Energean Streamlines Global Operations to Zero In on Morocco

Monday 24 June 2024 - 08:45

London-based Energean PLC divests Egyptian, Italian, and Croatian portfolios in a $945 million deal, aiming to sharpen its focus on Moroccan assets.

In a strategic move poised to reshape its global footprint, Energean PLC, headquartered in London, has announced the sale of its portfolios in Egypt, Italy, and Croatia to Carlyle International Energy Partners. The transaction, valued at up to $945 million, marks a significant shift in the company's operational focus towards its Moroccan assets.

The deal, which represents a more than threefold return on Energean's $284 million investment made in 2020, underscores the company’s strategic pivot towards its expanding Moroccan operations. The divestment is expected to immediately enhance free cash flow, positioning Energean for sustained growth in the region.

Energean’s CEO, Mathios Rigas, highlighted the strategic advantages of this move. "This deal represents an exciting new chapter for Energean," Rigas remarked. "We have realized a significant return on our investment and taken a major step forward in our strategy to focus on our gas-weighted, gas-development assets, particularly in Morocco."

The company plans to utilize the proceeds from the sale to fully repay its $450 million PLC Corporate Bond and to facilitate a special dividend of up to $200 million. This financial maneuver is projected to yield at least $7.5 million in annual General & Administrative (G&A) savings.

Rigas emphasized the broader implications of the transaction, stating, "This transaction underscores our commitment to maximizing value for shareholders and maintaining disciplined capital allocation." According to Energean, the sale will enable the company to streamline its portfolio, concentrating on gas-development projects such as the Karish field in Israel and the Anchois field in Morocco.

Furthermore, the divestment will allow Energean to offload later-life assets, thereby eliminating over 60% of the Group’s decommissioning liabilities and enhancing short- to medium-term free cash flow. The company also anticipates a 40% reduction in its scope 1 and 2 emissions intensity, accelerating its 2035 target by a decade.

Energean remains committed to maintaining and expanding its presence in the Mediterranean and the broader Europe, Middle East, and Africa (EMEA) region, particularly in areas with robust policy support for gas and coal displacement. Additionally, the company aims to establish a carbon storage hub in Greece and the wider Mediterranean region through its EnEarth subsidiary.

"This transaction unlocks management capacity and financial flexibility to drive future growth," Rigas stated. "Our focus will now be to create enhanced value from our Israel assets and evaluate new opportunities that align with our key business drivers: reliable dividend payment, deleveraging, growth, and our commitment to Net Zero."

As Energean embarks on this new chapter, the company’s strategic realignment towards Morocco and other key regions underscores its commitment to sustainable growth and shareholder value.