Energean plc

good morning ladies and gentlemen and welcome to energy in full year 2025 results call after the speaker's remarks there will be a question and answer session if you have a question we ask that you please use the raise hand function at the bottom of your zoom screen once your name has been announced please unmute yourself and ask your question if you want to withdraw your question please lower your hand using the raise hand function for those watching our live stream we ask that you please use the ask a question tab in the top right hand of your player to ask your anonymous question we will repeat these instructions before we begin the q a section of this call i will now hand over to energy and ceo matthias rigas please go ahead

Good morning and thank you all for joining us for our full year results call. I want to begin as I always do by acknowledging the context in which this call is being taking place and the situation that is evolving around us. The broader Middle East conflict and the regional escalation that we're watching is obviously very serious and the first thing that I want to say is that our thoughts are with the people of the region, our colleagues, our partners and all the communities where we operate safety remains and will always remain the first priority for energy against this i want to be clear today about three things before we get into the numbers and before we get into the results which is the main purpose of the presentation i will talk about where we stand operationally i will talk about how financially resilient we are and why the long-term case of energy and remains intact in my view as you all know when this war started about 20 days ago we were instructed by the ministry of energy and infrastructure of israel to suspend production and all the activities of the energy and power fpso until further notice and reacted immediately as we all do and as i said earlier the safety of our people is our highest priority and we fully supported the decision of the ministry because that is keeping everybody safe for those of you that have followed us and know our story from last year you know that we've been there before so we're managing a situation that we've managed before in june of last year as you remember the ministry ordered us to shut down and 12 days later they gave us the green light to restart it took us 24 to 48 hours to get back up to full production and ended up the year at the higher end of our 2025 guidance our operational team the people that run the fpso run onshore and offshore operations are in the best position to restart our production and get us back online as soon as we get the green light we've done it before we know how to do it and we are standing by ready to restart as soon as we get back the green light to restart the one thing i can't tell you because i will not speculate about how long this is going to take is that we're in constant communication with both the ministry of defense and the ministry of energy and we're all aligned about the importance of restarting this operation and we will restart very soon is my expectation the second point is the obvious question how is this affecting us as a business and how resilient we are let me be very specific i'll give you a very simple number that frames the discussion our monthly running costs in israel are 10 million dollars that's the cost of operating the fpso of people our staff and of course on top of that we have the financial costs but we're sitting on more than 300 million dollars of liquidity all our debt service reserve accounts are filled and most importantly our finance team did a phenomenal job to refinance all our debt facilities so we have no debt maturities ahead of us so there's no financial pressure of course it hurts not to produce from israel but in the bigger scheme of things and with oil and gas in the ground we will produce this oil and gas as soon as we get the green light panels will obviously give you the details but beyond israel all other production facilities in egypt and italy greece which is back on online at the moment we are benefiting from the higher commodity prices and that is strengthening significantly the cash flow of what i call the international business outside of israel another obvious question that people are asking us and are worried about is what's happening with our contracts and our buyers i refer to the exact same situation that we went through before we were in a situation like this last year and force majeure applies we have no take or pay provisions and our buyers are serving the market with alternative sources and as soon as we get on line we will start selling gas to them without any financial burden next important point that and questions that people are asking is what is happening with uh our growth and our projects we find ourselves in a very fortunate situation that catalan our major investment is all the key activities are happening outside of israel for the time being so we see no impact so far on the schedule we remain confident that katlan will be on stream in the first half of 27 again the caveat that this conflict and ends in the near future and we will be able to get back on track to drill the wells that we planned in may bring the construction vessels in may and keep the project going can have the first slide please now despite the challenges that we faced in 2025 we maintained group production at 154 000 barrels a day which is the upper end of our guidance we were able to recover from the shutdown we had last year and get back up to an average of 154. our ebitdax 1.1 billion our operating cash flow of similar levels and the strength of our contracts i remind everyone we have 20 billion dollars worth of gas contracts signed for the next 15 years gives us a very strong base to work from and be confident about the resilience of this business for the future i mentioned earlier about a balance sheet balance will give you more details But I repeat, no pressure at the moment from any front on energy. So we're very confident that as soon as this is over, we go back into normal operations. Last, before we turn the floor to Panos to go to take you through the numbers, I want to talk about our investment thesis and growth, because that is a key focus for us for the year to come. two very important points one or three very important points one in our existing business in egypt we're working very closely with the government to complete the merger of the three concessions that will allow us to invest more in the country we believe in egypt we believe it's a great place to produce oil and gas the country needs every drop of oil and gas it can produce and we have an excellent relationship with the government that is making every effort they can to support us on all fronts and we'll go into details later two in greece we are we completed in March the farm out of the Exxon to Exxon of our well in block 2 and this is a fantastic prospect it's an exploration well that we will drill in February of 27 that has great prospectivity and very limited financial impact on us in a no success case and last but not least and I'll close with this we are continuing to grow we said we will go to west africa and we delivered on what we said as we always do you all know we signed a deal to buy block 14 the operated position of chevron in angola our first project in west africa we needed and we said we would diversify and add a third production lead for our business and we did it we're working now to get to closing it's a great asset that allows us to start from a very nice space in angola our expansion in west africa so overall as i said in the beginning i feel that we are in the best position to manage this crisis we've done it before we know how to manage a crisis like this the team the operating team is in a great position to shut down but most important to restart as soon as possible we're financially strong and we're totally focused on growth and managing all our balance sheet and liabilities in the future i remain confident and optimistic obviously in a very challenging situation but this is what this management is built to do manage challenges and continue the growth of the business as we've always done with this let me hand over to panos to take us through the results of 2025 thank you monsieur good morning from me as well uh moving to slide five please 2025

was a mixed year, with a challenging first six months until June, when our careers field was shut in for a few weeks, but followed by a record second half of the year, where the company recorded average production of more than 170,000 barrels a day, with August being a record month with 180,000 barrels a day. As a result, the total production came in just a bit higher of 2024, at 51.5 million barrels of oil equivalent, with higher gas production offsetting the lower oil production which was affected by the ROSPO oil field in Italy sat down. Total revenue came in flat compared to 2024 just below 1.8 billion with higher gas production and prices achieved as well as the insurance proceeds we had linked to the ROSPO oil incident offsetting the lower oil production and prices compared to 2024. Moving to slide 6, I would like to highlight a couple more KPIs that we always record and guide. Cash, cost of production and GNA, flat, which is actually I have to say a modest reduction if adjusted for the weakness of the dollar versus our sterling, euro and sekel OPEX in 2025. Adjusted bid-tax came in just below 2024 figure, at 1 billion 117 million. The final P&L result however, as flagged in a January trading update, came in at 250 million loss, effectively being the impact of a Cassiopeia gas field impairment, which including the annual depreciation on the field, plus the adjustment of the deferred tax asset had an impact of circa 550 million. So if adjusted with that the profitability of the business would have been almost double than last year. CapEx, development CapEx specifically came in 20% lower than 2024 but still pretty high and we want it to be high because that means that the Catalan project is going as planned. And our APEX came in at 60 million at the lower end of the guidance, reflecting better performance of decommissioning costs and the ability of the teams, respective teams, to keep on deferring decommissioning. Moving to slide 7, please. A familiar slide for people that follow our presentations, but always an important one to highlight the commercial structure of our revenues where the long-term gas contracts in israel and egypt have a half floor price mechanism protecting our base revenues and profitability when oil and gas prices are low but then are complemented by circa 20 percent of our total production being priced off brent and psv representing 40 percent of our revenue stream in 2024 and 30 percent in 2025 We expect these prices to remain as they are now during the 2026 and I'm not talking about 110 barrels. We have adjusted our profiles at around 80 to 85 for the full year. We do expect these open market barrels of our total production to make more than 50% of the total revenue of the year. Slide 8 please. So, in a very challenging and volatile environment, as Matthios mentioned, for our sector and especially in the region we operate, our capital structure provides us enough flexibility and time to manage both our liquidity and capital allocation at the most optimum way. On the back of our 18-year reserve life and more than 20 billion of gas contracts expanding well into the late 2030s, We have a weighted average maturity of other loans of around 6 years and a weighted average cost of debt of 7%. But most importantly, no debt maturity until 2028. Our net debt position for the year came in 50 million higher than guided at 3 billion 250. but that was the result of effectively slower recoverability of our ngpc receivables in the year versus what we were expecting however i have to flag here that the progress has been very good since january and we are getting those receivables down And of course our euro and second denominated credit lines and notes that given the dollar weakness we had an impact of around 40 million linked to that effect. But I have to flag this is unrealized since maturity have not happened yet. Closing with next slide, slide 9 please. The guidance for the year. where we will need to spend our guidance for israeli linked figures the rest of the numbers are pretty much in line with what we had guided earlier in the year in january with the rest of the portfolio of the company still guided at mid 30s 32 to 36 thousand dollars a day Our OPEX, we expect it to stay at around the 190 or the 200 million mark for the rest of the portfolio. Our cash GMA, as you have seen years now, we are pretty much consistent around the 35 million mark. on the capital expenditure we don't expect investment to go more than 100 million and our decommissioning to continue as always guided at around 60 million per annum and a very light exploration expenditure especially given that we are carried to the big wells that matthews mentioned our net debt again this is a very provisional number at around 3.2 to 3.3 as guided initially This is a very odd position to be as a CFO, not provide guidance on some figures. Obviously, we have run a number of sensitivities and I would like to share those, let's call it the soft guidance to our investors and analysts. So, roughly for each month of starting production, you can assume roughly 10,000, 9 to 10,000 barrels a day reduction in the initial guidance. The OPEX line, for the time being, you should consider to be similar, because we're keeping the facilities ready to turn on within 24 to 48 hours, reflecting what Mathieu said, that our expectation is that this is a short-term event. And the same applies to the Catalan CAPEX. For the time being, all projects are on time and they haven't been affected. Of course, we do have the flexibility to postpone that, and we're keeping... um a close eye uh technical operations and hsc of course have the first uh uh you know they will need to advise us on that but for the time being we're on track on all on all our projects so uh back to you thank you let's move to the next slide please

very quickly um a high level comment on hsc which is extremely important and even more important these days all our ratios and all our kpis had improved in 25 even our emissions came down by 11 i know this is not the priority clearly when we have a war going on but we remain committed to our sustainability and the sustainability of this business next one please production shows i think this slide shows the resilience of our production 154 000 barrels of average production 25 a very strong start of the year with 155 and it was going to get higher third and fourth quarter strongest ever third and fourth quarter production 2025 reflecting the strong operational performance of the fpso and all the other assets but also the better understanding of the market and stronger sales in the shoulder months to fill in the gaps of the lower demand months in israel next one please this is for me probably one of the most important slides and i'm talking about reserves because this is what this business is about we're sitting on a billion barrels of 2p reserves across all our fields an 18 year reserve life which is obviously matched with the gas contracts we have in israel on top of that close to 200 million barrels of 2c resources that we're working with our technical team and our commercial teams to convert to 2p and most importantly in this existing portfolio close to 2.6 billion barrels of oil equivalent of stoip or gas in place of prospective resources that we're targeting to move through the drill bit into 2c and 2p so this is a great portfolio to be handling and a lot of people ask me if i'm happy that we have kept the portfolio following the car like the car live fallout and the answer is absolutely yes because there is huge upside in our existing business regardless of mna regardless of any new transactions we have gas to discover in egypt under our platforms gas to discover in greece with block two gas more gas to discover in our existing other assets in israel oil to be produced and discovered or developed in italy so it's a portfolio full of opportunities without the need for any additional m&a and all of them are next to existing infrastructure and that's what makes it a very exciting portfolio to be managing next please a bit of a deeper dive in israel i will not repeat what i said before on the highlights but in 2025 we added another four billion dollars of new long-term gas contracts getting our total to over 20 billion dollars of contracted revenue Catalan is, as we mentioned earlier, on track. I repeat that all the works at the moment are being done outside of Israel. May is the critical month for our operations, but as Banos said, we have the flexibility to push things back, and this is the benefit of being an operator. I remind everyone that we are in this unique situation of being independent with a deep water operating capability. that's what we intend to continue to do because that gives us total control over our projects over how we want to spend our capex how we deal with our contractors and how we manage financial liabilities on our balance sheet and this is this has been our strategy from day one this is what we did in angola i'll come to angola in a minute but this is what gives us the control of our destiny in our life next please egypt is a country that as i said earlier i really like and i really trust despite the challenges and there are challenges there that are increasing because of the energy crisis that we're going through at the moment but the relationship with the government is excellent we're working very closely with egas egpc the ministry and all our stakeholders there to complete the merger of the three concessions this unlocks significant value and this reduces our gna and admin costs giving us the opportunity to invest more we see a lot of potential sitting under the abukir platform and this is probably the fastest gas to market that egypt can get in a period where egypt needs a lot of gas as you can imagine especially with what's going on with the lng bases around the world beyond abukir which has showed a very stable production and continues to produce above expectations we have the other project that will last go to the next slide please heaven we're drilling our first wells in 2026 a partnership with kina from croatia wells will be drilled we're targeting close to 270 million barrels of stoich volumes onshore low-cost wells very fast to develop a very great a very nice project to add to our egyptian teams production in 2026 obviously exploration obviously with the risks of exploration but one that if it works it can turn into cash flow very quickly next please i group italy greece croatia and the uk i still consider the uk europe a production base of 12 000 barrels a day from all the from all the assets obviously benefiting from the higher commodity prices today strong cash flow the arena project in croatia is expected to come on stream first half of 27 that will produce gas in europe and with the gas price that we're seeing today this is a fantastic opportunity to invest not a huge one like paris obviously but a very nice addition to our european production uh the big one of course that we're expecting and this is uh one that we're looking for forward to next slide please is block two in greece where we have formed a very strong alliance with Exxon that farmed into our well, took a 60% working interest Energean remains the operator and we're very proud that Exxon trusts Energean to be the operator of this exploration well which is a testament to our operating capabilities in the deep waters of the East Mediterranean we will drill the well in early 27 as panos said it's a well that will be carried and we have already received all our past costs targeting close to 10 tcf of gas in the middle of two countries that need a lot of gas both italy and greece and especially with what's going on now these are even more important projects we got the approvals from the greek government in record time november we signed a deal deal that was witnessed by secretary wright and secretary bergham of the united states showing the support that this project has from the u.s administration next please and i will close with the new area the strategic entry offshore angola in uh block 14 we signed an agreement with chevron to take over the 31 operated position they have in the block a block that has today about 28 million barrels is producing uh networking interest 13 000 barrels for the post the percentage that we're buying and cash flowing close to 90 million dollars these are all based on old prices obviously and most importantly it gives us the strong base to create and start our expansion into africa diversifying from the men and getting a new a new area of operation that we believe has huge potential because we start always with the rocks we start with the subsurface we believe there's a lot of upside and the pkbb uh projects in angola in block 14 we will be working on that and this is in line with our strategy that i've outlined many times which is to go after projects that are immaterial or below the radar screen of the majors look for opportunities to cut costs look for opportunities to develop assets next to existing infrastructure this is exactly what we did in israel we took over karish developed it and started to add assets next to it like katlan and later tanin this is exactly what we did with egypt we took over abukir and then added nani with a subsidy back to increase and stabilize production this is exactly what we will do in angola so we have a unique position of being a deep water operator and dependent with deep water operating capabilities targeting projects that are below the radar screen of the majors it's very complementary for the country it's very complementary for our relationships with the majors or like chevron and exxon in greece and i believe that this gives us a great base to add more into our portfolio for going forward in west africa next one i will hand back to panos because this is a deal that has been led by him and the m&a team to walk you through next steps and what we plan to do with the asset

On block 14 the transaction highlights are a 260 million base consideration with a lockbox date of 1st January 2026. Transaction is subject to the usual government regulatory approval and waiver of the preemption rights. The target closing is within 2026. We hope that we will be able to achieve that as soon as possible. and the funding of this transaction will be a combination of the non-recourse reserve-based loan and the available group liquidity. As Mathios said, we are very excited about the potential of both our new country entry and specifically block 14, as in addition to the roughly 30 million barrels we are acquiring, an asset that is currently doing around 13,000 barrels a day, the 120 million of EBITDAX for 2025 at an average oil price of just above 60 dollars and around 90 million of operating cash flow we have the PKBB development near infrastructure development where we would like or we're aiming to start subject of course to the approval and alignment with our new partners a five well initial development where we can see a six thousand barrels a day additional production and further material upside The whole area of that PKBB area is around 30 million barrels of 2p reserves with one well drilled so far and producing, 72 million barrels of 2c resources and 600 million barrels of gross stoip. So the potential are great. We can't wait to get our hands on the asset and make that development a little bit more ambitious. Of course there are additional opportunities around block 14 and the existing infrastructure is what makes those very economic and as Mathios said we will try to apply what we've learned and what we are doing currently in Israel where we do have the base infrastructure in place and that allows us to monetize different accumulations around our FPSO very quickly and very profitably. we expect to do the same in block 14 where we have two appraised fields the Malange and Lukapa within block 14 and this is a very simple subsea tieback development and of course two additional discoveries which we would like to appraise as soon as possible with our partners Eregia is well qualified to apply its experience and track records as a deep water operator in the Isthmeth now into west africa and this acquisition was as we have mentioned in the past provides a foothold for further inorganic growth in the region we continue seeking for opportunities and we hope and trust you will hear from us very soon for further exciting new transactions but always within the discipline and the capital allocation priorities we have already communicated to our shareholders

thank you and let's get to the final slide what to look for obviously you um we all want a safe restart of production operations in israel and that's our top focus and continuing to produce from the rest of the portfolio we focus on value value created through the deal that we're negotiating with the egyptian authorities that will allow us to invest more in the country that we really like and trust we look to complete the katlan project during 2026 and be able to start in the first half of 2027 without any interruption we look for exploration growth in our existing portfolio i mentioned earlier the wells that are planned to be drilled in the next 18 months both in egypt and greece we look for the completion of our entry into angola adding another 12 to 13 barrels of existing production increasing production in west africa and building our presence there in the same way we build it in the mediterranean all of that as pano said with a very strict capital discipline we recognize that the oil price is where it is today and any deal has to be very value accretive to our shareholders so we will do only deals that add value to us and to our shareholders that are in line with our trajectory of uh growth but also deleveraging which is very firmly focused in our minds to bring our leverage ratios down to where we've communicated before that our targets are going to be closing and before i open for questions i want to say just a personal note energy was built for this exact environment that we're going through right now we've chosen to operate in challenging geopolitical environments not because we like to be involved in wars but that's where oil and gas exists and that is what we know very well how to handle we know how to handle above surface issues we know how to navigate these challenging times we've done it before and we will continue to operate safely and making sure that all our people are safe our facilities are safe and we maximize value for all our shareholders as we've done from the day of our ipo all the way today with that i want to thank you for being with us today and open the floor to questions

ladies and gentlemen we will now begin our q a session if you have a question we ask that you please use the raise hand function at the bottom of your zoom screen once your name has been announced you can ask a question if you want to withdraw your question please lower your hand using the raise hand function for those watching our live stream we ask that you please use the ask a question tab in the top right hand of your player to ask your anonymous anonymous question to be read out thank you and a moment for the first question please our first question comes from dave roundwood stifle please unmute your line and ask your question i'm pretty sure i'm unmuted um a couple of questions for me please firstly

You mentioned a couple of times that Parish could be a short-term event. I'm just wondering if there are any discussions ongoing in the background that give you confidence that will be the case or whether it's just the fact you've been in this situation before and you've sort of seen the situation and that kind of gives you confidence that with that situation that things will open up. um the second one was on cat land please i mean comments that it remains on track which is great i suppose i'm just slightly taking the other side and i appreciate it's not your base case but under what circumstances might you choose to slow that down um and and to what extent would you be able to slow it down if you wanted to thank you thank you for the question david um why am i confident

you're right we've been there before we've seen it and we've seen how situations like this one day you get a green light that says we're now safe to restart so this is not just about the wider geopolitics and what is going on is about the confidence that the idf and the security services have in israel that they can protect this very strategic asset for the country so i'm not going to speculate i don't think anybody in this planet can predict when this escalation and this war is going to be over but what i do know is that the region needs so much gas so the moment that people feel that it is safe to restart we will restart immediately and this is the message that we're getting from the government of israel because simply everybody needs the gas on your second question about katlan we are in a very fortunate situation that as i said earlier all the work streams at the moment are happening outside of israel the critical month as i said is may because that is when we are scheduled to have drilling rigs and construction vessels in israel we're working very closely with all the contractors that have those rigs and construction vessels to make sure that they're comfortable also to operate in this environment today there is activity going on in Israel tankers and ships go in and out of the port of Haifa every day to bring fuel supplies and all the rest so operations keep keep going and this is something that again that we will work very closely with the ministers the ministries in israel to make sure that everything is done safely for people and and assets if this war continues beyond may then you know we have the choice to delay things push things back and of course that will have an impact on the schedule of catalan so we were very careful to state that as of today and based on the scenario that we go back to a more normal situation in the next three to four weeks then we see no schedule impact on Catalan if this extends then obviously we will advise the market and give proper guidance as soon as we know thanks very clear

as a reminder if you would like to ask a question please use the raise hand feature once you have been invited to ask your question please unmute and ask your question a moment for the cue to form please

at this point there are no more questions i will now hand back over to mafios rigas for closing remarks thank you it's uh surprising not to have any further questions i assume we covered all your questions and everything that everybody needed to ask we remain available for everyone analysts investors colleagues 24 7 to provide any answers or support that you may need as i said earlier and i will repeat it again energy and is made to handle this situation and grow out of it stronger resilience we have the balance sheet we have the operating capability we have the growth potential so despite the challenges we see great opportunities ahead thank you very much and i look forward to seeing you all especially my colleagues in israel very soon

this concludes today's call thank you everyone for joining you may now disconnect