NEO Energy wraps up buy of Total’s UK North Sea assets

NEO Energy has completed the acquisition of a portfolio of operated and non-operated assets in the UK North Sea from two Total subsidiaries.

NEO Energy said on Monday that the assets were bought from Total Oil UK and Total E&P North Sea UK.

The transaction consists of a material, cash generative portfolio of assets in four producing areas of the UK North Sea, with an average 2019 production of approximately 23,000 boepd and substantial development upside.

In addition, the portfolio adds reserves of around 51 mmboe to NEO Energy. The transaction includes operatorship of two asset clusters, the Quad 15 and Flyndre areas, and an operator organisation of more than 60 employees and contractors.

Paul Harris, COO and interim CEO of NEO Energy, said: “The expeditious completion of this transaction is a major milestone for NEO Energy as we build a next-generation North Sea operator.

“We have quickly established NEO as a leading UKCS independent with a solid platform from which to continue to deliver our sustainable growth strategy. Underpinned by a meaningful production base and development opportunities, I look forward to embarking on this next chapter in NEO’s development”.

It is worth noting that NEO enjoys strong institutional support from HitecVision, a provider of capital to the North Sea region’s energy industry.

HitecVision has been investing in the region for more than three decades, building successful companies such as Vår Energi, currently the largest independent E&P company on the Norwegian continental shelf.

To remind, the initial sale agreement for the assets saw Petrogas partner with HitecVision to attempt to buy the assets from Total for a consideration of $635 million in July last year.

All of the assets on sale were non-core and previously owned by Maersk Oil, a company which Total bought in March 2018.

Under the renegotiated and completed deal, NEO now owns Total’s Dumbarton, Balloch, Lochranca, Drumtochty, Flyndre, Affleck, and Cawdor fields, all of which it operates. Total also divested its ownership in CNOOC-operated fields Golden Eagle, Scott, and Telford.

See below the corresponding Total ownership before the sale.