Neptune Energy boss Jim House said yesterday the North Sea newcomer was making progress on all fronts.
The fledgling company was facing the future with “all healthy parameters”, he said, highlighting pre-tax profits of £690 million during the year to Decmber 31 2018, average daily production rising to 161,800 barrels of oil equivalent (boe), a 15% increase in proved and probable reserves and a “strong” balance sheet overall.
He also pointed to a 3% reduction in operating costs to about $10 a barrel, although the UK North Sea figure was even lower at just $7.
Backed by private-equity firms Carlyle Group and CVC Capital Partners, as well as China’s sovereign wealth fund, with a 49% stake, London-based Neptune has firepower for further acquisitions after a busy spell on that front last year.
It completed its near-£4billion purchase of the exploration and production business of France’s Engie, giving it operatorship of the Cygnus gas field in the southern North Sea, in February 2018.
Later in the year it snapped up Norwegian business VNG Norge, for an undisclosed sum, and bought stakes in two UK North Sea fields from Apache for £55m. The Apache deal added 35% of the Seagull development and 50% of the Isabella prospect to Neptune’s portfolio.
Neptune recently announced the UK North Sea’s first final investment decision of 2019, with a commitment to develop the 50m barrel Seagull asset.
Mr House, who led Apache’s North Sea business for many years, said the focus in 2019 was on “project delivery and organic growth”.
But Neptune has the financial muscle to consider further acquisitions “if the right opportunities come along”, he said.
Exploration is another key element of the internationally-focused firm’s organic growth strategy.
In 2018, Neptune drilled seven exploration and appraisal wells, resulting in three discoveries. Exploration drilling expenditure in 2019 will increase “markedly” to around £95m, said Neptune, which plans to drill seven exploration wells in Indonesia, Norway and the UK.
Executive chairman Sam Laidlaw said: “We are delighted with the strategic progress Neptune has made during 2018.
“We have completed three important acquisitions in the period and made significant strides towards our ambition of establishing Neptune as a leading international independent exploration and production company.”