Energean Israel’s 2025 numbers: profitable year, bigger projects, and a post‑year shutdown to watch
Energean Israel Limited has posted another profitable year while pushing ahead with growth projects in Israel. The wrinkle is a government-ordered shutdown of the Energean Power FPSO on 28 February 2026, after the year end. Management still signs off the accounts on a going concern basis, but the geopolitical backdrop remains elevated.
Here’s what stood out in the audited 2025 financials and why it matters for investors.
Headline figures investors care about
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | US$1,165.2 million | US$1,239.1 million |
| Operating profit | US$541.5 million | US$622.8 million |
| Net profit | US$279.4 million | US$346.7 million |
| Operating cash flow | US$682.1 million | US$889.0 million |
| Investing cash outflow | (US$566.5 million) | (US$436.8 million) |
| Year‑end cash | US$118.8 million | US$157.7 million |
| Borrowings (carrying value) | US$2,744.1 million | US$2,594.2 million |
| Dividends paid | US$129.1 million | US$394.0 million |
| 2P reserves (auditor-referenced) | 818 Mmboe | not disclosed |
| Gas sales volume | 5.6 bcm | 5.5 bcm |
| Liquids sales volume | 5,065 kbbl | 5,351 kbbl |
What drove 2025 performance
Gas steady, liquids softer
Revenue was US$1.17 billion, down 6.0% year on year. The mix tells the story:
- Gas sales were US$848.9 million on 5.6 bcm, up from 5.5 bcm in 2024.
- Hydrocarbon liquids sales were US$316.3 million on 5,065 kbbl, down from US$400.2 million on 5,351 kbbl in 2024.
Cost of sales was US$610.9 million and includes hefty non-cash depreciation of US$276.2 million and royalties of US$206.2 million. Administrative expenses rose to US$20.6 million, and there was a US$2.0 million exploration write‑off as Block 21 expired in January 2025.
Other income got a one‑off lift: US$9.5 million of insurance compensation linked to remedial work on auxiliary piping systems.
Financing costs remain chunky, but partly capitalised
Total finance costs were US$163.6 million, mainly interest on borrowings of US$184.3 million, offset by US$40.7 million capitalised to qualifying assets (IFRS allows this while you build long‑life assets). Net foreign exchange losses were US$18.7 million.
Bottom line: net profit of US$279.4 million and total comprehensive income of US$307.7 million, helped by US$36.8 million of cash‑flow hedge gains recognised in other comprehensive income.
Balance sheet, refinancing and hedging
Debt refinanced out to 2035
- In February 2025 the group signed a US$750 million senior secured term loan (part USD, part ILS) with bullet repayment in 2035. It drew the full amount.
- US$625 million notes due March 2026 were redeemed in full on 21 September 2025.
- Year‑end borrowings were US$2,744.1 million. Restricted cash of US$97.6 million was set aside for the March 2026 interest payment.
My read: pushing the near‑dated maturity wall out to 2035 is sensible, especially given the current production suspension. The trade‑off is higher interest expense.
FX hedges working as designed
To manage multi‑currency payments on the Katlan subsea contract, Energean entered forward FX contracts across EUR, GBP and NOK. These were effective and added US$36.8 million to OCI in 2025. A portion (US$10.8 million, pre‑tax) was “basis adjusted” into property, plant and equipment as assets were recognised – accounting speak for locking in the hedge into the asset cost.
Growth pipeline: Katlan, second oil train and Nitzana capacity
Katlan moves forward
- Final Investment Decision was taken in July 2024; first gas is planned for H1 2027.
- The subsea EPCI was awarded to TechnipFMC with capacity for a four‑slot tieback over ~30 km to the Energean Power FPSO.
Second oil train nearing start‑up
The second oil train lift was safely executed in Q4 2024 and is expected to start operation in Q2 2026, increasing liquids production capacity.
Nitzana transmission agreement signed
In October 2025, Energean agreed capacity with Israel Natural Gas Lines for up to 1 bcm per year (up to 6 bcm total) for 15 years, with rights to access capacity in the Jordan‑North pipeline during construction. The company’s 16.4% share of construction is expected to be ~US$100 million (plus up to 12% contingency). Around US$50 million was paid in Q4 2025. Because Energean is buying capacity access rather than the pipe itself, it’s recorded as an intangible asset to be amortised over 15 years from start‑up. Nitzana is expected to be operational no later than 36 months from end‑October 2025.
Contracts: more long‑term gas sales signed in 2025
- Kesem Energy GSPA (April 2025): about 1 bcm per year from the mid‑2030s, c.12.5 bcm over ~17 years, representing over US$2 billion in revenues. Includes floor pricing, take‑or‑pay and indexation (not Brent‑linked).
- Dalia Energy GSPA (November 2025): about 0.5 bcm per year from January 2030, then c.1.2 bcm per year from June 2035, excluding June‑September supply between 2030‑2034. Also represents over US$2 billion in contracted revenues with floor pricing, take‑or‑pay and indexation (not Brent‑linked).
These deals extend revenue visibility well into the 2030s and underpin future infrastructure investments.
Post‑period production suspension and going concern
On 28 February 2026, the Ministry of Energy and Infrastructure ordered a temporary suspension of production and all activities of the Energean Power FPSO after a geopolitical escalation. As at 18 March 2026 (approval date), production remained suspended.
Why this matters: Karish and Karish North – processed through the FPSO – represent all of the group’s revenue and operating cash generation. The board modelled:
- Base case: near‑term resumption, consistent with previous government‑ordered suspensions (June 2025 lasted 12 days), using a Brent assumption of US$65/bbl and contracted gas prices – adequate liquidity and covenant headroom.
- Reasonable worst case: a materially longer suspension. Management actions within Energean’s control include deferring dividends, trimming or deferring non‑committed capex, cutting discretionary opex and managing working capital. With these, liquidity is maintained over the assessment period to 30 June 2027.
- Reverse stress test: the conditions required to eliminate liquidity headroom are judged remote.
Directors therefore continue to adopt the going concern basis and state no material uncertainty. That’s reassuring, though the single‑asset exposure remains a key risk.
Dividends and shareholder returns
Dividends of US$129.1 million were paid in 2025. An interim dividend of US$39 million was declared and paid in January 2026. The board also flags that, if needed under a prolonged shutdown, dividends could be deferred as part of its mitigation toolkit.
Reserves, decommissioning and audit
- The external auditor highlighted reserve estimation as a key audit matter and referenced 2P reserves of 818 Mmboe at 31 December 2025.
- Decommissioning provision increased slightly to US$90.0 million (non‑current).
- The audit opinion is clean under IFRS as adopted by the EU.
My take: strengths vs watch‑outs
Positives
- Strong profitability and cash generation in 2025 despite lower liquids revenue.
- Refinancing pushed maturities out to 2035, reducing near‑term funding risk.
- Hedges are working, cushioning FX outflows on project spend.
- Clear growth path: Katlan (H1 2027 first gas), second oil train (Q2 2026), and Nitzana capacity rights.
- New long‑term GSPAs add multi‑year revenue visibility.
