Monday 18 June 2018

Vermilion records €50m Corrib loss in 2016

Canadians predict that 2018 will be field’s most productive year
Canadians predict that 2018 will be field’s most productive year

Gordon Deegan

The new operator of the Corrib gas project recorded a pre-tax loss of €50.34m on the project in 2016, new figures show.

Accounts just filed by Canadian energy firm Vermilion Energy Ireland Ltd show revenues of €75m based on its then 18.5pc ownership of Corrib gas in 2016.

Vermilion, in a partnership with the Canadian Pension Plan Investment Board, purchased Shell Ireland's interest in the field for €830m last year.

The new accounts show that Vermilion recorded the 2016 loss as a result of €63.93m in costs concerning depletion and depreciation of assets along with a €10m impairment charge.

The company also incurred €49.14m in interest charges. The company did record gains of €20.5m from gas hedging revenues.

According to the Vermilion website, "the Corrib project generates significant free cash flow for Vermilion given low operating costs and minimal ongoing capital expenditures requirements". The company is forecasting that 2018 will be the most productive year yet at the field.

According to the 2016 accounts, "production at Corrib is expected to remain stable for a period of 12 to 18 months following the achievement of peak production volumes before starting to decline". End-of-year production figures are not yet available but production from Corrib Gas increased by 26pc to the end of September compared to the corresponding nine months in 2016.

The increase came despite the Corrib Gas Partners losing out on 31 days of production as a result of odourless gas getting into the gas network, and a scheduled down-time.

The 2016 accounts show that the Vermilion Ireland received an interest-free loan of €543m and a cash injection of €150m in connection with the financing of the project.

Last year, Vermilion told investors that it doesn't expect to pay corporation tax here for the foreseeable future. The company has based this claim on its tax pool in Ireland.

Irish Independent

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