November 2019 Corporate Presentation - Energean
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November 2019 Corporate Presentation 1 1
Energean at a Glance
The leading sustainable, gas-focused, independent E&P company in the Mediterranean
9 ESG & HSE
Countries of
609 mmboe 70 kboed 80% FTSE 250 &
focused
2P Reserves production gas-weighted
Operations A rating MSCI TA-35
Med Focused
2 2
A Continuous Growth Story Since 2008
Analysts Third Point Energean Energean IPO Edison
700 Acquisition Development Analysts predict
predict invests acquires & E&P
of Prinos of Prinos $20 oil price
$200 oil price in Energean Karish & Tanin Project FID acquisition
609
600
500
400
mmboe
300
200
100
2
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Prinos 2P Prinos 2C Katakolo 2P Karish and Tanin 2P Karish and Tanin 2C Edison
3 Reserves stated as net working interest, exclusive of Kerogen minority 3
Our Strategy in Action – Consistent Growth & Value Creation
Production
2007 2018 2019 2022
Fast track 140
Growing production
1 4 Edison Acquisition 70 development of 185 kboe/d with
from mature assets FPSO at full
Karish capacity
kboe/d
Reserves
127
Italy 14%
(85 mmboe)
Israel 49% Egypt 25% 79%
(297 mmboe) (152 mmboe)
gas-weighted 609
Croatia
Strong Deal Delivery Capabilities
2013-2015 $250 million Third Point investment
$200 million RBL for Prinos & Epsilon
2018 $1.275 billion Project Finance facility for Karish
$460 million equity raise through LSE IPO
$750 million Acquisition
$265 million equity raise on LSE and TASE
2019
$600 million committed Bridge Loan Facility
$280 million Sale of North Sea asset to Neptune
5 5
The E&P Company Of The Future – ESG Is A Top Priority
• Operating in Environmentally Sensitive areas with >10 blue flagged
beaches next to our oil & gas production platforms
• Actively reducing CO2 Footprint with goal to be a net 0 emitter
• c.80% of reserves and production from Natural Gas
• Decarbonising Israel with Energean gas replacing coal
• Focus on HSE - 4 Million man hours free of LTIs during Energean Power
FPSO Hull construction.
• Diversified - Employees from 28 countries around the world
• Creating a Sustainability and Climate Change Department
• Executive pay to be linked to ESG goals from 2020
• Signatory of the United Nations Global Compact
6 6
Karish and Tanin
Project Update
7
At a Glance: Our Acreage in Israel
Key Facts & Figures
2.4 Tcf + 32.8 mmbbls (gross) 2P (92%) + 2C (8%)
RESOURCES 0.9 Tcf + 34.2 mmbls (gross) Karish North discovery
6.3 Tcf + 83 mmbbls gross prospective resources
OWNERSHIP Energean Israel is owned 70% Energean plc, 30% Kerogen1
4.5 Bcm/yr firm GSPAs plus 0.4 Bcm/yr IPM contract plus 0.7
REVENUES Bcm/yr Or contract
KEY DATES FID March 2018, First Gas 2021
8 BCM/yr owned FPSO with subsea tie-backs
DEVELOPMENT
800,000 bbls oil & condensate storage capacity
CONCEPT Gas pipeline to shore. Liquids tanker offload
TechnipFMC: lump-sum EPCIC
SERVICE
Stena: 5 firm + 5 optional wells
PROVIDERS
Wood contracted for ops and maintenance.
CAPEX $1.6bn to 2021
Funded by $1.3bn Project Finance + $440m net IPO proceeds
STRATEGY Secure additional resource and offtake to fill the FPSO
8 1. Minority interest stake consolidated for reporting purposes 8
On Track to Deliver First Gas in 2021 – Key Milestones
FID (1Q 2018)
First Gas On track
FPSO Workstream
2018 2019 2020 2021
Hull and Hull Sailaway Hull and
Topsides First Hull Keel FPSO mooring
Hull First Steel Cut Topsides from Cosco Topsides Performance
Steel Cut Laying hookup and
4Q Construction Yard Integration testing
4Q 2Q Riser
1Q – 4Q 4Q 1Q – 4Q
Achieved Achieved
November 2018 November 2018
Drilling Workstream
2019
Karish North, Complete Zeus Exploration
Mobilise Stena
KM-03, KM-01 Development
DrillMAX
& KM-02 Wells
1Q 1Q
1Q – 4Q 4Q
Rig mobilized
Discovery
February 2019
Subsea and Onshore Workstreams
2019 2020
Pipeline Onshore Installation of
Pipeline beach
installation facilities subsea
crossing at Dor
Karish to Dor commissioning infrastructure
1Q – 4Q
3Q – 1Q20 2Q – 4Q 1Q – 4Q
9 9
Execution Capabilities – Developing Karish
Hull ready for undocking, COSCO Zhoushan Yard (Sept 2019) Hull towing, Zhoushan (Sept 2019)
10 Topsides overview, Sembcorp Marine Admiralty Yard (Sept 2019) Assembly, Sembcorp Marine Admiralty Yard (Sept 2019) 10Project Progress
636
610
54% of contract value by
expenditure
Physical progress ahead
at 60%
MCC= Milestone Completion Certificate
11 112019 Firm Four Well Drilling Programme
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Karish
KARISH WORK PROGRAMME Karish Main
Karish North North
3x DEV Wells + 1x EXP Well 1,2 & 3 Karish Main 1, 2, & 3 DRILLING Karish Main COMPLETION
EXPLORATION APPRAI
TOPHOLES
SAL
• 3x Karish Main development wells:
Karish Main 02 drilling completed end June
Karish Main 03 drilling completed early August
Karish Main 01 drilling completed October
• Benefited from batch-setting philosophy:
− Optimised well construction sequence
− Delivered low spread costKarish North Discovery
Low Case Best Estimate High Case
GIIP (Tcf) 1.1 1.3 1.8
GIIP (BCM) 30.0 35.6 51.6
Recoverable Gas (Tcf) 0.7 0.9 1.4
Recoverable Gas (BCM) 19.5 24.9 38.7
Recoverable Liquids 25.2 34.2 55.0
KARISH NORTH (MMbbls)
Seismic Attribute • Appraisal completed November 2019
• Sidetrack 700m north of original wellbore
• GWC discovered at 4791 TDVSS
• Thin rim light oil immediately above GWC
KARISH NORTH • Remaining volumetric uncertainty associated
with thinly bedded sections of the reservoir
in the B Sand Unit
− Will be confirmed via acquisition of a
core when well is completed as a
producer
KARISH EAST
KARISH
13 132020 Drilling Opportunities
2.4Tcf (68bcm)
2P & 2C
1 – 1.5 Tcf (c.28 - 42bcm)
GIIP at
Karish North
6.3 Tcf (c.178bcm)
Prospective
Resources
c. 10 Tcf (c.283bcm)
Total Reserves
& Resources
14 14Zeus Exploration Well
Unrisked in Geological
Place Volumes Chance of
(Bcf / Bcm) Success (%)
A Sand 467 / 13 77
B Sand 123 / 3 72
C Sand 52 / 1 68
Total 641 / 18 NA
• Block 12
− Between Karish & Tanin leases
− Development synergies with Tanin
• Any discovery would be tied back to the
Energean Power FPSO
• Discovery would de-risk nearby prospects
• Hera – 485 Bcf / 14 Bcm
• Athena – 853 Bcf / 24 Bcm
• No seller royalties payable
• New Sheshinsky calculation (versus Karish
and Tanin leases)
15 15‘Filling The Boat’: Capacity Overview
Or Contract
6.1 0.7 BCM/yr contingent on Or Power Plant Close. Or
has unlimited capacity to dispose of gas for alternate
9 Contracted volumes & spare capacity uses
8
MRC Contract
7 0.5 BCM/yr term sheet. MRC is the winning bidder
Available for tie-back of future discoveries 5.4 in the IEC Alon Tavor tender process. Both parties
6 and additional gas sales from Karish North intend to convert to a firm GSPA
5 IPM Contract
4 0.4 BCM/yr contingent on additional resource in
4.9 2019. We may supply additional gas pre-2024
3
11 Firm Contracts
2 Secured Revenues
1 4.5 BCM/yr Av. 16 yrs 75% ToP
4.5
0
1/1/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025
Firm Contracts IPM Contract MRC Term Sheet Major IPPs and Industrial customers
Or Contract Spare Capacity
16 16Key Demand Driver: Gasification of the Israeli Economy
Israel Gas Demand Growth Recent Updated and Progress
35
Closure of the following coal-fired power-stations
30
announced, increasing demand for gas:
25
20 • Units 5-6 of Orot Rabin, Hadera – 1150 MW
bcma
•
15
Units 1-4 of Rotenberg, Ashkelon – 2250 MW
10
5
0
Energean Contracted Energean Available Capacity Term sheet executed with MRC Alon Tavor Power Ltd
Rest of Market per Adiri Additional demand per BDO
• Winning bidder of the “Alon Tavor tender”
Power station privatisation
• Executed 10 June 2019
Site Capacity – MW Bcm/y Last date of
delivery of • Includes the material commercial terms for the sale of
possession
gas to MRC for use in the natural gas fired generation
Alon Tavor 600 0.5 December 2019
units in the Alon Tavor site
Ramat Hovav 1,137 1.0 December 2020
• Both parties are working together to conclude a GSPA
Reading 428 0.4 June 2020
which will confirm the agreement between them
Hagit 697 0.6 June 2021
Eshkol 1,693 1.8 June 2022
17 17Edison Transaction Update
Edison E&P: Attractive Metrics1
2.6 c.3 yrs. 18%
Payback on 10yr estimated
Pre-Neptune Disposal AV/2P
Production unlevered IRR
Post-Neptune 1.9 c.3 yrs. 26%
Payback on 10yr estimated
Disposal AV/2P
Production unlevered IRR
Reported Working Interest 2P Reserves Reported 2018 Working Interest Production
1.200
1.083 200
185
1.000 917
156
150 140
800 745
609
600 100
465 444 82 81 81 81
70
400 55
285 280 51
245 50 41
194 34
200 155
18
56 47 7
-
0 0
Co'y 1 Co'y 2 Co'y 3 Edison + Co'y 4 Co'y 5 Co'y 6 Co'y 7 Co'y 8 Co'y 9 Co'y 10 Co'y 11 Co'y 12 Co'y 1 Energean Co'y 2 Co'y 3 Co'y 4 Co'y 5 Energean Co'y 6 Co'y 7 Co'y 8 Co'y 9 Co'y 10 Co'y 11 Co'y 12
Energean + Edison + Edison
(2022E)
Sources: Company Information, CPR, Management Estimates, Capital IQ
1. As per Management Estimates
19Creating a Material Mediterranean-Focused Player… (1)
Immediate cash flows &
Growth story, focused on
EBITDAX with incremental
developing new reserves
growth opportunities
Reserves
(mmboe)
W.I. 2P
347 262
Production
(kboe/d)
4 66
Revenue
($ MM)
90 566
Full-Cycle, Low Cost, Growth Oriented but with a Diverse Underlying Cash Flow Base
Source: Company information, CPR
1. Metrics presented on a 2018 basis
20 20…and Enhancing Production and Cash Flow Generation
Clear Trajectory to 200 kboe/d(1) (2)
Combined 2019 - 2025 Production Profile by Country
(kboe/d)
Enhancing post 2021 cash
250
flows and supporting medium-
term ambition to pay a dividend
200
150
Bridging near term
cash flow generation
We need exactly(!) the
100
same chart just without
UK
and Norway
50
0
2019
2019 20202020 2021 2021 2022 2022 2023 2023 2024 2024 2025 2025
Assuming Karish & Tanin
Greece Israel Egypt Italy Algeria Croatia
FPSO at Full Capacity
Sources: Company Information, CPR, Management Estimates
2121
1. Metrics presented on a net working interest basis
21 2. As per Management Estimates
3. Represents committed exploration spendConsideration and Financing Structure
Consideration and Funding Equity Placing
• Total consideration − $850 MM
• Equity placing of $265 MM
‒ $750 MM up-front cash
• ABB announced 4 July 2019
‒ $100 MM contingent on Cassiopea first gas funded via FCF
• Placing executed at 900p
‒ 8% profit oil royalty on discoveries made by upcoming drilling
drilling, funded through FCF • Settlement and admission of new shares achieved on 8
July 2019
Sources and Uses
Other Financing
Up front Cash Consideration $750 MM
• $600 MM Bridge Facility u/w by MS and ING
Ongoing Funding Requirements $115 MM
‒ Refinancing H2 2019 – completion expected 4Q19
Total Funding Requirements $865 MM
‒ Expected Net Debt : EBITDAX not to exceed 2x for more
than 1 year (excl. Israel non-recourse project financing)
Bridge Loan $600 MM
‒ Strong combined cash flow expected to support
Equity Placing $265 MM deleveraging thereafter
• Agreed to sell UK and Norway North Sea to Neptune for
Total Funding Sources $865 MM
$250 million + $30 million contingent
Disposal of North Sea Assets $250 MM
22 22Transaction Timing and Next Steps
July 19 Transaction Signing & Announcement
July 19 Equity Raise
July 19 Bridge Facility Agreement signed
H2 19 Regulatory Approvals and Partner Consents Initiated & Progressing as Expected
H2 19 Reserve Based Facility Takeout of Bridge Loan Initiated & Progressing as Expected
H2 19 Planned Disposal of Non-Core Assets
Q4 19 Publication of Circular and EGM No Change to Expectations
Q4 19 Publication of Enlarged Group Prospectus and Technical Readmission
No Change to Expectations
Completion expected Year End 2019 No Change to Expectations
23 23Other Assets Update 24 24
Mature Basin Operating Expertise – Ongoing Success in Greece
Demonstrable Operational Track Record Prinos Basin Highlights
Continuous Growth in Reserves & Resources
80
70
73 73 • Operator, 100% WI
60 58 58 57
50
• Shallow water – 36 meters
mmboe
40
30
30 24
20
11
17 • Four platforms operating next to traditional tourist destinations (Thasos
7
10
2
5 Island)
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Prinos 2P Prinos 2C • c. 120 million barrels of oil produced – offtaker BP
• Production increase from 1.2 kbopd to 4.1 kbopd
• Production costs decreased to $17.6/ boe in 2018 from $24.7/ boe in 2017
• Currently developing Epsilon satellite - $100 million investment
• Expecting first oil from the Lamda platform in 2H 2020
25 25Wider Potential: Upside in Greece…
Material Position
• 40% WI in the Ioannina and Aitoloakarnania licences
• Repsol operated (60% WI).
• Neighboring Block 4 in Albania acquired by Shell
Prolific Geology
• Onshore Western Greece part of the Hellinide fold belt, which hosts the
prolific Ionian Basin and Apulian platform
• On trend with recent large discoveries made in Albania
Ongoing Activity
• 2D seismic survey completed in Ioannina block
• Ioannina best estimate prospective resources 103 Bcf and 187 million bbls
• 2D seismic survey to commence in the Aitoloakarnania block in 2020.
• Katakolo field under development
26 26…and the Adriatic - Montenegro
Material Position
• Operator, 100% WI in offshore blocks 4219-26 and 4218-
30
• Best estimate unrisked prospective resources 143.9
mmbbls and 1,766.1 Bcf
Commitments Fulfilled
• First round exploration commitment fulfilled
− 338 km2 new 3D shot in Feb 2019
− To be processed together with legacy 2D
− Full results expected end-2019
− Drill-or-drop decision 2020
Majors focusing on the area
• ENI-Novatek owns the four blocks to the south
− Shot seismic in 4Q 2018-1Q 2019
− Expected to drill two wells in 2019-2020
27 27Our Next 24 Months: Catalyst-Rich
Country Asset Activity H2 2019E H1 2020E H2 2020E 2021E/22E
Additional Israeli Wells Potential exploration drilling
Karish North Appraisal
Karish First Gas
Karish Additional GSPAs
North Thekah Offshore Exploration
NEA Final Investment Decision FID
North East Hap’y Exploration
Abu Qir Infill Drilling
NEA First Gas
Rospo Sidetracks
Cassiopea First Gas
Gemini & Centauro Prospect Drilling
Epsilon First Oil
Echo (W. Patraikos) Exploration
Sources: Company Information
28 28Thank you!
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