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. Key new developments confirmed:
- Significant reductions to consideration, net consideration now expected to be just $178 million.
- Energean will add UK North Sea to its expanded portfolio including interests in two recent, material gas discoveries.
- EGM confirmed for 20 July 2020.
- Energean will gain operations in Egypt, Italy, the UK, Croatia and Malta, with 226 mmboe 2P reserves and 2C resources. The assets produced 58.7 kboed in 2019 and generated $264 million of EBITDAX. Edison’s operations in Norway and Algeria will remain with the seller.
- Energean has negotiated a total of $466 million of discounts for its acquisition of Edison E&P, the headline cost of which has been reduced to $284 million from an initial $750 million.
- After working capital, Energean expects to pay just $178 million for its acquisition of Edison E&P.
- Energean expects to pay a contingent payment on first gas production from Cassiopea. If gas prices don’t recover from current levels, no contingent payment will materialise.
- 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 has signed a new $220 million Reserve Based Lending facility with ING, Natixis
and Deutsche Bank. Combined with the equity raised in 2019, the transaction and all working capital requirements of the company are fully-funded.
- Energean looks forward to completing the transaction later this year, and to integrating the teams and portfolios to drive value creation.
Retaining Extensive Growth Portfolio in the UK North Sea
As announced on 19 May, Energean will now retain the UK subsidiaries within the perimeter of the transaction including a 25% interest in the Glengorm discovery and a 10% interest in the Isabella discovery
The UK subsidiaries include non-operated interests in the Glengorm and Isabella gas discoveries which could add a further 85 MMboe of net gas condensate resources
- One of the biggest discoveries in the UK North Sea in the last decade
- Contains gross estimated resource of 250 mmboe - based on operator estimates
- Two-well appraisal programme is scheduled to commence in 4Q 2020 / 1Q 2021
- Represents an attractive source of resource upside for the enlarged group’s portfolio.
- Discovery announced in March 2020.
- An appraisal programme is expected on the Isabella discovery in 4Q 2020 / 1Q 2021.
- Potential to contribute additional near term value creation potential.