Neptune Energy announces Q3 2022 results

Neptune Energy today announced its financial results for the third quarter of 2022.

Safety improvements, low carbon intensity, increasing production
•    Rolling out measures to tackle rise in minor safety incidents, PSER performance remains ahead of target.
•    Group carbon intensity remained low at 6.5 kg CO2/boe, reflecting good emissions management.
•    Production of 133.7 kboepd, higher than prior quarter, due to full period’s contribution from Snøhvit (Norway). 
•    Full year production guidance revised to around 135 kboepd, reflecting delayed restart of Touat (Algeria).

 

Progress on development projects, focused capital programme
•    Njord (Norway) start-up in December, expected to produce net ~20 kboepd at plateau.
•    YTD adjusted development capex of ~$386 million, full year 2022 guidance reduced to ~$550 million. 
•    Discovery at Ofelia (Norway), potential fast-track development with Hamlet, where PDO is targeted by end of 2022.
•    Hydrocarbons encountered in Calypso well (Norway), operations ongoing. Appraisal drilling underway at Isabella (UK).

 

Supporting energy security in Europe, continuing to progress lower carbon projects
•    Raised awareness and emergency preparedness level for our operations in Europe.
•    Production expected to increase to more than 165 kboepd in 2023, reflecting >$4 billion of investment since 2018.
•    Key contracts for the H2opZee (Netherlands) green hydrogen feasibility programme awarded.
•    New Errai CCS project (Norway) has potential to store 4-8 million tonnes of CO2 annually in initial phase.

 

Strong financial results, lower net debt, upgrading full year operating cash flow guidance
•    Post-tax operating cash flow YTD of $2,053 million, EBITDAX of $2,894 million and operating profit of $2,293 million.
•    Net debt to EBITDAX fallen further to 0.18 times. Credit rating upgrades from Moody’s, S&P and Fitch.
•    Full year guidance for post-tax operating cash flow increased to $2.5-3.0 billion, supporting investment plans. 
•    Tax charge of $846 million in Q3 2022 ($242 million, Q3 2021), FY tax charge expected to be ~$2.2 billion.


Neptune Energy’s CEO, Pete Jones, said: “Neptune delivered a good operational and a strong financial performance in the third quarter of 2022, underpinned by higher production, gas prices and tight cost control.

 

“Near-term production growth will be driven by our projects, which are expected to add a further 47 kboepd of new production and increase output to more than 165 kboepd in 2023. This growth reflects the culmination of more than $4 billion of investment since 2018, including the development of seven projects. 

 

“We have been maturing new development opportunities across our global portfolio, however, some of these opportunities are at risk from potentially poorly targeted windfall taxes, particularly in the UK, Germany and the Netherlands. Neptune is supportive of a fair level of taxation, but mechanisms must not discourage investment in incremental production to support energy security priorities, as well as carbon reduction initiatives.”