Page 7 - EurOil Week 50 2021

EurOil INVESTMENT EurOil

NEO closes $1bn takeover

of UK North Sea fields

UK NEO Energy has wrapped up the $1bn purchase is targeting an output of over 80,000 boepd by
of a package of ExxonMobil UK assets, including 2024, on the back of projects like Penguins.
NEO has said the deal stakes in 14 producing fields, and various infra- The company also took over Zennor Petro-
will establish it as one structure and various other infrastructure. leum over the summer and struck a deal this
of the top five oil and The two companies clinched the deal back in month to buy JX Nippon’s assets in the UK North
gas producers in the February and had been slated for closure before Sea, including a 20% interest in the Mariner field
North Sea. mid-year. The delay prompted some concern, and a 18% stake in the Culzean field. That deal
prompting upstream regulator Oil and Gas excluded JX Nippon’s interests in the Andrew
Authority (OGA) to open an inquiry into its area.
progress in October. Under the terms of the deal with Exx-
NEO, supported by private equity group onMobil, NEO might have to pay a further
HitecVison, has said the deal will establish it $300mn in contingent payments based on
as one of the top five oil and gas producers in future oil and gas prices. The US major is not
the North Sea. International majors have been exiting the UK North Sea, as it will retain gas
scaling back in the region over recent years, and assets in the south in the region and its share
many of their assets have fallen into the hands of in the Shell Esso gas and liquids (SEGAL)
private equity groups. transport system that delivers ethane to its
The deal lands NEO positions in the Shear- ethylene plant in Fife, Scotland. It is also keep-
water area and the Penguins development, as ing hold of extensive refining, fuel marketing,
well as stakes in the Gannet, Nelson, ETAP and lubricants, petrochemicals and natural gas
Elgin-Franklin fields. It is the TotalEnergies-op- marketing activities in the UK.
erated Elgin-Franklin that was at the centre of Whether or not ExxonMobil’s remaining UK
OGA’s investigation. North Sea assets will stay in the US major’s port-
NEO is a young company born out of the folio in the long term is unclear, however, as its
2019 merger of Verus Petroleum and NEO E&P strategy calls for a complete withdrawal from the
– two investment vehicles of HitecVison. It made European upstream sector altogether. It recently
its first acquisition last year, when it bought up agreed to sell its stake in the Neptun Deep gas
a group of TotalEnergies assets. NEO produced discovery in Romania to local state-owned
26,500 barrels of oil equivalent per day but it Romgaz. ™

Week 50 16•December•2021 www. NEWSBASE .com P7