UK North Sea operator NEO Energy, part of Norway’s HitecVision, has agreed a deal worth more than $1bn with ExxonMobil to acquire the US energy giant’s non-operated upstream assets in the UK central and northern North Sea.
The agreement consists of 21 assets, with 14 producing fields including Penguins, Starling, Fram, the Gannet Cluster and Shearwater, and the Elgin Franklin fields.
The sale price of more than $1bn has additional upside of around $300m based on potential for increase in commodity prices.
The deal puts NEO Energy among the top five oil and gas companies in the UK, and the company will become Shell’s largest partner in the UK Central and Northern North Sea.
Russ Alton, CEO of NEO Energy, said: “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.”
ExxonMobil will retain its non-operated share in upstream assets in the southern North Sea, and its share in the Shell Esso gas and liquids infrastructure that supplies ethane to the company’s Fife ethylene plant.
The transaction is expected to close by the middle of 2021 subject to approvals.