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The $945 million acquisition of Carlisle, a portfolio of oil and gas projects from London listed energy, has hit the plan for the acquisition group to build an energy company focused on the Mediterranean.
The acquisition was set to be the latest advancement by the U.S. Head Office Fund into the upstream oil and gas sector. This continues to buy and sell production assets despite most of their competitors retreating from such investments.
The companies had set a Thursday deadline to close the transaction announced in June. Carlisle has failed to secure “specific regulatory approvals” in Italy and Egypt, and companies have failed to reach an agreement on an extension, Energy said in a statement Friday.
A Carlyle spokesman said the group “made a sincere, honest and extensive effort to close the deal, but ultimately failed to meet all the conditions.”
Carlisle had agreed to pay $820 million to its portfolio of assets in Egypt, Italy and Croatia. This includes $504 million in advance cash, subject to performance across the portfolio.
The major regulatory hurdles relate to Italy and the requirement that Carlisle provide financial guarantees to its Italian subsidiary, which ultimately owns the assets, said those familiar with the process.
Carlisle was planning to increase production from the project to 50,000 barrels of oil per day from around 34,000 BOE/D in 2023, and use that structure to make further acquisitions throughout the Mediterranean.
The new company was to be chaired by former BP CEO Tony Hayward, who also chairs Sierra Col, Carlisle’s Columbia-centric oil producer.
Despite the set-off, Private Equity Group is understood to be interested in other oil and gas assets in the region.
The flagship development of the Energean is a carish gas field off the coast of Israel, which began production in 2022 and pumped 112,000 BOE/Ds last year.
“We are disappointed that Carlisle has not been able to obtain the necessary approvals in Italy and Egypt, but we would like to reaffirm that this outcome will not change our strategic direction and our commitment to growth and shareholder returns.”
Energean shares rose 5% in trading on Friday morning.
