TIDMENOG
RNS Number : 7346E
Energean PLC
10 November 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Energean plc
("Energean" or the "Company")
Independent CPR on the Karish, Karish North and Tanin fields,
offshore Israel
Third party CPR certifies 3.5 Tcf (98.2 Bcm) of gas plus 99.6
million barrels of liquids gross 2P reserves in the Karish, Karish
North and Tanin fields
London, 10 November 2020 - Energean plc (LSE: ENOG, TASE: ) ))
is pleased to announce the completion of an independent Competent
Persons Report ("CPR") by DeGolyer and MacNaughton ("D&M").
Highlights
-- Gross 2P reserves (Energean 70%) of 98.2 Bcm (3.5 Tcf) of gas
and 99.6 million barrels ("MMbbls") of liquids certified in the
Karish, Karish North and Tanin fields; representing approximately
729 million barrels of oil equivalent ("MMboe") [1]
o Gas 2P volumes are broadly aligned with the previous 2P + 2C
estimates of 99 Bcm (3.5 Tcf)
o Approximately 241 MMboe [2] of gross 2C resources associated
with Karish North have been upgraded into the 2P category following
approval of the Field Development Plan ("FDP") by the Israeli
government. Energean expects to take Final Investment Decision
("FID") on the Karish North development in 4Q 2020
o Liquids gross 2P volumes represent a 17.5 MMbbls (21.4%)
uplift to previously estimated 2P reserve + 2C resource volumes
-- Liquids production from the fields is now expected to average
28 kbpd (gross) over a plateau period of approximately five
years
o The additional liquids production is expected to have no
discernible impact on scope 1 and scope 2 carbon intensity of the
fields, which is expected to remain at approximately 6
kgCO2/boe
-- Gross best estimate risked prospective resources across the
Karish and Tanin leases and Block 12 certified as 62.0 Bcm of gas
plus 33.4 MMbbls of liquids.
o These prospective resource volumes will be targeted by
Energean's next exploration campaign, which is expected to commence
in early 2022
o All prospects are in close proximity to the Energean Power
FPSO, representing potential low-cost tie-back options for future
developments
o The Geological Probability of Success ("PoS") of these
prospective resources ranges from approximately 15% to 79%, with
the primary targets having a PoS range of 70% to 79%. Exploration
of prospects that have a lower PoS, including targets in the D
Sand, can be achieved without a dedicated exploration well
Mathios Rigas, CEO of Energean said:
"We are delighted that our independent reserves auditor has
confirmed 2P gas volumes of 98 Bcm within our Karish, Karish North
and Tanin fields, offshore Israel, representing another year of
continuous reserves growth in our portfolio. This gas, the majority
of which has already been contracted, will be sold under
fixed-price gas sales agreements that will protect our revenue
stream from commodity price fluctuations, which underpins our
strategic goal of paying a sustainable dividend.
The approximately 100 MMbbls of 2P liquids reserves and
production plateau averaging 28 kbpd over five years, represents a
substantial increase on previous estimates, which further
supplements our shareholder returns profile with high-margin
production that has no incremental impact on our scope 1 and scope
2 CO(2) emissions intensity.
We look forward to progressing the 62 Bcm and 33 MMbbls of
risked prospective resources across our Karish and Tanin leases and
in Block 12, with the intention to recommence our successful
exploration programme in early-2022 and, through doing so, will
continue to contribute to the diversity and security of natural gas
supply into Israel and the wider Eastern Mediterranean."
Reserves Volumes
D&M has certified gross 2P reserves of:
-- 98.2 Bcm (3.5 Tcf) of gas (previously 59.1 Bcm (2.1 Tcf) of
2P reserves plus 39.5 Bcm (1.4 Tcf) of 2C resources); and
-- 99.6 MMbbls of liquids (previously 41.5 MMbbls of 2P reserves
plus 40.5 MMbbls of 2C resources)
Gross liquids reserves represent an uplift of 17.5 MMbbls (21.4
%) versus the previous 2P + 2C estimates of 82.0 MMbbls and result
from the higher liquids content of the gas encountered in the
Karish Main development wells and Karish North discovery wells. The
liquids assayed are light and of high quality with samples from
Karish Main measured at 48 API degrees. A potential oil rim has
also been identified in the KM-03 development and is included in
the 3P reserves category; upside to liquids volumes associated with
the oil rim is estimated to be 25.7 MMbbls.
Approximately 241 MMboe [3] of Karish North gross 2C resources
have been upgraded to the 2P reserves category following approval
of the FDP by the Israeli government. Energean expects to take FID
on the Karish North development in 4Q 2020 and first production is
expected in 2023. Capital expenditure on the tie-back to the
Energean Power FPSO is expected to be approximately $100 million
and completion of the existing well as a producer in the C-sands,
approximately $50 million. This capital expenditure is expected to
be incurred in 2021-23.
Revised Gross (Energean 70%) 2P Reserves
Liquids Sales Gas Sales Gas Total Oil Equivalent
MMbbls Bcf Bcm MMboe [4]
Karish 61.0 1,409 39.9 317.0
-------- ---------- ---------- ---------------------
Karish North 34.1 1,137 32.2 240.7
-------- ---------- ---------- ---------------------
Tanin 4.5 921 26.1 171.7
-------- ---------- ---------- ---------------------
Total 99.6 3,467 98.2 729.4
-------- ---------- ---------- ---------------------
Production Rates
Gas
D&M forecasts plateau production from the Karish, Karish
North and Tanin fields at a rate of approximately 7.2 Bcm/yr on
plateau (gross). Energean's gas sales profile currently achieves
7.0 Bcm/yr (gross) on plateau and the company is pursuing a number
of opportunities to fill the remaining space in its 8 Bcm/yr FPSO
and export pipeline.
Production rates above 6.5 Bcm/yr require the installation of a
second riser on the FPSO, which is expected to cost approximately
$50 million. The riser is expected to become operational by
end-2023.
Liquids
Following performance assessment, D&M estimates that liquids
production from Karish Main and Karish North (exclusive of the
potential oil rim) could deliver 28.4 kbpd at peak, and a
production plateau averaging approximately 27.8 kbpd over five
years.
The initial design capacity of the FPSO accommodates liquids
production capacity of approximately 21 kbpd but enables easy
addition of a second liquids processing train and associated gas
compressor which will increase liquids production capacity to 40
kbpd. Capital expenditure associated with these facilities is
estimated to be approximately $40 million, gross.
The FPSO has storage capacity of up to 800,000 bbls. Storage
capacity is not expected to be a restricting factor to production;
the increased production rate will be handled through increased
frequency offtake with parcel sizes expected to remain in the
region between 350 and 450 kbbls.
The additional liquids production is not expected to materially
impact upon the scope 1 and scope 2 CO(2) intensity of the Karish
development, which is expected to remain at approximately 6
kgCO2/boe. Scope 1 and scope 2 CO(2) emissions from the project are
almost entirely associated with fuel gas usage by the gas turbine
generators and are proportional to the rate of gas production.
Prospective Resources
D&M has also certified gross best estimate risked
prospective resources of 62.0 Bcm (2.2 Tcf) of gas and 33.4 MMbbls
of liquids in the Karish and Tanin leases and Block 12. A breakdown
of these prospective resources by prospect is provided in the table
below. The PoS of these prospective resources ranges from
approximately 15 to 79%, with the primary targets having a PoS
range of 70% to 79%. Exploration of prospects with a lower PoS,
including targets in the D Sand, can be achieved without a
dedicated exploration well.
The Israel Ministry of Energy has approved an extension of
licences 12, 21, 23, 31 until 31 October 2021, by which time
Energean is required to take a drill-or-drop decision on each of
the licences. Block 22 has been relinquished. Energean is
progressing well planning and design operations for potential
drilling of the prospects on Block 12.
A commercial discovery in Block 12 would be prioritised ahead of
the Tanin development. Capital expenditure associated with the
tie-back of Block 12 to the Energean Power FPSO is expected to be
significantly lower than the capital expenditure associated with
the development of the Tanin structures.
Revised Gross (Energean 70%) Best Estimate Risked Prospective
Resources
Block Prospect Liquids Gas Gas Total Oil
MMbbls Bcf Bcm Equivalent
MMboe [5]
Karish Main
Karish Central 17.3 158 4.5 46.0
----------------- -------- ------ ----- ------------
Karish Lacnesis 1.2 30 0.8 6.6
----------------- -------- ------ ----- ------------
Karish Main
Karish A 1.9 53 1.5 11.5
----------------- -------- ------ ----- ------------
Karish Tortonian-1 1.9 48 1.3 10.5
----------------- -------- ------ ----- ------------
Block 12 Hera 1.5 249 7.0 46.6
----------------- -------- ------ ----- ------------
Block 12 Hera - D Sand 0.3 51 1.5 9.6
----------------- -------- ------ ----- ------------
Block 12 Zeus 1.9 315 8.9 59.0
----------------- -------- ------ ----- ------------
Block 12 Zeus - D Sand 0.4 71 2.0 13.3
----------------- -------- ------ ----- ------------
Block 12 Athena 1.5 253 7.2 47.5
----------------- -------- ------ ----- ------------
Block 12 Athena - D Sand 0.5 77 2.2 14.4
----------------- -------- ------ ----- ------------
Block 12 Apollo 0.5 91 2.6 17.1
----------------- -------- ------ ----- ------------
Block 12 Apollo - D Sand 0.1 15 0.4 2.8
----------------- -------- ------ ----- ------------
Block 12 Hestia 0.1 22 0.6 4.1
----------------- -------- ------ ----- ------------
Block 12 Hestia - D Sand 0.1 12 0.3 2.3
----------------- -------- ------ ----- ------------
Tanin/Block
12 Tanin F 0.9 160 4.5 30.0
----------------- -------- ------ ----- ------------
Tanin/Block Tanin F - D
12 Sand 0.5 83 2.3 15.5
----------------- -------- ------ ----- ------------
Tanin/Block
12 Tanin G 0.5 79 2.2 14.7
----------------- -------- ------ ----- ------------
Tanin/Block Tanin G - D
12 Sand 0.3 45 1.3 8.5
----------------- -------- ------ ----- ------------
Tanin Tanin D 0.1 17 0.5 3.1
----------------- -------- ------ ----- ------------
Tanin D - D
Tanin Sand 0.1 15 0.4 2.8
----------------- -------- ------ ----- ------------
Tanin Tanin E 1.5 251 7.1 47.1
----------------- -------- ------ ----- ------------
Tanin E - D
Tanin Sand 0.6 95 2.7 17.9
----------------- -------- ------ ----- ------------
Total 33.4 2,189 62.0 431.1
-------- ------ ----- ------------
Enquiries
Investors and Analysts
Kate Sloan, Head of IR & Tel: +44 (0)7917 608 645
ECM
Media
Sotiris Chiotakis Tel: +30 210 8174 242
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 ("MAR"). 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 Russell Poynter,
Company Secretary.
About Energean plc
Energean is a London Premium Listed FTSE 250 and Tel Aviv 35
Listed gas-focused E&P company with operations offshore Israel,
Greece and the Adriatic. In August 2017 the Company received
Israeli Governmental approval for the FDP for its flagship
Karish-Tanin gas development project, where it intends to use the
only FPSO in the Eastern Mediterranean to produce first gas in
2021. Energean has already signed firm contracts for 7.0 Bcm/yr 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.
Energean has nine 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.
On 4 July 2019, Energean announced the conditional acquisition
of Edison E&P for $750 million plus $100 million of contingent
consideration. On 23 December 2019, Energean announced the
exclusion of the Algerian assets from the transaction. On 29 June
2020, Energean announced the exclusion of the Norwegian subsidiary
from the transaction and a revised enterprise value (as at the
locked-box date of the transaction, 1 January 2019) of $284
million. The acquisition of Edison E&P, exclusive of the
Algerian assets and Norwegian subsidiary, is expected to complete
later in 2020.
www.energean.com
[1] Gas reserves converted from Bcf to MMboe using a conversion
factor of 5.505
[2] Refer to note 1
[3] Refer to note 1
[4] Refer to note 1
[5] Refer to note 1
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