Energean Oil & Gas stands to gain a US$50 million investment from Kerogen Capital for its Karish and Tanin gas fields, offshore Israel.
The move could see the independent private equity fund manager take a 50% stake in Energean’s Israeli subsidiary.
Image of Israeli Minister of Energy Y. Steinitz and M. Rigas, Karish & Tanin license award in December 2016. Image from Energean.
The initial investment from Kerogen will be given to Energean subsidiary Energean Israel, ahead of the planned $1.3 billion development of the company’s two 100% owned fields.
According to Energean, proceeds from Kerogen’s investment will finance the acquisition and key workstreams to investment sanction including front-end engineering and design (FEED) studies, and the field development plan that is currently being prepared in cooperation with TechnipFMC.
Both fields contain at least 2.4 Tcf of gas contingent resources, and will be developed through an FPSO that will be the first to be installed and operated in the East Mediterranean. The gas produced from the fields will supply Israel’s growing domestic gas market, with first gas expected in 2020.
Kerogen’s investment is subject to approval by the Israeli government, after which Kerogen will own a 50% interest in Energean Israel with Energean holding the balance. It is intended that Roy Franklin OBE, Kerogen executive board member, will become non-executive chairman of Energean Israel.
“Energean has already commenced negotiations with potential gas consumers in Israel and is progressing rapidly the field development plan that we expect to submit to the Israeli government by May 2017 with an intention to FID the project by year end 2017,” Energean Group Chairman and CEO Mathios Rigas said. “We believe Israel is an attractive destination for energy investment offering exciting growth opportunities through the development of Karish and Tanin, as well as through the additional exploration potential in offshore Israel, all of which are underpinned by a supportive government policy and favorable financing environment.”
“Kerogen intends to collaborate with Energean to deliver a successful development of the Karish and
Tanin fields in Israel,” Roy Franklin, Kerogen executive board member said. “This investment provides Kerogen with exposure to a large-scale, low break-even discovered gas resource located within an OECD country, which, as a near-term development, can benefit from today’s deflationary cost environment.”
In late-December, has closed the $40 million cash deal with Delek Group, Avner Oil Exploration, and Delek Drilling for 100% stake in the I/16 Tanin and I/17 Karish leases.