Energy exploration and production company Energean plc (LSE: ENOG; TASE: ENOG), which holds the rights to the Israeli offshore Karish and Tanin gas fields, has announced the signing of a binding agreement for the sale of its portfolio in Egypt, Italy and Croatia to private equity firm Carlyle International Energy Partners. Carlyle will pay up to $945 million, of which $820 million is assured. Energean, which bought the portfolio in 2020 for $284 million, has more than tripled its value.
The assets are worth $1.67 billion, offset by commitments amounting to $1.27 billion of which $516 million is set aside for liquidation, the company said. These assets generated EBITDAX of $264 million in 2023.
The deal, which is due to close by the end of 2024, will be implemented in several stages. Energean will receive $504 million upfront on closing of the transaction, adjusted capital of $177 million and a $139 millionb vendor loan over six years, and $125 million dependent on production and commodity prices.
Energean will use the proceeds to repay a $405 million bond and pay shareholders a special dividend of $200 million.
The company said, 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."
Energean CEO Mathios Rigas said, "This deal represents an exciting new chapter for Energean. Today we have realized a significant return on the investment made when we acquired this portfolio over four years ago. The transaction delivers on our strategy and Energean’s ability to maximize value for our shareholders. It maintains our highly disciplined approach to capital allocation, as demonstrated by the accretive transaction metrics, coupled with an anticipated special dividend.
He added, "Looking ahead, this transaction unlocks management capacity and financial flexibility to drive future growth. Our focus will now be to create enhanced value from our Israel assets, and evaluate new opportunities that fit Energean’s key business drivers: paying a reliable dividend, deleveraging, growth, and our commitment to net zero."
Published by Globes, Israel business news - en.globes.co.il - on June 20, 2024.
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