Capricorn Energy has struck a deal to be acquired by gas-rich Israeli independent NewMed, a transaction that comes with a $620 million cash dividend and kiboshes a much-criticised agreement that would have seen it merge with Tullow Oil.

In June, after heavily indebted Tullow unveiled a proposal to buy London-listed Capricorn, many shareholders in Capricorn rose up against the plan, with one investor describing it as “inexplicable”.

Capricorn hammered another nail into the coffin of that earlier deal, saying that after agreeing terms with London-listed NewMed — which has a major stake in the huge Leviathan gas field offshore Israel — it has withdrawn its intention to recommend the Tullow agreement.