Eni SpA has announced that it and Vår Energi ASA have reached an agreement to acquire Neptune Energy Group Limited.
In a statement sent to Rigzone, Eni noted that it will acquire assets that make up Neptune’s entire portfolio, apart from its operations in Germany and Norway. The German operations will take place before the Eni transaction and the Norwegian operations will be acquired by Vår directly from Neptune under a separate share purchase agreement, Eni said in the statement. The Vår transaction will close immediately before the Eni transaction and proceeds from the sale in Norway will remain with the global Neptune business purchased by Eni, the company revealed.
Under the agreed terms, the global Neptune business will have an enterprise value of about $2.6 billion, while the Neptune Norway business will have an enterprise value of about $2.3 billion, Eni said in the statement. The final net consideration for both transactions will be subject to customary closing adjustments and will be paid in cash upon closing, Eni noted, adding that Eni’s transaction will be financed through available liquidity.
The closing of the Eni transaction is subject to a number of customary closing conditions, including the spin-off of Neptune’s operations in Germany, the completion of the Vår transaction and the receipt of other customary governmental and contractual consents, FDI and anti-monopoly authorizations. Eni said in the statement. The deal is currently expected to close in the first quarter of 2024.
In its statement, Eni noted that the transaction represents an exceptional fit for the company, adding that it complements its key areas of geographic focus and supports its goal of increasing its share of natural gas production to 60 percent and achieve net zero emissions (scope 1). +2) of your business up in 2030.
The deal will add around 130,000 barrels of oil equivalent per day to Eni and Vår’s portfolios, according to Eni’s statement, which also noted that the transaction is expected to be immediately positive for earnings and the cash flow of the operations per share, as well as the free. positive cash flow.
“This transaction offers Eni a high-quality, low-carbon portfolio with exceptional strategic and operational complementarity,” Eni CEO Claudio Descalzi said in a company statement.
“Eni sees gas as a critical bridge energy source in the global energy transition and is focused on increasing the share of its natural gas production to 60 percent by 2030. Neptune will mainly contribute gas resources to the portfolio of Eni,” he added.
“Furthermore, the geographic and operational overlap is striking, adding scale to Eni’s majority-owned Vår Energi; bringing more gas production and CCUS opportunities to the remaining North Sea footprint; building on the leadership position of Eni in Algeria, a key supplier to European gas markets; and deepening Eni’s presence on the Indonesian coast, supplying the Bontang LNG plant and domestic markets,” he continued.
“The nature and challenges of the energy transition require a focused response and, in particular, this transaction highlights two important aspects of Eni’s financial strategy: the flexibility and optionality offered by our strong liquidity and low leverage of the balance sheet; and our innovative satellite model that helps align and access dedicated capital,” continued Descalzi.
In a separate statement sent to Rigzone, Neptune Energy confirmed that Eni had signed a sale and purchase agreement to acquire Neptune Energy Group Limited and that Vår Energi had simultaneously signed a cross-conditional sale and purchase agreement to acquire Neptune Energy Norge AS.
The company stressed that Neptune’s business in Germany is not part of the transactions and said it will continue to be owned and operated by current Neptune shareholders as a standalone group.
In the statement, Neptune said that the boards of Eni, Vår Energi and Neptune believe that the proposed combinations will enhance their technical and financial capabilities to provide energy security and participate in the energy transition.
“Since forming Neptune in 2018, we have invested in the business and transformed the organization, resulting in material improvements in safety, operational performance and cost efficiency,” said Sam Laidlaw, executive chairman of Neptune Energy, in a statement from the company.
“I am incredibly proud of Neptune’s achievements over the past five years, and of the hard work and dedication of so many people in our organization, who, along with our shareholders, have contributed to the growth and success of the business,” he said. add.
“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 the greater scale and available resources of Eni and Vår Energi,” he said. continue Laidlaw.
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