NEO wraps up Zennor purchase in UK North Sea
Private equity-backed NEO Energy has completed the purchase of UK North Sea producer Zennor Petroleum from equity fund manager Kerogen Capital, it announced on July 12.
The deal worth $625mn, including deferred and contingent payments, was first announced in March. Its completion comes five months after NEO, owned by Norway's HitecVision, also closed the takeover of ExxonMobil's assets in the UK North Sea for $1bn. Together the two transactions will raise NEO's output to around 80,000 barrels of oil equivalent/day in 2021. The company is targeting 120,000 boe/d of supply by 2023.
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The Zennor deal alone gives NEO around 40mn boe of reserves and more than 90mn boe of unrisked resources, the company said. It gives NEO assets centred around the strategic Britannia and ETAP production hubs with near-term growth prospects from sanctioned projects, including the Finlaggan tieback, due to start up later this year. Further options for development include the Leverett and Greenwell projects and Murlach, where NEO is targeting a final investment decision next year.
"NEO has now firmly established its presence in the UKCS and is determined to lead the way for the sector through initiatives such as our recently published low carbon transition plan," NEO CEO Russ Alton said in a statement. "We are focused on generating sustainable growth and maximising value from the UK’s offshore assets, whilst playing our part in reducing the carbon intensity of the sector."