Energean Still Needs Buyers for Israeli Gas

Mediterranean-focused explorer Energean Oil and Gas is looking for buyers for its unsold 3.4bn m³/yr Karish/Tanim fields off Israel, it said January 16. CEO Mathios Rigas said it has secured $12.9bn of future revenues through 4.6bn m³/yr of contracted gas sales, "firmly underpinning the project's economics", but the capacity of the floating production, storage and offtake vessel is 8bn m³/yr.

The facilities workstream, managed and executed by TechnipFMC under the $1.36bn lump sum turnkey contract signed in 2018, is progressing in line with expectations. First steel cut on the topsides was achieved in December 2018 and the laying the keel is to start in March, in a Chinese shipyard. Karish North will also be spudded that month, it said, where it is targeting 1.3bn ft³ gas and 16mn barrels of liquids (gross).

Rigas said in a trading update: "2018 was a very successful year for Energean. We increased revenues by 56% while reducing cost of production by 29%, made significant progress on our development projects and converted significant volumes of resources into reserves. In Israel, Karish and Tanin remain on track for first gas in 1Q 2021. I look forward to continuing this positive momentum in 2019, which will include the drilling of at least six new wells across our acreage in Israel and Greece, targeting significant increases in reserves, resources and production. In Israel we continue to see increasing demand for our gas and are aiming to fill the 3.4bn m³/yr of spare capacity in our FPSO in the medium term."

Energean's 2019 drilling programme will target up to 2.3 trillion ft³ of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetised, it said.

Energean believes that success at Karish North, which it puts at 69%, 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 500bn ft³ of gas and 7.5mn barrels of liquids, with a probability of success of 70%. Karish North will also provide important read-across information for the Karish Main structure.