NEPTUNE Energy today announced it will pay £4 million to terminate a deal to buy Edison E&P’s UK and Norwegian subsidiaries from Energean Oil and Gas.
The agreement would have given Neptune Energy 25% of the 250 million barrels of oil equivalent Glengorm discovery in the North Sea.
It comes after the private-equity firm agreed with Energean to buy the UK & Norwegian portfolios of Edison E&P for up to £225 million back in October.
However, oil prices have dropped dramatically since the announcement of that transaction, which hinged on Energean completing its own £600m acquisition of Italian firm Edison E&P.
London-listed Energean hoped to finalise that deal — first announced in July — by the end of last year but has run into delays.
In April, Energean and Edison firmed up an agreement to exclude Algerian assets from their deal, which would be reduced in value by £120m.
Today, Energean said it was in talks to further amend the transaction, omitting Edison’s Norwegian business and it remained committed to its acquisition of Edison E&P, “and is working to complete the transaction as soon as possible.”
If the deal goes through, Energean would retain Edison’s UK portfolio, which includes the stake in Glengorm, a gas field operated by Chinese firm Cnooc, and 10% of the Isabella field.
Neptune already owns 50% of Isabella, having bought its stake from Apache in 2018.
A statement from Neptune today said: “Neptune will continue to pursue its pipeline of global development projects and other growth opportunities.”