Neptune Energy is predicting production growth in the UK and Norway later this year as the $4.9 billion takeover of the oil and gas company progresses.

Neptune reported a slight increase in output and steady operating profits in the first six months of 2023 from assets spanning the Europe, North Africa, Indonesia and Australia. Furthermore, new project start-ups in the UK and Norway are on track to deliver "material" year-on-year production growth.

Set up in 2015 by former Centrica boss Sam Laidlaw, Neptune announced last month that it had agreed a takeover deal for the majority of its operations.

Italy's Eni has agreed to buy the business for $2.6bn and Eni's Norwegian-listed subsidiary, Var Energy, will acquire Neptune's Norwegian business for $2.3bn. The business in Germany will continue to be owned and operated by existing Neptune shareholders as a standalone group.

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In an update accompanying yesterday's financial results, Neptune's board of directors led by chief executive Pete Jones said the deal looks "highly probable" to go ahead and is expected to conclude by the end of March. The company, which employs about 200 people between its headquarters in London and its North Sea base in Aberdeen, is currently owned by China Investment Corporation, funds advised by private equity players Carlyle Group and CVC Capital Partners, and certain management owners.

“Neptune remains on track to deliver material year-on-year production growth, supported by project start-ups in Norway and the UK," Mr Jones said. "In the first half, we hit a major milestone in our new energy strategy, with the award of three CO2 appraisal and storage licences, meaning we now have licensed storage capacity for the equivalent emissions from our reserves portfolio.

“Commodity prices are likely to be increasingly volatile in the second half of the year, while the industry faces continued inflationary pressures in the supply chain. We remain focused on capital discipline and have re-phased some of our smaller development projects, our exploration programme and our decommissioning plans.”

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Revenues at Neptune during the first six months of 2023 came in at $2.26bn, up from $2.06bn in the same period a year earlier. Total daily production averaged 140,100 barrels of oil equivalent per day, up from 132,300 previously.

Pre-tax profit held steady at $1.44bn but a 40% jump in taxation charges took post-tax profits to $303.9m, down from $761.1m in the first half of in 2022.