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

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 ...