Greek Energy Firm Energean Weighs IPO to Fund $1.5b Development of Israeli Gas Fields

Greece’s sole oil producer says it is in the process of developing Israel’s Karish and Tanin offshore fields and 'engaged in a range of contracting and financing discussions'

File photo: An Energean drilling rig
File photo: An Energean drilling rig Energean

Greek energy firm Energean is considering listing on the London Stock Exchange to raise cash for a $1.5 billion development of gas fields off Israel’s coast, sources told Reuters.

Energean, Greece’s sole oil producer, said in a statement it was in the process of developing Israel’s Karish and Tanin offshore fields and was “engaged in a range of contracting and financing discussions to achieve this.”

“We are currently examining all options of funding the project’s requirements,” a company spokesman said in an email, without saying if this included a public listing.

Four sources, including three banking sources, told Reuters that investment banks Morgan Stanley and Citibank were advising the firm on the initial public offering process. The banks did not immediately respond to requests for comment.

If management opted for an IPO, the listing would take place next year although it was unclear how much cash Energean would seek to raise, the sources said.

Energean, a private exploration and production firm operating in the eastern Mediterranean, and private equity fund Kerogen Capital bought the Karish and Tanin licenses from Israel’s Delek Group in December 2016 for $40 million up front and $108.5 million in contingent payments.

Led by CEO Mathios Rigas, Energean expects to make a final investment decision on developing the fields, estimated to hold 2.4 trillion cubic feet of gas, by the end of 2017. Development is expected to cost $1.3 billion to $1.5 billion, according to the company website.

Energean said in May it had signed contracts to supply up to 23 billion cubic meters of natural gas to private Israeli power stations from the fields.

London energy listings have been sporadic and small in the past three years as a dip in oil prices dried up investor interest. But 2017 has seen eight such listings on London’s junior market so far, compared to five in the whole of 2016, when oil prices reached a 12-year low of around $26 a barrel.