Energean Oil & Gas (ENOG) will try to negotiate a change to its $850m (£694m) deal with Edison for its Mediterranean and North Sea oil and gas assets, after a separate arrangement to sell off part of the portfolio fell through.
Neptune Energy was set to buy theNorth Sea assets from Energean for $280m when the Edison deal went through. Energean now says it will try to get Edison to hold on to the Norway North Sea assets while keeping the licences in the UK North Sea area. Neptune did not give a reason for pulling out and will trigger a $5m break clause, although deals announced before the oil price crash have come into question as cash flow has fallen across the sector.
For example, Premier Oil (PMO) has said it would “re-engage with stakeholders” over the $871m deal to take over BP’s Andrew Area and Shearwater operations and buy Dana Petroleum’s 25 per cent stake in the Tolmount Area field. This is after it mounted a legal defence of the arrangement as its creditor Asia Research and Capital Management (ARCM) challenged it in the courts.
This is the second change to the Edison deal announced almost a year ago, with the Algerian assets removed in April after government sign-off proved too hard to get. Energean had previously said this approval was the sticking point for completion.
Following Neptune’s withdrawal, Energean has pushed out the expected completion date from the end of June to the end of September. This could be delayed again if Edison does not agree right away to Energean’s new terms. Edison said last year that the sale was done in order to move it out of a “highly volatile and capital-intensive segment”.
Alongside this deal, which would have given Energean 69,000 barrels of oil equivalent per day in production (boepd), the company is moving ahead with its Israel gas field developments. Its floating production, storage and offloading (FPSO) vessel is currently on its way to the Mediterranean, although its journey has been held up by Covid-19 restrictions. First gas for the project is expected in 2022.
