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(Alliance News) - Energean Oil & Gas PLC on Thursday said it has bought the oil exploration and production unit of Italian electricity and natural gas company Edison SpA for a total consideration of USD850 million.
Shares in Energean Oil were up 10% at 929.00 pence each in London on Thursday morning.
The Mediterranean-focused company has bought Edison Exploration & Production SpA for USD750 million, with an additional contingent consideration of USD100 million payable following first gas from the Cassiopea development, offshore Italy.
The acquisition will add working interest 2P reserves of 292 million barrels of oil equivalent, with the enlarged Energean company to have a total of 639 million barrels of 2P reserves. Edison Exploration & Production's portfolio of assets includes producing assets in Egypt, Italy, Algeria, the UK North Sea and Croatia as well as development assets in Egypt, Italy and Norway.
Energean Oil will fund the initial USD750 million consideration through a USD600 million committed bridge loan facility and up to USD265 million of equity financing through a new share placing.
The share placing - to raise GBP211 million or around USD265 million - will be conducted through an accelerated bookbuild. Certain Energean directors have indicated their intention to participate in the placing up to GBP3 million.
"The acquisition of Edison E&P establishes Energean as the leading independent, gas focused E&P company in the Mediterranean with a mainly operated, low cost, gas weighted portfolio, with the capability, focus and team to prosper in our rapidly changing industry. It will diversify Energean into a multi-country, multi-asset, full-cycle E&P company with scale, material cash flows, significant growth and portfolio optionality," said Chief Executive Mathios Rigas.