Three join race for Exxon assets

Which companies are in the race for Exxon Mobil’s Gippsland Basin oil and gas assets?

Neptune Energy, Harbour Energy and OMV have put forward first-round bids for Exxon Mobil’s Gippsland Basin oil and gas assets.

The three new competitors join Beach Energy and Macquarie Group-related interests in bidding for the assets.

The sales process for the Exxon interests — estimated to be worth about $US2.5bn ($3.4bn) — is being run by JPMorgan.

Shortlisted parties are expected to soon learn whether they have made it through to the second round of the contest.

OMV is an Austrian multinational oil and gas company that has had a meaningful presence in the Australian market in the past.

However, an acquisition of the Exxon assets would be a big cheque for the European group, according to analysts.

Neptune Energy could face challenges gaining Foreign Investment Review Board approval given China Investment Corporation owns 49 per cent of it.

The Carlyle Group has 30 per cent and CVC Capital Partners the remainder.

The London-based business is also bidding for Eni’s Australian oil and gas assets.

Harbour Energy is backed by private equity firm EIG Global Energy Partners and run by former Shell executive Linda Cook.

It previously launched a $14.5bn bid for Santos that was rebuffed in 2018.

Being backed by private equity, it will probably expect a big return on its investment.

The three new bidders will need to demonstrate their ability to operate the assets.

On offer is the 50 per cent operating interest that Exxon owns in Gippsland Basin oil and gas assets in the Bass Strait off the coast of Victoria.

BHP owns the remainder of the operations and has hired Goldman Sachs as an adviser. It is also expected to sell its interest in the assets.

Cooper Energy was earlier thought to be teaming up with OMV to make an offer, but it is unclear whether a first-round bid was submitted.

Beach Energy, a $3bn Australian-listed oil and gas producer that counts Kerry Stokes’ Seven Group Holdings as a 28.5 per cent shareholder, is also interested after buying the Lattice Energy business in 2017 for $1.59bn from Origin Energy.

The challenge for Beach will be appeasing the Australian Competition & Consumer Commission, given that a number of the Latitude assets are also located in the Bass Strait.

However, some experts say that Beach is the strongest operator. a joint acquisition with another party is possible, but the understanding is that banks have committed enough funding to the Australian-listed group to buy the asset outright.