Good day, ladies and gentlemen. Thank you for standing by. Welcome to NewMed Energy's Fourth Quarter and Full Year 2023 Earnings Webinar. With us today, Guil Bashan, Chief Analyst and IR Manager, Tzachi Habusha, CFO, and Yossi Abu, the CEO. Just for you to know, today's conference will be recorded and may be found later on our website. I will now hand the conference to Yossi Abu, NewMed Energy's CEO. Yossi, go ahead.
Thank you very much. Thank you, everybody, for joining us this afternoon in Israel. We would like to take you through our annual financial result of 2023 and Q4 2023. With your permission, we'll go forward. The key highlights of what we'll discuss today: fourth quarter average production was a bit higher than 1 BCF, 1,069 MMCF a day. That's more or less the same as the yearly average. Very good year from our perspective. It's very unique for us because that was the year of first production from Karish, and we still maintain our target. More than that, we maintain the same level of last year. When we are looking forward to 2024, our target is 11.2 BCM. That's our guidance. And realistically, up until now, we are more than in the target that we are guided.
We'll update this presentation about Leviathan expansion and where we are. And as well, we'll update that we are on budget on time for the subsea gathering line for Leviathan. As well, we'll update that we start basically to sell our condensate to Paz Ashdod Refinery in the south vis-à-vis delivery without selling to ORL in the north. So that will add to our expected revenues around $50-$70 million a year. And that's an additional upside. We'll as well update that, as you know, in 2023, we pay our first bullet 2023 of our bond, $500 million. And as well, we are continuing with our dividend policy, so $60 million in Q4 2023. So basically based on the annual report. And that's added to a total of $210 million for 2023. Let's go part by part. We'll start with the production summary.
Basically, as you can see, basically in Q4, we sell 0.9 to the Israeli market. To be frank, this is a quarter—sorry, 0.7. This is a quarter that we sell the Israeli market when the situation in October 7th started. When Tamar fell down, we were covering the Tamar commitment to the Israeli market and flow more to the Israeli market. At the same quarter, we deliver 1.5 to the Egyptian market and 0.6 to the Jordanian market. So basically, a total of 2.4 BCM at average price, which is similar to the previous equivalent quarter, $6.2 per MMBtu. When we are looking on yearly average, we reach our guidance of 11 BCM a year. And again, mainly to the Egyptian market with 6.3 BCM. The Jordanian market, very stable through all the years with 2.7 BCM. And the Israeli market with 2 BCM.
So basically, the reduction in the consumption from Leviathan in the Israeli market was due to the entry of Karish. But as you can see, we maintain our sale, although we lost some quantity to the Israeli market. We increased the sale to the Egyptian market, what helped us to realize a higher netback. So the average price is 6.1 throughout the year, very similar to the previous year. I think this is a slide that we really like, and we show it quarter after quarter. And that's basically a slide that shows that although most of our export prices are linked to Brent, we have a very stable price mechanism due to the S-curve Brent-linked price that we have.
So in all our contract, even Brent-linked prices, we have a floor price that allows us to protect ourselves in the downside, but as well enjoy some of the upside of the Brent prices. And as you can see, we really enjoy a very stable environment of netback from Leviathan sales to the markets. And that's what allows you and us to see 15, 20 years forward a very stable price mechanism. And this is basically what we are expecting to see many, many years to come. So basically, the financial metrics, I will deliver to our CFO, Mr. Tzachi Habusha, to continue and take it from there.
Yeah. So thank you, Yossi. Thank you all for being with us. Let's move first to the P&L slide. Yes. So we have summarized 2023, as was mentioned, with revenues of approximately $1.1 billion and about 11 BCM, which were produced from Leviathan reservoir. Compared to the last year, 2023 operating income, profit before interest, and tax expenses is slightly higher. A total of approximately $680 million. The main differences, which offset each other, are a decrease in net revenues and a decrease in the sum of the total expenses and costs. The latter is because of the irregular costs, which were written last year. Compared to 2022, while the 2023 operating income is almost the same, the net profit decreased. This is due to an increase in the net financial and tax expenses.
The increase in the net financial expenses is mainly a result of an income which was written and recognized in 2022 in the sum of approximately $62 million due to the reevaluation of Karish and Tanin royalties. Regarding the tax expenses, in 2022, the tax expenses were reduced because of the exchange rate of fluctuation between 2021 and 2022. This has affected the tax expenses in 2022 since the partnership income tax is measured in Israeli New Shekel. Here is a very good slide that shows us the difference between the profit in the difference between 2022 and 2023.
A reduction in natural gas revenues after royalties in the sum of $38 million, out of which $12 million are due to a decrease in the average gas price per MMBtu, which is partially linked to the Brent oil price, and $26 million are due to a decrease in natural gas quantities. Regarding this issue, I want to point out again that the Leviathan long-term and strong contracts have a takeoff failure mechanism and limited exposure to Brent price decline, floor price per MMBtu. In other words, we don't get a 100% adjustment when the Brent price increases. However, we have a limited risk when the Brent price decreases. As was previously explained, another factor that affected the net income was a decrease in operating and tax expenses in the sum of $37 million and an increase in net financial expenses.
In relation to the balance sheet, I'd like to highlight the reduction in our current debt position. This is as a result of the fact that on June 30th, we repaid Leviathan Bond Series 2023 in the sum of $500 million. As of December 31st, the total debt is approximately $1.75 billion, which consists of Leviathan Bonds with maturity in 2025, 2027, and 2030. There is no impact from the world interest rate changes on these bonds since they have fixed interest rates. This fact situates us in a very positive financial position and had a positive impact on our financial costs in 2023 and will keep having so in the upcoming days. Let's go again to the P&L report. So the bottom line is that the net profit for 2023 is slightly lower than the net profit last year.
As explained, this is mainly due to the reevaluation of Karish and Tanin royalties, which were recognized in the 2022 report, and the 2022 tax expenses decreased as a result of exchange rate fluctuation. I want to emphasize that since the war broke out, there has been no significant impact on the partnership's sale productions or profit. The partnership declared a $60 million profit distribution. This was in addition to $210 million distribution paid during 2023. A total of $685 million has been distributed since Leviathan activities have started. That's it for now, Yossi.
Thank you very much, Tzachi. So just a short update about the operation before we move to Q&A. So basically, two things. One, we are continuing with the third gathering line.
So remember, we take investment decisions on the third flow line from Leviathan reservoir to the platform that will increase our capacity from 12 BCM to 14 BCM, 1.2 BCF a day to 1.4 BCF a day. That should happen early next year. Although the geopolitical situation, we are on time, on budget, and we are keen to have that on board. We're still commencing more activity to connect more connectivity from our reservoir to Egypt. So we are working on installing a compression system in Jordan that will double the capacity. We currently flow 3.5 BCM a day from Israel to Jordan to Egypt, Tamar and Leviathan total together. With this compression system, we are targeting to have 7 BCM a day to double the capacity.
And we have another project to connect Nitzana, so the Israeli grid with the Egyptian grid onshore in the area of Nitzana that will add at least 6 BCM a day. So with EMG, we are expecting more than 21 BCM a day connectivity between Israel and Egypt by 2027, 2028. That will support phase two of Leviathan. So taking Leviathan from the 14 BCM that we are expecting to have early next year to a level of 21 BCM yearly sales by 2028, 2029. This is our target. So that's kind of from an operational perspective, an update. Now we'll move to Q&A. And please, you can send to the system the Q&A, and we'll have a look. Okay. First question is about Aphrodite.
So in 2019, sorry, we were submitting a final development plan to the Cypriot government to develop Aphrodite with an FPU floating unit to the Egyptian market. So basically, have a floating unit above the reservoir, treat the gas, reduce the pressure, have a spare gas flowing from that unit to the Egyptian market with a new build pipeline. That was what we submitted. And last year, we submitted an updated the development plan. So basically, without an FPU, using existing platforms in Egypt. The idea was to reduce the environmental footprint. So basically, use more existing facilities and reduce the initial Capex. The Cypriot government basically approached us and told us that they preferred the 2019 development plan. We are in discussion with them. Both projects are commercial. Both projects are viable.
We are trying to agree with the Cypriot government about what is the best project for both sides. As long as they will not update and take an active decision of changing the development plan, we are committed and we stay committed to the FPU to be developed in Cyprus. That's basically for Cyprus. For the floating LNG, there's a question about the floating LNG. I would say we were targeting to have floating LNG offshore Israel. We actually did some kind of a bid in the market, but we got into a place which the numbers that we got were significantly higher than expected, mainly due to the fact that we are in a peak of the LNG Capex globally.
We maintain all the work that we did, all the engineering, and practically, we are looking into the market to see whether we'll have an opportunity when the cycle goes down to go ahead with that. We can allow ourselves that because we can run with the upstream based on the regional market. We have a very significant market waiting for us, mainly in Egypt, but also in Israel. And if we will have a better commercial opportunity with the floating LNG, we'll not hesitate to run with that. Last question is with respect to the BP-ADNOC deal. Actually, I don't have a lot to say over what already we announced. As you know, the special committee and ADNOC and BP agreed to basically suspend the discussion until the geopolitical environment will come down. And we respect that. And we are continuing with the bread and butter.
The bread and butter for us is developing our assets, doing our business development, and go ahead. Leviathan is a very unique reservoir. It's the largest by far in the Middle East. There are many players looking into that reservoir. Thank you again, and thank you for joining us this afternoon here. Wish you all the best, and see you in the next quarter.
Thank you.