NewMed Energy - Limited Partnership ($NWMD)

Thank you very much. Good afternoon for everybody. Thank you for participating in this [ week ] to review our financial results for Q1 2026. And as you know, in Q1, we had around a month of basically [ grow their off ] Leviathan platform. So that affected our income, EBITDA and net profit for Q1. Together with the Bulgarian Krom well, it's basically provide us with EBITDA of $97 million and net profit which is basically 0 for this quarter. But our agreement, the GSPA for the region are [ brand like delayed ], and the price for this month is an average credit price of the last 3 months. So basically, what we are seeing are [ pad forward ] for this year, taking into consideration the current Brent prices, practically taking $90 Brent until the end of the year. What we are seeing is the upside of $330 million in income vis-a-vis our initial forecast. So if you -- if we reduce what we lost at these 30, 33 days of shutdown and take into consideration what we are seeing already in prices in the market, so that will bring us to a better situation for this year. As I mentioned, $330 million upside for [ human bot ]. Another great news for us is we finished the third gathering line for Leviathan with [ the ] pipeline that flow gas from the field from the reservoir to the platform. And initially, we estimate 1.4 Bcf a day. Based on actual results, we are updating the production capability to 1.53 Bcf a day, equivalent to 15.8 Bcm. This is a great upside that we didn't take into consideration yet in our forecast, not for this year, not for later years. The reason is that we want to finish as well, the Ashdod-Ashkelon project, which is a basically INGL project that we increased the capacity of flow in the EMG pipeline. We estimate that it will bring us to around 8, 8.5 this year, and it probably can do more. And together with the 1.53, we will update the result base on actual flow in EMG. And we will see it within a month, we'll take you through that. We're supposed to have gas in this pipeline in 26th of June. So really in around [ the demand side ], and that should bring us to a place that we can upgrade our forecast for the later years and as well for the second half of 2026 on top of this $330 million asset. We will share with you as well where we are with [ cycles at modality ] and with [ Hanask ] Bulgaria. And we announced, as you saw, a $60 million dividend. Again, we are distributing dividend in parallel to keep the investment in [ sites of] Leviathan, Aphrodite. And you will see as well that we are maintaining a very low level of debt vis-a-vis the value of the assets. So that's the summary. Based on [ that subsea ] Q1 2026 to 2025, we should be a little bit higher, but the shutdown of the Leviathan brought to around 1 Bcm short vis-a-vis the Q1 2025. In terms of pricing, Q1 2026 was basically Brent prices before the [ woke ], and we didn't enjoy the upside of the [ woke ] in terms of Brent prices for this quarter. But we should see it in next quarter. As you know, we are sharing this graph in every quarter. What you see in blue is the realized blended price of NewMed vis-a-vis in orange, the Brent -- the average Brent of each month. And what you can see basically is that we should enjoy the asset of the Brent in the next month this year and following, obviously. And this is take us to revenues of $288 billion for Leviathan this year vis-a-vis $255 million that we assumed earlier this year. This is the $330 million upside. That basically with the average price of $90, we are basically seeing more today, but this is -- this analysis is based on a $90 Brent price average. So on the operational side, as I mentioned, we finished the entire gathering line of Leviathan. We finished this project amazingly in basically $480 million vis-a-vis $570 million that was budget. So we have $90 million saving in basically Leviathan project. And as I mentioned, we increased the capacity from the assumption, [ able ] capacity of 1.4 Bcf day to 1.53. Great news, better forward for us. And I assume that in the next few months, we'll upgrade our sales production according to that and taking into consideration the midstream capability. With respect to Phase 1b, the expansion of Leviathan, everything is as expected and even better. We are on time table. We are on the budget, and the project is running extremely well, and we are very happy with that. As I mentioned, we have basically 3 projects of additional connectivity in the region. The first one that should come in by the end of June is this Ashdod-Ashkelon offshore pipeline, which INGL [ lead ]. This pipeline should increase the capacity of low in EMG to around [ 850, 80.5 ] Bcf a day vis-a-vis 6.5 of today. Out of it, Leviathan have basically a [ chutamae ] of [ 200 million stuff ] a day and Leviathan, all the rest. So any upside in this pipeline is going solely to Leviathan, and this is -- and we are expecting some upside inflow. We've been last week in Egypt. We discussed with our [ logistics ] partner on reducing the pressure at the EMG and the head of the EMG side in the Egyptian [ lead ] that will allow us to flow more then those numbers into the Egyptian market. In parallel, we are continuing with the basically compression system in FAJR. That should bring us with an additional [ 400 million stuff ] a day to flow to Egypt vis-a-vis the numbers of today, which is split between Leviathan and Tamar. So we are expecting that the Leviathan capacity will be 725 in this pipeline, Jordan and Egypt. And happy to share that [ Michana ] pipeline going very well, where we are seeing already pipelines onshore being installed, and we are on budget, on time table on this project. All those projects should lead Leviathan to an export capacity of 1.6 Bcf a day, mainly to Egypt and Jordan. Well, I would like to think that we have great news. We signed a few MOUs that basically established the pillars to take FID of the project. So first thing, we signed an MOU for selling all the gas in reservoir to the Egyptian market to [ EGAS ]. That MOU will establish basically flexibility to -- in the project to basically [ fleet ] the commitment of the Egyptian to the actual flow. We established a Brent-related price, which is very important for us to go forward. And we also signed the principle of Host Government Agreement with respect to the projects that cover entry point, ability to make the pipeline, taxation issues, et cetera, et cetera. So this is -- there was government agreement pillar. And we note of that, we have $105 million FEED underway, and targeted to take investment decision in the project first half of 2027 and has agreed with the [ city ] government. So we are really enjoying a very good environment for these projects right now. With all what's going on, everybody wants to see more gas flowing into markets. And we get a [ last flow ]. As you know, we have on one hand, 2 dry wells, not commercial. But on the other hand, in each of those reservoirs, we identified natural gas, so it means that there is a play there. And now we are evaluating OMV, our operator, together with us evaluating the result, understanding and analyzing what else we have in the project, in the license in terms of potential additional prospects. While everything there is that we saw lately, adjustable a license name, [ Han Travel ]. And we saw Shell together with OMV and [ TPO ] the Turkish player that has some discovery, [ little more ] than a license they took. They are running into 3D, very close to the license. So we need to evaluate that as well and how it affect us. For the key financial metrics, I will ask Tzachi Habusha, our CFO, to take you through the numbers.

Hey, everyone. And thank you, Yossi. Thank you, all. So let's turn to the financial statements for the Q1. So revenues were approximately $164 million, and production was about 1.9 Bcm compared with revenues of $288 million and production of 2.9 Bcm in the first quarter of last year. Net profit was $0.1 million compared with [ $116 million ] last year. The change in the net profit in the first quarter was mainly driven by 4 factors. [ Trends the ] lower natural gas production and lower net revenues from natural gas resulted from the 33 days shutdown of operation during the war with Iran. This reduced revenues by approximately $76 million. A reduction in the [ energy ] gas price reduced revenues by approximately $27 million. The third point -- the third factor was an increase in cost and expenses, mainly due to the onetime amortization of drilling costs following the unsuccessful drilling campaign in Bulgaria, totaling $74 million. The final factor was a higher net financial income of $40 million, driven by the reevaluation of Karish and Tanin royalties, together with the lower financing expenses following the full repayment of $600 million of the American bond Series June '25. Despite this issue about the revenues, despite the impact of the shutdown, our forecast indicates a positive overall impact of Leviathan's 2026 cash flow due to the higher forecast of the Brent price relating the published DCF, which we published in the beginning of this year. Regarding the balance sheet and liquidity, after the repayment of the Leviathan bond series at June '25 and before the repayment of the [ next ] series in June '27, we signed a new credit facilities with Bank Leumi amounting to $500 million. As of today, the total available credit facilities are $600 million. In addition, during 2025, the Board of Directors approved an additional buyback program for Leviathan bonds for the '27 and '30 series. To date, we purchased approximately $84 million from these series. Regarding the dividend. So as Yossi mentioned, similar to the previous quarter, a profit distribution of $60 million was approved by the Board of Directors. I think you'll see this concludes the key financial highlights for the financial statement.

Thank you, Tzachi. Before we will go to questions, just one thing on the dividend. Again, in parallel to keep investing in Leviathan second phase, Aphrodite and exploration [ on ], we are keeping a very, I would say, a stable level of debt in end. We [indiscernible] dividend. So we announced $60 million, which is, again, I would say, how the standard. And we would like to continue [indiscernible] dividends in parallel to those investment. This is our plan. This is our strategy. So -- and that's what we would like to do. Now we will move to Q&A. If you have any questions, you can basically ask us in the Q&A box, then we'll try to answer. Yes?

So the first question with regards to the local market in Israel, a negotiation that we have with the localized bill.

So we'll expand -- basically, as you know, we have a long-term agreement with Jordan. We have a long-term agreement with the Egyptian market. And in parallel, we left -- if I'm taking the Egyptian deal, let's say that the main capacity for next decade is around almost 13 Bcm, I'm taking the [indiscernible] Jordan. So we left with capacity to the Israeli market, which would commit to the Israeli market. And based on that capacity, we are negotiating. We have an advanced discussion with [indiscernible] to sign a long-term agreement with them, mainly to cover the next decade. That's -- beforehand, we don't have enough -- we don't have a lot of capacity. And I assume that soon, we'll announce some of them.

Another question that we have with regards to the third -- to the third gathering line and our ability to use that gas in order to sell future mutual sales to neighboring countries. So can you please talk about the use of the gathering line capacity into the midstream [indiscernible]?

Yes. So basically, all our models have been on assumption of 1.4 Bcf per day. So we didn't take into consideration the 1.53. Even in the updated focus of revenue for this year, we didn't take that into consideration. Because it's not only the upstream that we need to solve. And we have additional -- more than -- it's almost 1.5 this year additional that we have to sell. On a yearly basis, we need to show -- we need to see that we have the means and the capacity to sell it. Because we have months before the flow in the Ashdod-Ashkelon pipeline, we have -- we think that Ashdod-Ashkelon pipeline can bring EMG to a flow of about 8.5 Bcm, even 9 and more, and that will go solidly to Leviathan and enable Leviathan to enjoy, I would say, more sales to Egypt. It obviously come with additional revenues to the project. And in parallel, we are as well looking into additional [ risk ] market in the region [ in South City ]. And one of them is the Syria market, which is starting to [ do that ]. There's an ongoing discussion between the Israeli government and the Syrian government on a few agreements as well with Lebanon, which could be a market as well. But that capacity can allow us to basically sell to those markets, gas in parallel to what we are selling to Egypt and Jordan. But being very frank, we believe that every molecule that down the road we'll be able to produce, we'll find a market, and that's post EMG and FAJR compression system that I mentioned. So question about myself, [ as is not ] my last quarter. I assume that I will see you here August in the second quarter results. But yes, I'm very glad to bring NewMed to a beautiful place with this actual production now, it's 1.53 Bcf a day capability. Second phase of Leviathan is leading on almost automatically pilot in the next few weeks. I believe that we'll cover all the capacity of Leviathan, many, many years to come on NewMed perspective. And Aphrodite, we signed those agreements that they are the pillars to take investment decision. So I'm leaving NewMed in the best situation that NewMed ever be. And I basically take my own best. We stay in the oil and gas business probably in the global market.

We in your last quarter here.

We have a lot of question superlative with regards to Yossi, all will be answered in due time, I guess, all those assumptions. We want to thank you all for joining us in this webinar. Please feel free to reach out if you have any additional questions. We'll see you all next quarter. Thank you.

Thank you, all.

Thank you, all.