Energean plans to raise $500 million with London listing

Greek oil and gas company Energean is preparing for listing on the London Stock Exchange in March with plans to raise $500 million. The large portion of the raised funds will be used for development of its assets offshore Israel.

Energean announced its intention to proceed with an initial public offering on Monday, February 19, 2018.

The company intends to apply for admission of its shares to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s main market for listed securities.

Energean expects that admission will occur in March 2018. The offer is expected to raise gross proceeds of approximately $500 million.

Explaining its reasons for the offer on Monday, Energean said that its directors believe that the offer will provide funding, in addition to existing debt facilities in place, required for planned near-term investment in the group’s development projects and organic growth of the existing producing asset base. The company also believes this will further increase its international profile and brand recognition; and provide shareholders with the opportunity to monetize part of their shareholdings in future.

Out of $500 million expected to be raised through the offer, approximately $395 million will be used to fund investment in the development of the Karish and Tanin gas fields, offshore Israel, including the $80 million carry payable by Energean E&P Holdings to increase its interest in Energean Israel to 70%.

Furthermore, $10 million will be used to fund mandatory payments to the founders; $20 million will be used for transaction fees and expenses; $22 million will be used for exploration capital expenditure; and $53 million will be used for other corporate purposes.

Following completion of the offer, the board will consider a secondary listing of the Shares on the Tel Aviv Stock Exchange.

Mathios Rigas, Chief Executive of Energean, said: “Over the last few years, Energean has built a strong production, development and exploration portfolio in the Eastern Mediterranean to position itself as one of the leading independent oil and gas companies in the region. The current, advanced plans for the development of the Karish and Tanin fields, offshore Israel, together with the significant development program for the Prinos licenses in Greece, have given us considerable momentum in our progress towards achieving this objective.”

He added: “The offer will provide us with a platform to secure this next phase of growth for our pipeline of attractive exploration projects.”

Energean’s assets 

Since its establishment in 2007, Energean has acquired a diverse portfolio of oil and gas assets in the Eastern Mediterranean, including Greece, Israel, the Adriatic and North Africa.

At the end of October 2017, Energean’s total 2P reserves were 50.0 MMbbls of oil and 6.0 BcF of gas and its total 2C resources were 55.8 MMbbls of oil and 2.4 Tcf of gas (including Karish and Tanin resources at 100%, of which the group’s effective working interest will be 50% at admission, expected to rise to 70% subject to certain conditions being met).

Producing

Energean’s current developed producing assets, Prinos and Prinos North, are offshore oil fields located in Greek waters.

The group produced on average approximately 2,803 bopd from the Prinos basin fields during the year ended December 31, 2017, with an investment plan from 2018 of approximately $353 million in total through 2021 to increase production from the Prinos and Prinos North oil fields, as well as to develop the Epsilon oil field, which is also a part of the Prinos license. The program consists of drilling of up to 25 wells and the installation of two new platforms up to 2021.

Energean is the only oil and gas producer in Greece and currently sells 100% of its production to BP under a long-term offtake agreement, which was recently extended by four years to 2025.

Development

The company has development projects located in Israel and Greece. Its most significant undeveloped assets are the Karish and Tanin offshore gas fields located in Israel.

Karish and Tanin had an estimated 2.4 Tcf of natural gas and 32.8 MMbbls of condensate and light oil (contingent 2C resources) as of October 31, 2017. Energean has a development plan, submitted in June 2017, to deliver first gas from the Karish field in 2021, with estimated capex of approximately $1.6 billion.

The group has to date signed gas supply agreements relating to supply of approximately 4.1 BCM of gas per annum on an annual contract quantity basis.

Exploration

The group also has a focused exploration strategy with several exploration prospects in Greece, Montenegro and Israel.

At the end of October 2017, the group’s exploration portfolio had best estimate unrisked prospective resources estimated at 4.3 Tcf of natural gas (3.3 TcF in prospects, 1.0 TcF in leads) and 410.8 MMbbls of liquids (77.3 MMbbls in prospects, 333.5 MMbbls in leads)