Neptune Energy today announces its financial results for the third quarter of 2021.
Production growth delivered on plan, driven by new projects and Touat re-start
- Improved HSE performance, with a total recordable injury rate of 1.5 per million hours worked.
- Q3 production of 135.3 kboepd (160.6 kboepd including production-equivalent insurance income), within guidance.
- Duva (Norway) delivered on plan and Touat (Algeria) back up to plateau, offsetting planned shutdowns.
- Full year production guidance unchanged at 130-135 kboepd (145-155 including production-equivalent insurance income).
Higher cash flow, due to increased production and stronger commodity prices
- Higher quarterly average realised prices (including hedging) of $69.5/bbl for oil and $9.6/MMbtu for gas.
- EBITDAX of $608.9m and post-tax operating cash flow (after working capital) of $580.8m in the third quarter.
- FY post-tax operating cash flow (before working capital) guidance increased to more than $2bn.
- Q3 operating costs of $12.0/boe, FY guidance tightened to ~$11.5/boe.
Deleveraging well ahead of target, with development capex lower
- Leverage sharply lower at 1.12 times on lower net debt and higher 12-month rolling EBITDAX.
- Lower adjusted development capex of $129.7m in Q3, reflecting completion of projects. FY guidance reduced to ~$650m.
- Aggregate post-tax hedge ratio of 58% for Q4 2021 and 43% for 2022; actively managing hedging to increase upside exposure.
- Total available liquidity of $1.5bn as at September 30 to support growth plans.
Progress on low carbon developments, providing optionality in New Energy
- New large scale offshore green hydrogen project in the Netherlands, utilising wind energy and existing infrastructure.
- L10 CCS project progressing well; FEED due to commence on completion of feasibility study.
- Methane monitoring study at Cygnus completed in September, awarded ‘Gold Standard’ for OGMP 2.0 reporting.
- PosHYdon planning continuing to progress. Reviewing options to advance our DelpHYnus project.
FINANCIAL SUMMARY
Neptune Energy |
Third quarter
2021 |
Third quarter
2020 |
Nine months
2021 |
Nine months
2020 |
Total daily production (kboepd) (note a) |
135.3 |
134.5 |
124.6 |
148.6 |
Total daily production (kboepd) including production-equivalent insurance payments (note b) |
160.6 |
134.5 |
144.5 |
148.6 |
Operating costs ($/boe) |
12.0 |
10.2 |
11.2 |
9.1 |
EBITDAX ($m) (RBL basis) (note c) |
608.9 |
172.1 |
1,278.5 |
732.0 |
Underlying operating profit (note d) |
393.3 |
15.7 |
714.5 |
257.6 |
Cash flow from operations, after tax ($m) |
|
|
1,111.2 |
675.9 |
Adjusted development cash capital expenditure ($m) (note e) |
|
|
465.7 |
598.9 |
Free cash flow ($m) (note f) |
|
|
454.9 |
11.4 |
Net debt ($m) (book value) (RBL basis) (note g) |
|
|
1,669.7 |
1,836.1 |
Net debt/EBITDAX (RBL basis) (note g) |
|
|
1.12x |
1.64x |
Jim House, Neptune Energy’s chief executive officer, said: “Neptune delivered a strong operational and financial performance in the third quarter. With the Duva development in Norway now online, we have added more than 27 kboepd this year of new production. Growth is set to continue, with a further 52 kboepd due to come onstream from projects under construction within the next two years.
“As gas and oil supplies remain tight, we are focused on maximising safe and efficient production operations to supply key markets. The tightening of supply and subsequent increase in prices underlines the need for a diverse energy mix and for economies to maximise lower carbon and lower cost domestic production.
“Although commodity markets remain volatile, we are managing our hedging programme proactively in order to benefit from higher global prices, while mitigating downside risk.”