Energean Oil & Gas

Engie, Terna, Energean join for underground gas storage facility

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Three major firms, each specializing in its own respective field, have formed a consortium to seek a contract to develop and operate a depleted natural gas field in northern’s Greece’s offshore South Kavala region as an underground gas storage facility, energypress sources have informed.

Storengy, belonging to France’s Engie group, Energean Oil & Gas, holder of a license for the South Kavala field, and technical firm Gek Terna are the three players joining forces for this contract, to be offered through a tender being prepared by the privatization fund TAIPED.

Greece remains the only country European country without an underground gas storage facility. All others maintain storage facilities covering over 20 percent of their annual natural gas consumption needs. At present, many countries in Europe are planning to develop additional such projects over the next five years.

Underground gas storage facilities play a key role in subduing carbon emissions as a result of the flexibility they offer to renewable energy sources.

Consortium member Storengy is Europe’s biggest developer and operator of underground gas storage facilities. It currently operates 21 such facilities of all types on the continent.

Offering a capacity of between 360 and 720 million cubic meters, or 10 percent of annual natural gas consumption in Greece, the South Kavala underground gas storage facility will require an investment of between 300 and 400 million euros to develop. The project has been granted PCI status by the European Commission, enabling EU funding support.

 

Energean makes significant gas discovery at Karish North

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has made a significant gas discovery at its Karish North exploration offshore Israel, the company announced in a statement.

Initial gas in place is estimated between 1 Tcf (28 Bcm) and 1.5 Tcf (42 Bcm), while high quality reservoir in the B and C sands has been found, the company added.

The well reached an intermediate TD of 4,880 meters approximately 7 days ahead of schedule. A gross hydrocarbon column of up to 249 meters was encountered and a 27 meter core was recovered to surface. Further evaluation will now be undertaken to further refine resource potential and determine the liquids content of the discovery.

Drilling of the initial phase of the Karish North well is now complete. As planned, Energean will now deepen the well to evaluate hydrocarbon potential at the D4 horizon.

Once operations are completed on Karish North, the Stena DrillMAX will return to drilling the three Karish Main development wells. Following this four well program, Energean has six drilling options remaining on its contract with Stena Drilling.

The Karish North discovery will be commercialized via a tie-back to the Energean Power FPSO, which is located 5.4km from the Karish North well. The FPSO is being built with total processing and export capacity of 8 Bcm/yr (775 mmcf/d), which will enable Karish North, and future discoveries, to be monetized.

In December, 2018, Energean signed a contract with I.P.M Beer Tuvia to supply an estimated 5.5 Bcm (0.2 Tcf) of gas over the life of the contract. The contract is contingent, inter alia, on the results of Energean’s 2019 drilling program and today’s announcement significantly increases the likelihood of its conversion into a firm contract.

Inclusive of the I.P.M. contract, Energean has contracted 4.6 Bcm/yr (445 mmcf/d) of gas sales, leaving a further 3.4 Bcm/yr (330 mmcf/d) of spare capacity in its FPSO for additional sales of discovered gas at Karish and the tie back of future discoveries.

Karish North spudded on 15 March, 2019 utilizing the Stena DrillMAX, a sixth generation drillship capable of drilling in water depth of up to 10,000 feet.

Mathios Rigas, CEO of Energean said: “We are delighted to be announcing this significant new gas discovery at Karish North, which further demonstrates the attractiveness of our acreage offshore Israel. We are building the Energean Power FPSO with spare capacity, which will enable us to quickly, safely and economically develop both Karish North and future discoveries. We have already signed a contingent contract to sell 5.5 bcm (0.2 Tcf) of this new resource, and our strategy is now to secure the offtake for remaining volumes. We continue to see strong demand for our gas, which we believe will be supported by today’s announcement.”

Energean is a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic. Energean has 347 mmboe of 2P reserves and 58 mmboe of 2C resources across its portfolio.

In August, 2017, the company received Israeli Governmental approval for the FDP for its Karish-Tanin gas development project, where it intends to use an FPSO and produce first gas in 2021.

Energean has already signed contracts for 4.6 bcma of gas sales into the Israeli domestic market. Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region. In Greece, the Company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field in the Gulf of Kavala, northern Greece.

Energean has five exploration licences offshore Israel, and a 25 year exploitation licence for the Katakolo offshore block in western Greece and additional exploration potential in its other licences in western Greece and Montenegro.

 

Energean Oil and Gas successfully completes drilling at EA-H3 in the north

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has successfully completed its drilling operations of the extended reach well, EA-H3, in northern Greece, the company has announced.

The well was brought into production on April 1 and is currently producing at a stable dry oil rate of more than 1,000 bopd on a restricted choke, Energean noted.

The well was drilled to a total measured depth of 5,679 meters and has penetrated 689 meters of the Epsilon sandstone reservoir, in line with pre-drill expectations, Energean informed, adding it will continue to monitor and finetune production parameters to ensure optimal production from the well.

The EA-H3 well was drilled using the company-owned drilling rig, the ‘Energean Force’.

Energean is a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic.

Energean has 349 mmboe of 2P reserves and 48 mmboe of 2C resources across its portfolio.

In August 2017, the company received Israeli Governmental approval for the FDP for its Karish-Tanin gas development project, where it intends to use an FPSO and produce first gas in 2021.

Energean has already signed contracts for 4.6 bcma of gas sales into the Israeli domestic market. Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region.

In Greece, the company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field in the Gulf of Kavala, northern Greece.

Energean has five exploration licences offshore Israel, and a 25 year exploitation licence for the Katakolo offshore block in western Greece and additional exploration potential in its other licences in western Greece and Montenegro.

 

 

Energean on track to deliver first gas at Karish and Tanin in 1Q 2021

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has delivered its full-year results for the year ended 31 December, 2018, announcing the company is on track to deliver first gas Karish and Tanin in 1Q 2021, adding a four-well drilling campaign in Israel commenced February, 2019.

Mathios Rigas, Chief Executive, Energean Oil & Gas, commented: “In 2018, we made substantial progress in advancing our flagship Karish and Tanin development project and remain on-track to deliver first gas in 1Q 2021. We secured $13 billion of future revenues by signing 12 Gas Sales Agreements to deliver a total volume of 4.6 bcma, firmly underpinning the project’s economics, signed a lump-sum, turnkey EPCIC contract with TechnipFMC, simplified project management, reduced our financial risk exposure, and secured funding for the project through the combination of a $1.3 billion project finance facility and the funds raised through our IPO on the LSE in March 2018. We remain focused on delivering the project and our medium-term strategy is to secure both the additional resource and offtake for the remaining spare capacity in our 8 bcma FPSO, which we believe will create significant further value for all of our stakeholders. In Greece, we grew production by 45% whilst simultaneously reducing costs per barrel by 29%, a tangible result of our commitment to optimising cash flows from our producing assets. We also commenced exploration activities in western Greece and Montenegro. We continue to target value-enhancing opportunities in the Mediterranean area and aim to replicate the growth achieved over the last decade.”

Operational and Financial highlights

* Increased 2P reserves to 347 million barrels with 2C resources of 58 million barrels, a combined 35% year-on-year increase.

* Delivered upon our milestones for achieving first gas from Karish and Tanin in 1Q 2021.

– Secured $460 million of equity and a US$1.275 billion project finance facility in March 2018;

– Took Final Investment Decision in March 2018;

– Achieved first steel cuts on the FPSO hull and topsides in November and December;

– Commenced the four well drilling campaign on 28 February 2019; spudded Karish North on 15 March 2019.

* Secured $13bn of future revenues by signing 12 Gas Sales Agreements (excluding Or), to supply an average 4.6 bcma to the Israel domestic market.

* Signed an MOU with INGL for the transfer of the onshore infrastructure following first gas, which will result in cash inflow of NIS 369 million ($98 million) for Energean Israel.

* Delivered 4,053 bopd of production (2017: 2,803 bopd), a 45% year-on-year increase.

* Sanctioned the Epsilon development, commenced platform construction and the drilling programme.

* Reduced cost of production by 29% to $17.6/bbl (FY 2017: $24.7/bbl).

* Submitted the ESIA for the Katakolo project and commenced seismic operations in western Greece, Israel and Montenegro.

* Listed on the London and Tel Aviv Stock Exchanges, subsequently becoming a constituent of the FTSE 250 and TA-35 indices.

Energean Oil & Gas – Full Year Results ($m)

Sales revenue:  90.3 (2018) – 57.8 (2017).

Cost of production ($/boe) 17.6 (2018) – 24.7 (2017)

Operating profit/(loss) 23.8 (2018) – 13.7 loss (2017)

Adjusted EBITDAX 52.4 (2018) – 20.7 (2017)

Operating cash flow 62.7 (2018) – 29.1 (2017)

Capital expenditure 494.6 (2018) – 67.7 (2017)

 

Energean commences its drilling campaign in Israel

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has commenced its 2019 drilling program in Israel, consisting of three development wells and Karish North, the company has announced.

As a result of this four-well campaign, Energean has a further six drilling options available in its contract with Stena Drilling Ltd.

Energean plans to batch drill the top-hole sections of the wells, which will allow significant operational efficiencies and cost savings, the company noted.

The drilling campaign is being undertaken using the Stena DrillMAX drillship, a sixth-generation drillship capable of drilling in water depths of up to 10,000 feet.

Energean is a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic.

Energean has 349 mmboe of 2P reserves and 48 mmboe of 2C resources across its portfolio.

In August, 2017, the company received Israeli Governmental approval for the FDP for its Karish Tanin gas development project, where it intends to use an FPSO and produce first gas in 2021.

Energean has already signed contracts for 4.6 bcma of gas sales into the Israeli domestic market.

Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region, the company noted.

In Greece, Energean is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field in the Gulf of Kavala, northern Greece.

Energean possesses five exploration licences offshore Israel, a 25-year exploitation licence for the Katakolo offshore block in western Greece, as well as additional exploration potential in its other licences in western Greece and Montenegro.

 

 

 

Energean begins 3D seismic survey work at Montenegro licenses

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Energean Oil & Gas, Greece’s sole oil producer, has begun 3D seismic survey work at its offshore exploration and production licenses in Montenegro in search of additional hydrocarbon deposits.

Norway’s PGS has been commissioned for the task, whose results are expected in the third quarter of this year. The PGS survey work on behalf of Energean Oil & Gas is expected to be completed within February.

A PGS seismic ship, Ramform Titan, entered Montenegro’s offshore area on Wednesday and anchored about one mile from the coast, near Bar, the country’s main sea port. Its 3D seismic survey work plans to scan offshore areas between Bar and the Montenegrin town Budva.

Energean Oil & Gas took part in a tender in 2014 and acquired licenses measuring a total of 338 square kilometers in two Montenegro offshore areas. The company went on to sign exploration and production licenses for these plots in March, 2017.

Both areas are believed to be promising. An independent industry firm believes they could contain 1.8 trillion cubic feet of natural gas and 144 million barrels of oil.

Montenegro’s plots have drawn major international players. A consortium made up of ENI and Novatek recently completed seismic surveys at four offshore blocks adjacent to those held by Energean Oil & Gas.

Energean signs extra Karish and Tanin sale, purchase deals

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Energean Oil and Gas has signed a Gas Sales and Purchase Agreement (GSPA) with I.P.M. Beer Tuvia Ltd. (IPM) to supply an estimated 5.5 BCM of gas from its Karish and Tanin FPSO over a period of 19 years.

The contract is subject to necessary approvals and is contingent on results of the 2019 drilling program, which includes the drilling of four wells in Israel and commences with the spud of Karish North in March 2019, targeting 36.8 BCM (1.3 Tcf) of gas with a volume weighted geological chance of success of 69%.

The agreement adds between 0.265 and 0.38 BCM/yr of gas sales, commencing in approximately 2024. Energean estimates that the agreement will contribute revenues of approximately $0.9 billion over the life of the contract. Energean may supply IPM with limited volumes between 2021 and 2024.

IPM holds an option to increase volumes up to 0.55 BCM/yr.

Energean has now signed GSPAs for 4.6 BCM/yr from its Karish and Tanin FPSO, which is being built with a total capacity of 8 BCM/yr. Energean targets filling the remaining 3.4 BCM/yr of FPSO spare capacity in the medium term, which it believes will deliver attractive incremental economics.

IPM is an independent power producer that will supply the national power grid and large private consumers with power. IPM is building a new power plant that is due to start operating in 2H 2020, and gas purchased from Energean will provide part of the total quantity of gas required for its operations. The remaining gas supply will be purchased in accordance with IPM’s existing Gas Agreements.

The Karish and Tanin development remains on track for first gas in 1Q 2021.

“This additional Gas Sales Agreement aligns with Energean’s strategy to secure offtake for the remaining spare capacity in our 8 BCM/yr FPSO and to commercialize the resource being targeted by our upcoming drilling program, providing competition and energy security to the Israeli domestic market,” noted Mathios Rigas, CEO of Energean Oil & Gas. “The signing of this contract ahead of results from our 2019 drilling program demonstrates not only the attractiveness of the Karish and Tanin fields but the strong incremental demand that we have identified for our gas and we will continue to target additional sales. Our future sales contracts will target both the growing domestic and regional export markets, delivering attractive incremental economics for all of our stakeholders.”

 

 

Energean set for 20-year output high of 1.5m barrels in 2018, new drilling

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Officials at Energean Oil & Gas, nowadays a publically traded company following last March’s listing on the London Stock Exchange’s main market, avoided disclosing too much information at a company presentation yesterday but confirmed the achievement of a 20-year production high of 1.5 million barrels for 2018, at a production rate of nearly 4,100 bpd.

Half this amount – 2,000 bpd – was provided by the company’s Prinos North oil field, which began producing last February following horizontal drilling.

Company officials also noted a new drilling effort will be staged at the Epsilon oil field, located in the Gulf of Kavala, northern Greece. Output here will signal Greece’s first point of utilization and oil production since the Prinos and Prinos North fields.

Energean’s detailed new production guidelines are expected to be announced by the board in January.

Beyond Greece, Energean, a leading independent E&P company focused on the Eastern Mediterranean region, plans to commence 3D seismic surveys at a section of offshore licenses held in Israel as well as at two offshore licenses in Montenegro.

In March, Energean plans to drill at its Karish North license in Israel, aiming to discover 34 billion cubic meters of natural gas. This drill has been given an almost 70 percent chance of succeeding.

Last November, Energean began constructing a Floating Production, Storage and Offloading (FPSO) unit to be installed in the east Mediterranean region. It will offer an annual production capacity of 8 billion cubic meters.

Energean’s listing on the London Stock Exchange was the biggest IPO by a petroleum firm in the past four years and the sole entry in 2018. Energean’s share has since been one of the best FTSE 250 performers, rising 35 percent.

Just under two months ago, Energean was also listed on the Tel Aviv Stock Exchange (TASE) secondary list.

 

 

TAIPED planning South Kavala UGS privatization for 2019

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State privatization fund TAIPED intends to commence a sale procedure in 2019 for a depleted natural gas field in northern’s Greece’s offshore South Kavala region to be utilized as an underground gas storage facility, according to fund sources, who view the asset as pivotal infrastructure for the country’s development into a regional energy hub.

Regulatory and technical matters concerning the asset’s prospective utilization still need to be worked on before the privatization fund stages a tender for this UGS next year.

Also, the energy ministry is preparing a necessary ministerial decision to classify the asset as an independent natural gas system.

This depleted natural gas field belongs to Greek State, while the Energean Oil & Gas company holds South Kavala’s exploration and production rights. These been extended over the past few years as a result of the Greek State’s indecisiveness on how to go about utilizing the depleted Kavala gas field. A further one-year extension, with an option for an additional year, is expected.

About a year ago, an energy ministry committee advised energy minister Giorgos Stathakis to pursue converting the depleted field into a UGS, a common practice in other EU member states, where a total of 162 such facilities with an overall storage capacity of 100 billion cubic meters have been developed.

The South Kavala asset could offer storage capacity of 950 million cubic meters following a needed investment estimated at between 250 and 280 million euros.

The asset had lost its PCI status before regaining it as a result of its potential.

Consulting firm PwC and the Rokas Law Firm have been hired for the privatization procedure.

Repsol, ELPE nearing finalized deal for new Ionian Sea block

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EDEY, the Greek Hydrocarbon Management Company, and a consortium comprising Spain’s Repsol and ELPE (Hellenic Petroleum) have completed negotiations for exploration and production rights at a new Ionian Sea block on offer.

The two sides have delivered a draft agreement to the energy ministry. It will also be forwarded to a supervisory committee within the next few days for approval before being signed by all sides involved and submitted to parliament for ratification. The agreement could be finalized by the end of the month, sources informed.

The new Ionian Sea block, measuring 6,612 square kilometers, is the latest block to be offered to investors by EDEY following blocks southwest and west of Crete that were made available in the summer of 2017 through international tenders.

As has been previously reported, Energean Oil & Gas’s early interest in this new Ionian Sea block prompted the latest procedure. Energean, operating Prinos oil fields in Greece’s north as well as Israel’s Karish and Tanin gas fields, ended up not submitting an offer for this Ionian Sea block. Instead, Repsol and ELPE emerged with a joint bid.

Repsol, which has developed into an exploratory force in western Greece and the Ionian Sea, is pressuring for a swift bureaucratic procedure in order to commence seismic survey work at the new block.

Repsol also jointly holds onshore licenses, with Energean as its partner, in northwestern Greece’s Ioannina and Etoloakarnania regions.

Energean’s 2019 Israel drilling to target 2.3 Tcf in resources

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Energean Oil and Gas, the London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic, has issued a Trading Update for the period from July 1 to November 13, 2018. The Group will publish a Trading Statement and Operational Update on January 16, 2019, while full-year results for 2018 will be announced on March 21, 2019, it has announced.

Highlights

  • On track to deliver first gas from the 2.4 Tcf Karish – Tanin development in 1Q 2021.
  • Scheduled first steel cut on the Karish – Tanin FPSO for 26 November 2018.
  • Targeting 2.3 Tcf gas and 31 million barrels liquids gross prospective resources with a high probability of success through the 2019 Israeli drilling programme.
  • Aiming to fill the 3.8 BCM per annum (‘bcma’)[1] of FPSO spare capacity in the medium term. Identified strong incremental demand for gas with future sales contracts targeting growing domestic and regional export markets.
  • Expecting first oil from the Epsilon extended reach well in late 2018 and achieved first steel cut on the Epsilon jacket on 26 September.
  • Started trading on the Tel Aviv Stock Exchange (“TASE”) on 29 October and expecting to enter the TA-90, TA-125 and TA-Oil & Gas Indices.
  • Strengthened the senior management team with the appointment of Iman Hill as Chief Operating Officer.
  • Well-funded for all development projects. At 30 September 2018 the group had gross cash of $289 million (net cash $160 million), plus liquidity of $68 million under its RBL and $1,275 million under its project finance facility.

Mathios Rigas, CEO of Energean said:

“Our developments are on schedule and we have an active programme of drilling in both Israel and Greece in the months ahead, targeting significant increases in prospective resources and production.

We are seeing strong incremental demand for our gas and aim to prove up enough resources to fill the 3.8 bcma of spare capacity in our 8 bcma FPSO. Future gas sales agreements will focus on both further contributing to security and diversity of supply in the Israeli markets as well as targeting key regional export markets.”

Operational Update

Israel – Karish and Tanin Development

Energean’s Karish and Tanin development remains on track to deliver first gas into the Israeli domestic market in 1Q 2021. The next visible milestone will be first steel cut on the FPSO hull on 26 November 2018.

Karish development drilling will immediately follow the Karish North well. Three development wells will target Karish Main with completion expected by 2019 year end. These three wells will deliver 4.2 bcma (c. 406 mmcfd) of firm gas sales into the Israeli domestic market from 1Q 2021. Gross production capability of the three wells is expected to be far in excess of the 4.2 bcma requirement.

The subsea workstream, managed and executed by TechnipFMC under the $1.36 billion lump sum turnkey EPCIC contract signed earlier this year, is progressing in line with expectations.

Energean has recently awarded a second contract to Wood. The latest contract, effective immediately, is to provide operations and maintenance manpower and specialist engineering services over the next five years. This follows an earlier two-year contract, awarded in April 2018, which involves the preparation of systems and procedures to ensure safety and efficiency in all aspects of the pre-operation period.

Israel – Exploration

Energean sees strong incremental demand for its gas and future gas sales contracts will target both the growing domestic and key regional export markets. Over the medium term, Energean aims to prove up enough resource to fill the remaining 3.8 bcma of spare capacity[2] in its 8 bcma FPSO and fulfil this additional demand.

The Company’s 2019 drilling programme will target 2.3 Tcf of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetised.

Planning for Karish North is currently being concluded. Spud is expected in March 2019 and drilling is forecast to take 45 days. Karish North will directly target 1.3 Tcf of gas and 16 million barrels of liquids (gross) with a volume weighted geological chance of success of 69%4.

Energean is of the view that success at Karish North could have a positive read-across to Karish East; technical analysis indicates that the fault between Karish North and Karish East does not form a barrier and, therefore, does not limit the extent or flow of any hydrocarbons. Karish East contains gross prospective resources of 0.5 Tcf of gas and 7.5 million barrels of liquids with a volume weighted geological probability of success of 70%. Karish North will also provide important read-across information for the Karish Main structure.

The exploration component of the Karish Main wells consists of drilling into the deeper D sand horizons, which have been proven in the Tamar field (upper D sands) and Aphrodite (lower D sands) discovery. Energean believes that Karish Main drilling offers additional upside beyond that reflected in NSAI independent estimates.

Energean shares begin trading on Tel Aviv Stock Exchange

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The shares of independent oil and gas exploration and production company Energean Oil and Gas have begun trading on the Tel Aviv Stock Exchange (TASE) secondary list, the group has announced in a statement.

Energean is the first London-listed, international oil and gas operator to list shares on the Tel Aviv bourse, following the largest E&P IPO in London since 2014.

Delivery of Energean’s highly attractive, flagship Karish and Tanin gas development, offshore Israel, remains on track for first gas in 1Q 2021 providing energy security and supplying gas to the Israeli domestic market.

Energean is currently at the start of an active 18-month period including first steel cut for Energean’s FPSO, the only FPSO in the East Mediterranean, scheduled for 26 November 2018, and drilling of the high potential Karish North well to commence in March 2019, with the potential to de-risk up to 1.8 TCF of resources across Karish North and Karish East.

In addition, during this 18-month period, Energean will continue to de-risk its wider Israeli portfolio which has 7.5 Tcf of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) and pursue future gas sales contracts, to target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders. Energean is also focusing on an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

Energean has also reported a significant further upside from its diverse eastern Mediterranean portfolio including exploration and appraisal opportunities in Israel, Greece and Montenegro.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented:

“There is strong momentum at Energean as we prepare to begin our active Israeli work program to deliver our flagship Israel gas project which will not only deliver significant shareholder value but provide competition and energy security to the Israeli domestic market. Alongside this in Greece we continue to focus on growing our low cost production.

“As such, we are delighted to be the first UK listed international oil and gas operator to list its shares on the Tel Aviv Stock Exchange, fulfilling our commitment that we made to shareholders at the time of our IPO, improving the breadth and depth of the Company shareholder base.

“Israel is a core component of our portfolio and we are on track to start producing gas from the only FPSO in the Eastern Mediterranean in 1Q 2021 providing competition and energy security to the Israeli domestic market, so it is only natural that we expand the accessibility of our company to the Israeli market.”

Mr. Yuval Steinitz, Minister of National Infrastructure, Energy and Water Resources, who attended the opening ceremony, remarked:

“Having Energean in the Israeli Stock Exchange is an important development. It is a positive message to the stock market, but mostly a positive message to the developing energy market of the country, a message that shows that Israel is emerging as a player in the global energy market”.

On track for first gas in 1Q 2021

Energean’s secondary listing precedes an operationally active 2019 as it continues to progress its flagship gas development on track for 1Q 2021 and the wider Israeli portfolio which has 7.5 Tcf* of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) that were awarded as part of the recent offshore licencing round.

Energean will kick off its 2019 campaign with the drilling of the high potential Karish North well in March which has the potential to de-risk more than 1.8 Tcf** of resources across Karish North and Karish East and is in line with the company’s strategy to target near field prospects where potential discoveries can be quickly, economically and safely monetised through its offshore FPSO.

Following Karish North, the Stena DrillMAX will drill three development wells into the Karish Main structure. These three wells will be the producers that deliver 4.2 bcma of gas sales into the Israeli domestic market from 1Q 2021.

Energean is building its FPSO with a production and processing capacity of 8 bcma and first steel cut is planned for 26 November 2018. Current gas sales contracts, which account for all of its existing discovered resource, underpin the 4.2 bcma of firm contracts signed to date, leaving 3.8 bcma of spare capacity for the tie-back of additional discoveries.

Future gas sales contracts will target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders.

Energean has a strong environmental track record and working successfully with local communities, The company has over 37 years’ experience of working safely in environmentally sensitive locations in NE Greece and is focused on transferring this safety and success to all areas where it is present. As the first operator of a FPSO in the eastern Mediterranean, Energean is committed to the safe production of hydrocarbons in Israel as well as being focused on leaving as little environmental footprint as possible.

 

 

First new Prinos platform in 40 years planned by Energean

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Energean Oil and Gas plans to install a new platform at its Prinos oil fields, the area’s first since 1979, at the end of 2019, once its construction is completed by Romanian company GPS, an old Energean associate, at its Costanta facility on the Black Sea coast.

“Lamda”, as the new platform will be named, will be installed over two digs at the Epsilon oil field, now the focus of Energean’s efforts at its offshore Prinos basin.

The first drilling venture, planned for early in 2019, will be conducted by  Energean Force, Energean’s owned and operated offshore drilling rig.

A second Energean drilling operation at the Epsilon oil field, entailing as many as three exploratory efforts, is planned to take place later on in 2019, prior to the arrival of the new “Lamda” platform from Costanta. This effort will be performed by the jack-up GSP Jupiter, leased from Romania.

Energean is investing to further increase production from the Prinos and Prinos North oil fields, as well as to develop the Epsilon oil field, which is also a part of the Prinos licence.

According to Energean officials, Prinos North, which began producing in 1994, has offered better results than Prinos, producing since 1981. Epsilon is also seen possessing potential for favorable results, like Prinos North.

 

 

Energean announces timing of Secondary Listing on Tel Aviv bourse

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Energean Oil and Gas, a London Premium Listed independent FTSE250 E&P company with operations offshore Israel, Greece and the Adriatic, expects the process for its Secondary Listing on the Tel Aviv Stock Exchange to be completed on 29 October 2018, the company has announced in a statement.

Energean, whose portfolio carries 349 mmboe of 2P reserves and 48 mmboe of 2C resources, expects to become a constituent of the TA-90 and TA-Oil and Gas Indices.

The TA-90 is composed of the 90 most highly capitalized companies listed on the Tel Aviv Stock Exchange that are not included in the TA-35 Index. Energean maintains its Primary Listing on the Premium Listing Segment of the Official List of the FCA and its shares will continue to trade on the main market of the London Stock Exchange. Shares will be fully transferrable and fungible between the two markets. Energean is not issuing any new shares in connection with the Secondary Listing.

Energean is pursuing the Secondary Listing in order to further expand the accessibility of its Oil & Gas growth story to a wider pool of investors; improve the breadth and depth of the company shareholder base, ultimately improving the liquidity and tradability of the shares; and fulfil the commitment the Company made at IPO to pursue a secondary listing on the Tel Aviv Stock Exchange.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented: “Israel is a core component of our portfolio and we are on track to start producing gas from the only FPSO in the Eastern Mediterranean in 1Q 2021. We have already secured contracts to supply 4.2 bcma of gas into the growing Israeli domestic market, contributing diversity and security of supply. Looking ahead, our future gas sales agreements will target both domestic and key export markets in the region. Our Tel Aviv Stock Exchange Listing fulfils a further commitment that we made to shareholders at the time of our London Stock Exchange IPO and I am pleased to further expand the accessibility of our company to a wider pool of investors.”

In August, 2017, Energean Oil & Gas received Israeli Governmental approval for the FDP for its flagship Karish-Tanin gas development project, where it intends to use an FPSO and produce first gas in 2021. Energean has already signed firm contracts for 4.2 bcma of gas sales into the Israeli domestic market. Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region.

In Greece, the company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

Energean Oil and Gas staging analyst, investor site visit

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Energean Oil and Gas, a London Premium Listed independent FTSE 250 E&P company with operations offshore Israel, Greece and the Adriatic, is holding a site visit for analysts and investors concerning its operations in Israel and Greece, the company has announced.

In Israel, investors and analysts will meet with several of Energean’s gas buyers and the Minister of Energy. The presentations will discuss growth in Israeli gas demand and Energean’s key role in contributing to diversity and security of supply. TechnipFMC will make a presentation on the Karish and Tanin development, which Energean has reiterated as being on schedule to deliver first gas from the only FPSO in the Eastern Mediterranean in 1Q 2021.

Energean will be making a Greek assets presentation on Wednesday 10 October, which will be made available on the company’s website in due course. 3Q 2018 production is confirmed as 4,080 bopd and full-year guidance has been reiterated at 4,000 – 4,250 bopd.

No other material information will be disclosed.

Energean possesses 349 mmboe of 2P reserves and 48 mmboe of 2C resources across its portfolio.

In August, 2017, the company’s Field Development Plan (FDP) for its flagship Karish-Tanin gas development project, where it intends to use an FPSO to produce first gas for the Israeli domestic market in 2021, was approved by the Israeli government.

In Greece, the company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

 

Energean bolsters senior management with new Chief Operating Officer

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Energean Oil & Gas has appointed Iman Hill, a seasoned petroleum engineer with over 30 years’ global experience in the oil and gas industry, as Chief Operating Officer, effective 1 November, the company has announced in a statement.

Hill is backed by extensive expertise in the technical and commercial aspects of the petroleum business, especially development and production projects.

Prior to joining Energean, Iman was the Technical Director, GM UAE and President Egypt for Dana Gas PJSC, responsible for managing global operations.

Hill began her career with BP in 1984 and worked in a variety of technical positions before becoming a Senior Reservoir Engineer. In 1997 she joined Shell International, where she held positions such as Senior Regional Adviser Africa to the E&P CEO and the Chairman of Shell, E&P Business Interface Manager, Middle East and GM Shell Egypt and Chairwoman of Shell Companies in Egypt. From 2005 to 2011 Iman worked at BG Group in roles such as Senior Vice President for Developments and Operations responsible for maturing developments to sanction, well engineering and operations.

Iman previously held Non-Executive Directorships at Outokumpu and EMGS.

Commenting on the appointment, Mathios Rigas, CEO at Energean Oil & Gas, noted: “Iman is a highly experienced oil and gas professional with a proven track record and we are delighted to welcome her to the team. She brings a wealth of operational and technical expertise and we look forward to working closely with Iman across all of our global operations as we continue to grow production, profitability and deliver shareholder value.”

Energean is a London Premium Listed independent E&P company with 13 licenses across offshore Israel, Greece and the Adriatic. Energean has 349 mmboe of 2P reserves and 48 mmboe of 2C resources across its portfolio. 

In August 2017, the company received Israeli Governmental approval for the FDP for its flagship Karish-Tanin gas development project, where it intends to use an FPSO and produce first gas for the Israeli market in 2021.

In Greece, the company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, Northern Greece.

Energean has five exploration licences offshore Israel, and a 25 year exploitation licence for the Katakolo offshore block in Western Greece and additional exploration potential in its other licences offshore Western Greece, and Montenegro.

 

 

Repsol forced to up budget for Ioannina license seismic survey work

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Spanish energy company Repsol, the operator of a 60 percent stake in an onshore block in the Ioannina area, northwestern Greece, farmed out by Energean Oil & Gas, has been forced to revise upwards the project’s budget as a result of increased costs concerning 2D seismic survey work, made more challenging by the region’s landscape features.

Repsol, which has also had to deal with bureaucratic delays, has resumed hydrocarbon exploration work at the Ioannina license following a summer break.

Project costs have risen significantly for Repsol as a result of the company’s need to use specialized equipment, including helicopters, to minimalize the effort’s environmental impact and guarantee the safety of workers. Labor costs have also risen by the need for Repsol to employ more workers. They have ranged between 120 and 200 per day.

Greek energy ministry officials who are well informed on the effort believe further cost increases will be difficult to avoid, given the Ioannina project’s nature. Energean Oil & Gas has retained a 40 percent stake in the venture.

The seismic survey work being conducted in the Ioannina area represents the first such initiative taken in western Greece, onshore, over the past two decades. Lines totaling 400 km and covering seven municipalities are being explored.

 

Energean first-half EBITDAX up 108.9% to $16.7m

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Energean Oil and Gas,  the  independent  oil  and  gas  exploration  and  production  company  focused  on  the  Eastern  Mediterranean, has posted a first-half EBITDAX figure of 16.7 million dollars, up 108.9 percent from an 8 million-dollar performance a year earlier.

The company’s first-half profit before tax was registered at 82.1 million US dollars, up a spectacular 1,965.9 percent from a 4.4 million-dollar loss incurred in the first half of 2017.

Operating profit was up 229.1 percent to 10.2 million following a 7.9 million-dollar loss a year earlier.

Mathios Rigas, Chief Executive at Energean Oil & Gas, commented:

“During the period we made substantial progress in de-risking our flagship Karish and Tanin development project. We signed a lump-sum, turn-key EPCIC contract with TechnipFMC, simplifying project management and reducing our financial risk exposure, and secured $12 billion of future revenue by signing 12 firm Gas Sales Agreements to deliver a total of 4.2 bcm/yr. Over the next 18 months we aim to prove up sufficient resource to fill the 3.8 bcm/yr of spare capacity in our Karish  FPSO, delivering significant incremental value to our stakeholders. Our independent reserves auditor has identified 7.5 Tcf of Israeli prospective resource with a high geological probability of success, which gives us confidence that we can meet this target whilst adhering to our exploration strategy to target resource that can be quickly and economically monetised. We look forward to the results from the Karish North exploration well in 2Q 2019.”

Operational and Financial highlights

– Raised $460 million through Premium London Stock Exchange IPO, the largest Oil & Gas IPO for nearly four years.

– Arranged $1,275 million of project financing with an attractive estimated average margin of 4%.

– Took Final Investment Decision for Karish-Tanin in March 2018; on track to deliver first gas in 1Q 2021.

– Increased net 2P reserves to 349 mmboe, a more-than-six times increase versus the 51 mmboe identified at the point of Listing.

– Identified 7.5 Tcf of gross prospective resources offshore Israel with a high geological chance of success.

– Committed to the high impact Karish North exploration well, commencing 1Q 2019 and targeting 1.3 Tcf and 16 million bbls of gross recoverable prospective resource (Energean 70%) with a volume weighted geological chance of success of 69%.

– Delivered 3,801 bopd of production, a 50% increase versus the comparable period for 2017.

– Drilled an Extended Reach Horizontal well into Prinos North; well contributed > 1,000 bopd in 1H 2018.

– Reduced production costs by 27% to $19/bbl  (1H 2017: $26/bbl); costs per barrel forecast to reduce further.

4Q18 Outlook 

– 2018 Full Year production guidance narrowed to 4,000 –  4,250 bopd (previously 4,000 –  4,500 bopd) due to  replacement  of  Prinos  infill  drilling  with  the  Epsilon  Extended  Reach  Well. Energean expects production to grow to more than 10,000 bopd by 2021.

–  First steel cut on the FPSO hull.

– Complete planning for Karish North exploration well.

– Early production from the Epsilon field via the Extended Reach Well.

– Drilling of one vertical well and commencement of a second at Epsilon.

– Continue early stage seismic operations

– Secondary listing on the Tel Aviv Stock Exchange.

 

 

 

Energean gas resources in Israel 40 times the size of annual Greek needs

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The 212 billion cubic meters (bcm) of recoverable prospective natural gas resources included in an updated Competent Persons Report (CPR) by petroleum industry consulting firm Netherland Sewell & Associates (NSAI) for the Israeli portfolio of Energean Oil and Gas, the independent oil and gas exploration and production company focused on the eastern Mediterranean, would cover demand in a country with the consumption patterns of Greece for about 40 years.

Annual natural gas demand in Greece ranges between 5 and 6 billion bcm, roughly forty times less the figure reported by NSAI, an independent consulting firm.

Of the 212 bcm, 86 bcm are located in the Karish and Tanin fields being exploited by Energean in Israel, while the other 126 bcm have been identified at five new blocks, numbered 12, 21, 22, 23 and 31, whose rights were acquired by the energy company last December.

The NSAI report’s findings essentially bolster Energean’s potential to export from its Israeli fields to other markets. Possible export destinations will depend on geopolitical developments and outcomes of various regional pipeline development plans being negotiated in recent years.

A portion of Energean’s offshore Israel natural gas resources could be exported to Cyprus, for example, if a 200-km pipeline plan linking the two countries is developed. A portion of these resources could also be exported to Greece should the ambitious East Med pipeline plan proceed.

A Floating Production Storage Offloading (FPSO) facility being constructed for the development of the Karish field is planned to have an annual natural gas production capacity of 8 bcm.

Also, Energean Israel, an Energean subsidiary holding a 70 percent stake of the aforementioned Israeli fields, has already signed a sale agreement for 4.2 bcm of annual supply to the Israeli market of natural gas reserves already discovered. Given the FPSO’s capacity, a further 4 bcm could be exported.

Energean recently announced a decision to go ahead with exploratory drilling at Karish North. According to an NSAI estimate, this area holds 38 bcm of natural gas resources and 16.4 million barrels of liquid hydrocarbons resources.

 

Energean’s Israeli reserves, resources increase significantly

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An updated Competent Persons Report (CPR) for the Israeli portfolio of Energean Oil and Gas, the independent oil and gas exploration and production company focused on the eastern Mediterranean, includes the certification of 63 bcm (2.2 Tcf) of 2P reserves and 7.5 Tcf of gross prospective resources and is the first assessment of prospective resources in the new Blocks (12, 21, 22, 23 and 31) that were awarded as part of the recent offshore licencing round, Energean has just announced in a statement.

The oil and gas firm’s updated CPR was provided by petroleum industry consulting firm Netherland Sewell & Associates.

Mathios Rigas, CEO of Energean Oil & Gas, commented: “We are pleased that our independent reserves auditors have identified 7.5 Tcf of prospective resource across our Israeli acreage with a very high probability of geological success, across which we have limited exploration capital commitments.  The outcome is consistent with Energean’s view that our portfolio contains multiple attractive near-field exploration opportunities that could deliver significant upside alongside our existing Karish and Tanin development. The conversion of contingent resources demonstrates our commitment to increasing reserves and underpins a more-than-six times increase in our independently verified 2P reserves at IPO.”

The updated CPR includes 63 bcm (2.2 Tcf) of gas and 31.8 million barrels of liquids (gross, Energean 70%) of 2P reserves in the Karish and Tanin fields. Energean’s independently certified net 2P reserves are now 349 mmboe, an increase from the 51 mmboe estimated when Energean undertook its London Stock Exchange listing in March 2018.

Contingent resources in the Karish field of 5.4 bcm (0.2 Tcf) of gas and 1.0 million barrels of liquids (Gross, Energean 70%) are recognized. Remaining contingent resource relates to the Karish B reservoir.

Overall 2P reserves plus contingent resources across the Karish and Tanin leases remain the same.

The updated CPR also recognises gross recoverable prospective resources of 212 bcm (7.5 Tcf) of gas and 101 million barrels of liquids (Energean 70%), consistent with Energean’s view that its acreage contains an attractive number of near-field prospects where potential discoveries can be quickly and economically monetised. The Karish FPSO is being built with gas production and processing capacity of 8 bcm/yr.

Energean Israel (Energean 70%) has sold 4.2 bcm/yr of discovered gas volumes, leaving 3.8 bcm/yr of available FPSO capacity for the potential tie-back of future discoveries.

Energean recently committed to drill a well in the Karish North exploration prospect. NSAI estimates that the Karish North well will target 38 bcm (1.3 Tcf) of gas and 16.4 million barrels of liquids (gross, Energean 70%) and has a 69% volume weighted probability of geological success.

The option to drill additional exploration wells remains open. Energean has six options remaining within its Stena drilling contract.

 

 

 

Mytilineos wins GEF energy company of the year prize

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The Mytilineos corporate group Group has been awarded the Energy/Hydrocarbons Company of the Year prize, one of seven awards offered by the Greek Energy Forum, an exchange platform for energy sector professionals, at its annual GEF Energy Awards, held for a second time, at an event just staged at London’s prestigious Cass Business School.

Energean Oil & Gas CEO Mathios Rigas picked up the Energy Influencer prize.

ELPE (Hellenic Pegtroleum) took the Social Responsibility prize.

The Smart Islands Initiative, aiming to drastically increase RES production on Greek islands, won an Energy Innovator prize; Kantor Management Consultants was awarded the Energy Consultancy/Services of the Year prize; Gaslog, an international LNG carrier, took the Maritime Services of the Year prize; and the Eunice Energy Group won the Green Energy prize.

Greek Energy Forum was founded in 2013 and its GEF Energy Awards established in 2016 as a biennial event to recognize and award organizations, enterprises and personalities inspiring others through exceptional work and valuable contributions to the energy and hydrocarbon sectors of the east Mediterranean.

The prizewinners of all categories were voted by an independent prize committee comprised of internationally renowned industry players not linked to the GEF.

The committee, in alphabetical order, was comprised of Panos Kelamis, CEO, Cyprus Hydrocarbons Company; Stavros Kokkinis, General Manager Shipping & Products Trading, Shell Trading; Yanos Michopoulos, Managing Director, Authentix, former Country Manager Greece & Cyprus; Michael Tamvakis, Professor of Commodity Economics & Finance, Cass Business School; Petros Tratskas, Senior Originator, ENI Trading & Shipping; Ioannis Tsipouridis, General Manager at R.E.D Pro Consultants and former President of Hellenic Wind Energy Association; and Rikard Skoufias, Energy Consultant, former Country Manager Greece of TAP.

 

 

Energean board endorses Karish & Tanin project’s FID

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The board of directors at Energean Oil & Gas has approved the Final Investment Decision (FID) to proceed with the $1.6 billion Karish & Tanin Development Project, offshore Israel, the company has just announced in a statement.

$405 million of the $460 million raised from the recent IPO of Energean will be used to fund the company’s 70% share in the project, while the remaining 30% will be funded by Kerogen Capital, Energean’s partner in the project.

The project is also being financed through a Senior Credit Facility of US$1.275 billion recently announced and underwritten by Morgan Stanley, Natixis, Bank Hapoalim and Société Générale.

Energean has secured long-term gas agreements with some of the largest private power producers and industrial companies in Israel. The company has contracted for the purchase of a total of 61 BCM of gas over a period of 16 years, at an annual rate of approximately 4.2 BCM per year (on an ACQ basis).

Energean will develop the project through a new build, owned FPSO with gas treatment capacity of 800 MMscf/day (8 BCM/per annum) and liquids storage capacity of 800,000 bbls, which the company believes provides a flexible infrastructure solution and, potentially, the scope to expand output for potential additional projects.

A 90km gas pipeline will link the FPSO to the Israeli coast and necessary onshore facilities to allow connection to the domestic sales gas grid operated by INGL, the national gas transmission company.

The entire project infrastructure has been contracted to be engineered, built and commissioned under a lump sum EPCIC Contract with Technip FMC, with a contracted delivery date of Q1 2021.

During 2019, three wells will be drilled into the Karish discovery, using the Stena Forth Drill Ship which is under contract from Energean.

The company has also secured options to drill five further wells in the licences Energean holds in Israel.

Energean Oil & Gas CEO, Mathios Rigas, commented: “We committed to the investors in the IPO that we would take FID immediately after the equity raise and I am pleased to be honouring this, the day after the shares started trading on the London Stock Exchange.

“Today, we commence the development of the project having, in a very short period of time, secured the necessary gas contracts, a turn-key EPCIC contract with Technip FMC, a drilling contract with Stena and project finance backed by four international banks. All this has been achieved in just 14 months since January 2017, when the Israeli Government approved the transfer of the licences to Energean.

“The Karish & Tanin development will bring competition and security of supply to the Israeli gas market, and will support Energean’s strategy to become a major player in the gas developments of the East Mediterranean.

“Owning and operating the only FPSO in the East Mediterranean with an 8 BCM per annum capacity gives Energean significant scope for growth through being able to support potential additional gas discoveries from Karish & Tanin and the five adjacent licences that we own in Israel.”

 

 

Israel’s Clal buys 10% of Energean at London stock exchange listing

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Israel’s Clal Insurance Enterprises Holdings invested over 100 million US dollars to acquire a ten percent stake of oil and gas explorer and producer Energean at a successful listing on the London Stock Exchange staged several days ago.

The listing was staged by Energean to raise funds for the development its offshore Israel Karish and Tanin gas fields.

As was reported by Israeli news publication Globes, Israeli firms invested a total of 140 million US dollars in Energean, Clal acquiring the biggest share among these investors.

Founded in 1987, Clal is active in a variety of sectors, including health insurance, pension programs, financial products, savings and innovations.

Clal is a member of the IDB corporate group, which holds a 50 percent stake in the company. Bank Hapoalim holds a further 10 percent stake in Clal, while the remaining 40 percent is owned by the Israeli State.

IDB also holds a 36.75 percent stake in the petroleum firm Modlin, active in the US market, as well as a 10 percent share of Israel’s Samson natural gas field, estimated to hold 550 billion cubic feet of natural gas.

 

 

Energean signs $1.275bn finance deal for Karish project

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Energean Oil & Gas subsidiary Energean Israel has signed a secured  Senior  Credit Facility of up to US$1.275  billion with Morgan  Stanley, Natixis, Bank Hapoalim and  Societe Generale as Mandated Lead Arrangers (“MLAs”), the company has announced in a statement.

The Facility Agreement will be the primary source of funding for the development of the Karish offshore gas field over the next three years, with first gas production expected in early 2021.

It also promises to provide further momentum for the company to make a Final Investment Decision (“FID”) on Karish and Tanin.

Energean Oil & Gas CEO, Mathios  Rigas, commented:  “We are  rapidly  advancing the Karish and Tanin development by continually delivering on substantial project milestones.

“The participation of four international banks in the Facility Agreement is a strong vote of confidence in Energean’s flagship project. Long-term cash flow from Karish and Tanin has been secured through our previously signed gas supply agreements for approximately 4.2 BCM per year with 12 established counterparties.

“Furthermore, Energean has signed a US$1.36 billion contract with TechnipFMC for the construction of an FPSO with a production capacity of 8 BCM per year, potentially enabling us to take advantage of future production potential from our existing licences or adjacent fields to deliver gas to a rapidly growing regional market.

“The company is in the process of raising the equity required to develop Karish and Tanin through a premium listing on the London Stock Exchange’s Main Market. At the same time, we are pressing  ahead  with  the  expansion  programme  of  our  existing  production and development base in the Eastern Mediterranean, to deliver our next phase of growth.”

Oil majors set for Crete block offers, milder Ionian interest

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With just days remaining before deadlines for tenders offering exploration and exploitation rights at a total of three offshore blocks off Crete and in the Ionian Sea, five petroleum firms, including three international oil majors, took part in an exploration security-related meeting held by EDEY (Greek Hydrocarbon Management Company) yesterday, which suggests they will be submitting offers.

Exxon Mobil, Total and ELPE (Hellenic Petroleum), whose interest in the Greek market prompted EDEY to offer two offshore blocks off Crete, Repsol, following developments for Ionian Sea investments, and Energean Oil & Gas, whose interest in the Ionian Sea area led to the other EDEY tender, all participated in the hydrocarbon company’s meeting, ahead of the deadines for the three tenders, expiring this coming Monday.

The interest expressed by investors for the two Cretan offshore blocks appears to be greater.

Noble Energy and Israel’s Delek, which have visited a related virtual room set up for the tenders by EDEY for information, were not represented by any officials at yesterday’s meeting. It remains to be seen whether these absences mean that the two firms will not submit offers on Monday.

At this stage it appears that a three-member consortium made up of Exxon Mobil, Total and ELPE, as well as Italy’s Eni, already active in Cyrpus, will submit offers for the Cretan blocks. A third offer from Noble and Delek would come as a surprise.

Eni recently had to deal with Turkish intervention in Cypriot waters, which has delayed the firm’s drilling plans for that area.

As for the one Ionian Sea block being offered, Spain’s Repsol has displayed a consistent interest, despite negative reactions by local authorities and citizens against nearby exploration work, with Energean, in the Ioannina area, northwestern Greece.

In an Oil & Gas Journal article published last month, two EDEY officials informed that areas west and southwest of Crete have shown serious signs of deposits.

The northwest part of the Ionian Sea, the location of the third block being offered, has also shown hydrocarbon potential as it shares similar geological characteristics with the southeast Adriatic Sea, already producing.

 

 

 

 

Energean share offer generating interest, spurred by east Med prospects

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An upcoming Energean Oil & Gas share offer at the London stock exchange worth a sum of 500 million dollars has generated considerable British media interest beyond publications specializing in the enery sector. The media coverage to date has included reports in the Financial Times, Daiily Telegraph and The Times.

The level of success achieved by Energean Oil & Gas, Greece’s only privately owned hydrocarbon exploration and exploitation firm, is important for the country’s national morale ahead of Greece’s planned return to international capital markets, when the third bailout program soon expires.

Last year, the firm – launched in 2007 as Aegean Energy before switching to its current business name – took a big step by acquiring the Karish and Tanin fields, offshore Israel, from Israel’s Delek.

Officials in London have already declared Energean’s upcoming share offer as a guaranteed success, basing their upbeat projections on the certified 2.4 trillion cubic meters of natural gas and 33 million barrels of light crude oil at the firm’s Israeli fields.

The exploitation effort of these deposits is expected to cost 1.6 billion dollars with first gas expected to be produced in 2021.

Energean Oil & Gas plans to invest 395 million dollars – of the total of 500 million dollars anticipated from the London share offer – at its Israeli facilities as well as a further 353 million dollars, over the next four years, for development of its Greek fields.

Less than a fortnight ago, Energean Oil & Gas extended its long-term offtake agreement with BP for its Prinos license in northern Greece by four years, until November 1, 2025.

All of the group’s production of crude oil from the Prinos basin is currently sold to BP under the offtake agreement.

The discovery of offshore hydrocarbon deposits in waters controlled by Israel, Egypt, Lebanon and Cyprus has prompted global energy firms to turn to the east Mediterranean region, despite problems faced by all the aforementioned countries with neighboring countries.

Details concerning the development of East Med, a 2,000-km pipeline planned to carry southeast Mediterranean natural gas deposits along a route stretching from Israel to Europe, need to be finalized, including the project’s route and development method.

This project, estimated to cost 6 billion euros, is expected to cover energy needs in the region and EU member states.

 

 

Tender seen for subterranean gas storage unit in the north

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The energy ministry and TAIPED, the state privatization fund, are making preliminary  moves leading to an international tender for the development of a subterranean natural gas storage facility in the south Kavala offshore area through utilization of a virtually depleted gas deposit.

The ministry is preparing a ministerial decision that will officially brand the project as an independent natural gas system (ASFA), or private storage facility, a necessary step ahead of the tender. TAIPED is preparing official texts for the tender, which, according to energypress sources, will be announced in the second half of this year and most definitely within the year.

An exploitation license held by Energean Oil – following a series of mandatory extensions provided to keep the facility operational – is due to expire in November.

The project is not only seen as useful but necessary for bolstering the country’s supply security and chances of becoming a regional energy hub.

Details concerning the project’s development and exact role remain undetermined.

Besides moving to declare the depleted deposit as an independent natural gas system, which would lead to the staging of an international tender, authorities have also considered two other options. One entails offering the development rights to Energean Oil, holder of the deposit’s existing operational license. Passing on the subterranean storage facility’s  investment and utilization rights to DESFA, the natural gas grid operator, has also been considered.

The south Kavala gas deposit is still producing small amounts being exploited by Energean Oil. The company had proposed converting the virtually depleted deposit into a natural gas storage facility back in 2010. A related application was submitted by the firm the following year, shortly before control of the facility was passed on to TAIPED for appraisal. A period of indeciveness by the Greek State followed, which led to the project’s removal from the EU’s Projects of Common Interest list. The facility regained its PCI status this year as it is regarded pivotal for energy security in Greece and the western Balkans, while also having potential to support the TAP gas pipeline, now being developed and planned to cross northern Greece.

The south Kavala project’s cost is estimated between 250 and 300 million euros.

French energy group Engie, a successor of GDF Suez, Europe’s oldest energy firm, has expressed an interest in the south Kavala project. Company officials who were part of French president Emmanuel Macron’s delegation for an official visit to Athens last September singled out the south Kavala project. Engie is already present in the Greek market with a 25 percent stake in electricity supplier Heron.

 

 

East Mediterranean action suggests gas export boundaries stretchable

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Heightened natural gas sector activity witnessed in the east Mediterranean region over the past few days, combined with various other moves, including changing regional market conditions, to a certain degree, suggest gas exports to more distant markets beyond the east Mediterranean are possible.

Developments in recent days have included the establishment of an agreement for Israeli gas supply to Egypt, which coincides with an increased drive by Greece’s Energean to finance an ambitious investment plan.

The Israeli firms Delek Drilling and Noble Energy have just signed two binding agreements to export gas to Egyptian company Dolphinius Holdings Ltd. The energy companies will supply 64 billion cubic meters (bcm) of natural gas from the Tamar and Leviathan gas fields over ten years.

The two sides will, as a first objective, seek to transport the gas via the existing EMG pipeline, which previously transported gas in the opposite direction, from Egypt to Israel.

If this is not possible, other options include exporting the gas via pipeline to Jordan and then to Egypt or via a new pipeline linking Israel to Egypt.

The Israeli gas will be directly aimed at the Egyptian market, not Egypt’s two LNG terminals for liquefaction, meaning the agreement does not represent an additional step for Delek Drilling and Noble Energy. For the time being, both firms are continuing to eye regional markets ahead of more distant ones.

This agreement, in an indirect way, should facilitate the export of Cypriot gas for liquefaction at the Egyptian plants, as it leaves unutilized larger production capacities at the terminals.

A recent move by Greece’s Energean into the Israeli gas market with gas sales and purchase agreements for natural gas supply from its Karish and Tanin fields, offshore Israel, at price levels 33 percent less than those paid by Israel’s power utility for supply from the Tamar gas field, has prompted the utility to react and request a price reevaluation from its suppliers. They have remained adamant, noting no changes will be made until at least 2021, based on supply contracts already signed.

Energean’s entry into the Israeli market has certainly not gone by unnoticed. The increased level of competitiveness resulting from this entry vindicates Israeli government and market officials who, in the past, had backed competition and the  division of gas fields so as to enable the entry of new players.

The maintenance of low prices in Israel could eventually make exports to more distant markets, such as European markets, more viable.

Energean extends Prinos offtake agreement with BP until late 2025

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Energean Oil & Gas, a leading independent E&P company focused on the Eastern Mediterranean, has extended its Prinos long-term offtake agreement with BP Oil International Limited until November 1, 2025, the company has announced.

All of the group’s production of crude oil from the Prinos basin is currently sold to BP under the offtake agreement, which was originally signed in 2013 and covered the period until July 31, 2021.

The extension of this agreement secures Energean’s sales of crude oil from the Prinos basin for a further four years, helping safeguard the group’s cash flow, the company noted.

Energean is implementing a new investment program to further increase production from the Prinos and Prinos North oil fields, as well as to develop the Epsilon oil field, which is also a part of the Prinos licence.

The new program, to be financed by a $180 million reserve-based lending facility, consists of drilling of up to 25 wells and the installation of two new platforms by 2021. This will be executed by both the Energean Force, Energean’s owned and operated offshore drilling rig, and the jack-up GSP Jupiter that will drill the first 3 Epsilon wells.

Energean Oil & Gas CEO, Mathios Rigas, commented: “We are very pleased to extend our agreement with BP, a relationship that started in April 2013 and is now developing into a strategic partnership that secures cash flow from our production in Greece. BP has consistently lifted Prinos cargoes in the past four years and has established the Prinos crude in the international markets.

“Increasing our production from Greece, the $1.6 billion capex Phase 1 development of the Karish and Tanin gas fields, offshore Israel, and the exploration of the Eastern Mediterranean remain our focus and we believe the extended BP offtake agreement further strengthens our position to deliver maximum value from the Prinos licence.”

 

Energean signs $180m loan for Prinos, Epsilon development

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Energean Oil & Gas has signed a US$180 million reserves-based senior facility agreement to finance further development of the Prinos, Prinos North and Epsilon oil fields, the company announced in a statement.

The loan agreement was reached with the European Bank for Reconstruction and Development (EBRD), the Black Sea Trade and Development Bank (BSTDB), the Export-Import Bank of Romania EximBank SA (EximBank Romania) and Banca Comerciala Intesa Sanpaolo Romania SA (Intesa Sanpaolo Bank), HSBC acting as the agent bank.

It represents an extension to an existing US$75 million loan signed with the EBRD in May, 2016.

The agreement now includes two facilities: a senior secured reducing revolving credit facility of up to US$105 million with the EBRD and BSTDB as lenders; and a senior secured revolving credit facility of up to US$75 million arranged by EximBank Romania and having EximBank Romania and Intesa Sanpaolo Bank as lenders.

The expansion of the existing loan agreement will support the company’s development program in respect of 41 mmboe (39.5mmbbls oil/6bcf gas) 2P reserves and 23.8 mmboe (22.9mmbbls oil /5.3bcf gas) 2C resources in the Prinos, Prinos North and Epsilon operating oil fields, located offshore Greece (Prinos Basin).

The financing will principally fund the ongoing development of the Epsilon oil field with GSP Offshore S.R.L, the appointed EPCIC contractor, as part of the ongoing Prinos development program that includes the drilling of up to 25 additional wells and construction of two additional well platforms by 2021 to materially increase production.

Energean Oil & Gas CEO, Mathios Rigas, commented: “Energean is delighted to sign this agreement with EBRD, BSTDB, EximBank Romania and Intesa Sanpaolo Bank to support the further development of our North-Eastern Greece assets. We are committed to increasing our investment in the Prinos Basin, where we already have a strong production track record, and are now focusing on developing the Epsilon oil field, which is part of the Prinos Licence.

“We believe this loan agreement is further evidence of the trust placed in Energean by international banks and we believe demonstrates confidence in the Company’s ability to consistently increase value for its shareholders.

“The development program underway at Prinos, where Energean holds a long-term offtake agreement with BP for the entire Prinos production, is part of the company’s wider development plans in the eastern Mediterranean. This includes the company’s flagship US$1.6 billion development project of the Karish field, offshore Israel, as well as development and exploration programmes in Western Greece and the Adriatic. Energean is making strong progress on all fronts and is moving towards fulfilling its goal of becoming a leading independent E&P company in the East Mediterranean region.”

Ihsan Ugur Delikanli, BSTDB President, commented: “We are happy to contribute to this operation bringing substantial development impact to the Greek economy, including export promotion, job creation and increased revenues for the state budget. It is particularly fulfilling to join forces with our partners in supporting Greek businesses. I am pleased to observe the strengthening of cooperation with EBRD and the engagement of Export-Import Bank of Romania in a deal that will increase Greece‘s energy efficiency.”

Eric Rasmussen, EBRD Director, Head of Natural Resources, said: “We are very pleased to be involved in this transaction which will strengthen Energean’s strategic growth plans with the participation of two important new financial partners.”