Energean rises on latest report from Israel assets

Energean announced the completion of an independent competent persons report on Tuesday, with gross 2P reserves of 98.2 billion cubic metres of gas and 99.6 million barrels of liquids certified in the Karish, Karish North and Tanin fields; representing about 729 million barrels of oil equivalent.

The FTSE 250 company holds a 70% interest in the assets.

It said gas 2P volumes were “broadly aligned” with the previous 2P and 2C estimates of 99 billion cubic metres.

Approximately 241 million barrels of oil equivalent of gross 2C resources associated with Karish North had been upgraded into the 2P category, following the approval of the field development plan by the Israeli government.

Energean said it expected to take a final investment decision on the Karish North development in the fourth quarter of 2020.

Liquids gross 2P volumes represented a 17.5 million barrel, or 21.4%, uplift to the previously-estimated 2P reserve and 2C resource volumes.

The company said liquids production from the fields was now expected to average a gross 28,000 barrels per day over a plateau period of around five years.

It said the additional liquids production was expected to have no discernible impact on scope one and scope two carbon intensity of the fields, which were expected to remain at approximately six kilograms of carbon dioxide per barrel of oil equivalent.

Energean said the gross best estimate risked prospective resources across the Karish and Tanin leases and Block 12 were certified as 62 billion cubic metres of gas, plus 33.4 million barrels of liquids.

It said those prospective resource volumes would be targeted by its next exploration campaign, which was expected to start in early 2022/

All prospects were in close proximity to the Energean Power floating production, storage and offloading (FPSO) vessel, representing potential low-cost tie-back options for future developments.

The geological probability of success of the prospective resources ranged from 15% to 79%, with the primary targets having a range of 70% to 79%.

Exploration of prospects that had a lower probability of success, including targets in the D Sand, could be achieved without a dedicated exploration well, the board 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,” said chief executive officer Mathios Rigas.

“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 28,000 barrels per day 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 one and scope two carbon dioxide emissions intensity.”

At 1034 GMT, shares in Energean were up 6.88% at 603.9p.