Greece’s Energean Oil and Gas said Monday it had decided to drill an exploration well in the Karish North prospect, offshore Israel, before end-March 2019, subject to necessary approvals.
This will exercise the first of seven optional wells included in the Stena Drilling contract.
The Green energy company focused on the Eastern Mediterranean, is also negotiating with the Palestinian Authority to develop field offshore the Gaza Strip, sources told TheMarker on Sunday.
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Gaza Marine field is small, estimated to hold over 30 to 35 billion cubic meters of natural gas. But still, it may provide a major source of income to the Palestinian Authority in an effort to reduce its reliance on outside aid.
For Energean, Gazan Marine may be an opportunity since the field located about 30 kilometers off the Gaza coast, and consistent with Energean’s exploration strategy to target near field prospects where potential discoveries can be quickly and economically monetized.
Shell, which holds 55% shares, a part of 2016 acquisition of BG Group, had been striving to find a buyer for its stake in an area which considers being a war zone. Other 45% stack held by the Palestine Investment Fund.
Back to Israel, Energean will be drilled the Karish field immediately prior to the three well development of the adjacent Karish Main field, the Company’s flagship gas development project.
Gross drilling costs are expected to be between $15-25 million. according to the company announcement, an Independent Competent Report for the Karish North prospect estimates gross prospective resources of 33.5 BCM of natural gas and 14 MMbbls of light oil.
The Karish lease is 100% owned and operated by Energean Israel Ltd, which is 70% owned by Energean.
The Karish FPSO is being built with gas production and processing capacity of 8 BCMA. Energean Israel has forward sold 4.2 BCMA of currently discovered gas volumes, leaving circa 4 BCMA of excess FPSO capacity available for the potential tie-back of future discoveries.
The option to drill additional exploration wells at the end of the development well campaign remains open. Options for a second well include the Karish East prospect in the Karish lease and Prospect 4 in the Block 12 exploration license, which Energean secured at the end of 2017, following the First Israeli Offshore Bid Round.
