Vermilion Energy expects Irish gas field will soon be key source of growth

CALGARY – Vermilion Energy (TSX:VET) says the Corrib offshore natural gas in Ireland began producing for the first time on Wednesday.

The Calgary-based company expects output to rise over six months and Vermilion’s share will peak at 58 million cubic feet per day, the equivalent of 9,700 barrels per day of oil.

Vermillion has an 18.5 per cent interest in the Corrib project, which is a joint venture with Shell E&P Ireland Ltd. (45 per cent) and Statoil Exploration Ireland Ltd. (36.5 per cent).

It says the Corrib field — 83 kilometrs off the coast, beneath 350 metres of water — has the potential to meet up to 60 per cent of Ireland’s gas needs at peak production.

The gas will be priced against a U.K. benchmark and add to Vermilion’s European production, which will account for 30 per cent of the company’s total volumes in 2016.

“Corrib will be a significant contributor to both our 2016 and 2017 production growth and generate meaningful free cash flow for the company,” Vermilion chief executive Lorenzo Donadeo said in a statement.