EurOil: Neptune owners reportedly mull sale

The owners of leading North Sea player Neptune Energy are considering a sale of the business, sources told Bloomberg on November 14, with the hope of raising as much as $5bn.

Sources said that advisors to the company’s private equity backers, Carlyle Group and CVC Capital Partners, had requested takeover bids from interested parties next month. Deliberations continue and Neptune’s owners could still decide against a divestment. They could instead decide to list the company.

The news comes after Neptune was reported by Bloomberg in September to be evaluating a potential merger with rival Harbour. Rothschild, Goldman Sachs and JP Morgan Chase have been hired to help it choose options.

Neptune was established in 2015 by former Centrica CEO Sam Laidlaw, with funding support coming from Carlyle and CVC. While a listing is understood to be under consideration, IPOs have been relatively rare in the energy sector. Increases in valuations have lagged behind growth in oil and gas prices, in part because of uncertainty about future oil and gas demand during the energy transition.

“We are going to need to see that those multiples improve, and that will probably take several quarters of cash flows, improved dividends and improved investor confidence,” Laidlaw said in an earnings call earlier this month.

Neptune works off the coast of the UK, Norway and the Netherlands, and also has interests in Germany, Algeria, Egypt and Indonesia. According to its website, it flows an average of just over 140,000 barrels of oil equivalent per day (boepd). A merger with Harbour would have established the North Sea’s largest independent operator with a market capitalisation as large as $10bn.

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