Energean Nets $4B in New Israeli Gas Offtake Deals

(Credit: Energean)

Eastern Mediterranean focused gas producer Energean secured $4 billion worth of new Israeli gas offtake contracts in the first half of the year, the group said on Thursday, bringing its contract pipeline to $20 billion over the next two decades.

However, the London-listed group cut its annual production forecast for the second time in nearly four months because of a temporary production suspension in Israel in June.

Energean, which aims to expand in its core locations, including Israel and Egypt and is seeking new business in West Africa, also reported a 11% drop in its core profit in six months to June 30, while after-tax profit jumped nearly 24%.

It now expects this year's production at 145,000 to 155,000 barrels of oil equivalent per day (boed), down from 160,000-175,000 boed seen in May, after Israel ordered it to stop production at its Karish offshore field during its conflict with Iran.

Energean reported first-half adjusted EBITDAX (Earnings Before Interest, Taxes, Depreciation, Amortisation, and Exploration Expense) of $505 million and after-tax profit of $110 million.

In Egypt, the group estimates there is a further 3 trillion cubic feet of gas under its existing platforms, CEO Mathios Rigas told Reuters.

Offshore Israel, Energean was weighing drilling into yet untapped formations in deep Mesozoic rocks in Block 23, which could be a "new play opener for the whole East (Mediterranean)", Rigas said.

Energean would seek a partner, though, for such a complex well, which probably have to wait until stability returned to the region, he said.

Energean also expects up to 2 billion cubic metres a year from its Katlan field off Israel, due to start production in 2027, to be carried on the planned Nitzana pipeline from Israel to Egypt after that is yet to be built, Rigas said.

(Reuters - Additional reporting by Ankita Bora in Bengaluru; Editing by Harikrishnan Nair and Tomasz Janowski)