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Energean's second-biggest shareholder sells £1mn stake

Director and co-founder Stathis Topouzoglou sells as company trades at near-record highs in months before first gas at Karish
May 24, 2022

Gas producers were already trading strongly when Energean (ENOG) announced a new sales agreement and discovery earlier this month, sending its shares up even higher. At the same time, continued high forecasts for gas prices for the rest of the year mean gas producers have seen some of the biggest gains this year of any UK-listed companies as investors have aggressively sold off most other sectors.

The gas price has remained high even with warmer weather hitting Europe and the European Union allowing Russian gas exports to continue.

While slightly divorced from this volatile market through locked-in forward sales deals at the Karish project – set to hit first gas by the end of September – Energean’s share price is up 59 per cent year-to-date, to 1,358p a share.

Its second-biggest individual shareholder, Stathis Topouzoglou, has crystallised some of these gains through a £1.35mn share sale last week, at 1,306p a share. Energean declined to comment on the transaction. Topouzoglou, a founding partner of Energean and board member, holds 9.49 per cent of the company, behind only chief executive Mathios Rigas (who owns 11.15 per cent) in the individual shareholder rankings.

The recent uptick in the share price can be linked to more supply being sold off from Karish and the Athena discovery, which is near to Karish and therefore could be connected to the floating, production, storage and offloading (FPSO) ship that will form the hub of the asset.

Energean is in the privileged position of being highly valued on future sales but also already has cash flow from its Egyptian and Italian assets, bought when gas prices were extremely low in 2019. While its price-to-earnings ratio is a high 20 times for the energy sector, using consensus 2022 reported earnings per share, this comes down to just four times when 2023’s earnings are plugged in. While any company bringing a major extraction project into production will face challenges, we are optimistic Energean is a solid buy. 

Last IC View: Buy, 1,150p, 31 Mar 2022