             The Trust's communication policy provides for open and timely
                                                                disclosure of relevant information relating to the Trust and its
                                                                business and affairs. The board reviews the Trust's audited
                                                                consolidated financial statements and selected corporate
                                                                disclosure documents, including the annual information form,
                                                                information circulars and all prospectuses before they are
                                                                publicly released. The communication policy, which is reviewed
                                                                by the board annually, addresses how the Trust interacts with
                                                                analysts and the public, and contains measures for avoiding
                                                                selective disclosure.
- ----------------------------------------------------------------------------------------------------------------------------------
e) Integrity of internal control and            YES             The Audit Committee is specifically mandated to assist the board
                                                                by management information systems. reviewing the effectiveness
                                                                of financial reporting, management information and internal
                                                                control systems. The Audit Committee is mandated to meet at
                                                                least four times each year. The Audit Committee meets with the
                                                                auditors independent of management as required. The Independent
                                                                Reserves Committee was specifically mandated to assist the board
                                                                by reviewing the effectiveness of the engineering reserves'
                                                                reports and related significance of the reserves on the public
                                                                and financial reporting of the Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
2. Majority of directors should be              YES             Two members of the board are "related" and the remaining four
"unrelated", (free from conflicting                             directors are "unrelated" to the Trust as those terms are defined
interests).                                                     in the TSX guidelines.
- ----------------------------------------------------------------------------------------------------------------------------------
3. Disclose for each director whether he        YES             Larry Macdonald, Jeffrey Boyce, Joseph Killi and James McFarland
or she is related, and how that                                 are unrelated to the Trust as that term is used in the TSX
conclusion was reached.                                         guidelines. Each of these directors is independent of management
                                                                and is free from any interest, business or other relationship that
                                                                could, or could reasonably be perceived to, materially interfere
                                                                with their ability to act in the Trust's best interests, and
                                                                none of them has received any material compensation from the
                                                                Trust, although each director is eligible to participate in the
                                                                Trust Unit Rights Incentive Plan. Claudio Ghersinisch and
                                                                Lorenzo Donadeo are related directors as both are senior
                                                                executive officers of the Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
4. Appoint a committee:

a) Responsible for the appointment and          YES             The board has constituted a Governance and Human Resources
assessment of directors.                                        Committee which is responsible for nominating new directors and
                                                                assessing the board as well as individual directors on an
                                                                ongoing basis. With respect to new directors, the full board
                                                                determines the competencies, skills and personal qualities that
                                                                the Governance and Human Resources Committee should seek in new
                                                                board members to add value to the Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               DOES
                                             VERMILION
   CORPORATE GOVERNANCE GUIDELINES             ALIGN                                            COMMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                <C>
b) Composed exclusively of outside (i.e.        YES             All of the members of the Governance and Human Resources
non-management) directors, the majority                         Committee are unrelated directors.
of whom are unrelated.
- ----------------------------------------------------------------------------------------------------------------------------------
5. Implement a process for assessing            YES             The Governance and Human Resources Committee has been mandated to
effectiveness of the board and its                              perform assessments of the board as a whole, the committees of the
committees and individual directors.                            board, the Lead Director and the other individual directors on an
                                                                ongoing basis. Individual director evaluations regarding the
                                                                effectiveness and contribution of the directors are completed by
                                                                the Governance and Human Resources Committee on an annual basis.
- ----------------------------------------------------------------------------------------------------------------------------------
6. Provide orientation and education            YES             New directors are provided with an orientation and education
programs for new directors.                                     program which includes written information about the duties and
                                                                obligations of directors, the role of the board and its committees,
                                                                the expected contributions of individual directors, the business
                                                                and operations of the Trust, and opportunities for meetings and
                                                                discussion with senior management and other directors. The
                                                                details of the orientation of each new director are tailored to
                                                                that director's individual needs and areas of interests.
- ----------------------------------------------------------------------------------------------------------------------------------
7. Examine the size of the board with a         YES             The board of directors consists of 6 members. The board of
view to improving effectiveness.                                directors is committed to reviewing the number of directors
                                                                regularly and currently considers 6 directors to be appropriate
                                                                for the Trust's size and a number that facilitates effective
                                                                decision-making, as well as an appropriate mix of backgrounds
                                                                and skills for the stewardship of the Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
8. Review compensation of directors in          YES             The Governance and Human Resources Committee reviews and reports
light of risks and responsibilities.                            to the board of directors on compensation issues. The board has
                                                                determined that the current compensation realistically reflects
                                                                the responsibilities of and risks involved in being a director.
- ----------------------------------------------------------------------------------------------------------------------------------
9. Committees should generally be composed      YES             All board committees are made up of unrelated directors.
of outside directors, a majority of whom
are unrelated.
- ----------------------------------------------------------------------------------------------------------------------------------
10. Appoint a committee responsible for         YES             The Governance and Human Resources Committee, which is comprised
approach to corporate governance issues.                        solely of unrelated directors, is responsible for governance
                                                                issues and the Trust's response to the TSX's governance
                                                                guidelines.
- ----------------------------------------------------------------------------------------------------------------------------------

11. a) Develop position descriptions and                        The board and the CEO develop  position  descriptions for the
mandates for the board and the Chief                            board and the CEO and define the limits to management's
Executive Officer (CEO), and define                              responsibilities.
limits to management's responsibilities.
- ----------------------------------------------------------------------------------------------------------------------------------
(i) the board.                                  YES             The board has ultimate responsibility for the stewardship of
                                                                the Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
(ii) the Chief Executive Officer.               YES             Day-to-day leadership and management are the responsibility of
                                                                the President and CEO and other management, subject to the
                                                                board's stewardship. The CEO is responsible to lead and manage
                                                                the Trust within parameters established by the board of
                                                                directors and relevant committees. The CEO is also responsible
                                                                for developing and recommending strategic plans to the board of
                                                                directors and for involving the board of directors in the early
                                                                stages of strategy development. Additionally, the CEO is
                                                                expected to successfully implement capital and operating plans;
                                                                report regularly to the board of directors on the progress and
                                                                results compared with the operating and financial objectives,
                                                                and initiate courses of action for improvement; develop and
                                                                maintain a sound, effective organization structure; and ensure
                                                                progressive employee training and development programs.
- ----------------------------------------------------------------------------------------------------------------------------------
b) Board should approve the Chief               YES             The corporate objectives for which the CEO is responsible are set
Executive Officer's corporate objectives,                       by the board of directors, and assesses the CEO against such
and assess the Chief Executive Officer                           objectives.
against these objectives.
- ----------------------------------------------------------------------------------------------------------------------------------
12. Establish structures and procedures         YES             The board has appointed Larry Macdonald, an unrelated director,
to enable the board to function                                 to act as the Lead Director of the board to ensure the board acts
independently of management.                                    independently of management and properly discharges its
                                                                responsibilities, and the board has adopted terms of reference
                                                                with respect to the Lead Director's role. The Lead Director
                                                                ensures that the board meets on a regular basis without
                                                                management, emphasizes the boundaries between the board's and
                                                                management's responsibilities, ensures prospective board members
                                                                understand the role and contribution of directors, and ensures
                                                                the board addresses its responsibilities in relation to
                                                                corporate governance.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               DOES
                                             VERMILION
   CORPORATE GOVERNANCE GUIDELINES             ALIGN                                            COMMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                <C>
13. a) Ensure an Audit Committee has a          YES             The Audit Committee reviews the Trust's audited consolidated
specifically defined mandate and direct                         financial statements and interim financial statements and selected
communication channels with internal and                        corporate disclosure documents before they are approved by the
external auditors.                                              board of directors. It approves the public release of quarterly
                                                                financial results; monitors accounting, financial reporting,
                                                                control and audit functions; reviews risk management policies;
                                                                and reviews issues relating to legal and regulatory
                                                                responsibilities. The Audit Committee has direct communication
                                                                with the internal and external auditors and has oversight
                                                                responsibility for management's system of internal control
                                                                reporting on internal control. The Audit Committee reviews the
                                                                external audit plans for the external auditors and has
                                                                implemented procedures to ensure that it meets with the external
                                                                auditors on a regular basis independently of management. The
                                                                board has adopted a charter for the Audit Committee setting
                                                                forth the above responsibilities of the Audit Committee. The
                                                                Audit Committee charter details the Audit Committee's
                                                                relationship with and expectation of the internal and external
                                                                auditors, establishes the independence of the external auditors
                                                                and specifies that the external auditors are ultimately
                                                                accountable to the board and the Audit Committee as
                                                                representatives of the shareholders. The charter mandates that
                                                                the Audit Committee discuss the quality and acceptability of the
                                                                Trust's accounting principles with the external auditors. The
                                                                charter also sets out the Audit Committee's oversight of
                                                                internal control and responsibility for the disclosure of
                                                                financial information. The board assesses the Audit Committee
                                                                charter on an annual basis.
- ----------------------------------------------------------------------------------------------------------------------------------
b) All members of the Audit Committee           YES             All members of the audit committee are unrelated directors and
should be unrelated directors and should                        are financially literate. The chair of the Audit Committee,
be financially literate. At least one                           Joseph Killi, is a chartered accountant and has accounting and
member should have financial expertise.                         financial expertise.
- ----------------------------------------------------------------------------------------------------------------------------------
14. Implement a system to enable                YES             In addition to the authority of committees to retain external
individual directors to engage outside                          advisors in connection with their responsibilities, individual
advisors at the Company's expense.                              directors may engage outside advisors at any time (at the expense
                                                                of the Trust) to provide advice on a corporate decision or action.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>20
<FILENAME>ex99_17form40-f.txt
<DESCRIPTION>EXHIBIT 99.17
<TEXT>
                                                                   EXHIBIT 99.17
                                                                   -------------




                             MATERIAL CHANGE REPORT




1.       Reporting Issuer:

         Vermilion Energy Trust
         2800, 400 - 4th Avenue S.W.
         Calgary, Alberta T2P 0J4

2.       Date of Material Change:

         March 19, 2004

3.       Press Release:

         On March 22, 2004 at Calgary, Alberta, a news release was issued and
         disseminated through Canada NewsWire.

4.       Summary of Material Change:

         On March 22, 2004, Vermilion Energy Trust (the "Trust") together with
         its subsidiary, Aventura Energy Inc. ("Aventura") announced that
         Aventura had entered into an agreement with BG Group, through its
         wholly-owned Canadian subsidiary, BG Canada Ltd., whereby BG Canada
         Ltd. will offer to acquire all of the outstanding shares of Aventura
         for $5.10 in cash per share (the "Offer"). The Offer is intended to
         expire at 7:00 p.m. (Calgary time) on May 4, 2004.

         In connection with the Offer, the Trust and its operating subsidiary,
         Vermilion Resources Ltd. ("Vermilion"), agreed to irrevocably tender
         Vermilion's 32,271,590 common shares of Aventura to the Offer
         (representing approximately 68.4% of the outstanding common shares of
         Aventura on a partially diluted basis (which assumes all in-the-money
         options to acquire common shares of Aventura are exercised in full))
         pursuant to a lock-up agreement with BG Canada Ltd. and BG Energy
         Holdings Limited. If the Offer is successful, Vermilion will receive
         proceeds of approximately $164.6 million from the tender of its
         Aventura shares to the Offer.

5.       Full Description of Material Change:

         On March 22, 2004, Vermilion Energy Trust (the "Trust") together with
         its subsidiary, Aventura Energy Inc. ("Aventura") announced that
         Aventura had entered into an agreement with BG Group, through its
         wholly-owned Canadian subsidiary, BG Canada Ltd., whereby BG Canada
         Ltd. will offer to acquire all of the outstanding shares of Aventura
         for $5.10 in cash per share (the "Offer"). The Offer is intended to
         expire at 7:00 p.m. (Calgary time) on May 4, 2004.

         In connection with the Offer, the Trust and its operating subsidiary,
         Vermilion Resources Ltd. ("Vermilion"), agreed to irrevocably tender
         Vermilion's 32,271,590 common shares of Aventura to the Offer
         (representing approximately 68.4% of the outstanding common shares of
         Aventura on a partially diluted basis (which assumes all in-the-money
         options to acquire common shares of Aventura are exercised in full))
         pursuant to a lock-up agreement with BG Canada Ltd. and BG Energy
         Holdings Limited. If the Offer is successful, Vermilion will receive
         proceeds of approximately $164.6 million from the tender of its
         Aventura shares to the Offer.

<PAGE>
                                      -2-


         On March 19, 2004, Vermilion and the Trust entered into a Lock-Up
         Agreement with BG Energy Holdings Limited ("BGEH") and BG Canada Ltd.
         (the "Offeror"). Pursuant to the Lock-Up Agreement, Vermilion and the
         Trust represented that Vermilion is the beneficial owner of 32,271,590
         common shares of Aventura and irrevocably agreed to accept the Offer
         and tender such common shares to the Offer.

         The following is a summary of the principal terms of the Lock-Up
         Agreement.

         AGREEMENT TO DEPOSIT: Vermilion and the Trust have irrevocably agreed
         to accept the Offer and deposit the common shares of Aventura held by
         Vermilion to the Offer on the terms set out in the Lock-Up Agreement.

         COMPLIANCE WITH SUPPORT AGREEMENT: The Offeror has agreed with
         Vermilion and the Trust that it would make the Offer on the terms and
         conditions outlined in the Support Agreement entered into between
         Aventura, BGEH and the Offeror dated March 19, 2004 (the "Support
         Agreement").

         TERMINATION OF THE LOCK-UP AGREEMENT: The Lock-Up Agreement may be
         terminated in certain circumstances, including:

         (a)      by mutual consent of BGEH, the Offeror, Vermilion and the
                  Trust;

         (b)      by Vermilion and the Trust, BGEH or the Offeror, if the
                  conditions to the Offer are not satisfied or waived by the
                  Offeror in its sole discretion prior to the expiry time of the
                  Offer provided that Vermilion and the Trust may not exercise
                  this termination right if the conditions to the Offer have not
                  been satisfied as a result of a breach by or the Trust of the
                  Lock-up Agreement or a breach by Aventura of the Support
                  Agreement;

         (c)      by the Offeror and/or BGEH if:

                  (i)      the Support Agreement is terminated;

                  (ii)     if Vermilion or the Trust is in default of any
                           material covenant or obligation under the Lock-Up
                           Agreement, or if any representation or warranty of
                           Vermilion or the Trust in such agreement was untrue
                           or incorrect at the date of Lock-up Agreement, or, if
                           not already qualified by a materiality concept, was
                           untrue or incorrect in any material respect; or

         (d)      by Vermilion and the Trust:

                  (i)      if after the 60th day after the Offer is commenced,
                           the Offeror has not taken up and paid for all common
                           shares of Aventura deposited under the Offer unless
                           the failure of the Offeror to take up and pay for
                           common shares arises as a result of the breach by
                           Vermilion and/or the Trust or Aventura of any
                           material covenant or obligation under the Lock-Up
                           Agreement or the Support Agreement, respectively, or
                           as a result of any representation or warranty of
                           Vermilion or the Trust or Aventura under the Lock-Up
                           Agreement or the Support Agreement, respectively,
                           being untrue or incorrect or if not already qualified
                           by a materiality concept (other than with respect to
                           title to the common shares held by Vermilion and
                           outstanding share capital) untrue or incorrect in any
                           material respect;

<PAGE>
                                      -3-


                           provided, however, that if the take up and payment by
                           the Offeror for common shares deposited under the
                           Offer is delayed by:

                           (A)     an injunction or order of a court or
                                   regulatory authority of competent
                                   jurisdiction; or

                           (B)     the Offeror not having obtained any
                                   regulatory waiver, consent or approval which
                                   is necessary to permit the Offeror to take up
                                   and pay for common shares deposited under the
                                   Offer or necessary for Aventura to continue
                                   to carry on its business as currently
                                   conducted;

                           then, provided that such injunction or order is being
                           contested or appealed or such regulatory waiver,
                           consent or approval is being actively sought, as
                           applicable, the Lock-Up Agreement shall not be
                           terminated pursuant to this provision until the
                           earlier of:

                           (C)     90 days after the Offer is commenced; and

                           (D)     the 10th business day following the date on
                                   which such injunction or order ceases to be
                                   in effect or such waiver, consent or approval
                                   is obtained, as applicable;

                           and provided further that if the board of directors
                           of Aventura implements a shareholders' right plan,
                           then the Lock-Up Agreement shall not be terminated
                           pursuant to this provision until the earlier of:

                           (E)     180 days after the Offer is commenced; and

                           (F)     the 10th business day following the date on
                                   which such shareholders' rights plan is
                                   terminated;

                  (ii)     if the Support Agreement is terminated by BGEH or the
                           Offeror;

                  (iii)    if the Offer having expired and all of the conditions
                           having been satisfied or waived, the Offeror has not
                           taken up and paid for the common shares held by
                           Vermilion pursuant to the Offer as required under the
                           terms of the Support Agreement or Offer; or

                  (iv)     if BGEH or the Offeror is in default of any material
                           covenant or obligation under the Lock-Up Agreement,
                           or if any representation or warranty of BGEH or the
                           Offeror under such agreement shall have been untrue
                           or incorrect and if not already qualified by a
                           materiality concept untrue or incorrect in any
                           material respect.

         COVENANTS OF VERMILION AND THE TRUST: Each of Vermilion and the Trust
         has agreed that during the period commencing on the date of the Lock-Up
         Agreement and continuing until the earlier of the termination of the
         Offer and the withdrawal of the common shares of Aventura held by
         Vermilion from the Offer as permitted by the Lock-Up Agreement: (a) it
         will not and will not permit any of its representatives to take any
         action of any kind which may in any way adversely affect the success of
         the Offer; (b) it will immediately terminate any existing discussions
         with

<PAGE>
                                      -4-


         any parties (other than the Offeror) with respect to any Acquisition
         Proposal (as defined in the Lock-Up Agreement); and (c) it will not
         directly or indirectly solicit, initiate, encourage or otherwise
         facilitate inquiries or offers from any other person relating to any
         Acquisition Proposal (provided that this shall not prevent Aventura
         from complying with its obligations under the Support Agreement with
         respect to Superior Proposals (as defined in the Lock-Up Agreement));
         (d) it will notify the Offeror in writing and provide relevant details
         of any Acquisition Proposal it receives; (e) it will use its reasonable
         commercial efforts as a direct or indirect shareholder of Aventura to
         satisfy the conditions of the Offer; (f) it will exercise the voting
         rights attaching to the common shares held by Vermilion and otherwise
         use its reasonable commercial efforts to oppose any proposed action
         which might reasonably prevent or delay the successful completion of
         the Offer, or which could result in material adverse effect in respect
         of Aventura (provided that this shall not prevent Aventura from
         complying with its obligations under the Support Agreement with respect
         to Superior Proposals); (g) it will not grant any proxy or other right
         to the common shares held by Vermilion or enter into any voting
         agreement with respect to such shares; (h) it will not sell transfer,
         pledge, encumber or grant an option over any common shares held by
         Vermilion; (i) it will promptly advise the Offeror of any material
         adverse effect in respect of Aventura known to Vermilion which might
         cause the conditions to the Offer not to be satisfied; (j) it will not
         directly or indirectly purchase any additional common shares; and (k)
         it will take all such steps as are required to ensure that at the time
         at which the Offeror takes up and pays for common shares pursuant to
         the Offer, the common shares held by the Vermilion will be owned
         beneficially and of record by the Vermilion with a good and marketable
         title thereto, free and clear of any and all restrictions or
         encumbrances of any kind.

         REPRESENTATIONS AND WARRANTIES: Each of Vermilion and the Trust made
         certain customary representations and warranties to each of BGEH and
         the Offeror and each of the Offeror and BGEH made certain customary
         representations and warranties to each of Vermilion and the Trust.

         INDEMNITY: Vermilion and the Trust have agreed to jointly and severally
         indemnify BGEH and the Offeror and their respective successors, assigns
         and affiliates and their respective directors, officers, agents,
         employees and shareholders for incorrectness in or breaches of the
         Lock-Up Agreement or breaches by Aventura of the Support Agreement, in
         each case discovered prior to the take up and payment for common shares
         deposited under the Offer, to a maximum amount of $9,000,000 (except in
         the case of intentional misrepresentation, intentional breach or fraud
         where the indemnification obligations are not limited in any way). If
         any such breaches are discovered after the take up and payment for
         common shares deposited under the Offer, the indemnification
         obligations of Vermilion and the Trust will extend to the total amount
         paid by the Offeror to Vermilion for its common shares (except in the
         case of intentional misrepresentation, intentional breach or fraud, and
         with except in the case of breaches of representations and warranties
         relating to tax matters, pensions and employee benefits and interested
         party transactions where the indemnification obligations are not
         limited in any way). Vermilion and the Trust have also provided full
         indemnities in respect of specific matters, including claims relating
         to the management or disposition of Aventura's former Argentine
         subsidiary and the surrender or cancellation of stock options of
         Aventura. With certain exceptions, indemnification payments are not
         required to be made to the Offeror or BGEH until the aggregate of such
         claims exceeds US$3,000,000.

         In the event of any breach by Vermilion or the Trust of the Lock-Up
         Agreement or by Aventura of the Support Agreement discovered prior to
         the take up and payment for common shares deposited under the Offer
         that results in a failure to consummate the transactions provided for
         in

<PAGE>
                                      -5-


         the Lock-Up Agreement, the termination of such agreement or the
         termination of the Support Agreement, and within six months of the
         expiry of the Offer, Vermilion and/or the Trust enter into an agreement
         for the sale of all or some of the common shares of Aventura held by
         them to a third party for more than $5.10 per share in cash or other
         consideration, then they shall be jointly and severally liable to pay
         to BGEH the greater of $9,000,000 and the aggregate amount which they
         received on the sale of such common shares in excess of the amount that
         the Offeror had agreed to pay to Vermilion in respect of the Offer.

6.       Reliance on Section 146(2) of the SECURITIES ACT (Alberta), Section
         85(2) of the SECURITIES ACT (British Columbia), Section 75(3) of the
         SECURITIES ACT (Ontario) and Section 74 of the SECURITIES ACT (Quebec):

         Not Applicable

7.       Omitted Information:

         Not Applicable

8.       Senior Officers:

         For further information contact Lorenzo Donadeo, President and Chief
         Executive Officer by telephone at (403) 269-4884 or by fax at (403)
         269-4880.

9.       Statement of Senior Officer:

         The foregoing accurately discloses the material change referred to
herein.



DATED at Calgary, Alberta this 29th day of March, 2004.


                                VERMILION ENERGY TRUST, by its
                                Administrator, Vermilion Resources Ltd.


                                Per: /s/ Lorenzo Donadeo
                                     ---------------------
                                     Lorenzo Donadeo
                                     President and Chief Executive Officer


IT IS AN OFFENCE UNDER THE SECURITIES ACT AND THE SECURITIES REGULATIONS FOR A
PERSON OR COMPANY TO MAKE A STATEMENT IN A DOCUMENT REQUIRED TO BE FILED OR
FURNISHED UNDER THE ACT OR THE REGULATIONS THAT, AT THE TIME AND IN THE LIGHT OF
THE CIRCUMSTANCES UNDER WHICH IT IS MADE, IS A MISREPRESENTATION



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>21
<FILENAME>ex99_18form40-f.txt
<DESCRIPTION>EXHIBIT 99.18
<TEXT>
                                                                   EXHIBIT 99.18
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                          PRESS RELEASE - MAY 20, 2004
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION


Vermilion Energy Trust (VET.UN - TSX) is pleased to announce the cash
distribution of $0.17 per trust unit payable on June 15, 2004 to all unitholders
of record on May 31, 2004. The ex-distribution date for this payment is May 27,
2004. This will be the Trust's 16th consecutive distribution payment of $0.17
since Vermilion was formed as a Trust in January 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. With the completion of the recently announced closing of our
acquisition in the Netherlands, approximately 45% of our production is in
Western Europe. Vermilion Energy Trust trades on The Toronto Stock Exchange
under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>22
<FILENAME>ex99_19form40-f.txt
<DESCRIPTION>EXHIBIT 99.19
<TEXT>
                                                                   EXHIBIT 99.19
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                                 PRESS RELEASE
       VERMILION ENERGY TRUST ANNOUNCES CLOSING OF NETHERLANDS TRANSACTION
                      FOR IMMEDIATE RELEASE - MAY 19, 2004


Vermilion Energy Trust (VET.UN-TSX) ("Vermilion") is pleased to announce that it
has closed the previously announced $80.5 million acquisition of producing
properties in the Netherlands. The transaction is effective on January 1, 2004
and the adjusted cash closing cost is approximately $65 million. Vermilion has
also signed a transitional operating agreement with the vendor. The vendor will
continue to operate these properties on contract to Vermilion over the next six
months in order to facilitate a smooth transition of operatorship. Vermilion
expects to establish fully staffed regional headquarters in Harlingen before
year-end 2004.

The acquisition of 5,900 boe/d will provide an immediate 25% boost to
Vermilion's production and should increase cash flow by approximately $27mm over
the remaining seven months of 2004. Vermilion's capital commitment in the
Netherlands for 2004 includes participation in the drilling of the Zuidwal A10
prospect. This well is targeting an expansion of the existing Zuidwal pool with
gross reserve potential of 90 bcf (15 mm boe). Vermilion estimates that its 21%
share in this well will cost $10 million. In the event the well is successful,
the operator has agreed to sell its 21% interest to Vermilion under pre-arranged
terms. The well is expected to spud in September and, if successful, should be
completed by the end of 2004.

Vermilion's management is excited about the opportunities these new properties
provide, and is looking forward to engaging in the Netherlands' oil and gas
industry.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>23
<FILENAME>ex99_20form40-f.txt
<DESCRIPTION>EXHIBIT 99.20
<TEXT>
                                                                   EXHIBIT 99.20
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                                 PRESS RELEASE
   VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO & WEBCAST AT AGM
                      FOR IMMEDIATE RELEASE - MAY 14, 2004


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.17747 to 1.18848. The increase will be effective on May 14, 2004. A "Notice of
Retraction" must be received by Computershare by May 19, 2004 to receive this
exchange ratio. All notices received after this date will receive the exchange
ratio to be determined on June 15, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      April 30, 2004
Opening Exchange Ratio                                                                  1.17747
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $18.17343
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01101
Effective Date of the Increase in the Exchange Ratio                                    May 14, 2004
Exchange Ratio as of the Effective Date                                                 1.18848
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN. A holder of Vermilion Resources
Ltd. Exchangeable Shares can exchange all or a portion of their holdings at any
time for Vermilion Trust Units by completing a Retraction Request form. You can
obtain a copy by contacting Computershare Trust Company of Canada at (403)
267-6894.

WEBCAST AT VERMILION ENERGY TRUST'S ANNUAL GENERAL MEETING

Vermilion will webcast its AGM presentation on May 18th, 2004 at approximately
10:15 a.m. MST. To view this online event, click
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=817300 or visit our
website at http://www.vermilionenergy.com/presentations.html

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>24
<FILENAME>ex99_21form40-f.txt
<DESCRIPTION>EXHIBIT 99.21
<TEXT>
                                                                   EXHIBIT 99.21
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                           PRESS RELEASE - MAY 6, 2004
                VERMILION ENERGY TRUST ANNOUNCES RECEIPT OF CASH


Vermilion Energy Trust (VET.UN - TSX) today announced that it has received
approximately $165 million in cash in exchange for 32.2 million shares of
Aventura that it tendered to the BG Group's offer of $5.10 per share that was
previously announced on March 22, 2004. The proceeds from the sale of Aventura
will initially be used to repay outstanding bank indebtedness and will
ultimately be available to fund the Trust's acquisition and/or capital
development program.

Currently, Vermilion has essentially eliminated all of its outstanding
indebtedness. Once the previously announced Netherlands acquisition has closed,
which is expected to occur in late May, the Trust will have outstanding debt of
approximately $50 million which will represent less than 0.4 times annualized
cash flow.

The Trust is an international energy trust that benefits from geographically
diverse production. Currently 70% of production volumes come from high quality
oil and gas reserves in Canada. Upon completion of our recently announced
acquisition in the Netherlands, approximately 45% of our production will be in
Western Europe. Vermilion Energy Trust trades on The Toronto Stock Exchange
under the symbol VET.UN.

For further information please contact:

Curtis W. Hicks, Chief Financial Officer
or
Paul Beique, Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>25
<FILENAME>ex99_22form40-f.txt
<DESCRIPTION>EXHIBIT 99.22
<TEXT>
                                                                   EXHIBIT 99.22
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                         PRESS RELEASE - APRIL 30, 2004
      VERMILION ENERGY TRUST ANNOUNCES AVENTURA ENERGY INC. SHARE TRANSFER


Vermilion Energy Trust (VET.UN - TSX) today announces a series of private
transactions which were not conducted through the facilities of any stock
exchange. Vermilion Resources (the "Partnership") acquired ownership on April
30, 2004 of an aggregate of 32,271,590 common shares of Aventura Energy Inc.
("Aventura") at a price of $5.10 per common share. The common shares acquired by
the Partnership represent approximately 72% of the issued and outstanding common
shares of Aventura. Of the total common shares of Aventura acquired by the
Partnership, 30,761,280 were transferred to the Partnership by Vermilion
Resources Ltd. ("VRL"), and 1,510,310 were transferred to the Partnership by
764031 Alberta Ltd. ("Numberco"). Immediately prior to these transfers, Numberco
had acquired 1,510,310 common shares of Aventura from VRL. Numberco and VRL are
the sole partners in the Partnership, which is an Alberta partnership.

The 32,271,590 common shares of Aventura acquired by the Partnership are subject
to a lock-up agreement with BG Canada Ltd. and BG Energy Holdings Limited, in
connection with BG Canada Ltd.'s offer to acquire all of the common shares of
Aventura dated March 29, 2004.

VRL and Numberco may be considered to be acting jointly and in concert with the
Partnership, as they are the sole partners of the Partnership.

The Trust is an international energy trust that benefits from geographically
diverse production. Currently 70% of production volumes come from high quality
oil and gas reserves in Canada. Upon completion of our recently announced
acquisition in the Netherlands, approximately 45% of our production will be in
Western Europe. Vermilion Energy Trust trades on The Toronto Stock Exchange
under the symbol VET.UN.

For further information please contact:

Curtis W. Hicks, Chief Financial Officer
or
Paul Beique, Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>26
<FILENAME>ex99_23form40-f.txt
<DESCRIPTION>EXHIBIT 99.23
<TEXT>
                                                                   EXHIBIT 99.23
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                         PRESS RELEASE - APRIL 21, 2004
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION


Vermilion Energy Trust (VET.UN - TSX) is pleased to announce the cash
distribution of $0.17 per trust unit payable on May 14, 2004 to all unitholders
of record on April 30, 2004. The ex-distribution date for this payment is April
28, 2004. This will be the Trust's 15th consecutive distribution payment of
$0.17 since Vermilion was formed as a Trust in January 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. Currently 70% of production volumes come from high quality
oil and gas reserves in Canada. Upon completion of our recently announced
acquisition in the Netherlands, approximately 45% of our production will be in
Western Europe. Vermilion Energy Trust trades on The Toronto Stock Exchange
under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>27
<FILENAME>ex99_24form40-f.txt
<DESCRIPTION>EXHIBIT 99.24
<TEXT>
                                                                   EXHIBIT 99.24
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                     FOR IMMEDIATE RELEASE - APRIL 15, 2004


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.16656 to 1.17747. The increase will be effective on April 15, 2004. A "Notice
of Retraction" must be received by Computershare by April 21, 2004 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on May 14, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      March 31, 2004
Opening Exchange Ratio                                                                  1.16656
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $18.18500
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01091
Effective Date of the Increase in the Exchange Ratio                                    April 15, 2004
Exchange Ratio as of the Effective Date                                                 1.17747
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>28
<FILENAME>ex99_25form40-f.txt
<DESCRIPTION>EXHIBIT 99.25
<TEXT>
                                                                   EXHIBIT 99.25
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


                                  PRESS RELEASE
              VERMILION ENERGY TRUST / PRAIRIE FIRE OIL & GAS LTD.
           PRAIRIE FIRE PROPOSES TO COMBINE WITH VERENEX ENERGY INC.,
          VERMILION ENERGY TRUST'S NEWEST INTERNATIONAL E&P SUBSIDIARY
                      FOR IMMEDIATE RELEASE - APRIL 5, 2004

                 NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
                   OR FOR DISSEMINATION IN THE UNITED STATES


Vermilion Energy Trust ("Vermilion" or the "Trust") (TSX - VET.UN) and Prairie
Fire Oil & Gas Ltd. ("Prairie Fire") announced today that a wholly owned
subsidiary of Vermilion, Verenex Energy Inc. ("Verenex"), has entered into a
letter agreement with Prairie Fire whereby Verenex will amalgamate with Prairie
Fire. Verenex is a new Calgary-based, international exploration and production
(E&P) company sponsored by Vermilion to pursue international exploration and
acquisition opportunities. Prairie Fire is a junior capital pool corporation,
formerly listed on the TSX Venture Exchange. The arm's length transaction is
subject to regulatory approvals and the approval of Prairie Fire's minority
shareholders. Completion of this transaction is targeted for early June 2004.

VERENEX TO CHART ITS OWN PATH WITH FRANCE AS A FIRST STEP

The independent management team at Verenex will be led by James D. (Jim)
McFarland, President & CEO, until recently a director of Vermilion and its
affiliate Aventura Energy Inc. ("Aventura"). Mr. McFarland has more than 31
years of oil and gas and senior executive experience, most recently as Managing
Director of Southern Pacific Petroleum N.L. in Brisbane, Australia. Prior to his
move to Australia in 1999, he was President & COO of Husky Oil Limited from 1995
to 1998. This followed a successful 23-year career with Imperial Oil Limited and
other Exxon affiliates in Canada, the United States, the United Kingdom and
Western Europe.

Verenex will initially accelerate the exploration program that Vermilion began
in France prior to its conversion to an income trust in 2003. Vermilion has been
involved as an operator in France since 1997 and currently produces
approximately 6,300 BOE/D in France representing around 26% of its consolidated
production. The board of directors of Vermilion determined that the significant
exploration opportunities identified in France are best pursued outside the
Trust in a new E&P company.

Vermilion plans to grant to Verenex participating interests in approximately
820,000 acres (net to Verenex) in France in the form of one offshore and six
onshore exploratory permits, two of which are pending approval by the Government
of France. Vermilion will retain a 50% interest in the offshore permit and a 5%
interest in the onshore permits, and will continue to hold all of its producing
assets in France.

In addition to the France exploration lands, Vermilion will transfer a royalty
on a producing oil and gas asset in Alberta to provide Verenex with $1.0 to $1.3
million of annual cash flow to help offset G&A costs. Under a proposed services
agreement, Vermilion will also provide operational and administrative support to
Verenex in France and Canada at competitive rates.

Verenex plans to pursue attractive opportunities to expand the E&P portfolio
outside France and is targeting to secure a meaningful position in one to two
other regions within a two-year period. Suitable non-competition arrangements
will be established between Vermilion and Verenex at the outset.

The sponsorship by Vermilion of this new international E&P company follows the
recently announced $228 million sale of Aventura, a 72.2% owned subsidiary of
Vermilion that achieved significant exploration success and value creation on
the Central Block onshore Trinidad. Vermilion founded Aventura in 1999.

<PAGE>
                                      -2-


Aventura's share value increased from the initial financing at $1.00 per share
to the recent sale price of $5.10 per share in less than five years.

FINANCING PLANNED

An initial equity financing is contemplated to fund the Verenex capital program
over the next few years. Verenex intends to initiate this fundraising in late
April 2004 on a private placement basis with assistance from a syndicate of
investment dealers led by Tristone Capital Inc. that will include FirstEnergy
Capital Corp., TD Securities Inc. and Canaccord Capital.

Upon completion of the amalgamation and concurrent closing of the planned
financing, it is anticipated that Vermilion, through its contribution of land,
royalty interest and cash, will own approximately 50% of the shares of Verenex.
This ownership position could vary as a function of the funds raised at closing.

APPOINTMENT OF INTERNATIONALLY EXPERIENCED MANAGEMENT TEAM

Joining Mr. McFarland on the founding management team will be Fadi Nammour,
Manager, Business Development & Operations and Maria Comrie, Manager,
Exploration - France. Mr. Nammour has more than 22 years experience in business
development and operations management both domestically and internationally. He
has an extensive background in international acquisitions and operations in the
US, Europe, the Middle East, Africa and South America. Ms. Comrie has more than
20 years experience both internationally and domestically and most recently was
Manager, Exploration for France at Vermilion. Prior to this, Ms. Comrie lived
and worked in Tunisia with Ecumed Petroleum and with Canadian Occidental
Petroleum in Yemen.

Verenex is also pleased to announce that Blair Anderson, Manager, Exploration -
New Ventures and Giuseppe (Joe) Arcuri, Manager, Geophysics will join the
founding management team from Aventura, with these two appointments being
finalized upon completion of the announced sale of Aventura to the BG Group. Mr.
Anderson brings more than 25 years of international and domestic/frontier
(Canada) exploration and development experience to Verenex. Most recently, Mr.
Anderson was Manager, Exploration and Development for Aventura. He has worked
and lived in Australia and Indonesia, and has worked on projects throughout
Asia, Australasia, South America, Africa and Europe. Mr. Arcuri has more than 30
years of experience in the oil and gas industry, 20 years of which have been
within the international theatre. Most recently, he was Manager Geophysics for
Aventura. Prior to this, Mr. Arcuri worked and lived in South America
(Argentina, Bolivia, Peru), Asia (Indonesia) and the Middle East (Kuwait). He
has also completed projects throughout Australia, Asia, Europe, North Africa and
West Africa.

Searches are underway for two additional appointments, including a Chief
Financial Officer and a Manager, Engineering.

This multilingual (Arabic, English, French, Indonesian, Italian and Spanish)
management team has business and life experiences in many of the oil and gas
basins and regions of the world that will be of interest to Verenex.

BUILDING A STRONG BOARD OF DIRECTORS

Subject to shareholder approval, the board of directors of the amalgamated
Verenex will consist of six members, including the Chief Executive Officer and
three other directors independent of Vermilion.

Lorenzo Donadeo and Claudio Ghersinich, who are officers, directors and
co-founders of Vermilion, will join the Board. Each has more than 23 years of
industry experience. Mr. Donadeo has been involved in Vermilion since 1994 and
is currently its President and Chief Executive Officer. Mr. Ghersinich is
currently the Executive Vice President, Business Development. Prior to
Vermilion, Mr. Donadeo and Mr. Ghersinich were co-founders of Vista Nuova Energy
Inc., which completed a reverse takeover of Vermilion in 1994.

<PAGE>
                                      -3-


Verenex is pleased to advise that William (Bill) T. Fanagan and Johannes (Jim)
J. Nieuwenburg have agreed to serve as independent directors. Mr. Fanagan was
President & CEO of Gulf Indonesia Resources Limited from 1998 to 2001, based in
Jakarta. Prior executive roles included Director International for Gulf Canada
Resources Limited and the Director of Finance, based in Moscow, for
KomiArcticOil, a joint venture with Komineft, British Gas and Gulf Canada. Mr.
Fanagan is chartered accountant (Ireland) and articled with Coopers and Lybrand
in Dublin. Mr. Nieuwenburg was President & CEO of Petromet Resources Limited
from 1998 to 2001 prior to its sale to Talisman Energy. Mr. Nieuwenburg also
held positions as Vice President, Asset Management of Norcen Energy Resources
Limited and General Manager, Business Development of Amoco Energy Group, North
America. He currently serves on the boards of C1 Energy Ltd., Capitol Energy
Resources Ltd. and NAV Energy Trust.

Discussions are underway with potential candidates for the other independent
director position.

PRAIRIE FIRE - VERENEX TRANSACTION

The proposed transaction contemplates the combination of Prairie Fire and
Verenex on the following basis:

(a)      Prairie Fire common shares will be exchanged for common shares of
         amalgamated Verenex on the basis of one amalgamated Verenex share for
         every 50 Prairie Fire common shares; and

(b)      Each Verenex common share will be exchanged for common shares of the
         amalgamated Verenex on the basis of one amalgamated Verenex share for
         every one Verenex common share.

One of the terms of the transaction is that the directors and founders of
Prairie Fire will transfer, subject to regulatory approval, 2.2 million of their
2.5 million escrowed Prairie Fire common shares at $0.05 per share ($2.50 per
share on a consolidated basis) to Vermilion.

The proposed amalgamation between Prairie Fire and Verenex is intended to
constitute Prairie Fire's required qualifying transaction within the meaning of
Policy 2.4 of the TSX Venture Exchange. It is anticipated that Prairie Fire will
apply to reinstate its listing on the TSX Venture Exchange, conditional on the
completion of the proposed transactions.

This news release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of Verenex's shares in any
jurisdiction in which such offer, solicitation or sale would be unlawful under
the securities laws of any such jurisdiction. Verenex's shares have not been,
and will not be, registered under the U.S. Securities Act of 1933, as amended,
and may not be offered, sold or delivered in the United States absent
registration or an applicable exemption from the registration requirements of
U.S. securities laws.

THE TSX VENTURE EXCHANGE INC DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.

For further information, please contact:

Lorenzo Donadeo, President & CEO              David Tonken, President
or                                            Prairie Fire Oil & Gas Ltd.
Paul Beique, Director, Investor Relations     Telephone: (780) 486-2317
Vermilion Energy Trust                        E-mail: TONKEN@ICROSSROADS.COM
Telephone:  (403) 269-4884
E-mail:  INFO@VERMILIONENERGY.COM

Jim McFarland, President & CEO
Verenex Energy Inc.
Telephone:  (403) 781-9444
E-mail:  JMCFARLAND@VERENEXENERGY.COM

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>29
<FILENAME>ex99_26form40-f.txt
<DESCRIPTION>EXHIBIT 99.26
<TEXT>
                                                                   EXHIBIT 99.26
                                                                   -------------


        [GRAPHIC OMITTED]                                    [GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]                           [AVENTURA ENERGY INC.]


                                  PRESS RELEASE
                 AVENTURA ENTERS INTO AN AGREEMENT WITH BG GROUP
                     FOR IMMEDIATE RELEASE - MARCH 22, 2004


Aventura Energy Inc. ("Aventura" or the "Corporation") (TSX: AVR) and Vermilion
Energy Trust ("Vermilion") (TSX: VET.UN), Aventura's parent, are pleased to
announce that Aventura has entered into an agreement with BG Group, through its
wholly-owned Canadian subsidiary, BG Canada Ltd., whereby BG Group will offer to
acquire all of the outstanding shares of Aventura for $5.10 in cash per share.
Aventura has approximately 44.7 million shares outstanding for a transaction
value of $228 million. The transaction is expected to be completed in early May,
2004.

The offer will be made pursuant to a take-over bid and will be conditional on
acquiring a minimum of 90% of the Aventura shares and will be subject to other
customary conditions. Aventura and BG Group have already received required
consents to the transaction from the Government of the Republic of Trinidad and
Tobago.

The Aventura and Vermilion boards of directors have approved the transaction and
the board of directors of Aventura has resolved unanimously to recommend to its
shareholders that they accept the BG Group offer. The board of directors of
Aventura has received a fairness opinion from Tristone Capital Inc. that the
consideration to be received by Aventura shareholders pursuant to the BG Group
offer is fair, from a financial point of view. TD Securities Inc., acted as
special advisor to Vermilion in connection with this transaction.

In connection with the offer, Vermilion has agreed to irrevocably tender its
32.3 million (72.2%) common shares of Aventura to the offer pursuant to a
lock-up agreement with BG Group. In addition, all of the directors of Aventura,
representing an additional one million common shares (2.2%), will execute
lock-up agreements under which they irrevocably deposit their Aventura shares to
the offer.

The board of directors of Aventura has agreed that it will not solicit or
initiate discussions or negotiations with any third party concerning the sale of
Aventura or any of its assets. Aventura has agreed under certain circumstances
to pay to BG Group a non-completion fee of $9.0 million.

In the event that the transaction is not completed, BG Group has agreed to
purchase a certain volume of Aventura's on- island gas production, subject to
certain approvals.

The decision to sell Aventura included a full review of the existing discovered
reserves as well as the exploration potential of the Central Block onshore
Trinidad, the availability and timing of gas markets and the capital
requirements needed to access these markets. The inability to access the full
value chain in the LNG export market limited Aventura to the less-attractive
captive markets on island. BG Group has capacity in the Atlantic LNG facility
and can make use of additional supply. By selling Aventura to BG Group, Aventura
believes that it will realize a price that is considerably higher than the value
it would have received from entering into lower-priced gas markets for current
and anticipated risked future reserves.

For further information, please contact:

Aventura                                Vermilion Energy Trust
Lorenzo Donadeo, President and CEO      Lorenzo Donadeo, President and CEO
(403) 269-4884                          (403) 269-4884

Marty Wares, Chief Financial Officer    Paul Beique, Director Investor Relations
(403) 231-1721                          (403) 781-9449

Aventura Energy Inc.                    Vermilion Energy Trust
2800, 400 - 4th Avenue S. W.            2800, 400 - 4th Avenue S. W.
Calgary, Alberta  T2P 0J4               Calgary, Alberta  T2P 0J4
E-Mail: info@aventuraenergy.com         E-Mail: info@vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>30
<FILENAME>ex99_27form40-f.txt
<DESCRIPTION>EXHIBIT 99.27
<TEXT>
                                                                   EXHIBIT 99.27
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
                                 MARCH 22, 2004
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on April 15, 2004 to all
unitholders of record on March 31, 2004. The ex-distribution date for this
payment is March 29, 2004. This will be the Trust's 14th consecutive
distribution payment of $0.17 since Vermilion was formed as a Trust in January
2003.

The Trust is an international energy trust that benefits from geographically
diverse production. Currently 70% of production volumes come from high quality
oil and gas reserves in Canada. Upon completion of our recently announced
acquisition in the Netherlands, approximately 45% of our production will be in
Western Europe. Vermilion Energy Trust trades on The Toronto Stock Exchange
under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>31
<FILENAME>ex99_28form40-f.txt
<DESCRIPTION>EXHIBIT 99.28
<TEXT>
                                                                   EXHIBIT 99.28
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                     FOR IMMEDIATE RELEASE - MARCH 15, 2004

Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.15563 to 1.16656. The increase will be effective on March 15, 2004. A "Notice
of Retraction" must be received by Computershare by March 22, 2004 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on April 15, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      February 27, 2004
Opening Exchange Ratio                                                                  1.15563
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $17.96603
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01093
Effective Date of the Increase in the Exchange Ratio                                    March 15, 2004
Exchange Ratio as of the Effective Date                                                 1.16656
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>32
<FILENAME>ex99_29form40-f.txt
<DESCRIPTION>EXHIBIT 99.29
<TEXT>
                                                                   EXHIBIT 99.29
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


                                  PRESS RELEASE
      VERMILION ENERGY TRUST ANNOUNCES 2003 CANADIAN AND US TAX INFORMATION
                     FOR IMMEDIATE RELEASE - MARCH 10, 2004


Vermilion Energy Trust ("Vermilion" or the "Trust") (VET.UN-TSX) announces the
2003 tax treatment on distributions for unitholders in Canada and the United
States.

CANADIAN INDIVIDUAL UNITHOLDERS:

FOR THE 2003 TAXATION YEAR, THE TREATMENT OF DISTRIBUTIONS IS 82.006% RETURN ON
CAPITAL (TAXABLE INCOME) AND A 17.994% RETURN OF CAPITAL (TAX DEFERRED) FOR
CANADIAN UNITHOLDERS.

For purposes of the Canadian Income Tax Act, the Trust is a mutual fund trust.
Each year, an income tax return is filed by the Trust with the taxable income
allocated to and taxable in the hands of unitholders. Distributions paid by the
Trust are both a return OF capital (i.e. a repayment of a portion of the
investment) and a return ON capital (i.e. income).

Each year the taxable income portion or return on capital, is calculated and
reported in the Trust's T3 return and allocated to each unitholder who received
distributions in that taxation year on the T3 Supplementary forms, which are
mailed to unitholders before March 31st in accordance with regulatory
requirements. Registered unitholders will receive a T3 Supplementary form
directly from the Trust's transfer agent, Computershare Trust Company of Canada.
Beneficial unitholders will receive a T3 Supplementary form from their broker or
other intermediary. The T3 slip will report only the taxable income component.
The tax deferred, or return of capital component of distributions reduces the
unitholder's adjusted cost base of trust units.

Unitholders who hold their investment in a Registered Retirement Savings Plan,
Registered Retirement Income Fund, Deferred Profit Sharing Plan or Registered
Education Savings Plan need not report any income related to trust unit
distributions on their 2003 income tax return.

The following table sets out the tax treatment of the Canadian 2003 monthly
distributions:

<TABLE>
<CAPTION>
                                            TOTAL                 TAX DEFERRED          TAXABLE
PAYMENT DATE          RECORD DATE           DISTRIBUTION          AMOUNT                AMOUNT (INCOME)
- -------------------------------------------------------------------------------------------------------
<S>                   <C>                   <C>                   <C>                   <C>
Mar 14/03             Feb 28/03             0.17000               0.03059               0.13941
Apr 15/03             Mar 31/03             0.17000               0.03059               0.13941
May 15/03             Apr 30/03             0.17000               0.03059               0.13941
Jun 13/03             May 31/03             0.17000               0.03059               0.13941
Jul 15/03             Jun 30/03             0.17000               0.03059               0.13941
Aug 15/03             Jul 31/03             0.17000               0.03059               0.13941
Sep 15/03             Aug 31/03             0.17000               0.03059               0.13941
Oct 15/03             Sep 30/03             0.17000               0.03059               0.13941
Nov 14/03             Oct 31/03             0.17000               0.03059               0.13941
Dec 15/03             Nov 30/03             0.17000               0.03059               0.13941
Jan 15/04             Dec 31/03             0.17000               0.03059               0.13941
                                            -------               -------               -------
                                            1.87000               0.33649               1.53351
                                            =======               =======               =======
</TABLE>

UNITED STATES INDIVIDUAL UNITHOLDERS:

For 2003, the Trust has calculated that 58.38% of the distributions made in 2003
are dividends that are "Qualifying Dividends". The remaining 41.62% of the 2003
distributions are a tax-deferred reduction to the cost of units for tax
purposes. If the amount of "Non-Taxable Return of Capital" exceeds the cost of

<PAGE>

units, the excess should be reported as a capital gain. We believe the Trust
should be treated as a qualified corporation for United States tax purposes. For
unitholders resident in the United States, taxability of distributions is
calculated using U.S. tax rules. The taxable portion of the monthly distribution
is determined annually by the Trust based upon current and accumulated earnings
in accordance with U.S. tax law.

Investors should consult their brokers and tax advisors to ensure that the
information presented here is accurately reflected on their tax returns.

SUMMARY

The information in this release is not meant to be an exhaustive discussion of
all possible income tax considerations, but a general guideline and is not
intended to be legal or tax advice to any particular holder or potential holder
of Vermilion trust units. Holders or potential holders of trust units should
consult their own income tax advisors as to the particular income tax
consequences of holding the trust units.

Unitholders who are not residents of Canada for income tax purposes are
encouraged to seek advice from a qualified tax advisor in the country of
residence for the tax treatment of distributions. Monthly distributions payable
to non-residents of Canada are normally subject to a withholding tax of 25% as
prescribed by the Income Tax Act of Canada. This withholding tax may be reduced
in accordance with reciprocal tax treaties, and in the case of the Tax Treaty
between Canada and the United States, the withholding tax for residents of the
United States is prescribed at 15%. U.S. taxpayers may be eligible for a foreign
tax credit with respect to the Canadian withholding taxes paid. Information
regarding the amount of Canadian tax withheld in 2003 should be available
through your broker or other intermediary and is not provided by Vermilion.

Vermilion is an international energy trust that benefits from geographically
diverse production. The Trust also holds a 72.2% interest in Aventura Energy
Inc., a Trinidad-based operation. The Trust's objective is to deliver stable
distributions and maintain a strong balance sheet while reinvesting capital to
maximize production and asset value for unitholders.

For further information contact:

Curtis W. Hicks, VP Finance & CFO or Paul Beique, Director, Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>33
<FILENAME>ex99_30form40-f.txt
<DESCRIPTION>EXHIBIT 99.30
<TEXT>
                                                                   EXHIBIT 99.30
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
     VERMILION ENERGY TRUST ANNOUNCES ACQUISITION OF NETHERLANDS PRODUCTION
                                FEBRUARY 19, 2004


Vermilion Energy Trust ("Vermilion" or the "Trust") (TSX-VET.UN) announced today
the signing of an agreement to purchase 5,900 boe/d of production, 14.3 mmboe of
proven (P90) reserves and 17.4 mmboe of proven plus probable (P50) reserves in
the Netherlands by its wholly-owned subsidiary, Vermilion Oil & Gas Netherlands
B.V. ("Vermilion Netherlands") for (a)48.3 million (Cdn$80.5 million) effective
January 1, 2004. The transaction is subject to normal government and regulatory
approvals and is expected to close on or before May 1, 2004. Standard purchase
adjustments to be made at closing (cash flow received by the vendor over the
first four months of 2004 net of interest on the purchase price) are estimated
to be Cdn$12 million in favour of Vermilion. These properties are expected to
generate incremental cash flow to Vermilion of approximately Cdn$25 million for
the last eight months of 2004.

Acquisition Highlights

Vermilion is acquiring production at Cdn$13,644 per flowing barrel, Cdn$5.62 per
boe of proven (P90) reserves and Cdn$4.63 per boe of proven plus probable (P50)
reserves. Gilbert Laustsen Jung Associates Ltd., independent petroleum
engineering consultants of Calgary, evaluated the reserves using new NI 51-101
standards. The estimated reserve life index (P50) of these properties is over
eight years. On a combined basis with Vermilion's existing reserves effective
January 1, 2004, the reserve life index of the Trust is 10.5 years (P50). The
proposed transaction will increase the Trust's reserves per unit by more than
20% and will increase 2004 cash flow per unit basis by approximately 20%. The
transaction will be financed entirely through Vermilion's existing credit
facility. Following the acquisition, Vermilion's debt will total approximately
Cdn$210 million or less than 1.5 times annualized cash flow.

Benefits to Unitholders

The transaction will replace over two times the volumes produced by the Trust in
2003 and will increase Vermilion's 2004 production base after the transaction
closes by more than 25%. The Trust's gas production will climb from 42% to 57%
of total production and the deal will provide significant exposure to European
gas markets. Vermilion believes the transaction will enhance the Trust's ability
to deliver stable distributions to unit holders, while further strengthening the
asset base.

Property Description

The acquisition includes seven production licences with working interests
ranging from 42% to 93%, all of which will be operated by Vermilion Netherlands;
three state-of-the-art processing facilities with an extensive gas gathering
system; and a shallow, near-shore production platform. The Netherlands
properties are expected to produce a net 35 mmcf/d of sales gas from 50
producing wells with an average estimated decline rate of 15%. The primary
producing horizons include the Cretaceous and Permian reservoirs, with well
depths ranging from 1,900 to 2,300 metres. These licenses cover over 445,000
acres and include a number of exploration and development prospects. Most of the
lands are covered by 3D seismic. As part of the transaction, Vermilion has
agreed to participate in the drilling of an offshore well if the well receives
regulatory approval. This delineation well is testing a separate structure
adjacent to the Zuidwal gas field.


<PAGE>


Gas Marketing Arrangements

The natural gas produced from the acquired properties is contracted for the life
of the reserves to a domestic distributor. Gas pricing is energy based,
referenced off alternate fuel sources. The expected price range for this gas in
2004 is between Cdn$5.00 and Cdn$5.50 per mcf.

Attractive Netbacks

For 2004, market prices for this gas are budgeted to average over Cdn$5.00 per
mcf. No royalties are payable on this production and direct operating costs
associated with the assets are projected to be approximately Cdn$6.50 per boe in
2004. Vermilion anticipates that the effective income tax rate will be
approximately 15% over the life of the assets. The operating netback is budgeted
at Cdn$23.70 per boe. Cash taxes for 2004 are expected to be Cdn$3.90/boe while
general administrative costs will be in the order of Cdn$1.20/boe.

A comparison of the budgeted 2004 netbacks for the Trust's operations in Canada,
France and the Netherlands is shown below. Based on the pricing assumptions
shown, this comparison illustrates the attractive netbacks in the Netherlands
relative to our existing operations.

                                     CANADA          FRANCE        NETHERLANDS
- --------------------------------------------------------------------------------
Revenue, Cdn$/boe                    $31.51          $27.93             $30.20
Royalties                            $(8.37)         $(4.37)            $(0.00)
Operating costs                      $(5.81)         $(7.18)            $(6.50)
- --------------------------------------------------------------------------------
Operating Netback                    $17.33          $16.38             $23.70
G&A                                  $(1.86)         $(0.63)            $(1.20)
Taxes                                $(0.17)         $(1.93)            $(3.90)
- --------------------------------------------------------------------------------
Cash Flow (After Tax)                $15.30          $13.82             $18.60

Commodity Price and              Oil: WTI, US$26.50/bbl     Brent, US$25.00/bbl
                                 Gas: AECO, Cdn$5.00/mcf
Foreign Exchange Assumptions     CAD/US $0.75               CAD/(a)$0.64

Organizational Structure

Vermilion Netherlands plans to set up a regional office at its Harlingen,
Netherlands facility with a full complement of in-country employees to manage
its new operations. To ensure a smooth transfer of operations, Vermilion
Netherlands has also entered into a transitional arrangement with the vendor.
The Company expects to assume full control of activities prior to year-end.

Strategic Pursuit of Value

The proposed acquisition will expand the Trust's opportunity base in Western
Europe, reinforcing Vermilion's vision to be recognized as the premier Canadian
based international energy trust. The transaction also reflects Vermilion's
continuous efforts to add high quality properties at a reasonable cost.
Vermilion Netherlands will assume full operatorship of these properties,
consistent with the Trust's stated objectives, which will facilitate the control
of capital and operating costs. The Trust believes it will be able to minimize
production decline from these properties through the use of production
optimization efforts and, longer term, through future drilling. The proposed
acquisition of these high quality, high netback assets at an attractive price
demonstrates the advantage of Vermilion's commitment to a geographically
diverse, value-driven approach. The transaction will further enhance our role as
a competitive producer in Western Europe. Following this transaction, 45% of
Vermilion's production will be sourced from European operations with the balance
in Western Canada.


<PAGE>


Vermilion is an international energy trust that benefits from geographically
diverse production. The Trust also holds a 72.2% interest in Aventura Energy
Inc., a Trinidad-based operation. The Trust's objective is to deliver stable
distributions and maintain a strong balance sheet while reinvesting capital to
maximize production and asset value for unitholders.

For further information contact:

Lorenzo Donadeo, President & CEO
Curtis W. Hicks, VP Finance & CFO
or Paul Beique, Director, Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>34
<FILENAME>ex99_31form40-f.txt
<DESCRIPTION>EXHIBIT 99.31
<TEXT>
                                                                   EXHIBIT 99.31
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                        PRESS RELEASE - FEBRUARY 18, 2004
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on March 15, 2004 to all
unitholders of record on February 27, 2004. The ex-distribution date for this
payment is February 25, 2004. This will be the Trust's 13th consecutive
distribution payment of $0.17 since Vermilion was formed as a Trust in January
2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 70% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>35
<FILENAME>ex99_32form40-f.txt
<DESCRIPTION>EXHIBIT 99.32
<TEXT>
                                                                   EXHIBIT 99.32
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                    FOR IMMEDIATE RELEASE - FEBRUARY 13, 2004


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.14371 to 1.15563. The increase will be effective on February 13, 2004. A
"Notice of Retraction" must be received by Computershare by February 18, 2004 to
receive this exchange ratio. All notices received after this date will receive
the exchange ratio to be determined on March 15, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      January 30, 2004
Opening Exchange Ratio                                                                  1.14371
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $16.31494
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01192
Effective Date of the Increase in the Exchange Ratio                                    February 13, 2004
Exchange Ratio as of the Effective Date                                                 1.15563
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>36
<FILENAME>ex99_33form40-f.txt
<DESCRIPTION>EXHIBIT 99.33
<TEXT>
                                                                   EXHIBIT 99.33
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                    FOR IMMEDIATE RELEASE - JANUARY 15, 2004


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.13151 to 1.14371. The increase will be effective on January 15, 2004. A
"Notice of Retraction" must be received by Computershare by January 21, 2004 to
receive this exchange ratio. All notices received after this date will receive
the exchange ratio to be determined on February 13, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      December 31, 2003
Opening Exchange Ratio                                                                  1.13151
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $15.77212
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01220
Effective Date of the Increase in the Exchange Ratio                                    January 15, 2004
Exchange Ratio as of the Effective Date                                                 1.14371
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>37
<FILENAME>ex99_34form40-f.txt
<DESCRIPTION>EXHIBIT 99.34
<TEXT>
                                                                   EXHIBIT 99.34
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                DECEMBER 18, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on January 15, 2004 to all
unitholders of record on December 31, 2003. The ex-distribution date for this
payment is December 29, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>38
<FILENAME>ex99_35form40-f.txt
<DESCRIPTION>EXHIBIT 99.35
<TEXT>
                                                                   EXHIBIT 99.35
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                    FOR IMMEDIATE RELEASE - DECEMBER 15, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.11834 to 1.13151. The increase will be effective on December 15, 2003. A
"Notice of Retraction" must be received by Computershare by December 18, 2003 to
receive this exchange ratio. All notices received after this date will receive
the exchange ratio to be determined on January 15, 2004.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      November 28, 2003
Opening Exchange Ratio                                                                  1.11834
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $14.43229
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01317
Effective Date of the Increase in the Exchange Ratio                                    December 15, 2003
Exchange Ratio as of the Effective Date                                                 1.13151
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>39
<FILENAME>ex99_36form40-f.txt
<DESCRIPTION>EXHIBIT 99.36
<TEXT>
                                                                   EXHIBIT 99.36
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
              VERMILION ENERGY TRUST ANNOUNCES CLOSING OF FINANCING
                                DECEMBER 10, 2003


Vermilion Energy Trust ("Vermilion" or the "Trust") - (VET.UN) announced today
the closing of the issue of 6,050,000 Trust Units ("Trust Units") at a price of
$14.10 per Trust Unit for gross proceeds of approximately $85 million, which
includes the exercise in full of the underwriters' option to purchase an
additional 550,000 Trust Units. The Trust Units were offered to the public on a
bought deal basis through a syndicate of underwriters led by CIBC World Markets
Inc. and included BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., TD
Securities Inc., National Bank Financial Inc., Canaccord Capital Corporation,
Scotia Capital Inc. and FirstEnergy Capital Corp.

The net proceeds of the financing will be used to fund the Trust's capital
expenditure and acquisition program and for general purposes. In the interim,
the net proceeds will be used to repay a portion of Vermilion's bank
indebtedness.

This news release shall not constitute an offer to sell or the solicitation of
an offer to buy the securities in any jurisdiction. The Trust Units offered will
not and have not been registered under the United States Securities Act of 1933
and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirement.

Vermilion is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc., a
Trinidad-based operation. The Trust's objective is to deliver stable
distributions and maintain a strong balance sheet while reinvesting capital to
maximize production and asset value for unitholders.

For further information contact:

Lorenzo Donadeo, President and CEO Curtis W. Hicks, Vice-President, Finance and
CFO or Paul Beique, Director, Investor Relations 2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com

To find out more about Vermilion Energy Trust visit our website at
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>40
<FILENAME>ex99_37form40-f.txt
<DESCRIPTION>EXHIBIT 99.37
<TEXT>
                                                                   EXHIBIT 99.37
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]

================================================================================
                 NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
                    OR FOR DISTRIBUTION IN THE UNITED STATES
================================================================================


                        VERMILION ENERGY TRUST ANNOUNCES
                          BOUGHT DEAL EQUITY FINANCING
                        PRESS RELEASE - NOVEMBER 19, 2003


CALGARY, ALBERTA (TSX - VET.UN) - Vermilion Energy Trust ("Vermilion" or the
"Trust") is pleased to announce it has entered into an agreement with a
syndicate of underwriters to sell 5,500,000 Trust Units at $14.10 per unit to
raise gross proceeds of $77,550,000.

The underwriting syndicate led by CIBC World Markets Inc., includes BMO Nesbitt
Burns Inc., RBC Capital Markets, TD Securities Inc., National Bank Financial
Inc., Canaccord Capital Corporation, Scotia Capital Inc. and FirstEnergy Capital
Corp. Vermilion has granted the underwriters an option, exercisable in whole or
in part, no later than 48 hours prior to the closing, to purchase up to an
additional 550,000 Trust Units at the same offering price. Should the option be
fully exercised, the total gross proceeds of the issue would be $85,305,000. The
offering will be made in all provinces of Canada and is expected to close on or
about December 10, 2003, subject to regulatory approval.

The net proceeds from the financing will be used to partially repay outstanding
borrowings under Vermilion's credit facilities, and for general purposes
including funding Vermilion's ongoing capital expenditure and acquisition
program.

VERMILION IS AN INTERNATIONAL ENERGY TRUST THAT BENEFITS FROM GEOGRAPHICALLY
DIVERSE PRODUCTION. WHILE 73% OF PRODUCTION VOLUMES COME FROM HIGH QUALITY OIL
AND GAS RESERVES IN CANADA, THE TRUST ALSO PRODUCES HIGH VALUE, LIGHT OIL IN
FRANCE. THE TRUST ALSO HOLDS A 72.2% INTEREST IN AVENTURA ENERGY INC., A
TRINIDAD-BASED OPERATION. THE TRUST'S OBJECTIVE IS TO DELIVER STABLE
DISTRIBUTIONS AND MAINTAIN A STRONG BALANCE SHEET WHILE REINVESTING CAPITAL TO
MAXIMIZE PRODUCTION AND ASSET VALUE FOR UNITHOLDERS. VERMILION TRADES ON THE
TORONTO STOCK EXCHANGE UNDER THE SYMBOL VET.UN. FOR FURTHER INFORMATION ON
VERMILION, PLEASE VISIT WWW.VERMILIONENERGY.COM.

THE SECURITIES OFFERED HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), AND MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

ADVISORY: THE TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE
INFORMATION CONTAINED HEREIN. CERTAIN INFORMATION REGARDING VERMILION MAY
CONSTITUTE FORWARD-LOOKING FINANCIAL AND OPERATIONAL INFORMATION INCLUDING
EARNINGS, CASH FLOW, PRODUCTION AND CAPITAL EXPENDITURE PROJECTIONS. THESE
PROJECTIONS ARE BASED ON THE TRUST'S EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF
RISKS AND UNCERTAINTIES THAT COULD MATERIALLY AFFECT THE RESULTS. THESE RISKS
INCLUDE, BUT ARE NOT LIMITED TO, FUTURE COMMODITY PRICES, EXCHANGE RATES,
INTEREST RATES, GEOLOGICAL RISK, RESERVE RISK, POLITICAL RISK, ENVIRONMENTAL
RISK, PRODUCT DEMAND AND TRANSPORTATION RESTRICTIONS. AS A CONSEQUENCE, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING
INFORMATION.

FOR FURTHER INFORMATION PLEASE CONTACT:
LORENZO DONADEO, P. ENG.
PRESIDENT & CHIEF EXECUTIVE OFFICER
(403) 269-4884
OR:
CURTIS W. HICKS, CA
VICE PRESIDENT, FINANCE & CFO
(403) 781-9424
 OR:
PAUL BEIQUE
DIRECTOR, INVESTOR RELATIONS
(403) 781-9449


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>41
<FILENAME>ex99_38form40-f.txt
<DESCRIPTION>EXHIBIT 99.38
<TEXT>
                                                                   EXHIBIT 99.38
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                    FOR IMMEDIATE RELEASE - NOVEMBER 14, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.10569 to 1.11834. The increase will be effective on November 14, 2003. A
"Notice of Retraction" must be received by Computershare by November 19, 2003 to
receive this exchange ratio. All notices received after this date will receive
the exchange ratio to be determined on December 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      October 31, 2003
Opening Exchange Ratio                                                                  1.10569
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $14.85788
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01265
Effective Date of the Increase in the Exchange Ratio                                    November 14, 2003
Exchange Ratio as of the Effective Date                                                 1.11834
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>42
<FILENAME>ex99_39form40-f.txt
<DESCRIPTION>EXHIBIT 99.39
<TEXT>
                                                                   EXHIBIT 99.39
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                NOVEMBER 13, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on December 15, 2003 to all
unitholders of record on November 28, 2003. The ex-distribution date for this
payment is November 26, 2003. With this distribution payment, Vermilion Energy
Trust will have made 10 consecutive monthly distribution payments of $0.17 per
trust unit since converting to a Trust in January totalling $1.70 per trust
unit.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>43
<FILENAME>ex99_40form40-f.txt
<DESCRIPTION>EXHIBIT 99.40
<TEXT>
                                                                   EXHIBIT 99.40
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
                        VERMILION ENERGY TRUST ANNOUNCES
               THIRD QUARTER RELEASE DATE/CONFERENCE CALL DETAILS
                                NOVEMBER 5, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) would like to advise that
its third quarter report will be released prior to opening of markets on Monday,
November 10th, 2003.

Vermilion will discuss these results in a conference call to be held on
Wednesday, November 12, 2003. The conference call will begin at 10:00 a.m. EST
(8:00 a.m. MST). To participate, you may call toll free 1-800-814-3911 or
1-416-640-4127 (Toronto area). The conference call will also be available on
replay by calling 1-877-289-8525 or 1-416-640-1917 (Toronto area) using pass
code 21021476 followed by the pound "#" key. The replay will be available until
midnight eastern time on November 19, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>44
<FILENAME>ex99_41form40-f.txt
<DESCRIPTION>EXHIBIT 99.41
<TEXT>
                                                                   EXHIBIT 99.41
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                OCTOBER 22, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on November 14, 2003 to all
unitholders of record on October 31, 2003. The ex-distribution date for this
payment is October 29, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>45
<FILENAME>ex99_42form40-f.txt
<DESCRIPTION>EXHIBIT 99.42
<TEXT>
                                                                   EXHIBIT 99.42
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                    FOR IMMEDIATE RELEASE - OCTOBER 15, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.09317 to 1.10569. The increase will be effective on October 15, 2003. A
"Notice of Retraction" must be received by Computershare by October 22, 2003 to
receive this exchange ratio. All notices received after this date will receive
the exchange ratio to be determined on November 14, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                      <C>
Record Date of Vermilion Energy Trust Distribution                                      September 30, 2003
Opening Exchange Ratio                                                                  1.09317
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $14.84075
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01252
Effective Date of the Increase in the Exchange Ratio                                    October 15, 2003
Exchange Ratio as of the Effective Date                                                 1.10569
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>46
<FILENAME>ex99_43form40-f.txt
<DESCRIPTION>EXHIBIT 99.43
<TEXT>
                                                                   EXHIBIT 99.43
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]


                                  PRESS RELEASE
       VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION AND NEW WEB PAGE
                               SEPTEMBER 19, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on October 15, 2003 to all
unitholders of record on September 30, 2003. The ex-distribution date for this
payment is September 26, 2003.

The Trust would also like to advise that it has launched a new page on its
website "Business Opportunities". This page lists details of opportunities
available for sale or farmout. Please visit www.vermilionenergy.com for further
details.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>47
<FILENAME>ex99_44form40-f.txt
<DESCRIPTION>EXHIBIT 99.44
<TEXT>
                                                                   EXHIBIT 99.44
                                                                   -------------


  [GRAPHIC OMITTED]                                      [GRAPHIC OMITTED]
[AVENTURA ENERGY INC.]                           [LOGO - VERMILION ENERGY TRUST]


                   Aventura Energy Inc./Vermilion Energy Trust
                    For Immediate Release September 15, 2003
                       Discussions with Potential Acquirer


Aventura Energy Inc. ("Aventura" or the "Corporation") (TSX:AVR) and Vermilion
Energy Trust ("Vermilion") (TSX:VET.un), Aventura's parent, announced that they
are in discussions with a potential acquirer of Aventura Energy Inc.

The completion of the proposed transaction is dependent upon the parties
reaching agreement on all terms as well as satisfying a number of conditions
precedent including obtaining government and other approvals in Trinidad.

There is no assurance that should the transaction proceed, the price to be paid
for Aventura's shares will reach or exceed the current trading price. In the
event that a definitive agreement is concluded or the discussions are
terminated, a further announcement will be made.

For additional information please contact:

<TABLE>
<S>                                                          <C>
Aventura Energy Inc.                                         Vermilion Energy Trust

Lorenzo Donadeo, President and Chief Executive Officer       Lorenzo Donadeo, President and Chief Executive Officer
(403) 269-4884                                               (403) 269-4884

Marty Wares, Chief Financial Officer                         Paul Beique, Director Investor Relations
(403) 231-1721                                               (403) 781-9449

Aventura Energy Inc.                                         Vermilion Energy Trust
2800, 400 - 4th Avenue S. W.                                 2800, 400 - 4th Avenue S. W.
Calgary, Alberta  T2P 0J4                                    Calgary, Alberta  T2P 0J4
E-Mail: info@aventuraenergy.com                              E-Mail: info@vermilionenergy.com
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>48
<FILENAME>ex99_45form40-f.txt
<DESCRIPTION>EXHIBIT 99.45
<TEXT>
                                                                   EXHIBIT 99.45
                                                                   -------------


[GRAPHIC OMITTED]
[VERMILION ENERGY TRUST]


                                 PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                   FOR IMMEDIATE RELEASE - SEPTEMBER 15, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.08076 to 1.09317. The increase will be effective on September 15, 2003. A
"Notice of Retraction" must be received by Computershare by September 19, 2003
to receive this exchange ratio. All notices received after this date will
receive the exchange ratio to be determined on October 15, 2003

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      August 29, 2003
Opening Exchange Ratio                                                                  1.08076
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $14.81072
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01241
Effective Date of the Increase in the Exchange Ratio                                    September 15, 2003
Exchange Ratio as of the Effective Date                                                 1.09317
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:  (403) 269-4884
Fax:    (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>49
<FILENAME>ex99_46form40-f.txt
<DESCRIPTION>EXHIBIT 99.46
<TEXT>
                                                                   EXHIBIT 99.46
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                 AUGUST 20, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on September 15, 2003 to all
unitholders of record on August 29, 2003. The ex-distribution date for this
payment is August 27, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>50
<FILENAME>ex99_47form40-f.txt
<DESCRIPTION>EXHIBIT 99.47
<TEXT>
                                                                   EXHIBIT 99.47
                                                                   -------------


                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                     FOR IMMEDIATE RELEASE - AUGUST 15, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.06810 to 1.08076. The increase will be effective on August 15, 2003. A "Notice
of Retraction" must be received by Computershare by August 20, 2003 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on September 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      July 31, 2003
Opening Exchange Ratio                                                                  1.06810
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $14.34463
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01266
Effective Date of the Increase in the Exchange Ratio                                    August 15, 2003
Exchange Ratio as of the Effective Date                                                 1.08076
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>51
<FILENAME>ex99_48form40-f.txt
<DESCRIPTION>EXHIBIT 99.48
<TEXT>
                                                                   EXHIBIT 99.48
                                                                   -------------


                                  PRESS RELEASE
              VERMILION ENERGY TRUST TEMPORARILY SHUTS IN GAS WELLS
                                 AUGUST 6, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) announced today that it has
temporarily shut-in production from the Shane Kiskatinaw "D" pool (the "Pool").

The Pool was subject to EUB Order No. GA360 issued on June 10, 2003, that
described the manner in which production was to be allocated from the pool and
determined that production must be balanced on a monthly basis with any under or
over production in any month being balanced in the following month.

The off-target producer intentionally shut-in its well located within the Pool
over the last two months. A clarification by the EUB Panel on this situation
determined that over-production by all of the other Pool producers has occurred,
resulting in the requirement that such other producers temporarily shut in their
production from the Pool.

The Trust will therefore be temporarily shutting in approximately 1,600 boe per
day of net production, however, this temporary shut-in does not affect its share
of Pool reserves. This shut-in situation will now enable the Trust to bring on
an existing tied-in gas well at Shane 8-1-77-2 W6M (net 150/boe per day to the
Trust) that had been previously shut in due to facility constraints.

The Trust and its partners will be taking all necessary steps to ensure
production from this Pool comes back on-stream as quickly as possible. The
impact of the shut-in on the Trust's cash flow will not affect planned
distributions through 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:  (403) 269-4884
Fax:    (403) 264-6306


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>52
<FILENAME>ex99_49form40-f.txt
<DESCRIPTION>EXHIBIT 99.49
<TEXT>
                                                                   EXHIBIT 99.49
                                                                   -------------


                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                  JULY 22, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on August 15, 2003 to all
unitholders of record on July 31, 2003. The ex-distribution date for this
payment is July 29, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>53
<FILENAME>ex99_50form40-f.txt
<DESCRIPTION>EXHIBIT 99.50
<TEXT>
                                                                   EXHIBIT 99.50
                                                                   -------------


                                 PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                      FOR IMMEDIATE RELEASE - JULY 15, 2003


Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.05507 to 1.06810. The increase will be effective on July 15, 2003. A "Notice
of Retraction" must be received by Computershare by July 22, 2003 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on August 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      June 30, 2003
Opening Exchange Ratio                                                                  1.05507
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $13.76625
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01303
Effective Date of the Increase in the Exchange Ratio                                    July 15, 2003
Exchange Ratio as of the Effective Date                                                 1.06810
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>54
<FILENAME>ex99_51form40-f.txt
<DESCRIPTION>EXHIBIT 99.51
<TEXT>
                                                                   EXHIBIT 99.51
                                                                   -------------


                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                  JUNE 19, 2003


Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on July 15, 2003 to all
unitholders of record on June 30, 2003. The ex-distribution date for this
payment is June 26, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>55
<FILENAME>ex99_52form40-f.txt
<DESCRIPTION>EXHIBIT 99.52
<TEXT>
                                                                   EXHIBIT 99.52
                                                                   -------------


                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                      FOR IMMEDIATE RELEASE - JUNE 13, 2003

Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.04127 to 1.05507. The increase will be effective on June 13, 2003. A "Notice
of Retraction" must be received by Computershare by June 19, 2003 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on July 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      May 30, 2003
Opening Exchange Ratio                                                                  1.04127
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $12.82937
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01380
Effective Date of the Increase in the Exchange Ratio                                    June 13, 2003
Exchange Ratio as of the Effective Date                                                 1.05507
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>56
<FILENAME>ex99_53form40-f.txt
<DESCRIPTION>EXHIBIT 99.53
<TEXT>
                                                                   EXHIBIT 99.53
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



            VERMILION ENERGY TRUST ANNOUNCES FAVOURABLE RULING BY EUB
                      FOR IMMEDIATE RELEASE - JUNE 11, 2003

Vermilion Energy Trust ("Vermilion") (TSX:VET.UN) as operator and along with
their partners CLEAR Energy Inc. ("CLEAR") (TSX:CEN) and TUSK Energy Inc.
("TUSK") (TSX:TKE) announce that a positive decision has been rendered with
respect to their applications made to the Alberta Energy Utilities Board
("AEUB") regarding natural gas production from the Shane Kiskatinaw D Pool.
These applications were made with the objective of achieving equitable drainage
of pool reserves. The decision of the AEUB and the related order with respect to
future production has a significant impact upon Vermilion, CLEAR and TUSK.

Decision 2003-046 and the related Order No. GA 359 was issued June 10, 2003 and
is effective immediately, may be viewed at the AEUB website www.eub.gov.ab.ca.

The Shane Kiskatinaw D Pool had been subject to competitive drainage prior to
June 10, 2003 with two Vermilion operated wells and two third party wells
competing for production from the pool. The order has the immediate effect of
increasing the recoverable reserves attributable to the interests of Vermilion,
CLEAR and TUSK and ending the competitive drainage of the Shane Kiskatinaw D
Pool. Additionally, the competitive off-target well at 2-30-77-1 W6M has been
reduced to producing 9.5 percent of the pool, a significant decrease from
approximately 37 percent prior to the ruling.

The Order requires that all affected parties manage production and equity from
the pool on a monthly basis. Overall pool production is expected to be reduced
thereby extending the reserve life of the pool.

Vermilion is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique, Director Investor Relations
or
Martin Robert, P.Eng., Vice President, Engineering and International Operations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>57
<FILENAME>ex99_54form40-f.txt
<DESCRIPTION>EXHIBIT 99.54
<TEXT>
                                                                   EXHIBIT 99.54
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                  MAY 20, 2003

Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on June 13, 2003 to all
unitholders of record on May 30, 2003. The ex-distribution date for this payment
is May 28, 2003.

The Trust is an international energy trust that benefits from geographically
diverse production. While 73% of production volumes come from high quality oil
and gas reserves in Canada, the Trust also produces high-value, light oil in
France. The Trust also holds a 72.2% interest in Aventura Energy Inc. a Trinidad
based operation that provides capital appreciation potential for the Trust
unitholders. The Trust's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>58
<FILENAME>ex99_55form40-f.txt
<DESCRIPTION>EXHIBIT 99.55
<TEXT>
                                                                   EXHIBIT 99.55
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                      FOR IMMEDIATE RELEASE - MAY 15, 2003

Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.02770 to 1.04127. The increase will be effective on May 15, 2003. A "Notice of
Retraction" must be received by Computershare by May 21, 2003 to receive this
exchange ratio. All notices received after this date will receive the exchange
ratio to be determined on June 13, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      April 30, 2003
Opening Exchange Ratio                                                                  1.02770
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $12.87666
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01357
Effective Date of the Increase in the Exchange Ratio                                    May 15, 2003
Exchange Ratio as of the Effective Date                                                 1.04127
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:   (403) 269-4884
Fax:     (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>59
<FILENAME>ex99_56form40-f.txt
<DESCRIPTION>EXHIBIT 99.56
<TEXT>
                                                                   EXHIBIT 99.56
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]


                                  PRESS RELEASE
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION
                                 APRIL 21, 2003

Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on May 15, 2003 to all
unitholders of record on April 30, 2003. The ex-distribution date for this
payment is April 28, 2003.

The Trust will be releasing its first quarter results for 2003 on May 12, 2003.

Vermilion Energy Trust is an international energy trust that benefits from
geographically diverse production. While 74% of production volumes come from
high quality oil and gas reserves in Canada, the Trust also produces high-value,
light oil in France. The Trust also holds a 72.4% interest in Aventura Energy
Inc. a Trinidad based operation that provides capital appreciation potential for
the Trust unitholders. Vermilion's objective is to deliver stable distributions
and maintain a strong balance sheet while reinvesting capital to maximize
production and asset value for unitholders. Vermilion Energy Trust trades on The
Toronto Stock Exchange under the symbol VET.UN.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:  (403) 269-4884
Fax:  (403) 264-6306
IR Toll Free:  1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>60
<FILENAME>ex99_57form40-f.txt
<DESCRIPTION>EXHIBIT 99.57
<TEXT>
                                                                   EXHIBIT 99.57
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO - VERMILION ENERGY TRUST]



                                  PRESS RELEASE
            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                     FOR IMMEDIATE RELEASE - APRIL 15, 2003

Vermilion Energy Trust (VET.UN-TSX) is pleased to announce the increase to the
Exchange Ratio of the Exchangeable Shares of Vermilion Resources Ltd. from
1.01352 to 1.02770. The increase will be effective on April 15, 2003. A "Notice
of Retraction" must be received by Computershare by April 21, 2003 to receive
this exchange ratio. All notices received after this date will receive the
exchange ratio to be determined on May 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      March 31, 2003
Opening Exchange Ratio                                                                  1.01352
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $12.14690
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01418
Effective Date of the Increase in the Exchange Ratio                                    April 15, 2003
Exchange Ratio as of the Effective Date                                                 1.02770
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique
Director Investor Relations
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Phone:  (403) 269-4884
Fax:    (403) 264-6306
IR Toll Free: 1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>61
<FILENAME>ex99_58form40-f.txt
<DESCRIPTION>EXHIBIT 99.58
<TEXT>
                                                                   EXHIBIT 99.58
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO -- VERMILION ENERGY TRUST]



                         PRESS RELEASE - MARCH 20, 2003
               VERMILION ENERGY TRUST ANNOUNCES CASH DISTRIBUTION

Vermilion Energy Trust (the "Trust") (VET.UN - TSX) is pleased to announce the
cash distribution of $0.17 per trust unit payable on April 15, 2003 to all
unitholders of record on March 31, 2003. The ex-distribution date for this
payment is March 27, 2003.

Vermilion Energy Trust is an international energy trust that benefits from
geographically diverse production. While 74% of production volumes come from
high quality oil and gas reserves in Canada, the Trust also produces high-value,
light oil in France. The Trust also holds a 72.4% interest in Aventura Energy
Inc. a Trinidad based operation with capital appreciation potential for the
Trust unitholders. Vermilion's objective is to deliver stable distributions and
maintain a strong balance sheet while reinvesting capital to maximize production
and asset value for unitholders. Vermilion Energy Trust trades on The Toronto
Stock Exchange under the symbol VET.UN.

For further information on Vermilion Energy Trust including information
regarding the Trust's Distribution Reinvestment Plan please visit
www.vermilionenergy.com or contact:

Paul Beique
Director Investor Relations
Vermilion Energy Trust
2800, 400 - 4th Avenue S.W.
Calgary, Alberta  T2P 0J4
Telephone:  (403) 269-4884
Facsimile:  (403) 264-6306
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>62
<FILENAME>ex99_59form40-f.txt
<DESCRIPTION>EXHIBIT 99.59
<TEXT>
                                                                   EXHIBIT 99.59
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO -- VERMILION ENERGY TRUST]



            VERMILION ENERGY TRUST ANNOUNCES EXCHANGEABLE SHARE RATIO
                     FOR IMMEDIATE RELEASE - MARCH 14, 2003


CALGARY, March 14 - (VET.UN-TSX) Vermilion Energy Trust is pleased to announce
the increase to the Exchange Ratio of the Exchangeable Shares of Vermilion
Resources Ltd. from 1.00000 to 1.01352. The increase will be effective on March
14, 2003. A "Notice of Retraction" must be received by Computershare by March
20, 2003 to receive this exchange ratio. All notices received after this date
will receive the exchange ratio to be determined on April 15, 2003.

The following are the details used in the calculation of the Exchange ratio:

<TABLE>
<S>                                                                                     <C>
Record Date of Vermilion Energy Trust Distribution                                      February 28, 2003
Opening Exchange Ratio                                                                  1.00000
Vermilion Energy Trust Distribution per Unit                                            $0.17

10-day Weighted Average Trading Price ("Current Market Price")                          $12.57289
(Including the Last Business Day Prior to the Distribution Payment Date)

Increase in the Exchange Ratio                                                          0.01352
Effective Date of the Increase in the Exchange Ratio                                    March 14, 2003
Exchange Ratio as of the Effective Date                                                 1.01352
</TABLE>

The increase in the exchange ratio is calculated by multiplying the Vermilion
Energy Trust Distribution per Unit by the previous months exchange ratio and
dividing by the Current Market Price of VET.UN.

A holder of Vermilion Resources Ltd. Exchangeable Shares can exchange all or a
portion of their holdings at any time for Vermilion Trust Units by completing a
Retraction Request form. You can obtain a copy by contacting Computershare Trust
Company of Canada at (403) 267-6894.

For further information please contact:

Paul Beique, Director Investor Relations
Phone: (403) 269-4884
Fax:   (403) 264-6306
Toll Free 1-866-895-8101
info@vermilionenergy.com
www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>63
<FILENAME>ex99_60form40-f.txt
<DESCRIPTION>EXHIBIT 99.60
<TEXT>
                                                                   EXHIBIT 99.60
                                                                   -------------



     [GRAPHIC OMITTED]                                   [GRAPHIC OMITTED]
[LOGO- AVENTURA ENERGY INC.]                     [LOGO - VERMILION ENERGY TRUST]



                  AVENTURA ENERGY INC. /VERMILION ENERGY TRUST
                      FOR IMMEDIATE RELEASE MARCH 10, 2003
                       TSX LISTING AND SHARE CONSOLIDATION


Aventura Energy Inc. ("Aventura" or the "Corporation") (TSX-V: AVR) and
Vermilion Energy Trust ("Vermilion") (TSX-VET.UN), Aventura's parent, are
pleased to announce that on Tuesday, March 11, 2003, the common shares of
Aventura will no longer trade on the TSX Venture Exchange, and will commence
trading on The Toronto Stock Exchange. The common shares will trade on The
Toronto Stock Exchange under the symbol AVR, with CUSIP number 053562 20 3.

On Monday, March 10, 2003, Aventura is also completing the consolidation of its
issued and outstanding common shares on the basis of one (1) new common share
for each ten (10) common shares issued and outstanding. Accordingly, at the
commencement of trading on Tuesday, March 11, 2003, Aventura will have
approximately 44.6 million shares issued and outstanding.

For additional information, please contact:

Lorenzo Donadeo, President & CEO
(403) 269-4884

Marty Wares, Chief Financial Officer
(403) 231-1721

Aventura Energy Inc./ Vermilion Energy Trust
2800, 400 - 4th Avenue SW
Calgary, Alberta  T2P 0J4
E-Mail:  INFO@VERMILIONENERGY.COM






       THE TSX VENTURE EXCHANGE AND THE TSX EXCHANGE HAVE NEITHER APPROVED
             NOR DISAPPROVED OF THE CONTENTS OF THIS PRESS RELEASE.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>64
<FILENAME>ex99_61form40-f.txt
<DESCRIPTION>EXHIBIT 99.61
<TEXT>
                                                                   EXHIBIT 99.61
                                                                   -------------


[GRAPHIC OMITTED]
[LOGO -- VERMILION ENERGY TRUST]



            VERMILION ENERGY TRUST - NEW APPOINTMENTS AND VALUATIONS
                      FOR IMMEDIATE RELEASE - MARCH 3, 2003

March 3, 2003 - Calgary, Alberta - Vermilion Energy Trust (VET.UN-TSX) ("the
Trust") is pleased to announce the appointment of Curtis W. Hicks to the
position of Vice President, Finance and Chief Financial Officer. Curtis has over
20 years experience in the financial management of oil and gas companies and
most recently served in a similar capacity for another well-respected oil & gas
trust. Vermilion is also pleased to announce the appointment of Paul Beique to
the position of Director, Investor Relations. Paul's background includes 15
years as an energy investment analyst, prior to which he worked as a petroleum
engineer for a multi-national oil company.

The Trust also announces its determination of the fair market value of Trust
units and common shares of Clear Energy Inc. issued pursuant to the Plan of
Arrangement (the "Arrangement") which became effective on January 22, 2003 and
which involved Vermilion Resources Ltd. ("Vermilion"), Clear Energy Inc.,
Vermilion Acquisition Ltd., and the Trust.

Under the Arrangement, a holder of Vermilion common shares (other than those
holders who received Exchangeable Shares) received one Interim Note (the Clear
Energy Inc. Share Consideration) and one Note (the Trust Unit Consideration) for
each Vermilion common share held by such holder. Based on the five day weighted
average trading price of the Vermilion common shares prior to the effective date
of the Arrangement ($12.49 per share) and the valuation of the assets which were
transferred to Clear Energy Inc. ($.0565 per share), the Trust has determined
that the value of each Interim Note was $0.565 and the value of each Note was
$11.925. Holders of Vermilion common shares received one trust unit of the Trust
for each Note and one common share of Clear Energy Inc. for every three Interim
Notes (rounded to the nearest number of whole shares). Accordingly, the Trust
has determined that it would be reasonable to ascribe a value as at January 21,
2003, of $11.925 to each unit of the Trust and a value of $1.695 to each common
share of Clear Energy Inc.

SINCE THE DETERMINATION OF FAIR MARKET VALUE IS A QUESTION OF FACT, NEITHER THE
CANADA CUSTOMS AND REVENUE AGENCY NOR ANY OTHER TAX AUTHORITY WILL BE BOUND BY
THE VIEWS OF THE TRUST AS EXPRESSED ABOVE. CONSEQUENTLY, FORMER HOLDERS OF
VERMILION COMMON SHARES SHOULD SEEK INDEPENDENT ADVICE REGARDING THE VALUATION
OF THE CONSIDERATION RECEIVED BY THEM PURSUANT TO THE ARRANGEMENT.

For further information please contact:

Lorenzo Donadeo                                 Vermilion Energy Trust
President and Chief Executive Officer           2800, 400 - 4th Avenue S.W.
                                                Calgary, Alberta  T2P 0J4
Paul Beique                                     Telephone:  (403) 269-4884
Director Investor Relations                     Facsimile:  (403) 264-6306
                                                Investor Relations Toll Free:
                                                    1-866-895-8101

www.vermilionenergy.com


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>65
<FILENAME>ex99_62form40-f.txt
<DESCRIPTION>EXHIBIT 99.62
<TEXT>
                                                                   EXHIBIT 99.62
                                                                   -------------


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[LOGO- AVENTURA ENERGY INC.]                     [LOGO - VERMILION ENERGY TRUST]



                  AVENTURA ENERGY INC. /VERMILION ENERGY TRUST
                       FOR IMMEDIATE RELEASE MARCH 3, 2003

TSX LISTING, SHARE CONSOLIDATION, OPERATIONAL UPDATE AND TECHNICAL TEAM
REORGANIZATION

Aventura Energy Inc. ("Aventura" or the "Corporation") (TSX-V:AVR) and Vermilion
Energy Trust ("Vermilion") (TSX-VET.UN), Aventura's parent, are pleased to
announce that Aventura has received conditional approval to list its shares for
trading on the Toronto Stock Exchange ("TSX"). The transfer process has been
initiated and the shares are expected to begin trading as soon as possible under
the stock symbol AVR. As part of this transition, Aventura will consolidate its
issued and outstanding share capital on a 10:1 basis. Aventura will have
approximately 44.6 million issued and outstanding common shares post
consolidation.

Aventura is pleased to provide an operational update and to announce that it has
reorganized its management team and enhanced its exploration team to fully
capitalize on the Corporation's opportunities in Trinidad.

TRINIDAD OPERATIONAL UPDATE
- ---------------------------

The Carapal Ridge-1 well, which commenced production on December 12, 2003
continues to exceed expectations. Gross production rates for 2003 have been
averaging 21.5 mmscfd (as constrained by contract volumes) with field liquid
recovery averaging 27 bbls/mmscfd or 580 bbls/day. Estimated current daily
production volumes for Aventura's 65% WI is 2,700 boe/d on a 6:1 basis. The
gross deliverability of the well at current line pressure is estimated at 100
mmscfd.

The Saunders-1 exploration well, located 3km southwest of the Carapal Ridge-1
well, is delineating the Carapal Ridge discovery and will also test a deeper
prospect. The well is currently drilling with a planned total depth of 10,500
feet. Lease construction is complete at the Baraka-1 location and the well will
spud immediately after the rig is released from the Saunders-1 well. The
Baraka-1 exploration well is located 3km northeast of the Carapal Ridge-1 well
and will also test a separate prospect.

TRINIDAD IN-COUNTRY OPERATIONS TEAM
- -----------------------------------

Barry Larson, Vermilion Oil & Gas (Trinidad) Ltd.'s in-country General Manager,
will continue to manage and direct all of the operations to be carried out in
Trinidad. Direct support for these operations will be supplied by a number of
individuals. Denis Gratton, the former Controller of Vermilion's French
operations, will provide administrative assistance and guidance with respect to
the on-island financial and tax issues. Carl Dorsch, who was in charge of
Vermilion's French drilling operations, has been involved in the design of
Aventura's current drilling program and is serving as the Drilling Manager for
this program. Eric Key, a former superintendent of operations for Vermilion in
Canada, will oversee well completions, testing and production operations.

TRINIDAD CORPORATE TEAM - CALGARY
- ---------------------------------

Lorenzo Donadeo has been appointed as President and CEO of Aventura. Marty Wares
has been appointed as Chief Financial Officer of Aventura and will be
responsible for all of Aventura's financial reporting and accounting functions.
Marty has over twenty-five years experience in the financial operations of both
public and private junior oil and gas companies.

<PAGE>
                                      -2-


A highly skilled team of individuals guides the exploration and development
program for Trinidad. Blair Anderson, who will continue as Manager Exploration
and Development, has approximately 25 years of international exploration and
development experience. He has provided key expertise and guidance in this
position over the last three very successful years of Aventura's activities.
Mike Leith has joined the group as Vice President, Exploration & Development.
His 35 years of varied domestic and international exploration experience will be
a strong complement to the team. Giuseppe (Joe) Arcuri, a geophysist by
training, with over 25 years of primarily international experience, joins the
team as Sr. Explorationist.

VERMILION SUPPORT
- -----------------

Under the current joint venture arrangement, Vermilion will continue to provide
corporate, administrative and technical support, specifically in areas of joint
venture accounting, tax planning; product marketing; drilling supervision; well
testing; facility design; project planning and reservoir engineering.

CAPITAL PROGRAM
- ---------------

As previously reported, Aventura has completed the disposition of its Canadian
royalty interest to Vermilion. It has also sold its remaining producing assets
in Canada for $1.3 million. Accordingly, as of January 31, 2003, Aventura no
longer has any oil and gas operations in Canada. Aventura expects to fund its
2003 capital program from existing cash balances and strong operating cash flow
from the Trinidad operation.

Aventura Energy Inc. is an internationally focused public energy company engaged
in the exploration, development and production of oil and gas. Aventura is the
operator of its major asset, a 65% working interest in a world-class gas and
condensate discovery on a 111 square kilometre exploration block in Trinidad.
Vermilion Energy Trust holds 72.3% of the shares of Aventura. Effective February
21, 2003 Aventura has relocated its corporate offices to 2800, 400 - 4th Avenue
SW, Calgary, Alberta T2P OJ4.

The Corporation's common shares are currently traded on the TSX Venture Exchange
under the symbol AVR and, upon final approval, will trade on TSX under the
symbol AVR.

For additional information, please contact:

Lorenzo Donadeo, President & CEO
(403) 269-4884

Marty Wares, Chief Financial Officer
(403) 231-1721

Aventura Energy Inc./ Vermilion Energy Trust
2800, 400-4th Avenue S.W.
Calgary, Alberta  T2P 0J4
E-Mail: info@vermilionenergy.com




    The TSX Venture Exchange Inc.and the TSX Exchange have neither approved
             nor disapproved of the contents of this press release.

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