20th Jun 2024 11:17
(Alliance News) - Energean PLC on Thursday said it will sell its oil and gas portfolio in Egypt, Italy and Croatia in order to focus on its gas fields in Israel and Morocco.
Energean is a London-based energy production, development, and exploration company and possesses a portfolio of assets across the Mediterranean and UK North Sea.
The company said the deal with Carlyle International Energy Partners, part of private equity firm Carlyle Group, was valued at around USD945 million.
Carlyle clarified that it will establish a stand-alone exploration & production company in the Mediterranean, through organic growth initiatives and mergers & acquisitions.
The chair of the new company will be former BP PLC Chief Executive Officer Tony Hayward. Hayward had left BP in October 2010 following the Deepwater Horizon oil spill in the Gulf of Mexico, which lasted for over four months and saw over 210 million gallons of crude oil spilt into the ocean. BP had to pay USD65 billion in compensation.
The deal between Energean and Carlyle announced Thursday is worth up to USD945 million. Of this, USD820 million is firm.
The proceeds will be enough to repay a USD450 million corporate bond and allow for the payment USD200 million of a special dividend to Energean shareholders, the company said.
Carlyle expects to deliver a diversified portfolio of strategic gas-weighted assets with an anticipated production equivalent to 47,000 barrels of oil per day and operations across Italy, Egypt and Croatia.
"The portfolio includes interests in Cassiopea, Italy's largest gas field in terms of reserves, and Abu Qir, one of the largest gas producing hubs in Egypt," it said.
Hayward, chair designate of the incoming new company said: "This acquisition provides a strong platform to build a standalone regional champion in the Mediterranean, one of the fastest growing natural gas markets in the world."
Energean said: "This sale enables Energean to rationalise the portfolio and focus on its gas-weighted, gas-development strategy, underpinned by the Karish field in Israel and recent farm-in to the Anchois field in Morocco. This strategy aims to maximise asset monetisation (through a develop and operate model), free cash flow generation and returns to shareholders.
"The transaction also optimises the portfolio by divesting later life assets, removing over 60% of the group's decommissioning liabilities, and improving free cashflow generation in the short to medium-term."
Energean Chief Executive Officer Mathios Rigas said: "Looking ahead, this transaction unlocks management capacity and financial flexibility to drive future growth. Our focus will now be to create enhanced value from our Israel assets, and evaluate new opportunities that fit Energean's key business drivers: paying a reliable dividend, deleveraging, growth, and our commitment to net zero.
"Carlyle is the right custodian of the asset base and will create an excellent home for our colleagues. We wish them every success and look forward to watching their progress. I want to thank all of our colleagues based in Egypt, Italy and Croatia for their hard work and dedication over the years."
The deal is expected to be completed by the end of 2024.
Energean shares rose 2.6% to 1,059.00 pence each on Thursday morning in London.
By Tom Budszus, Alliance News slot editor
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