Energean Israel signs deals for sale of extra 1.4 bcm/yr from Karish project

Energean Israel (Energean, 70%) has signed two new Gas Sales and Purchase Agreements, which, combined, represent gas quantities of up to 1.4 bcm/yr and increase total firm contracted gas sales from its flagship Karish project to approximately 7.0 bcm/yr on plateau, Energean plc has announced in a statement.

The new agreements represent contracted revenues of more than $2.5 billion over the life of the contracts, but require no further capital investment beyond Karish North, upon which Energean Israel expects to take Final Investment Decision later this year. The GSPAs have been signed at levels that are aligned with the other large, long-term contracts within Energean’s portfolio and are only subject to buyers’ lenders’ consent

The majority of the quantities are represented by a GSPA to supply gas to the Ramat Hovav Power Plant Limited Partnership (“RH Partnership”), a partnership between the Edeltech Group and Shikun & Binui. RH Partnership was the winning bidder in the Israel Electric Corporation (“IEC”) Ramat Hovav tender process, the second IEC power plant in a series of five to be privatised. The GSPA is for a term of up to 20 years and contains provisions regarding floor pricing for the main plateau period and exclusivity. The annual contract quantity (“ACQ”) reduces after the first seven years following first gas from Karish.

The remainder of the quantities are represented by a second new GSPA that has been signed with an affiliate of the RH Partnership for the supply of gas for other existing power stations. Gas supply will commence following first gas from Karish, achieving the plateau rate from January 2024. The contract term is for up to 15 years and the GSPA contains provisions regarding floor pricing for the main plateau period and take-or-pay.

Energean Israel (Energean 70%) now has firm GSPAs in place for the supply of approximately 7.0 bcm/yr on plateau. Having secured sufficient resources to fill the FPSO for a number of years, Energean’s near-term strategy is to secure the necessary offtake to fill the remaining 1.0 bcm/yr of spare capacity in the 8 bcm/yr Energean Power FPSO. Energean is assessing several opportunities in both the Israeli domestic market and key export markets in order to meet this target, alongside reviewing further growth opportunities across the nine exploration blocks that it holds in Israel to further expand its presence in the Eastern Mediterranean.

Mathios Rigas, Energean’s CEO, commented: “We are delighted to have signed these additional gas sales agreements, which increase firm gas sales to 7 bcm/yr on plateau from our flagship Karish gas project, which is on track to deliver first gas in 2H 2021 and I want to thank Edeltech and Shikun & Binui for their continued trust.

We remain committed to continue bringing competition and security of supply to the Israeli gas market even after we fill the Karish FPSO to its maximum 8 bcm/yr capacity.

The new contracts we signed today further strengthen our secured revenues stream, which is well-insulated against future commodity price fluctuations, and provide cash flows that will support our strategic goal of paying a sustainable dividend to our shareholders.”

 

Energean announces key developments for Karish project

Energean plc, the gas producer focused on the Mediterranean, has announced two important developments in the Karish Development Project.

In Singapore, the first topsides module lift on to the Energean Power FPSO (floating production storage and offloading unit)hull has been safely and successfully completed at Sembcorp Marine’s Admiralty Yard, Singapore, the company announced in a statement.

The electrical house (E-house), which contains all the FPSO control equipment and electrical switchgear, was lifted onto the Energean Power hull on August 24. The E-house, weighing in at 850 tonnes, was lifted using the L-801 Barge pontoon crane, with lift preparation commencing early morning and successful touchdown on the hull in the early afternoon.

Sembcorp Marine has been subcontracted by EPC contractor TechnipFMC, while lifting operation has been executed by Jurong Marine Services PTE.

Also, the Energean Power FPSO suction anchors have been successfully installed at the 267 mmboe 2P Karish Field.

In less than 3 weeks, 13 piles of 7.5m diameter, 19m height, and weighing 176 tons each plus one pile of 9m diameter, 17m height, and weighing 233 tons have been installed on the seabed, in water depths ranging from 1,695m to 1,763m.

The piles were transported and installed by the heavy lift construction vessel “Fairprayer”, owned by Jumbo Offshore and subcontracted by the Karish EPC contractor, TechnipFMC.

The operations were performed under Covid-19 social distancing conditions and without any LTIFR incidents.

The “Energean Power” FPSO will be used to develop all of the company’s Israeli fields. It will be installed 90 km offshore and be the first FPSO ever to operate in the Eastern Mediterranean. The FPSO will have a gas treatment capacity of 800 MMscf/day and liquids storage capacity of 800,000 bbls.

Installation of the Energean Power FPSO mooring lines is now in progress and the project remains on track to deliver first gas in 2H 2021.

 

 

 

Energean: Karish pipe laying, subsea systems completed

Energean, the oil and gas producer focused on the Mediterranean, has announced that partner TechnipFMC has successfully completed, on time, the laying of the gas sales pipeline and the main deep-water installations of the subsea production systems for its Karish and Tanin Development project, offshore Israel, describing the step as a key milestone.

Pipelay vessel Solitaire completed the core installation of a 30’’ and 24’’ pipeline of 90.3 km length, at depths of up to 1,700 metres, Energean’s announcement noted. The full pipeline installation, including a significant Tie In Manifold structure (TIM-Water Depth 72m) and the pre-commissioning program, is expected to be completed in 4Q 2020, well within the project schedule, it added.

The pipeline was laid at an average rate, excluding the beach pull, of 4,578 meters per day which represents a world-class performance by TechnipFMC, Energean explained.

The construction support vessel Normand Cutter completed the installation of the production manifold and subsea isolation valve foundations and structures. The Installation of the three sets of risers (2×10” and 1×16”) that will connect the three producing wells to the FPSO and then to the Gas Sales Pipeline is expected to commence in 4Q 2020 and be completed in 1Q 2021, according to the statement.

More than 400 personnel have worked on these offshore operations, during which zero Lost Time Injuries occurred, Energean noted, adding the overall physical progress of the Karish Development project now stands at c. 80% complete.

On behalf of Energean, Vincent Reboul Salze, Project Director – Karish EPCIC, stated: “We are very satisfied with the current installation performance on the subsea scope until now. The East Med in spring has proven to be a favorable environment and the pipelay performance has been remarkable on all aspects.”

Energean Power FPSO hull sails away from China

Energean Oil & Gas’ Enegean Power FPSO hull sailed away from the COSCO yard in China today and will now be towed to the Sembcorp Marine Admiralty Yard in Singapore, where the topsides will be integrated, before the completed FPSO is towed to the Karish field in Israel for installation and hook-up, the company has announced in a statement.

The sailaway of the hull from China represents the achievement of a key milestone in the Karish project timetable, the statement noted.

During the construction of the hull in China, more than 5 million man hours free of LTI’s have been completed. Including the construction of the topsides in Singapore and other relevant works, more than 10 million man hours free of LTI’s have been completed so far in the construction of the Energean Power FPSO.

Energean has also successfully completed the drilling of the three development wells in the Karish Main field and is confident that the three development wells can produce at combined rates of 800 mmscf/d, which is sufficient to fill the capacity of the FPSO (8 BCM per year), the company statement added.

On another important development, the Karish gas sales pipeline (30 & 24 inch) was shipped from Greece last week and offloaded successfully at Limassol Port, Cyprus.

The pipeline will be loaded from the Limassol port on PSVs and from them on the Karish Field pipe-laying vessel Solitaire.

The gas sales pipeline of approximately 90 km will transport gas from the Enegean Power FPSO to an onshore valve station at the Dor landfall in Israel.

First gas on the Karish project is on track for H1 2021.

Update on the Edison E&P acquisition

Also, Energean and Edison have entered into a formal amendment to the Sale and Pusrchase Agreement on 2 April 2020, in which:

  • the Algerian Assets shall be excluded from the scope of the acquisition of Edison E&P;
  • in recognition of the exclusion of the Algerian Assets, there will be an adjustment to the total consideration of the acquisition of approximately $150 million (as at the lock-box date of 1st January 2019).

Energean is working to complete the acquisition of Edison E&P as soon as is possible in 2020, subject to the approval of its shareholders and the other relevant governments, the company statement noted. Thereafter, completion of Energean’s agreement for the sale of Edison E&P’s UK and Norwegian subsidiaries to Neptune for a consideration of $250 Million plus contingent consideration of up to $30 million (as previously announced), will be completed as soon as is reasonably practicable, it added.

 

 

Energean offers FPSO Hull update, work in China continuing

Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has issued an update on the potential impacts of the Novel Coronavirus on the construction of the Energean Power FPSO Hull, which is currently being built in Liuheng Island, China, and the overall project timetable. Work on the hull is ongoing and, at this stage, Energean reiterates that the Karish Project remains on track to deliver First Gas in 1H 2021.

The Novel Coronavirus was recently identified in China and has spread to most provinces within China and several other countries, leading the World Health Organisation to declare the virus a “Public Health Emergency of International Concern”. In order to prevent the spread of the virus, several countries, including China, have issued emergency travel and transportation restrictions, which have had an immediate impact on the availability of labour and resources in affected areas, including Liuheng Island.

Energean has received a notice under its EPCIC contract with TechnipFMC in relation to the travel restriction constituting a Force Majeure event, potentially entitling TechnipFMC to claim an extension of time under the EPCIC contract. Energean has, in turn, issued corresponding notices to its buyers of Karish gas and other relevant counterparties.

The rapidly evolving nature of these circumstances is such that it is impossible, at this stage, to determine the overall impact, if any, on Energean’s project timeline. However, work is still progressing well in the Chinese yard with approximately 550 staff on site; and Energean is working actively with TechnipFMC to ensure that all appropriate measures are being taken to avoid or mitigate any delay. Based on the information available at this stage, Energean still expects the Karish Project to remain on track and deliver First Gas in 1H 2021. Energean shall provide further updates as the situation clarifies.

Energean highlights the importance of guaranteeing the health and safety of its employees and contractors and will act in accordance with instructions and guidance from the UK and Chinese health authorities.

Energean Israel signs GSPA with MRC

Energean Israel and MRC Alon Tavor Ltd. have signed a Gas Sales and Purchase Agreement (GSPA) for the sale of approximately 0.5Bcm/yr, or up to 8 Bcm over the term of the contract, Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has announced in a statement.

Supply will commence at Karish first gas and the contract term is for a period of 15 years from the date of signature, according to the statement. The GSPA is linked to the Israeli Electricity Production Index and has floor pricing and take-or-pay provisions, the statement added.

Energean estimates the GSPA will add revenues in excess of $1 billion over the term of the contract.

Energean also recently signed a contract amendment with OPCRotem that accelerated the rate of gas consumption and increased annual gas supply by 0.2Bcm/yr. This was accompanied by a shortening of the contract term such that there was no change in the total contract quantity of gas.

Energean now has firm GSPAs for the supply of 5.0Bcm/yr of gas into the Israeli domestic market, excluding the contingent GSPAs that have been signed with I.P.M Beer Tuvia (0.4Bcm/yr) and Or Power Energies (“Or”) (0.7Bcm/yr).

Energean submits applications to import, supply gas to Cyprus

Energean Oil & Gas, the oil and gas producer focused on the Mediterranean, has submitted applications to Cypriot authorities for import and supply of natural gas to Cyprus commencing 2021, the company has announced.

The submission of the applications follows the ‘Karish to Cyprus Preliminary Pipeline Development Plan’ that has already been presented to the Cyprus Energy Regulatory Authority, according to which, natural gas will be transported through pipelines from the Karish offshore block to the “Energean Power” Floating Production, Storage and Offloading unit, and from there through a pipeline to Vassiliko, Cyprus, where it will landfall.

The pipeline from the Energean Power FPSO to Vassiliko will have a total length of 215 kilometres and transport natural gas from the Karish North field, offshore Israel, which contains 25 BCM of discovered recoverable resources. Total investment will be circa $350 million and will be funded by Energean.

The Republic of Cyprus will bear no upfront cost. Provided that there will be no delays in permitting procedures, the project will allow the Republic of Cyprus to receive competitively priced natural gas from 2021.

Moreover, the project will further strengthen Cyprus’ geostrategic role in the Eastern Mediterranean, in accordance with the trilateral cooperation between Cyprus, Israel and Greece and in reference to the East Med Pipeline project that is planned to transport natural gas to Europe.

Mathios Rigas, CEO of Energean, stated:

“Energean’s proposal offers the Republic of Cyprus the option to switch to natural gas as soon as possible, and under the most competitive terms. Execution of the proposal will bring competition to the Cypriot natural gas market, decrease energy costs across the economy and result in enhanced diversity and security of supply. Our proposal enhances the planning of the Republic of Cyprus and the security of supply, as it is supplementary to the LNG import procedures launched by the Cypriot Government.

We expect that the Republic of Cyprus will take advantage of the options that the market offers for the benefit of the Cypriot economy and the consumers”.

Energean has already signed Letters of Intent (LOIs) with all three IPPs that have been granted a license to construct combined cycle power plants in Cyprus – Power Energy Cyprus, Lysarea Energia and Paramount Energy Corporation.

The Energean Power FPSO has a capacity of 8BCM per year and Energean has already signed firm GSPAs with Israeli IPPs and industrial consumers for 4.5 BCM per year for an average period of 16 years as of 2021.

 

Energean signs deal with INGL for partial infrastructure transfer

Energean Oil and Gas, a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, has signed a Detailed Agreement with Israel Natural Gas Lines (INGL) for the handover of the near shore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin FPSO into the Israeli national gas transmission grid. An MOU with INGL was signed in December 2018, Energean has announced in a statement.

As consideration, INGL will pay Energean 369 million Israeli New Shekels, approximately US$102 million, which will be paid in accordance with milestones detailed in the agreement.

The agreement covers the onshore section of the Karish and Tanin infrastructure and the near shore section of pipeline extending to approximately 10km offshore. It is intended that the handover to INGL will become effective shortly after the delivery of first gas from the Karish field in 1Q 2021.

Following handover, INGL will be responsible for the operation and maintenance of this part of the infrastructure. Energean will not incur any charges or tariffs for use of this infrastructure.

Mathios Rigas, CEO of Energean Oil & Gas, commented:

“The agreement signed with INGL is an important milestone for the Karish and Tanin development, which will start flowing natural gas to the Israeli market in 1Q 2021. This demonstrates the commitment of the Israeli government to the project, and to long-term development of gas resources offshore Israel. The infrastructure being built by Energean will enable connection of future gas discoveries to the system, further contributing to Israel’s energy security and diversity of supply. We thank INGL management and professional team for the collaboration – we look forward to developing more projects together in the future”.

Energean makes significant gas discovery at Karish North

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 commences its drilling campaign in Israel

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 signs extra Karish and Tanin sale, purchase deals

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’s 2019 Israel drilling to target 2.3 Tcf in resources

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

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.

 

 

Energean announces timing of Secondary Listing on Tel Aviv bourse

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

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 board endorses Karish & Tanin project’s FID

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.”

 

 

Energean signs $1.275bn finance deal for Karish project

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.”

Energean signs gas supply deals with Israel’s Dalia, Or

The Energean Oil & Gas subsidiary Energy Israel has signed respective agreements with Dalia Power Energies and its sister company Or Power Energies for the supply of natural gas from the Karish and Tanin fields, offshore Israel, Energean announced in a statement released today.

Dalia and Or will purchase part of their gas requirements from Karish-Tanin to operate the Dalia power plant, the largest private power station in Tzafit, south-central Israel, as well as future power plants to be built by Or.

Under the supply agreements, Energean Israel has undertaken to supply the purchasers with an overall amount of up to 23 billion cubic meters of natural gas from Karish-Tanin reservoirs over the lifetime of the contracts.

The period of the supply agreements will start from the date natural gas flows in commercial volumes from Karish-Tanin to the purchasers, and conclude at the point when the pPurchasers’ generation licenses need to be extended.

The purchasers have agreed to a Take or Pay arrangement for a minimum annual amount of natural gas from Energean Israel, at a price linked to Israeli electricity markets and underpinned by a floor price.

Energean Oil & Gas Chairman & CEO, Mr. Mathios Rigas commented: “This is a significant day for the Israeli gas market. These are the first contracts for gas supplies from the Karish and Tanin fields signed with the Dalia group, the largest private power producer in Israel. The agreement is a substantial step towards bringing competition and cheaper energy to the market for the benefit of Israeli consumers and the country’s economy. Energean is in talks regarding further contracts with other potential customers in the market and is aiming to submit a Field Development Plan for the Karish and Tanin project in the next few weeks.”

Dalia Power Energies Company CEO, Mr. Eitan Meir added: “Dalia and Or Energy are working to expand the volume of production offered by them while continuing to reduce the price of electricity. We are pleased to sign the agreement that expands the gas sources and the ability of the companies to offer their customers electricity at a competitive price. Competition in all segments of the electricity sector will serve the public and the Israeli economy.”

Dalia Power Energies Ltd. was established in 2005 with the aim of building and operating a private power plant that would provide cheaper electricity than Israel Electric Corporation, while encouraging and developing competition in the electricity sector. The Dalia power plant was set up at Tzafit in accordance with government policy and on the understanding that cooperation between private power producers and promotion of competition in the Israeli electricity sector are essential. The plant is based on combined-cycle technology and operates using a steam turbine and a gas turbine with an overall output of approximately 900MW, with maximum energy efficiency of 58%. Dalia is a major player in the Israeli electricity market and accounts for about 7% of the country’s electricity production capacity.

Energean Israel is the operator of, and holds a 100% interest in, both the Karish and Tanin licenses, acquired from Delek Group in December 2016, for an upfront consideration of $40m as well as $108.5m in contingent payments. The fields contain at least 2.4 TCF of gas contingent resources, as reported by the NSAI, and will be developed through a Floating Production Storage and Offloading (FPSO) vessel, the first to be installed and operated in the East Mediterranean. The gas produced from the fields will supply Israel’s growing domestic gas market, with first gas expected in 2020. Kerogen Capital has agreed to invest an initial US$50 million in Energean Israel. Kerogen’s investment is subject to approval by the Israeli Government, after which Kerogen will own a 50% interest in Energean Israel with Energean holding the balance.

Energean is a leading independent E&P company focused on the Eastern Mediterranean region where it holdsnine E&P licenses, encompassing offshore Israel, Greece, the Adriatic and onshore North Africa. It is the only oil and gas producer in Greece with a 35-year track record of operating offshore and onshore assets in environmentally sensitive areas and employs 480 oil and gas professionals.

Energean has reserves of 2.4 TCF of natural gas (2C) at the Karish and Tanin fields, offshore Israel as well as 41 million barrels (2P) in the Prinos License, offshore North-Eastern Greece.

The company has planned to submit to the Israeli Government an FDP for the Karish and Tanin fields by mid-2017, aiming to use an FPSO and produce gas in 2020.

The company is pursuing an ongoing investment and development program to increase production from the Prinos and North Prinos Oil Fields and develop the Epsilon Oil Field. The company has secured a 25-year exploitation license for the West Katakolo offshore block in Western Greece with first oil expected in 2019/20, which will represent the first production of oil or gas in the west of country.

Energean also has significant exploration potential in the licenses held in western Greece, Montenegro and Egypt, which provide the basis for future organic growth.

Kerogen Capital is an independent private equity fund manager specializing in the international oil and gas sector. Kerogen Capital was established in 2007 and manages approximately US$2 billion across its funds.

Its investors comprise a range of blue-chip institutions including endowment funds, foundations, pension plans, fund of funds, international corporations and family offices. The team at Kerogen Capital comprises highly experienced investment professionals, in-house technical and operations expertise and a world class Executive Board. Kerogen Capital seeks to support and assist its portfolio companies in delivering the full potential of their assets. Energean Israel represents Kerogen Capital’s first investment in the Eastern Mediterranean hydrocarbon province.