Eni and Var Energi to buy Neptune Energy in £3.9bn mega-deal
Eni and Var Energi (Var) have reached an agreement to acquire oil and gas specialist Neptune Energy in a deal that values the company’s assets at £3.9bn ($4.9bn).
Neptune’s Norwegian assets will be snapped up by Var, while Eni will take on the rest of its global portfolio – aside from the company’s German onshore oil assets, which will continue to be owned and operated by the ultimate existing Neptune shareholders as a standalone group.
The global business overseen by Eni is valued at £2.1bn ($2.6bn), while the Norwegian arm taken up by Var has a £1.8bn ($2.3bn) value.
The transactions will be funded through available liquidity.
It is expected that the takeovers will not be closed until in first quarter of next year, as it is conditional on approval across at least eight countries.
The boards of the three firms believe the proposed combinations will enhance their financial capabilities to provide energy security and participate in the energy transition.
Neptune operates the Cygnus field in the North Sea, the UK’s largest single gas producing site, and the deal makes Eni a top 10 player in the North Sea.
Last year 2022 Neptune produced 15,000 barrels of oil and gas equivalent per day (boepd) – and is currently developing the operated Seagull field which is due to come onstream later this year.
Meanwhile Eni’s output from the UK was 44,000 boepd – with the company
It is potentially the first sign of consolidation in the domestic oil and gas market – with firms merging existing assets to grow their companies.
Neptune deals expands Eni’s global footprint
Alongside the growth in its North Sea operations, Eni will benefit from a greater global footprint, as Neptune has an extensive portfolio of gas operations in Europe, North Africa, Indonesia and Australia – contributing to its £940m ($1.2bn) revenues last year.
Neptune is particularly attractive to Eni due to this wider portfolio, which means it has been less hampered by the windfall tax and toughened investment climate in British waters.-
Meanwhile, the latest developments further reduce China’s influence in the North Sea, a growing matter of concern in Westminster.
Neptune, which was founded in 2015, is currently part-owned by the China Investment Corporation, a state-backed investor with a 49 per cent share in the company.
Sam Laidlaw, founder and executive chairman of Neptune Energy, said: “This transaction offers a new and exciting phase for Neptune, with significant growth opportunities supporting energy security and the energy transition, which will benefit from Eni’s and Vår Energi’s larger scale and available resources.”
Eni’s chief executive, Claudio Descalzi, said ‘’This transaction delivers to Eni a high-quality and low carbon intensity portfolio with exceptional strategic and operational complementarity.”
Torger Rød, chief executive of Var added: “The acquisition will strengthen our position in core areas, support continuous asset optimisation and increase operatorships, while providing attractive early phase projects and exploration opportunities.”