Energean Plc said on Dec. 30 it would pay between $380 million and $405 million to acquire the remaining 30% stake in its Israeli offshore fields.

The London-based E&P company, which currently holds 70% interest in its Israeli unit, said it would pay private-equity firm Kerogen Capital $175 million upfront for the stake. Energean also agreed to pay a deferred payment of $125 million to $150 million after the completion of the Karish project. 

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The Karish Field was discovered by Noble Energy in 2013 and located in the Levantine Basin, 25 km northeast of the currently-producing Tamar Field.

In August 2016, Energean acquired the Karish and Tanin fields from Delek Drilling and Avner. In December 2016, Energean's subsidiary, Energean Israel, with the financial backing of its partner Kerogen Capital, received from the Israeli government the approval for the field development plan to develop the Karish and Tanin fields via a gas FPSO. Energean made the final investment decision for the development project in March 2018.

The Karish main field will be the first asset to be developed in the Karish and Tanin blocks by the group. Karish was selected as the initial development as it is the largest discovery, is expected to provide the highest yield of liquid per volume of produced gas and is the closest discovery to shore, according to the company website.

The company has decided to develop the Israeli fields using the Energean Power FPSO that will be installed 90 km offshore, making it the first FPSO ever to operate in the eastern Mediterranean, the company website said. 

The Energean Power FPSO is expected to set sail from Singapore to Israel in third-quarter 2021 and to deliver first gas in fourth-quarter 2021.

By buying out Kerogen Capital’s stake in the project, Energean will add 2P reserves of 29.5 Bcm of gas and 30 million barrels of liquids, representing approximately 219 MMboe in total, to the company.

Following the recent close of its acquisition of Edison SpA, Energean currently has 2P reserves of almost 1 billion boe, 80% of which is gas, according to Mathios Rigas, CEO of Energean, who added the company is at a key transition point of turning its reserves into long-term cash flows to support a “meaningful, sustainable dividend.”

“The acquisition represents a unique opportunity, given our existing, unrivaled understanding of the assets and the fact that the position significantly enhances Energean’s cash flow, whilst generating no incremental G&A costs,” Mathios said in a statement. “It allows us to consolidate our interests in Israel, enabling us to further generate long-term value by capitalizing on the production growth and upside potential of our acreage offshore Israel; and is supportive of our ambition to be the leading independent, gas-producer in the Mediterranean.”

Reuters contributed to this article.

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