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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Energean Plc | LSE:ENOG | London | Ordinary Share | GB00BG12Y042 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-9.50 | -0.95% | 986.00 | 980.50 | 983.00 | 1,000.00 | 973.00 | 985.00 | 246,914 | 16:35:03 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Crude Petroleum & Natural Gs | 1.42B | 184.94M | 0.4576 | 21.46 | 3.97B |
TIDMENOG
RNS Number : 6354L
Energean PLC
07 September 2023
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONDENCED CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2023
ENERGEAN ISRAEL LIMITED
UNAUDITED INTERIM CONDENCED CONSOLIDATED FINANCIAL STATEMENTS
AS OF 30 JUNE 2023
INDEX
Page ----- Interim Condensed Consolidated Statement of Comprehensive Income 3 Interim Condensed Consolidated Statement of Financial Position 4 Interim Condensed Consolidated Statement of Changes in Equity 5 Interim Condensed Consolidated Statement of Cash Flows 6 Notes to the Interim Condensed Consolidated Financial Statements 7-20
- - - - - - - - - - - - - - - - - - - -
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SIX MONTHSED 30 JUNE 2023
30 June (Unaudited) 2023 2022 Notes $'000 $'000 ------------------------------------- -------- ------------ --------- Revenue 3 347,743 - Cost of sales 4 (178,077) - ------------------------------------- -------- ------------ --------- Gross profit 169,666 - Administrative expenses 4 (9,048) (5,453) Exploration and evaluation expenses 4 (50) - Other expenses 4 - (1,074) Other income 4 - 53 ------------------------------------- -------- ------------ --------- Operating profit/(loss) 160,568 (6,474) Financial income 5 1,044 4,504 Financial expenses 5 (67,569) (4,671) Foreign exchange loss, net 5 (5,578) (967) ------------------------------------- -------- ------------ --------- Profit/(loss) for the period before tax 88,465 (7,608 ) Taxation (expense)/income 6 (20,215) 2,703 ------------------------------------- -------- ------------ --------- Net profit (loss) for the period 68,250 (4,905 )
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF 30 JUNE 2023
30 June 20 23 31 December (Unaudited) 2022 Notes $'000 $'000 ----------------------------------------- ------ ------------- ------------ ASSETS: NON-CURRENT ASSETS: Property, plant and equipment 7 2,873,206 2,926,313 Intangible assets 8 156,689 143,554 Other receivables 10 8,506 108 Deferred tax asset 9 2,827 22,886 --------------------------------------------- ------ ------------- ------------ 3,041,228 3,092,861 -------------------------------------------- ------ ------------- ------------ CURRENT ASSETS: Trade and other receivables 10 97,381 82,611 Inventories 11 13,327 8,313 Restricted cash 8,481 71,778 Cash and cash equivalents 64,688 24,825 --------------------------------------------- ------ ------------- ------------ 183,877 187,527 -------------------------------------------- ------ ------------- ------------ TOTAL ASSETS 3,225,105 3,280,388 --------------------------------------------- ------ ------------- ------------ EQUITY AND LIABILITIES: EQUITY: Share capital 1,708 1,708 Share premium 212,539 212,539 Retained losses (2,278) (70,528) --------------------------------------------- ------ ------------- ------------ TOTAL EQUITY 211,969 143,719 --------------------------------------------- ------ ------------- ------------ NON-CURRENT LIABILITIES: Senior secured notes 12 1,852,685 2,471,030 Decommissioning provisions 87,400 84,299 Trade and other payables 13 205,870 210,241 --------------------------------------------- ------ ------------- ------------ 2,145,955 2,765,570 -------------------------------------------- ------ ------------- ------------ CURRENT LIABILITIES: Current portion of senior secured notes 12 622,225 - Trade and other payables 13 244,956 371,099 --------------------------------------------- ------ ------------- ------------ 867,181 371,099 -------------------------------------------- ------ ------------- ------------ TOTAL LIABILITIES 3,013,136 3,136,669 --------------------------------------------- ------ ------------- ------------ TOTAL EQUITY AND LIABILITIES 3,225,105 3,280,388 --------------------------------------------- ------ ------------- ------------ 06 September 2023 ----------------- ---------------- --------------- Panagiotis Benos Matthaios Rigas Director Director
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
SIX MONTHSED 30 JUNE 2023
Share Accumulated Total Share capital Premium losses equity $'000 $'000 $'000 $'000 -------------------------------- ------------- --------- ----------- --------- Balance as of 1 January 2023 1,708 212,539 (70,528) 143,719 Profit for the period - - 68,250 68,250 --------------------------------- ------------- --------- ----------- --------- Balance as of 30 June 2023 (unaudited) 1,708 212,539 (2,278) 211,969 ================================= ============= ========= =========== ========= Balance as of 1 January 2022 1,708 572,539 (35,946) 538,301 Transactions with shareholders Share premium reduction (*) - (360,000) - (360,000) Comprehensive loss Loss for the period - - (4,905) (4,905) --------------------------------- ------------- --------- ----------- --------- Balance as of 30 June 2022 (unaudited) 1,708 212,539 (40,851) 173,396 ================================= ============= ========= =========== =========
(*) In April 2022 the Company reduced its share premium capital by US$360 million and credited US$346 million against the shareholder loan account plus accrued interest.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS PERIODED 30 JUNE 2023
30 June (Unaudited) Notes 2023 2022 $'000 $'000 ---------------------------------------------- ------ ----------- ----------- Operating activities Profit (Loss) for the period before tax 88,465 (7,608) Adjustments to reconcile loss before taxation to net cash provided by operating activities: Depreciation, depletion and amortisation 4 74,375 110 Loss from sale on property, plant and equipment 4 - 1,074 Amortisation of payment made in advance to customers 3 4,928 -
Finance Income 5 (1,044) (4,504) Finance expenses 5 67,569 4,673 Net foreign exchange loss 5 5,578 967 -------------------------------------------------- ------ ----------- ----------- Cash flow from operations before working capital 239,871 (5,288) -------------------------------------------------- ------ ----------- ----------- (Increase)/decrease in trade and other receivables (36,564) 871 Increase in inventories (5,014) - Decrease in trade and other payables (25,707) (310) -------------------------------------------------- ------ ----------- ----------- Cash from operations 172,586 (4,727) -------------------------------------------------- ------ ----------- ----------- Income taxes paid (368) (558) -------------------------------------------------- ------ ----------- ----------- Net cash inflows from/(used in) operating activities 172,218 819 (5,285) ------------------------------------------------- ------ ----------- ----------- Investing activities Payment for exploration and evaluation, and other intangible assets 8(B) (69,227) (10,034) Payment for purchase of property, plant and equipment 7(C) (115,511) (130,118) Proceeds from disposals of property, plant and equipment - 188 Amounts received from INGL related to transfer of property, plant and equipment 10 56,906 17,371 Movement in restricted cash, net 63,297 64,119 Interest received 1,841 1,544 -------------------------------------------------- ------ ----------- ----------- Net cash outflows used in investing activities (62,694) (56,930) -------------------------------------------------- ------ ----------- ----------- Financing activities Senior secured notes - interest paid 12 (64,453) (64,453) Other finance cost paid (91) (1,869) Finance costs paid for deferred licence (2,496) payments - Transaction cost related to Senior Secured Notes 16 (1,214) - Repayment of obligations under leases 13 (570) (499) -------------------------------------------------- ------ ----------- ----------- Net cash outflow used in financing activities (68,824) (66,821) -------------------------------------------------- ------ ----------- ----------- Net increase/(decrease) in cash and cash equivalents 40,700 (129,036) -------------------------------------------------- ------ ----------- ----------- Cash and cash equivalents at beginning of the period 24,825 349,827 Effect of exchange differences on cash and cash equivalents (837) (2,080) -------------------------------------------------- ------ ----------- ----------- Cash and cash equivalents at end of the period 64,688 218,711 -------------------------------------------------- ------ ----------- -----------
The accompanying notes are an integral part of the interim condensed 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. Its registered office is at Lefkonos 22, 1(st) Floor, Strovolos, 2064 Nicosia, Cyprus.
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 30 June 2023, the Company had investments in the following subsidiaries: Name of subsidiary Country of incorporation Principal Shareholding Shareholding / registered office activities At 30 June At 31 December 2022 2023 (%) (%) --------------------- --------------------------- -------------------- -------------- ----------------- 121, Menachem Begin St. Azrieli Sarona Energean Israel Tower, POB 24, Gas transportation Transmission Tel Aviv 67012039 license LTD Israel holder 100 100 121, Menachem Begin St. Azrieli Sarona Tower, POB 24, Energean Israel Tel Aviv 67012039 Financing Finance LTD Israel activities 100 100 d. The Group's core assets as of 30 June 2023 are comprised of: Country Asset Field Working interest Field phase -------- ------------------------ ------------------------------------------ ----------------- ------------ Israel Karish Karish Main 100% Production Israel Karish Karish North 100% Development Israel Tanin Tanin 100% Development Israel Blocks 12, 21, 23, 31 Athena, Zeus, Hera, Hermes and Hercules 100% Exploration NOTE 2: - Accounting policies and basis of preparation
These unaudited interim condensed consolidated financial statements for the six months ended 30 June 2023, have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union (EU). The unaudited interim condensed 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 2022.
These unaudited interim financial statements have been prepared on a going concern basis.
NOTE 3: - Revenues 30 June (Unaudited) 2023 2022 $'000 $'000 --------------------------------------------- --- ------------ --------- Revenue from gas sales (1) 271,399 - Revenue from Hydrocarbon liquids sales (3) 81,272 - Compensation to customers (2) (4,928) - --------------------------------------------- --- ------------ --------- Total revenue 347,743 -
(1) Sales gas for six months ended 30 June 2023 totaled approximately 1.8 bcm (the Company started production on 26 October 2022).
(2) During 2021 and in accordance with the GSPAs signed with a group of gas buyers, the Company paid compensation to these counterparties following delays to the supply of gas from the Karish project. The compensation is deducted from revenue, as variable consideration, as the gas is delivered to the gas buyers, in accordance with IFRS 15 Revenue Recognition
(3) Sales Hydrocarbon liquids for six months ended 30 June 2023 totaled approximately 1.16 mmbbl (the Company did not sell Hydrocarbon liquids during 2022).
NOTE 4: - Operating profit (loss) before taxation 30 June (Unaudited) 2023 2022 $'000 $'000 ---------------------------------------------- ---------- --------- --------- ---------- (a) Cost of sales Staff costs 4,071 - Energy cost 2,285 - Royalty payable 63,474 - Depreciation and amortisation (Note 7) 73,397 - Other operating costs 38,203 - Liquids inventory movement (Note 11) (3,353) - ---------------------------------------------------------- --------- --------- --------------- Total cost of sales 178,077 - (b) General & administration expenses (c) (d) Staff costs 1,715 935 Share-based payment charge 312 80 Depreciation and amortisation (Note 7, 8) 978 110 Auditor fees 106 88 Other general & administration expenses 5,937 4,240 ---------------------------------------------------------- --------- --------- --------------- Total administrative expenses 9,048 5,453 (c) Exploration and evaluation expenses Other exploration and evaluation expenses 50 - ---------------------------------------------------------- --------- --------- --------------- Total exploration and evaluation expenses 50 - (d) Other expenses Loss from disposal of property, plant and equipment - 1,074 ---------------------------------------------------------- --------- --------- --------------- Total other expenses - 1,074 (e) Other income (f) (g) Other income - 53 ---------------------------------------------------------- --------- --------- --------------- Total other income - 53 NOTE 5: - Net finance income/(expenses) 30 June (Unaudited) 2023 2022 $'000 $'000 -------------------------------------------------------- --- -------- --------- Interest on senior secured notes (1) 68,333 68,179 Interest expense on long terms payables (3) 1,554 4 ,731 Less amounts included in the cost of qualifying assets (2) (7,592) (68,866) ------------------------------------------------------------- -------- --------- 62,295 4,044 Finance and arrangement fees 1,481 2,842 Other finance costs and bank charges 55 284 Unwinding of discount on trade payable 2,060 264 Unwinding of discount on provision for decommissioning 1,668 343 Unwinding of discount on right of use asset (1) 98 160 Less amounts included in the cost of qualifying assets (2) (88) (3,266) ------------------------------------------------------------- -------- --------- 5,274 627 ------------------------------------------------------------ -------- --------- Total finance costs 67,569 4,671 ------------------------------------------------------------- -------- --------- Interest income from time deposits (1,044) (1,290) Interest income from loans to related parties - (3,214) ------------------------------------------------------------- -------- --------- Total finance income (1,044) (4,504) Net foreign exchange losses 5,578 967 ------------------------------------------------------------- -------- --------- Net finance expense 72,103 1,134 ------------------------------------------------------------- -------- --------- (1) See also Note 12. (2) See also Note 7(A). (3) See also Note 13. NOTE 6: - Taxation 1. Taxation charge: 30 June (Unaudited) 2023 2022 $'000 $'000 ----------------------- -------- -------------------------- ------------ Tax - current period (156) (180) Deferred tax (20,059) 2,883 --------------------------------- -------------------------- ------------ Total taxation income (expense) yyyyyuuuu( (20,215) 2,703 --------------------------------- -------------------------- ------------ NOTE 7: - Property, Plant and Equipment a. Composition: Furniture, Oil and Leased fixtures gas Assets assets and equipment Total $'000 $'000 $'000 $'000 ---------------------------------------- ----------- ------- -------------- --------- Cost: At 1 January 2022 2,241,783 4,009 829 2,246,621 Additions (1) 514,373 731 1,165 516,269 Disposals (900) - - (900) Capitalised borrowing cost (2) 129,357 - - 129,357 Capitalised depreciation 632 - - 632 Change in decommissioning provision 47,544 - - 47,544 ----------------------------------------- ----------- ------- -------------- --------- Total cost at 31 December 2022 2,932,789 4,740 1,994 2,939,523 Additions (1) 111,124 12,197 111 123,432 Handover to INGL(4) (111,448) - - (111,448) Capitalised borrowing cost (2) 7,680 - - 7,680 Change in decommissioning provision 1,433 - - 1,433 ----------------------------------------- ----------- ------- -------------- --------- Total cost at 30 June 2023 (unaudited) 2,941,578 16,937 2,105 2,960,620 Depreciation: At 1 January 2022 433 693 228 1,354 Charge for the year (3) 10,976 134 297 11,407 Capitalised to oil and gas assets - 632 - 632 Disposals (433) - - (433) Write down of the assets 250 - - 250 ----------------------------------------- ----------- ------- -------------- --------- Total Depreciation at 31 December 2022 11,226 1,459 525 13,210 Charge for the period 73,397 618 189 74,204 Total Depreciation at 30 June 2023 (unaudited) 84,623 2,077 714 87,414 At 31 December 2022 2,921,563 3,281 1,469 2,926,313 ----------------------------------------- ----------- ------- -------------- --------- At 30 June 2023 (unaudited) 2,856,955 14,860 1,391 2,873,206 ----------------------------------------- ----------- ------- -------------- ---------
(1) The additions to oil & gas assets in 2023 are primarily due to development costs for the FPSO, Karish North and 2(nd) Oil Train. The additions in 2022 are primarily due to development costs for the Karish field, incurred under the EPCIC contract, FPSO, subsea and onshore construction.
(2) Capitalised borrowing costs relate primarily to the secured senior notes.
(3) First production from the Karish project was achieved on 26 October 2022.
(4) Handover to INGL took place on 22 March 2023.
NOTE 7: - Property, Plant and Equipment (Cont.) b. Depreciation expense for the period has been recognised as follows: 30 June (Unaudited) 2023 2022 $'000 $'000 --------------------------------------------- ---------------- ------------ Cost of sales 73,397 - Administration expenses 807 110 Capitalised depreciation in oil & gas assets - 357 --------------------------------------------- ---------------- ------------ Total 74,204 467 c. Cash flow statement reconciliations: 30 June (Unaudited) 2023 2022 $'000 $'000 --------------------------------------------------- --- ------------- ----------- Additions and disposals to property, plant and equipment, net 21,097 339,911 Associated cash flows Payment for additions to property, plant and equipment , net (58,605) (130,118) Non-cash movements/presented in other cash flow lines Capitalised borrowing costs (7,680) (60,749) Right-of-use asset additions (12,197) (198) Handover to INGL 111,448 - Capitalised share-based payment charge - (109) Capitalised depreciation - (357) Change in decommissioning provision (1,433) 9,259 (157,639 Movement in working capital (52,630) +) NOTE 8: - Intangible Assets a. Composition: Exploration and evaluation Software assets licences Total $'000 $'000 $'000 ---------------------------------- --------------- --------- ------- Cost: At 1 January 2022 20,141 255 20,396 Additions (1) 123,005 1,713 124,718 Write off of exploration and evaluation costs (2) (1,277) - (1,277) ----------------------------------- --------------- --------- ------- At 31 December 2022 141,869 1,968 143,837 Additions (1) 13,306 - 13,306 At 30 June 2023 (unaudited) 155,175 1,968 155,173 Amortisation: At 1 January 2022 - 255 255 Charge for the year - 28 28 ----------------------------------- --------------- --------- ------- Total Amortisation at 31 December 2022 - 283 283 Charge for the period - 171 171 ----------------------------------- --------------- --------- ------- Total Amortisation at 30 June 2023 (unaudited) - 454 454 At 31 December 2022 141,869 1,685 143,554 ----------------------------------- --------------- --------- ------- At 30 June 2023 (unaudited) 155,175 1,514 156,689 ----------------------------------- --------------- --------- -------
(1) Additions to exploration and evaluation assets are primarily due to the 2022 growth drilling programme undertaken offshore Israel.
(2) Zone D: On 27 July 2022, the Company sent a formal notice to the Ministry of Energy notifying the relinquishment of Zone D and discontinuation of related work. As such, the licences subsequently expired on 27 October 2022.
b. Cash flow statement reconciliations: 30 June (Unaudited) 2023 2022 $'000 $'000 -------------------------------------------- ------------ ---------- Additions to intangible assets 13,306 34,386 Associated cash flows Payment for additions to intangible assets (69,227) (10,034) Non-cash movements/presented in other cash flow lines Movement in working capital 55,921 24,352 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 depend on the purchase date and the nature of the asset. The general capital gains 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.
The Group expects that there will be sufficient taxable profits in the following years and that deferred tax assets, recognised in the interim condensed consolidated financial statements of the Group, will be recovered.
NOTE 9: - Deferred taxes (Cont.)
Below are the items for which deferred taxes were recognised:
Right of use asset Accrued expenses and other Property, short -- plant and term liabilities equipment Deferred and other & intangible expenses Staff leaving long -- Decommissioning assets IFRS 16 Tax losses for tax indemnities term liabilities provision Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 -------------------------------------------- --- ------------ --------- ----------- -------- ------------- ---------------- ---------------- -------- At 1 January 2023 (40,344) (754) 56,415 6,209 167 1,193 - 22,886 Increase/(decrease) for the period through: Profit or loss (13,597) (2,663) (6,305) (314) 50 2,770 - (20,059) At 30 June 2023 (53,941) (3,417) 50,110 5,895 217 3,963 - 2,827 ------------------------------------------------- ------------ --------- ----------- -------- ------------- ---------------- ---------------- -------- At 1 January 2022 (12,632) (762) 4,750 11,031 94 923 8,171 11,575 Increase/(decrease) for the year through: Profit or loss (27,712) 8 51,665 (4,822) 73 270 (8,171) 11,311 At 31 December 2022 (40,344) (754) 56,415 6,209 167 1,193 - 22,886 ------------------------------------------------- ------------ --------- ----------- -------- ------------- ---------------- ---------------- -------- 30 June 20 23 31 December (Unaudited) 2022 $'000 $'000 ------------------------- -------------- ------------ Deferred tax liabilities (57,358) (41,099)
Deferred tax assets 60,185 63,985 ----------------------------- -------------- ------------ 2,827 22,886 NOTE 10: - Trade and other receivables 30 June 20 23 31 December (Unaudited) 2022 $'000 $'000 ---------------------------------------------- -------------- ------------- Current Financial items Trade receivables Trade receivables 93,896 37,491 Other receivables (1) 2,294 999 Refundable VAT - 37,131 Accrued interest income 92 888 -------------------------------------------------- -------------- ------------- 96,282 76,509 Non-financial items Prepayments 363 159 Prepaid income tax 189 - Deferred expenses (2) - 4,929 Prepaid expenses and other receivable 547 1,014 -------------------------------------------------- -------------- ------------- 1,099 6,102 Total current trade and other receivables 97,381 82,611 Non-current Financial items Other receivables (1) 4,949 - Non-financial items Deferred borrowing fees(3) 3,449 - Deposits and prepayments 108 108 -------------------------------------------------- -------------- ------------- 3,557 108 ------------------------------------------------- -------------- ------------- Total non-current trade and other receivables 8,506 108 -------------------------------------------------- -------------- -------------
(1) The increase from 2022 is due to the recognition of a receivable from INGL (US$2.3 million current (US$57 received during Q2 2023) and US$4.95 million non-current) following the handover of the asset to INGL, in line with the agreement. See Note 13(4) for further details.
(2) Deferred expenses relate to compensation to gas buyers following delays to the supply of gas from the Karish project. This compensation is treated as variable consideration under IFRS 15 Revenue Recognition and therefore, reduced from gas sales following commencement of production, see also Note 3.
(3) Fees incurred in relation to the $750 million senior secured note offering. See Note 16 for further details .
NOTE 11: - Inventory 30 June 20 23 31 December (Unaudited) 2022 $'000 $'000 --------------------------- ------------- ------------ Hydrocarbon liquids 5,707 2,367 Natural gas 457 383 Raw materials and supplies 7,163 5,563 Total 13,327 8,313 NOTE 12: - Borrowings and secured notes a. Issuance of US$2,500,000,000 senior secured 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 repay in full the project finance facility
The Notes were issued in four equal tranches as follows:
30 June 20 23 31 December (Unaudited) 2022 Series Maturity Annual fixed Interest Carrying value rate Carrying value $'000 $'000 ------------------ --------------- ------------- --------------------- --------------- US$ 625 million 30 March 2024 4.500% 622,225 620,461 US$ 625 million 30 March 2026 4.875% 618,918 617,912 US$ 625 million 30 March 2028 5.375% 617,447 616,767 US$ 625 million 30 March 2031 5.875% 616,320 615,890 ------------------ --------------- ------------- --------------------- --------------- US$2,500 million 2,474,910 2,471,030 30 June 20 23 31 December (Unaudited) 2022 $'000 $'000 -------------------------------------- ------------- ------------ Senior secured notes - current 622,225 - Senior secured notes - non current 1,852,685 2,471,030 ------------------------------------------ ------------- ------------ Total 2,474,910 2,471,030
The interest on each series of the Notes is paid semi-annually, on 30 March and on 30 September of each year.
The Notes are listed on the TASE-UP of the Tel Aviv Stock Exchange Ltd (the "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 the Trustee:
a. 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 sale and purchase agreements ("GSPAs"), several bank accounts, operating permits, insurance policies, the Company's exploration licences and the INGL Agreement.
b. Floating charge over all of the present and future assets of Energean Israel Limited and Energean Israel Finance Ltd.
c. The Energean Power FPSO.
Subsequent to 30 June 2023, the notes maturing on 30 March 2024 were refinanced. Please refer to note 16 for more
details
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 30 June 20 23 31 December (Unaudited) 2022 $'000 $'000 ----------------------------------------- ---------------- -------------- Current Financial items Trade accounts payable (1) 113,144 209,853 Payables to related parties 32,260 21,028 VAT payable 2,398 - Deferred licence payments due within one year (2) 12,852 13,345 Other creditors 10,300 6,712 Current lease liabilities 7,868 1,792 --------------------------------------------- ---------------- -------------- 178,822 252,730 Non-financial items Accrued expenses (1) 33,182 29,404 Other finance costs accrued 32,227 32,227 Contract liability (4) - 56,230 Social insurance and other taxes 724 502 Income taxes - 6 --------------------------------------------- ---------------- -------------- 66,133 118,369 Total current trade and other payables 244,956 371,099 --------------------------------------------- ---------------- -------------- Non-current financial items Trade and other payables (3) 169,869 169,360 Deferred licence payments (2) 27,698 38,488 Long term lease liabilities 7,937 2,214 ---------------------------------------------------- --------- ------------ 205,504 210,062 Non-financial items Accrued expenses to related parties 366 179 366 179 ---------------------------------------------------- --------- ------------ Total non-current trade and other payables 205,870 210,241 ---------------------------------------------------- --------- ------------
(1) Trade payables and accrued expenses relate primarily to development expenditure on the Karish project, with the main contributors being FPSO and subsea construction costs and for drilling activities performed offshore Israel. Trade payables are non-interest bearing.
(2) In December 2016, the Company acquired the Karish and Tanin leases for US$40 million of upfront consideration plus contingent consideration of US$108.5 million (paid over 10 equal instalments) bearing interest at an annual rate of 4.6%. On 30 June 2023, the total discounted deferred consideration was US$41 million (31 December 2022: US$52million).
(3) This represents the amount payable to Technip in respect of the EPCIC contract. Under this contract, US$250 million becomes payable nine months following the practical completion date (as defined under that contract), and is payable in eight equal quarterly instalments, bearing no interest. A discount rate of 5.831% has been applied ( being the yield rate of the senior secured loan notes, maturing in 2024, at the date of entering into the settlement agreement) . The amounts payable to Technip up to 30 June 2024 under this contract are presented as part of trade accounts payable - current.
(4) The contract liability relates to 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. The Hand Over became effective in March 2023. Following the Hand Over, INGL is responsible for the operations and maintenance of this part of the infrastructure and the related asset (refer to Note 7) and contract liability was derecognised. The final $5million consideration is receivable within 12 months of handover and is recognised within other receivable (refer to Note 10)
NOTE 14: - Financial Instruments
Fair Values :
Fair value is the amount for which the asset or liability could be exchanged in an arm's length transaction at the relevant date. Where available, fair values are determined using quoted prices in active markets. To the extent that market prices are not available, fair values are estimated by reference to market-based transactions or using standard valuation techniques involved. Values recorded are as at the balance sheet date and will not necessarily be realised. There were no transfers between fair value levels during the year.
The fair value hierarchy of financial assets and financial liabilities that are not measured at fair value (but fair value disclosure is required) is as follows:
Fair value hierarchy as at 30 June 2023 (unaudited) Level 1 Level 2 Total $'000 $'000 $'000 --------------------------------------- --------- -------- --------- Financial assets Long term other receivables - 4,949 4,949 Short term restricted cash 8,481 - 8,481 Short term trade and other receivables - 96,282 96,282 Cash and cash equivalents 64,688 - 64,688 ------------------------------------------- --------- -------- --------- Total 73,169 101,231 174,400 ------------------------------------------- --------- -------- --------- Financial liabilities Senior secured notes (1) 2,311,875 - 2,311,875 Trade and other payables - long term - 205,504 205,504 Trade and other payables - short term - 178,822 178,822 ------------------------------------------- --------- -------- --------- Total 2,311,875 384,326 2,696,201 ------------------------------------------- --------- -------- --------- Fair value hierarchy as at 31 December 2022 Level 1 Level 2 Total $'000 $'000 $'000 --------------------------------------- ---------- ------------ -------- --------- Financial assets Short term restricted cash 71,778 - 71,778 Short term trade and other receivables - 76,509 76,509 Cash and cash equivalents 24,825 - 24,825 --------------------------------------------------- ------------ -------- --------- Total 96,603 76,509 173,112 --------------------------------------------------- ------------ -------- --------- Financial liabilities Senior secured notes (1) 2,298,125 - 2,298,125 Trade and other payables - long term - 210,062 210,062 Trade and other payables - short term - 252,730 252,730 --------------------------------------------------- ------------ -------- --------- Total 2,298,125 462,792 2,760,917 --------------------------------------------------- ------------ -------- ---------
(1) The senior secured notes are measured at amortised cost in the Group's financial statements. The notes are listed for trading on the TACT Institutional of the Tel Aviv Stock Exchange Ltd (the "TASE"). The carrying amount as of 30 June 2023 was US$2,475 million and as of 31 December 2022 was US$2,471 million.
NOTE 15: - Significant events and transaction during the reporting period
(a) Gas Sales Agreements - Energean signed spot gas sale and purchase agreement with three Israeli gas buyers. The gas price will be determined in each period, with purchased amounts determined on a daily basis. The agreement will be valid for an initial one-year period with an option to extend subject to ratification by both parties.
(b) INGL Hand-Over completion - The Hand Over became effective in March 2023. Following the Hand Over, INGL is responsible for the operations and maintenance of this part of the infrastructure.
NOTE 1 6: - Significant events and transaction after the reporting period
Pricing of an offering of US$750,000,000 senior secured notes
Subsequent to period end, Energean Israel Finance Ltd. has priced the offering of US$750 million aggregate principal amount of senior secured notes due September 30, 2033, with a fixed annual interest rate of 8.500%. The interest on the Notes will be paid semi-annually, on March 30 and September 30 of each year, beginning on March 30, 2024.
The issuance of the Notes was completed on July 11, 2023, subject to satisfaction of customary conditions. The Notes are expected to be listed for trading on the TASE-UP of the Tel Aviv Stock Exchange Ltd. (the "TASE"), subject to the approval of the TASE.
The proceeds from the Offering, upon release from escrow are expected to be used to refinance the $625 million notes due in 2024, pay fees and expenses associated with this refinancing, contribute towards funding the interest payment reserve account, and contribute towards the payment of the final deferred consideration to Kerogen.
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September 07, 2023 02:02 ET (06:02 GMT)
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