Energean Israel 1Q 2021 Accounts

ENERGEAN ISRAEL LIMITED

NOTE 3:    FINANCIAL POSITION (Cont.)

(1)  The main balance of the Trade Payables and Accrued expenses as of 31 March 2021 relates to development costs for a total amount of US$78.34 million (31 December 2020: US$68.72 million), US$23.13 million (31 December 2020: US$67.59 million) included in trade payable and US$55.21 million (31 December 2020: US$1.13 million) at the accrued expenses. The change in trade payables represents mainly timing differences and levels of work activity in Karish project. Trade payables are non-interest bearing.

(2)  In December 2016, the Company acquired the Karish and Tanin offshore gas fields for US$40.0 million closing payment with an obligation to pay additional consideration of US$108.5 million plus interest inflated at an annual rate of 4.6% in ten equal annual payments. As at 31 March 2021 the total discounted deferred consideration was US$56.65 million (as at 31 December 2020: US$69.52 million).

The Sale Purchase Agreement ("SPA") includes provisions in the event of Force Majeure that prevents or delays the implementation of the development plan as approved under one lease for a period of more than ninety (90) days in any year following the final investment decision ("FID") date. In the event of Force Majeure the applicable annual payment of the remaining consideration will be postponed by an equivalent period of time, and no interest will be accrued in that period of time as well.

(3)  As at 31 March 2021 include short term accrued interest for the Project Senior Facility Loan in the amount of US$2,020 thousands (as at 31 December 2020: US$2,081) and accrued interest for the senior secured notes in amount of US$2,507 thousands.

(4)  The sales consideration received in advance is related to the agreement with Israel Natural Gas Lines ("INGL") for the transfer of title (the "hand over") of the near shore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin FPSO into the Israeli national gas transmission grid. There were no additional proceeds received during the period of three months ended 31 March 2021. It is intended that the hand over to INGL will become effective shortly after the delivery of first gas from the Karish field expected in mid - 2022.

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ENERGEAN ISRAEL LIMITED

NOTE 4:    SIGNIFICANTS EVENTS AND TRANSACTIONS DURING THE REPORTING PERIOD

A.      Company's shareholders transaction completion:

On 29 December 2020, Energean E&P Holdings Limited had entered into a conditional sale and purchase agreement to acquire Kerogen Investments No. 38 Limited's entire interest in Energean Israel Limited, which constitutes 30% of the total issued share capital of Energean Israel and completion took place during February 2021.

B.      Issuance of US$2,500,000,000 senior secured notes:

On 24 March 2021 ("Issue Date"), Energean Israel Finance Ltd (subsidiary of the company, held 100%) announced on closing of an offering of US$2,500,000,000 senior secured notes.

The Notes will be issued in four series as follows:

-     Notes in an aggregate principal amount of US$625 million, maturing on 30 March 2024, with a fixed annual interest rate of 4.500%.

-     Notes in an aggregate principal amount of US$625 million, maturing on 30 March 2026, with a fixed annual interest rate of 4.875%.

-     Notes in an aggregate principal amount of US$625 million, maturing on 30 March 2028, with a fixed annual interest rate of 5.375%.

-     Notes in an aggregate principal amount of US$625 million, maturing on 30 March 2031, with a fixed annual interest rate of 5.875%.

The interest on each series of the Notes will be paid semi-annually, on 30 March and on 30 September of each year, beginning on 30 September 2021.

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