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North Sea well starts pumping gas in bid to power 1.9 million homes

North Sea well starts pumping gas in bid to power 1.9 million homes

 

Neptune Energy said it would help support the UK’s energy security and supply the gas needs of almost two million homes after kicking off production at a new North Sea well.

The firm and its partner, Spirit Energy, said production had commenced from the 11th well at its operated Cygnus gas field in the southern North Sea. The latest well is expected to produce about 4,000 barrels of oil equivalent per day - enough gas to heat approximately 200,000 homes. Together with the tenth well which started up earlier this year, the Cygnus facility is expected to produce enough gas per day to meet the needs of around 1.9 million UK households.

Neptune Energy’s UK country director, Alan Muirhead, said: “Cygnus plays an important role in supporting UK energy security and has the capacity to supply around 6 per cent of the country’s gas demand. We’re taking steps to boost North Sea gas production which reduces the UK’s reliance on less secure and more carbon intensive supplies of imported energy, and also supports the government’s aim of achieving energy independence by 2040.”

Neptune, which was founded by former Centrica boss Sam Laidlaw and is backed by CIC and funds advised by Carlyle Group and CVC Capital Partners, said the Cygnus field continues to have one of the lowest carbon intensities on the UK continental shelf.

Spirit Energy’s chief executive, Neil McCulloch, added: “Continuing to secure reliable and responsible supplies of energy from the UK continental shelf has never been more important. Spirit Energy is delighted to welcome first gas from the joint venture’s most recent investment in Cygnus, as gas continues to be a key energy source in the transition towards net zero.”

Meanwhile, Edinburgh-based oil and gas producer Capricorn Energy - formerly Cairn Energy - has appointed a new chief executive in the wake of its boardroom shake-up and operational overhaul. Randy Neely, former president and chief executive of Egypt-focused operator TransGlobe Energy, is set to join the group at the start of June. Interim chief executive Chris Cox will leave after a handover period.

The new board is planning to give shareholders $575 million (£462m) in pay-outs, through a $450m special dividend, proposed to be paid next month, along with a further special dividend of $100m to be paid in the fourth quarter, and a share buyback of at least $25m over the next 12 months. The firm has already begun selling its UK interests in the Catcher and Kraken fields as it offloads or scales back its non-Egyptian assets.

Capricorn added: “With fewer people, we will require much less office space and ancillary services. Capricorn will be moving out of its current office on Lothian Road, Edinburgh as planned but will not be moving into the new offices in Edinburgh which were outlined in last year's annual report. The search for smaller, lower cost alternative office space in Edinburgh is now underway. Significantly smaller, low-cost premises will also be found in London for those limited activities which need to take place there.”

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Published: 28-04-2023

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