Page 16 - EurOil Week 35

EurOil PERFORMANCE EurOil

Neptune supported by

hedging in Q2

NETHERLANDS THE Netherlands’ biggest producer Neptune the current quarter would be affected by main-
Energy reported strong second-quarter results tenance and restrictions in Indonesia, where it
Neptune recently made on August 27 given the circumstances, thanks to also operates.
Norway’s largest oil oil price hedging. However, the mostly gas-pro- Neptune drew attention to recent exploration
discovery of the year. ducing firm warned that the recovery in gas and successes, including the Dugong oil discovery in
LNG prices would be slow. August, hailed as Norway’s largest of the year.
Neptune’s pre-tax earnings excluding explo- The find is estimated to be between 40mn and
ration costs (EBITDAX) was $214.7mn in 120mn barrels of oil equivalent (boe) in size.
the three months ending June 30, from nearly Neptune sees additional potential at the
$431mn a year earlier. Its average gas sales price Dugong licence area, it said, without divulging
fell from $5 to $3.3 per 1,000 cubic feet ($116.5 details on further work plans.
per 1,000 cubic metres), while its oil sold for The company’s net debt rose to $1.6bn at the
$41.5 per barrel, as a result of hedging. end of June from $1.5bn three months earlier,
Neptune also gained from an increase in pro- but this increase was smaller than anticipated.
duction from 145,600 to 149,600 barrels of oil The producer gained from recent tax breaks
equivalent per day (boepd). But it warned prices granted by the government, which enable opera-
would take time to rebound. tors to get reimbursed for capital spending faster.
“While oil markets have to some extent stabi- The breaks apply to projects submitted to
lised and prices are trading well above lows, LNG authorities for approval before the end of 2022,
realisations are expected to decline in the third and have enabled Neptune to review potential
quarter due to lag effects in our contracts,” it said. investment options in Norway, it said.
“A recovery in European gas prices is in the early Neptune generated $417mn in operating cash
stages, with prices expected to be higher in 2021.” flow in the first half, down from $613mn a year
Neptune has shelved several new North Sea earlier, and it booked $125mn in impairments.
investments in response to the price collapse, “The changes to the business we announced
including the redevelopment of the Equinor-op- in the first half of the year will enhance our
erated Njord field off Norway and its Seagull oil financial resilience, efficiency, effectiveness and
project in the UK. But it said it was proceeding adaptability, while retaining core capabilities and
with development drilling at other projects, optionality for growth,” CEO Jim House said.
including the Fenja and Duva fields off Norway. “This will result in a more focused activity set
The full-year output guidance remains in the short term, but positions us better to still
unchanged at 145,000-160,000 boepd, Nep- generate value, even in a lower commodity price
tune said, while cautioning that production in environment.”™

P16 www. NEWSBASE .com Week 35 03•September•2020