Neo in Line for ExxonMobil UK Assets: Update
Neo Energy, backed by Norwegian private equity group Hitecvision, announced on January 21 it had entered exclusive negotiations to buy ExxonMobil's upstream operations in the central and northern UK North Sea. If all goes to plan, Neo expects to reach a signed sales agreement in the first quarter, with closure later in the year.
ExxonMobil has been searching for a buyer for its UK business since 2019. The US major has shares in almost 40 oil and gas fields through its Esso Exploration & Production UK subsidiary. It netted 23,000 barrels/day of oil and 202mn ft3/d of gas production from these interests in 2019.
The US major is seeking to exit the European upstream sector altogether within a few years, in order to focus more on higher-margin plays elsewhere. It sold its Norwegian business in 2019 for $4.5bn to Var Energi, which also counts HitecVision as an investor alongside Italy's Eni as the majority owner.
HitecVision set up Neo in October 2019 through the merger of two existing North Sea investment vehicles Neo E&P and Verus Petroleum. Neo went on to buy a group of Total assets in the UK North Sea in August last year, gaining a further 23,000 barrels of oil equivalent/day of oil and gas supply. The company's eventual goal is to produce 80-100,000 boe/d in the region.
Most international majors have scaled back their operations in the North Sea in recent years, providing an opening to private equity players like Hitecvision. Another Hitecvision unit Sval Energi clinched a deal this month to buy the Norwegian upstream business of French-owned Edison.