NEO Energy, through its acquisitions, is expected to double its production, exclusively based in the United Kingdom, to 70,000 b/d of oil equivalent. A major step towards the short-term objective of producing 120,000 b/d.
NEO Energy targets production of 120,000 b/d
NEO Energy, the portfolio company of HitecVision, has acquired a number of non-operated oil and gas assets fromExxonMobil. The $1 billion transaction includes 21 assets, including 14 estates in the central and northern North Sea. But this price could vary depending on fluctuations in commodity prices. It could therefore be increased by approximately $300 million through contingent payments.
NEO Energy said these holdings would provide an additional 140 million barrels of oil equivalent (boe) of reserves. In total, the company hopes to produce 70,000 b/d this year. This is a major step towards the short-term goal of producing 120,000 b/d.
Becoming a UKCS leader
With these acquisitions, NEO Energy aims to become one of the top ten oil and gas producers in the UK. The objective is to become a leading exploration and production (E&P) company in the full UKCS cycle.
However, despite the continued interest in the Southern North Sea, the assets may not be easy to offload. They do come with an aging infrastructure and a significant decommissioning cost. This may be an opportunity to participate in the UK government’s efforts to transform the UKCS oil and gas industry.