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11 Pages

Neptune Energy buys ENGIE's upstream assets for US$2.6 billion


Neptune Energy buys ENGIE's upstream assets for US$2.6 billion

Report summary

Private equity-backed Neptune Energy is buying ENGIE's E&P business as the French utility exits the upstream. Neptune will pay US$2.6 billion for a 70% interest in Exploration & Production International ("EPI"). The remaining 30% of EPI is held by China Investment Corporation, which acquired its stake from GDF Suez in 2011 for US$3.2 billion. Upon completion of the ENGIE deal, Neptune will become the sole (100%) owner of EPI, implying a change in the nature of CIC's investment. EPI's commercial reserves base covers a large number of mostly gas assets. Europe accounts for three-quarters of our commercial reserves figure. The portfolio is expected to decline from 2018, but is highly cash generative for many years. Neptune intends to build a diverse international E&P business of scale and EPI offers an ideal starting point. It is not a surprise to see ENGIE exit the upstream. European utilities are focusing on a low-carbon future, and others have already left the sector. ENGIE has ...

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  • Neptune Energy buys ENGIE's upstream assets for US$2.6 billion PDF - 347.49 KB 11 Pages, 7 Tables, 4 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
    • Assets excluded
  • Upstream assets
    • Country and key asset summary
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
    • ENGIE
    • Norway
    • Germany
    • Netherlands
    • UK
    • Indonesia
    • Algeria
    • Egypt
  • Oil & gas pricing and assumptions

In this report there are 11 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • EPI (70%) WM commercial reserves (mmboe): by country; by asset (top 10 only)
    • EPI production by country (70% net)
    • Upstream assets: Table 1
  • Deal analysis
    • EPI (70%) WM commercial valuation (standalone): by country; by asset (top 10 only)
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
  • Upsides and risks
  • Strategic rationale
    • EPI (70%) cash flow forecast
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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