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Italian oil giant Eni buys Neptune Energy for $4.9 billion

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Italy’s Eni has agreed to buy private equity-backed Neptune Energy for $4.9 billion in the largest cash deal in Europe’s oil and gas sector in nearly a decade.

Headquartered in London, Neptune produces oil and gas from fields in eight countries, including the UK, Norway, Germany, Algeria, the Netherlands and Indonesia, and already shares a license with an Italian energy giant.

Under the terms of the contract announced on Friday, Eni acquired Neptune and Var Energi, Eni’s Norwegian listed subsidiary, will acquire the company’s operations in Norway.

Given that European oil majors such as Eni, BP and Shell have been more inclined to sell than buy oil and gas assets since setting targets to reduce carbon emissions and transition to greener forms of energy And this deal is particularly important.

Bob Maguire, Managing Director carlyleThe company, which owns 30.6% of Neptune, said its gas field production portfolio (many of which are close to or with access to European markets) specifically sought to replace gas previously secured from Russia. Eni said it made Neptune attractive.

Neptune produces about 135,000 barrels per day, about three-quarters of which is natural gas. About 10 percent of production comes from British waters.

“This transaction provides Eni with a high quality, low carbon intensity portfolio,” said Claudio Descalzi, Chief Executive Officer of Eni. “Eni sees gas as an important bridge energy source in the global energy transition.” Eni is 30% owned by the Italian government.

Since its $3.9 billion acquisition of assets from French utility Engie in 2017, Carlyle and other Neptune shareholders have sought to expand their resource base, reduce the carbon intensity of their operations, and enable future carbon capture and storage. Maguire said he has invested more than $4 billion in sexual development. Financial Times.

“That’s why it’s such an attractive business. It presents an opportunity for strategic buyers like Eni to replenish their reserve base…but it also increases its own carbon index,” he added. , noted the low carbon intensity of much of Neptune’s production, especially compared to conventional petroleum.

State-owned China Investment Corporation holds a 49% stake in Neptune, while private equity group CVC Partners owns 20.4%. Shareholders initially targeted an initial public offering (IPO) last year, but faced insufficient interest from public markets reluctant to invest in oil and gas producers.

Founded in 2015 by former Centrica CEO Sam Laidlaw, Neptune generated $924.4 million in net income last year from $4.6 billion in revenue and $1.7 billion in net debt.

Carlyle declined to comment on the return on its investment in Neptune if the deal is approved.

Carlyle managing director Parminder Singh said the investment proved the fund’s theory that it could benefit from investing in oil and gas assets “often overlooked by the market.”

“There will be mass production of oil and gas for decades to come. We know it, but someone has to own it the right way,” he said.

Neptune is developing CCS projects in the UK and the Netherlands aimed at pumping more than 9 million tonnes of carbon dioxide per year from UK and Dutch emitters into its depleted reservoirs.

If successful, it will exceed the emissions from Neptune’s own operations and the use of the fuel it sells. “It’s a business decision, either retire that infrastructure or reuse it,” Singh said. “The goal is to store more of the carbon dioxide we emit.”

The transaction is expected to close by the end of March 2024. Neptune’s assets in Germany are not part of the transaction and will continue to be managed by current shareholders.

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Italy’s Eni has agreed to buy private equity-backed Neptune Energy for $4.9 billion in the largest cash deal in Europe’s oil and gas sector in nearly a decade.Headquartered in London, Neptune produces oil and gas from fields in eight countries, including the UK, Norway, Germany, Algeria, the Netherlands and Indonesia, and already shares a license with an Italian energy giant.Under the terms of the contract announced on Friday, Eni acquired Neptune and Var Energi, Eni’s Norwegian listed subsidiary, will acquire the company’s operations in Norway.Given that European oil majors such as Eni, BP and Shell have been more inclined to sell than buy oil and gas assets since setting targets to reduce carbon emissions and transition to greener forms of energy And this deal is particularly important.Bob Maguire, Managing Director carlyleThe company, which owns 30.6% of Neptune, said its gas field production portfolio (many of which are close to or with access to European markets) specifically sought to replace gas previously secured from Russia. Eni said it made Neptune attractive.Neptune produces about 135,000 barrels per day, about three-quarters of which is natural gas. About 10 percent of production comes from British waters. “This transaction provides Eni with a high quality, low carbon intensity portfolio,” said Claudio Descalzi, Chief Executive Officer of Eni. “Eni sees gas as an important bridge energy source in the global energy transition.” Eni is 30% owned by the Italian government.Since its $3.9 billion acquisition of assets from French utility Engie in 2017, Carlyle and other Neptune shareholders have sought to expand their resource base, reduce the carbon intensity of their operations, and enable future carbon capture and storage. Maguire said he has invested more than $4 billion in sexual development. Financial Times. “That’s why it’s such an attractive business. It presents an opportunity for strategic buyers like Eni to replenish their reserve base…but it also increases its own carbon index,” he added. , noted the low carbon intensity of much of Neptune’s production, especially compared to conventional petroleum.State-owned China Investment Corporation holds a 49% stake in Neptune, while private equity group CVC Partners owns 20.4%. Shareholders initially targeted an initial public offering (IPO) last year, but faced insufficient interest from public markets reluctant to invest in oil and gas producers.Founded in 2015 by former Centrica CEO Sam Laidlaw, Neptune generated $924.4 million in net income last year from $4.6 billion in revenue and $1.7 billion in net debt.Carlyle declined to comment on the return on its investment in Neptune if the deal is approved.

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Carlyle managing director Parminder Singh said the investment proved the fund’s theory that it could benefit from investing in oil and gas assets “often overlooked by the market.”“There will be mass production of oil and gas for decades to come. We know it, but someone has to own it the right way,” he said.Neptune is developing CCS projects in the UK and the Netherlands aimed at pumping more than 9 million tonnes of carbon dioxide per year from UK and Dutch emitters into its depleted reservoirs. If successful, it will exceed the emissions from Neptune’s own operations and the use of the fuel it sells. “It’s a business decision, either retire that infrastructure or reuse it,” Singh said. “The goal is to store more of the carbon dioxide we emit.”The transaction is expected to close by the end of March 2024. Neptune’s assets in Germany are not part of the transaction and will continue to be managed by current shareholders.
https://www.ft.com/content/d30040ec-e9dc-4845-8fd2-27c5f903204f Italian oil giant Eni buys Neptune Energy for $4.9 billion

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