NEO Energy agreed to acquire Zennor Petroleum Ltd., which includes a portfolio of assets in the Central and Northern North Sea, for total consideration up to $625 million, including deferred and contingent payments.
NEO estimates its production will grow from 80,000 boe/d in 2021 to a stable production base in 2022-2026 of 90,000-100,000 boe/d. The company expects to operate about 55% of the production growth.
The deal “provides a further immediate uplift to NEO’s production and resource base with several high-quality follow-on development opportunities,” said Russ Alton, chief executive officer of NEO Energy, and “is a further demonstration of the scale of our ambition in the UKCS, with a clearly defined target of achieving 120,000 boe/d in 2023,” he said.
In February, NEO Energy agreed to acquire a portfolio of non-operated North Sea oil and gas assets from ExxonMobil (OGJ Online, Feb. 24, 2021).
NEO will take ownership of a portfolio of assets centered around Britannia and ETAP production hubs, with near-term growth prospects from sanctioned projects including the operated Finlaggan tie-back, scheduled for first production later this year, and a series of future development opportunities including the operated Greenwell and Leverett projects (tie-backs to Britannia), and Murlach (tie-back to ETAP).
The Zennor portfolio adds about 40 MMboe of reserves and more than 90 MMboe of unrisked resource to NEO and is expected to bring NEO’s oil-to-gas weighting to 60-40.
Following completion, the Zennor team will join NEO, increasing headcount to over 180 people.
NEO is backed by private equity investor HitecVision.