Energean Plc · LSE:ENOG
Energean — Investor Presentation (August 2020)
41 slides from Energean's investor presentation, August 2020
Slide 1: Energean Corporate Presentation August 2020
Energean Corporate Presentation August 2020
Slide 2: At a Glance
At a Glance
Slide 3: The Leading Independent E&P in the East Med
The Leading Independent E&P in the East Med Large Best in reserve & Growing Gas- class Resilient resource production focused industry cash flows base emissions 70% of future 130 kboed +70% gas- production +800 MMboe 70% reduction medium-term weighted insulated from 2P & 2C target by 2023 target port
Slide 4: Track Record of Growing Reserves and Resources
Track Record of Growing Reserves and Resources 900 2016-20 CAGR 37% WI 2P Reserves and 2C Resources MMboe 800 700 2P & 2C 600 = 500 828 MMboe 400 300 >10 years of consecutive growth 200 in 2P reserves & 2C resources 100 Focused on growing production - 2016 2017 2018 2019 2020E to >130 kboed in the m
Slide 5: Delivering Near-Term Low-Risk Production Growth
Delivering Near-Term Low-Risk Production Growth Long-term upside >200 kboe/d Medium-term target >130 kboe/d 44.5 – 51.5 kboe/d Filling FPSO Developing UK 2020 2023+ discoveries 5
Slide 6: …That is Resilient to Commodity Price Fluctuations
…That is Resilient to Commodity Price Fluctuations % of Estimated Production 2020-25 100% 20% liquids with Brent-linkage 90% 20% 80% 10% 10% gas sold at local market price 70% 60% 70% gas sold under contracts with 50% pricing mechanisms that protect against Brent price fluctuations 40% 70% 30% Gas f
Slide 7: Enhanced Liquidity and Optimised Funding Structure
Enhanced Liquidity and Optimised Funding Structure June 2020 $245-260m > $1 bn of cost reductions and cash and undrawn deferrals in 2020* facilities** + $220m RBL facility signed Facility with +$175m additional $200m additional liquidity from accordion and £80m upsized $1.45 billion PFF LC facilitie
Slide 8: Committed to Taking Action on ESG Goals
Committed to Taking Action on ESG Goals Targeting Committed to +70% gas- First E&P Executive pay +70% carbon transparency weighted company to linked to ESG intensity and adherence portfolio commit to net goals from reduction to the UN (2P + 2C) zero by 2050 2020 SDG’s 2019-22 8
Slide 9: … And Creating a Sector Leading Low Carbon Business
… And Creating a Sector Leading Low Carbon Business Rolling 3 Year Carbon Intensity Reduction Plan* Energean 70 Today 60 50 Target 40 Energean + Edison E&P Energean + Carbon Edison E&P 30 + Karish Energean + Neutral Edison E&P 20 + Karish 2050 (operational emissions) 10 0 2019 2020 2021 2022 Carbon
Slide 10: Israel – Focused on Monetising Gas Reserves
Israel – Focused on Monetising Gas Reserves
Slide 11: Karish & Tanin – Driving Value Through a De-Risked Project
Karish & Tanin – Driving Value Through a De- Risked Project Key Project Differentiators 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 infra
Slide 12: Karish Pipe Laying and Subsea Systems Installation Completed
Karish Pipe Laying and Subsea Systems Installation Completed Karish pipe laying completed offshore Israel Near-and-onshore pipe laying completed May 2020 Installation of Karish manifold completed June 2020 12
Slide 13: Singapore Yard Re-opened Following Lifting of COVID-19 Measures
Singapore Yard Re-opened 2 June Following Lifting of COVID-19 Circuit-breaker Measures Topside integration and commissioning activities in Singapore expected to take approximately 10 months Sail away of Energean Power FPSO Hull from China Zhoushan, China Singapore Arrival of FPSO Hull in Singapore o
Slide 14: Three Wells Drilled and Tested in 1Q 2020 – Ready for Tie-In to FPSO
Three Wells Drilled and Tested in 1Q 2020 – Ready for Tie-In to FPSO World class Prolific High quality well reservoir liquids deliverability All three wells capable of Well performance same or delivering at 300 mmscf/d Measured at 48°API with better compared with design capacity when upside from pot
Slide 15: First Gas Expected 2H 2021
First Gas Expected 2H 2021 FID (1Q 2018) Revised timetable not expected to have a material financial impact due to the contracting structures in place with TechnipFMC and gas buyers in Israel FPSO Workstream First Gas 2H 2021* 2019 2020 2021 Hull First Steel Cut Topsides First Hull Keel Hull and Hul
Slide 16: Karish North – 32% Uplift on Previous Resource
Karish North – 32% Uplift on Previous Resource Estimates Confirmed by CPR and FDP Submitted Continue sales effort 1.2 Tcf 250 MMboe in the domestic 39 MMboe 84% (~34 Bcm) Gross 2C market targeting the Liquids Gas Ramat Hovav Gas Resource* privatisation (1 bcm) KARISH NORTH Field Development Plan Add
Slide 17: 5.6 Bcm/yr Firm Gas Sales Agreements – Secured Revenues
5.6 Bcm/yr Firm Gas Sales Agreements – Secured Revenues with Spare FPSO Capacity 0.6 bcm/yr of contingent contracts converted to firm following issuance of Karish North CPR GSPA contracting structure provides certainty of revenue stream and insulation from Take-or-Pay Floor No Price High Quality glo
Slide 18: World-Class Drilling Optionality Offshore Israel
World-Class Drilling Optionality Offshore Israel - Attractive Upside with Limited Commitments Full flexibility on investment timing Zeus and Athena wells deferred to 2021 No immediate requirement to drill Medium-term value creation potential 7 Tcf gross unrisked prospective in place volumes with 19
Slide 19: Southern Europe
Southern Europe
Slide 20: Additional Low-Commitment Options in Western Greece and the Adriatic
Additional Low-Commitment, High-Potential Return Options in Western Greece and the Adriatic Ioannina & Aitoloakarnania Blocks Greece • No drilling commitments • Limited outstanding financial commitments • Drill-or-drop decision expected at Ioannina in 2020 • Four prospects identified • GCoS* ranges
Slide 21: Edison E&P Transaction Update
Edison E&P Transaction Update
Slide 22: Transaction Update
Transaction Update 1 Algeria and Norway excluded from perimeter 2 $466 million total reductions agreed 3 Net consideration now $178 million* 4 Represents approximately $1.1 / 2P boe and 1.2x cash flow** 5 Cassiopea payment now linked to Italian gas prices (PSV) 6 UK assets retained – recent discover
Slide 23: Net Consideration Reduced to $178m
Net Consideration Reduced to $178m** Original $750m Consideration ($155m) Algeria Carve Out $4.5 /boe received ($200m) Norway Carve Out $8.0 /boe received ($111m) Negotiated discount $0.7 /boe price reduction*** Economic performance ($206m) FCF (pre exploration) > net consideration to be paid to 31
Slide 24: Cassiopea Contingent Payment to Vary Between $0 and $100m
Cassiopea Contingent Payment to Vary Between $0 and $100m Depending on future gas prices at the point of first gas* • Minimum payment • Gas prices < €10/Mwh • Equivalent to c.$3.4/mcf $100m • Payment equivalent to $0/mcf • Straight line formula for prices between €10 and €20/Mwh • E.g. $50m payable
Slide 25: Fully Funded Through New Financing Signed on 20 June 2020
Fully Funded Through New Financing Signed on 20 June 2020* Facility Interest Providers Key Terms Size Rate • 6-year term • $220m initial RBL facility • Semi-annual redeterminations • $200m accordion • LIBOR + 4.75% yrs 1-3 • Customary covenants • £80m letter of credit • LIBOR + 5.75% yrs 4-6 facilit
Slide 26: Transaction Path to Closing – Key Steps in Detail
Transaction Path to Closing – Key Steps in Detail Algeria carve out agreed Norway carve out agreed and discount negotiated Publication of Prospectus & Circular Energean shareholder vote EGM: 20 July 2020 passed 100.00% of shareholders approved Outstanding Government Late 3Q / early 4Q 2020 Approvals
Slide 27: Acquisition Delivers Material Production with Near-Term Investment Opportunities
Acquisition Delivers Material Production with Near-Term Investment Opportunities Adds a Gas-Weighted Portfolio Liquids Gas 2P + 2C MMboe Robust Valuation $178m 27% 28% 31% Net acquisition price Energean Acquired Pro-forma Adds 226 MMboe 2P + 2C at Assets <$1.0/boe 73% 69% 72% <$0 Acquisition price o
Slide 28: Large Combined Reserve and Resource Base
Large Combined Reserve and Resource Base MMboe 2P 2C 2P + 2C** % Gas 114 - 114 87% 70 36 106 50% 3 - 3 100% 4 - 4 46% 287 201 489 88% 54 59 113 7% 532 296 828 72% * To be acquired ** D&M CPR at 31.12.19 28 *** Management estimates
Slide 29: Edison E&P – Assets Overview
Edison E&P – Assets Overview
Slide 30: Egypt: Low-Cost, Cash-Generative Production
Egypt: Low-Cost, Cash-Generative Production With upside from over $214m net receivables, of which $136m are classified as overdue* 40 Secured Gas Pricing Life of Field Due to gas pricing formulae with Egas 35 30 Low Cost Development 25 Kboe/d Abu Qir infill drilling estimated at <$4/boe 20 Fast Conv
Slide 31: Stable Gas Prices in Egypt due to Protective Gas Pricing Mechanisms
Stable Gas Prices in Egypt due to Protective Gas Pricing Mechanisms Abu Qir Gas Price Structure 7.0 $3.71 /mcf At Brent prices of $40-72/bbl 6.0 5.0 $/mcf 4.0 $1.37 /mcf Price floor at $0/bbl Brent 3.0 2.0 1.0 6-month Rolling pricing applied 0.0 0 20 40 60 80 100 120 $/bbl Brent NEA Gas Price Struct
Slide 32: Italy – Long-term Gas Production Growth Driven by Cassiopea Development
Italy – Long-term Gas Production Growth Driven by Cassiopea Development Stable Limited near- Material production term volumes with upside abandonment potential spend Cassiopea – largest greenfield in Italy 2020 output performing in line with Decommissioning costs in 2020-22 with first gas expected i
Slide 33: UK North Sea – Significant Upside Potential From Glengorm and Isabella
UK North Sea – Significant Upside Potential From Glengorm and Isabella Gas-Condensate Discoveries Glengorm Discovery Total-operated Blocks in Central North Sea • Situated in Central North Sea in 80m water depth • Largest UK gas find since Culzean in 2008 • 250 MMboe gross gas-condensate resources •
Slide 34: Committed to Optimising Decommissioning Activities and Spend
Committed to Optimising Decommissioning Activities and Spend Regulations 400 Proactive interaction with local government and regulation bodies 372 to jointly design/review decommissioning regulations 350 112 Scale Effects 300 Scale achievement through grouping of assets in adjacent areas also promot
Slide 35: The Combined Business
The Combined Business
Slide 36: 2019 – Pro Forma Position
2019 – Pro Forma Position Revenue 76 495 $571m Production 3 59 62 kboe/d 2P Reserves 341 190 532 MMboe Operating Costs 22 10 $10 / boe EBITDAX 36 264 $300m Cash from Operations 36 237 $273m Capital Expenditure 685 89 $774m Energean Edison E&P assets to be acquired 36
Slide 37: 2020 Production Above Guidance YTD
2020 Production Above Guidance YTD YTD Production of 52.1 kboe/d in Jan-June 2020* Jan-June 2020 38.1 11.7 2.3 52.1 kboe/d kboe/d kboe/d kboe/d …Outperforming FY 2020 Guidance of 44.5 – 51.5 kboe/d* FY 2020 Guidance 34 – 37 9.5 – 12.5 1–2 44.5 – 51.5 kboe/d kboe/d kboe/d kboe/d * Average WI producti
Slide 38: Our 2020 Targets – What Next?
Our 2020 Targets – What Next? 1 Securing new GSPAs and resource in Israel 2 Cutting costs and financial discipline – targeting G&A savings of $10-15m per year* 3 Edison E&P transaction close and integration 4 Karish North FID 5 Further progress Karish project as per FDP 6 NEA / NI Final Investment D
Slide 39: Growth in Production and Cash Flows – Funded
Growth in Production and Cash Flows – Funded Transformation of Reserves into Returns 200 180 Including Karish, Karish North Upside: Production CAGR 2020-23: c.52%** 160 140 Base Case Production CAGR 2020-23: c.41%* Average Annual Wroking Interest Production - Kboe/d 120 100 80 60 40 20 0 2020 2021 2
Slide 40: 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 40
Slide 41: Disclaimer
Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Energean believes the expectations reflected herein to be reasonable in light of the infor