Neptune Energy Announces 3rd Quarter 2019 Results

22/11/2019

Neptune Energy, the global independent oil and gas exploration and production company, today announces its financial results for the period ended 30 September 2019.

Continued strategic progress focused on value-accretive growth, increasing long-life and low-cost reserves in key areas

  • Announced agreement to acquire Edison E&P’s UK and Norwegian producing, development and exploration assets from Energean Oil & Gas: portfolio provides further growth with 30 mmboe of 2P reserves, 15 kboepd of near-term production and additional contingent resources.
  • Important discovery at Echino South in Norway: discovery located close to existing infrastructure, with an estimated 38-100 mmboe of recoverable resources. Potential for fast-track development.
  • Officially signed West Ganal PSC: covers an area of 1,129 km2and is located adjacent to our existing Jangkrik and Jangkrik NE fields in the prolific Kutei Basin, Indonesia. Includes the Maha discovery, which has 24 mmboe of 2C resources.

Production expected to increase with new projects set to contribute ~110 kboepd in coming years

  • Production expected to increase in the fourth quarter: the Touat gas development, in Algeria, is ramping up to plateau, while production in Norway and the Netherlands is expected to return to normal levels.
  • More than 110 kboepd of new production under development: projects remain on track and on budget. Merakes (Indonesia) and Nova and Dvalin (Norway) added to development pipeline from recent acquisitions.
  • Full year 2019 average production guidance of around 145 kboepd: revised guidance reflects later than expected start-up and plateau at Touat, maintenance shutdowns and other unplanned deferrals.

Strong balance sheet, disciplined capital allocation and healthy liquidity levels

  • Expect robust full year cash flow, despite modest commodity prices and lower production: expect to deliver operating cash flow of more than $1 billion in 2019, reflecting disciplined capital allocation and a low cost base of around $10.5/boe.
  • Liquidity boosted by $300 million bond issue: additional issuance to the existing $550 million Senior Notes due 2025. Total headroom of $1.7 billion, including $1.5 billion currently available and undrawn under the RBL facility.
  • Higher capital investment programme for 2020, funded from existing resources: proposed development capex programme of approximately $1-1.1 billion in 2020, before falling to around current levels in 2021 as new projects come on stream.

 

FINANCIAL SUMMARY

Neptune Energy  Q3 2019 Q2 2019 Q1 2019 Q1-Q3 2019 Q1-Q3 2018 (note a)
3 months to 30 Sept 2019 3 months to 30 June 2019 3 months to 31 March 2019 9 months to 30 Sept 2019 15 Feb – 30 Sept 2018
Total daily production (kboepd) (note c) 130.8 145.6 151.8 142.6 160.5
Average realised oil price ($/bbl)(note b,c) 64.2 65.9 58.5 62.1 70.7
Average realised gas price ($/mcf)(note b,c) 3.6 4.4 6.5 5.0 7.8
EBITDAX ($m) (note d) 331.4 430.8 451.0 1,213.2 1,330.6
Operating costs ($/boe) 11.2 10.8 10.1 10.6 11.2
Operating cash flow ($m) 334.2 250.7 362.3 947.2 822.5
  1. a) Results for 2018 reflect the acquired EPI business from 15 February to 30 September 2018. The unaudited results for the period ended 30 September 2018 as previously disclosed have been revised as they were based on provisional assigned fair values of the acquisition of the EPI business on 15 February 2018.
  2. b) Average realised prices are stated before the impact of hedging.
  3. c) Production and realised price figures are for wholly owned affiliates and equity accounted affiliates.
  4. d) EBITDAX (excluding our share of net income from Touat), as defined by the RBL and shareholder agreement.

 

CEO Jim House said: “Neptune made significant strategic progress in the third quarter, focused on delivering value-accretive and material growth, increasing long-life and low-cost reserves in key areas of our portfolio. Our acquisition of Edison E&P’s North Sea assets from Energean Oil & Gas is an excellent fit with our existing portfolio in Norway and the UK and offer additional contingent resources, while the discovery at Echino South in Norway is one of the year’s largest on the Norwegian continental shelf and has the potential for fast-track development.

“We have a strong project pipeline, which will deliver 110 kboepd of new production in the coming years. We expect to exit 2019 producing at higher levels as Touat continues to ramp up to plateau and production in Norway and the Netherlands returns to more normal levels.”

– Ends –

 

For further information, please contact:

 

For media

Gavin Roberts

+44 (0) 7704 308138

gavin.roberts@neptuneenergy.com

For investors

William Arnstein

+44 (0) 207 832 3949

william.arnstein@neptuneenergy.com

About Neptune Energy Group

Neptune Energy is an independent global E&P company with operations across the North Sea, North Africa and Asia Pacific. The business had production of 162,000 net barrels of oil equivalent per day in 2018 and 2P reserves at 31st December 2018 of 638 million barrels of oil equivalent. The Company, founded by Sam Laidlaw, is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners.

Back to news and press releases