REG - Energean PLC - Athena Gas Discovery

EnergeanAnnouncement

09/05/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220509:nRSI7042Ka&default-theme=true

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: אנאג) 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 (mailto:ir@energean.com)

Maria Martin, Head of Corporate
Finance
Tel: +44 7917 573 354

For media: pblewer@energean.com (mailto: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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCBKFBKDBKBKPK