North Sea firm NEO Energy snaps up Zennor Petroleum for $625m
North Sea oil firm NEO Energy has this evening announced that it has bought fellow explorer Zennor Petroleum for $625m (£450m).
The deal means that the independent producer will increase its regular output to 90,000 and 100,000 barrels a day over the next five years, making it one of the biggest producers focused on the UK continental shelf.
At the moment the the firm, which has set itself the target of achieving production output of 120,000 barrels per day, extracts about 80,000 barrels a day.
When the deal is complete, Zennor’s staff will join NEO, swelling the size of the firm’s workforce to around 180 people.
Today’s deal comes swiftly on the back of a $1bn agreement with investment fund HitecVision to acquire a major portfolio of non-operated oil and gas assets in the Central and Northern North Sea from US giant Exxon Mobil.
Zennor’s assets are also located in the same parts of the basin, further consolidating NEO’s presence in the region.
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Chief executive Russ Alton said: “This transaction provides a further immediate uplift to NEO’s production and resource base with several high-quality follow-on development opportunities.
“This follows closely on from our agreement with ExxonMobil and is a further demonstration of the scale of our ambition in the UK continent, with a clearly defined target of achieving 120,000 barrels per day.”
HitecVision, which focuses on the offshore oil industry, currently holds assets worth around $6.7bn under management.
Senior partner John Knight said: “This deal creates a company with a very distinctive growth profile and a high level of stable and operated production into the mid 2020’s.
“This is a unique profile among large oil and gas companies in the UK and it resembles what HitecVision and ENI have achieved in Norway with Vår Energi.”