NEO Energy has announced a strategic merger with Repsol Resources UK, creating a leading independent producer in the North Sea.
Under the terms of the Transaction, the combined business will be jointly owned by NEO (55%) and Repsol UK (45%) and have a large and diverse asset portfolio which is expected to generate material cashflows and provide a platform for organic and inorganic growth. Repsol will retain US$1.8 billion of the decommissioning liabilities related to its legacy assets, enhancing the cash flows of the combined business.
The combined group will be renamed NEO NEXT Energy Ltd and is expected to become one of the largest producers in the region.
Completion of the Transaction remains subject to approvals from the relevant authorities and regulatory consents and is expected during the 3Q25.
Francisco Gea, CEO of Repsol E&P commented: “This combination will create a jointly governed business which will call upon the key strengths of both shareholders. Repsol contributes operational capabilities on production, development, and decommissioning activities which will be combined with NEO Energy expertise on financial and commercial matters. We believe this combined business has many more opportunities for profitable growth in the basin and beyond.”
John Knight, Chair of NEO Energy, commented: “This is a great deal for all stakeholders. Our strategy can be summarised as “Resilience, Yield and Growth”: the combined company has much more scale and diversity and opportunities for cost consolidation and portfolio high-grading giving resilience despite the tough conditions in the UK. The benefits of synergies from consolidation will create much stronger value creation, profit and cash flow yield for shareholders and more options for capital allocation decisions well into the next decade. But this company will also be very well positioned to choose both organic and inorganic growth. We will certainly look to be making more value accretive acquisitions. We have known Repsol E&P for many years and have the highest regard for them as a capable and reliable partner.”
Read the latest issue of Oilfield Technology magazine for upstream news, project stories, industry insight and technical articles.
Oilfield Technology’s January/February 2025 issue
The January/February 2025 issue of Oilfield Technology includes keynote articles on enhancing offshore safety and risk management; technical articles on digital technology, drilling, EOR, and flow control. We also cover predictive maintenance, and production monitoring.