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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END
IR UNOKROAUKRAR
(END) Dow Jones Newswires
September 07, 2023 02:02 ET (06:02 GMT)
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