Delek Drilling, Avner to sell Karish and Tanin fields to Energean

8/17/2016

ATHENS -- Delek Drilling and Avner Oil Exploration, part of Israel's leading integrated energy company, have signed a deal for the sale of 100% of their holdings in Karish and Tanin natural gas fields to Energean Oil & Gas.

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Image: Energean Oil & Gas.

The deal, which is being undertaken as part of the implementation of the Gas Framework, set up by the Israeli government as part of their strategy to develop the energy market, is estimated to be valued at $148 million, which reflects return of Delek Drilling and Avner’s investment and future royalties from the expected sales of gas and condensate from the reservoirs.

Karish and Tanin are located in the north of Israel’s exclusive economic zone, approximately 40 km from each other. In Tanin, which was discovered in 2011, approximately 22.4 Bcm of natural gas (contingent resources) and 12.7 Bcm of natural gas (prospective resources) was discovered. In Karish, which was discovered in 2013, approximately 36.3 Bcm of natural gas (contingent resources) and 14.0 Bcm of natural gas (prospective resources) was discovered. In addition, a further approximately 14.3 MMbbl of condensate (contingent resources) and approximately 4.3 MMbbl of condensate (prospective resources) was discovered in the two reservoirs.

Under the requirements of the Gas Framework, the partners in the reservoirs were obligated to sell their holdings in the reservoirs 14 months after the date of execution of the agreement.

The gas that shall be produced from the Karish and Tanin reservoirs is intended for the domestic Israeli market and is expected to be sufficient to supply gas for domestic needs for many years. Energean has committed to submitting a development plan to the Israeli government within six months of closing the transaction.

“In recent months we have examined several offers and I believe that the present deal provides the most compelling route to developing Karish-Tanin in the coming years,” Yossi Abu, CEO of Delek Drilling and Avner Oil Exploration, said. “I am pleased that we have demonstrated absolute compliance with the provisions of the framework, in strict adherence with very challenging timetables. Just as we have met our obligations in this respect, we are determined to achieve the other targets that we have set ourselves for the benefit of our investors and all of the citizens of Israel.”

Mathios Rigas, chairman and CEO of Energean Oil & Gas, said, “Within six months of closing the deal, Energean will submit a development plan for the two fields to the Israeli government, in the context of a project which will also strengthen the geopolitical role of the energy triangle shaped by Israel, Greece and Cyprus”.

According to the gas framework regulation, the deal is subject to the final approval of the relevant Israeli authorities.

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