UK's Energean to sell its assets in Egypt, Italy and Croatia to Carlyle for $945 million

Oil and gas producer aiming to maximise value for shareholders, chief executive says

The Mari-B platform in the Mediterranean Sea, off the coast of Israel. AFP

London-listed oil and gas producer Energean has agreed to sell its portfolio in Egypt, Italy and Croatia to an entity controlled by 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, enabling the Mediterranean-focused company to pay a special dividend of $200 million and fully repay a $450 million corporate bond, Energean said on Thursday.

“The transaction delivers on our strategy and Energean’s ability to maximise value for our shareholders,” said chief executive Mathios Rigas.

“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, which operates the Karish offshore gasfield in the Israeli segment of the Mediterranean Sea, produced 123,000 barrels of oil equivalent per day (boed) last year. The company set a production guidance of 155,000 to 175,000 boed for this year.

The assets being sold, which can produce 47,000 boed, include interests in Cassiopea, Italy’s largest gasfield by reserves, and Abu Qir, one of Egypt's largest gas-producing hubs, Carlyle said.

Carlyle International Energy Partners, an oil and gas fund managed by Carlyle, will establish a stand-alone company in the Mediterranean through both organic growth and mergers and acquisitions, it 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,” said Bob Maguire, co-head of Carlyle International Energy partners.

Energean got the assets in Egypt, Italy and Croatia when it acquired Edison's oil and gas portfolio in 2020.

Energean provided 60 per cent of Israel’s domestic natural gas demand last year after the country ordered a temporary shutdown of the Chevron-operated Tamar gasfield in the aftermath of the October 7 attack. Production was restarted a month later.

The Levant Basin in the eastern Mediterranean has one of the world's largest natural gas reserves.

In 2009 and 2010, consortia comprising US and Israeli companies discovered the Tamar and Leviathan gasfields, which are estimated to hold 26 trillion cubic feet of natural gas.

Within the past two decades, Israel has switched from being a net importer of oil and gas to an exporter of the commodity to countries such as Egypt and Jordan.

In recent years, the region has become increasingly important, with Europe aiming to replace its gas supplies from Russia.

Israel, Egypt and Cyprus are expected to build the $6.5 billion Eastern Mediterranean pipeline that will transport natural gas to Europe via Greece.

However, the timeline for the proposed project remains uncertain amid concerns about the Gaza conflict and a global shift away from fossil fuels.