HK’s Kerogen commits $50m for 50% interest in Energean Israel

Photo from Energean's website

Hong Kong-based private equity firm Kerogen Capital has committed an initial $50 million in Energean Israel, a subsidiary of Greek exploration and production firm Energean Oil & Gas, ahead of the planned $1.3 billion development of the Karish and Tanin gas fields, offshore Israel.

The transaction, however, needs the approval of the Israeli Government. Kerogen will own a 50 per cent interest in Energean Israel if the deal is completed.

In conjunction with the equity holding, Roy Franklin, Kerogen’s executive board member, will become non-executive chairman of Energean Israel.

“Energean has already commenced negotiations with potential gas consumers in Israel and is progressing rapidly the Field Development Plan that we expect to submit to the Israeli Government by May 2017,” said Mathios Rigas, chairman and CEO of Energean.

The company fully acquired the Karish and Tanin leases from Delek Group in December 2016 for an upfront consideration of $40 million as well as $108.5 million in contingent payments. It would use the proceeds from Kerogen’s investment to finance the acquisition as well as key work streams to investment sanction including front-end engineering design studies and its field development plan currently being prepared in cooperation with TechnipFMC.

The fields, which contain at least 2.4 Tcf of gas, will be developed through a floating production, storage and offloading unit, the first of its kind in the East Mediterranean. First gas output is expected to be produced in 2020.

“We believe Israel is an attractive destination for energy investment offering exciting growth opportunities through the development of Karish and Tanin, as well as through the additional exploration potential in offshore Israel,” commented Rigas.

Energean Israel will mark the first investment in the Eastern Mediterranean hydrocarbon province by Kerogen, the $2 billion AUM fund manager specialising in the international oil and gas sector.

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