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Energean PLC
Earnings Release • Jan 23, 2025
5342_rns_2025-01-23_1db754bb-6c47-42c9-8336-7e7c14e96d84.pdf
Earnings Release
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Energean
January Trading & Operations Update
23 January 2025
Disclaimer
This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business.
Whilst Energean believes the expectations reflected herein to be reasonable considering the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group's control or within the Group's control where, for example, the Group decides on a change of plan or strategy.
The Group undertakes no obligation to revise any such forward-looking statements to reflect any changes in the Group's expectations or any change in circumstances, events or the Group's plans and strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.
The numbers contained herein are unaudited and may be subject to further review and amendment.
Highlights Mathios Rigas, Chief Executive Officer
Highlights
Strong performance from core assets generating significant growth in both sales and profitability
153 kboed Group 2024 production
: 114 kboed
Continuing operations1
\$1,784 million
Group 2024 revenue Continuing operations1 : \$1,316 million
\$1,166 million Group 2024 EBITDAX Continuing operations1 : \$888 million
2.5x Group 31 Dec 2024 leverage \$541 million
Cumulative dividends
Excellent FPSO uptime (99%), production increasing year-on-year and all projects on track
Carlyle Transaction2 expected to close this quarter, generating around \$800 million proceeds
Over \$4 billion of new gas contracts agreed in Israel to supply growing domestic demand
Refinancing of 2026 Notes secured
Expanded geographical M&A focus, supported by balance sheet strength, to deliver deep-value growth
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1. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK and Morocco. 2. On 20 June 2024, the Group publicly announced that it has entered into a binding agreement for the sale of its portfolio in Egypt, Italy and Croatia (together referred to as "Energean Capital Limited Group" or "ECL"), fully owned and controlled by the Group.
Operations Review Mathios Rigas, Chief Executive Officer
A reliable and low-cost producer with steady cash flows and material reserves life
Proven reliability
Continuing operations 2P reserves1,3
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1. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK and Morocco. 2. Operating netback is defined as adjusted EBITDAX over production. 3. Per D&M and NSAI YE23 CPRs 4. To the midpoint of 2025 guidance.
Double digit year-on-year production growth expected to continue in 2025 with long-term secured contracts
1. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK and Morocco. 2. Includes Dalia Energy Companies Ltd. binding term sheets and one additional contract yet to be signed.
Close to \$20 billion1 of gas sales contracted over the next ~20 years
Providing visible cash flows immune to commodity price fluctuations
1. Total revenues over the life of the contract as per the ACQ. Life-of-contracts take-or-pay revenues are close to \$15 billion. 2.Dalia Energy Companies Ltd. 3. Summer months defined as between June to September. 4. Subject to issuance of an export permit by the
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Petroleum Commissioner and compliance with any governmental export policy.
Israel drilling outlook
2026 campaign will include Athena and Zeus (Katlan) development wells (26 bcm) plus optional wells
Katlan overview
Hera and Apollo expected to be drilled in 2028 Development extends the production plateau Katlan first gas on track for H1 2027 No seller royalties or export restrictions2
1. Volumes based on YE23 D&M CPR. 2. Subject to issuance of an export permit by the Petroleum Commissioner and compliance with any governmental export policy
Organic growth opportunities
Multiple opportunities identified across the existing portfolio
Exploration opportunities across the Mediterranean to grow production base
Greece: high-impact exploration prospect
Block 2 75% W.I. operator 5 bnbbl STOIIP or > 9 Tcf2 GIIP
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1. Block 31 contains the YE23 D&M CPR unrisked 2U volumes and Block 23 contains 30 mmboe (management P50 unrisked from conceptual FDP). 2. Management unrisked P50 case
Greek Government approval of the Prinos Carbon Storage project within RRF
Transitioning the Prinos area into a decarbonisation hub
| Project overview | Funding update | |||
|---|---|---|---|---|
| Prinos Carbon Storage is the only licenced carbon storage project in the Eastern Mediterranean |
The Greek Government formally approved the project's inclusion within the RRF in December |
|||
| NSAI CPR for 66 million tons 2C contingent storage resources and potential sequestration of up to 3 MtCO2/year |
Application submitted for funding under the Connecting Europe Facility to seek support for the development of a liquid CO2 receiving terminal |
|||
| 11 MoUs signed with heavy industry emitters for a storage demand of 9 MtCO2/year |
Funding enables the transition of Prinos into a new decarbonisation hub |
1. Subject to a joint ministerial decision. 2. Per NSAI's Competent Persons Report
10% annual reduction in emissions intensity
Focused on Net Zero by 20501 commitment
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1. Scope 1 and 2 emissions. 2. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK and Morocco.
Financial Review Panos Benos, Chief Financial Officer
2024 results – key figures
Material year-on-year revenue growth from continuing operations1
| Financial Figures | ||||||
|---|---|---|---|---|---|---|
| Energean Group | Continuing operations1 | |||||
| 2024 | 2023 | % change | 2024 | 2023 | % change | |
| Sales & Other Revenue (\$ million) | 1,784 | 1,420 | 26% | 1,316 | 978 | 35% |
| Cash Cost of Production (\$/boe) | 10 | 11 | (9%) | 9 | 9 | 0% |
| Cash G&A (\$ million) | 37 | 31 | 19% | 20 | 19 | 5% |
| Adjusted EBITDAX (\$ million) | 1,166 | 931 | 25% | 888 | 667 | 33% |
| Development and production expenditure | 574 | 487 | 18% | 328 | 184 | 78% |
| Exploration expenditure | 112 | 57 | 97% | 71 | 29 | 145% |
| Decommissioning expenditure | 44 | 19 | 132% | 13 | 9 | 44% |
| 2024 (Energean Group) | 2023 (Energean Group) | % change | ||||
| Net Debt – Consolidated (\$ million) |
2,949 | 2,849 | 4% | |||
| Leverage (Net Debt / Annualised Adjusted EBITDAX) |
2.5 | 3.1 | (19%) |
14 and Morocco.
1. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK
Disciplined capital allocation framework
Focused on maximising returns to shareholders and maintaining an efficient capital structure
1. Or to fund growth opportunities or a combination of both, in accordance with the terms of its financing documents.
2025 guidance for the continuing operations1
| Production Guidance | ||
|---|---|---|
| FY 2025 | ||
| Total Production (kboed) | 120 – 130 |
|
| Financial Guidance | ||
| FY 2025 | ||
| Net Debt – Consolidated (\$ million) |
2,700 – 2,900 |
|
| Cash Cost of Production (includes royalties; \$ million) | 410 – 440 |
|
| Cash SG&A (\$ million) | 20 – 30 |
|
| Total Development & Production Capital Expenditure (\$ million) | 400 – 430 |
|
| Israel | 380 – 400 |
|
| Europe | 20 – 30 |
|
| Exploration Expenditure (\$ million) | 0 – 5 |
|
| Decommissioning Expenditure (\$ million) | 55 – 65 |
1. The continuing operations comprises of the Group's remaining operations, post the Carlyle Transaction, in Israel, Greece, UK
Outlook Mathios Rigas, Chief Executive Officer
M&A: Expanded geographical focus and balance sheet strength to deliver deep-value growth
Expanded geographical focus to the wider EMEA region
- Energean will evaluate opportunities beyond the Mediterranean in the wider Europe, Middle East and Africa ("EMEA") region.
- Proven operator across the entire life cycle of oil and gas.
Focused on executing deep-value deals
• Any future acquisitions will be value-driven, opportunistic and focused on protecting shareholder returns.
Around \$800m sales proceeds expected in the near term
• Carlyle Transaction is expected to provide around \$800 million, which will be redeployed to maximise shareholder value.
Management team with proven M&A track-record
• Energean has executed five well-timed deals, taking advantage of the opportunities in the market, at the right time, with strict capital discipline.
Core Israel assets provide an excellent foundation for future growth
underpinned by long-term gas contracts with floor pricing
Geographical focus for M&A
Outlook
