Vermilion Energy Inc T.VET

Alternate Symbol(s): VET

Energy Oil & Gas Integrated

Vermilion Energy Inc. is a Canada-based international energy producer. The Company seeks to create value through the acquisition, exploration, development, and optimization of producing assets in North America, Europe, and Australia. Its business model emphasizes free cash flow generation and returning capital to investors when economically warranted, augmented by value-adding acquisitions. The Company’s operations are focused on the exploitation of light oil and liquids-rich natural gas conventional and unconventional resource plays in North America and the exploration and development of conventional natural gas and oil opportunities in Europe and Australia. The Company operates through seven geographical segments: Canada, the United States, France, Netherlands, Germany, Ireland, and Australia. In Canada, the Company is a key player in the highly productive Mannville condensate-rich gas play. It holds a 100% working interest in the Wandoo field, offshore Australia.

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Vermilion Energy Inc > Why would Equinor sell so cheap?

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Comment by Commr51bkdon Nov 29, 2021 2:37pm

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Post# 34176844

RE:Why would Equinor sell so cheap?

I am only a simple country patent lawyer. However, I believe that based on the way Vermilion acquired its Corrib assets (after the original partners in the project spent 4x their original estimate of 800M euro), they inherited an awesome tax writeoff which probably gives them a huge advantage, operationally, here. Since, the taxation writeoffs can be applied to both the Corrib interest had before today's announcement and the one it is presently acquiring, it is an opportunity to accelerate the realization of much income. Seems like quite the windfall to me!

See, for example from Aug 2017:  https://www.independent.ie/business/irish/new-corrib-operators-wont-pay-taxes-for-foreseeable-future-36032565.html

"New Corrib operators won't pay taxes 'for foreseeable future'"

The new operator of Corrib gas field has told investors that it does not expect to incur income taxes from profits on the project "for the foreseeable future".  Last month, Shell Ireland disposed of its shareholding in the project to the Canadian Pension Plan Investment Board (CPPIB) in a strategic partnership with Vermilion - a deal potentially worth as much as €1.08bn.

Vermilion already owns 18.5pc of the field and will take over as operators of the project from Shell Ireland. "As a result of our tax pools in Ireland, we do not expect to incur current income taxes in the Ireland Business Unit for the foreseeable future," stated Vermilion in an update to investors.

Shell E&P Ireland has already received €186m in tax credits from the project since its inception.

Vermilion stated that other characteristics of the Irish asset include "no royalties, low operational expenditure and minimal ongoing capital expenditure translate to high netback and significant free cash flow".

In the Shell-CPPIB deal - which is expected to close in the first half of next year - Vermilion is to increase its ownership in Corrib to 20pc for Can$28.4m. "We view the acquisition, and assumption of operatorship of Corrib as a strategic milestone for Vermilion, and one that will add value over the long-term," stated Vermilion. Vermilion has recorded revenues of $81.31m to date this year on the Corrib gas field.

There may be other reasons - perhaps Equinor wishes to take advantage of some other opportunity. Heck maybe the have drunk the climate alarmist cool-aid and decided to go into the battery business....