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 2025 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 andloss
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) $'000
31 December 2024 (Audited) $'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 Director
Matthaios Rigas 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 $'000
Share Premium $'000
Hedges Reserve $'000
Retained earnings $'000
Total equity $'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 2025 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 At 31 March 2025 (%)
Shareholding At 31 December 2024 (%)
Energean Israel Transmission LTD
121, Menachem Begin St. Azrieli Sarona Tower, POB 24, Tel Aviv 67012039 Israel
Gas transportation license holder
100
100
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 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 (1)
167
226
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 (Unaudited) $'000
31 March 2024 (Unaudited) $'000
Current income tax charge
(15,414)
(246)
Deferred tax relating to origination and reversal of temporary differences (Note 9)
(2,995)
(13,085)
Total taxation expense
(18,409)
(13,331)
NOTE 7: - Property, Plant and Equipment
a. Composition:
First half
Oil and gas Assets $'000
Leased assets $'000
Furniture, fixtures and equipment $'000
Total $'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 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 (Unaudited) $'000
31 March 2024 (Unaudited) $'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 $'000
Software licences $'000
Total $'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) $'000
31 March 2024 (Unaudited) $'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 $'000
Right of use asset IFRS 16 $'000
Tax losses $'000
Deferred expenses for tax $'000
Staff leaving indemnities $'000
Accrued expenses and other short‑term liabilities and other long‑term liabilities $'000
Derivative asset/ liability $'000
Total $'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) $'000
31 December 2024 (Audited) $'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) $'000
31 December 2024 (Audited) $'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) $'000
31 December 2024 (Audited) $'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) Carrying value $'000
31 December 2024 (Audited) Carrying value $'000
Non-current
US$ 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) $'000
31 December 2024 (Audited) $'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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