Newmed Energy Ltd

Thank you very much. Good afternoon for everybody. Thank you for participating in this Zoom to review our financial results for Q1 2026. And as you know, in Q1 we had around a month of basically closure of Leviathan platform. So that affected our income, EBITDA and net profit for Q1. together with the Bulgarian Home Well. It's basically provided us with $80,000, $97 million in net profit, which is basically zero for this quarter. But our agreement, the GSPA for the region, are plenty, deeply related. And the price for this month is an average price of the last three months. So basically, what we are seeing, PEP4 for this year, taking into consideration the current rent prices, practically taking $90 rent until the end of the year. What we are seeing is an upside of $330 million in income, vis-a-vis our initial forecast. So if we reduce what we lost these 33 days, of shutdown, and we take into consideration what we are seeing already in prices in the market, so that will bring us to a better situation for this year. As I mentioned, $230 million upside for a new project. Another great news for us is we finished the third gathering line for Leviathan, the third pipeline that flowed gas from the field from the reservoir to the platform. And initially we estimated 1.4 VCF a day. Based on actual results, we are updating the production capability to 1.53 VCF a day. equivalent to 15.8 BCM. This is a great upside that we didn't take into consideration yet in our forecast, not for this year, not for later years. The reason is that we want to finish as well the Ashdod Ashkelon project, which is basically an INGL project that will increase the capacity of flow in the EMG pipeline we estimate that it will bring us to around 8-8.5 PCM and probably can do more and together with the 1.53 we will update the result base on actual flow in EMG and we will see it within a month I will take you through that we are supposed to have gas in this pipeline in 26th of June so really in around a month time and that should bring us to a place that we can upgrade our forecast for the later years and as well for the second half of 2026 on top of this $330 million asset. We will share with you as well where we are with Cyprus, Aphrodite and with Hanasko in Bulgaria. And we announced, as you saw, a $60 million dividend. Again, we are distributing dividend in parallel to keep investment in second place of Leviathan, Aphrodite, and you will see as well that we are maintaining a very low level of debt vis-à-vis the value of our space. production summary basically we compare Q1 2026 to 2025 we should be a little bit higher but the shutdown of Leviathan brought us to around 1 BCM short vis-a-vis the Q1 2025 in terms of pricing Q1 2026 was basically a great crisis before the war and we didn't enjoy the upside of the world in terms of plant prices for this quarter, but we should see it in next quarter. As you know, we are sharing this graph in every quarter. What you see in blue is the realized blended price of NUMED vis-a-vis in orange, the average brand of each month and what you can see basically is that we should enjoy the upside of the brand in the next month this year and following obviously and this is taking us to revenues of $2.88 billion for the buy-in this year vis-a-vis $2.55 billion that we assumed earlier this year. This is the $330 million upside. That basically, with the average price of $90, we are basically seeing more today, but this analysis is based on a $90 grain price average. So, on the operational side, as I mentioned, we finished the third gathering line of the biotan, We finished this project, amazingly, in basically $480 million, vis-a-vis $570 million that was budget, so we had $90 million saving in basically the Viatom project. And as I mentioned, we increased the capacity from the assumption, make the capacity of 1.4 PCF a day to 1.53, great news, back forward for us, and I assume that in the next few months will upgrade our sales production according to that and taking into consideration the mid-stream capability. With respect to Phase 1b, the expansion of Leviathan, everything is as expected and even better. We are on timetable, we are on the budget, and the project is running extremely well. and we are very happy with that. As I mentioned, we have basically three projects of additional connectivity in the region. The first one that should come by the end of June is this Ashdod-Asteroid offshore pipeline which INGL lead. This pipeline should increase the capacity of flow in EMG to around 850, 8.5 BCF a day, vis-a-vis 6.5 of today. Out of it, Leviathan have, basically, actually Tamari have 200 million scap a day and Leviathan all the rest. So, any upside in this pipeline is going solely to Leviathan and this is, and we are expecting some upside in flow. last week in Egypt, we discussed with our Egyptian partners on reducing the pressure at the EMG and the head of the EMG side in the Egyptian grid that will allow us to flow more than those numbers into the Egyptian market. In parallel, we are continuing with the basic compression system in Fajr. That should bring us with additional 400 million staff a day to flow to Egypt, vis-a-vis the numbers of today. which is split between Leviathan and Tamar. So we are expecting that Leviathan capacity will be 725 in this pipeline in Jordan and Egypt. And happy to share that the Nitsana pipeline is going very, very well. We are seeing already pipelines onshore being installed. And we are on budget, on timetable on this project. All those projects should bring Leviathan to an export capacity of 1.6 PCF a day, mainly to Egypt and Jordan. Well, I would like to think that we have great news. We signed a few MOUs that basically established the pillars to take FID of the project. So first thing, we signed an MOU for selling all the gas in the reservoir to the Egyptian market, to EGAS. That MOU established basically flexibility to the project to basically fit the commitment of the Egyptians to the actual flow. We established a pre-related price, which is very important for us to go forward. And we also signed the principle of host government agreement with respect to the projects that cover entry point, ability to lay the pipeline, taxation issues, etc., etc. So this is the host government agreement pillar. And on top of that, we are with $105 million feed underway and targeted to take investment decision in the project first half of 2027 and as agreed with the CTO and government. So we are really enjoying a very good environment for this project right now with all what's going on. Everybody wants to see more gas flowing into markets. And Bulgarian Astro, as you know, we have, on one hand, two dry wells, not commercial, but on the other hand, in each of those reservoirs we identified natural gas, so it means that there's a play there, and now we are evaluating OMV, our operator, together with us, evaluating the results, understanding and analyzing what else we have in the project, in the license, in terms of potential additional prospects. One element there is that we saw lately a license named Hunt Travel. We saw Shell, together with OMV, and TPU, the Turkish player that has some discovery, really bolded our license. They are running into a 3D, very close to the license, so we need to evaluate that as well, and how it affects us. So the key financial metrics, I will ask our CFO to take you through the numbers.

Hey everyone, thank you Rossi, thank you all. So let's run through the financial statements for the Q1. So our revenues were approximately $164 million, and production was about 1.9 BPM, compared with revenues of $288 million, and production of 2.9 BPM in the first quarter of last year. Net profit was $0.1 million compared with $116 million last year. The change in the net profit in the first quarter was mainly driven by four factors. First, the lower natural gas production and the lower net revenues for natural gas resulted from the 33-day shutdown of operation during the war with Iran. These reduced revenues by approximately $76 million. A reduction in the average gas price reduced revenues by approximately $27 million. The third factor was an increase in cost and expenses, mainly due to the one-time amortization of drilling costs following the unsuccessful drilling campaign in Bulgaria, totaling $74 million. The final factor was a higher net financial income of $40 million driven by the re-evaluation of coalition 10-in royalties together with the lower financing expenses following the full repayment of $600 million of Levi-Tambon Series June 25. Despite the impact of the shutdown, our forecast indicates a positive overall impact of Leviathan's 2026 cash flow due to the higher forecast of the Brent price relative to the published DCS which we published in the beginning of this year. Regarding the balance sheet and liquidity, after the repayment of the Leviathan Bond Series June 25 and before the repayment of the next series in June 27, We signed the new credit facilities with Bank Hiromi amounting to $500 million. As of today, the total available credit facilities are $600 million. In addition, during 2025, the Board of Directors approved an additional buyback program for Leviathan bonds for the 27 and 30 series. To date, we purchased approximately $84 million from this series. Regarding the dividends, as Yossi mentioned, similar to the previous quarter, a profit distribution of $60 million was approved by the Board of Directors. I think, Yossi, this concludes the key financial highlights from the financial statements. Thank you, Zachi.

Before we go to questions, just one thing on the dividend. Again, in order to keep investing in the right and second phase, Aphrodite, even Exploration and Chrome, we are keeping a very, I would say, stable level of debt and this will be dividend So we announced the $60 million, which is, again, I would say, our standard. And we would like to continue in distributing dividends in parallel to tokens investment. This is our plan. This is our strategy. And that's what we would like to do. Now we will move to Q&A. If you have any questions, you can basically ask us in the Q&A box, and we'll try to answer.

So, the first question with regards to the local market in Israel and the negotiations that we have with the localized bill.

So, we'll extend basically, as you know, we have a long-term agreement with Jordan, we have a long-term agreement with the Egyptian market, and in parallel we left, if I'm taking the Egyptian bill, Let's say that the main capacity for next decade is around almost 13 BCN. I'm taking the 3.5 BCN of Jordan. So we left with a capacity to the Israeli market, which we committed to the Israeli market. And based on that capacity, we are negotiating, we have an advanced discussion with two like-minded to sign a long-term agreement with them, mainly to cover the next decade. That's beforehand. We don't have enough. We don't have a lot of capacity. And I assume that soon you will announce some of them.

Another question that we have is with regards to the federal gathering line and our ability to use that gas in order to sell future... Yeah, so basically all our models have been on assumption of 1.4 BCF a day.

so we didn't take into consideration the 1.53% even in the updated focus of revenue for this year we didn't take that into consideration because it's not only the upstream that we need to solve, and we have additional more than, it's almost 1.5 BCM additional that we have to sell on a yearly basis, we need to show, we need to see that we have the mutual capacity to sell it. Because we are a month before the flow in the Ashdod-Ashkelon pipeline, We have, we think that that Al-Torashkelon pipeline can bring EMG to a flow of about 8.5 PCM, even 9 more, and that will go solely to Leviathan and enable Leviathan to enjoy, I would say, more sales to Egypt. It's obviously come with additional revenues to the project. And in parallel, we're as well looking into additional rich market in the region. It's not a secret, and one of them is the Syrian market, which, starting today, there's an ongoing discussion between the Israeli government and the Syrian government on a few agreements, as well with Lebanon, which could be a market as well. But that capacity can allow us to basically sell to those market gas in parallel to what we are selling to Egypt and Jordan. But being very frank, we believe that every molecule that down the road will be able to produce will find a market and that's post EMG and larger compression system that I mentioned. So, question about myself. First, it's not my last quarter. I assume that I will see you here almost in the second quarter as well. But yes, I'm very glad to bring NUMED to a beautiful place with this actual production. Now it's 1.53 DCF a day capability. Second phase of Leviathan is really on almost automatic pilot in the next few weeks. I believe that we'll cover all the capacity of Leviathan many, many, many years to come from NUMED perspective. And we signed all the agreement that they are the pillars to take investment decisions. So, I'm leaving UN in the best situation that UN ever been. And I'm basically take my own path to stay in the oil and gas business, probably in the global markets.

We also hope that it's not your last quotation. We have more questions in superlative with regards to Yossi. We'll be answering in due time, I guess, all those assumptions. We want to thank you all for joining us in this webinar. Please feel free to reach out if you have any additional questions. We'll see you all next quarter. Thank you. Thank you. Thank you all.