The CEO's blog, 19/4/2021

2020 Full Year Results 

---

Our results, which are backwards looking, only tell half the story.  The statutory numbers are made largely irrelevant by the transformational acquisition we completed in December, but the pro forma numbers – which include the results of both Energean and Edison E&P for the whole of 2020 - begin to tell the story of why we are one of the leading E&P companies listed in London and Tel Aviv.

Furthermore, our growth journey has only just begun; our performance is set for a further, much more material transformation over the next 18-months as we deliver first production from Karish (Israel) and NEA/NI (Egypt), optimise our existing production portfolio, grow our business in Italy and undertake an ambitious 4-well exploration and appraisal programme offshore Israel that has the potential to double the size of our resource base, adding over 1 billion boe to our portfolio.

To put this transformation into context, in 2020 our EBITDA was $108 million; whilst our medium-term EBITDA target (which we expect to achieve after first production from key development projects) is $1.4 billion. That is growth of almost 14-times, a truly exceptional growth profile that you will struggle to find in any other business within our sector. It is one of the many reasons why I am so confident about Energean’s future. 

Equally important, we are maintaining, and advancing, our ESG leadership position. In 2019 we were the first E&P globally to set a net zero 2050 target and since then we have already delivered a 67% carbon intensity reduction, with a target of an 85% reduction by 2023.  We have introduced renewable energy usage at sites of interest in Israel, Greece and Croatia and aim to roll this out across the rest of our operated assets in 2021. Longer-term, we are embarking on a strategy to extend the life of mature fields by applying new technology and transitioning them into carbon storage developments, furthering our net zero ambition whilst continuing to leverage the subsurface expertise that our employee base brings to us.

Italian production is very important to our portfolio and, in 2021 to date, is performing significantly ahead of expectations; and will continue to benefit from our focus on optimisation. Smaller projects and interventions will compound in their impact and will have an important influence on our bottom line. In the medium-term term, we expect to roll out our mature assets transition strategy across several locations, significantly extending the life of our Italian business.

Croatia and Montenegro are exciting areas of growth and I look forward to seeing the potential of both areas being realised.

The year has not been without headwinds with oil-producing assets needing to deal with an extremely difficult lower oil price environment. This was a year in which major international oil companies recorded billons of dollars of impairments. We, unfortunately, did not escape and recorded a $65 million impairment on Prinos in Greece. Recognising that Prinos has been dramatically hurt by the pandemic, the European Commission has approved €100 million of Greek state loan-support, which could help to secure the future of the asset.

We are rapidly establishing ourselves as the leading independent, gas-focused E&P company in the Mediterranean region with production of at least 200kboepd in the medium term and an aspiration to lead the region's energy transition. You will all play a part in this transition, and I thank you in advance for your dedication, commitment, and hard work