Energy exploration and production company Energean plc (LSE: ENOG; TASE: ENOG), which owns the rights to operate the Israeli Karish and Tanin offshore gas fields, announced the signing of a binding agreement to sell its investment portfolio in Egypt, Italy and Croatia to private equity firm Carlyle International. Energy Partners. Carlyle will pay up to $945 million, including $820 million guaranteed. Energean, which bought the portfolio in 2020 for $284 million, more than tripled its value.
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The company said that the value of assets amounts to $1.67 billion, offset by liabilities amounting to $1.27 billion, of which $516 million has been allocated for liquidation. These assets generated EBITDAX of $264 million in 2023.
The deal, scheduled to close by the end of 2024, will be implemented in several phases. Energean will receive a $504 million upfront payment upon closing of the deal, $177 million in adjusted capital and a $139 million seller loan over six years, with $125 million dependent on production and commodity prices.
Energean will use the proceeds to repay $405 million in bonds and pay a special dividend to shareholders of $200 million.
The company said that this sale enables Energean to rationalize the portfolio and focus on its gas-weighted gas development strategy, which is supported by the Karish field in Israel and the recent farm in the Anchois field in Morocco. This strategy aims to maximize asset monetization (through a development and operation model), and generate free cash flow and returns to shareholders.
“This transaction represents an exciting new chapter for Energean,” said Matthews Rigas, CEO of Energean. “Today we have achieved a significant return on the investment we made when we acquired this portfolio more than four years ago. This transaction underscores our strategy and Energean’s ability to maximize value.” For our shareholders, it maintains our highly disciplined approach to capital allocation, as evidenced by cumulative transaction metrics, along with expected special dividends.
He added: “Looking to the future, this transaction will unlock the management capacity and financial flexibility to drive future growth. Our focus will now be on creating enhanced value from our assets in Israel, and evaluating new opportunities that fit Energean’s key business drivers: reliable dividend payment, debt reduction, growth and our commitment to net zero. Zero.”
Published by Globes, Israel Business News – en.globes.co.il – on June 20, 2024.
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