April 19, 2018 / 11:37 AM / 4 months ago

Oil and gas firm Energean to boost east Mediterranean output

LONDON (Reuters) - Freshly London-listed Energean Oil & Gas (ENOG.L) is boosting its Greek output and expects first gas from its Israeli fields in the first quarter of 2021, making it one of the biggest independent energy firms operating in the eastern Mediterranean.

Energean listed last month, raising $460 million (324.17 million pounds) to develop two Israeli offshore gas fields, Karish and Tanin, which have potential reserves of up to 2.4 trillion cubic feet of gas and 32.8 million barrels of light oil and condensate.

It also won five more Israeli blocks nearby and plans to publish their contingent resource data in the next few months, Chief Executive Mathios Rigas told Reuters in a phone interview.

Energean awarded the contract to design and install a floating production and storage platform (FPSO) for Karish to TechnipFMC. It is expected to sail from Singapore to Israel in late 2020 and could be linked to other fields to process more gas for export.

“There is a lot of gas that is sitting next to us (and) the FPSO we are building has an 8 billion cubic metre capacity and we’ve only contracted 4 bcm (with Israel),” Rigas said, adding Israeli annual demand was set to almost double from 10 bcm.

“Incremental volumes are very profitable for us,” he said. “We will be working to unlock this tremendous potential for us over the next 12 to 24 months.”

Energean expects to benefit from plans to build pipelines in the Eastern Mediterranean to southern Europe, Cyprus and Egypt. Rigas said there were no export restrictions on the new blocks.

In Greece, Energean plans to lift oil output this year to 4,000 to 4,500 barrels per day (bpd) from an average of 2,800 bpd in 2017 and 3,670 bpd in the first quarter this year.

It said on Thursday it had extended an offtake agreement with BP (BP.L) by more than four years to 2025 for its Greek output at an average discount of $7 a barrel to dated Brent oil.

It hedges less than half of its output in six-month hedges.

It also plans to take a final investment decision this year on its Greek Katakolo field, which has proved and probable reserves of 10.5 million barrels with production set to start within 18 months.

Energean shares began trading at 4.55 pounds ($6.47) and hit 4.70 pounds on Thursday. It reported cash flow from operations of $29 million for 2017, twice as much as in the previous year.

Reporting by Shadia Nasralla; Editing by Edmund Blair

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