Canada’s Vermilion Energy surges in Q1
Canadian producer Vermilion Energy, with assets in North America, Europe and Australia, said April 28 it had Q1 2021 net earnings of C$499.96mn (US$406.1mn), rebounding from a C$1.3bn loss in the same period a year ago.
The company realised free cash flow of C$78.7mn in Q1 on exploration and development expenditures of C$83.4mn, resulting in a payout ratio of 56%, including reclamation and abandonment expenditures.
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“The economic outlook has significantly improved compared to what we were facing at this time last year,” Vermilion said. “As the global economy continues to recover from the devastating impacts of the Covid-19 pandemic, we are starting to see increased demand for oil and natural gas, which is being reflected in higher benchmark prices for these commodities.”
Average realised prices were sharply higher across the board: crude oil and condensate averaged C$71.09/b compared to C$58.66/b in Q1 2020; natural gas liquids increased to C$29.39/b from C$8.92/b; natural gas rose to C$5.51/’000 ft3 from C$2.94/’000 ft3.
But total production slipped to 86,276 barrels of oil equivalent (boe)/day in Q1 2021, down from 97,154 boe/day a year ago and from 87,848 boe/day in Q4 2020. Natural gas production averaged just under 234mn ft3/day, down from 265mn ft3/day a year ago, while liquids production fell to 47,278 b/day from 52,903 b/day.
North American production in Q1 2021 slipped about 3% from the prior quarter, due primarily to natural decline and weather-related downtime in February, when temperatures plunged across Canada and the US. International production increased slightly quarter-over-quarter, as higher output in Australia and Germany offset natural declines elsewhere in Vermilion’s international portfolio.