Investing.com -- Shares of Eni (NYSE:E) inched up 0.5% after the company announced the sale of stakes in its upstream assets in Ivory Coast and the Republic of the Congo to Vitol, a global energy trader.
The deal, announced on Wednesday, is valued at $1.65 billion, effective January 1, 2024, with a cash adjustment expected at closing. The transaction involves Vitol acquiring interests in oil and gas assets currently in production, as well as blocks that are in various stages of exploration, appraisal, and development.
Eni’s Baleine project in Ivory Coast, where the company holds a 77.25% interest, will see a 30% stake transfer to Vitol. Additionally, Vitol will acquire a 25% interest in the Congo liquefied natural gas (LNG) project in the Republic of the Congo, where Eni owns a 65% stake.
UBS analysts commented on the sale, stating, "Small positive. There is a cash adjustment upon closing which we estimate at ~$1bn given capex spent, taking the total consideration to ~$2.7bn or €2.5bn, 25% above expectations. All else equal, this drives a ~4pp reduction of the leverage ratio."
The cash adjustment at closing, estimated by UBS to be approximately $1 billion, suggests that the total consideration for the deal could reach around $2.7 billion or €2.5 billion, exceeding initial expectations by 25%.
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