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TUWOY's Merger Plans Ditched by Capricorn for Israel's NewMed

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The British oil and gas exploration and development company — Capricorn Energy — has abandoned its merger plans with Tullow Oil Plc (TUWOY - Free Report) in favor of a deal with the Israeli natural gas group NewMed Energy.

The all-stock deal between Capricorn and NewMed will lead to the creation of an Israel-Egypt-focused gas producer. This will include NewMed's interest in Israel's giant Leviathan offshore field at a time when Europe is hustling for non-Russian energy supplies.

Per the deal, NewMed shareholders will get 2.337344 new Capricorn shares for each of their existing units. Capricorn shareholders will hold about 10.3% of the combined entity with NewMed stockholders, along with the partnership’s current general partner owning the remaining interest.

Additionally, Capricorn shareholders will also receive a cash special dividend of around $620 million before the business combination.

This announcement comes weeks after Tullow stated that it was “fully committed” to the earlier declared all-stock deal with Capricorn. The deal would have led to the formation of a £1.4 billion Africa-focused energy company despite Capricorn looking for alternatives following shareholders’ opposition to its merger with Tullow.  

The Capricorn-NewMed merger is anticipated to be wound up in the first quarter of 2023, subject to shareholders’ approval from both firms.

The U.K.-based, West Africa-focused Tullow Oil operates as an independent oil and gas exploration and production company in Europe. The company has a large portfolio of exploration and production assets, with a focus on balanced long-term growth. It is headquartered in London, the United Kingdom.

Tullow currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include HF Sinclair (DINO - Free Report) , Earthstone Energy and Murphy USA (MUSA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HF Sinclair’s 2022 earnings has been revised about 18.1% upward over the past 60 days from $12.07 per share to $14.26.

The consensus estimate for DINO’s 2022 earnings is pegged at $14.26 per share, up 838.2% from the year-ago earnings of $1.52.

The Zacks Consensus Estimate for Earthstone’s 2022 earnings is pegged at $5.85 per share, indicating an increase of about 368% from the year-ago earnings of $1.25.

ESTE beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 27%.

The Zacks Consensus Estimate for Murphy USA’s 2022 EPS has been revised upward by about 14% over the past 60 days from $21.39 to $24.38.

MUSA beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being 49%.


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