Analysts noted that the gas-focused exploration and production company is on the cusp of a major transformation, as the acquisition of Edison is due to complete in December and the organic Karish development in Israel is on course for start-up by the end of 2021.
As a result, production is forecast to zoom up to over 125,000 barrels of oil equivalent per day (boepd) from only 2,000 boepd.
Reserves in Israel have recently been upgraded to 511mln barrels of oil equivalent, up 82% from the previous estimate, with new gas sales agreements underpinning 7bn cubic metres per year of production.
These contracts have durations of up to 20 years with minimum pricing floors providing “impressive” cash-flow visibility, the Swiss bank highlighted, and aid Israel in its target of phasing out coal-fired power generation by 2030.
“We expect Energean to employ a percentage of free cash flow shareholder distribution policy of 20%, which would result in over 20% of the current market cap returned to shareholders by the end of 2025 while still reducing net debt levels,” analysts said.
Shares dipped 3% to 671p on Thursday afternoon.