Energean sells Egyptian, Italian, Croatian assets to Carlyle International Energy Partners for $945 million

(WO) – Energean has entered into a binding agreement for the sale of its portfolio in Egypt, Italy and Croatia to an entity controlled by Carlyle International Energy Partners for up to $945 million, of which $820 million is firm.

This sale enables Energean to rationalize 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 maximize asset monetization (through a develop and operate model), free cash flow generation and returns to shareholders. 

The Transaction also optimizes 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.

Moving forward, Energean will maintain and seek to grow its footprint in the Mediterranean and look beyond this to the wider Europe, Middle East and Africa (“EMEA”) region, particularly where there is long-term policy support for gas and displacement of coal. 

The Group will also focus on creating a Carbon Storage Hub in Greece and the wider Mediterranean region via its EnEarth subsidiary.

Post-closing, Energean’s scope 1 and 2 emissions intensity will reduce by around 40% to ~5 kgCO2e/boe accelerating its 2035 target by 10 years.                

Background. In 2020, Energean acquired Edison E&P, which included production, development and exploration assets in Egypt, Italy and Croatia. Energean’s portfolio of assets in these countries has net working interest 2P reserves of 150 MMboe (70% gas) (D&M YE23 CPR) and 2023 net working interest production of 34,000 boed (37% gas). 

Strategic rationale. Energean’s strategy is to be the leading independent gas-focused E&P in the Mediterranean and beyond. The group has taken the decision to sell certain non-core geographies, where at least $7.5 million per annum of G&A savings have been identified, in line with its key business drivers to:

Be cashflow accretive: the Transaction is expected to be immediately free cash flow accretive. The Group expects to redefine its dividend policy post-Transaction close. 

Focus on gas and gas development: the Transaction enables management to focus on its core gas-weighted assets, underpinned by Israel and the recent farm-in to the Anchois field in Morocco, to maximize asset monetization, free cash flow generation and returns to shareholders.

Achieve growth objectives: moving forward, Energean will continue to evaluate existing organic growth opportunities within its portfolio, as well as inorganic opportunities beyond the Mediterranean in the wider EMEA region, particularly where there is long-term policy support for gas and coal phase-out. 

Bob Maguire, Co-Head of Carlyle International Energy partners, said, “We are delighted to acquire this portfolio of high-quality assets in Italy, Egypt and Croatia, countries that are actively encouraging new gas development, which we believe will play a central role in the energy transition. We look forward to supporting the transformation of these assets into a scalable E&P platform in the Mediterranean, through the execution of near-term developments, unlocking organic growth opportunities, M&A, and accelerating the delivery of existing decarbonization plans.”