Neptune Energy to be acquired by Eni and Vår Energi for $4.9bn

Eni and Vår Energi are set to acquire Neptune Energy Group, a key independent exploration and production firm known for its low-emission, gas-oriented operations in Western Europe, North Africa, Indonesia, and Australia, for $4.9 billion.

Neptune Energy, currently owned by China Investment Corporation, Carlyle Group, CVC Capital Partners, and specific management owners, has been a competitive force in the energy sector since its foundation by Sam Laidlaw in 2015.

As per the agreement, Eni will take over Neptune Energy’s entire portfolio, excluding its operations in Germany and Norway. Vår Energi, on the other hand, will separately acquire Neptune Energy’s Norwegian operations.

The Norwegian sale will close immediately before the Eni transaction, leaving the proceeds within the global business that the Italian oil and gas company purchases. As of the end of 2022, the Neptune Energy’s global business had a net debt of approximately $0.5 billion, with an enterprise value of roughly $2.6 billion. Meanwhile, the Neptune Energy’s Norway business valued at an estimated $2.3 billion.

Sam Laidlaw — Neptune Energy Executive Chairman said: “Since Neptune’s formation in 2018, we have invested in the business and transformed the organisation, resulting in material improvements in safety, operational performance and cost efficiency.

“I am incredibly proud of Neptune’s achievements over the past five years – and the hard work and dedication of so many people across our organisation, who, together with our shareholders, have contributed to the growth and success of the business.

“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.”

This transaction is in perfect alignment with Eni’s aim to increase its share of natural gas production to 60% and achieve net zero emissions from its upstream business by 2030. The acquisition will also generate over $0.5 billion in value from synergies and additional cost-saving opportunities. With Neptune Energy’s 2022 reported revenues of around $1.22 billion and EBITDAX of approximately $0.95 billion, the deal stands to add roughly 130 kboed to the portfolios of Eni and Vår Energi.

The purchase also resonates with the operations and strategy of both Eni and Vår Energi. It consolidates Eni’s positions in the UK, Netherlands, Algeria, Indonesia, and Australia, while integrating Neptune’s Norwegian operations into Vår Energi’s production framework.

Claudio Descalzi — Eni CEO said: “This transaction delivers to Eni a high-quality and low carbon intensity portfolio with exceptional strategic and operational complementarity. 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% by 2030.”

The acquisition is expected to be finalized by the end of Q1 2024, subject to regulatory and governmental clearances.