London, November 22, 2019 – Neptune Energy, the global independent oil and gas exploration and production company, today announces its financial results for the period ended September 30, 2019.
Continued strategic progress focused on value-accretive growth, increasing long-life and low-cost reserves in key areas
- Announced agreement to acquire Edison E&P’s UK and Norwegian producing, development and exploration assets from Energean Oil & Gas: portfolio provides further growth with 30 mmboe of 2P reserves, 15 kboepd of near-term production and additional contingent resources.
- Important discovery at Echino South in Norway: discovery located close to existing infrastructure, with an estimated 38-100 mmboe of recoverable resources. Potential for fast-track development.
- Officially signed West Ganal PSC: covers an area of 1,129 km2 and is located adjacent to our existing Jangkrik and Jangkrik NE fields in the prolific Kutei Basin, Indonesia. Includes the Maha discovery, which has 24 mmboe of 2C resources.
Production expected to increase with new projects set to contribute ~110 kboepd in coming years
- Production expected to increase in the fourth quarter: the Touat gas development, in Algeria, is ramping up to plateau, while production in Norway and the Netherlands is expected to return to normal levels.
- More than 110 kboepd of new production under development: projects remain on track and on budget. Merakes (Indonesia) and Nova and Dvalin (Norway) added to development pipeline from recent acquisitions.
- Full year 2019 average production guidance of around 145 kboepd: revised guidance reflects later than expected start-up and plateau at Touat, maintenance shutdowns and other unplanned deferrals.
Strong balance sheet, disciplined capital allocation and healthy liquidity levels
- Expect robust full year cash flow, despite modest commodity prices and lower production: expect to deliver operating cash flow of more than $1 billion in 2019, reflecting disciplined capital allocation and a low cost base of around $10.5/boe.
- Liquidity boosted by $300 million bond issue: additional issuance to the existing $550 million Senior Notes due 2025. Total headroom of $1.7 billion, including $1.5 billion currently available and undrawn under the RBL facility.
- Higher capital investment programme for 2020, funded from existing resources: proposed development capex programme of approximately $1-1.1 billion in 2020, before falling to around current levels in 2021 as new projects come on stream.
CEO Jim House said: “Neptune made significant strategic progress in the third quarter, focused on delivering value-accretive and material growth, increasing long-life and low-cost reserves in key areas of our portfolio. Our acquisition of Edison E&P’s North Sea assets from Energean Oil & Gas is an excellent fit with our existing portfolio in Norway and the UK and offer additional contingent resources, while the discovery at Echino South in Norway is one of the year’s largest on the Norwegian continental shelf and has the potential for fast-track development.
“We have a strong project pipeline, which will deliver 110 kboepd of new production in the coming years. We expect to exit 2019 producing at higher levels as Touat continues to ramp up to plateau and production in Norway and the Netherlands returns to more normal levels.
