TIDMENOG
RNS Number : 6996Y
Energean PLC
08 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Energean plc
("Energean" or the "Company")
Results for Half Year Ended 30 June 2022
London, 8 September 2022 - Energean plc (LSE: ENOG TASE: ) is
pleased to announce its half-year results for the six months ended
30 June 2022 ("H1 2022").
Mathios Rigas, Chief Executive of Energean, commented:
"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 $1.75 billion, underpinned by
production of more than 200 kboed.
"In a year where global focus has shifted to security of energy
supply and affordability of energy for the consumers, we remain
proud of our landmark ESG commitments, which remain at the heart of
our operations. From choosing to focus on gas as the driver of
energy transition; to a 74% reduction in emissions intensity since
2019 [1] ; to our commitment to be net zero by 2050, and our
ongoing positive engagement with the communities that host our
operations, we commit to being the best version of Energean
possible.
"Finally, the global energy dynamic changed in February 2022.
Russia's tragic invasion of Ukraine revealed a major weakness in
European energy security and, by extension, European energy policy.
Overreliance on a single supplier has - and will continue to -
fundamentally disrupt the European global energy dynamic. We
therefore call on governments and the broader international energy
stakeholder community to recognise the value of natural gas as the
foundation of, and catalyst for, a just transition. Policy must be
adjusted to encourage domestic upstream projects that will enhance
security of energy supply as well as international energy
transportation projects that will interconnect Europe with the East
Med, which can be a stable and reliable supplier of energy for the
European consumer."
Highlights - Operational and Corporate
-- Declared maiden quarterly dividend of 30 US$ cents/share
o Accelerated timetable due to strong cash flows from the
ex-Edison E&P assets, readiness of Karish project and strong
liquidity position
o Aligned with commitment to:
-- Return an initial $50 million per quarter no later than the
end of 2022 and at least $1 billion by the end of 2025
-- Provide a reliable and progressive dividend stream to
shareholders, expecting to reach a minimum of $100 million per
quarter once medium-term targets are achieved
-- On track to deliver first gas from Karish within weeks
-- 58 bcm of resources de-risked across the Olympus Area
following successful results from the Athena exploration well in
May 2022; Zeus elected for the fifth drilling slot with the aim of
further refining volumetrics and enabling faster progress to
commercialisation
-- Ongoing drilling operations on the Hermes prospect, with
results expected later this year
-- New spot gas sales agreement signed with Israel Electric
Corporation (" IEC ") in March 2022, enhancing ability to fill the
capacity of the Energean Power FPSO
-- Improved gas sales prices confirmed in Egypt and Israel
o Abu Qir Production Sharing Contract ("PSC") amendment increases gas sales prices
o 13% increase in the Israeli Price Tariff ("PT") raises current
weighted average sales price to $4.3/mmBTU (approximately
$4.6/mcf)
Highlights - Financial
-- Strong half-year financial results underpinned by strong commodity prices
o Revenues were $339.0 million, a 65% increase versus H1 2021
($205.5 million)
o Adjusted EBITDAX was $198.2 million [2] , a 165% increase
versus H1 2021 ($74.7 million)
o Group cash as of 30 June 2022 was $812.1 million (including
restricted amounts of $138.4 million)
-- H1 production was 35.4 kboed (73% gas), a 19.5% reduction
year-on-year, primarily due to anticipated natural decline at Abu
Qir, which is expected to be offset by production from NEA/NI,
expected onstream by the end of 2022
-- One-off windfall tax in Italy totalling $29.3 million (40%
paid in H1 2022, with the remainder to be paid by end-November
2022). The Company continues to advocate for domestic energy
investment to support Italian energy and socio-economic
security
H1 2022 H1 2021 Increase /
(Decrease)
$m $m %
Average working interest
production (kboed) 35.4 44.0 (19.5)
---------- --------- ------------
Sales and other revenue 339.0 205.5 65.0
---------- --------- ------------
Cash Cost of Production
[3] 123.3 122.4 0.7
---------- --------- ------------
Cash Cost of Production
per boe 19.2 15.4 24.7
---------- --------- ------------
Cash S,G&A(6) 15.1 17.0 (11.4)
---------- --------- ------------
Adjusted EBITDAX [4] 198.2 (3) 74.7 165.3
---------- --------- ------------
Operating cash flow
[5] 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
---------- --------- ------------
Outlook
-- Medium-term targets increased following confirmation of
improved gas prices in Israel and Egypt
o Annual revenues now expected to be $2.5 billion (up from $2.0
billion)
o Annual Adjusted EBITDAX(6) now expected to be $1.75 billion
(up from $1.4 billion)
-- First gas from Karish on track for delivery within weeks
-- First gas from NEA/NI, Egypt is on track for year-end 2022
-- Results from the Hermes and Zeus wells, expected later this year
-- 2022 net debt guidance reduced to $2.4 - $2.5 billion (down from $2.6 - $2.8 billion)
-- 2022 production guidance (ex-Israel) narrowed to 34 - 37 kboed (from 35 - 40 kboed)
o H2 production (ex-Israel) expected to benefit from the
start-up of the Abu Qir NAQ-PII#6 infill well and recommencement of
production at fields in Italy following planned maintenance in June
2022
o Israel production rate in Q4 2022 expected to average 60 - 100
kboed (15 - 25 kboed on a 2022 annualised basis)
-- Per barrel financial and operational metrics expected to be
significantly enhanced following first gas from Karish
o Cash Cost of Production expected to reduce to $14 - 18/boe
o Emissions intensity expected to reduce to 7 - 8 kgCO2e/boe,
approximately half the current average for the global oil and gas
industry
Enquiries
For capital markets: ir@energean.com
Kate Sloan, Head of IR and ECM Tel: +44 7917 608 645
For media: pblewer@energean.com
Paddy Blewer, Head of Corporate Communications Tel: +44 7765 250
857
Conference call
A webcast will be held today at 08:30 BST / 10:30 Israel
Time.
Webcast: https://edge.media-server.com/mmc/p/79ysvw5a
Dial-In:
https://register.vevent.com/register/BIe2a07fbb3e0745b29986a53e01755548
(Please note, once you register for the conference call line you
will receive a unique pin code and dial-in details.)
The presentation slides will be made available on the website
shortly www.energean.com .
Maiden Dividend Declaration
Strong financial performance in H1 2022 has allowed Energean to
accelerate payment of its maiden quarterly dividend, and the
Company has today declared a dividend of 30 US$ 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.
Energean Operational Review
Production
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:
-- Commencement of production from the Abu Qir NAQ-PII#6 infill well
-- Resumption of production at Rospo Mare, Italy, following planned maintenance in June 2022
-- Commencement of production from Karish
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
-------- ---------------------- --------
Israel
Karish Project
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.
Growth Projects
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.
Drilling Campaign
1. Athena Gas Discovery
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.
2. Karish Main (KM-04)
In June 2022, Energean safely and successfully completed the
KM-04 appraisal well. The KM-04 appraisal well achieved the
following:
-- Gas and associated liquids were encountered in the previously
undrilled fault block between Karish Main and Karish North;
-- Gas was encountered in the A-sands on the flanks of the
Karish Main structure, these sands were tested and fluid samples
obtained; and
-- An oil rim was confirmed in the central part of the field,
with thickness towards the lower end of the pre-drill expectation
range (5-10 metres vs. 0-100 metres pre-drill). A sample of oil was
obtained for testing. Energean expects to be able to commercialise
the oil volumes through the existing well stock.
Additional analysis is being undertaken to further refine
reserves volumes and the liquids-to-gas ratio across the Karish
lease.
3. Hermes Exploration Well
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.
4. Zeus Well
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.
Gas and Liquids Contracts and Gas Pricing
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.
Egypt
Production
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
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.
Abu Qir
Commercial
During August 2022, Abu Qir Petroleum and EGPC agreed an
amendment to the PSC, resulting in improved gas sales pricing.
Drilling programme
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.
Receivables
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.
Italy
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.
Windfall tax
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.
Rest of producing portfolio
In the six-months to 30 June 2022, w orking 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.
Greece
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.
Croatia
Energean is continuing FEED activities for the development of
the Irena gas field. The target for final investment decision
remains Q4 2022.
United Kingdom
The Isabella appraisal well spudded in September 2022.
Energean Corporate Review
ESG
Net Zero
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 levels [6] ; and a 74% reduction
versus the 2019 base measurement year [7] . Post-first 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.
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.
Corporate
In July 2022, Energean re-entered the Tel Aviv Stock Exchange 35
Index.
2022 guidance
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 49.0 - 62.0
(kboed)
-----------------------------
Total production, excluding Israel 34.0 - 37.0
(kboed)
-----------------------------
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
-----------------------------
Decommissioning expenditure ($
million) 15
-----------------------------
Energean Financial Review
Financial results summary
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 production [8] ($m) 123.3 122.4 0.74%
-------- -------- --------
Cash cost of production per barrel
($/boe) [9] 19.2 15.4 24.7%
-------- -------- --------
Cash SG&A [10] 15.1 17.0 (11.2%)
-------- -------- --------
Adjusted EBITDAX [11] ($m) 198.2 74.7 165.3%
-------- -------- --------
Profit/(Loss) after tax ($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) 2,174.6 [12] 2,016.6 7.8%
------------- -------- --------
Revenue, production and commodity prices
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 start-up 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:
-- During H1 2022, the average Brent oil price was $104.9/bbl
(H1 2021: $65.2/bbl) and the average PSV (Italian gas) price was
EUR101.2/MWh ($32.4/mcf) (1H 2021: EUR21.2/MWh ($7.3/mcf))
-- Commodity price strength underpinned 1H 2022 total revenues
of $339 million (H1 2021: $206 million). Gas sales were $211
million (H1 2021: $106 million) with a post-hedge realised PSV
price in Italy EUR82.6/MWh or $26.6/mcf (H1 2021: EUR20.6/MWh or
$4.7/mcf). Liquid sales, crude and petroleum product, were $145
million (H1 2021: $99 million), with a realised price of $87.5/boe
(H1 2021: $47.3/boe).
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.
Underlying cash production costs
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 price-drive higher
revenues.
Depreciation, impairments and write-offs
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 income and expenses
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.
Finance income / costs
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).
Commodity hedging
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 EUR39.60/MWh($12.7mcf).
Taxation
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
Profit after tax was $118.7 million (1H 2021: $35.7 million
loss). This increase is primarily due to the $134 million
year-on-year 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.
Operating cash flow
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.
Capital Expenditures
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).
Net Debt
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 $138.4million of restricted cash).
The Senior Secured Notes (both at Energean Plc and Energean
Israel) have fixed interest rates, a blended average interest rate
of approximately 5%, and have decreased Energean's interest rate
exposure and increased Energean's weighted average debt maturity to
approximately six years.
Shareholder Distributions
Strong financial performance in H1 2022 has allowed Energean to
accelerate payment of its maiden quarterly (Q2) dividend, and the
Board is pleased to declare a dividend of 30 US$ cents per ordinary
share to be paid on 30 September 2022.
Non-IFRS measures
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
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 H1 2021
$m $m
Adjusted EBITDAX [13] 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 118.7 [14] (35.7)
----------- ---------
Cash Cost of Production
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-to-period, 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 H1 2021
$m $m
Cost of sales 158.0 147.6
--------- ---------
Less:
--------- ---------
Depreciation (32.3) (33.8)
--------- ---------
Change in inventory (2.4) 8.6
--------- ---------
Cost of production 123.3 122.4
--------- ---------
Total production for the period
(MMboe) 6.4 7.9
--------- ---------
Cost of production per boe ($/boe) 19.2(15) 15.4
--------- ---------
Cash Selling, General & Administrative Expense
(SG&A)
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 share-based
payment charge that are included in SG&A.
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 15.1 [15] 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
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 398.3(16) 230.0
---------- --------
Movement in working capital (185.3) (60.0)
---------- --------
Cash capital expenditures per the
cash flow statement 213.0(16) 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 $m
-------------------- --------------------
Development and Production
-------------------- --------------------
Israel 286.8 161.8
-------------------- --------------------
Egypt 40.9 17.5
-------------------- --------------------
Italy 9.9 11.4
-------------------- --------------------
Greece, Croatia, UK
and Other 8.7 10.1
-------------------- --------------------
Total 346.3 200.8
-------------------- --------------------
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 Cash / Debt
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 Debt [16] 2,174.6 [17] 2,016.6(18)
------------- ------------
Net Debt Excluding Israel(18) 61.7 102.6
------------- ------------
Going Concern
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.
Subsequent Events
Zone D
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.
Principal Risks and Uncertainties
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.
Overview of key risks and key changes since 31 December 2021
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:
Strategic risks
#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.
#2 Progress other key development projects
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.
#3 Deliver exploration success and reserves addition
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.
#4 Market risk in Israel
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
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.
#8 Egypt receivables
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.
#9 Decommissioning liability
Principal risk: Higher than expected decommissioning costs and
acceleration of abandonment schedules.
H1 2022 movement: The risk remained static in H1 2022.
Organisational, Compliance and Regulatory Risks
#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.
Climate Change Risks
#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.
External Risks
#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.
#16 Global pandemic
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.
Statement of Directors' responsibilities
The Directors confirm that to the best of their knowledge:
1) The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted
in the UK;
2) The interim management report contains a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year);
3) The interim management report includes a true and fair review
of the information required by DTR 4.2.8R (disclosure of related
parties' transactions and changes therein).
Mathios Rigas Panos Benos
Chief Executive Officer Chief Financial Officer
7 September 2022 7 September 2022
Inside Information
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.
Forward looking statements
This announcement contains statements that are, or are deemed to
be, forward-looking statements. In some instances, forward-looking
statements can be identified by the use of terms such as
"projects", "forecasts", "on track", "anticipates", "expects",
"believes", "intends", "may", "will", or "should" or, in each case,
their negative or other variations or comparable terminology.
Forward-looking statements are subject to a number of known and
unknown risks and uncertainties that may cause actual results and
events to differ materially from those expressed in or implied by
such forward-looking statements, including, but not limited to:
general economic and business conditions; demand for the Company's
products and services; competitive factors in the industries in
which the Company operates; exchange rate fluctuations;
legislative, fiscal and regulatory developments; political risks;
terrorism, acts of war and pandemics; changes in law and legal
interpretations; and the impact of technological change.
Forward-looking statements speak only as of the date of such
statements and, except as required by applicable law, the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. The information contained in this
announcement is subject to change without notice.
INDEPENT REVIEW REPORT TO ENERGEAN PLC
Conclusion
We have been engaged by Energean plc (the Company) to review the
condensed set of financial statements in the half-yearly 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.
Basis for Conclusion
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".
Conclusions Relating to Going Concern
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.
Responsibilities of the directors
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.
Auditor's Responsibilities for the review of the financial
information
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.
Use of our 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
Interim Condensed Consolidated Income Statement
Six months ended 30 June 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)
------------------------------------- --------- ---------- ----------
Interim Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2022
-----------------------------------------------------------------
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)
======================================== ============================== =========
Interim Condensed Consolidated Statement of Financial Position
As at 30 June 2022
---------------------------------------------------------------
--------------------------------------------------------------------------------
30 June 31 December
2022 (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
-------------------------------------- ------ ------------------ ------------
Interim Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2022
--------------------------------------------------------------
Hedge Equity
and component Share
Defined of based
Share Benefit convertible payment Translation Non
Share Premium Pension bonds(3) reserve Reserve Retained Merger -Controlling
Capital (1) Plan (2) (4) (5) earnings reserve Total Interests Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'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 - - - - - - 118,734 - 118,734 - 118,734
Remeasurement
of
defined
benefit
pension plan,
net
of tax - - 49 - - - - - 49 - 49
Hedges , net
of
tax - - (17,438) - - - - - (17,438) - (17,438)
Exchange
difference
on the
translation
of foreign
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
reduction(6) - (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
======== ========== ========= ============ ======== ======================= ============= ============ ========= ============= =========
(1) The share premium account represents the total net proceeds
on issue of the Company's shares in excess of their nominal value
of GBP 0.01 per share less amounts transferred to any other
reserves.
(2) The 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.
(3) Refers 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
(4) The 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.
Interim Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2022
--------------------------------------------------------------
Hedge Equity
and component
Defined of Share
Benefit convertible based
Share Pension bonds(3) payment Translation Non-
Share Premium Plan reserve Reserve Retained Merger Controlling
Capital (1) (2) (4) (5) earnings reserve Total Interests Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'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 - - 5,326 - - - - - 5,326 2 5,328
Exchange
difference
on the
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) 1 - - - 2,474 - - - 2,475 2,475
Acquisition
of
non-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
======== ======== ======== ============ ======== ============ ========== ======== ========== ============ ==========
Interim Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2022
------------------------------------------------------------------------------
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 Egypt(1) (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 capital adjustments 159,059 48,552
------------------------------------------- ------- ---------- ------------
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 intangible assets (18,513) (28,818)
Acquisition of a subsidiary - (3,335)
Proceeds from disposal of property, 1,996 -
plant and equipment
Movement in restricted cash 14 61,320 (266,241)
Amounts received from INGL related 17,371 -
to the future transfer of property,
plant and equipment
Interest received 2,911 861
------------------------------------------- ------- ---------- ------------
Net cash outflow for investing
activities (129,406) (438,715)
------------------------------------------- ------- ---------- ------------
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-controlling interest - (1,677)
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.
Notes to the Interim Condensed Consolidated Financial Statements
(continued)
1. Corporate Information
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.
2. Basis of preparation
2.1 Basis of preparation
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.
2.2 Going concern
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) t hroughout 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:
-- Reasonable sensitivities appropriate for the current status
of the business and the wider macro environment; and
-- the Group's ability to implement the mitigating actions, such
as deferral of Capex expenditure in the Group's control, in the
event this were required.
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.
2.3 New and amended accounting standards and interpretations
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:
-- Annual improvements to IFRS 2018-2020
-- Property, Plant and Equipment : Proceeds before intended use ( Amendments to IAS 16)
-- Onerous Contracts - Cost of Fulfilling a Contract ( Amendments to IAS 37 )
-- Reference to the Conceptual Framework (Amendments to IFRS 3)
-- AIP IFRS 9 Financial Instruments - Fees in the '10 per cent'
test for derecognition of financial liabilities
None of the above amendments had a significant impact on the
Group's interim condensed consolidated financial statements.
2.4 Approval of interim condensed consolidated financial
statements by Directors
These unaudited interim condensed consolidated financial
statements were approved by the Board of Directors on 7 September
2022.
3. Segmental Reporting
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.
Segment revenues, results and reconciliation to profit before
tax
The following is an analysis of the Group's revenue, results and
reconciliation to profit/ (loss) before tax by reportable
segment:
Europe Israel Egypt Other & Total
inter-segment
transactions
$'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 EBITDAX(1) 122,423 (5,343) 79,914 1,171 198,165
Reconciliation to profit
before tax:
Depreciation and amortisation
expenses (11,303) (110) (22,258) (214) (33,885)
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
operations 146,256 (5,618) 29,026 (50,930) 118,734
------------------------------- ---------- ---------- ---------- --------------- ----------
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 EBITDAX (1) 9,685 (1,563) 69,113 (2,584) 74,651
Reconciliation to profit
before tax: -
Depreciation and amortisation
expenses (21,586) (50) (14,256) (451) (36,343)
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)
Profit from continuing
operations (14,442) (7,547) 32,872 (46,541) (35,658)
------------------------------- ---------- ---------- ---------- --------------- ----------
(1) 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 (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:
Europe Israel Egypt Other & inter-segment Total
transactions
$'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 assets 1,496 34,386 - 1,076 36,958
-------------------------- ---------- ---------- --------- ------------------------- ----------
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:
- 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
Europe Israel Egypt Other & Total
inter-segment
transactions
$'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
--------------------------- --------- ----------- --------- --------------- -----------
4. Revenue
30 June (Unaudited)
2022 2021
$'000 $'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
5. Operating profit/(loss) before taxation
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
Selling and distribution
(c) expense
Staff costs 116 29
Other Selling and distribution
expense 158 73
--------- ----------------------------------- -------- ---------------------
Total selling and distribution
expense 274 102
(b) Total Administrative and
+ (c) Selling Expenses 19,349 21,770
Exploration and evaluation
(d) 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
5. Operating profit/(loss) before taxation (continued)
30 June (unaudited)
2022 2021
$'000 $'000
(e) Other expenses
Transaction costs in relation
to Edison E&P acquisition - 1,470
Restructuring costs(1) 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
(1) One-off restructuring costs incurred in Greece
6. Net finance cost
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 of the Karish
project finance(2) - 36,200
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.
7. Fair value measurements
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.
Contingent consideration
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 EUR10/MWh when first gas production is delivered from the
field. US$100 million is payable if that average price exceeds
EUR20/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 EUR 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 reconciliation
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.
Fair values of derivative financial instruments
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 Contract Month Cargo Month Gas Sales Fixed Price
(MWs) Size 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 of
minority - 175,140 - 175,140
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 Level 2 Level Total
3
$'000 $'000 $'000 $'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 2,931,950 - 2,931,950
Borrowings - 41,495 - 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
8. Taxation
30 June (Unaudited)
2022 2021
$'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)
(b) Reconciliation of the total tax charge
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)
Tax calculated at 29.5% weighted average
rate (2021: 19.7%) (32,197) 4,035
Impact of different tax rates 1,920 13
Utilisation of unrecognised deferred tax/
(non-recognition of deferred tax) 89,417 (4,834)
Permanent differences(1) (12,758) (1,912)
Foreign taxes (5,171) (21,535)
Windfall tax(2) (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.
9. Earnings per share
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
10. Property, plant and equipment
Oil and gas properties Leased assets Other property, plant Total
and equipment
Property, plant and $'000 $'000 $'000 $'000
equipment at Cost
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
Accumulated
Depreciation
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.
11. Intangible assets
Exploration
and evaluation Other Intangible
assets Goodwill assets Total
$'000 $'000 $'000 $'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
Accumulated amortisation
and 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
Net Carrying Amount
At 31 December 2021 122,054 101,146 4,941 228,141
At 30 June 2022 149,906 101,146 5,736 256,788
12. Net deferred tax (liability)/ asset
Deferred Property, Right Decom-missioning Prepaid Inventory Tax Deferred Retirement Accrued Total
tax plant of expenses losses expenses benefit expenses
(liabilities)/assets and use and other for liability and other
equipment asset receivables tax short--term
IFRS liabilities
16
$'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) 9,848 (718) 50,808 890 (254) (32,501) 5,020 (932) 6,996 39,157
Other comprehensive
income 1,586 1,586
Reclassifications
in the current
period(1) (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
31 December
30 June 2022 2021
$'000 $'000
Deferred tax liabilities (64,542) (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.
13. Cash and cash equivalents
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% ).
14. Restricted Cash
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
- $2.8million- $2.1million required to be restricted in Interest
Service Reserve Account ('ISRA') in relation to the Greek Loan
Notes and $0.6million for Prinos Guarantee.
15. Inventories
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
16. Trade and other receivables
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 receivables(1) 26,749 38,683
Government subsidies (2) 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 prepayments (3) 19,392 17,139
Deferred issuance expenses 4,940 2,095
Other deferred expenses(4) 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 expenses(4) - 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 .
(3) Mainly relates to prepayments for goods and services under
the GSP Engineering, Procurement, Construction and Installation
Contract (EPCIC) for the Epsilon project.
(4) In 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.
17. Share capital
The below tables outline the share capital of the Company.
Equity share capital Share capital Share premium
allotted and fully
paid
Number $'000 $'000
Issued and authorized
At 1 January 2021 177,089,406 2,36 7 915,388
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 Reduction(1) (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.
18. Borrowings
30 June 2022 31 December
(Unaudited)
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.
US$2,500,000,000 senior secured notes:
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:
1. Notes in an aggregate principal amount of US$625 million,
maturing on 30 March 2024, with a fixed annual interest rate of
4.500%.
2. Notes in an aggregate principal amount of US$625 million,
maturing on 30 March 2026, with a fixed annual interest rate of
4.875%.
3. Notes in an aggregate principal amount of US$625 million,
maturing on 30 March 2028, with a fixed annual interest rate of
5.375%.
4. Notes in an aggregate principal amount of US$625 million,
maturing on 30 March 2031, with a fixed annual interest rate of
5.875%.
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:
1. 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.
2. Floating charge over all of the present and future assets of
Energean Israel Limited and Energean Israel Finance Ltd.
3. Energean Power FPSO (subject to using commercially reasonable
efforts, including obtaining Israel Petroleum Commissioner approval
and any other applicable governmental authority).
Kerogen Convertible Loan
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:
-- An up-front payment of $175 million paid at completion of the transaction
-- Deferred cash consideration amounts totalling $180 million,
which are expected to be funded from future cash flows and
optimisation of the group capital structure, post-first gas from
the Karish project. The deferred consideration is discounted at the
selected unsecured liability rate of 9.77%.
-- $50 million of convertible loan notes (the "Convertible loan
notes"), which have a maturity date of 29 December 2023, a strike
price of GBP9.50 and a zero-coupon rate
$450,000,000 senior secured notes:
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
30 October 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:
1. Share pledge of Energean Capital Ltd, Energean Egypt Ltd,
Energean Italy Ltd and Energean Egypt Services JSC
2. Fixed charges over the material bank accounts of the Company
and the Guarantors (other than Energean Egypt Services JSC)
3. Floating charge over the assets of Energean plc (other than
the shares of Energean E&P Holdings)
Energean Oil and Gas SA ('EOGSA') loan for Epsilon/Prinos
Development :
On 27 December 2021 EOGSA entered into a loan agreement with
Black Sea Trade and Development Bank for EUR90.5 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 EUR9.5 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%
Capital management
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%
Reconciliation of liabilities arising from financing
activities
Borrowing
costs
including
amortisation
of Foreign
1 January Cash Cash Lease arrangement exchange 30 June
2022 inflows outflows Reclassification Additions modification fees impact 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 78,450 - - - - - 1,322 - 79,772
Deferred
consideration
for acquisition
of
minority 167,228 - - - - - 7,912 - 175,140
19. Retirement benefit liability
19.1 Provision for retirement benefits
30 June 2022
(Unaudited) 31 December 2021
$'000 $'000
Defined benefit obligation 1,957 2,767
Provision for retirement benefits
recognised 1,957 2,767
Allocated as:
Non-current portion 1,957 2,767
19.2 Defined benefit obligation
30 June 2022 31 December
(Unaudited) 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
20. Provisions
Decommissioning Litigation Total
provision and other provisions
$'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:
Inflation Discount rate Cessation of 30 June
assumption assumption production 2022 31 December 2021
30 June 2022 30 June 2022 assumption $'000 $'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
Israel(1) 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
(1) US inflation rate and US Bond rates have been used.
Litigation and other claims provisions
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 (EUR7.2 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 (EUR2.1million)
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.
21. Trade and other payables
30 June 2022 31 December
(Unaudited) 2021
$'000 $'000
Trade and other payables-Current
Financial items:
Trade accounts payable 154,181 109,525
Payables to partners under JOA
(1) 41,607 43,499
Deferred licence payments due
within one year (2) 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
423,406 340,548
Non-financial items:
Contract Liability(3) 54,690 -
Accrued Expenses(4) 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 payables(5) 122,579 -
Deferred licence payments (2) 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 Liability(3) - 53,537
Social insurance 663 598
663 54,135
265,664 225,987
(1) Payables related to operated Joint operations primarily in
Italy
(2) In 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 .
(3) In 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.
(4) Included in trade payables and accrued expenses in HY22 and
FY21 are mainly Karish field-related development expenditures
(mainly FPSO and sub-sea 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.
22. Share based payments
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
Energean Long Term Incentive Plan (LTIP)
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
GBP8.49.
Deferred Share Bonus Plan (DSBP)
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 GBP10.05.
23. Related parties
23a. Related party relationships
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.
23b. Related party transactions
Purchases of goods and services
30 June (Unaudited)
2022 2021
$'000 $'000
Nature of transactions
Other related party
"Seven Marine" Vessel leasing 1,079 993
Other related party Construction
"Prime Marine Energy of field support
Inc" vessel 1,556 3,300
Other related party
"Capital Earth Ltd" Consulting services 48 46
2,683 4,339
23c. Related party balances
Payables
30 June 2022 31 December
(Unaudited) 2021
$'000 $'000
Nature of balance
Seven Marine Vessel leasing 232 417
232 417
24. Commitments and contingencies
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
202,511 212,287
* Performance guarantees are in respect of abandonment
obligations, committed work programmes and certain financial
obligations
Issued guarantees:
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).
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.
Legal cases and contingent liabilities
The Group had no material contingent liabilities as of 30 June
2022 and 31 December 2021.
25. Subsequent events
Zone D
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.
26. Subsidiary undertakings
At 30 June 2022, the Group had investments in the following
subsidiaries:
Name of subsidiary Country of incorporation Principal activities Shareholding Shareholding
/ registered office
At 30 June At 31 December
2022 2021
(%) (%)
Energean E&P Holdings 22 Lefkonos Street,
Ltd 2064 Nicosia, Cyprus Holding Company 100 100
Energean Capital 22 Lefkonos Street,
Ltd 2064 Nicosia, Cyprus Holding Company 100 100
Oil and gas
exploration,
44 Baker Street, London development
Energean MED Limited W1U 7AL, United Kingdom and production 100 100
Oil and gas
32 Kifissias Ave. exploration,
Energean Oil & 151 25 Marousi Athens, development
Gas S.A. Greece and production 100 100
Oil and gas
exploration,
Energean International 22 Lefkonos Street, development
Limited 2064 Nicosia, Cyprus and production 100 100
Oil and gas
exploration,
Energean Israel 22 Lefkonos Street, development
Limited 2064 Nicosia, Cyprus and production 100 100
Oil and gas
exploration,
Energean Montenegro 22 Lefkonos Street, development
Limited 2064 Nicosia, Cyprus and production 100 100
Energean Israel 560A rue de Neudorf,
Finance SARL L-2220, Luxembourg Financing activities 100 100
Energean Israel Andre Sakharov 9, Gas transportation
Transmission LTD Haifa, Israel license holder 100 100
Energean Israel Andre Sakharov 9,
Finance LTD Haifa, Israel Financing activities 100 100
Oil and gas
exploration,
Energean Egypt 22 Lefkonos Street, development
Limited 2064 Nicosia, Cyprus and production 100 100
Oil and gas
exploration,
Energean Hellas 22 Lefkonos Street, development
Limited 2064 Nicosia, Cyprus and production 100 100
Oil and gas
exploration,
Energean Italy Piazza Sigmund Freud development
S.p.a. 1 and production 100 100
20154 Milan,Italy
Oil and gas
exploration,
Energean International Piazza Sigmund Freud development
E&P S.p.a. 1 and production 100 100
20154 Milan,Italy
Oil and gas
exploration,
Energean Sicilia Via Salvatore Quasimodo development
Srl 2 - 97100 Ragusa (Ragusa) and production 100 100
Oil and gas
exploration,
Energean Exploration 44 Baker Street, London development
Limited W1U 7AL, United Kingdom and production 100 100
Oil and gas
exploration,
44 Baker Street, London development
Energean UK Ltd W1U 7AL, United Kingdom and production 100 100
Building 11, 273 Palestine Oil and gas
Energean Egypt Street exploration,
Energy Services New Maadi , Cairo development
JSC EGYPT and production 100 100
27. Exploration, Development and production interests
Country Fields Fiscal Regime Group's working Field Phase Joint Operation Operator
interest
Israel
Karish Concession 100% Development No NA
Tanin Concession 100% Development No NA
Blocks 12, 21, 22, Concession 100% Exploration No NA
23, 31
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 Concession 100% Exploration No NA
area
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
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 Concession 40% Production Yes Energean
Lorenzo
Naide Concession 49% Production Yes ENI
Portocannone Concession 62% Production Yes Energean
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 Concession 100% Exploration No NA
Area 3
[1] When considering H1 2022 data versus 2019 Energean
standalone (pre-Edison acquisition)
[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
[3] Cash Cost of Production is defined in the Financial Review
section. Includes $17.4 million of flux costs.
[4] Cash S ,G&A and Adjusted EBITDAX are defined in the
Financial Review section
[5] After working capital movements
[6] On an equity share basis
[7] 2019 data is Energean standalone (pre-Edison
acquisition)
[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
[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
[15] Numbers may not sum due to rounding
[16] Inclusive of restricted cash
[17] Numbers may not sum due to rounding
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END
IR BKFBNDBKKACK
(END) Dow Jones Newswires
September 08, 2022 02:01 ET (06:01 GMT)
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