November 2019 Corporate Presentation - Energean

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November 2019 Corporate Presentation - Energean
November 2019
Corporate Presentation
1                        1
November 2019 Corporate Presentation - Energean
Energean at a Glance
    The leading sustainable, gas-focused, independent E&P company in the Mediterranean

          9                                                   ESG & HSE
     Countries of
                    609 mmboe     70 kboed           80%                      FTSE 250 &
                                                                 focused
                    2P Reserves   production   gas-weighted
      Operations                                              A rating MSCI     TA-35

                                       Med Focused

2                                                                                      2
November 2019 Corporate Presentation - Energean
A Continuous Growth Story Since 2008
                                                  Analysts              Third Point                             Energean          Energean IPO            Edison
  700       Acquisition        Development                                              Analysts predict
                                                   predict                invests                                acquires               &                  E&P
             of Prinos          of Prinos                                                $20 oil price
                                                $200 oil price         in Energean                            Karish & Tanin       Project FID          acquisition

                                                                                                                                                                609
  600

  500

  400
mmboe

  300

  200

  100

              2
        0
            2008            2009        2010        2011           2012          2013       2014           2015       2016        2017           2018          2019
                   Prinos 2P            Prinos 2C                Katakolo 2P            Karish and Tanin 2P            Karish and Tanin 2C               Edison

  3                       Reserves stated as net working interest, exclusive of Kerogen minority                                                                  3
November 2019 Corporate Presentation - Energean
Our Strategy in Action – Consistent Growth & Value Creation
                                                               Production

        2007                     2018                                                      2019                                       2022

                                                                                                        Fast track                     140
          Growing production
    1                               4         Edison Acquisition                             70       development of            185 kboe/d with
          from mature assets                                                                                                      FPSO at full
                                                                                                          Karish                   capacity

                                                                         kboe/d

                                                                Reserves

                                                                                                              127
                                                   Italy 14%
                                                 (85 mmboe)

                 Israel 49%     Egypt 25%                                                  79%
               (297 mmboe)     (152 mmboe)
                                                                                       gas-weighted                   609
                                                                         Croatia
November 2019 Corporate Presentation - Energean
Strong Deal Delivery Capabilities

    2013-2015   $250 million Third Point investment

                $200 million RBL for Prinos & Epsilon

      2018      $1.275 billion Project Finance facility for Karish

                $460 million equity raise through LSE IPO

                $750 million Acquisition

                $265 million equity raise on LSE and TASE
      2019
                $600 million committed Bridge Loan Facility

                $280 million Sale of North Sea asset to Neptune

5                                                                    5
November 2019 Corporate Presentation - Energean
The E&P Company Of The Future – ESG Is A Top Priority

                           •   Operating in Environmentally Sensitive areas with >10 blue flagged
                               beaches next to our oil & gas production platforms

                           •   Actively reducing CO2 Footprint with goal to be a net 0 emitter

                           •   c.80% of reserves and production from Natural Gas

                           •   Decarbonising Israel with Energean gas replacing coal

                           •   Focus on HSE - 4 Million man hours free of LTIs during Energean Power
                               FPSO Hull construction.

                           •   Diversified - Employees from 28 countries around the world

                           •   Creating a Sustainability and Climate Change Department

                           •   Executive pay to be linked to ESG goals from 2020

                           •   Signatory of the United Nations Global Compact

6                                                                                                      6
November 2019 Corporate Presentation - Energean
Karish and Tanin
Project Update

                   7
November 2019 Corporate Presentation - Energean
At a Glance: Our Acreage in Israel
                                                                    Key Facts & Figures

              2.4 Tcf + 32.8 mmbbls (gross) 2P (92%) + 2C (8%)
RESOURCES     0.9 Tcf + 34.2 mmbls (gross) Karish North discovery
              6.3 Tcf + 83 mmbbls gross prospective resources

 OWNERSHIP    Energean Israel is owned 70% Energean plc, 30% Kerogen1

              4.5 Bcm/yr firm GSPAs plus 0.4 Bcm/yr IPM contract plus 0.7
 REVENUES     Bcm/yr Or contract

 KEY DATES    FID March 2018, First Gas 2021

              8 BCM/yr owned FPSO with subsea tie-backs
DEVELOPMENT
              800,000 bbls oil & condensate storage capacity
  CONCEPT     Gas pipeline to shore. Liquids tanker offload

              TechnipFMC: lump-sum EPCIC
  SERVICE
              Stena: 5 firm + 5 optional wells
 PROVIDERS
              Wood contracted for ops and maintenance.

     CAPEX    $1.6bn to 2021
              Funded by $1.3bn Project Finance + $440m net IPO proceeds

 STRATEGY     Secure additional resource and offtake to fill the FPSO

 8             1. Minority interest stake consolidated for reporting purposes             8
November 2019 Corporate Presentation - Energean
On Track to Deliver First Gas in 2021 – Key Milestones
 FID        (1Q 2018)

                                                                                                                                      First Gas   On track
FPSO Workstream

                 2018                                            2019                             2020                            2021
                                                                Hull and       Hull Sailaway       Hull and
                         Topsides First        Hull Keel                                                             FPSO mooring
 Hull First Steel Cut                                           Topsides        from Cosco         Topsides                                   Performance
                           Steel Cut            Laying                                                                hookup and
         4Q                                                    Construction         Yard          Integration                                    testing
                              4Q                   2Q                                                                    Riser
                                                                 1Q – 4Q            4Q             1Q – 4Q

   Achieved               Achieved
 November 2018          November 2018

 Drilling Workstream
                                                                2019
                                                              Karish North,      Complete        Zeus Exploration
                                          Mobilise Stena
                                                              KM-03, KM-01      Development
                                            DrillMAX
                                                                & KM-02            Wells
                                                 1Q                                                    1Q
                                                                 1Q – 4Q             4Q

                                          Rig mobilized
                                                                Discovery
                                          February 2019

Subsea and Onshore Workstreams
                                                                2019                              2020
                                                                                 Pipeline        Onshore            Installation of
                                                           Pipeline beach
                                                                               installation       facilities            subsea
                                                           crossing at Dor
                                                                              Karish to Dor    commissioning        infrastructure
                                                              1Q – 4Q
                                                                               3Q – 1Q20         2Q – 4Q              1Q – 4Q

 9                                                                                                                                                     9
November 2019 Corporate Presentation - Energean
Execution Capabilities – Developing Karish
      Hull ready for undocking, COSCO Zhoushan Yard (Sept 2019)                Hull towing, Zhoushan (Sept 2019)

10   Topsides overview, Sembcorp Marine Admiralty Yard (Sept 2019)   Assembly, Sembcorp Marine Admiralty Yard (Sept 2019)   10
Project Progress

                                               636

                                                     610

                                                           54% of contract value by
                                                                expenditure

                                                           Physical progress ahead
                                                                    at 60%

       MCC= Milestone Completion Certificate
11                                                                                11
2019 Firm Four Well Drilling Programme
          JAN         FEB             MAR              APR              MAY     JUN            JUL             AUG     SEP   OCT        NOV           DEC

                                                                                                                              Karish
KARISH WORK PROGRAMME            Karish Main
                                                   Karish North                                                               North
 3x DEV Wells + 1x EXP Well        1,2 & 3                                            Karish Main 1, 2, & 3 DRILLING                   Karish Main COMPLETION
                                                  EXPLORATION                                                                APPRAI
                                 TOPHOLES
                                                                                                                               SAL

      •   3x Karish Main development wells:
           Karish Main 02 drilling completed end June
           Karish Main 03 drilling completed early August
           Karish Main 01 drilling completed October
      •   Benefited from batch-setting philosophy:
          − Optimised well construction sequence
          − Delivered low spread cost
Karish North Discovery
                                                           Low Case         Best Estimate         High Case
                                   GIIP (Tcf)                 1.1                 1.3                1.8
                                   GIIP (BCM)                30.0                35.6                51.6
                                   Recoverable Gas (Tcf)      0.7                 0.9                1.4
                                   Recoverable Gas (BCM)     19.5                24.9                38.7
                                   Recoverable Liquids       25.2                34.2                55.0
        KARISH NORTH               (MMbbls)

     Seismic Attribute                                        •   Appraisal completed November 2019
                                                              •   Sidetrack 700m north of original wellbore
                                                              •   GWC discovered at 4791 TDVSS
                                                              •   Thin rim light oil immediately above GWC
                         KARISH NORTH                         •   Remaining volumetric uncertainty associated
                                                                  with thinly bedded sections of the reservoir
                                                                  in the B Sand Unit
                                                                      − Will be confirmed via acquisition of a
                                                                        core when well is completed as a
                                                                        producer

                                         KARISH EAST

                         KARISH

13                                                                                                            13
2020 Drilling Opportunities

                                   2.4Tcf (68bcm)
                                      2P & 2C

                              1 – 1.5 Tcf (c.28 - 42bcm)
                                       GIIP at
                                    Karish North

                                 6.3 Tcf (c.178bcm)
                                    Prospective
                                     Resources

                                c. 10 Tcf (c.283bcm)
                                  Total Reserves
                                    & Resources

14                                                         14
Zeus Exploration Well

                                                     Unrisked in          Geological
                                                   Place Volumes          Chance of
                                                     (Bcf / Bcm)         Success (%)
                        A Sand                         467 / 13              77
                        B Sand                         123 / 3               72
                        C Sand                          52 / 1               68
                        Total                          641 / 18              NA

                                 •   Block 12
                                         − Between Karish & Tanin leases
                                         − Development synergies with Tanin
                                 •   Any discovery would be tied back to the
                                     Energean Power FPSO
                                 •   Discovery would de-risk nearby prospects
                                         •   Hera – 485 Bcf / 14 Bcm
                                         •   Athena – 853 Bcf / 24 Bcm
                                 •   No seller royalties payable
                                 •   New Sheshinsky calculation (versus Karish
                                     and Tanin leases)

15                                                                                     15
‘Filling The Boat’: Capacity Overview

                                                                                                   Or Contract

                                                                        6.1   0.7 BCM/yr contingent on Or Power Plant Close. Or
                                                                              has unlimited capacity to dispose of gas for alternate
 9              Contracted volumes & spare capacity                                                   uses

 8
                                                                                                 MRC Contract
 7                                                                             0.5 BCM/yr term sheet. MRC is the winning bidder
                  Available for tie-back of future discoveries          5.4    in the IEC Alon Tavor tender process. Both parties
 6                and additional gas sales from Karish North                            intend to convert to a firm GSPA

 5                                                                                                IPM Contract

 4                                                                              0.4 BCM/yr contingent on additional resource in
                                                                        4.9      2019. We may supply additional gas pre-2024
 3
                                                                                               11 Firm Contracts
 2                           Secured Revenues

 1                                                                            4.5 BCM/yr            Av. 16 yrs           75% ToP
                                                                        4.5
 0
1/1/2021        1/1/2022       1/1/2023       1/1/2024       1/1/2025
           Firm Contracts   IPM Contract      MRC Term Sheet                         Major IPPs and Industrial customers

           Or Contract      Spare Capacity

 16                                                                                                                                16
Key Demand Driver: Gasification of the Israeli Economy
                            Israel Gas Demand Growth                                      Recent Updated and Progress

            35
                                                                               Closure of the following coal-fired power-stations
            30

                                                                               announced, increasing demand for gas:
            25

            20                                                                 •   Units 5-6 of Orot Rabin, Hadera – 1150 MW
     bcma

                                                                               •
            15
                                                                                   Units 1-4 of Rotenberg, Ashkelon – 2250 MW
            10

            5

            0

                 Energean Contracted             Energean Available Capacity   Term sheet executed with MRC Alon Tavor Power Ltd
                 Rest of Market per Adiri        Additional demand per BDO

                                                                               •   Winning bidder of the “Alon Tavor tender”
                             Power station privatisation
                                                                               •   Executed 10 June 2019
     Site                    Capacity – MW     Bcm/y          Last date of
                                                              delivery of      •   Includes the material commercial terms for the sale of
                                                              possession
                                                                                   gas to MRC for use in the natural gas fired generation
     Alon Tavor                      600        0.5           December 2019
                                                                                   units in the Alon Tavor site
     Ramat Hovav                    1,137       1.0           December 2020
                                                                               •   Both parties are working together to conclude a GSPA
     Reading                         428        0.4           June 2020
                                                                                   which will confirm the agreement between them
     Hagit                           697        0.6           June 2021

     Eshkol                         1,693       1.8           June 2022

17                                                                                                                                          17
Edison Transaction Update
Edison E&P: Attractive Metrics1

                                                                                            2.6                             c.3 yrs.                            18%
                                                                                                                                Payback on                  10yr estimated
Pre-Neptune Disposal                                                                        AV/2P
                                                                                                                                Production                  unlevered IRR

         Post-Neptune                                                         1.9                                        c.3 yrs.                                               26%
                                                                                                                                Payback on                                 10yr estimated
           Disposal                                                             AV/2P
                                                                                                                                Production                                 unlevered IRR

                      Reported Working Interest 2P Reserves                                                                                                 Reported 2018 Working Interest Production
1.200
         1.083                                                                                                                               200
                                                                                                                                                             185

1.000             917
                                                                                                                                                   156
                                                                                                                                             150             140
 800                       745

                                      609
 600                                                                                                                                         100
                                               465      444                                                                                                             82       81       81       81
                                                                                                                                                                                                              70
 400                                                                                                                                                                                                                   55
                                                                 285      280                                                                                                                                                   51
                                                                                   245                                                       50                                                                                          41
                                                                                            194                                                                                                                                                   34
 200                                                                                                  155
                                                                                                                                                                                                                                                            18
                                                                                                                 56        47                                                                                                                                         7
                                                                                                                                                                                                                                                                                 -
     0                                                                                                                                        0
         Co'y 1   Co'y 2   Co'y 3   Edison +   Co'y 4   Co'y 5   Co'y 6   Co'y 7   Co'y 8   Co'y 9   Co'y 10   Co'y 11   Co'y 12                   Co'y 1   Energean   Co'y 2   Co'y 3   Co'y 4   Co'y 5   Energean   Co'y 6   Co'y 7   Co'y 8   Co'y 9   Co'y 10   Co'y 11   Co'y 12
                                    Energean                                                                                                                + Edison                                       + Edison
                                                                                                                                                             (2022E)

                           Sources: Company Information, CPR, Management Estimates, Capital IQ
                           1.    As per Management Estimates
19
Creating a Material Mediterranean-Focused Player… (1)

                                                                                    Immediate cash flows &
                                  Growth story, focused on
                                                                                   EBITDAX with incremental
                                  developing new reserves
                                                                                      growth opportunities
     Reserves
     (mmboe)
      W.I. 2P

                                                                  347                         262
       Production
        (kboe/d)

                    4                                                   66
       Revenue
        ($ MM)

                        90                                                   566

                    Full-Cycle, Low Cost, Growth Oriented but with a Diverse Underlying Cash Flow Base

                        Source: Company information, CPR
                        1.    Metrics presented on a 2018 basis
20                                                                                                            20
…and Enhancing Production and Cash Flow Generation
                                                                                   Clear Trajectory to 200 kboe/d(1) (2)
Combined 2019 - 2025 Production Profile by Country
(kboe/d)
                                                                                                                    Enhancing post 2021 cash
250
                                                                                                                  flows and supporting medium-
                                                                                                                 term ambition to pay a dividend

200

150
                     Bridging near term
                    cash flow generation
                                                                                           We need exactly(!) the
100
                                                                                           same chart just without
                                                                                                    UK
                                                                                                and Norway

 50

     0
         2019
         2019                   20202020                         2021 2021                 2022 2022        2023 2023           2024 2024             2025 2025

                                                                 Assuming Karish & Tanin
                Greece               Israel                                                        Egypt                Italy               Algeria               Croatia
                                                                 FPSO at Full Capacity

                         Sources: Company Information, CPR, Management Estimates

                                                                                                                                                                       2121
                         1.    Metrics presented on a net working interest basis
21                       2.    As per Management Estimates
                         3.    Represents committed exploration spend
Consideration and Financing Structure
Consideration and Funding                                                                      Equity Placing
• Total consideration − $850 MM
                                                                        • Equity placing of $265 MM
     ‒ $750 MM up-front cash
                                                                        • ABB announced 4 July 2019
     ‒ $100 MM contingent on Cassiopea first gas funded via FCF
                                                                        • Placing executed at 900p
     ‒ 8% profit oil royalty on discoveries made by upcoming drilling
       drilling, funded through FCF                                     • Settlement and admission of new shares achieved on 8
                                                                          July 2019

Sources and Uses
                                                                                               Other Financing
      Up front Cash Consideration                  $750 MM
                                                                        • $600 MM Bridge Facility u/w by MS and ING
     Ongoing Funding Requirements                  $115 MM
                                                                          ‒ Refinancing H2 2019 – completion expected 4Q19
      Total Funding Requirements                   $865 MM
                                                                          ‒ Expected Net Debt : EBITDAX not to exceed 2x for more
                                                                            than 1 year (excl. Israel non-recourse project financing)
              Bridge Loan                          $600 MM
                                                                          ‒ Strong combined cash flow expected to support
             Equity Placing                        $265 MM                  deleveraging thereafter

                                                                        • Agreed to sell UK and Norway North Sea to Neptune for
         Total Funding Sources                     $865 MM
                                                                          $250 million + $30 million contingent

      Disposal of North Sea Assets                 $250 MM

22                                                                                                                                  22
Transaction Timing and Next Steps
     July 19   Transaction Signing & Announcement

     July 19   Equity Raise

     July 19   Bridge Facility Agreement signed

     H2 19     Regulatory Approvals and Partner Consents                       Initiated & Progressing as Expected

     H2 19     Reserve Based Facility Takeout of Bridge Loan                   Initiated & Progressing as Expected

     H2 19     Planned Disposal of Non-Core Assets

     Q4 19     Publication of Circular and EGM                                     No Change to Expectations

     Q4 19     Publication of Enlarged Group Prospectus and Technical Readmission
                                                                             No Change to Expectations

                                Completion expected Year End 2019                  No Change to Expectations

23                                                                                                               23
Other Assets
 Update

24              24
Mature Basin Operating Expertise – Ongoing Success in Greece
         Demonstrable Operational Track Record                                                                Prinos Basin Highlights

                  Continuous Growth in Reserves & Resources

             80
             70
                                                                         73   73   •   Operator, 100% WI
             60                                          58    58   57

             50
                                                                                   •   Shallow water – 36 meters
     mmboe

             40
                                                   30
             30                               24
             20
                                 11
                                         17                                        •   Four platforms operating next to traditional tourist destinations (Thasos
                             7
             10
                   2
                        5                                                              Island)
             0
                  2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
                             Prinos 2P                  Prinos 2C                  •   c. 120 million barrels of oil produced – offtaker BP

                                                                                   •   Production increase from 1.2 kbopd to 4.1 kbopd

                                                                                   •   Production costs decreased to $17.6/ boe in 2018 from $24.7/ boe in 2017

                                                                                   •   Currently developing Epsilon satellite - $100 million investment

                                                                                           •   Expecting first oil from the Lamda platform in 2H 2020

25                                                                                                                                                                 25
Wider Potential: Upside in Greece…
                                                           Material Position

                           •   40% WI in the Ioannina and Aitoloakarnania licences
                           •   Repsol operated (60% WI).
                           •   Neighboring Block 4 in Albania acquired by Shell

                                                           Prolific Geology

                           •   Onshore Western Greece part of the Hellinide fold belt, which hosts the
                               prolific Ionian Basin and Apulian platform
                           •   On trend with recent large discoveries made in Albania

                                                           Ongoing Activity

                           •   2D seismic survey completed in Ioannina block
                           •   Ioannina best estimate prospective resources 103 Bcf and 187 million bbls
                           •   2D seismic survey to commence in the Aitoloakarnania block in 2020.
                           •   Katakolo field under development

26                                                                                                       26
…and the Adriatic - Montenegro
                                                              Material Position

                                     •    Operator, 100% WI in offshore blocks 4219-26 and 4218-
                                          30
                                     •    Best estimate unrisked prospective resources 143.9
                                          mmbbls and 1,766.1 Bcf

                                                          Commitments Fulfilled

                                 •       First round exploration commitment fulfilled

                                             −   338 km2 new 3D shot in Feb 2019

                                             −   To be processed together with legacy 2D

                                             −   Full results expected end-2019

                                             −   Drill-or-drop decision 2020

                                                     Majors focusing on the area

                                 •       ENI-Novatek owns the four blocks to the south

                                             −   Shot seismic in 4Q 2018-1Q 2019

                                             −   Expected to drill two wells in 2019-2020

27                                                                                                 27
Our Next 24 Months: Catalyst-Rich
Country              Asset                            Activity               H2 2019E   H1 2020E   H2 2020E   2021E/22E

          Additional Israeli Wells          Potential exploration drilling

                Karish North                         Appraisal

                     Karish                           First Gas

                     Karish                      Additional GSPAs

          North Thekah Offshore                     Exploration

                       NEA                  Final Investment Decision                     FID
             North East Hap’y                       Exploration

                    Abu Qir                         Infill Drilling

                       NEA                            First Gas

                     Rospo                           Sidetracks

                  Cassiopea                           First Gas

            Gemini & Centauro                     Prospect Drilling

                    Epsilon                           First Oil

           Echo (W. Patraikos)                       Exploration

             Sources: Company Information

28                                                                                                                        28
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