Vermilion Energy Inc. Announces Closing of the Acquisition of Leucrotta Exploration Inc. – QNT Press Release

CALGARY, AB, May 31, 2022 /CNW/ – Vermilion Energy Inc. (“Vermilion”, “We”, “Our”, “Us” or the “Company”) (TSX:VET) (NYSE:VET) is pleased to announce that we have closed the acquisition of Leucrotta Exploration Inc. (“Leucrotta”) pursuant to the terms of the previously announced arrangement agreement (the “Arrangement” or the “Leucrotta Acquisition”) dated March 28, 2022as amended, among Vermilion, Leucrotta and Coelacanth Energy Inc. (“Coelacanth”).

The primary asset acquired pursuant to the Leucrotta Acquisition is the Mica property, comprised of 81,000 gross (77,000 net) contiguous acres of Montney mineral rights in the Peace River Arch straddling the Alberta and British Columbia borders. We have conservatively identified 275 multi-zone, extended reach, drilling prospects to date, representing an expected two decades or more of low-risk, self-funding, high-deliverability drilling inventory with strong rates of return. Over the past two months since time of deal announcement, North American gas prices have strengthened, as illustrated by the 35% increase to 2023 AECO strip further reinforcing the profitability of the Mica property. We believe there is meaningful upside in other zones, which could add significant inventory to this land base and the optionality for cube development. The multi-zone development nature of these assets is a natural extension of the multi-zone development that our Canadian Business Unit has been focused on in West Central Alberta for over a decade. Integrating these assets into our Canadian asset base allows us to high-grade our North American portfolio and is expected to add decades of inventory while continuing to develop and grow o ur international portfolio with the goal of maximizing free cash flow for shareholders over the near and long-term. We look forward to integrating the Mica assets into our portfolio, and our experienced team has the operating, technical and financial capability to deliver synergies and maximize the value of this fully delineated, multi-decade free cash flow(1) generating assets.

Prior to the completion of the Arrangement, Vermilion had ownership, control or direction over 7,536,800 common shares (“Leucrotta Shares”) of Leucrotta, representing approximately 2.9% of the outstanding Leucrotta Shares, and no common shares (“Coelacanth Shares”) of Coelacanth . As a result of the Arrangement, we acquired: (A) all of the outstanding shares of Leucrotta for $1.73 per Leucrotta Share paid to the former holders of Leucrotta Shares (other than Vermilion) and approximately $0.76 per Leucrotta Share “flow-though” purchase warrant paid to the former holders of Leucrotta Share “flow-though” purchase warrants; and (B) 53,303,668 Coelacanth Shares for aggregate cash consideration of $14.3 million (or $0.27 per Coelacanth Share) paid to Coelacanth. Additionally, as part of the Arrangement, Coelacanth issued an aggregate of approximately 289,792,341 Coelacanth Shares and an aggregate of approximately 55,553,192 Coelacanth Share purchase warrants (“Coelacanth Warrants”) to the former holders of Leucrotta Shares, including 7,536,800 Coelacanth Shares and 1,444,804.56 Coelacanth Warrants to Vermilion. The Coelacanth Warrants are exercisable at a price of $0.27 per Coelacanth Share and will be exercisable in whole or in part at any time until 5:00 pm (Calgary time) on June 30, 2022. Vermilion has hence acquired 18.0% of the outstanding Coelacanth Shares on a partially diluted basis.

The purpose of the Arrangement was to enable Vermilion to acquire all of the outstanding voting shares of Leucrotta and to acquire an ownership position in Coelacanth. Following delisting of the Leucrotta Shares from the TSX Venture Exchange, we will cause Leucrotta to apply to cease to be a reporting issuer or equivalent in each of the provinces of Canada.Subject…

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