We surveyed 1.75 square degrees of sky near Neptune to an R-band 50 \% detection efficiency of 25.8 mags ( corresponding to radii of about 17 km for an assumed albedo of 0.04 ) . We discovered one new outer satellite , Psamathe ( S/2003 N1 ) , about 20 km in radius and having a distant retrograde orbit and moderate eccentricity . Until 2003 Neptune was only known to have two satellites which exhibited orbital signatures indicative of capture . Both of these , Triton and Nereid , are unusual when compared to the irregular satellites of other giant planets . With recent discoveries of four additional satellites by Holman et al . ( 2004 ) it is now apparent that Neptune has a distant “ normal ” irregular satellite system in which the satellites have radii and orbital properties similar to those of the satellites of other giant planets . We find that the satellite size distribution at Neptune is not well determined given the few objects known to date , being especially sensitive to the inclusion of Triton and Nereid in the sample . Finally , we note that Psamathe and S/2002 N4 have similar semi-major axes , inclinations and eccentricities . They may be fragments of a once larger satellite .