Energean Greenlights Israel's Karish North Gas Field
Energean has announced taking a final investment decision (FID) on its Karish North gas project off Israel, less than two years after discovering the field. Karish North will complement gas supply from the company's Karish and Tanin deposits, due to commence in the fourth quarter of this year.
Karish North holds 32bn m3 of gas and 34mn barrels of liquids, according to a recent appraisal by DeGolyer and MacNaughton. Production is slated to begin in the second half of 2023 and reach 3bn m3/year, Energean said on January 14.
The field will be tied back to the 8bn m3/yr Energean Power floating production storage and offloading (FPSO) vessel which Energean is using to exploit Karish and Tanin. The target for capital expenditure is $150mn, or $0.6/barrel of oil equivalent, with Energean estimating an internal rate of return on investment of over 40%.
Energean CEO Mathios Rigas said the FID demonstrated Energean Power's value "as a quick and low-cost commercialisation route for our assets in Israel." The company is also increasing the liquid processing capacity of the FPSO to handle additional volumes discovered, he said.
Energean has also obtained a 18-month, $700mn loan facility, it said, which will be used to fast-track Karish North's development and to fund a $175mn upfront payment to buy private equity fund partner Kerogen's 30% interests in the Karish, Tanin and Karish North fields. The deal, which an overall $380-405mn price tag, is on track for closure in the current quarter and will give Energean 100% control of the projects.
Some $100mn of the facility will also go towards installing a second oil train and second riser at Energean Power, increasing the amount of liquids it can handle from 21,000 to 40,000 barrels/day, and its gas capacity from 6.5 to 8.0bn m3/yr. Additional funds will be spent on Energean's five-well exploration and appraisal campaign off Israel in 2022.
Energean also agreed with existing lenders of its $1.45bn project finance facility to extend the maturity by nine months to September 2022.
"The new term loan and the extension of our project finance facility are a further testament of the confidence of the financial markets in Energean," Rigas said. "We remain on track to achieve our goal of delivering meaningful free cash flows that will support the payment of a sustainable dividend whilst also moving towards our stated target to achieve net zero emissions."