Isramco Negev 2 reports that in 2021, revenues from the sale of gas and condensate, net of royalties, amounted to approximately $ 318 million, compared with approximately $ 343 million in the corresponding period last year.
According to the company, the decrease in revenues occurred mainly against the background of a decrease of about 11% in the average price of natural gas sold this year, and especially from a decrease in the price to the electricity company.
On the other hand, there was an increase of about 5% in the amount of natural gas sold in 2021, compared to the same period last year, which is mainly due to an increase in the amount of natural gas sold to the IEC and gas sales under the export agreement to Egypt.
The company notes that in 2021, a total of approximately $ 11 million was deducted from revenues, due to royalties from previous years.
The cost of producing natural gas and condensate sold in 2021 amounted to approximately $ 39 million, compared with approximately $ 28 million in the corresponding period last year. According to the company, the increase in production costs is mainly due to maintenance work in the amount of about $ 5 million, an increase in transmission costs for gas exports to Egypt in the amount of about $ 2 million and tax expenses for foreign workers’ wages of Chevron, in the amount of about $ 2 million. In the reporting period for previous years.
EBITDA (before the effect of the oil and gas profit levy) amounted to approximately $ 271 million in 2021, compared with approximately $ 306 million in the corresponding period last year. The company noted that the decrease in EBITDA is mainly due to a decrease in revenues from the sale of gas and condensate, less royalties of approximately $ 25 million, mainly due to a decrease in the average price of natural gas sold from the Tamar reservoir, as well as an increase in production costs of approximately $ 11 million.
For the first time, expenses for the oil and gas profit levy (Sheshinsky levy) in the amount of approximately $ 63 million were recorded in the reporting period, which were not recorded in the corresponding period last year.
Net financing expenses in 2021 amounted to approximately $ 29 million, compared with approximately $ 21 million in the corresponding period last year. The increase was mainly due to exchange rate differential expenses in the amount of approximately $ 4 million, compared with exchange rate differential income of approximately $ 3 million last year. The exchange rate differences were recorded due to the change in the exchange rate of the dollar against the shekel on the shekel balances of the partnership.
Profit before tax in 2021 amounted to approximately $ 133 million, compared with approximately $ 238 million in the corresponding period last year. The company explains that the decrease in profit is mainly due to the decrease in EBITDA and the expense expenses that were not recorded in the corresponding period last year, as stated.
The loss in 2021 amounted to about $ 45 million. The company notes that the loss is due to the registration of deferred tax expenses in the amount of approximately $ 178 million (accounting expense that is not cash flow) following a one-time event due to a change in the partnership’s tax regime, in such a way that the partnership is dissolved as of January 2022.
Cash flow from operating activities in 2021 amounted to approximately $ 175 million, compared with approximately $ 305 million in the corresponding period last year. The cash flow from operating activities in 2021 is after a one-time payment (including interest) in the amount of approximately $ 53 million in respect of an arbitral award in the royalty dispute with Isramco Inc., given in October 2021.
As of the end of 2021, the partnership’s capital amounted to approximately $ 379 million, compared with approximately $ 538 million last year. The decrease in capital, in the amount of approximately $ 159 million, according to the company is due to a loss in the reporting period in the amount of approximately $ 45 million, a profit distribution in the amount of approximately $ 40 million, balance payments and taxes charged for all partners in the partnership.
The partnership’s net financial debt at the end of 2021 amounted to approximately $ 456 million (excluding a liability for balance payments in the amount of approximately $ 37 million).
Regarding the results of the fourth quarter of 2021:
Revenues from the sale of gas and condensate in the quarter amounted to approximately $ 97 million, compared with a total of approximately $ 95 million in the corresponding quarter last year.
The cost of producing natural gas and condensate sold in the fourth quarter amounted to approximately $ 10 million, compared with approximately $ 8 million in the corresponding quarter last year.
EBITDA in the fourth quarter amounted to approximately $ 85 million, similar to the corresponding period.
Financing expenses in the quarter amounted to $ 9 million, compared to $ 5 million in the fourth quarter of 2020.
The partnership’s profits in the fourth quarter of 2021 amounted to approximately $ 47 million, compared with approximately $ 66 million in the corresponding quarter last year. The decrease in net profit is due, according to the company, mainly to the levy expenses of about $ 20 million (which were not recorded in the corresponding quarter last year).
Ron Maor, CEO of Isramco: “The year 2021 was characterized by an increase in the amount of gas sold, a trend that we expect to continue in 2022, among other things against the background of the amendments we are promoting in the agreements with IEC and Dalia. In the coming years. We continue to work to promote activity in the local market and to promote gas exports from the Tamar reservoir to regional markets. We have signed agreements that will allow the flow of additional natural gas to Egypt via Jordan, in order to meet the growing demand from Egypt and to meet the contractual amount that will increase in accordance with the agreement starting in mid-2022. Including its advancement and investment that will allow for an increase in daily production capacity. “