LONDON (ShareCast) - (Sharecast News) - Energean reported production in the four months to 30 April of 44,200 barrels of oil equivalent per day on Monday, at 72% gas, which was 15% ahead of the mid-point of its full year guidance.
The FTSE 250 company increased its guidance to between 38,000 and 42,000 barrels of oil equivalent per day, from 36,000 to 41,000 barrels.

It said the first production from Karish was now expected in mid-2022, following the re-introduction of enhanced Covid-19 restrictions in Singapore.

Energean said its core focus there was on optimising the revised timetable, with around 30 improvements being considered for implementation, and not reflected in the schedule.

A final investment decision had been taken on two growth projects, offshore Israel, with the first being a $70m second oil train that would enable increased production of around five million barrels of hydrocarbon liquids per year at "minimal" incremental operating costs.

The second was a $40m second gas sales riser, which would enable gas production at the full eight billion cubic metres per year capacity of the floating production, storage and offloading (FPSO) vessel.

A rig contract award for the 2022-2023 five-well growth drilling programme, offshore Israel, was expected to be signed shortly.

Energean said it was targeting more than one billion barrels of oil equivalent of prospective resources, adding that the Athena well on block 12 was expected to spud in the first quarter of 2022.

A final investment decision had been taken on the revised Epsilon project, offshore Greece, with a tieback to existing Prinos infrastructure and first oil expected around the end of 2022.

Greek parliamentary approval had been granted for the Prinos area funding package, with investment targets including unlevered internal rates of return of more than 30%, peak production rates in excess of 10,000 barrels of oil equivalent per day, and extending the life of the fields as a precursor to the implementation of carbon capture and underground storage.

A total of $122m of receivables collection in Egypt was reported between December and April, following closing of the acquisition of Edison E&P in December.

As at 30 April, following the refinancing of Energean Israel's project finance facility and term loan on 29 April, Energean had cash resources of $1.1bn, providing financial flexibility and ensuring that all planned activities were fully funded.

Year-end net debt guidance for 2021 was reduced to between $1.9bn and $2bn, from $2bn to $2.2bn.

"Although Covid-19 continues to present challenges, we continue to deliver upon all of our promises that are within our control," said chief executive officer Mathios Rigas.

"Our production is 15% ahead of guidance, we have taken the final investment decision on three low-cost, high-return organic projects and have $1.1bn of cash on our balance sheet, providing financial flexibility and ensuring that we are fully-funded for all of our planned investments.

"Due to the ongoing impact of Covid-19 in Singapore, we are prudently updating our guidance for Karish first gas to reflect revised forecasts from our EPCiC contractor, TechnipFMC; but we continue to work together to improve the timetable."

Rigas said that although it was "unfortunate", the revised timetable should not have a material impact on the 15-year secured revenue stream of the firm's Israeli gas business.

"In the near-term, we expect to sign a rig contract for our Israel-growth programme, commencing 2022, and with the potential to double the size of our resource base.

"We have also recently received Greek parliamentary approval of the Prinos area funding package, which will enable us to extend the productive life of the area as a precursor to the implementation of our carbon capture and eco-hydrogen plans."

At 0855 BST, shares in Energean were down 1.51% at 780.5p.

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