Carlyle launches energy asset buying spree with Romanian deal

Thu Mar 26, 2015 11:09am EDT
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LONDON, March 26 (Reuters) - Private equity firm Carlyle Group said on Thursday it had agreed to buy Sterling Resources' Romanian gas fields, days after it raised $2.5 billion to snap up energy assets around the world.

Canadian-listed Sterling Resources will receive $42.5 million from Carlyle's international energy fund for the sale of its entire Romanian operations as it struggles to stay afloat following the recent drop in oil prices.

The fund, Carlyle International Energy Partners (CIEP), announced last Friday that it had raised $2.5 billion from 160 investors to buy energy assets outside the United States.

CIEP managing director Marcel van Poecke told Reuters he expected the fund to make up to 12 investments over the next two to three years around the world.

"A large part of the investments will be done this year and next year because of the market conditions. Most will be invested in upstream in Europe, Africa, Southeast Asia and Latin America," he said.

The halving of oil prices since last June has hit Sterling's revenue. Following the Romanian deal, which includes four licence blocks in the Black Sea, the oil and gas producer's focus will shift mainly to Britain as it seeks to sell other assets or be bought while attempting to refinance debt.

"We expect that this refocusing and simplification of our portfolio will make the company a more attractive candidate for a merger or corporate sale, benefiting all stakeholders," said Sterling Chief Executive Jake Ulrich.

Sterling holds a 30 percent stake in the Breagh gas field in the North Sea, which is operated by RWE. RWE has itself sold its stake to Russian billionaire Mikhail Fridman's LetterOne fund..

In an investor presentation earlier this month, Sterling said it would pursue the sale of its Breagh interest to facilitate refinancing of debt and improve liquidity. (Reporting by Ron Bousso; Editing by Pravin Char)