Page 14 - Euroil Week 44 2020

EurOil PIPELINES & TRANSPORT EurOil

Galp offloads 75% stake in gas distribution

business for €368mn

PORTUGAL PORTUGUESE energy firm Galp Energia has its losses in the third quarter to €23mn, from
agreed to sell its gas distribution arm to German €52mn in the second quarter. Its income was still
Galp will sell 75% of financial group Allianz Capital Partners (ACP) smaller than the €101mn in profit it generated in
its distribution business for €368mn ($435mn). the third quarter of 2019, however.
to Germany’s Allianz Under the transaction, Galp will sell 75% of Like other oil and gas companies, Galp
Capital Partners. Galp Gas Natural Distribuicao (GGND) to ACP, blamed the year-on-year decline on weaker
leaving it with less than 2.5%. GGND consists of oil and fuel prices, which more than offset the
nine regional gas distributors with a combined impact of a 6% growth in its output.
network of 13,000 km of pipelines supplying ACP issued its own statement hailing the deal
1.1mn households. with Galp as its “first direct infrastructure invest-
Galp said the deal was “crystallising value ment in Portugal.” It noted that nearly 95% of
from a non-core asset,” valuing GGND at 13 GGND’s network could be used for distributing
times its projected EBITDA this year. It should be hydrogen, synthetic gas or biomethane.
closed in the first quarter of next year, after reg- CEO Christian Fingerle said the group
ulatory and third-party approvals are secured. looked forward “to supporting jointly with
Galp shed a 22.5% stake in the business to GGND and our partners this critical infrastruc-
Japanese firms Marubeni and Toho Gas in 2016, ture which contributes to the decarbonisation
raising €138mn. It was first reported to be seek- plan of the Portuguese economy and can become
ing a further divestment by Bloomberg in March. an important enabler for the energy transition
The Portuguese firm, which operates across towards renewable gases while delivering long-
the upstream, midstream and downstream sec- term, risk adjusted returns for our insurance cus-
tors, as well as in renewables, was able to narrow tomers and investors.” ™

INVESTMENT

i3 shares rise after UK junior “envisages”

maiden dividend

UK SHARES in London-listed junior i3 rose on discussions with a counterparty regarding a
November 2 after the company said it “envis- potential farm-in to the Serenity discovery.”
i3 also said it was in aged” paying its maiden dividend in the first Terms for the deal are being negotiated, and i3
talks to farm out a quarter of 2021. said it would report to the market once an agree-
stake in the Serenity oil The dividend will amount to up to 30% of free ment had been reached.
discovery. cash flow (FCF) and based on its current share In addition, i3 said it expected to begin trad-
price, i3 anticipates a dividend yield of over ing on the Toronto Stock Exchange on Novem-
10% on an annual basis. Its stock price rose by ber 6, giving it dual-listed status. The move
8% in the early hours of trading, to GBP0.0438 comes after it completed several acquisitions in
($0.0565). Canada this year. In September it bought Gain
i3 also said it was in talks to farm out a stake Energy and on October 30 it took over Toscana
in the Serenity oil discovery in the UK’s outer Energy.
Moray Firth area. Production from the Gain and Toscana fields
i3 made the “transformational” oil discovery had averaged 9,407 barrels of oil equivalent per
in October last year, reporting that well results day (boepd) in October, i3 said.
had lived up to pre-drill estimates of nearly “We are delighted to announce the closing of
200mn barrels of oil in place (OIP). Its share the Toscana acquisition and with it the immi-
price soared 60% on the announcement, but has nent listing of i2 on the TSX,” CEO Majid Shafiq
shed far more value since the oil price collapse. said in a statement. “This and the acquisition of
The company has been searching for a the Gain assets in September completes the first
farm-in partner to take the project forward. In phase of our Canadian business plan.”
February it said that unnamed suitors were eval- i3 aims to fully integrate and optimise its
uating the opportunity. operations to maximise margins and recovering
In its latest update, i3 said it was “in gas prices in Canada, Shafiq said. ™

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