Energean triples gas production in H1 of 2023
07:58 - 08 September 2023
![Collage Maker-08-Sep-2023-07-58-AM-4730](/images/ynuqWY3R30-NcxSMreCbQiY3nCc=/711174/width-750/2023/09/08/Collage_Maker-08-Sep-2023-07-58-AM-4730.jpg)
Energean Plc announced that for the first semester of 2023 its production has tripled, compared to the same period of 2022.
Production for the period was 105.9 kboed (thousands of barrels of oil equivalent per day), nearly triple that of H1 2022.
Moreover, Karish production is currently steady at about 6 bcm/yr of oil equivalent.
In a press release, the company said the completion of commissioning under the gas sales agreements (“GSAs”) achieved in April, with Practical Completion under the EPCIC with Technip having been achieved in June.
In addition, optimisation activities on the FPSO and subsea systems have progressed well, according to the company, and the Energean Power FPSO achieved 97% uptime in August. Efficiency levels have followed a similarly positive trajectory and production is currently steady, averaging around 570 million standard cubic feet per day (about 6 bcm/yr of oil equivalent) over the last three weeks.
Energean Power FPSO capacity increase to 8 bcm/yr is on track for delivery by the end of 2023, according to the company, which also notes that positive results were also achieved at the second and third NEA/NI (Egypt) development wells, reinforcing Energean’s view that the results from NEA #6 would have no read-across to the remainder of the field; NEA#5 came on-stream in July 2023 and is producing in line with pre-drill expectations, whilst PY#1 testing has delivered results in line with expectations. Remaining two wells are expected on-stream in 2023, Energean notes.
Moreover, Cassiopea development is progressing in line with expectations: pipe-laying is complete and sub-sea installation activities are progressing well. Additionally, final investment decision (“FID”) on Katlan is expected in late 2023. As far as Orion 1X is concerned, drilling is expected to commence in Q4 2023, the company says.
Energean notes that 2023 production guidance is revised to 120 – 130 kboed (from 125 – 140 kboed), reflecting start-up issues that have now been substantially overcome, while it notes that it is on track to deliver near-term targets of 200 kboed, $2.5 billion revenues.
The company has delivered strong financial results, underpinned by the contribution of Karish and despite the softer commodity price environment. Its revenues for H1 2023 was $587.6 million, noting a 73% increase compared to the same period of 2022 and adjusted earnings before interest, taxes, depreciation, and amortization of $345.2 million, a 74% increase.
Cash Cost of Production is at $12.1/boe, a 37% decrease, while Group cash, as of 30 June 2023, was $357.9 million, including restricted amounts of $11.5 million, and total liquidity was $897.4 million.
In July 2023, Energean’s subsidiary, Energean Israel Finance Limited (“Energean Israel”), issued a $750 million bond, the primary purpose of which was to repay Energean Israel’s March 2024 bond. The newly issued bond matures in 2033, and extends Energean’s weighted average debt maturity from just over five to over six years.
Additionally, Energean declared a Q2 2023 dividend of 30 US$ cents/share declared, in line with company's dividend policy, scheduled to be paid on 29 September 2023. Following this payment, cumulative dividends of $266 million (150 US$ cents/share) will have been returned to shareholders.
Lastly, emissions intensity dropped by 36%, compared to H1, 2022.
Energean's CEO, Mathios Rigas, commented that the company "is now a major energy producer in the Eastern Mediterranean".
"We are pleased with the positive demand in the market for our gas and will continue to focus on optimising production efficiency", he added.
Rigas noted that, regarding the company's growth projects, which target to increase production to 200 kboed by H2 2024, "Karish North and the FPSO capacity increase projects (Israel), NEA/NI (Egypt) and Cassiopea (Italy) are all progressing well".
“We are also preparing for FID on Katlan later in the year. Given the export potential from the Katlan licence, we plan to engage with local and international buyers to market our gas. Elsewhere, we look forward to the spudding of the Orion-1X exploration well next quarter, offshore Egypt, with our partner Eni".
“We continue to be disciplined and focused on stable predictable cashflows, which underpin Energean’s goals of consistent returns to shareholders, low leverage and growth through responsibly produced energy", he concluded.