Italian energy giant Eni is reportedly in talks to acquire private equity-backed UK independent Neptune Energy in a deal worth a potential $5 billion to $6 billion, which would translate to one of the largest such industry transactions in recent times.
Neptune currently produces some 130,000 barrels of oil equivalent per day from fields in countries including the UK, Norway, Algeria, the Netherlands, and Indonesia — the Southeast Asian nation where it has upstream operations with Eni.
Approximately three-quarters of Neptune’s global production is natural gas, according to the UK’s Financial Times, which is understood to be of particular interest to Eni.
Neptune is owned by Beijing’s sovereign wealth fund China Investment Corporation — which holds 49% equity — and private equity funds including the Carlyle Group and CVC Capital Partners.
The upstream independent Neptune is headed by executive chairman Sam Laidlaw, the former chief executive of Centrica.
Neptune last year made a net profit of $387.2 million on revenues of $2.5 billion while the company’s net debt stood at $2.1 billion.
Reuters, which first reported the discussions between Eni and Neptune, noted from a source that talks between the two companies are at a preliminary stage and that there is no guarantee that a deal will ultimately be struck.
Neptune in recent months has looked at listing on the London Stock Exchange, worth around £7 billion ($8.54 billion), while in 2021 it also considered divesting all or some of its assets.
Companies that were then touted as prospective purchasers included compatriot Harbour Energy, which also has operations in the North Sea and gas-prone regions of Indonesia.
Eni is on schedule to take the final investment decision next year on its Maha Energy’s ultra-deepwater gas and liquids field development offshore Indonesia, with the project’s Plan of Development (PoD) expected to be approved by the host government in 2023.
Meanwhile, partner Neptune last month said that before the end of this year Eni expects to progress the unitisation agreement for Maha, which straddles the West Ganal and Ganal production sharing contracts.
The co-venturers in tandem are advancing the PoD for their Merakes East field, which will be exploited as another satellite tie-back to the Eni-operated Jangkrik floating production unit offshore East Kalimantan, Indonesia.
Neptune and Eni both told Upstream they would not comment on the reported acquisition talks.