LONDON (ShareCast) - (Sharecast News) - Energean reported a strong first-quarter in an update on Thursday, with significant growth in both operational and financial metrics.
The FTSE 250 company said revenues reached $413m, marking a 43% increase from the first three months of 2023.

Its adjusted EBITDAX also saw substantial growth, increasing 60% to $259m, and as of 31 March, Energean's group cash stood at $220m, with total liquidity amounting to $424m.

In line with its dividend policy, Energean declared a first-quarter dividend of 30 US cents per share, scheduled for payment on 28 June.

Operationally, Energean's production averaged 142,000 barrels of oil equivalent per day, with gas making up 82% of the figure.

That represented a 49% increase from the 95,000 equivalent daily barrels reported in the first three months of 2023.

The company reiterated its 2024 production guidance of 155,000 to 175,000 barrels of oil equivalent per day, weighted towards the second half of the year.

In Israel, the floating production, storage and offloading (FPSO) unit maintained an uptime of 98% during the period.

The wells were successfully tested at 720 million standard cubic feet per day in April, while day-to-day production remained unaffected by ongoing geopolitical developments.

Additionally, the FPSO completed a scheduled five-day turnaround for routine maintenance in mid-May.

In Egypt, new wells in the Abu Qir, NEA, and NI concessions continued to perform above expectations.

Energean achieved notable success in its Abu Qir infill well drilling campaign in Egypt, encountering around 270 feet of net pay across the BKES-1 and Abu Madi formations, which was roughly double the initial expectations.

Preliminary analysis indicated gas-initially-in-place volumes of 87 to 129 billion cubic feet, with the well also encountering a possible liquids column of around 55 feet of net pay that requires further analysis.

First production from the well was expected in the third quarter of 2024.

Elsewhere, drilling operations on the Cassiopea project in Italy were continuing, with the second and third wells in progress.

Energean also completed its farm-in in Morocco and signed a rig contract for the Anchois appraisal well.

The company ordered long-lead items for the Katlan development in Israel to maintain the project schedule ahead of the final investment decision.

Furthermore, Energean took over operatorship of the Tors and Wenlock fields in the UK to manage decommissioning work.

In terms of environmental performance, the group's scope 1 and 2 emissions intensity in the quarter was estimated at nine kilograms of carbon dioxide equivalent per barrel of oil equivalent, making for a 19% reduction compared to the first quarter of 2023.

Looking ahead, Energean anticipated peak gas demand in Israel during the summer, driving maximum gas output.

The Cassiopea project in Italy was meanwhile on track for first gas in the summer, followed by the drilling of the near-field Gemini exploration well.

It added that the Anchois appraisal well in Morocco was planned to spud in August, and the final investment decision on the Katlan project in Israel was expected soon.

Energean also planned to install the second oil train in Israel as soon as feasible, while it expected to submit the storage permit application for the Prinos Carbon Storage Project by the end of June.

It added that it intended to continue its policy of quarterly dividend payments, aligning with its commitment to shareholder returns.

"We continue to achieve strong operational and financial results, with production, revenue and adjusted EBITDAX all increased year-on-year," said chief executive officer Mathios Rigas.

"In Israel, our operations remain unimpacted by the ongoing geopolitical developments, with peak gas demand expected during summer driving maximum gas output.

"In addition, we are pleased to announce success at our Abu Qir infill drilling campaign in Egypt, where we have discovered 270 feet of net pay, which is around two times initial expectations."

Rigas said that in line with the company's dividend policy, it had declared a first-quarter dividend of 30 US cents per share, and continued to focus on the key business drivers of paying a reliable dividend, deleveraging, growth, and a commitment to net zero.

"We continue to remain alert to opportunities that fit our key business drivers and can move quickly to take advantage when they arise.

"Looking forward, we have several milestones on the horizon across the portfolio.

"Cassiopea, which is the largest gas development in Italy, is expected to come onstream this summer; the Anchois appraisal well in Morocco is planned to spud in August; in Egypt, we look forward to the start-up of the new well; in Greece, the carbon storage permit application will be submitted at the end of June and; in Israel, we will start the supply to our new gas contracts signed earlier this year."

At 1030 BST, shares in Energean were up 0.26% at 1,137p.

Reporting by Josh White for Sharecast.com.

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