Energean’s shares are up by almost 50 per cent over the past 12 months, boosted both by the market forces that have benefited gas production companies and a stream of positive announcements. In recent months, there has been news of a gas discovery off the coast of Israel by the company’s Athena exploration well, the signing of another gas sales and purchase agreement, and the extension of its growth drilling programme.
The company’s main attraction is its flagship Karish project, which has locked-in contractual sales and which looks set to transform the scope of the business. The project’s floating production, storage, and offloading vessel has arrived in Israel, after pandemic-related delays, with first gas expected in the third quarter of this year after three-to-four months of commissioning. Energean forecasts total production of 60-70kboed (thousand barrels of oil equivalent per day) for financial year 2022, up from 41 kboed in 2021, and aims to hit 200kboed in the medium-term.
In the company’s latest trading update, for the first quarter to 31 March, revenue was up by 80 per cent to $171mn (£139mn) and earnings before interest, tax, depreciation, amortisation and exploration expenses hit $90mn, up 172 per cent. Total production came in at 36 kboed for the four months to April 30, within expectations.
Energean’s directors have been busy with the company’s shares. On June 23, chief executive Mathios Rigas sold £55.3mn-worth of shares through his company Growthy Holdings, perhaps wanting to lock in profits from the booming share price. Chair Karen Simon, meanwhile, picked up £376,000-worth of shares on the same date. Both transactions were completed at 1,106p a share.
The shares sold by Rigas went to institutional investors through an accelerated bookbuild and represented around a quarter of his holding. He still owns a stake of 8.5 per cent and the company said he “remains fully committed to the business and is confident in the outlook for Energean”.
He is not the only one. Peel Hunt analysts said in a recent research note that the company “is in the middle of delivering a transformational year”. With Karish production on track for the third quarter and the shares trading at just five times consensus forward earnings, we also remain bullish.
Berkeley directors envisage return on capital
Board members of London-focused housebuilder Berkeley and their wives have bought £2.7mn-worth of shares following a positive set of results for the company — even as experts predict a downturn in the London housing market.
Chief executive Robert Perrins and his wife Vanessa snapped up £1.85mn-worth of shares at 3,695p a share, adding to the £3mn Mr Perrins bought in July last year at an average of 4,606p a share. Both purchases represent a discount compared to Mrs Perrins’ sale of £10.8mn in shares in January last year at 4,743p.
Julia Barker, wife of interim chair Glyn Barker, has just bought £73,000 of shares while non-executive director William Jackson and his wife Jane bought £591,000. Incoming chair and Schroders veteran Michael Dobson has bought £145,000.
Dobson has been appointed as a permanent replacement for former chair and founder Tony Pidgley, who died in June 2020. Barker had been serving as interim since Pidgley’s death.
The share transactions follow a strong set of results for the company. Berkeley’s cash due on forward sales has risen to £2.2bn from £1.7bn in 2021, while pre-tax profit, earnings per share and turnover have all grown for the second year in a row following their distinct plummet in the year of Covid-19. However, dark clouds loom for the housebuilder, with Savills predicting that London house prices will fall 1 per cent next year, with three years of sluggish growth to follow.
Charlie Huggins, head of equities at Wealth Club, said the company is better placed than most housebuilders in the event of a housing crash. “And if the housing market stays robust, which it might do given the chronic shortage of housing especially in London, the group’s exciting development pipeline means it looks well-placed to capitalise,” he added.