Canada Pension Plan Investment Board and Vermilion Energy announce strategic partnership in Corrib

On July 12, 2017, Canada Pension Plan Investment Board ("CPPIB") and Vermilion Energy Inc. ("Vermilion") announced a strategic partnership in the Corrib Natural Gas Field in Ireland ("Corrib"), whereby CPPIB will acquire Shell Exploration Company B.V.'s ("Shell") 45% interest in the project, with Vermilion operating the assets after completion of the acquisition.

Through its wholly owned subsidiary, CPP Investment Board Europe S.a.r.l., CPPIB entered into a definitive purchase and sale agreement with Shell, to acquire 100% of Shell E&P Ireland Limited ("SEPIL"), which holds Shell's 45% interest in Corrib, for total cash consideration of €830 million, subject to customary closing adjustments and future contingent value payments of up to €250 million based on pricing and production thresholds. The acquisition, which remains subject to customary conditions and receipt of all necessary government consents, is anticipated to close in the first half of 2018.

At closing, Vermilion will assume operatorship, and CPPIB plans to transfer SEPIL along with a 1.5% working interest to Vermilion for €19.4 million (before closing adjustments). Following the transfer to Vermilion, ownership in Corrib would be as follows: CPPIB would hold a 43.5% non-operated interest; Vermilion would hold a 20% operated interest; and Statoil ASA would continue to hold a 36.5% non-operated interest.

Corrib is located 83km off the northwest coast of Ireland and has a gross plant capacity of approximately 350 million cubic feet of natural gas per day, providing approximately 60% of Ireland's natural gas consumption and constituting approximately 95% of Ireland's gas production.

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.

Canada Pension Plan Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20 million contributors and beneficiaries. At March 31, 2017, the CPP Fund totalled C$316.7 billion.

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