Revenues slump at Corrib gas operator in 2020 due to Covid

Operations hit by a 25 increase in expenses

The Corrib gas terminal. Vermilion said that one of the factors for the drop in the price of natural gas is the Covid 19 pandemic.

The Corrib gas terminal. Vermilion said that one of the factors for the drop in the price of natural gas is the Covid 19 pandemic.

 

Revenues from the sale of natural gas from the Corrib gas field declined by 57 per cent in the first nine months of this year when compared to last year.

According to a quarterly report by Canadian based Vermilion Energy, the company recorded the 57 per cent decline in revenues from Can$82.45 million to Can $35.32 million (€22.8 million) for the first nine months of this year.

Separate figures recently lodged by Vermilion Energy Ireland Ltd to the Companies Office for the 12 months of 2019 show that the company recorded a pre-tax loss of €13.19 million after a pre-tax profit of €36.4 million in 2018 – a negative swing of €49.6 million.

This followed revenues more than halving from €133.18 million to €65.4 million for 2019.

The company said revenues declined due to the decrease in the price of gas and a natural decline in production volumes at Corrib.

Vermilion said one of the factors for the drop in the price of natural gas is the Covid 19 pandemic.

Fund flows to Vermilion from Corrib Gas for the first nine months of this year have fallen even further at 72 per cent from Can$67.4 million in 2019 to $19.24 million to the end of September this year.

The fund flows from operations were hit by a 25 increase in operating expenses to Can$12 million for the first nine months.

Vermilion has a 20 per cent share in the field and operates the project.

The quarterly report states that natural gas revenues for the third quarter of Can$10.72 million was a 44 per cent increase on the Can$7.2 million revenue for the second quarter, much of which coincided with the first Covid-19 lockdown here.

Vermilion achieved the increase in revenues for the third quarter despite producing less gas than in the second quarter. The main reason for the revenue increase was a rise in the price of gas for the third quarter.

The company recorded an 8 per cent drop in gas production for the third quarter due a planned turnaround at the Corrib facility.

On the issues of taxes for the project, the report said that “given the significant level of investment in Corrib and the resulting tax pools, we do not expect to incur current income taxes in the Ireland Business Unit for the foreseeable future”.

The Irish accounts – signed off earlier this month – show that the company recorded the loss for 2019 after non-cash impairment costs of €26.39 million and non cash costs of depletion and depreciation of assets of €47.7 million.

The company recorded the loss after making a €16.6 million gain from hedging last year.