Neptune Energy announces Q3 2018 financial results

30/11/2018

Continued strong financial and operating performance.

London, 30 November, 2018 – Neptune Energy, the global independent oil and gas E&P company, today announces its financial results for the third quarter of 2018.

In the period to 30 September 2018, Neptune delivered a strong financial and operating performance. It remains on target to meet production guidance for the full year.

Summary of results

  Neptune Energy Pro forma information relating to EPI business
  Period 15 February to 30 September 20181 9 months ended September 2018 9 months ended September 2017
Total production (kboepd) 160.5 161.5 151.4
Average realised oil price ($/bbl)2 70.7 70.0 51.4
Operating costs ($/boe) 10.0 10.0 11.1
Cash capex ($m)3 151.1 247 508
EBITDAX ($m)4 1,309.7 1,482 954

Operational highlights
Neptune’s average production for the period was 160.5 kboepd, which was in line with the company’s expectations given the planned annual programme of shutdowns in most countries in the period.

On a pro forma basis production for the period increased to 161.5 kboepd compared with 151.4 kboepd for the corresponding period in 2017, largely as a result of higher production in Indonesia and the UK.

Portfolio highlights
Neptune’s capital investment programme continues to progress well, with all projects remaining on schedule.

Construction of its joint venture operated Touat gas project in Algeria is now 93 per cent complete. The operated P1 and Cara projects in Norway are being combined in the pre-sanction phase, with sanction for both projects expected early next year. The company’s portfolio of non-operated projects also remains on track.

During the third quarter, three new exploration wells commenced drilling, namely the Bagha C-88 in Egypt, the Silfari prospect in the Norwegian North Sea and Cygnus FB9 in the UK acreage of the North Sea.

Financial highlights
Neptune delivered a strong financial performance for the period, with operating cash flow (post tax) of $740.4 million.

The results benefited from strengthening markets for both oil and gas, resulting in Neptune’s average realised price increasing 36 per cent to $70 per barrel.

A combination of higher commodity prices and higher production resulted in Group EBITDAX increasing 55 per cent to $1,482 million on a pro forma basis.

Sam Laidlaw, Executive Chairman, said: “With the new management team now in place, we continued to build on our strong first half performance throughout the third quarter, delivering strong production and financial results.

We also delivered good strategic progress with the acquisitions of VNG Norge, Seagull and Isabella, which are important steps in developing the portfolio.”

Jim House, Chief Executive Officer, said: “2018 has been a transformational year for the company as we integrated the ENGIE E&P and VNG Norge businesses. We have achieved this while taking a more rigorous approach to production management.

Our portfolio provides us with attractive prospects for growth. Since February we have continued to identify and progress additional opportunities within our acquired portfolio to add reserves and strengthen the medium term production outlook as we continue to build Neptune Energy into the leading independent international E&P company.

– ends –

A full copy of the results statement can be found on our website: www.neptuneenergy.com/investors

Notes
1 Relates to the post-acquisition period only.
2Excluding the impact of hedging.
3 Before acquisitions.
4EBITDAX comprises net income for the period before income tax expense, financial expenses, financial income, non-recurring acquisition-related expenses, mark-to-market adjustments on commodity contracts exploration expense and depreciation and amortisation.

Contact

Julian Regan-Mears
Neptune Energy
T: +44 (0)20 7832 3925
M: +44 (0)7789 576179
julian.regan-mears@neptuneenergy.com
Nicole Nordwall
Neptune Energy
T: +44 (0)20 7832 3949
M: +44 (0)7902 342216
nicole.nordwall@neptuneenergy.com

About Neptune Energy
Neptune Energy is an independent global E&P company and, having completed the acquisition of the exploration and production business of the ENGIE group in February 2018, is now active across the North Sea, North Africa and Asia Pacific. The business had production of 165,000 net barrels of oil equivalent per day during H1 2018 and 2P reserves at 31st December 2017 of 542 million barrels of oil equivalent. The Company is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners.

For further information please visit: www.neptuneenergy.com

Cautionary Statement 
This announcement is not being made in and copies of it may not be distributed or sent into any jurisdiction where distribution would be unlawful.

This communication does not constitute an offer of the securities referred to herein to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the securities referred to herein. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom or (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”).

Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

Forward-looking statements
This announcement includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to materially differ from those expressed or implied by the forward-looking statements. While these forward-looking statements are based on our internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, future capital expenditures and cash flow, we caution you that the assumptions used in the preparation of such information may prove to be incorrect and no assurance can be given that our expectations, or the assumptions underlying these expectations, will prove to be correct. Any forward-looking statements that we make in this announcement speak only as of the date of such statement or the date of this announcement.