NewMed's Aphrodite Hidden Value and Seismic Shift

Strong Q2 with high gas prices, but the real story is the emerging Aphrodite valuation gap and new exploration.

NWMD.TA · Earnings Call · 2026-08-13

A Quarter of Strength and Signal

NewMed Energy delivered a robust Q2 2026, with production of 2.7 Bcm and net profit of ~$118 million, driven by high gas prices linked to Brent. As new CEO Niv Sarne put it, “We had a very strong Q2 performance, started with high production of about 2.7 Bcm.” — Niv Sarne, CEO · 2026-08-13 The company also completed its third pipeline from the field, lifting capacity to 15.8 Bcm annually — an extra 1 Bcm to sell. This operational momentum is underpinned by seismic survey plans and a fresh strategic lens under new leadership. But the quarter's most striking development is not in the income statement — it's the market's quiet recognition of value at Aphrodite field. Shell's intention to sell its stake to MOL for $720 million implies an asset value of ~$2 billion, against NewMed's book value of $190 million. Sarne highlighted this gap:

In a related note, one of our partners, Shell, has announced last week their intention to sell their share in the field to MOL, the Hungarian energy company, for a value of $720 million, which, in a very simple calculation, gives a value of about $2 billion for the asset. Just kind of like in our books, we have a value of about $190 million. So there is, from our perspective, a hidden value in the value that's reported on our books.
Niv Sarne, CEO · 2026-08-13

This is a company-unique catalyst — the market has barely repriced NewMed for Aphrodite, and the transaction confirms the asset's real-world worth.

Riding High Gas Prices, Expanding Infrastructure

High gas prices were the headline driver, with average prices up to $6.5/mmBtu from $5.6 a year ago. CFO Tzachi Habusha noted, “Net revenues increased by $86 million compared with the same quarter last year. $59 million of that came from higher natural gas production, another $25 million came from a higher average gas price per MMBtu.” — Tzachi Habusha, Deputy CEO and CFO · 2026-08-13 The company is also progressing on midstream infrastructure — the Ashdod-Ashkelon looping adds 2 Bcm/yr of Egyptian delivery capacity, and the FAJR+ compression and Nitzana pipeline are on track. These projects are crucial for monetizing the extra capacity from the third pipeline and the upcoming Leviathan Phase 1b. Leviathan expansion remains the core growth driver. The $2.4 billion project is 23% complete, with the drilling rig expected on location by year-end to drill three new production wells. Despite regional tensions, Sarne confirmed, “To date, everything is on time. We have ordered already the long-lead items, and the critical ones are on the critical path.” — Niv Sarne, CEO · 2026-08-13 This resilience is notable given the Middle East conflict backdrop affecting many peers.

A New Exploration Era

NewMed is also initiating two seismic surveys — a first for Leviathan since production began in 2019. The OBN (ocean bottom nodes) survey with 5,000 nodes will map the field and explore deeper oil prospects. Additionally, a new Zone I license in northern Israel's economic waters has attracted SOCAR and BP as partners, a positive signal for exploration upside. Sarne commented, “We have brought two new international energy players, SOCAR and BP, into this license. And we see that as a good indication and a positive as the potential that could be in this zone.” — Niv Sarne, CEO · 2026-08-13 These moves transform the company from a single-asset producer to a broader exploration play.

Bottom Line

NewMed's Q2 was strong operationally, but the Aphrodite valuation gap and new seismic activity are the real fresh signals. With a buoyant gas price environment and expanding infrastructure, the company is well-positioned. However, the market has yet to fully credit the hidden value in Aphrodite — a mispricing that could narrow as FID approaches in 2027.