NEO Energy revises deal to acquire UK North Sea assets from Total

NEO Energy has revised terms of a deal to acquire operated and non-operated assets in the UK North Sea from Total Oil UK Ltd. and Total E&P North Sea UK Ltd.

Citing market volatility, the parties renegotiated the financial terms of the deal first reported in July 2019 (OGJ Online, July 10, 2019). Previous deal partner Petrogas is no longer part of the transaction.

The structure of the consideration and phasing of payments has been modified, including vendor financing and earnout arrangements.

Total and NEO Energy have developed transition plans for NEO Energy to take over operations upon completion and “to allow NEO to focus on embedding planned operating efficiencies and growth plans as rapidly as possible,” NEO said in a press statement. Subject to regulatory approvals, the parties expect to complete the transaction by this year’s third quarter.

The assets in four producing areas produced an average of 23,000 boe/d in 2019. The portfolio adds reserves of 51 MMboe to NEO Energy.

The transaction includes operatorship of two asset clusters, the Quad 15 and Flyndre areas, and an operator organization of more than 80 employees and contractors.

NEO is backed by private equity investor HitecVision.