Cygnus gas field in the southern North Sea; Source: Neptune Energy

Eni and Vår Energi enrich their portfolios by taking over Neptune’s oil & gas business

Italian energy giant Eni and its majority-owned Vår Energi have expanded their footprint by wrapping up the acquisition of Neptune Energy’s oil and gas assets, aside from the firm’s business in Germany. This portfolio enlargement comes with a total aggregate enterprise price tag of $4.9 billion.

Cygnus gas field in the southern North Sea; Source: Neptune Energy

With gas-oriented assets and operations being highly sought after, Eni took steps to get their hands on Neptune Energy’s entire portfolio – aside from its operations in Germany and Norway. While the German operations were expected to be carved out before the completion of the acquisition, the Norwegian assets were going to be acquired by the Italian oil major’s majority-owned Vår Energi.

While confirming the completion of the sale of Neptune Energy Group Limited to Eni and Neptune Energy Norge to Vår Energi on Tuesday, January 31, 2024, Neptune Energy explained that the carve-out of its activities in Germany was finished before the completion of the sale. The German business will continue as a stand-alone entity, owned and operated by CIC, Carlyle, and CVC Capital Partners.

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Nick Walker, CEO of Vår Energi, commented: “Vår Energi is one of the fastest growing E&P companies in the world and is on track to nearly double production by end-2025. The acquisition of Neptune Norway is an important step to this end. Neptune Norway’s complementary assets and highly skilled organization are a perfect fit to Vår Energi.

We will work as one strong team, a company committed to delivering high-value barrels from one of the most attractive oil and gas regions in the world with low cost and low emissions. The transaction is cash generative from day one supporting attractive and predictable dividends going forward.”

According to Vår Energi, the combined company is now the second-largest independent E&P company on the Norwegian Continental Shelf (NCS) and the second-largest supplier of gas from Norway to Europe. The firm is targeting production of around 400 kboepd by the end of 2025.

The Norwegian player’s growth strategy is centered around four hub areas with ownership in a total of 203 NCS licenses, including 47 producing fields, of which 7 are operated, following the Neptune Norge acquisition. The effective date of the transaction is January 1, 2023.

The acquisition of the Norwegian slice of the Neptune business pie was financed through available liquidity and credit facilities. From January 31, 2024, Neptune Norway will operate as a fully owned subsidiary of Vår Energi and change the name to Vår Energi Norge.

Come May 1, 2024, all employees of Vår Energi Norge will be fully integrated into the Vår Energi organization. Afterward, the companies will consolidate their businesses, a process that is contemplated as a statutory merger planned to be completed in the second half of 2024.

Eni considers Neptune’s portfolio of gas-oriented assets and operations in Western Europe, North Africa, Indonesia, and Australia to be competitive in terms of cost and low operational emissions.