oil

Energean appoints Non-Executive Chairman, Ind. Non-Executive Director

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has announce the appointment of Karen Simon (photo), currently Independent Non-Executive Director, as Non-Executive Chairman, replacing Simon Heale, who has retired; and Amy Lashinsky as Independent Non-Executive Director, all effective on 21 November 2019.

Karen Simon is newly retired from J.P. Morgan as a Vice Chairman in the Investment Bank with over 35 years of corporate finance experience with the firm.

Most recently, Ms. Simon headed up Director Advisory Services, a newly established client service at J.P. Morgan focused on public company directors.

From 2004 to 2016, Ms. Simon worked with private equity firms in J.P. Morgan’s Financial Sponsor Coverage group and was promoted to head the European group in 2007 and the North American group in 2013.

Ms. Simon held a number of other senior positions previously, including Co-Head of EMEA Debt Capital Markets and Head of EMEA Oil & Gas coverage.

Ms. Simon spent 20 years of her career working in London and is a dual US/UK citizen. She currently sits on the boards of Aker ASA in Oslo, an industrial investment company, and the Texas Woman’s Foundation, a non-profit charity focused on the needs of underprivileged girls and women across Texas.

Ms. Simon graduated from the University of Colorado and has Masters degrees from Southern Methodist University and from the American Graduate School of International Management.

Karen Simon, Non-Executive Director and new Chairman, remarked:

“It is a privilege for me to step up as Chairman at Energean, a company with a clear strategy, a strong and growing asset base and a focused, diverse and professional team. I look forward to working closely with colleagues to drive the business forward and create value for our shareholders as we execute our transition fuel strategy. On behalf of the Board I would like to thank Simon [Heale] for his significant contribution to Energean and the entire Energean team offers Simon all best wishes for the future.”

Simon Heale, non-executive Chairman, noted:

“Karen Simon has made a significant contribution to Energean since she became a Non-Executive Director in 2017 and I leave Energean in excellent hands, with listings in London and Tel Aviv, a significant development in Israel and a growing reserves and production base in the Mediterranean. With its gas-weighted strategy and portfolio, Energean is well-placed to address the many challenges and opportunities ahead. It has been an honor to serve on the Board and I wish Energean every success, going forward.”

Amy Lashinsky, the new independent Non-Executive Director, is a co-founder of Alaco, the international risk management company, and a member of its Board.

Ms Lashinsky trained as a securities analyst on Wall Street before joining Kroll in New York in 1985. She moved to London in 1988 to help establish Kroll’s first overseas office where she became Managing Director of its business intelligence unit.

In 1995 Ms. Lashinsky set up Asmara Limited, which was sold to NYSE-listed Armor Holdings in 1998, before founding Alaco in 2002.  Ms Lashinsky graduated from the University of Michigan.

New and ambitious NECP set for consultation procedure

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Greece’s new National Energy and Climate Plan, expected this week for public consultation, will be aggressive in terms of decarbonization targets and principles, details discussed by the plan’s committee last Friday have indicated.

Besides total decarbonization by 2028 and a RES sector energy mix percentage of 35 percent by 2030, the new NECP also includes energy savings of at least 35 percent compared to 2007 consumption levels, energypress sources have informed.

The targets set for electric vehicle usage are also ambitious. Despite initial reservations, the maintenance of a target for a domestic electric car fleet of 10 percent by 2030 is being considered, the same sources noted.

The swift withdrawal of lignite-fired units during the NECP’s early stages, combined with the development of natural gas-fueled units will be pivotal for the new plan’s success.

Like its precursor, the new plan is also expected to feature targets aiming for reduced greenhouse emissions and energy dependence, the latter resulting from high-level usage of petroleum products and, to a lesser extent, natural gas. Combined, the two energy sources represent over 65 percent of the country’s gross energy consumption.

A longer second national plan with targets reaching 2050 is also expected to soon be delivered by the ministry for consultation, sources noted.

Energean releases trading update covering recent activity

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has released the following trading update for the period from 30 June 2019 to 12 November 2019.

Highlights

Transaction Update:

  • On track to complete the Edison E&P acquisition around year end 2019 (“Acquisition Completion”). The onward sale of Edison E&P’s UK and Norwegian subsidiaries to Neptune Energy is on track to complete as soon as is reasonably practicable thereafter.
  • Refinancing of the $600 million committed bridge facility with a Reserve Based Lending (“RBL”) facility progressing well; expected to be in place in 4Q 2019, before Acquisition Completion.

Operational:

  • On track to deliver first gas from the Karish Development in early 2021.
  • Completed the drilling of the three development wells required to deliver first gas from Karish.
  • Karish North appraisal confirmed best estimate recoverable resource volumes of 0.9 Tcf (25 Bcm) plus 34 MMbbls of light oil / condensate (combined c.190 mmboe).
  • Signed a Term Sheet with MRC Alon Tavor Power, Ltd., the winning bidder of the Alon Tavor tender, which could add a further 0.5 Bcm/yr of firm gas sales.

Outlook:

  • Committed to drilling the Zeus exploration well in Block 12, Israel, targeting 0.6 Tcf.
  • Full year production guidance maintained at 3,400 – 3,600 bopd.
  • At 30 September 2019, Energean had cash and undrawn debt facilities of $1.6 billion.  

Acquisition of Edison E&P

Energean remains on track to complete the acquisition of Edison E&P, announced on 4 July 2019, around year end 2019 and Edison E&P continues to perform in line with expectations. Energean is progressing the necessary regulatory approvals. To date, approvals have been received in France, Norway and Greece. Approvals are outstanding, and expected shortly, in Italy, Egypt, Algeria and the UK.

The $600 Bridge Loan is expected to be replaced with a reserve-based lending facility before Acquisition Completion. The process is progressing in line with expectations.

Disposal of UK North Sea & Norway Assets to Neptune Energy

Energean remains on track to complete the sale of Edison E&P’s UK and Norwegian subsidiaries to Neptune Energy, as announced on 14 October 2019. The sale is contingent on Acquisition Completion and is expected to close as soon as is reasonably practicable thereafter.

Israel – Karish and Tanin Development

Energean’s Karish and Tanin development project remains on track to deliver first gas into the Israeli domestic market in 2021. During the period, Energean met its key milestones of completing the drilling of the three development wells required to deliver first gas from Karish, appraising the Karish North Discovery and launch of the Energean Power FPSO hull.

Israel – Drilling

As announced on 4 November 2019, Energean has now completed sidetrack appraisal operations at Karish North, confirming best estimate recoverable resources of 0.9 Tcf (25 BCM) plus 34 million barrels of light oil / condensate (combined c.190 mmboe), significantly enhancing Energean’s discovered resource volumes across its Karish and Tanin leases.

Low, Best and High case estimated resources are outlined in the table below. The remaining volumetric uncertainty is largely associated with thinly bedded sections of the reservoir in the B Sand Unit. This potential will be confirmed via acquisition of a core from this section, which is expected to be achieved when the well is completed as a producer.

Low Case Best Estimate High Case
GIIP (Tcf) 1.1 1.3 1.8
GIIP (BCM) 30.0 35.6 51.6
Recoverable Gas (Tcf) 0.7 0.9 1.4
Recoverable Gas (BCM) 19.5 24.9 38.7
Recoverable Liquids (MMbbls) 25.2 34.2 55.0

 

The Karish North Discovery will be developed via a tie-back to the Energean Power FPSO, which will be located 5.4 kilometers away and is being built with 8 Bcm/yr (775 mmcf/d) of capacity. Future GSPAs will target both the growing domestic market and key regional export markets.

As planned, the Stena DrillMax has now moved to complete the three Karish Main development wells. Following completion of these wells, Energean has elected to drill the Zeus exploration well, which is targeting 0.6 Tcf of Gas Initially In Place (“GIIP”) across three reservoir intervals. Zeus is located in Block 12, between the Karish and Tanin leases, and a discovery would be commercialised through the Energean Power FPSO. The Zeus exploration well is expected to cost $35 million (gross).

Energean is assessing options for the remaining five drilling options available under its contract with Stena.

Israel – Commercial

In December 2018, Energean signed a GSPA with I.P.M Beer Tuvia Ltd. (“I.P.M.”) to supply an estimated 5.5 Bcm (c. 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 programme and the results from the Karish North exploration well and appraisal sidetrack well significantly increase the likelihood of it becoming unconditional. Inclusive of the I.P.M contract, Energean’s firm contracted gas sales are equivalent to 4.7 Bcm/yr.

Energean has also recently signed a detailed term sheet with MRC Alon Tavor Power, Ltd., the winning bidder in the IEC Alon Tavor tender process. If, as is the express intention of the parties, this is converted into a GSPA, this will add c.0.5 Bcm/year (48 mmcf/d).

Finally, Energean also has a conditional GSPA with Or Power Energies (Dalia) Ltd. (“Or”), which is contingent, inter alia, on certain conditions precedent. The contract is for c.0.7 Bcm/yr (68 mmcf/d). It should be noted that, in common with other GSPAs in Israel where Energean is the seller, Or has an unlimited ability to dispose of gas for alternative end uses.

The weighted average contract price was US$4.22/mmbtu as of 30 September 2019 based on the Israeli electricity production component index, Brent oil price and exchange rates as of that date.

Greece – Prinos Area

Production in the year to 30 September 2019 was 3,577 bopd. Full year production guidance is maintained at 3,400 – 3,600 bopd. Energean’s review of capital allocation is ongoing.

The Epsilon Platform Development remains on track to deliver first oil in 2H 2020.

Additional activities

At Katakolo, legacy 3D seismic re-processing has been finalised in parallel with application for necessary environmental permits. Analysis suggests significant upside to in place volumes. A decision on whether to farm down or take Final Investment Decision will be taken after the results from this analysis have been finalised.

In Ioannina, 2D seismic acquisition has been completed and interpretation is ongoing. In Aitokarnania, activities are focused on the re-processing of existing data and preparation for the new seismic campaign, which is scheduled to start before year end.

In Montenegro, processing and interpretation of the recently acquired 3D seismic survey is ongoing. Results are anticipated before year end 2019. 

Financial Update

Energean recorded revenues of $52.4 million in the 9 months to 30 September 2019, (1Q-3Q 2018:  US$55.4 million). Unit cost of production was $19.8/bbl and Energean maintains Full Year Guidance of $20/bbl.

Revised capital expenditure guidance is shown in the table below. Development capex is reduced by $25 million on expected timing.  Exploration capital expenditure in increased by $8 – 23 million due to the inclusion of the Karish North sidetrack and preparatory activities for the Zeus exploration well, which is expected to be drilled during 2020.

Revised Full Year 2019 Capital Expenditure Guidance

$m

 Previous Full Year 2019 Capital Expenditure Guidance

$m
Prinos & Epsilon 70 – 80 70 – 80
Israel – Development 625 650
Total Development & Production Capital Expenditure 695 – 705 720 – 730
Israel Exploration 65 45 – 55
Western Greece 7 – 8 5 – 10
Montenegro 5 5
Total Exploration 77 – 78 55 – 70

 

At 30 September 2019, Energean had net debt of $348.6 million. Gross cash was $393.1 million, offset by $741.7 million of borrowings. As at this date, Energean had $36 million remaining undrawn under its Greece RBL facility, $615 million under the $1.275 billion Karish-Tanin project finance facility and $600 million of debt available under the committed Bridge Facility.

Energean has no crude oil hedges outstanding.

ELPE reports significantly higher operating profitability

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HELLENIC PETROLEUM Group announced its 3Q/9M19 financial results in accordance with IFRS. 3Q19 Adjusted EBITDA came in at €201m, a notable improvement vs last quarters, while Adjusted Net Income amounted to €90m. Higher total production, at 4.3m MT and good operations at refining units, despite end of run performance ahead of scheduled shut-downs and IMO test runs, resulted to sales exceeding 4m MT. Equally, improved performance in Domestic and International Fuels Marketing had a positive contribution.

The BoD, considering the strong results, as well as positive outlook for the Group, decided the distribution of an interim dividend of €0.25/share, payable in January 2020.

Performance was also positively affected by improved refining environment, despite weaker benchmark refining margins compared to historical highs recorded in recent years, as well as the restoration of the Russian crude oil supply infrastructure in Central Europe and a strong US dollar vs the Euro.

IFRS Reported Results were affected by crude price movements, which in 3Q19 dropped to the lower levels of the last two years, leading to a 12% drop in Revenues to €2.3bn. Equally, impact on Net Income was also negative, with inventory valuation losses of €43m, vs €53m gains recorded in 3Q18, as prices then increased. It should be noted that the results include for the first time the impact of new IFRS 16 on operating leases of retail fuel stations and other equipment.

The Group continued to improve its financial position, with finance cost further dropping by 25% y-o-y in 3Q19, at €27m, mainly on account of repayment of the €325m Eurobond issued in 2014. Furthermore, during the quarter, the Group proceeded to the successful issue of a new €500m, 2% Eurobond, with partial refinancing of existing bonds maturing in 2021. The transaction is expected to lead to an additional annual decrease in finance costs of approximately €15m, with total reduction exceeding 50% in the last 3 years, with a notable impact on the Group’s cash flow profile and dividend distribution capacity.

Commenting on the results, Andreas Shiamishis, Group CEO, noted:

“Improved 3Q19 results, the strongest of last 3 quarters, are particularly encouraging, on the back of a material improvement in environment. We are operating in a highly cyclical industry, without the ability to influence international developments. As a result, it is important to focus on issues we can control through strategic direction, managing and operating our business units and improving competitiveness. Despite 2019 being the most challenging refining environment in the last few years, our results and financial position are strong. On a positive note, domestic fuels market recorded a 3% growth. We consider the short term outlook to be positive, with the introduction of new bunkering fuel specs; our recent performance in capital markets, with the successful Eurobond issue in 3Q19, further confirms the confidence of the domestic and international investor community in HELLENIC PETROLEUM. I would like to thank once again the management and employees for their significant contribution to our successful performance.” 

Volatile refining environment and stronger USD

Global macroeconomic developments, especially around international trade relations, led to weaker crude oil prices, with Brent averaging at $62/bbl, lower vs both 2Q19 ($69/bbl), as well as 3Q18 ($76/bbl).

The US dollar strengthened for one more quarter, with average Euro/USD exchange rate at €1.11, mainly driven by central banks monetary policy.

In product markets, an important development was the drop in HSFO cracks, in contrast with other products, that were notably stronger q-o-q, leading refining benchmark margins higher vs 1H19. This trend, was sustained in 4Q19, especially for diesel, ahead of IMO regulation implementation, confirming the Group’s strategy for structural minimization of HSFO production, while increasing high value products output, through the investment in Elefsina refinery upgrade, as well as the new Aspropyrgos refinery operating model for bunkering fuels in 2020.

Urals pricing at parity to Brent, albeit with volatility during the quarter, led to weaker refining margins vs last year. FCC margins averaged at $4.9/bbl, vs $5.7/bbl in 3Q18, with Hydrocracking margins at $4.8/bbl (3Q18: $5.6/bbl). 

Increasing demand for domestic fuels market

Domestic fuel demand in 3Q19 amounted to 1.6m MT (+3%), with a respective increase in auto-fuels, the highest in the last few quarters. Aviation and bunkering fuels grew significantly (+14%), mainly on account of higher marine fuel offtake (+22%). 

Strong balance sheet, improved capital structure, reduction in finance costs

The new €500m Eurobond issue, at the lowest cost for the Group in more than 10 years, combined with the partial refinancing of 2021 eurobonds through a tender offer, as well as the repayment of the €325m notes in 3Q19, are expected to have a positive impact on finance costs of over €30m. Furthermore, the new issue has improved commercial terms vs previous, enhancing flexibility, while extending the Group’s maturity profile.

Net Debt at €1.5bn, significantly lower y-o-y, with gearing ratio at 39%.

Key strategic developments

Aspropyrgos refinery is planning its transition to the new operating model in November, in view of new MARPOL regulation implementation for bunkering fuels, in order to effectively respond to the new market needs. A material part of feedstock required to operate the new model has already been secured, de-risking our planning.

During October 2019 a full turnaround, involving extended maintenance at all units, was successfully completed at Elefsina refinery, safely and in line with timetable. Works are now concluded and the refinery will resume operations in the next days.

In E&P, the Greek parliament proceeded to the ratification of the Lease Agreements (effective 10 October 2019) for the offshore areas of ‘West Crete’ and ‘Southwest Crete’ (Total 40% – Operator, ExxonMobil 40%, HELLENIC PETROLEUM 20%), as well as ‘Ionio’ (REPSOL 50% – Operator, HELLENIC PETROLEUM 50%) and ‘Kyparissiakos Gulf’ (HELLENIC PETROLEUM 100%), while planned environmental and exploration studies in the other Western Greece concessions continued.

Key highlights and contribution for each of the main business units in 3Q19 were:

REFINING, SUPPLY & TRADING

­     Refining, Supply & Trading 3Q19 Adjusted EBITDA at €129m (-25%).

  • Net production amounted to 3.8m MT (-5%), with sales at 4m MT (-1%).
  • Realised ELPE system margin came in at $10.1/bbl, a significant recovery vs 1H19.
  • During 3Q19, the IMO test run led to further diversify crude slate.

PETROCHEMICALS

  • Lower PP sales (-5%), as well as inventory losses, led EBITDA to €20m (- 20%).

MARKETING

  • 3Q19 Marketing Adjusted EBITDA at €51m, with 9M at €111m. Excluding the impact of IFRS 16 implementation, Comparable EBITDA was €46m (+9%), with 9M at €86m (+7%).
  • In Domestic Marketing, improved performance in Retail and Aviation led 3Q19 Comparable EBITDA at €27m (+5%).
  • Profitability improved in most markets the Group operates, with 3Q19 International Marketing Comparable EBITDA at €19m (+16%).

ASSOCIATE COMPANIES

  • DEPA Group contribution to consolidated Net Income was €17m for 9M19.
  • Higher production in both ELPEDISON plants, led EBITDA to €8m (+79%).

Key consolidated financial indicators (prepared in accordance with IFRS) for 3Q/9M19 are shown below:

€ million 3Q18 3Q19 % Δ 9M18 1H19 % Δ
P&L figures  
Refining Sales Volumes (‘000 ΜΤ) 4,087 4,037 -1% 12,354 11,727 -5%
Sales 2,674 2,348 -12% 7,341 6,805 -7%
EBITDA 258 141 -45% 731 464 -37%
Adjusted EBITDA 1 237 201 -15% 574 453 -21%
Net Income 135 46 -66% 360 167 -53%
Adjusted Net Income 1 111 90 -19% 239 160 –33%
Balance Sheet Items
Capital Employed 4,421 3,916 -11%
Net Debt 1,773 1,509 -15%
Debt Gearing (ND/ND+E) 40% 39% –

 

20th Cippe, major petroleum industry event, in Beijing March 26-28

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The 20th China International Petroleum & Petrochemical Technology and Equipment Exhibition (cippe2020) will be held on March 26-28, 2020 at the New China International Exhibition Center in Beijing.

For its 20th edition, cippe2020 is once again inviting global industry giants to showcase latest petroleum equipment and technologies, as well as discuss the latest trends in the industry with experts and professional buyers from all over the world.

cippe2020 will continue to expand its scale by providing seven halls and eight exhibiting zones, focusing on technologies and equipment of petroleum & petrochemical, natural gas, offshore oil & gas, offshore engineering, pipelines & storage, shale gas, as well as explosion-proof instruments and oilfield soil remediation.

In response to the national strategy for clean energy development and transformation to promote energy consumption, a new hall will be dedicated to showcasing natural gas and shale gas.

An Event Gathering Global Giants

As the world’s leading petroleum & petrochemical equipment event, cippe is an annual gathering of leading petroleum & petrochemical companies in the world. International exhibitors will include ExxonMobil, Rosneft, Gazprom, Transneft, Caterpillar, NOV, Schlumberger, Baker Hughes, GE, Cameron, Honeywell, Philips, Schneider, Dow Chemical, Rockwell, Cummins, Emerson, AkzoNobel, API, 3M, E+H, MTU, ARIEL, KSB, Tyco, Atlas Copco, Forum, Huisman, Sandvik, AKSA, HEMPEL, etc.

Domestic exhibitors will include CNPC, Sinopec, CNOOC, CSSC, CSIC, CASC, AVIC, Jereh, Honghua, CIMC Raffles, Kerui, RG Petro-Machinery Group, Sany Group, NHI, CITIC HIC, CITIC Pacific, etc.

Various Concurrent Events

As a global display platform, cippe is keen on promoting the exhibition effectiveness and providing communication opportunities for the exhibitors. Therefore, cippe2020 will hold many concurrent events including the cippe Gold Innovation Award, the 12th International Petroleum and Natural Gas Summit, International Petroleum and Petrochemical Technology Conference 2020, cippe2020 Embassy (Oil & Gas) Promotion Conference. In addition, special events such as one-on-one purchasing meeting–cippe2020 Business Matchmaking Meeting, technical exchange meetings and product launching conferences will also be held.

Currently, the cippe2020 organizing committee is visiting major oil producing countries such as Russia, the United States, Norway, the United Arab Emirates, Saudi Arabia, Malaysia, Canada, Iran, Brazil and the United Kingdom to invite more global professional buyers.

Contacts:

cippe2020 Organizing Committee

For Exhibitors

Mona Wang, 86-10-56176968

cippe@vip.163.com

cippe@zhenweiexpo.com

For Visitors

Yolanda Zhao, 86-10-56176962

yolanda@zhenweiexpo.com

Jetoil placed on the comeback trail by new owner Centracore

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Bankruptcy-struck oil trading company Jetoil, now controlled by Austria’s Centracore and on the rebound, has reclaimed approximately 15 percent of the fuel-station network it controlled prior to the rescue plan.

Jetoil now operates 83 fuel stations (DODO, dealer-owned, dealer-operated), primarily in northern Greece, as well as the Thessaly, Epirus and other mainland regions.

At the peak of Jetoil’s crisis in the summer of 2016 – when founder Kyriakos Mamidakis committed suicide, aged 84, not long after the company had filed for bankruptcy – the company’s retail network had shrunk to just 34 outlets.

A Jetoil rescue plan was approved Iast year. Strategic investor Centracore agreed to take on the company’s liabilities following a partial haircut.

Besides a purchase price of 107 million euros, the new Jetoil shareholder has invested 10 million euros to upgrade the company’s storage facility in Kalohori, on the outskirts of Thessaloniki.

Jetoil has increased its sales in Greece and achieved significantly higher exports since its takeover. Total sales for the first financial year since Centracore’s entry reached 420 million euros generated by a trading volume of 350,000 metric tons.

In a year, the company has achieved 35 percent of its business plan’s target, set at one million metric tons of trading volume, or a 10 percent Greek market share, including exports.

The strategic investor, maintaining access to Russian refineries, has admitted the decision to invest in Greece was based on export potential to Balkan markets. Centracore obtained a Greek trading license in July, 2018.

Centracore is a Vienna-based trading company headed by Luxembourg’s UFG Europe Holding, holding an 80.1 percent share and comprised of private equity funds. Russian Petroleum company Rosneft holds the other 19.9 percent.

Repsol-Energean given extra year for Ioannina license preliminary stage

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A consortium comprising Repsol and Energean Oil & Gas has been granted a one-year extension by EDEY, the Greek Hydrocarbon Management Company, to complete preliminary exploration work at an onshore license in the wider region of Ioannina, northwestern Greece.

Repsol, controlling a 60 percent stake in the consortium, and Energean, holding 40 percent stake, requested an additional year until October 2, 2020, to complete preliminary exploration work at the license.

This is the second deadline extension granted to Repsol-Energean for the license’s preliminary phase. A first extension, granted in 2017, expires next month. The consortium is currently processing new seismic data.

The EDEY extension decision also requires the consortium to complete a second exploration phase, involving deep drilling, by October 2, 2022, should the partners decide to pursue the license further.

The license location’s geological features, featuring rocky terrain, are considered challenging. Also, the two companies have faced resistance, at times extreme, from small groups representing local communities while conducting their seismic research and related activities. The support of local landowners exceeds 90 percent, which has enabled the completion of research work in recent weeks.

ELPE roadshow ahead of bond issue, €300-400m sought

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Hellenic Petroleum ELPE has organized a series of meetings with institutional investors over the next few days to pitch an imminent five-year bond issue aiming to attract a capital amount of between 300 and 400 million euros at an interest rate, according to some sources, of just under 3 percent.

The ELPE bond issue could take place this week, sources have informed.

The listed petroleum group has asked participating banks to organize a series of presentations, the first in London today. Zurich and Paris follow tomorrow, while an Athens session is planned for Thursday.

ELPE officials are optimistic on the prospects of the bond issue, whose objectives include premature settlement of a bond with a 4.875 percent interest rate, expiring October 2021. This bond is worth 449.53 million euros.

The new ELPE bond issue comes amid a favorable time for the Greek economy and following a successful bond issue by Hellenic Telecommunications OTE.

A privatization plan to offer part of the Greek State’s 35.48 percent stake of ELPE has yet to be finalized, according to energy minister Costis Hatzidakis. Sources insist the privatization will take place through the Athens bourse.

Major upstream players meet at EPOCH congress in Thessaloniki

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Over 100 companies participated at the Exploration and Production Offshore Congress Hub (EPOCH) Congress, a two-day event held September 16 and 17 in Thessaloniki.

The event, a closed-door congress supported by Greek and international media and co-hosted by Hellenic Petroleum (ELPE), drew keynote speakers who covered both the business and technical sides concerning the developing markets of the Mediterranean and offshore West Africa.

Over the event’s two days, major players of the upstream industry, representing E&P companies, EPC contractors, drilling contractors, service providers & equipment manufacturers, shared their experience and views on the current situation in regions and presented solutions, cases and technologies to overcome these challenges.

Besides discussions, delegates also established new business contacts and held preliminary talks for further cooperation.

The first day of the event began with presentations highlighting new challenges, opportunities and strategies across the Mediterranean region, while the second day’s plenary session was devoted to an overview of the West African offshore region and its current performance.

The keynote speakers at EPOCH were: Dr Abdelarahim Mohamed – Board Director for Exploration & Production of National Oil Corporation of Libya; Yannis Bassias – President & CEO of Hellenic Hydrocarbon Resources Management; Kees Jongepier – VP Exploration of Aker Energy AS; Chijioke Akwukwuma – CEO of Ocean Deep Drilling ESV Nigeria Limited (ODENL); Dr. Jörg Köhli – Senior Expert – Head of Upstream Oil and Gas of European Commission; Christophe Souillart – BD Director Africa, Mediterranean and Southern Europe of Subsea 7; and Henry Okolie-Aboh – Founder & CEO of Westfield Energy Resources Limited.

ELPE bond issue plan may be delayed by Middle East tension

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A Hellenic Petroleum ELPE plan for an imminent bond issue that will seek to raise a sum of at least 300 million euros at an interest rate of less than 2 percent in order to refinance an existing loan could be delayed by increased tension in the Middle East over the past few days as a result of drone attack on Saudi Arabia’s oil installations.

A firm US reaction against Iran would further escalate this tension in the wider area and could negatively impact ELPE’s planned bond issue as some investors would certainly hesitate to invest.

The petroleum group’s net debt is 1.4 billion euros, down by approximately 500 million euros compared to a year earlier, according to ELPE’s first half results, announced August 29.

Along with its first-half results, ELPE announced a bond issue plan for within 2019, the objective being to further decrease its financial costs.

Energean up to 4th in European upstream with Edison E&P deal

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Greece’s Energean Oil and Gas has risen to fourth place among Europe’s independent hydrocarbon exploration and production companies, in terms of proven reserves, following its acquisition of Edison’s E&P, a sale and purchase agreement announced yesterday.

Energean Oil and Gas, a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company, will, as a result, possess 639 million barrels.

Israel’s Delek Drilling, with one billion barrels, and Norway’s Aker BP, with 917 million barrels, and Lundin, also Norwegian, with 745 million barrels, make up Europe’s top three.

Energean anticipates it will capture first place within the next two to three years, in terms of daily hydrocarbon production, expected to rise to 200,000 barrels, when an FPSO at Israel’s Karish and Tanin reserves begins operating.

The company’s Edison E&P acquisition – expected to be finalized by the end of 2019 as it is subject to conditions for transactions of this kind, including Italian Economic Development Ministry approval – stands to place Energean at the forefront of Greece’s upstream as the company will gain licenses in western Greece.

Energean will take over Edison’s stakes in two consortiums, the first with Total and Hellenic Petroleum (ELPE) for Block 2 west of Corfu, and the second with ELPE for a license at the Gulf of Patras.

Energean also holds rights to a license in Etoloakarnania, western Greece, with Spain’s Repsol, the operator, as well as in the Ioannina region, in the northwest.

The Edison E&P acquisition will also broaden Energean’s portfolio, to possess 90 licenses in nine countries.

The agreement also adds 434 million dollars to Energean’s earnings before interest, tax, depreciation and amortization (EBITDA), up from 52 million dollars last year.

 

Edison agrees to sell exploration and production to Energean

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Italian energy giant Edison has announced the signing of a sale and purchase agreement with Energean Oil and Gas to sell the 100% of Edison Exploration and Production (E&P) and its subsidiaries in the hydrocarbons exploration and production business (oil and natural gas). The Edison Board of Directors approved the transaction yesterday.
The price of the transaction is based on an enterprise value of USD 750 million, with an additional consideration of USD 100 million contingent on the commissioning of Cassiopea development gas project in Italy.

Additionally, Edison will be entitled to royalties associated with further potential developments in Egypt that would bring the aggregate value close to USD 1 billion. The transaction also includes the transferring to the buyer of all Edison future decommissioning obligations.

Edison Exploration and Production manages all of Edison’s activities, mining titles and corporate shareholdings in the hydrocarbons business in Italy and abroad. In particular, Edison E&P owns a portfolio of approximately 90 licences in 9 countries in the Mediterranean and Northern Europe, corresponding to approximately 49,000 barrels per day of net entitlement production as December 31, 2018.

Following the transaction, considering the first half 2019 developments, in particular in terms of regulations as well as brent and gas market trends, and the contractual terms currently being finalized, a 400-500 million euros writedown at Group level is expected.

Edison’s Board of Directors has reserved the right to perform suitable analyses to evaluate the possible capital surplus with respect to the guarantee requirements it is
called upon to meet, considering that the transaction means exiting from a highly volatile and capital-intensive segment, with a higher risk profile than Edison’s other strategic businesses.

This is with a view to possibly reducing the ordinary capital to an extent of covering prior losses as well as those that will be recorded in the 2019 financial statements.
Energean Oil and Gas, a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic, has committed to guaranteeing a future of development for the E&P business area and its employees, being the ideal operator to unleash all the potential of the business.

The workforce employed by Edison Exploration and Production amounts to 282 people as June 30, 2019.

Edison Exploration and Production counts also to the staff of the Egyptian Operating Company Abu Qir Petroleum (AQP). With regard to the acquired personnel, Energean Oil and Gas is committed to ensuring certain protections, taking into account the specific regulatory conditions governing the employment rules and
the existing market practices in the various countries.

The closing of the transaction with Energean Oil and Gas is expected to take place by the end of 2019 and it is subject to conditions for transactions of this kind, including Italian Economic Development Ministry approval.

The financial resources deriving from this transaction will support Edison’s strategic development plan, which envisages very significant investments in Italy in the 2019-2021 three-year period intended mainly for sustainable production from renewable sources and gas, as well as the strengthening of the Company’s activities in retail market and energy efficiency services.

Edison has a target to produce by 2030 40% of its energy from green sources and an emissions target of 0.26 kilogrammes of CO2 per kilowatt hour produced. In this way Edison contributes effectively to the energy transition providing Italy with a balanced production mix, able to guarantee the security and flexibility of the country’s energy system.

Edison, with 91 hydroelectric power stations (of which 53 mini-hydroelectric), 45 wind farms and 65 photovoltaic power plants, has an installed capacity in Italy of 1,900 megawatts in renewable sources, with more than 4,000 gigawatt hours of electricity generated in 2018 (21% of the Company’s total electricity production, of which 3,000 gigawatt hours from hydroelectric power plants and 1,000 gigawatt hours from
wind farms).

Investors will ‘abandon Crete blocks if discoveries not significant’

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Two offshore blocks west and southwest of Crete, licensed out just days ago to a three-member consortium comprised of Total (40%), ExxonMobil (40%) and Hellenic Petroleum-ELPE (20%), promise far greater production potential than blocks further north in the Ionian Sea, but investors will leave if these Cretan blocks do not offer significant output, a top-ranked official has noted.

Investors will abandon their efforts if a production target of at least 500 million barrels is not reached as the investment costs are considerable, Yiannis Basias, the head official at EDEY, the Greek Hydrocarbon Management Company, told state-run radio Proto Programma.

He denounced environmental concerns being expressed, describing these as inexplicable, “unless the intention is to stop the exploration activity altogether.”

Hydrocarbon companies spend vast amounts of money to ensure the avoidance of problems as, besides affecting the environment, local economy and health of individuals, any accident would also instantly blacklist companies and trouble their futures, the EDEY chief highlighted.

Sizable discoveries promise to greatly change Greece’s image and standing in the southeast Mediterranean region, Basias remarked, adding that the country’s economy would gain some balance for a less burdensome future.

At present, economic gains generated by tourism are immediately offset by costs concerning  natural gas and crude costs, the EDEY chief said.

PM to attend Cretan block signing ceremony, reshuffling in west

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A signing ceremony scheduled to take place tomorrow for hydrocarbon exploration and production rights concerning at least one of two offshore Cretan blocks will be attended by Prime Minister Alexis Tsipras, whose speech is expected to emphasize Greece’s effort to utilize the country’s mineral wealth and also project a message opposing Turkey’s provocative behavior in the southeast Mediterranean.

The energy ministry will sign an agreement tomorrow with a three-member consortium comprised of ExxonMobil, Total and Hellenic Petroleum (ELPE) for an offshore license west of Crete.

A second block, situated adjacently southwest of Crete, could also be signed by the two sides tomorrow. But it still needs to be endorsed by a local authority, making the prospect highly unlikely.

Both agreements will first need to be approved by Greek Parliament before exploration work commences. A first phase of exploratory survey work is planned to last three years. If the feedback is favorable, drilling activities will follow after 2022, according to current plans.

Meanwhile, consortiums that have secured licenses for blocks in western Greece are moving to reshuffle their line-ups, energypress sources have reported.

This activity, a common occurrence in the global oil industry, has been attributed to maneuvering by multinationals for moves to blocks seen offering better prospects as well as efforts to seek additional partners for investment cost sharing.

Greece’s geopolitical role and blocks are gaining stature on the international map amid all this activity.

EDEY aims to offer complete Crete portfolio with new areas to next gov’t

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EDEY, the Greek Hydrocarbon Management Company, is striving to have completed all preliminary work for new licenses off Crete so that Greece’s next government can be handed a complete portfolio ready for licensing procedures when it begins its tenure following the snap elections on July 7.

The country’s next administration will need to push ahead with new hydrocarbon projects.

EDEY is currently working on environmental studies concerning new areas south of Crete, which the company intends to offer to investors for exploration and production.

Their features differ to those of two offshore licenses already secured by a three-member consortium comprised of ExxonMobil, Total and Hellenic Petroleum (ELPE), west and southwest of Crete.

The new areas south of Crete had been swept aside in previous procedures but new scientific data has revitalized the interest of investors.

A signing ceremony for one of the two Cretan hydrocarbon exploration and production licenses, west of Crete, will be staged this Thursday, the ExxonMobil- Total-ELPE consortium has been informed.

The second license, southwest of Crete, may also be added to Thursday’s signing ceremony. However, its finalized version still needs to be formally presented, meaning investors will most probably need to wait until after Greece’s snap elections for this license to be signed.

Crete offshore licenses a step away from finalization

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A decision by the Court of Audit, one of Greece’s highest ranking courts, approving two hydrocarbon exploration and production licenses for offshore blocks south and west of Crete to a consortium comprised of Total, ExxonMobil and Hellenic Petroleum (ELPE) paves the way for the signing of finalized agreements.

This could take place at a signing ceremony on Crete prior to the July 7 snap elections with the participation of energy minister Giorgos Stathakis.

The three companies, keen to begin exploration activities before the end of the year, have urged the government for a swift completion of procedures.

The two agreements will still need to be ratified in Parliament following next month’s general elections before the three-member consortium can commence work.

The Court of Audit’s favorable decision represents one of the final steps in a procedure started in 2017, when Total and ExxonMobil had expressed interest.

 

Heightened activity, consortium reshuffling as drilling nears

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Following a wider trend observed in the southeast Mediterranean, consortiums holding hydrocarbon exploration and production licenses in Greek territory are moving to reshuffle their line-ups, especially for blocks in the Ionian Sea, as the first local drilling operations in decades draw nearer, energypress sources have informed.

The reshuffling activity, which has not involved blocks off Crete, has been attributed to a search by multinationals for additional partners in consortiums established with Hellenic Petroleum (ELPE) as a means of reducing high costs demanded by deep-water exploration in the Ionian Sea.

ELPE holds exploration and production rights for various blocks in the Ionian Sea through consortiums established with Total, Edison and Repsol.

Video Data Rooms have been set up to enable prospective participants to view seismic survey data for Ionian Sea blocks, as well as technical and financial information.

The current reshuffling activity could produce new consortium line-ups by the end of the year, sources have informed.

Greece’s first drilling operation in several decades, at the Gulf of Patras, is expected to commence early next year. Positive results promise to provide further impetus for more drilling in Greek territory.

 

Hydrocarbon licenses on hold as a result of snap elections

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The country’s ambitious hydrocarbon exploration and production plan appears set to be impacted by further delays as a result of the government’s call for snap elections, now expected to take place on July 7.

License agreements signed recently for offshore blocks in the Ionian Sea and west of the Peloponnese, will, as a result, not be pushed through for ratification in parliament until after the elections.

An Ionian Sea license has been acquired by a consortium comprising Repsol and Hellenic Petroleum (ELPE), while ELPE has also taken on Block 10, further south, west of the Peloponnese.

Licenses offered for blocks west and southwest of Crete to a consortium made up of Total, ExxonMobil and ELPE are also set to face delays as a result of the country’s political developments. The triple-member team will need to hold on for several more months before it can begin work at these promising spots. The consortium’s licences, still in the hands of a supervisory committee, have also yet to be ratified in parliament. No action on these is expected prior to the early general elections.

Procedures concerning the formation of a new government and the ensuing summer break will delay the ratification of these agreements until September, experts have estimated.

Investors looking forward to exploration work in the Ionian Sea and off Crete have become well acquainted with the slow-moving ways of Greece and are prepared to remain patient until this latest obstacle is cleared, pundits noted.

The country’s recent administrations have all moved slowly on hydrocarbon licensing matters.

 

Ministry, TAIPED to meet for ELPE, DEPA Trade sales

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The privatization fund TAIPED and the energy ministry plan to hold talks this week in an effort to clarify matters concerning the futures of the Hellenic Petroleum (ELPE) and DEPA Trade privatizations.

The privatization plan for DEPA Trade, one of two new entities emerging from a split at gas utility DEPA, is still unclear and will be greatly shaped by the stance at ELPE, holding a 35 percent stake in DEPA.

A government-backed recruitment plan involving DEPA’s sub-contracted external associates is another factor holding back the DEPA Trade privatization, to offer investors a majority stake.

Energy minister Giorgos Stathakis is believed to have held meetings last week with the administrations of DEPA subsidiaries to request swift recruitment procedures for these external associates by the end of the current month.

Matters concerning the DEPA business plan as well as the division of DEPA’s cash reserves to DEPA Trade and DEPA Infrastructure, the other new entity emerging from the company split, appear to have been finalized.

TAIPED could launch the DEPA Trade privatization by the end of this month if ELPE’s role is clarified soon, sources noted.

An initial ELPE privatization effort, offering investors a 50.1 percent share, failed to produce a result and has impacted the DEPA sale. The country’s lenders have requested alternatives from the privatization fund.

The Latsis group’s Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort. The Greek State offered 20 percent of its 35.48 percent share in ELPE.

ELPE has expressed an interest in DEPA Trade. The petroleum group is waiting for the sale’s terms to be finalized before it decides on whether to increase ELPE’s 35 percent stake in the natural gas company or sell its share and withdraw.

 

 

Date revision for Argentina Oil, Gas & Energy Summit in July

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International oil, gas and energy companies will be gathering at the Argentina Oil, Gas & Energy Summit, an event staged by the Agencia Argentina de Inversiones y Comercio Internacional (AAICI) and scheduled for July 10-11, 2019.

The event’s organizers have revised the summit’s initial dates, which had also included July 12.

For the first time, AAICI will present onshore and offshore updates for Argentina, Latin America’s leading shale oil & gas producer, and opportunities for independent oil, gas and energy companies.

The summit will focus on Argentina’s plans, sharing important updates for the Argentinian hydrocarbons and energy industries. With more exploration and production projects on the way, the need for new partners is higher than ever, AAICI highlighted in a statement.

Argentina’s main operators will provide updates, discuss future plans and partnership opportunities while networking with the region’s key players.

The Argentina Oil, Gas & Energy Summit speakers include: Francisco Uranga, General Director, Agencia Argentina de Inversiones y Comercio Internacional; Martin Mandarano, Ceo, YPF Luz; Dr Erico Spinadel, Presidente, AAEE Ldo; Mauricio Roitman, Presidente, Enargas; Niccola Melchiotti, Country Manager, Enel; and Alejandro Lew, CEO, 360º Energy.

The event is an ideal opportunity for oil, gas and energy companies (exploration and production), consultants, seismic, drilling and other service companies to have in-depth discussions and one-to-one private meetings with AAICI and Argentina’s main operators.

The focus will be on current exploration opportunities, geology, legislation, midstream and licensing updates in Argentina, as well as updates on the country’s attractive investment renewable energy environment.

For further information visit: https://www.argentina-summit.com/

Or contact: felix@in-vr.co

EPOCH to provide virtual reality experience to its delegates

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Exploration and Production Offshore Congress Hub (EPOCH) has partnered with Lloyd’s Register to give all the delegates the opportunity to experience new VR technology to be used in the Offshore industry. EPOCH is scheduled to take place in Thessaloniki from September 16 to 17.

“We chose Lloyd’s Register as our VR partner because this company is a leading global provider of engineering and technology-centric professional services,” noted Regina Chislova, the EPOCH project director. “All delegates will be able to try Virtual Reality Safety Simulator recently launched by Lloyd’s Register during the two days of the congress.”

Virtual Reality Safety Simulator was developed to help further support training and knowledge transfer in the energy industry. Through the application of the latest innovation and technology advancements, LR has built a virtual environment to help illustrate the need for a continued focus on safety and risk assessments in the industry.

The EPOCH event will include a two-day business program full of cases and updates on major offshore projects in the Mediterranean and west Africa, including exploring for hydrocarbons across the Mediterranean by Hellenic Petroleum (ELPE), Total and ExxonMobil.

Presentations have been confirmed from NOCs, EPCs, Drilling Contractors, Investors, Governmental bodies. These include ELPE, BP, Shell, ADNOC, Ghana National Petroleum Corporation, Oando Energy Resources, McDermott, Saipem, TechnipFMC, Transocean, Nabors, Lebanese Petroleum Administration, European Commission, and Hellenic Hydrocarbon Resources Management.

For EPOCH registrations, visit https://bit.ly/2IMCk04

 

 

Further delays in full implementation of fuel smuggling measures

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Measures designed to clamp down on illicit fuel trade will require an additional three-year period to be fully implemented, the heads of a fuel traders association were told at a meeting yesterday with Giorgos Pitsilis, the head official at AADE, the Independent Authority for Public Revenue, a finance ministry division.

The measures, intended to prevent fuel smuggling activity said to be worth as much as 250 million euros annually, were originally presented in 2009, meaning their full implementation by December 31, 2021, as traders were told, will have required 12 years to achieve, if achieved.

The plan includes a cash inflow-outflow tracking system for petrol stations and the installation of GPS systems on fuel trucks to monitor their movements.

Petrol stations installed the required technology for cash inflow-outflow monitoring between 2014 and 2016 but AADE has not fully utilized incoming data. The authority has limited its activity to random checks.

Complicating matters even more, AADE intends to commission a firm for inflow-outflow tracking system inspections in autumn, as part of a re-certification process. Any systems found to not meet required standards will need to be reinstalled, according to this plan.

This could cause additional confusion and unrest as petrol station owners and fuel companies spent over 100 million euros between 2014 and 2016 to have cash inflow-outflow monitoring systems installed.

EDEY paving the way for hydrocarbon surveys in north

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EDEY, the Greek Hydrocarbon Management Company, is preparing the ground for exploration work in the country’s north, in the Grevena area, as well as the wider west Macedonia region, through processing of seismic surveys and dialogue with local communities.

EDEY’s head official Yiannis Basias offered an indication of the hydrocarbon management company’s next steps at a recent signing ceremony for offshore licenses in the Ionian Sea and Block 10, off western Peloponnese.

He stressed that onshore areas also need to be explored, indicating Grevena would be one of these. The geological features of the Grevena region represent a continuation of Albanian territory being explored by multinational Shell.

Besides the potential of discovering hydrocarbon reserves, EDEY’s interest in Grevena and the west Macedonia region is also linked to a plan to replace lignite mining activities of the past, gradually winding down as a result of the EU’s decarbonization policies. Lignite deposits contain methane, which could be utilized in the domestic market and encourage entrepreneurial activities for continued regional economic growth and employment.

An older round of offshore licenses offered through a series of tenders staged by EDEY, beginning in 2012 with the Gulf of Patras license, will be completed with competitions for two blocks west and southwest of Crete, launched in 2017.

 

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.

 

 

EDEY to drum up Greek oil, gas hopes at Italy, Romania events

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Spurred by recent significant gas field discoveries at Cypriot and Egyptian offshore blocks and the favorable prospects these have generated for the wider region, top officials at EDEY, the Greek Hydrocarbon Management Company, will be looking to attract major foreign investors to new Greek blocks at two industry events in Italy and Romania.

EDEY chairman Yiannis Basias, who is in Ravenna, Italy today to attend the Offshore Mediterranean Conference & Exhibition, a leading industry event, will be exploring the potential interest of oil majors, including Italy’s ENI, for new offshore blocks in the Ionian Sea and off Crete to soon be licensed out.

EDEY chief’s deputy Spyros Bellas will follow up this effort in Bucharest at the Balkans & Black Sea Cooperation Forum, scheduled to take place April 4 and 5.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, hailed the wider region’s prospects at the recent Delphi Economic Forum in Greece. ExxonMobil is currently involved in exploration work being carried out in Romania.

Speaking earlier this month at London’s Global APPEX (Prospect & Property Expo), an event organized by the American Association of Petroleum Geologists (AAPG), Bellas, EDEY’s deputy, presented a road map of Greece’s hydrocarbon plans for 2019 to officials of foreign companies as well as latest and more detailed geological data on the Ionian Sea and Cretan regions. This data was processed by Norway’s PGS.

The strategy adopted at EDEY is to plan tenders for offshore blocks based on the interest expressed by foreign investors at this series of meetings.

Besides ENI and ExxonMobil, EDEY is seeking to convince Repsol, Shell and other US majors of Greece’s hydrocarbon prospects.

 

 

ELPE bids deadline extended to April 3, union announces strike

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The Greek privatization fund TAIPED has extended a binding-bids deadline for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) to April 3 from March 29, a  development that takes the sale procedure into the home stretch.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

The sale’s officials may call for a second round of improved binding bids if needed, sources informed.

Meanwhile, the ELPE workers union group PSEEP has reacted strongly against the planned privatization, describing it as a “major scandal” and “national crime”.  PSEEP has announced a three-day strike for March 28 to 30.

 

 

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)

 

ELPE sale March 29 binding bids deadline set for mild extension

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A March 29 binding-bids deadline set for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) will need to be extended by a few days as officials require more time to finalize details of the privatization’s sale and purchase (SPA) and shareholder (SHA) agreements, sources have informed.

The Greek privatization fund TAIPED, energy ministry and potential buyers are currently consulting on these details.

Energy minister Giorgos Stathakis has apparently raised certain objections and is awaiting responses from the privatization fund and investors, sources have informed.

Also, a US trip made last week by the energy minister to a major energy conference in Houston, Texas has contributed to the overall procedure’s delay, prompting the need for a binding-bids deadline extension.

Sources informed a few extra days beyond the March 29 date will be needed, while some believe the deadline could be stretched to around April 10.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

 

ELPE bidding deadline in sale offering 50.1% set for March 29

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Two bidding teams participating in a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) have been set a March 29 deadline for binding bids, the state privatization fund TAIPED, staging the sale, has decided. All candidates have been informed.

Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach for the ELPE tender.

Much work was needed to finalize this privatization’s sale and purchase (SPA) and shareholder (SHA) agreements.

Also, preceding ELPE sale deadlines needed to be stretched to allow the new entries, Carlyle and Sonatrach, to prepare, officials have noted.

ELPE’s bourse value at the end of yesterday’s trading session was 2.53 billion euros. The company’s share has gained 5.3 percent over the past month.

The European Commission, part of the troika, wants the ELPE privatization to be completed by the year’s half-way mark. In a recent report, Brussels expressed concern over the limited field of final-round qualifiers.