TIDMENOG
RNS Number : 7042K
Energean PLC
09 May 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Energean plc
("Energean" or the "Company")
Athena Gas Discovery
London, 9 May 2022 - Energean plc (LSE: ENOG, TASE: ) is pleased
to announce that a commercial gas discovery has been made by the
Athena exploration well, offshore Israel.
Highlights
-- Commercial discovery made by the Athena exploration well,
Block 12, in the A, B and C sands. Preliminary analysis indicates
that the Athena discovery contains recoverable gas volumes of 8 bcm
(283 bcf / (51 mmboe) on a standalone basis.
-- This discovery is particularly significant as it de-risks an
additional 50 bcm (1.8 tcf / (321 mmboe) of mean unrisked
prospective resources across Energean's Olympus Area (total 58
bcm/372mmboe including Athena).
o The Olympus Area is Energean's newly defined area which
includes Athena, plus the undrilled prospects on Block 12 and the
adjacent Tanin Lease.
-- Athena can be commercialised in the near-term via tie-back to
the Energean Power FPSO, enhancing the profitability of the
Karish-Tanin development. Alternatively, it could form part of a
new Olympus Area development.
-- Energean is therefore actively pursuing development options
for the commercialisation of the wider Olympus Area, (potentially
including Athena), such as:
o Further domestic Israeli gas sales:
-- New Gas Sales and Purchase Agreements (" GSPA ") underpinned
by the continued growth of the Israeli power market
-- Spot sales
o Export options:
-- Developing the Memorandum of Understanding (" MoU ") signed
with The Egyptian Natural Gas Holding Company (" EGAS ") for the
supply of up to 3 Bcm/yr into a binding agreement
-- Exports to other regional and European markets via pipeline
and LNG via Cyprus and/or Egypt
-- The economics of gas produced and sold from Block 12 are not
subject to royalties payable to the original sellers of the Karish
and Tanin leases, leading to an approximate 8% increase in revenue
for the same volumes sold, when compared with the Karish and Tanin
discoveries
Mathios Rigas, Chief Executive of Energean, commented:
"We are delighted to announce this new gas discovery at Athena
and the potential of the wider Olympus Area. We are considering a
range of strategic commercialisation options both for a standalone
and wider Olympus Area development, including domestic and multiple
export routes.
"This discovery and the broader de-risking of a number of
prospects in the Olympus Area reaffirms the role of the East
Mediterranean as a global gas exploration hotspot. It strengthens
our commitment to provide competition and security of supply to the
region, enables the optimisation of our Israel portfolio and
fulfils one of our key milestones for 2022."
Athena Gas Discovery
Athena Well Results
The Athena exploration well was drilled on Block 12 (Energean
Israel, 100%), located 20 kilometres from Karish and 20 kilometres
from Tanin A, in a water depth of 1,769 metres. It was drilled in
51 days and came in below the budget of $35 million. The Athena
exploration well is the fifth well in a row that has been drilled
successfully by Energean in Israel.
A gross hydrocarbon column of 156 metres was encountered in the
primary target (the A, B and C sands). Preliminary analysis
indicates that the Athena discovery contains recoverable gas
volumes of 8 bcm (283 bcf / (51 mmboe) on a standalone basis.
Additional analysis will now be undertaken to further refine the
full resource potential (including volumes contained within thinner
sands between the main reservoir units) and to confirm the liquids
content of the discovery.
The Athena well has been suspended as a future production
well.
Commercial hydrocarbons were not discovered in the deeper
secondary target (22% Probability of Success, D sands).
Multiple Commercialisation Options Under Consideration
Athena can be commercialised in the near-term via tie-back to
the Energean Power FPSO, enhancing the profitability of the
Karish-Tanin development. Alternatively, it could form part of a
new development called the Olympus Area.
Energean's Olympus Area consists of Block 12 and the prospects
on the Tanin lease. The discoveries and prospects in this area lie
along the same geological trend and Athena was drilled on the same
direct hydrocarbon indicator (shown in the seismic analysis) as
Tanin. As such, Energean is confident that the Athena discovery has
de-risked the A, B and C sands in the remaining prospects of the
Olympus Area, estimated to be 50 bcm (1.8 tcf / (321 mmboe) of mean
unrisked prospective resources (total 58 bcm/372mmboe including
Athena). This estimate excludes the liquids component as well as
any gas upside in the thinner sands between the main reservoir
units.
Energean has identified multiple commercialisation options for
the Athena discovery and potential future Olympus Area development,
including both domestic customers and export routes. These options
include:
-- Further domestic Israeli gas sales:
o New GSPAs underpinned by the continued growth of the Israeli
power market
o Spot sales (spot contract signed with the Israel Electric
Corporation (" IEC ") in March 2022)
-- Export options:
o Developing the MoU signed with EGAS into a binding agreement.
The MoU was signed in December 2021 for the sale and purchase of up
to 3 bcm/yr of natural gas on average for a period of 10 years,
commencing with initial volumes of up to 1 bcm/yr.
o Exports to other regional and European markets via pipeline
and LNG via Cyprus and/or Egypt
Block 12 (including Athena) benefits from an absence of any
seller royalties on production or constraint on export from the
lease, improving the economics versus the Karish and Tanin
leases.
Remaining Drilling Campaign
The Stena IceMAX has now moved to the Karish Main-04 appraisal
well, of which the top hole has already been drilled. The rig will
then complete the Karish North development well. A decision on
whether to drill the previously communicated optional wells (Hermes
and/or Hercules) is expected to be made by the end of Q2 2022.
Inside Information
Some of the information contained within this announcement is
considered by Energean to constitute inside information, as defined
under the EU Market Abuse Regulation, EU No.596/2014. By the
publication of this Announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain. The person responsible for arranging for the release
of this announcement on behalf of Energean is Eleftheria Kotsana,
Company Secretary.
Enquiries
For capital markets: ir@energean.com
Maria Martin, Head of Corporate Finance Tel: +44 7917 573
354
For media: pblewer@energean.com
Paddy Blewer, Head of Corporate Communications Tel: +44 7765 250
857
Forward looking statements
This announcement contains statements that are, or are deemed to
be, forward-looking statements. In some instances, forward-looking
statements can be identified by the use of terms such as
"projects", "forecasts", "on track", "anticipates", "expects",
"believes", "intends", "may", "will", or "should" or, in each case,
their negative or other variations or comparable terminology.
Forward-looking statements are subject to a number of known and
unknown risks and uncertainties that may cause actual results and
events to differ materially from those expressed in or implied by
such forward-looking statements, including, but not limited to:
general economic and business conditions; demand for the Company's
products and services; competitive factors in the industries in
which the Company operates; exchange rate fluctuations;
legislative, fiscal and regulatory developments; political risks;
terrorism, acts of war and pandemics; changes in law and legal
interpretations; and the impact of technological change.
Forward-looking statements speak only as of the date of such
statements and, except as required by applicable law, the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. The information contained in this
announcement is subject to change without notice.
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END
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