Energean raised $460 Million in Yesterday’s IPO 

The day following its London IPO, the Energean Oil & Gas PLC (ticker: ENOG) board approved the Final Investment Decision for the $1.6 billion Karish & Tanin development project, offshore Israel.

Financing the project

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

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

Energean said it has established long-term gas sales agreements with some of the largest private power producers, who will 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 Cleared to Start $1.6 Billion Karish & Tanin Gas Project - Offshore Israel

Energean Cleared to Start $1.6 Billion Karish & Tanin Gas Project – Offshore Israel. Photo: Energean Oil & Gas

Energean will develop the project through a new build FPSO which it will own. The floating facility is to have gas treatment capacity of 800 MMscf/day (8 BCM/per annum) and liquids storage capacity of 800,000 bbls, expandable to accommodate additional projects. Plans call for a 90km gas pipeline that 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.

First gas targeted for 2021

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. Energean’s target is to produce first gas in 2021.

Getting there

Energean Oil & Gas said that 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 said it has options to drill five further wells in the licenses Energean holds in Israel.

“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, said Energean Oil & Gas CEO Mathios Rigas.

Energean Cleared to Start $1.6 Billion Karish & Tanin Gas Project - Offshore Israel

Mathios Rigas, Chairman and CEO, Energean Oil & Gas

“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 licenses to Energean.”

Rigas said Energean’s goal is to become a major player in the gas developments of the East Mediterranean.

The company reports 2P reserves of 50.0 MMbbls of oil and 6 Bcf of gas and 2C resources of 22.9 MMbbls of oil and 11.5 Bcf of gas at its Prinos Basin and Katakolo fields, and its associate, Energean Israel, has 2C resources of 32.8 MMbbls of liquids and 2.4 Tcf of gas.

Energean said the Israeli government approved the FDP for the Karish and Tanin fields in August 2017. It also said it has a 25- year exploitation license for the Katakolo offshore block in Western Greece.



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