Edison has signed an agreement for the sale of 100% of its oil and natural gas unit Edison Exploration and Production (E&P) to Energean Oil and Gas for $750m.

The agreement comes after Edison’s Board of Directors approved the transaction. With the acquisition, Energean will be able to expand its operations in the growing eastern Mediterranean gas hub, with a significant presence in Egypt’s offshore basin.

Edison noted that an additional $100m fee is expected at the start of production of the Cassiopea gas field offshore Italy, expected in 2022. Additionally, the company will be entitled to royalties associated with further potential developments in Egypt that would bring the aggregate value close to $1bn.

Edison E&P has a portfolio of around 90 licences in nine countries in the Mediterranean and in the north of Europe corresponding to the production of 49,000 barrels per day as of 31 December 2018. It also uses the staff of the Egyptian operating company Abu Qir Petroleum (AQP).

Energean said that Edison’s portfolio includes assets in Italy, Algeria, Croatia, the British and Norwegian North Sea, as well as Greece and adds net working interest production of 69kboed/d. The company proposes to guarantee a future of development for the E&P business area.

The transaction is subject to the necessary approvals, including that of the Ministry of Economic Development, and is expected to close by the end of 2019.

With the financial resources derived from this operation, Edison will support its strategic development plan which envisages significant investments in Italy during 2019-2021. The company aims to produce 40% of its energy from renewable sources by 2030.