Mouse acquires cat

Amiram Barkat

Energean's acquisition of Edison E&P shocked the energy market, but the company's sterling record in Israel gives hope that it will succeed.

"A mouse acquired a cat" was the energy market's response to the report of Energean Oil and Gas's acquisition of Edison Energy & Production. The small Greek company, which was unknown until a few years ago, has acquired one of the oldest energy companies in Europe in a leveraged deal. Edison E&P, founded in Italy in the late 19th century, is active in various parts of Europe and the Middle East. Israel, however, has learned not to make light of Energean's management; its actions to date in the Israeli market have aroused great professional admiration.

Energean was able to make the most of the Karish and Tanin natural gas reservoirs, which it acquired from Delek Group and Noble Energy for $150 million in August 2016, including $40 million as an advance. The sale was in the framework of Israel's natural gas plan. Energean sold the gas from the two reservoirs at competitive prices, safeguarded for itself the largest private gas customers in Israel, raised £500 million in an offering in London (with dual registration on the Tel Aviv Stock Exchange), and recently announced another discovery, called Karish North.The ambitious project for developing Karish and Tanin is making rapid progress towards the commencement of gas supplies in 2021.

For this reason, although there were some raised eyebrows, the consensus today was that the acquisition was positive for Energean, and would put the company into a higher league. Edison E&P's activity in Egypt will help Energean enhance its presence in the Eastern Mediterranean Basin and enter new regions, such as Italy and the North Sea. The challenge for Energean's management will be integrating the business acquired from the Italian company.

Published by Globes, Israel business news - en.globes.co.il - on July 4, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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