Energean has today announced HY results for the period ended 20 June 2020. The highlights include:

• Completed installation of the 90km gas pipeline that will connect the Energean Power FPSO to the national natural gas transmission system in Israel
• The electrical house ("Ehouse") module was lifted onto the FPSO hull at the Admiralty Yard, Singapore on 24 August 2020 marking the start of the FPSO hull and topsides integration campaign
• Subsea and onshore works for the Karish project progressing in line with expectations; installation of the production manifold and subsea isolation valves was completed during June 2020, and installation of the FPSO anchoring system in August 2020
• Analysis of the results of performance testing during clean-up operations of the three Karish Main development wells indicates a significantly higher liquids content than had previously been envisaged
• The Israel Ministry of Energy approved the Karish North Field Development Plan ("FDP") during August 2020
• During 1H 2020, Energean increased debt capacity by $395 million through its $175 million upsizing of the Israel project finance facility and the signing of a new $220 million reserve-based lending facility ("RBL") to fund the Edison E&P acquisition, significantly enhancing financial flexibility
• In August 2020, Energean was rated at gold level by MAALA, the Israel CSR standards-setting organisation and will be rated under the Maala Index on the Tel Aviv Stock Exchange going forward

Mathios Rigas, Chief Executive, Energean commented:
"Despite some COVID-19-related disruptions, in the year-to-date, we have made solid progress on our flagship gas project in Israel, which is scheduled to deliver first gas in 2H 2021. We have successfully performance-tested all three Karish development wells, delivered a resource upgrade at Karish North, completed the installation of the 8 bcm/yr capacity, 90km pipeline that will deliver Energean's gas sales (currently at 5.6 bcm/yr) into the Israeli domestic market, completed the hull of our FPSO in China and moved it to Singapore, and have commenced heavy lifting operations.

In the second half of the year, we look forward to completing our acquisition of Edison E&P, which, alongside the Karish project, will further secure our long-term, resilient cash flow profile and option-rich portfolio. Following completion of the deal, around 70% of our future production will be sold under long-term gas sales agreements that will largely insulate us against oil price volatility. We will continue to own and operate the majority of our asset base and are well-funded for all of our projects.

On the ESG front we received an award for "Best ESG Energy Growth Strategy in Europe 2020", recognising our efforts and focus on achieving our stated net zero target and our overall focus to comply with the United Nation's 17 SDG's.

As we move into an exciting and transformational period for the business, I would like to personally thank my colleagues around the world for their hard work and commitment to driving the business forward and keeping one another safe and well during these challenging times."

OPERATIONAL REVIEW

Israel

Despite COVID-related challenges experienced during the period, Energean has made solid progress on its flagship Karish project, offshore Israel. The project remains on track to deliver first gas in 2H 2021.

Reserves, resources and production
Well performance testing: During 1H 2020, Energean Israel successfully assessed the performance of all three development wells during clean-up operations. Results from production measurement confirmed that each of the three wells will be capable of delivering up to the individual well design limit of 300 mmscfd (approximately 3 bcm/yr per well) and that, combined, the three wells will be able to produce to the 8 bcm/yr capacity of the Energean Power FPSO.

Liquids production: All three development wells encountered high quality liquids with samples measured at 48 API. Analysis of the results of performance testing during clean-up operations of the three Karish Main development wells indicates a significantly higher liquids content than had previously been envisaged. Liquids production potential will be quantified as part of the upcoming CPR of the Karish, Karish North and Tanin fields.

CPR: As announced on 9 April 2020, D&M certified gross (Energean, 70%) contingent resources of 1.2 Tcf (33.7 bcm) of gas and 39 mmbbl of liquids in the Karish North field, a 32% uplift to Energean's previous estimates. Following issuance of this CPR, combined total gross (Energean, 70%) 2P reserves plus 2C resources in the Karish, Karish North and Tanin fields were estimated to be 99 bcm (almost 3.5 Tcf) of gas and 82 mmbbls of liquids, a total of 698 mmboe (88% gas).

Following completion of the drilling and performance testing of the three development wells in Karish Main, Energean has engaged D&M to produce a CPR to refine and confirm reserve and resource volumes across the Karish Main, Karish North and Tanin fields.

Gas Sales and Purchase Agreements ("GSPAs")

Energean Israel (Energean, 70%) has signed GSPAs for the supply of 5.6 bcm/yr of gas on plateau. Over the life of the contracts, the GSPAs account for approximately 75% of the current 2P reserve plus 2C resource base of 99 bcm. Having secured sufficient resources to fill the FPSO for a number of years, Energean's near-term strategy is to secure the necessary offtake to fill the remaining 2.4 bcm/yr of spare capacity in the Energean Power FPSO. Energean is assessing a number of opportunities in both the Israeli domestic market, as well as key export markets in order to meet this target.

Greece

Working interest production from the Prinos area averaged 2.1 kboed during 1H 2020 with full year production expected to be between 1.5 - 2.0 kboed. There was one cargo shipment of 212 kbbls during 1H 2020 that occurred on 29 March 2020, which generated $1.9 million of revenue. A second cargo of 211 kbbls was sold on 14 July 2020, generating $7.6 million of revenues that are not included within 1H 2020 revenues.

At the end of 2019, Energean decided to place its Prinos area assets under strategic review, during which investment has been limited, resulting in current production levels. Energean is in discussions with the Greek government, which, if successful, could result in a capital injection through a combined debt and equity package. Any equity would relate solely to the subsidiary in which the Prinos area assets are held. Should this financing package materialise, Energean could recommence work on the Epsilon project, which could add approximately 2 kbopd upon first oil from the three vertical wells that have been pre-drilled. These three wells plus the drilling of further wellstock could result in commercialisation of the 44 mmboe of working interest 2P reserves and 2C resources held within the field. 

Exploration
In Ioannina, interpretation of the newly acquired seismic lines has been completed and a drill-or-drop decision will be taken in 2H 2020. In Aitoloakarnania, the joint venture is awaiting approval of its environmental action plan before commencing the 2D seismic acquisition campaign.

In Montenegro, Energean has been granted a one-year extension to the first exploration period, which now ends on 15 March 2022.

Southern Europe 

Producing assets
Edison E&P's Southern European assets delivered average working interest production of 9.7 kboed (55% gas) during 1H 2020, towards the top end of the full year guidance range of 8 - 10.5 kboed.

In order to preserve capital in the current commodity price environment much of the activity previously planned for 2020 has been deferred, including the Calipso and Leoni sidetracks (both Italy), which will now be included in the 2021 programme.

Argo Cassiopea
In light of the macro environment, Edison E&P is working closely with ENI to streamline this development project. First gas continues to be expected during 2023.

Exploration and appraisal
In Croatia, Edison E&P expects to spud the Irena-2 appraisal well in 4Q 2020. It will target the same gas-bearing horizon that was successful in Irena-1 and, in the event of a success, the well will be suspended for future production.

Egypt

Abu Qir
Egypt delivered 38 kboed of production during 1H 2020, approximately 90% of which was gas (200 mmcfd / 1 bcm), ahead of full year 2020 market guidance of 34 - 37 kboed (of which 90% is gas: 197 - 215 mmcfd or 2.0 - 2.2 bcm). The four-well infill drilling programme has been deferred until after start-up of the NEA / NI greenfield development.

NEA / NI
Contractor commercial bids for the Engineering, Procurement, Installation and Commissioning ("EPIC") contracts were received during August 2020 and are currently being assessed by Edison E&P. Edison E&P and Energean expect to take FID on the NEA project later in 2020.

Exploration
In June 2020, Edison E&P submitted a formal request to enter the second exploration period in the North East Hap'y Offshore block (Edison E&P, 30%). Although the exploration well drilled during the first exploration phase did not find commercial hydrocarbons, Edison E&P and ENI are evaluating a large, Zohr-like structure for a potential well in the second exploration phase.

Following completion of the commitment well in the North Thekah Offshore licence, Edison E&P has decided to relinquish the licence.

United Kingdom

Production
1H 2020 production in the UK North Sea was 2.3 kboed (35% gas, 0.02 bcm). This is ahead of full year guidance of 1 - 2 kboed primarily due to better-than-forecast uptime.

Perenco has shut in the Trent field, awaiting higher gas prices before resuming production. As Trent is the host facility for production from the Tors fields, the Tors fields are currently offline. Production from the Tors fields represents approximately 10% of the full year budget. As such, this shut in is not expected to materially impact performance against the full year guidance range.

Appraisal
The two-well Glengorm appraisal campaign is expected to commence in late 2020.

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