Energean plc on Monday morning announced it had made a commercial gas discovery had been made in the Athena exploration well, off the shore of Israel. In December 2017, Energean was awarded five offshore exploration licenses within the Israeli Exclusive Economic Zone (EEZ), for blocks 12, 21, 23, and 31. According to Monday’s press release, the discovery was inside block 12. Preliminary analysis indicates that the Athena discovery contains recoverable gas volumes of 8 billion cubic meters of natural gas (bcm) on a standalone basis.
According to the press release, this discovery is particularly significant as it de-risks an additional 50 bcm of mean unrisked prospective resources across Energean’s Olympus Area, now totaling 58 bcm including Athena. The Olympus Area is Energean’s newly defined area which includes Athena, plus the undrilled prospects on Block 12 and the adjacent Tanin lease.
Energean is considering different ways to commercialize the newly discovered gas, including more domestic sales to the ever-growing Israeli power market; and exporting to the Egyptian Natural Gas Holding Company (EGAS).
Energean also explained (most likely with a sly smile across its face) that “the economics of gas produced and sold from Block 12 are not subject to royalties payable to the original sellers of the Karish and Tanin leases, leading to an approximate 8% increase in revenue for the same volumes sold when compared with the Karish and Tanin discoveries.
In November 2019, Energean was sued in Tel Aviv District Court for $176 million by Tsabar Gas and Oil who claimed that Energean had acted in breach of contract and deprived Tsabar of its rightful share in the Karish and Tanin fields. In response, Energean denied the claims and asserted that it was the sole owner of the rights to the Karish and Tanin gas fields and that it had acted in complete transparency. On November 25, 2019, Tsabar wrote Natural Resources Administration Director and Petroleum Commissioner Yossi Wurzburger an angry letter pointing out allegedly inappropriate conduct by Energean that included Energean’s alleged physical refusal to accept delivery of documents from a messenger informing it of the lawsuit.
Energean responded: “We totally dismiss all the claims brought on behalf of [Israeli businessman Benny] Steinmetz. Mr. Steinmetz and the Tsabar Group, which are unfounded and slanderous and totally lacking in any truth. Energean is the owner of the rights in the Karish and Tanin fields, which it has bought legally with the approval of the government of Israel, and operates in full transparency and in compliance with the full provisions of the law throughout the whole process. Tsabar and Mr. Steinmetz are now trying to benefit at the expense of the successful development of the Karish project with this groundless and refuted lawsuit.”