Good morning, everyone, and thank you for joining our call today. We're very happy to be reporting results from the first half of 2023, that brings Energean to be a major producer of gas and oil in the East Mediterranean. The first half that brought us to 106,000 bbl of oil a day, nearly three times our production of the first half of 2022. And I remind everyone that a few years ago, we were just a producing company from Prinos, grew to that, to the Italian and other assets we have in the portfolio. And today, we are firmly on track and are steadily producing more than 6 billion cbm a year, primarily in Israel, of course, from our FPSO, and a field that is performing exceptionally well.
We did have some startup issues, and I think that is only to be expected, like every major project like this, like every major FPSO, but these have been substantially overcome. We did give new guidance with our production results today, and we believe we will be around 125,000 bbl a day equivalent mark towards the end of the year. We did address all the issues of the startup and the FPSO. I can get into details if people want, and we can arrange deep dive sessions, but I want everybody to be reassured that Energean today is meeting all its nominations. It is producing, as I said, exceptionally well from the wells, and the FPSO is working as it should. Now, we're not stopping. Obviously, we are continuing.
We are continuing with our efforts to increase our capacity to 8 bcm a year, which is the project that will come on stream by the end of 2023, to reach the maximum capacity of our FPSO and our project, and reach the 32,000 bbl of liquids capacity that our FPSO can do, to get closer to our target, which is firm at 200,000 bbl of oil equivalent a day, in the very near term. Moving into Egypt. Last time we spoke, we had results of our NEA #6 well, which were not as expected, and at the time, those were you that participated in the call, I said that there should not be any read across to the other wells of the NEA/NI project.
Since then, we drilled two wells, tested both of them, and they are in line with our expectations, testing at about 25 million scf/d. We are spudding our last well tomorrow, actually, to complete the project by the end of this year. So Egypt, back on track. Cassiopea, the other major project that we're working on, the biggest gas development in Italy. Again, reiterating and reconfirming that the plan is to bring the field on stream by 2024 with our partner, Eni. The big next step in Israel, the Olympus development or Katlan, as it has been named by the government of Israel. We have selected the development plan.
As we have announced, we are going with a subsea tie-back to the FPSO, utilizing the infrastructure and building on the strategy of having a central processing and production hub, our FPSO, and tying back satellite fields. Our selection of the FPSO has been absolutely correct, and that allows us to bring, at a low cost in this very high-cost environment, the Katlan development over the next years. Our FDP has been submitted to the Minister of Energy, and the contract has been awarded to Technip, who is working to complete the work so that we can take FID by the end of the year. All that, of course, converts into a very strong financial performance, with revenues reaching $588 million, 73% increase year-on-year.
EBITDAX, 74% increase year-on-year, and a liquidity of close to $900 million, giving us a very solid, balance sheet to continue our growth efforts. Today, we announced, another quarter of dividends in line with our policy, which is to continue to return to our shareholders, to continue to have a strong balance sheet and to continue the growth of Energean. With that as an introduction, I would like to hand over to Panos to walk us through the financial results.
Thank you, Mathios. Good morning to everyone. As mentioned, as expected, the first half of 2023 has been a pivotal period for Energean, when after five years of development CapEx, including two years of pandemic, I remind everyone, the company is now a much more balanced E&P company, with production rates well above 105,000 bbl a day and growing. Three key developments expected to be completed in the next nine to 12 months, and of course, a continued focus on both organic and inorganic growth opportunities in the region. As a result, all metrics compared to the same period of last year have improved. Production is the most impressive one, which is threefold, the one recorded last year. Costs, despite the huge inflationary pressures in our sector, have remained well under control.
In, if anything, you will see in the guidance we are reducing the numbers we expect to spend this year. The EBITDAX is $350 million, 75% more than the same period last year. Of course, we're not surprised to see that the CapEx, CapEx intensity is softening, since most of the development CapEx is now behind us. The debt metrics are within, and they will stay within guidance and expectations. Of course, as Israel is now into production, the deleveraging is gonna be fast and, as expected in the next 12-18 months. Moving to slide six, again, a slide that I don't think will surprise anyone. We continue our focus to optimum capital allocation.
We use our net operating cash flow to pay and serve all our maintenance CapEx, which includes asset integrity and OpEx obligations. Of course, our interest and coupon costs, and then to meet our target dividend policy, which we have met, and we continue communicating to all. We have already delivered with a dividend payment of September, almost $266 million to shareholders, in line with what we communicated almost a year back. Of course, our focus on growth opportunities that the technical team continues bringing, near field developments like the Katlan development that Mathios will go through in the following slides.
Of course, we are on track to keep the leverage down to the levels we have communicated as our long-term sustainable level at 1.5, and we expect this to happen as we meet, of course, our near-term production targets, which are 200,000 bbl a day towards the second half of next year. Moving to page seven, another key milestone that was met this year already was the refinancing of the bonds maturing, the first tranche of the bonds maturing in Israel in 2024. Despite extremely challenging debt capital markets, we managed to print a 10-year note maturing in 2023.
Of course, the pricing was above 8%, which is not something we like, but compared to where the market is and compared where the base rates are, we're extremely happy, and that represents a tightening of the credit spreads of our story in Israel. Of course, the continuous trust and confidence of the debt capital markets to our story and our project in Israel. As a result, our debt profile has a weighted average maturity of over six years at a fixed now cost of 6%. That allows us plenty of time to complete with our already sanctioned and underway developments, which include, of course, the tieback of Karish North, Cassiopea, and the completeness of the drilling in Egypt.
As well as reassure and reconfirm our dividend policy as communicated in 2022. The last chart that you see here, the deleveraging now is evident, starting from 2021, that it was the peak, dropping to 6 end of 2022. Mid-year, we're just below 4, and we expect this trend to continue. Each six months, you will see this trend continuing, and we're very confident we will be reaching the previously communicated levels of 1.5%. Last slide from me, page 8 in the presentation. We're narrowing the production guidance, as Mathios mentioned, to 120-130. Most of the other metrics, except from the OpEx, is unchanged.
Again, in Israel, we see that the team and the asset managers have done a fantastic job to keep costs under control, despite the start-up period. All the other CapEx commitments and targets for this year, we're not prepared to change at the moment. If I were to provide some kind of guidance here, I would expect all the CapEx numbers to end up towards the lower end of the guidance, with exploration, the commissioning expenditure, the most likely scenario being that we will be undershooting those figures. So costs well under control, expenditure well under control, net debt, it will stay between $2.7-$2.9, and this is a range that we expect to stay until first half of next year, and then the absolute net debt as well will be dropping.
As I said before, the deleveraging with the profitability of our assets now will be very natural and very reliable in the next few months and quarters. Mathios, back to you.
Thank you, Panos. Let me take you to page 10. Hello?
Mathios, we can't hear you.
Just one moment, please. Your conference will resume shortly. Mathios, you're back online.
Yeah, apologies for this. So, taking you to page 10, I think this slide shows the complete picture of what is happening in Israel. As we are growing our production, as we are becoming more reliable, and I just want to give everybody a statistic. July and August, our uptime was 97% at the FPSO. So as I said in the beginning of my introduction, the FPSO is working exceptionally well at the moment, and the market is growing confidence in us. We have reached now the levels of 6 bcm a year, with nominations being around that level, so we're meeting all the nominations from our buyers and looking to continue to grow this to get to the 8 bcm level that our target's gonna be for the years to come.
On the next page, I would like to bring Nick, our commercial director, into the picture to talk about how the market has behaved, what have we sold, and what we're planning to do over the next years.
Thank you, Mathios. Good morning, everyone. Yes, as Mathios said, on the previous slide, we have had a steady ramp up since the end of commissioning or through commissioning from First Gas. We have, to aid this process, signed four spot contracts to add to the one we signed with IEC last year, to ensure that we had access to sufficient of the market to get the flow rates through to commission the FPSO. We have continued with those contracts. We received nominations periodically under those spot contracts, as well as our firm contracts. Demand is very strong at the moment in Israel, particularly in the summer months, with the hot weather creating a large air conditioning load, which obviously is generated by power.
Also our industrial customers, who are just over a quarter of our load, are also consuming at very high levels. So the picture on the demand side is very good. And we expect to sign in the next few weeks another two fairly small but long-term contracts with new customers, which I think is a sign of the market's confidence in us, and their liking for our product, which is, you know, flexible and, should we say, keenly priced gas. On the oil side, as Mathios said, we have become, we've brought Israel into the oil exporters club. We lifted early this year the first cargo of oil to be exported from Israel.
We've now lifted and sold four cargoes with a 5th due this weekend. We have an arrangement with Vitol to assist us in marketing and exposing our oil to the markets, the international markets. We can see that our price differential to other market grades has narrowed with every cargo. We're looking to optimize, obviously, both destination and freight costs to receive the best net back for that. In the longer term, we've talked about the Katlan development. On the bottom of that page, you can see, looking only at the 2P, the existing 2P certified reserves, not the P50, which is about another 35 bcm.
That gas will extend, in the base case, our plateau, for some years, and aid with that, that cash flow, and continued dividend payments. We'll also be looking, of course, to push up towards the 8 bcm as well. So some of that gas may well come forward, with success in that area. Those of you keeping an eye on things in Israel, and especially those who can read Hebrew, will perhaps have noted a decision by the Natural Gas Authority, in Israel, to allocate capacity in the new export line being built between Nitzana and Egypt. And that confirms that Energean will have access to up to 2 bcm of capacity in that pipeline. So our ability to export that gas over the medium term is crystallizing.
Thank you very much.
Thank you, Nick.
Mathios.
Yeah, thank you, Nick. Let me now take you back to the future. Future meaning the growth projects, because we're not just about what we're producing and what we've contracted, it's about how we continue the growth and this journey. All four projects in Israel, Karish North, the second gas export riser and the second oil train, are on track to be delivered and to start production by the end of this year, to bring us to the maximum capacity, as I mentioned earlier. The fourth project, as I also mentioned earlier, Katlan, that is in the phase of studies.
We're completing the FEED with Technip, and we will do a subsea tie-back to our FPSO to increase our reliability, to have more wells on stream, and to be able also, I remind everyone, to sell gas from a block that does not have royalties. So 7.5% of the revenue line, better numbers for us, and has export capacity. Not, I wouldn't call it a permit, but ability to export to allow us, as Nick said, to use export pipelines that will be built by others to export gas to either Jordan or Egypt. And of course, we are continuing our discussions to bring gas to Cyprus and beyond, assuming that infrastructure is put in place. On Egypt, as I said earlier, on page 13, NEA #6 was brought online in March.
No read across to the other two wells. NEA #5 reached first production in July, 25 million scf/d, steady production, increasing, the production coming from our Abu Qir facilities. Python-1 was completed, tested, and, we're now waiting, to bring it on stream by the end of this year, according to the plan. North Idku is starting actually tomorrow, and-... Those two wells will be, simultaneously brought on stream by the end of this year. So Egypt, as expected, coming back, to its, original expectations. In Italy, on page 14, very briefly, we have, continued the development of the project with Eni, who's leading.
It's a project that is expected to come on stream in 2024, and significantly increase our production of gas into Europe, into Italy, and take advantage of significantly higher European gas prices compared to the ones we see, obviously, in Israel. Now, all that, summarized on page 15. Our target to become a 200,000 bbl a day producer is much closer than it was last time we spoke. We are targeting very firmly $2.5 billion of revenues, $9-$10 per barrel of oil equivalent production, EBITDAX of $1.75 billion, and, as Panos mentioned earlier, we have our eyes firmly set on reducing our leverage ratios to a net debt to EBITDAX target of 1.5 times.
That is a picture of what Energean will look like from 2024, when all our developments and all our projects come on stream. Page 16, I think this is a very important page to us because we are producing, or we will be producing, close to 200,000 bbl a day. And with the 1.4 billion bbl of resources that we have in the group, this gives us a 19-year reserve to production ratio, which is a very healthy number. Looking at the future, there's a lot more to be produced from our assets. Of course, on page 17, the well that could be a game changer for us is going to be spud later in the year.
The Orion-1 well in Egypt, on the northeast offshore block, together with Eni as the operator. We are finalizing, and it's a matter of days, if not a couple of weeks, to complete a farm down that will bring us from 30%-19% in this frontier. Very exciting well. We don't like to be talking about the huge numbers of unrisked numbers. They are there for people to assess. It is a well, it has risk, but it could be a game changer for us. The rest of the portfolio on the exploration side, we are continuing the work to de-risk our Arcadia and Hercules area in Israel, where we did discover gas, and continuing the work to assess what our next drilling operation should be.
In Croatia, the Izabela-9 exploration well is expected towards the end of the year. We have two drill or drop decisions in our very exciting Greek exploration wells. As Panos said, exploration spend is probably gonna be reducing. We have a clear target to be a stable cash flow producer, and as I've said many times to you when we speak and meet, exploration, and especially frontier exploration for us, is money we can afford to lose. But it could provide very exciting prospects for us. I remind also everyone that all the wells we drilled in in Israel last year were successful. All of them found gas, all of them came in, as expected. Last, but not least, and maybe it's not the first topic of discussion, our ESG plan and our plan to get to net zero.
We have continued to decrease our emission intensity. A further 30% achieved in the first half compared to last year. We are now at about 11 kg of CO2 per barrel of oil equivalent, and have our target to reach levels of 7-8 in the years to come, in our path to be the leader on the ESG and environmental footprint front as well. So let me close and bring the presentation to an end. What's our outlook? What are we waiting for over the next 18 months?
Number one, we will increase the capacity of the FPSO to 8 bcm and 32,000 bbl a day, and continue to optimize production, continue to target increased reliability of our FPSO, continue to tap every market, every molecule of gas that we can sell in Israel and the region, we will be going after to keep the selling as much as we can. We will keep that boat full. We are planning to take FID on the Olympus. We will be calling it from now on Katlan, as per the Israeli naming, at the end of the year, to continue the growth of the company. We will bring on stream NEA/NI, the two wells, and stabilize our production in Egypt.
We will drill our Orion One exploration well, we will continue our dividend in line with our policy, and plan to achieve all the short-term targets that we communicated. Energean will be a 200,000 bbl a day producer very shortly, focusing on gas, focusing on the Mediterranean, focusing on our plan to combine responsibly produced energy, reduced leverage, which is one of our key targets, and continuous growth. And I remind everyone that this company has grown from 2018, when we started and listed on the stock market, being a oil producer of Prinos, into one of the leading producers in the Med and Europe today. And of course, as I said, responsibly produced energy and progressing our commitment to be a Net Zero producer without greenwashing is also one of our key targets.
With that, I thank you for your attention today, and I would like to 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. We will now take the first question. One moment, please. From the line of David Round from Stifel, please go ahead.
Morning, guys, thanks for the presentation. I've got a couple, please. Can I start just with your uptime of 97%? I mean, that's quite a bit better than what we were expecting. Does that give you confidence going forward that you'll be near the 8 bcm capacity rather than the contractual amounts? And am I reading too much into this, or does it say anything about your ability as well to push the vessel higher than the 8 bcm? Because, I mean, it seems to be performing pretty well at the moment. Secondly, can I just very quick one, just ask about your near-term targets. Could you just remind me of the price assumptions behind that? Because presumably, it's not $90 a barrel. Thank you.
Thank you, David. Yes, the uptime has been exceptional over the last couple of months. July and August, we were at 97%. Am I surprised? No, I'm not. Am I surprised that we had teething issues, and we had startup problems in the first few months? No, I'm not. We did face some problems with chokes down in the wells. I don't want to get too technical here, but we found a solution. We found a root cause analysis. We found the spare parts we needed, and with our own equipment and boats, we're able to address those issues and respond very quickly to those technical issues. Will there be other problems? Maybe, yes. I can't guarantee what's gonna happen in the future, but we are...
Now that we're learning and becoming more confident in the operation of this FPSO, we are also optimizing. So where we see that we have a single-point failure, we're fixing it to be to have a backup plan and be able to respond very quickly to any issue. Am I confident that we will get to 8 bcm? Yes, is the answer. I am. And that's why we are signing two more gas contracts, as Nick said, to bring more gas volumes and push as hard as we can the FPSO. Will we be able to push the FPSO harder? That is something that is too early to tell.
Let's be realistic, and realistic means we will work to maximize reliability, to bring the FPSO to its design capacity, and be at the maximum possible uptime that we need to be to meet our nominations and more. But let's not start talking about increases of capacity. If we want to increase the capacity of the FPSO, the way to do it would be to add another gas train, which we can do, but that will be very much driven by the demand we see in the country and the region. And that will drive us in our next investments in increasing capacity of the FPSO. Panos, you want to talk about-
Yes, on our, on our targets, and that's not only the targets we communicate, but this is how we run long-term and medium-term economics in any opportunity we have. Our price deck on prices that we do not contract, because obviously, the gas is contracted with specific formulas with low price protection, and the same in Egypt. So for the rest of our portfolio, oil-wise, we're running anywhere between $65-$70 price decks, and that is not inflated, so that is real numbers for the long term. And for gas, European gas, we are $25-$30, and obviously, we're putting sensitivities of $5 and $10 to the downside to stress our economics. So any numbers you see from us and any guidance is based on those metrics.
Okay. That's really helpful. Thank you.
Thank you. We will now take the next question. And the next question is from the line of Matt Smith from Bank of America. Please go ahead.
Hey, morning, guys. Hopefully you can hear me. Thanks for taking my questions. I have a couple. I just wanted to focus on the timing of the production issues in Israel, if I may. Are you able to sort of outline what specific issues you've had operationally since the May update? And I guess specifically, I note that you say that they're substantially resolved now. Can I just focus on what is still left to resolve there, if anything, please? And then the second question would be on the demand side of things, again, on the Israeli gas side. Thanks for including the details on slide 10, very useful, I think.
But I was just wondering from your experience so far, if you'd be able to offer any color on how you expect, you know, nominations to compare to ACQ volumes over a full year basis, particularly given seasonality will offer some pluses and minuses throughout the year, and perhaps any additional color on- on how you might expect spot sales to make up for any shortfalls. I guess ultimately, my second question really is, you know, how has demand and nominations sort of shaped up versus your expectations so far? And do you have-- are there any reasons why that might alter going forward, please? Thanks.
Well, let me take the first question, and Nick will address the commercial one. I didn't really want to get too technical, but since you asked, and I'm an engineer, I will become a little bit more technical than than I planned to. So the issue that we faced since we last spoke was some problems with the chokes. The chokes are the devices that we use to control the flow from the wells. Those chokes, as we were producing really hard from those wells in the beginning, were failing, their seals were failing, and we had to replace them.
The replacement of each of those chokes, in terms of numbers, just to put this in perspective, and what it costs, is $250,000, is the cost of the choke insert, plus the cost of the vessel to bring it to the field and change over that choke. So we faced problems with those downhole chokes. We brought from Technip the necessary replacements and inserts. We brought in vessels, and we fixed them. Since then, with the root cause analysis, we found out why these chokes were failing, and this was due to vibration. We fixed the problem, and beyond that, we have now spares on site, and we have our own vessel, so we don't need to mobilize another vessel.
From now on, if there is a choke failure, and I just note that, since we fixed them, there's been six months of steady, no problem production. We will be able to change them within 24 hours and at a very, very low cost, and it will impact our business. So those... That was the main issue, that we are pushing some production to the future. There's no lost production. There's production deferred to the last quarter and the first quarter of next year. Are there any other issues? Nothing that we know of, as we speak. As I said earlier, will something happen? I cannot predict the unknowns. I cannot tell you anything that I don't know today. I'm just reporting actual numbers from July and August.
September is performing as per the plan. There's nothing to worry about at the moment, as I mentioned, so, we are confident about, the production guidance for the year and of course, for next year. Nick, you want to pick the, or you want to cover the, the commercial question?
Yes, yes, I'll do that. Thank you. Yes. So, as I said, I think in my introduction, that we going through the period from first gas and through commissioning, we signed up spot contracts to help us to pull through sufficient demand to complete commissioning. And that is because, as you'll recall, a number of our contracts had to make, should we say, transitional arrangements from the previous supplier. And while they were doing that, they kept the flexibility, therefore, to take from the other supplier, or from us, depending on circumstances at the time.
Because we had a bumpy ride through commissioning, what tended to happen was that a lot of the buyers took a very conservative approach, particularly those operating the industrial plant, which can't quickly shut down, and those power generators who didn't have distillate storage or sufficient distillate storage. Since we've become more reliable of late, and we've hit the peaks, what we're seeing is very, very strong demand. Demand higher than we can supply with our current 6.5 bcm capacity until we have the growth projects finished. So we have spot customers nominating, but we're unable to supply them. This is why you see nominations are significantly higher than supplies.
So I, you know, I would say that certainly next year, the high, the high period runs from, from June to September, when the weather is warm. I will be reasonably confident that we will be producing at whatever capacity we have available at the time. As I say, our, our industrial customers are, are taking from us very strongly, and they're not weather dependent. So, yeah, I think I've consistently said I expect to see us closer to ACQ than take or pay, and I think, I'm still in that bullish, if not even more bullish, for next year, and more so from the years onwards, as I say, when we get access to export infrastructure.
I think that's gonna be the key in the rest of the 15-20-year cycle, that we will be at capacity, producing at capacity, because we will have access to all markets.
Thanks very much. Appreciate the color. Happy to pass it on.
Thank you.
Thank you. One moment, please. We will now take the next question. From the line of Rachel Fletcher from Morgan Stanley, please go ahead.
Morning, gentlemen. Thank you for taking my question. I just have one, please. Just, building on the question on, on spot demand and, and some of these spot contracts. I think you mentioned that you had four additional spot contracts. I was, I was wondering if you could give any indication of, where spot prices for gas have been in Israel recently, please? Thank you.
I think I can probably say, in the mid to high fours, depending on the time of year and the ability to supply of other suppliers. Obviously, exports, as people have seen who have been looking at our competitors' statements, exports at times have maxed out. And occasionally we see a price response from that, but generally, we are the most active player in the spot market, apart from obviously our own customers. And we try and manage appropriately. So at the moment, I'd say it's in the mid to high fours. But again, I would see, in the longer term, that becoming more of a regional price point.
And then you look at the prices in Egypt and the prices in Jordan, and you have to factor that in.
That's very helpful. Thank you very much.
Thank you. We will now take the next question. From the line of Ruben Dewa from Jefferies. Please go ahead.
Hi, good morning, guys. Thank you very much for taking my questions. I only have two, please. Just one on the dividend policy. Do you still intend to pay back at least $1 billion by the end of 2025? And if so, when are you planning to step up the dividend to the $100 million per quarter that you previously had announced? And second question, I wanted to just get an idea of how you see the competitive environment in Israel, given that you've got Katlan development, et cetera, and in Karish North. How do you see competition for gas sales developing in Israel, given that also some of the competing fields in Israel are undergoing large expansions? Thank you very much.
Right. Mathios, let me take the first buying point on dividend. As I said, and as I think communicated in our RNS, our dividend policy and commitments stay intact. So the targets are as communicated previously. We have no reason to be changing and amending those, and I think the track record so far demonstrates our commitment to this. Now, when we should expect or people should expect an increase, and ultimately that increase would need to come at some point until end of 2025, we have set that period to the time we will meet our near-term targets, which are the 200,000 bbl a day. That implies that the Cassiopea project, and of course, Karish North and the second oil trend, are successfully commissioned.
Again, if I were to put a period of time, that is expected to happen the second half of 2024. So during that time, and assuming we do meet those near-term targets, and of course, the leverage is under control, which should be at those, at those, levels of production, we will be stepping up our dividend to get to the target of $1 billion by end of 2025. So dividend policy unchanged, as well as the targets as communicated previously.
Okay, I'll say a few words about the demand side, gas demand in Israel. As most of you will know, that consistently independent reports we quite often turn to BDO, who produce a quite comprehensive report for a number of parties, has shown strong, consistent demand growth for gas in Israel, driven by general economic growth, demographics growth, electrification of industries and transport. We see the current state of the Israeli power market as being balanced very close to having no surplus capacity. You know, there are concerns about that margin. And you'll see that some of the coal-fired stations which should have been retired by now are being retained.
There was a hiccup in the privatization process for IEC, such that the most recent station has not been able to be sold. So there is demand there that IEC might not have expected to have had to meet. And obviously, we now have a commercial relationship with them, which we didn't before. Two new power stations are being supported by the government for construction, Dorad Two and Kesem. And they're both going to be big new 800 MW type stations, coming on stream just after the middle of the decade, 2027 perhaps. Both of the proponents of those power schemes are existing customers of ours, with whom we have very good relations, so we will be no doubt speaking to them over the long term.
For us, you know, the issue is, as Mathios said, the timing and the economics of any expansion of the FPSO or, once we've addressed the unstuck the machine properly, seeing what we can get to in terms of full growth. 800 million cu ft a day, I'll remind the technically minded, is the capacity of the FPSO, which is actually slightly more than 8 bcm a year equivalent. It's about 5% more on the basis of the calorific value of the gas. So we see strong growth in Israel. It's still a very, very core market for us, despite the fact obviously we have a focus on exports, because they are-...
Currently higher prices, but also, as our Head of Finance in Israel reminded me, we have very, very strong creditworthy customers in Israel who pay their bills and pay them on time. So we have no receivables issues there at all. It's just good, steady cash flow. Thanks.
Let me just add one, you know, wider comment here on what's happening in the East Med, which I think that's defining our future strategy. Indeed, there are expansion projects from others, and we are looking to drill more wells and expand our capacity as well. But what we do see in a wider picture, we see Israel growing from the current levels to probably closer to 20 bcm. We see Egypt steadily and increasing demands more than 60-70 bcm. We see Jordan demand. So the just the local three countries that I mentioned will be consuming close to 100 bcm in the years to come. Beyond that, we have the two LNG terminals, Idku and Damietta, that can export.
We have continuous meetings, trilateral, bilateral. Just yesterday or two days ago, Greece, Cyprus and Israel met in Cyprus to talk about energy cooperation and how the gas from the East Med can reach Europe, either through the LNG terminal in Egypt or through new infrastructure in Cyprus. Once and when and if this infrastructure is in place, the market that we will be looking at is significantly higher. So a market that has lost 150 bcm from Russia, replaced by global LNG, but with the closest gas supply that can fill that gap being the East Med. So am I concerned about demand of gas from the region? Absolutely not.
The big challenge for all of us is to find the export infrastructure and capacity, and that's why Nick mentioned the Nitzana pipeline that will bring us into Egypt and the export market. We're looking also at other projects in Cyprus and other parts of the Mediterranean, to tap that very, very big gas demand that we see coming from the wider region. The wider region I also include now the South European countries. Absolutely no issue in my view about demand of gas. But we need to be, as Nick said, very careful with who we contract, what is the creditworthiness of the counterparty, and making sure that, you know, our working capital and cash stays in line with what we would plan to do.
That is part of our robust and very conservative financial policy. Also, a quick comment on the dividend policy. Panos covered it exceptionally well, I think. I reiterate what he says. Our dividend policy stays in place, but what Energean is all about is the three pillars that we've talked about over and over again, returning money to shareholders, at the same time, keeping leverage at reasonable levels and eyes focused on growth to continue the journey that started from, you know, 1 million bbl back in 2007, when we started the business, to 1.4 billion bbl today. That's the type of growth that we're used to. That's what we're planning to do going forward. Will we be able to continue at the same pace?
Obviously not, because we are a very different company today. But growth is in our DNA, and that is what we're planning to do going forward, at the right time and at the right price. We are not there, and I remind everybody that this company has a management team that is fully aligned with shareholders, being the management team that has the largest shareholding of the company compared to anybody else. So we will be focused on growth, but at the right time and at the right price. And we've demonstrated as a management team that every time we've done a deal, whether it was the acquisition of Prinos, the acquisition of Edison, the acquisition of Karish, it has been at the right time and at the right price.
Every time that we've developed a project, like when we did Karish, and we drilled those wells at very low drill rates, it was the right time of the market. At this point in time, we're not rushing to do anything because the situation that we see around us with respect to price inflation and everything is of concern, and we will not be rushing to go and spend shareholder funds at the peak of the cost cycle and the inflation cycle. We will continue to be extremely conservative and continue to target growth and returns to shareholders from the projects we have or anything else that we see in our region.
Great. Thank you very much. I appreciate the extra color. Thanks.
Thank you. As a reminder, if you wish to ask a question, please press star one and one on your telephone. That's star one and one, if you wish to ask a question. We will now take the next question. One moment, please. From the line of Anna Kuchina from T. Rowe Price, please go ahead.
Hello. Thank you for your presentation. I just wanted to check if you're still experiencing payment issues in Egypt. Do you get your dollar payments, or do you get- local currency. So how is the payments and receivable situation there? That's question number one. And second one, just quickly check on the use of proceeds of the bond which was placed in summer. So do I understand correctly that nothing was actually upstreamed to Energean plc, and the use of proceeds were directed directly from the Energean Israel for including Kerogen payment? Thank you.
Yes. On Egypt, I think we can say that the receivable situation is definitely not improving. I would say it has stabilized. Versus last year, we have an increase in the overdues, but still, I would say it's within control and within range of our sensitivities. I don't have any update, what is the trajectory. Definitely, we are monitoring this very carefully. We are getting paid, but we're not getting paid at the rate that we are producing and we were used to in 2021 and 2022. This is one aspect that we are focusing, but for the time being, both the status and the immediate trajectory is not worrying us. If you want specific numbers, I think the overdue right now is around $80 million.
It is an increase of $25 million versus the end of 2022. Now, when it comes to the use of proceeds of the bonds, you're right. The raise that we have done is in Israel. Funds will stay in Israel, with the exception of $75 million that will be used for the redemption of the $150 million payable we have to Kerogen. So all the funds that we are raising through bonds in Israel stay within the Energean Israel subsidiary, under the very well-known non-recourse structure that we have been using, the last few years. Does that cover your question?
Yes. Thank you.
Thank you. We will now take the next question. One moment, please. We will now take the question from James Carmichael from Berenberg. Please go ahead.
Hi, guys. Just one question from me remaining . Just on the Israel Electric Corporation gas pricing set in the country. I think last time I heard it was $4.60. Feel like I might have missed this, but just wondering when we next hear where that's gonna go. Appreciate you've obviously got the floor pricing in your contracts, but what was the sort of price situation in the country? Thanks.
So, if I understand you correctly, you're asking about the IEC gas price, you know-
That's correct.
Yeah. So that obviously they were historically the dominant buyer and generator in Israel. They're now not. The private sector produces more than half of the electricity, and obviously, therefore, to the extent that most of it is gas-fired, buy most of the gas. IEC's long-term contract, to the extent that we can divine, they have been taking the opportunity to, if you like, reprice that and with our entry into the market, so obviously they probably think we're wonderful. We have the spot arrangement with them to help them cover short-term variations in demand.
And also, it will help them, in terms of the, if you like, the medium term, the rest of this year, with the unexpected need to supply, can supply the Eshkol Power Station. Underlying, the pricing structure for the, independent sector is, I think what you might also be referring to is the, what's we call the PT Index, which is the, input, index to, for cost of generation, for IEC. And that drives a number of our contracts, which are, indexed to that link. I think we would see that holding steady. I think, had the Eshkol privatization gone ahead and those receipts gone to IEC, we'd perhaps have seen it go down.
Israel is still buying quite a substantial amount of coal. I think in their recent reports, about 25% of their demand was coal, but a considerably larger portion of their expenditure. So I think you can look at world coal prices as well. So I think I see PT being steady in the short term. And it becomes almost, if you like, a self-fulfilling cycle that the more IEC buy power from independent producers, that goes into the mix as well. And to the extent those prices are linked to PT, then it reinforces a fairly steady inflation-linked growth to prices.
Great. Thanks. And maybe one just sort of follow on to Matt, just if I can. I think when you were talking about M&A there, maybe sounded a bit more bullish than I was expecting around, or ambitious, maybe, than I was expecting, I think.... Previously might have thought that the M&A strategy sort of, you know, near field tie-backs, and, and, and set that sort of target in existing jurisdictions. But it feels like, maybe not right now, but the, the ambition is, is bigger than that. Should we be thinking sort of medium term, new country entries, that, that sort of thing?
Well, James, you know, if ambition is the driver, I think when we started in Energean, the ambition was to make it the leading independent E&P producer in the Med, and we are probably there. The ambition now is to continue the growth and double the size of the company over the next years. So whether that will happen through the drill bit, or through acquisitions, that will be depending on what we see in front of us. As I said, clearly focused on gas, not afraid of oil. We are producing substantial amounts of oil. Just from Israel, we will be producing close to 30,000 bbl of liquids, but gas still remains the main target. And the Med is a country that we know.
We know the rocks, we know the geopolitics, we know how to navigate around governments and complex issues, so we feel very comfortable to do more in the Med. Would we go outside the Med? I think it's too early to tell. Our strategy is to look at the opportunities in the region. New country entries, there are countries that we feel comfortable to go to, and we are looking at opportunities there. But as I said earlier, our driver always is, and will continue to be, the right deal for the shareholder. We're not doing deals just for the sake of doing a deal and saying, as a management team, that we're busy, because we are shareholders, and everything we do has to add value to the shareholder. Are we ambitious? Yes, we are, and we will continue the growth. This is...
The journey is not stopping here.
Very clear. Thanks a lot.
Thank you. There are no further questions at this time. I would like to hand back over to Mathios Rigas for final remarks.
Thank you very much for participating. Thank you for the questions on market strategy, clarification on technical issues. We are, as I said, as always, firmly targeting to reduce our leverage, get as much gas out of our FPSO and the rest of the projects, get to our 200,000 bbl a day target. I remind again, and I will be talking about this over and over again, the three pillars: return to shareholders, focus on deleveraging, and continuous growth. That's what Energean is all about. Thank you very much for participating, and I look forward to seeing you very soon. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.