Energean on track to deliver first gas at Karish and Tanin in 1Q 2021

Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has delivered its full-year results for the year ended 31 December, 2018, announcing the company is on track to deliver first gas Karish and Tanin in 1Q 2021, adding a four-well drilling campaign in Israel commenced February, 2019.

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;

– 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.

Energean Oil & Gas – Full Year Results ($m)

Sales revenue:  90.3 (2018) – 57.8 (2017).

Cost of production ($/boe) 17.6 (2018) – 24.7 (2017)

Operating profit/(loss) 23.8 (2018) – 13.7 loss (2017)

Adjusted EBITDAX 52.4 (2018) – 20.7 (2017)

Operating cash flow 62.7 (2018) – 29.1 (2017)

Capital expenditure 494.6 (2018) – 67.7 (2017)