Energean plc achieved a new production record in June, reaching 177 thousand barrels of oil equivalent per day, of which 84% was in natural gas. As disclosed by the company’s management in the context of the announcement of the first half results to the London and Tel Aviv stock exchanges, the development mainly reflects the significant increase in demand for natural gas during the summer in Israel.
It is worth noting here that the 140 thousand barrels of oil equivalent (86% in natural gas) are from assets that will remain in Energean’s portfolio after the completion of the recent deal with Carlyle.
Overall in the first half of the year, daily production was 146 thousand barrels of oil equivalent (82% in gas), up 38% year-on-year. In the assets that will remain in Energean’s portfolio, production was 106 thousand barrels of oil equivalent (84% in gas), up 47% year-on-year.
Main developments
Key developments in Energean’s performance in the first half of the year include:
– The strategic agreement to sell to Carlyle the assets in Egypt, Italy and Croatia, which is expected to be completed by the end of the year and which will ensure the company has sufficient liquidity to repay the €450 million Corporate Bond and distribute a special dividend to shareholders.
– The start of production from the Karish North offshore gas field in Israel and Cassiopea offshore gas field in Italy (Operator ENI), while in August the production of natural gas from the Location B offshore field in Egypt started.
– Achieving revenues of $867 million (+47% year-on-year) of which $643 million is from assets to be retained in Energean’s portfolio. Also, the achievement of adjusted earnings before interest, taxes, depreciation and amortization (EBITDAX) of $568 million (+65% year-on-year) of which $436 million from the assets to be retained in the company. In addition, net income was $89 million (+27% year-on-year), and it is noteworthy that net profitability from assets that will remain with Energean amounted to $116 million.
– The dividend distribution of $0.30 per share for the second quarter to be paid on September 30; including this distribution, a total of $486 million will have been distributed to the company’s shareholders, with Energean maintaining its commitment to distribute dividends totalling $1 billion by the end of 2025.
– Further reducing the company’s carbon footprint, with emissions (Scope 1 and Scope 2) falling by 20% annually, to 8.5 kg of carbon dioxide per barrel of oil equivalent produced (kgCO2e/boe). In the assets that will remain with the company, the emissions reduction is even greater, at 6.2 kgCO2e/boe.
– The taking of the Final Investment Decision for the development of the Katlan offshore field in Israel, the start of production from which is set for the first half of 2027 and can also be used for export.
– The filing of an application for a storage permit for the carbon dioxide (CO2) storage project in Prinos, which is expected to be received within the next few months. Engineering design procedures and the required geological and technical studies are also progressing, with the aim of increasing the storage capacity of Prinos from 1 million tonnes of CO2 in the first phase to 3 million tonnes of CO2 in the second phase of the project.
– The commencement and continuation of the Anchois-3 appraisal well in Morocco in the Atlantic Ocean, with early indications pointing to gas volumes lower than initial estimates.
Mathios Rigas: Significant progress on all our strategic priorities
Commenting on the first half results, Mathios Rigas, CEO of Energean plc Group, said:
“We are delighted to announce the best results in Energean’s history, with double-digit percentage growth in production, revenue and profitability. In Israel we achieved record production, driven by summer demand and the excellent performance of the FPSO ‘Energean Power’. Our operation remained resilient to the ongoing geopolitical developments and our production was not affected.
Our strong operational and financial performance supports our dividend distribution for the second quarter, consistent with our overall dividend policy. As we have already communicated, the dividend policy will be reset following the completion of the Carlyle deal.
We also made significant progress across our strategic priorities: we advanced our gas-focused projects with the receipt of the Final Investment Decision for the Katlan field and the start of production at the Cassiopea and Location B fields, while our carbonation activities are underway with a focus on CO2 storage at Prinos, Kavala, for which we expect to receive a storage license for 1 million tonnes per year in the coming months.
All of this is just the beginning of a new chapter in Energean’s story. The combination of operational excellence and the achievement of important agreements is the foundation for the new Energean to continue to deliver on its commitments to its shareholders. We continue to be committed to returning value to them, to capital discipline and to responsible energy production with the impressive ratings we achieve against our Environmental, Social and Corporate Governance criteria.”
Full-year estimates
For the full year 2024, Energean estimates that the group’s production will be between 155 and 165 thousand barrels of oil equivalent per day, of which 115-125 thousand will come from the assets retained in the portfolio. Capital expenditure on development and production is estimated at $600-700 million, increased mainly due to the Katlan field development project in Israel.
