Energean signs further gas sales contracts for the Karish and Tanin project

The new GSPAs will bring total contracted volumes from the Karish and Tanin development project to more than 4 BCM per year, surpassing the Company’s initial targeted sales volumes and creating significant additional value.
Energean Oil & Gas (“Energean” or “the Company”) is pleased to announce that Energean Israel has signed further Gas Sales and Purchase Agreements (“GSPAs”) for natural gas supply from the Karish and Tanin fields, offshore Israel.
GSPAs totalling up to 2.6 billion cubic metres (“BCM”) of natural gas annually have been signed with one of the largest industrial groups in Israel, comprising Israel Chemicals (NYSE and TASE: ICL), Bazan Oil Refineries (TASE:ORL) and the independent power producer OPC. In addition, a GSPA totalling up to 0.3 BCM has also been signed with Rapac Group, a leading group focusing on Telecom, Government and Energy & Infrastructure in Israel.
The new GSPAs, together with those already signed with Dalia Group, Dorad Group and Edeltech Group, bring the annual total committed purchase volume to more than 4 BCM per year of natural gas from the Karish and Tanin fields providing further momentum to progress to FID, targeted for early 2018.
Energean Oil & Gas CEO, Mathios Rigas, commented: “In just one year since the Israeli Government granted its approval for the acquisition of the Karish and Tanin fields, Energean has succeeded in securing its targeted gas supply volume to help de-risk the project. Some of the leading private Israeli companies have seized the opportunity to buy gas at an attractive price and Energean has brought competition to the market for the benefit of Israeli consumers and the country’s economy.
“These supply commitments, surpassing our initial 3 BCM per year target, demonstrate the strength of the local gas demand and we look forward to unlocking the significant further potential of these fields. We are aiming to progress with FID early in 2018 and our focus now lies in moving ahead on all related project milestones to deliver first gas as planned.”
Energean press release

Pandion Energy to partner with Aker BP on Valhall

Pandion Energy AS (Pandion Energy) has entered into an agreement with Aker BP ASA (Aker BP) to acquire a 10 percent interest in the Valhall area, including licences PL006B, PL033 and PL033B.
Since production commencement in 1982, the Valhall field continues to be one of the largest oil fields in the southern Norwegian North Sea. Together with Hod field over one billion barrels of oil equivalent has been produced, more than three times the initial expected volume. Following commissioning of a new combined production and hotel platform in 2013, the field is currently producing ca. 37.5 kboepd* and is expected to continue to produce for several decades. Aker BP, the operator of Valhall field, has stated an ambition to produce at least an additional 500 million barrels of oil equivalent.
Jan Christian Ellefsen, Pandion Energy’s CEO, commented:
“We are pleased and proud to be chosen by Aker BP to partner on such a high quality asset. By acquiring a 10 percent interest in Valhall, Pandion Energy gains exposure to a material production base with significant value-creation potential through near-term growth projects and substantial resource upside from field redevelopment, appraisal and exploration opportunities.”
This is an important milestone in the growth of Pandion Energy, which was established in November last year. The company also holds a 20 percent interest in the Cara development project, one of the largest discoveries on the Norwegian Continental Shelf in 2016, where ENGIE E&P is the operator.
The transaction is subject to customary conditions for completion, including approval by the Norwegian Ministry of Petroleum and Energy.
For more information on Valhall, please see: https://www.akerbp.com/en/our-assets/production/valhall/
*Average gross production rate for first 9 months in 2017

Pandion press release

Increase in resource estimate for Pandion’s Cara discovery

ENGIE E&P, the operator of the Cara-licence (PL 636) in the Norwegian sector of the North Sea has increased the resource estimate for the Cara discovery to 56 – 94 million barrels of oil equivalent.
Cara is a gas and oil discovery in PL636 in block 36/7, located approximately 14 kilometres from the ENGIE E&P operated Gjøa facilities. The original volumes were estimated to be between 4.5 and 12 million standard cubic metres (MSm3) of recoverable oil equivalent, which corresponds to 25 – 70 million barrels. This made Cara the second largest discovery on the Norwegian continental shelf in 2016, according to the Norwegian Petroleum Directorate.
Increase in volumes
The operator now estimates the volumes of the discovery to be in the range of 9 – 15 million standard cubic metres (MSm3) of recoverable oil equivalent. This corresponds to 56 – 94 million barrels.
Since the discovery in 2016, the expanded data acquired during drilling and testing of the well has been analysed, resulting in increased volumes, which give improved economics and a more robust field development project.
Tie-back to Gjøa
This week, the Cara-licence reached the “Concretisation Decision”*, which is the feasibility decision gate in the Norwegian petroleum system. At this stage, the licensees have identified at least one technical and economically feasible concept that provides a basis for initiating studies that should lead to concept selection by 1st November 2018.  The suggested concept involves a tie-back to the ENGIE E&P operated Gjøa-facilities.
Expected start-up of production at the Cara field is being targeted for late 2020/2021.
Licence partners in PL636:
Partners in PL636 are: ENGIE E&P (30%, Operator), Idemitsu Petroleum (30%), Pandion Energy (20%) and Wellesley Petroleum (20%)
Strengthened foundation for further growth for Pandion  Energy
Pandion Energy has a 20% interest in the Cara licence PL636.
Jan Christian Ellefsen, the CEO of Pandion Energy commented:
– This is positive news and in line with our own understanding of the discovery. This represents a substantial increase in contingent resources for Pandion Energy given we only recently prequalified as a licensee on the Norwegian continental shelf. The Cara discovery is our first development and a good example of the type of investment opportunities we are targeting through exploration as well as when evaluating farm-in opportunities in development projects and producing assets. The foundation for our growth has been further strengthened.
Pandion Energy, founded in November 2016, is a private oil and gas company focusing on exploration, appraisal and development opportunities on the Norwegian continental shelf.
Pandion press release

Kerogen Capital invests in Energean Israel

Athens, Greece – Energean Oil & Gas (“Energean”) is pleased to announce that Kerogen Capital (“Kerogen”) has committed to invest an initial US$50 million in Energean Israel, a subsidiary of Energean, ahead of the planned $1.3 billion development of the Karish and Tanin gas fields, offshore Israel.
Energean Israel is the operator of and holds a 100% interest in each of the Karish and Tanin leases, acquired from Delek Group in December 2016, for an upfront consideration of $40mm as well as $108.5mm in contingent payments. Proceeds from Kerogen’s investment in Energean Israel will finance the acquisition and key workstreams to investment sanction including FEED studies and the Field Development Plan currently being prepared in cooperation with TechnipFMC. The fields contain at least 2.4 Tcf of Gas contingent resources (NSAI report), and will be developed through an FPSO that will be the first to be installed and operated in the East Mediterranean. The gas produced from the fields will supply Israel’s growing domestic gas market, with first gas expected in 2020.
Kerogen’s investment is subject to approval by the Israeli Government, after which Kerogen will own a 50% interest in Energean Israel with Energean holding the balance.  It is intended that Roy Franklin OBE, Kerogen Executive Board Member, will become Non Executive Chairman of Energean Israel.
Energean Group Chairman & CEO, Mr. Mathios Rigas, commented:
“We are delighted to welcome Kerogen to the Karish and Tanin project, planned to deliver gas to a rapidly growing market in 2020 for the benefit of Israeli domestic consumers and the economy. Energean has already commenced negotiations with potential gas consumers in Israel and is progressing rapidly the Field Development Plan that we expect to submit to the Israeli Government by May 2017 with an intention to FID the project by year end 2017.
“We believe Israel is an attractive destination for energy investment offering exciting growth opportunities through the development of Karish and Tanin, as well as through the additional exploration potential in offshore Israel, all of which are underpinned by a supportive government policy and favorable financing environment.”
Roy Franklin, Kerogen Executive Board Member, commented:
“Energean’s track record speaks for itself. The company has successfully redeveloped the Prinos complex in Greece, increasing reserves and production substantially. Kerogen intends to collaborate with Energean to deliver a successful development of the Karish and Tanin fields in Israel.
“This investment provides Kerogen with exposure to a large-scale, low break-even discovered gas resource located within an OECD country, which, as a near-term development, can benefit from today’s deflationary cost environment.”
Kerogen press release

Kerogen Capital invests in Norway-based Pandion Energy

Kerogen Capital is pleased to announce it has made an initial commitment of US$100 million to Pandion Energy AS (“Pandion Energy” or the “Company”), an exploration and production  company focused on the Norwegian Continental Shelf (“NCS”). Pandion Energy will pursue exploration, appraisal and development opportunities on the NCS via acquisitions, farm-ins and licensing rounds. Kerogen, together with its limited partners, may commit up to US$300 million to Pandion Energy as its portfolio develops.
Pandion Energy, headquartered in Oslo, was formed to effect a management buy-out* of Tullow Oil Plc’s Norwegian subsidiary, Tullow Oil Norge AS. Kerogen will become its majority shareholder alongside the Pandion Energy management team. Pandion Energy’s strategy is focused on participating in discoveries with resource upside and enhancing their value through appraisal drilling, near field exploration and moving the assets up the development curve.
Proceeds from Kerogen’s investment will be used to build-out Pandion Energy’s portfolio, including funding the acquisition of all licences in Tullow Oil Norge AS’ existing portfolio*, as well as its operational platform. This transaction remains subject to approval from the Norwegian Ministry of Petroleum and Energy, and to the pre-qualification of Pandion Energy as a licensee on the Norwegian Continental Shelf.
The initial portfolio includes a 20% interest in the Cara discovery made in September 2016 in PL 636. Cara is an attractive low breakeven oil and gas discovery with a preliminary mean resource estimate of approximately 50 mmboe located just 6km northeast of the existing Gjøa infrastructure in the North Sea.
The Pandion Energy management team has a long track record of technical, commercial and financial success in the NCS, having worked together for almost 10 years at Tullow Oil Norge AS and its predecessor, Spring Energy Norway AS, which was acquired by Tullow Oil Plc in 2013. The senior management team of Pandion Energy includes: Jan Christian Ellefsen, CEO; Bente Flakstad Vold, VP Exploration and Appraisal and Kjetil Steen, VP Development and Production. Helge Larssen Nordtorp, Deputy CEO and VP Business Development, and Hege Peters, VP Finance and Business Support, will be joining Pandion Energy management team upon transaction completion after fulfilling their current commitments to Tullow Oil Norge AS. Further detail is provided below.
Kerogen’s Co-Founder and Managing Partner, Jason Cheng, commented:
“We are excited to partner with the highly experienced Pandion Energy management team to develop the Cara discovery and to capitalise on the many attractive opportunities we currently see in Norway. Kerogen remains attracted to the North Sea given recent market dynamics, combining attractive pricing for assets, substantial reductions in operating cost structures and Norway’s low risk stable fiscal environment.”
 Pandion Energy’s CEO, Jan Christian Ellefsen, commented:
 “Following a period of reduced investment, we see a compelling case for the Norwegian Continental Shelf. With Kerogen as a partner, we are now able to mature our portfolio while acting swiftly on attractive opportunities in the asset market. Having worked close to 10 years together, I have great confidence in the Pandion Energy team and its ability to deliver on its objectives. We look forward to the journey that lies ahead.”
 Profile of the Management Team

* Includes assignment of participating interests in the following licences on the Norwegian Continental Shelf: PL 636 (Cara discovery), PL 651, PL 689, PL 746 S, PL 750, PL 750 B, PL 774, PL 774 B, PL 776, PL 786, PL 791 and PL 826
Kerogen press release