London-listed oil and gas company Energean has become the full owner of Energean Israel Limited, a company working to develop the Karish and Tanin fields in the Mediterranian Sea, offshore Israel.
As previously reported, Energean in December 2020 struck a deal to buy Kerogen’s 30% shareholding in Energean Israel, which would result in Energean owning a 100% stake in the company.
In a statement on Thursday afternoon, Energean said it had completed the acquisition of the 30% minority interest in Energean Israel Limited from Kerogen Investments No.38 Limited, an affiliate of Kerogen Capital.
Energean will pay between $380 million and $405 million, in total.
"The $175 million of up-front consideration has been funded through a drawdown from the $700 million term loan, arrangement of which was announced on 14 January 2021 and a further $50 million has been satisfied through the issuance of convertible loan notes to Kerogen, which have a maturity date of 29 December 2023, a strike price of GBP 9.50 and a zero-coupon rate. The remaining consideration will be satisfied through deferred cash amounts of between $155 million and $180 million," Energean said.
The acquisition adds 2P reserves of 29.5 billion cubic meters ("Bcm") of gas and 30 million barrels of liquids, representing approximately 219 million barrels of oil equivalent ("MMboe") in total, to Energean.
Mathios Rigas, CEO of Energean, said: "I am delighted that we have increased our holding in Energean Israel to 100%, which will enable us to further generate long-term value by capitalizing on the production growth and upside potential of our Israeli acreage offshore whilst further supporting our ambition to be the leading independent gas producer in the Mediterranean.
"I would like to thank Kerogen for their support and involvement in the Karish development over the last four years. Together, we will have delivered a project that will provide diversity and security of gas supply to Israel, whilst also helping to remove significant amounts of CO2 annually from Israel's emissions by enabling the switch from coal to natural gas."
Energean Israel holds a 100% working interest in the Karish and Tanin leases, offshore Israel, and the company is working to develop the Karish field which is expected to go online in late 2021.
A recent independent Competent Persons Report by DeGolyer and MacNaughton ("D&M") certified gross 2P reserves of 98.2 Bcm (3.5 Tcf) of gas and 99.6 million barrels ("MMbbls") of liquids across the Karish, Karish North, and Tanin fields representing approximately 729 million barrels of oil equivalent.
Energean plans to bring online the main Karish field later this year, via the Energean Power FPSO being built in Singapore, however, Covid-19 related delays with FPSO construction could push the first gas date, as well.
The company recently said that while it was it was in talks with contractors to achieve the required workforce numbers to deliver first gas around year-end, in the case that no further ramp up in the workforce is achieved, first gas could slip by between two and three months, into 1Q 2022.
Also, Energean in January 2021 sanctioned the development of the Karish North field. The Karish North gas discovery was announced in April 2019.
In November 2020, DeGolyer and MacNaughton issued an independent Competent Persons Report that certified 2P reserves of 32 Bcm of gas plus 34 million barrels of liquids - approximately 241 million barrels of oil equivalent in aggregate - in Karish North as at June 30, 2020.
The discovery will be commercialized via a tie-back to the Energean Power FPSO, which will be moored 5.4km away.
For the Karish North, TechnipFMC will design, manufacture, deliver and install subsea equipment including the subsea production system, rigid flowlines, and umbilicals as a tieback to the ‘Energean Power’ FPSO as well as the second gas export riser.