Israeli oil and gas firm Energean (ENOG) was the top riser in the FTSE 250, up 13.2% to 502p after it announced that it had agreed to acquire Edison E&P at a revised price of $284 million, down from the original sum of $740 million, after the latter’s Norwegian assets were excluded from the takeover deal.

Investors reacted positively to the reduction in outlay on the deal which is still expected to see a significant increase in the company’s reserves and production.

The reduction of $466 million to the initial consideration included a $155 million reduction relating to the exclusion of the Algerian asset from the transaction perimeter; $200 million reduction relating to exclusion of the Norwegian subsidiary from the transaction perimeter; and $111 million of additional reductions relating to the macro environment.

Edison’s UK North Sea subsidiaries, which included interests in the large Glengorm and Isabella gas condensate discoveries, would now be retained within the perimeter of the transaction, further supplementing the growth potential of the enlarged group, the company said.

The change in the terms of the deal has reduced the capital expenditure outlook for 2020 to $760 million to $780 million from $840 million.

Energean said it would have working interest 2P (proved and probable) reserves plus 2C (contingent) resources of more than 800 million barrels of oil equivalent (boe), and guidance for 2020 output was 44,500-51,500 boe per day.

‘Following completion, around 70% of our production will be sold under long-term gas sales agreements that insulate our future revenues against oil price volatility,’ the company said.

The transaction will be put to a shareholder vote at an EGM on 20 July.

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Issue Date: 29 Jun 2020