REG - Energean PLC - Energean Israel 1Q 2026 Accounts
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RNS Number : 9908E Energean PLC 20 May 2026
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
31 MARCH 2026
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 MARCH 2026
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 6-21
- - - - - - - - - - - - - - - - - - - -
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
THREE MONTHS ENDED 31 MARCH 2026
Notes 31 March 31 March
2026 2025
(Unaudited) (Unaudited)
$'000 $'000
Revenue 3 181,127 253,283
Cost of sales 4 (104,302) (132,342)
Gross profit for the period 76,825 120,941
Administrative expenses 4 (6,362) (5,335)
Exploration and evaluation expenses 4 - (1,994)
Other (expenses)/ income 4 (524) 9,500
Operating profit for the period 69,939 123,112
Finance income 5 1,402 1,692
Finance costs 5 (39,350) (41,148)
Net foreign exchange losses 5 (955) (3,283)
Profit for the period before tax 31,036 80,373
Taxation expense 6 (7,282) (18,409)
Net profit for the period 23,754 61,964
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit or loss:
(Loss)/ Income on cash flow hedge for the period 15 (4,728) 17,211
Income tax on items that may be reclassified to profit and loss 15 1,087 (3,959)
Other comprehensive income (loss) for the period (3,641) 13,252
Total comprehensive income for the period 20,113 75,216
The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF 31 MARCH 2026
Notes 31 March 2026 (Unaudited) 31 December 2025 (Audited)
$'000 $'000
ASSETS:
NON-CURRENT ASSETS:
Property, plant and equipment 7 3,104,945 3,077,029
Intangible assets 8 148,530 147,477
Derivative financial instruments 15 208 3,931
Other receivables 10,900 12,282
3,264,583 3,240,719
CURRENT ASSETS:
Trade and other receivables 10 50,672 145,902
Derivative financial instruments 15 17,111 21,705
Inventories 11 25,802 20,991
Restricted cash 12 2,194 97,647
Cash and cash equivalents 158,522 118,819
254,301 405,064
TOTAL ASSETS 3,518,884 3,645,783
EQUITY AND LIABILITIES:
EQUITY:
Share capital 1,708 1,708
Share premium 212,539 212,539
Hedges reserve 15 13,335 19,740
Retained earnings 162,595 177,841
TOTAL EQUITY 390,177 411,828
NON-CURRENT LIABILITIES:
Borrowings 12 2,747,359 2,744,085
Decommissioning provision 86,946 89,999
Deferred tax liabilities 9 79,042 75,995
Trade and other payables 13 3,896 4,417
2,917,243 2,914,496
CURRENT LIABILITIES:
Trade and other payables 13 211,464 311,134
Income tax liability 6 - 8,325
211,464 319,459
TOTAL LIABILITIES 3,128,707 3,233,955
TOTAL EQUITY AND LIABILITIES 3,518,884 3,645,783
19 May 2026
Date of approval of the interim consolidated financial statements Panagiotis Benos Matthaios Rigas
Director Director
The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
THREE MONTHS ENDED 31 MARCH 2026
Share capital Share Premium Hedges Retained earnings Total equity
$'000 $'000 Reserve $'000 $'000
$'000
Balance as of 1 January 2026 (Audited) 1,708 212,539 19,740 177,841 411,828
Transactions with shareholders:
Dividend, see note 14 - - - (39,000) (39,000)
Comprehensive Income:
Profit for the period - - - 23,754 23,754
Other comprehensive loss - - (3,641) - (3,641)
Total comprehensive income - - (3,641) 23,754 20,113
Cashflow hedges - basis adjustment transferred to PPE - - (3,590) - (3,590)
Cashflow hedge - deferred tax related to basis adjustment - - 826 - 826
Balance as of 31 March 2026 (Unaudited) 1,708 212,539 13,335 162,595 390,177
At 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
The accompanying notes are an integral part of these unaudited interim
consolidated financial statements.
ENERGEAN ISRAEL LIMITED
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED 31 MARCH 2026
Notes 31 March 31 March
2026 2025
(Unaudited) (Unaudited)
$'000 $'000
Operating activities
Profit for the period before tax 31,036 80,373
Adjustments to reconcile profit before taxation to net cash provided by:
operating activities:
Depreciation, depletion and amortisation ( ) 4 49,165 57,453
Impairment of exploration and evaluation asset ( ) 4 - 1,994
Other expenses ( ) 4 524 -
Finance income ( ) 5 (1,402) (1,692)
Finance expenses ( ) 5 39,350 41,148
Net foreign exchange loss ( ) 5 955 3,283
Cash flow from operations before working capital 119,628 182,559
Decrease in trade and other receivables 108,080 20,351
Increase in inventories (4,811) (1,410)
Decrease in trade and other payables (42,298) (22,134)
Cash flow from operations 180,599 179,366
Income tax paid (13,620) (18,109)
Net cash inflows from operating activities 166,979 161,257
Investing activities
Payment for purchase of property, plant and equipment (PP&E) 7(C) (80,904) (66,902)
Payment for exploration and evaluation, and other intangible assets 8(B) (1,525) (646)
Loan granted to Related Party ((1)) - (28,000)
Movement in restricted cash, net 12 95,453 80,873
Income on derivatives 117 -
Interest received 2,195 2,622
Net cash inflow (outflow) from investing activities 15,336 (12,053)
Financing activities
Transaction costs in relation to borrowing issuance 12 - (5,860)
Drawdown of borrowings 12 - 75,000
Borrowings - interest paid 12 (98,295) (82,482)
Dividends paid 14 (39,000) (67,600)
Other finance cost paid (2,097) (395)
Repayment of obligations under leases 13 (2,350) (1,511)
Net cash outflow used in financing activities (141,742) (82,848)
Net increase in cash and cash equivalents 40,573 66,356
Cash and cash equivalents at beginning of period 118,819 157,728
Effect of exchange differences on cash and cash equivalents (870) (757)
Cash and cash equivalents at end of period 158,522 223,327
((1)) An interim dividend of US$28.25 million was declared in May 2025 and was
settled through the offset of a loan to the parent company, including accrued
interest.
The accompanying notes are an integral part of these unaudited 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 One Great Cumberland Place,
London, W1H 7AL.
b. The Company and its subsidiaries (the "Group") have been established
with the objective of the exploration, production and commercialisation of
natural gas and hydrocarbon liquids. The Group's main activities are performed
in Israel by its Israeli Branch.
c. As of 31 March 2026, the Company had investments in the following
subsidiaries:
Name of subsidiary Country of incorporation / registered office Principal activities Shareholding Shareholding
At 31 March 2026
At 31 December 2025
(%)
(%)
Energean Israel Transmission LTD 121, Menachem Begin St. Gas transportation license holder 100 100
Azrieli Sarona Tower, POB 24,
Tel Aviv 6701203 Israel
Energean Israel Finance LTD Financing activities 100 100
d. The Group's core assets as of 31 March 2026 comprised:
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.
e. There have been no significant changes to related parties since 31
December 2025, refer to note 22 in the 2025 Group's annual consolidated
financial statements for more information.
NOTE 2: - Accounting policies and basis of preparation
The interim consolidated 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 2026. 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 2025.
These financial statements are presented in U.S. Dollars and all values are
rounded to the nearest thousand dollars except where otherwise indicated.
NOTE 2: - Accounting policies and basis of preparation (Cont.)
The financial information presented herein has been prepared in accordance
with the accounting policies expected to be used in preparing the Group's
annual consolidated financial statements for the year ended 31 December 2026
which are the same as those used in preparing the annual consolidated
financial statements for the year ended 31 December 2025.
The directors consider it appropriate to adopt the going concern basis of
accounting in preparing these interim consolidated financial statements. The
Going Concern assessment covers the period up to 30 June 2027, "the forecast
period".
Since 7 October 2023, regional geopolitical risk has remained elevated. The
intensification of tensions in the Middle East has increased the security
risks to essential infrastructure, including the Energean
Power FPSO offshore Israel, which may be exposed to missile fire or
sabotage. Any event affecting production from the Karish and Karish North
fields could have a material adverse impact on the Group's business, results
of operations, cash flows, financial condition and prospects.
On 28 February 2026, the Ministry of Energy and Infrastructure ordered the
temporary suspension of production and activities of the Energean Power FPSO
following further escalation of geopolitical tensions in the region. On 9
April 2026, the Ministry of Energy and Infrastructure instructed the safe
restart and resumption of production and operations of the Energean Power
FPSO, and Energean acted in accordance with those instructions. Production of
the Energean Power FPSO was resumed and the FPSO became fully operational on
10 April 2026.
Throughout 2026 and subsequent to the reporting period, Energean has
maintained all necessary measures to support the continuity of business
operations (subject to any governmental instructions), including the mobility
of its people and the security of its information.
NOTE 3: - Revenues
31 March 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
Revenue from gas sales ((1)) 144,413 178,458
Revenue from hydrocarbon liquids sales ((2)) 36,714 74,825
Total revenue 181,127 253,283
((1)) Sales gas for three months ended 31 March 2026 totaled approximately
0.96 bcm (billion cubic metres) and for three months ended 31 March 2025
totaled approximately 1.19 bcm.
((2)) Sales from hydrocarbon liquids for three months ended 31 March 2026
totaled approximately 532 kbbl (kilo barrel) and for three months ended 31
March 2025 totaled approximately 1,042 kbbl.
See also Note 2 regarding the temporary suspension of production of the
Energean Power FPSO.
NOTE 4: - Operating profit before taxation
31 March 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
(a) Cost of sales
Staff costs 6,264 5,105
Energy cost 906 658
Royalty payable 32,052 44,821
Depreciation (Note 7) 48,548 56,884
Other operating costs ((1)) 20,742 26,085
Oil stock movement (4,210) (1,211)
Total cost of sales 104,302 132,342
(b) Administration expenses
Staff costs 2,638 1,710
Share-based payment charge 321 279
Depreciation and amortisation (Note 7, 8) 617 569
Auditor fees 81 69
Other general & administration expenses ((2)) 2,705 2,708
Total administrative expenses 6,362 5,335
(c) Exploration and evaluation expenses
Impairment of exploration and evaluation asset ((3)) - 1,994
Total exploration and evaluation expenses - 1,994
(d) Other expenses
Loss from disposal of property, plant and equipment 524 -
Total other expenses 524 -
(e) 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 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
Interest expense on borrowing (Note 12) 50,289 42,957
Less amounts included in the cost of qualifying assets (Note 7(A)) (14,966) (6,628)
35,323 36,329
Costs related to parent company guarantees 387 556
Other finance costs and bank charges 1,160 534
Unwinding of discount on trade payable (Note 13(1)) 1,335 2,731
Unwinding of discount on provision for decommissioning 1,056 1,019
Unwinding of discount on lease liability 131 167
(1)
Less amounts included in the cost of qualifying assets (Note 7(A)) (42) (188)
4,027 4,819
Total finance costs 39,350 41,148
Interest income from related parties - (34)
Interest income from time deposits (1,282) (1,675)
Loss (income) from derivatives operation (117) 17
Other interest income (3) -
Total finance income (1,402) (1,692)
Net foreign exchange losses (955) (3,283)
Net finance costs 38,903 42,739
NOTE 6: - Taxation
1. Corporate Tax rates applicable to the Company:
Israel:
The Israeli corporate tax rate is 23% in 2026 and 2025.
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%.
The Group's taxable profits arise in Israel through the Israeli branch and are
taxed at the Israeli statutory tax rate of 23%. No material taxable income was
generated at the UK parent entity level.
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.
NOTE 6: - Taxation (Cont.)
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"), introducing an oil and gas profits levy at a rate
calculated as described. 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%.
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 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
Current income tax charge (2,322) (15,414)
Deferred tax relating to origination and reversal of temporary differences (4,960) (2,995)
(Note 9)
Total taxation expense (7,282) (18,409)
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 2025 3,360,476 18,349 2,741 3,381,566
Additions 390,756 8,988 937 400,681
Lease disposal - (11,250) - (11,250)
Capitalised borrowing cost 40,144 - - 40,144
Change in decommissioning provision 547 - - 547
Total cost at 31 December 2025 (Audited) 3,791,923 16,087 3,678 3,811,688
Additions ((1)) 67,468 (36) 429 67,861
Asset disposal (868) - - (868)
Capitalised borrowing cost 13,931 - - 13,931
Change in decommissioning provision (4,109) - - (4,109)
Total cost at 31 March 2026 (Unaudited) 3,868,345 16,051 4,107 3,888,503
Depreciation:
At 1 January 2025 453,452 9,387 1,452 464,291
Charge for the year 271,276 5,755 527 277,558
Lease disposal - (7,190) - (7,190)
Total depreciation at 31 December 2025 (Audited) 724,728 7,952 1,979 734,659
Charge for the period 46,679 2,189 143 49,011
Asset disposal (112) - - (112)
Total Depreciation at 31 March 2026 (Unaudited) 771,295 10,141 2,122 783,558
At 31 December 2025 (Audited) 3,067,195 8,135 1,699 3,077,029
At 31 March 2026 (Unaudited) 3,097,050 5,910 1,985 3,104,945
((1)) The additions to oil & gas assets in Q1 2026 mainly relate to the
Katlan development.
Second oil train lift safely and successfully performed in Q4 2024;
commissioning activities are ongoing and are expected to complete by around
the end of May, which will result in an increase in liquids' production
capacity.
Borrowing costs capitalised for qualifying assets during the year are
calculated by applying a weighted average interest rate of 7.89% for the
period ended 31 March 2026 (for the year ended 31 December 2025: 7.02%).
NOTE 7: - Property, Plant and Equipment (Cont.)
b. Depreciation expense for the year has been recognised as follows:
31 March 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
Cost of sales 48,548 56,884
Administration expenses 463 444
Total 49,011 57,328
c. Cash flow statement reconciliations:
31 March 2026 31 March 2025
(Unaudited) (Unaudited)
$'000 $'000
Additions and disposals to property, plant and equipment 66,993 95,618
Associated cash flows
Payments for additions to property, plant and equipment (80,904) (66,902)
Non-cash movements/presented in other cash flow lines
Right-of-use asset additions 36 (149)
Asset disposal 868 -
Lease payments related to capital activities 2,350 1,511
Movement in working capital 10,657 (30,078)
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 Other Intangible assets ((1)) Total
$'000 $'000 $'000
Cost:
At 1 January 2025 94,366 2,866 97,232
Additions 1,860 51,498 53,358
Capitalized borrowing cost - 580 580
31 December 2025 (Audited) 96,226 54,944 151,170
Additions 164 8 172
Capitalized borrowing cost - 1,035 1,035
At 31 March 2026 (Unaudited) 96,390 55,987 152,377
Amortisation:
At 1 January 2025 - 1,129 1,129
Charge for the year - 570 570
Impairment of exploration and evaluation assets 1,994 - 1,994
Total Amortisation at 31 December 2025 (Audited) 1,994 1,699 3,693
Charge for the period - 154 154
Total Amortisation at 31 March 2026 (Unaudited) 1,994 1,853 3,847
At 31 December 2025 (Audited) 94,232 53,245 147,477
At 31 March 2026 (Unaudited) 94,396 54,134 148,530
The additions to other intangible assets in Q1 2026 are mainly related to
Nitzana pipeline, see note (1) below.
((1)) Nitzana transmission agreement- In October 2025, the company signed a
transmission agreement with Israel Natural Gas Lines Ltd. ("INGL") for
capacity in the Nitzana pipeline. The agreed terms in the transmission
agreement are for the supply of up to 1 bcm/year up to 6 bcm total contracted
supply for a 15-year period, with provisions for extensions and early
termination. The terms also include rights, during the construction phase, to
access available capacity in the Jordan-North pipeline. Nitzana is expected to
be operational no later than Q4 2028.
The Company's 16.4% share of the construction costs for the pipeline and
compression station is expected to be approximately US$100 million (excludes
contingency amounts, which may add up to an additional 12%, as per the
transmission agreement) and will primarily be funded via the Unsecured Term
Loan. Refer to note 16 below. During the fourth quarter of 2025, approximately
US$50 million was paid, representing approximately 50% of the total expected
investment. The remaining investment will be made in accordance with the
milestones set out in the agreement with INGL. Subsequent to the reporting
date, during the second quarter of 2026, an additional approximately US$10
million was paid, representing approximately 10% of the total expected
investment.
As the Group does not obtain ownership of, or control over, the physical
pipeline asset, but instead acquires a contractual right to access defined
transportation capacity for a period of 15 years, the arrangement has been
recognised as an intangible asset in accordance with IAS 38. The asset will be
amortised on a straight-line basis over the 15-year access period from the
date the pipeline becomes operational.
NOTE 8: - Intangible Assets (Cont.)
b. Cash flow statement reconciliations:
31 March 2026 (Unaudited) 31 March 2025 (Unaudited)
$'000 $'000
Additions to intangible assets 172 819
Associated cash flows
Payment for additions to intangible assets (1,525) (646)
Non-cash movements/presented in other cash flow lines
Movement in working capital 1,353 (173)
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 2026
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 2026, 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 Deferred expenses for tax Staff leaving indemnities Accrued expenses and other short‑term liabilities and other long‑term Derivative asset Total
liabilities
$'000 IFRS 16 $'000 $'000
$'000 $'000
$'000
$'000
At 1 January 2025 (73,090) (2,028) 2,709 292 2,992 79 (69,046)
Increase/(decrease) for the year through:
Profit or loss (679) 190 (546) 5 59 - (972)
Other comprehensive income - - - - - (8,469) (8,469)
Cashflow hedge related to basis adjustment 2,492 2,492
At 31 December 2025 (Audited) (73,769) (1,838) 2,163 297 3,050 (5,898) (75,995)
At 1 January 2026 (73,769) (1,838) 2,163 297 3,050 (5,898) (75,995)
Increase/(decrease) for the period through:
Profit or loss (4,997) 512 (46) - (429) - (4,960)
Other comprehensive loss - - - - - 1,087 1,087
Cashflow hedge related to basis adjustment - - - - - 826 826
At 31 March 2026 (Unaudited) (78,766) (1,326) 2,117 297 2,621 (3,985) (79,042)
31 March 2026 (Unaudited) 31 December 2025 (Audited)
$'000 $'000
Deferred tax liabilities (84,077) (81,424)
Deferred tax assets 5,035 5,429
(79,042) (75,995)
NOTE 10: - Trade and other receivables
31 March 2026 (Unaudited) 31 December 2025 (Audited)
$'000 $'000
Financial items
Trade receivables
Trade receivables 18,404 121,006
Receivables from related parties - 6
Other receivables ((2)) 5,814 5,737
Accrued interest income 9 968
24,227 127,717
Non-financial items
Prepayments 10,737 10,231
Refundable excise 8,323 7,954
VAT receivable 4,803 -
Prepaid income tax 2,582 -
26,445 18,185
Total trade and other receivables 50,672 145,902
((2)) The balance relates to 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 2026.
NOTE 11: - Inventories
31 March 2026 (Unaudited) 31 December 2025 (Audited)
$'000 $'000
Hydrocarbon liquids 4,751 1,031
Natural gas 434 506
Raw materials and supplies 20,617 19,454
Total 25,802 20,991
NOTE 12: - Borrowings
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. completed the offering of US$750
million aggregate principal amount of the Notes with a fixed annual interest
rate of 8.5%. The proceeds were used mainly to repay Energean Israel's US$625
million Notes series due in March 2024. On 21 September 2025, Energean Israel
Finance Ltd redeemed in full the US$625 million Notes series due in March
2026, see below disclosure regarding the US$750 Million Secured Term Loan. As
of 31 March 2026, the group has three Senior secured notes series of the total
amount of US$2,000 Million.
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 purpose of Term Loan was to refinance its 2026 senior
secured notes and provide additional liquidity for the Katlan development. Up
to US$475 million is in US dollars and up to US$275 million is in New Israeli
Shekel. The Term Loan bears a floating interest rate of SOFR plus a margin on
the USD component and the Bank of Israel (BOI) rate plus a 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.
As of 31 March 2026, Energean Israel Finance Ltd drew down the full US$750
million amount of the Term Loan.
US$70 Million Unsecured Term Loan:
In October 2025, the Company signed an unsecured term loan facility agreement
with a banking corporation in Israel for US$70 million ("Unsecured Term
Loan"), to fund the development of the Nitzana pipeline (see note 8(1)). The
Unsecured Term Loan bears a floating interest rate of SOFR plus a margin and
non-utilization fee.
During October 2025, the Company drew US$33.2 million from the above facility
loan and US$36.2 million was drawn as a letter of credit in favor of INGL.
Composition:
Series Type Maturity Annual Interest rate 31 March 2026 (Unaudited) 31 December 2025 (Audited)
Carrying value Carrying value
$'000 $'000
Non-current
US$ 625 million Senior secured notes 30 March 2028 5.375% 621,600 621,144
US$ 625 million Senior secured notes 30 March 2031 5.875% 618,997 618,673
US$ 750 million Senior secured notes 30 September 2033 8.5% 736,247 735,990
US$ 275 million Secured term Loan 26 February 2035 3.1%+ BOI 282,144 279,850
US$ 475 million Secured term Loan 26 February 2035 4.25%+ SOFR 456,331 456,580
US$ 33.2 million Unsecured term Loan 30 September 2034 3.9%+ SOFR 32,040 31,848
Total 2,747,359 2,744,085
NOTE 12: - Borrowings (Cont.)
The interest on each series of the Notes and loans 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.
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.
Restricted cash:
As of 31 March 2026, the Company had short-term restricted cash of US$2.2
million (31 December 2025: US$97.6 million), which will be used for the
September 2026 interest payment.
Credit rating:
The senior secured Notes have been assigned a Ba3 rating by Moody's and a BB-
rating by S&P Global.
NOTE 13: - Trade and other payables
31 March 2026 (Unaudited) 31 December 2025 (Audited)
$'000 $'000
Current
Financial items
Trade accounts payable ((1)) 135,733 159,638
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Payables to related parties 17,164 14,812
Other creditors ((2)) 16,478 36,803
Short term lease liabilities 3,199 5,002
172,574 216,255
Non-financial items
Accrued expenses 30,728 29,457
Other finance costs accrued 172 49,275
Deferred revenues 5,711 5,530
VAT payable - 9,677
Social insurance and other taxes 2,279 940
38,890 94,879
Total current trade and other payables 211,464 311,134
Non-current
Financial items
Long term lease liabilities 3,569 4,008
3,569 4,008
Non-financial items
Accrued expenses to related parties 327 409
327 409
Total non-current trade and other payables 3,896 4,417
((1) ) The amount includes 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$210 million of the consideration will be paid in 12 equal quarterly
deferred payments started in March 2024 and as such has been discounted at
8.67% per annum (being the yield rate of the senior secured loan notes,
maturing in 2026, as at the date of agreeing the payment terms). As of 31
March 2026, nine installments have been paid and the remaining outstanding
payable amounted to US$ 50.5 million (2025: US$67.1 million).
((2) ) The amount mainly comprises of royalties payables to the
Israel government and third parties with regards to the Karish Lease,
including US$5.7 million (2025: US$13.1 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 )Sale and Purchase Agreement( 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 14: - Equity
Interim dividends:
Dividends of US$39.0 million were declared and paid during Q1 2026 (Q1 2025:
US$67.6 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 2026 (Unaudited) 31 December 2025 (Audited)
Book Value $'000 Fair value $'000 Book Value $'000 Fair value $'000
Senior Secured Notes (Note 12) 1,976,844 1,956,750 1,975,807 2,026,375
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 Bank loans bears
floating interest rates reset periodically to current market rates and its
carrying amount is therefore considered to approximate its fair value. The
fair values of other financial instruments not measured at fair value includes
cash and short-term deposits, trade receivables and trade and other payables
equate approximately to their carrying amounts.
Cash Flow Hedging
In February 2024, the Group entered into a forward transaction to hedge
against foreign currency volatility risk associated with its deferred payment
to EPCIC contractor. In addition, in January 2025 the Group entered into the
forward contracts with a bank in Israel to manage the foreign currency risk
related to EUR, NOK and GBP payments to suppliers under the Katlan EPCI
contract. The forward contracts are subject to different maturity dates and
are designed to match the Katlan Subsea development milestones completion
payments under the host contract. Multi-currency instruments are effective
from April 2025 to August 2027. 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 2026, the Group recorded a derivative asset of
US$17.3 million, and other comprehensive loss of US$3.6 million, during the
reporting period (31 December 2025, the Group recorded a derivative asset of
US$25.6 million, and other comprehensive income of US$13.2 million during Q1
2025).
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: - Subsequent events
Production of the Energean Power FPSO was restored and the FPSO became fully
operational on 10 April 2026. For more details see Note 2.
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