Lower prices for oil and gas around the world translated into a second quarter net loss on 55 per cent lower revenue for Canadian and international producer Vermilion Energy Inc.
The Calgary-based company reported Monday a net loss of $71.3 million on revenue of $193 million in the three months ended June 30, versus net earnings of $2 million on revenue of $428 million in the same period of 2019.
Production was about 100,400 barrels of oil equivalent in the quarter, down from 103,000 boe/d in the year-earlier period.
Vermilion’s European operations produced about 25,200 boe/d, a decrease of about 3,700 boe/d from the same period in 2019 mainly due to the curtailment of 3,000 barrels per day of French oil production because of the temporary shutdown of the Grandpuits refinery during the COVID-19 confinement period.
The company said it is ramping up French production after the refinery capacity was restored in mid-June.
An active first-quarter drilling program in Canada and the United States, meanwhile, boosted North American production by nine per cent to 69,900 boe/d.
Unlike many of its peers, Vermilion said it didn’t voluntarily reduce production because of low oil prices caused by lower demand during the pandemic lockdowns and overproduction by OPEC plus countries.
The quarterly report was the first since CEO Anthony Marino left the company in May. Vermilion appointed Lorenzo Donadeo as executive chairman and Curtis Hicks as president as part of a new executive committee governance model.
The company elected not to host an analyst conference call.
In a report, analyst Michael Dunn of Stifel FirstEnergy said Vermilion’s production slightly beat expectations.
He added the company’s cash flow was in line with forecasts after accounting for a $25-million gain from unwinding a cross currency interest rate hedging contract.
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