Good afternoon, and welcome to our conference call for discussing the financial results recorded by Romgaz Group in the first nine months of 2022, and the third quarter of 2022 respectively. After introducing the speakers, Mr. Aristotel Jude will make an opening speech. Thereafter, the Q&A session will take place. Please be advised that this conference is being recorded for internal purposes. On behalf of the company, the following speakers attend this conference: Mr. Aristotel Jude, Deputy Chief Executive Officer. Mr. Andrei Bobar, Chief Financial Officer. Mr. Marius Veza, Accounting Department Director. Mr. Robert Chirca, Exploration Production Director. Mr. Ion Foidaș, Production Department Director. Mr. Radu Moldovan, Energy Trade Director. Mr. Andrei Novac, Finance Director. Mr. Olimpiu Hǎtǎgan, Economic Director from Iernut, and our Investor Relations Department. Now, I would like to give the floor over to Mr. Jude Aristotel, who will open the conference call with an opening speech. Good afternoon, ladies and gentlemen. Thank you, first of all, for joining our conference call to discuss the results recorded by Romgaz Group in the first nine months of, and Q3 of 2022. We published yesterday our quarterly report and the consolidated financial statements at September 30, 2022, which comprise a detailed presentation of our operational, economic, and financial achievements in the period. An updated presentation of Romgaz Group is available on our website in the investors section. Now I will start with some aspects regarding the gas market context in the first nine months of 2022 compared to the same period of the previous year. According to our assessments, natural gas consumption in Romania declined by 30% year-on-year, while gas imports grew and reached 31% of consumption. In third quarter alone, gas consumption decreased by same pace, while imports were flat year-to-year in volume, and those increased their weight to 43% according to our estimate. It is worth noting that, compared to other European countries, gas consumption in Romania relies heavily on the domestic output. Regarding transactions on the Romanian Commodities Exchange, the monthly average of wholesale gas price, spot and forward markets increased over six times in nine months, 2022, compared to 2021. These prices are considered as of the month of delivery for transactions concluded on this market segment. On the Central European Gas Hub, the average monthly reference price also advanced over six times year-on-year in nine months 2022, according to data provided by National Agency for Mineral Resources. Regarding the fiscal framework in the first nine months of 2022, Romgaz operations were influenced mainly by Government Emergency Ordinance 27/2022 and 119/2022, and by the gas release program. Government Emergency Ordinance 27/2022 and Government Emergency Ordinance 119/2022 comprise provisions effective during 1st of April 2022 and August 31, 2023. Main provisions applicable to gas producers include regulated gas selling price of 150 RON per megawatt-hour for the gas contracted for households and RON 250 per megawatt-hour for gas contracted with thermal plants to produce thermal energy for households. Starting the first of September 2022 and until the end of August 2022, the price of RON 150 per megawatt-hour applies to both categories. Exemption of windfall profit tax for revenues from the gas sold at regulated price and computation of gas royalty based on these prices instead of CEGH prices. The mentioned ordinances also state that the gas suppliers have to keep the selling price for some categories of final clients as follows: maximum RON 310 per megawatt-hour for households and maximum RON 370 per megawatt-hour for thermal plants and for industrial clients with a 2021 annual consumption below 50,000 MWh. For energy market, the ordinance is also imposed pricing levels and an 80% windfall profit tax was enforced for energy producers during April 1 and end of August 2022. Starting with September 1, 2022, energy producers which started operation before this date, energy traders and gas traders are required to contribute to the Energy Transition Fund. Gas storage is also mandatory for gas supplier and thermal plants to assure 30% of households consumption during April 2022 and October 2023. Regarding the gas release program. This is suspended during April 1st and December 31st, 2022 by the Government Emergency Ordinance 27/2022. We continue this presentation by highlighting the operational and financial performance recorded by Romgaz Group in the first nine months of 2022. Natural gas production was reported at 3.69 billion cubic meters with a marginal adjustment of 0.5% compared to the same period of 2021. We continued our efficient measures to support production development, and here I could mention optimization of well operation, extension of rehabilitation projects in the main major gas reservoirs, workover and recompletion operation at inactive or low flows wells, and completion of investment to extend production infrastructures and connect new wells to these infrastructures. We also continue to make investments in our gas production facilities. We put in operation the gas dehydration plant in Coșereni in second quarter of this year, an investment of RON 31 million. We completed first production well. Four wells are in drilling acquisition process, and other three wells design is in progress. We finalize nine surface facilities. Other eight are in construction, and 19 are in different preparation stages. Also, we perform recompletion, reactivation, and repairs for 161 production wells. Please also note that an external audit of our gas portfolio was finalized by DeGolyer and MacNaughton at the end of June. The audit states that the total gas reserves is at 65.9 billion cubic meters and total gas resources of 55.9 billion cubic meters as of December 31st, 2021. We improved even more our already significant position on the gas market. Our market shares climbed to almost 51% of total deliveries in Romania, and we reached as much as 73% of consumption covered by domestic gas, according to our estimates. Regarding gas sales, the third party's volume of our own gas delivered to the market was flat year-over-year. The total gas sales declined by 6.2% year-over-year as a result of lower volume of gas acquired and resold. The revenues from the gas sold were again record high at RON 9.28 billion, over 3.1x year-over-year, supported by the favorable market environment which led to a significant increase in our average realized gas selling price. The electricity segment had a very good contribution with revenue from electricity at historical high of RON 1.009 million, almost seven times year-over-year, reflecting the high energy demand and elevated price on centralized market as well as almost double production indeed. Revenues from storage services added RON 324 million, higher by 66% year-on-year, mainly due to the higher revenue from capacity reservation and also higher injection services. Overall, we reported total revenues of RON 10.81 billion, over three times higher year-on-year at a historical record. On the expenses side, we can mention that windfall profit tax increased over thirty times year-on-year to RON 0.475 billion from RON 364 million in 2021. Total royalties rose over three times to RON 1.49 billion. Adding the contribution to the energy transition fund, altogether these three taxes reach the substantial amount of RON 6.36 billion, almost nine times higher compared to 2021. Expenses with these three taxes accounted for almost 60% of total revenues over the first nine months of 2022, compared to only 20% the year before. Bottom line, net profit was record high at RON 2.24 billion, elevated by 94% compared to the same period of 2021. Although impacted by substantial tax expenses, our profitability rates continue to be strong. EBITDA margin at 26.8% and net profit margin at 20.7%. For the third quarter 2022 alone, we can note the following results. Natural gas produced edged down 1.3 billion to 1.17 billion cubic meters. Total revenues were record high at RON 3.32 billion. Net profit reach also an historic high of RON 512 million, up 30% year-on-year. Profitability rates remain at favorable levels. EBITDA margin at 21.5% and net profit margin at 15.4%. With respect to the strategic development of our company, the latest achievements are in line with the development strategy for 2021-2030 that was approved by our shareholders in November last year. We already informed the market that on August 1st, 2022, Romgaz finalized the transaction with ExxonMobil for the acquisition and transfer of all four shares issued by ExxonMobil Exploration and Production Romania Limited, representing 50% of the rights and obligation related to the Neptun Deep project. We partially financed the acquisition through a credit facility of EUR 325 million that was signed by Romgaz on March 30. Regarding our new power plant, please recall that the legal norms released in the second quarter will help us to finalize the remaining works by the end of 2023, and have expenses reimbursed by mid of 2024. Regarding the CapEx side, in the first nine months of 2022, Romgaz Group invested a total amount of RON 5.5 billion, which included also the amount paid for the acquisition of 50% of Neptun Deep project. Another important event that we would also like to mention here is the release of the 2021 sustainability report in June, in line with the national and European legal requirements for non-financial reporting. Which also address corporate governance, ethics, anti-corruption and, well, as also our economic figures, social and environmental performance. By the end of this presentation, I would like also to remind you the dividends distributed in this July. Total gross dividends amounted to RON 1.46 billion, or a total gross dividend per share of RON 3.80. Which resulted in a gross payout ratio of 76% from the 2021 net profit. With this, I would like to close our presentation, and thank you once again for your attention. Thank you for the presentation. The line is now open to take the questions. Please know that you have two options to address questions, either raise the hand or write a question. We have a hand raised from Ioana Andrei. Please address your question. Please activate your microphone. Miss Ioana Andrei. When you raise the hand, please activate the microphone in order to be able to address the question. In the meantime, we received a written question from Mr. Oleg Galbur. We'll answer. We will provide the answer for the written question. What was the volume of gas sold by Romgaz to gas-fired power producers, except Iernut, in the second quarter of 2022? And what volume do you expect to sell to this consumer group in the fourth quarter of 2022 and in 2023? Mr. Galbur, did you mean the quantities for year the quantities of gas sold by Romgaz to gas-fired power producers in the third quarter of 2022 or the second, as you wrote? The third quarter, okay. Thank you. For thermal energy producers, the quantity delivered was 0.4 TWh in Q3 2022. The quantities delivered for nine months, 2022, was 0.51 TWh. For the fourth quarter, it was 11.9 TWh for households and thermal energy producers because the sale price was the same. We received another written question from Irina Răilean. What were the volumes sold at a capped price of RON 150 per megawatt-hour, and those sold at RON 250 per megawatt-hour in the third quarter? The answer would be for households in the third quarter, the price for RON 150, the quantity was 3.3 TWh, and for thermal energy producers, 0.4 TWh at a weighted average price of RON 214 per megawatt-hour. We received a written question from Mr. Andrei. Did Romgaz import gas so far in 2022? If yes, in what quantity and at what price? We received several questions. The second one, are there any plans to import gas in the future, Q4 2022 and year 2023? Do you target any specific quantities to be imported? The third question, do you see a scenario in which there will be a gas shortage in Romania in the next twelve months? For the first question, the answer is no. On the second one, yes, indeed, we have some plans in order to conclude some import contracts. We are in the middle of negotiation with some third parties, but at the moment we are still covered by the confidential information in this respect. Once the contract will be concluded, we will inform also the capital market and also the market in this respect. On the third question, in our point of view, the answer is no. Please note that at the moment in the natural gas storage is the highest percentage of gas stored during the last period of time. In this respect, the consumption also will be covered by the gas extracted from the natural gas storages. Thank you. We received another written question from Cosmin Paraschiv. Given the developments of gas prices, when should we expect these high prices to kick in? The second question, if you can provide some details on selling activity, is 2023 mostly covered already by the end of last month? The answer will be provided by Mr. Radu Moldovan in Romanian and translated. Price evolution reached the maximum level in 2022. As it can be seen in the national and the international market, prices began to decrease. Romgaz has contracted all natural gas quantities for the first quarter of 2023. For the sales for the second quarter, we are expecting that the transmission system operator does this. The TSO has to allocate to distribute quantities according to Government Emergency Ordinance 119. Another written question from Laura Simion. Were there other factors contributing to the decline in average realized price quarter by quarter besides the quantities sold at regulated prices? Prices have decreased on the international market. Romgaz prices for the third quarter 2022 are prices that were contracted last year. Gas contracted according to Government Emergency Ordinance 27. Since April 2022, no other new contract has been concluded. A written question from Mr. Florin Turcaș. How do you foresee your activity in 2023? Thank you. Romgaz is still under analysis, and once with the budget for 2023, there will be a decision. We received another written question from Irina Răilean. What was the realized natural gas price on the competitive market in the third quarter? The answer is around RON 250 per MWh. We received another written question from Mr. Cristian Petre. Can you detail a little bit on prices and Government Emergency Ordinance 119? What are the caps? How much do you have to sell at this, these prices? Mr. Petre, Romgaz will publish detailed information in this respect. Romgaz has transmitted all the information to the transmission system operator. We are waiting to see how much of these available quantities the TSO will distribute, starting with 1st February. Oh, sorry, with 1st April. A written question from Ioana Andrei. You presented in half-year 2022 results that around 12 TWh should be delivered in Q4 2022. Is this estimate still in place? The answer is it may be around 14 TWh. Ms. Iuliana Ciopraga, you may address your question. You have your hand raised. Hi. Actually, I've written now the question. On the one hand, we're seeing a lower price on the competitive market. RON 250 is lower compared with the second quarter. What you achieve in the third quarter is lower. It seems lower anyway compared to the second quarter. If you could provide the reasons for that. And also, we noticed a decline in EBITDA in the third quarter versus the second. Would one reason be these costs with imbalances that we're noticing in the power? Thank you. As mentioned before, the gas delivered in Q3, except the gas that are subject to Government Emergency Ordinance 27. Those quantities were contracted mostly in September 2021, and the contract price is fixed. The price differences are resulting from quantity differences. The difference from quantities from contracts that have different prices. Regarding the decrease in EBITDA, practically in the third quarter, what we can see is that starting with September 1st, 2022, the windfall tax for electricity of 80% was changed to contribution to the Energy Transition Fund. Right now, the percentage is not 80%, is 100%, starting with 1st September 2022. Also, it's very important to mention the fact that the royalty for the natural gas produced has increased. In September, the royalty for the natural gas produced, which was not sold under a regulated price, reached a record high of RON 1,200 per megawatt. This clearly affected the financial results of the company. We had higher taxation. Thank you. We received a written question from Mr. Oleg Galbur. What is the volume of electricity expected to be generated by the Iernut Power Plant in Q4 2022? The quantity will be around 150 MWh for the fourth quarter of 2022. We received a written question from Israel Luca- Moica. There are two questions. The first one, EBITDA in Q3 2022 is lower by 25% versus Q2 2022. You received an answer just seconds before. The second question, how is Q4 2022 forecast versus Q3 2022, weaker or better? It is very difficult to respond regarding the Q4 EBITDA, because on one hand, we have the electricity EBITDA generated from electricity. Here we will have a full quarter with 100% of contribution to the electricity transition fund, instead of two months with 80% and one month with 100% after RON 450. Of course, after we can deduct the CO2 certificates from this price. We also have the royalty. The royalty it is very significant, and it is unknown at this hour. Practically, the National Agency for Mineral Resources it is communicating the royalty each month based on the gas prices on the CEGH. Thank you. Thank you. Thank you. A written question from Laura Simion. How much gas do you expect to sell at regulated prices in Q4 2022 and the first quarter of 2023? For the first quarter of 2022, it's 11.88 terawatt hour, around 19% from sales. For the first quarter of 2023, it's, Twelve. 12.1 TWh, around 91% from sales. Another written question from Ioana Andrei. What happened at Iernut Power Plant in August? Can you tell us the power acquisition costs related to this outage recorded in Q3 2022? Related to the question about Iernut Power Plant, we will provide the answer in a few minutes. Until then, we will go on with another question from Iuliana Ciopraga. The price for the competitive market was lower in the third quarter 2022 versus the second quarter of 2022, and why? The answer to this question was provided a few minutes ago. We go on with another question from Iuliana Ciopraga. We will answer a question from Ioana Andrei. Please tell us what was the amount recorded in Q3 2022 for impairment charges related to the misinterpretation of Government Emergency Ordinance 27. Can we see a reversal on this amount over the next quarter? Regarding the changes in the interpretation of the emergency ordinance 27, there was a certain interpretation that starting with the application of this ordinance, practically, we will apply the prices in the contracts, prices that are stipulated in the emergency ordinance 27. There were also cases in which the prices in the already signed contracts before the introduction of this emergency ordinance were lower than the prices according to the ordinance. Our customers said that should be applied the lower price, meaning the price from the contract, not the price from the emergency ordinance. After that, in this summer of 2022, with the appearance of the law to put the application of the emergency ordinance, this interpretation was clarified. starting with that time, the most favorable price should be applied. Meaning that if you have in the signed contracts a price lower than the price calculated based on emergency ordinance, you remain with the lower price from the contract. I hope it's clear. It's over. Another question from Iuliana Ciopraga. Cost of imbalances for power, were they deducted from the windfall tax? Were these costs the reason for the weaker financial performance in Q3 versus the second quarter? To respond, if the costs for imbalances for power, if they are deducted from the windfall tax, yes, they are deducted. They were deducted. The second question, were these costs the reason for the weaker financial performance in Q3 versus Q2? Yes, of course. Practically, when we had that technical problem with the power plant, practically, we had to go to buy electricity from the day-ahead market, from OPCOM day-ahead market. The prices that we bought from day-ahead market were higher than the prices that we were selling the electricity, but we had to deliver the electricity in accordance with the contractual obligation. Thank you. We received a written question from Mr. Oleg Galbur. What is the reason for such a low electricity production plan for the fourth quarter of 2022 at Iernut of only 115 GWh, which is lower both quarter-on-quarter and year-on-year? The figure was 150 GWh. If we want to refer to the gigawatt-hour, it's roughly 240 GWh for the fourth quarter of 2022. Another question from Irina Răilean. Just a follow-up question. Volumes to be sold at a capped price of 150 RON per MWh in Q4 is 14 TWh or 11 TWh. Total volumes, both to households and heat producers. It is 14.3 TWh total deliveries, total supplies, and 11.88 TWh sales according to Government Emergency Ordinance 27, households and thermal energy producers. Another written question from Ioana Andrei. Can you tell us what amount was registered in Q3 for these impairment charges? Around RON 70 million. Yes, it is receivable related to only one client, so it is about RON 70 million. Yes. Another written question from Irina Răilean. Do you plan to reverse this amount of RON 70 million? Currently, we are in discussion with this customer in order to recover this amount. If the discussions are not, let's say, positive to reach the conclusion that we want to recover, practically, we will address to the court. If we successfully recover this amount, practically, the depreciation will be reversed, of course. Thank you. We received a question by email from Mr. Florin Turcaș. What percentage of your 2023 production capacity is already sold, and at what medium price do you intend to hedge arbitrage on gas price? The sales are only the quantities related to the first quarter of 2023. This quantity is fully sold. The percentage that it represents from the full year 2023 will be discussed when we will have the budget draft. Related to the question, if we intend to hedge, the answer is no. Another written question from Irina Răilean. Could you provide any updates regarding Iernut development? What is the updated deadline for completion? We have launched the acquisition procedure in August. We are still negotiating the contract with the third party for the remaining execution works. As soon as possible, and when we will reach a common agreement with the third party in this respect, we will announce the capital market and the market by announcing the signing of the contract. Related to the written question from Ioana Andrei. Please consider my previous question, what happened to Iernut power plant in August? Can you tell us the power acquisition cost related to this outage recorded in Q3 2022? Regarding the Iernut Power Plant, in August, there was a technical problem with the turbine. As you already know, we are operating an old power plant that will be in production until April 2024. Currently, we are operating with one single group of 200 MW gross power. Practically at that time in August, the problem with the turbine took us almost 11 days of not functioning the power plant. A period in which we had to acquire energy from the day-ahead market, which was at a very high price of over RON 3,000 per megawatt. We had to sell this energy further to our customers, for which we already had contracts in place, at a lower price. Thank you. Another written question from Ioana Andrei. Please detail the main aspects regarding your selling strategy over the next couple of years. We would like to remind you that sales strategy is public on Romgaz website. Another written question from Irina Răilean. On Iernut, by how much do you expect the total investment cost to increase compared to your initial budget? We will present the final figures once the contract will be concluded. At the moment, we are still negotiating the contract, and based on the negotiation, will result also the final figures of the remaining works. Being under the procedure, it's very hard for us to inform third party in this respect. We have to wait the finalization of the negotiation, and only afterwards we may release any figures in this respect. Regarding the sales strategy, probably you refer to the energy produced by Iernut Power Plant. At the moment, Romgaz is still analyzing the latest emergency ordinance stating the centralized trade purchase and sales. We have also to amend the strategy in this respect by reflecting the amendments and the provision of the latest emergency ordinance. Ms. Iuliana Ciopraga, you may now address your question. Hi. You mentioned in regards to royalties, you mentioned an average price of RON 1,200 as reference for the third quarter, if I understood correctly. I checked, in the third quarter was around RON 200. The reference price would have been closer to RON 1,000, not RON 1,200. Can you clarify a bit on this? Also, what's the average percentage for royalties? Another question. I was asking you before, these balancing costs from the third quarter, if you were able to use them to offset some of the windfall tax. From your answer, it seems that you were able to use them, but even so, you still incurred some losses. Is that correct? Thank you. Regarding the royalty, practically, you have to multiply that reference price of 1,200 MW with the quantities sold under free market, at non-regulated prices. Why 1,200? Because the check in the quarter was EUR 200. That would mean about less than 1,000, or not 1,200. Only for December, I explained that the reference price for the royalty has increased gradually during the year, reaching an all-time high in the third quarter. Okay. mean, more specifically, in September month was the highest price that we- I see. Received from the National Agency for Mineral Resources of RON 1,200 RON per megawatt. I see. Okay. Okay. It wasn't an average for the third quarter. Okay. The average percentage for the royalty is 7%. Mm-hmm. If there are any other questions. Iuliana Ciopraga, do you have another question? Actually I do, but it refers to the power segment. You were mentioning before that, in the fourth quarter you'll see the impact of the windfall tax of 100%. On the other hand, the transfer price between gas and power is now 100, right? You'll be using that 100. In principle, EBITDA in the segment should be quite good. I mean, there will be an impact on upstream, but not in the downstream side, not in power production, right? In order to answer to your question earlier that you said, if the with the imbalances that, although we had deducted them from the windfall. Yes, but it was not enough. Clearly that generated a loss. The electricity acquired for the 10 almost 11 days in August was over RON 83 million in value. Thank you. Thank you. We received a written question from Oleg Galbur. What is the reference price for calculation of royalty on the gas supplied to Iernut? One, the reference price for the royalty on the gas supplied to Iernut is the reference price for all the quantities that are sold to the free market. It's not a special price. The price communicated by the National Agency for Mineral Resources. No, no. A question from Ioana Andrei. Starting with September will be RON 100 per megawatt. No, this is what we have requested, also that the price, the transfer price of RON 100 should be also applied to royalty. We know that this emergency ordinance is in parliament right now. We have proposed also a modification that the RON 100 reference price should be applied also to the calculation of royalty. Thank you. Another written question from OGRBI. Does Romgaz sell gas to other gas-fired power plants? If yes, what was the volume in the third quarter? We sell natural gas to customers that produce electricity but also thermal energy. Not only gas-fired power plants, it's also the thermal energy producers. Okay? The answer was already provided before. Are there any other questions? If there are no further questions, we will conclude this conference call. Thank you very much for your questions. If you need further information, please contact our investor relations team. The conference is now concluded. On behalf of Romgaz team, thank you for attending today's conference call. Goodbye.