TIDMENOG
RNS Number : 8387M
Energean PLC
26 May 2022
Energean plc
("Energean" or the "Company")
Trading Statement & Operational Update
London, 26 May 2022 - Energean plc (LSE: ENOG, TASE: ) is
pleased to provide an update on recent operations and the Group's
trading performance in the 3-months to 31 March 2022.
Highlights
-- Revenues for the period were $170.7 million, an 80% increase versus Q1 2021 ($94.9 million)
-- EBITDAX for the period was $89.6 million, a 172% increase versus Q1 2021 ($32.9 million)
-- Group cash as of 31 March 2022 was $812.7 million (including
restricted amounts of $135.6 million)
-- Production in the four-months to 30 April 2022 was 36.1 kboed (73% gas)
o Within full-year guidance (excluding Israel) of 35-40
kboed
-- First gas from Karish on track for Q3 2022, development was
93.2% complete and the FPSO 99.3% complete as at 30 April 2022
o The Energean Power FPSO has sailed-away from Singapore and is
expected to arrive in Israel in early June
-- Inaugural dividend policy announced
-- Commercial discovery made by the Athena exploration well,
containing recoverable gas volumes of 8 bcm (283 bcf / 51 mmboe) on
a standalone basis.
o Discovery de-risks an additional 50 bcm (1.8 tcf / 321 mmboe)
of mean unrisked prospective resources across Energean's Olympus
Area (total 58 bcm / 372 mmboe including Athena).
-- New GSPA signed in May 2022 for up to 0.8 bcm/yr to supply
gas to the East Hagit Power Station
Mathios Rigas, Chief Executive Officer of Energean,
commented:
"I am pleased to report that Energean has had a strong start to
the year. We have delivered record quarterly revenue and EBITDAX,
our production performance is within guidance and our flagship
project Karish is on track for first gas in Q3 this year.
"2022 will be a transformational year for Energean and we have
already delivered on several of our 2022 milestones. We have
announced our inaugural dividend policy, we have made a commercial
gas discovery at Athena in our Israel drilling campaign, and we
have signed an additional commercialisation agreement for our gas
in Israel. I look forward to continuing to deliver on our promises
to our shareholders and broader stakeholder communities for the
remainder of the year."
Enquiries
For capital markets: ir@energean.com
Maria Martin, Head of Corporate Finance Tel: +44 7917 573
354
For media: pblewer@energean.com
Paddy Blewer, Head of Corporate Communications Tel: +44 7765 250
857
Energean Operational & Financial Review
Production
In the 4-months to 30 April 2022, average working interest
production was 36.1 kboed ( 73 % gas), within the full year
guidance range (excluding Israel) of 35.0 - 40.0 kboed.
Four-months to 30 FY 2022 guidance
April 2022 Kboed
Kboed
Israel - 25.0 - 30.0
(including 1.0 - 1.3
bcm of gas)
------------------ ----------------------
Egypt 25.1 25.0 - 28.0
------------------ ----------------------
Italy 9.7 9.0 - 10.0
------------------ ----------------------
Greece, Croatia and 1.3 1.0 - 2.0
UK
------------------ ----------------------
Total production (including N/A 60.0 - 70.0
Israel)
------------------ ----------------------
Total production (excluding 36.1 35.0 - 40.0
Israel)
------------------ ----------------------
Israel
Karish Project Progress
Energean remains on track to deliver first gas from the Karish
gas development project in Q3 2022. At 30 April 2022, the project
was approximately 93.2% complete [1] and the FPSO 99.3%
complete.
The Energean Power FPSO is expected to arrive in Israel in early
June and will immediately commence hook-up and offshore
commissioning operations, which includes risers and jumpers
installation as well as the commissioning of the sales gas
pipeline. Energean expects approximately three to four months of
commissioning and hook-up activities between the FPSO's arrival and
first gas.
% Completion at 30 April 2022
[2]
Production Wells 100.0
--------------------------------------------------
FPSO 99.3
--------------------------------------------------
Subsea 84.3
--------------------------------------------------
Onshore 100.0
--------------------------------------------------
Total 93.2
--------------------------------------------------
Growth Projects
1. Karish North
The KN-01 exploration well will be re-entered, side-tracked and
completed as a production well as part of the Israel growth
drilling campaign, expected during the summer 2022, following the
completion of the Karish Main-04 appraisal well.
Karish North is expected to commence production in H2 2023.
2. Second oil train & riser
The second oil train and second gas sales riser are progressing
on schedule and are on track to come onstream in H2 2023.
Drilling Campaign
1. Athena Gas Discovery
As announced on 9 May 2022, a commercial discovery was made by
the Athena exploration well, Block 12, in the A, B and C sands.
Preliminary analysis indicates that the Athena discovery contains
recoverable gas volumes of 8 bcm (283 bcf / (51 mmboe)) on a
standalone basis.
This discovery is particularly significant as it de-risks an
additional 50 bcm (1.8 tcf / (321 mmboe)) of mean unrisked
prospective resources across Energean's Olympus Area (total 58 bcm
/ 372 mmboe including Athena).
Multiple commercialisation options are under evaluation for a
standalone tie-back to the Energean Power FPSO or as part of a new
Olympus Area development.
2. Remaining Campaign
In May 2022, the Stena IceMAX re-spudded the Karish Main-04
exploration and appraisal well, of which the top hole had already
been drilled.
After KM-04 the following wells will be drilled, in order of
sequence:
-- Karish North - Development - Firm
-- Hermes (Block 31) - Exploration - Optional
-- Hercules (Block 23) - Exploration - Optional
A decision on whether to drill the optional wells, as part of
this drilling campaign, will be made by the end of Q2 2022.
Gas Contracts
In May 2022, further to the claims raised by the parties in the
related arbitration proceedings (including the counterclaim filed
by Energean seeking a declaration that Energean is entitled to
terminate the GSPA as well as damages), Dalia and Energean Israel
agreed to end all claims and disputes between them. Both companies
agreed that the Dalia GSPA (which represents up to 0.8 Bcm/yr) was
lawfully terminated, that the arbitration proceedings are
terminated, and that neither party owes or will be liable to the
other for any payment in connection with and due to the Dalia GSPA,
the arbitration proceedings and the facts subject thereof. This was
agreed to be final and unappealable.
In May 2022, Energean announced that it had signed a new GSPA,
representing up to 0.8 Bcm/yr, to supply gas to the East Hagit
Power Plant Limited Partnership, a partnership between the Edeltech
Group and Shikun & Binui Energy.
Also in May 2022, Energean Israel signed an amendment to the OPC
GSPAs with OPC Rotem and OPC Hadera. The amendment has secured
additional near-term cash flows for Energean following first gas
during the transition period, which is the period when the buyers
transition from their existing agreements in the ramp-up period to
the full total annual contracted quantities of 0.7 bcm/yr.
Egypt
In the 4-months to 30 April 2022, w orking interest production
from the Abu Qir area averaged 25.1 kboed ( 87 % gas), within the
full year production guidance (25.0 - 28.0 kboed).
NEA/NI was 53.1 % complete as of 30 April 2022. Subsea
installation operations began in late May, after which the first
well will be drilled. First gas from the first well is expected in
H2 2022.
Italy
In the 4-months to 30 April 2022, w orking interest production
from Italy averaged 9.7 kboed ( 41 % gas), at the upper end of the
full year production guidance (9.0 - 10.0 kboed).
First gas from Cassiopea remains on track for H1 2024.
Rest of Portfolio
In the 4-months to 30 April 2022, w orking interest production
from the rest of the portfolio averaged 1.3 kboed (32% gas), at the
lower end of the full year production guidance of 1.0-2.0 kboed due
to a delay in the re-start of the Prinos Assets in Greece to ensure
full health and safety compliance.
Greece
First oil from the Epsilon development is expected in
mid-2023.
Pre-FEED for the Prinos CCS project is progressing well and is
expected to complete during Q2 2022.
Croatia
Energean is continuing FEED activities for the development of
the Irena gas field, located five kilometres north of the Izabela
field offshore Croatia, with the target to take FID on the project
in Q4 2022. Energean is also undertaking an assessment of the
adjacent Ivona prospect, which has the potential to add additional
gas volumes in Croatia.
United Kingdom
Energean has received interest from third parties with respect
to the potential sale of its UK assets portfolio and is continuing
to consider and develop its options.
Montenegro
Energean is continuing to assess potential farm-out options for
the drilling of a cluster of near shore gas prospects for Blocks 26
and 30 ahead of the licence expiry date of 14 July 2022.
Financial
The table below presents Energean's key results to 31 March
2022.
Three months to 31
March 2022
Revenues $ million 170.7
----------- -------------------
Cost of production
(including flux) $ million 62.3
----------- -------------------
Cost of production
(including flux) $/boe 19.2
----------- -------------------
G&A $ million 8.2
----------- -------------------
EBITDAX $ million 89.6
----------- -------------------
Capital expenditure $ million 74.3
----------- -------------------
Exploration expenditure $ million 5.8
----------- -------------------
Decommissioning expenditure $ million 0.6
----------- -------------------
Cash (including restricted
amounts) [3] $ million 812.7
----------- -------------------
Net debt - consolidated $ million 2,148.3
----------- -------------------
Net debt - plc excluding
Israel $ million 119.8
----------- -------------------
Net debt - Israel $ million 2,028.4
----------- -------------------
Forward looking statements
This announcement contains statements that are, or are deemed to
be, forward-looking statements. In some instances, forward-looking
statements can be identified by the use of terms such as
"projects", "forecasts", "on track", "anticipates", "expects",
"believes", "intends", "may", "will", or "should" or, in each case,
their negative or other variations or comparable terminology.
Forward-looking statements are subject to a number of known and
unknown risks and uncertainties that may cause actual results and
events to differ materially from those expressed in or implied by
such forward-looking statements, including, but not limited to:
general economic and business conditions; demand for the Company's
products and services; competitive factors in the industries in
which the Company operates; exchange rate fluctuations;
legislative, fiscal and regulatory developments; political risks;
terrorism, acts of war and pandemics; changes in law and legal
interpretations; and the impact of technological change.
Forward-looking statements speak only as of the date of such
statements and, except as required by applicable law, the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. The information contained in this
announcement is subject to change without notice.
[1] As measured by project milestones under the TechnipFMC
EPCIC
[2] As measured by project milestones under the TechnipFMC
EPCIC
[3] Restricted amounts of $135.6 million
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