Corrib gas field revenue increases due to record high energy prices

Record summer European gas prices saw Vermilion Energy’s revenues from the Corrib gas field more than double to $259.9 million (€189.9 million) in the first nine months of this year to have.

New quarterly earnings from Vermilion Energy show that the Corrib gas field operator reported revenue of $102 million from early July through late September, representing 39 percent of Vermilion’s total Corrib revenue for the first nine months of 2022 .

Vermilion’s gas price realized for the first nine months is more than three times what the energy company realized for the corresponding period in 2021.

European natural gas prices hit an all-time high in August on concerns about Europe’s ability to meet winter gas demand, followed more recently by price weakness due to warm weather and full storage.

The Vermillion report notes that projected natural gas prices “remain high.”

According to the quarterly report, Vermilion’s revenue of $259.59 million this year represents a 147 percent increase over the $105 million in revenue for the same period last year.

The gas produced by Corrib accounts for 100 per cent of Ireland’s domestic natural gas production.

The report said Vermilion posted record global fund flows from operations (FFO) of $580 million in the third quarter, “driven by strong European gas prices.” The increase in sales at Corrib Gas contributed to Vermilion’s total revenues of $2.63 billion for the nine months, compared to $1.3 billion for the same period last year.

Vermilion has a 20 percent interest in the Corrib project and as a result of a $556 million deal last November, Vermilion acquired an additional 36.5 percent interest after agreeing to take Equinor’s interest in it field to buy.

The new report states that the Corrib acquisition is now expected to close in the first quarter of 2023.

The report also estimates that Vermilion’s exposure to the EU windfall tax could range from $250 million to $350 million in 2022.

Figures show that Vermilion’s Irish operations accounted for 18% of its European revenue of $1.47 billion for the first nine months of this year, ranging from $32.7 million to $46 million. Based on this estimate, the state could receive between €163.5 million and €230 million in windfall taxes from the Corrib project this year.

Vermilion plans to continue natural gas production off the West Coast for a decade longer than expected, after privately briefing Taoiseach Micheal Martin of its proposals during a meeting at government buildings over the summer.

Vermilion plans to invest €20 million in new technology that will allow them to dig deeper in the search for more natural gas, and the company told Mr. Martin that it believes the site’s life expectancy could be extended to 2038.

Production volumes reached full plant capacity at the end of 2016 and production stagnated at this level until the decline started in early 2018.

The gas is produced at a subsea facility off the coast of Mayo and brought ashore via an 83 km pipeline to the Bellanaboy Bridge gas facility. Corrib gas field revenue increases due to record high energy prices

Fry Electronics Team

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