Renta 4 | Repsol has reportedly reached a new agreement with the Stonepeak fund to transfer a 43.8% stake in its Outpost solar project (629 MW) in Texas, US.
The sale price amounts to €252.5 million, which values 100% of the asset at approximately €775 million in EV, including approximately €200 million derived from the monetisation of production tax credits received by the project.
Outpost (629 MW) began operating in September with a long-term PPA, becoming Repsol’s fourth commercial-scale solar plant in operation in the US, where it has already reached agreements with Stonepeak for the partial sale of the Frye (632 MW) and Jicarilla (125 MW solar and 20 MW/80 MWh storage) solar farms.
In addition, it has been announced that the Company has been awarded 12 exploration and production blocks (74,880 gross acres) in the Big Beautiful Gulf 1 auction (BBG1) auction, the first offshore oil and gas auction held by the United States since 2023, where the One Big Beautiful Bill Act establishes the obligation to hold 30 auctions in the Gulf until 2039. We note that the Gulf of Mexico is one of the growth drivers of its Exploration and Production division, alongside developments in Eagle Ford (Texas), Marcellus (Pennsylvania) and Alaska.
Assessment: Although the implied sale price reaches €1.16 million/MW, close to our own valuation, the profitability achieved is slightly below the Company’s guidance for its low-carbon projects (>10%), given the complex pricing environment in which the project was launched (2023/2024) and the current uncertain regulatory framework in the US. However, we do not believe that this has a negative bias despite the lower profitability achieved, as the Company continues to advance its strategy of asset rotation and value crystallisation, having already rotated more than 65% of its renewable portfolio and achieving double-digit returns on the vast majority of its operations.
We note that at 9M25 Repsol had an operational renewable capacity of 5 GW, of which more than 2.6 GW are in Spain (with more than 600 MW under construction), and expects to reach around 6 GW by the end of 2025 and between 9-10 GW in 2027, for which it has a portfolio of 60 GW of projects in various stages of development.
We reiterate our HOLD recommendation and target price of €18.50/share.
