Energean reports new gas discoveries, robust Q1 financial results

The London-based independent exploration and production company Energean, which specialises in developing resources across the Mediterranean, on Thursday announced the discovery of new gas findings, in the context of disclosing its first-quarter financial results.

Energean, known for its substantial multi-country portfolio that exceeds 1 billion barrels of oil equivalent, is predominantly gas-focused, with approximately 80 per cent of its resources comprised of gas.

The company’s production has reached impressive levels, with outputs up to 150,000 barrels of oil equivalent per day.

Mathios Rigas, Chief Executive Officer of Energean, expressed satisfaction with the company’s trajectory.

“We continue to achieve strong operational and financial results, with production, revenue, and adjusted EBITDAX all showing significant increases compared to last year,” he said.

“In Israel, our operations have not been affected by ongoing geopolitical developments, with peak gas demand expected this summer, ensuring maximum gas output,” he added.

Furthermore, Rigasa said that the company is “delighted to report success in our Abu Qir infill drilling campaign in Egypt, where we discovered approximately 270 feet of net pay in the formations, which is about double our initial expectations”.

Rigas also highlighted the company’s commitment to its shareholders and strategic goals. “In line with our dividend policy, we have declared a Q1 2024 dividend of 30 US cents per share and continue to focus on our key business drivers—paying a reliable dividend, deleveraging, growth, and our commitment to Net Zero. We remain vigilant for opportunities that align with our strategic goals and are ready to act swiftly when they arise”, he said.

“We anticipate significant developments across our portfolio. Cassiopea, the largest gas development in Italy, is expected to commence operations this summer. The Anchois appraisal well in Morocco is scheduled to be drilled in August. In Egypt, we look forward to the start-up of the new well,” he added.

“In Greece, we plan to submit a carbon storage permit application by the end of June. Furthermore, in Israel, we will begin supplying gas under new contracts signed earlier this year”, Rigas concluded.

Energean’s outlook remains strong with a focus on maximising production in line with the peak gas demand expected in Israel during the summer months. Cassiopea’s first gas output is on track for this summer, and subsequent exploration at the near-field Gemini well will commence post-completion of Cassiopea’s production wells.

The Anchois appraisal well in Morocco is set for a spud in August 2024. The company is also gearing up for a final investment decision on the Katlan project in Israel and plans to install a second oil train in Israel as soon as feasible. Additionally, the application for a storage permit for the Prinos Carbon Storage Project is due by the end of June 2024.

Delving into operational details, production for the quarter reached 142 thousand barrels of oil equivalent per day (kboed), marking a 49 per cent increase from Q1 2023’s 95 kboed. The group’s production guidance for 2024 remains steady at 155 – 175 kboed, with the expectation of higher output in the latter half of the year. In Israel, the FPSO (Floating Production Storage and Offloading) unit reported a 98 per cent uptime during the first quarter.

In April, the wells tested successfully at 720 million standard cubic feet per day. Despite geopolitical tensions, daily production continued without interruption.

Mid-May saw the FPSO complete a scheduled five-day maintenance shutdown. The newly online wells in the Abu Qir, NEA, and NI concessions in Egypt are exceeding expectations.

The Abu Qir infill well drilling campaign in Egypt has been particularly fruitful, encountering approximately 270 feet of net pay across the BKES-1 and Abu Madi formations—roughly twice the initially projected figures. Preliminary analysis suggests gas-initially-in-place (GIIP) volumes could be between 87 and 129 billion cubic feet, based on the P90 to P10 range, with a potential liquids’ column of about 55 feet also identified, pending further investigation. Drilled from the existing North Abu Qir PII platform, the first production from this well is anticipated in the third quarter of 2024.

In Italy, drilling operations at Cassiopea continue with the second and third wells nearing completion. A farm-in in Morocco has been finalised, and a rig contract has been signed for the upcoming Anchois appraisal well.

Orders for long-lead items have been placed for the Katlan development in Israel to keep the project on schedule ahead of the final investment decision.

Moreover, Energean has assumed operatorship of the Tors and Wenlock fields in the UK to oversee their decommissioning.

On the environmental front, Energean reported a 19 per cent reduction in Scope 1 and 2 emissions intensity in Q1 2024, down to approximately 9.0 kgCO2e/boe compared to the same period last year.

Financially, the company saw a robust increase in revenues, reaching $413 million for the period, a 43 per cent increase from Q1 2023’s $289 million. Adjusted EBITDAX also rose by 60 per cent, reaching $259 million, compared to $162 million in the previous year. As of March 31, 2024, Energean’s cash reserves stood at $220 million, with total liquidity at $424 million.

The dividend of 30 US cents per share declared today is scheduled for payment on June 28, 2024. Energean reiterates its commitment to quarterly dividend payments, aligned with its previously communicated dividend policy.