REG - Energean PLC - Energean Israel 1Q 2025 Accounts
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RNS Number : 6873J Energean PLC 22 May 2025
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
31 MARCH 2025
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 MARCH 2025
INDEX
Page
Interim Consolidated Statement of Comprehensive Income 2
Interim Consolidated Statement of Financial Position 3
Interim Consolidated Statement of Changes in Equity 4
Interim Consolidated Statement of Cash Flows 5
Notes to the Interim Consolidated Financial Statements 6-19
- - - - - - - - - - - - - - - - - - - -
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
THREE MONTHS ENDED 31 MARCH 2025
Notes 31 March 31 March
2025 2024
(Unaudited) (Unaudited)
$'000 $'000
Revenue 3 253,283 266,286
Cost of sales 4 (132,342) (126,268)
Gross profit 120,941 140,018
Administrative expenses 4 (5,335) (3,409)
Exploration and evaluation expenses 4 (1,994) -
Other income 4 9,500 -
Operating profit 123,112 136,609
Finance income 5 1,709 3,056
Finance costs 5 (41,148) (46,554)
Unrealised gain (loss) on derivatives 5,15 (17) 5
Net foreign exchange gains (losses) 5 (3,283) 125
Profit for the period before tax 80,373 93,241
Taxation expense 6 (18,409) (13,331)
Net profit for the period 61,964 79,910
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit or loss:
Income (loss) on cash flow hedge for the period 15 17,211 (165)
Income tax on items that may be reclassified to profit and loss 15 (3,959) 38
Other comprehensive income (loss) for the period 13,252 (127)
Total comprehensive income for the period 75,216 79,783
The accompanying notes are an integral part of the unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF 31 MARCH 2025
Notes 31 March 2025 (Unaudited) 31 December 2024 (Audited)
$'000 $'000
ASSETS:
NON-CURRENT ASSETS:
Property, plant and equipment 7 2,964,254 2,917,275
Intangible assets 8 94,803 96,103
Derivative financial instruments 15 9,498 -
Other receivables 9,767 9,848
3,078,322 3,023,226
CURRENT ASSETS:
Trade and other receivables 10 126,815 121,280
Derivative financial instruments 15 7,367 -
Inventories 11 18,124 16,714
Restricted cash 12(e) 1,554 82,427
Cash and cash equivalents 223,327 157,728
377,187 378,149
TOTAL ASSETS 3,455,509 3,401,375
EQUITY AND LIABILITIES:
EQUITY:
Share capital 1,708 1,708
Share premium 212,539 212,539
Hedges reserve 15 12,986 (266)
Retained earnings 21,863 27,499
TOTAL EQUITY 249,096 241,480
NON-CURRENT LIABILITIES:
Borrowings 12 2,039,115 2,594,213
Decommissioning provision 88,248 85,357
Deferred tax liabilities 9 75,999 69,046
Trade and other payables 13 56,720 67,044
2,260,082 2,815,660
CURRENT LIABILITIES:
Current portion of borrowings 12 622,706 -
Trade and other payables 13 245,045 262,924
Income tax liability 6 78,580 80,966
Derivative financial instruments 15 - 345
946,331 344,235
TOTAL LIABILITIES 3,206,413 3,159,895
TOTAL EQUITY AND LIABILITIES 3,455,509 3,401,375
21 May 2025
Date of approval of the interim consolidated financial statements Panagiotis Benos Matthaios Rigas
Director Director
The accompanying notes are an integral part of the unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
THREE MONTHS ENDED 31 MARCH 2025
Share capital Share Premium Hedges Retained earnings Total equity
$'000 $'000 Reserve $'000 $'000
$'000
Balance as of 1 January 2025 (Audited) 1,708 212,539 (266) 27,499 241,480
Transactions with shareholders:
Dividend, see note 14 - - - (67,600) (67,600)
Comprehensive Income:
Profit for the period - - - 61,964 61,964
Cashflow hedge, net of tax - - 13,252 - 13,252
Total comprehensive income - - 13,252 61,964 75,216
Balance as of 31 March 2025 (Unaudited) 1,708 212,539 12,986 21,863 249,096
At 1 January 2024 (Audited) 1,708 212,539 - 74,781 289,028
Transactions with shareholders:
Dividend, see note 14 - - - (110,000) (110,000)
Comprehensive Income:
Profit for the period - - - 79,910 79,910
Cashflow hedge, net of tax (127) - (127)
Total comprehensive income - - (127) 79,910 79,783
Balance as of 31 March 2024 (Unaudited) 1,708 212,539 (127) 44,691 258,811
The accompanying notes are an integral part of the unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED 31 MARCH 2025
Notes 31 March 31 March
2025 2024
(Unaudited) (Unaudited)
$'000 $'000
Operating activities
Profit for the period before tax 80,373 93,241
Adjustments to reconcile profit before taxation to net cash provided by:
operating activities:
Depreciation, depletion and amortisation ( ) 4 57,453 54,787
Impairment of exploration and evaluation asset ( ) 4 1,994 -
Finance income ( ) 5 (1,709) (3,056)
Finance expenses ( ) 5 41,148 46,554
Unrealised (gain) loss on derivatives ( ) 15 17 (5)
Net foreign exchange loss (gain) ( ) 5 3,283 (125)
Cash flow from operations before working capital 182,559 191,396
(Increase)/decrease in trade and other receivables 20,351 (20,495)
Increase in inventories (1,410) (4,134)
Decrease in trade and other payables (22,134) (18,950)
Cash flow from operations 179,366 147,817
Income tax paid (18,109) (1,946)
Net cash inflows from operating activities 161,257 145,871
Investing activities
Payment for purchase of property, plant and equipment (PP&E) 7(C) (66,902) (69,160)
Payment for exploration and evaluation, and other intangible assets 8(B) (646) (5,724)
Amounts received from INGL related to transfer of PP&E 10(1) - 1,712
Loan granted to Related Party 10 (28,000) -
Movement in restricted cash, net 12(e) 80,873 21,191
Interest received 2,622 3,870
Net cash outflow used in investing activities (12,053) (48,111)
Financing activities
Transaction costs in relation to borrowing issuance 12(b) (5,860) -
Drawdown of borrowings issuance 12(b) 75,000 -
Borrowings - interest paid 12 (82,482) (96,326)
Dividends paid 14 (67,600) (110,000)
Other finance cost paid (395) (280)
Finance costs paid for deferred license payments - (3,900)
Repayment of obligations under leases 13 (1,511) (1,381)
Net cash outflow used in financing activities (82,848) (211,887)
Net increase/ (decrease) in cash and cash equivalents 66,356 (114,127)
Cash and cash equivalents at beginning of period 157,728 286,625
Effect of exchange differences on cash and cash equivalents (757) (283)
Cash and cash equivalents at end of period 223,327 172,215
The accompanying notes are an integral part of the unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: - General
a. Energean Israel Limited (the "Company") was incorporated in Cyprus
on 22 July 2014 as a private company with limited liability under the
Companies Law, Cap. 113. As of 1 January 2024, the Company is tax resident in
the UK by virtue of having transferred its management and control from Cyprus
to the UK, with its registered address being at Accurist House, 44 Baker
Street, London, W1U 7AL.
b. The Company and its subsidiaries (the "Group") has been established
with the objective of exploration, production and commercialisation of natural
gas and crude oil. The Group's main activities are performed in Israel by its
Israeli Branch.
c. As of 31 March 2025, the Company had investments in the following
subsidiaries:
Name of subsidiary Country of incorporation / registered office Principal activities Shareholding Shareholding
At 31 March 2025
At 31 December 2024
(%)
(%)
Energean Israel Transmission LTD 121, Menachem Begin St. Gas transportation license holder 100 100
Azrieli Sarona Tower, POB 24,
Tel Aviv 67012039 Israel
Energean Israel Finance LTD Financing activities 100 100
d. The Group's core assets as of 31 March 2025 were comprised of:
Country Asset Working interest Field phase
Israel Karish including Karish North (1) 100% Production
Israel Tanin (1) 100% Development
Israel Katlan (Block 12) (2) 100% Development
Israel Blocks 23, 31 (3) 100% Exploration
(1) The concession agreement expires in 2044.
(2) The concession agreement expires in 2054.
(3) Refer to Note 8.
NOTE 2: - Accounting policies and basis of preparation
The interim financial information included in this report has been prepared in
accordance with IAS 34 "Interim Financial Reporting". The results for the
interim period are unaudited and, in the opinion of management, include all
adjustments necessary for a fair presentation of the results for the period
ended 31 March 2025. All such adjustments are of a normal recurring nature.
The unaudited interim consolidated financial statements do not include all the
information and disclosures that are required for the annual financial
statements and must be read in conjunction with the Group's annual
consolidated financial statements for the year ended 31 December 2024.
The financial statements are presented in U.S. Dollars and all values are
rounded to the nearest thousand dollars except where otherwise indicated.
The financial information presented herein has been prepared in accordance
with the accounting policies expected to be
NOTE 2: - Accounting policies and basis of preparation (Cont.)
used in preparing the Group's annual consolidated financial statements for the
year ended 31 December 2025 which are the same as those used in preparing the
annual consolidated financial statements for the year ended 31 December 2024.
The directors consider it appropriate to adopt the going concern basis of
accounting in preparing these interim financial statements. The Going Concern
assessment covers the period up to 30 June 2026, "the forecast period".
Israel geopolitical environment - Energean highlights the following as
important in relation to its principal risks. Since 7 October 2023, and the
ongoing conflict in Israel, the magnitude of regional geopolitical risk
remains elevated. Concerns of escalations in the Middle East have intensified
the security risk in the region, as essential infrastructure systems (such as
the Energean Power FPSO offshore Israel) may be targets for missile fire and
sabotage operations. While the Karish and Karish North fields have continued
to produce with no disruption since the start of the conflict, any event that
impacts production from these fields could have a material adverse impact on
the business, results of operations, cash flows, financial condition and
prospects of the Group. In Q1 2025, Energean has ensured that all measures are
in place to continue business operations, maintain the mobility of its people
and make certain that the security of information is unaffected.
New and amended accounting standards and interpretations:
The following amendments became effective as of 1 January 2025 and have been
applied in the preparation of these consolidated financial statements
· Amendments to IAS 21- Lack of exchangeability.
The adoption of the above standard and interpretations did not lead to any
material changes to the Group's accounting policies and did not have any other
material impact on the financial position or performance of the Group.
NOTE 3: - Revenues
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
Revenue from gas sales ((1)) 178,458 182,245
Revenue from hydrocarbon liquids sales ((2)) 74,825 84,041
Total revenue 253,283 266,286
((1)) Sales gas for three months ended 31 March 2025 totaled approximately 1.2
bcm (billion cubic metres) and for three months ended 31 March 2024 totaled
approximately 1.2 bcm.
((2)) Sales from hydrocarbon liquids for three months ended 31 March 2025
totaled approximately 1,042 kbbl (kilo barrel) and for three months ended 31
March 2024 totaled approximately 1,069 kbbl.
NOTE 4: - Operating profit before taxation
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
(a) Cost of sales
Staff costs 5,105 4,186
Energy cost 658 420
Royalty payable 44,821 47,122
Depreciation (Note 7) 56,884 54,317
Other operating costs ((1)) 26,085 22,938
Oil stock movement (1,211) (2,715)
Total cost of sales 132,342 126,268
(b) Administration expenses
Staff costs 1,710 1,478
Share-based payment charge 279 181
Depreciation and amortisation (Note 7, 8) 569 470
Auditor fees 69 52
Other general & administration expenses ((2)) 2,708 1,228
Total administrative expenses 5,335 3,409
(c) Exploration and evaluation expenses
Impairment of exploration and evaluation asset ((3)) 1,994 -
Total exploration and evaluation expenses 1,994 -
(d) Other income
Other income((4)) 9,500 -
Total other income 9,500 -
( )
((1)) Other operating costs comprise of insurance costs and planned
maintenance costs.
((2)) The Administration expenses mainly consist of legal expenses,
intercompany management fees and external advisors' fees.
((3) )The licence for Block 21 expired on 13 January 2025. Capitalized costs
associated with Block 21 were written off. (Refer to Note 8)
((4)) The amount of US$9.5 million relates to insurance compensation due to
remedial work on auxiliary piping systems.
NOTE 5: - Net finance costs
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
Interest expense on borrowing (Note 12) 42,957 42,525
Interest expense on long terms payables - 1,046
Less amounts included in the cost of qualifying assets (Note 7(A)) (6,628) (3,686)
36,329 39,885
Costs related to parent company guarantees 556 932
Other finance costs and bank charges 534 594
Unwinding of discount on trade payable (Note 13(2)) 2,731 4,051
Unwinding of discount on provision for decommissioning 1,019 926
Unwinding of discount on right of use asset 167 226
(1)
Less amounts included in the cost of qualifying assets (Note 7(A)) (188) (60)
4,819 6,669
Total finance costs 41,148 46,554
Unrealised loss (gain) on derivatives 17 (5)
Interest income from related parties (34) -
Interest income from time deposits (1,675) (3,056)
Total finance income (1,709) (3,056)
Net foreign exchange losses )gains) 3,283 (125)
Net finance costs 42,739 43,368
NOTE 6: - Taxation
1. Corporate Tax rates applicable to the Company:
Israel:
The Israeli corporate tax rate is 23% in 2025 and 2024.
United Kingdom:
Starting from 1 January 2024, the company's control and management was
transferred from the Republic of Cyprus to the United Kingdom ("UK") and as
such the company's tax residency migrated from Cyprus to UK from the first day
of the accounting period. The applicable tax rate in the UK is 25%.
Under s.18A of the UK CTA 2009, the Company made an election for the branch of
Energean Israel Limited (and any other branches that may open from time to
time) to be exempt from UK corporation tax from its first accounting period
commencing on 1 January 2024 and all subsequent accounting period.
2. The Income and Natural Resources Taxation Law, 5771-2011 -
Israel- the main provisions of the law are as follows:
In April 2011, the Knesset passed the Income and Natural Resources Tax Law,
5771-2011 ("the Law"). The imposition of oil and gas profits levy at a rate to
be set as set out below. The rate of the levy will be calculated according to
a proposed R factor mechanism, according to the ratio between the net accrued
revenues from the project and the cumulative investments as defined in the
law. A minimum levy of 20% will be levied at the stage where the R factor
ratio reaches 1.5, and when the ratio increases, the levy will increase
gradually until the maximum rate of 50% until the ratio reaches 2.3. In
addition, it was determined that the rate of the levy as stated will be
reduced starting in 2017 by multiplying 0.64 by the difference between the
corporate tax rate prescribed in section 126 of the Income Tax Ordinance for
each tax year and the tax rate of 18%. In accordance with the corporate tax
rate from 2018 onwards, the maximum rate will be 46.8%.
NOTE 6: - Taxation (Cont.)
In addition, additional provisions were prescribed regarding the levy, inter
alia: the levy will be recognised as an expense for the purpose of calculating
income tax; the limits of the levy shall not include export facilities; the
levy will be calculated and imposed for each reservoir separately (ring
fencing); payment by the owner of an oil right calculated as a percentage of
the oil produced, the recipient of the payment will be liable to pay a levy
according to the amount of the payment received, and this amount will be
subtracted from the amount of the levy owed by the holder of the oil right.
The law also sets rules for the unification or separation or consolidation of
oil projects for the purposes of the Law.
In accordance with the provisions of the Law, the Group is not yet required to
pay any payment in respect of the said levy, and therefore no liability has
been recognised in the financial statements in respect of this payment.
3. Taxation charge:
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
Current income tax charge (15,414) (246)
Deferred tax relating to origination and reversal of temporary differences (2,995) (13,085)
(Note 9)
Total taxation expense (18,409) (13,331)
NOTE 7: - Property, Plant and Equipment
a. Composition:
First half Oil and gas Assets Leased assets Furniture, fixtures and equipment Total
$'000 $'000 $'000 $'000
Cost:
At 1 January 2024 2,979,038 16,986 2,390 2,998,414
Additions 172,421 1,363 351 174,135
Transfer from Intangible Assets ((1)) 205,324 - - 205,324
Disposals (448) - - (448)
Capitalised borrowing cost 15,348 - - 15,348
Change in decommissioning provision (11,207) - - (11,207)
Total cost at 31 December 2024 (Audited) 3,360,476 18,349 2,741 3,381,566
Additions 95,028 149 441 95,618
Capitalised borrowing cost 6,816 - - 6,816
Change in decommissioning provision 1,872 - - 1,872
Total cost at 31 March 2025 (Unaudited) 3,464,192 18,498 3,182 3,485,872
Depreciation:
At 1 January 2024 195,124 4,425 1,034 200,583
Charge for the year 258,328 4,962 418 263,708
Total depreciation at 31 December 2024 (Audited) 453,452 9,387 1,452 464,291
Charge for the period 55,899 1,305 123 57,327
Total Depreciation at 31 March 2025 (Unaudited) 509,351 10,692 1,575 521,618
At 31 December 2024 (Audited) 2,907,024 8,962 1,289 2,917,275
At 31 March 2025 (Unaudited) 2,954,841 7,806 1,607 2,964,254
The additions to oil & gas assets in Q1 2025 mainly relates to Katlan
development.
In February 2024, Karish North first gas was achieved and the second gas
export riser was completed.
Second oil train lift safely and successfully performed in Q4 2024;
commissioning activities are ongoing and are expected to complete in late Q2
2025, which will result in an increase in liquids' production capacity.
((1)) The Final Investment Decision ("FID") for Katlan was made in July 2024,
and the concession agreement granted in the same month expires in 2054. Refer
to note 8 for further details.
Borrowing costs capitalised for qualifying assets during the year are
calculated by applying a weighted average interest rate of 1.47% for the
period ended 31 March 2025 (for the year ended 31 December 2024: 3.93%).
NOTE 7: - Property, Plant and Equipment (Cont.)
b. Depreciation expense for the year has been recognised as follows:
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
Cost of sales 56,884 54,317
Administration expenses 444 365
Total 57,328 54,682
c. Cash flow statement reconciliations:
31 March 2025 31 March 2024
(Unaudited) (Unaudited)
$'000 $'000
Additions and disposals to property, plant and equipment 104,306 33,690
Associated cash flows
Payments for additions to property, plant and equipment (66,902) (67,448)
Non-cash movements/presented in other cash flow lines
Capitalised borrowing costs (6,816) (3,746)
Right-of-use asset additions (149) (47)
Change in decommissioning provision (1,872) 7,072
Lease payments related to capital activities 1,511 1,381
Movement in working capital (30,078) 29,098
d. Details of the Group's rights in petroleum and gas assets are presented
in note 1.
NOTE 8: - Intangible Assets
a. Composition:
Exploration and evaluation assets Software licences Total
$'000 $'000 $'000
Cost:
At 1 January 2024 166,466 2,330 168,796
Additions 133,224 536 133,760
Transfer to Property Plant and Equipment (*) (205,324) - (205,324)
31 December 2024 (Audited) 94,366 2,866 97,232
Additions 819 - 819
At 31 March 2025 (Unaudited) 95,185 2,866 98,051
Amortisation:
At 1 January 2024 - 631 631
Charge for the year - 498 498
Total Amortisation at 31 December 2024 (Audited) - 1,129 1,129
Impairment of exploration and evaluation assets (note 8(d)) 1,994 - 1,994
Charge for the period - 125 125
Total Amortisation at 31 March 2025 (Unaudited) 1,994 1,254 3,248
At 31 December 2024 (Audited) 94,366 1,737 96,103
At 31 March 2025 (Unaudited) 93,191 1,612 94,803
The additions to exploration and evaluation assets in 2024 are mainly related
to pre-FID costs for Block 12 "Katlan".
(*) Katlan Final Investment Decision
In July 2024, the Ministry of Energy and Infrastructure granted the Company a
30-year concession for the Katlan area including a 20-year extension option.
Following this, Energean announced in July 2024 that it had taken FID for the
Katlan development project in Israel. The Katlan area will be developed in a
phased approach through a subsea tieback to the existing Energean Power FPSO.
First gas is planned for H1 2027. The EPCI (Engineering, Procurement,
Construction and Installation) contract for the subsea scope was awarded to
Technip FMC.
b. Cash flow statement reconciliations:
31 March 2025 (Unaudited) 31 March 2024 (Unaudited)
$'000 $'000
Additions to intangible assets 819 6,237
Associated cash flows
Payment for additions to intangible assets (646) (5,724)
Non-cash movements/presented in other cash flow lines
Movement in working capital (173) (513)
NOTE 8: - Intangible Assets (Cont.)
c. Details on the Group's rights in the intangible assets:
Right Type of right Valid date of the right Group's interest as at 31 March 2025
Block 23 Licence 13 January 2027 100%
Block 31 Licence 13 January 2027 100%
d. Additional information regarding the Exploration and Evaluation assets:
As of 31 March 2025, the Group holds two licences to explore for gas and oil,
Block 23 and Block 31, which are located in the economic waters of the State
of Israel. In January 2025 the licences for Blocks 23 and 31 were extended
until 13 January 2027.
The licence for Block 21 was not extended and expired on 13 January 2025.
NOTE 9: - Deferred taxes
The Group is subject to corporation tax on its taxable profits in Israel at
the rate of 23%. The Capital Gain Tax rates depends on the purchase date and
the nature of asset. The general capital tax rate for a corporation is the
standard corporate tax rate.
Tax losses can be utilised for an unlimited period, and tax losses may not be
carried back.
According to Income Tax (Deductions from Income of Oil Rights Holders)
Regulations, 5716-1956, the exploration and evaluation expenses of oil and gas
assets are deductible in the year in which they are incurred.
Below are the items for which deferred taxes were recognised:
Property, plant and equipment & intangible assets Right of use asset Tax losses Deferred expenses for tax Staff leaving indemnities Accrued expenses and other short‑term liabilities and other long‑term Derivative asset/ liability Total
liabilities
$'000 IFRS 16 $'000 $'000 $'000
$'000 $'000
$'000
$'000
At 1 January 2024 (61,050) (2,888) 8,983 4,082 337 3,551 - (46,985)
Increase/(decrease) for the year through:
Profit or loss (12,040) 860 (8,983) (1,373) (45) (559) - (22,140)
Other comprehensive income - - - - - - 79 79
At 31 December 2024 (Audited) (73,090) (2,028) - 2,709 292 2,992 79 (69,046)
At 1 January 2025 (73,090) (2,028) - 2,709 292 2,992 79 (69,046)
Increase/(decrease) for the period through:
Profit or loss (2,693) 266 - (378) 19 (209) - (2,995)
Other comprehensive loss - - - - - - (3,958) (3,958)
At 31 March 2025 (Unaudited) (75,783) (1,762) - 2,331 311 2,783 (3,879) (75,999)
NOTE 9: - Deferred taxes (Cont.)
31 March 2025 (Unaudited) 31 December 2024 (Audited)
$'000 $'000
Deferred tax liabilities (81,424) (75,118)
Deferred tax assets 5,425 6,072
(75,999) (69,046)
NOTE 10: - Trade and other receivables
31 March 2025 (Unaudited) 31 December 2024 (Audited)
$'000 $'000
Financial items
Trade receivables
Trade receivables 68,153 108,085
Receivables from related parties ((1)) 28,363 330
Other receivables ((2)) 14,435 5,038
Accrued interest income 102 1,048
Refundable VAT 7,555 -
118,608 114,501
Non-financial items
Prepayments and prepaid expenses 8,207 6,779
8,207 6,779
Total trade and other receivables 126,815 121,280
((1)) During March 2025, the Company provided an interim loan of US$28 million
to its parent company. The loan was settled in May 2025.
((2)) The balance relates to:
(a) The final amount related the agreement with Israel Natural Gas Lines
("INGL") for the transfer of title (the "Hand Over") of the near shore and
onshore segments of the infrastructure that delivers gas from the Energean
Power FPSO into the Israeli national gas transmission grid is approximately
US$5 million and is expected to be received in 2025.
(b) The agreement regarding insurance compensation for US$9.5 million
reached during Q1 2025 and received in April 2025 (refer to note 4).
NOTE 11: - Inventories
31 March 2025 (Unaudited) 31 December 2024 (Audited)
$'000 $'000
Hydrocarbon liquids 4,764 3,581
Natural gas 486 502
Raw materials and supplies 12,874 12,631
Total 18,124 16,714
NOTE 12: - Borrowings
a. Senior secured notes (the "Notes"):
On 24 March 2021 (the "Issue Date"), Energean Israel Finance Ltd (a 100%
subsidiary of the Company) issued US$2,500 million of senior secured notes.
The proceeds were primarily used to prepay in full the Project Finance
Facility.
On 11 July 2023, Energean Israel Finance Ltd. Ltd completed the offering of
US$750 million aggregate principal amount of the Notes with a fixed annual
interest rate of 8.500%. The proceeds were used mainly to repay Energean
Israel's US$625 million Notes series due in March 2024.
b. US$750 Million Term Loan:
In February 2025 Energean Israel Finance Ltd signed a 10-year, senior-secured
term loan with banking corporation in Israel as the facility agent and
arranger for US$750 million (the "Term Loan" and the "Term Loan Agent",
respectively). The Term Loan will be available to refinance its 2026 senior
secured notes series and to provide additional liquidity for the Katlan
development. It has a 12-month availability period, during which multiple
drawdowns can be made. Up to US$475 million is available in US dollars and up
to US$275 million is available in New Israeli Shekel. The Term Loan is bearing
floating interest SOFR plus margin on the USD component and Bank of Israel
(BOI) plus margin on the ILS component. The Term Loan is secured on the assets
of the Group (including the Company's shares), pari passu with the senior
secured Notes, non-recourse to Energean plc and has a bullet repayment in 2035
(refer to note 12(d) for related collaterals).
During Q1 2025, Energean Israel Finance Ltd drew US$75 million from the above
facility.
c. Composition:
Series Type Maturity Annual Interest rate 31 March 2025 (Unaudited) 31 December 2024 (Audited)
Carrying value Carrying value
$'000 $'000
Non-current
US$ 625 million Senior secured notes 30/03/2026 4.875% - 622,102
US$ 625 million Senior secured notes 30/03/2028 5.375% 620,038 619,602
US$ 625 million Senior secured notes 30/03/2031 5.875% 617,998 617,689
US$ 750 million Senior secured notes 30/09/2033 8.5% 735,052 734,820
US$ 75 million Term Loan 26/02/2035 3.1%+ BOI 66,027 -
2,039,115 2,594,213
Current
US$ 625 million Senior secured notes 30/03/2026 4.875% 622,706 -
622,706 -
Total 2,661,821 2,594,213
The interest on each series of the Notes and loan is paid semi-annually, on 30
March and on 30 September of each year.
The Notes are listed on the TACT Institutional of the Tel Aviv Stock Exchange
Ltd. ("TASE").
With regards to the indenture document, signed on 24 March 2021 with HSBC BANK
USA, N.A (the "Trustee"), no indenture default or indenture event of default
has occurred and is continuing.
d. Collateral:
The Company has provided/undertakes to provide the following collateral in
favor of HSBC BANK USA, N.A, which serves as the "Collateral Agent" under both
the Notes and the Term Loan:
1) First rank fixed charges over the shares of Energean Israel Limited,
Energean Israel Finance Ltd and Energean Israel Transmission Ltd, the Karish
& Tanin Leases, the gas sales purchase agreements ("GSPAs"), several bank
accounts, operating permits, insurance policies, the Company's exploration
licences and the INGL Agreement.
2) Floating charge over all of the present and future assets of Energean
Israel Limited and Energean Israel Finance Ltd (except specifically excluded
assets).
3) The Energean Power FPSO.
NOTE 12: - Borrowings (Cont.)
e. Restricted cash:
As of 31 March 2025, the Company had short-term restricted cash of US$1.55
million (31 December 2024: US$82.43 million), which will be used mainly for
the September 2025 interest payment.
f. Credit rating:
The senior secured Notes have been assigned a Ba3 rating by Moody's and a BB-
global rating by S&P Global.
The Term Loan has been assigned a local rating of ilA by S&P Maalot.
NOTE 13: - Trade and other payables
31 March 2025 (Unaudited) 31 December 2024 (Audited)
$'000 $'000
Current
Financial items
Trade accounts payable 161,358 140,840
Payables to related parties 13,148 11,021
VAT payable - 4,182
Other creditors ((1)) 24,827 35,468
Short term lease liabilities 5,345 5,296
204,678 196,807
Non-financial items
Accrued expenses 38,943 24,480
Other finance costs accrued 15 41,133
Social insurance and other taxes 1,409 504
40,367 66,117
Total current trade and other payables 245,045 262,924
Non-current
Financial items
Trade and other payables ((2)) 52,710 61,758
Long term lease liabilities 3,531 4,767
56,241 66.525
Non-financial items
Accrued expenses to related parties 479 519
479 519
Total non-current trade and other payables 56,720 67,044
((1) ) The amount mainly comprises of royalties payables to the
Israel government and third parties with regards to the Karish Lease,
including US$9.4 million (2024: US$12.9 million) of royalties payable to third
parties. Contractual royalties are payable to third-party holders at a total
rate of 7.5%, increasing to 8.25% after the date at which the lease in
question starts to pay the oil and gas profits levy. The royalty payable to
third-party holders under the SPA is calculated on the value of the total
amount of natural gas and condensate produced at the wellhead without any
deduction (except for natural gas and Petroleum (as defined under the
Petroleum Law) used in the production process). No contractual royalties under
the SPA will be payable on future discoveries that were not part of the
original acquisition of the Karish and Tanin leases.
NOTE 13: - Trade and other payables (Cont.)
((2) ) The amount represents a long-term amount payable in terms
of the EPCIC (Engineering, Procurement, Construction, Installation and
Commissioning) contract to Technip. According to the agreement with the EPCIC
contractor, the last US$210 million of the consideration will be paid in 12
equal quarterly deferred payments started in March 2024 and as such has been
discounted at 8.67% per annum (being the yield rate of the senior secured loan
notes, maturing in 2026, as at the date of agreeing the payment terms). As of
31 March 2025, 5 installments have been paid.
NOTE 14: - Equity
Interim dividends:
Dividends of US$67.6 million were declared and paid during Q1 2025 (Q1 2024:
US$110 million).
NOTE 15: - Financial Instruments
Fair Values of other financial instruments
The following financial instruments are measured at amortised cost and are
considered to have fair values different to their book values.
31 March 2025 (Unaudited) 31 December 2024 (Audited)
Book Value $'000 Fair value $'000 Book Value $'000 Fair value $'000
Senior Secured Notes (Note 12) 2,595,794 2,566,375 2,594,213 2,485,589
The fair value of the Senior Secured Notes is within level 1 of the fair value
hierarchy and has been estimated by discounting future cash flows by the
relevant market yield curve at the balance sheet date. The fair values of
other financial instruments not measured at fair value, including cash and
short-term deposits, trade receivables, trade and other payables and the Term
Loan which equate approximately to their carrying amounts.
Cash Flow Hedging
In addition to the hedging agreements described in the 2024 annual
consolidated financial statements, in February 2025 the Group entered into a
forward transaction to hedge against foreign currency volatility risk
associated with its forecasted payment to the EPCI contractor for its Katlan
development. The hedge relationship was deemed effective at inception, and in
accordance with the Group's accounting policy, the transaction was subject to
cash flow hedge accounting.
Consequently, as of 31 March 2025, the Group recorded a derivative asset of
US$16.86 million, and other comprehensive gain of US$13.25 million, during the
reporting period (31 December 2024, the Group recorded a derivative liability
of US$0.3 million, and other comprehensive gain of US$0.3 million during
2024).
Financial risk management objectives
In addition to the risks discussed in the consolidated annual financial
statements, due to the Term Loan (refer to note 12), the Company has some
exposure to interest rate risk. The management carefully considers the future
impact of the floating interest fluctuation and will consider mitigation plans
as needed and implement accordingly.
NOTE 16: - Significant events and transaction during the reporting period
a. Approximately US$2 billion binding term sheet signed with
Dalia Energy Companies Ltd in January 2025 for gas sales in Israel. The agreed
terms are for the supply of up to 0.1 bcm/year from April 2026, rising to up
to 0.5 bcm/year from around January 2030 and then approx. 1 bcm/year from June
2035 till 2044 with potential extension, and excludes supply in the summer
months (between June to September) between 2026-2034. The binding term sheet
contains provisions regarding floor pricing, take or pay and price indexation
linked to CPI (not Brent-price linked). The terms have been agreed at levels
that are in line with the other large, long-term contracts within the Company
portfolio.
NOTE 17: - Subsequent events
a. An interim dividend of US$28.3 million was declared in
May 2025 and settled the loan to its parent company (refer to note 10(1)).
b. The Company has signed a Gas Sale and Purchase Agreement
("GSPA") with Kesem Energy Ltd ("Kesem"). The contract is for the supply of
gas to Kesem's new power plant, which is estimated to be operational before
the end of the current decade. The contracted supply is approx. 1 bcm/year
from around the middle of the 2030s with limited quantities of gas supplied
intermittently before then. The contract represents over US$2 billion in
revenues and approx.12.5 bcm in contracted supply over the approx. 17 years
period. The contract contains provisions regarding floor pricing, take or pay
and price indexation (not Brent-price linked). GSPA has been signed at levels
that are in line with the other large, long-term contracts within the Company
portfolio.
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