Energean makes commercial gas discovery at Hermes well offshore Israel

Mediterranean-focused Energean has made a commercial gas discovery at the Hermes exploration well offshore Israel, with recoverable resources estimated at 7-15 Bcm, it said Oct. 6.

Energean, which is expected to start production from its flagship Karish field offshore Israel imminently, said the new Hermes discovery would also help de-risk the nearby Poseidon and Orpheus structures.

"Detailed analysis of the data collected by the well is ongoing, with the aim of refining volumetric estimates and potential commerciality for both the discovery and the full area," Energean said in a statement.

The discovery was made in Israel's block 31 using the Stena IceMax drilling rig, which has now moved to block 12 (the Olympus area) to drill the Zeus structure.

Zeus is estimated to contain 10-12 Bcm of gross prospective unrisked gas resources, Energean said.

The Zeus well, it said, would enable Energean to gather additional data to "further refine resource estimates across the entire Olympus area, currently estimated to be approximately 58 Bcm of unrisked recoverable resources."

Energean has also exercised its option to drill a sixth well with Stena Drilling as part of the current drilling campaign. This well is expected to target the Hercules prospect, located on block 23.

Karish startup

In the meantime, Energean is still preparing to begin gas production from the Karish field.

On Sept. 8, CEO Mathios Rigas said Energean was on track to begin gas production from Karish "within weeks" and a company spokesperson said this was still the case.

"We will update the market once we achieve first gas," the spokesperson said.

Energean has been carrying out commissioning work at Karish and its dedicated 8 Bcm/year capacity Energean Power production vessel ahead of first gas from the project.

The EU is looking to Israel as a new source of gas supply to help replace Russian gas and the two signed a memorandum of understanding together with Egypt in June for the supply of Israeli gas to Europe via Egypt's LNG export facilities.

This comes as sharply reduced Russian gas deliveries pushed European gas prices back to record highs in August.

Platts assessed the Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh Aug. 26, according to data from S&P Global Commodity Insights. It was last assessed at Eur178/MWh Oct. 5.

Israel has become a major gas producing country in recent years thanks to the start-up of the Tamar and Leviathan fields, with output reaching almost 20 Bcm in 2021, according to energy ministry data.

Karish is now set to become the third major producing field in Israeli waters.