Neptune Earns More, Eyes Acquisitions

Neptune reported rising income in the first half of the year as hedging offset low prices and operating costs fell. Cashflow reached $613mn and executive chairman Sam Laidlaw said the company had “ample headroom to continue to build a resilient business for the long term, both organically and through acquisition.”

Pre-tax earnings of $880mn were up from $767mn in the same period last year.

Its output is ramping up, and the Touat gas development in Algeria is “due onstream imminently”, with commissioning complete. It will add around 16,000 barrels of oil equivalent (boe)/day net to Neptune at plateau. There will be additional production from three infill wells at Fram, in Norway. Further ahead, the company can expect more output from Germany and Asia, after acquisitions and licence awards. Laidlaw said Neptune had significantly strengthened its Asian gas position, which will deliver medium-term production and long-term growth opportunities.

CEO Jim House said Neptune’s “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.”

Full year production is weighted towards H2, with a guidance of 150,000-155,000 boe/d. Neptune has hedged about 64% of gas output and 53% of oil for the rest of the year. H1 operating expenditure was about 5% down on the same period last year and full-year opex guidance is $10-11/boe.