Energean plc

morning ladies and gentlemen and welcome to the energy in half year 2026 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 if you are joined by a zoom browser please click the reactions button at the bottom of your zoom page and select raise hand if you have dialed in by phone please use star 9 on your keypad to raise your hand and star 6 to unmute 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's CEO, Matheus Rigas. Please go ahead.

Good morning, everyone, and thank you for joining our half-year results call today. If we may start with the first slide of the presentation, please. so i would like to start with some introductory remarks i'll hand over to panels to go through our financial results and then i'll pick up again to go through our operations and business outlook the first half was a very strong half for energy we're entering the second half of 26 for a position of real strength three cash flow is up 33 36 percent profits after tax up net debt down and all while we're in the peak of our investment program of catalan the first half obviously we saw the shutdown due to the security issues in israel but that's behind us we're already exceeding 180 000 barrels of oil equivalent production in august all our operations are doing extremely well israel we're seeing strong gas demand oil production is up following the second oil train that we completed and all our business units are performing at or above expectations egypt that i will focus on a lot more today we have a new investment program that i would outline later and that is the next phase of our organic growth beyond that we are focused on our exploration activities in greece and the other parts of the portfolio and the inorganic opportunities that will form a core part of our growth strategy going forward so overall a very strong first half with the second half being even stronger leading us to the very positive results that we are announcing today with that let me hand over to panels to take you over take you through the numbers and then i'll come back to go through the business thank you

Thank you, Mathieu. Good morning, everyone. Moving to the next slide, please. And as per Mathieu's introduction, the company recorded the solid first half of the year, despite the high volatility of political environment our assets are located, and the 41 days of shutdown of production in our largest producer. More specifically, our production was down 12% compared to last year, mainly driven by that shutdown in our career asset. but the total top line was down by only 8% as the production impact was partially offset by the higher oil prices you will see however gas prices in the first half were lower compared to the same period in 2025 but with the current strength of European gas prices we expect 2026 gas revenues to catch up if not surpass the equivalent of 2025 moving to the next slide and to our cost line analysis we have managed to keep our cost base well under control and within budgets and guidance despite the high inflationary environment in all countries of operation that resulted in a six-month epitax of just five percent off the 2025 results and combined with some favorable movements in effects with a strengthening of the dollar and lower taxation we recorded a 45 percent increase for profit after tax at 160 million another important metric is the increased operating cash flow to over half a billion 550 million driven by the reduction in eGPC receivables from 215 million in the start of the year down to only 75 we're now seeing an impressive normalization of eGPC receivables and we are now more confident than ever on the strength of our assets in the country. As expected, CapEx has been at $350 million, well within our 2026 guidance and reflecting progress to our Catalan project, with CapEx continues to be both deferred and managed in the most cost-effective way, recording only $4 million spent in the first half of the year. Finally, another metric, our free cash flow, which includes both cash flow from operations and cash flows from investing, recorded an impressive number of over 350 million the first half of the year, which is 35% higher on the same period last year. Next page, please, moving to page seven. A little bit more details of our net cash flow performance for the period. again highlighting that this 88 million of their cash flow was delivered in a period that our largest producer was down for more than 40 days the catalan project in full capital intensive mode and european gas prices relatively softer on the same period last year but of course the half a billion of cash flow from operation gave us the chance to fully fund all our projects interest and coupons and dividends as well as reduce our debt by almost 50 50 million next page eight a very repetitive slide for those that follow us the last few years but extremely important to explain our difference in debt capital structure As we're currently in a capital-intensive period with our Catalan project, we expect our leverage ratio to stay around the 2.5 to 3 times range, but with a relatively long weighted average life of debt of our target being consistently more than five, ideally more than six years, and a competitive, given both the sector and the country risk, weighted cost of debt of circa 7%. but what gives us the ability to have this favorable debt profile clearly the ownership of the ownership of more than a billion worth of floater the only one fully operational in the med the 18-year reserve life one of the longest compared with our peers and more than 20 billion contracted top line through low-term gas contracts in israel and egypt with floor price and take-home-pray provisions running well into the late 30s. But I want to clarify something for the abundance of any doubt, and despite this obvious strength of our assets and contracts, our medium-term leverage target is not to stay at three times, but it is to bring it down to two times, and we expect that after the completion of the Kaplan project, this is the target of our company. finally page 9 our guidance for the full year 2026 shouldn't surprise anyone if we can move to the next slide please thank you those figures shouldn't surprise anyone as we're still aiming for a production of more 130 000 pounds a day um our cost base to stay at around 300 million with 200 million of royalties and a gna at the usual 35 million range that hasn't really changed uh the last few years on developer topics we expect progress to catalan to continue as planned so we keep our guidance at around 800 million 800 850 million mark but we revised both our exploration and decommissioning expenditure where we do see scope for even further reductions by the end of 2026. Finally, we keep our net debt guidance at around the 3.3 billion mark. We're given our ongoing projects. We are at peak net debt expected to soften as we progress and as the Catalan startup and the Catalan project is completed.

in the beginning of 2027. thank you all thank you panno and thank you for a great financial performance this year and beyond let me go through our operations next slide please i will start with hse which has been as always a very key focus for us a very solid performance of our teams despite multiple operations and something that makes me extremely proud is to see an aegean and independent that is able to do offshore operations even in war zones deep water in parallel drilling with a deep water drilling rig heavy lift operations bringing in second oil train modules all with exceptional hsc statistics that gives everyone confidence to continue and invest more in israel and of course in the other countries of operation next please group production as we said before is peaking at the moment at 182 000 barrels a day when we lifted the company back in 2018 we had set a target that we would be at 200 000 barrel a day business when all our projects were on stream we are pretty close with the exception of the projects that have not performed so far like cassiopeia in italy but we're very close to the stop to the goal that we had set 182 000 barrels a day consisting mostly from gas from our operations in israel and egypt but oil plays a very big role also in our operations and especially with the oil prices as today being a hundred dollars a barrel that is a major role in our cash flow and operations our outlook for 2026 remains stable we read the radar guidance that we will be around 130 to 140 000 barrel a day mark giving us solid financial results as panos alluded to earlier next one please i will focus on the second oil train because i think this was a very important operation for us and this was a key target that we had discussed in previous results and investor polls we have increased our oil production capacity to 31,000 barrels of oil a day we have already tested the system to 25,000 barrels a day and we are gradually opening the wells the oil rich wells that we have in Qarish to test as much oil as we can or produce as much oil as we can 32% of Israel's revenues comes from liquids And this is something that investors need to be aware because obviously our focus is gas. But as I said earlier, oil plays a major role and we are benefiting from the higher oil prices today. And we've averaged $88.4 a barrel in Q2 in Israel because of the strength of the oil prices. Another important statistic is that we are by far the largest oil producer in Israel, with Karish producing more than three times the oil production of Leviathan and Tamar combined. and we believe that there's a lot more that we can do and a lot more we can produce and our technical team is totally focused on unlocking the oil potential of our assets offshore in israel we are the only ones that have the infrastructure to produce it both from our existing licenses but also from new licenses we're targeting from the upcoming bedrooms and the infrastructure that we have built the second oil train is a great example gives us the opportunity to unlock value even from smaller accumulations that could be around our infrastructure next please and it's not only oil of course our focus remains gas we have announced uh a new gas sales and purchase agreement with sorex another 1.4 billion dollars of secured revenue that brings our total contracted revenue to 22 billion dollars over the next two decades demonstrates the strength of the gas demand in israel which we see increasing we see an incremental 10 bcm gas demand growth over the next two decades in the country and we feel very comfortable to continue selling gas to our israeli buyers of course we're developing the nissan pipeline to take advantage of exports opportunities but israel remains a very strong market for us and a very key focus for our operations and gas sales it is important to note that we have now all major new power stations contracted with us uh sorry kes and dahlia too are all expected to be online around the end of the next decade and we are looking to do a lot more in country in the country that despite the geopolitical challenges remains a fantastic place to do business next is How will we fuel the growth and the future? Our Catalan development, a major development that we started and is getting very close to completion, has seen all the major milestones complete. we have completed two subsea campaigns we have installed two modules on the spso already two heavy lift operations very complex uh in parallel with live gas production and drilling next to these operations we have now completed the two development wells athena and zeus we are remaining to finish the subsea campaign in the second half of 26 and we're targeting first gas from athena and zoosh in the first half of 27 as we have indicated before project remains on budget and on schedule but as you can see from the map on this slide we are working gradually from east to west we started with karish north we're moving now to athena and zeus we have apollo and hera and we still have uh the remaining gas accumulations of tannin to be developed in the future to continue selling gas to the israeli and domestic markets and the international markets of the region beyond uh this gas that we've already discovered and it's already either developed producing or remains undeveloped ready to be produced if i go to the next slide please the next phase of growth for us in israel israel has a new exploration background that has been announced you can see on this slide the zones that are being offered we are very keen to get new acreage we know the geology very well and we have the benefits of owning the infrastructure that allows us to develop oil and gas accumulations that will exist next to our fpso next to our pipelines and this is a key focus for us for 2026 and 27 obviously israel is an election period but it is continuing a long-term energy strategy of being energy independent and an exporter of gas and energy to the region and being one of two operators in country sharon being the other one we are very keen to expand our production and exploration potential in the country we believe that there's a lot more to be discovered in israel and a lot more to be developed and in the previous big round we were effectively excluded from getting any licenses given our position in the country now that most of our gas has been sold we are back into a proper competitive environment and we look to get more licenses and expand our business in israel next i want to focus on next time please i want to focus on egypt egypt as pano said has given us the highest ever euro collections our net receivables are down to about 75 million the lowest ever and this is a strategy that the country has followed and a strategy that has increased the confidence of us and other investors to invest in egypt we are focused on our existing assets and if i can go to the next slide please which as of today have reached an agreement to merge the three concessions this is something we talked about over the past year uh abukir northeast alamaria and north idku are being merged into one concession terms have now been agreed with egpc we are improving fiscal terms and gas prices and on the back of these improved fiscal terms and the improved collections we are committing 150 million dollars to a new investment program in egypt a program that unlocks development projects that allow us to be confident that production can be doubled from the existing areas but beyond that we're adding exploration acreage from the deep horizon of Aboukir that was not part of our concession until now where we see four tcf of exploration potential probably more than four tcf of exploration potential and this is sitting right next or under our existing platforms and pipelines and infrastructures so very low development cost and very fast time to market egypt is a core country for energy and the country that we look to invest more in our existing concessions and in new opportunities that we are evaluating next please beyond egypt obviously the big exploration target for 2027 is block 2 in greece it's a very big prospect 1000 square kilometers i repeat what i've said in previous presentations together with exxon and uh hellenic but with energy and as the operator we are planning to drill the well rig has been contracted we are targeting to spot the well in the second quarter early second quarter of uh 2027 uh we're waiting for stena to give us a final um timetable but we're very confident uh that we will be drilling a very high impact well obviously with the risks of a deep water frontier exploration well but with the massive potential that we see over nine pcs of prospective gas resource that could bring a substantial new area of operation for us and our partners next i will focus very briefly on the remaining business operations can i have the next slide please italy operated production remains stable about eight to nine thousand barrels a day we are looking to optimize production and increase cash flow and profitability taking advantage obviously of high oil and european gas prices in greece we will be focusing just on the excellent development uh primos is reaching the end of its life but epsilon remains a key focus for us 27 million dollars of 2p reserves in an oecd country with fantastic fiscal terms remains a very nice project for us Croatia, the IRENA project development is continuously progressing. First gas expected in H127 and we're adding now an additional exploration well in Isabella 9. Small but extremely profitable operation in Croatia. and uk decommissioning car and kilmar platforms have been safely removed i repeat and i remind everyone we are the operator we become the operators of our decommissioning projects to contain control costs and we are carrying tax losses of over 700 million pounds which obviously we would look to monetize and use in the business environments of the uk north sea next slide please I will finish with a couple of slides and have the next one the outlook and M&A and I know that many of you have possibly seen leaks that have been in the market I will not comment on leaks so I will pre-empt any question about things that may or may not happen but I will outline what are strategies we remain focused on our core areas which is the mediterranean and west africa these are the countries that we know we understand we know how to operate and given our deep water operating capabilities which i consider to be unique for a company of our size we are targeting assets that either majors consider non-core or too small for them but are too big for the independence and countries that are looking for new investors companies that have the technical and financial capability to work in the deep waters of those core countries our goal is very clear we want to diversify production we want to have three pillars of production israel egypt and one in west africa all of a similar or equal rating we want to build at least a new core hub in the new in the near future and increase our cash flow which allows us obviously to increase our returns to shareholders we remain totally focused on strict capital allocation we want leverage as panos said to be reduced although i had to comment on leverage that was 22 billion dollars of secured revenue in israel i feel pretty good about the strength of the balance sheet and our ability to service all our debt obligations and that i think is very obvious from the support we get both from the bond markets and our banks and other private credit markets finally and can i have the last slide please wrapping it all up 2026 is a very strong year despite the geopolitical challenges full year production of 130 to 140 000 barrels a day with august over 180 000 barrels a day gives us the momentum we want to get into the last quarter of this year and achieve all our stated objectives in gypt this for me is extremely important the signing of the three concessions into one the new investment program unlocks a significant potential to double our egyptian production and targets substantial gas upside in a country that needs gas desperately there's gas imports today in egypt both from israel and from lng ssru and the focus of the egyptian government is to increase domestic production and that's remained our focus as well in israel our catalan project remains on target uh that will uh be a step change or a bit tax given that uh catalan doesn't have any royalties as tarish and has also the export rights that allow us to target higher priced gas molecules that we can sell either locally or internationally block 2 as i said earlier remains a big i would call it dream for greece but also a key target for us given the strength of the relationship with exxon and the size of the price this remains a very big focus for us for 2027 leveraging strengthening the balance sheet increasing cash flow allowing us to return money to shareholders and being one of the biggest ones that is a very strong message to everyone that we remain focused on returns to our shareholders and strength of our business going forward last but not least we're targeting transformational mna opportunities in our existing core countries and west africa and uh as everybody remembers um all those that followed us from day one when uh we started with the greek assets then with the edison acquisitions and with the creation acquisition uh we have built this business from uh what was a one uh thousand barrel a day business in greece to what is today 180 000 barrels uh a day business uh business that we listed at four pounds in 2018 trading at over eight today and returning substantial amounts of dividends to shareholders energy is entering the next cycle of growth from a position of strength with a very strong core business delivering on the business plan as you heard from panos with our numbers which are very strong giving us the base to go into our next phase of growth

with that i want to thank everybody for participating and open the floor to questions ladies and gentlemen we will now begin our q a session if you have a question and are using the zoom app we ask that you please use the raise hand function at the bottom of your zoom screen or by clicking the three dots on the black bar at the bottom of your screen alternatively if you have joined via zoom browser please click the reactions button at the bottom of your zoom page and select raise hand If you have dialed in by phone, please use star 9 on your keypad to raise your hand and star 6 to unmute. Once your name has been announced, you can ask your question. If you want to withdraw your question, please lower your hand using the raise hand function or star 9 if you have dialed in. 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 to be read out. Thank you and a moment for the first question please.

our first question comes from werner riding with hill hunt please unmute your line and ask your question uh hi thank you um i have a question on capital allocation as peak cap land capex rolls off next year when you move into a stronger phase of cash generation what um balance sheet of free cash flow milestones would you need to see before your thoughts move back to higher shareholder returns which you've which you've talked about are important and related to that it's based on what you see your expectations can you both reduce debt and pay higher dividends in 2027 let me take that

Of course, the situation at this time today makes us especially optimistic that we will be able to do that. We have a very solid operating cash flow, starting from the top line and keeping the costs down in all our operations and that applies in all our assets, from the smallest in Italy down to the biggest in Israel. So, with the evening help and the tailwind from the very strong commodity prices, we're confident we're going to get there. As you may have seen, and I think in our presentation we have made the point, we are chasing and looking for a couple of transformational M&A opportunities. Those will have to get into the mix. We do like non-recourse asset-based leverage to do that. again staying within and not breaching that three times leverage position we are today but within the bigger frame of a wider business we will need to re-evaluate anything our commitment to returns credit returns repetitive returns through dividends to our shareholders stays intact I cannot right now tell you the specific timing that we will be getting those returns back to what we had used as shareholders, but given the continued geopolitical volatility, the capital intensity of Catalan currently and of course look out for big m&a transactions i think it would be premature to give you a specific date what i want to give you factually is that our existing assets will start getting into a much more solid free cash flow position from q2 next year when katlan will be behind us and center is valuable you know effectively the same assets right now would be providing enough cash flows for us to consider increasing both dividends and reducing the leverage okay that's clear thank you thank you our next question comes from david round with stifle please unmute your line and ask your question

morning guys thanks for the presentation um especially on the um power station contract i mean good to see that that come in my understanding was that the security situation in israel over the last couple of years had had slowed down a number of these awards um so is this something we can read into is this a sign that things are returning to normal and we might see a few more of these um the second question please interested in israel again just just how you intend to balance production from carish and catland next year i before nitsana comes on stream just wondering i guess is there a way to balance the or to benefit from from the higher liquids at paris and then the better terms at catland at the same time and is that how you're thinking about it thank you

uh thanks for the question david um i travel to israel very often i'm there pretty much every month the security situation that you mentioned is uh or has been a challenge but life in israel continues uh economy grows the strength of the economy you can see from the results uh and the checking the demand for electricity continues to grow there is a lot of additional electricity demand coming from data centers and israel is effectively an energy island not connected to any other country so it needs its own energy supply um so the answer to your question is i don't see any slow down in award of licenses for power stations i do see in fact the opposites i do see uh new licenses being awarded i do see new um demand coming as i mentioned earlier the 10 bcm demand growth in israel that we forecast or others forecast for us as well is there driven primarily from electricity demand at the same time egypt has incremental demand has 120 million people and growing with existing production in egypt declining needs gas coming from israel and from other sources so overall i don't see any signs of slowdown of gas demand in uh in the region and we haven't even started talking about exports of gas to europe through the energy terminals of egypt so the demand is not the issue it's uh the resource and that's why i focused a lot today on the new bedrooms and unlocking new potential how do we plan to manage production we plan to maximize sales of gas and obviously through proper management of the reservoirs optimize the recovery from our wells we don't want to be pulling wells too hard we don't want to see water coming into our wells we've seen other projects in the region in egypt that pulled wells very hard and ended up with gas declined rates because of water influx so reservoir management is a top priority diversification of number of wells producing the gas we need is extremely important. We have four today. We are adding two more. These are big wells. Our wells are doing 300 million scuffs a day. Each of these are world class wells. We will be managing the reservoirs. Our priority obviously is to maximize cash flow and the returns but beyond that we want to optimize reservoir management because with the wrong management of the reservoir there's going to be no cash flow so that is our top priority how we continue to produce the FPSO at the maximum capacity till the shoulder months because that is the only weakness of the market there we have the slow months of the spring and the fall where we don't have the same demand that we have in the summer in the summer even if we had uh double the gas capacity in the episode we could sell it to the region so the constraint in the summer is the capacity of the fpso and the target is to maximize sales in the slow months okay very clear thank you

Thank you. Our next question comes from Alice Winograd with Morgan Stanley. Please unmute your line and ask your question.

Hi, good morning. Congratulations on results. First on the Egypt concession merger, there's a couple of things I was hoping you might be able to elaborate on, please. First, what do you expect can be the immediate improvement to the existing business in the region after this becomes effective? you alluded to better fiscal terms higher gas price so is there anything you can guide us on that and second there is also reference of potential to be unlocked there in terms of future growth and resources in the region so how would you frame this underpins either growth or longevity for the energy and production more generally so for instance you know under what timeline can this be unlocked and will this support more near-term growth or longer-term potential if I can put it like that and second just on your comments about M&A you apparently have continued interest in West Africa even after the Angola deal fell through and I guess you alluded to this potentially having a similar weighting in the mix over time as there is for Israel and Egypt so what is your view with regards to increasing

commodity exposure right in the business because uh of course israel and egypt today have uh different uh dynamics there in terms of pricing uh thank you thank you alex great questions um egypt turns uh unfortunately i can't give details of the gas prices which are substantially higher than the ones we have today I remind you we are selling all our gas to eGas and eGPC so it's all government contracts. Improved fiscal terms come from combining the cost pool of Abuqir with NEANI which means that we can offset the 250 million dollar investment that was made in NEANI from our Abuqir production which is a very old and mature production and that improves the level of the cost pool that we have to depreciate we will guide the market when we're ready and we're able to announce those terms i have to make sure that what is clear these are terms that have been agreed but they remain subject to the approval by the egyptian parliament and that should take a couple of months until they become effective from i hope first of january 2027. the timeline and what it unlocks it uh first of all it extends the life of a book here which otherwise um would be ending its life around the beginning of the next decade and that gives us uh more reserves because we have a longer tail uh from uh we stated that we are targeting the double production from Abuqir and this is from very well-defined targets that the team has identified which are either side tracks from existing wells or new wells which would be classified as exploration wells but with a very high probability of success in extra infrastructure so very easy to monetize the investment program of 150 million to answer your question is committed over the next five years and that's the horizon where we see gradually the production increasing but the big prize is not just the production increase the big prize is the exploration potential is the deep horizon of abukir where i mentioned earlier we see more than three tcf of potential we will be shooting new seismic and we will be planning um to drill a well that is more risky obviously we will be looking for partners there and that would give the equivalent of another parish if it comes in i remind you paris and tanin was three and a half pcf so we're talking about another israel and potentially sitting under our existing infrastructure without the need to invest billions of dollars to unlock it. So big focus on the exploration and Egypt upside. Aboukir will increase its production, but if we are looking for the transformational organic growth opportunities, this potential sitting next to infrastructure is a very big focus for us going forward. um the mna in west africa which was your last question obviously yes yeah you're right i'm gonna do sell through um i think that uh this is a sign of the times where with the high commodity prices we do see a lot more local players wanting to play a role but um deep water is not an easy place to operate you need to know what you're doing you need to have capabilities you need to have the ability to finance because these projects are requiring a lot of money and a lot of technical capabilities so the mistake that should be avoided by the west african countries in my view is to end with operators that don't have the capabilities to drill wells or fund new developments because then they will end up with standard gas and oil and a dream to produce more so deep water operating capabilities and funding capabilities are extremely important and that's what we bring to the table so we do see opportunities in west africa we do see opportunities from producing assets we do see opportunities also from discovered undeveloped resources which is if you want our speciality this is exactly what we did in israel so if you take the israel model where we took over in 2016 tarish tarish was a parisian tannin three and a half pcf undeveloped nobody was or nobody very few people were interested because it was too small for the majors but it was too big for independence similar models we're chasing in west africa and we do see a lot of opportunities there with obviously the challenges um of each country that we need to navigate but um on this i think if we are able to navigate um production development drilling deep water complex operations in the middle of the war zone i think we're pretty well positioned to navigate the complexities of a west african country thank you thank you our next question comes from james carmichael with berenberg please unmute your line and ask a question

hi morning guys um just a couple of quick ones i think you answered some of this um when speaking today but i guess it was just looking at the read through sort of gas pricing historic agreement and it looks um a little bit higher than maybe we would have uh expected based on the previous sort of average um value just wondering if there's anything fundamental that's sort of changed in the israeli market um since you last signed a contract or um and how you expect uh pricing to evolve i guess you sort of touched on um the higher demand that one and then just looking at the 2028 notes um refinancing um just wondering whether you know the expectation should be you know roll that through with conventional bonds if there are any other structures um that you're thinking about bringing onto the balance sheet thanks

um i'll take the gas price panel for last to be recognizing gas price in israel is gradually increasing obviously um not as much as uh in europe and uh the benefit that israel has is that through the long-term contract that we brought to the market there's a lot of stability in uh the energy crisis there's no energy price inflation they don't suffer from the peaks of gas prices that we see in europe or in the us or other places and that allows the economy to be strong and resilient we have a very different model um when we agree to sign long-term contracts obviously you know we lock ourselves into nearly fixed price contracts but that gives us the stability of cash flow that i mentioned earlier the 22 billion dollars of secured revenue that allow us to have a solid um base business we do see prices taking higher um but obviously this is linked to inflation this is linked to the general environment in the competitive environment in israel but i don't see prices shooting up through the roof because of the nature of those contracts but we do see higher prices and the targets in the next phase of contracts is to bring our contract prices closer to the export markets that everybody else is enjoying given that our next phase of production does not have the export limits that we talked about earlier and allow us to get even higher gas prices. But for us, it's a long-term thing. This is another spot to take advantage of gas prices today. Prices will go up, will go down. We are long-term focused and I'll let Panos talk about the refinancing of the bonds.

yes thank you look on the refinance this is now getting into a radius we have never ambushed or surprised when it comes to our debt management so now we're getting to that 18 month mark our bondholders and our banks we're talking to them on a regular basis um you know we don't want to to effectively unboost anyone with what would be their debt profile um there is a make hole in those notes that is dropping a lot from the start of 2027. uh we have a lot of options the secondary the current boards the secondary market they are trading very well uh despite the vulnerability in the market um we have a good presence uh to the bond markets both for the israeli bonds and the plc bonds so we don't expect any any drama and we don't expect any excitement around that for us is the regular tapping of the markets uh we will explore other avenues if those are more cost competitive i think that will benefit everyone even the existing both holders if there is another route But yes, this is key for us and we expect anywhere between the next three to six months those bonds will be refinanced again with the usual type of seven to ten year tenor, pushing that out to the late 2030s. we do have the capacity the new gas contracts that carry the same provisions the same protections allow us to continue printing uh long-term debt that fits fits our assets and of course our balance sheet profile great thanks for coming thank you our next question comes from mark wilson from jeffries please unmute your line pressing star six and ask your question

hello good morning um thank you uh for the questions excellent results considering everything's going on very impressive my first question was going to be on israel pricing but you've you've answered that so thank you for that and so let me just end with uh regarding m&a opportunities and the manner of execution of them it does seem to me that the big one big change in the sector in the past one maybe two years is the availability of credit for such opportunities and just a few years ago for example reserve based lending facilities almost disappeared from the market so i just wonder if you could expand on your commentary regarding that side of things for some of these opportunities that may be available um out there some of which are obviously quite large size thank you if i can do correctly because the line wasn't clear

But if the question was about funding sources, about those type of M&A opportunities, yes, you're right. The market and the debt capital markets and the credit capacity seems to be pretty enhanced and favorable at the time. Of course, all the projects that we're looking have this similar long-term profile that we have and we like and we prefer to manage. currently we will focus mostly on non-recourse debt and try to max this out when it comes to specific targets that is always a priority and then we will see if and at what cost we can fund the rest The current environment is not only the credit availability, but it provides a very positive cash flow for any asset you agree to buy. That means the current price environment allows for a nice positive carry in whatever M&A transaction you do. So it seems that whatever price you assume as a lockbox date of X, by the time you close if it especially if it is a producing asset actually uh the final money that you need to pay is is less than the headline uh price so the combination of those makes us pretty confident that we will not ambush anyone meaning specifically the shareholders with any surprise um stuff but and that's the priority and the other metric that we will always comply with is that we will not disturb the current leverage position of the company as well as the medium targets when it comes to dropping that leverage so we will definitely not do something to increase the current leverage ratios even at the group level and it won't disturb the medium term targets to reduce that to the two times we explained uh but yes the great availability is good that makes mna uh more executable um and most importantly the current price environment allows us to to factor in a better closing price to the one to the headline one agreed thank you our next question is a written question from thomas streeter with street research

with oil and gas supply uncertainty from the middle east are you seeing more exploration and development activity in the greater mediterranean region if if so is this impacting pricing for equipment and service providers for energy in thank you thomas streeter um the straight answer is no um then what we do see is increased level of activity

in the mediterranean indeed we are doing well in greece there is uh developments being discussed in cyprus we have our big projects in israel egypt has increased demand but the the prices that we see from service providers and i'm talking about drilling rigs heavy lift vessels and related services and equipment is more related to the global demand for oil and gas services and that is what is affecting the availability of drilling rigs and the pricing the pricing that we've seen for the drilling rig in greece coming up in 2027 is similar to what we saw last year so we haven't seen a substantial or a material increase in the levels of activity these are deep water projects and not everybody can go and drill deep water wells in 2000 meters of water depth so the projects are in the hands of very few companies the majors and us we are the only ones that have drilled wells in israel in the last five years now so there isn't that much activity to drive prices specifically in the mediterranean the global situation is a different story but not because of activity in the mediterranean thank you and a follow-up from thomas street of street research

as you see it what is driving the long-term electricity growth in israel the country is a technology hub are we seeing data centers construction there as part of the electricity demand growth does this impact your marketing strategy in any way or are you limited to selling gas into israel's grid thank you thomas streeter um yes the demand is increasing primarily because of the growth of the economy

because of what is happening in the tech sector and because of the new drive for demand centers in country which of course israel wants data centers to be stationed in israel also for security reasons so the combination of all three and if you add on top of that the lack of wing because israel is a country that doesn't have wind so there's very limited um renewable potential from wind solar is uh increasing but there cannot be a replacement for uh for the gas it does we do see incremental um in the mix we see incremental um electricity supply from solar but that's uh that's it uh so does it change our marketing strategy as i said earlier we have been selling to Israel and we are very confident and happy to continue selling to Israeli buyers as long as the prices that we see in the next phase of our contracts are in line with the regional gas prices that we see in Egypt and elsewhere so we want to sell gas to the best buyers we don't discriminate against buyers we don't want to be taking unnecessary credit risk so credit quality is very important we like to be paid on time and we like to know our customers and this is something that is very comfortable for us in israel so the next phase of our marketing is to cover the israeli needs because obviously that remains a priority but also take advantage of the regional higher gas prices that we see in egypt and potentially also from the southeast european market thank you and a final written question from roshan for her aura from egon am

how are you structuring the egypt concession merger to avoid the repeat buildup of receivables and will the new arrangement include any payment security mechanisms can you confirm the current drilling status of the athena and zeus wells and what are the key milestones between now and first gas in h1 2027 um there's no security if the question is about a potential lc or something like that it is

the confidence in the Egyptian market we are we've been operating in Egypt for over 15 years we've seen all the cycles cycles go up and down and you have to be confident and you have to be supportive of the country that you do business regardless of the challenges this is our DNA we are committed to israel we're committed to egypt we are committed to greece we're committed to the core countries that give us the opportunity to develop our assets and even in the tough times even when receivables were at peaks we always stayed committed to egypt and in faith negotiated with the government and egpc and egas ways to mitigate the challenges so i don't have a magic solution but i have a lot of confidence especially in the new administration the new minister and the policy of the president to maintain this record of no overdues to the industry this is not just an energy phenomenon this is also this is covering the rest of the market so we remain confident without any specific safety mechanism could you repeat the second question please yes can you confirm the current drilling status of the athena and zeus wells and what yes and what are the key milestones between now and Saskatchewan thank you Zeus and Athena have been completed and in the next I would say days if not weeks the rig will be released so everything has gone according to plan and the worlds will be hooked up with the remaining production platforms production facilities there are obviously more milestones we have other units that will allow us to continue the project and nothing related to the subsurface it's all facilities and equipment that are being developed in various parts of the world by technique our major contractor as i said earlier first half 2027 we will see cash flow information at zoosh and then we will move to the other wells in the next phase of Catalan I can give a lot of technical details or I can have a separate call but I don't see anybody's interested in specific details of the technical session of Catalan but happy to take the question offline in more details thank you

that is all the questions that we have for now this concludes today's call thank you everyone for joining you may now disconnect