The acquisition is set to expand Energean’s operations in the eastern Mediterranean gas hub, where Edison has a significant presence in Egypt’s rapidly-growing offshore basin.
The deal marks a bold bet by Energean Chief Executive Mathios Rigas as Energean develops the Karish and Tanin gas fields offshore Israel, where production is due to start early in 2021.
Energean agreed to pay an initial consideration of US$750 million and said it would be likely to pay an additional US$100 million after gas production from the Cassiopeia field in offshore Italy begins, which is expected in 2022.
Energean expects the expanded group to produce over 140 000 boe/d in 2021 and up to 200 000 boe/d once the Israeli fields reach full capacity.
Edison’s portfolio, which includes assets in Italy, Algeria, Croatia, the British and Norwegian North Sea as well as Greece, will add to Energean’s net working interest production of 69 000 boe/d. More than 75% of Edison’s production and reserves is gas.
Edison’s production generated US$434 million in core earnings last year, and is set to significantly boost Energean’s earnings which reached US$52.4 million in 2018, Energean said.
Energean also said it would finance the initial consideration for the deal through a short-term loan facility of US$600 million and up to US$265 million through equity financing which it completed on Thursday.
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