Carlyle is set to form a new Mediterranean-focused oil and gas company after agreeing to acquire Energean's assets in Egypt, Italy, and Croatia for up to $945 million. This new venture will be led by former BP CEO Tony Hayward.
The acquisition allows Carlyle to tap into the burgeoning eastern Mediterranean gas market, driven by soaring gas demand in Egypt and Europe’s search for alternatives to Russian gas. Carlyle International Energy Partners (CIEP), the private equity fund’s non-U.S. energy investment arm, will oversee the new company, which will initially produce up to 47,000 barrels of oil per day across the three countries.
Energean, which primarily operates a gas facility offshore Israel, plans to expand into Europe, the Middle East, and Africa, particularly in regions with long-term support for gas over coal. “It’s a great deal for us, we're selling assets at three times the price we bought them,” said Energean CEO Mathios Rigas.
Energean’s shares rose by 2.7% following the announcement. Jefferies analysts estimated the net asset value of the sold resources at $1.28 billion, suggesting a 26% discount on the deal. Energean had acquired these assets through its 2020 purchase of Edison's oil and gas portfolio.
The transaction includes a $504 million cash payment, after which Energean plans to issue a $200 million special dividend and fully repay a $450 million corporate bond. The board will also redefine its dividend policy post-completion, expected by year-end.
Energean produced 123,000 barrels of oil equivalent per day (boed) in 2023 and expects production in Egypt to rise to 29,000-31,000 boed in 2024, up from around 25,000 boed.
For CIEP's new entity, production will stem from interests in Italy's largest gas field, Cassiopea, and Egypt’s Abu Qir, a significant gas-producing hub. Over the past decade, CIEP has developed and sold several oil and gas companies, including Neptune Energy in the North Sea, Assala Energy in Gabon, and SierraCol in Colombia, all led by Hayward.
