Energean Oil and Gas plc Substantial progress in advancing flagship Karish and Tanin development project

Energean Oil and Gas plc (LON: ENOG, TASE: אנאג), the oil and gas producer focused on the Mediterranean, is pleased to announce its full-year results for the year ended 31 December 2018.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented:

“In 2018 we made substantial progress in advancing our flagship Karish and Tanin development project and remain on-track to deliver first gas in 1Q 2021. We secured $13 billion of future revenues by signing 12 Gas Sales Agreements to deliver a total volume of 4.6 bcma, firmly underpinning the project’s economics, signed a lump-sum, turnkey EPCIC contract with TechnipFMC, simplified project management, reduced our financial risk exposure, and secured funding for the project through the combination of a $1.3 billion project finance facility and the funds raised through our IPO on the LSE in March 2018. We remain focused on delivering the project and our medium-term strategy is to secure both the additional resource and offtake for the remaining spare capacity in our 8 bcma FPSO, which we believe will create significant further value for all of our stakeholders. In Greece, we grew production by 45% whilst simultaneously reducing costs per barrel by 29%, a tangible result of our commitment to optimising cash flows from our producing assets. We also commenced exploration activities in Western Greece and Montenegro. We continue to target value-enhancing opportunities in the Mediterranean area and aim to replicate the growth achieved over the last decade.”

Operational and Financial highlights

· Increased 2P reserves to 347 million barrels with 2C resources of 58 million barrels, a combined 35% year-on-year increase.

· Delivered upon our milestones for achieving first gas from Karish and Tanin in 1Q 2021:

– Secured $460 million of equity and a US$1.275 billion project finance facility in March 2018;

– Took Final Investment Decision in March 2018;

– Achieved first steel cuts on the FPSO hull and topsides in November and December; and

– Commenced the four well drilling campaign on 28 February 2019; spudded Karish North on 15 March 2019.

· Secured $13bn of future revenues by signing 12 Gas Sales Agreements (excluding Or), to supply an average 4.6 bcma to the Israel domestic market.

· Signed an MOU with INGL for the transfer of the onshore infrastructure following first gas, which will result in cash inflow of NIS 369 million ($98 million) for Energean Israel.

· Delivered 4,053 bopd of production (2017: 2,803 bopd), a 45% year-on-year increase.

· Sanctioned the Epsilon development, commenced platform construction and the drilling programme.

· Reduced cost of production by 29% to $17.6/bbl (FY 2017: $24.7/bbl).

· Submitted the ESIA for the Katakolo project and commenced seismic operations in Western Greece, Israel and Montenegro.

· Listed on the London and Tel Aviv Stock Exchanges, subsequently becoming a constituent of the FTSE 250 and TA-35 indices.

Outlook

· Results from Karish North.

· Completion of the three Karish Main development wells including an exploration component.

· Sailaway of the Energean Power FPSO Hull from China to Singapore for integration of the topsides

· Continued pursuit of our strategy to secure both the resource and offtake for the remaining spare capacity in our 8 bcma FPSO.

· 2019 average production narrowed to 5,000 – 5,500 bopd, reflecting the delay experienced by the Epsilon extended reach well.

· Continued progress at Epsilon. Drilling of the extended reach well has been completed and the well completion is ongoing with first oil expected before the end of March. Pre-drilling of the vertical wells and platform construction is ongoing.

· Conclusions from early stage seismic operations in Israel, Montenegro and Western Greece.