# Energean Oil and Gas plc  Substantial progress in advancing flagship Karish and Tanin development project

- Link: https://www.directorstalkinterviews.com/energean-oil-and-gas-plc-substantial-progress-in-advancing-flagship-karish-and-tanin-development-project/412770232
- Published: 2019-03-21T07:53:27+00:00
- Author: Charlotte Edwards

**Energean Oil and Gas plc** (LON: ENOG, TASE: אנאג), the oil and gas producer focused
on the Mediterranean, is pleased to announce its full-year results for the year 
ended 31 December 2018.

> **Mathios Rigas, Chief Executive, Energean Oil & Gas commented:**
> “In 2018 we made substantial progress in advancing our flagship Karish and Tanin
> development project and remain on-track to deliver first gas in 1Q 2021. We secured
> $13 billion of future revenues by signing 12 Gas Sales Agreements to deliver a
> total volume of 4.6 bcma, firmly underpinning the project’s economics, signed 
> a lump-sum, turnkey EPCIC contract with TechnipFMC, simplified project management,
> reduced our financial risk exposure, and secured funding for the project through
> the combination of a $1.3 billion project finance facility and the funds raised
> through our IPO on the LSE in March 2018. We remain focused on delivering the 
> project and our medium-term strategy is to secure both the additional resource
> and offtake for the remaining spare capacity in our 8 bcma FPSO, which we believe
> will create significant further value for all of our stakeholders. In Greece, 
> we grew production by 45% whilst simultaneously reducing costs per barrel by 29%,
> a tangible result of our commitment to optimising cash flows from our producing
> assets. We also commenced exploration activities in Western Greece and Montenegro.
> We continue to target value-enhancing opportunities in the Mediterranean area 
> and aim to replicate the growth achieved over the last decade.”

**Operational and Financial highlights**

· Increased 2P reserves to 347 million barrels with 2C resources of 58 million barrels,
a combined 35% year-on-year increase.

· Delivered upon our milestones for achieving first gas from Karish and Tanin in
1Q 2021:

– Secured $460 million of equity and a US$1.275 billion project finance facility
in March 2018;

– Took Final Investment Decision in March 2018;

– Achieved first steel cuts on the FPSO hull and topsides in November and December;
and

– Commenced the four well drilling campaign on 28 February 2019; spudded Karish 
North on 15 March 2019.

· Secured $13bn of future revenues by signing 12 Gas Sales Agreements (excluding
Or), to supply an average 4.6 bcma to the Israel domestic market.

· Signed an MOU with INGL for the transfer of the onshore infrastructure following
first gas, which will result in cash inflow of NIS 369 million ($98 million) for
Energean Israel.

· Delivered 4,053 bopd of production (2017: 2,803 bopd), a 45% year-on-year increase.

· Sanctioned the Epsilon development, commenced platform construction and the drilling
programme.

· Reduced cost of production by 29% to $17.6/bbl (FY 2017: $24.7/bbl).

· Submitted the ESIA for the Katakolo project and commenced seismic operations in
Western Greece, Israel and Montenegro.

· Listed on the London and Tel Aviv Stock Exchanges, subsequently becoming a constituent
of the [FTSE 250](https://www.directorstalkinterviews.com/news/ftse-250) and TA-
35 indices.

  |

FY 2018

$m

  |

FY 2017

$m

  |  
 |

Sales revenue

  |

90.3

  |

57.8

  |  
 |

Cost of production ($/boe)

  |

17.6

  |

24.7

  |  
 |

Operating profit / (loss)

  |

23.8

  |

(13.7)

  |  
 |

Adjusted EBITDAX

  |

52.4

  |

20.7

  |  
 |

Operating cash flow

  |

62.7

  |

29.1

  |  
 |

Capital expenditure

  |

494.6

  |

67.7

  |  
 |

Cash capital expenditure

  |

293.6

  |

67.3

  |  
 |

Net debt / (cash)

  |

(75.6)

  |

75.6

  |

**Outlook**

· Results from Karish North.

· Completion of the three Karish Main development wells including an exploration
component.

· Sailaway of the Energean Power FPSO Hull from China to Singapore for integration
of the topsides

· Continued pursuit of our strategy to secure both the resource and offtake for 
the remaining spare capacity in our 8 bcma FPSO.

· 2019 average production narrowed to 5,000 – 5,500 bopd, reflecting the delay experienced
by the Epsilon extended reach well.

· Continued progress at Epsilon. Drilling of the extended reach well has been completed
and the well completion is ongoing with first oil expected before the end of March.
Pre-drilling of the vertical wells and platform construction is ongoing.

· Conclusions from early stage seismic operations in Israel, Montenegro and Western
Greece.

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