MEOG: NewMed, Capricorn merger

NewMed Energy announced this week that it would merge with UK-based Capricorn Energy in a shares-plus-cash deal that combines a wealth of gas-rich assets around the Mediterranean.

The agreement will see shareholders in Capricorn – formerly Cairn Energy – receive a special dividend of $620mn and the new entity will be listed under NewMed – formerly Delek Drilling – whose shareholders will hold an 89.7% stake in the new “MENA gas and energy champion”.

Delek rebranded as NewMed and listed in London in February while announcing plans to enter the Moroccan upstream as it continues to leverage its strong position in the Eastern Mediterranean.

NewMed’s assets comprise equal 45.33% stakes in Israel’s giant Leviathan gas field and the East Med Gas (EMG) pipeline stakes, as well as 30% in Cyprus’ 3.5 trillion cubic foot (10bn cubic metre) Aphrodite gas field and the onshore Israeli New Ofek and New Yahel licences. It will also receive royalties from the Karish and Tanin fields, which were sold to fellow London-listed Energean in 2016.

The Leviathan partners agreed in January to spend around $235mn to construct the EMG pipeline allowing for direct gas exports from the assets to Egypt.