SNGN Romgaz S.A.

Good afternoon, ladies and gentlemen, and welcome to our conference call for discussing the results recorded by Romgaz Group in the first half of 2026. After introducing the speakers, Mr. Razvan Popescu, Chief Executive Officer, will make an opening speech. Thereafter, the Q&A session will take place. Please be advised that this conference is being recorded for internal purposes. On half of the company, the following speakers attend this conference. Mr. Razvan Popescu, Chief Executive Officer. Mr. Aristotel Jude, Deputy Chief Executive Officer, Ms. Gabriela Trambițaș, Chief Financial Officer, Mr. Adu Moldovan, Energy Trading Director, Mr. Ion Foitaș, Production Department Director, and our Investor Relations Department. Now I would like to give the floor over to Mr. Zvan Popescu, who will open the conference call with an opening speech.

Good afternoon, ladies and gentlemen. Thank you for joining our conference call to discuss the result recorded by the Romgaz group in the first half of this year. Today, we released the Board of Directors report, which comprises a detailed presentation of our economic performance and the consolidated interim financial statements. Also, an overall presentation of the group is available on our website in the investor section. I will start by highlighting some of the aspects of the gas market environment in the first half of 2026 compared to the same period of the previous year. We estimate that natural gas consumption in Romania increased by around 3% to 60 tera, while imported volumes declined by 14%, reaching a 22% weight in the total gas consumption. The European natural gas market remained challenging and highly volatile during the first half of 2026, Market dynamics continue to be shaped by geopolitical uncertainties, lower storage levels, and Europe's increasing exposure to global energy markets, while security of supply remains a key priority across the region. Romania, Romgaz activities continue to be influenced mainly by the ordinances issued to regulate the gas prices. The main legal provisions applicable to gas producers include regulated gas selling price of 110 Ron megawatt hour applicable starting 1st of April 2026 and up until 31st of March 27 for the gas sold to household consumer and their suppliers and to heat producers was higher at 120 RON per MWh and was applied to a slightly wider category of consumers. For the gas sold at regulated prices, payment of the WIP for profit tax is exempt and gas royalties are computed based on these regulated prices instead of the ZEG reference prices. Regarding the operational and financial performance recorded by the group in the first half of 2016, We recorded a natural gas production of 2.4 BCM, which exceeded by 22 million, or almost 1%, the level budgeted for the first six months. In Q2 alone, the natural gas production was 1.17 BCM, and we succeeded to narrow the production decline to 2.8% year over year, closer to our strategic annual goal of 2.5%. and an improvement compared to the decline recorded in the first quarter. The six-month output results were achieved through steady efforts aiming to consolidate the potential of our onshore production, which included intervention and completion operation, which allowed us to resume production at 89 inactive wells that improved production by over 62 million cubic meters, successful exploration activity and completion Gn Romgaz S.A. Gn Romgaz S.A. S.A. Gn Romgaz S.A. We continue to hold a significant position on the domestic gas market in the first six months. Romgaz was the leading gas supplier with a 43% market share in total gas delivery according to our estimates. Regarding gas consumption covered only from domestically produced gas, we have a 55% market share according to our internal assessments. lower by 10% year-over-year as a result of declining production and volumes extracted and sold from storages, but also a regulated lower price. Revenues from storage services were higher by 3% year-on-year at R284 million, with withdrawal-related revenues up by 30% and capacity reservation having a 54% weight. As of 30 June 2026, 86% of the operational capacity of our gas underground storages was already booked. Revenues from electricity added 149 million RON, adjusted by 16% year-on-year due to an almost half production of the old power plant to 182 gigs. Overall, Romgaz Group reported total revenues of 3.88 billion RON adjusted by 9% compared to 4.25 billion RON in the previous year based on the lower contribution of our gas segment. Regarding expenses, we recorded willful profit tax of 486 million RON and royalties of 284 million RON representing a total expense of 771 million, only up 0.4% compared to the previous year. S.A. In the second quarter alone, we recorded a net profit of 763 million RON, elevated by 4.7% compared to last year, and the highest net profit rate ever recorded in the second quarter of the company. On the capex side, the first half of 2026, Romgaz will be invested in a total consolidated amount of over 2.55 billion RON. Of this amount, 2.02 billion represented the investment in Romgaz Black Sea Limited and 429 million the investment that were made by Romgaz alone. 99 million was the capex for the depot gas subsidiary. Regarding our strategic project, Neptune Deep, the progress made this year is aligned with the budget and with the execution calendar. The Transocean Barrens drilling rig is currently drilling and completing well operations. Six wells have already been completed out of a total of 10 development wells across the project. Installation of the Neptune Alpha offshore production platform was achieved in July, representing a major milestone of the project of an unprecedented magnitude for Romania and the EU. The 160 km offshore main gas pipeline has been installed. This will transport natural gas from the Neptune Deep Alpha platform to the shore at Tuzla. and delivered into the national grid. Also, preparatory drilling works have been performed in H1 for the Anaconda 1 exploration well, with drilling scheduled after the Neptune Deep block drilling is completed. We aim to explore this new prospect in the Neptune Deep block. As a result of this significant development, Romgaz and OEV Petro are on track to safely deliver the first gas from Neptune Deep in 2027. and the project does remain within our 4 billion euro guidance for the total investments. Another strategic objective is the CCGT Power Plant in Yerba. The project has now entered an advanced implementation stage that comprises the execution of already awarded contracts and the procurement procedures for the remaining activities. The multidisciplinary team dedicated to the project Simultaneously managing design, procurement, negotiation, contracting, execution and monitoring activities. A memorandum has been approved by the Romanian government in May, aiming to facilitate the procurement process. It enabled the initiation and acceleration of award procedures, reduced decision-making times and facilitated the fast mobilization of all entities. As a result, significant progress has been made Gn Romgaz S.A. S.A. The shareholders approved the transfer of business agreement between Romgaz as a buyer and Azomurash as a seller. For Romgaz, the agreement's scope is to improve the gas value chain, provide new value-added products, and also assure a partial natural hedge against gas price volatility. At the end of the presentation, I would also like to mention the dividends that Romgaz distributed this year. We remind that on 29th of April, the shareholders of Romgaz decided upon total gross dividends of R606 million, which resulted into a total payout ratio of 19% for the last year and will allow Romgaz to partially finance its significant investment.

Ladies and gentlemen, the line is now open to take the questions. I would like to remind you that you have two options to address your questions, either to raise your hand and turn on your microphone or write a question.

Hello, good afternoon.

Thank you for the presentation and for the results.

First, could you please confirm the capped price gas volumes of around 7.9 terawatts in the second quarter? And if you could provide the expectations for the third quarter and the fourth quarter. This would be my first question. Second, if you could please share with us if you still expect for 2026 a gas production of around 4.8 bcm. This would imply in the second half of the year a decline of around 3%. Is this the correct profile for the second part of the year? And should we see productions stabilizing around 2026, also in 2027, before Neptune Deep starts contributing? And my last question is regarding the Jernut power plant. In the presentation, it appears that it has been shut down till August. Has the electricity production now resumed and the plant is fully operational? And regarding the new power plant, we are already in the third quarter. And we're moving really close to year end. Is commercial operation in the first half of 2027 a realistic target? Or should we expect a meaningful contribution from the new plant in 2027 or maybe later from 2028? That's all. Thank you.

Thank you for the questions regarding the quantities that were sold in the second quarter of 26. On the ordinance, we sold 7.84 tera. In the third quarter, we are estimating somewhere above 7.5 tera. For the fourth quarter, we estimate that quantity to rise Gn Romgaz S.A. Gn Romgaz S.A. Gn Romgaz S.A. Gn Romgaz S.A. Gn Romgaz S.A. S.A. S.A. We will have an update in the third quarter of this year.

Okay, thank you very much.

You're welcome.

We received three written questions from Mr. Vladimir David. Hello, Romgaz team. Three questions, please. One, the first one. Can you please tell us what percent of gas sales was done at regulated prices in Q2 and in the future include that number in your presentations? And the second question, can you please also include the forecast percent of gas to be sold at regulated prices? These two questions already received an answer from Mr. Popescu previously. And the third question, do you foresee any delays for Neptune from what is happening in the Black Sea?

S.A. in the Black Sea. The Romanian institutions are taking every precautionary measures and Romgaz with OMV Protocpetrom and the subcontractors are taking all necessary measures in order to mitigate what is happening in the Black Sea.

Another written question from Mr. Liviu Popescu. Hello. What clients do you have for the gas in Ektunib? How many contracts did you sign? And the second one, what is the status regarding the gas supply for population?

We haven't signed any contracts regarding in December, with deliveries starting from 1st of April, 2027.

We received a further written question from Mr. Adam Milewicz. What was the reason for decline in average gas selling price in Q2 versus Q1, despite increase in market gas price?

Gn Romgaz S.A. Another written question from Ms. Ioana Andrei.

What was the wrong 51 million deferred tax income recognized in Q2 mainly a catch up or should we expect further deferred tax income in the second half?

The deferred income tax recognized in Q2 was generated by The fiscal loss reported by Romgaz Black Sea, which was generated mainly by the increase in foreign exchange rates. Currently, the exchange rates appear to be quite stable, so we don't expect significant impact on the results of Q3.

We have a raised hand by Mr. Oleg Galbur. Please turn on your microphone and address the question.

Yes, good afternoon. I hope you can hear me well. I have several questions. First of all, two specific ones. Could you explain what is the nature of almost 128 million RON reported under the net impairment gains on trade receivables in the upstream segment in the second quarter? And secondly, on the income tax in the second quarter, it went down to just 4%. Maybe you can explain as well what is the reason behind this drop. And lastly, on AzoMuresh, if you could provide an update on the assets takeover process following the shareholders approval from July. So basically, starting when should we see employees of AzoMuris to be booked and reported by or covered by Romgaz and also if you could provide an estimation when do we expect to actually start operational activities at And lastly, could you also disclose what was the realized gas price in the second quarter alone and remind us what was it in the first quarter of this year? Thank you.

If you recall, last year in December we reported an impairment on receivables from the Ministry of Energy related to the cap prices related to sales to household consumers. According to legislation issued in 2022 and then updated,

Excuse me, there is a background noise and it's very hard to listen to what you are saying. Thank you.

Sure, let me start over. In Q4 of last year, we recorded an impairment for receivables from the Ministry of Energy. In 2022, an ordinance was released which said that we should sell gas to household consumers at a regulated price. And whatever difference between this price and the price we had contracts already signed would be recovered from the Romanian state. In 2025, we decided to record an impairment as three years had already gone by and we didn't receive anything from the Romanian state. However, in this June, we received a significant amount of the abstaining receivable, so we released that impairment. Regarding the income tax, this release of impairment-generated non-taxable income, which reduced the income tax, and also we recorded a deferred income tax related to the fiscal loss in Romgaz Black Sea. And what cost level are we talking about, please? Sorry?

What is the cost level you are expecting to incur on a quarterly basis or any other things?

We cannot give this information now. What I can say is that we are working on a revised budget and you will have this information when we will come out with this revised budget.

Okay, thank you. And on the realized prices, if you can say what?

S.A.

Okay, so the elevated average realized price in the second quarter was lower than the first quarter despite the up-price movement, right? Correct.

Which was impacted mainly by the reduction of 10 RON in the regulated gas price.

Okay. and not by these bilateral agreements that you have signed for the delivery during the year.

Yes, some of them were impacted by those as well because most of the contracts were concluded in the beginning of the year before the Iran war has started and before the European gas market went completely higher.

Would you expect these contracts to further impact negatively your realized prices during the year?

They are long-term contracts. For the entire year, we expect a slightly higher price than the one that we had for the Q2.

Understood. Thank you very much. That's very helpful.

We received another written question from Livia. Could you please let us know if there is any update in CAPEX guidance for this year or next year? Does it change due to Azomoresh now?

As Gabi has said, we are redoing Romgaz's budget and you'll have all these numbers the moment that we will publish the updated budget that will encompass the eyes of Moris Peko.

We pass on to another written question from Mr. Adam Milevic. Should we expect higher dividend payout next year?

This is something that the shareholders and Romgaz shareholders will approve on after

Another written question from Mr. Vladimir David.

Hello. For the bilateral gas sales agreement, can you please share the volumes and prices on quarterly basis in Q3 and Q4? So the answer is provided by Mr. Radu Moldovan. The figures would be for Q3, 7.56 terawatt. And for Q4, 9.97 TL.

For the moment, we do not have the quantities for Q3 and Q4. Another written question from Mr. Cristian Petre.

How can you repeat the realized prices for Q1 and Q2, including the regulated prices? Sorry, I missed the answer. Mr. Oleg Galbur, you may now address your question.

Thank you. I have a follow-up on an earlier question, but I missed the answer and just want to make sure that I don't use the wrong information. There was a question about when do you expect to start production at Neptune and to deliver the first gas to the market. Could you please repeat your answer? Thank you.

2027, when we'll have a different date as the project progress will inform the investors in the market. For now, 2027 is the date that we have.

OK. Thank you.

We received another written question from Mr. Ciprian. Hello, in which period of the year are the majority of the annual contracts concluded or negotiated?

Usually that used to happen before the winter period on the annual basis, so into the summer, but because of the distortion from the government ordinances and the fact that allocated on the ordinances, these dates were, let's say, a bit changed. And some of the contracts were concluded both in the summer and both in the winter. So it wasn't exact timing for the contracts. But usually after the ordinance was given, all the quantities that Romgaz had available for the coming year and up to the 31st of March 2027 were allocated on this ordinance.

Mr. Milevic wrote another written question. Do you expect any Neptune Deep CapEx next year?

Yes, we expect Neptune Deep CapEx for next year as well and it will be shown in the revised budget.

Another written question from Mr. Cristian Petre. You mentioned 9.9TB for Q4 regulated price. Can this quantity change? What would be the factors to increase or to decrease it?

No, this quantity should be set. It's set under contracts and it shouldn't change. Only if some of the Suppliers may not want to receive the gas in that order and would ask for movement, but basically this is the quantity that we will have in the fourth quarter of 2026 under the ordinance, given the fact that it's also a winter quarter, we do not expect it to change.

The next received written question from Divia. How much have you already spent for Neptune Deep in CAPEX and how much is remaining now?

So far we spent around 7.5 billion lei. We expect another 2.5 billion lei to be spent until the end of the project.

If there are any other questions, please feel free to ask or write them down. Another written question from Mr. Liviu Popescu. Is anything changing in Jernut's strategy now that Prime Minister Boložan has said he discussed this with you? Are you setting new priorities or allocating new investments?

The strategy is to be able to synchronize the power plant as soon as possible, to have it in commercial operations as soon as possible and use it to balance the grid as it

The next written question from Mr. Cristian Petre. Can you talk about demand for Neptune gas? How would you sell the excess?

There is a demand for Neptune gas and the excess of gas that we'll have from Neptune Deep will be sold according to the commercial policy

If there are any other questions, we have some other minutes to discuss them. If there are no further questions, we will conclude this conference call. Thank you for your questions. If you need further information, please contact our investor relations team. The conference is now concluded. On behalf of Romgaz team, thank you for attending today's conference call.