Tamar Petroleum shows significant decrease in net profit in 2020: $ 88 million

Tamar Petroleum, which holds 16.75% of the rights in the Tamar gas reservoir, published its financial statements for 2020, and showed a significant decrease in revenues and net profit compared to 2019.
The company's revenue fell 27% last year to $ 212 million, compared to $ 292 million in 2019.
Net income fell 30% to $ 88 million. However, in the fourth quarter there was an improvement trend and the net profit for the quarter rose by 20% to $ 35 million.
The decrease in the Company's revenues was mainly due to a decrease of about 21% in the quantities of natural gas sold in 2020 and also to a decrease of about 8% in the average price of natural gas sold. In 2020, a total amount of 8.25 BCM (billion cubic meters) of natural gas was sold from the Tamar reservoir, compared to 10.4 BCM in 2019.
A decrease in revenues from the sale of natural gas to the IEC also affected the decrease in Tamar Petroleum's revenues, due to Levitan winning the IEC tender. In addition, a number of other customers who began consuming gas from the Levitan reservoir contributed to the decline, as well as a decrease in sales to private electricity producers and industrial customers, which the company estimates is mainly due to a decline in demand for electricity and energy products as a result of the corona crisis.
The report shows that from the beginning of 2021 until close to the date of approval of the report, a quantity of natural gas of only 1.6 BCM was sold from the Tamar reservoir. This amount reflects an annual volume of only about 7.4 BCM, lower than the 8.8 BCM that is Tamar's sales expectations for 2021. However it should be taken into account that in the second half of 2021 the bulk of the sale is expected from a transformer to the electricity company (1.7 BCM), so the annual target is not expected to change.
The annual target includes the sale of 1 BCM to Egypt, in accordance with the export agreement beginning in June 2020. According to the agreement, by June 2022, the Tamar reservoir will supply Egypt with natural gas amounting to 1 BCM per year and then 2 BCM per year. The date of the increase in the flow of natural gas to Egypt depends on the completion of the section of the Ashdod Ashkelon marine transmission system by Natgaz. In contrast to the decline in revenue and profit, general and administrative expenses actually rose to $ 3.9 million in 2020 compared to $ 3.2 million in 2019. Income taxes were significantly reduced to $ 11.3 million in 2020 from $ 27.9 million in 2019.
Liami Weissman, CEO of Tamar Petroleum, said: "We conclude the fourth quarter of 2020 with positive momentum in gas sales from the Tamar reservoir, in continuation of the growing demand for gas in the economy, and we also enjoy significant districts signed in the past year. Accordingly, in the second half of 2020 there was an increase of over 40% in gas sales from the reservoir compared to the first half of the year and we expect a significant increase in demand in the domestic market, among other things in light of the government's policy to stop using coal. "