As a $3bn-plus sale process is expected to ramp up shortly for ExxonMobil’s Bass Strait assets, the question on dealmakers’ minds is whether Macquarie Group and Brookfield will be contenders.
The pair made a windfall in November 2018 when they offloaded their Quadrant Energy business to Santos for $2.15bn.
This was after buying Quadrant in 2016 from Apache Corporation for $US2.1bn ($3bn), including debt. After 2016, they sold portions to other investors, including Wesfarmers.
Macquarie had owned 36.3 per cent of the West Australian-based oil and gas company, while Brookfield Asset Management had 48 per cent and Wesfarmers 13.7 per cent and management largely the remainder.
Some believe the latest offering would meet their requirements for acquisition targets. The big appeal will be more than 15 years of contracted gas on offer in what would be similar to Quadrant.
Brookfield has been a big spender in Australia in the past year, acquiring the second largest private hospital operator Healthscope for $4.4bn, and like most major buyout funds globally it is cashed up.
Macquarie, meanwhile, has signalled that it remains eager to embark on acquisitions globally, although it has suggested that its focus is more in the renewable energy, infrastructure and technology markets.
But with its gas, ExxonMobil’s Bass Strait assets are considered more annuity assets.
Other interested parties are expected to be Japanese trading houses and Asian buyers, although global exploration and production companies may sidestep the offering because it would not be considered of large enough scale. Tipped as interested have been Beach Energy, Santos, AGL Energy and Mitsui, which was thought to be a Quadrant underbidder.
The Gippsland Basin Joint Venture off the Victorian coast is owned by Exxon in partnership with BHP and produces oil and gas with valuation estimates of about $US2bn. It supplies between 40 and 50 per cent of east coast domestic gas demand.
As part of the joint venture, Exxon also owns the Kipper gas field in the same area, with its 30 per cent interest estimated to be worth about $US800m.
It is understood that investment bank JPMorgan will be working on the sale.
Executives from ExxonMobil are believed to be arriving in Australia in the coming days as it assesses a sale.
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