High Demand in export markets generated another strong quarter for Ratio with revenues of $82 million

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May 31, 2022, 04:42 ET

During the first quarter, sales of 2.7 BCM of natural gas were made from the Leviathan reservoir, generating an operating profit of $49 million and net profits of $28 million

The introduction of the additional transmission route to Egypt allowed record demand in the export markets to be met, resulting in regional sales of 1.8 BCM during the quarter

From the beginning of the year, and until the report release date, 4.5 BCM of natural gas were sold from the Leviathan reservoir

TEL AVIV, Israel, May 31, 2022 /PRNewswire/ -- Ratio Energies (TASE: RATI-L), which holds 15% of the Leviathan natural gas reservoir, reports results for the first quarter of 2022. Revenues and operating profit in this quarter totaled $82 million and $49 million respectively, up 14% over the same quarter last year. Ratio's net profit for the first quarter was $28 million, representing an increase of 12% over the same quarter last year.

During the first quarter, 2.7 BCM of natural gas were sold from the Leviathan reservoir, of which 1.8 BCM were exported to Egypt and Jordan. From the beginning of the year and until the report release date, 4.5 BCM of natural gas were sold from the Leviathan reservoir. The growth in sales was facilitated by the introduction of an additional transmission route in early March between Israel and Egypt via Jordan

Naturel gas was sold at an average price of $5.59 per MMBtu compared to $4.91 in the same quarter last year, an increase of 14% which directly affected the profit line recorded by the partnership. The increase in the average price is mainly due to a change in the sales mix in favor of exports which are affected by, among others, oil prices. The rise in the oil prices in recent months should also be expressed in a rise in the average price of natural gas to the export markets in the second quarter of 2022.

During the quarter, drilling of the "Leviathan-8" well commenced, which will enable maximization of the potential volumes of gas for sale while also increasing reservoir redundancy when it joins the four existing production wells.

In this quarter, Ratio continued to maintain its high cash balances which stood, as of the end of the quarter, at $222 million, $21 million more than at the end of the previous quarter. The partnership is working to start distribution of profits to the unit holders based on its financial results for 2022.

Yigal Landau, CEO of Ratio Energies: "2022 continues the trend of peak demand of the past year, resulting in another strong quarter for Ratio in sales and export combined with an increase in the average price of natural gas.

The agreement we signed during the first quarter to open an additional natural gas transmission route to Egypt via Jordan is proving itself and enables us to respond to the growing demand for natural gas from customers in countries in the region alongside regular delivery to the local market. We believe that the Leviathan reservoir will be able to contribute to gas supplies to European countries as part of the process of diversifying supply sources. Accordingly, we continue to work with the Leviathan partners on selecting the best alternative for the development of Stage 1B, which will enable a significant increase in production and sales from the reservoir."

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SOURCE Ratio Energies Limited Partnership