Energean inks loan agreement to finance further development of Greek fields

Greek oil company Energean has entered into a loan agreement with a consortium of banks to finance further development of its Prinos, Prinos North and Epsilon oil fields offshore Greece.

Energean Oil & Gas said on Thursday it has signed a reserves-based senior facility agreement, amounting to $180 million, with the European Bank for Reconstruction and Development (EBRD), the Black Sea Trade and Development Bank (BSTDB), the Export-Import Bank of Romania EximBank SA (EximBank Romania) and Banca Comerciala Intesa Sanpaolo Romania S.A (Intesa Sanpaolo Bank), HSBC acting as the agent bank.

This agreement is an extension to the existing $75 million loan signed with the EBRD on May 19, 2016.

The agreement now includes two facilities: a senior secured reducing revolving credit facility of up to $105 million with the EBRD and BSTDB as lenders; and a senior secured revolving credit facility of up to $75 million arranged by EximBank Romania and having EximBank Romania and Intesa Sanpaolo Bank as lenders.

Development program

Energean explained that the expansion of the existing facility agreement will support the company’s development program in respect of 41 mmboe (39.5mmbbls oil/6bcf gas) 2P reserves and 23.8 mmboe (22.9mmbbls oil /5.3bcf gas) 2C resources in the Prinos, Prinos North and Epsilon operating oil fields, located offshore Greece (Prinos Basin).

The financing will principally fund the ongoing development of the Epsilon oil field with GSP Offshore S.R.L, the appointed EPCIC contractor, as part of the ongoing Prinos development program that includes the drilling of up to 25 additional wells and construction of two additional well platforms by 2021 to materially increase production.

Energean Oil & Gas CEO, Mathios Rigas, commented: “Energean is delighted to sign this agreement with EBRD, BSTDB, EximBank Romania and Intesa Sanpaolo Bank to support the further development of our North-Eastern Greece assets. We are committed to increasing our investment in the Prinos Basin, where we already have a strong production track record, and are now focusing on developing the Epsilon oil field, which is part of the Prinos License.”

Rigas added: “The development program underway at Prinos, where Energean holds a long-term offtake agreement with BP for the entire Prinos production, is part of the company’s wider development plans in the Eastern Mediterranean. This includes the company’s flagship $1.6 billion development project of the Karish field, offshore Israel, as well as development and exploration programs in Western Greece and the Adriatic.”

Ihsan Ugur Delikanli, BSTDB President, commented: “We are happy to contribute to this operation bringing substantial development impact to the Greek economy, including export promotion, job creation and increased revenues for the state budget.”

Eric Rasmussen, EBRD Director, Head of Natural Resources, said: “We are very pleased to be involved in this transaction which will strengthen Energean’s strategic growth plans with the participation of two important new financial partners.”