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Eni SpA Management Discusses Q2 2012 Results - Earnings Call Transcript

Let's look at Snam and Galp. As for Snam, the disposal process is well underway. Following the signing of the sale of 30% to Cassa Depositi e Prestiti, we have placed a field of 5% in the market, destabilizing value for our investors, reducing the overhang on Snam and confirming the market's appetite for this asset. For our remaining 20%, we are talking to potential investors.

Depending on the evolution of the stocks and market conditions, we will evaluate how best to progress on the disposal. Any transaction will take place following the closing of the Cassa Depositi e Prestiti deal expected in the autumn.

With regards to Galp, we have recently executed the first step of our disposal process, completing the sale of 5% to Amorim Energia for EUR 14.25 per share and exited the company's shareholder back. We are now free to evaluate the different options to start value from our stake with flexibility and no time constraint.

As a result of these 2 disposals, by next year, Eni's business portfolio will look like better than its peers. And net debt will fall by around EUR 20 billion, taking our gearing below industry average. As a consequence, we will adjust the way we return cash to shareholders in line with industry practices, accompanying our dividend with a recently approved share buyback program.

Let's now turn to the second highlight, exploration. For many years now, we have discovered around 1 billion boe of new resources a year, well in excess of our average production of about 600 million, 700 million boe a year, providing fuel for future growth. In the first 6 months of the this year, through our discoveries and appraisals in the Barents Sea, Egypt and West Africa, we have discovered over 400 million boe. And on top of that, we have an extraordinary game changing success in Mozambique, which brings total new resources discovered by June 30 to 2.2 billion boe. This number does not include the results of the fifth well in Mozambique announced today, which increases gas in place to 60 TCF.

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