Energean strikes black gold in $750m EDF deal
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Energean Oil and Gas took a step towards the big league today with a $750m (£596m) acquisition of EDF’s oil exploration wing.
The company will take over Edison E&P in a deal which it claims makes it one of the biggest independent energy explorers in London.
Read more: Shares in Energean soar as Israeli energy minister hails major gas discovery
It won a race against, among others, London-listed Cairn Energy. Neptune Energy was also understood to be bidding.
The firm, which listed in London in March last year, has a market valuation of around £1.3bn. Its shares soared more than 11 per cent to 935p after the news today.
“I think it’s a fantastic deal. It is a transformational deal for Energean, it adds a great collection of assets to our book, with a strong production,” chief executive Mathios Rigas told City A.M.
The acquisition broadens Energean’s portfolio, which currently mainly focuses on two wells in Israel. The $1.7bn development aims to bring gas to the Israeli market by 2021.
It deal brings Energean’s reserves to 640m barrels of oil equivalent. Production will hit between 150,000 and 200,000 barrels if it manages to sell more gas to Israel, Rigas said.
But it also gives Energean non-core assets in the North Sea which Rigas said it will look to dispose of.
“I have my simple rule that says that we do business within three hours from flight time from Athens, to keep us focused and make sure that I can manage this business properly,” Rigas said.
The company has set a minimum target of $200m from the sale of the 30m barrels of North Sea reserves it is looking to sell.
Read more: Energean shares jump as drilling starts on offshore Israeli wells
“But this is no where near the price that we expect to get,” this is in order for us to do our financing,” the chief executive said.
It is the third acquisition for London and Tel Aviv-listed Energean.