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Vermilion Energy Q1 fund flows from operations $93.7m

Staff writer |
Vermilion Energy reported operating and unaudited financial results for the three months ended March 31, 2016.

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The company redeemed the senior unsecured notes that were due February 10, 2016 by using funds from its revolving credit facility.

Its revolving credit facility limit of $2 billion remains unchanged and we have approximately $520 million of borrowing capacity available. Vermilion Energy was in compliance with all covenants as of March 31, 2016 and expect to remain in compliance based on commodity strip pricing.

Fund flows from operations (FFO) for Q1 2016 of $93.7 million ($0.83/basic share) represented a decrease of 31% quarter-over-quarter and 22% year-over-year.

The quarter-over-quarter decrease in FFO was attributable to lower commodity prices and an inventory build in Australia (due to the timing of crude liftings), partially offset by lower operating expenses from company's ongoing focus on cost reduction.

Since the initiation of first gas on December 30, 2015, Corrib has produced strongly, with robust well deliverability and minimal downtime.

Net production for Q1 2016 averaged approximately 34 mmcf/d (5,650 boe/d). Five of the six wells are capable of production with the remaining well to be brought online in the third quarter of 2016 following conclusion of company's offshore work program.

Production remains subject to limitations on maximum pipeline operating pressures while previously-planned certification activities are conducted on the Irish distribution pipeline network.

Upon completion of the recertification process, production levels at Corrib are expected to rise to an estimated peak rate of 58 mmcf/d (9,700 boe/d), net to Vermilion.

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