Neptune Posts Profit Jump in 2022

Neptune Energy has reported a net profit for 2022 of $924.4 million, significantly above the figure of $387.2 million reported in the year prior.

The company noted in its latest report that FY 2022 production rose to 135.0 kboepd, reflecting the restart of Snøhvit and a full-year’s contribution from Duva. However, the extension to the outage at the joint venture-operated Touat gas plant (Algeria) restricted production growth and, as a result, group production for the full year averaged at the lower end of guidance, the company highlighted. Production including production-equivalent insurance income was 135.6 kboepd, the company said.

With a full-year contribution from Snøhvit, the scheduled restart of Touat and the ramp-up of production from its new projects at Njord (Norway), Fenja (Norway) and Seagull (UK), Neptune Energy expects production in 2023 to average 150-165 kboepd and to end the year at around 180 kboepd.

In 2022, Neptune finalized a cooperation agreement with its partners at its L10 CCS project and continued to mature the project towards concept selection. In the second half of the year, the company formed a partnership with Horisont Energi to develop the Errai CCS project in Norway. Neptune also submitted CO2 storage license applications in Norway and the UK, the statement reads.

The company further said it will continue to pursue opportunities to lower the carbon intensity of its operations and in December 2022 submitted plans for the electrification of Snøhvit and Njord. The Gudrun electrification project is due to start operation in mid-2023.

By 2028, Neptune expects 100 percent of its production in Norway to be from hubs that have been fully or partially electrified.

At the end of 2022, Neptune said it had 2P reserves of 552 mmboe and a reserves to production ratio of 11 years. The decrease in reserves reflects production in the year and the disposal of non-core assets in Norway. Its contingent resources increased to 468 mmboe, due mainly to recent discoveries and license acquisitions in Norway and the Netherlands, providing Neptune with additional growth opportunities, the statement reads.

“The last 12 months have seen a dramatic shift in the geopolitical environment that shapes how energy is produced and used. After Russia’s war in Europe it is inevitable that there is a generational redrawing of political and economic allegiances,” said Neptune Energy’s Executive Chairman, Sam Laidlaw.

“Against a backdrop of underinvestment, lower commodity prices of the last decade have been replaced by surging prices and marked volatility. This is particularly the case with natural gas, due not only to the war, but also increased awareness of its importance in the energy transition. Having invested more than $7 billion to transform Neptune over the past five years, we are well positioned for these changes, with a portfolio that now has greater production capacity, more lower carbon development opportunities and a stronger balance sheet,” Laidlaw said.

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