Neptune Energy has seen its net profit fall in the first quarter of the year, however, the company remains positive with imminent production growth. The company reported a net profit of $205.9 million, down from $493.6 million in the first quarter last year.
In its quarterly report, the company noted that it was a robust financial performance, despite lower commodity prices and inflationary pressures on its cost base.
“After-tax operating cash flow for the period fell to $347.5 million, compared to $741.3 million in the first quarter of 2022, primarily as a result of lower realized prices and an increase in cash taxes,” the report says.
In the first quarter of 2023, Neptune invested $121.8 million in development investments (including Touat), primarily in its development projects in Norway and the United Kingdom.
“Neptune delivered a strong operational and financial performance in the first quarter, with higher production and improvements in health and safety. Project commissioning is expected to drive further production growth as we progress through the year, including the Neptune-operated Fenja and Seagull developments,” said CEO Pete Jones.
“Our new energy strategy continues to develop, with good progress in the first quarter as we mature our existing opportunities and target important milestones in the second quarter. Our strong ESG performance and disclosure was again recognized by Sustainalytics , giving us an industry-leading ESG rating and placing us in the top 3% of all oil and gas producers,” he said.
Neptune said its first-quarter 2023 production averaged 142.1 kboepd, up 6.3 percent from the comparable period in 2022, mainly due to the contribution of Snøhvit (Norway), after the restart of operations in June 2022, the commissioning of Njord and increased production of Duva. (Norway) and Merakes (Indonesia). During this period, new development wells came on stream at Rӧmerberg (Germany) and Cygnus (UK).
Q1 2022 production included volumes of non-core assets sold in Norway and gas sales from Altmark (Germany). The Altmark field was converted to power generation sales in April 2022, but at lower equivalent rates, the report said.
The production efficiency of Neptune’s operated assets was 86 percent in the period, reflecting strong performance in Norway offset by lower production availability in the UK, the report noted. Production efficiency in the UK was hit by operations planned to tie-in the new Cygnus wells, compressor stability issues and mix shortages, the report added.
“We expect production to increase materially in the second quarter, reflecting a full quarter’s contribution from Njord and the commissioning of Hyme, Bauge and Fenja,” the company said.
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