Energian will invest $ 150 million in shark and gas and oil development

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Energian
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, Traded in Tel Aviv 35 and London (ENOG: LSE) and operates in the field of oil and natural gas exploration and production, reports that it will invest $ 150 million in the development of the North Shark Reservoir. It is estimated that the first gas discharge from the North Shark Reservoir will take place in the second half of 2023. About a month ago, the company reported that it was acquiring Crogen’s holdings in shark and crocodile for about $ 400 million.

The company expects the internal return (IRR) from the project to be around 40% and explains that the decision was made following the approval of the reservoir development plan, which was recently approved by the government.

A resource report produced last November by the external evaluator M&D included an estimate that the volume of resources in the reservoir is about 32 bcm and 34 million barrels of liquid – about 241 million barrels of 2P equivalent oil (mmboe) (proven resources).

The gas production will be done by connecting (Tie Back) the reservoir to the Energy Floating Treatment Facility (FPSO), at a relatively low cost. The treatment facility will be located about 90 km from the shore and will be used for the production and treatment of a shark reservoir – a distance of about 5.4 km from the northern shark.

At the same time, the company reports that last night it signed with the banks JPMorgan and Morgan Stanley, a loan agreement in the amount of $ 700 million for a period of 18 months. The loan will be used, among other things, to finance the development of the North Shark; To finance the acquisition of the Krugen Fund’s holdings in the subsidiary Energian Israel, for additional investments in the Shark project; And for the purpose of another exploration campaign of the company in early 2022.

In addition, Energian yesterday reached agreements with its existing lenders to finance shark development regarding an extension of the loan repayment period of $ 1.45 billion in 9 months from December 2021 to September 2022. Energian believes that the above loan is combined with the existing financing after the extension of the repayment date , Will provide the time and flexibility for optimal optimization of the long-term capital structure of Energian Israel in accordance with market conditions.

Matthews Riggs, CEO of Energian: “The investment decision in the development of the discovery in the North Shark, amounting to bcm 32, will contribute to stabilizing the supply of natural gas to the Israeli energy economy, along with a significant reduction in emissions – this as a result of the transition from coal to natural gas.”

Energian entered the Israeli market in 2016, with the acquisition of development licenses for shark and crocodile reservoirs. In March 2018, the company made a final investment decision for the development of its flagship project, the shark-crocodile natural gas reservoirs. The gas treatment and production will be carried out using FPSO – the first floating treatment facility of its kind in the Mediterranean basin, which will be located at a distance of about 90 km from the coast throughout the life of the project; gas production is expected to begin in 2021.

The company has signed agreements for the sale of approximately Bcm 7.4 (annual) of natural gas to the Israeli market. In addition, the company holds 9 additional exploration licenses in Israel’s economic waters and additional exploration licenses in Greece and Montenegro.

In December 2020, Energian reported the completion of the acquisition of the Italian gas company Edison’s gas and oil operations for $ 284 million, and as stated, the signing of an agreement to acquire the Krugen Fund’s holdings in Energian Israel, after which the Group will hold 100% of Energian Israel .