Energean (LSE: ENOG; TASE: ENOG) has announced a gas discovery at commercial quantities in the drilling it carried out in the Athena exploration well in its Block 12 license. The company says that preliminary analysis indicates that the Athena discovery contains recoverable gas volumes of 8 BCM.
According to the company, this discovery is particularly significant as it de-risks an additional 50 BCM of mean unrisked prospective resources across Energean’s Olympus Area, giving a total of 58 BCM including Athena.
The Olympus Area is Energean’s newly defined area which includes Athena, plus the undrilled prospects on Block 12 and the adjacent Tanin Lease.
The discovery represents a significant addition to the confirmed amount of gas discovered in Israel's Economic Zone, bringing the total to some 800 BCM.
Energean is now considering various possibilities for commercializing the gas in the Olympus Area, among them further domestic Israeli gas sales, in the form of new Gas Sales and Purchase Agreements (GSPA) underpinned by the continued growth of the Israeli power market or spot sales; and export options, such as developing the Memorandum of Understanding signed with The Egyptian Natural Gas Holding Company (EGAS) for the supply of up to 3 BCM annually into a binding agreement, and exports to other regional and European markets via pipeline and LNG through Cyprus and/or Egypt. "Globes" reported last week on talks with the EU and the joint teams set up to examine the possibility of gas sales to Europe as it seeks to reduce its dependence on Russian gas.
Energean points out that gas produced and sold from Block 12 is not subject to royalties payable to the original sellers of the Karish and Tanin leases that the company holds, leading to an approximate 8% increase in revenue for the same volumes sold in comparison with the Karish and Tanin discoveries.
Energean CEO Mathios Rigas said, "We are delighted to announce this new gas discovery at Athena and the potential of the wider Olympus Area. We are considering a range of strategic commercialization options both for a standalone and wider Olympus Area development, including domestic and multiple export routes.
"This discovery and the broader de-risking of a number of prospects in the Olympus Area reaffirms the role of the East Mediterranean as a global gas exploration hotspot. It strengthens our commitment to provide competition and security of supply to the region, enables the optimization of our Israel portfolio and fulfils one of our key milestones for 2022."
Energean's share price is up 2.12% on the Tel Aviv Stock Exchange this morning.
Published by Globes, Israel business news - en.globes.co.il - on May 9, 2022.
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