Energean reports solid results, warns of Carlyle transaction risks

(Sharecast News) - Energean reported a strong financial performance for 2024 on Thursday, driven by growth in its core Israeli operations, despite an impairment charge impacting net profit. The FTSE 250 company also provided an update on its planned asset sale to Carlyle, warning that the deal may not close as expected.

Group revenue rose 25% to $1.78bn, while adjusted EBITDAX increased by the same percentage to $1.16bn.

Excluding discontinued operations, revenue was $1.32bn, up 34%, and adjusted EBITDAX stood at $885m, a 33% rise.

Group profit after tax edged up 2% to $188m, but that was affected by a $241m impairment charge related to exploration activities in Egypt, Morocco, and Greece, as well as oil and gas assets in Greece.

Profit from continuing operations increased 14% to $116m.

Production growth underpinned the financial results, with total output rising 24% year-on-year to 153,000 barrels of oil equivalent per day, 83% of which was gas.

Continuing operations production increased by 28% to 114,000 daily barrels.

In Israel, the company maintained 99% uptime at its FPSO unit.

Energean's reserves remained stable, with 911 million barrels of oil equivalent in proven and probable reserves for continuing operations, reflecting over 20 years of production life.

The company said it continued to expand its operations, with the Katlan gas development in Israel progressing toward first production in the first half of 2027.

It recently signed a drilling contract with Saipem for wells at the Athena and Zeus fields.

Meanwhile, its Prinos carbon capture project in Greece secured nearly €120m in additional EU funding, bringing total grants to approximately €270m.

Energean declared a fourth-quarter dividend of 30 cents per share, bringing total shareholder returns to $595m since payments began.

In early 2025, it secured additional gas sales contracts worth over $2bn, bringing its total contracted revenues over a 20-year period to nearly $20bn.

The firm also strengthened its balance sheet with a $750m senior-secured loan to refinance debt and fund Katlan, along with a $300m revolving credit facility extension to 2028.

Uncertainty remained over Energean's planned sale of its Egypt, Italy, and Croatia assets to Carlyle International Energy Partners, however.

The company warned that the deal, initially expected to close in the first quarter, could be terminated unless an extension was agreed, as key conditions remained unmet.

Energean reaffirmed its commitment to maximising shareholder returns with or without the transaction.

For 2025, the company reiterated its production guidance of 120,000 to 130,000 barrels of oil equivalent per day for continuing operations, and expected its dividend programme to continue with a revised policy to be announced after the Carlyle deal was resolved.

Energean said it was also evaluating expansion opportunities in the EMEA region, prioritising assets that aligned with its dividend, growth, and net-zero targets.

"During 2024, we have continued our growth trajectory with group production rising by 24% to 153,000 barrels of oil equivalent per day, of which 112,000 daily barrels came from our flagship Karish and Karish North fields in Israel," said chief executive officer Mathios Rigas.

"Despite the geopolitical challenges in the region during the year, we operated continuously, sustaining 99% uptime at the Energean Power FPSO.

"We continue to develop and optimise our assets."

Rigas noted that the company took final investment decision on Katlan, which remained on track for first gas in the first half of 2027; while commissioning of the second oil train was ongoing and is scheduled to complete in the second quarter of 2025, which would increase the liquids production capacity of the FPSO; and the Ministry of Energy confirmed the Drakon license 31 and Hercules license 23 discoveries, setting the foundations for continued growth in Israel.

"In Greece, our regionally unique Prinos carbon storage project has been approved for around €270m of funding from the EU's Recovery and Resilience and Connecting Europe Facilities.

"In the UK, we took over operatorship to take control of the current decommissioning operations."

Mathios Rigas said that as sovereign states made energy security and affordability a top priority, the oil and gas industry was repositioning towards new growth.

"Our years of focus on operational excellence in development and production means we are very well placed to take advantage of a new era of oil and gas investment.

"We are confident that our operating capabilities and track record in deep water offshore project delivery is unique in the independent E&P sector.

"This ability allows us to target multiple new opportunities in the wider EMEA region that will continue the growth trajectory of Energean; we are and will always be disciplined in our approach, aligned with shareholders."

At 0845 GMT, shares in Energean were down 1.73% at 826p.

Reporting by Josh White for Sharecast.com.