REG - Energean PLC - Trading Statement & Operational Update

EnergeanAnnouncement

23/05/2024 07:00

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RNS Number : 5452P  Energean PLC  23 May 2024

 

 

 

 Energean plc

("Energean" or the "Company")

 

Trading Statement & Operational Update

London, 23 May 2024 - Energean plc (LSE: ENOG, TASE: אנאג) is pleased to
provide the following update on recent operations and the Group's trading
performance in the 3-months to 31 March 2024. The numbers contained herein are
unaudited and may be subject to further review and amendment.

Mathios Rigas, Chief Executive Officer of Energean,
commented:

"We continue to achieve strong operational and financial results, with
production, revenue and adjusted EBITDAX all increased year-on-year. In
Israel, our operations remain unimpacted by the ongoing geopolitical
developments, with peak gas demand expected during summer driving maximum gas
output. In addition, we are pleased to announce success at our Abu Qir infill
drilling campaign in Egypt, where we have discovered 270 ft of net pay, which
is around two times initial expectations.

"In line with our dividend policy, we have declared our Q1 2024 dividend of 30
US$ cents/share and continue to focus on our key business drivers (paying a
reliable dividend, deleveraging, growth, and our commitment to Net Zero). We
continue to remain alert to opportunities that fit our key business drivers
and can move quickly to take advantage when they arise.

"Looking forward, we have several milestones on the horizon across the
portfolio: Cassiopea, which is the largest gas development in Italy, is
expected to come onstream this summer; the Anchois appraisal well in Morocco
is planned to spud in August; in Egypt, we look forward to the start-up of the
new well; in Greece, the carbon storage permit application will be submitted
at the end of June and; in Israel, we will start the supply to our new gas
contracts signed earlier this year."

Operational Highlights

·      Production for the period was 142 kboed (82% gas), a 49% increase
versus Q1 2023 (95 kboed). Group 2024 production guidance is reiterated at 155
- 175 kboed, which is weighted towards the second half of the year.

o  In Israel, FPSO uptime during Q1 2024 was 98%. In April 2024, the wells
were successfully tested at 720 mmscfd. Day-to-day production was and
continues to be unimpacted as a result of the ongoing geopolitical
developments.

o  In mid-May, the FPSO successfully completed a scheduled 5-day turnaround
for routine maintenance.

o  The new wells brought online in Egypt in the Abu Qir, NEA and NI
concessions continue to perform above expectations.

·      Success at the Abu Qir infill well drilling campaign in Egypt,
encountering around 270 feet of net pay across the BKES-1 formation and Abu
Madi formations, around two times initial expectations.

o  Preliminary analysis indicates gas-initially-in-place ("GIIP") volumes of
approximately 87-129 Bcf 1  based on the P90 to P10 range. The well also
encountered a possible liquids column of around 55 feet of net pay that
requires further analysis.

o  The well was drilled from the existing North Abu Qir PII platform. First
production is expected in Q3 2024.

·      Drilling operations continue on Cassiopea (Italy) with the second
and third well (out of four).

·      Morocco farm-in completed and rig contract signed for the Anchois
appraisal well.

·      Long-lead items ordered for the Katlan development (Israel) to
maintain project schedule ahead of Final Investment Decision.

·      Energean has taken over operatorship of the Tors and Wenlock (UK)
fields to manage the decommissioning work plan.

·      The Group's Scope 1 and 2 emissions intensity in Q1 2024 was
estimated to be approximately 9.0 kgCO2e/boe, a 19% reduction versus Q1 2023.

Financial and Corporate Highlights

·      Revenues for the period were $413 million, a 43% increase versus
Q1 2023 ($289 million).

·      Adjusted EBITDAX for the period was $259 million, a 60% increase
versus Q1 2023 ($162 million).

·      Group cash as of 31 March 2024 was $220 million (including
restricted amounts of $4 million) and total liquidity was $424 million.

·    Q1 2024 dividend of 30 US$ cents/share declared today, scheduled to
be paid on 28 June 2024.

Outlook

·      Peak gas demand in Israel during the summer, driving maximum gas
output.

·      Cassiopea (Italy) first gas on track for summer of 2024.
Near-field Gemini exploration well to be drilled after completion of the
Cassiopea production wells.

·      Anchois (Morocco) appraisal well spud planned for August 2024.

·      Final Investment Decision on Katlan (Israel).

·      The second oil train (Israel) to be installed as soon as
feasible.

·      Storage permit application for the Prinos Carbon Storage Project
is expected to be submitted by end-June 2024.

·    Quarterly dividend payments intended to be declared in line with the
previously communicated dividend policy.

Production

                    Three-months to 31 March 2024  Three-months to 31 March 2023  Three months to 31 March 2023-24 % change  Four-months to 30 April 2024

                    Kboed                          Kboed                                                                     Kboed
 Israel             99                             59                             68%                                        100

                    (inc. 1.2 bcm of sales gas)    (inc. 0.7 bcm of sales gas)                                               (inc. 1.6 bcm of sales gas)
 Egypt              32                             25                             28%                                        32
 Rest of portfolio  11                             11                             0%                                         11
 Total production   142                            95                             49%                                        143

 

Financials

                                                    Three months to 31 March 2024   Three months to 31 March 2023   % change
 Sales and other revenue                 $ million  413                             289                             43%
 Cash cost of production                 $ million  131 (includes 51 of royalties)  117 (includes 35 of royalties)  12%
 Cash cost of production                 $/boe      10 (includes 4 of royalties)    14 (includes 4 of royalties)    -29%
 Cash SG&A                               $ million  10                              12                              -17%
 Adjusted EBITDAX                        $ million  259                             162                             60%

 Development and production expenditure  $ million  111                             95                              -17%
 Exploration expenditure                 $ million  41                              13                              215%
 Decommissioning expenditure             $ million  6                               1                               500%

                                                    31 March 2024                   31 December 2023                % change
 Cash (including restricted amounts) 2   $ million  220                             372                             -41%
 Net debt - consolidated                 $ million  2,989                           2,849                           5%
 Leverage (Net Debt / Adjusted EBITDAX)             3x 3                            3x                              0%

 

 

2024 Guidance

                                                                     FY 2024
 Production
 Israel (kboed)                                                      115-130
 Egypt (kboed)                                                       29-31
 Rest of portfolio (kboed)                                           11-14
 Total production (kboed)                                            155-175

 Consolidated net debt ($ million)                                   2,800-2,900

 Cash Cost of Production (operating costs plus royalties)
 Israel ($ million)                                                  350-380
 Egypt ($ million)                                                   30-40
 Rest of portfolio ($ million)                                       190-210
 Total Cash Cost of Production ($ million)                           570-630

 Development and production capital expenditure
 Israel ($ million)                                                  240-290 (from 150-200)
 Egypt ($ million)                                                   40-60  (from 30-50)
 Rest of portfolio ($ million)                                       220-250 4 
 Total development & production capital expenditure ($ million)      500-600 (from 400-500)

 Exploration expenditure ($ million)                                 120-155 (from 130-170 5 )

 Decommissioning expenditure ($ million)                             40-50

 

Enquiries

 

 For capital markets: ir@energean.com (mailto:ir@energean.com)
 Kyrah McKenzie, Investor Relations Manager                               Tel: +44 (0) 7921 210 862

 For media: pblewer@energean.com (mailto:pblewer@energean.com)
 Paddy Blewer, Director of Corporate Communications & Head of CSR         Tel: +44 (0) 7765 250 857

 

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  Only includes volumes in the primary BKES-1 and Abu Madi targets

 2  Restricted amounts of $4 million

 3  31 March 2024 leverage is based upon 3-months to 31 March 2024 annualised
Adjusted EBITDAX

 4  Includes around $5 million of expenditure on the Prinos Carbon Storage
project in Greece, which is expected to be covered by EU grants.

 5  Includes the Anchois appraisal well in Morocco.

 

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