LONDON (ShareCast) - (Sharecast News) - Energean announced the final investment decision (FID) for its Katlan development project in Israel on Tuesday.
The FTSE 250 company said the project would be developed in phases through a subsea tieback to the existing Energean Power floating production storage and offloading (FPSO) vessel, extending the production plateau without incurring seller royalties or export restrictions.

It said the development aimed to support its current gas sales agreements and target international markets, with first gas expected in the first half of 2027.

The engineering, procurement, construction and installation (EPCI) contract for the subsea scope was awarded to TechnipFMC.

Energean said the project would include a four-well-slot tieback to a single large 30-kilometre production line, facilitating future phases of the Katlan area.

The capital expenditure for the project was estimated at around $1.2bn, with that budget covering the subsea infrastructure, an upgrade of the FPSO topsides for Monoethylene Glycol (MEG) treatment, injection, and storage, and the drilling of the first two production wells, Athena and Zeus, which contain 170 million barrels of oil equivalent (mmboe), including 26 billion cubic metres (bcm) of gas.

Energean said the Israeli Ministry of Energy and Infrastructure had granted a 30-year lease for the Katlan area, with a 20-year extension option, and ratified the Hermes discovery in the newly-named Drakon area, which was part of the 2022 drilling campaign.

The Katlan area, discovered by Energean in 2022, is fully owned and operated by the company.

It said the fields are located in water depths of up to 1,800 metres, adding that the phase one development plan, approved by the Israeli Government in December, included four fields - Athena, Zeus, Hera, and Apollo, with 229 million barrels of oil equivalent, including 35 billion cubic metres of gas.

The wider Katlan area has an additional 223 million barrels of oil equivalent, including 34 billion cubic metres of gas, of prospective volumes across other accumulations.

Those volumes were considered substantially de-risked, and would be developed in subsequent phases, benefiting from the phase one infrastructure and investment.

"This decision marks yet another positive milestone on Energean's growth journey," said chief executive officer Mathios Rigas.

"The decision to move ahead with Katlan will not surprise anyone that knows our successful track record, given our commitment to the swift development and production of gas assets."

Rigas said the company was "pleased" that the ministry had officially granted the 30-year lease for Katlan and confirmed the company's 2022 Hermes discovery, which de-risked the nearby accumulations and represented attractive potential in the newly-named Drakon area on block 31.

"By developing Katlan, we will unlock further value in the Israeli subsurface that will provide additional energy security and drive sustainable development, both in Israel and the broader region."

At 0827 BST, shares in Energean were up 0.28% at 1,058p.

Reporting by Josh White for Sharecast.com.

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