Deal insight

ExxonMobil acquires 25% in Mozambique Area 4 from Eni for US$2.8 billion

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Report summary

Eni is to sell half of its 50% indirect interest in Area 4 offshore Mozambique to ExxonMobil for US$2.8 bn. The Area 4 block contains deep water gas resources of c.65 tcf (WM commercial technical). The block will be developed through the Coral FLNG and Area 4 onshore LNG projects. ExxonMobil will operate the proposed two train onshore LNG project while Eni will continue to operate Coral FLNG and the upstream development. The price equates to US$0.17/mcf based on our resource volumes. This is a significant discount to earlier entries into Mozambique LNG but is not unexpected given the change in commodity markets since those deals were announced. Our base case valuation (Coral FLNG and two onshore LNG trains) is lower than the price paid and it seems clear ExxonMobil has expansion in mind. There is certainly enough gas to expand the onshore project to 6 x 5 mmtpa trains; this would bring our valuation more in line with the transaction price.

What's included

This report contains

  • Document

    ExxonMobil acquires 25% in Mozambique Area 4 from Eni for US$2.8 billion

    PDF 448.93 KB

Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Strategic rationale
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 12 images and tables including:

Images

  • Mozambique Area 4 LNG project capital costs
  • ExxonMobil's share of Area 4 gas production
  • Map of Mozambique LNG supply areas

Tables

  • Executive summary: Table 1
  • Upstream assets: Table 1
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Deal analysis: Table 4
  • Deal analysis: Table 5
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2

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