Neptune Energy announces H1 2020 results

Neptune Energy announces H1 2020 results

Neptune Energy today announced its financial results for the first half of 2020.

Good safety and operational performance despite challenges posed by COVID-19 pandemic

• Improved safety performance, with LTIF rate of 0.6, TRIR of 2.1 and PSER of 2.1, with no impact from COVID-19 on operations

• Q2 production of 149.6 kboepd, reflecting planned shutdowns and prioritisation of value over volume

• H1 production of 155.8 kboepd; full year production guidance unchanged at 145-160 kboepd

• Operational handover of Touat gas facility completed, with improved performance achieved since April


Robust financial performance, supported by hedging and lower operating costs


• EBITDAX of $537.6 million and cash flow of $417.3 million in H1 2020, reflecting weaker commodity prices, partially offset by hedging gains and cost reductions; tax refunds to increase cash flows in H2

• Lower operating costs of $8.5/boe in Q2, further reduced FY guidance to <$9.5/boe

• Better than expected net debt of $1.6 billion and leverage of 1.31x at 30 June 2020

• Non-cash pre-tax net impairments of $125 million and reorganisation costs of $34 million recognised in Q2


Resilience plan on track to achieve FY 2020 cost savings of $300-400 million


• Operating and G&A cost savings of $50 million achieved in H1. On track for FY savings of $85 million in 2020

• Revised capex guidance for 2020 of $700-800 million on track

• Expected exploration spend increased marginally to $135 million, reflecting positive drilling results and a further appraisal study at Isabella

• Reduced exploration and development drilling activity in H2


Decisive action taken to reflect more focused activity set, while preserving long-term value


• Reduced costs – announced proposals in June to reduce the organisation by 400 roles in 2020/21
• Sharpened strategic focus – tighter capital plan focused on low-cost near-term projects
• High-graded exploration – Dugong discovery in Norway a potential material new operated growth project
• New Energy – formation of New Energy team to scale partnerships and investment in low carbon technologies; increased focus on ESG


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Source: Neptune Energy


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