Energean Israel 3Q 2023 Accounts

Source Company Press Release
Company Energean plc
Tags Corporate: Corporate Results, Country: Israel, Financial - Costs & Metrics: Capital Expenditures, Upstream: Drilling Activity, Upstream News
Date November 16, 2023

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

NINE MONTHS ENDED 30 SEPTEMBER 2023

        30 September  (Unaudited)   
    Notes     2023 $'000     2022 $'000   
Revenue      646,585     
Cost of sales      (313,374)     
Gross profit        333,211     
               
Administrative expenses      (13,182)    (7,218)   
Exploration and evaluation expenses      (50)    (1,277)   
Other expenses      (170)    (1,079)   
Other income        53   
Operating profit/(loss)        319,811    (9,521)   
               
Financial income      9,133    5,757   
Financial expenses      (120,379)    (4,931)   
Foreign exchange loss, net      (4,872)    1,405   
Profit/(loss) for the period before tax        203,693    (7,290)   
               
Taxation (expense)/income      (46,766)    2,663   
Net profit (loss) for the period        156,927    (4,627)   
               

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

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF 30 SEPTEMBER 2023

    Notes     30 September 2023 (Unaudited) $'000     31 December 2022 $'000  
ASSETS:             
NON-CURRENT ASSETS:             
Property, plant and equipment      2,869,484    2,926,313 
Intangible assets      160,410    143,554 
Other receivables    10    507    108 
Deferred tax asset        22,886 
        3,030,401    3,092,861 
CURRENT ASSETS:             
Trade and other receivables    10    121,412    82,611 
Inventories    11    11,856    8,313 
Restricted cash        24,500    71,778 
Cash and cash equivalents        239,076    24,825 
        396,844    187,527 
TOTAL ASSETS        3,427,245    3,280,388 
             
EQUITY AND LIABILITIES:             
EQUITY:             
Share capital        1,708    1,708 
Share premium        212,539    212,539 
Retained earnings (losses)        86,399    (70,528) 
TOTAL EQUITY        300,646    143,719 
NON-CURRENT LIABILITIES:             
     Senior secured notes    12    2,587,848    2,471,030 
Decommissioning provisions        73,602    84,299 
Deferred tax liability      22,028   
Trade and other payables    13    180,038    210,241 
        2,863,516    2,765,570 
CURRENT LIABILITIES:             
Trade and other payables    13    263,083    371,099 
        263,083    371,099 
TOTAL LIABILITIES        3,126,599    3,136,669 
TOTAL EQUITY AND LIABILITIES        3,427,245    3,280,388 
15 November  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

NINE MONTHS ENDED 30 SEPTEMBER 2023

    Share capital $'000    Share Premium $'000      Retained earnings (losses) $'000    Total equity $'000 
Balance as of 1 January 2023    1,708    212,539      (70,528)    143,719 
Profit for the period          156,927    156,927 
Balance as of 30 September 2023 (unaudited)    1,708    212,539      86,399    300,646 
                   
Balance as of 1 January 2022    1,708    572,539      (35,946)    538,301 
Transactions with shareholders                   
Share premium reduction (*)      (360,000)        (360,000) 
Comprehensive loss                   
Loss for the period          (4,627)    (4,627) 
Balance as of 30 September 2022 (unaudited)    1,708    212,539      (40,573)    173,674 

(*) In April 2022 the Company reduced its share premium capital by US$360 million and credited US$346 million against the shareholder loan account plus accrued interest.

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

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS PERIOD ENDED 30 SEPTEMBER 2023

        30 September (Unaudited) 
    Notes    2023 $'000    2022 $'000 
Operating activities             
Profit (Loss) for the period before tax        203,693    (7,290) 
Adjustments to reconcile loss before taxation to net cash provided by operating activities:             
Depreciation, depletion and amortisation      132,527    232 
Loss from sale on equipment      170    1,079 
Exploration and evaluation expenses        1,277 
Compensation to gas buyers,  payment made in advance      4,929   
Finance Income      (9,133)    (5,757) 
Finance expenses      120,379    4,932 
Net foreign exchange loss (gains)      4,872    (1,405) 
Cash flow from operations before working capital        457,437    (6,932) 
(Increase)/decrease in trade and other receivables        (56,590)    906 
Increase in inventories        (3,543)   
Decrease in trade and other payables        (20,930)    (665) 
Cash from operations        376,374    (6,691) 
Income taxes paid        (397)    (572) 
Net cash inflows from/(used in) operating activities        375,977 819    (7,263) 
Investing activities             
Payment for exploration and evaluation, and other intangible assets    8(B)    (92,634)    (18,823) 
Payment for purchase of property, plant and equipment    7(C)    (164,913)    (232,037) 
Proceeds from disposals of property, plant and equipment          188 
Amounts received from INGL related to transfer of property, plant and equipment    10    56,906    17,371 
Movement in restricted cash, net        47,278    127,945 
Interest received        9,921    2,863 
Net cash outflows used in investing activities        (143,440)    (102,493) 
Financing activities             
Senior secured notes - interest paid    12    (128,906)    (128,906) 
Senior secured notes issuance    12    750,000   
Senior secured notes repayment    12    (625,000)   
Other distribution        (4,386)   
Other finance cost paid        (335)    (2,359) 
Finance costs paid for deferred licence payments        (2,496)    (1,501) 
Transaction cost related to senior secured notes issuance    16    (3,690)   
Repayment of obligations under leases    13    (1,942)    (683) 
Net cash outflow used in financing activities        (16,755)    (133,449) 
             
Net increase/(decrease) in cash and cash equivalents        215,782    (243,205) 
Cash and cash equivalents at beginning of the period        24,825    349,827 
Effect of exchange differences on cash and cash equivalents        (1,531)    (2,656) 
Cash and cash equivalents at end of the period        239,076    103,966 

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 30 September 2023, the Company had investments in the following subsidiaries:

Name of subsidiary  Country of incorporation / registered office  Principal activities  Shareholding
At 30 September  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 30 September 2023 are comprised of:

Country  Asset  Field  Working interest  Field phase 
Israel  Karish  Karish Main  100%  Production 
Israel        Karish  Karish North  100%  Development 
Israel  Tanin  Tanin  100%  Development 
Israel  Block 12,  Katlan  100%  Appraisal 
Israel  Blocks 21, 23, 31  Hercules and Hermes  100%  Exploration 

NOTE 2: -     Accounting policies and basis of preparation

The interim financial information included in this report has been prepared in accordance with IAS 34 "Interim Financial Reporting" . The results for the interim period are unaudited and, in the opinion of management, include all adjustments necessary for a fair presentation of the results for the period ended 30 September 2023. All such adjustments are of a normal recurring nature. 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.

The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing the Group's annual consolidated financial statements for the year ended 31 December 2023 which are the same as those used in preparing the annual consolidated financial statements for the year ended 31 December 2022.

The directors consider it appropriate to adopt the going concern basis of accounting in preparing these interim financial statements.

NOTE 3: -     Revenues

        30 September (Unaudited) 
    2023 $'000    2022 $'000 
Revenue from gas sales (1)    484,238   
Revenue from hydrocarbon liquids sales (2)    167,275   
Compensation to customers (3)    (4,928)   
Total revenue    646,585   
                 

(1) Sales gas for nine months ended 30 September 2023 totaled approximately 3.1 bcm (the Company started production on 26 October 2022).

(2) Sales from hydrocarbon liquids for nine months ended 30 September 2023 totaled approximately 2.22 mmbbl (the Company did not sell hydrocarbon liquids during 2022).

(3) 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 deducted from revenue, as variable consideration, as the gas is delivered to the gas buyers, in accordance with IFRS 15 Revenue Recognition

NOTE 4: -     Operating profit (loss) before taxation

(a)   Cost of sales         
Staff costs    6,566   
Energy cost    2,869   
Royalty payable    117,266   
 Other operating costs    57,061   
Depreciation and amortisation (Note 7)    131,262   
Hydrocarbon liquids inventory movement (Note 11)    (1,650)   
Total cost of sales    313,374   
(b)   General & administration expenses      (c)   
Staff costs    2,544    1,115 
Share-based payment charge    517    128 
Depreciation and amortisation (Note 7, 8)    1,265    352 
Auditor fees    135    200 
Other general & administration expenses    8,721    5,423 
Total administrative expenses    13,182    7,218 
(c)    Exploration and evaluation expenses         
Other exploration and evaluation expenses    50    1,277 
Total exploration and evaluation expenses    50    1,277 
(d)   Other expenses         
Loss from disposal of inventory property, plant and equipment    170    1,079 
Total other expenses    170    1,079 
(e)   Other income      (f)   
Other income      53 
Total other income      53 
         
           

NOTE 5: -     Net finance income/(expenses)

Interest on senior secured notes (1)    119,322    102,505 
Interest expense on long terms payables (2)    2,485    8,716 
Less amounts included in the cost of qualifying assets (3)    (11,813)    (107,177) 
    109,994    4,044 
Finance and arrangement fees    1,757    3,681 
Other finance costs and bank charges    497    319 
Unwinding of discount on trade payable    5,407   
Unwinding of discount on provision for decommissioning    2,513    568 
Unwinding of discount on right of use asset (1)    391    238 
Less amounts included in the cost of qualifying assets (3)    (180)    (3,919) 
    10,385    887 
Total finance costs    120,379    4,931 
Interest income from time deposits    (9,133)    (2,543) 
Interest income from loans to related parties      (3,214) 
Total finance income    (9,133)    (5,757) 
Net foreign exchange (gains) losses    4,872    (1,405) 
Net finance expense (income)    116,118    (2,231) 

(1)    Refer also to Note 12.

(2)    Refer  also to Note 13.

(3)    Refer also to Note 7(A).

NOTE 6: -     Taxation

1.      Taxation charge:

           

NOTE 7: -     Property, Plant and Equipment  

a.          Composition:

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    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)    175,598    12,197    311    188,106 
Handover to INGL(2)    (111,448)        (111,448) 
Capitalised borrowing cost    11,993        11,993 
Change in decommissioning provision    (13,211)        (13,211) 
Total cost at 30 September 2023 (unaudited)    2,995,721    16,937    2,305    3,014,963 
                 
Depreciation:                 
At 1 January 2022    433    693    228    1,354 
Charge for the year    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 period    130,211    1,400    659    132,270 
Total Depreciation at 30 September 2023 (unaudited)    141,436   
2,859 
  1,184    145,479 
                 
At 31 December 2022    2,921,563    3,281    1,469    2,926,313 
At 30 September 2023 (unaudited)    2,854,285    14,078    1,121    2,869,484 

(1) The additions to oil & gas assets in nine month period 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) Handover to INGL took place on 22 March 2023, please refer to note 13

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

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

  30 September (Unaudited)   
  2023 $'000    2022 $'000   
Cost of sales  131,262     
Administration expenses  1,008    110   
Capitalised depreciation in oil & gas assets    357   
Total  132,270    467   
           

c.          Cash flow statement reconciliations:

  30 September (Unaudited) 
  2023    2022 
  $'000    $'000 
Additions to property, plant and equipment  188,106    392,377 
Less:       
Right-of-use asset additions  12,197    198 
Capitalised depreciation    656 
Capitalised share-based payment charge    174 
Add:       
Lease payments related to capital activities  1,942   
Capital expenditures  177,851    391,349 
Movement in working capital  (12,938)    (159,312) 
Payment for additions to property, plant and equipment as per the cash flow statement  164,913    232,037 
       
       
       
             


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)    17,113      17,113 
At 30 September 2023 (unaudited)    158,982    1,968    160,950 
Amortisation:             
At 1 January 2022      255    255 
Charge for the year      28    28 
Total Amortisation at 31 December 2022      283    283 
Charge for the period      257    257 
Total Amortisation at 30 September 2023 (unaudited)      540    540 
             
At 31 December 2022    141,869    1,685    143,554 
At 30 September 2023 (unaudited)    158,982    1,428    160,410 

(1) Additions to exploration and evaluation assets are primarily related 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:

      30 September (Unaudited) 
      2023    2022 
      $'000    $'000 
Additions to intangible assets      17,113    66,219 
Associated cash flows           
Movement in working capital      75,521    (47,396) 
Payment for additions to intangible assets      92,634    18,823 

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 interim condensed 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 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)        51,665    (4,822)    73    270      (8,171)    11,311 
At 1 January 2023    (40,344)    (754)      56,415    6,209    167    1,193        22,886 
Increase/(decrease) for the period through:                                     
Profit or loss    (16,269)    (2,393)      (28,382)    (472)    50    2,552        (44,914) 
At 30 September 2023    (56,613)    (3,147)      28,033    5,737    217    3,745        (22,028) 
    30 September 2023 (Unaudited) $'000    31 December 2022 $'000 
Deferred tax liabilities    (59,760)    (41,099) 
Deferred tax assets    37,732    63,985 
    (22,028)    22,886 

NOTE 10: -   Trade and other receivables

    30 September 2023 (Unaudited) $'000    31 December 2022 $'000 
  Current         
   Financial items    Trade receivables         
   Trade receivables    112,955    37,491 
Other receivables (1)    6,646    999 
Refundable VAT      37,131 
Accrued interest income    101    888 
    119,702    76,509 
    Non-financial items         
Prepayments    544    159 
Deferred expenses (2)      4,929 
Prepaid expenses and other receivable    1,166    1,014 
    1,710    6,102 
   Total current trade and other receivables    121,412    82,611 
  Non-current         
   Financial items           
Deposits and prepayments    507    108 
    507    108 
Total non-current trade and other receivables    507    108 

(1) The increase from 2022 is due to the recognition of a receivable from INGL, please refer to Note 13(4) for further details.

(2) Deferred expenses relate to compensation to gas buyers 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, please refer  also Note 3.

NOTE 11: -   Inventory

    30 September 2023 (Unaudited) $'000    31 December 2022 $'000 
Raw materials and supplies    7,379    5,563 
Hydrocarbon liquids    3,987    2,367 
Natural gas    490    383 
         
Total    11,856    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 million of senior secured notes. The proceeds were primarily used to repay in full the project finance facility.

On 11 July 2023, Energean Israel Finance Ltd. Ltd completed the offering of US$750 million aggregate principal amount of senior secured notes with a fixed annual interest rate of 8.500%. The interest on the Notes will be paid semi-annually, on March 30 and September 30 of each year, beginning on March 30, 2024. The Notes are listed for trading on the TASE-UP of the Tel Aviv Stock Exchange Ltd. (the "TASE"). The proceed from the Offering, was released from escrow in September 2023 and was used to a) refinance the $625 million notes due in 2024 (redemption date on 30 September 2023), b) pay fees and expenses associated with this refinancing, c) contribute towards funding the interest payment reserve account, and d) contribute towards the payment of the final deferred consideration to Kerogen.

The Notes were issued in five tranches as follows:

      30 September 2023 (Unaudited)     31 December 2022 
Series   Maturity   Annual fixed Interest rate  Carrying value $'000    Carrying value $'000 
US$ 625 million  30 March 2024  4.500%    620,461 
US$ 625 million  30 March 2026  4.875%  619,462    617,912 
US$ 625 million  30 March 2028  5.375%  617,852    616,767 
US$ 625 million  30 March 2031  5.875%  616,628    615,890 
US$ 750 million  30 September 2031  8.500%  733,906   
US$2,625 million      2,587,848    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.

The Notes are listed on the TASE-UP 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"), as amended and supplemented, 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

Current         
Financial items         
Trade accounts payable (1)    144,990    209,853 
Payables to related parties    14,103    21,028 
VAT payable    5,105   
Deferred licence payments due within one year (2)    12,852    13,345 
Other creditors    21,843    6,712 
Current lease liabilities    7,870    1,792 
    206,763    252,730 
Non-financial items         
Accrued expenses (1)    39,897    29,404 
Other finance costs accrued    14,147    32,227 
Contract liability (4)      56,230 
Social insurance and other taxes    759    502 
Income taxes    1,517   
    56,320    118,369 
 Total current trade and other payables    263,083    371,099 
Non-current           
financial items           
Trade and other payables (3)    144,092    169,360   
Deferred licence payments (2)    28,629    38,488   
Long term lease liabilities    6,786    2,214   
    179,507    210,062   
Non-financial items           
Accrued expenses to related parties    531    179   
    531    179   
Total non-current trade and other payables    180,038    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 30 September 2023, the total discounted deferred consideration was US$41 million (31 December 2022: US$52million).  Refer  to Note 16.

(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 (June 18, 2023), and is payable in eight equal quarterly instalments, bearing no interest.  A discount rate of 5.831% has been applied (being the yield rate of the senior secured loan notes, maturing in 2024, at the date of entering into the settlement agreement). The amounts payable to  Technip up to 30 September 2024 under this contract are presented as part of trade accounts payable - current.

(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 and the related asset (refer to Note 7) and contract liability was derecognised. The final $5million consideration is receivable within 12 months of handover and is recognised within other receivable (refer to Note 10).

NOTE 14: - Financial Instruments

Fair Values:

The fair values of the Group's non-current liabilities measured at amortised cost are considered to approximate their carrying amounts at the reporting date.

The carrying value less any estimated credit adjustments for financial assets and financial liabilities with a maturity of less than one year are assumed to approximate their fair values due to their short-term nature. The fair value of the Group's finance lease obligations is estimated using discounted cash flow analysis based on the Group's current incremental borrowing rates for similar types and maturities of borrowing and are consequently categorized in level 2 of the fair value hierarchy.

There were no transfers between fair value levels during the period.

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 30 September 2023 (unaudited) 
    Level 1 $'000    Level 2 $'000      Total $'000 
Financial assets               
Short term restricted cash    24,500        24,500 
Short term trade and other receivables      119,702      119,702 
Cash and cash equivalents    239,076        239,076 
Total    263,576    119,702      383,278 
Financial liabilities               
Senior secured notes (1)    2,439,500        2,439,500 
Trade and other payables - long term      179,507      179,507 
Trade and other payables - short term      206,763      206,763 
Total    2,439,500    386,270      2,825,770 
    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 Group'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 30 September 2023 was US$2,588 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 three 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.

(c)    Completion of offering of US$750,000,000 senior secured notes - see Note 12.

NOTE 16: -    Significant events and transaction after the reporting period

(a)  Interim dividend - An interim dividend of US$78 million was declared and paid on the 18 October, as part of the process to make the final deferred consideration to Kerogen.

(b)  Israel-Hamas conflict (Swords of Iron War) - as of 7 October 2023, following an unprecedented attack against Israel by Hamas, Israel has been declared in a state of war. While the situation has not impacted the Company's production from the FPSO, it is not possible to predict whether the conflict will have a material adverse effect on our future earnings, cash flows and financial conditions.

(c)    Karish and Tanin purchase agreement - In November 2023, Energean Israel reached a settlement with NewMed Energy for the remaining deferred consideration under the original purchase agreement of the Karish and Tanin leases of approximately $47.4 million, which includes the agreed annual interest. This will be paid in 2024 in two instalments. This agreement is final and unappealable.

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd