Neptune Energy is the latest party to emerge as a suitor for the Australian oil and gas assets up for sale through Italian company Eni, as interested parties prepare to submit bids for the assets at the end of this month.
The European producer will come up against Macquarie Capital and Beach Energy to buy the portfolio.
While the three groups are considered to be the strongest contenders, other industry names are thought to be at least taking a look at the assets, including Santos, Cooper Energy and energy infrastructure investors such as the APA Group.
Neptune has a focus on the North Sea, North Africa and Asia Pacific and was founded in 2015 by executive chairman Sam Laidlaw and private equity investors.
In Australia, Neptune operates the Petrel Field in the Bonaparte basin project in the Timor Sea and has an office based in Perth.
Eni’s key assets on offer are a 10.99 per cent stake in Darwin LNG and the Blacktip gas field project.
Other infrastructure investors such as ICG, QIC and IFM are potentially in the mix for some components.
Macquarie is expected to choose at least one partner for the competition.
Earlier, the thinking was that Beach would not be a contender for the Eni business, because it had no other assets in the region.
However, should limited interest exist for the operation, the attraction to Beach is that it could pick up the portfolio at an opportunistic price, given that it remains one of the few parties that could operate the assets.
It would make it a larger and more diversified industry player.
Beach is now positioned to carry out M&A and has bedded down the Lattice Energy portfolio that it bought from Origin Energy in 2017 for $1.59bn, in a move that took the company from a junior explorer to a $4bn business.
The challenge for any party vying for the Eni assets is extracting earnings growth. It has a 15-year government contract that is expected to have limited upside.
Working on the sale process for Eni is Citi. While first round bids were initially due about August 18, most expect that date will be extended until the end of the month.
The current environment marks challenging times for deal-makers, with the COVID-19 lockdown in Victoria said to be slowing transactions that were in train and funding at an attractive price currently proving hard to come by.
Still, many believe more corporate activity will play out in the oil and gas space, with global groups likely to cash out of assets in Australia and return funds closer to home as the oil price remains at low levels amid the pandemic.
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