Neptune Energy is prepared for prices to be lower for longer, its executive chairman and founder Sam Laidlaw has revealed.
“We have … seen a rapid deterioration in oil prices in 2020, which presents the energy sector with further challenges,” Laidlaw said in a company statement.
“While the pricing outlook is unclear, we are prepared for prices to be lower for longer. We have built Neptune to be a resilient business, with a low-cost base, relatively low leverage, a robust balance sheet and a fully funded development program,” he added.
Neptune has identified total cost reductions of between $300 and $400 million for 2020 across its operating costs, general and administrative expenses and capital expenditure in response to the Covid-19 pandemic and weaker oil price environment.
The company reported a “robust” operating cash flow of $1.3 billion for 2019, “despite lower commodity prices and production”. It also registered a cost base of $10.3 per barrel of oil equivalent last year, which it expects to be “broadly unchanged” in 2020.
In 2019, Neptune made acquisitions in Indonesia, the UK and Norway which it said “add attractive growth projects and strengthen our acreage position around core areas”.
“Neptune made significant progress in 2019, positioning the business well for long-term growth,” Neptune’s Chief Executive Officer Jim House said in a company statement.
Neptune Energy describes itself as one of Europe’s largest independent exploration and production companies. The business holds 265 licenses and has operations in the North Sea, mainland Europe, North Africa and the Asia-Pacific region, according to its website.
The company was set up in 2015 by Laidlaw, who has more than 30 years of experience in the oil and gas sector, with private equity investors. Neptune Energy’s vision is to become the world’s leading international independent exploration and production company, its website shows.
To contact the author, email andreas.exarheas@rigzone.com
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