In a strategic move to maximize shareholder value and focus on its core assets, London-listed oil and gas producer Energean has agreed to sell its portfolio in Egypt, Italy, and Croatia to an entity controlled by the private equity fund Carlyle for an enterprise value of up to $945 million. The deal, expected to close by the end of 2024, will involve a cash payment of $504 million.
Energean announced on Thursday that the proceeds from this transaction will allow the Mediterranean-focused company to pay a special dividend of $200 million and fully repay a $450 million corporate bond.
“The transaction delivers on our strategy and Energean’s ability to maximize value for our shareholders,” said Mathios Rigas, Energean’s Chief Executive Officer. “Our focus will now be to create enhanced value from our Israel assets and evaluate new opportunities that fit Energean’s key business drivers.”
Energean operates the Karish offshore gas field in the Israeli segment of the Mediterranean Sea, producing 123,000 barrels of oil equivalent per day (boed) last year. The company has set a production guidance of 155,000 to 175,000 boed for this year.
Carlyle’s New Mediterranean Venture
The assets being sold, which can produce 47,000 boed, include significant interests such as Cassiopea, Italy’s largest gas field by reserves, and Abu Qir, one of Egypt’s largest gas-producing hubs. Bob Maguire, co-head of Carlyle International Energy Partners, expressed enthusiasm about the acquisition: “We are delighted to acquire this portfolio of high-quality assets in Italy, Egypt, and Croatia, countries that are actively encouraging new gas development.”
Carlyle International Energy Partners plans to establish a stand-alone company in the Mediterranean, aiming for growth through both organic development and mergers and acquisitions.
Energean’s Strategic Shift
Energean acquired the assets in Egypt, Italy, and Croatia when it purchased Edison’s oil and gas portfolio in 2020. The sale of these assets aligns with Energean’s strategy to concentrate on its Israeli operations, which have become increasingly significant.
Last year, Energean provided 60% of Israel’s domestic natural gas demand after the country ordered a temporary shutdown of the Chevron-operated Tamar gas field following the October 7 attack. Production at Tamar was restarted a month later.
The Eastern Mediterranean’s Growing Importance
The Levant Basin in the eastern Mediterranean is known for its substantial natural gas reserves. The Tamar and Leviathan gas fields, discovered in 2009 and 2010, hold an estimated 26 trillion cubic feet of natural gas. Over the past two decades, Israel has transformed from a net importer of oil and gas to an exporter, supplying countries such as Egypt and Jordan.
The region has gained further significance as Europe seeks to replace its gas supplies from Russia. Israel, Egypt, and Cyprus are planning the $6.5 billion Eastern Mediterranean pipeline to transport natural gas to Europe via Greece. However, the timeline for this project remains uncertain amid ongoing concerns about the Gaza conflict and the global shift away from fossil fuels.
Conclusion
The sale of Energean’s portfolio to Carlyle marks a significant reshaping of its strategic focus, allowing it to prioritize its core assets and enhance shareholder value. For Carlyle, the acquisition represents a robust entry into the Mediterranean’s burgeoning natural gas market, aligning with the broader goal of supporting gas development in Italy, Egypt, and Croatia.
