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Eni (E) Completes Purchase of UK's Neptune Energy for $4.9B

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Eni SPA (E - Free Report) has completed the acquisition of the U.K.-based independent Neptune Energy in a deal valued at $4.9 billion.

The acquisition encompasses Neptune Energy’s extensive portfolio, excluding its operations in Norway and Germany. Eni's Norwegian subsidiary, Vaar Energi, acquired Neptune Energy’s assets in Norway.

Vaar Energi acquired Neptune Energy's business in Norway separately before the completion of the overall transaction. Activities in Germany were carved out and will continue to be owned and operated by existing Neptune Energy shareholders as a standalone group.

Neptune Energy operates primarily in the U.K. and Norway, focusing on natural gas production. The company also has a presence in the Netherlands, Germany, Algeria, Egypt and Indonesia. Eni's acquisition aligns with its goal of integrating a high-quality, low-carbon-intensity portfolio, offering geographic and operational complementarity.

The deal also includes Neptune Energy's participation in the Eni-operated Geng North-1 gas discovery offshore Indonesia, along with projects in Western Europe, Australia and North Africa.

The transaction brings substantial benefits to Eni, including increased gas production in North Africa and potential carbon capture and storage opportunities in Northern Europe. Eni will assume the operatorship of the Cygnus Field off the U.K. as part of the acquired assets.

Notably, Neptune Energy reported an 80% increase in profits in 2022 and produced approximately 139,100 barrels of oil equivalent per day in the third quarter of 2023, with a predominant focus on natural gas.

The acquisition marks a significant shift in the trend among European oil majors, which have generally been more inclined to divest oil and gas assets in a bid to reduce carbon emissions and transition toward renewables. Eni's move stands out as one of the largest oil and gas deals in recent years, signaling a strategic expansion of its natural gas business.

Eni, a prominent player in the energy sector, plans to make more than 90% of its fuel from gas by 2050, reducing crude production and cutting its carbon footprint. The Neptune Energy acquisition is a significant step toward achieving these goals, strengthening Eni's role in the changing energy sector.

Zacks Ranks & Stocks to Consider

Eni currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked companies mentioned below. The three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.

The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $1.49. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. The company’s earnings for 2024 are expected to surge 325.7% year over year.

Energy Transfer (ET - Free Report) is a publicly traded limited partnership focused on diverse energy assets in the U.S. Their core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.

The Zacks Consensus Estimate for ET’s 2024 EPS is pegged at $1.17. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. The company’s earnings for 2024 are expected to rise 13.5% year over year.

Oceaneering International, Inc. (OII - Free Report) is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.

The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. It has a Zacks Style Score of A for Growth and B for Value. OII’s earnings for 2024 are expected to surge 76.4% year over year.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

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