15:07:00 +01:00: Energean Israel 1Q 2023 Accounts

RNS Number : 9331ZEnergean PLC18 May 2023

ENERGEAN ISRAEL LIMITED

UNAUDITED INTERIM CONDENCED CONSOLIDATED FINANCIAL STATEMENTS

31 MARCH 2023



ENERGEAN ISRAEL LIMITED

UNAUDITED INTERIM CONDENCED CONSOLIDATED FINANCIAL STATEMENTS

AS OF 31 MARCH 2023

INDEX

Page


Interim Condensed Consolidated Statement of Comprehensive Income


3

Interim Condensed Consolidated Statement of Financial Position


4

Interim Condensed Consolidated Statement of Changes in Equity


5

Interim Condensed Consolidated Statement of Cash Flows


6

Notes to the Interim Condensed Consolidated Financial Statements


7-20

- - - - - - - - - - - - - - - - - - - -


INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED 31 MARCH 2023



31 March (Unaudited)



Notes


2023

$'000


2022

$'000


Revenue


3


158,853


-


Cost of sales


4


(83,905)


-


Gross profit




74,948

-









Administrative expenses


4


(3,922)


(2,205)


Exploration and evaluation expenses


4


(50)


-


Other expenses


4


-


(824)


Other income


4


-


53


Operating profit (loss)




70,976


(2,976)









Financial income


5


1,526


3,338


Financial expenses


5


(32,487)


(3,078)


Foreign exchange loss, net


5


(257)


(68)


Profit (loss) for the period before tax

39,758

(2,784)









Taxation income (expense)


6


(9,482)


1,260


Net profit (loss) for the period




30,276

(1,524)









The accompanying notes are an integral part of the interim condensed consolidated financial statements.


INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF 31 MARCH 2023


Notes


31 March2023

(Unaudited)

$'000


31 December

2022

$'000

ASSETS:







NON-CURRENT ASSETS:







Property, plant and equipment


7


2,818,159


2,926,313

Intangible assets


8


152,558


143,554

Other accounts receivable


10


5,614


108

Deferred tax asset


9


13,547


22,886

2,989,878


3,092,861

CURRENT ASSETS:







Trade and other receivables


10


141,123


82,611

Inventory


11


8,142


8,313

Restricted cash




8,462


71,778

Cash and cash equivalents




32,081


24,825





189,808


187,527

TOTAL ASSETS



3,179,686

3,280,388








EQUITY AND LIABILITIES:







EQUITY:







Share capital




1,708


1,708

Share premium




212,539


212,539

Retainedlosses




(40,252)


(70,528)

TOTAL EQUITY

173,995

143,719

NON-CURRENT LIABILITIES:







     Senior secured notes


12


1,851,797


2,471,030

Decommissioning provisions




86,182


84,299

Trade and other payables


13


200,461


210,241





2,138,440


2,765,570

CURRENT LIABILITIES:







     Senior secured notes


12


621,382


-

Trade and other payables


13


245,869


371,099





867,251


371,099

TOTAL LIABILITIES




3,005,691

3,136,669

TOTAL EQUITY AND LIABILITIES



3,179,686


3,280,388

18 May 2023

Panagiotis Benos

Director

Matthaios Rigas

Director

The accompanying notes are an integral part of the interim condensed consolidated financial statements.



INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

THREE MONTHS ENDED 31 MARCH 2023

Share capital

$'000

Share Premium

$'000

Accumulated losses

$'000

Total equity

$'000

Balance as of 1 January 2023

1,708

212,539

(70,528)

143,719

Profit for the period


-


-



30,276


30,276

Balance as of 31 March 2023


1,708


212,539



(40,252)

173,995











Balance as of 1 January 2022

1,708

572,539

(35,946)

538,301

Loss for the period


-


-



(1,524)


(1,524)

Balance as of 31 March 2022


1,708


572,539



(37,470)


536,777

The accompanying notes are an integral part of the interim condensed consolidated financial statements.


INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS PERIOD ENDED 31 MARCH 2023



31 March (Unaudited)



Notes

2023

$'000

2022

$'000

Operating activities







Profit (Loss) for the period before tax

39,758

(2,784)

Adjustments to reconcile loss before taxation to net cash provided by operating activities:






Depreciation, depletion and amortisation

4


30,871


38

Loss from disposal on property, plant and equipment

4


-


824

Amortisation of payment made in advance to customers

3


4,928


-

Other expenses

4


-


5

Other income



-


(53)

Finance Income

5


(1,526)


(3,338)

Finance expenses

5


32,487


3,078

Net foreign exchange loss

5


257


68

Cash flow from operations before working capital




106,775


(2,162)

Increase in trade and other receivables




(18,315)


(2)

Decrease in inventories




172


-

Increase in trade and other payables




314


800

Cash from operations




88,946


(1,364)

Income taxes paid




(368)


(330)

Net cash inflows from (used in) operating activities




88,578


(1,694)

Investing activities







Payment for exploration and evaluation, and other intangible assets


8(B)


(25,318)


(2,231)

Payment for purchase of property, plant and equipment


7(C)


(55,752)


(44,002)

Movement in restricted cash, net




63,316


64,112

Interest received




1,509


692

Net cash inflows from (used in) investing activities




(16,245)


18,571

Financing activities







Senior secured notes - interest paid


12


(64,453)


(64,453)

Other finance cost paid




(44)


(384)

Transaction cost in relation to Senior Secured Notes




(229)


-

Repayment of obligations under leases


13


(250)


(248)

Net cash used in financing activities




(64,976)


(65,085)



Net increase (decrease) in cash and cash equivalents




7,357


(48,208)

Cash and cash equivalents at beginning of period




24,825


349,827

Effect of exchange differences on cash and cash equivalents




(101)


(45)

Cash and cash equivalents at end of period




32,081


301,574

The accompanying notes are an integral part of the interim condensed consolidated financial statements.


NOTE 1: -     GENERAL

a.   Energean Israel Limited (the "Company") was incorporated in Cyprus on 22 July 2014 as a private company with limited liability under the Companies Law, Cap. 113. Its registered office is at Lefkonos 22, 1st Floor, Strovolos, 2064 Nicosia, Cyprus.

b.   The Company and its subsidiaries (the "Group") has been established with the objective of exploration, production and commercialisation of natural gas and crude oil. The Group's main activities are performed in Israel by its Israeli Branch.

c.   As of 31 March 2023, the Company had investments in the following subsidiaries:

Name of subsidiary

Country of incorporation / registered office

Principal activities

Shareholding
At 31 March

 2023
(%)

Shareholding
At 31 December 2022
(%)

Energean Israel Transmission LTD

121, Menachem Begin St.
Azrieli Sarona Tower, POB 24,
Tel Aviv 67012039 Israel

Gas transportation license holder

100

100

Energean Israel Finance LTD

121, Menachem Begin St.
Azrieli Sarona Tower, POB 24,
Tel Aviv 67012039 Israel

Financing activities

100

100

d.   The Group's core assets as of 31 March 2023 are comprised of:

Country

Asset

Working interest

Field phase

Israel

Karish

100%

Production

Israel

Tanin

100%

Development

Israel

Blocks 12, 21, 23, 31

100%

Exploration


NOTE 2: -     Accounting policies and basis of preparation

These unaudited interim condensed consolidated financial statements for the three months ended 31 March 2023, have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union (EU). The unaudited interim condensed consolidated financial statements do not include all the information and disclosures that are required for the annual financial statements and must be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2022.

These unaudited interim financial statements have been prepared on a going concern basis.

NOTE 3: -     Revenues



31 March (Unaudited)



2023

$'000


2022

$'000

Revenue from gas sales (1)


113,090


-

Revenue from Hydrocarbon liquids sales (3)


50,691


-

Compensation to customers (2)


(4,928)


-

Total revenue

158,853

-

(1) Sales gas for three months ended 31 March 2023 totaled approximately 0.72 bcm (the Company started production on 26 October 2022).

(2) During 2021 and in accordance with the GSPAs signed with a group of gas buyers, the Company paid compensation to these counterparties following delays to the supply of gas from the Karish project. The compensation is accounted for as variable consideration under IFRS 15 Revenue Recognition, as a deduction from revenue once production commences and gas is delivered to the gas buyers.

(3) Sales Hydrocarbon liquids for three months ended 31 March 2023 totaled approximately 0.714mmbbl (the Company did not sell Hydrocarbon liquids during 2022).

NOTE 4: -     Operating profit (loss) before taxation



31 March (Unaudited)



2023

$'000


2022

$'000

(a)   Cost of sales





Staff costs


1,885


-

Energy cost


1,288


-

Royalty payable


29,474


-

Depreciation and amortisation (Note 7)


30,279


-

Other operating costs


20,110


-

Stock movement (Note 11)


869


-

Total cost of sales

83,905

-

(b)   General & administration expenses

Staff costs


960


397

Share-based payment charge


99


31

Depreciation and amortisation (Note 7, 8)


592


38

Auditor fees


48


80

Other general & administration expenses


2,223


1,659

Total administrative expenses

3,922

2,205

(c)    Exploration and evaluation expenses





Other exploration and evaluation expenses


50


-

Total exploration and evaluation expenses

50

-

(d)   Other expenses





Loss from disposal of property, plant and equipment


-


824

Total other expenses

-

824

(e)   Other income

Other income


-


53

Total other income

-

53






NOTE 5: -     Net finance income/(expenses)



31 March (Unaudited)



2023

$'000


2022

$'000

Interest on senior secured notes (1)


34,375


34,323

Interest expense on long terms payables (3)


612


2,064

Less amounts included in the cost of qualifying assets (2)


(3,568)


(33,744)



31,419

2,643

Finance and arrangement fees


145


1,459

Other finance costs and bank charges


107


264

Unwinding of discount on provision for decommissioning


861


171

Unwinding of discount on right of use asset

(1)


15


83

Less amounts included in the cost of qualifying assets (2)


(60)


(1,542)



1,068

435

Total finance costs

32,487

3,078

Interest income from time deposits


654


557

Change of discount estimate on payables (3)


872


-

Interest income from loans to related parties


-


2,781

Total finance income


1,526


3,338

Net foreign exchange losses


(257)


(68)

Net finance income/(expense)


(31,218)

192

(1)    See also Note 12.

(2)    See also Note 7(A).

(3)    See also Note 13.

NOTE 6: -     Taxation

1.      Taxation charge:



31 March (Unaudited)



2023

$'000

2022

$'000

Tax - current year


(143)

(67)

Deferred tax


(9,339)

1,327

Total taxation income (expense)

(9,482)

1,260

NOTE 7: -     Property, Plant and Equipment  

a.          Composition:

Oil and gas Assets

$'000

Leased assets

$'000

Furniture, fixtures and equipment

$'000

Total

$'000

Cost:

At 1 January 2022

2,241,783

4,009

829

2,246,621

Additions (1)


514,373


731


1,165


516,269

Disposals


(900)


-


-


(900)

Capitalised borrowing cost (2)


129,357


-


-


129,357

Capitalised depreciation


632


-


-


632

Change in decommissioning provision


47,544


-


-


47,544

Total cost at 31 December 2022

2,932,789

4,740

1,994

2,939,523

Additions (1)


29,048


-


41


29,089

Handover to INGL(4)


(111,105)


-


-


(111,105)

Capitalised borrowing cost (2)


3,628


-


-


3,628

Change in decommissioning provision


1,020


-


-


1,020

Total cost at 31 March 2023

2,855,380

4,740

2,035

2,862,155









Depreciation:









At 1 January 2022

433

693

228

1,354

Charge for the year (3)


10,976


134


297


11,407

Capitalised to oil and gas assets


-


632


-


632

Disposals


(433)


-


-


(433)

Write down of the assets


250


-


-


250

Total Depreciation at 31 December 2022

11,226

1,459

525

13,210

Charge for the year


30,279


412


95


30,786

Total Depreciation at 31 March 2023

41,505

1,871

620

43,996

At 31 December 2022

2,921,563

3,281

1,469

2,926,313

At 31 31 March 2023

2,813,875

2,869

1,415

2,818,159

(1) The additions to oil & gas assets in 2023 are primarily due to development costs for the FPSO, Karish North and 2nd Oil Train. The additions in 2022 are primarily due to development costs for the Karish field, incurred under the EPCIC contract, FPSO, subsea and onshore construction.

(2) Capitalised borrowing costs relate primarily to the secured senior notes.

(3) First production from the Karish project was achieved on 26 October 2022.

(4) Handover to INGL took place on 22 March 2023.

NOTE 7: -     Property, Plant and Equipment  (Cont.)

b.         Depreciation expense for the year has been recognised as follows:


31 March (Unaudited)



2023

$'000


2022

$'000


Cost of sales

30,279


-


Administration expenses

507


38


Capitalised depreciation in oil & gas assets

-


177


Total

30,786


215

c.          Cash flow statement reconciliations:


31 March (Unaudited)




2023

$'000

2022

$'000

Additions to property, plant and equipment, net

77,368

88,654

Associated cash flows




Payment for additions to property, plant and equipment


(55,752)

(44,002)

Non-cash movements/presented in other cash flow lines




Capitalised borrowing costs


(3,628)

(35,284)

Right-of-use asset additions


-

(107)

Capitalised share-based payment charge


-

(40)

Capitalised depreciation


-

(177)

Change in decommissioning provision

(1,020)

-

Movement in working capital


(16,968)

(9,044)

NOTE 8: -     Intangible Assets

a.          Composition:

Exploration and evaluation assets

$'000

Software licences

$'000

Total

$'000

Cost:







At 1 January 2022


20,141


255


20,396

Additions (1)


123,005


1,713


124,718

Write off of exploration and evaluation costs (2)


(1,277)


-


(1,277)

At 31 December 2022

141,869

1,968

143,837

Additions (1)


9,089


-


9,089

At 31 March 2023

150,958

1,968

152,926

Amortisation:

At 1 January 2022

-

255

255

Charge for the year


-


28


28

Total Amortisation at 31 December 2022

-

283

283

Charge for the year


-


85


85

Total Amortisation at 31 March 2023

-

368

368








At 31 December 2022

141,869

1,685

143,554

At 31 March 2023

150,958

1,600

152,558

(1) Additions to exploration and evaluation assets are primarily due to the 2022 growth drilling programme undertaken offshore Israel.

(2)  Zone D: On 27 July 2022, the Company sent a formal notice to the Ministry of Energy notifying the relinquishment of Zone D and discontinuation of related work. As such, the licences subsequently expired on 27 October 2022.

b.         Cash flow statement reconciliations:


31 March (Unaudited)




2023

$'000


2022

$'000

Additions to intangible assets


9,089


5,173

Associated cash flows




Payment for additions to intangible assets


(25,318)


(2,231)

Non-cash movements/presented in other cash flow lines




Movement in working capital


16,229


(2,942)

NOTE 9: -     Deferred taxes

The Group is subject to corporation tax on its taxable profits in Israel at the rate of 23%. The capital gain tax rates depend on the purchase date and the nature of the asset. The general capital gains tax rate for a corporation is the standard corporate tax rate.

Tax losses can be utilised for an unlimited period, and tax losses may not be carried back.

According to Income Tax (Deductions from Income of Oil Rights Holders) Regulations, 5716-1956, the exploration and evaluation expenses of oil and gas assets are deductible in the year in which they are incurred.

The Group expects that there will be sufficient taxable profits in the following years and that deferred tax assets, recognised in the consolidated financial statements of the Group, will be recovered.


NOTE 9: -        DEFERRED TAXES (Cont.)

Below are the items for which deferred taxes were recognised:

Property, plant and equipment & intangible assets

$'000


Right of use asset

IFRS 16

$'000


Tax losses

$'000


Deferred expenses for tax

$'000


Staff leaving indemnities

$'000


Accrued expenses and other short‑term liabilities and other long‑term liabilities

$'000

Decommissioning provision

$'000

Total

$'000

At 1 January 2023


(40,344)


(754)



56,415


6,209


167


1,193



-


22,886

Increase/(decrease) for the year through:



Profit or loss


(8,359)


95



(965)


(156)


13


33



-

(9,339)

At 31 March 2023

(48,703)

(659)

55,450

6,053

180

1,226

-

13,547

At 1 January 2022


(12,632)


(762)



4,750


11,031


94


923

8,171

11,575

Increase/(decrease) for the year through:














Profit or loss


(27,712)


8



51,665


(4,822)


73


270

(8,171)

11,311

At 31 December 2022

(40,344)

(754)

56,415

6,209

167

1,193

-

22,886



31 March2023

(Unaudited)

$'000


31 December

2022

$'000

Deferred tax liabilities


(49,362)


(41,099)

Deferred tax assets


62,909


63,985

13,547

22,886


NOTE 10: -   Trade and other receivables



31 March2023

(Unaudited)

$'000


31 December

2022

$'000

  Current





   Financial items

Trade receivables





Trade receivables


62,998


37,491

Other receivables (1)


59,348


999

Refundable VAT


17,711


37,131

Accrued interest income


33


888



140,090

76,509

    Non-financial items





Prepayments


214


159

Prepaid income tax


202


-

Deferred expenses(2)


-


4,929

Prepaid expenses


617


1,014



1,033

6,102

   Total current trade and other receivables


141,123

82,611

  Non-current





   Financial items





  Other receivables (1)


5,072


-

    Non-financial items





Deferred borrowing fees


434


-

Deposits and prepayments


108


108



542


108

Total non-current trade and other receivables


5,614

108

(1) The increase from 2022 is due to the receivable from INGL (US$59.3 million current and US$5.07 million non-current) resulting from relevant milestones being achieved, in line with the agreement. See Note 13(4) for further details.

(2) Deferred expenses relate to compensation of US$22.9 million that had been accrued in 2021 following delays to the supply of gas from the Karish project. This compensation is treated as variable consideration under IFRS 15 Revenue Recognition and therefore, reduced from gas sales following commencement of production., see also Note 3.

NOTE 11: -   Inventory



31 March2023

(Unaudited)

$'000


31 December

2022

$'000

Hydrocarbon liquids


1,389


2,367

Natural gas


492


383

Raw materials and supplies


6,261


5,563

Total

8,142

8,313

NOTE 12: -   Borrowings and secured notes

a.     Issuance of US$2,500,000,000 senior secured notes:

On 24 March 2021 (the "Issue Date"), Energean Israel Finance Ltd (a 100% subsidiary of the Company) issued US$2,500,000,000 of senior secured notes. The proceeds were primarily used to repay in full the project finance facility

The Notes were issued in four equal tranches as follows:




31 March2023

(Unaudited)


31 December

2022

Series

Maturity

Annual fixed Interest rate

Carrying value $'000


Carrying value $'000

US$ 625 million

30 March 2024

4.500%

621,382


620,461

US$ 625 million

30 March 2026

4.875%

618,461


617,912

US$ 625 million

30 March 2028

5.375%

617,163


616,767

US$ 625 million

30 March 2031

5.875%

616,173


615,890

US$2,500 million



2,473,179

2,471,030



31 March2023

(Unaudited)

$'000


31 December

2022

$'000

    Senior secured notes - current


621,382


-

    Senior secured notes - non current


1,851,797


2,471,030

Total

2,473,179

2,471,030

The interest on each series of the Notes is paid semi-annually, on 30 March and on 30 September of each year starting 30 September 2021.

The Notes are listed on the TACT Institutional of the Tel Aviv Stock Exchange Ltd (the "TASE").

With regards to the indenture document, signed on 24 March 2021 with HSBC BANK USA, N.A (the "Trustee"), no indenture default or indenture event of default has occurred and is continuing.

Collateral:

The Company has provided/undertakes to provide the following collateral in favor of the Trustee:

a.       First rank fixed charges over the shares of Energean Israel Limited, Energean Israel

Finance Ltd and Energean Israel Transmission Ltd, the Karish & Tanin Leases, the gas sale and purchase agreements ("GSPAs"), several bank accounts, operating permits, insurance policies, the Company's exploration licences and the INGL Agreement.

b.      Floating charge over all of the present and future assets of Energean Israel Limited and Energean Israel Finance Ltd.

c.       The Energean Power FPSO.

Credit rating:

The senior secured notes have been assigned a Ba3 rating by Moody's and a BB- rating by S&P Global.

NOTE 13: -   Trade and other payables



31 March2023

(Unaudited)

$'000


31 December

2022

$'000

Current





Financial items





Trade accounts payable (1)


143,853


209,853

Payables to related parties


24,568


21,028

Deferred licence payments (2)


26,197


13,345

Other creditors


11,377


6,712

Current lease liabilities


2,567


1,792

208,562

252,730

Non-financial items





Accrued expenses (1)


35,913


29,404

Interest payable


-


32,227

Contract liability (4)


-


56,230

Social insurance and other taxes


1,394


502

Income taxes


-


6

37,307

118,369

 Total current trade and other payables

245,869

371,099

Non-current





financial items





Trade and other payables (3)


172,013


169,360

Deferred licence payments (2)


26,777


38,488

Long term lease liabilities


1,482


2,214



200,272

210,062

Non-financial items


Accrued expenses to related parties


189


179

189

179

Total non-current trade and other payables


200,461


210,241

(1)     Trade payables and accrued expenses relate primarily to development expenditure on the Karish project, with the main contributors being FPSO and subsea construction costs and for drilling activities performed offshore Israel. Trade payables are non-interest bearing.

(2)     In December 2016, the Company acquired the Karish and Tanin leases for US$40 million of upfront consideration plus contingent consideration of US$108.5 million (paid over 10 equal instalments) bearing interest at an annual rate of 4.6%. On 31 March 2023, the total discounted deferred consideration was US$53 million (31 December 2022: US$52million) including the March 2023 payment, which was subsequently paid in April 2023. 

(3)     This represents the amount payable to Technip in respect of the EPCIC contract. Under this contract, US$250 million becomes payable nine months following the practical completion date (as defined under that contract), and is payable in eight equal instalments, bearing no interest.  A discount rate of 5.831% has been applied.

(4)     The contract liability relates to the agreement with Israel Natural Gas Lines ("INGL") for the transfer of title (the "Hand Over") of the near shore and onshore segments of the infrastructure that delivers gas from the Energean Power FPSO into the Israeli national gas transmission grid. The Hand Over became effective in March 2023. Following the Hand Over, INGL is responsible for the operations and maintenance of this part of the infrastructure.

NOTE 14: - Financial Instruments

Fair Values:

Fair value is the amount for which the asset or liability could be exchanged in an arm's length transaction at the relevant date. Where available, fair values are determined using quoted prices in active markets. To the extent that market prices are not available, fair values are estimated by reference to market-based transactions or using standard valuation techniques involved. Values recorded are as at the balance sheet date and will not necessarily be realised. There were no transfers between fair value levels during the year.

The fair value hierarchy of financial assets and financial liabilities that are not measured at fair value (but fair value disclosure is required) is as follows:



Fair value hierarchy as at 31 March 2023



Level 1

$'000


Level 2

$'000



Total

$'000

Financial assets





Long term other accounts receivable


-


5,072


5,072

Short term restricted cash


8,462


-


8,462

Short term trade and other receivables


-


140,090


140,090

Cash and cash equivalents


32,081


-


32,081

Total


40,543


145,162


185,705

Financial liabilities





Senior secured notes (1)


2,298,750


-


2,298,750

Trade and other payables - long term


-


201,047


201,047

Trade and other payables - short term


-


207,788


207,788

Total

2,298,750


408,835


2,707,585



Fair value hierarchy as at 31 December 2022



Level 1

$'000


Level 2

$'000



Total

$'000

Financial assets





Short term restricted cash


71,778


-


71,778

Short term trade and other receivables


-


76,509


76,509

Cash and cash equivalents


24,825


-


24,825

Total


96,603


76,509


173,112

Financial liabilities





Senior secured notes (1)


2,298,125


-


2,298,125

Trade and other payables - long term


-


210,062


210,062

Trade and other payables - short term


-


252,730


252,730

Total

2,298,125


462,792


2,760,917

(1) The senior secured notes are measured at amortised cost in the Company's financial statements. The notes are listed for trading on the TACT Institutional of the Tel Aviv Stock Exchange Ltd (the "TASE"). The carrying amount as of 31 March 2023 was US$2,473 million and as of 31 December 2022 was US$2,471 million.

NOTE 15: -   Significant events and transaction during the reporting period

(a)  Gas Sales Agreements - Energean signed spot gas sale and purchase agreement with two Israeli gas buyers. The gas price will be determined in each period, with purchased amounts determined on a daily basis. The agreement will be valid for an initial one-year period with an option to extend subject to ratification by both parties.

(b)   INGL Hand-Over completion - The Hand Over became effective in March 2023. Following the Hand Over, INGL is responsible for the operations and maintenance of this part of the infrastructure.

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