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Eni (E) Negotiates to Acquire Neptune Energy Worth $5M
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Eni SPA (E - Free Report) is advancing to acquire upstream company Neptune Energy for about $5 billion, per a report by Bloomberg.
Eni is well-positioned to outperform other suitors in acquiring Neptune Energy and could reach an agreement this week. A final decision is yet to be made. Notably, the timing of the agreement could change or may not materialize.
Eni has been eyeing Neptune Energy since last year to expand its natural gas business. The companies were in the early stages of discussions. However, the negotiations stopped after disagreements occurred over price.
The negotiations have significantly progressed after Eni increased its offer price to acquire Neptune Energy, which is currently between $5 billion and $6 billion. Neptune is backed by Carlyle Group and CVC Capital Partners.
Neptune Energy primarily operates in the United Kingdom and Norway, where most of its hydrocarbon production comprises natural gas. Neptune Energy also operates in the Netherlands, Germany, Algeria, Egypt and Indonesia.
About 75% of the company’s overall production is natural gas, which is obtained from the Eni-operated North Sea, North Africa and Asia operating areas. Neptune Energy increased profits by 80% in 2022.
European oil majors have been more likely to divest oil and gas assets than to purchase them as they aimed to reduce carbon emissions and shift to renewables. Notably, the acquisition will be one of the largest oil and gas deals in recent years.
Eni’s acquisition will help expand its natural gas business, which is crucial to its growth strategy. The company aims to boost gas business to be more than 90% of its hydrocarbon production by 2050 while reducing crude production and lowering the carbon footprint of its portfolio.
Price Performance
Shares of Eni have outperformed the industry in the past three months. The stock has gained 7.2% compared with the industry’s 2.7% growth.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, beating the Zacks Consensus Estimate of earnings of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings is pegged at $2.93 per share and $4.01 per share, respectively.
Evolution Petroleum is an independent energy company. EPM reported first-quarter 2023 earnings of 42 cents per share, beating the Zacks Consensus Estimate of earnings of 17 cents per share.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings is pegged at $1.11 and $1.05 per share, respectively.
PHX Minerals is an oil and natural gas mineral company. The company posted first-quarter 2023 earnings of 11 cents per share, beating the Zacks Consensus Estimate of earnings of 7 cents per share.
PHX has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for the company’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.
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Eni (E) Negotiates to Acquire Neptune Energy Worth $5M
Eni SPA (E - Free Report) is advancing to acquire upstream company Neptune Energy for about $5 billion, per a report by Bloomberg.
Eni is well-positioned to outperform other suitors in acquiring Neptune Energy and could reach an agreement this week. A final decision is yet to be made. Notably, the timing of the agreement could change or may not materialize.
Eni has been eyeing Neptune Energy since last year to expand its natural gas business. The companies were in the early stages of discussions. However, the negotiations stopped after disagreements occurred over price.
The negotiations have significantly progressed after Eni increased its offer price to acquire Neptune Energy, which is currently between $5 billion and $6 billion. Neptune is backed by Carlyle Group and CVC Capital Partners.
Neptune Energy primarily operates in the United Kingdom and Norway, where most of its hydrocarbon production comprises natural gas. Neptune Energy also operates in the Netherlands, Germany, Algeria, Egypt and Indonesia.
About 75% of the company’s overall production is natural gas, which is obtained from the Eni-operated North Sea, North Africa and Asia operating areas. Neptune Energy increased profits by 80% in 2022.
European oil majors have been more likely to divest oil and gas assets than to purchase them as they aimed to reduce carbon emissions and shift to renewables. Notably, the acquisition will be one of the largest oil and gas deals in recent years.
Eni’s acquisition will help expand its natural gas business, which is crucial to its growth strategy. The company aims to boost gas business to be more than 90% of its hydrocarbon production by 2050 while reducing crude production and lowering the carbon footprint of its portfolio.
Price Performance
Shares of Eni have outperformed the industry in the past three months. The stock has gained 7.2% compared with the industry’s 2.7% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Eni currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy space are Seadrill Limited (SDRL - Free Report) , Evolution Petroleum Corporation (EPM - Free Report) and PHX Minerals Inc. (PHX - Free Report) . SDRL and EPM currently sport a Zacks Rank of 1 (Strong Buy), and PHX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, beating the Zacks Consensus Estimate of earnings of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings is pegged at $2.93 per share and $4.01 per share, respectively.
Evolution Petroleum is an independent energy company. EPM reported first-quarter 2023 earnings of 42 cents per share, beating the Zacks Consensus Estimate of earnings of 17 cents per share.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings is pegged at $1.11 and $1.05 per share, respectively.
PHX Minerals is an oil and natural gas mineral company. The company posted first-quarter 2023 earnings of 11 cents per share, beating the Zacks Consensus Estimate of earnings of 7 cents per share.
PHX has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for the company’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.