Energean plc (LON:ENOG, TASE: אנאג) has this morning provided an update on recent operations and the Group’s trading performance in the 3-months to 31st March 2021.
Highlights
· Production in the four-months to 30 April 2021 was 44.2 kboepd (72% gas)
o 15% ahead of the mid-point of full year guidance
o Guidance increased to 38 – 42 kboepd (from 36 – 41 kboepd)
· First production from Karish now expected in mid-2022 following the re-introduction of enhanced COVID-19-related restrictions in Singapore
o Core focus on optimising the revised timetable with approximately 30 improvements being considered for implementation and not reflected in the schedule
· Final Investment Decision (“FID”) taken on two growth projects, offshore Israel:
o $70 million second oil train that will enable increased production of approximately 5 million barrels of hydrocarbon liquids per year at minimal incremental operating costs
o $40 million second gas sales riser, which will enable gas production at the full 8 Bcm/yr capacity of the FPSO
· Rig contract award for the 2022/2023 five-well growth drilling programme, offshore Israel, is expected to be signed shortly
o Targeting more than 1 billion barrels of oil equivalent of prospective resources
o Athena well on Block 12 expected to spud in 1Q 2022
· FID taken on the revised Epsilon project, offshore Greece:
o Tieback to existing Prinos infrastructure with first oil expected around year-end 2022
· Greek parliamentary approval has been granted for the Prinos area funding package. Investment targets:
o Unlevered IRRs in excess of 30%
o Peak production rates in excess of 10 kboepd
o Extending the life of the fields as a pre-cursor to the implementation of carbon capture and underground storage (“CCUS”)
· $122 million of receivables collection in Egypt December 2020 – April 2021 (inclusive), following closing of the acquisition of Edison E&P in December 2020
· At 30 April 2021, following the refinancing of Energean Israel Limited’s project finance facility and term loan on 29 April 2021, Energean had cash resources of $1.1 billion, providing financial flexibility and ensuring that all planned activities are fully-funded
· 2021 year-end net debt guidance reduced to between $1.9 billion and $2.0 billion (from $2.0 billion to $2.2 billion)
Mathios Rigas, Chief Executive of Energean commented:
“Although COVID-19 continues to present challenges, we continue to deliver upon all of our promises that are within our control. Our production is 15% ahead of guidance, we have taken Final Investment Decision on three low-cost, high-return organic projects and have $1.1 billion of cash on our balance sheet, providing financial flexibility and ensuring that we are fully-funded for all of our planned investments.
Due to the ongoing impact of COVID-19 in Singapore, we are prudently updating our guidance for Karish first gas to reflect revised forecasts from our EPCiC contractor, TechnipFMC; but we continue to work together to improve the timetable. Although unfortunate, the revised timetable should not have a material impact on the 15+ year secured revenue stream of our Israeli gas business.
In the near-term, we expect to sign a rig contract for our Israel-growth programme, commencing 2022, and with the potential to double the size of our resource base. We have also recently received Greek parliamentary approval of the Prinos area funding package, which will enable us to extend the productive life of the area as a precursor to the implementation of our carbon capture and eco-hydrogen plans.”
