Energean plc Announces 2020 Full Year Results

Source: www.gulfoilandgas.com 4/19/2021, Location: Europe

Energean plc has announced its audited full-year results for the year ended 31 December 2020 ("FY 2020").

Mathios Rigas, Chief Executive Officer, Energean commented:

"2020 was clearly a challenging year, but nevertheless a successful one for Energean. We completed our acquisition of Edison E&P, agreed to acquire the minority interest in Energean Israel Limited and made solid progress on our flagship Karish gas development.

"Strong momentum has continued into 2021; we have sanctioned the high-return Karish North and NEA/NI projects and successfully completed a $2.5 billion bond issuance at extremely attractive rates, significantly extending the average maturity-profile of our debt.

"Our focus in Israel is delivery of first gas from Karish and commencing our 1 billion boe growth programme. Together, these actions will significantly advance us towards our target of paying a meaningful and sustainable dividend and meeting our growth ambitions through targeting low-risk, high return opportunities.

"We remain fully committed to our net zero target and in 2021 we will roll out three initiatives across all of our operated sites: i) switching to purchasing "green" electricity; ii) introduce a zero-routine-flaring policy; and iii) establish procedures to reduce methane emissions.

"In the next stage of our transition strategy, we will apply new technologies to older fields, converting them into carbon capture and underground storage facilities, starting with Prinos. This will leverage our subsurface expertise to accelerate our path to net zero through implementation of NPV-positive initiatives. We are rapidly establishing ourselves as the leading independent, gas-focused E&P company in the Mediterranean with an aspiration to lead the region's energy transition."

Highlights

Completed the acquisition of Edison E&P for a net consideration of $203 million, approximately $1.0/2P boe

Karish approximately 87% complete at 31 December 2020 (90% at 31 March 2021)

Total gas sales and purchase agreements ("GSPAs") in Israel now 7.4 Bcm/yr on plateau, utilising 93% of the Energean Power FPSO capacity

Increased 2P reserves by 187%[3] to 982 million barrels of oil equivalent ("MMboe"), 79% of which is gas

Average working interest pro forma production of 48.3 kboed (3.6 kbopd on a consolidated basis) with pro forma4 cost of production[6] of $11.3/boe ($21.4 /boe on a consolidated basis)

Pro forma revenues were $336 million ($28 million on a consolidated basis). Pro forma4 EBITDAX5 was $108 million ($(8) million on a consolidated basis). Pro forma4 capital expenditure5 was $565 million ($429 million on a consolidated basis)

$65 million impairment charge reflects the impact of price and production assumptions on the Prinos field

67% year-on-year reduction in carbon emissions intensity when considering 2020 pro forma performance data versus 2019 Energean standalone data

Post Balance Sheet

Took final investment decision ("FID") on the Karish North and NEA/NI projects in January 2021

Closed the acquisition of the 30% minority interest in Energean Israel Limited ("EISL") on 25 February 2021

Increased working interest in the producing Rospo Mare and Vega fields, offshore Italy, to 100%, at zero cost

Issued $2.5 billion of senior secured notes, removing a key perceived risk on the Karish project and significantly extending the company's average debt maturity

Confirmed a lower three-year CO2 intensity target of 9.5kg/boe, approximately half the current global average for the oil and gas industry

Outlook

2021 working interest production expected to be 36.0 - 41.0 kboepd, increased by 1 kboed due to the absorption of the Rospo Mare and Vega interests. Average working interest production in the three-months to 31 March 2021 was approximately 44.0 kboepd

2021 development and production capital expenditure guidance reduced to $470 - 550 million (from $510 - 590 million previously), of which $350 - 400 million relates to Karish and Karish North

Future dividend policy to be defined, targeting inaugural dividend payment in 2022

Energean continues to work towards first gas from Karish in 1Q 2022. The shipyard in Singapore remains under limitations imposed by COVID-related restrictions, including limited access to workers and yard productivity. Energean is working with its contractors to firm up this timetable and will update the market as the situation evolves

Rig contract award for 2022 growth drilling campaign, offshore Israel, expected in 2Q 2021

Contract awards for Karish North tie back and riser installation, and (separately) second oil train installation on the Energean Power FPSO

Offtake agreement for Karish liquids expected 2H 2021

Renewable energy usage to be rolled-out across operated assets and premises following successful implementation at Prinos

Zero-routine-flaring policy to be introduced across all operated sites

Progress carbon capture and underground storage feasibility study at Prinos


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