Energean's North Sea Sale to Neptune Collapses
Energean Oil and Gas's $280mn sale of North Sea assets to Neptune Energy has fallen through, both companies reported on May 19, prompting the former to seek a restructuring of a larger deal to buy Edison E&P.
Energean struck a $750mn deal last summer to acquire Edison E&P, the upstream arm of EDF-owned Edison. But it went on to sign a second agreement to sell Edison E&P's North Sea assets to Neptune.
The asset includes a 25% stake in the Glengorm gas condensate discovery in the UK central North Sea, as well as Edison E&P's shares in the Nova (15%) and Dvalin (10%) gas projects off the coast of Norway, and its interests in the smaller Scott (10.5%), Telford (15.7%), Tors (68%), Wenlock (80%) and Markham (3.1%) UK fields. Neptune was to pay $250mn in cash and make a further $30mn contingent payment depending on development plans.
Neptune and Energean both said in statements that they had "agreed to terminate the agreement." Neptune will pay a $5mn termination fee to Energean.
"Energean remains committed to its acquisition of Edison E&P, and is working to complete the transaction as soon as possible," the London-listed, east Mediterranean-focused company said.
Energean's main interest in Edison E&P was its assets in Algeria, Croatia and Egypt, which would complement its existing Mediterranean operations off Israel. However, in April it reported that Edison E&P's Algerian business had been excluded from the sale because of difficulties getting consent from local authorities. Resistance from the Algerian government has also just upended a deal between Occidental Petroleum as the seller and Total as the buyer.
In a subsequent statement, Energean said it was in discussions with Edison to amend the sales agreement even further, potentially excluding Edison E&P's Norwegian subsidiary. However, Energean said it would still pursue the purchase of Edison E&P's position at the UK's Glengorm discovery, and a 10% stake in the Total-operated Isabella gas find made off the UK in March 2020.
Neptune, which operates in the Dutch, Norwegian and UK waters of the North Sea, said it would "continue to pursue its pipeline of global development projects and other growth opportunities."