Energean plc (ENOG) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Energean plc Full Year 2022 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthaios Rigas. Please go ahead.

Good morning, everyone, and thank you for joining our results call today. I will start with a general comment, 2022 was a transformational year for Energean, a year where our vision became an operational reality. I remind everyone, 5 years ago, we were a Prinos only producer, today, we are on track to get to our target of 200,000 barrels a day from the Vitol EastMed region, where our Israel project has commenced production in October. We have now completed commissioning. We have notified our buyers or we started to notify our buyers that all the contracts go into full take-or-pay mode. As we have said in the past, most of our gas is contracted with long-term contracts to very high-quality Israeli names. We plan to deliver this year anywhere between 4.5 and 5.5 Bcm of gas into the Israeli gas market, securing the supply of gas to the region, securing the supply of gas to the Israeli market. Beyond our gas sales, we've commenced our liquid production. We sold already two cargoes from our Israeli field. And our strategy to build and own an FPSO, the only FPSO in the region is proving to be absolutely the correct one, because not only we are producing gas and liquids, but we are now starting to work on the additional gas resources. And this is going to be the biggest next step for us, which is organic growth and the development of additional resources from the Olympus area. In 2022, we drilled five successful wells. It is the largest drilling campaign that has ever happened back to back in the EastMed. And we were the operator and 100% owner of those wells that proved more gas. This additional gas is needed everywhere. Israel needs more gas, Egypt needs more gas, Europe needs more gas. So we're in a very fortunate position of being long gas in the region that needs gas. The development of those resources will be the next big growth step for us. We will not stop, obviously. We have grown from a small producer in Greece into one of the largest, if not the largest independent E&P player in the EastMed, and we intend to continue this solid growth. We have increased our reserves and resources by over 20% to 1.2 billion barrels of oil equivalent, and this is the 15th consecutive year of growth. And this is what Energean is all about, continuing to grow, continuing to deliver on our promises and bringing gas in all countries of operation, like Israel. But of course, Egypt is the other country that we've been focusing on in 2022. We brought Miami, as we promised on stream and we are continuing to deliver the rest of the wells to ramp up production there as well. Italy, our other European -- country of operation has had a solid year, helped obviously by the very high prices that we saw in Europe this year. In Greece, we are continuing with the progress of converting the Prinos field into CCS project. And all that is underpinned by solid liquidity because we are extremely disciplined in our financial strategy. Panos will talk about that a bit later. We are sitting on over $1 billion of liquidity at the moment, making sure that all our projects are funded, and we are very well positioned for any eventuality. And as we've seen in the last couple of weeks, things can go wrong in financial markets. And it is our obligation, it is our duty to be protected against any risk. Beyond that, all of our strategy and delivery of projects turns into delivery of value to our shareholders. We have three consecutive quarters of declared dividends totaling $0.90 per share, which represents an annualized yield of about 9%. And we will continue to increase our dividend stream as per our dividend policy that was announced last year. Last but of course, not least, our path to net zero for 2050 is on track. We said we were the first E&P company in the world to commit a net zero strategy. We are continuing this effort. We are not going to say things that will not happen. It's going to take time, but ESG is at the heart of Energean. Turning to Page 4 of the presentation, which illustrates our near-term targets and where we want to be as a company. We are continuing to grow our production. As I said earlier, our target is to reach 200,000 barrels a day and exceed 200,000 barrels a day. Turning this production into $2.5 billion of revenue at a cost of about $10 a barrel with an EBITDAX target of $1.7 billion a year and very firmly focused on deleveraging and keeping our net debt-to-EBITDAX ratio to below 1.5. So in summary, delivery was the keyword in 2022. 2023 is going to be focused on further growth. We're evaluating a number of options. We'll come back to those a bit later. So with this, I want to turn to Panos to take us through financial results. Thank you.

Thank you, Matthaios, and good morning, all. Following from our trading statement earlier in the year, our audited results confirmed the record year Energean had on the back of excellent productivity and uptime from our legacy production assets, the record gas prices in Europe and of course, the recovery of global oil prices. More specifically, we recorded more than $700 million of revenue, almost 50% higher than last year. Cash cost of production, including royalties and the increased energy costs around $19 per barrel. G&A stayed the same at around 35, even though the company grows every day. The adjusted EBITDAX more than doubled as well as the operating cash flow compared to '21 at $422 million and $272 million, respectively are big in all the years in the history of Energean capital expenditure of close to $900 million, and that includes, as Matthaios mentioned the record number of offshore deepwater wells investment back to back that led to the Olympus discovery. And net debt increased only 25% at around $2.5 billion, even though the very large capital commitments and all a sanction projects being at peak intensity. In terms of the '23 guidance, stays unchanged. We expect production to be around 130,000 to 160,000 barrels of oil equivalent, cash cost production of 600 million to 700 million, that results well below $15 per BOE, and we're very confident we will hit well below $10 when we meet our medium-term targets. As most of the sanctioned projects are coming into production, you will see a softening on the capital expenditure intensity. And already this year, we expect this to drop at around $600 million, exploration expenditure much lower, only one well in Egypt and offshore well, we're drilling with Eni of around $50 million. The commissioning will stay at around $30 million as per last year and our consolidated net debt should stay at around $2.6 billion for the rest of the year and that we expect to be the peak net debt, and we will see that even in absolute terms dropping from next year onwards. Moving to Page 8. Following payment of $150 million, including the one that we will pay in March of dividends, we reiterate our target to distribute at least $1 billion by end of 2025. Again, the emphasis on the at least. I remind you, we paid dividends 1 quarter earlier than our targets, and we expect to continue giving surprises to our shareholders, good surprises to our shareholders, I believe. And of course, continue with the progressive nature of our dividend stream, we expect to go at $100 million per quarter when we meet our near-term targets. As I have communicated before, we don't expect this to be from $50 million straight to $100 million, but we will gradually be doing that as we reach our production targets. And as we see the majority of our projects are going on stream later in the year. Post '25, we expect to maintain that progressive dividend policy. And how can we say that? We can say that based on the commercial strategy we have chosen that 75% of our production has long-term contracts with very firm floor prices. And of course, a very low reserve life Matthaios communicated before, it's around $1.2 billion. We see if you do that on 200,000 barrels [indiscernible] of production is way above 15 years type of reserve life. Moving to Slide 9. It is clear and as expected, the deleveraging has commenced already, and we expect to hit our target ratio of well below 1.5x in the next 15 to 18 months. Our absolute net debt, as I mentioned, will stay at around 2.6 to 2.8 for the rest of the year as we expect that to be the big number as we bring and as we finish our major sanction projects. We have a total liquidity in excess of $1 billion, including cash and undrawn lines at the group level, more than enough to fund our ongoing projects and most importantly, which is the best time to tap the bond market if we choose to do so. On the right-hand side of the slide, you can see that the debt maturity profile versus the production profile of our Israeli asset -- of our Israeli assets. As we communicated before, the structure of our gas contracts and reserve life allows us to further optimize our debt profile if we choose to do so. And we expect the first tranche of the bonds, the 24th and the 26th to be either partially or fully refinanced. Based on the latest CPR, that is up on our website as of this morning, post 2031, 55 of our Israeli reserves are still not produced and expected to be produced so in the next decade. And out of those, more than 60% are already contracted. So that you understand allows us and gives us great flexibility and optionality on how to best structure both our dividend, long-term dividend and debt maturity profile well into the next decade. Matthaios, back to you.

Thank you, Panos. Let me take you now through the core countries of operation. I will start with Slide 11, talk about Karish in a bit more detail. The reservoir has been performing exceptionally well. The -- 2 of the 3 wells are doing more than 270 million [ scraps ] a day. These are world-class wells, and we are extremely pleased with the results that we're seeing from those [indiscernible]. Production is ramping up in line with expectations, and commissioning, as I mentioned earlier, is complete. Under our GSPAs, we are now notifying our buyers, and Nick will walk you through our commercial update. We maintain our production guidance at between 4.5 and 5.5 Bcm. I remind everyone, this is roughly 45% to 50% of what Israel consumes. And we are now playing a very important role in the stability of supply for the country. We saw that a couple of weeks ago when Tamar had a shutdown, we maintained the system going. So Karish is becoming a core part of the stability of supply for Israel. Beyond that, we have two cargo liftings that have been offloaded from the FPSO, and this represents the first exports of liquid hydrocarbons for Israel. And for us, this is extremely important because it's not just about the gas revenues, it's also a lot of liquids that we will continue to develop from our field. And I'll ask Nick to cover our commercial update, please?

Thank you, Matthaios. As Matthaios said, we have -- and Panos has also alluded to in terms of our revenues, we have a very strong risk-free profile of gas production. I know that last year, while the European prices were sky high, the focus was elsewhere. But certainly, in a very volatile commodity market that we're seeing now as prices come down again, the benefit of that floor on our cash-generating position. Also important there is the quality of our counterparties, all our counterparties in Israel are very strong, high-quality, creditworthy counterparties, which is not something you necessarily find in other parts of the world. So this is another good reason for our development in Israel being so important. The liquids production, as Matthaios mentioned, is also is an added bonus for us. When we first went into Israel, we were very focused, as everyone knows our story is gas. But through the development and appraisal of the field, we've discovered a significant liquid stream, which is now being produced from the FPSO through the first oil train. And by the end of this year, we'll have a second oil train in place, which will enable us to increase that liquids production north of 30,000 barrels a day, which is a reasonably significant producer stream. And as Matthaios said, we've already offloaded two cargoes which have gone into the European market. So molecules from EastMed energy are already reaching Northern Europe, which just happened to be at the moment, the oil ones and not the gas ones. So we look to build on that in the future as suggested when we commercialize the rest of our discovered reserves. We're looking to access those European markets with our gas molecules from the Olympus development primarily through a number of possible routes which we are currently evaluating.

So all of this was about the existing business and the existing production. But as I mentioned earlier, Energean is also about growth. So turning to Page 13 and moving outside of Israel. We have three key projects that we're working on at the moment, NEA/NI in Egypt, we have achieved first gas as we promised. This was the first milestone for the year, and we are continuing to bring wells on stream. We have about 40 million barrels of oil reserves of gas reserves from NEA/NI. And the next well will come on stream sometime at the beginning of the summer. Karish, we are continuing the growth. We are adding a second oil train and another riser, and we're already evaluating the potential of increasing further the capacity of the FPSO beyond the original 8 Bcm in our evaluation of options for Olympus and the other resources that we believe we will find in the region. Cassiopea in Italy, is progressing well. ENI operated expected to come on stream first half of 2024. With those projects and with the existing production, we will -- we expect to reach our 200,000 barrel a day production target. Turning to Page 14. Just to show, as what I said before, we added more than 200 million barrels of oil equivalent from Olympus to our 2P reserves. Beyond that, we have prospective resources which are not reported here that we're working on. And we have -- we are now evaluating all the exploration blocks in Israel, the bid rounds that are coming up because we believe there's going to be a lot more resource that will be discovered in the country and in the wider region. We have a well coming up in Egypt, an exploration well Northeast Hap'y offshore together with ENI, it's a very prospective well that we believe could add significant resources also to us as well. Turning to Page 15 and picking up on what Nick said, we are evaluating all options at the moment for Olympus. And everything from the base case scenario, which is to just get this gas into the FPSO and extend the plateau with zero CapEx effective or very low CapEx to tie back those well to the FPSO and extend our plateau. This is the base case scenario based on which we got 2P reserves from our auditors, but also evaluating options to get this gas to Egypt. Liquefy it or use it in the Egyptian market or through a pipeline to Cyprus and from Cyprus on to Europe. We have said that we will announce or give more detail on our thoughts towards the middle of the year. We are looking at all options once gas is liquefied, it will go to the highest bidder, obviously. And Europe needs this gas. All the countries of operation, Greece, Italy, Egypt, Israel need gas at the moment. So we are very fortunate to have this additional gas resource in our hands. In Egypt, turning to Page 16, are main field, Abu Qir. We amended the gas price, lifted it to a higher level that allows us to invest more in the country. NEA/NI, we achieved first gas and we have three more wells to be on stream towards the end of the year. And Orion is the name of the well that we're going to drill together with ENI. In the rest of the portfolio page -- on Page 17, again, solid production growth coming from Italy, primarily from Cassiopea. And Italy is a country that is now starting to seriously think about reopening the country to hydrocarbon developments because everybody is realizing that they will burn the hydrocarbons, so it's better to produce them than to just import them. So we believe our strategy to be focused in the EastMed countries that need oil and gas is absolutely the right one. We will remain focused both on our geographic area and our financial discipline. And last but not least, on Page 18, comments on ESG, which are not the priority these days. Everybody is talking about security of supply and affordability of energy, but ESG has been and will continue to be at the heart of our operations. Our carbon intensity has continued to reduce, and we reduced by 13%. Our emissions intensity in 2022 versus 2021, and this represents a 76% year-on-year reduction in absolute scope 2 emissions. We are rated by a number of outside entities and we've achieved top marks A mines on our CDP rating and others that you can see on Page 18. We will continue to reduce emissions. We will continue to remove carbon from the system through the CCS project that we're working on in Greece and ultimately, we will reach a point where we'll need to neutralize and invest in carbon neutral solutions. We target to reach 7 to 8 kilos of CO2 per barrel of oil equivalent and be significantly below the sector average. That allows us to operate and achieve all our milestones, and I will close today's presentation with the key upcoming catalysts that are coming up for us. The first one is the capacity increase of the FPSO to add the second oil train and increase to 8 Bcm, but as I mentioned earlier, we're evaluating a further increase to bring more gas to the system. We will announce towards the middle of the year, our preferred development concept for the Olympus area, and continue to bring wells on stream in Egypt and increase our production outside of Israel as well. The Orion well will spud or we expect ENI to spud the well later in the year. And we -- on the financial strategy, we will continue, as Panos said, to pay our quarterly dividends in line with our policy. Keeping firmly our eyes on our target of 200,000 barrels a day of production, $2.5 billion of revenue and $1.7 billion of EBITDA, extremely focused on bringing value to our shareholders and maintaining our robust capital structure with the refinance of our 2024 bond maturities, which is what Panos and the finance team are working on. Last but not least, continuing our ESG strategy to be the leaders in our sector, which gives us the license to operate in every country of operation. So all in all, 2022, a year of delivery for Energean, 2023 a year of continuous growth and achievement of our targets on track to be the leading producer of gas in the EastMed. With that, I conclude the presentation. Thank you very much for your attention and open the floor to any questions.

[Operator Instructions] We will now take the first question. It comes from the line of David Round from Stifel.

Great. [indiscernible] with Karish, that was great to see this morning. I've just got a couple of questions, please. The first, on the additional reserves at Athena, obviously, that is part of the Olympus project. So we will wait and see what happens. But so I understand if possible, does this now give you the flexibility to secure additional fixed contracts in the near term? So could you take production up to 8 Bcm? And is that something you would want to do? Or are you comfortable with the spot market as it is? And the second one, just on Olympus. And again, I appreciate you will come back -- I'll just finish the second question. And just on Olympus, you're going to come back to it. But I just wanted to get your view on the recent announcement from Edison this week about the EastMed pipeline. And you've clearly said you're looking at all options still, but I wonder how significant an announcement that was in your opinion.

I'll let Nick comment on the commercial strategy. On -- I'll start with your second answer -- or second question. Edison announced that their plan is to take FID on the famous EastMed pipeline. My comment on that is, if they build it, we will use it. We do not intend to embark into multibillion dollar investments in infrastructure. We have gone through that phase for the development of Karish. There is discussions from Chevron about an LNG terminal in Israel, discussions about the pipeline from Edison and their partners. We have many options, and it's great to have many options. There is capacity in the LNG terminals in Egypt. There is a lot of discussions going on with Cyprus. Cyprus is still burning fuel oil for power generation. This is a country that still has not move to gas. So the country needs gas, Israel needs more gas. Egypt needs more gas. So we don't necessarily need to build a multibillion-dollar projects ourselves. And of course, we don't need to be 100% in all future projects. So as I said earlier, the base case scenario which is the lowest CapEx, and that gives us a huge impact -- has a huge impact on our NPV because Athena and Block 12, I remind everyone does not have royalties that will be paid to Delek under our original agreements, can very easily be used to replace production from Tanin. So we will maximize return by optimizing the sequence of the developments. Whether we want to go beyond the 8 Bcm will depend on the prices that we see from the various markets nick, do you want to make...

Yes. I think the point that was made was that Matthaios made there, it's about the margin. We -- there is still continued growth in the Israeli gas market. I think next year, we're anticipating seeing about 15 Bcm, this year, it's about 13.5, which will be about half of that. But what we're focusing now particularly with the next development around Olympus and around the additional reserve that we booked is those margins. So we're looking for markets that will give us the best margins. If that happens to be Israel because of lower capital investment, then obviously, we will look at that. In the interim, as you said, we have a spot market starting to function quite well in Israel. So while we've been commissioning, we have been able to sell significant amounts of gas under spot agreements even with buyers who are not our long-term buyers, but also with our long-term buyers under more flexible arrangements during commissioning. So the spot market is working. It's not liquid. It's not something you'll see very soon to see any futures published again so that you could manage risk in that way, but it's an effective market and it's providing good prices. But we are now in the next phase of our growth. We don't need to raise any additional project capital. So we're quite happy to not sit and wait, but we're quite happy to look at and take our time to secure the best markets, the best margins. Does that answer your question?

Great. That's very clear. Yes, it does.

We will now take the next question. It comes from the line of Werner Riding from Peel Hunt.

I was wondering if you could tell us what current group production levels are? And what, if any, are the risks to ongoing carriage ramp up as you move towards guidance levels of production? The first question.

Well, currently, we are producing from Israel around 450 million to 500 million [ indiscernible ] a day. But obviously, I will not be reporting daily production numbers. We're giving you what the group will be producing on average. The rest of the portfolio is very stable. Italy is producing around about 10,000 barrels of oil per day equivalent. Egypt, is around 40,000 barrels a day mark, including the NEA/NI production. So all in all, we've guided production for the year of 130,000 to 150,000 barrels a day, 158,000, we will continue to -- we maintain this production guidance for the year. But as I said, no, I don't want to get into a daily production report since we are looking at the overall picture of the company. Israel is producing about 10,000 barrels of liquids as well. So all in all, I think the message is we are maintaining our production guidance over 130,000 to 158,000 barrels for a year. If you do the math, it's around about 50 million barrels of oil equivalent from all our assets. And the risks of the ramp up, I think, to a large extent, are behind us. We have all wells on stream, they're all producing. Of course, we are continuing to optimize production of the FPSO, it's a new facility. We are learning it and we are maximizing the uptime. So I think from now on, our target is going to be to get the uptime of the FPSO to the maximum level to ensure that we don't need to minimize maintenance downtime. The only times that we will need to be shutting down -- planned shutdown of production is for construction work. When we do heavy lifts for the additional drivers, the oil train, there's one happening in the next couple of days planned for 2 days to lift the heavy modules that we need to bring on stream for the next projects. But this is all planned and timed and built into our models.

Second question, just with production ramping up and cash generation increasing and helping your liquidity, just wondering what the requirement is for the new $350 million term loan in addition to your undrawn RCF. Is it perhaps going to be earmarked for Olympus? Is that the thinking?

Yes. So Werner, no, it's not for that. It's an extra liquidity line as Matthaios mentioned before, and I think I mentioned it as well. It is a volatile year in the financial markets for sure. And we have seen the Bcm markets as well suffering a lot in the last 15 months. So I would say it's only an extra liquidity buffer. There is absolutely, I want to emphasize, and that applies even to the existing RCF that we have and we have undrawn completely. All the lines at group level are not earmarked for anything. It's an extra liquidity line. We still in full sanctioning projects, capital intensity mode. Yes, most of it is behind us, but we're still having our CapEx being spent and projects coming on stream. And at the same time, we do have a turbulence in the financial markets. So for us, continuing being a little bit prudent, sometimes a little bit over conservative when it comes to our capital structure. So far, it has worked in our favor. So it is just emphasizing and delivering on that. There is no specific use of those funds, adjust liquidity lines available for us for a rainy day, that hopefully, we will never need to draw upon.

We will now take the next question. It comes from the line of Matt Smith from Bank of America.

A couple of questions perhaps from me. I'll just go with the first one to begin. Just wondering if we could touch on the pricing for gas in Israel perhaps, and I suppose as it relates to the spot market that you've been sort of selling quite significant volumes into so far. But I also wondered if we could touch upon the contracted pricing as well. I appreciate that's largely fixed, but with some inflation linkage or electricity tariffs linkage I think it last reported, that was at $4.3 per MMbtu. I wonder if there's any update there or if that number still in place?

Okay. Just to comment first -- then on the spot market. The spot prices from other suppliers are in excess of our weighted average sales price, which we tend to talk about. It's currently about $4.3 per MMbtu. Our spot sales were pitched somewhat lower than this because as you will appreciate, we were selling on effectively an interruptible basis while we're commissioning. So we have no shortfall. So in order to attract buyers to protect the gas that we needed to commission, we were offering what I promised you as the last of the sales in bargains. The spot prices in Israel are largely driven by, if you like, the alternative market, which is currently the exports to Egypt, which I believe is currently priced between $5 and $6, depending on oil price on a netback basis. So as I said, our current long-term contracts are secured against primarily the cost of generation of IEC which is, if you like, a legacy pricing mechanism in the Israeli market, which was the one that we established our core business on. Those come and go with the prices that IEC pay, which is a little bit circular related to the gas that they buy, the independent generators primarily consuming our gas and the coal and LNG imports that IEC keep for standby. Over the last year with the significant coal imports, you've seen in the market quite a lot of discussion about the effect of that on that pricing formula. Global coal prices are still high. I recall being told, I think only yesterday that last year was the largest ever burn of coal for power generation globally. So despite the carbon pressures, coal is still in demand, and this basically feeds into the whole price -- the price index.

Second question perhaps around Olympus the possibility of expanding the Karish FPSO capacity. I think that's mention of a third gas processing train in the release today. I appreciate it might be slightly -- it depends answer. But could you give us some sort of scope in terms of how much of an expansion that could be? Is that an extra 1 Bcm? Or is it possibly an extra 5 Bcm or somewhere in between some color there would be interested to hear.

Well, when we started this FPSO, I remind everyone, 2018, we were talking about a project that was sanctioned in the back of 3 Bcm, very quickly, we saw that there was a lot more demand and we increased the capacity, and we sanctioned the project to take it to 8 Bcm with a second train. And we had designed the FPSO to have a lot more real estate. That's why we built a much bigger floating vessels than we needed. And what we are evaluating at the moment is the possibility of another train that could take the capacity up to 12 Bcm. It is not a small project because, obviously, doing work whilst we are producing is not easy, and it will require shutdowns that have to be taken into consideration. So there is potential to add another train. I'm not going to say today that, that's our preferred option, just to be clear because there are other options as well that we're evaluating. Again, I repeat what I said before, base plan is to just continue producing the 8 Bcm for a longer period of time. We NPV that, and once that is -- once we've assured -- we've seen what the NPV of that is any other option has to be accretive and bring incremental value to us, whether that is increasing the capacity of the FPSO or using somebody else's capacity or another development option. I can't tell you today, as we said, we will talk about this later in the year. But we have the real estate. And I think we know that machine now pretty well and we can assess very easily what the best option is. Sorry for not being very specific, but it's too early, and we're still doing the work.

We will now take the next question. It comes from the line of Mark Wilson from Jefferies.

Okay. Excellent commentary on Karish and well done for getting to this stage, a fantastic achievement. My question, however, is on the exploration at Northeast Hap'y license with the Orion well. Could you give us some details on the predrill prospect changes there? And also the type of targets, are they Zohr like in terms of the geology you're looking to drill on? And then the second part of that question is, could you remind us of the license partners and indeed, the farm-out you're looking to do, are you able to disclose if that two? Or do we just have to wait for that?

Mark, I'm sorry, I will disappoint you with my answer. I cannot disclose because it's the operator that's driving this. So I think you need to get commentary from ENI on this. And on the prospects, we are not the type of company that builds up expectations on the back of huge prospects. It is a big well, ENI in my view, is a fantastic, if not the best explorer in the region. They know Egypt. They have discovered Zohr and developed Zohr very quickly. And we are very confident that they are the best to lead this exploration effort for us. So we have never given huge prospects and talked up resources. And I'm not going to do this right now either. So we prefer to focus on tangible results, plans that we control. When this well is drilled and if we have the value that Eni believes is going to be delivered, then we will celebrate, but let's wait for the well to be drilled first. And we know very well that exploration carries risk. We're trying to minimize the risk through this farm-out process. We are very disciplined in terms of our exploration spend. We have a very interesting exploration portfolio that is beyond the Egyptian asset. We have a block in Greece. Onshore, we have block in Greece offshore, we're trying to convince the Italians to open the country for more exploration. We will not go crazy on exploration. That's not our strength. Our strength is to identify and create value from developed resources. That's what we've done for -- from the Greek asset, from the Italian assets from the Israeli assets. So don't expect that I would be giving you huge expectations. When it's discovered, we will celebrate altogether the numbers. And if it is Zohr type, of course, it will be significant for the region. But ENI, I'm totally confident is the best operator for this well for us.

Okay. Then the second question is, and I think you may have answered it there. In terms of further drilling in Israel and like what it would take together bring a drilling rig back in the five wells last year, as you say, the largest program back to back. It doesn't sound like you would require further appraisal of the Olympus area to build a development plan around. Let's just check that. And therefore, maybe further drilling in the Hermes and Hercules area that would follow on from a development decision in Olympus, would that be the correct way to look at it?

Absolutely correct way to look at it. We do not need additional wells for Olympus. We have drilled enough to get even 2P reserves from our auditors. So we don't need to drill more to appraise Olympus. The other blocks need further drilling. And when we bring the drilling rig to do the further development wells that will be required based on the development plan of Olympus, we may add exploration wells to the sequence. It's not going to be in 2023, probably not in '24 either. So if there is a further drilling campaign that will come in 2025.

There are no more further questions at this time. Please continue.

Well, if there are no further questions, let me thank everybody for participating today. Just closing with the key word for us today, which is delivery in 2022, growth for 2023 and beyond. This is what Energean is all about. We're continuing to deliver on our promises and continuing our focus and efforts to be the leading gas focused independent E&P in the EastMed. Thank you all, and we look forward to seeing you live in the near future. Thank you.

That does concludes the conference for today. Thank you for participating. You may all disconnect.