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Repsol in talks to pick up Mexico assets from Exxon: Reuters
Posted on Tuesday, 10 September 2019 09:05
Exxon Mobil is continuing to seek divestments to return cash to shareholders and fund major projects, this time entering into advanced talks with Repsol for its US Gulf of Mexico assets, three sources with knowledge of the situation told Reuters.
According to these insiders, a sale of the deepwater operations to the Spanish oil group could be worth USD 1.00 billion.
The people, who asked not to be identified as the situation is still private, said there is no guarantee of an agreement being reached and the transaction requires approval from partners in the assets that may have preferential rights to buy them.
Exxon has been weighing a number of sales in a bid to focus on its US onshore production; these potential disposals include offloading its oil and gas unit in Norway for around USD 4.00 billion, as well as divesting its British North Sea operations.
Last year, Reuters reported on the potential jettisoning of the Gulf of Mexico business and said the company had hired JPMorgan to advise on the situation.
Citing a document dated Fall/Winter 2018, the news provider suggested Exxon is marketing nine assets for a sale, including a 50.0 per cent interest in the Julia oil field, a 9.4 per cent stake of the Heidelberg field and a 23.0 per cent holding in the Lucius oil and gas field.
A deal, should one go ahead, would represent the largest acquisition by Repsol since buying Talisman Energy for USD 13.10 billion in 2015, according to Zephyr, the M&A database published by Bureau van Dijk.
Exxon posted earnings of USD 5.48 billion in the opening six months of 2019, a 36.3 per cent decline from USD 8.60 billion in the corresponding period of 2018.
Repsol posted net income of EUR 1.13 billion in the first half of this year, compared to EUR 1.55 billion in the same timeframe in 2018.
Reuters cited suppressed oil prices as the reason why such companies are struggling with asset sales.
© Zephus Ltd