CALGARY, AB, Sept. 24, 2020 /CNW/ - Vermilion Energy Inc.
("Vermilion", "We", "Our", "Us" or the "Company") (TSX:
VET) (NYSE: VET) has prepared the following response to the
recent news from Total SA ("Total") regarding their plans to
convert the Grandpuits refinery in France to biofuels and bioplastics.
Earlier today, Total announced plans to convert its Grandpuits
refinery into a zero-crude platform for biofuels and bioplastics
and will discontinue crude oil refining at the platform in the
first quarter of 2021. The Grandpuits refinery has been in
operation for over 50 years and currently processes all of our
Paris Basin oil production,
currently estimated at approximately 5,000 bbl/d. We were aware
that Total had been evaluating the long-term viability of its
Grandpuits refinery for the past several years, and as such we have
written provisions in our existing contract to deal with the
potential closure of the Grandpuits refinery. As defined in our
recently negotiated long-term agreement, Total will take receipt of
our crude at one of their other refineries in France following the closure of the Grandpuits
refinery.
In anticipation of the potential closure of the Grandpuits
refinery, our France business unit
has been working on securing other transportation and delivery
options to ensure a smooth transition. We estimate this will
increase our transportation costs by approximately $20 million on an annualized basis, however we
will continue to evaluate longer-term marketing options for this
crude.
Vermilion has been operating in France for over 20 years and we remain
committed to our France business
unit which we believe offers significant long-term value
potential.
About Vermilion
Vermilion is an international energy producer that seeks to
create value through the acquisition, exploration, development and
optimization of producing properties in North
America, Europe and Australia. Our business model
emphasizes organic production growth augmented with value-adding
acquisitions, along with returning capital to investors when
economically warranted. Vermilion is targeting growth in production
primarily through the exploitation of light oil and liquids-rich
natural gas conventional resource plays
in Canada and the United
States, the exploration and development of high impact
natural gas opportunities in the
Netherlands and Germany, and through oil drilling and
workover programs in France and Australia. Vermilion
holds a 20% working interest in the Corrib gas field
in Ireland.
Vermilion's priorities are health and safety, the environment,
and profitability, in that order. Nothing is more important to us
than the safety of the public and those who work with us, and the
protection of our natural surroundings. We have been recognized as
a top decile performer amongst Canadian publicly listed companies
in governance practices, as a Climate Leadership level (A-)
performer by the CDP, and a Best Workplace in the Great Place to
Work® Institute's annual rankings in Canada, the
Netherlands and Germany. In addition, Vermilion
emphasizes strategic community investment in each of our operating
areas.
Employees and directors hold approximately 5% of our fully
diluted shares and are committed to delivering long-term value for
all stakeholders. Vermilion trades on the Toronto Stock Exchange
and the New York Stock Exchange under the symbol VET.
Disclaimer
Certain statements included or incorporated by reference in this
document may constitute forward-looking statements or financial
outlooks under applicable securities legislation. Such
forward-looking statements or information typically contain
statements with words such as "anticipate", "believe", "expect",
"plan", "intend", "estimate", "propose", or similar words
suggesting future outcomes or statements regarding an
outlook. Forward looking statements or information in this
document may include, but are not limited to: future transportation
and delivery options for Vermilion's crude oil production in
France, expectations for future
transportation costs for our Paris
Basin production, and future longer-term marketing options for our
French crude oil production.
Such forward-looking statements or information are based on a
number of assumptions, all or any of which may prove to be
incorrect. In addition to any other assumptions identified in
this document, assumptions have been made regarding, among other
things: the ability of Vermilion to obtain equipment, services and
supplies in a timely manner to carry out its activities in
France; the ability of Vermilion
to market crude oil successfully to current and new customers; the
timing and costs of pipeline and storage facility construction and
expansion and the ability to secure adequate product
transportation; the timely receipt of required regulatory
approvals; the ability of Vermilion to obtain financing on
acceptable terms; foreign currency exchange rates and interest
rates; future crude oil prices; and management's expectations
relating to the timing and results of exploration and development
activities.
Although Vermilion believes that the expectations reflected in
such forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking statements
because Vermilion can give no assurance that such expectations will
prove to be correct. Financial outlooks are provided for the
purpose of understanding Vermilion's financial position and
business objectives, and the information may not be appropriate for
other purposes. Forward-looking statements or information are
based on current expectations, estimates, and projections that
involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by
Vermilion and described in the forward-looking statements or
information. These risks and uncertainties include, but are
not limited to: the ability of management to execute its business
plan; the risks of the oil and gas industry, both domestically and
internationally, such as operational risks in exploring for,
developing and producing crude oil, natural gas liquids, and
natural gas; risks and uncertainties involving geology of crude
oil, natural gas liquids, and natural gas deposits; risks inherent
in Vermilion's marketing operations, including credit risk; the
uncertainty of reserves estimates and reserves life and estimates
of resources and associated expenditures; the uncertainty of
estimates and projections relating to production and associated
expenditures; potential delays or changes in plans with respect to
exploration or development projects; Vermilion's ability to enter
into or renew leases on acceptable terms; fluctuations in crude
oil, natural gas liquids, and natural gas prices, foreign currency
exchange rates and interest rates; health, safety, and
environmental risks; uncertainties as to the availability and cost
of financing; the ability of Vermilion to add production and
reserves through exploration and development activities; the
possibility that government policies or laws may change or
governmental approvals may be delayed or withheld; uncertainty in
amounts and timing of royalty payments; risks associated with
existing and potential future law suits and regulatory actions
against Vermilion; and other risks and uncertainties described
elsewhere in this document or in Vermilion's other filings with
Canadian securities regulatory authorities.
The forward-looking statements or information contained in this
document are made as of the date hereof and Vermilion undertakes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events, or otherwise, unless required by applicable
securities laws.
All crude oil and natural gas reserve and resource information
contained in this document has been prepared and presented in
accordance with National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities and the Canadian
Oil and Gas Evaluation Handbook. Reserves estimates have been
made assuming that development of each property in respect of which
the estimate is made will occur, without regard to the likely
availability of funding required for such development. The
actual crude oil and natural gas reserves and future production
will be greater than or less than the estimates provided in this
document.
Natural gas volumes have been converted on the basis of six
thousand cubic feet of natural gas to one barrel of oil
equivalent. Barrels of oil equivalent (boe) may be
misleading, particularly if used in isolation. A boe
conversion ratio of six thousand cubic feet to one barrel of oil is
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Financial data contained within this document are reported in
Canadian dollars unless otherwise stated.
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SOURCE Vermilion Energy Inc.