Neptune Energy announces Q1 2021 results
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Neptune Energy (Neptune E&P UK Ltd)
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Neptune Energy (Neptune E&P UK Ltd)
13 May 2021
Neptune Energy today announces its financial results for the three months ended 31 March 2021.
Good operational performance, with production in line with guidance:
- Continued improvement in health and safety, with total recordable injury rate down to 1.3 per million hours worked in the period
- Q1 production of 125.7 kboepd (139.0 kboepd including production-equivalent insurance income), in line with guidance
- First production from Gjøa P1 (Norway) and Merakes (Indonesia) projects, adding c.19 kboepd at plateau
- Exports from Touat (Algeria) recommenced in April
Strong financial performance, with higher prices supporting improved cash flow:
- Average realised prices (including hedging) of $53.4/bbl for oil and $6.1/mcf for gas
- Continued low operating costs of $10.1/boe. Adjusted development capex of $153.4 million; activity to fall in H2
- EBITDAX of $323.2 million, reflecting stronger commodity prices and tight cost control. Post-tax operating cash flow of $314.1 million on track for full year guidance
Production growth momentum on track, with more than 27 kboepd to be added in 2021:
- Acquisition of oil and gas fields in Germany complete, adding c.1.8 kboepd production. Pegasus West (UK) acquisition announced in May, adding possible tie-back development to Cygnus
- Duva (Norway) on track for first production in Q3, adding 8 kboepd
- Snøhvit (Norway) restart revised by the operator to 31 March 2022, mitigated through loss of production insurance. FY 2021 group production guidance unchanged
Further long-term growth opportunities, supported by strong liquidity, higher credit and ESG ratings:
- Further exploration success with a discovery at Blasto (Norway). Dugong (Norway) appraisal well successful
- Completed annual redetermination of RBL facility and reconfirmed a borrowing base of $2.3 billion. Total available liquidity of $1.2 billion to support growth
- Upgraded credit ratings to ‘stable’ from S&P and Fitch; global top-quartile ESG rating of 26.1 (Sustainalytics)
Neptune Energy’s Chief Executive Officer, Jim House, said: "Neptune delivered a good operating and financial performance in the first quarter, supported by stable production and stronger commodity prices. We also delivered growth from the portfolio, bringing online our Gjøa P1 project and having further drilling success with the Blasto discovery and Dugong appraisal wells in Norway.
"In the second quarter, we have already brought our Merakes project online and restarted exports from our Touat gas facility. With drilling underway we continue good progress towards delivering first production from our Duva project in the third quarter.
"We remain on track to deliver material production growth, while generating strong cash flows that will support further long-term portfolio development.”
