30th Dec 2020 08:24
(Alliance News) - Energean PLC on Wednesday entered into a conditional sale and purchase agreement with Kerogen Investments No 38 Ltd, an affiliate of Kerogen Capital, to acquire its 30% stake in Energean Israel Ltd for between USD380 million and USD405 million.
The London-based exploration and production company, with operations in Israel, Greece and Egypt, entered a 30-day exclusive period to acquire London-headquartered private equity fund manager Kerogen's 30% stake in Energean Israel earlier this month, as it already owns a 70% stake.
Taking a 100% interest in Energean Israel will enable Energean to fully control its capital structure, it said, enhancing its ability to maximise total shareholder returns.
Energean said the total consideration for the 30% stake includes an up-front payment of USD175 million, deferred cash consideration amounts totalling between USD155 million and USD180 million, and USD50 million of convertible loan notes with a maturity date of December 29, 2023.
The company said the acquisition adds proved and probable reserves of 29.5 billion cubic metres of gas and 30 million barrels of liquids, representing 219 million barrels of oil equivalent in total.
Chief Executive Mathios Rigas said: "The acquisition represents a unique opportunity, given our existing, unrivalled understanding of the assets and the fact that the position significantly enhances Energean's cash flow, whilst generating no incremental G&A costs. It allows us to consolidate our interests in Israel, enabling us to further generate long-term value by capitalising 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."
Energean said it expects the acquisition to close in the first quarter of 2021.
Shares in Energean were up 0.3% at 699.80 pence in London on Wednesday.
By Zoe Wickens; [email protected]
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