April 30, 2007
Macho macho
The US Gulf of Mexico appears in significant demand. Following on from this morning’s news of new leases, Eni this morning paid a macho price of $4.757bn for Dominion Resources’s assets there. Read the FT story here. Citigroup in a note this morning valued the assets at only $3.9bn. Analysts at Wood Mackenzie, the Edinburgh-based industry consultanting firm, are still crunching their numbers, but hint their valuation for the Gulf of Mexico fields Eni is buying had also been significantly lower. In terms of implied oil price, the one to beat is Repsol’s acquisition of BP’s Shenzi field. The Spanish energy group last July assumed a whopping $97 oil price to make it work, barring significant new reserve discoveries. Eni’s disappointing production results are not as desperate as Repsol’s problems, but it will be interesting to see what the numbers reveal later today. Judging from the field’s names: Devil’s Tower, Goldfinger, Spiderman, Q and Thunderhawk among others Eni’s Dominion deal is quite a macho affair.
