Shenandoah project boosts Navitas' half-year revenues - and shifts it to profit

Navitas Petroleum, headed by Gideon Tadmor, concludes the first half of 2026 with a sharp jump in activity following the first year of production of the Shenandoah project in the Gulf of Mexico, and is directing the cash flow from it to accelerate its next projects.

The partnership recorded revenues of 517.2 million dollars and an EBITDA of 424.2 million dollars in the half-year, compared to 35.8 million dollars and 12.3 million dollars respectively in the corresponding half-year last year. The net profit attributable to the participation unit holders amounted to 80.4 million dollars, compared to a loss of 45.3 million dollars last year. Excluding a one-time loss from early debt repayment and exchange rate difference expenses, the net profit amounted to about 165 million dollars.

Looking at the second quarter, revenues amounted to 279.2 million dollars compared to revenues of about 18 million dollars in the corresponding quarter, and the EBITDA reached 236 million dollars, compared to 7.2 million dollars in the corresponding period. The net profit amounted to 77.2 million dollars, compared to a loss of 56.4 million dollars in the corresponding quarter.

The main jump stems from the transition of Shenandoah to commercial production in July 2025. During the first year of production of that project, and including its launch period, it generated an EBITDA of about 690 million dollars for the partnership, reflecting an investment return of about 60%. In the first half of the year, the Shenandoah venture contributed 412 million dollars to its EBITDA and about 224 million dollars in the second quarter, while only 7.7% of the total reserves in it have been produced so far.

In recent days, the company completed the purchase of a second floating production, storage and offloading unit (FPSO) for 125 million dollars, which is expected to be used in its plans for the development of the Sea Lion project in the Falkland Islands, and its production capacity is about 125 thousand barrels per day. According to Navitas, the development plan for the central area in this venture includes 38 wells in two stages. It intends to bring the plan to a final investment decision in the first half of 2028 and the start of production is planned by the end of 2030. This is one of the largest oil reservoirs in the world and Navitas received the rights to it in 2022 without paying for them and even received 6 million dollars from Rockhopper, the operating company, to transfer the rights to it.

The acquisition of the second floating production facility also changes the economic value attributed to the Sea Lion project, as according to Navitas' new reserves and resources report, the discounted cash flow of its share in the existing stages of the project has increased by 39% since its previous report to an amount of about 5.2 billion dollars, compared to about 3.7 billion dollars in the previous report it published. The figure refers to about 535 million barrels of oil equivalent out of 873 million barrels in Navitas' share in the project. Stage 1NDA in the Sea Lion project, the investment volume of which is estimated at about 1.8 billion dollars, includes 11 wells in the first stage and another 12 wells in the second stage. The start of production is planned for March 2028. By the end of June, actual development expenses amounted to about 18% of total development costs until the start of production, and work is focused on preparing infrastructure in the Falkland Islands.

At the same time, Navitas continues with moves to expand its activity in Shenandoah according to its strategic plan to turn this area into a regional production center. Thus, it is preparing for five additional development drillings by the end of the first quarter of 2028, including two additional drillings in Shenandoah, two drillings in Monument and a first drilling in Shenandoah South. The first drilling in Monument was completed successfully and production from it is expected to start by the end of the year and add about 5,700 barrels of oil to it, while the second drilling is expected to start producing in the first quarter of 2027.

Another asset that has entered Navitas' portfolio is the Tiberius and Logan oil discoveries in the Gulf of Mexico. At the beginning of the month, the partnership signed the acquisition of 33.33% of the rights in the discoveries, and production from the first well in Tiberius is expected at the end of the third quarter of 2028 and production from Logan is expected only at later stages. The rights in these reservoirs were purchased for 68 million dollars from the American gas and oil giant Occidental, which is held by Warren Buffett's Berkshire Hathaway, and the company Kosmos. The production wells are planned to connect to the existing facility of the Buckskin discovery, which is about 20 km away from them, in a way that will allow using existing infrastructure and turning it into a regional center. According to the resources report, the NPV of the first well in Tiberius is estimated at 164 million dollars, and future wells in the same area are not included in its calculations at this stage.

Navitas' rapid growth carries a financial price as its financing expenses in the first half amounted to 173 million dollars compared to 42.3 million dollars in the corresponding period. Among other things, it recorded about 50 million dollars of financing expenses following early debt repayments, and 67 million dollars of net interest expenses. In addition, it increased hedging expenses on oil prices by 28 million dollars compared to the corresponding half-year.

Alongside these, Navitas presents an ambitious target for the rest of the decade, including an EBITDA of about 3.3 billion dollars in 2031, compared to about 760 million dollars in 2026, and a production of 183 thousand barrels of oil equivalent per day. The forecast relies on the expected expansions in Shenandoah, Sea Lion, Monument and Tiberius. With the publication of its forecasts, Navitas Chairman Tadmor said in a conversation with investors that "the strong cash flow from Shenandoah allows us to continue with an accelerated growth strategy". According to him, the continuation of the crisis in the Strait of Hormuz leads to the realization of strategic inventories of countries and may slow down new projects in new areas. "Our expectation is that the global economy will be more oil-dependent than before and this situation gives us a strong tailwind. We are in the right place and at the right time," he said.