Navitas Petroleum Surges to Profit on Shenandoah Project Boost in First Half 2026

Navitas Petroleum, led by CEO Gideon Tadmor, reported a significant increase in revenue and profitability in the first half of 2026, driven by the first year of production from its Shenandoah project in the Gulf of Mexico. The company recorded revenues of $517.2 million and an EBITDA of $424.2 million, compared to $35.8 million and $12.3 million respectively in the same period last year. Net profit attributable to unit holders reached $80.4 million, reversing a loss of $45.3 million from the previous year. Adjusted net profit, excluding one-time losses from early debt repayments and exchange rate expenses, was approximately $165 million.

In the second quarter alone, revenues totaled $279.2 million with EBITDA of $236 million, compared to $18 million and $7.2 million respectively in Q2 2025. Net profit for the quarter was $77.2 million, compared to a loss of $56.4 million in the prior year. The sharp rise stems from Shenandoah’s commercial production start in July 2025, which generated about $690 million EBITDA in its first production year, reflecting a 60% return on investment. Shenandoah contributed $412 million to EBITDA in H1 2026 and $224 million in Q2, despite only 7.7% of its reserves having been extracted so far.

Recently, Navitas completed the acquisition of a second floating production storage and offloading (FPSO) vessel for $125 million, intended for its Sea Lion project in the Falkland Islands, which has a production capacity of approximately 125,000 barrels per day. The Sea Lion development plan includes 38 wells in two phases, with a final investment decision expected by mid-2028 and production slated to begin by the end of 2030. Navitas obtained rights to this major oil field in 2022 without payment and received $6 million from operator Rockhopper for transferring the rights. The FPSO purchase increased the project’s economic value, with the discounted cash flow of Navitas’s share rising 39% to about $5.2 billion, based on 535 million barrels of oil equivalent from its 873 million barrel stake.

The first phase of Sea Lion involves an estimated $1.8 billion investment for 23 wells, with production expected to start in March 2028. Development expenses through June reached about 18% of total projected costs, focusing on infrastructure preparation in the Falklands. Navitas is also advancing its Shenandoah area operations with plans for five additional development wells by early 2028, including two more in Shenandoah, two in Monument, and one in South Shenandoah. The first Monument well was successfully completed and is expected to add about 5,700 barrels per day by year-end, with the second well starting production in early 2027.

Additionally, Navitas acquired a 33.33% stake in the Tiberius and Logan oil discoveries in the Americas Gulf for $68 million from Occidental Petroleum, owned by Warren Buffett’s Berkshire Hathaway and Cosmos Energy. Production from the first Tiberius well is expected by late Q3 2028, with Logan production planned for later stages. These wells will connect to the existing Bacchus facility about 20 km away, creating a regional hub. The net present value of the first Tiberius well is estimated at $164 million.

Navitas’s rapid growth has increased its financial costs, with financing expenses reaching $173 million in H1 2026, up from $42.3 million a year earlier. This includes $50 million in early debt repayment costs, $67 million in net interest expenses, and a $28 million rise in oil price hedging costs compared to last year. Despite these costs, Navitas projects ambitious growth targets, aiming for an EBITDA of about $3.3 billion by 2031 and production of 183,000 barrels of oil equivalent per day, driven by expansions in Shenandoah, Sea Lion, Monument, and Tiberius.

Chairman Tadmor told investors that strong cash flow from Shenandoah supports the company’s accelerated growth strategy. He noted that ongoing tensions in the Strait of Hormuz are prompting countries to build strategic reserves, potentially slowing new projects in emerging regions. Tadmor added, "Our outlook is for the global economy to be more dependent on oil than before, which provides us with strong tailwinds. We are in the right place at the right time."