Energean Sheds Mediterranean Assets in $945 Million Deal

London-listed Energean plc has struck a deal to sell its exploration and production assets in Egypt, Italy, and Croatia to private equity giant Carlyle Group for an enterprise value of up to $945 million. The transaction, announced on June 20, 2024, marks a strategic shift for Energean, allowing it to focus on its core gas development projects in Israel and Morocco.

The divestment encompasses a portfolio with a significant gas weighting, currently producing an estimated 47, 000 barrels of oil equivalent per day (boed). Key assets included in the sale are stakes in Cassiopea, Italy's largest gas field by reserve volume, and Abu Qir, a cornerstone of Egypt's gas production.

Financial details of the agreement reveal a potential windfall for Energean. The deal includes a guaranteed cash payment of $820 million, with an additional $125 million contingent on performance metrics tied to a recent Egyptian well discovery. This represents a significant return on investment for Energean, having acquired the portfolio for $284 million in 2020.

Commenting on the transaction, Energean CEO Mathios Rigas highlighted its alignment with the company's long-term strategy. "The transaction delivers on our strategy and Energean's ability to maximize value for our shareholders, " Rigas stated. The sale proceeds will empower Energean to not only pay a special dividend of $200 million but also fully repay a $450 million corporate bond. With a more streamlined portfolio, Energean can now devote its full resources to maximizing the value of its Israeli assets, including the operational Karish offshore gas field, and explore new growth opportunities aligned with its core business objectives.

The acquisition by Carlyle presents a strategic opportunity for the private equity firm to solidify its presence in the Mediterranean energy market. Carlyle's International Energy Partners arm will take over operational responsibility for the acquired assets, bringing its industry expertise to bear on optimizing production and potentially unlocking further development potential.

The Energean-Carlyle deal underscores the evolving dynamics of the Mediterranean energy sector. As regional energy security concerns intensify, the role of private equity firms in supporting and capitalizing on strategic asset development is likely to expand. The transaction's successful completion, expected by the end of 2024 subject to regulatory approvals, will be closely watched by industry stakeholders for its implications on future investment trends in the region.

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