Yesterday Neptune Energy shared its 2022 H1 results, announcing drilling had commenced on the tenth well on the Cygnus field and reporting pre-tax profits of £1.18 billion.
The 10th well in Neptune’s Cygnus is expected to start up in the fourth quarter of this year.
Producing first gas in 2016, the Cygnus field is the largest single producing gas field in the UK and produces 6% of the country’s gas demand.
A second well in the programme is due to be brought onstream next year.
Once both wells are online they will be used to maintain production and offset the natural decline.
However, A planned field shutdown at Cygnus is scheduled in August to align with a planned outage at the Shearwater Elgin Area Line (SEAL) pipeline.
Change in gas entry specifications
Neptune Energy continues to lobby for a permanent change in gas entry specifications.
The company says this is “required to maintain reliable indigenous gas supplies into the UK and unlock additional potential reserves and resources”, the government response to this gas safety (management) regulations consultation is due later this year in autumn.
By lowering the calorific value of gas that enters the network for domestic use by 1% would reduce the current requirement for gas producers to blend below spec gas, thereby unlocking larger volumes to protect supply.
Last year Neptune Energy provided an opinion piece for Energy Voice, describing the change in gas entry specifications as a “simple, immediate solution”.
The London-baed energy company has doubled down on investment in the UK despite the increase in tax for oil and gas companies rising to 65% in light of windfall tax.
Neptune has invested more than the country contributed to its balance sheet (£74.01m), pledging £81.78m in the first half of this year.
This accounts for 20% of Neptune’s capital expenditure in H1.
Other UK developments
The Neptune-operated Seagull project has made progress with one of two 2022 campaigns completed.
The first well has been perforated and clean-up operations are expected to be completed in August.
The subsea campaign was finished in May, including umbilical hook-up, installing subsea pipeline spools and leak testing the production pipeline system.
As for Neptune’s other UK project, Isabella, the drilling of an appraisal well is set to commence in September, with results due in the first half of 2023.
Production availability in the UK increased to 93% in the first half of 2022,
compared to 60% in the first half of 2021.