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Deal List 2015

Five Firms Advise on Carlyle Acquisition of Romanian Business of Sterling Resources

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Herbert Smith Freehills has advised Carlyle International Energy Partners (CIEP), part of the Carlyle Group, on its agreement to purchase the entire Romanian business of Sterling Resources. Local law advice to Carlyle was provided by Pachiu & Associates in Romania, and Osler, Hoskin & Harcourt in Canada. Musat & Asociatii advised Sterling Resources, along with Burness & Paull. The acquisition includes license blocks 13 Pelican, 15 Midia, 25 Luceafarul, and 27 Muridava, all located in the Romanian Black Sea.

The purchase will be structured as a corporate acquisition of Sterling's wholly-owned subsidiary Midia Resouces SRL and is expected to complete by the end of the second quarter of 2015, subject to typical conditions, including statutory Romanian approvals and the consent of certain participants in the Romanian concessions. 

In addition to the initial consideration paid for the acquisition of Midia, CIEP will also fund the future development of the assets, which is expected to constitute a sizable inward investment into Romania. The development project will focus on drilling, infrastructure construction, production and sale of gas to market. The current Midia team will remain in place, with additional resources added to deliver this important project, with the aim of the company becoming a significant regional energy player in the near term.

Marcel Van Poecke, the Head of Carlyle’s international energy team, said: “We are investing in the future of energy for South East Europe. Our team’s expertise and resources can help deliver the production capacity and infrastructure needed to ensure the company becomes a significant regional gas producer.”

CIEP is a USD 2.5 billion fund that invests in global oil and gas exploration and production mid- and downstream and oil field services, refining, and marketing in Europe, Africa, Latin America, and Asia. 

The Herbert Smith team was led by Corporate Energy Partner Anna Howell, Senior Associate Laura Hulett, and Associates Ian Williams and Natalia Camargo Barros, with assistance by Tax Partner Isaac Zailer, Finance Partner Thomas Bethel, Senior Associate Heather Woodward, and Associate Camilla Grundy. Anna Howell commented: "We were extremely pleased to work with Carlyle on what is a strategically important investment for their energy investment platform.  This deal demonstrates that there are buyers for quality oil & gas assets even with the drop in the oil price. “  

Sterling Resources was advised by Musat & Asociatii Partner Cleopatra Leaahu and Tax Partner Razvan Graure, as well as the Fidexpert, the Romanian accounting firm.

In 2014, Musat & Asociatii advised Sterling Resources on its sale of 65% of it shares in the offshore Midia XV deep water perimeter (originally reported on by CEE Legal Matters on February 3, 2014).  

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