Energean PLC has announced the strategic sale of its portfolio in Egypt, Italy, and Croatia to an entity controlled by Carlyle International Energy Partners for an enterprise value of up to $945 million. The sale is expected to be completed by the end of 2024, subject to regulatory and antitrust approvals. The transaction is expected to be immediately accretive to free cash flow and will enable Energean to repay its corporate bond and facilitate a special dividend of up to $200 million.
The sale allows Energean to rationalize its portfolio and focus on its gas-weighted, gas-development strategy, particularly in Israel and Morocco. It also optimizes the portfolio by divesting later life assets, reducing decommissioning liabilities, and improving free cash flow generation in the short to medium-term. Energean will maintain and seek to grow its footprint in the Mediterranean and beyond, focusing on creating a Carbon Storage Hub in Greece and the wider Mediterranean region.
Following the sale, Energean's scope 1 and 2 emissions intensity will reduce by around 40% to ~5 kgCO2e/boe, accelerating its 2035 target by 10 years. Mathios Rigas, CEO of Energean, expressed excitement about the deal, highlighting the significant return on investment and the company's ability to maximize value for shareholders. He emphasized the company's disciplined approach to capital allocation and its focus on creating enhanced value from its Israel assets.
Carlyle International Energy Partners expressed delight in acquiring the high-quality assets, emphasizing their belief in the central role of gas development in the energy transition. The transaction terms include an upfront cash consideration upon closing, working capital/cash adjustments, a vendor loan, and capped contingent consideration linked to Italian oil and gas production over a specified period.
This strategic sale marks a significant development for Energean, allowing the company to refocus its efforts on its core gas development strategy while reducing emissions intensity and accelerating its decarbonization plans.