SNGN Romgaz S.A.

Good afternoon. Thank you for joining Rome Gas Group conference call on the preliminary results for 2025. Following a brief introduction of our speakers, Mr. Razvan Popescu, Chief Executive Officer, will provide an overview of the preliminary results recorded by Rome Gas Group in 2025, after which we will proceed to the Q&A session. Please be advised that this conference is being recorded for internal purposes. On behalf of the company, the following speakers attend this conference. Mr. Razvan Popescu, Chief Executive Officer, Ms. Gabriela Trambitsas, Chief Financial Officer, Mr. Radu Moldovan, Energy Trade Director, and Mr. Ion Foidas, Production Department Director. With that, I will now invite Mr. Rozvan Popescu for the opening presentation.

Good afternoon to everyone and thank you for joining. will be available on our website in the investor section. I would like to take this opportunity to address certain aspects regarding the market context last year with impact on our group's performance. Natural gas consumption in Romania rose by 1.1% weak trading liquidity as a result of the current regulation in force, and we estimate that the average wholesale price increased by almost 30% year-on-year. Under Central European Gas Hub, the average monthly reference price also rose around 17% in 2025, according to the data provided by Neomar. sector raw gas activity were mainly impacted by GEO number 27, which was effected from April 1st, 2022, for the gas sold to households and supplier of households. Regarding the operational and financial performance recorded by RomGas in 2025, we can highlight the following main activities. Natural gas consumption amounted to 4.95 BCM, marginally adjusted by 0.2% production, which included completion of investment works to extend production infrastructure, allowing us to stream into production six new wells, specific investment works in inactive or low-flow wells resulting in reactivation of 175 wells that generated a total flow of over 300 million cubic meters, continuous rehabilitation projects of our main and Also, we completed drilling of one new production well, finalized seven surface facilities while other 23 are in different preparatory stages. We can also highlight that all these measures led to a in production test, 54 Damianca well that is being prepared for production test, and 78 Rossetti well that is already in production, while other seven wells are in different stages of drilling preparation. For the last quarter alone, we can mention that gas production amounted to 1.28 BCM, adjusted only by 0.9% from the 1.29 BCM record output that was We reported total revenues from gas sold of over 6.9 billion ron, marginally adjusted by 0.3%. This was the combined result of a lower average selling price, while gas volume sold increased by 5.5% to 4.82 BCM in 2025, gas supplier in Romania in the last year, with a significant contribution of 50% in total gas delivery. Also, we are strongly positioning gas consumption covered from domestically produced gas, holding a substantial share of 71% last year according to our internal estimates. Revit Scrum Storage Services also advances revenues higher by 56% and capacity reservation activities having the largest weight 55%. We succeeded to increase our revenues from electricity by almost 2% to 382 million euro while production of our old power plant has expectedly decreased to 750 GWh in the last year. giving to the security of supply in the energy market in Romania. Overall, the group recorded total revenues amounting over R8 billion, higher by 1.2% compared to 2024, based mainly on the strong contribution of our upstream segment. Regarding the expenses, the windfall tax recorded a 36% decrease year-on-year to R767 million, mostly due to higher gas volumes sold at the regulated prices. Gas and UGS royalties adjusted by 6% to 559 million RON. Altogether, the three main taxes, windfall tax, royalties, and the duty to the Energy Transition Fund decreased by 26% year-on-year, but still represented a significant expense of 1.34 billion in 2025, having the Bottom line, we reported a historical annual net profit of 3.35 billion RON, higher by more than 4% comparing to the 3.21 billion recorded in 2024, and representing the highest annual value ever recorded by the group. All profitability rates were substantial last year, with net profit margin rose to the highest historical annual value of 41.7%, and both EBITDA and EBIT margin continue to be significant at 54.9% and 46.3% respectively. For the last quarter alone, we can underline a net profit of R912 million, 70% higher compared to the quarterly average of the past three years. 86 billion RON in 2025. Investment in RONCAS Black Sea Limited, which basically is the Neptune Deep, represented 2.74 billion RON from RONCAS alone. And with respect to our flagship offshore project, we can mention that it is currently in the execution phase, in line with our programs and budget and the execution calendar. During 2025, significant milestones of the projects included, not only start of the construction works at the microtunnel in Tuzla, but also the achievement of all four reservoir targets in the Pelican South field by drilling all the four wells that were in the drilling program. Also, it is important to mention that in December 2025, the Romanian government approved Addendum Type No. 7 to the Concession Agreement exploration well will be drilled in the deep water area with the aim to identify, evaluate and exploit further the energy potential of the Black Sea. Another important objective is the combined cycle gas turbine power plant in Yermut, for which the completion rate is around 98% for the overall turnkey project and 90% that was remaining from the last EPC contract. Following the termination of work's contract with Duro-Felguera as executor of this project on October 13, ROC has became the general contractor, and we are in process to assign the contracts for the essential subcontractors and directly purchase the services not exceed December 31, 2026, according to the government decision that was taken at the end of 2025. Another important event was the approval of the company's decarbonization strategy for the 2050 target on October 22 by the Rome Gas Board. This strategy was developed in the context of European and national policies aiming to mitigate greenhouse gas Our net zero trajectory should be periodically reassessed based on technological progress, availability of funding, and the clarity of regulations. I would also like to mention that the second issue of the bonds under the EMTN program, which were oversubscribed eight times on October 28th, our new 500 million issue of bonds has a maturity of six years and an points confirms the confidence of the institutional investors in the company's development strategy. At the end of the presentation, I would like to emphasize the significant performance recorded by the Rongya stock on the Bucharest Stock Exchange. S&G share price doubled over the last 12 months period, leading to a current market cap of around 9 billion euros, With this, I would like to close our presentation and thank you all for your attention. Thank you.

Thank you, Mr. Popescu. We will now begin the Q&A session. You have two options for addressing your questions. Either raise hand and unmute your microphone or submit your questions in writing in the chat window. We have a question from Ms. Daniela Mandru.

Hi. Hello. Thank you for the presentation. What I've seen just compared to my estimates, I've seen some large deviation in the income tax expense. I don't know. You recorded some deferred income tax or something in the last quarter.

Yes, hello. For 2025, it's still valid an ordinance issued a few years ago which provides for certain discounts, let's call them, on taxation if equity increases. Considering the increase in equity from 2024 to 2025, the income tax benefited from a 14% decrease.

Sorry, can you detail what equity increase?

So equity in the balance sheet. Ah, equity in the balance sheet, yes, please. Increase from $14 million in December 2024 to $17 billion in December 2025.

And, sorry, I don't know what is this... regulation, not regulation, but this exemption referring to. So if this equity increase, you can please detail this tax exemption or what it is.

Yes, it's based on an emergency ordinance number 153 issued a few years ago. I don't recall the exact year. Just a second. So it was issued in 2020 and it has several discounts. One of them is if equity increases compared to 2020, it benefits from discount of 3%. Then another discount is if equity has an annual increase between 20 and 25%, it benefits from a decrease of 9%. And there's another 2% decrease if... Okay, I understood.

I understood the logic behind, but this discount of 3, 9% is applied to what? To the full year.

Yes, to the full year.

Yeah, to the full year, but applied to what? To the normal income tax, applied to what?

The current income tax.

Ah, to the current income tax. Okay. And... I was not from the very beginning, but can you disclose the quantity sold at cap prices in Q4, please? And what do you expect for 2026, if it's possible?

Unfortunately, we don't have the final ordinance, so the ordinance has not been published. The ordinance not having been published, we do not have the year of 2025, around 80% of our entire production was sold at regulated prices.

Okay.

Over 80% was sold at regulated prices.

Okay. And now regarding the... I didn't see... the notes, but I believe you don't publish them. Regarding the financial costs and regarding the capitalized interest costs, can you disclose the total interest costs capitalized in the full year? Yes, just a second. so of a total income finance cost of 183 million lei we capitalized 69 million for the full year 69 million yes okay so please help me a little bit here i'm not quite familiar with these capitalizations and so on so when the the investment will be fully functional, this cost will be, all these interest costs will be reflected in the financial result?

No, it will be included in the value of the investment, and it will be depreciated based on the useful life of the investment. So it will... Yeah, it will be...

Because I've seen at Digi, they did the same, but all the capitalized interest, they put in the financial results. So I'm just wondering if you do the same. I don't know the reason why. Okay. But for the first quarter of the year, of this year, do you know the volumes at regulated prices?

Yes. For the first quarter of 26? Yes. Yeah, they are the same. So, it's around 81% for the first quarter of 2026. So, they are basically the same.

Basically the same compared to the last quarter, with Q1 2025. Yeah.

So, it's a bit over 10 Tera.

Yeah. Okay. And regarding the execution of the warranty, I don't know, because I didn't have time to go through all the notes, the report you published. Have you registered them? Yes. Maybe it's unregistered, no?

Yes, we recorded the amount that was executed, around 60 million lei. We still have to recover around 20 million lei. The provider of the guarantee would not pay the amount that he owes us, so that amount was not recorded yet. But we are taking action, legal action against him.

So probably this amount will be recorded. So there are... You can record the remaining of $21 million in the first quarter of this year or later? What is your estimate?

It depends when they are going to pay. We cannot estimate right now.

Okay, thank you. This is all from me. Thank you. Thank you.

Ms. Irina Railiano? We are ready for your question.

Thank you for the presentation and for taking my questions. I hope you hear me well. My first question is regarding these changes on the regulated gas market. I mean the expected change from regulated gas prices to some kind of administrated gas prices. How does this impact, Romgas? I understand you don't have the volumes for this year, but in general, what is the difference for a producer, let's say? And also here related to your supply segment strategy, I mean, I see you plan to expand to the supply business. Will you enter also this administrated price scheme? If you could give us more details here.

Yeah, thank you for the questions. From our analysis, the impact for the producer is, of course, going to be the 10-day difference that is going to be assigned to the regulated price. So this is going to be the impact, but, of course, it depends right now on the quantities that are going to be allocated because in the past years we had fluctuations It's going to be published probably next month, and we'll have the allocation of quantities in order to have a correct calculation and impact on the profitability. from commercial, economic, IT, has been working around the clock. From a technical perspective, we will be ready to be able to cover the supply for the small household consumer and non-household probably starting from 1st of April. But, of course, this is relative compared to the quantities that are going to be allocated. energy producers and the suppliers of the house. Also, there is another ordinance, again, the Trenulets ordinance that was published in November that kept our current workforce number and also the spending that we can make and the hiring that we can have to the levels of the end of November. to the supply business.

So basically, you don't know exactly the quantities, but does this prevent you from further trying to develop the supply business? I mean, even though if you have to deliver some of your production, so these heating producers and suppliers of households, does this prevent you from developing further your own portfolio?

No, we will develop our portfolio. It depends on how this ordinance will be published. For our strategy for the supply business, we'll see how we'll approach probably the commercial, the small non-household commercial that will be on the free market. We will not stop developing this supply business, but we need to see exactly how we'll draw up our strategy, given the quantities that are going to be allocated. Because, of course, this will impact our pricing power. Because we are basing the synergies that we have from the production to the supply business and the fact that we are the producer. So, basically, the entire supply, our supply business was drawn up from our own internal production.

Okay, so a lower share in this case will be more favorable for Ramgas. Yeah. Okay, because you'll have a remaining larger part to support your supply business. Correct. Okay, thank you. And you said you don't have contracts for households, but what was the situation on the smaller commercial or industrial clients? Do you have any discussion there or potential clients for this supply business?

We do have. already in the non-household, let's say, business even now. We have the FUI, and we also have a couple of thousand people in the FUI that are registered to RomGas already. So, basically, we have a small foothold in the supply business, but in order to make it in order to be able to be, let's say, favorable and get the market share in this respect.

Okay, thank you. And regarding Azamurish, if you can provide us some updates, if you have in a favorable, let's say, situation, any estimated capex besides acquisition that you will need to allocate if the transaction concludes, and what are generally these scenarios that can materialize this year regarding this acquisition?

with Aldo Mures and we have made a non-binding offer, an interval of price to them and we are expecting for them to come back. We'll see if it will conclude or not. Until then, I cannot give any details regarding CapEx or other investments.

Okay, thank you. And regarding this, Mr. Muresh, there are some discussions in the press, and I'm not sure if you could provide more transparency here, that you provided or the price was mainly the issue here, and you view the acquisition price lower than the partner price. So, that's why I'm asking about the scenarios. What if you don't agree on the price? What are the possible solutions or situations or outcomes here?

Well, the possibilities are two. We either ask you the acquisition or we don't. Of course, it's a matter of prices. We view the issues that the entire petrochemical industry is having in Europe because of the high gas prices, because of the NCR regulation, because of the CO2 pricing. So our offer was in accordance with this scenario, with the maturity of the asset. And of course, with the modeling that we've done on the asset. acquisition also as commitment to an investment for the foreseeable future. So for us, we took everything into account when we made this offer.

Okay, thank you.

You're welcome.

We have a question from Laura Simeon. What is your production estimate and what volumes will be sold in 2026 at regulated price?

Our production estimate for 2026 is keeping our 2.5% decline in production in check. production, with workovers that we're going to have on our mature fields. At regulated prices, we really don't know what the allocation is going to be. We have the entire quantities sold for Q1 and around So it has to be somewhere in the vicinity of around half power production, probably at a regulated price.

Another question from Ms. Laura Simeon. What is your estimate for 2026 power production?

This is a bit complicated because for our energy business, we already our old power plant is shut down. We've been having some technical issues with it. So this is going to be very, very volatile to say so. The moment that we'll start testing in the new Yernut power plant, then the old Yernut power plant will not be put into production. We had up until two weeks ago, the plant was working, but full capacity. We'll probably be trying to go progress in the general site, it's going to be probably stopped.

The next question from Laura Simeon. When will you start retail business forecasts?

As I said, it depends a lot on the quantities that are going to be allocated on the ordinance in 2019. Technically, we want to be ready starting for the 1st of October. So, in terms of

Ms. Simeon wants to know what will happen with Trident Block after Lukoil retired.

So, officially Lukoil has not retired yet. This is mostly a question for the Myanmar. The concession agreement and the exploration phase for Lukoil ends at the end of this year, but it who will be the new investor in Lukoil. Of course, Romgas

Another question from Ms. Simeon. Do you estimate that quantities sold at regulated prices in 2026 will be more or less than 2025?

For us, it's probably going to be less because we already have quantities sold in 2025. But if you take into account the Q1 quantities, which is basically at over 80%, they could be in the same vicinity of 2025.

And finally, the last question from Ms. Simeon for stored quantities. Will it remain the obligation to be registered at regulated prices after the 1st of April, 2026?

Or does the quantity be registered?

So far we have, we do not have gas at regulated prices in our storage facilities. And we do not know what happens with the remainder. We have a hand raised from user ending in 85. Okay, Mr. Thomas Fletcher.

Yes, can you hear me? Hello? Yes. Can you hear me now? Yes. Good afternoon. I got two questions. First of all, you mentioned the Lukoil stake in Trident Block. Would Romgas be interested to acquire Lukoil stake? I think you suggested on your answer that you may be not interested, but I'm just curious what is the reason that you are not interested. If you are not interested, then if you are interested, please explain us why. The next question would be regarding the Yernut power plant. Last time you said that you would finish the project by yourself. Is this the case right now? Will you make the last part of this investment by yourself? Thank you.

Yeah, thank you for the question. So regarding the Trident block, Things that a site manager needs to know is to know how to recover such project, to, let's say, cut some corners in order to put it into production. From the companies that have made the bid for this site manager,

We will proceed now with Mr. Oleg Galbur.

Yes, hello. I hope you can hear me well. I have several follow-ups. First of all, can you please disclose the exact volume of gas sold at regulated prices in Q4-25? and what level of realized gas price as RomeGas recorded in the last quarter of last year. And also, since we don't have yet a full report with a full disclosure, it would be very helpful if you could disclose the profit before tax by segment, I mean by upstream storage and power for the full year or last quarter of 2025. And then I have two more general questions. The first one refers to the production outlook. So it is my understanding that for this year, you would rather expect a flat level of gas production. Please correct me if I'm wrong. But otherwise, it would be also interesting to know what is your expectations longer term, let's say for the next three years, according to your strategy. Do you see the possibility to keep the production stable? Would you rather see small production declines? So, putting in the longer term perspective would be very helpful for us to understand which way you see developing. And lastly, on the upstream production costs. And here I refer to all costs excluding taxes, windfall taxes, and royalty expenses. So if I look correctly at those expenses, production costs, sorry, then I calculate a level of 320,000 cubic meters for the full year of 2025, and that would imply 22% increase year over year, which would be in line with the cost inflation seen by other oil and gas producers in the region. So first of all, if you could confirm whether i'm not too wrong with my calculation and second of all it would be helpful to hear your comments about the cost development whether you see some high cost inflations coming from labor from services coming from other angles and whether you have a strategy in mind or already an action plan how to contain this growth or even maybe improve your your cost base so that would be my those would be my questions thank you

So, regarding the sales, in the fourth quarter of 2025, we saw 10.23 Tera at regulated prices, but an average selling price of 134 RON per megawatt. In the first quarter of 2026, we expect around 10.38 Tera necessarily our production cost. Yes, it can be computed. You are not far from the truth. We have been seeing inflationary pressures, especially on the services side, given the fact that raw gases' mature fields need heavy investment, heavy investment in compressors, heavy investment in the well workovers. That's why we are investing in the Carangeli field as well. That's why we are drilling in the Carangeli field as well. We've seen inflation also stemming to our contracts for drilling the rigs. So, yes, we have been seeing pressures. And one way that we are trying to mitigate this is through our Circos branch. Given the fact that we do most of our well-worked are trying to implement and we are implementing right now. We are implementing the well production, a well production type of analysis and this will help us in the well workovers and also to be able to have Romania, except for the Caragere field and the Botene project, there aren't that much prospects that we can work on. This is why we invested in the Neptune Deep, this is why we have gone offshore, in order to be able to have this production capacity and in order to keep is getting difficult year after year because of our mature fields and the fact that without having these investments, we are talking around 200 million euros each year only in keeping production at this level, we will have a much higher decline somewhere in the 8% region in our mature fields under operation.

Thank you very much. That's extremely helpful. So, in other words, just to check if I understood correctly, the strategy is to continue investing in, if not maintaining, at least lowering the production decline in the next years. And I'm talking about the current portfolio, onshore portfolio, not including the new developments.

Correct, correct. This has been kept in check through well-worked let's say, 6% of the, let's say, counter decline of production, and from new wells, around 3%. So, this is how we managed to keep the production in check. We are, of course, investing in a new drying station, we are investing in a new compressor station, and also the deep wells that we have been drilling at Karadzile in 2019. We are trying to open the Caragile field deep gas reservoirs in order to counter this decline in production that we have from our mature field in the northwestern Romania.

Thank you.

You're welcome.

Miss Yona Andre has sent us some questions. First, a follow-up question on supply business. Do you have a target beyond the next year?

We will keep our strategic approach in order to be the supplier, the main supplier in the years to come for the Romanian household and non-household consumers.

The second question from Ms. Andrejoana, regarding Neptune Deep, since drilling has begun on the second perimeter, can you confirm whether the drilling results from the first perimeter validate the anticipated volumes? Yes. Please also share whether there is any deviation from initially estimated volumes.

I cannot share that.

Is there a regional trading strategy? Could you please share?

Right now, the trading strategy for the Neptune will be devised after we know what we're going to do with the Azo Muresh and how we'll approach and our estimates for the supply business and Moldova. But right now, we are more focused on delivering the Neptune Deep with OMB Petrom, the operator. We are supporting the operator in finalizing the drilling and continuing the drilling on the domino field. It's going to be, let's say, a year, not necessarily, but a very intensive year in terms of investment, technical, exploration there and we are trying to be more concentrating on that.

And the third question from Ms. Ioana Andrei, regarding power prices, what is the estimate impact of vertical corridor on gas transit, especially considering the influence of LNG?

We see the vertical corridor in Europe, and when the vertical corridor will be operationalized, it will give, let's say, a connection with the TTF with the Henry Hub prices. So for us in this region, it will have a beneficial impact from the perspective of possibility of gas supply diversification.

Regarding Karadzele, what is the current status of the project? Please share something on the volumes.

The current status of the project is evolving. As I said, we have built three deep wells in Karadzele. One is already in production. Two of them are In Carajele, around 8% of our entire production stems from this field, and 97% of the gas condensate production comes from this field. So, yes, we can expect a continuing increase in the Carajele field production.

The next question we will take from Ms. Daniela Mândru.

Yes, regarding the topics, how much did you invest up to now in Neptune Deep? Yes, this is the question. And the other one is regarding an update on Yernut. I'm not sure if I know anymore when this new power plant will be commissioned. So I want some clarification, please, on the issue.

So for the Neptune, this year we've invested around $2.74 billion. We've invested around... than 4 billion last year, and for this year we anticipate around 3.5 billion RON, around 70% of our entire investment in Epicurean is going to be the highest CapEx here in RON gases history. For the Yernu power plant, as I said, we went into auction for the site management. There, after the site management, we are working on 58 different contracts in order to negotiate with subcontractors that have already worked in the site. And we are confident that we're going to start works in the site starting from late March to early April. the markets and we'll continue to update the investors site manager and with the support of General Electric that is the producer of the equipment in the site.

Yes, here some more clarification. I've read in the newspaper, so I don't know if it's true or not, regarding the grant for this Yarnut plant. I've read that if you... If you don't commission the plant by June 26th, you will be forced to reimburse the grant. This is true?

It's always been like that. So it has been prolonged, but it's 31st of December 26th.

31st. So now it's prolonged to the end of 26th.

In December 25, it has been prolonged up to the 31st of December 26. Okay. So, we have almost a full year in order to finalize and put it into production, but the parameters, it should work.

So, just to conclude for now, you don't know exactly when this plant will start producing power?

No. We need to have everyone back in the site. We need to have General Electric and the subcontractors in the site, and we need to have the site manager to see if we can put it into production as soon as possible. For us, it's very important to start the tests as soon as possible and to be able to put it into commercial production by the end of this year. But, of course, it has a number of factors that it depends.

Okay, thank you.

So finally, questions from the user with the number ending in 85. Could you please unmute your microphone?

Mr. Oleg Galbur?

Yes, thank you for the opportunity to ask a follow-up question. I wanted to ask about dividends. I know what you've been communicating in the recent past, that before the start of production at Neptune, you don't see dividend levels coming to the historical of about 50%. But still, for last year, for 2025, a year with quite good results, how should we think about the dividend payout? Would you see it staying at the previous two years' levels, or do you still see room for some increases? So any comments on this matter would be very helpful. Thank you.

we would like to have a balanced approach of the dividend payout. So, in our opinion, the dividend payout has to take into consideration the fact that we still have raised to, let's say, more historical standards. Understood. Thank you.

Are there any further questions? So if there are no further questions, we would like to conclude today's conference call. For any additional information, please contact our investor relations team. And on behalf of Roamcast, thank you for joining us today.