Earnings Release • Sep 8, 2022
Earnings Release
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London, 8 September 2022 - Energean plc (LSE: ENOG TASE: אנאג (is pleased to announce its half-year results for the six months ended 30 June 2022 ("H1 2022").
"During H1 2022, Energean delivered strong operational and financial results. The ex-Edison assets have outperformed our expectations and our flagship Karish project is on track to start production within weeks and will enhance energy security in Israel and the region. In addition, our growth drilling and development operations offshore Israel have enhanced our portfolio by de-risking 58 bcm of natural gas, and we are evaluating multiple geographical routes to monetisation through either increased Israeli domestic sales or key regional export markets. The strong financial performance of our existing assets, the current readiness status of our Karish project, and our strong liquidity position have allowed us to, today, declare our maiden quarterly dividend, in line with our previously announced dividend policy. We are concurrently raising our medium-term targets to annual revenues of \$2.5 billion and Adjusted EBITDAX of \$1.75 billion, underpinned by production of more than 200 kboed.
"In a year where global focus has shifted to security of energy supply and affordability of energy for the consumers, we remain proud of our landmark ESG commitments, which remain at the heart of our operations. From choosing to focus on gas as the driver of energy transition; to a 74% reduction in emissions intensity since 20191 ; to our commitment to be net zero by 2050, and our ongoing positive engagement with the communities that host our operations, we commit to being the best version of Energean possible.
"Finally, the global energy dynamic changed in February 2022. Russia's tragic invasion of Ukraine revealed a major weakness in European energy security and, by extension, European energy policy. Overreliance on a single supplier has and will continue to - fundamentally disrupt the European global energy dynamic. We therefore call on governments and the broader international energy stakeholder community to recognise the value of natural gas as the foundation of, and catalyst for, a just transition. Policy must be adjusted to encourage domestic upstream projects that will enhance security of energy supply as well as international energy transportation projects that will interconnect Europe with the East Med, which can be a stable and reliable supplier of energy for the European consumer."
1 When considering H1 2022 data versus 2019 Energean standalone (pre-Edison acquisition)
| H1 2022 \$m |
H1 2021 \$m |
Increase / (Decrease) % |
|
|---|---|---|---|
| Average working interest production (kboed) |
35.4 | 44.0 | (19.5) |
| Sales and other revenue | 339.0 | 205.5 | 65.0 |
| Cash Cost of Production3 | 123.3 | 122.4 | 0.7 |
| Cash Cost of Production per boe | 19.2 | 15.4 | 24.7 |
| Cash S,G&A6 | 15.1 | 17.0 | (11.4) |
| Adjusted EBITDAX4 | 198.23 | 74.7 | 165.3 |
| Operating cash flow5 | 146.6 | 53.1 | 176.0 |
| Development capital expenditure | 345.7 | 200.8 | 72.2 |
| Exploration capital expenditure | 37.0 | 29.2 | 26.7 |
| Decommissioning expenditure | 1.5 | 1.7 | (11.8) |
| Net debt (including restricted cash) | 2,174.6 | 1,692.6 | 28.5 |
2 Adjusted H1 2022 EBITDAX includes losses on forward transactions of \$18.2 million (H1 2021: \$nil) reported in Revenue (Note 5 in the interim financial statements). Adjusted EBITDAX excluding these hedges would be \$216.4 million
3Cash Cost of Production is defined in the Financial Review section. Includes \$17.4 million of flux costs.
4Cash S,G&A and Adjusted EBITDAX are defined in the Financial Review section
5 After working capital movements
For capital markets: [email protected] Kate Sloan, Head of IR and ECM Tel: +44 7917 608 645 For media: [email protected] Paddy Blewer, Head of Corporate Communications Tel: +44 7765 250 857
A webcast will be held today at 08:30 BST / 10:30 Israel Time.
Webcast: https://edge.media-server.com/mmc/p/79ysvw5a
Dial-In: https://register.vevent.com/register/BIe2a07fbb3e0745b29986a53e01755548 (Please note, once you register for the conference call line you will receive a unique pin code and dial-in details.)
The presentation slides will be made available on the website shortly www.energean.com.
Strong financial performance in H1 2022 has allowed Energean to accelerate payment of its maiden quarterly dividend, and the Company has today declared a dividend of 30 US\$ cents per share. This represents Energean's first payment under its commitment to pay average quarterly dividends of \$50 million, rising to \$100 million once it achieves its medium-term targets. Energean remains committed to sharing its success with shareholders and re-confirms its target of returning at least \$1 billion to shareholders by end-2025.
H1 2022 average working interest production was 35.4 kboed (73% gas), down 19.5% year-on-year due to natural decline in Egypt, maintenance activities at Rospo Mare, Italy, and the shut-in of production at Prinos, Greece. Energean is narrowing the full year guidance range (excluding Israel) to 34 – 37 kboed (from 35 – 40 kboed). Karish is expected to commence production within weeks, with Q4 2022 production contribution of 60 – 100 kboed (15 – 25 kboed annualised).
Production during H2 2022 is expected to benefit from:
| H1 2022 | FY 2022 guidance | H1 2021 | |
|---|---|---|---|
| Kboed | Kboed | Kboed | |
| Israel | - | 15.0 – 25.0 | - |
| (including 0.7 – 1.2 bcm of gas) | |||
| Egypt | 24.8 | 24.0 – 26.0 | 31.4 |
| Italy | 9.3 | 9.0 – 9.5 | 10.2 |
| Greece, Croatia and UK | 1.3 | 1.0 – 1.5 | 2.4 |
| Total production (including Israel) |
35.4 | 49.0 – 62.0 | 44.0 |
|---|---|---|---|
| Total production (excluding Israel) |
35.4 | 34.0 – 37.0 | 44.0 |
The Energean Power FPSO arrived in Israel on 5 June 2022, after which it was moored to the seabed and connected to the risers as planned. Energean remains on track to deliver first gas from the Karish development project within weeks. During H1 2022, Energean negotiated an amendment to the deferred payment to TechnipFMC. Payment for a total of \$250 million relating to capital expenditure accrued due to 2022 activities will be deferred, with payment made in eight equal quarterly instalments commencing nine months following practical completion of the project. Deferred amounts do not incur any interest. Energean's capital expenditure guidance of \$560 – 610 million for Israel includes the full \$250 million that will be deferred. As part of the amendment, the period from which liquidated damages due to Energean apply now commences on 30 September 2022.
The Karish North KN-01 development well was successfully drilled and completed in early August 2022.
First gas from Karish North, as well as the completion and installation of the second gas sales export riser and the second oil train, remains on track for end-2023.
In May 2022, Energean announced a commercial discovery from the Athena exploration well, which is estimated to contain recoverable gas volumes of 8 bcm (283 bcf / 51 mmboe) on a standalone basis. The discovery de-risked 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 continue to be under evaluation for a standalone tie-back to the Energean Power FPSO or as part of a new Olympus Area development.
In June 2022, Energean safely and successfully completed the KM-04 appraisal well. The KM-04 appraisal well achieved the following:
Additional analysis is being undertaken to further refine reserves volumes and the liquids-to-gas ratio across the Karish lease.
The Hermes exploration well spudded in August 2022. Drilling operations are ongoing, with results expected later this year. Energean has an option to drill a sixth well, which may be exercised, depending on the results from Hermes.
Energean has elected to drill the Zeus structure, Block 12 (Olympus Area) using its fifth drilling rig slot and the well will spud following drilling of the Hermes well. Zeus is estimated to contain 10 – 12 bcm of gross prospective unrisked gas resources in the A/B/C sands and results will enable Energean to gather additional data to further refine resource estimates across the entire Olympus Area.
In July 2022, Israel Electric Authority announced a 13% increase in the PT from 27.6 to 31.4. This translates into a weighted average sales price under Energean's Gas Sales and Purchase Agreements ("GSPAs") to \$4.3/mmBTU (approximately \$4.6/mcf).
In March 2022, Energean signed a limited-term exclusivity agreement and term sheet for the marketing of its Karish liquids with Vitol SA. A firm offtake agreement is in the final stages of negotiation and is expected to be signed before Karish first gas.
In May 2022, Energean signed a new GSPA, representing up to 0.8 bcm/yr, to supply gas to the East Hagit Power Plant Limited Partnership ("EH Partnership"), a partnership between the Edeltech Group and Shikun & Binui Energy. The GSPA is for a term of approximately 15 years, for a total contract quantity of up to 12 bcm. The contract contains provisions regarding floor pricing, offtake exclusivity and a price indexation mechanism (not Brent price linked).
In July 2022, Energean Israel signed a new GSPA, representing 0.08 bcm/yr, to supply gas to Shapir-G.E.S Concessionaire IPP Ltd for the Ashdod Desalination Plant. The GSPA is for a term of 20 years starting from January 2024 and includes take-or-pay provisions and floor pricing.
Energean has now signed a total of 20 GSPAs for the firm supply of 7.2 bcm/yr of gas on plateau. The contract signed with IEC during March 2022 helps to optimise Energean's gas sales portfolio and may enable Energean to fully utilise the available capacity of its FPSO. Under the contract with IEC, the gas price will be determined month ahead with volumes determined on a daily basis. Starting upon commencement of first gas, the agreement is valid for an initial one-year period with an option to extend, subject to ratification by both parties.
Working interest production from the Abu Qir area averaged 24.8 kboed (86% gas) during H1 2022 with full year production guidance narrowed to between 24 - 26 kboed.
NEA/NI was 72% complete as of 31 July 2022. Subsea installation activities are complete and the first well is expected to spud imminently. Remaining activities include the finalisation of the Abu Qir platform modifications and the tie-in and commissioning of the subsea production systems. First gas from the first well is on track for end-2022.
During August 2022, Abu Qir Petroleum and EGPC agreed an amendment to the PSC, resulting in improved gas sales pricing.
Energean is completing the NAQ-PII#6 well to support production in the Abu Qir concession. Four additional infill wells on the Abu Qir field are expected to be drilled between 2023 and 2024.
At 30 June 2022, net receivables (after provision for bad and doubtful debts) in Egypt were \$109.6 million (30 June 2021: \$158.7 million), of which \$64.2 million (30 June 2021: \$94.0 million) was classified as overdue.
Working interest production from Italy averaged 9.3 kboed (43% gas) during H1 2022 with full year production expected to be between 9.0 and 9.5 kboed.
First gas from Cassiopea remains on track for H1 2024.
During H1 2022, Italy introduced a windfall tax in the form of a law decree which imposed a 25% one-off tax on profit between October 2021 and April 2022 compared to the same period in the prior year. At 30 June 2022, an advance payment of 40%, or approximately \$11.7 million, had been remitted to the Italian Revenue Agency, with the remaining balance, \$17.6 million, to be paid by the end of November 2022.
In the six-months to 30 June 2022, working interest production from the rest of the portfolio averaged 1.3 kboed (30% gas). Full year production is expected to be between 1.0 – 1.5 kboed.
First oil from the Epsilon development is expected in H1 2024.
In July 2022, the Greek government passed legislation setting out the legal framework for Carbon Capture, Utilisation and Storage ("CCUS") licences. Pre-FEED activities with Wood Group and the subsurface studies with Haliburton have progressed well and are expected to complete before the end of this month. This progresses Energean's plans to achieve net zero emissions by 2050.
Energean is continuing FEED activities for the development of the Irena gas field. The target for final investment decision remains Q4 2022.
The Isabella appraisal well spudded in September 2022.
Energean's Scope 1 and 2 carbon emissions intensity in H1 2022 was estimated to be approximately 17.3 kgCO2e/boe, a 5.5% reduction versus 2021 emissions levels6 ; and a 74% reduction versus the 2019 base measurement year7 . Postfirst gas from Karish, emissions are expected to be approximately 7-8 kgCO2e/boe, which is approximately half the current average for the global oil and gas industry, and Energean expects to maintain or reduce this lower level going forward.
The decrease between YE21 and H122 carbon emissions intensity was due to energy use optimisation activities in Egypt and the prolonged shut-down of the Prinos facilities in Greece.
Environmental, Social and Governance ("ESG") Reporting and Ratings
In April 2022, Energean was rated as AA by MSCI for a second year running.
In July 2022, Israeli's Maala Index updated its rating for Energean to Platinum, up from Gold in the previous year. The Maala Index is an ESG rating system and stock market index that rates the largest companies in Israel on an annual basis. Also in July, Moody's published ESG Issuer Profiles, wherein Energean ranked above average on all three categories compared to 89 E&P peers.
6 On an equity share basis
7 2019 data is Energean standalone (pre-Edison acquisition)
In August 2022, Energean was confirmed as a constituent of the FTSE4Good Index Series, following the FTSE4Good Index Series June 2022 review. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong ESG practices.
Energean has also continued to comply with the Task Force on Climate Related Financial Disclosure ("TCFD") recommendations, full disclosure of which is provided in the 2021 Annual Report and Accounts as well as the 2021 Sustainability Report.
In July 2022, Energean re-entered the Tel Aviv Stock Exchange 35 Index.
| FY 2022 | |
|---|---|
| Production | |
| Israel (kboed) | 15.0 – 25.0 |
| (including 0.7 – 1.2 bcm of gas) | |
| Egypt (kboed) | 24.0 – 26.0 |
| Italy (kboed) | 9.0 – 9.5 |
| Greece, Croatia & UK North Sea (kboed) | 1.0 – 1.5 |
| Total production, including Israel (kboed) | 49.0 – 62.0 |
| Total production, excluding Israel (kboed) | 34.0 – 37.0 |
| Financials | |
| Consolidated net debt (\$ million) | 2,400 – 2,500 |
| Cash Cost of Production (operating costs plus royalties) | |
| Israel (\$ million) | 100 – 110 |
| Egypt (\$ million) | 50 |
| Italy (\$ million) | 170 including flux costs of 30 |
| Greece, Croatia & UK North Sea (\$ million) | 50 |
| Total Cash Cost of Production (\$ million) | 370 – 380 |
| Cash S,G&A (\$ million) | 35 – 40 |
| Development and production capital expenditure | |
| Israel (\$ million) | 560 – 610 |
| Egypt (\$ million) | 140 |
| Italy (\$ million) | 60 |
| Greece, Croatia & UK North Sea (\$ million) | 40 |
| Total development & production capital expenditure (\$ million) |
800 – 850 |
| Exploration expenditure | |
| Israel (\$ million) | 150 – 180 (5 wells) |
| Egypt, Italy, Greece, Croatia & UK North Sea (\$ million) | 15 |
| Total exploration expenditure (\$ million) | 165 – 195 |
| Decommissioning | |
| UK North Sea | 5 |
| Italy | 10 |
| FY 2022 | |
|---|---|
| Decommissioning expenditure (\$ million) | 15 |
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Average daily working interest production (kboed) | 35.4 | 44.0 | (19.5%) |
| Sales revenue (\$m) | 339.0 | 205.5 | 65.0% |
| Realised weighted average oil price (\$/boe) |
87.5 | 47.3 | 85.0% |
| Realized weighted average gas price pre-hedging (\$/mcf) |
10.4 | 4.2 | 147.6% |
| Realized PSV gas (Italian gas) price pre-hedging (\$/mcf) |
30.9 | 7.3 | 323.3% |
| Cash cost of production8 (\$m) |
123.3 | 122.4 | 0.74% |
| Cash cost of production per barrel (\$/boe)9 | 19.2 | 15.4 | 24.7% |
| Cash SG&A10 | 15.1 | 17.0 | (11.2%) |
| Adjusted EBITDAX11 (\$m) | 198.2 | 74.7 | 165.3% |
| Profit/(Loss) after tax (\$m) | 118.7 | (35.7) | 432.5% |
| Cash flow from operating activities (\$m) | 146.6 | 53.1 | 176.0% |
| Capital expenditure (\$m) | 398.3 | 230.0 | 73.2% |
| H1 2022 | FY 2021 | Change | |
| Total borrowings (\$m) | 2,986.8 | 2,947.1 | 1.4% |
| Cash and cash equivalents and restricted cash (\$m) | 812.1 | 930.6 | (12.7%) |
| Net debt / (cash) (\$m) (including restricted cash) | 2,174.612 | 2,016.6 | 7.8% |
Group working interest production averaged 35.4 kboed, a decrease of 19.5% for the period (H1 2021: 44.0 kboed), with the Abu Qir field, offshore Egypt, accounting for approximately 70% of total output. The production split was 73% gas (H1 2021: 72%) and 27 % oil (H1 2021: 28%). Production decreased due to planned maintenance activities in Italy commenced in June 2022 and the shut-down of Prinos. Egypt production expected to benefit in H2 2022 from the startup of the Abu Qir NAQ-PII#6 infill well and the re-start of production at Prinos. The Company has narrowed its guidance for production (excluding Israel) to 34 to 37 kboed for the full year (49.0 to 62.0 kboed for the full year including Israel). H1 2022 revenue was \$339.0 million, a 65.0% increase for the period (H1 2021: \$205.5 million), primarily due to the higher commodity prices achieved:
8 Cash cost of production is defined later in the financial review
9 Inclusive of flux costs
10 Cash SG&A is defined later in the financial review
11 Adjusted EBITDAX is defined later in the financial review. Energean uses Adjusted EBITDAX as a core business KPI.
12 Numbers may not sum due to rounding
Adjusted EBITDAX for the period was \$198.2 million (H1 2021: \$74.7 million), the increase of 165% is predominantly a result of the higher revenue achieved due to strong commodity prices.
Cash production costs for the period were \$123.3 million (H1 2021: 122.4 million). Although production costs are relatively stable year on year, the unit costs for the period were \$19.2 /boe (H1 2021: \$15.4 /boe), this increase in unit production costs was primarily driven by decreased production in Italy and Egypt, as applied to a primarily fixed cost base.
Additionally, production costs were also impacted by increased royalties in Italy associated with the commodity pricedrive higher revenues.
Depreciation charges on production and development assets decreased by 7% to \$33.9 million (H1 2021: \$36.3 million). On a per barrel of oil equivalent of production basis, this represented a 15% increase, to \$5.3/boe (H1 2021: \$4.6/boe). During the current period and comparative prior period no impairment of cash generating units (CGUs) was recognised. An impairment of intangible assets of \$0.4million was recognised in Italy, following relinquishment of an exploration licence.
Other expenses of \$8.8 million (H1 2021: \$3.1 million) includes \$3.5 million of one-off restructuring costs incurred in Greece, \$1.3 million write down of inventory supplies, \$1.1 million loss incurred from disposal of property, plant and equipment and \$1.4 million increase in legal provisions.
Other income of \$1.6 million (H1 2021: \$3.6 million) relates to reversal of prior period provisions, that were reassessed in the current year based on the latest facts and circumstances.
Net finance costs in H1 2022 were \$35.9 million (H1 2021: \$42.2 million). Finance costs (\$38.6 million (H1 2021: \$44.9million)) are composed of \$19.8 million (H1 2021: \$17.0 million) of interest on borrowings excluding amounts capitalised and other finance cost of \$18.8 million (H1 2021: \$27.9 million), excluding amounts capitalised. Other finance costs include debt arrangement fees and unwinding of the discount on the right of use assets, decommissioning provisions, deferred consideration, convertible loan notes and contingent consideration. Finance income was \$2.7 million for the period (H1 2021: \$2.7 million).
Energean undertakes hedging activities as part of the ongoing financial risk management to protect against commodity price volatility and to ensure the availability of cash flow for re-investment in capital programmes that are driving business delivery. Commodity hedge contracts entered into in Italy aim to mitigate the risk of changes to the selling price of natural gas.
Energean has commodity price hedges of \$33 million outstanding as of 30 June 2022 (H1 2021 \$nil). The hedges reflect 300,000 MWh hedged at an average price of €39.60/MWh(\$12.7mcf).
Energean recorded a net income tax recovery of \$8.9 million in H1 2022 (H1 2021 taxation expense: \$15.2 million), composed of corporation tax charges of \$67.1 million as offset by a deferred tax recovery of \$76.0 million. The deferred tax recovery is a result of the utilisation of carried forward tax losses in the period and the recognition of previously unrecognised deferred tax on carried forward losses, of which the largest is Italy (\$66.5million), to offset forecast taxable profits stemming from increased Brent and PSV price expectations. Taxation charges in the period ended 30 June 2022 include \$27.1 million relating to taxes (non-cash in nature) being deducted at source in Egypt plus windfall tax payable in Italy of \$29.3 million. During H1 2022, Italy introduced a windfall tax in the form of a law decree which imposed a 25% one-off tax on profit between October 2021 and April 2022 compared to the same period a year earlier. At 30 June 2022 an advance payment of 40%, or approximately \$11.7 million, had been remitted to the Italian Revenue Agency, with remaining balance, \$17.6million, to be paid by the end of November 2022.
Profit after tax was \$118.7 million (1H 2021: \$35.7 million loss). This increase is primarily due to the \$134 million year-onyear increase in revenue, relatively stable operating cost, \$9 million decrease in foreign exchange losses and \$24 million increase in a net income tax recovery when compared to H1 2021.
Earnings per share were \$0.67 per share compared to a loss of \$0.20 per share for H1 2021. The increased earnings per share was driven by increased profit after tax. The diluted earnings per share were \$0.66 per share which consider the impact of Long Term Incentive Plans (LTIPs), the Deferred Bonus Plans (DBP) and the convertible loan notes.
In H1 2022, Energean recorded a cash inflow from operations before changes in working capital of \$159.1 million (1H 2021: \$48.6 million). After working capital movements and taxation received/(paid), the cash inflow in H1 2022 was \$146.6 million (H1 2021: \$53.1 million). The year-on-year increase in operating cash flow has been predominantly driven by the growth in revenues delivered between the two periods. As discussed above, the increase in revenues during the period is predominantly due the higher commodity price environment.
During the period, the Group incurred capital expenditure of \$398.3 million (H1 2021: \$230 million). Capital expenditure mainly consisted of development expenditure in relation to the Karish Main and Karish North Fields (\$286.8 million) in Israel, the NEA/NI project in Egypt (\$40.9 million), the Cassiopea field in Italy (\$9.9 million), the Scott field in the UK (\$0.2 million) and exploration and appraisal expenditure relating to Athena in Israel (\$34.4 million) plus the Glengorm and Isabella discoveries in the UK (\$1.4 million).
As at 30 June 2022, net debt of \$2,174.6 million (FY21: \$2,016.6 million) consisted of \$2,500 million of Energean Israel senior secured notes, \$450 million of Energean plc senior secured notes, \$50 million of convertible loan notes (relating to the acquisition of the minority stake in Energean Israel), \$10 million of Greek Loan notes, \$26 million draw down on the Greek Black Sea Trade Development Bank loan, less deferred amortised fees, the equity component of the convertible loan (\$10.5 million) and cash balances of \$812.1 million (including \$138.4million of restricted cash).
The Senior Secured Notes (both at Energean Plc and Energean Israel) have fixed interest rates, a blended average interest rate of approximately 5%, and have decreased Energean's interest rate exposure and increased Energean's weighted average debt maturity to approximately six years.
Strong financial performance in H1 2022 has allowed Energean to accelerate payment of its maiden quarterly (Q2) dividend, and the Board is pleased to declare a dividend of 30 US\$ cents per ordinary share to be paid on 30 September 2022.
The Group uses certain measures of performance that are not specifically defined under IFRS or other generally accepted accounting principles. These non-IFRS measures include adjusted EBITDAX, underlying cash cost of production and S,G&A, capital expenditure, net debt and gearing.
Adjusted EBITDAX is a non-IFRS measure used by the Group to measure business performance. It is calculated as profit or loss for the period, adjusted for discontinued operations, taxation, depreciation and amortisation, share-based payment charge, impairment of property, plant and equipment, other income and expenses, net finance costs and exploration and evaluation expenses. The Group presents adjusted EBITDAX as it is used in assessing the Group's growth and operational efficiencies as it illustrates the underlying performance of the Group's business by excluding items not considered by management to reflect the underlying operations of the Group.
| H1 2022 \$m |
H1 2021 \$m |
|
|---|---|---|
| Adjusted EBITDAX13 | 198.2 | 74.7 |
| Reconciliation to profit / (loss): | ||
| Depreciation and amortisation | (33.9) | (36.3) |
| Share-based payment charge | (2.7) | (2.3) |
| Exploration and evaluation expense | (4.3) | (1.0) |
| Other expenses | (8.8) | (3.1) |
| Other income | 1.6 | 3.6 |
| Finance income | 2.7 | 2.7 |
| Finance cost | (38.6) | (44.9) |
| Net foreign exchange loss | (4.5) | (13.9) |
| Taxation income / (expense) | 8.9 | (15.2) |
| Profit / (loss) from continuing operations | 118.714 | (35.7) |
Cash Cost of Production is a non-IFRS measure that is used by the Group as a useful indicator of the Group's underlying cash costs to produce hydrocarbons. The Group uses the measure to compare operational performance period-toperiod, to monitor cost and assess operational efficiency. Cash cost of production is calculated as cost of sales, adjusted for depreciation and hydrocarbon inventory movements.
| H1 2022 \$m |
H1 2021 \$m |
|
|---|---|---|
| Cost of sales | 158.0 | 147.6 |
| Less: | ||
| Depreciation | (32.3) | (33.8) |
| Change in inventory | (2.4) | 8.6 |
| Cost of production | 123.3 | 122.4 |
| Total production for the period (MMboe) | 6.4 | 7.9 |
| Cost of production per boe (\$/boe) | 19.215 | 15.4 |
Cash SG&A excludes certain non-cash accounting items from the Group's reported SG&A. Cash SG&A is calculated as follows: Administrative and Selling and distribution expenses, excluding depletion and amortisation of assets and sharebased payment charge that are included in SG&A.
13 Adjusted EBITDAX includes losses on forward transactions of \$18.2million (H1 2021: \$0million) reported in Revenue (Note 4 in the interim financial
statements). Adjusted EBITDAX excluding these hedges would be \$216.4million
14 Numbers may not sum due to rounding
| H1 2022 | H1 2021 | |
|---|---|---|
| \$m | \$m | |
| Administrative expenses | 19.1 | 21.7 |
| Selling and distribution expenses | 0.3 | 0.1 |
| Less: | ||
| Depreciation | 1.5 | 2.5 |
| Share-based payment charge included in SG&A | 2.7 | 2.3 |
| Cash SG&A | 15.115 | 17.0 |
Energean incurred Cash SG&A costs of \$15.1 million in H1 2022. This represents a 11.2% decrease versus the comparable period last year (1H 2021: \$17.0 million) and is due to cost efficiencies implemented across the Group.
Capital Expenditure is defined as additions to property, plant and equipment and intangible exploration and evaluation assets, cash lease payments made in the period, less lease asset additions, asset additions due to decommissioning provisions, capitalised share-based payment charge, capitalised borrowing costs and certain other non-cash adjustments. Management believes that capital expenditure is a useful indicator of the Group's organic expenditure on oil and gas development assets, exploration and evaluation assets incurred during a period because it eliminates certain accounting adjustments such as capitalised borrowing costs and decommissioning asset additions.
| H1 2022 | H1 2021 | |
|---|---|---|
| \$m | \$m | |
| Additions to property, plant and equipment | 404.5 | 317.8 |
| Additions to intangible exploration and evaluation assets | 37.0 | 30.3 |
| Less: | ||
| Capitalised borrowing cost | 60.1 | 114.0 |
| Leased assets additions and modifications | (0.2) | 12.3 |
| Lease payments related to capital activities | (5.8) | (5.8) |
| Capitalised share-based payment charge | 0.1 | 0.2 |
| Capitalised depreciation | 0.4 | 0.1 |
| Change in decommissioning provision | (11.5) | (2.5) |
| Total capital expenditures | 398.316 | 230.0 |
| Movement in working capital | (185.3) | (60.0) |
| Cash capital expenditures per the cash flow statement | 213.016 | 170.0 |
The breakdown of capital expenditure during H1 2022 and H1 2021 was as follows:
| H1 2022 | H1 2021 | |
|---|---|---|
| Capital expenditure | Capital expenditure \$m |
|
| 161.8 | ||
| 17.5 | ||
| 9.9 | 11.4 | |
| 8.7 | 10.1 | |
| 200.8 | ||
| \$m 286.8 40.9 346.3 |
15 Numbers may not sum due to rounding
| H1 2022 | H1 2021 | |
|---|---|---|
| Capital expenditure \$m |
Capital expenditure \$m |
|
| Exploration and Appraisal | ||
| Israel | 34.4 | 3.7 |
| Egypt | - | 0.3 |
| Italy | - | 2.0 |
| Greece, Croatia, UK and Other | 2.6 | 23.2 |
| Total | 37.0 | 29.2 |
Net debt is defined as the Group's total borrowings less cash and cash equivalents and restricted cash held for loan repayments. Management believes that net debt is a useful indicator of the Group's indebtedness, financial flexibility and capital structure because it indicates the level of borrowings after taking account of any cash and cash equivalents that could be used to reduce borrowings.
| Net debt reconciliation | H1 2022 | FY 2021 |
|---|---|---|
| \$m | \$m | |
| Current borrowings | - | - |
| Non-current borrowings | 2,986.8 | 2,947.1 |
| Total borrowings | 2,986.8 | 2,947.1 |
| Less: Cash and cash equivalents | (673.7) | (730.8) |
| Restricted cash held for loan repayment | (138.4) | (199.7) |
| Net Debt16 | 2,174.617 | 2,016.618 |
| Net Debt Excluding Israel18 | 61.7 | 102.6 |
The Directors assessed the Group's ability to continue as a going concern over a going concern assessment period to 31 December 2023. As a result of this assessment, the Directors are satisfied that the Group has sufficient financial resources to continue in operation for the foreseeable future and for this reason they continue to adopt the going concern basis in preparing the consolidated financial statements. Detail of the Group's going concern assessment for the period can be found within note 2.2 of the interim condensed consolidated financial statements.
On 27 July 2022 the Company sent a formal notice to the Ministry of Energy asking the relinquishment of Zone D licenses and discontinue any work regarding them. The licenses will expire at the end of their term, i.e., on 27 October 2022.
16 Inclusive of restricted cash
17 Numbers may not sum due to rounding
Effective risk management is fundamental to achieving Energean's strategic objectives and protecting its personnel, assets, shareholder value and reputation. The Board has overall responsibility for determining the nature and extent of the risks it is willing to take in achieving the strategic objectives of the Group and ensuring that such risks are managed effectively. A key aspect of this is ensuring the maintenance of a sound system of internal control and risk management. For all the known risks facing the business, Energean attempts to minimise the likelihood and mitigate the impact. Energean has a zero-tolerance approach to financial fraud or ethics non-compliance and ensures that HSE risks are managed to levels that are as low as reasonably practicable.
The Group's principal risks for the remaining 6 months of the year and key changes since 31 December 2021 are set out below. For further information on key risks, please refer to Energean's 2021 Annual Report and Accounts:
#1 Progress key development project in Israel
Principal risk: Delay to first gas at Karish.
H1 2022 movement: ▬ The risk remained static in H1 2022. The Energean Power FPSO arrival on location in Israel in June 2022 and is expected to deliver first gas within weeks.
The closer to completion the project gets, the lower the risk of delays.
Principal risk: Delayed delivery of future development projects (including NEA / NI in Egypt, Cassiopea in Italy and Epsilon in Greece).
H1 2022 movement: ▲ The risk increased in H1 2022. Although Energean continued to make progress on its growth projects, Joint Venture ("JV") and contractor misalignment risks associated with the Cassiopea project in Italy increase the exposure to potential cost and schedule overruns.
Principal risk: Lack of new commercial discoveries and reserves replacement
H1 2022 movement: ▼ The risk decreased in H1 2022. In May 2022, the Athena exploration well discovered 8 bcm of recoverable gas volumes on a standalone basis. This discovery is particularly significant as it de-risks an additional 50 bcm of mean unrisked prospective resources across Energean's Olympus Area (total 58 bcm 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.
Principal risk: The potential for Israeli gas market oversupply may result in offtake being at the take-or-pay level of existing GSPAs and could result in the failure to secure new GSPAs.
H1 2022 movement: ▬ The risk remained static in H1 2022.
#5 Maintaining liquidity and solvency
Principal risk: Insufficient liquidity and funding capacity
H1 2022 movement: ▬ The risk remained static in H1 2022.
#6 Organisational & HR risk
Energean plc - Half Year Results
Principal risk: The potential risk of group level roles being overwhelmed by the additional workload associated with the Company's growth.
H1 2022 movement: ▬ The risk remained static in 1H 2022.
#7 Misalignment with JV operators
Principal risk: Misalignment with JV operators.
H1 2022 movement: ▲ The risk increased in H1 2022. Non-operated positions are held in the entire UK portfolio and a large component of the Italian portfolio. Contractor misalignment risks associated with the Cassiopea project in Italy increase the exposure to potential cost and schedule overruns. Energean will continue to manage any risks associated with non-operator roles by actively participating in operational and technical meetings to challenge, apply influence and/or support partners to establish a cohesive JV view.
Principal risk: Recoverability of revenues and receivables in Egypt.
H1 2022 movement: ▬ The risk remained static in H1 2022. At 30 June 2022, net receivables (after provision for bad and doubtful debts) in Egypt were \$109.6 million (30 June 2021: \$158.7 million), of which \$64.2 million (30 June 2021: \$94.0 million) was classified as overdue.
Principal risk: Higher than expected decommissioning costs and acceleration of abandonment schedules.
H1 2022 movement: ▬ The risk remained static in H1 2022.
#10 Cyber/Information Communication Technologies ("ICT") security
Principal risk: Major cyber-attack or information security incident.
H1 2022 movement: ▲ The risk increased in H1 2022. Information and operations technology systems are being closely monitored as Energean grows into a >200 kboed producer, following first gas from Karish and the start-up of its other growth projects.
#11 Fraud, bribery and corruption
Principal risk: Major breach of values, business principles and 'Ethos'
H1 2022 movement: ▬ The risk remained static in H1 2022.
#12 Health Safety and Environment (HSE)
Principal risk: Lack of adherence to health, safety, environment and security policies.
H1 2022 movement: ▬ The risk remained static in H1 2022.
#13 Climate change – Transition
Principal risk: Failure to manage the risk of climate change and to adapt to the energy transition.
H1 2022 movement: ▬ The risk remained static in H1 2022.
#14 Climate change – Physical
Principal risk: Disruption to operations and/or development projects due to severe weather (both acute and chronic).
H1 2022 movement: ▬ This risk remained static in H1 2022.
#15 External geopolitical, political and social risks
Principal risk: Political and fiscal uncertainties in the Eastern Mediterranean.
H1 2022 movement: ▲ The risk increased in H1 2022. Energean continues to monitor any risks associated with the ongoing dispute between Israel and Lebanon over their maritime boundary. Following the arrival of the FPSO on location in June 2022, the State of Israel restated that the Company's assets are located in Israeli territory, several kilometres south from the area over which negotiations are being conducted between the State of Israel and the Republic of Lebanon, mediated by the United States, and that the State of Israel prioritises the protection of its strategic assets.
Principal risk: Risk related to the spread of pandemics and epidemics and the continuing impact of Covid-19, including the associated deterioration of health response capacity, financial and business disruption, whilst maintaining operability.
H1 2022 movement: ▼ The risk decreased in H1 2022. Global Covid-19-related restrictions and security measures have been removed or reduced, which has reduced the related risks to the business.
The Directors confirm that to the best of their knowledge:
Mathios Rigas Panos Benos Chief Executive Officer Chief Financial Officer 7 September 2022 7 September 2022
Some of the information contained within this announcement is considered by Energean to constitute inside information, as defined under the EU Market Abuse Regulation, EU No.596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018. By the publication of this Announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of Energean is Eleftheria Kotsana, Company Secretary.
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.
We have been engaged by Energean plc (the Company) to review the condensed set of financial statements in the halfyearly financial report for the six months ended 30 June 2022 which comprises the interim condensed consolidated income statement, the interim condensed consolidated statement of comprehensive income, the interim condensed consolidated statement of financial position, the interim condensed consolidated statement of changes in equity, the interim condensed consolidated statement of cash flows and the related explanatory notes 1 to 27. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2022 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE) issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.
The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Ernst & Young LLP London 8 September 2022
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Notes | |||
| Revenue | 4 | 338,955 | 205,466 |
| Cost of Sales | 5(a) | (158,043) | (147,640) |
| Gross profit | 180,912 | 57,826 | |
| Administrative and selling expenses | 5(b)/(c) | (19,349) | (21,770) |
| Exploration and evaluation expenses | 5(d) | (4,254) | (1,041) |
| Other expenses | 5(e) | (8,826) | (3,071) |
| Other income | 5(f) | 1,630 | 3,571 |
| Operating profit | 150,113 | 35,515 | |
| Finance Income | 6 | 2,701 | 2,700 |
| Finance Costs | 6 | (38,551) | (44,912) |
| Net foreign exchange loss | 6 | (4,473) | (13,787) |
| Profit/ (Loss) before tax | 109,790 | (20,484) | |
| Taxation income / (expense) | 8 | 8,944 | (15,174) |
| Profit/ (Loss) from continuing operations | 118,734 | (35,658) | |
| Attributable to: | |||
| Owners of the parent | 118,734 | (35,550) | |
| Non-controlling Interests | - | (108) | |
| 118,734 | (35,658) | ||
| Basic and diluted total loss per share (cents per share) | |||
| Basic | 9 | \$0.67 | (\$0.20) |
| Diluted | 9 | \$0.66 | (\$0.20) |
| 30 June (Unaudited) | ||
|---|---|---|
| 2022 | 2021 | |
| \$'000 | \$'000 | |
| Profit/ (Loss) for the period | 118,734 | (35,658) |
| Other comprehensive income: | ||
| Items that may be reclassified subsequently to | ||
| profit or loss | ||
| Cash Flow hedges | ||
| Gain/(loss) arising in the period | (22,945) | 2,278 |
| Reclassification to profit and loss upon repayment of related borrowings |
- | 4,641 |
| Income tax relating to items that may be | ||
| reclassified to profit or loss | 5,507 | (1,591) |
| Exchange difference on the translation of foreign | ||
| operations, net of tax | (8,234) | (6,576) |
| Items that will not be reclassified subsequently to | ||
| profit or loss | ||
| Remeasurement of defined benefit plan | 65 | - |
| Income taxes on items that will not be reclassified | ||
| to profit and loss | (16) | - |
| Other comprehensive loss after tax | (25,623) | (1,248) |
| Total comprehensive profit/ (loss) for the period | 93,111 | (36,906) |
| Total comprehensive loss attributable to: | ||
| Owners of the parent | 93,111 | (36,800) |
| Non-controlling Interests | - | (106) |
| 93,111 | (36,906) |
| 30 June 2022 | 31 December | ||||
|---|---|---|---|---|---|
| (Unaudited) | 2021 | ||||
| Notes | \$'000 | \$'000 | |||
| ASSETS | |||||
| Non-current assets | |||||
| Property, plant and equipment | 10 | 3,822,664 | 3,499,473 | ||
| Intangible assets | 11 | 256,788 | 228,141 | ||
| Equity-accounted investments | 4 | 4 | |||
| Other receivables | 16 | 26,694 | 52,639 | ||
| Deferred tax asset | 12 | 216,182 | 154,798 | ||
| Restricted cash | 14 | 2,799 | 100,000 | ||
| 4,325,131 | 4,035,055 | ||||
| Current assets | |||||
| Inventories | 15 | 80,307 | 87,203 | ||
| Trade and other receivables | 16 | 326,037 | 288,526 | ||
| Restricted cash | 14 | 135,610 | 99,729 | ||
| Cash and cash equivalents | 13 | 673,708 | 730,839 | ||
| 1,215,662 | 1,206,297 | ||||
| Total assets | 5,540,793 | 5,241,352 | |||
| EQUITY AND LIABILITIES | |||||
| Equity attributable to owners of the parent | |||||
| Share capital | 17 | 2,380 | 2,374 | ||
| Share premium | 17 | 415,388 | 915,388 | ||
| Merger reserve | 139,903 | 139,903 | |||
| Other reserves | (9,901) | 7,488 | |||
| Foreign currency translation reserve | (21,057) | (12,823) | |||
| Share-based payment reserve | 22,172 | 19,352 | |||
| Retained earnings | 264,175 | (354,559) | |||
| Equity attributable to equity holders of the parent | 813,060 | 717,123 | |||
| Non-controlling interests | - | - | |||
| Total equity | 813,060 | 717,123 | |||
| Non-current liabilities | |||||
| Borrowings | 18 | 2,986,757 | 2,947,126 | ||
| Deferred tax liabilities | 12 | 64,542 | 67,425 | ||
| Retirement benefit liability | 19 | 1,957 | 2,767 | ||
| Provisions | 20 | 724,374 | 801,026 | ||
| Other payables | 21 | 265,664 | 225,987 | ||
| 4,043,294 | 4,044,331 | ||||
| Current liabilities | |||||
| Trade and other payables | 21 | 607,853 | 449,707 | ||
| Current Tax Liability | 31,148 | 5,279 | |||
| Derivative financial instruments | 7 | 33,305 | 12,546 | ||
| Provisions | 20 | 12,133 | 12,366 | ||
| 684,439 | 479,898 | ||||
| Total liabilities | 4,727,733 | 4,524,229 | |||
| Total equity and liabilities | 5,540,793 | 5,241,352 | |||
| Share Capital \$'000 |
Share Premium1 \$'000 |
Hedge and Defined Benefit Pension Plan2 \$'000 |
Equity component of convertible bonds3 \$'000 |
Share based payment reserve 4 \$'000 |
Translation Reserve5 \$'000 |
Retained earnings \$'000 |
Merger reserve \$'000 |
Total \$'000 |
Non - Controlling Interests \$'000 |
Total \$'000 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| At 1 January 2022 | 2,374 | 915,388 | (2,971) | 10,459 | 19,352 | (12,823) | (354,559) | 139,903 | 717,123 | - | 717,123 |
| Profit for the period Remeasurement of defined benefit pension plan, net of |
- | - | - | - | - | - | 118,734 | - | 118,734 | - | 118,734 |
| tax | - | - | 49 | - | - | - | - | - | 49 | - | 49 |
| Hedges, net of tax Exchange difference on the translation of foreign |
- | - | (17,438) | - | - | - | - | - | (17,438) | - | (17,438) |
| operations | - | - | - | - | - | (8,234) | - | - | (8,234) | - | (8,234) |
| Total comprehensive income | - | - | (17,389) | - | - | (8,234) | 118,734 | - | 93,111 | - | 93,111 |
| Transactions with owners of the company Share based payment |
|||||||||||
| charges (note 22) | - | - | - | - | 2,826 | - | - | - | 2,826 | - | 2,826 |
| Exercise of employment share options |
6 | - | - | - | (6) | - | - | - | - | - | - |
| Share premium reduction6 | - | (500,000) | - | - | - | - | 500,000 | - | - | - | - |
| At 30 June 2022 | 2,380 | 415,388 | (20,360) | 10,459 | 22,172 | (21,057) | 264,175 | 139,903 | 813,060 | - | 813,060 |
1The share premium account represents the total net proceeds on issue of the Company's shares in excess of their nominal value of £0.01 per share less amounts transferred to any other reserves.
2The reserve is used to recognise remeasurement gain or loss on cash flow hedges and actuarial gain or loss from the defined retirement benefit plan. In the Statement of Financial Position this reserve is combined with the 'Equity component of convertible bonds' reserve.
3Refers to the Equity component of \$50 million of convertible loan notes, which were issued in February 2021 and have a maturity date of 29 December 2023
4The share-based payments reserve is used to recognise the value of equity-settled share-based payments granted to parties including employees and key management personnel, as part of their remuneration.
5 The foreign currency translation reserve is used to record unrealised exchange differences arising from the translation of the financial statements of entities within the Group that have a functional currency other than US dollar.
6 Energean plc by special resolution reduced its share premium account, as confirmed by an Order of the High Court of Justice on the 14 June 2022.
| Share Capital \$'000 |
Share Premium1 \$'000 |
Hedge and Defined Benefit Pension Plan2 \$'000 |
Equity component of convertible bonds3 \$'000 |
Share based payment reserve4 \$'000 |
Translation Reserve5 \$'000 |
Retained earnings \$'000 |
Merger reserve \$'000 |
Total \$'000 |
Non Controlling Interests \$'000 |
Total \$'000 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| At 1 January 2021 | 2,367 | 915,388 | 1,792 | - | 13,419 | (42) | (144,734) | 139,903 | 928,093 | 266,299 | 1,194,392 |
| Loss for the period | - | - | - | - | - | - | (35,550) | - | (35,550) | (108) | (35,658) |
| Hedges, net of tax Exchange difference on the |
- | - | 5,326 | - | - | - | - | - | 5,326 | 2 | 5,328 |
| translation of foreign operations |
- | - | - | - | - | (6,576) | - | - | (6,576) | - | (6,576) |
| Total comprehensive income |
- | - | 5,326 | - | - | (6,576) | (35,550) | - | (36,800) | (106) | (36,906) |
| Transactions with owners of the company |
|||||||||||
| Employee share schemes (note 22) Acquisition of non |
1 | - | - | - | 2,474 | - | - | - | 2,475 | 2,475 | |
| controlling Interests |
- | - | - | 10,459 | - | - | (113,779) | - | (103,320) | (266,193) | (369,513) |
| At 30 June 2021 | 2,368 | 915,388 | 7,118 | 10,459 | 15,893 | (6,618) | (294,063) | 139,903 | 790,448 | - | 790,448 |
| 30 June (Unaudited) | |||||
|---|---|---|---|---|---|
| 2022 | 2021 | ||||
| Note | \$'000 | \$'000 | |||
| Operating activities | |||||
| Profit/ (Loss) before taxation | 109,790 | (20,484) | |||
| Adjustments to reconcile profit/(loss) before taxation | |||||
| to net cash provided by operating activities: | |||||
| Depreciation, depletion and amortisation | 10, 11 | 33,885 | 36,343 | ||
| Impairment loss on intangible assets | 11 | 362 | - | ||
| Loss from the sale of property, plant and equipment | 1,074 | 36 | |||
| Defined benefit (gain)/expense | 19 | (676) | (1,120) | ||
| Finance income | 6 | (2,701) | (2,700) | ||
| Finance costs | 6 | 38,551 | 44,912 | ||
| Non-cash revenues from Egypt1 | (27,177) | (21,577) | |||
| Movement in provisions | 20 | (1,239) | 483 | ||
| Other income | 5 | - | (3,602) | ||
| Share-based payment charge | 22 | 2,717 | 2,474 | ||
| Net foreign exchange gain/(loss) | 6 | 4,473 | 13,787 | ||
| Cash flow from/(used in) operations before working | 159,059 | 48,552 | |||
| capital adjustments | |||||
| Decrease/ (Increase) in inventories | 2,748 | (5,185) | |||
| Increase in trade and other receivables | 14,309 | 42,392 | |||
| (Decrease) in trade and other payables | (17,282) | (33,082) | |||
| Cash inflow from operations | 158,834 | 52,677 | |||
| Income tax paid | (12,267) | 388 | |||
| Net cash inflow from operating activities | 146,567 | 53,065 | |||
| Investing activities | |||||
| Payment for purchase of property, plant and | |||||
| equipment | (194,491) | (141,182) | |||
| Payment for exploration and evaluation, and other | (18,513) | (28,818) | |||
| intangible assets | |||||
| Acquisition of a subsidiary | - | (3,335) | |||
| Proceeds from disposal of property, plant and | 1,996 | - | |||
| equipment | |||||
| Movement in restricted cash | 14 | 61,320 | (266,241) | ||
| Amounts received from INGL related to the future | 17,371 | - | |||
| transfer of property, plant and equipment Interest received |
2,911 | 861 | |||
| (129,406) | (438,715) | ||||
| Net cash outflow for investing activities | |||||
| Financing activities | |||||
| Drawdown of borrowings | 18 | 35,835 | 293,000 | ||
| Repayment of borrowings | 18 | - | (1,452,509) | ||
| Senior secured notes Issuance | 18 | - | 2,500,000 | ||
| Transaction costs related to Senior secured notes paid | - | (37,218) | |||
| Acquisition of non-controlling interests | 18 | - | (175,000) | ||
| Transaction costs related to acquisition of non | - | (1,677) | |||
| controlling interest | |||||
| Repayment of obligations under leases | (5,785) | (5,875) | |||
| Finance cost paid for deferred license payments | - | (3,494) | |||
| Finance costs paid | (87,341) | (55,641) |
| Net cash inflow from financing activities | (57,291) | 1,061,586 | |
|---|---|---|---|
| Net increase / (decrease) in cash and cash equivalents | (40,130) | 675,936 | |
| Cash and cash equivalents at beginning of the period | 730,839 | 202,939 | |
| Effect of exchange rate fluctuations on cash held | (17,001) | 1,142 | |
| Cash and cash equivalents at end of the period | 13 | 673,708 | 880,017 |
1 Non-cash revenues from Egypt arise due to taxes being deducted at source from invoices as such revenue and tax charges are grossed up to reflect this deduction but no cash inflow or outflow results.
Energean plc (the 'Company') was incorporated in England & Wales on 8 May 2017 as a public company with limited liability, under the Companies Act 2006. Its registered office is at 44 Baker Street, London W1U 7AL, United Kingdom. The Company and all subsidiaries controlled by the Company, are together referred to as 'the Group'.
The Group has been established with the objective of exploration, production and commercialisation of crude oil and natural gas in Greece, Israel, Italy, North Africa and the wider Eastern Mediterranean.
The Group's subsidiaries and core assets, as of 30 June 2022, are presented in notes 26 and 27 respectively.
The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2022 included in this interim report have been prepared in accordance with UK-adopted International Accounting Standard 34 'Interim Financial Reporting', and unless otherwise disclosed have been prepared on the basis of the same accounting policies and methods of computation as applied in the Group's Annual Report for the year ended 31 December 2021.
The interim condensed consolidated financial statements have been prepared on a historical cost basis and are presented in US Dollars, which is also the Company's functional currency, rounded to the nearest thousand dollars (\$'000) except as otherwise indicated. The US dollar is the currency that mainly influences sales prices and revenue estimates, and also highly affects the Group's operations. The functional currencies of the Group's main subsidiaries are as follows: for Energean Oil & Gas S.A, Energean Montenegro, Energean Italy Spa and Energean International E&P Spa the functional currency is Euro, for Energean E&P Holdings Ltd, Energean International Limited, Energean Capital Ltd, Energean Egypt Ltd and Energean Israel Limited the functional currency is US\$.
The interim financial statements do not constitute statutory accounts of the Group within the meaning of Section 435 of the Companies Act 2006 and do not include all the information and disclosures required in the annual financial statements. The interim financial statements should be read in conjunction with the Group's Annual Report and Accounts for the year ended 31 December 2021, which were prepared UK-adopted International Accounting Standards ('UK-adopted IAS') and also in accordance with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board (IASB) as applied to financial periods beginning on or after 1 January 2021. The auditor's report on those financial statements was unqualified with no reference to matters to which the auditor drew attention by way of emphasis and no statement under s498(2) or s498(3) of the Companies Act 2006.
The Group carefully manages the risk of a shortage of funds by closely monitoring its funding position and its liquidity risk. The Going Concern assessment covers the period up to 31 December 2023 'the Forecast Period'.
Cash forecasts are regularly produced based on, inter alia, the Group's latest life of field production, budgeted expenditure forecasts, management's best estimate of future commodity prices (based on recent published forward curves) and headroom under its debt facilities. The Base Case cash flow model used for the going concern assessment assumes first gas from Karish in October 2022, Brent at \$100/bbl for the YTG (Year to Go) 2022 and \$90/bbl in 2023 and PSV (Italian gas price) at EUR200/MWh for the YTG 2022 and EUR150/MWh in 2023.
In addition, on a regular basis, the Group performs sensitivity analysis of its liquidity position to evaluate adverse impacts that may result from changes to the macro-economic environment such as a reduction in commodity prices and reduction in the Group production (due to deferral of key projects) throughout the going concern period. In this combined downside scenario applied to the base case forecast, the Group is forecasted to have sufficient financial headroom throughout the Forecast Period.
Reverse stress testing was performed to determine what levels of prices and/or production would need to occur for the liquidity headroom to be eliminated, prior to any mitigating actions; the likelihood of such conditions occurring was concluded to be remote. The portfolio can withstand a material drop in commodity price and average production largely because most of the revenue is generated from fixed gas price contracts. In the event an extreme downside scenario occurred, prudent mitigating actions could be executed in the necessary timeframe such as postponement of discretionary exploration and development expenditures. Energean is predominantly Operator of its assets, therefore the majority of the key development projects are 100% within its control. There is no material impact of climate change within the Forecast Period therefore it does not form part of the reverse stress testing performed by management.
As of 30 June 2022, the Group's available liquidity was \$880 million (\$674 million unrestricted cash, \$138 million restricted cash and \$68 million available under Greek State-Backed Loan).
In forming its assessment of the Group's ability to continue as a going concern, including its review of the forecasted cashflow of the Group over the Forecast Period, the Board has made judgements about:
After careful consideration, the Directors are satisfied that the Group has sufficient financial resources to continue in operation for the foreseeable future, for the Forecast Period to 31 December 2023. For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.
The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are the same as those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021, except for the adoption of the new standards and interpretations effective as of 1 January 2022 listed below:
None of the above amendments had a significant impact on the Group's interim condensed consolidated financial statements.
These unaudited interim condensed consolidated financial statements were approved by the Board of Directors on 7 September 2022.
The information reported to the Group's Chief Executive Officer and Chief Financial Officer (together the Chief Operating Decision Makers) for the purposes of resource allocation and assessment of segment performance is focused on four operating segments: Europe, (including Greece, Italy, UK, Croatia), Israel, Egypt and New Ventures (Montenegro and Malta).
The Group's reportable segments under IFRS 8 Operating Segments are Europe, Israel and Egypt. Segments that do not exceed the quantitative thresholds for reporting information about operating segments have been included in Other.
The following is an analysis of the Group's revenue, results and reconciliation to profit/ (loss) before tax by reportable segment:
| Other & inter | |||||
|---|---|---|---|---|---|
| Europe | Israel | Egypt | segment transactions |
Total | |
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| Six months ended 30 June 2022 | |||||
| (unaudited) | |||||
| Revenue from Oil | 111,007 | - | - | - | 111,007 |
| Revenue from Gas | 137,717 | - | 73,511 | - | 211,228 |
| Petroleum product sales | 1,288 | - | 33,040 | - | 34,328 |
| Rendering of services | 4,008 | - | - | (3,383) | 625 |
| Loss on forward transactions | (18,233) | - | - | - | (18,233) |
| Total revenue | 235,787 | - | 106,551 | (3,383) | 338,955 |
| Adjusted EBITDAX1 | 122,423 | (5,343) | 79,914 | 1,171 | 198,165 |
| Reconciliation to profit before tax: | |||||
| Depreciation and amortisation | (11,303) | (110) | (22,258) | (214) | (33,885) |
| expenses | |||||
| Share-based payment charge | (2,501) | (88) | (30) | (98) | (2,717) |
| Exploration and evaluation expenses | (2,499) | - | (1,482) | (273) | (4,254) |
| Other expense | (6,263) | (1,074) | (342) | (1,147) | (8,826) |
| Other income | 1,391 | 53 | 552 | (366) | 1,630 |
| Finance income | 1,467 | 4,504 | 521 | (3,791) | 2,701 |
| Finance costs | (10,436) | (4,671) | (453) | (22,991) | (38,551) |
| Net foreign exchange gain/(loss) | 20,548 | (1,778) | (219) | (23,024) | (4,473) |
| Profit/(loss) before income tax | 112,827 | (8,507) | 56,203 | (50,733) | 109,790 |
| Taxation income / (expense) | 33,429 | 2,889 | (27,177) | (197) | 8,944 |
| Profit/(loss) from continuing | 146,256 | (5,618) | 29,026 | (50,930) | 118,734 |
| operations | |||||
| Six months ended 30 June 2021 | |||||
| (unaudited) | |||||
| Revenue from Oil | 70,736 | - | 27,431 | - | 98,167 |
| Revenue from Gas | 34,765 | - | 70,929 | - | 105,694 |
| Petroleum products sales | 492 | - | - | - | 492 |
| Rendering of services | 5,228 | - | - | (4,115) | 1,113 |
| Total revenue | 111,221 | - | 98,360 | (4,115) | 205,466 |
| Adjusted EBITDAX1 | 9,685 | (1,563) | 69,113 | (2,584) | 74,651 |
| Reconciliation to profit before tax: | - | ||||
| Depreciation and amortisation | (21,586) | (50) | (14,256) | (451) | (36,343) |
| expenses | |||||
| Share-based payment charge | (431) | (122) | - | (1,699) | (2,252) |
| Exploration and evaluation expenses | (630) | - | - | (411) | (1,041) |
| Other expense | (1,458) | (28) | (88) | (1,497) | (3,071) |
| Other income | 2,887 | - | 641 | 43 | 3,571 |
| Finance income | 1,667 | 1,808 | 676 | (1,451) | 2,700 |
| Finance costs | (10,797) | (9,436) | (624) | (24,055) | (44,912) |
| Net foreign exchange gain/(loss) | 2,879 | (727) | (1,055) | (14,884) | (13,787) |
| Profit before income tax | (17,784) | (10,118) | 54,407 | (46,989) | (20,484) |
| Taxation income / (expense) | 3,342 | 2,571 | (21,535) | 448 | (15,174) |
| Other & inter | |||||
|---|---|---|---|---|---|
| Europe | Israel | Egypt | segment transactions |
Total | |
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| Profit from continuing operations | (14,442) | (7,547) | 32,872 | (46,541) | (35,658) |
1Adjusted EBITDAX is a non-IFRS measure used by the Group to measure business performance. It is calculated as profit or loss for the period, adjusted for discontinued operations, taxation, depreciation and amortisation, share-based payment charge, impairment of property, plant and equipment, other income and expenses (including the impact of derivative financial instruments and foreign exchange), net finance costs and exploration and evaluation expenses.
The following table presents assets and liabilities information for the Group's operating segments as at 30 June 2022 and 31 December 2021, respectively:
| Other & inter | |||||
|---|---|---|---|---|---|
| Europe | Israel | Egypt | segment transactions |
Total | |
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| Six months ended 30 June 2022 | |||||
| (unaudited) | |||||
| Oil & Gas properties | 505,690 | 2,922,369 | 366,077 | (10,326) | 3,783,810 |
| Other fixed assets | 14,723 | 5,570 | 19,786 | (1,225) | 38,854 |
| Intangible assets | 69,043 | 130,327 | 20,484 | 36,934 | 256,788 |
| Trade and other receivables | 159,459 | 55,110 | 123,702 | (12,234) | 326,037 |
| Deferred tax asset | 218,349 | (1,210) | - | (957) | 216,182 |
| Other assets | 761,556 | 218,793 | 109,471 | (170,698) | 919,122 |
| Total assets | 1,728,820 | 3,330,959 | 639,520 | (158,506) | 5,540,793 |
| Trade and other payables | 169,045 | 156,395 | 53,187 | 229,226 | 607,853 |
| Borrowings | 33,528 | 2,467,251 | - | 485,978 | 2,986,757 |
| Decommissioning provision | 700,088 | 26,609 | - | - | 726,697 |
| Other current liabilities | 64,418 | - | - | 34 | 64,452 |
| Other non-current liabilities | 125,510 | 225,129 | 21,872 | (30,537) | 341,974 |
| Total liabilities | 1,092,589 | 2,875,384 | 75,059 | 684,701 | 4,727,733 |
| Other segment information | |||||
| Capital Expenditure: | |||||
| - Property, plant and equipment | 21,753 | 288,964 | 41,132 | 4,551 | 356,400 |
| - Intangible, exploration and evaluation | 1,496 | 34,386 | - | 1,076 | 36,958 |
| assets | |||||
| Year ended 31 December 2021 | |||||
| Oil & Gas properties | 537,600 | 2,584,828 | 342,528 | (9,694) | 3,455,262 |
| Other fixed assets | 16,578 | 3,917 | 24,076 | (360) | 44,211 |
| Intangible assets | 74,868 | 95,941 | 20,484 | 36,848 | 228,141 |
| Trade and other receivables | 164,131 | 22,769 | 102, 605 | (979) | 288,526 |
| Deferred tax asset | 154,798 | - | - | - | 154,798 |
| Other assets | 674,157 | 379,248 | 98,720 | (81,711) | 1,070,414 |
| Total assets | 1,622,132 | 3,086,703 | 588,413 | (55,896) | 5,241,352 |
| Trade and other payables | 202,797 | 74,115 | 25,511 | 152,563 | 454,986 |
| Borrowings | - | 2,463,524 | - | 483,602 | 2,947,126 |
| Decommissioning provision | 766,573 | 35,525 | - | - | 802,098 |
| Other current liabilities | (20,395) | - | - | 32,941 | 12,546 |
| Other non-current liabilities | 134,203 | 180,689 | 24,663 | (32,082) | 307,473 |
| Total liabilities | 1,083,178 | 2,753,853 | 50,174 | 637,024 | 4,524,229 |
| Other segment information |
Capital Expenditure:
| Europe \$'000 |
Israel \$'000 |
Egypt \$'000 |
Other & inter segment transactions \$'000 |
Total \$'000 |
|
|---|---|---|---|---|---|
| - Property, plant and equipment | 72,782 | 247,463 | 52,085 | (14,330) | 358,000 |
| - Intangible, exploration and evaluation assets |
40,523 | 6,342 | 215 | 3,329 | 50,409 |
| Segment Cash flows | |||||
|---|---|---|---|---|---|
| Other & inter | |||||
| Europe | Israel | Egypt | segment transactions |
Total | |
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| Six months ended 30 June | |||||
| 2022 (unaudited) | |||||
| Net cash from / (used in) | |||||
| operating activities | 87,922 | (5,286) | 64,578 | (647) | 146,567 |
| Net cash (used in) investing | |||||
| activities | (23,560) | (56,932) | (43,931) | (4,983) | (129,406) |
| Net cash from financing | |||||
| activities | (85,460) | (66,819) | 280 | 94,708 | (57,291) |
| Net increase/(decrease) in | |||||
| cash and cash equivalents, and | |||||
| restricted cash | (21,098) | (129,037) | 20,927 | 89,078 | (40,130) |
| Cash and cash equivalents at | |||||
| beginning of the period | 71,316 | 349,828 | 19,254 | 290,441 | 730,839 |
| Effect of exchange rate | |||||
| fluctuations on cash held | (4,542) | (2,080) | (919) | (9,460) | (17,001) |
| Cash and cash equivalents at | |||||
| the end of the period | 45,676 | 218,711 | 39,262 | 370,059 | 673,708 |
| Six months ended 30 June | |||||
| 2021 (unaudited) | |||||
| Net cash from / (used in) | |||||
| operating activities | 22,329 | (2,802) | 52,958 | (19,420) | 53,065 |
| Net cash (used in) investing | |||||
| activities | (41,614) | (378,265) | (15,695) | (3,141) | (438,715) |
| Net cash from financing | |||||
| activities | 22,447 | 1,075,374 | (87,054) | 50,819 | 1,061,586 |
| Net increase/(decrease) in | |||||
| cash and cash equivalents | 3,162 | 694,307 | (49,791) | 28,258 | 675,936 |
| At beginning of the year | 13,609 | 37,421 | 76,240 | 75,669 | 202,939 |
| Effect of exchange rate | |||||
| fluctuations on cash held | 409 | (146) | (1) | 880 | 1,142 |
| Cash and cash equivalents at | |||||
| end of the period | 17,180 | 731,582 | 26,448 | 104,807 | 880,017 |
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 \$'000 |
2021 \$'000 |
||
| Revenue from crude oil sales | 111,007 | 70,736 | |
| Revenue from gas sales | 211,228 | 105,694 | |
| Gain/ (Loss) on forward transactions | (18,233) | - | |
| Petroleum products sales | 34,328 | 27,923 | |
| Rendering of services | 625 | 1,113 | |
| Total revenue | 338,955 | 205,466 |
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| (a) | Cost of sales | ||
| Staff costs | 27,895 | 32,626 | |
| Flux costs | 17,391 | 6,957 | |
| Energy cost | 5,716 | 3,475 | |
| Royalty payable | 11,678 | 5,814 | |
| Other operating costs | 60,661 | 73,546 | |
| Depreciation and amortisation | 32,345 | 33,845 | |
| Stock overlift/(underlift) movement | 2,357 | (8,623) | |
| Total cost of sales | 158,043 | 147,640 | |
| (b) | Administrative expenses | ||
| Staff costs | 9,765 | 7,329 | |
| Other General & administration expenses | 4,103 | 8,815 | |
| Share-based payment charge included in | |||
| administrative expenses | 2,717 | 2,247 | |
| Depreciation and amortisation | 1,539 | 2,498 | |
| Auditor fees | 951 | 779 | |
| Total administrative expenses | 19,075 | 21,668 | |
| (c) | Selling and distribution expense | ||
| Staff costs | 116 | 29 | |
| Other Selling and distribution expense | 158 | 73 | |
| Total selling and distribution expense | 274 | 102 | |
| (b) + (c) | Total Administrative and Selling Expenses | 19,349 | 21,770 |
| (d) | Exploration and evaluation expenses Staff costs for Exploration and evaluation |
||
| activities | 2,118 | 355 | |
| Exploration costs written off | 362 | - | |
| Other exploration and evaluation expenses | 1,774 | 686 | |
| Total exploration and evaluation expenses | 4,254 | 1,041 | |
| 30 June (unaudited) 2022 \$'000 |
2021 \$'000 |
||
|---|---|---|---|
| (e) | Other expenses | ||
| Transaction costs in relation to Edison E&P | |||
| acquisition | - | 1,470 | |
| Restructuring costs1 | 3,481 | ||
| Provision for litigation and claims | 1,443 | - | |
| Loss from disposal of Property plant & Equipment | 1,074 | 36 | |
| Write down of inventory | 1,335 | - | |
| Expected credit losses | 342 | 279 | |
| Other expenses | 1,151 | 1,286 | |
| 8,826 | 3,071 | ||
| (f) | Other income | ||
| Reversal of prior period accruals | 1,630 | 3,496 | |
| Other income | - | 75 | |
| 1,630 | 3,571 | ||
| 1One-off restructuring costs incurred in Greece |
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Interest on bank borrowings | 307 | 55,710 | |
| Interest on Senior Secured Notes | 83,630 | 33,791 | |
| Interest expense on long term payables | 4,734 | 467 | |
| Interest expense on short term liabilities | - | 28 | |
| Less amounts included in the cost of qualifying assets | (68,866) | (72,969) | |
| 19,805 | 17,027 | ||
| Finance and arrangement fees | 4,003 | 11,869 | |
| Unamortised financing costs related to the repayment | 36,200 | ||
| of the Karish project finance2 | - | ||
| Other finance costs and bank charges | 593 | 2,172 | |
| Loss on interest rate hedges | - | 6,988 | |
| Unwinding of discount on right of use asset | 694 | 837 | |
| Unwinding of discount on provision for decommissioning | 5,261 | 4,946 | |
| Unwinding of discount on deferred consideration | 7,912 | 5,124 | |
| Unwinding of discount on convertible loan | 1,963 | - | |
| Unwinding of discount on contingent consideration | 1,322 | 744 | |
| Less amounts included in the cost of qualifying assets | (3,002) | (40,995) | |
| Total finance costs | 38,551 | 44,912 | |
| Interest income from time deposits | (2,701) | (1,534) | |
| Gain from revised estimated loan cash flow | - | (1,166) | |
| Total finance revenue | (2,701) | (2,700) | |
| Foreign exchange losses/(gain) | 4,473 | 13,787 | |
| Net financing costs | 40,323 | 55,999 |
2 On 29 April 2021, the Group fully repaid the Israel Project Finance Facility before the maturity date of 31 December 2021 and, as such, the unamortised financing costs have been expensed in the period.
The information set out below provides information about how the Group determines the fair values of various financial assets and liabilities.
The fair values of the Group's non-current liabilities measured at amortised cost are considered to approximate their carrying amounts at the reporting date.
The carrying value less any estimated credit adjustments for financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair values due to their short term-nature. The fair value of the Group's finance lease obligations is estimated using discounted cash flow analysis based on the group's current incremental borrowing rates for similar types and maturities of borrowing and are consequently categorized in level 2 of the fair value hierarchy.
The share purchase agreement (the "SPA") dated 4 July 2019 between Energean and Edison Spa provides for a contingent consideration of up to \$100.0 million subject to the commissioning of the Cassiopea development gas project in Italy. The consideration was determined to be contingent on the basis of future gas prices (PSV) recorded at the time of the commissioning of the field, which is expected in 2024. No payment will be due if the arithmetic average of the year one (i.e., the first year after first gas production) and year two (i.e., the second year after first gas production) Italian PSV Natural Gas Futures prices is less than €10/MWh when first gas production is delivered from the field. US\$100 million is payable if that average price exceeds €20/MWh. The fair value of the contingent consideration is estimated by reference to the terms of the SPA and the simulated PSV pricing by reference to the forecasted PSV pricing, historical volatility and a log normal distribution, discounted at a cost of debt.
The contingent consideration to be payable in 2024 is estimated at acquisition date to amount to \$61.7 million, which discounted at the acquisition date resulted in a present value of \$55.2 million.
As at 30 June 2022, the two year future curve of PSV prices indicate an average price in excess of €20/MWh. Therefore, the Group's estimate as at 30 June 2022 of the fair value of the contingent consideration payable in 2024 is \$79.8 million, based on a Monte Carlo simulation (31 December 2021: \$78.5 million).
The fair value of the consideration payable has been recognized at level 3 in the fair value hierarchy.
| Contingent consideration | 2022 |
|---|---|
| 1 January 2022 | 78,450 |
| Fair value adjustment | 1,322 |
| 30 June 2022 | 79,772 |
Management believes there are no reasonably possible change to any key assumptions that would impact the contingent consideration valuation.
The Group held financial instruments at fair value at 30 June 2022 related to commodity derivatives. All derivatives are recognised at fair value on the balance sheet with valuation changes recognised immediately in the income statement, unless the derivatives have been designated as a cash flow hedge. Fair value is the amount for which the asset or liability could be exchanged in an arm's length transaction at the relevant date. Where available, fair values are determined using quoted prices in active markets. To the extent that market prices are not available, fair values are estimated by reference to market-based transactions or using standard valuation techniques for the applicable instruments and commodities involved. Values recorded are as at the balance sheet date and will not necessarily be realised.
The Group undertakes hedging activities as part of the ongoing financial risk management to protect against commodity price volatility and to ensure the availability of cash flow for re-investment in capital programmes that are driving business delivery. Commodity hedge contracts entered into in Italy aim to mitigate the risk of changes to the selling price of natural gas.
| Hedged Quantity (MWs) |
Contract Month | Cargo Month | Gas Sales Size | Fixed Price EUR |
|---|---|---|---|---|
| 50,000 | July 2022 | July 2022 | 222,110 | 39.13 |
| 50,000 | August 2022 | August 2022 | 222,679 | 39.13 |
| 50,000 | September 2022 | September 2022 | 216,103 | 39.13 |
| 50,000 | October 2022 | October 2022 | 215,290 | 40.07 |
| 50,000 | November 2022 | November 2022 | 200,205 | 40.07 |
| 50,000 | December 2022 | December 2022 | 206,640 | 40.07 |
The Group's commodity derivatives are level 2. There were no transfers between fair value levels during the period.
The fair value hierarchy of financial assets and financial liabilities that are not measured at fair value (but for which disclosure of fair value is required) is as follows:
| Fair value hierarchy as of 30 June 2022 (Unaudited) | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | |
| \$'000 | \$'000 | \$'000 | \$'000 | |
| Financial assets | ||||
| Trade and other receivables (note 16) | - | 292,896 | - | 292,896 |
| Cash and cash equivalents (note 13) | 673,708 | - | - | 673,708 |
| Restricted cash (note 14) | 138,409 | - | - | 138,409 |
| Total | 812,117 | 292,896 | - | 1,105,013 |
| Financial liabilities | ||||
| Financial liabilities held at amortised cost: | ||||
| Trade and other payables - current | - | 270,096 | - | 270,096 |
| Trade and other payables- non-current | - | 122,579 | - | 122,579 |
| Senior Secured Notes (note 18) | 2,591,675 | - | - | 2,591,675 |
| Borrowings (note 18) | - | 76,824 | - | 76,824 |
| Deferred consideration for acquisition | - | 175,140 | - | 175,140 |
| of minority | ||||
| Net obligations under finance leases (note 21) |
- | 35,412 | - | 35,412 |
| Deferred licence payments (note 21) | - | 60,098 | - | 60,098 |
| Financial liabilities held at fair value | ||||
| through OCI: | ||||
| Derivative | - | 33,305 | - | 33,305 |
| Financial liabilities held at FVTPL: | ||||
| Contingent consideration (note 7) | - | - | 79,772 | 79,772 |
| Total | 2,591,675 | 773,454 | 79,772 | 3,444,901 |
| Fair value hierarchy as at 31 December 2021 | ||||
|---|---|---|---|---|
| Level 1 \$'000 |
Level 2 \$'000 |
Level 3 \$'000 |
Total \$'000 |
|
| Financial assets | ||||
| Trade and other receivables | - | 284,692 | - | 284,692 |
| Cash and cash equivalents | 730,839 | - - |
730,839 | |
| Restricted Cash | 199,729 | 199,729 | ||
| Total | 930,568 | 284,692 | - | 1,215,260 |
| Financial liabilities Financial liabilities held at amortised cost: |
||||
| Trade and other payables -current | - | 173,319 | - | 173,319 |
| Senior Secured Notes Borrowings |
2,931,950 - |
- 41,495 |
- | 2,931,950 41,495 |
| Deferred consideration for acquisition of minority |
- | 167,228 | - | 167,228 |
| Net obligations under finance leases | - | 44,425 | - | 44,425 |
| Deferred licence payments | - | 57,230 | - | 57,230 |
| Financial liabilities held at FVTPL: | - | |||
| Interest rate derivatives | - | 12,546 | - | 12,546 |
| Contingent consideration | - | - | 78,450 | 78,450 |
| Total | 2,931,950 | 496,243 | 78,450 | 3,506,643 |
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | |||
| \$'000 | \$'000 | ||
| Corporation tax – current period | (67,069) | (21,565) | |
| Corporation tax - prior years | - | 448 | |
| Deferred tax (Note 12) | 76,013 | 5,943 | |
| Total taxation income / (expense) | 8,944 | (15,174) |
The Group calculates its income tax expense as per IAS 34 by applying a weighted average tax rate calculated based on the statutory tax rates in Greece (25%), Israel (23%), Italy (24%), Cyprus (12.5%), Egypt (40.55%) and United Kingdom (40%) weighted according to the profit or loss before tax earned by the Group in each jurisdiction where deferred tax is recognised, or material current tax charge arises. The effective tax rate for the period is -8% (30 June 2021: -74%).
The tax (charge)/ credit of the period can be reconciled to the loss per the consolidated income statement as follows:
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Profit/(loss) before tax | 109,790 | (20,484) |
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 (32,197) |
\$'000 4,035 |
||
| Tax calculated at 29.5% weighted average rate (2021: 19.7%) Impact of different tax rates |
1,920 | 13 | |
| Utilisation of unrecognised deferred tax/ (non-recognition of deferred tax) | 89,417 | (4,834) | |
| Permanent differences1 | (12,758) | (1,912) | |
| Foreign taxes | (5,171) | (21,535) | |
| Windfall tax2 | (29,274) | - | |
| Tax effect of non-taxable income and allowances | (3,304) | 10,985 | |
| Other adjustments | 311 | (2,374) | |
| Prior year tax | - | 448 | |
| Taxation income/(expense) | 8,944 | (15,174) |
1 Permanent differences mainly consisted of non-deductible expenses, consolidation differences, intercompany dividends and foreign exchange differences.
2 During H1 2022, Italy introduced a windfall tax in the form of a law decree which imposed a 25% one-off tax on profit margins that rose by more than 5 million euros between October 2021 and April 2022 compared to the same period a year earlier. The amount of the windfall tax to be paid by Energean Italy is estimated to be \$29.3mil with an advance payment of 40% or c\$11.7million remitted to the Italian Revenue Agency at the end of June 2022, while the remaining balance shall be paid by the end of November 2022. The windfall tax has been determined to be an income tax as defined by IAS 12.
Basic earnings per ordinary share amounts are calculated by dividing net income for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted income per ordinary share amounts is calculated by dividing net income for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued if dilutive employee share options were converted into ordinary shares.
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Total profit/(loss) attributable to equity shareholders | 118,734 | (35,550) | |
| Effect of dilutive potential ordinary shares | 1,963 | - | |
| 120,697 | (35,550) | ||
| Number of shares | |||
| Basic weighted average number of shares | 177,821,533 | 177,117,612 | |
| Dilutive potential ordinary shares | 6,362,834 | - | |
| Diluted weighted average number of shares | 184,184,367 | 177,117,612 | |
| Basic earnings/ (loss) per share | \$0.67/share | (\$0.20)/share | |
| Diluted earnings/ (loss) per share | \$0.66/share | (\$0.20)/share |
| Oil and gas properties |
Leased assets | Other property, plant and equipment |
Total | |
|---|---|---|---|---|
| Property, plant and equipment at Cost | \$'000 | \$'000 | \$'000 | \$'000 |
| At 1 January 2021 | 3,430,329 | 50,841 | 60,237 | 3,541,407 |
| Additions | 345,180 | 6,428 | 1,623 | 353,231 |
| Lease modification | - | 2,261 | - | 2,261 |
| Disposal of assets | (23) | - | (34) | (57) |
| Capitalized borrowing cost | 178,891 | - | - | 178,891 |
| Capitalized depreciation | 227 | - | - | 227 |
| Change in decommissioning provision | (13,174) | - | - | (13,174) |
| Transfer from Intangible assets | 14,317 | - | 26 | 14,343 |
| Foreign exchange impact | (57,960) | (2,285) | (2,806) | (63,051) |
| At 31 December 2021 | 3,897,787 | 57,245 | 59,046 | 4,014,078 |
| Additions | 353,374 | 746 | 2,280 | 356,400 |
| Lease modifications | - | (897) | - | (897) |
| Disposal of assets | (900) | - | - | (900) |
| Capitalized borrowing cost | 60,131 | - | - | 60,131 |
| Capitalised depreciation | 357 | - | - | 357 |
| Change in environmental rehabilitation provision |
(11,469) | - | - | (11,469) |
| Foreign exchange impact | (52,051) | (1,088) | (1,308) | (54,447) |
| At 30 June 2022 | 4,247,229 | 56,006 | 60,018 | 4,363,253 |
| At 1 January 2021 | 376,643 | 6,979 | 50,513 | 434,135 |
|---|---|---|---|---|
| Charge for the period | ||||
| Expensed | 81,234 | 12,274 | 1,998 | 95,506 |
| Impairments | 774 | 774 | ||
| Disposal of assets | - | - | 21 | 21 |
| Foreign exchange impact | (16,129) | (151) | 449 | (15,831) |
| At 31 December 2021 | 442,522 | 19,102 | 52,981 | 514,605 |
| Charge for the period expensed | 29,130 | 4,661 | 354 | 34,145 |
| Write down on disposal of assets | 250 | - | - | 250 |
| Disposal of assets | (433) | - | - | (433) |
| Foreign exchange impact | (8,050) | 393 | (321) | (7,978) |
| At 30 June 2022 | 463,419 | 24,156 | 53,014 | 540,589 |
| Net carrying amount | ||||
| At 31 December 2021 | 3,455,265 | 38,143 | 6,065 | 3,499,473 |
| At 30 June 2022 | 3,783,810 | 31,850 | 7,004 | 3,822,664 |
Included in the carrying amount of leased assets at 30 June 2022 are right of use assets related to oil and gas properties and other property, plant and equipment of \$30.3 million and \$1.6 million respectively. The depreciation charged on these classes for the six-month ending 30 June 2022 were \$4.4 million and \$0.2 million respectively
The additions to oil & gas properties for the period of six months ended 30 June 2022 are mainly due to development costs of Karish field related to the EPCIC contract (FPSO, Sub Sea and On-shore construction cost) at the amount of \$286.8 million and NEA/NI project in Egypt at the amount of \$44.2 million.
Borrowing costs capitalised for qualifying assets, included in oil & gas properties, for the six months ended 30 June 2022 amounted to \$70.6 million. The average interest rates used was 5.16% for the six months ended 30 June 2022.
There were no impairment indicators identified at 30 June 2022.
| Exploration and | ||||
|---|---|---|---|---|
| evaluation assets \$'000 |
Goodwill \$'000 |
Other Intangible assets \$'000 |
Total \$'000 |
|
| Intangibles at Cost | ||||
| At 1 January 2021 | 158,213 | 101,146 | 22,355 | 281,714 |
| Additions | 47,995 | - | 2,413 | 50,408 |
| Capitalized borrowing costs | 2,202 | - | - | 2,202 |
| Change in decommissioning provision | 2,141 | 2,141 | ||
| Transfers to property, plant and | ||||
| equipment | (265) | - | (14,078) | (14,343) |
| Exchange differences | (4,953) | - | (983) | (5,936) |
| At 31 December 2021 | 205,333 | 101,146 | 9,707 | 316,186 |
| Additions | 36,045 | - | 914 | 36,959 |
| Capitalized borrowing costs | - | - | - | - |
| Exchange differences | (8,434) | - | (138) | (8,572) |
| At 30 June 2022 | 232,944 | 101,146 | 10,483 | 344,573 |
| impairments | ||||
|---|---|---|---|---|
| At 1 January 2021 | 3,004 | - | 2,894 | 5,898 |
| Charge for the period | - | - | 1,946 | 1,946 |
| Impairment | 82,125 | - | - | 82,125 |
| Exchange differences | (1,850) | - | (74) | (1,924) |
| At 31 December 2021 | 83,279 | - | 4,766 | 88,045 |
| Charge for the period | - | 96 | 96 | |
| Impairment | 362 | - | - | 362 |
| Exchange differences | (603) | - | (115) | (718) |
| At 30 June 2022 | 83,038 | - | 4,747 | 87,785 |
| At 31 December 2021 | 122,054 | 101,146 | 4,941 | 228,141 |
|---|---|---|---|---|
| At 30 June 2022 | 149,906 | 101,146 | 5,736 | 256,788 |
| Deferred tax (liabilities)/assets |
Property, plant and equipment |
Right of use asset IFRS 16 |
Decom mission ing |
Prepaid expenses and other receivabl es |
Inven tory |
Tax losses |
Deferre d expense s for tax |
Retire ment benefit liability |
Accrued expenses and other short-term liabilities |
Total |
|---|---|---|---|---|---|---|---|---|---|---|
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| At 1 January 2021 | (123,543) | (292) | 8,877 | (4,651) | 695 | 165,841 | - | 1,050 | 9,470 | 57,447 |
| Increase / (decrease) for the period through: |
||||||||||
| Profit or loss (Note 8) Other |
9,848 | (718) | 50,808 | 890 | (254) | (32,501) | 5,020 | (932) | 6,996 | 39,157 |
| comprehensive income |
1,586 | 1,586 | ||||||||
| Reclassifications in the current period1 |
(28,442) | 33,644 | 2,025 | (233) | (4,903) | 6, 010 | 200 | (8,301) | - | |
| Exchange difference | 1,584 | 20 | (3,889) | 165 | (25) | (8,257) | (52) | (363) | (10,817) | |
| At 31 December 2021 |
(140,553) | (990) | 89,440 | (1,571) | 183 | 120,180 | 11,030 | 266 | 9,388 | 87,373 |
| Increase / (decrease) for the period through: Profit or loss (Note 8) |
(7,216) | 34 | 242 | 2,601 | 250 | 85,902 | (4,687) | (61) | (1,052) | 76,013 |
| Other comprehensive income |
- | - | - | - | - | - | - | - | 5,507 | 5,507 |
| Exchange difference |
4,565 | 20 | (7,148) | - | (28) | (13,510) | - | (10) | (1,142) | (17,253) |
| At 30 June 2022 (Unaudited) |
(143,204) | (936) | 82,534 | 1,030 | 405 | 192,572 | 6,343 | 195 | 12,701 | 151,640 |
| 30 June 2022 | 31 December 2021 | |||||||||
| Deferred tax liabilities | \$'000 (64,542) |
\$'000 (67,425) |
||||||||
| Deferred tax assets | 216,182 | 154,798 | ||||||||
| Net deferred tax assets | 151,640 | 87,373 |
At 30 June 2022 the Group had gross unused tax losses of \$988.2 million (as of 31 December 2021: \$1,123.8 million) available to offset against future profits and other temporary differences. A deferred tax asset of \$192.6 million (2021: \$120.2 million) has been recognised on tax losses of \$758.5 million, based on the forecasted profits. The Group did not recognise deferred tax on tax losses and other differences totalling \$629.4 million.
In Greece, Italy and the UK, the net DTA for carried forward losses recognised in excess of the other net taxable temporary differences was \$60.7 million, \$63.0 million and \$12.2 million (2021: \$59.3 million, \$0.19 million and \$13.8 million) respectively. An additional DTA of \$80.3 million (2021: \$81.4 million) arose primarily in respect of deductible temporary differences related to property, plant and equipment, decommissioning provisions and accrued expenses, resulting in a total DTA of \$216.2 million (2021: \$154.8 million). During the period, Italy recognised a DTA of \$63.0 million on tax losses of \$262.7 million in accordance with its latest tax loss utilisation forecast which was revised given the high forecast PSV and Brent prices.
Greek tax losses (Prinos area) can be carried forward without limitation up until the relevant concession agreement expires (by 2039), whereas the tax losses in Israel, Italy and the United Kingdom can be carried forward indefinitely. Based on the Prinos area forecasts (including the Epsilon development), the deferred tax asset is fully utilised by 2029. In Italy, a deferred tax asset of \$62.3 million is recognised on decommissioning costs scheduled to be incurred up to 2030. Finally, in the UK, decommissioning spend is expected to be tax relieved up until 2027, and the deferred tax asset recognised on UK tax losses is fully offset against deferred tax liabilities on temporary differences.
On 3 March 2021 it was announced in the UK budget that the UK non-ring fence corporation tax rate will increase from 19% to 25% with effect from 2023. The Group does not currently recognise any deferred tax assets in respect of UK non-ring fence tax losses and therefore this rate change did not impact the tax disclosures.
| 30 June | 31 December | |
|---|---|---|
| 2022 (Unaudited) | 2021 | |
| \$'000 | \$'000 | |
| Cash at bank | 673,708 | 729,390 |
| Deposits in escrow | - | 1,449 |
| 673,708 | 730,839 |
Bank demand deposits comprise deposits and other short-term money market deposit accounts that are readily convertible into known amounts of cash. The annual effective interest rate on short-term bank deposits was 0.854% for the six months period ended 30 June 2022 (year ended 31 December 2021: 0.386%).
Restricted cash comprises cash retained under the Israel Senior Secured Notes and the Greek State Loan requirement as follows: Current
\$35.6 million -Interest Payment Account for the accrued interest (less coupons actually paid) for the period to September 2022 and
\$100 million Debt Payment Fund which will be used partly for the September 2022 coupon payment and the remainder released in June 2023, upon achieving six months production at an annualized rate of 3.8 bcm/year from the Karish asset in Israel.
Non-Current
| 30 June 2022 (Unaudited) |
31 December 2021 | |
|---|---|---|
| \$'000 | \$'000 | |
| Crude oil | 35,297 | 32,832 |
| Raw materials and supplies | 45,010 | 54,371 |
| Total inventories | 80,307 | 87,203 |
| 30 June | 31 December | |
|---|---|---|
| 2022 (Unaudited) | 2021 | |
| \$'000 | \$'000 | |
| Trade and other receivables-Current | ||
| Financial items: | ||
| Trade receivables | 166,130 | 178,804 |
| Receivables from partners under JOA | 8,534 | 5,138 |
| Other receivables1 | 26,749 | 38,683 |
| Government subsidies2 | 2,946 | 3,212 |
| Receivable Vat | 73,742 | 42,376 |
| Receivables from related parties (note 23) | - | 1 |
| 278,101 | 268,214 | |
| Non-financial items: | ||
| Deposits and prepayments3 | 19,392 | 17,139 |
| Deferred issuance expenses | 4,940 | 2,095 |
| Other deferred expenses4 | 22,958 | - |
| Accrued interest income | 646 | 1,078 |
| 47,936 | 20,312 | |
| 326,037 | 288,526 | |
| Trade and other receivables-Non Current | ||
| Financial items: | ||
| Other tax recoverable | 14,795 | 16,478 |
| 14,795 | 16,478 | |
| Non-financial items: | ||
| Deposits and prepayments | 11,398 | 12,337 |
| Other deferred expenses4 | - | 22,958 |
| Other non-current assets | 501 | 866 |
| 11,899 | 36,161 | |
| 26,694 | 52,639 |
1 Included in other receivables is \$26 million (31 December 2021: \$29.4million) cash on account in relation to the hedges in Italy
2 Government subsidies mainly relate to grants from Greek Public Body for Employment and Social Inclusion (OAED) to financially support the Kavala Oil S.A. labour cost from manufacturing under the action plan for promoting sustainable employment in underdeveloped or deprived districts of Greece.
3Mainly relates to prepayments for goods and services under the GSP Engineering, Procurement, Construction and Installation Contract (EPCIC) for the Epsilon project.
4In accordance with the Gas Sale and Purchase Arrangements (GSPAs) signed with a group of gas buyers, the Company has agreed to pay compensation due to the fact the first gas supply date is taking place beyond the 30 June 2021. The compensation, amounting to \$23million, was fully paid in H2 2021 and presented as a current asset as it will be accounted for as variable consideration in line with IFRS 15 against the first gas sale once production commences and gas is delivered to the offtakers, which is expected within the next 12 months.
The below tables outline the share capital of the Company.
| Equity share capital allotted and fully paid |
Share capital | Share premium | |
|---|---|---|---|
| Number | \$'000 | \$'000 | |
| Issued and authorized | |||
| At 1 January 2021 | 177,089,406 | 2,367 | 915,388 |
| Issued during the year | |||
| - New shares | - | - | - |
| - Share based payment | 513,154 | 7 | - |
| At 31 December 2021 | 177,602,560 | 2,374 | 915,388 |
| Issued during the period | |||
| - Share based payment | 437,945 | 6 | - |
| Share Premium Reduction1 | (500,000) | ||
| At 30 June 2022 (Unaudited) | 178,040,505 | 2,380 | 415,388 |
1 Energean plc by special resolution reduced its share premium account, as confirmed by an Order of the High Court of Justice on the 14 June 2022.
| 30 June 2022 (Unaudited) |
31 December | |
|---|---|---|
| 2021 | ||
| \$'000 | \$'000 | |
| Non-current | ||
| Bank borrowings - after two years but within five years | ||
| 4.5% Senior Secured notes due 2024 (\$625 million) | 618,741 | 617,060 |
| 4.875% Senior Secured notes due 2026 (\$625 million) | 616,930 | 615,966 |
| Convertible loan notes (\$50 million) | 43,458 | 41,495 |
| Bank borrowings - more than five years | ||
| 6.5% Senior Secured notes due 2027 (\$450 million) | 442,682 | 442,107 |
| 5.375% Senior Secured notes due 2028 (\$625 million) | 616,107 | 615,451 |
| 5.875% Senior Secured notes due 2031 (\$625 million) | 615,473 | 615,047 |
| BSTDB Loan and Greek State Loan Notes | 33,366 | - |
| Carrying value of non-current borrowings | 2,986,757 | 2,947,126 |
| Current | ||
| Carrying value of current borrowings | - | - |
| Carrying value of total borrowings | 2,986,757 | 2,947,126 |
The Group has provided security in respect of certain borrowings in the form of share pledges, as well as fixed and floating charges over certain assets of the Group.
On 24 March 2021, the Group completed the issuance of US\$2.5 billion aggregate principal amount of senior secured notes. The Notes were issued in four series as follows:
The interest on each series of the Notes is be paid semi-annually, on 30 March and on 30 September of each year.
The Notes are listed for trading on the TACT Institutional of the Tel Aviv Stock Exchange Ltd. (the "TASE").
The Company has provided the following collateral in favour of the Trustee:
First rank fixed charges over the shares of Energean Israel Limited, Energean Israel Finance Ltd and Energean Israel Transmission Ltd, the Karish & Tanin Leases, the gas sales purchase agreements ("GSPAs"), several bank accounts, Operating Permits (once issued), Insurance policies, the Company exploration licenses and the INGL Agreement.
Floating charge over all of the present and future assets of Energean Israel Limited and Energean Israel Finance Ltd.
Energean Power FPSO (subject to using commercially reasonable efforts, including obtaining Israel Petroleum Commissioner approval and any other applicable governmental authority).
On 25 February 2021, the Group completed the acquisition of the remaining 30% minority interest in Energean Israel Ltd from Kerogen Investments No.38 Limited, Energean now owns 100% of Energean Israel Limited.
This resulted in a reduction of the Group's reported non-controlling interest balance to \$nil at 31 December 2021.
The total consideration includes:
On 18 November 2021, the Group completed the issuance of \$450 million of senior secured notes, maturing on 30 April 2027 and carrying a fixed annual interest rate of 6.5%.
The interest on the notes is paid semi-annually on 30 April and 30October of each year.
The notes are listed for trading on the Official List of the International Stock Exchange ("TISE").
The issuer is Energean plc and the Guarantors are Energean E&P Holdings, Energean Capital Ltd, Energean Egypt Ltd, and Energean Egypt Services JSC.
The company undertook to provide the following collateral in favour of the Security Trustee:
On 27 December 2021 EOGSA entered into a loan agreement with Black Sea Trade and Development Bank for €90.5 million to fund the development of Epsilon Oil Field. The loan is subject to an interest rate of EURIBOR plus a margin of 2% on 90% of the loan (guaranteed portion) and 4.9% margin on 10% of the loan (unguaranteed portion). The loan has a final maturity date 7 years and 11 months after first disbursement.
On 27 December 2021 EOGSA entered into an agreement with Greek State to issue €9.5 million of notes maturing in 8 years with fixed rate -0.31% plus margin as outlined in the table below:
| Year | Margin |
|---|---|
| 1 | 3.0% |
| 2 | 3.5% |
| 3 | 3.5% |
| 4 | 4.5% |
| 5 | 4.5% |
| 6 | 4.5% |
| 7 | 5.5% |
| 8 | 6.5% |
The Group defines capital as the total equity and net debt of the Group. Capital is managed in order to provide returns for shareholders and benefits to stakeholders and to safeguard the Group's ability to continue as a going concern.
Energean is not subject to any externally imposed capital requirements. To maintain or adjust the capital structure, the Group may put in place new debt facilities, issue new shares for cash, repay debt, engage in active portfolio management, adjust the dividend payment to shareholders, or undertake other such restructuring activities as appropriate.
| 30 June 2022 (Unaudited) | 31 December 2021 | ||
|---|---|---|---|
| \$'000 | \$'000 | ||
| Net Debt | |||
| Current borrowings | - | - | |
| Non-current borrowings | 2,986,757 | 2,947,126 | |
| Total borrowings | 2,986,757 | 2,947,126 | |
| Less: Cash and cash equivalents | (673,708) | (730,839) | |
| Restricted cash | (138,409) | (199,729) | |
| Net Debt (1) | 2,174,640 | 2,016,558 | |
| Total equity (2) | 813,060 | 717,123 | |
| Gearing Ratio (1/2): | 267.46% | 281.2% |
| Borrowing costs including |
Foreign | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1 January 2022 | Cash inflows | Cash outflows |
Reclassificati on |
Addition s |
Lease modification |
amortisation of arrangement fees |
exchange impact |
30 June 2022 | |
| \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | \$'000 | |
| 2022 | 3,294,459 | 35,835 | (85,970) | (365) | 746 | (897) | 97,229 | (3,858) | 3,337,179 |
| Secured Senior Notes | 2,905,631 | - | (77,763) | - | - | - | 82,065 | - | 2,909,933 |
| Convertible loan notes | 41,495 | - | - | - | - | - | 1,963 | - | 43,458 |
| Long -term borrowings | - | 35,835 | (2,422) | (365) | - | - | 365 | (47) | 33,366 |
| Lease liabilities | 44,425 | - | (5,785) | - | 746 | (897) | 734 | (3,811) | 35,412 |
| Deferred licence payments | 57,230 | - | - | - | - | - | 2,868 | - | 60,098 |
| Contingent consideration Deferred consideration for |
78,450 | - | - | - | - | - | 1,322 | - | 79,772 |
| acquisition of minority | 167,228 | - | - | - | - | - | 7,912 | - | 175,140 |
| 30 June 2022 (Unaudited) \$'000 |
31 December 2021 \$'000 |
|
|---|---|---|
| Defined benefit obligation | 1,957 | 2,767 |
| Provision for retirement benefits recognised Allocated as: |
1,957 | 2,767 |
| Non-current portion | 1,957 | 2,767 |
| 30 June 2022 (Unaudited) | 31 December 2021 | |
|---|---|---|
| \$'000 | \$'000 | |
| At 1 January | 2,767 | 7,839 |
| Change in estimate | - | (3,463) |
| Current service cost | 52 | 191 |
| Interest cost | 21 | 13 |
| Extra payments or expenses | 2,934 | 775 |
| Actuarial losses - from changes in financial assumptions | (48) | 162 |
| Benefits paid | (3,574) | (2,314) |
| Transfer in/(out) | - | (34) |
| Exchange differences | (195) | (402) |
| At 30 June / 31 December | 1,957 | 2,767 |
| Decommissioning provision |
Litigation and other provisions |
Total | ||
|---|---|---|---|---|
| \$'000 | \$'000 | \$'000 | ||
| At 1 January 2022 | 802,098 | 11,294 | 813,392 | |
| New provisions | 1,443 | 1,443 | ||
| Change in estimates | (11,469) | - | (11,469) | |
| Recognised in property, plant and equipment | (11,469) | - | (11,469) | |
| Recognised in Intangible assets | - | - | - | |
| Recognised in profit& loss | - | - | - | |
| Payments | (1,474) | (1,474) | ||
| Unwinding of discount | 5,261 | 5,261 | ||
| Currency translation adjustment | (67,719) | (2,927) | (70,646) | |
| At 30 June 2022 (Unaudited) | 726,697 | 9,810 | 736,507 | |
| Current provisions | 12,133 | - | 12,133 | |
| Non-current provisions | 714,564 | 9,810 | 724,374 |
Decommissioning provision
The decommissioning provision represents the present value of decommissioning costs relating to oil and gas properties, which are expected to be incurred up to 2040, when the producing oil and gas properties are expected to cease operations.
The key assumptions underpinning the estimated decommissioning provision are as follows:
| Cessation | |||||
|---|---|---|---|---|---|
| Inflation | Discount rate | of productio n |
30 June | 31 December |
|
| assumption 30 June 2022 |
assumption 30 June 2022 |
assumptio n |
2022 \$'000 |
2021 \$'000 |
|
| Greece | 0.8%- 2.4% | 2.87% | 2034 | 13,610 | 17,058 |
| Italy | 1.1% - 1.4% | 1.23% | 2022-2040 | 485,560 | 527,801 |
| UK | 2.5% | 1.49% | 2023-2031 | 183,878 | 203,246 |
| Israel1 | 2.0%-5.3%1 | 3.43%1 | 2041 | 26,609 | 35,525 |
| Croatia | 1.8% | 1.25% | 2022 | 17,040 | 18,467 |
| Total | 726,697 | 802,097 |
1US inflation rate and US Bond rates have been used.
Litigation and other claim provision relates to litigation actions currently open in Italy with the Termoli Port Authority in respect of the fees payable under the marine concession regarding FSO Alba Marina serving the Rospo Mare field. Energean Italy Spa has appealed these cases to the Campobasso Court of Appeal. None of the other cases has yet had a decision on the substantive issue. The Group provided \$7.5 million (€7.2 million) against an adverse outcome of these court cases.
Energean Italy SpA has currently open litigations with three municipalities in Italy related to the imposition of real estate municipality taxes (IMU/TASI), interest and related penalties concerning the periods 2016 to 2019. For the years before 2019, Edison SpA bears uncapped liability for any amount assessed according to the sale and purchase agreement (SPA) signed between the companies while Energean is liable for any tax liability related to tax year 2019. For all three cases, Energean Italy SpA (together with Edison SpA, as appropriate) filed appeals presenting strong legal and technical arguments for reducing the assessed taxes as well as cancelling the assessed penalties. Based on legal advice received, the Group strongly believes that the outcome of the court decisions will be in its favour with no material exposure expected in excess of the provision of \$2.2 million (€2.1million) recognised.
It is not currently possible to accurately predict the timing of the settlement of these claims and therefore the expected timing of the cash flows have been disclosed as non-current based timings of the next court hearing dates.
| 30 June 2022 | ||
|---|---|---|
| (Unaudited) | 31 December 2021 | |
| \$'000 | \$'000 | |
| Trade and other payables-Current | ||
| Financial items: | ||
| Trade accounts payable | 154,181 | 109,525 |
| Payables to partners under JOA1 | 41,607 | 43,499 |
| Deferred licence payments due within one year2 | 24,466 | - |
| Deferred consideration for acquisition of minority | 175,140 | 167,228 |
| Other creditors | 19,618 | 12,043 |
| Short term lease liability | 8,394 | 8,253 |
| 30 June 2022 (Unaudited) \$'000 |
31 December 2021 \$'000 |
|
|---|---|---|
| 423,406 | 340,548 | |
| Non-financial items: | ||
| Contract Liability3 | 54,690 | - |
| Accrued Expenses4 | 87,848 | 64,823 |
| Other finance costs accrued | 37,581 | 36,693 |
| Social insurance and other taxes | 4,328 | 7,643 |
| 184,447 | 109,159 | |
| 607,853 | 449,707 | |
| Trade and other payables-Non Current | ||
| Financial items: | ||
| Trade and other payables5 | 122,579 | - |
| Deferred licence payments2 | 35,632 | 57,230 |
| Contingent consideration (note 7) | 79,772 | 78,450 |
| Long term lease liability | 27,018 | 36,172 |
| 265,001 | 171,852 | |
| Non-financial items: | ||
| Contract Liability3 | - | 53,537 |
| Social insurance | 663 | 598 |
| 663 | 54,135 | |
| 265,664 | 225,987 |
1 Payables related to operated Joint operations primarily in Italy
2In December 2016, Energean Israel acquired the Karish and Tanin offshore gas fields for a \$40.0 million closing payment with an obligation to pay additional consideration of \$108.5 million plus interest at an annual rate of 4.6% in ten equal annual payments. As at 30 June 2022 the total discounted deferred consideration liability remaining was \$60 million (31 December 2021: \$57 million). The Sale and Purchase Agreement ("SPA") includes provisions in the event of Force Majeure that prevents or delays the implementation of the development plan as approved under one lease for a period of more than ninety (90) days in any year following the final investment decision. In the event of Force Majeure, the applicable annual payment of the remaining consideration will be postponed by an equivalent period of time, and no interest will be accrued in that period of time as well. Due to the effects of the COVID-19 pandemic which constitute a Force Majeure event, the deferred payment due in March 2022 was postponed accordingly.
3In June 2019, Energean signed an agreement with Israel Natural Gas Lines ("INGL") for the transfer of title (the "hand over") of the nearshore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin FPSO into the Israeli national gas transmission grid. As consideration, INGL will pay Energean 369 million Israeli new shekel (ILS) (c. \$115 million) for the infrastructure being built by Energean which will be paid in accordance with milestones detailed in the agreement. The agreement covers the onshore section of the Karish and Tanin infrastructure and the nearshore section of pipeline extending to approximately 10km offshore. It is intended that the hand over to INGL will become effective at least 90 days after the delivery of first gas from the Karish field which expected within weeks. Following Hand Over, INGL will be responsible for the operation and maintenance of this part of the infrastructure.
4Included in trade payables and accrued expenses in HY22 and FY21 are mainly Karish field-related development expenditures (mainly FPSO and subsea construction cost) and the NEA/NI project in Egypt.
5 The amount represents an amount payable to Technip in respect of costs incurred starting 1 April 2022 until completion, in terms of the EPCIC contract. The amount is payable in eight equal quarterly deferred payments due after practical completion date and therefore has been discounted at 5.831%. p.a.
Analysis of share-based payment charge
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Energean Deferred Bonus Plan (DSBP) | 609 | 530 | |
| Energean Long Term Incentive Plans (LTIP) | 2,217 | 1,944 | |
| Total share-based payment charge | 2,826 | 2,474 | |
| Capitalised to intangible and tangible assets | 109 | 207 | |
| Expensed as cost of sales | - | 5 | |
| Expensed as administration expenses | 2,717 | 2,247 | |
| Expensed to exploration and evaluation expenses | - | 14 | |
| Expensed as other expenses | - | 1 | |
| Total share-based payment charge | 2,826 | 2,474 |
Under the LTIP, Senior Management can be granted nil exercise price options, normally exercisable from three to ten years following grant provided an individual remains in employment. The size of awards depends on both annual performance measures and Total Shareholder Return (TSR) over a period of up to three years. There are no post-grant performance conditions. No dividends are paid over the vesting period; however, Energean's Board may decide at any time prior to the issue or transfer of the shares in respect of which an award is released that the participant will receive an amount (in cash and/or additional Shares) equal in value to any dividends that would have been paid on those shares on such terms and over such period (ending no later than the Release Date) as the Board may determine. This amount may assume the reinvestment of dividends (on such basis as the Board may determine) and may exclude or include special dividends.
The weighted average remaining contractual life for LTIP awards outstanding at 30 June 2022 was 1.6 years, number of shares outstanding 2,103,849 and weighted average price at grant date £8.49.
Under the DSBP, the portion of any annual bonus above 30 per cent of the base salary of a Senior Executive nominated by the Remuneration Committee was deferred into shares.
Deferred awards are usually granted in the form of conditional share awards or nil-cost options (or, exceptionally, as cash-settled equivalents). Deferred awards usually vest two years after award although may vest early on leaving employment or on a change of control.
The weighted average remaining contractual life for DSBP awards outstanding at 30 June 2022 was 1.3 years, number of shares outstanding 230,707 and price at grant date £10.05.
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
The Directors of Energean Plc are considered to be the only key management personnel as defined by IAS 24. The following information is provided in relation to the related party transaction disclosures provided in note 23b below:
Adobelero Holdings Co Ltd. is a beneficially owned holding company controlled by Panos Benos, the CFO of the Group. Growthy Holdings Co Ltd is a beneficially owned holding company controlled by Matthaios Rigas, the CEO of the Group. Oil Co Investments Limited is beneficially owned and controlled by Efstathios Topouzoglou, a Non-Executive Director of the Group.
Seven Maritime Company (Seven Marine) is a related party company controlled by one the Company's shareholders Mr Efstathios Topouzoglou. Seven Marine owns the offshore supply ship Energean Wave which support the Group's operation in northern Greece.
Capital Earth: During the period ended 30 June 2022 the Group received consultancy services from Capital Earth Limited, a consulting company controlled by the spouse of one of Energean's executive directors, for the provision of Group Corporate Social Responsibility Consultancy and Project Management Services.
Prime Marine Energy Inc: Following a competitive tender process, the Group entered into an agreement to purchase a Field Support Vessel ("FSV") from Prime Marine Energy Inc., a company controlled by director and shareholder at Energean plc, for \$33.3 million. The FSV is being constructed to meet the Group's specifications and will provide significant in-country capability to support the Karish project, including FPSO re-supply, crew changes, holdback operations for tanker offloading, emergency subsea intervention, drilling support and emergency response. The purchase of this multi-purpose vessel will enhance operational efficiencies and economics when compared to the leasing of multiple different vessels for the various activities.
| 30 June (Unaudited) | |||
|---|---|---|---|
| 2022 | 2021 | ||
| \$'000 | \$'000 | ||
| Nature of transactions | |||
| Other related party "Seven Marine" | Vessel leasing | 1,079 | 993 |
| Other related party "Prime Marine | Construction of field | ||
| Energy Inc" | support vessel | 1,556 | 3,300 |
| Other related party "Capital Earth | |||
| Ltd" | Consulting services | 48 | 46 |
| 2,683 | 4,339 |
| 30 June 2022 (Unaudited) \$'000 |
31 December 2021 \$'000 |
||
|---|---|---|---|
| Nature of balance | |||
| Seven Marine | Vessel leasing | 232 | 417 |
| 232 | 417 |
In acquiring its oil and gas interests, the Group has pledged that various work programmes will be undertaken on each permit/interest. The exploration commitments in the following table are an estimate of the net cost to the Group of performing these work programmes:
| 30 June 2022 | 31 December | |
|---|---|---|
| (Unaudited) | 2021 | |
| \$'000 | \$'000 | |
| Capital Commitments: | ||
| Due within one year | 35,866 | 20,575 |
| Due later than one year but within two years | 38,658 | 51,180 |
| Due later two years but within five years | 2,035 | 1,497 |
| 76,559 | 73,252 | |
| Contingent liabilities: | ||
| Performance guarantees*: | ||
| Greece | 2,540 | 1,176 |
| Israel | 101,100 | 89,683 |
| UK | 83,320 | 99,570 |
| Italy | 13,551 | 21,292 |
| Egypt | 2,000 | - |
| Montenegro | - | 566 |
* Performance guarantees are in respect of abandonment obligations, committed work programmes and certain financial obligations
Karish and Tanin Leases (\$25 million) - As part of the requirements of the Karish and Tanin Lease deeds, the Group provided the Ministry of National Infrastructures, Energy and Water with bank guarantees for each lease. The bank guarantees expire 29 June 2023.
Blocks 12, 21, 22, 23 and 31 (\$21.1 million)- As part of the requirements of the exploration and appraisal licences which granted to the Group during the Israeli offshore bid in December 2017, the Group provided the Ministry of National Infrastructures, Energy and Water in January 2018 with bank guarantees for all 5 blocks mentioned above. The bank guarantees are in force until 13 January 2023. Additionally, a bank guarantee related Block 12 drilling was issued in November 2021 and is in force until 17 December 2022.
Blocks 55, 56, 61 and 62, also known as "ZONE D" (\$3.2million)- As part of the requirements of the exploration and appraisal licences which granted to the Group during the Israeli 2nd offshore bid in July 2019, the Group provided the Ministry of National Infrastructures, Energy and Water in January 2018 with bank guarantees for all 4 blocks mentioned above. The bank guarantees are in force until 28 September 2022.
Israeli Natural Gas Lines ("INGL") (\$47.3million) - As part of the agreement signed with INGL on June 2019 the Group provided INGL bank guarantee in order to secure the milestone payments from INGL. These bank guarantees are in force until 30 November 2022 (\$42.1million) and June 2023 (\$5.2million).
202,511 212,287
Israel Other (\$4.4million) - As part of ongoing operations in Israel, the Group has provided various bank guarantees to third parties in Israel.
United Kingdom: Following the Edison E&P acquisition, the Group issued letters of credit amounting to \$83.3 million for United Kingdom decommissioning obligations and other obligations under the United Kingdom licenses.
Italy: Following the Edison E&P acquisition, the Group issued letters of credit amounting to \$13.5 million for decommissioning obligations and other obligations under the Italian licenses.
The Group had no material contingent liabilities as of 30 June 2022 and 31 December 2021.
On 27 July 2022 the Company sent a formal notice to the Ministry of Energy asking the relinquishment of Zone D licenses and discontinue any work regarding them. The licenses will expire at the end of their term, i.e., on October 27, 2022.
At 30 June 2022, the Group had investments in the following subsidiaries:
| Name of subsidiary | Country of incorporation / registered office |
Principal activities | Shareholding At 30 June 2022 (%) |
Shareholding At 31 December 2021 (%) |
|---|---|---|---|---|
| Energean E&P Holdings Ltd | 22 Lefkonos Street, 2064 Nicosia, Cyprus |
Holding Company | 100 | 100 |
| Energean Capital Ltd | 22 Lefkonos Street, 2064 Nicosia, Cyprus |
Holding Company | 100 | 100 |
| Energean MED Limited | 44 Baker Street, London W1U 7AL, United Kingdom |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Oil & Gas S.A. | 32 Kifissias Ave. 151 25 Marousi Athens, Greece |
Oil and gas exploration, development and production |
100 | 100 |
| Energean International Limited |
22 Lefkonos Street, 2064 Nicosia, Cyprus |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Israel Limited | 22 Lefkonos Street, 2064 Nicosia, Cyprus |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Montenegro Limited |
22 Lefkonos Street, 2064 Nicosia, Cyprus |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Israel Finance SARL |
560A rue de Neudorf, L-2220, Luxembourg |
Financing activities | 100 | 100 |
| Energean Israel Transmission LTD |
Andre Sakharov 9, Haifa, Israel | Gas transportation license holder |
100 | 100 |
| Energean Israel Finance LTD | Andre Sakharov 9, Haifa, Israel | Financing activities | 100 | 100 |
| Energean Egypt Limited | 22 Lefkonos Street, 2064 Nicosia, Cyprus |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Hellas Limited | 22 Lefkonos Street, 2064 Nicosia, Cyprus |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Italy S.p.a. | Piazza Sigmund Freud 1 20154 Milan,Italy |
Oil and gas exploration, development and production |
100 | 100 |
| Energean International E&P S.p.a. |
Piazza Sigmund Freud 1 20154 Milan,Italy |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Sicilia Srl | Via Salvatore Quasimodo 2 - 97100 Ragusa (Ragusa) |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Exploration Limited |
44 Baker Street, London W1U 7AL, United Kingdom |
Oil and gas exploration, development and production |
100 | 100 |
| Name of subsidiary | Country of incorporation / registered office |
Principal activities | Shareholding At 30 June 2022 (%) |
Shareholding At 31 December 2021 (%) |
|---|---|---|---|---|
| Energean UK Ltd | 44 Baker Street, London W1U 7AL, United Kingdom |
Oil and gas exploration, development and production |
100 | 100 |
| Energean Egypt Energy Services JSC |
Building 11, 273 Palestine Street New Maadi , Cairo EGYPT |
Oil and gas exploration, development and production |
100 | 100 |
| Country | Fields | Fiscal Regime | Group's working interest |
Field Phase | Joint Operation |
Operator |
|---|---|---|---|---|---|---|
| Israel | ||||||
| Karish | Concession | 100% | Development | No | NA | |
| Tanin | Concession | 100% | Development | No | NA | |
| Blocks 12, 21, 22, 23, 31 |
Concession | 100% | Exploration | No | NA | |
| Four licenses Zone D | Concession | 80% | Exploration | Yes | Energean | |
| Egypt | ||||||
| Abu Qir | PSC | 100% | Production | No | NA | |
| Abu Qir North | PSC | 100% | Production | No | NA | |
| Abu Qir West | PSC | 100% | Production | No | NA | |
| Yazzi | PSC | 100% | Development | No | NA | |
| Python | PSC | 100% | Development | No | NA | |
| Field A (NI-1X) | PSC | 100% | Exploration | No | NA | |
| Field B (NI-3X) | PSC | 100% | Exploration | No | NA | |
| NI-2X | PSC | 100% | Exploration | No | NA | |
| North East Hap'y | PSC | 30% | Exploration | Yes | ENI | |
| Viper (NI-4X) | PSC | 100% | Exploration | No | NA | |
| Greece | ||||||
| Prinos | Concession | 100% | Production | No | NA | |
| Epsilon | Concession | 100% | Development | No | NA | |
| Prinos exploration area |
Concession | 100% | Exploration | No | NA | |
| South Kavala | Concession | 100% | Production | No | NA | |
| Katakolo | Concession | 100% | Undeveloped | No | NA | |
| Ioannina | Concession | 40% | Exploration | Yes | Repsol | |
| West Patraikos | Concession | 50% | Exploration | Yes | HELPE | |
| Block-2 | Concession | 75% | Exploration | Yes | Energean | |
| Italy | ||||||
| Vega A | Concession | 100% | Production | Yes | Energean | |
| Vega B | Concession | 100% | Production | Yes | Energean |
Energean plc - Half Year Results Page | 56
| Country | Fields | Fiscal Regime | Group's working interest |
Field Phase | Joint Operation |
Operator |
|---|---|---|---|---|---|---|
| Rospo Mare | Concession | 100% | Production | Yes | Energean | |
| Verdicchio | Concession | 100% | Production | No | NA | |
| Vongola Mare | Concession | 95% | Production | Yes | Energean | |
| Gianna | Concession | 49% | Development | Yes | ENI | |
| Accettura | Concession | 50% | Production | Yes | Energean | |
| Anemone | Concession | 19% | Production | Yes | ENI | |
| Appia | Concession | 50% | Production | Yes | Energean | |
| Argo-Cassiopea | Concession | 40% | Development | Yes | ENI | |
| Azalea | Concession | 16% | Production | Yes | ENI | |
| Calipso | Concession | 49% | Production | Yes | ENI | |
| Candela Dolce | Concession | 40% | Production | Yes | ENI | |
| Candela Povero | Concession | 40% | Production | Yes | ENI | |
| Carlo | Concession | 49% | Production | Yes | ENI | |
| Cassiano | Concession | 50% | Production | Yes | Energean | |
| Castellaro | Concession | 50% | Production | Yes | Energean | |
| Cecilia | Concession | 49% | Production | Yes | ENI | |
| Clara East | Concession | 49% | Production | Yes | ENI | |
| Clara North | Concession | 49% | Production | Yes | ENI | |
| Clara Northwest | Concession | 49% | Production | Yes | ENI | |
| Clara West | Concession | 49% | Production | Yes | ENI | |
| Comiso | Concession | 100% | Production | No | NA | |
| Cozza | Concession | 85% | Production | Yes | Energean | |
| Daria | Concession | 49% | Production | Yes | ENI | |
| Didone | Concession | 49% | Production | Yes | ENI | |
| Emma West | Concession | 49% | Production | Yes | ENI | |
| Fauzia | Concession | 40% | Production | Yes | ENI | |
| Giovanna | Concession | 49% | Production | Yes | ENI | |
| Leoni | Concession | 50% | Production | Yes | Gas Plus | |
| Monte Urano-San Lorenzo |
Concession | 40% | Production | Yes | Energean | |
| Naide | Concession | 49% | Production | Yes | ENI | |
| Portocannone | Concession | 62% | Production | Yes | Energean |
| Group's working |
Joint | |||||
|---|---|---|---|---|---|---|
| Country | Fields | Fiscal Regime | interest | Field Phase | Operation | Operator |
| Quarto | Concession | 33% | Production | Yes | Padana Energia | |
| Ramona | Concession | 49% | Production | Yes | ENI | |
| Regina | Concession | 25% | Production | Yes | ENI | |
| Salacaro | Concession | 50% | Production | Yes | Energean | |
| San Giorgio Mare | Concession | 95% | Production | Yes | Energean | |
| San Marco | Concession | 100% | Production | No | NA | |
| Santa Maria Mare | Concession | 96% | Production | Yes | Energean | |
| Santo Stefano | Concession | 95% | Production | Yes | Energean | |
| Sarago Mare | Concession | 85% | Production | Yes | Energean | |
| Sinarca | Concession | 40% | Production | Yes | Gas Plus | |
| Talamonti | Concession | 50% | Production | Yes | Energean | |
| Tresauro | Concession | 25% | Production | Yes | Enimed | |
| UK | ||||||
| Garrow | Concession | 68% | Production | Yes | Alpha Petroleum |
|
| Kilmar | Concession | 68% | Production | Yes | Alpha Petroleum |
|
| Scott | Concession | 10% | Production | Yes | CNOOC | |
| Telford | Concession | 16% | Production | Yes | CNOOC | |
| Wenlock | Concession | 80% | Production | Yes | Alpha Petroleum |
|
| Glengorm | Concession | 25% | Exploration | Yes | CNOOC | |
| Isabella | Concession | 10% | Exploration | Yes | Total Energies E&P North Sea UK Limited |
|
| Montenegro | ||||||
| Block 26, 30 | Concession | 100% | Exploration | No | NA | |
| Croatia | ||||||
| Irena | PSC | 70% | Exploration | No | NA | |
| Izabela | PSC | 70% | Production | No | NA | |
| Malta | ||||||
| Blocks 1, 2 and 3 of Area 3 |
Concession | 100% | Exploration | No | NA |
Energean plc - Half Year Results Page | 59
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