Energean, which signed a $850m deal to acquire Edison E&P, has agreed to sell some of the latter’s assets to the UK-based Neptune Energy

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Image: Energean’s CEO Mathios Rigas signing the agreement with Neptune Energy executive chairman Sam Laidlaw. Photo: courtesy of Energean Oil and Gas plc.

Neptune Energy has agreed to acquire the UK and Norwegian upstream assets of Edison Exploration & Production (Edison E&P) from Energean Oil and Gas for up to $280m.

The consideration includes an initial cash payment of $250m and a contingent payment of up to $30m. The contingent payment will be made following the approval of the field development plan by the UK Oil and Gas Authority for the Glengorm discovery on incremental undiscovered volumes, by the end of 2025, or the Isabella license by the end of 2026.

The closing of the transaction is subject to the completion of Energean’s previously announced $850m acquisition of Edison E&P from Italian energy company Edison.

Neptune Energy in Norway will acquire 15% stake in Nova gas development project

Through the deal, Neptune Energy in Norway will be acquiring 15% stake in the Nova gas development project and 10% in the Dvalin gas development project. In the UK, the company will acquire a 10.5% stake in the producing Scott field, 15.7% in the Telford field, 68% in the Tors field, and 80% in the Winlock field.

Neptune Energy will also acquire a 3.1% stake in the Markham asset, 25% in the Glengorm discovery, and 10% in the Isabella licence.

The UK-based oil and gas company said that the portfolio will give it material growth in contingent resources, an estimated 30 million barrels of oil equivalent (mmboe) of 2P reserves, and near term production in key areas of the North Sea close to infrastructure.

Neptune Energy CEO Jim House said: “This is an important bolt-on acquisition that is in line with our strategy of consolidating our position in key areas with high quality and complementary assets.

“The assets are an excellent fit with our North Sea portfolio. Nova and Dvalin are expected to add 12,000 boepd to our production base over the next two years and Glengorm adds the significant potential for the longer term.”

For Energean, the sale aligns with its strategy of becoming the largest independent gas-focused E&P company in the Mediterranean Sea, and its intention to offload non-core assets.

Energean chief executive Mathios Rigas said: “The acquisition of Edison E&P established Energean as the leading independent, gas-focused E&P Company in the Mediterranean with a mainly-operated, low-cost, gas-weighted portfolio and a highly experienced team to prosper in our rapidly changing industry.

“At the time of announcement, we committed to our Shareholders that we would seek to dispose of non-core assets that do not adhere to our strategy. I am delighted to be able to make this announcement today, which demonstrates our commitment and capability to deliver upon our stated goals.”

Subject to customary regulatory approvals, the transaction is expected to be closed in early 2020.