Delivering Sustainable Growth in the E&P Business - - PowerPoint PPT Presentation

1

Το σχέδιο ανάπτυξης του κοιτάσματος υδρογονανθράκων στο Δυτικό Κατάκολο

Δρ. Κωνσταντίνος Νικολάου, Τεχνικός Σύμβουλος Energean Δημοτικό Συμβούλιο Πύργου, 14 Νοεμβρίου 2019

Delivering Sustainable Growth in the E&P Business

2

Energean at a Glance

The leading independent, gas-focused, sustainable E&P company in the East Mediterranean Underpinned by our Core Competencies of Disciplined Capital Allocation, Operational Excellence, Risk Mitigation and Effective Project Delivery

8

Countries of Operations

~60 kboed

Production in 2019*

ESG & HSE

Focused A rating MSCI

East Med Focused ~820 MMboe

Reserves and resources*

~80%

Gas-weighted portfolio

FTSE 250 & TA-35

Leading Independent E&P

Key Metrics

*Edison E&P reserve estimates as of 31.10.2018, excludes UK, Norway and Algeria Energean Israel reserve estimates as of 30.06.2019 CPR Energean reserve estimates are pending finalization of 2019 CPR 2019 Production excludes Algeria and UK

3

2019 – The Year the World Woke Up to Climate Change

4

O&G Companies, Governments and Banks are Under Unprecedented Pressure

5

Leaders in ESG through Action

Female chairperson Executive pay linked to ESG goals from 2020 70% gas focus Estimated 70% reduction in carbon intensity 2020-23 Employees from 28 countries around the world

Committed to the UN Global Compact ‘Business Ambition for 1.5°C: Our Only Future’ campaign and net zero emissions by 2050

6

100 200 300 400 500 600 700 800 900 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E mmboe Prinos 2P Prinos 2C Katakolo 2P Karish and Tanin 2P Karish and Tanin 2C Karish North 2C Edison 2P & 2C

Over a Decade of Continuous Growth

Energean : A Continuous Growth Story Since 2008 – 78% CAGR Of

*Excludes UK, Norway and Algeria from Edison.

Reserves and resources have grown exponentially, despite the recent downturn

Acquisition

• f Prinos

Third Point invests in Energean Analysts predict $200 oil price Analysts predict $20 oil price Energean acquires Karish & Tanin Energean IPO & Project FID Edison E&P acquisition Development

• f Prinos

2

73% CAGR in Reserves and Resources 2008-20E*

7

2019 Marked Another Year of Success

A number of events laid the foundations for growth, ensuring a sustainable future

Key Milestones

4 shallow water wells: Drilled offshore Greece + 2P reserves increase at Epsilon & Katakolo 25 Bcm gas + 34 MMbbl light oil (~190 MMboe): Discovery of Karish North offshore Israel 4 deepwater wells: Drilled offshore Israel with a best in class HSE record Edison E&P Acquisition: Adding operating cash flow of c.$210 million & EBITDAX of c.$235 million Karish project 72% complete: FPSO construction at an advanced stage 5.0 Bcm/yr of firm GSPAs signed in Israel: With a further 1.3 Bcm/yr of contingent contracts & 2.0 Bcm/yr of potential sales to be discussed under a Letter of Intent $265 million: Of new equity raised from shareholders $600 million: Secured from international banks to fund the Edison E&P acquisition

8

Our Next 24 Months: Focus on Israel

Karish project at 72% complete and further exploration success targeted on Block 12*

2020 drilling plans:

• Zeus well on Block 12
• Between Karish and Tanin leases
• Targeting 641 bcf / 18 bcm with 75% CoS
• Discovery tied back to the Energean FPSO
• $35 million (gross) cost
• No seller royalties and gas export rights

Potential Block 12 follow on wells:

• Hera prospect
• 485 bcf / 14 bcm*
• Athena prospect
• 853 bcf / 24 bcm*

Zeus prospect, Block 12

2020 milestones:

• FPSO Workstream
• Hull sailaway from Cosco Yard
• Hull and topsides integration
• Completed FPSO sailaway from Singapore
• Drilling Workstream
• Complete development wells
• Subsea and Onshore Workstreams
• Pipeline installation Karish to Dor
• Onshore facilities commissioning
• Installation of subsea infrastructure

2019 progress

*Unrisked gross prospective resources 72% completion at Karish refers to physical completion

9

‘Filling The Boat’: Capacity Overview

Contracted volumes & spare capacity

IPM Contract 12 Firm Contracts Or Contract 0.4 BCM/yr post-2024 contingent on additional resource in 2020. We may supply additional gas pre- 2024 0.7 BCM/yr contingent on Or Power Plant Financial

• Close. Or has unlimited capacity to dispose of gas

for alternate uses

Available for tie-back of future discoveries and additional gas sales from Karish North

5.0 BCM/yr

• Av. 16 yrs

75% ToP Major IPPs and Industrial customers

Secured Revenues

1 2 3 4 5 6 7 8 9

1/1/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025

Firm Contracts IPM Contract Or Contract New Spare Capacity

New Contract Up to 0.2 BCM/yr contingent on additional resource in 2020. Supply ramp up between 2022 and 2025. DEPA Letter of Intent (LoI) For the potential sale and purchase of up to 2.0 BCM/yr.

5.0 5.4 6.1 6.3 8.0

10

Key Demand Drivers: Gasification of the Israeli Economy

Israel Gas Demand Growth Recent Progress

Site Capacity – MW Bcm/y Last date of delivery of possession Alon Tavor 600 0.5 December 2019 Ramat Hovav 1,137 1.0 December 2020 Reading 428 0.4 June 2021 Hagit 697 0.6 June 2022 Eshkol 1,693 1.8 June 2023

Power station privatisation

Closure of the following coal-fired power-stations announced, increasing demand for gas:

• Units 5-6 of Orot Rabin, Hadera – 1150 MW
• Units 1-4 of Rotenberg, Ashkelon – 2250 MW

5 10 15 20 25 30 35 40

bcma

Energean Contracted Energean Available Capacity Rest of Market per Ministry of Energy Additional demand per BDO

Israel Gas Demand Drivers

• Growing electricity sector to serve population growth
• Rising living standards
• Increased water desalination
• Electrification of the railway system
• Adoption of electric vehicles
• Compressed natural gas (CNG) for transportation
• Ministry of Energy focused on reducing harmful

emissions and diversifying the fuel mix

11

Export Markets Offer Additional East Med Gas Monetisation Options

EastMed Pipeline An Export Route to Europe

• Proposed 1,700 kilometer pipeline
• Connecting the East Med’s Levantine Base (Israel) with

the European gas network via Cyprus, Greece & Italy

• Classified as an EU Project of Common Interest
• Estimated $6-7 billion construction costs
• Capacity of up to 10 bcm/year of gas
• The pipeline is being developed by IGI Poseidon, a JV of

Greece’s state-owned DEPA and Edison SpA

Recent Progress

• Energean and DEPA signed a LoI in January 2020 for

the potential sale and purchase of up to 2 bcm/year of gas from its fields offshore Israel

• The very same day, the leaders of Cyrpus, Greece and

Israel signed the EastMed Pipeline Accord in Athens

• Italy is expected to sign the agreement at a later date, at

which point the agreement will come into full effect

• The countries are targeting FID in 2022 and pipeline

completion by 2025

12

Energean + Edison E&P: On a Trajectory to Produce up to 140 kboed by 2022

Transaction Progress

• 2020 milestones:

−

Publication of Circular and EGM Q2

−

Publication of Enlarged Group Prospectus and Technical Readmission Q2

−

Settlement of the Algeria asset

−

Completion of Edison E&P acquisition H1

−

Disposal of Non-Core Assets to Neptune H1

−

Portfolio Integration and Optimisation H2

Combined 2P Reserves Breakdown*

Israel 49% (287 mmboe) Egypt 26% (152 mmboe) Italy 15% (85 mmboe) Greece 9% (54 mmboe) Croatia <1%

Growth story, focused on developing new reserves Immediate cash flows & EBITDAX with incremental growth opportunities

~80% gas-weighted*

131 449 Liquids Gas

580

Focus On Gas (2P Reserves MMboe)*

~140 kboed production by 2022*

*Excludes UK, Norway and Algeria from Edison.

13

Greece: Focused on Delivering Epsilon and Developing Katakolo

• Currently developing Epsilon satellite - $100 million investment
• 4x wells drilled in 2019 (3x vertical & 1x ERW)
• First oil from the Epsilon ERW achieved in April 2019
• Expected 2P reserve increase to 21 mmboe

Epsilon Development Project

• 2D seismic survey completed in Ioannina block in 2019
• Ioannina best estimate prospective resources 103 Bcf and 187 million bbls
• Ioannina drill or drop decision by end-2020
• 2D seismic survey to commence in the Aitoloakarnania block in 2020

Exploration Activity

Katakolo Progress

• Expected 33% uplift in 2P reserves, to 14 mmboe
• Award of the EIA expected in Q2 2020
• Final Investment Decision targeted by end-2020
• ERW to be drilled from onshore to offshore reservoirs.

14

Montenegro: Drill or Drop Decision by End-2020

• Operator, 100% WI in offshore blocks 4219-26 and 4218-

30

• Best estimate unrisked prospective resources 143.9

mmbbls and 1,766.1 Bcf

Material Position Commitments Fulfilled Majors Focusing on the Area

• First round exploration commitment fulfilled

−

338 km2 new 3D shot in Feb 2019

−

To be processed together with legacy 2D

−

Full results expected start-2020

−

Drill-or-drop decision by end-2020

• Eni (50% WI, operator) and NOVATEK (50% WI) own the

four blocks to the south

−

Shot seismic in 4Q 2018-1Q 2019

−

Expected to drill two wells in 2020

15

Edison E&P: Portfolio Overview

• 2019 Average WI production of 45.5 kboe/d
• Net receivables were $222 million, of which $126 million

were classified as overdue, as of December 2019

• A further payment for $55 million was received in January

2020

Egypt Italy Croatia

• 2019 Average WI production of 10.4 kboe/d
• Updated Italian EIA approval received on Cassiopea
• Development progressing as expected with First Gas

anticipated in 2022

• 2019 Average WI production of 0.5 kboe/d

Producing Exploration Producing, development & exploration

Corporate

• 2019 Average WI production of 56.4 kboe/d*
• $152 million of FCF during 2019*
• Edison E&P transaction to exclude the Algerian asset
• Agreement to sell North Sea assets to Neptune for up to $280

million

*Excludes UK, Norway and Algeria.

16

Our Enlarged Portfolio: Catalyst-Rich

14

North Thekah Offshore Exploration NEA Final Investment Decision Abu Qir Infill Drilling NEA First Gas Epsilon First Oil Echo (W. Patraikos) Exploration Katakolo Final Investment Decision Ioannina Drill or Drop Zeus Exploration Optional Exploration Up to 2 Optional Wells Karish First Gas Rospo Sidetracks Cassiopea First Gas Gemini & Centauro Prospect Drilling

FID

Country Asset Activity 2020E 2021E 2022E

Sources: Company Information

Blocks 26 & 30 Drill or Drop

FID

17

2020 will be another transformational year for Energean. We are focused on delivering a number of strategic

• bjectives, including:
• 1. Closure of the Edison E&P acquisition
• 2. Disposal of Edison’s North Sea Assets to Neptune
• 3. Sailaway of the Energean Power FPSO
• 4. Discovering more gas in Israel
• 5. Securing additional gas sales in the East Med
• 6. Further growth of the business
• 7. Achieving our ESG goals

18

Thank you!