NEO Energy’s portfolio of assets grows following Zennor takeover

North Sea operator NEO Energy, backed by HitecVision, has completed its acquisition of Zennor Petroleum, solidifying its position among the largest oil and gas producers in the UKCS.

NEO Energy made a deal to acquire Zennor Petroleum for about $625 million in early March 2021, less than two weeks after announcing a deal to buy ExxonMobil’s North Sea assets in a deal valued at over $1 billion.

Announcing the completion on Monday, NEO said that the Zennor team would now join NEO, increasing the overall headcount to over 180 staff.

This transaction, alongside the ongoing acquisition of a package of assets from ExxonMobil, will increase NEO’s production to circa 80,000 barrels of oil equivalent per day (boepd) in 2021 with further developments providing a stable production base in the period 2022 – 2026 of between 90,000 and 100,000 boepd.

The acquisition increases NEO’s portfolio of operated assets as the Zennor portfolio adds circa 40 mmboe of reserves and more than 90 mmboe of un-risked resources to NEO.

NEO pointed out it has taken ownership of a portfolio of assets centred around the strategic Britannia and ETAP production hubs, with organic near-term growth prospects from sanctioned projects.

These include the operated Finlaggan tie-back, scheduled for first production later this year, and a series of future development opportunities including the operated Leverett and Greenwell projects (tie-backs to Britannia), and Murlach (tie-back to ETAP) where NEO will be looking to take the FID next year.

Russell Alton, CEO of NEO Energy, said: “Our combined teams are very excited by the opportunities this portfolio of assets brings to NEO, as we further expand our operated position providing us with greater control and flexibility to maximise value.

“The completion of this deal is yet another demonstration of the scale of our ambition in the UKCS, as we seek to grow our production to approximately 120,000 boepd in 2023.

“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. 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”.