HitecVision-Backed NEO Energy Acquires Exxon North Sea Assets
ExxonMobil Corp. has signed an agreement with Norwegian private equity firm HitecVision AS to sell most of its non-operated upstream assets in the UK central and northern North Sea for over US$1 billion. The transaction will be executed through NEO Energy Ltd., a HitecVision portfolio company.
Under the terms of the transaction, NEO Energy will pay over US$1 billion, subject to closing adjustments, and an additional US$300 million in contingent payments based on potential for increase in commodity prices.
The agreement includes ownership interests in 14 producing fields, including the Penguins, Starling, Fram, the Gannet Cluster and Shearwater fields operated by Royal Dutch Shell Plc, as well as interests in the Elgin Franklin fields operated by TOTAL SA. ExxonMobil will retain its non-operated share in upstream assets in the southern North Sea, as well as its share in the Shell Esso gas and liquids (SEGAL) infrastructure that supplies ethane to its Fife ethylene plant.
Production from the acquired interests averaged approximately 38,000 barrels of oil equivalent per day (boe/d) during 2019. Upon completion, NEO’s expected pro forma 2021 production will be 70,000 boe/d, growing organically to more than 80,000 boe/d in 2024 through ongoing field developments.
“This acquisition builds on NEO’s existing North Sea portfolio and towards delivering on our ambition to be a leading producer on the UKCS. NEO is well placed, together with its operating partners, to extract value from this and other opportunities, while at the same time focusing on improved environmental performance,” commented Russ Alton, CEO of NEO Energy.
HitecVision is an oil & gas focused private equity firm with a portfolio of investments in offshore operators and oil field services companies focused primarily on the North Sea. The firm currently has approximately US$6.7 billion of funds under management.
The transaction, which is subject to approvals from the relevant authorities and regulatory consents, is expected to be completed by the middle of 2021.