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Monday, June 29, 2020
Energean announced an update on its acquisition of Edison E&P assets which include it holdings in Egypt. Following completion, Energean will have reserves and resources in excess of 800 mmboe, that are substantially weighted towards gas and a clear path to producing more than 130 kboed, making it one of the largest E&P companies listed on the London Stock Exchange.
Energean says this is a transformational deal for the company providing immediate and material increases in cash flow and access to future growth opportunities.
Energean entered into a conditional sale and purchase agreement to acquire Edison E&P from Edison S.p.A. for $750 million on the 4 July 2019. Since then, both parties have agreed several amendments to the deal which has resulted in a total of $466 million of discounts for the acquisition
The net acquisition price is less than $1 per barrel versus $2.6/boe of 2P+2C when the deal was initially agreed. After working capital, Energean expects to pay just $178 million for the acquisition which is expected to close later this year.
Mathios Rigas, Chief Executive, Energean commented: “We are pleased to have agreed revised terms for our acquisition of Edison E&P, which will now exclude the Algerian assets and Norwegian subsidiary, and for which we have agreed $466 million of total reductions to the original consideration. I look forward to completing the transaction, which I believe represents excellent value for our shareholders and also enhances our material, gas-focused platform for value creation in the Eastern Mediterranean. Upon completion, our core focus, alongside the Karish project, will be integrating our teams and portfolios, which will further secure our long-term, resilient cash flow profile and option-rich portfolio.
“Following completion, around 70% of our production will be sold under long-term gas sales agreements that insulate our future revenues against oil price volatility. We will continue to own and operate the majority of our asset base and are well-funded for all of our projects.
“Our financial and operational positioning will ensure that we can continue to grow the business but also respond quickly and appropriately to changes in the macro environment, if needed, to protect our business and our shareholders.”
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