Navitas turns Shenandoah cash flow into an aggressive new oil expansion
After generating $690 million in EBITDA during its first year of production, Navitas is investing in new Gulf of Mexico wells, Tiberius and Sea Lion as it targets $3.3 billion in EBITDA by 2031.
Navitas Petroleum, led by Gideon Tadmor, is entering the second half of 2026 with sharply higher cash flow following the first full year of production from the Shenandoah project in the Gulf of Mexico, while directing that cash toward an ambitious pipeline of new developments.
The partnership reported revenue of $517.2 million in the first half of 2026, compared with $35.8 million in the corresponding period last year. EBITDA rose to $424.2 million from $12.3 million, while net income attributable to participation unit holders reached $80.4 million, compared with a loss of $45.3 million a year earlier.
Excluding a one-time loss related to early debt repayment and foreign exchange expenses, net income was approximately $165 million.
The improvement was even more pronounced in the second quarter. Revenue reached $279.2 million, compared with approximately $18 million a year earlier, while EBITDA climbed to $236 million from $7.2 million. Net income totaled $77.2 million, compared with a loss of $56.4 million in the second quarter of 2025.
The sharp increase largely reflects Shenandoah's transition to commercial production in July 2025.
During its first year of production, including the project's ramp-up period, Shenandoah generated approximately $690 million in EBITDA for Navitas, representing a return on investment of about 60%. The project contributed $412 million of Navitas' EBITDA in the first half of 2026 and approximately $224 million in the second quarter alone.
Navitas says only 7.7% of Shenandoah's total reserves have been produced so far.
Navitas is using the cash generated by Shenandoah to expand production in the Gulf of Mexico and build a regional production hub around existing infrastructure.
The partnership is preparing five additional development wells by the end of the first quarter of 2028: two additional wells at Shenandoah, two at Monument and the first well at Shenandoah South.
The first Monument well has been successfully completed, with production expected to begin by the end of 2026 and add approximately 5,700 barrels per day. A second well is expected to begin production in the first quarter of 2027.
Earlier this month, Navitas also signed an agreement to acquire a 33.33% interest in the Tiberius and Logan oil discoveries in the Gulf of Mexico. The partnership is paying $68 million for the interests, acquired from Occidental and Cosmos.
Production from the first Tiberius well is expected to begin by the end of the third quarter of 2028, while Logan is expected to come online at a later stage.
The wells are planned to connect to the existing Buckskin facility, located about 20 kilometers away, allowing Navitas to use existing infrastructure and develop the area as a regional production center.
According to Navitas' resource report, the net present value of the first Tiberius well is estimated at $164 million. Future wells in the area are not included in that calculation at this stage.
Navitas is also moving forward with its plans to develop the Sea Lion project in the Falkland Islands.
The partnership recently completed the purchase of a second floating production, storage and offloading vessel, or FPSO, for $125 million. The facility is expected to be used in the development of Sea Lion and has a production capacity of approximately 125,000 barrels per day.
Navitas' development plan for the project's northern area calls for 38 wells to be drilled in two phases. The partnership aims to reach a final investment decision in the first half of 2028, with production targeted for the end of 2030.
Navitas acquired its rights to the project in 2022 without paying for them and received $6 million from Rockhopper, the company that transferred the rights.
The acquisition of the second FPSO has also increased the value Navitas attributes to its interest in Sea Lion. According to the partnership's latest reserves and resources report, the discounted cash flow value of its share of the project's existing phases has risen 39% to approximately $5.2 billion, from $3.7 billion in the previous report.
The figure represents approximately 535 million barrels of oil equivalent out of Navitas' total 873 million barrels of oil equivalent in the project.
Sea Lion's Phase 1 North Development Area is expected to require approximately $1.8 billion of investment. The project includes 11 wells in its first phase and 12 in the second, with production scheduled to begin in March 2028.
By the end of June, approximately 18% of the development costs expected to be incurred through the start of production had already been spent. Current work is focused on preparing infrastructure in the Falkland Islands.
Navitas' rapid expansion is also increasing its financing costs.
Financing expenses reached $173 million in the first half of 2026, compared with $42.3 million in the same period last year. The figure included approximately $50 million in expenses related to early debt repayments and $67 million in net interest expenses.
The partnership also increased its oil-price hedging expenses by $28 million compared with the first half of 2025.
Navitas nevertheless has set an ambitious target for the end of the decade. It expects to generate approximately $3.3 billion in EBITDA in 2031, compared with about $760 million in 2026, while reaching production of 183,000 barrels of oil equivalent per day.
The forecast depends on additional production from Shenandoah, Sea Lion, Monument and Tiberius.
"The strong flow from Shenandoah allows us to continue with an accelerated growth strategy," Tadmor said in a conversation with investors.
He also argued that the continuing crisis in the Strait of Hormuz could affect the global oil market by prompting countries to draw down strategic reserves and potentially slowing the development of new projects in emerging regions.
"Our expectation is that the global economy will be more oil-dependent than in the past, and this situation gives us a strong tailwind. We are in the right place at the right time," he said.
