Aberdeen-based full-cycle energy business New European Offshore (NEO Energy) has completed its strategic merger with Repsol Resources UK, a subsidiary of Spanish energy giant Repsol.
The combined group has been renamed NEO NEXT Energy , reportedly becoming one of the largest producers on the UK Continental Shelf (UKCS). According to the information released when the merger was announced, the combined group will be 55% owned by NEO and 45% by Repsol UK.
As explained by John Knight , Executive Chair of NEO NEXT, the new company’s strategy can be summarized as “Resilience, Yield and Growth.” The combined entity is expected to have more scale and diversity, offering resilience despite what are perceived as tough conditions in the UK.
According to Knight, the benefits of synergies from consolidation will create much stronger value creation, profit, and cash flow yield for shareholders. There will also be more options for capital allocation decisions well into the next decade.
“This combination will create a jointly governed business which will call upon the key strengths of both shareholders. Repsol contributes operational capabilities on production, development, and decommissioning activities which will be combined with NEO Energy expertise on financial and commercial matters.
“ We believe this combined business has many more opportunities for profitable growth in the basin and beyond,” said Francisco Gea , Executive Managing Director of Exploration & Production at Repsol.
In addition to this merger, NEO has set sights on expanding its North Sea operations by acquiring Gran Tierra North Sea Limited (GTNSL), a subsidiary of Canada’s Gran Tierra. The $7.5 million deal encompasses GTNSL’s 100% equity interest in the license P2358 on the UKCS, which includes the Serenity discovery.