The gas company Energian published this morning (Thursday) the financial reports for the first quarter of the year, and provided a surprising forecast for the entire year 2023, and lowers the production rate forecast.
Energian expects a decrease in kboed (a conversion unit of gas equivalent to thousands of barrels of oil) to a range of 125-140 compared to a previous forecast of 131-158, among other things, due to a downward revision of the upper range of the gas production forecast in Israel from 5.5 BCM to 5 BCM.
Another factor that contributed to lowering this forecast was a higher-than-expected reassessment of the decline in gas production from the NEA reservoir in Egypt.
The market does not like the forecast since there were known delays, but the previous range that has now been changed was given in January and confirmed only last March, which puts investors in a position of surprise in view of the slow increase in demand, and Energian’s stock is down 6.5% on the Tel Aviv Stock Exchange.
At the same time, the Shark project is progressing as planned and is expected to be completed at the end of this year. Beyond that, a final investment decision regarding the Olympus reservoir is expected to be made at the end of 2023 when the reservoir will be developed by connecting to an existing platform while giving priority before the development of the Tanin reservoir in order to utilize the existing infrastructure and save expenses.
Energian ended the first quarter this year with a 69% increase in revenue to $288.8 million compared to the corresponding quarter last year.
Energian recorded an 81% increase in Ebitdax – the current operating profit minus depreciation, the effect of discontinued operations, and the cost of drilling to discover gas and oil reserves – to $162.2 million in the first quarter of this year.
Energian will distribute a dividend of 53 million dollars that will be paid this June.
Matthews Riggs, CEO of Energian: “We are increasing production from the Harish reservoir, and are ending four months of significant production of gas and liquids in Israel, while we are optimizing the Harish rig. Our gas contracts in Israel have moved to commercial status and customers are increasing their demand. Energian is expected to supply a considerable amount of Israel’s gas consumption this year.
“This is why we are moving quickly to develop our new gas discoveries in the Olympus area, as efficiently as possible. The development concept we have chosen fits our commitment to budgetary discipline. With no royalties paid to concession sellers and no restrictions on exports, this strategy will create sustainable value for all our stakeholders, And will allow us to maintain and grow our dividend policy, which is a leader in the sector,” said Riggs.
