Neptune Energy Announces H1 2019 Results

29/08/2019

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

London, 29 August 2019 – Neptune Energy, the global independent oil and gas exploration and production company, today announces its financial results for the period ended 30 June 2019.

Solid strategic progress, delivering long-life and low-cost production and increasing reserves 

  • In July, interests were acquired in the Kutei Basin PSCs offshore Indonesia: the transaction includes the low-cost Merakes development in East Sepinggan PSC (20 per cent WI), which provides production growth from 2020. The East Ganal PSC (30 per cent WI) provides longer-term exploration potential.

 

  • Awarded the West Ganal PSC, strengthening strategic alignment with partners: provides further long-term growth potential in the strategically important Kutei Basin. The acreage contains world-class exploration potential, which can be commercialised via our existing Jangkrik infrastructure.

 

  • In July, increased interests were acquired in existing oil and gas assets in Emsland and Grafschaft Bentheim regions in Germany: adds around five per cent (600 boepd) to German production portfolio, building on project development in North-West Germany.

 

Strong project development, with ~100 kboepd of new production coming onstream between 2019 and 2021

 

  • Touat gas development, in Algeria, due onstream imminently: commissioning complete and ready to commence gas exports. Will contribute around 16 kboepd net production at plateau.

 

  • Operated Seagull oil development sanctioned and EPCI contract awarded: offshore construction campaign scheduled to start in Q2 2020. On track for first oil in 2021, adding 17 kboepd net production.

 

  • Operated Duva and Gjøa P1 project sanctioned and approved by Norwegian authorities: EPCIC contract awarded and drilling campaign expected to commence at the end of 2019. On track for first production in 2021, adding around 16 kboepd net production.

 

Robust financial and operating performance, with near record production expected by year end

 

  • Full year production weighted towards H2: expect near record production in December as a result of Touat plateau. Full year production guidance of 150-155 kboepd.

 

  • Strong cash flow of $613 million despite lower commodity prices, which were offset partially by our active hedging programme. Hedged approximately 64 per cent of gas volumes and 53 per cent of oil volumes for remainder of 2019.

 

  • H1 2019 opex down ~5 per cent on H1 2018: full year opex guidance of $10-11/boe. Cost efficiency programmes in place across the Group.

 

FINANCIAL SUMMARY

 

Neptune Energy  Q2 2019 Q1 2019                         H1 2019 H1 2018 (note a)
  3 months to 30 June 2019 3 months to 31 March 2019 6 months to 30 June 2019 15 Feb – 30 June 2018
Total daily production (kboepd) 145.6 151.8 148.5 165.6
Average realised oil price ($/bbl) (note b) 65.9 58.5 62.7 69.8
Average realised gas price ($/mcf) (note b) 4.4 6.5 5.5 7.9
EBITDAX ($m) 428.7 451.3 880.0 767.2
Operating costs ($/boe) 10.8 10.1 10.3 10.9
Operating cash flow ($m) 250.7 362.3 613.0 585.1
  1. a) Results for 2018 reflect the acquired EPI business from 15 February to 30 June 2018. The unaudited results for the period ended 30 June 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.

  1. b) Average realised prices are stated before the impact of hedging.

 

Sam Laidlaw, Executive Chairman

“Neptune made important strategic progress in the first half of 2019, significantly strengthening our Asian gas position, which will deliver medium-term production and long-term growth opportunities. We also sanctioned key projects in Norway and the UK and increased our footprint in Germany, all of which improves our production profile in the medium term while also delivering short-term value.

“Despite lower commodity prices in the period, we have delivered strong cash flow and maintained a robust balance sheet, which provides us with ample headroom to continue to build a resilient business for the long term, both organically and through acquisition.”

 

Jim House, Chief Executive Officer

 “Neptune’s production profile for 2019 will be weighted towards the second half, with our Touat gas development in Algeria reaching plateau and additional production from three infill wells at Fram, in Norway. As a result, we expect to end the year with near record volumes.

“Our key projects in Norway and the UK all remain on track and will add significant incremental production from 2021. Our exploration programme continues to grow, with new acreage and opportunities added in Norway, Indonesia, Germany, the Netherlands and Egypt.

“We delivered a robust operational performance in the first six months of the year, with stable production across much of the portfolio. We have also maintained high safety levels and high production efficiency, while continuing to reduce costs.”

 

-ends-

 

Contacts

 

For media:

Gavin Roberts

gavin.roberts@neptuneenergy.com

01224 281200

For investors:

William Arnstein

William.arnstein@neptuneenergy.com

0207 832 3949

 

About Neptune Energy

Neptune Energy is an independent global E&P company with operations across the North Sea, North Africa and Asia Pacific. Neptune had production of around 160 thousand net boe per day in 2018 and 2P reserves at 31st December 2018 of 638 million boe. The Company, founded by Sam Laidlaw, is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners.

For further information please visit: www.neptuneenergy.com

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