Good afternoon, ladies and gentlemen, and welcome to our conference call for discussing the results recorded by Romgaz Group in the first half of 2025. After introducing the speakers, Mr. Răzvan Popescu, Chief Executive Officer, 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. Răzvan Popescu, Chief Executive Officer, Mr. Aristotel Jude, Deputy Chief Executive Officer, Ms. Gabriela Trâmbiţaş, Chief Financial Officer, Mr. Robert Chircă, Exploration Production Director, Mr. Ion Făudăș, Production Department Director, and our Investor Relations Department. Now, I would like to give the floor over to Mr. Răzvan Popescu, who will open the conference call with an opening speech. Good afternoon, ladies and gentlemen, and thank you for joining our conference call to discuss the results recorded by the Romgaz Group in the first half of this year. Today, we will release the Board of Directors’ report, which comprises a detailed presentation of our economic performance and the consolidated interim financial statements. Also, an overall presentation of the group is available on our website in the Investors section. I will start by highlighting some aspects of the gas market environment in the first half of 2025 compared to the same period of the previous year. We estimate that natural gas consumption in Romania increased by around 4% to 58 TWh, while imported volumes grew significantly by over 60% and increased their weight to 26% in total gas consumption. On the Central European Gas Hub, the average reference price advanced by over 45% according to the data provided by the National Authority for Regulation of the Mining, Oil, and CO2 Geological Storage Activities. Similarly, we assess that on the Romanian Commodities Exchange, the wholesale average price, spot forward on palliative segments, increased significantly in the first six months, the market still having a weak trading liquidity as a result of the current regulation enforcement. Regarding the Gas and Energy Sector Administration in Romania, Romgaz activities continue to be influenced mainly by GEO No. 27, issued in March 2022, valid for the first quarter of 2025, and Government GEO No. 6, issued in 2025, in force starting 1st of April 2025. The main legal provisions applicable to the gas producers include regulated gas selling price of RON 120 per MWh for the gas flow to households and supplier of households, heat producers and their suppliers for the production of thermal energy, and also to transportation operators and distributors for a maximum of 75% of their technological consumption. The price level is applied starting in April 2024 and will be valid until the end of March 2026. For the gas holder regulated prices, payment of the Windfall Profit Tax is exempt, and gas royalties are computed based on these regulated prices instead of the reference prices. Regarding the operational and financial performance reported by Romgaz in the first half of 2025, we can highlight the following results: natural gas production amounted to 2.49 ECM, adjusted marginally by 0.1% year-on-year, but elevated by 1% compared to the semestrial average recorded over the three previous years. In the second quarter alone, we succeeded to increase our gas production by 0.4% compared to the same period of 2024 to 1.2 ECM. The six-month performance was achieved through steady efforts aiming to consolidate the potential of our production, which included specific activities and intervention recompletion operations that allowed us to resume production at 85 inactive wells and improved production by over 100 million cubic- meters. Continuous rehabilitation projects of our main mature gas fields, optimization of gas fields' exploitation, and investment to extend production infrastructure and connect new fields to it. Regarding investments in our production facilities, we can point out that we performed drilling preparations for one production well, while other wells are in different drilling preparation stages. We finalized five surface facilities, have seven in execution, and 20 others are in different preparation stages. We performed reactivation and capitalizable repairs for 105 production wells. We can also highlight that all of these measures led to a significant 363% increase in our condensate production to over 25,000 tons in the first half of 2025, due mostly to a higher production level in our Caragele commercial field. Regarding the Caragele Deep, works are progressing with 76 Rosetti and 54 Damianca wells in execution and 78 Rosetti wells in production and other seven wells in different stages of drilling preparation. We continue to improve our significant position already held on the domestic gas market. In the first six months, our market share reached 47% of total gas deliveries in Romania. Regarding gas consumption covered from domestically produced gas, we are strongly positioned with a 64% estimated share, significantly over 54% held in the first half of 2024. We succeeded to increase our total revenues from gas flow by 9.4% year-on-year to over RON 3.7 billion, compared to RON 3.4 billion in the first half of 2024. The strong result was due to gas volumes sold significantly higher by 12.6% year-over-year to 2.33 ECM in 2025 compared to 2.24 ECM a year before. Based on the optimum management of our gas flows, thus lower volumes injected into underground storages and higher volumes withdrawn from storages this year. These revenues from storage services were higher by 8% year-on-year, amounting to RON 276 million, with capacity reservation at 54%. Reserve capacity was 93.76% at the end of June 2025, with a filling rate of a little over 56%. Revenues from electricity adjusted by 1.5% year-on-year, including RON 177 million in revenues. Production from our old power plant, which operates only one unit, has unexpectedly declined to 342 GWh in the first half of 2025, still supporting the security of supply in the energy market of Romania. Overall, the Romgaz Group reported total revenues of RON 4.25 billion, higher by 9% compared to RON 3.9 billion in the previous year, based especially on the contribution of our gas sales sector. Regarding the expenses, the Windfall Profit Tax increased by 24% to RON 475 million in the first half of 2025, compared to RON 383 million last year in the same period. This is due to the high expense that we recorded in the first quarter of 2025. Gas and UGS royalties increased by 6% to RON 292 million, mostly due to higher expense in the first quarter. Altogether, these taxes, including the duty to the Energy Transition Fund, were higher by 18% year-on-year and represent an expense of RON 781 million compared to RON 664 million from last year, with a negative effect on our profitability. This was the cumulative effect of increased gas volume sales, higher weight of gas holder regulated prices, and also gas pricing. Bottom line, we achieved a net profit of RON 1.68 billion, lower by 9% compared to the historically high value of RON 1.84 billion recorded in the first half of last year. All profitability rates were substantial: EBITDA margin extended at 54%, EBIT rate 46%, and net profit rate at over 39%. On the CapEx side, Romgaz Group invested a total consolidated amount of RON 1.89 billion in the first half of this year. Of this amount, RON 1.42 billion represents the investment of RBSL and RON 447 million, the investment made by Romgaz alone, mainly in the onshore exploration and production modernization. Regarding our strategic project in Neptun Deep, the project made in '25 is in line with the work programs, the budget, and with the execution calendar. In the first quarter of this year, the first gas production well was funded, and we are currently drilling on the Pelican South. Out of a total number of 10 wells, four are to be drilled in the Pelican South and six other wells on the Domino Field. In the second quarter, closer to shore, we started the works for the micro tunnel that will connect the pipeline to the land near Tuzla on Franza County. Also, work is in progress on the natural gas metering station, another key element of this development. Offshore infrastructure is also advancing. In Italy, fabrication of the jacket is underway, and in Indonesia, the works continue on the topside module. As a result of this significant development, Romgaz and its partners are on track to safely deliver the first gas from Neptun Deep in 2027, and the project remains within the up to €4 billion guidance for the total investment. Another strategic objective is the CCGT power plant in Iernut. On Iernut July 2025, the total work progress of the investment of the Turnkey project stands at 98%. Related only to the new EPC contract that started in August 2023, the total progress of the investment was around 90%. In the first six months, work was carried out on the electrical automation side mainly, and some tests were performed on the thermomechanical side. However, I would like to highlight some of the recent difficulties encountered during the execution of the project. As is well known, the contractor is currently facing financial hardship, being involved in a pre-insolvency procedure in his home country. The distress also affected the progress on the works on our power plant. Despite the fact that Romgaz paid on time all invoices that met the payment criteria, having no outstanding debt, the contractor became unable to support the execution of the works, incurring overdue liabilities for the subcontractor's own side. The hardship faced by the contractor also caused a lot lower mobilization than was expected on site, and the contractor failed to meet intermediate deadlines to achieve the contractual commissioning date. This delay was flagged repeatedly by Romgaz and the site supervisor to the contractor. Although the contractor benefited from the option to extend the duration of the works by six months, they still could not recover these delays. Among other drawbacks that you can mention was the partial impossibility of entering the site for a period of around 45 days due to some droughts caused by the moorage rivers in some areas that also had a negative effect on the progress. Romgaz does take all efforts to support the contractor and find the best legal and technical solution to finalize the plan as soon as possible. I would like to also mention dividends distributed this year. We remind you that on April 29, the shareholders of Romgaz decided upon a total gross dividend of RON 604 million, which resulted in a total payout ratio of 30% for the last year and will allow Romgaz to partially finance its significant investment plans. At the end of this presentation, I would like to highlight the strong performance recorded by Romgaz shares on the Bucharest Stock Exchange. SNGN share price boosted by over 65% this year and by almost 50% over the past six months' period. We believe that the positive stance of investors is due, among others, to the significant investment strategy of our company, solid position on the market, and good perspectives for the energy sector. With this, I would like to close our presentation, and thank you for your attention. Thank you for the presentation. Ladies and gentlemen, the line is now open to take questions. I would like to remind you that you have two options to address your questions, either to raise the hand and turn on your microphone or write down a question. Ms. Ioana Andrei, you may now address your question. Hello, and thank you for the presentation. I have a couple of questions. First, regarding the volumes sold at the regulated price over the next quarter, if you could please disclose the grid volumes for each of the following quarters and for the first quarter of 2026. Second, regarding the Iernut power plant update, I understand the difficulties, but in the last call, you mentioned the commercial production until the end of the year. Is this still possible? If not, when to expect it? Third, if you could please give us an update regarding the Azomureș acquisition. Thank you. That's all from my side. Thanks. I will start with the first one. The volume sold in this half year of 2025 at regulated prices was 77%. For the next quarters? For the entire year of 2025, it's around 84% of total sales are at regulated prices. For the first quarter of 2026, they will be over 87%. Does that answer your question from the point, if it's? Yes, thank you very much. Thank you. On the Iernut power plant, we have encountered this unexpected problem with the subcontractor. Romgaz has done everything that stands in our power to have direct payments made to critical subcontractors and keeping them on site. Unfortunately, our contractor decided to send us a letter last week in which they are looking to suspend the works on the power plant. This is contrary to our contract. We have sent them a corresponding letter in which we do not agree with such approach. Right now, we are analyzing both internally with the press and with the interested parties the actual, let's say, options that Romgaz has. We need to take into account the fact that Romgaz may be able to finalize this power plant without this contractor, but of course, this will probably incur additional time and also maybe additional costs. Okay, could you actually give us a guidance? The postponement should be, I don't know, first half of 2026. It's very hard to say. We are looking this year to be able to inject the first megawatt in the system. We are looking by the end of the year to try and inject the first megawatt from the new power plant in the system. Okay. As part of the final testing, you can basically, part of the testing has been done, and we need to have the final testing done regarding the injection of megawatts in the system. Okay. One more question related to Iernut: once the first megawatt is into the system, we could expect that the power plant will start operating at full capacity? There are a few months to be tested. That's why it's a little bit hard for us to express a certain answer. Exactly as Răzvan said, we would like to start the testing before the end of this year. As the case may be, based on the testing, to allow the market to know when the production for the entire Iernut power plant will start. Everything is subject to the testing period. Okay. Thank you. Regarding Azomureș, we've attributed the contract to KPMG and TÜV Austria. They are helping us in that evaluation. We've already had the first meeting on site last week with the consultants together with the Romgaz team. We are starting the proper analysis, both technical and economical, of the possibility of taking over Azomureș. Thank you. You're welcome. Ms. Daniela Mândru, you may now address your question. Ms. Daniela Mândru, please activate your microphone and you may address your question. Can you hear me? We can hear you, yes. Good. Thank you for the presentation. Several follow-up questions on the previous questions, of course. I have also my own questions. Regarding Iernut, from my understanding, what you said before is that with Iernut, everything is on set. You are in the testing period, correct? No. There are a few works to be done because at the moment, we are at 95% from the total execution. Also, under this 2% are the testing, but certain works have to be finished. Răzvan said that part of the testing is part of this 2%. At the moment, due to the fact that the entrepreneur has some problems in its own cash flow and with its subcontractors, we are analyzing how we will finish the Iernut power plant. Option one is with the actual entrepreneur, and the second is for Romgaz himself to finish the remaining works to be executed and the testing. For us, putting in function Iernut power plant is a priority. Yeah, because I've read that if you slip the commissioning date after June 30, 2026, you have to repay the grant. A such situation will be analyzed case by case and based on the actual facts and situation. In our perspective, if the testing stands, we will discuss also with the PNI commission in order to extend the PNI. So. As the case may be. There is a possibility to postpone this commissioning after June, from my understanding. There is a possibility. The actual due date under the PNI is December 2025. As the case may be, it will be prolonged, but it's subject to the part discussion with the PNI commission and our authority, namely Energy Ministry. Okay. Now also regarding Iernut, given this testing period, how would you see the production of Iernut in the following quarters? In the first half, the production declined by 24%. In the second half, to assume a same% decrease, or what are the plans here? You can assume similar to the first half. It depends a lot on the time and volumes of the testing of the new power plant because the two cannot work together. The moment that we start the testing and injection in the system from the new power plant, the whole. If you start testing in Q4, the production there will be close to zero or zero, something like this? Not exactly zero. is close to very low. Yes. Okay. Good. Now, I have several questions regarding the first half results. What I've noticed is that you record FX losses from debt revaluation and other gains and losses. I do not understand why you report these losses as an OpEx. You understate the operating profit and overstate the financial costs. This is a question. I didn't see up to now the debt revaluation losses, FX losses reported as this. Anyway, please detail for the first half because you don't have any note on the financial costs and also the third parties and other costs split, please. In your report, there is no note on these costs. Finance costs for the first half of the year and third party's costs also for the first half of the year. Hello. Thank you for your question. Regarding finance costs, we include here the interest charge on the existing liabilities, meaning the loan we took in 2022 when we acquired the current Romgaz Black Sea and the bonds on the bonds that we issued last year. For us, we always presented it in other gains and losses. Regarding third-party services and other costs, the increase is due mainly to transportation costs charged by the system operator. Yeah. I Yeah. I know all these things, yes? I know also because you have some, I know what each cost contains. What I want, I want the figures. Split, for example, finance costs. I want the interest expense. I want the commission, unweighting of the commissioning expenses. Also, for third parties, you should report their, I don't know, transmission, capacity booking costs, and something. For us, it's hard to guess what is there. You present a total, and we need to estimate it. Just a second, please. Please, this is a kind request. If it's possible to present such notes in your reports, finance costs and third parties, a split, please. Yes, we will take into consideration your request. For this first half year, interest expense was at RON 53 million, and the unwinding of the decommissioning provision at RON 13 million. RON 13 million. Thank you. For the third parties? For third parties, gas capacity reservation and transport was RON 180 million. We had other operating expenses, movement in provisions in the decommissioning provision, insurance costs. Yes, you see, there are a lot of details that we do not have access to. Please take my request into consideration. I will ask the IR for details to have all this split for the first half of the year. Also, regarding assets impairment, I've seen not significant, but quite large assets impairment in the first half of the year. What is the outlook for the second half of the year? To expect the same amounts, to expect these assets impairments to continue at these levels? No, this is not a regular event that happens. Some of the wells we drilled were not successful, so we recorded an impairment, but it doesn't have to be every quarter. We didn't record an impairment based on an impairment test. We didn't identify any impairment indicators. Okay. Thank you. Thank you. This is all from my part. Thank you. We go on with Mr. Oleg Galbur. You may now address your question. Mr. Oleg Galbur, please activate your microphone. We continue with Ms. Laura Simion. Please activate your microphone, and you may address your question. Ms. Laura Simion, please activate your microphone. Okay, good afternoon. I have a couple of follow-up questions. First one, also regarding Iernut. I heard that you consider finishing the works with some other company, but if I remember correctly, this was a problem when you first canceled the contract with Duro Felguera because you will lose the warranties for the work done. This risk, I think, is still there if you decide to finish the works with someone else. You said that we're going to finish with another company. We said that Romgaz might finish the works, and Romgaz would be the EPC of finalizing the works. Indeed, we did have that issue before, and not only this issue that stemmed from the old works contract that was signed in 2016, but for us, given the analysis that we have done and that we are currently doing, it wouldn't be a big difference to have an EPC company that's in bankruptcy and not having any type of guarantees wherein Romgaz is taking over the site. In this respect, we'll definitely inform the market when we have taken a decision regarding this. We are currently in the analysis. Okay. Thank you. Referring also to the Forex gains, which Daniela referred to, I expect the Forex losses because of your euro bonds and other euro-denominated loans, but you also registered some Forex gains, about €50 million. I was wondering what generates these Forex gains. We didn't use the money we collected from the bonds immediately. Some of the cash was placed in bank deposits. These generated the Forex gain. Okay, there were some assets in euro. Yes. Sorry, just to find my document and I put the questions. For the second bond issue, initially, the plan was for this autumn. Is this still in place, or you will delay the second bond issue? On the market, first and foremost, we do not have any stringent cash necessities at the moment. We are looking on the market and seeing how it will evolve. If the timing for us would be correct, we will be in the market by end of this year. If not, maybe next year. It depends a lot on the market conditions. Next year in the first quarter, or? Yes, in the first year. Okay. Okay. Thank you. That's all from my side. Thank you. Thank you. We continue with Mr. Oleg Galbur. If you can hear us now, please turn on your microphone. Can you hear me now, please? Yes. Yes. Okay. Thank you. Thank you for the opportunity to ask questions. I have two follow-ups. The first one is on the volume sold at regulated prices. Could you please give us the exact figure in terawatt- hours for the second quarter? The second follow-up is on Azomureș. Since at least based on the publicly available information, this company was a loss-making one in the recent years, I was wondering if you can talk a bit about your investment criteria for this specific company, which you try to meet in order to make a positive investment decision. Is it some minimum level of IRR, or is it your capability to turn the company profitable? Anything you could tell us would help to understand the logic for this acquisition. Lastly, on your storage segment, I noticed a drop of the net before tax on a year-on-year comparison. Could you tell us what was the trigger behind it? Was it due to tariffs or some one-off expenses that resulted in the drop? Thank you. Yes. Thank you for the question. On the second quarter, at regulated prices, we have 10.37 TWh sold. That will continue in the third quarter around 9.5, and then in the fourth and first quarter of 2026, somewhere in between 12 and 11 TWh for each quarter in market. Does this answer your question? Yes, yes. Thank you. Yes. On Azomureș, we are looking at it also in terms of business, but we are looking also at acquiring the Azomureș production facilities. Our evaluation is a bit more complex. It takes into account that the fact that mainly Azomureș was loss-making was because of the lack of access to natural gas volumes. That is something that Romgaz can supply. The logic behind it is if taking into account, of course, market pricing and the estimation that we have for CapEx investment, the environmental measures that have to be taken, and also the future price for fertilizer corroborated with the future price of gas, if Azomureș, in terms of business, will be more profitable than outright selling the gas, for Romgaz, that makes sense to be an acquisition target. This is how we do the. Okay. Understood. Can you please repeat regarding the storage? What have you received? The storage segment, regarding the storage segment? Sorry, I didn't hear your question. Can you repeat the last question regarding the storage segment? I was looking at the earnings before tax reported for the segment, and it was lower in comparison to last year's second quarter. I was wondering whether this is due to some one-off expenses or the tariff revision or whatever that triggered this drop. Revenue in Q2 was around RON 13 million lower than in Q1. Also, they recorded third-party services higher by about RON 51 million than in Q1. I will get back to you with the exact services that they incurred that caused such an increase. Okay, it was rather the mix of services provided that resulted in this drop of earnings. Yes. Okay. Thank you. You're welcome. It is also partially because of the lower injection that they had in the first half of this year. It will probably be recouped by the end of October. Understood. Thank you. Ms. Daniela Mândru, please address your question. Yeah. Speaking about storage, please remind us what is the minimum, what is the quantity, the obligatory quantity to be stored. I think it's 3.9 TWh. Correct me if I'm wrong. By the end of the year, where do you see the stored volumes? I think from my computation, you are above the 3.9 TWh right now. It was 3.9 last year. Romgaz has much less objectives than this year. We have around 345 volumes to inject. We are seeing the capacity reservation right now is around 94%, but we think that by the end of the injection cycle, it will reach almost 100%. Is the injection cycle ending in Q1 2026 or when? The injection cycle is ending on the 31st of October. Okay. This answer doesn't help me. I want to see, I would like to hear from you what volumes you will have in storage by the end of the year, if it's possible. Romgaz or the third parties? Romgaz, as reported in your KPIs report. It's not reported, but can be deducted, of course. It can be implied. Please proceed to you. The question basically, from now on, in the second half of the year, you plan to withdraw gas, or you will keep the current level of quantities as it is now? No, I don't understand the question. Why would we withdraw gas? We are injecting gas, not withdrawing gas? There is a lot of gas in the storage, that's why. I asked you, okay, what is the minimum obligation? For Romgaz, 345 GWh. Okay, 345. The question is because you usually say about these obligations. That's why. Yes, we will probably be above this obligation. Yeah, this is your usual business to say about the obligation. Yeah, okay. Thank you, thank you. It depends a lot on the quantity management and on the prices. It's going to be something flexible. It's not something that we can have, let's say, pinpoint. We'll be definitely above the obligation of 345 GWh. Okay. Thank you. Thank you. We received several written questions from Mr. Ciornei Marius Călin. I will read them separately, and you will be provided an answer. The first question is, please provide an update related to the following projects: ERP software for household invoicing and status of the 40 MW photovoltaic park. We already signed a contract with a company that is going to create the software for the household and non-household consumers. We have 160 days in order to have finalized the software and the platform for the household and non-household consumers. The second, it was related to. Yeah. At the moment, we are currently in analysis in order to award the contract according to the documentation published by Romgaz. Probably in the next week, we will announce the winner. Thank you. Another written question from Mr. Ciornei Marius Călin related to Azomureș. Will you make a decision until the end of the year? Everything is subject to the data that will be provided by Azomureș and the reports that will be issued by our consultants. We will not speed the decision if we will not have enough accurate and complete data and information from Azomureș. We would like to have all the details before having a decision taken. Prior to everything, we have to present such a decision to the Board of Directors and, as the case may be, to the General Assembly. Once the Board of Directors is convened or the General Assembly is convened, we have to have all the documents and management proposal to the Board of Directors and General Assembly. At the moment, we are looking forward to having a decision by the end of this year. Such a decision is subject to the data and reports that will be issued by the due diligence consultant. Thank you. Another written question from Mr. Ciornei Marius Călin. Is the filling degree of storages with natural gas of 54% on June 30, 2025, enough, which should be the filling degree of storages at the beginning of the gas year? From our perspective, by the end of the injection cycle, we will have more than 95% of the total capacity used. Due to that, the storage will be enough to the supplier in order to supply gas to the final end consumers. Thank you. If there are any other questions. % will be higher than that based on the contracts or capacities that will be awarded or concluded. Probably the final figure will be more than 98%, 99%. Thank you. Ms. Daniela Mândru, please address your question. In terms of gas production for this year, for the first half, the production ended about flat year-on-year. For the full year, what is your estimate? Please do not say that your target is to keep the decline at 2.5%. Just give us an approximation for the for 2025 production. Our estimation until the end of the year in terms of production volume is up to 4.9 billion cubic- meters this year. Those are our estimations, aligned with that 2.5% decline year by year. Thank you. Thank you. We received another written question from Mr. Ciornei Marius Călin. Will the winner, the awarding contract for the photovoltaic park, will it be announced on the Bucharest Stock Market? Announced? [Foreign language] Bucharest Stock Exchange. No, we don't have any obligation to announce. It was a public center, but if it's such a big interest, we can inform you. It's not something that we want to keep a secret. Are there any other questions? Please feel free to address them. Mr. Oleg Galbur, please address your question. Mr. Oleg Galbur, please turn on your microphone. Can you hear me now? Yes. Yes. Thank you. Just one follow-up question on the generation segment. Now that the energy price regulation has ended, what shall we expect in the third and fourth quarter for this segment? Do you see the segment turning to profit or just reducing the losses? This is, you know, ignoring what can happen on the new power plant development if there will be, let's say, less generation from the old power plant, assuming the status quo. What would be your expectations in terms of the segment results? Thank you. You can share your slide. It's hard to tell because we are not producing a very old power plant. We have had issues with it in the first part of this year. We are still looking to produce up until the testing in the new power plant will start. We are probably viewing it in line with the first part of this year, maybe with the smaller losses like this. Okay. Thank you. If there are no further questions, we will conclude this conference call. Thank you for your questions. If you need further information, please contact our investor relations team. The conference is now concluded. On behalf of the Romgaz team, thank you for attending today's conference.