Oil & Gas

Report: Eni exploring £5bn deal for North Sea firm Neptune Energy

Preliminary talks have kicked off with an oil and gas supermajor on a deal for North Sea producer Neptune Energy, according to reports.

Reuters is reporting that Italian giant Eni is exploring buying the private-equity backed firm, which has a regional base in Aberdeen, for as much as $6 billion (£5bn).

The news agency is quoting a “source with knowledge of the matter”, adding that an official bid is yet to be lodged.

Eni did not immediately reply to Reuters’ request for comment, while Neptune declined.

Neptune has extensive operations in the UK Southern North Sea and operates Cygnus, Britain’s  largest single producing gas field.

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Rumours about a potential deal for the firm, part-owned by Carlyle Group and CVC Capital Partners, have been flying around for over a year now.

In September 2021, Bloomberg reported that Neptune was mulling its options, including a merger with North Sea counterpart Harbour Energy.

It said that discussions were ongoing with an adviser over a potential combination of the two companies.

If it had progressed, it would have created one of Europe’s largest independent oil and gas companies, with a combined value of around $10bn.

A couple of months later, Bloomberg said Neptune’s owners were weighing plans to sell the explorer,

Takeover bids were reportedly being requested from interested parties, with a sale giving the company a potential equity value of about $5 billion.

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Neptune was formed in 2015 by former Centrica boss and current executive chairman Sam Laidlaw, with funding from Carlyle and CVC.

© Supplied by Neptune Energy
Sam Laidlaw, Executive Chairman, Neptune Energy

Rumours that the company was planning for an initial public offering (IPO) have also been ripe, particularly in recent months given the bounce back in oil and gas prices.

In addition to its UK presence, Neptune has operations in Norway, the Netherlands, Germany, Algeria, Egypt and Indonesia.

It produces an average 130,000 barrels of oil equivalent a day, 74% of which is gas, according to its website.

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Neptune Energy has been a vocal critic of the government’s windfall tax plans, and recently warned the policy puts UK projects “at risk”.

Neptune reported global operating profits of more than $1bn for Q3 – however only $43m of this was made in the UK, with the brunt of it being from Norwegian operations.

The firm expects to invest around $260m in UK projects this year – which is expected to increase by another 50% next year as its Seagull and Isabella developments ramp up.

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