Newmed Energy Ltd

Hello everyone, thank you for joining us today for the NewMade Energy Financial Result for 2025 webinar. All participants are in listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I am pleased to introduce Yossi Abou, CEO at NewMade Energy. Yossi, you may begin.

Good afternoon everybody and thank you for joining us this afternoon for the result of 2025. We basically will start. So, as you can see, we finished the whole quarter of 2025 with a little bit short of 1.1 BCF a day, 2.8 BCM of gas sales into the market and the average sales of 2025 was a little bit higher than 106 BCF a day, 10.9 BCM a year. We will update on those results vis-à-vis the previous years and where we are heading. On top of that, as you know, because of the war situation in the region, we are currently closed. We are working together with the government, very closely with them, and without getting into details, I assume that we'll be able to come back to operation soon. On top of that, we just finished the Evening of the World, the third gathering line of Leviathan. We successfully completed the project and when we'll be able to produce will be at around 1.4-1.45 PCF a day, so going up to 14-15 BCMAU capability of cells. We finished this project on time and basically with a reduced budget we managed to finish the project with $480 vis-a-vis $570 of the budget, so $90 million of budget saving in this project. As you know, we take investment decision on the second phase of Leviathan, we'll touch that in details later on. And one of the big, I would say, stories of the report is basically first time we are basically announcing that we are in negotiation with the Egyptians for two things. One, it's a post-government agreement for Aphrodite activity and a GSPA to sell to the Egyptian market all the recoverable reserves in Aphrodite. We'll touch and dive into details there. And on top of that, we are in the final stage of the Chrome Exploration World Offshore Bulgaria. We are in the Black Sea, and results are expected in the next few weeks. We are really in that process. We'll share more details down the road. And we announced a dividend of $70 million that gathered to 250 overall dividend in 2025, similar to the 2024 dividend. As I mentioned many times, our target is to continue with a stable dividend stream to our investors in parallel to investment in our core assets, second phase of Leviathan, development of Aphrodite, and maintaining a very reasonable debt to asset value cover ratio. We'll talk about that. Zachary will share that later on in those slides. So let's go through the journey. As you can see, the results in Q4 2025, we sell around 2.8 PCM vis-a-vis 2.7 in Q4 2024. And the average price was 5.4 vis-a-vis 5.8. mainly due to the fact that in 2024 Q4, we had around $73 rent price, and in Q4 2025, we enjoyed $63 rent price. That's really the gap in the price. And the same for the yearly result. In the yearly result we had in 2025, $68 rent price, vis-a-vis 79 in 2024, that results a price of 5.6 vis-a-vis 6.12. That's really the gap. On the sales side, we managed to sell 10.9 vis-a-vis 11.2. Mainly, we had some hiccups with the sales with respect to the previous round in the world in June 2025. when we were down for around two weeks. As you know, we enjoy a very, very stable flow price in all our sales to the markets that give us a very clear stream of revenue for many, many years, but we enjoy as well the upside. As you can see, once we will come back to flow, we'll enjoy the current rent prices, and that will allow us to incur a much higher sales price into the market. And when we are looking into the quarterly result, I think that the main thing is to understand the difference between Q4 2025 vis-a-vis 2024. What you basically can see here is that in 2024, we had net profit, Q4 2024, we had net profit of around $120 million. The gap down is mainly because by selling with you the brand price that I just explained. But the main reason that you see the drop is because we basically, you see here $76 million in the operating expenditure that as a result of the failure in VNEC1 in Bulgaria, the fact that it's not commercial, although we discovered natural gas, so that caused us to eliminate $76 million from the books and this is give us this is take us to where we are and in the early results you will see the same mechanism so first price for MBQ the difference between average of 68 dollar brand price in 2025 to $79 bread price in 2024, reduce the revenue in $85 million. And with respect to the whale of Bulgaria, I already understand. So that's mainly the results. As I mentioned, operating wise, we finished the tail gathering line of Leviathan. That takes us from around 1.2 BCF a day to more than 1.4 BCF a day, and currently we'll be able to sell much more to the market. As I mentioned, we save around $90 million from the budget of the project. and we finish it with around 480, so a significant saving in this project. Yes, we are very conservative when we are building, I would say, a budget for a project, so like the telegathering line, we were conservative as well in the second phase of Leviathan, and as the project goes, we will update the budget from time to time, but we are taking a conservative approach, so we will not have any, let's say, surprises in the market. Leviathan expansion going very, very well. We are engaging with all the main suppliers and we already have everything signed, the project going on as we target. As I mentioned, this project should take us from the 1.4 BCF a day to 2.1 BCF a day by 2029. The budget is 2.4. Again, we'll update once everything is closed and gets more certainty. I assume we'll be able to reduce some of the budget prices. and as you can see this is the assumption for sales to the market so immediately we'll increase the sales once we come back we'll increase the sales to around 1.4 and then by 2029 we'll be able to sell 2.1 to the market to the different markets Israel, Egypt, Jordan that we are selling to in the regional connectivity We have three projects that should bring us to around a 1.6, 1.7 BCF capacity of Leviathan to export market. And this is only Leviathan capacity, so the overall capacity will be more than 2.1, 2.2 BCF. So in Azoda-Shalon looping, what you can see, number one here, We were supposed to finish the project around April. I think with respect to the current condition, we probably have one or two months of delay, nothing significant. But this project will allow us to go up to 6.5 BCM a year capacity of Leviathan and total capacity of 8.5 BCM. On top of that, the Fajr activity is going very, very well. And we are due to finish this project mid this year. in order to increase the flow to Jordan to around 7.25 BCF a day to the Egyptian market through Jordan. And the Nitzana project, the connection onshore between Israel and Egypt, is running very well and this project is due to finish in Q4, 2028. We don't see any, I would say hiccups in this project due to the war and everything is going as expected. One thing I will say, what we did with respect to the off time that we are experiencing right now, we basically managed to do a lot of maintenance activities that were due to come later this year. We managed to do that during this period. so it will eliminate some of the maintenance days that we took into consideration down the road. So actually, we used that period in order to eliminate some of the downtime down the road, and I hope that we'll see better days later this year. Aphrodite project, I think this is one of the main items in the report right now. We are running very well with the feed for this project. As you can see, it's a floater with the 8 BCF a day capacity to the market. We are 0.8 BCF a day, 800 million staff a day to the market. And this project will be connected with the pipeline directly to the Egyptian market. We are negotiating as a partnership Shell Chevron and Human Energy we are negotiating two LOIs with the Egyptian one is host government agreement to cover all the activity with respect to the project. So pipeline lane, connection points, taxation, everything related to this activity. And in parallel, we are negotiating LOI to cover all the recoverable reserves from the reservoir that we will be able to flow to the market. So this will be an anchor to take investment decision down the road for the project. And it's go extremely well. We are very happy with that. As I mentioned, in Bulgaria, we are running with the Chrome 1 well. It's a very promising prospect from our perspective. We are talking about a potential of around 6 TCF, while the main target is almost 4 TCF potential. We are talking about a region that has full connectivity. Actually, the markets are waiting, and we really hope to get good results there. We are expecting to see results this month, and we are running forward with the project. So that could be a significant game changer for Newman Energy, because that can bring us not only to a new area, but this is the potential discovery in an area that paying double and triple the gas prices that we are experiencing. We also managed to bring in Bulgaria government and to set stability for the project for many years to come. And this is very interesting project for us. We are expecting the results soon. Now we will dive into more details of the P&L and the reports. Tachi Habusha, our CFO, please.

Thank you, Yossi. Thank you all for being with us today. Let's run through the numbers and try to understand. As Yossi mentioned, we are summarizing the 2025 full year results with revenues of approximately $1,000,000 and production of about 11 BCM. The net profit declined to approximately $343,000,000 compared with $524,000,000. The net income in the fourth quarter amounted to approximately $17 million, compared with $120 million in the corresponding quarter last year. Let's try to understand what drove this decline. So the change in the net profit was mainly driven by lower net revenues from the sale of natural gas, reflecting both reduced production volumes in total amount of $85 million and lower average price per MBBQ in 2025, which impacted us in a total amount of $24 million. From a production perspective, the yearly reduction that was concentrated in the second quarter resulted from two main factors. One, a 12-day shutdown following the war with Iran and approximately 11 days of shutdown of routine and planned maintenance mainly related to the Third Pipeline project. I'd like to highlight that the third pipeline project, as Yossi mentioned, has been completed below the budget. And in a full year basis, together with the Ashkelon project, this is expected to increase production capacity by approximately 2 BCM. Part of this uplift is expected in 2026, as mentioned. An additional factor impacting revenues was the decline in the average price per MWQ. While we are all aware of the current Brent price volatility, it is important to note and to understand that the downside exposure is mitigated by a flow price under the long-term contracts with a take-or-pay mechanism. In addition, there was a slight increase in revenues from condensate of $3.3 million. Regarding the expenses, the increase was mainly due to the full impairment of the first exploration well, Triglin Vinik Prospect in Bulgaria. The partnership fully recognized an impairment of $76 million in the fourth quarter. We all hope that this impairment is a one-time event regarding the future drilling activities. Regarding the balance sheet, following the repayment of the $600 million related to Leviathan Bond Series June 25, the partnership entered into a new credit facilities with Bank Lumi totaling $500 million and as of today, total available credit facilities amount $600 million. In addition, I would like to remind us that we have a bond buyback program of $100 million for Leviathan bonds from 2027 and 2030 series.

So, thank you, Tzahi. So, as I mentioned, we declare a dividend of $70 billion based on the port water results, and we are running forward with, in addition to what we already distributed in 2025, so a total of $250 billion in 2025, similar to 2024. And as I mentioned, our target is to continue with the stable dividend stream in parallel investment in our core assets. Now we'll open up for questions, so please feel free to ask any question

So the first question is regard to the budget, CAPEX budget of 2026. Maybe before I hand over to Tafia, I should mention that we've published for 26 and onwards. And in this cash flow, we highlight the exact number of capex and all other cash flow items for 26 and the following year. So we do not specify each in this cash flow, specify the exact capex for each project, but the sum number is available for all in this forecast.

Yes, so as Gil mentioned You have the full information in the DCF about Leviathan, related to Leviathan, and also a full disclosure in the financial situation about other projects. The main items to 2026 is of course Leviathan, is Aphrodite, the Nisana project for the midstream, the drilling in Bulgaria, and of course Aphrodite planning.

Thank you, Zachary. The second question by Dimitri with regards to the contract, the structure of contract that we have in place, mainly with regards to the export contracts that are linked to brand price and how those brand price indexation affect the realized price for human energy. You want to address this or something?

Yes. So basically, most of our export contracts, they are working that the current price is the average of the three months before the month. So basically, we will enjoy the current prices in the market in the next months. And I should say that although we have up until now around two weeks of shutdowns, When we are looking on the market, we assume a $62 average brand price for 2026 in our budget. and obviously what we are seeing right now is massively higher, so that will eliminate the impact of the shutdown up until now, and this is our assumption, so no impact for our, we don't see any impact of the shutdown up until now for our yearly results, and this is very clear due to the brain crisis.

An additional question is with regards to the un-drawn credit facilities that we have in place.

So as of today, the un-drawn and available credit facilities amounted to $600 million.

There's a question about Aphrodite and FID of Aphrodite. We are working in order to finish the fee process this year and in parallel to have in place GSPAs and all government agreement in order to take investment decision by the end of the year. This is really what we are targeting and we are working very poorly in order to be there.

So far, please do remember that we are available for you. If you have any additional questions in a later stage, do feel free to contact me or us directly. We will be more than happy to address any questions. I think, lastly, we would like to say a big thank you to our chairman of the board that is retiring.

So, Gaby Last is with NewMed, previously delegating for the last 25 years. He was the director and then the chairman. And Gaby is stepping down from his position as the chairman of NewMed Energy. And we want to say thank you, Gaby. for all your efforts and contribution over the year. Gabby will stay with us as a director and continue and bring from his experience and know-how into the board. So, Gabby, thank you very much and looking forward to continue our journey.

This concludes our webinar for the Thank you very much everyone.