Energean to target over 1 billion boe in Israel with Stena drillship

E&P company Energean has signed a contract with Stena Drilling for its 2022 – 2023 growth drilling programme offshore Israel, which is expected to target the derisking of unrisked prospective recoverable resources of over 1 billion barrels of oil equivalent (boe).

The contract is for the drilling of three firm wells and two optional wells, with the first firm well expected to spud in 1Q 2022, Energean revealed on Monday.

The drilling campaign will be undertaken using the Stena Icemax drillship, an ice-class harsh environment dual-activity dynamically positioned drillship, capable of drilling in water depths of up to 10,000 ft.

The drillship has also recently been hired by FAR Limited to drill the Bambo-1 exploration well, located offshore The Gambia, hoping for a discovery that could lead to the country’s first oil production. This contract is expected to start in 4Q of this year.

The firm wells for Energean are all expected to be drilled during 2022 and consist of the Karish North development well, which is a key part of the Karish North development. The scope includes re-entry, sidetracking and completion of the previously drilled Karish North well and completion as a producer.

The Karish North development will commercialise 33 Bcm (1.2 Tcf) of gas plus 31 mmbbls of liquids 2P reserves (a total of 243 mmboe) and is expected to deliver the first gas in 2H 2023.

The drilling programme also consists of the Karish Main-04 appraisal well, which is expected to target further prospective volumes within the Karish Main Block, including the potential oil rim that was identified as part of the KM-03 development well drilling. Total unrisked recoverable volumes estimated to be targeted by the well are 166 mmboe.

Another well to be drilled by Energean is the Athena exploration well, located in Block 12, which is situated directly between the Karish and Tanin leases.

Athena is estimated to contain unrisked recoverable prospective resource volumes of 20 Bcm (0.7 Tcf) of gas plus 4 mmbbls of liquids; of which the primary target is estimated to contain unrisked recoverable prospective resource volumes of 10 Bcm (0.4 Tcf) of gas plus 2 mmbbls of liquids1 with a 70 per cent geological chance of success.

According to Energean, the success at Athena would be expected to significantly de-risk approximately 90 Bcm (2.5 Tcf) plus 19 mmbbls1 of remaining unrisked recoverable prospective resource volumes located within Block 12 and Tanin.

Two factors support the commercialisation of a Block 12 discovery. Firstly, Block 12 was a new licence award to Energean Israel in 2018; produced volumes will therefore generate no royalty payments in respect of Energean Israel’s original acquisition of the block.

Secondly, the more proximate location of the potential development to the expected location of the Energean Power FPSO is also expected to reduce like-for-like development costs when compared with Tanin.

Mathios Rigas, Chief Executive Officer of Energean, commented: “We are delighted to be working with Stena again; and this five-well programme follows the three-well development drilling programme and 243 mmboe Karish North discovery, all successfully executed with Stena over 2019 and 2020”.

To remind, Energean also used a Stena Drilling-owned drillship for its 2019 drilling program in Israel under a contract awarded in early 2019.

Rigas added: “Our five-well growth programme offshore Israel, commencing 1Q 2022, has the potential to double Energean plc’s reserve base with resource volumes that can be quickly, economically and safely monetised. Combined with first gas from our flagship Karish gas development project in mid-2022, the next 12-months are set to be truly transformational for Energean”.