Vermilion 's official statement did not identify the asset or the seller but industry analysts believe it is probably ExxonMobil’s Wandoo field

Following the ExxonMobil merger, Wandoo was identified as a non-core asset and put up for sale.

Vermilion said it was aiming to make Australia its third core region of operations, adding to its Canadian and western European hubs.

"Vermilion's strategy over the next three to five years is to expand production in each of these three core regions," the Trust said.

"Australia, an energy resource-rich country, is the world's leading coal exporter and a source of significant reserves of oil and natural gas. Strong domestic demand for petroleum, combined with the country's proximity to Asian markets, provide alternative markets for existing and new production.

"Australia's stable political and economic environment and well-established energy industry afford an ideal setting for Vermilion to realise future growth opportunities."

Vermilion said its goal was to achieve an Australian production base of between 10,000 and 15,000 barrels of oil equivalent per day and this transaction would see it acquire 4,800 bopd.

The acquisition is expected to add approximately 15% to Vermilion's 2005 produced volumes.

Closing is subject to the parties entering into a definitive purchase and sale agreement and to the waiver of first rights of refusal by the owner of the remaining 40% working interest.