Key Takeaways:
Eastern Mediterranean-focused gas producer Energean PLC cut its 2026 production forecast by nearly 7% on Wednesday, after a 41-day shutdown of its primary Israeli offshore platform during the Middle East conflict squeezed first-quarter output.
"The Middle East crisis has intensified strains across developing economies," Li Junhua, United Nations Under‑Secretary‑General for Economic and Social Affairs, said in the UN's mid-2026 report, noting that rising borrowing costs and capital-flow pressures risk deepening debt vulnerabilities.
The London-listed company now expects to produce 130,000 to 140,000 boed for the full year, down from a prior forecast of 140,000 to 150,000 boed. The revision was driven by a reduction in its Israel production outlook to a range of 98,000-104,000 boed. The shutdown, which ended April 9, contributed to a $258 million post-tax loss in 2025, driven by non-cash impairments and foreign exchange losses.
The revision highlights the operational and financial risks for energy producers in geopolitically sensitive regions, even with firm energy prices. While the UN has lowered its global GDP growth forecast to 2.5% for 2026 over the crisis, Energean is pushing to diversify, positioning 2026 as an inflection year with its entry into offshore Angola by acquiring assets from Chevron.
The shutdown was initiated in late February after Israel's Ministry of Energy issued a directive amid heightened regional tensions. Energean said its floating production, storage, and offloading (FPSO) unit returned to full capacity within 48 hours of the directive being lifted on April 9.
Despite the operational disruption and a reported net loss, Energean's 2025 results showed resilience, with revenue broadly flat at $1.77 billion and an adjusted EBITDAX of $1.12 billion, according to a recent company announcement. The company maintained its operating costs at $6 per barrel of oil equivalent and secured over $4 billion in new long-term gas sales contracts in Israel, strengthening its core business there.
The impact of the conflict reflects a broader trend of economic disruption outlined by the UN, which projects growth in the West Asia region to plunge from 3.6% in 2025 to just 1.4% in 2026, driven by the energy shock and severe disruptions to production and trade.
Strategically, Energean is framing 2026 as a pivotal year for growth and diversification. The company is launching its next growth phase by entering offshore Angola through the acquisition of Chevron's interests in Blocks 14 and 14K. The deal adds ten producing oilfields to Energean's portfolio, providing immediate production and low-risk development options outside its core Eastern Mediterranean region.
Alongside the Angola expansion, the company is progressing exploration activities in Egypt’s East Bir El-Nus and advancing its Greek Block 2 project with partner ExxonMobil, with drilling anticipated in 2027. The company stated a goal of reducing leverage over time while growing and diversifying its portfolio under strict capital discipline.
This article is for informational purposes only and does not constitute investment advice.
