Energean cuts output guidance despite strong H1

(Sharecast News) - Shares in Energean slumped on Thursday despite the natural gas company reporting an impressive jump in first-half sales and adjusted profits, as it cut its production guidance for 2023. Output in the six months to 30 June average 105.9 thousand barrels of oil equivalents per day (kboed), near triple the level seen in the first half of 2022.

However, due to "start-up issues" at its flagship Karish project in Israel, production is now forecast to average 120-130kboed, down from earlier guidance of 125-140kboed.

The company stressed that these issues "have now been substantially overcome".

For the first half, revenues rose 73% year-on-year to $587.6m, as strong output at Karish offset the softer commodity price environment in whih the realised weighted average liquid price fell 26% to $64.6 a barrel.

Adjusted operating profits rose 74% to $345.2m, but the headline pre-tax profit slumped 41% to $69.8m as a result of higher production costs.

"On Karish, the Energean FPSO achieved 97% uptime in August and, although ramp-up and commissioning was slower than originally expected, Karish is now producing at around 6bcm/yr [billion cubic meters of natural gas per year]," said chief executive Mathios Rigas.

"We are pleased with the positive demand in the market for our gas and will continue to focus on optimising production efficiency."

The stock was down 2.3% at 1,091p by 0846 BST.