Greece’s Energean Oil & Gas listed on the London Stock Exchange on March 16, raising $460 million to develop two Israeli offshore gas fields in the latest milestone for the rapidly expanding eastern Mediterranean energy sector.

The firm offered 72.6 million new shares at £4.55 (US$6.35) apiece in the first flotation of an oil and gas producer on London’s main market since Zenith Energy Ltd. in January 2017, according to London Stock Exchange data.

Energean shares were trading flat at 7:13 a.m. CT.

The company will receive around £330 million (US$460 million) from the listing, which gave Energean a market capitalization of around $968 million, the company said in a statement.

The funds, together with a credit facility signed earlier this month, will go towards the $1.6 billion development of its Israeli offshore gas fields Karish and Tanin, which have potential reserves of up to 2.4 trillion cubic feet of natural gas and 32.8 million barrels (MMbbl) of light oil and condensate.

“East Med has had a lot of activity. Investors saw an opportunity to participate in the only independent E&P in the East Mediterranean, which is dominated by the majors,” Mathios Rigas, Energean’s CEO, said.

Companies including BP (NYSE: BP), Italy’s Eni (NYSE: E) and France’s Total (NYSE: TOT) have increasingly turned their focus to the eastern Mediterranean gas basin in recent years following a string of large discoveries off the coasts of Egypt, Israel and Cyprus.

Few international companies have however entered Israel due to political tensions with Arab countries.

Following the start-up of huge gas fields in Egypt and Israel, the eastern Mediterranean is on the verge of becoming a new hub for exporting gas to Europe and Asia.

Israel, Cyprus, Italy and Greece are planning to construct a pipeline linking the basin to southern Europe, which relies heavily on gas imports.

“This is for us a very important pipeline that, when developed, would open a huge markets for us and others,” Rigas said. The Karish floating production platform could be linked to other fields and process more gas that would be used for exports, according to Rigas.

Egypt also hopes to increase exports of LNG by the end of the decade.

 

De-risked

With the financing and all required permits in place as well as gas sale agreements in place, Energean is expected to give the green light for the development of the fields by the end of the month, Rigas said.

“This is a totally de-risked project,” he said.

It expects first gas from Karish in 2021. The Tanin Field will be developed following Karish. Energean said earlier this month it had signed a $1.275 billion credit facility with four banks.

Energean, which has signed gas supply agreements for about 4.1 billion cubic meters of gas a year, has 50 MMbbl of oil and 6 billion cubic feet of gas in more accessible reserves, mainly in Greek offshore fields.

It produced 2,800 barrels per day of oil at its Greek fields in 2017.

The listing was coordinated by Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Stifel Nicolaus (NYSE: SF) and RBC Capital Markets.

The company will also list on the Tel Aviv Stock Exchange in the coming weeks, Rigas said.