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Total and NEO Energy renegotiate North Sea asset deal

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Oilfield Technology,

HitecVision and NEO Energy have announced the revised terms of the acquisition of a portfolio of operated and non-operated assets in the UK North Sea from Total, first announced on 10 July 2019.

Reflecting recent significant market volatility, NEO, HitecVision and Total have renegotiated the financial terms of the deal to respond to the current environment. Previous deal partner Petrogas is no longer part of the transaction.

Through the transaction NEO acquires a material, cash generative portfolio of assets in four producing areas of the UK North Sea, with an average 2019 production of approximately 23 000 boe/d and substantial development upside. In addition, the portfolio adds reserves of approximately 51 million boe to NEO Energy. The transaction includes operatorship of two asset clusters, the Quad 15 and Flyndre areas, and an operator organisation of more than 80 highly experienced employees and contractors.

Subject to regulatory approvals, the parties expect to complete the transaction by 3Q20.

“We have worked closely with HitecVision and its portfolio company NEO Energy to reconfirm our mutual commitment to completing the deal. The agreed revisions respond to current market conditions while retaining the majority of the value of the transaction. The structure of the consideration and phasing of payments has been modified, including interest-bearing vendor financing and earnout arrangements,” declared Jean-Pierre Sbraire, Chief Financial Officer at Total. “We look forward to progressing swiftly to completion and for NEO Energy to take over operations. We are confident that this sale is the right thing for both parties and for the business and its employees.”

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