Thursday, 31 October 2024
Home Topics Business Energean to sell Med oil and gas assets to Carlyle for up to $945 million
BusinessFinanceFuelLiquefied Natural GasLiquefied Petroleum GasNewsOil

Energean to sell Med oil and gas assets to Carlyle for up to $945 million

45
A woman walks next to the logo for Carlyle at the company’s offices in New York City, U.S., June 28, 2022. Picture taken June 28, 2022. REUTERS/Brendan McDermid/ File Photo
A woman walks next to the logo for Carlyle at the company’s offices in New York City, U.S., June 28, 2022. Picture taken June 28, 2022. Energean has agreed to sell its assets in Egypt, Italy and Croatia to private equity fund Carlyle for up to $945m, the oil and gas producer said on Thursday.. REUTERS/Brendan McDermid/ File Photo

By Ron Bousso

LONDON (Reuters) – Carlyle will form a new Mediterranean-focused oil and gas company led by former BP CEO Tony Hayward after the private equity fund agreed to acquire Energean’s assets in Egypt, Italy and Croatia for up to $945 million, the companies said on Thursday.

The deal will allow Carlyle to tap into the eastern Mediterranean gas market that has grown rapidly in recent years as gas demand in Egypt soars and Europe seeks alternatives to Russian gas.

Organizations

Carlyle International Energy Partners (CIEP), the fund’s non-U.S. energy investment arm, said the new company will initially produce up to 47,000 barrels of oil per day in the three countries.

But it will seek to grow output by upgrading existing assets and through other acquisitions in the Mediterranean, CIEP co-head Bob Maguire told Reuters.

“There is plenty of running room for these assets in terms of geology,” Maguire said, adding that growing demand for natural gas in Egypt and Italy will underpin future investments.

Energean, whose main production comes from a gas facility offshore Israel, will also look to expand to the wider Europe, Middle East and Africa region, particularly where there is long-term policy support for gas and displacement of coal, CEO Mathios Rigas told Reuters.

“It’s a great deal for us, we’re selling assets at three times the price we bought them,” he said.

Shares of Energean were up 2.7% by 1252 GMT.

Jefferies analysts estimated the net asset value of the resources that Energean is selling to be $1.28 billion, implying a 26% discount in the deal.

London-listed Energean acquired the assets in Egypt, Italy and Croatia through its acquisition of Edison’s oil and gas portfolio in 2020.

Energean said the deal would include a cash payment of $504 million after which it will pay a special dividend of $200 million as well as repay in full a $450 million corporate bond.

Energean’s board expects to redefine its dividend policy following the completion of the deal, which is expected by year-end.

Energean produced 123,000 boed in 2023. For 2024, it expected production in Egypt to rise to 29,000-31,000 boed from around 25,000 boed.

For CIEP’s new company, production will come from interests in Cassiopea, Italy’s largest gas field in terms of reserves, and Abu Qir, one of the largest gas producing hubs in Egypt.

CIEP has over the past decade acquired, grown and sold several oil and gas companies, including Neptune Energy in the North Sea, Assala Energy in Gabon and SierraCol in Colombia, also led by Hayward. He led BP for more than three years before stepping down in the wake of the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

“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,” Hayward, chairman designate of the new company, said in a statement.

(This story has been corrected to fix the spelling of CIEP co-head Bob Maguire’s name in paragraphs 4 and 5)

(Reporting by Ron Bousso in London and Deep Vakil in Bengaluru; editing by Jason Neely, Stephen Coates, Susan Fenton and Jane Merriman)

Related Articles

Azerbaijan's capital Baku is preparing to host the United Nations COP29 climate conference (AFP)
ClimateEnvironmentPoliticsUnited Nations

UN rapporteur urges climate activist’s release ahead of COP29

The UN rapporteur called on Azerbaijan to release activist Anar Mammadli, detained...

FILE PHOTO: Coterra Energy's logo is pictured on a smartphone in this illustration taken, December 4, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
BusinessNatural GasOil

Coterra Energy posts lower quarterly profit

U.S. oil and gas producer Coterra Energy posted a 22 per cent...

FILE PHOTO: Wind turbines spin near Palm Springs, California, U.S., March 10, 2021.  REUTERS/Mike Blake
AnalysisBusinessElectionsElectricityOffshore WindOpinionPoliticsRegulations

US offshore wind execs fret privately over possible Trump election win

Offshore wind industry braces for impact as election uncertainty looms, eyeing potential...

Login into your Account

Please login to like, dislike or bookmark this article.