Energean plc, a London-based independent exploration and production (E&P) company, announced the sale of its portfolio in Egypt, Italy, and Croatia to an entity controlled by Carlyle International Energy Partners (“Carlyle”) to focus on its assets in Morocco.
In an official statement published last week, Energean plc noted that the sale is for an enterprise value (EV) of up to $945 million. This represents more than a threefold return on the $284 million investment made in 2020. The transaction is expected to be immediately accretive to free cash flow.
Energean intends to use the cash proceeds to completely repay the $450 million PLC Corporate Bond and enable a special dividend of up to $200 million. The sale is anticipated to yield annual savings of at least $7.5 million in General & Administrative (G&A) expenses.
The same source further highlighted that the completion is expected by year-end 2024, subject to customary regulatory and antitrust approvals.
The company explained that “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 the recent farm-in to the Anchois field in Morocco.”
The strategy seeks to maximize asset monetization via a develop-and-operate model, boost free cash flow generation, and improve returns to shareholders, according to the same source.
The statement highlighted that the transaction optimizes the portfolio by divesting later-life assets and removing over 60% of the Group’s decommissioning liabilities. It also improves free cash flow generation in the short to medium term.
“This deal represents an exciting new chapter for Energean,” commented Matjios Rigas, Chief Executive Officer of a London-based company.
He said that “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.”
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