Energean Plc · LSE:ENOG
Energean — H1 2018 Earnings Presentation
24 slides from Energean's earnings presentation, Sep 12, 2018
Slide 1: 2018 Half Year Results
2018 HALF YEAR RESULTS Wednesday 12 September 2018
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements and information that both represents management’s current expectations and beliefs and are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business and with any statemen
Slide 3: 2018 Half Year Results Summary & Outlook
2018 Half Year Results Summary & Outlook Operational Highlights 2H 2018 Operational Outlook • Raised $460 million through Premium London Stock • First steel cut on Karish FPSO Hull Exchange IPO • Complete planning for Karish North exploration well • Arranged $1,275 million of project financing for K
Slide 4: 2018 Half Year Results Summary & Outlook
2018 Half Year Results Summary & Outlook Financial Highlights 2018 Guidance Production Production Costs Production Production Costs 3,801 bopd $19 /boe Narrowed to 4,000 – $17 – 19 /bbl 4,250 bopd 1H 2017: 2,534 bopd 1H 2017: $26 /boe Revenue2 EBITDAX2 SG&A Accrued E&A Capex $26 million $17 million
Slide 5: Developing reserves - a de-risked project in Israel
Developing reserves - a de-risked project in Israel Risk Mitigation at Karish-Tanin 5 4
Slide 6: Developing reserves – mitigating risk through gas sales
Developing reserves – mitigating risk through gas sales Volume 4.2 bcm/yr Tenor Min: 7 years -- Weighted Average: 16 years -- Max: 20 years Weighted Avg Take-or-Pay 75% Weighted Avg Current Price $4.1 / mmbtu Weighted Avg Floor Price > $4 / mmbtu TASE- listed power generator, Supergas is a gas marke
Slide 7: Adding more hydrocarbons: our infrastructure opportunity
Adding more hydrocarbons: our infrastructure opportunity Additional FPSO capacity • 4.2 Bcm/yr contracted gas sales leaves 3.8 Bcm/yr of spare capacity (inclusive of the 0.7 Bcm/yr Or option) • Sunk costs increase net cash flow margins on incremental throughput (25% to >50%) 9 8 7 3.8 bcm/yr spare c
Slide 8: Adding more hydrocarbons - prospective resource overview
Adding more hydrocarbons - prospective resource overview Unrisked gross prospective resource volumes Prospect locations KARISH NORTH Geological Liquids Gas Chance of BLOCK 12 Success KARISH EAST HESTIA KARISH MAIN (mmbbl) (Tcf) (%) KARISH 1 TANIN F MESOZOIC HERA ZEUS ATHENA 2 Karish 39.0 2.5 70 TANI
Slide 9: Adding more hydrocarbons - committed well at Karish North
Adding more hydrocarbons - committed well at Karish North eus Karish North • Spud: March 2019. Drill time 45 days Strong DHI conforming to structure • 1.3 Tcf + 16.4 million bbls gross recoverable prospective resources Karish North (Energean 70%) • High Geological Chance of Success – 69% volume weig
Slide 10: Adding more hydrocarbons – commercialisation options
Adding more hydrocarbons – commercialisation options Meeting Growing Israeli Gas Demand Export Options 30 25.7 24.7 25 23.4 22.1 20.8 19.5 20 18.1 16.5 14.9 15 13.4 bcma 11.9 10.3 10.5 10 5 0 2018 2020 2021 2022 2023 2024 2026 2027 2028 2029 2030 2033 2034 2035 2036 2039 2040 2041 2042 2019 2025 203
Slide 11: Optimising production – Prinos development & Epsilon tie-back
Optimising production – Prinos development & Epsilon tie-back Recent progress and work programme Quarterly production growth • 40 mmboe of 2P resource across Prinos and Epsilon 5.0 • 2018 full year guidance narrowed to 4,000 – 4,250 bopd due to 4.5 replacement of Prinos infill drilling with Epsilon
Slide 12: Optimising production – Epsilon tie-back
Optimising production – Epsilon tie-back Highlights and installation sequence • 2P reserves 18.4 million barrels (NSAI); 2P production contribution estimated at >5,000 b/d (2020, NSAI) • GSP contracted on a lump sum EPCIC basis. Scope includes production facilities and three production wells Energea
Slide 13: Developing reserves – optionality at Katakolo
Developing reserves – optionality at Katakolo Katakolo overview • 2P reserves of 10.5 mmbbls • c.$100 million NPV • $60 million development capex • 2 wells tested • Development plan would be to drill the first pilot hole to be converted to an injection well shortly after FID • Environmental and soci
Slide 14: Adding more hydrocarbons - Western Greece and Montenegro
Adding more hydrocarbons - Western Greece and Montenegro Western Greece JV with Repsol Montenegro Key Highlights • Repsol 60% partner and operator; pays 90% of costs to • Blocks 4218-30 and 4219-26 awarded March 2017 $49.9 million cap • (Energean 100%) • Seismic exploration activities have commenced
Slide 15: The next 18 months: what to watch out for
The next 18 months: what to watch out for • Karish-Tanin project on track for first oil in 2021 • First steel cut on the FPSO – 4Q 18 • Hull completion – 4Q 19 Driving additional value Developing • Topsides integration starts – Jan 2020 ahead of First Gas Reserves • Karish Main development drilling
Slide 16: Q&A
Q&A 16 16
Slide 17: Appendix
Appendix 17 17
Slide 18: Energean Board of Directors
Energean Board of Directors Non Executive Directors Simon Heale – Independent Non-Executive Chairman Andrew Bartlett – Senior Independent Director • Currently serves as Chairman of Gulf Marine Services, Marex Spectron • Started his career in Royal Dutch Shell where he worked for 21 years and Kaz Min
Slide 19: Energean Management Team
Energean Management Team Executive Committee Senior Management Mathios Rigas David Donaldson Chief Executive Officer Managing Director Prinos Asset • Founding Shareholder • Petroleum Engineer with over 30 years of industry • Petroleum engineer with 20 years of investment banking and experience priva
Slide 20: Country Managers
Country Managers Dim itris Gontikas– Greece Licenced Attorney, w ith 25 years of senior management experience in the private and public sectors Shaul Zem ach– Israel Energy and Infrastructure expert w ith 20 years of experience Ex Chairman of inter-ministerial committee to examine Israel’s policy on
Slide 21: Value creation through organic and inorganic opportunities
Value creation through organic and inorganic opportunities Disciplined Capital Allocation Effective Project Delivery Developing reserves Optimising production Risk Mitigation Adding more hydrocarbons KARISH NORTH HESTIA KARISH HERA ATHENA MAIN 1 222 2 TANIN ZEUS APOLLO M&A FIELD 12 3 HERCULES ARTEMI
Slide 22: Our focus – The East Med
Our focus – The East Med Increasing M&A Activity Israel European Gas 5.4 • 22 Tcf Leviathan first gas expected 2019 Market 1.4 1.4 • Israel agreements to export gas to Egypt 0.9 0.8 and Jordan • Energean FID in 2018 for $1.6 billion Mar 18 Jan 18 Dec 16 Nov 16 Jan 16 investment in Karish/Tanin Asset
Slide 23: Adding more hydrocarbons – upside from development drilling
Adding more hydrocarbons – upside from development drilling Upside to be targeted by the 2019 Karish Main Campaign A Sands • Main reservoir at Tamar, Leviathan & Tanin • 8 bcm (283 bcf) GIIP potential B sands • Thinly bedded sands identified at Karish-1 • Conventional logs underestimate potential •
Slide 24: Work programme – catalyst timing
Work programme – catalyst timing 2018 2019 2020 2021 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Development and Producion First steel cut 3 development wells Hull leaves China Israel Topside installation, Singapore FPSO sailaway First gas Prinos infill drilling Epsilon extended reach Epsilon Main drilling Gre