Energean Plc · LSE:ENOG
Energean — FY2019 Earnings Presentation
44 slides from Energean's earnings presentation, Mar 19, 2020
Slide 1: Energean Full Year Results 2019
Energean Full Year Results 2019 19th March 2020
Slide 2: Introduction and 2019 milestones
Introduction and 2019 milestones 2
Slide 3: Key Messages
Key Messages 1. Karish On Schedule FPSO Hull leaving China in the coming weeks as planned Ability to supply 800 mmscf/d (8 bcm/yr) capacity confirmed 2. Edison E&P Acquisition – On Track Closing anticipated 2020 Algeria carve out agreed in principle at an effective price of $155 million** 3.
Slide 4: Key Milestones Achieved in 2019 and early 2020
Key Milestones Achieved in 2019 and early 2020 We maintained an active investment programme and a number of milestones were met which laid the foundations for future sustainable growth that will deliver value to our shareholders 39% year-on-year increase in 2P + 2C to 558 MMboe* Edison E&P acquisiti
Slide 5: Taking Action on Environmental Issues
Taking Action on Environmental Issues Leaders in ESG Rolling 3 Year Carbon Intensity Reduction Plan* Energean 70 80% gas-weighted portfolio Today 60 First E&P company to commit to net zero by 2050 50 40 Targeting +70% reduction in carbon intensity 2019-22 Energean + Energean + 30 Edison Edison E&P E
Slide 6: Financial Results
Financial Results
Slide 7: 2019 Results – Key Numbers
2019 Results – Key Numbers Energean + Edison Pro Energean 2019 Energean 2018 Forma 2019*** Working Interest 3 kboed 56 kboed 4 kboed Production Revenues $76 million $509 million $90 million Cost of Production* $21.5/boe $10 /boe $17.6/boe G&A $13 million $36 million $12 million Operating Cash Flow $
Slide 8: 2020 Guidance – pro forma Energean + Edison E&P
2020 Guidance – pro forma Energean + Edison E&P* Production 42.5 – 50.0 kboed Operating Costs* $10 – 13 / boe** G&A $40 million Development Capital Expenditure $770 million ($115 million reduction versus January Trading Update) $70 million Exploration Capital Expenditure ($40 million reduction versu
Slide 9: Limited Exposure To Oil Price Volatility
Limited Exposure To Oil Price Volatility Gas Pricing Mechanisms Protect the Value of the Underlying Production Base** 100% 20% Liquids 90% 20% With Brent-linkage 80% 10% 10% Gas 70% % of production 2020-25 Sold at Local Market Price 60% 50% 70% Gas Sold under Contract with Pricing Mechanisms 40% tha
Slide 10: Fully Funded Position
Fully Funded Position Consolidated Plc Net Debt $562m • Total (Cash) $(354)m • Total Debt $916m Israel Net Debt $646m Ex-Israel Net Cash $(84m) Total (Cash) $(111)m Total (Cash) $(244)m Total Debt $756m Total Debt $160m Energean plc (ex-Israel) • $244 million gross cash (31/12/2019) Year End Cash &
Slide 11: 2020 pro forma capex guidance reduced by $155 million
2020 pro forma capex guidance reduced by $155 million with further flexibility available if needed -$155 million 1200 Total $995 > Capex reduction due to: million • Epsilon deferral 1000 Total $840 • Greece capex savings Non-Discretionary $155 million million • Zeus deferral • Cassiopea delay 800 No
Slide 12: Key Near-Term Gas Projects Generate Strong Netbacks
Key Near-Term Gas Projects Generate Strong Netbacks Brent deck $30 / $35 / $40 / $45 LT; Gas sold at contracted prices (no inflation) Karish* Abu Qir** Cassiopea*** Working Interest Revenue Entitlement Revenue Working Interest Revenue $27 /boe $13 /boe $31 /boe Capex + Opex Capex + Opex Capex + Opex
Slide 13: Edison E&P Transaction Update
Edison E&P Transaction Update
Slide 14: Edison E&P deal status
Edison E&P deal status Bolstered by Strong Relationships Across the Mediterranean 1 Energean & Edison committed to close 2020 Algeria carve out mechanism & price agreed 2 in principle at $155 million* 3 Italian approvals expected in the near term HE President Sisi with E&P Operators, EGYPS 2020 4 Eg
Slide 15: Production & Reserves A Year of Transition
Production & Reserves A Year of Transition
Slide 16: Transforming Our Historical Success in Reserves Growth
Transforming Our Historical Success in Reserves Growth… 900 800 ~80% gas (2P + 2C) 700 39% growth in 2P + 2C ‘18-’19 driven by: 131 Mmboe (70% Working Interest) Karish North discovery (pre-CPR) 600 0.6 Tcf (17.5 Bcm) + 24 MMbbls at 70% working interest Working interest mmboe 26 MMboe new d
Slide 17: 2019 Production, 2020 Outlook
2019 Production, 2020 Outlook* 2019 Production of 52.4 kboe/d 14.2 2019 45.5 59.7 kboe/d kboe/d kboe/d YTD Production of 52.4 kboe/d in Jan-Feb 2020 Jan-Feb 2020 40.2 12.2 52.4 kboe/d kboe/d kboe/d …Outperforming FY 2020 Guidance of 42.5 – 50 kboe/d FY 2020 Guidance 32 – 37 10.5 – 13.0 42.5 – 50.0 k
Slide 18: Israel – Focused On Monetising Gas Reserves
Israel – Focused On Monetising Gas Reserves
Slide 19: Karish & Tanin – Driving Value Through a De-Risked Project
Karish & Tanin – Driving Value Through a De-Risked Project What Makes This Project Different? 1 Material Reserve & Resource Base 2 EPCIC Contract Minimises Development Risk 3 GSPAs Minimise Commodity Price Risk 4 Growing Domestic Market 5 Long Term, Sustainable, Utility-Type Cash Flows 6 Fully owned
Slide 20: On Track to Deliver First Gas in 1H 2021 – Key Milestones
On Track to Deliver First Gas in 1H 2021 – Key FID Milestones (1Q 2018) Coming Weeks FPSO Workstream First Gas 1H 2021 2019 2020 2021 Hull and Hull Sailaway Hull and Topsides First Hull Keel FPSO mooring Hull First Steel Cut Topsides from Cosco Topsides Performance Steel Cut Laying hookup and 4Q Con
Slide 21: Energean Power FPSO Hull Ready for Sailaway to Singapore
Energean Power FPSO Hull Ready for Sailaway to Singapore for Integration with Topsides 21 Energean Power FPSO Hull, COSCO Yard, Zhoushan China
Slide 22: Gas Sales Agreements: Secured Revenues with Spare FPSO Capacity
Gas Sales Agreements: Secured Revenues with Spare FPSO Capacity IPM and New Contracts expected to be upgraded to firm by end-March following issue of Karish North CPR GSPA contracting structure provides certainty of revenue stream and insulation from Take-or-Pay Floor No Price High Quality global co
Slide 23: Drilling Options in Israel: Future Low-Cost Upside
Drilling Options in Israel: Future Low-Cost Upside Full flexibility on timing of investment 5.5 Tcf (c.156 bcm) Gross Unrisked Prospective Recoverable Resources – Zeus & Athena deferred to 2021 – No immediate requirement to drill Karish North CPR expected to provide sufficient additional resourc
Slide 24: Southern Europe
Southern Europe
Slide 25: Production from Southern Europe expected to grow in the medium term
Production from Southern Europe expected to grow in the medium term Key Growth Projects & Opportunities 2020-23 Southern Europe Production 2020-23* • Italy • Cassiopea (+10 kboe/d) • Rospo Side Tracks (+3.6 kboe/d) 25 • Clara South East (+1.3 kboe/d) • Calipso ST (+0.5 kboe/d) 20 • Candela Dolce (+0
Slide 26: Additional Optionality in Western Greece-East Adriatic
Additional Optionality in Western Greece-East Adriatic Greece Our Western Greece & East Adriatic Acreage Minimal Commitments No drilling commitments Attractive Development 14 mmbls 2P reserves confirmed in Katakolo - Representing a 33% increase on 2018 Medium-term value creation potential Ioan
Slide 27: Egypt – Growing Medium-Term Cash Flows
Egypt – Growing Medium-Term Cash Flows
Slide 28: Egypt: Low-Cost Production Growth through Abu Qir infill drilling
Egypt: Low-Cost Production Growth through Abu Qir infill drilling Abu Qir Gas Price Structure • Low-cost infill drilling options 7 • drilling, averaging $3.0/boe • 4 options identified for potential upcoming campaign 6 $3.5/mmBTU • Potential to add 50 mmscf/d from all 4 wells ($3.71/mcf) At $40–72/b
Slide 29: NEA / NI Development: Adding Production Through Satellite Tie-Backs
NEA / NI Development: Adding Production Add /mcf Through Satellite Tie-Backs NEA Gas Price Structure Concession Field Ph 1 Gas Ph 1 Gas Capex Capex / Reserves Reserves -$ boe Bcf MMboe million $/boe 4,8 $4.6/mmBTU NEA Yazzi 195* 34 ($4.8/mcf) 152 3.6 above $40/bbl Brent NEA Python 49** 8 4,7 NI NI 4
Slide 30: Energean – The Leading Independent E&P Player in the East Med
Energean – The Leading Independent E&P Player in the East Med
Slide 31: Growth in Production and Cash Flows
Growth in Production and Cash Flows: Funded Transformation of Reserves into Returns 220 200 180 Including Karish, Karish North Upside: Production CAGR 2020-23: c.60%** 160 Base Case Production CAGR 2020-23: c.50%* 140 120 Average Annual Production - kboed 100 80 60 40 20 0 2019 2020 2021 2022 2023 2
Slide 32: Medium Term Targets Consolidated Financial Outlook
Medium Term Targets Consolidated Financial Outlook Consolidated (net) • 160 kboe/d (130 kboe/d) Production Revenues • > $1,400 million Cost of Production* • <$7.5/boe G&A • $25 – 35 million EBITDAX • > $900 million *Includes royalties 32
Slide 33: Near-Term Focus
Near-Term Focus 1 Cutting costs & financial discipline 2 Sailaway of the Energean Power FPSO Hull to Singapore 3 Karish North CPR & FDP approval 4 NEA / NI FID 5 Edison E&P transaction close and integration 33 6 First gas from Karish 1H 2021 7 Securing new GSPAs and resource in Israel to ‘fill the b
Slide 34: Key Takeaways
Key Takeaways > Portfolio and capital structure provide the necessary financial flexibility to operate in a lower commodity price world > Line of sight to target >$900m of EBITDAX > Low-commitment portfolio optionality, enabling future growth in returns 34
Slide 35: Appendices
Appendices
Slide 36: Appendix – Income Statement
Appendix 1 – Income Statement 36
Slide 37: Appendix – Statement of Comprehensive Income and Expenses
Appendix 2 – Statement of Comprehensive Income and Expenses YEAR ENDED 31 DECEMBER 2019 (AUDITED) 37
Slide 38: Appendix – Statement of Financial Position
Appendix 3 – Statement of Financial Position YEAR ENDED 31 DECEMBER 2019 (AUDITED) 38
Slide 39: Appendix – Statement of Changes in Equity
Appendix 4 – Statement of Changes in Equity YEAR ENDED 31 DECEMBER 2019 (AUDITED) 39
Slide 40: Appendix – Operating Cash Flow
Appendix 5 – Operating Cash Flow 40
Slide 41: Appendix – Cash Flow Statement
Appendix 6 – Cash Flow Statement 41
Slide 42: Appendix – 2019 Capex
Appendix – 2019 Capex DEVELOPMENT & PRODUCTION EXPLORATION ISRAEL ISRAEL $47 MM $565 MM GREECE $9 MM GREECE MONTENEGRO $60 MM $5 MM ENERGEAN TOTAL ENERGEAN TOTAL $625 MM $61 MM EDISON E&P TOTAL* EDISON E&P TOTAL* $33 MM $28 MM COMBINED BUSINESS TOTAL* COMBINED BUSINESS TOTAL* $658 MM $89 MM *Exclude
Slide 43: Appendix – 2019 Capex
Appendix 6 – 2019 Capex ACTUALS START OF DAY GUIDANCE ISRAEL ISRAEL $613 MM $670 – 690 MM $78 – 83 million of Capex Savings in Greece & Adriatic during 2019 GREECE & ADRIATIC GREECE & ADRIATIC $72 MM $150 - 155 MM ENERGEAN TOTAL ENERGEAN TOTAL $685 MM $820 - 855 MM EDISON E&P TOTAL* $61 MM COMBINED
Slide 44: FY 2020 Guidance
2019 Production, 2020 Outlook* 2019 Production of 52.4 kboe/d 2019 45.5 10.4 3.3 0.5 59.7 kboe/d kboe/d kboe/d kboe/d kboe/d YTD Production of 52.4 kboe/d in Jan-Feb 2020 Jan-Feb 2020 40.2 9.7 2.2 0.3 52.4 kboe/d kboe/d kboe/d kboe/d kboe/d …Outperforming FY 2020 Guidance of 42.5 – 50 kboe/d FY 2020