M&A WATCH- Energean is buying less of Edison’s oil and gas assets, but Egypt is still part of the transaction: Edison has agreed to cut the price at which it sell its oil and gas portfolio to Energean by more than 60% to USD 284 mn after its assets in Norway and Algeria were removed from the agreement, Energean said in a statement (pdf). Energean agreed in July 2019 to pay as much as USD 850 mn for the Italian company’s entire portfolio but last month asked for a revaluation in light of the coronavirus pandemic’s impact on the energy markets.

What has changed? The new assessment excludes the company’s Algerian assets worth USD 155 mn and its Norwegian subsidiary worth USD 200 mn. Edison has also agreed to a USD 111 mn discount to account for the recent weakening of oil and gas prices since the onset of the virus. The additional USD 100 mn payment conditional on gas production from the Italian Cassiopeia will now vary between USD 0-100 mn, depending on future Italian gas prices.

Edison’s Egypt portfolio remains unaffected: Edison’s Egypt oil and gas assets make up 24% of the company’s portfolio and include three producing concessions and six exploration concessions.

Energean is happy: “We are pleased to have agreed revised terms for our acquisition of Edison E&P … which I believe represents excellent value for our shareholders,” CEO Mathios Riga said.

Going forward: Energean has signed a USD 220 mn loan agreement with ING, Natixis, and Deutsche Bank and is waiting for final approvals from regulators before the company’s shareholders meet on 20 July. The company wants to close the transaction “as soon as possible” during the second half of 2020, the statement says.

Egypt is key to closing the transaction as the company noted it could be executed later this year; Regulatory approval from Egypt will be the final step, it added. The Oil Ministry approved the acquisition in principle last year.