Photo: FPSO Energean Power; Source: Energean on Twitter

Energean on track to ramp up its oil & gas output once new projects come online

Oil and gas company Energean is working on reaching its medium-term production target by boosting output from a field offshore Israel in 2023 and putting the wheels into motion to bring new projects on stream.

Energean started production from the Karish field off Israel in October 2022, after the Energean Power FPSO crossed the Suez Canal, as the first vessel of its type to do that, and reached the waters offshore Israel in early June 2022. This FPSO and the sales gas pipeline have an ultimate capacity of 8 bcm/yr, however, the initial capacity is up to 6.5 bcm/yr, and commercial gas sales were expected to reach this level approximately four to six months following the first gas.

At the time, Energean outlined that its growth projects – the Karish North development, the second oil train and the second export riser – were expected to be completed in 2023. Afterwards, the firm would be able to take advantage of its infrastructure’s full 8 bcm/yr capacity.

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In an update on Thursday, Energean confirmed that it had identified and implemented solutions to resolve a range of typical above-ground commissioning issues at Karish, with no further impact on production levels anticipated following the FPSO commissioning process expected in February 2023.

The company further highlighted that its 2022 growth drilling programme in Israel discovered and de-risked approximately 75 bcm – about 480 mmboe – of new gas resources, including 67 bcm – around 430 mmboe – of additional gas resource in the Olympus Area, for which the development concept is now being finalised.

Mathios Rigas, Chief Executive of Energean, commented: “2022 was a landmark year for Energean. We commenced production from the only FPSO in the strategically vital Eastern Mediterranean region; commenced payment of dividends to our shareholders; and we successfully discovered and de-risked new natural gas resources adjacent to our infrastructure, providing significant potential upside and export optionality.

“We are proud to have helped to underwrite Israeli and regional energy security and promote prosperity.”

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New projects coming on stream

Furthermore, Energean claims that its “key development projects” – Karish North, NEA/NI, Cassiopea – enable it to be on track to deliver its 200 kboed mid-term production target. To this end, the installation of the second oil train and gas export riser, and the first gas from Karish North is expected by year-end 2023, debottlenecking FPSO capacity to 8 bcm/yr.

“Our focus for 2023 is on continued operational growth. We will continue to ramp up production from Karish and finalise the development concept for the strategically significant, 67 bcm Olympus Area. Production will also start from Karish North in Israel and NEA/NI in Egypt. 2023 is the year that we will make a significant step towards delivering our medium-term production target of 200 kboed,” added Rigas.

In line with this, Energean underscored that the first gas from NEA/NI in Egypt is slated for the first half of 2023 while the firm’s expansion in Israel includes a development concept for the 67 bcm Olympus area, which is also expected to be communicated in 1H 2023. On the other hand, the first gas from Cassiopea in Italy is currently anticipated in 1H 2024.

“If we have learned anything in 2022, it is that the world needs additional secure supplies of energy, and that natural gas remains the catalyst for, and foundation of, a just energy transition and vital sustainable development,” highlighted Rigas.

Energean disclosed strong financial performance for 2022 with revenues of $736.7 million, a 48 per cent increase from $497.0 million during the same period in 2021. The company’s EBITDAX was $418.5 million, compared to $212.1 million in 2021. The firm further outlined that it remains on track to deliver mid-term annualised targets of $2.5 billion in revenues and $1.75 billion of EBITDAX. Additionally, total liquidity as of 31 December 2022 was $719.0 million.

“In an uncertain world, we hope governments understand the value of enhanced domestic and regional energy production, value that is unlocked through long-term investment. We hope that the intelligent policy we have seen in Israel and Egypt can be replicated across the region, continuing the investment that will unlock the strategic value in the subsurface,” concluded Rigas.