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Written by Ron Busso
LONDON (Reuters) – Carlyle will establish a new oil and gas company focused on the Mediterranean region led by former BP (NYSE:) CEO Tony Hayward after the private equity fund agreed to acquire Energean’s assets in Egypt, Italy and Croatia for up to To 945 million dollars. The companies said Thursday.
The deal will allow Carlyle to benefit from the gas market in the eastern Mediterranean, which has grown rapidly in recent years as demand for gas in Egypt rises and Europe searches 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 through modernization of existing assets and through other acquisitions in the Mediterranean, CIEP co-president Bob Maguire told Reuters.
“There is great scope to exploit these assets from a geological perspective,” McGuire said, adding that the growing demand for them in Egypt and Italy will support future investments.
Energean, whose main production comes from a gas facility off the coast of Israel, will also look to expand in the wider EMEA region, especially where there is long-term political support for gas and coal replacement, Energean CEO Matthews Rigas told Reuters. .
“It is a great deal for us, as we are selling the assets for three times the price we bought them for,” he said.
Energean shares rose 2.7 percent by 1252 GMT.
Jefferies analysts estimated the net asset value of the resources Energean is selling at $1.28 billion, implying a 26% discount in the deal.
London-listed Energean acquired 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 would pay a special dividend of $200 million, in addition to the full repayment of $450 million in corporate bonds.
Energean’s board expects to redefine its dividend policy following completion of the transaction, which is expected to close by the end of the year.
Energean produced 123,000 barrels of oil in 2023. For 2024, it expected production in Egypt to rise to 29,000 to 31,000 barrels of oil from about 25,000 barrels of oil.
For the new CIEP, production will come from interests in Cassiopeia, Italy’s largest gas field in terms of reserves, and Abu Qir, one of Egypt’s largest gas production centres.
Over the past decade, CIEP has 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 an independent regional champion in the Mediterranean region, one of the fastest growing natural gas markets in the world,” Hayward, chairman-designate of the new company, said in a statement.
