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Eni in Talks to Acquire Neptune Energy for up to $6bn

The Italian energy giant Eni looks to buy private-equity-backed gas and oil producer Neptune Energy in a deal worth potentially between $5bn and $6bn, although Eni was yet to make an offer. This would be one of the largest deals in the oil and gas industry in recent years if it proceeds.

The acquisition is expected to expand Eni’s natural gas business. Neptune produces around 135,000 barrels of oil equivalent per day (boed) from fields in eight countries, including the UK North Sea, Norway, Germany, Algeria, the Netherlands and Indonesia, where it shares licences with Eni. Approximately three-quarters of Neptune’s global production is natural gas.

Neptune is owned by the China Investment Corporation (CIC), the Carlyle Group and CVC Capital Partners. In 2021, Neptune made a net profit of $387.2mn from revenues of $2.5bn and had net debt of $2.1bn. In 2022, it aims to get post-tax operating cash flow to reach $2.5bn to $3bn and expects production to reach 165,000 boed. Neptune has also considered an initial public offering (IPO) as an alternative to a sale.

Deliberations are still at an initial stage and an official bid has not been submitted. According to a banking source, the outcome was “far from guaranteed” due to differences in valuations. Both Eni and Neptune declined to comment on the talks.

Written by: Quynh Chi Le

Source: Financial Times, Reuters

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