Energean in 2021: Our Year of Transition The Leading Independent E&P Player in the East Mediterranean
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Energean in 2021: Our Year of Transition The Leading Independent E&P Player in the East Mediterranean
Disclaimer
This presentation contains certain forward-looking statements that are subject to
the usual risk factors and uncertainties associated with the oil and gas exploration
and production business.
Whilst Energean believes the expectations reflected herein to be reasonable
considering the information available to them at this time, the actual outcome may
be materially different owing to factors beyond the Group’s control or within the
Group’s control where, for example, the Group decides on a change of plan or
strategy.
The Group undertakes no obligation to revise any such forward-looking statements
to reflect any changes in the Group’s expectations or any change in
circumstances, events or the Group’s plans and strategy. Accordingly, no reliance
may be placed on the figures contained in such forward-looking statements.
2
Energean – The Largest E&P Company Listed on LSE
& First in the World to Commit to Net Zero Emissions
9 Countries +1 Billion Boe
Of operation 2P reserves &
Med-focused 2C resources*
+200 Kboed +70%
Medium-term Gas-weighted
production target portfolio
Governance Management
Premium listing 30 years
on LSE experience in gas
Net Zero ESG & HSE
Emissions A rating MSCI
Commitment by 2050 Gold by MAALA
* Pro forma as at 31.12.2020. Includes an additional 219 MMboe of 2P reserves to be acquired from Kerogen Capital. Reserves information is unaudited and subject to further
review. 3
2020: Strong Delivery Despite a Challenging Year
Key Milestones Achieved
Strong Delivery Against Strategic Goals Despite COVID-19 Related Challenges
80% Y-o-Y Increase in 2P reserves to 956 MMboe (2019: 341 MMboe)*
Production 48.3 Kboepd (74% gas)
Strong Operational
Performance Karish development 87% Complete at 31 December 2020
Took FID on Karish North (Israel) and NEA / NI (Egypt)
Closed Edison Acquisition – Operational Footprint Expanded to 9 Countries
Continued Agreed to Acquire Kerogen’s 30% Holding in Energean Israel
Commercial Success
Increased signed GSPAs in Israel to 7.4 Bcm/yr
Optimised Capital $437 Million Capex Reduction versus January 2020 guidance
Structure & Strong
Financial Discipline $1.2 Billion Cash & Undrawn Facilities at 31 December 2020**
67% Y-o-Y Reduction in Carbon Intensity to 22.2 kgCO2/boe
Advanced Net Zero
Strategy Roll Out of ‘Green Electricity’ at Prinos in Greece
* Pro forma as at 31.12.2020. Includes an additional 219 MMboe of 2P reserves to be acquired from Kerogen Capital. Reserves information is unaudited and subject to further
review. 5
** Adjusted for the new $700 million term loan that was secured post-balance sheet
Our Transition into the Top Tier of European E&Ps
Moving into the top tier of E&Ps expected to enhance liquidity, valuations & investor attention
1.200 Norwegian Peers LSE-Listed Peers
WI 2P Reserves
1.000
800
(MMboe)
600
400
200
0
Energean Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11
250
WI Production
200
(Kboed)
150
100
50
0
Peer 1 Peer 2 Peer 3 Energean Peer 4 Peer 5 Peer 6 Peer 7 Energean Peer 8 Peer 9 Peer 10
Target Today
Top 5 European E&Ps by scale
6
2021: Our Year of Transition
2021 Guidance and Medium-Term Targets
Substantially Improved Medium-Term Outlook
Through successfully delivering our strategic objectives in 2021 we will achieve our Medium-Term Targets which underpin
our goal of generating sustainable Free Cash Flow and delivering a sustainable dividend
2021 Guidance Medium-Term Targets
Production
(excludes any contribution 35.0 – 40.0 kboed Production
200
Kboed
from Israel) (up from 160))
Cost of Production* $195 – 215 million Revenues
$2,000
Million
(up from $1,400)
Development &
Production Capital $510 – 590 million Cost of Production*
$9 – 11
/ boe
Expenditure Down from 10 -12
Exploration Capital
$35 – 50 million G&A
$25 – 35
Expenditure Million
=
Decommissioning
$25 – 32.5 million EBITDAX $1,400
Expenditure Million
(Up from $900)
Consolidated Net
$2,000 – 2,200 million Net Debt / EBITDAX < 2.0x
Debt
* Operating Costs plus all royalties.
SG&A costs of approximately $35 - 40 million anticipated in 2021 8
Focused on Monetising 1 Billion Barrels of Reserves
to Deliver Production of more than 200 Kboed
W.I. 2P Reserves + 2C Resources 2016-20E* W.I. Hydrocarbon Production 2021+
1.200 250
2016-20E CAGR 45%
Medium-term Target
200 kboe/d
1.000
200
Key growth drivers
800 • Karish & Karish North
150 • Incremental liquids
MMboe
Kboed
600 • Abu Qir infill drilling
• NEA/NI development
100
400
50
200
0 0
2016 2017 2018 2019 2020 2021 Medium-term Target
Israel Egypt Europe Israel Egypt Europe
* Pro forma as at 31.12.2020. Includes an additional 219 MMboe of 2P reserves to be acquired from Kerogen Capital. Reserves information is unaudited and subject to further
review. 9
Revenues Forecast to Reach Over $2 Billion
Growth Underpinned by Gas Sold Under Fixed-price Contracts
Revenue Outlook 2021-25 Revenue Outlook % 2021-25
3% 2%
9% 7% 7%
Medium-term Target
$2 billion
41% 42%
37% 36%
39%
56% 56% 56% 56%
53%
2021 2022 2023 2024 2025 2021 2022 2023 2024 2025
Gas sold under fixed price contracts Gas sold at market prices Gas sold under fixed price contracts Liquids with Brent-linkage
Liquids with Brent-linkage Gas sold at market prices
Based on a Brent price of $50/bbl in 2021, $55/bbl in 2022 and $60/bbl flat real 2023+
10Creating a Sustainable Low-Cost Business
Secured Lower Unit Cost of Production Further Targeted Cost Optimisation Expected
18 • Full, bottom-up internal review initiated
• Operating cost reductions
16
• Third party tariff optimisation
14
• Mothballing
12 Medium-term Target • Production efficiencies, such as gas
$9 - 11 / boe reinjection, to reduce power consumption
10
• Cost driven performance-management
$/boe
8 • Further savings expected and not yet reflected in
forecasts
Medium-term Target
6 $4 - 6 / boe • Karish, Karish North & Tanin operating costs
expected to be $70 – 80 million per year
4
• Approximately $1/boe on plateau (excludes
royalties)
2
• Limited variable costs
0
2021 2022 2023 2024 2025
Unit Operating Costs Unit Operating Costs + Royalties
11Disciplined Capital Allocation Remains a Priority
Development & Production Capex 2021-24 W.I. Capex Allocation 2021-24
600 100%
17% 21%
33%
80%
52%
500
60%
40% 83% 79%
400 67%
48%
20%
$ Million*
300 0%
2021 2022 2023 2024
Greenfield Brownfield
200
Strong ability to reduce capital spend in a
low commodity price environment
100
Investing ~80% of capital expenditure in
greenfield assets in 2021
0
2021 2022 2023 2024 Increasing spend on brownfield assets
Israel Croatia Egypt Italy UK through 2024 to optimise Edison portfolio
* Excludes exploration and appraisal expenditure
12Capital Allocation Prioritising Total Shareholder Return
With Core Focus On Distribution Policy That Underpins Sustainable Dividend
Sustainable Target for inaugural
Dividend
2022 dividend
Organic > 20% 40% IRR Karish North
Growth IRR Project Sanctioned
Capital
Structure < 2x Net debt / EBITDAX target
$1.85/boe acquisition price
Disciplined Value for Kerogen’s 30% holding
M&A Accretive in Energean Israel
13Current Capital Structure
Net Debt Position* Committed Facilities
To be refinanced in 2021
Group net debt: $1,241 million • $1.45bn PFF ($1.15bn drawn)
• $(201) million cash Israel • Extended maturity to September 2022
• $1,442 million debt • Non-recourse to parent
PFF • Interest payments & other project costs covered by
facility
Energean Israel net debt: $1,057 million
• $(37) million cash • $700 million Term Loan
• $1,094 million debt Term • Maturity July 2022
Loan • Primary uses to fund Kerogen acquisition and Karish
North development
Energean PLC excl. Israel net debt: $184 million
• $(164) million cash
• $348 million debt • $280m RBL facility (current borrowing base $237m;
availability expected to increase June 2021) with
Egypt $75m accordion
RBL • LIBOR + 4.75% yrs 1-3 / LIBOR + 5.75% yrs 4-6
• 6-year term, semi-annual redeterminations
Full Year 2021 Guidance • 3-year grace period with first amortisation July 2023
•
$2,000 – 2,200 million Greek •
Outstanding loans as of 31 December $127m
Scheduled principal repayments of $19m per
RBL semester
* Accounting net debt
14Project Updates: Israel
Karish Project – First Gas Expected Late 2021
Project Close to 90% Complete Despite COVID-19 Related Challenges in 2020
At 31 Dec 2020
KARISH
FPSO SUBSEA ONSHORE
PROJECT
~93% ~76% *90-100%
complete complete complete ~87%
complete
• Main modules & pipe racks • 14-line mooring system & • Installation of production rate
lifting campaign completed deepwater subsea production measurement system at Dor
3Q 2020 system fully installed commenced Aug 2020
• Final lifts of module-1 & flare • 90-km gas sales pipeline • Mechanical completion & First Gas Dec 2021 –
expected in 1Q 2021 scope close to completion commissioning expected 1Q 1Q 2022 depending on
• Sailaway to Israel expected • Tie-in manifold successfully 2021
in Sept / 4Q 2021 installed Oct 2020 & • Installation of onshore pipeline
further ramp up of
connected to gas sales commenced Jun 2020 & workforce in
pipeline Nov 2020 expected to complete 1Q 2021 Singapore
• Riser installation campaign • Civil works progressing well &
expected to commence & expected to complete 2Q
complete 1Q 2021. 2021.
* 90% inclusive Energean scope of work; 100% under the TechnipFMC EPCIC
16Karish North Sanctioned – First Gas Expected 2H 2023
FID Reached 21-Months After Announcement of 32 Bcm Discovery
Low-Cost High-Return Tieback to FPSO
2P Reserves 241 MMboe (84% Gas)
Initial Capex ~$150 Million
($0.6 / Boe)
300 MMscf/d
Well Deliverability (per well)
Minimal
Operating Costs (Incremental)
IRR +40%
Capex Profile (Including Riser & Oil Train)
200
150
$ Million
First Second
100 Gas Development Well
50
0
2021 2022 2023 2024 2025
Initial Capex Riser + Oil Train
17Focused on Developing & Expanding Liquids Output
Through Committed Investment Programme
• 100 MMbbl 2P liquids certified by DeGolyer & MacNaughton CPR:
Material Reserves • 17.4 MMbbl (21.4%) increase in 2P liquids (light oil) volumes
& Production • 28 kbpd production over a 5-year plateau period
• Further growth targeted from appraisal of potential oil rim in 2022
• Project to install second oil train and riser on Energean Power FPSO sanctioned
• Oil train increases liquids production capacity to 40 kbopd (from 21 kbopd)
Committed & Fully- • Allows maximum gas output of 8 Bcm (from 6.5 Bcm)
Funded
• Approximately $100 million of capex fully funded by new term loan
Infrastructure
• Expected to become operational in 2022
• 800,000 barrels of liquids storage capacity on FPSO
Ample Storage • Storage capacity not a restricting factor to liquids production
Capacity • Additional gas debottlenecking opportunities under evaluation that would allow gas
production above rates of 8 Bcm/yr
• Low carbon barrels added to portfolio
Low Carbon • Liquids production expected to have no discernible impact on Scope 1 & 2 CO2
emissions
Emissions
• Carbon intensity of 4.5 kg CO2/boe anticipated
18Investment Synergies Targeted from Low-Cost
Deepwater Tie-Back Options
Approx. Distance from FPSO 5 km 15-30 km 40-55 km
Karish Karish North Block 12 Tanin
Approximate Life of Field
capex/boe
$6/boe $1.5/boeIsrael – 7.4 Bcm/yr Gas Sales Agreements
Secured Revenues with 93% of Energean Power FPSO Capacity Utilised
Protection
1.8 Bcm/yr new Against
Take-or-Pay / High Quality
GSPAs Signed Floor Pricing Downside
Exclusivity Counterparties
in 2020 Commodity
Price Risk
9
Energean Israel Gas Supply Profile
8
7,4 7,4 7,4 7,4 7,4
7,2 • December 2021 – Karish first gas
7 6,7 6,8
• 2022-23 – Ramp up of 18 contracts
6 signed with independent power
producers (IPPs) including both recently
5 privatised IEC stations, Alon Tavor &
Bcm/yr
4.2*
Ramat Hovav, and blue-chip industrial
4
customers including ORL and ICL
3
• 2024 – Continued ramp up
2
• 2025 – Commencement of IPM contract
1 & continued ramp up of other contracts
0 • 2026 – Plateau gas supply reached
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Karish, Karish North & Tanin Gas Supply
Energean Power FPSO Capacity
* Company estimate during 12-month transition from existing suppliers
204-Well E&A Programme Targeting >1 bn boe
Prospective Resources to Commence Early 2022
Karish North drilled as part of a 5-well programme providing cost synergies
KM 04 + Pilot Hole (PH)
ATHENA 01
A discovery would significantly
de-risk prospects in the rest of
Block 12
Audited
Approx.
Prospect Size
Well Type Cost PoS
(Recoverable)
$ Million
MMboe*
Athena-01 Exploration 35 140 84%
94% +
KM-04 + PH Appraisal 45 176 + 64
72%
Exploration
Hermes-01 40 200 56%
(Optional)
Hercules- Exploration
50 488* Tbc
01** (Optional)
KN-01 ST-
04
Development 50 NA 100% HERMES 01 HERCULES 01
* Recoverable Volume”: is the sum of the unrisked mean recoverable volumes with recovery factor (gas) = 0.7 and recovery factor (oil) = 0.4. This represents the total recoverable
reserves targeted by the well bore 21
** Not yet audited. Management estimates presentedProject Updates: Egypt
NEA / NI Sanctioned – Monetisation of Well Defined,
High Return Drilling Opportunities
Key Project Metrics
Peak Production 15 – 16 Kboed
2P Reserves 49 MMboe
(87% Gas)
PYTHON
SUBSEA
WELL
CapexProposed Acquisition of Kerogen’s 30% Holding in Energean Israel Limited
Agreed to Acquire Kerogen Capital’s 30% holding in
Energean Israel Limited (EISL) for $380-405 Million
Compliments our gas-weighted portfolio Group 2P+2C to reach +1 billion boe
Energean Acquired assets Pro-forma
• Natural strategic fit that gives full control over capital
14%
structure of EISL 29% 26%
• Adds 219 MMboe 2P reserves (86% gas)
71% 74%
86%
• Group 2P + 2C set to grow to >1 Bnboe (74%
gas)
Gas Liquids
• Attractive transaction metrics
• $1.74 - $1.85 /boe Group production to reach +200 kboed
• 1x forecast Minority EBITDAX 250
• Payback achieved within three years
• 43% discount to EV 200
150
• Full control over EISL enables capital structure Kboed
optimisation 100
• Low carbon intensity hydrocarbons (< 4.5 kg 50
CO2/boe)
0
2021 2022 2023 2024 2025
Energean Acquired Assets
25Transaction Structure & Financing
Part of use of proceeds for Term
Up-Front
$175 Million Payable on completion Loan provided by J.P. Morgan &
Consideration Morgan Stanley
Deferred Cash Contingent on Practical Completion To be funded by optimised capital
$125-150 Million of Karish structure
Consideration
Additional Deferred
$30 Million Payable December 2022 Funded by free cash flows
Consideration
Conversion price £9.50 / 0% coupon
Convertible Loan
$50 Million rate / Maturity 31/12/2023 December Satisfied by new share issuance
Notes 2023
$380-405 Total
Highly accretive to plc leverage ratio
Million Consideration
26Milestones to Completion
Transaction Close Expected 1Q 2021
Timing Milestone
30 Dec 2020 Transaction announcement
Jan / Feb 2021 Israeli Petroleum Commissioner Approval
Feb 2021 Publication of Circular
Feb 2021 EGM & shareholder votes
Feb / Mar 2021 Closing of the Proposed Transaction
27ESG & Our Path to Carbon Neutrality
Creating a Low Carbon Business with Industry-
Leading ESG Credentials
First E&P Company Globally to Commit to
Net Zero Emissions by 2050
Net Zero
Carbon emissions by 2050
Visibility on Absolute Carbon Emissions
Intensity to Half the Current Global Average
Rolling Three-year Emissions Target
30
Current global average
25
+70% Gas-Weighted Portfolio (2P + 2C)
+85% reduction by 2023 versus
20 2019 base year
2023 target = Approx. half the
15 current global average for oil &
gas industry
10
Executive compensation tied to ESG
performance targets from 2020
5
0
2020* 2021 2022 2023 2024 2025
Committed to Transparency & Adherence to
Carbon emissions intensity – kgCO2e/boe the 17 UN SDGs
• Pro forma Energean + Edison
29Prinos – Carbon Capture & Storage Initiatve
Multiple CC&S Opportunities Under Evaluation in Greece
Greece Sources of CO2 Emissions Possible CO2 Storage Sites in Greece
Mesohellenic Western Prinos
Industry Facilities # CO2 Emitted (kt)
Trough Thessaloniki Basin
Energy Sector 21 36,463
Minerals 6 13,422
Production &
Processing of 2 708
Metals
2
Chemicals 490
Total 31 51,083
Prinos CC&S Project Under Evaluation
• Focused on meeting our carbon neutral by 2050 target and
leading the Mediterranean region’s energy transition
• Evaluation of Carbon Capture & Storage projects in the
Prinos basin initiated in late 2020
• Prinos subsurface volumes sufficient to sequester up to 50
million tonnes of CO2
• Use of captured CO2 for enhanced oil recovery (EOR) also
under investigating – to unlock additional upstream value
* Enhanced Oil Recovery
302021: The Outlook
2021-22 Outlook
Continue Strong Performance Versus Strategic Goals & Deliver Our Year of Transition
Deliver First Gas at Karish & Develop Karish North 2021 - 2023
Operational Develop NEA / NI in Egypt 2021 - 2022
Performance
Deliver (up to) 5-well E&A programme, offshore Israel 2022 - 2023
Kerogen Acquisition Close 1Q 2021
Commercial Success Sign GSPAs to fill remaining space in the Karish FPSO 2021
Sign offtake agreement for Karish liquids 2021
Optimise EISL capital structure through refinancing 2021
Optimised Capital
Structure & Strong Define dividend policy 2021
Financial Discipline
Bring net debt / EBITDAX below 2.0x Mid-term
Align with TCFD recommendations 2021
Advanced Net Zero Roll Out of ‘Green Electricity’ across operated assets Ongoing
Strategy
Evaluating converting Prinos into Greece’s first CC&S Project Ongoing
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