Energean Oil and Gas's (ENOG) half-year results were largely irrelevant after the announcement of a company-altering acquisition days into the second half.
The company said on 4 July it would buy EDF’s Edison offshoot for $750m (£601m) upfront, a $100m contingency payment and an 8 per cent royalty on profits from future discoveries.
Its existing production in Greece is negligible – 3,920 barrels of oil per day (bopd), stable on last year. The company has now said it would keep the Energean Force drill rig in port and cancel “near-term planned rig-based activities” as part of a spending review. July and August works have seen production suspended and guidance for the year is down from 4,300-4,800 bopd to 3,400-3,600 bopd.
Alongside the EDF deal, which the company says will be completed within a few months, progress at the Karish and Tanin fields development project in Israel has been made through a “substantial gas discovery” at Karish North and a supply deal.
In the background to this work, the company has gone from net cash of $167m midway through 2018 to net debt of $390m at the end of the first half, with cash capital expenditure (total capex plus movement in working capital) climbing from $136m to $541m. Investment in the Israel project took up $496m of this figure. Chief executive Mathios Rigas said first gas from the project was still expected at the start of 2021.
Consensus forecasts compiled by Bloomberg put full-year earnings per share at 5.1¢ on cash profits of $89m, climbing to 26.5¢ and $154m in 2020.
| ENERGEAN OIL AND GAS (ENOG) | ||||
| ORD PRICE: | 951p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 950-951p | 12-MONTH HIGH: | 1,092p | 526p |
| DIVIDEND YIELD: | na | PE RATIO: | na | |
| NET ASSET VALUE: | 466¢* | NET DEBT: | 36%** | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2018 | 26.3 | 82.1 | 81.0 | - |
| 2019 | 40.0 | -3.1 | -3.0 | - |
| % change | +52 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.23 *Includes intangible assets of $124m, or 70¢ a share **Excludes lease liabilities of $8.1m | ||||
