EPH

Coal-fired power plants rank as EU’s biggest polluters

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Greenhouse gas emissions rose by 6 percent in the EU’s ETS in 2022, compared to 2021, but remained lower than levels recorded in pre-pandemic 20219, a new study by energy thinktank Ember has shown.

Though coal-related emissions are on a downward trajectory, coal was responsible for over 60 percent of emissions in EU electricity generation last year, according to the study.

The EU’s ten biggest polluters are coal-fired power plants – most of these are located in Poland and Germany – and were responsible for 25 percent of the energy sector’s emissions in 2022, according to the Ember study.

Greece recorded a marginal 0.1 percent increase in overall greenhouse gas emissions, while the country’s lignite-fired power plant emissions increased by 1.1 percent in 2022.

Greece was ranked low in terms of green energy’s share of the energy mix, which reached 43 percent in 2022. Lignite-fired electricity production’s share of the energy mix reached 10.4 percent in Greece last year, the study showed.

Over the past six years, three energy companies have ranked as the EU’s biggest greenhouse gas emitters, these being Germany’s RWE, Poland’s PGE and the Czech Republic’s EPH, the study showed.

RWE topped this list in 2022 with 75 Mt CO2e, a 3 percent increase compared to 2021. Greek power utility PPC emitted 15.9 Mt CO2 in 2022.

Big week for energy privatizations, approaching finales

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It is a big week for the country’s energy privatizations with gas company DEPA Infrastructure’s tender set to reach a concluding stage tomorrow and that of distribution network operator DEDDIE/HEDNO also approaching its finale as its binding bids are scheduled to be opened on Friday.

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, has, according to sources, submitted the highest bid in the DEPA Infrastructure sale, offering an 100 percent stake, and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by tomorrow.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

As for the privatization of DEDDIE/HEDNO, a power utility PPC subsidiary, four binding offers, for a 49% stake, have been submitted by major international funds CVC Capital Partners Group, First Sentier Investors Group, KKR Group, and the Macquarie Group. This level of participation could boost bid levels. Offers of over 1.5 billion euros, or even 1.7 billion euros, could be unveiled, sources have anticipated.

The rebounding economy, potential of Greece’s energy market, as well as the statures of all five suitors involved in the two sales could result in two of the country’s most lucrative privatization agreements, in all sectors.

Italgas, DEPA Infrastructure’s top bidder, step from acquisition

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Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is now one step away from acquiring Greece’s DEPA Infrastructure as, according to energypresss sources, it has submitted the highest bid in the DEPA Infrastructure sale and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by September 8.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

The preferred bidder may be officially announced on September 9. The sale procedure is expected to be finalized by the end of the year as national and European authorities will need to re-certify DEPA Infrastructure as a natural gas network operator under its new ownership to emerge from the sale.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

The preferred bidder will also submit an offer for the remaining 49 percent stake in EDA THESS, based on an agreement reached between TAIPED, the privatization fund, with Italy’s Eni Gas e Luce, the current holder of this minority stake.

As a result, DEPA Infrastructure’s winning bidder stands to become the sole stakeholder in the three gas distribution companies.

Italgas, Czech Republic’s EPH bid for DEPA Infrastructure

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Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH) met yesterday’s deadline to submit binding bids for the 100 percent sale of gas company DEPA Infrastructure, bringing this privatization to its final stretch.

TAIPED, Greece’s privatization fund, will now need to check if the files submitted by the suitors are complete before opening up their respective financial offers.

The privatization fund’s board will inspect the first-stage files, carrying legal documents, at its next meeting, sources informed. If the files are complete, TAIPED will proceed to the next step of opening up the financial offers, but not before some time has elapsed to allow for possible objections.

If the price difference in the financial offers is no more than 15 percent, TAIPED will request improved follow-up bids from both bidders.

The preferred bidder is expected to be announced by the end of August or early September. DG Comp and DG Energy approval will then be required before an agreement can be signed for the transfer, to the winning bidder, of TAIPED’s 65 percent stake control of DEPA Infrastructure and the 35 percent stake held by Hellenic Petroleum (ELPE).

The sale of DEPA Infrastructure, controlling the distribution networks of EDA Attiki, covering the wider Athens area, EDA Thess, covering Thessaloniki and Thessaly, as well as DEDA, covering the rest of Greece, will spell the end of the Greek State’s control of the country’s low and medium-pressure natural gas pipelines.

DEPA Infrastructure sale now a showdown for two, Italgas, EPH

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With the deadline for binding bids in the 100 percent sale of gas company DEPA Infrastructure expiring tomorrow, a latest update from sources indicates that two suitors will submit offers, Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH). An additional bid by a third participant has not been ruled out.

Besides Italgas and EPH, four other bidders have qualified for the privatization’s final round, these being two Australian funds, FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II) and MACQUARIE (MEIF 6 DI HOLDINGS), international fund KKR and Chinese consortium SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

The Greek State is selling its 65 percent stake in DEPA Infrastructure, through the privatization fund TAIPED, and Hellenic Petroleum (ELPE) the other 35 percent.

Italgas’ chief executive Paolo Gallo, in an interview with Greek daily Ta Nea, has stated the company will be submitting a binding offer for the DEPA Infrastructure sale.

Italgas is Italy’s biggest natural gas distributor, holding a 34 percent market share, and also ranks as Europe’s third biggest network operator. Italgas operates 70,000 kilometers of networks serving over 1,800 municipalities.

Rival bidder EPH is a formidable energy group with vertically integrated investments in central Europe. It owns and utilizes assets in the Czech Republic, Slovakia, Germany, Italy, the UK, France, Hungary and Poland, covering a range of domains such as energy and heat production, natural gas transmission and storage, as well as distribution and supply of natural gas, heating and electricity.

DEPA Infrastructure controls gas distributors EDA Attiki and EDA THESS, both with 51 percent stakes, as well as DEDA.

DEPA Comm VDR open; 5-year stay for Infrastructure buyer

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The video data room for the privatization procedure of DEPA Commercial, one of two new gas utility DEPA entities placed for sale, is now open to prospective bidders, but initial information made available is limited to non-financial details.

Financial details on DEPA Commercial will be made available as a second step to all consultants representing the potential buyers, while a third and final stage will follow to conditionally offer bidders confidential information in person at the DEPA headquarters.

As previously reported, the second-round, binding-bids deadline for the DEPA Commercial sale, offering investors a 65 percent stake, has been extended to March, 2021.

The field of second-round qualifiers is comprised of two partnerships, Hellenic Petroleum (ELPE) with Edison and power utility PPC with Motor Oil Hellas, plus Mytilineos, TERNA, the Copelouzos group, Shell, and the Swiss-based MET Group.

As for DEPA Infrastructure, the other new DEPA entity up for sale, energy minister Costis Hatzidakis is preparing a legislative revision that will require the winning bidder to retain its company shares for a period of at least five years.

This condition will also apply for the DEPA Infrastructure subsidiaries EDA Attiki, EDA Thess and DEDA, the gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively. DEPA fully owns DEDA and EDA Attiki and holds a 51 percent stake in EDA Thess.

The DEPA Infrastructure binding-bids deadline has also been extended to the end of February, 2021. Italgas, EPH, First State Investments, KKR, Macquarie and Sino-CEEF have qualified for the final round.

 

DEPA Infrastructure VDR open, DEPA Commercial data soon

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A virtual data room has just been opened for the six bidding teams preparing to make second-round offers in the privatization of gas company DEPA Infrastracture, an offshoot of gas utility DEPA.

Czech company EPH, Italy’s Italgas, the Australian investment funds First State Investments and Macquarie, US firm KKR and China’s Sino-CEEF & Shanghai Dazhong Public Utilities now have access to all relevant data concerning the DEPA Infrastructure sale.

Another VDR is expected to be opened within the next few days for bidders participating in the privatization of DEPA Commercial, DEPA’s other entity up for sale.

The participants in this sale, seven entries in total, are: Motor Oil Hellas-PPC, ELPE-Edison, Mytilineos, GEK-TERNA, the Copelouzos group, Dutch company Shell and the Swiss-based MET Group.

VDR information for the DEPA Commercial sale will be made available over three phases as a protective measure intended to ensure competition. The first phase, offering non-sensitive data, will be open for all. Access to VDR information during the second stage, offering sensitive data, will be restricted to consultants. Bidders will be offered conditional access to confidential information in the third phase.

Greece’s privatization fund TAIPED is aiming to declare preferred bidders for both sales in the final quarter of this year. Market officials, however, believe this is more likely to occur in the first quarter of 2021.

DEPA Commercial bidders are allowed to team up and establish consortiums but partnerships for the DEPA Infrastructure sale are not permitted.

Bidders participating in the DEPA Commercial sale are mainly eyeing the company’s prized asset, retail gas supplier and subsidiary Fysiko Aerio Attikis, covering the wider Athens area. This company already serves close to 400,000 households and 10,000 businesses.

Brussels grants investors one-month extension for PPC bids

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Investors have been given a one-month extension for second-round binding bids concerning the main power utility PPC’s sale of lignite units following the European Commission’s approval of a request made by China’s CHN Energy, which has joined forces with the Copelouzos group for this sale.

Subsequently, prospective buyers now face a November 17 deadline for their binding bids. The deadline extension had been widely anticipated over the past ten days or so following hints made by energy ministry officials at the recent Thessaloniki International Trade Fair.

The additional time provides energy ministry and PPC officials with an opportunity to negotiate with Brussels for the possible inclusion in the sale of a CAT remuneration system for lignite-fired electricity generation.

CHN Energy and the Copelouzos group had requested up to two months of additional time but the deadline extension was limited to one month by a  Monitoring Trustee overlooking the overall sale procedure on behalf of the European Commission.

Both the energy ministry and PPC officials fear offers by investors could remain low, higher CO2 emission right costs being a key factor. CAT remuneration would offer some incentive for bigger bids.

Initial hopes of a total sale price of around one billion euros for PPC lignite units and mines representing 40 percent of the utility’s overall lignite capacity have now deescalated to levels of several hundred million euros. Some investors have suggested offers could be considerably lower.

GEK-Terna, which has united with the Czech Republic’s Seven Energy for the PPC sale; another Czech firm, EPH; ElvalHalcor, a member of the Viohalko group; as well as Mytilineos, are the sale’s other second-round qualifiers.

CHN Energy requests deadline extension for PPC unit sale bids

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China’s CHN Energy, which has joined forces with the Copelouzos group for the main power utility PPC’s bailout-required sale of lignite units – offered as two respective packages representing 40 percent of the utility’s overall lignite capacity in the north and south – has requested a deadline extension of one or two months for the submission of binding offers. The current deadline expires on October 17.

CHN Energy is seeking additional time for its analysis of data collected by company officials, including through the PPC sale’s virtual data room, energypress sources informed. CHN Energy officials have forwarded numerous questions concerning the units up for sale, the sources added. Company practices, including approval procedures, applied at CHN Energy are a contributing factor to the need for additional time, sources said.

The CHN Energy request is now being examined by the European Commission, supervising the PPC sale.

Other participants do not appear to have requested more time. GEK-Terna, which has united with Seven Energy for the PPC sale, Czech firm EPH, ElvalHalcor, a member of the Viohalko group, as well as Mytilineos, have all submitted first-round expressions of interest.

The prospect of other partnerships being formed by these players does not seem probable, sources noted.

PPC officials will begin a series of management interviews today with participants for clarification of financial data collected through the video data room during the summer. Despite union resistance, some candidates managed to make on-site inspections of PPC facilities included in the sale.

 

 

PPC lignite sale regaining pace, 4 of 5 candidates interested

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Four of five investment teams that submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations appear to have sustained their interested now that the disinvestment procedure is regaining speed following the summer slowdown in August.

Investors have actively sought sale-related information in the virtual data room established for the disinvestment ahead of a series of separate interviews, planned to begin next week, with PPC officials for further clarification of the assets up for sale, including technical and financial details. Interested parties are expected to submit binding second-round offers in October.

Czech firm EPH (Energeticky a Prumyslovy Holding) appears to have retreated and will most likely not take part in the upcoming series of meetings. Until now, EPH representatives have yet to request any meeting with PPC officials.

On the contrary, Seven Energy, another Czech firm that emerged in the first round, has stationed a representative in Athens, seems very interested, and has joined forces with local powerhouse GEK Terna.

Investors still need to gain further information as the two companies founded to offer two separate sale packages, respectively representing PPC lignite units in Greece’s north and south, did not exist prior to this sale’s launch. As a result, prospective buyers need to be particularly careful and seek further details on corporate, legal and sale matters.

PPC’s chief executve Manolis Panagiotakis is not expected to participate in the power utility’s series of forthcoming meetings with investors.

Despite certain reservations as a result of lignite’s indefinite future in Greece’s energy mix, all other four investment teams appear interested in PPC’s two sale packages, representing 40 percent of the power utility’s overall lignite capacity.

Besides the GEK Terna-Seven Energy partnership, the Copelouzos group has been joined by China Energy (Beijing Guohua Power), while the Mytilineos group and ElvalHalcor also emerged in the first round.

All first-round PPC units sale participants to make next stage

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All first-round participants of the main power utility PPC’s bailout-required sale of  lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity meet the procedure’s criteria to qualify for the next stage, PPC officials have unofficially made known.

A total of six bidding schemes submitted non-binding expressions of interest for the sale’s first round, expected to end today with the announcement of qualifiers.

As of Monday, the sale’s second-round qualifiers will gain access to the procedure’s data room for two months – once they have signed confidentiality agreements – to evaluate technical and financial information concerning the power stations and mines up for sale.

A consortium comprising Beijing Guohua, a subsidiary of China’s Shenhua, and Damco Energy, a wholly owned subsidiary of the Copelouzos group; GEK-Terna; ElvalHalcor, a member of the Viohalko group; Czech firm EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING); Indoverse Coal Investments Limited, also Czech; as well as Mytilineos, all submitted first-round expressions of interest.

The wide turnout could lead to aggressive bidding in the next round, when investors will be expected to produce binding offers. However, not all pundits are convinced turnout alone will be enough to generate elevated bids for a lofty sale price.

PPC’s administration has stressed solid incentives are needed for the prospective investors, including CAT payment assurances for the units included in the disinvestment’s packages, one covering the country’s north and the other the south.

Second-round terms are expected to be announced to the qualifying schemes next week. PPC and the utility’s advisers have pushed the sale’s authorities for the most favorable terms possible in an effort to increase the sale’s appeal for investors.

PPC wants terms that will enable, even encourage, participants to join forces. Mobility is being reported among the first-round bidders, including the Czech bidders, believed to be maneuvering for possible partnerships.

The second-round terms are also expected to clarify whether participants will be permitted to submit a joint offer for the sale’s northern and southern packages. Sources said such a provision will be included in the second-round terms, based on a formula applied for the privatization of regional airports around Greece.

The PPC disinvestment’s Greek-Chinese bidding team of Beijing Guohua and Damco Energy, which yesterday signed a partnership agreement for this sale yesterday, made clear it is interested in both the northern and southern packages.

CAT eligibility vital for prospects of PPC units sale, chief notes

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The level of investor interest, asset value and achievable sale price of a bailout-required sale of main power utility PPC lignite mines and power stations will depend on whether the units being offered will be eligible for CAT remuneration, the power utility’s CEO, Manolis Panagiotakis, has told journalists.

Strong political support by the government, perhaps from its top level, will be needed as European Commission directives issued so far exclude lignite units from CAT mechanism payments, the PPC boss noted.

Conventional power stations, such as lignite-fired units, must satisfy a CO2 emission limit of 550 grams per KWh to qualify for CAT mechanism payments.

A European Commission proposal calling for even stricter limits is gaining growing support throughout Europe.

Given the developments, the PPC lignite units placed for sale will most likely remain ineligible for CAT support. If so, this will severely limit their appeal for investors in general. They would need to be taken on by industrial enterprises active in sectors eligible for mechanisms offsetting a considerable percentage of CO2 emission right costs.

Meanwhile, taking the sale process a step further, PPC shareholders yesterday approved a split from the corporation of the two lignite unit packages being offered in the sale of lignite mines and power stations, representing 40 percent of the utility’s overall lignite capacity.

Yesterday’s approval now enables PPC to open a data room through which six candidate investors will be informed on the details of assets included in the disinvestment.

“Our work begins now – to correctly inform interested parties, make appropriate presentations and highlight the details that make the units attractive investment prospects – in order to to achieve a satisfactory sale price,” PPC’s chief executive, Manolis Panagiotakis, informed journalists. “Now is also the time for the government and the European Commission to show, with action, their support for lignite-related production,” he added.

Three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, submitted first-round expressions of interest for the PPC lignite units. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants.

 

 

 

Two Czech firms emerge as PPC unit sale’s surprise contenders

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The emergence of two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, for expressions of interest in the first round of the main power utility PPC’s bailout-required sale of lignite mines and power stations, is the procedure’s surprise development so far.

Expressions of interest by three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, had been widely anticipated.

EPH is the most recent buyer of lignite units in Europe. The Czech firm acquired facilities with a total capacity of 8,000 MW in 2016. Located in Germany’s east, these lignite units were sold by Sweden’s Vattenfall. Roughly half were built in the 1980s and the other half about two decades ago.

Vattenfall, a state-owned firm, is believed to have sold these units to EPH in order to reduce its portfolio’s exposure to CO2 polluting lignite.

The corporate size of EPH is comparable to that of PPC. Its assets are valued at 12.8 billion euros and annual total turnover reaches about 6 billion euros. However, the Czech firm’s profit figures are a lot more robust. The company’s most recent EBITDA figure was reported at 1.9 billion euros.

EPH maintains assets in central Europe – Czech Republic, Slovakia, Germany, Hungary and Poland – as well as in Italy and the UK.

The EPH group was established in 2009 with the PPF group, which has invested in Greece’s OPAP state lottery, among its founding shareholders. Through subsidiaries, EPH controls and operates lignite-fired power stations, mines, telethermal systems, natural gas networks and storage facilities. It also operates as a coal trader and supplier of electricity and natural gas and owns a number of renewable energy units.

The main shareholder at EPH, 42-year-old Daniel Kretinsky, sold 31 percent of EPH Infrastructure to Australia’s Macquarie Infrastructure and Real Assets in 2016. Kretinsky also holds stakes in Czech media and is a co-owner of the Sparta Prague soccer club.

Indoverse, the other Czech firm to emerge for the first round of PPC’s sale, is active in the Czech Republic’s coal market and operates one power station and mines. Early this year, the company’s head, energy-sector investor Pavel Tykac, who is ranked one of his country’s five wealthiest individuals, declared an intention to invest over one billion euros in European coal-fired power stations.

Tykac has been involved in a number of contentious issues and has needed to face legal charges prompted by unorthodox business practices, including aggressive takeover attempts.

He is the sole owner of Sev.en Energy Group, Indoverse’s parent company. The Sev.en energy group is far smaller than Greece’s PPC. It produces approximately 10 million tons of lignite each year and operates a 410-MW lignite-fired power station.

PPC sale draws expected local players, Shenhua, Czech firms

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Three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, have – as was anticipated – all submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants. The deadline for expressions of interest expired yesterday afternoon.

PPC needs to disinvest power stations and mines units representing 40 percent of the utility’s overall lignite capacity.

The list of first-round bidders could be revised if partnerships are established or entrants fail to meet criteria enabling qualification for binding bids in the second round. The PPC board will decide on the qualifiers.

Finalized investment schemes will need to be officially declared by the end of July. A September deadline is expected to be set for binding bids.

It is not yet known if any of the sale’s early participants intend to submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.

Results of other lignite unit sales in Europe not promising for PPC

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Without a doubt, the main power utility PPC’s bailout-required sell-off of lignite units, a procedure whose market test is now in progress, will attract investor interest but the level of offers to be made remains uncertain. The results of recent lignite-unit sales agreed to in other parts of Europe are not encouraging.

The price levels investors will be prepared to pay for PPC lignite units, representing 40 percent of the utility’s lignite capacity, will determine the sale’s degree of success, as was recently pointed out by the power utility’s CEO Manolis Panagiotakis.

Prevailing market conditions, especially the EU’s decarbonization policy, do not encourage major lignite investments.

The sale, in 2016, of lignite units and mines in Germany by Sweden’s Vattenfall, one of Europe’s biggest energy firms, should serve as a good indicator for PPC. Vattenfall, which has moved to sell fossil fuel and lignite interests and instead focus on electricity generation through hydropower, wind and nuclear facilities, sold its German lignite units and mines to a joint venture involving the EPH energy group and the Czech Republic’s PPF Investments for a symbolic price of one euro, according to foreign media reports.

These lignite units, possessing installed capacity of 8,000 MW and annual production of approximately 60 TWh, employ over 7,500 persons, including workers at the mines. Half of this installed capacity concerns units that operated between 1980 and 1988 and the other half units that began operating around the millennium, making them about as old as the Meliti facility included in PPC’s sale package.

According to reports, the EPH- PPF Investments joint venture acquired assets valued at 3.4 billion euros, cash reserves of one billion euros, and also took on debt worth two billion euros. Vattenfall, the seller, posted losses of approximately two billion euros from the sale of these specific assets. Even so, Vattenfall’s president and CEO, Magnus Hall, described the sale as a good move, strategically and financially, given the current and future market conditions. The Vattenfall boss pointed out that losses would have been greater had the company continued to operate these specific units. He attributed his reasoning to dwindling wholesale electricity prices in Germany, prompted by the rapidly increasing role of renewable energy.

A discrepancy of roughly 0.4 billion euros between the net accounting value of these lignite units bought by EPH-PPF Investments and the sale-related losses reported by Vattenfall was made up by an additional electricity supply agreement.

Commenting on the deal, EPH chief Daniel Kretinsky noted that he buyer is fully aware of the current economic conditions and Vettenfall’s lignite-related activities, adding that, in the near future, EPH will not be able to offer dividends and may also experience negative cashflow, unless energy prices rebound considerably.