Management guidance of the estimated Gas-in-Place is 1-1.5tcf of which ~875bcf could be recoverable resource (i.e. close to 60% recovery factor).
Further evaluation will now be undertaken to determine the liquids content on the discovery. The A, B and C sands have been drilled and Energean will now deepen the well to the D4 horizon. Following completion of D4 at Karish North, the rig (Stena DrillMAX) will return to drill the three development wells at the Karish Main development.
Karish North could be developed as a tie-back to the Energean Power FPSO which is located 5.4km from the Karish North well.
The FPSO is designed to handle 8bcm/y and Energean has so far secured 4.2bcm/y of offtake. It is expecting to finalise another 1.1bcm/y shortly, bringing contracted volumes up to 5.3bcm/y. Energean therefore has another 2.7bcm/y of capacity and Energean will look to contract this as soon as it is comfortable that it has more upstream gas volumes to underpin this.
In December 2018, Energean signed a contract with power supplier I.P.M. for 0.2tcf of gas over the life of the contract contingent on the results of the 2019 drilling programme. The result at Karish North significantly increases the chance of such potential supply being converted into firm contracted volumes.
Energean see lots of opportunity to sell more gas, led by the privatisation of Israeli power stations in the period 2019-22 which will open up 4.3bcm/y of demand.
See also: Energean targets Karish North
RBC Capital Markets, Morgan Stanley
