Vermilion Energy Inc (TSX: VET, OTC: VEMTF) this week announced the purchase of 0.15 percent Total SA’s (France: FP, NYSE: TOT) overall global production, adjusted its capital budget for 2012 and advised its non-Canadian investors to check in with their brokers regarding new Canada Revenue Agency (CRA) reporting rules for foreign withholding taxes.

The deal with a subsidiary of Total is for working interests six French oilfields in the Paris and Aquitaine basins for CAD115 million. These fields are complementary to Vermilion’s existing assets in France and will allow the company to deploy local knowledge it’s already accumulated.

Following close of the deal, which, assuming regulators’ granting their approval, should happen within 15 months, Vermilion will hold 100 percent working interests in five of the six fields. Aggregate production is 2,200 barrels of oil equivalent per day, weighted 96 percent oil. Proved plus probable reserves are estimated at 6.7 million barrels of oil equivalent.

Vermilion is paying about CAD 17.21 per barrel of oil equivalent of proved plus probable reserves, a bit on the high side relative to recent deals in North American but justified by the high netbacks the company earns in France.

The capital expenditure (CAPEX) changes are significant, though their meaning and impact were widely interpreted by computer-driven headlines for Reuters and Bloomberg et al, to wit:

• Reuters: Vermilion sees 2012 capex up 26 pct
• Upstream Online: Vermilion to hike capex by 26 percent
• Bloomberg: Vermilion Energy Cuts Spending Plan on Economic Instability

Headline No. 3 wasn’t available via the Google machine as of early Friday morning, Dec. 23, but it was scrolling down specialized Bloomberg terminals. All three attention-grabbers tell a bit of the reality, testament to the hard work of special software programs designed to make more efficient communication among humans and investors.

Vermilion has trimmed its drilling CAPEX budget by 34 percent to CAD375 million from CAD501 in 2011 because of volatile commodity prices, fiscal uncertainty in key regions and to ensure its ability to satisfy existing commitments. The “overall” CAPEX budget increase of 26 percent to CAD630 million can be explained by including the cost of already agreed to acquisitions, including the CAD115 million Total deal and a CAD135 million deal for the Corrib natural gas project in Ireland.

Vermilion expects production to rise up to 6 percent in 2012. Management forecast annual production of 37,000 to 38,000 barrels of oil equivalent per day; it also reiterated 2011 guidance of 35,000 to 36,000 barrels. Vermilion has hedged approximately 9,750 barrels of oil equivalent per day of 2012 production at an average price of CAD82.55 per barrel.

Reaction on Bay Street to the acquisition and CAPEX announcements has been rather muted. All analysts who cover the stock maintained their ratings, though RBC Capital Markets, CIBC World Markets, National Bank Financial and a couple other, smaller houses lowered price targets. Vermilion’s buy-hold-sell line on Bay Street is now five-seven-one, with an average target price of CAD49.75. Shares are changing hands at just under CAD46 as of midday Friday.

Management will report fourth-quarter and full-year 2011 results on or about Feb. 29, 2012.

Vermilion management has also issued an advisory to its non-Canadian shareholders about a new CRA rule that requires residents of countries with which Canada has a tax treaty to certify that they are resident in that country in order to continue to have non-resident tax withheld from dividends paid by Canada-based corporations at the “tax treaty” rate.

This rule is slated to take effect Jan. 1, 2012. If the CRA is not provided the verification it seeks, it will withhold from dividends paid to US owners of shares in Canada-based companies at a rate of 25 percent rather than 15 percent, as is contemplated by the Convention Between the United States of America and Canada with Respect to Taxes on Income and Capital, or the US-Canada tax treaty, and accompanying conventions and explanatory notes.

This marks a change from the previous CRA view that merely residing in such a country was sufficient to qualify for the treaty tax rate.

Broker-dealers and clearing agent on the US side of the border are seeking an extension of the Jan. 1, 2012, effective date in order to provide time to craft a single solution for American firms. The CRA, through a spokesman, confirmed this morning “that the CRA has been in contact with officials regarding the possibility of an extension.” According to the CRA, “Canadian payers” and withholding agents have been notifying both direct clients and financial intermediaries they pay of the new guidance.

We have confirmed that at least two brokerage firms, Pennaluna and Fidelity, are working through the Securities Industry and Financial Markets Association (SIFMA), along with their clearing agent, National Financial Services Inc, which is owned by Fidelity, on crafting an industry-wide solution.

If you’re an investor who holds Canada-based dividend-paying corporations in accounts with major brokerages such as Fidelity and including niche brokerages such as Pennaluna & Company, it’s unlikely you’ll be affected by this new rule.

Just to be on the safe side, and because we’ve heard nothing further on the state of negotiations between state-side brokerages and the CRA, it is in your interest to verify with your broker that it is aware of this new rule and that it is taking steps to protect your financial interests. It’s important to keep in mind that though the new rules will have effect Jan. 1, in a worst-case scenario there can be no harm until a dividend is “paid.”

However, if you own any of the several companies in the Canadian Edge How They Rate coverage universe that continue to pay on a monthly basis, including Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF) and Noranda Income Fund (TSX: NIF-U, OTC: NNDIF), this means your January dividend may be withheld from at a rate of 25 percent. We continue to monitor this situation on both sides of the border.

We’ll have more on the new CRA rules, Vermilion and the rest of the Canadian Edge Portfolio in the January issue, available Friday, Jan. 6, 2012, at www.CanadianEdge.com.

*And One about Keystone XL

Capitulation by the House Republican Leadership over a Senate bill to extend by two months a payroll tax holiday and unemployment insurance also includes a provision that would require President Obama to issue a decision on TransCanada Corp’s (TSX: TRP, NYSE: TRP) Keystone XL project within 60 days.

Smart money and the cynical would have bet bundles that come Nov. 7, 2012, major ground would be breaking across the US Midwest–but not over the Ogallala Aquifer–once potential consequences of selling out particular interest groups key to voter motivation and turnout had passed. The payroll tax fight is widely perceived as a win for President Obama, but he could be forced to make a decision that will either weaken him on the left or expose himself to further ridicule for failing to advance a job-creating project at a time when the US unemployment rate is still too close to double digits.

Perhaps credit should be given to the Obama administration for extracting from Republicans the ransom of a payroll-tax extension for its holding hostage the Keystone XL project. Had the president been able to run out the clock he could have had the cake and eaten it, too, maintaining the political capital and executing the rational decision of approving the pipeline extension.

Expect someone somewhere to get a judge involved. The administration can either neutralize this issue or embrace it as a latest step to help provide jobs for the middle class. Sure, estimates of job creation may and probably are overstated. The trouble is they needn’t be–especially to the 5,000 or so real people who may get these “realistic figure” jobs.

TransCanada continues to nod and smile, it’s stance being that this is what they do, that satisfying demands of legislators and regulators is part and parcel of the pipeline business, that the goal is to get Keystone XL done right, not just done. The year-long delay would have allowed the company to fund the majority of the project with cash flow rather that raising additional capital. The stock is actually trading at a five-year high today.

The Roundup

Following is a list of fourth-quarter and full-year reporting dates for Canadian Edge Portfolio Holdings.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Mar. 8, 2012 (estimate)
• Artis REIT (TSX: AX-U, OTC: ARESF)–Mar. 8, 2012 (estimate)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Mar. 19, 2012 (estimate)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Mar. 2, 2012 (estimate)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPUF)–Feb. 16, 2012 (estimate)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–Feb. 7, 2012 (estimate)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–Feb. 10, 2012 (estimate)
• Colabor Inc (TSX: GCL, OTC: COLFF)–Mar. 8, 2012 (estimate)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–Mar. 8, 2012 (estimate)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Feb. 23, 2012 (estimate)
• Extendicare REIT (TSX: EXE-U, OTC: EXETF)–Mar. 1, 2012 (estimate)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–Mar. 21, 2012 (estimate)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Mar. 23, 2012 (estimate)
• Just Energy Group Inc (TSX: JE, OTC: JUSTF)–Feb. 10, 2012 (estimate)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–Feb. 17, 2012 (estimate)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–Feb. 17, 2012 (estimate)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–Mar. 9, 2012 (estimate)
• Pembina Pipeline Corp (TSX: PPL, OTC: PBNPF)–Mar. 9, 2012 (estimate)
• Provident Energy Ltd (TSX: PVE, NYSE: PVX)–Mar. 9, 2012 (estimate)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–Feb. 29, 2012 (estimate)
• Student Transportation Inc (TSX: STB, OTC: STUXF)–Feb. 14, 2012 (estimate)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–Feb. 29, 2012 (confirmed)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–Feb. 8, 2012 (estimate)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–Mar. 14, 2012 (estimate)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–Feb. 10, 2012 (estimate)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–Feb. 23, 2012 (estimate)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–Mar. 16, 2012 (estimate)
• Daylight Energy Ltd (TSX: DAY, OTC: DAYYF)–Mar. 1, 2012 (estimate)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–Feb. 24, 2012 (estimate)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–Mar. 2, 2012 (estimate)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–Mar. 14, 2012 (estimate)
• Penn West Petroleum Ltd (TSX: PWT, NYSE: PWE)–Feb. 23, 2012 (estimate)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–Mar. 9, 2012 (estimate)
• PHX Energy Services Corp (TSX: PHX, OTC: PHXHF)–Mar. 7, 2012 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–Feb. 29, 2012 (estimate)