LONDON (Reuters) – Carlyle will form a new oil and gas company focused on the Mediterranean, led by the former chief executive of BP (LON:) Tony Hayward, after the private equity fund struck a deal to acquire Energean’s assets in Egypt, Italy and Croatia for up to $945 million.
The companies communicated this.
The deal will give Carlyle access to the Eastern Mediterranean gas market, which has grown rapidly in recent years due to rising demand for gas in Egypt and Europe’s search for alternatives to Russian gas.
Carlyle International Energy Partners (CIEP), the fund’s non-US energy investment arm, said the new company would initially produce up to 47,000 barrels of oil per day in the three countries.
But it will seek to increase production by boosting existing assets and through other acquisitions in the Mediterranean, Ciep co-head Bob Maguire told Reuters.
“There is a lot of scope for these assets from a geological perspective,” Maguire said, adding that growing demand for natural gas in Egypt and Italy will support future investments.
Energean, whose main production comes from a gas plant offshore Israel, will seek to expand into the wider Europe, Middle East and Africa region, particularly where there is long-term political support for gas and replacing coal, Chief Executive Mathios Rigas told Reuters.
“It’s a great deal for us, we’re selling the assets at three times the purchase price,” he said.
Analysts at Jefferies estimated that the net asset value of the assets Energean is selling is $1.28 billion, implying a 26% discount in the deal.
London-listed Energean had obtained the assets in Egypt, Italy and Croatia through its acquisition of Edison’s oil and gas portfolio in 2020.
Energean said the deal involves a cash payment of $504 million, after which it will pay a special dividend of $200 million and fully repay a $450 million corporate bond.
Energean’s board plans to redefine the dividend policy after the completion of the transaction, which is expected to be by the end of the year.
In 2023, Energean produced 123,000 barrels of oil equivalent per day (boed). For 2024, production in Egypt is expected to rise to 29,000-31,000 boed from around 25,000 boed.
For Ciep’s new company, production will come from stakes in Cassiopea, the largest gas field in Italy in terms of reserves, and Abu Qir, one of the largest gas production hubs in Egypt.
(Translated by Camilla Borri, editing Claudia Cristoferi)
