Good day, and thank you for standing by. Welcome to the Energean PLC full year 2022 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mathios Rigas. Please go ahead.
Good morning, everyone, and thank you for joining our results call today. I will start with a general comment. 2022 was a transformational year for Energean. A year where our vision became an operational reality. I remind everyone, five years ago, we were a Prinos only producer. Today, we are on track to get to our target of 200,000 bbl a day from the vital EastMed region, where our Israel project has commenced production in October. We have now completed commissioning. We have notified our buyers, or we started to notify our buyers, that all the contracts go into full take or pay mode. As we have said in the past, most of our gas is contracted with long-term contracts to very high-quality Israeli names.
We plan to deliver this year, anywhere between 4.5 and 5.5 BCM of gas into the Israeli gas market, securing the supply of gas to the region, securing the supply of gas to the Israeli market. Beyond our gas sales, we've commenced our liquid production. We sold already two cargos from our Israeli field, and our strategy to build and own an FPSO, the only FPSO in the region, is proving to be absolutely the correct one, because not only we are producing gas and liquids, but we are now starting to work on the additional gas resources. This is going to be the biggest next step for us, which is organic growth and the development of additional resources from the Olympus area. In 2022, we drilled five successful wells.
It is the largest drilling campaign that has ever happened, back-to-back in the EastMed, and we were the operator and 100% owner of those wells that proved more gas. This additional gas is needed everywhere. Israel needs more gas, Egypt needs more gas, Europe needs more gas. We are in the very fortunate position of being long gas in a region that needs gas. The development of those resources will be the next big growth step for us. We will not stop, obviously. We have grown from a small producer in Greece into one of the largest, if not the largest, independent E&P player in the EastMed, and we intend to continue this solid growth.
We have increased our reserves and resources by over 20% to 1.2 billion bbl of oil equivalent. This is the 15th consecutive year of growth. This is what Energean is all about, continuing to grow, continuing to deliver on our promises, and bringing gas in all countries of operation, like Israel, but of course, Egypt is the other country that we've been focusing on in 2022. We brought NEA/NI as we promised on stream. We are continuing to deliver the rest of the wells to ramp up production there as well. Italy, our country of operation, has had a solid year, helped obviously by the very high prices that we saw in Europe this year. In Greece, we are continuing with the progress of converting the Prinos field into a CCS project.
All that is underpinned by solid liquidity because we are extremely disciplined in our financial strategy. Panos will talk about that a bit later. We are sitting on over $1 billion of liquidity at the moment, making sure that all our projects are funded, and we are very well positioned for any eventuality. As we've seen the last couple of weeks, things can go wrong in financial markets and it is our obligation, it is our duty to be protected against any risk. Beyond that, all of our strategy and delivery of projects turns into delivery of value to our shareholders. We have three consecutive quarters of declared dividends totaling $0.90 per share, which represent an annualized yield of about 9%.
We will continue to increase our dividend stream as per our dividend policy that was announced last year. Last, but of course not least, our path to net zero for 2050 is on track. We said we were the first E&P company in the world to commit to a net zero strategy. We are continuing this effort. We are not going to say things that will not happen. It's gonna take time, but ESG is at the heart of Energean. Turning to page four of the presentation, which illustrates our near-term targets and where we want to be as a company. We are continuing to grow our production. As I said earlier, our target is to reach 200,000 bbl a day and exceed 200,000 bbl a day.
Turning this production into $2.5 billion of revenue at a cost of about $10 a barrel with an EBITDAX target of $1.7 billion a year, and very firmly focused on deleveraging and keeping our net debt to EBITDAX ratio to below 1.5. In summary, delivery was the key word in 2022. 2023 is gonna be focused on further growth. We're evaluating a number of options. We'll come back to those in a bit later. With this, I want to turn to Panos to take us through financial results. Thank you.
Thank you, Mathios, and good morning all. Following from our trading statement earlier in the year, our audited results confirm the record year in Egypt had on the back of excellent productivity and uptime from our legacy production assets. The record gas prices in Europe, and of course, the recovery of global oil prices. More specifically, we recorded more than $700 million of revenue, almost 50% higher than last year. Cash cost of production, including royalties and increased energy costs, around $19 per barrel. Our G&A stayed the same at around $35, even though the company grows every day. The adjusted EBITDAXs more than double, as well as the operating cash flow compared to 2021 at $422 million and $272 million respectively.
Our peak in all the years in the history of Energean capital expenditure of close to $900 million, and that includes, as Mathios's mentioned, the record number of offshore deep water wells in the East Med back-to-back that led to the Olympus discovery. Our net debt increased only 25% at around $2.5 billion, even though the very large capital commitments and all our sanction projects being at peak intensity. In terms of the 2023 guidance stays unchanged. We expect production to be around 130,000 bbl-160,000 bbl o f oil equivalent. Cash cost production of $600 million-$700 million. That results at well below $15 per BOE, and we're very confident we will hit well below $10 when we meet our medium-term targets.
As most of the sanction projects are coming into production, you will see a softening on the capital expenditure intensity. Already this year, we expect this to drop at around $600 million. Exploration expenditure much lower, only one well in Egypt, an offshore well we're dealing with CNI of around $50 million. Decommissioning will stay at around $30 million as per last year. Our consolidated net debt should stay at around $2.6 billion for the rest of the year, that we expect to be the peak net debt, we will see that even in absolute terms, dropping from next year onwards. Moving to page eight, following payment of $150 million, including the one that we will pay in March, of dividends, we reiterate our target to distribute at least $1 billion by end of 2025.
Again, the emphasis on the at least. I remind you, we paid dividends one quarter earlier than our targets. We expect to continue giving surprises to our shareholders, good surprises to our shareholders, I believe. Of course, continue with the progressive nature of our dividend stream. We expect to go at $100 million per quarter when we meet our near-term targets. As I have communicated before, we don't expect this to be from $50 straight to $100. We will gradually be doing that as we reach our production targets and as we see the majority of our projects going on stream later in the year. Post 2025, we expect to maintain that progressive dividend policy. How can we say that?
We can say that based on the commercial strategy we have chosen, that 75% of our production has long-term contracts with very firm floor prices. Of course, our very long reserve life that I've communicated before, it's around 1.2 billion, which if you do that on 200,000 bbl a day type of production, is way above 15 years type of reserve life. Moving to slide nine. It is clear, as expected, the deleveraging has commenced already. We expect to hit our target ratio of well below 1.5 x in the next 15-18 months.
Our absolute net debt, as I mentioned, will stay at around $2.6 billion-$2.8 billion for the rest of the year, as we expect that to be the peak number as we bring and as we finish our major sanction projects. We have a total liquidity in excess of $1 billion, including cash and undrawn lines at the group level, more than enough to fund our ongoing projects, and most importantly, choose the best time to tap the bond market if we choose to do so. On the right-hand side of the slide, you can see that the debt maturity profile versus the production profile of our Israeli assets.
As we communicated before, the structure of our gas contracts and reserve life allows us to further optimize our debt profile if we choose to do so, and we expect the first tranches of the bonds, the 24ths and the 26ths, to be either partially or fully refinanced. Based on the latest CPR that is up on our website as of this morning, post 2031, 55 of our Israeli reserves are still not produced and expected to be produced, so in the next decade. Out of those, more than 60% are already contracted. That you understand allows us and gives us great flexibility and optionality on how to best structure both our dividend, long-term dividend and debt maturity profile well into the next decade. Mathios, back to you with the.
Thank you, Panos. Let me take you now through the core countries of operation. I will start with slide 11, talk about Karish in a bit more detail. The reservoir has been performing exceptionally well. Two of the three wells are doing more than 270 million scf a day. These are world-class wells, and we are extremely pleased with the results that we're seeing from those wells. Production is ramping up in line with expectations, and commissioning, as I mentioned earlier, is complete. Under our GSPAs, we're now notifying our buyers, and Nick will walk you through our commercial update. We maintain our production guidance at between 4.5 and 5.5 BCM.
I remind everyone this is roughly, 45%-50% of what Israel consumes, and we are now playing a very important role in the stability of supply for the country. We saw that a couple of weeks ago when Tamar had a shutdown. We maintained the system going. Karish is becoming a core part of the stability of supply for Israel. Beyond that, we have two cargo liftings that have been offloaded from the FPSO, and this represents the first exports of liquid hydrocarbons for Israel. For us, this is extremely important because it's not just about the gas revenues, it's also a lot of liquids that we will continue to develop from our fields. I'll ask Nick to cover our commercial update, please.
Yeah. Thank you, Mathios. Yes, as Mathios said, we have and Panos has also alluded to in terms of our revenues. We have a very strong, risk-free profile of gas production. I know that last year, well, European prices were sky high, the focus was elsewhere. Certainly in a very volatile commodity market, we are seeing now as prices come down again, the benefit of that floor on our cash generating position. Also important there is the quality of our counterparties. All our counterparties in Israel are very strong, high quality credit worthy counterparties, which is not something you necessarily find in other parts of the world.
This is another good reason for our development in Israel being so important. The liquids production, as Mathios mentioned, is an added bonus for us. When we first went into Israel, we were very focused, as everyone knows, our story is gas. Through the development and appraisal of the field, we've discovered a significant liquid stream, which is now being produced from the FPSO through the first oil train. By the end of this year, we'll have a second oil train in place, which will enable us to increase that liquids production north of 30,000 bbl a day, which is a reasonably significant producer stream. As Mathios said, we've already offloaded two cargoes, which have gone into the European market.
You know, molecules from EastMed Energy are already reaching Northern Europe. They just happen to be, at the moment, the oil ones and not the gas ones. We look to build on that in the future, as Mathios has suggested, when we commercialize the rest of our discovered reserves. We're looking to access those European markets with our gas molecules, from the Olympus development primarily, through a number of possible routes which we're currently evaluating.
All of this was about the existing business and the existing production. As I mentioned earlier, Energean is also about growth. Turning to page 13 and moving outside of Israel, we have three key projects that we're working on at the moment. NEA/NI in Egypt, we have achieved first gas, as we promised, this was the first milestone for the year, and we are continuing to bring wells on stream. We have about 40 million bbl of gas reserves from NEA/NI, and the next well will come on stream sometime in the beginning of the summer. Karish, we are continuing the growth.
We are adding a second oil train and another riser, and we're already evaluating the potential of increasing further the capacity of the FPSO beyond the original 8 BCM in our evaluation of options for Olympus and the other resources that we believe we will find in the region. Cassiopea in Italy is progressing well, Eni operated, expected to come on stream first half of 2024. With those projects and with the existing production, we expect to reach our 200,000 bbl a day production target. Turning to page 14, just to show in a slide what I said before, we added more than 200 million bbl of oil equivalent from Olympus to our 2P reserves. Beyond that, we have prospective resources which are not reported here that we're working on.
We are now evaluating all the exploration blocks in Israel, the bid rounds that are coming up, because we believe there's gonna be a lot more resource that will be discovered in the country and in the wider region. We have a well coming up in Egypt, an exploration well near North East Hap'y offshore together with Eni. It's a very prospective well that we believe could add significant resource also to us as well. Turning to page 15, picking up on what Nick said, we are evaluating all options at the moment for Olympus. Everything from the base case scenario, which is to just get this gas into the FPSO and extend the plateau with zero CapEx effective or very low CapEx, to tie back those well to the FPSO and extend our plateau.
This is the base case scenario based on which we got 2P reserves from our auditors, but also evaluating options to get this gas to Egypt, liquefy it, or use it in the Egyptian market, or through a pipeline to Cyprus and from Cyprus on to Europe. We have said that we will announce or give more details on our thoughts towards the middle of the year. We are looking at all options. Once gas is liquefied, it will go to the highest bidder, obviously. Europe needs this gas. All the countries of operation, Greece, Italy, Egypt, Israel need gas at the moment, so we are very fortunate to have this additional gas resource in our hands.
In Egypt, turning to page 16, our main field, Abu Qir, we amended the gas price, lifted it to a higher level that allows us to invest more in the country. NEA/NI, we achieved first gas, and we have three more wells to bring on stream towards the end of the year. Orion is the name of the well that we're gonna drill together with Eni. In the rest of the portfolio in page on page 17, again, a solid production growth coming from Italy, primarily from Cassiopea. Italy is a country that is now starting to seriously think about reopening the country to hydrocarbon developments because everybody's realizing that they will burn the hydrocarbons, so it's better to produce them than to just import them.
We believe our strategy to be focused in the East Med and countries that need oil and gas is absolutely the right one. We will remain focused both on our geographic area and our financial discipline. Last but not least, on page 18, comments on ESG, which are not the priority these days. Everybody's talking about security of supply and affordability of energy. ESG has been and will continue to be at the heart of our operations. Our carbon intensity has continued to reduce, and we reduced by 13% our emissions intensity in 2022 versus 2021, and this represents a 76% year-on-year reduction in absolute scope two emissions.
We are rated by a number of outside entities, we've achieved top marks, A- from on our CDP rating and others that you can see on page 18. We will continue to reduce emissions. We will continue to remove carbon from the system through the CCS project that we're working on in Greece. Ultimately, we will reach the point where we'll need to neutralize and invest in carbon neutral solutions. We target to reach 7kg-8kg of CO2 per barrel of oil equivalent and be significantly below the sector average. That allows us to operate and achieve all our milestones, I will close today's presentation with the key upcoming catalysts that are coming up for us.
The first one is the capacity increase of the FPSO, to add the second oil train and increase to 8 BCM. As I mentioned earlier, we're evaluating a further increase to bring more gas to the system. We will announce towards the middle of the year our preferred development concept for the Olympus area, and continue to bring wells on stream in Egypt and increase our production outside of Israel as well. The Orion well will spud, or we expect Eni to spud the well later in the year. On the financial strategy, we will continue, as Panos said, to pay our quarterly dividends in line with our policy.
Keeping firmly our eyes on our target of 200,000 bbl a day of production, $2.5 billion of revenue, and $1.7 billions of EBITDA. Extremely focused on bringing value to our shareholders and maintaining our robust capital structure with the refinance of our 2024 bond maturities, which is what Panos and the finance team are working on. Last but not least, continuing our ESG strategy to be the leaders in our sector, which gives us the license to operate in every country of operation. All in all, 2022, a year of delivery for Energean. 2023, a year of continuous growth and achievement of our targets on track to be the leading producer of gas in the East Med. With that, I conclude the presentation.
Thank you very much for your attention and open the floor to any questions.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced.
To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A queue. We will now take the first question. It comes from the line of David Round from Stifel. Please go ahead. Your line is open.
Great. Thanks. Morning, guys. Firstly, well done with Karish. That was great to see this morning. I've just got a couple of questions, please. The first on the additional reserves at Athena, obviously that is part of the Olympus project, so we will wait and see what happens. Just so I understand the possible, does this now give you the flexibility to secure additional fixed contracts in the near term? Could you take production up to 8 BCM? Is that something you would want to do or are you comfortable with the spot market as it is? The second one, just on Olympus, and again, I appreciate you will come back... Sorry, did you... I'll just finish the second question.
Just on Olympus, okay, you're gonna come back to it, but I just wanted to get your view on the recent announcement from Edison this week about the EastMed pipeline. You know, you've clearly said you're looking at all options still, but I wonder how significant an announcement that was in your opinion.
I'll let Nick comment on the commercial strategy. I'll start with your second answer or second question. Edison announced that they're planning to take FID on the famous EastMed pipeline. My comment on that is, if they build it, we will use it. We do not intend to embark into multi-billion dollar investments in infrastructure. We have gone through that phase for the development of Karish. There is discussions from Chevron about an FLNG terminal in Israel, discussions about the pipeline from Edison and their partners. We have many options, and that's great to have many options. There is capacity in the LNG terminals in Egypt. There is a lot of discussions going on with Cyprus. Cyprus is still burning fuel oil for power generation.
This is a country that still has not moved to gas. The country needs gas. Israel needs more gas. Egypt needs more gas. We don't necessarily need to build multi-billion dollar projects ourselves. Of course, we don't need to be 100% in all future projects. As I said earlier, the base case scenario, which is the lowest CapEx, and that gives us a huge impact, has a huge impact on our NPV because Athena and Block 12, I remind everyone, does not have royalties that will be paid to Delek under our original agreements. Can very easily be used to replace production from Tanin. We will maximize return by optimizing the sequence of the developments.
Whether we want to go beyond the 8 BCM will depend on the prices that we see from the various markets. Nick, you wanna make a comment?
Yeah, I think the point that was made was that Karish made there, it's about the margin. There is still continued growth in the Israeli gas market. I think next year we're anticipating seeing about 15 BCM. This year it's about 13.5, which will be about half of that. What we're focusing now, particularly with the next development around Olympus and around the additional reserves that we've booked is those margins. We're looking for markets that will give us the best margins. If that happens to be Israel because of lower capital investment, then obviously we will look at that. In the interim, as you said, we have a spot market starting to function quite well in Israel.
While we've been commissioning, we have been able to sell significant amounts of gas under spot agreements, even with buyers who are not our long-term buyers, but also with our long-term buyers under more flexible arrangements during commissioning. The spot market is working. It's not liquid. It's not something you'll see very soon to see any futures published against, so that you could manage risk in that way. It's an effective market and it's providing good prices. We are now in the next phase of our growth. We don't need to raise any additional project capital. We're quite happy to not sit and wait, but we're quite happy to look at and take our time to secure the best markets, the best margins.
Does that answer your question?
Okay, great. That's very clear. Yeah, it does. Thank you very much.
Thank you. We will now take the next question. It comes from the line of Werner Riding from Peel Hunt. Please go ahead. Your line is open.
Yeah, good morning, everybody. I was wondering if you could tell us what current group production levels are and what, if any, are the risks to ongoing Karish ramp up as you move towards guidance levels of production? The first question.
Well, currently we are producing from Israel, around 450 million-500 million scf a day. You know, obviously I will not be reporting daily production numbers. We're giving you what the group will be producing on average. The rest of the portfolio is very stable. Italy is producing around about 10,000 bbl of oil per day equivalent. Egypt is around 40,000 bbl a day mark, including the NEA/NI production. All in all, we've guided production for the year of 130,000 bbl-150,000 bbl a day, and 58. We maintain this production guidance for the year.
As I said, Werner, I don't want to get into a daily production report, since we are looking at the overall picture of the company. Israel is producing about 10,000 bbl of liquids as well. All in all, I think the message is we are maintaining our production guidance of 130,000 bbl-158,000 bbl for a year. If you do the math, it's around about 50 million bbl of oil equivalent from all our assets. The risks of the ramp up, I think to a large extent are behind us. We have all wells on stream. They're all producing. Of course, we are continuing to optimize production of the FPSO. It's a new facility.
We are learning it, and we are maximizing the uptime. I think from now on, our target's gonna be to get the uptime of the FPSO to the maximum level to ensure that we don't need to, or to minimize maintenance downtime. The only times that we will need to be shutting down, planned shutdown of production is for construction work, when we do heavy lifts for the additional risers, the oil train. There's one happening in the next couple of days, planned for two days to lift the heavy modules that we need to bring on stream for the next projects. This is all planned and timed and built into our modules.
Great. Thank you. That's really useful. Second question, just with production ramping up and cash generation increasing helping your liquidity, just wondering what the requirement is for the new $350 million term loan in addition to your undrawn RCF. Is it perhaps going to be earmarked for Olympus? Is that the thinking?
No, it's not for that. It's an extra liquidity line, as Mathios mentioned before, and I think I mentioned it as well. It is a volatile year in the financial markets for sure, and we have seen the DCM markets as well suffering a lot in the last 15 months. I would say it's only an extra liquidity buffer. There is absolutely, I want to emphasize, and that applies even to the existing RCF that we have, and we have undrawn completely. All the lines at group level are not earmarked for anything. It's an extra liquidity line. We still in full sanctioning projects, capital intensity mode. Most of it is behind us, but we're still having a CapEx being spent and projects coming on stream. At the same time, we do have a turbulence in the financial markets.
For us, continuing being a little bit prudent, sometimes a little bit over conservative when it comes to our capital structure, so far it has worked in our favor. It is just emphasizing and delivering on that. There's no specific use of those funds. Just liquidity lines available for us for a rainy day that hopefully we will never need to draw upon.
Okay. Got it. Thank you so much.
Thank you. We will now take the next question. It comes from the line of Matt Smith from Bank of America. Please go ahead. Your line is open.
Morning. Thanks very much. A couple of questions, perhaps from me. I'll just go with the first one to begin. Just wondering if we could touch on the pricing for gas in Israel, perhaps, and I suppose as it relates to the stock market that you've been sort of selling quite significant volumes into so far. I also wondered if we could touch upon the contracted pricing as well. Appreciate that's largely fixed, but with some inflation linkage or electricity tariff linkage. I think it last reported that was at $4.3 per MMBtu. I wonder if there's any update there or if that number's still in play.
Okay. Just to comment first then on the spot market. The spot prices from other suppliers are in excess of our weighted average sales price, which we tend to talk about. It's currently about $4.3 per MMBtu. Our spot sales were pitched somewhat lower than this because as you will appreciate, we were selling on effectively an interruptible basis while we're commissioning, so we have no shortfall. In order to attract buyers to take the gas that we needed to commission, we were offering what I promise you is the last of the sales and bargains.
The spot prices in Israel are largely driven by, if you like, the alternative market, which is currently the exports to Egypt, which I believe is currently priced on a between $5 and $6, depending on oil price on a net back basis.
As I said, our current long-term contracts are secured against primarily the cost of generation of IEC, which is if you like a legacy pricing mechanism in the Israeli market, which was the one that we established our core business on. Those come and go with the prices that IEC pay, which is a little bit circular related to the gas that they buy, the independent generators primarily consuming our gas, and the coal and LNG imports that IEC keep for standby. Over the last year with the significant coal imports, you'll have seen in the markets, quite a lot of discussion about the effect of that on that pricing formula. Global coal prices are still high.
I recall being told, I think only yesterday that last year was the largest ever burn of coal for power generation globally. Despite the carbon pressures, you know, coal is still in demand, and this basically feeds into the whole price index.
Sure.
Okay.
Thanks very much. If you want to put the second question perhaps around Olympus and the possibility of expanding the Karish FPSO capacity. I think that's mention of a third gas processing train in the release today. Appreciate it might be slightly a, it depends answer. Could you give us some sort of scope in terms of how much of an expansion that could be? Is that, you know, an extra 1 BCM, or is it, you know, possibly an extra 5 BCM or somewhere in between? Some color there would be interesting to hear. Thanks.
Well, when we started this FPSO, I remind everyone, 2018, we were talking about a project that was sanctioned the back of 3 BCM. Very quickly, we saw that there was a lot more demand, and we increased the capacity, and we sanctioned the project to take it to 8 BCM with a second train. We had designed the FPSO to have a lot more real estate. That's why we built a much bigger floating vessel than we needed. What we are evaluating at the moment is the possibility of another train that could take the capacity up to 12 BCM. It is not a small project because obviously doing work whilst you're producing is not easy, and it will require shutdowns that have to be taken into consideration.
There is potential to add another train. I'm not going to say today that that's our preferred option, just to be clear, because there are other options as well that we're evaluating. Again, I repeat what I said before. Base plan is to just continue producing the 8 BCM for a longer period of time. We NPV that, and once we've assured we've seen what the NPV of that is, any other option has to be accretive and bring incremental value to us. Whether that is increasing the capacity of the FPSO or using somebody else's capacity or another development option, I can't tell you today. As we said, we will talk about this later in the year.
We have the real estate, and I think we know that machine now pretty well, and we can assess very easily what the best option is. Sorry for not being very specific, it's too early and, you know, we're still doing the work.
Thank you very much. Appreciate it.
Thank you. We will now take the next question. It comes from the line of Mark Wilson from Jefferies. Please go ahead. Your line is open.
Okay. Thank you very much. Good morning. Excellent commentary on Karish and well done for getting to this stage. Fantastic achievement. My question, however, is on the exploration at North East Hap'y License with the Orion well. Could you give us some details on the pre-drill prospect sizes there and also the type of targets? Are they Zohr-like in terms of the geology you're looking to drill on? The second part of that question is, could you remind us of the license partners and indeed the farm out you're looking to do? Are you able to disclose who that's to, or do we just have to wait for that? Thank you.
Mark, I'm sorry. I will disappoint you with my answers. I cannot disclose, 'cause it's the operator that's driving this, so I think you need to get commentary from Eni on this. On the prospects, we are not the type of company that builds up expectations on the back of huge prospects. It is a big well. Eni, in my view, is a fantastic, if not the best explorer in the region. They know Egypt. They have discovered Zohr and developed Zohr very quickly, and we're very confident that they are the best to lead this exploration effort for us. We have never given huge prospects and talked up resources, and I'm not gonna do this right now either. We prefer to focus on tangible results, plans that we control.
When this well is drilled and if we have the value that Eni believes is gonna be delivered, then, you know, we will celebrate. Let's wait for the well to be drilled first. We know very well that exploration carries risk. We're trying to minimize the risk through this farm-out process. We are very disciplined in terms of our exploration spend. We have a very interesting exploration portfolio that is beyond the Egyptian asset. We have a block in Greece. Onshore, we have a block in Greece offshore. We're trying to convince the Italians to open the country for more exploration. We will not go crazy on exploration. That's not our strength. Our strength is to identify and create value from developed resources.
That's what we've done from the Greek asset, from the Italian assets, from the Israeli assets. Don't expect that I will be giving you huge expectations. When it's discovered, we will celebrate all together the numbers. If it is Zohr type, of course it will be significant for the region. Eni, I'm totally confident, is the best operator for this well for us.
Okay. Thank you, Mathios. The second question is, I think you may have answered it there. In terms of further drilling in Israel and, like, what it would take to bring a drilling rig back in there. Five wells last year, as you say, the largest program back to back. It doesn't sound like you would require further appraisal of the Olympus area to build a development plan around. Let's just check that. Therefore maybe further drilling in the Hermes and Hercules areas would follow on from a development decision in Olympus. Would that be the correct way to look at it?
Absolutely correct way to look at it. We do not need additional wells for Olympus. We have drilled enough to get even 2P reserves from our auditors, so we don't need to drill more to appraise Olympus. The other blocks need further drilling. When we bring a drilling rig to do the further development wells that will be required based on the development plan of Olympus, we may add exploration wells to the sequence. It's not gonna be in 2023. Probably not in 2024 either. If there is a further drilling campaign, that will come in 2025.
Okay. Thank you. I'll hand it over.
Thank you. There are no more further questions at this time. Please continue.
If there are no further questions, let me thank everybody for participating today. Just closing with the key word for us today, which is delivery in 2022, growth for 2023 and beyond. This is what an Energean is all about. We're continuing to deliver on our promises and continuing our focus and efforts to be the leading gas-focused independent E&P in the East Med. Thank you all, and look forward to seeing you live in the near future. Thank you.
That does conclude the conference for today. Thank you for participating. You may all disconnect.