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Energean Oil & Gas sets sights on production growth, looks forward to 2019 drill programmes

"2018 was a very successful year for Energean," said CEO Mathios Rigas.

oil and gas operations
Energean has an active year of well drilling ahead of it

Energean Oil & Gas PLC (LON:ENOG), in a statement ahead of its full year results,  told investors it increased revenues by 56% during 2018;

The company noted that, in Greece, it produced 4,053 bopd and that falls within the expected range of 4,000 to 4,250 bopd.  Guidance for 2019 pitches production expectations at 5,000 to 6,000 bopd in Greece.

Meanwhile, Energean continues to advance the Karish and Tanin projects in Israel for ‘first gas’ in the first quarter of 2021.

This year, the company aims to expand the assets with the drill-bit. It plans to target some 2.3 trillion cubic feet of potential gas resources through the 2019 drill programmes.

"2018 was a very successful year for Energean. We increased revenues by 56% while reducing cost of production by 29%, made significant progress on our development projects and converted significant volumes of resources into reserves,” said Mathios Rigas, Energean chief executive.

Rigas added: “In Israel, Karish and Tanin remains on track for first gas in 1Q 2021 and we have secured $12.9 billion of future revenues through 4.6 bcm/yr of contracted gas sales, firmly underpinning the project's economics.”

READ: Tullow Oil eyes growth as 2018 production lands in line with expectations

The company highlighted that its exploration strategy is to target resources that can be quickly, economically and safely monetised.

Drilling at the Karish North prospect will target 1.3 TCF of gas and 16mln barrels of crude – with a 69% chance of success it is notably a ‘lower risk’ exploration well. Moreover, the company said that success at Karish North would further de-risk the Karish East prospect, estimated at 0.5 TCF and 7.5mln barrels (the smaller prospect is already deemed to have a 70% chance of success).

Three development wells are then slated for the Karish Main area, though these programmes include an exploration element with Energean set to test deeper horizons in addition to the anticipated production zones.

Elsewhere, Energean is also set to advance its exploration assets alongside partner Repsol. A seismic programme kicked off on the Ioannina Block in November and the data is due later this year.

At the Aitoloakarnania Block, the partners plan to complete the first stage of seismic this year and it noted that its costs are “substantially carried” by Repsol.

Separately, in Montenegro, Energean is due to start a seismic programme this month, with the 338 square kilometre survey expected to take two weeks to complete. The subsequent results will inform a ‘drill or drop’ decision in the first half of next year.

Quick facts: Energean Oil & Gas PLC

Price: 611 GBX

LSE:ENOG
Market: LSE
Market Cap: £1.08 billion
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