Energean secures new $4 billion Israeli gas offtake but conflicts hamper output

Energean, which focuses on the Eastern Mediterranean, said it had secured new Israeli gas contracts worth $4 billion in the first six months of this year. This brings the total contract pipeline of the company to $20 billion for the next 20 years.

The London-listed company cut its production forecast for a second time in less than four months due to a temporary suspension of production in Israel.

Energean is also seeking to expand its business in West Africa and Israel, and has reported a 11% decline in core profit for the six-month period ending June 30. However, its after-tax profit increased by nearly 24%.

After Israel's conflict with Iran, it expects to produce between 145,000 and 155,000 barrels equivalent per day this year. This is down from the 160,000-175,000 boed that was produced in May.

Energean's adjusted EBITDAX for the first half was $505 million, with an after-tax profit at $110 million.

Mathios Rigas, CEO of the group, said that it estimates 3 trillion cubic feet more gas beneath its existing platforms in Egypt.

Energean, which operates offshore Israel, is considering drilling in yet-untapped formations of deep Mesozoic rock in Block 23. This could "open up a new play for the entire East (Mediterranean)," Rigas stated.

He said that Energean will seek a partner for such a complicated well. This project would probably need to wait until the region is more stable.

Rigas stated that Energean expects to produce up to 2 billion cubic meters a year at its Katlan oil field, off Israel. Production is expected to begin in 2027. The pipeline Nitzana, which will connect Israel with Egypt, has yet to be constructed. (Ankita Bora contributed additional reporting from Bengaluru, and Harikrishnan Nair edited the story.)

(source: Reuters)