London—Independent gas-focused producer Neptune Energy said May 13 it expects its production to increase "materially" in the fourth quarter of 2021, supported by first production from the Duva field offshore Norway in Q3.
Announcing its first-quarter results, Neptune said it had also resumed gas exports from its Touat field in Algeria, which had been shut in since Q4 2020 due to technical issues.Neptune also said it was keeping its full-year production guidance unchanged. In February, it said it expected output this year to average 130,000-145,000 b/d of oil equivalent.
Neptune -- which was set up in 2015 with assets across northwest Europe, North Africa and the Asia-Pacific region -- said its production in Q1 averaged 125,700 boe/d, down 22% year on year.
It was hit by the outage at Touat and also by the closure of the Snohvit field offshore Norway due to the fire at the Hammerfest LNG plant that takes gas from Snohvit.
Including production-equivalent "insurance" due because of the Snohvit closure, Neptune's output in Q1 averaged 139,000 boe/d, it said.
CEO Jim House said Neptune started production at its Gjoa P1 project offshore Norway in Q1 and has now also brought its Merakes project in Indonesia online.
"We also continue good progress towards delivering first production from our Duva project in the third quarter," House said.
Touat restartTouat resumed exports on April 16 after a prolonged outage. "Production from the Touat gas processing plant remained shut-in throughout the first quarter as remedial works continued," it said. "Following a period of gas conditioning, exports recommenced on April 16."
Technical issues at Touat, which began last summer, caused the shutdown of the field in Q4 2020.
Touat began exporting gas into the Algerian network in September 2019 and reached plateau production in April 2020 of around 13 million cu m/d -- or 4.5 Bcm/year.
The outage at Touat may have led to some issues Algeria faced at the start of the year in maintaining gas export levels to Europe.
The project is led by Groupement Touat Gaz, comprising Neptune Energy Touat (65%) and state-owned Sonatrach (35%).
Demand outlookNeptune also said that it remained "cautious" about the short-term impact of the pandemic on global demand and prices despite the rollout of vaccination programs being a cause of "optimism."
It said planned shutdowns in Norway and the UK were expected to moderate production in the second quarter, but that the impact of the shutdowns should be offset partially by the re-start of Touat, production from Merakes and the assets acquired in Germany.
It said it also had an active program for development drilling in the second quarter, with rigs operating at its Seagull project in the UK, Duva in Norway, Adorf in Germany and the K9ab-A platform in the Netherlands.
"Development activity is expected to remain high in the second quarter, before declining in the second half of the year as our projects come on stream," it said.
