EDF Is Selling Their Oil & Gas Assets

Energean Oil & Gas Plc have agreed to purchase the oil and gas business unit of Electricite de France SA’s Italian as much as $850 million. The deal is substantially broadening the Greek company’s geographic footprint.

Energean will pay upfront $750 million for operational assets located in Egypt, Italy, Algeria, the North Sea and Croatia per the statement on the Tel Aviv Stock Exchange, of of two stock exchanges where its stock trades.

It is Energean’s first major acquisition since listing in London last year. It is also expanding its production and revenue streams.

The company is also acquiring assets under development in Egypt, Italy and Norway. They also have an option to purchase an additional $100 million following first gas from the Cassiopea development of Italy.

Per Bloomberg reports Energean was bidding for the same oil and gas business of EDF unit Edison SpA, where Neptune Energy and Warburg Pincus’s Apex International Energy had their own interests.

EDG was looking to sell their assets for $2 billion.

We see this deal as positive to the Energean investment case, diversifying the existing production base at attractive multiples,” Michael Alsford, an analyst at Citigroup Inc., said in a note to clients.

The shares of Energean rose as much as 13% in London and were trading up 10% at 927 pence as of 12:52 p.m. local time. EDF shares slipped 0.8% in Paris.

Edison will be entitled to royalties associated with further potential developments in Egypt. With an approximately $1 billion it would give Edison the cash to make significant investments in Italy. It also will broader their portfolio.

Parent company EDF has a program to sell as much as 3 billion euros of assets this year and next, following 10 billion euros of divestment in the previous four years. Earlier this year, EDF sold its 25% stake in Swiss power producer Alpiq for about 489 million Swiss francs ($496 million).