Carlyle Establishes Mediterranean Oil & Gas Entity In A $945 Million Deal With Energean
Carlyle is set to establish a new oil and gas company focused on the Mediterranean, led by former BP CEO Tony Hayward. This follows Carlyle's agreement to acquire Energean's assets in Egypt, Italy and Croatia for up to $945 million.
Energean's main production comes from a gas facility offshore Israel. The company aims to expand into Europe, the Middle East, and Africa, especially where there is long-term policy support for gas and coal displacement. CEO Mathios Rigas stated, "It's a great deal for us, we're selling assets at three times the price we bought them."
Carlyle International Energy Partners (CIEP), the fund's non-US energy investment arm, will initially produce up to 47,000 barrels of oil per day across the three countries. The new company plans to increase output by upgrading existing assets and making further acquisitions in the Mediterranean region.
Bob Maguire, co-head of CIEP, mentioned that there is significant potential for these assets in terms of geology. He added that growing demand for natural gas in Egypt and Italy would support future investments.
Energean acquired these assets through its purchase of Edison's oil and gas portfolio in 2020. The deal includes a cash payment of $504 million. Energean will also pay a special dividend of $200 million and fully repay a $450 million corporate bond. The board expects to redefine its dividend policy once the deal completes by year-end.
Jefferies analysts estimated the net asset value of the resources being sold at $1.28 billion, suggesting a 26% discount in the deal. Energean's shares rose 2.7% by 1252 GMT following the announcement.
Production Outlook
Energean produced 123,000 barrels of oil equivalent per day (boed) in 2023. For 2024, it expects production in Egypt to increase to 29,000-31,000 boed from around 25,000 boed. CIEP's new company will draw production from Cassiopea, Italy's largest gas field by reserves, and Abu Qir, one of Egypt's major gas-producing hubs.
Over the past decade, CIEP has acquired, grown, and sold several oil and gas companies under Hayward's leadership. These include Neptune Energy in the North Sea, Assala Energy in Gabon, and SierraCol in Colombia. Hayward led BP for over three years before stepping down after the Deepwater Horizon disaster in 2010.
"This acquisition provides a strong platform to build a standalone regional champion in the Mediterranean," said Hayward, chairman designate of the new company. He highlighted that this region is one of the fastest-growing natural gas markets globally.
The deal allows Carlyle to enter the eastern Mediterranean gas market amid rising gas demand in Egypt and Europe's search for alternatives to Russian gas.
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