Neptune Energy announced profits of $761.7 million (£627m) in the first six months of 2022 from its portfolio of oil and gas operations.
OPERATIONS
The H1 2022 profits are more than a seven-fold increase from H1 2021 at $100.3m.
The company’s financial results for the first half of 2022 showed a strong financial performance supported by strong commodity prices “despite higher tax charge”.
Revenues soared to $2,059.3m (H1 2021: £874.2).
Post-tax operating cash flow was $1,161.2m (H1 2021: $530.4m).
EBITDAX* amounted to $1,716.5m (H1 2021: $669.6m), while underlying operating profit was $1,376.3m (H1 2021: $319.2m).
The company repaid $650m during the first half of the year, and held total available liquidity of $1.7 billion.
| Neptune Energy | Second quarter 2022 | Second quarter 2021 | First half 2022 | First half 2021 |
| Revenue ($m) | 910.0 | 506.4 | 2,059.3 | 874.2 |
| Operating profit before financial items ($m) | 610.4 | 230.8 | 1,405.9 | 402.1 |
| Profit before tax ($m) | 686.4 | 162.6 | 1,439.8 | 360.0 |
| Taxation charge ($m) | (418.3) | (140.2) | (678.1) | (259.7) |
| Net profit after tax ($m) | 268.1 | 22.4 | 761.7 | 100.3 |
| Net cash flows from operating activities ($m) | 1,161.2 | 530.4 | ||
| Non-GAAP measures | ||||
| Total daily production (kboepd) (note a, b) | 131.0 | 112.8 | 132.3 | 119.6 |
| Total daily production (kboepd) including production-equivalent insurance income (note a, b, c) | 133.6 | 133.7 | 133.6 | 136.7 |
| Operating costs ($/boe) (note b, d) | 12.7 | 11.5 | 12.1 | 10.7 |
| EBITDAX ($m) (RBL basis) (note e) | 760.5 | 346.4 | 1,716.5 | 669.6 |
| Underlying operating profit ($m)(note f) | 580.8 | 147.3 | 1,376.3 | 319.2 |
| Adjusted development cash capital expenditure ($m) (note g) | 263.6 | 336.0 | ||
| Free cash flow ($m) (note h) | 818.9 | 61.3 | ||
| Net debt ($m) (book value) (RBL basis) (note i) | 1,358.3 | 2,044.4 | ||
| Net debt/EBITDAX (RBL basis) (note i, j) | 0.43x | 1.95x |
Neptune also received a credit rating upgrade from Moody’s and Ecovadis awarded the company a gold medal awarded for ESG performance.
GUIDANCE
The company’s full year guidance for post-tax operating cash flow is of more than $2 billion and cash taxes of some $1.3 billion.
Production is expected to be 135-145kboepd with production to date of 132.3kboepd.
Executive chairman Sam Laidlaw said that the impact of the Energy Profits Levy increased uncertainty and undermined the UK’s as a destination for future investment at a critical time for energy security.
“As countries around the world prioritise energy security, energy policy must support a stable and predictable investment climate to encourage new investment in additional sources of supply.
PRODUCTION
Neptune reported H1 2022 production of 132.3 kboepd (H1 2021: 119.6kboepd) due to project start-ups Duva and improved production efficiencies.
The re-start of Snøhvit (Norway) in early June, increased net production by around 16 kboepd, and the company is finalising plans to restart exports shortly from Touat (Algeria).
Neptune Energy’s chief executive Pete Jones added that near-term production growth would be supported by the restart of Snøhvit, with a further 47 kboepd of new production to be added by 2023 through new projects.
“We continue to mature new opportunities across our global portfolio, providing further growth potential.”
ESGs
Neptune continued to focus on health and safety improvements through hazard awareness across its operations.
Group carbon intensity in H1 2022 was lower at 6.1 kg CO2/boe.
*Earnings before interest, taxes, depreciation (or depletion), amortisation, and exploration expense