LONDON (Alliance News) - Energean Oil & Gas PLC on Wednesday reported a swing to an interim profit from a loss the year before despite a small dip in revenue.
The Mediterranean-focused oil and gas production company posted pretax profit for the six months ended June of GBP82.1 million, improved from the GBP4.4 million loss reported in the first half of 2017.
Energean's sales revenue decreased 1.9% to GBP26.3 million from GBP26.8 million.
Energean - which listed on the London Stock Exchange in March and is now a constituent of the FTSE 250 index - increased its working interest production 50% to 688,000 barrels of oil equivalent in the half-year from 459,000 barrels of oil equivalent a year previous.
Realised oil price in the half increased 33% to USD57.7 per barrel of oil equivalent from USD43.5 per barrel of oil equivalent, it said.
The cost of production increased in the period to USD13.2 million from USD12.0 million, but the cost of production per barrel improved to USD19.4 from USD26.3.
Energean's proved plus probable reserves multiplied in the period to 349 million barrels of oil from 51 million at the end of 2017.
The company also had a foreign exchange gain of USD18.7 million in the period, swung from a USD22.2 million loss a year before.
The company expects to list on the Tel Aviv stock exchange in the fourth quarter of the year.
Energean said operations in Israel are progressing in line with expectations. Its Karish and Tanin developments remain on track for first gas in the first quarter of 2021.
A competent persons report filed in August showed the developments' proved and probable gas reserves are 2.4 trillion cubic feet of gas, with 70% net to Energean.
Energean currently has "firm contracts" to sell 4.2 billion cubic metres of natural gas per year into the Israeli domestic market.
Looking ahead, the company expects an "active" 18 months ahead. Development drilling is expected in the first half of 2019 in Israel as the it focuses on "optimising production" for its Greece operations.
Energean said "well phasing and contribution" will be the "key drivers" of production levels in 2019.
The company narrowed its full-year production guidance to be between 4,000 and 4,250 barrels of oil equivalent per day, from a top range of 4,500, due to replacement infill drilling at its Prinos well.
The company expects production to be more than 10,000 barrels of oil per day by 2021.
Chief Executive Officer Mathios Rigas said: "During the period we made substantial progress in de-risking our flagship Karish and Tanin development project. We signed a lump-sum, turnkey engineering, procurement, construction, installation & commissioning contract with TechnipFMC, simplifying project management and reducing our financial risk exposure, and secured USD12 billion of future revenue by signing 12 firm gas sales agreements to deliver a total of 4.2 billion cubic metres of natural gas per year.
"Over the next 18 months we aim to prove up sufficient resource to fill the 3.8 billion cubic metres of natural gas per year of spare capacity in our Karish floating production storage and offloading vessel, delivering significant incremental value to our stakeholders. Our independent reserves auditor has identified 7.5 trillion cubic feet of gas of Israeli prospective resource with a high geological probability of success, which gives us confidence that we can meet this target whilst adhering to our exploration strategy to target resource that can be quickly and economically monetised. We look forward to the results from the Karish North exploration well in the second quarter of 2019."
Shares in Energean Oil & Gas were down 3.5% Wednesday at 526.00 pence each.
