CAIRO: A Citadel Capital fund will sell its interest in National Petroleum Company Egypt (NPC Egypt) to Calgary-based Sea Dragon Energy in a deal worth $147.5 million.
Private equity firm Citadel Capital said in a statement that its opportunity-specific fund Golden Crescent Investments signed on Jan. 6 a share purchase agreement to sell 100 percent of its interest in Egyptian upstream oil and gas company NPC Egypt.
Sea Dragon Energy, an exploration and development company, will pay cash and share consideration equal to $147.5 million, of which $60 million will be in cash. A total of 350 million common shares of Sea Dragon will also be issued to Golden Crescent at $0.25 per share.
When the transaction is completed — by late February or early March — Golden Crescent will hold at least 20 percent of the issued and outstanding common shares of Sea Dragon.
“This is the first of several transactions to which we have alluded in recent months that will see Citadel Capital rationalize its portfolio through the divestiture of some non-core investments,” said Citadel Capital Chairman and Founder Ahmed Heikal.
Sea Dragon has delivered $2.5 million into escrow as an initial deposit against the payment of the cash consideration, the statement added.
Citadel Capital owns 15.05 percent of Golden Crescent with management control while the balance of Golden Crescent’s equity is held by limited partners.
“The transaction’s upside potential for Golden Crescent shareholders includes the potential appreciation of the Sea Dragon common shares received as share consideration, as well as the after-payout net profits interest,” the statement read.
Golden Crescent will be granted a 20 percent after-payout net profits interest from production attributable to a field comprising part of an existing NPC Egypt development asset that Sea Dragon expects to bring onstream during the first quarter of 2013.
Golden Crescent will also be granted a 17.5 percent after-payout net profits interest from production attributable to the balance of the same development asset.
Sea Dragon is presently engaged in the exploration and development of two concessions in Egypt, including the NW Gemsa concession and the Kom Ombo concession.