Renta 4 | According to press reports, Repsol is negotiating a merger with Apache Corporation, a US oil company listed on the Nasdaq with a market capitalisation of $8.76 billion.
According to the information, these negotiations would be part of the ‘liquidity event’ agreed with EIG after its entry into Repsol’s capital by 2026. We recall that this event could consist of an initial public offering, a reverse merger with a listed company, or the entry of a private investor. In any case, 51% of the capital would be retained.
Apache has an estimated production of around 465k boe/d (51% crude oil, 16% LNG and 33% gas) spread across Alaska, Permian, North Sea, Suriname, Uruguay and Egypt.
In 2024, Apache obtained an EBITDA of around $6 billion and is currently trading at ~8x 2026 earnings and ~3x EV/EBITDA 2026, in a phase of operational and financial improvement thanks to production growth, an aggressive cost reduction plan and a portfolio of international projects under development.
Assessment: Although we believe the news is positive, with the Company moving forward with its commitment to list its upstream business in the US next year, it is impossible to offer an accurate assessment as the details of the possible agreement are not known.
We recall that EIG acquired 25% of the upstream business in 2022, valuing 100% of it at approximately $19 billion, equivalent to approximately 4x EV/EBITDA ’23.
