UK North Sea oil and gas producer NEO Energy potentially up for sale
(Bloomberg) – Norwegian private equity firm HitecVision is weighing options for UK oil and gas producer NEO Energy, including a potential sale, according to people with knowledge of the matter.
HitecVision is working with advisers as it studies strategic alternatives for NEO Energy, which could also include merging it with another operator, the people said, asking not to be identified because the information is private.
HitecVision declined to comment. NEO Energy didn’t immediately respond to requests for comment.
NEO Energy is one of a handful of newcomers to the UK North Sea that in recent years has swept up oil and gas assets, in particular those from majors who have left the aging basin to pursue higher returns elsewhere. With the backing of HitecVision in 2021, the firm bought ExxonMobil Corp.’s non-operated oil and gas assets in the UK’s central and northern North Sea for more than $1 billion.
Through acquisitions like this, NEO grew to become the sixth-largest oil and gas producer in the UK North Sea, with output of more than 80,000 boed in 2023, according to data from Wood Mackenzie Lens Upstream.
UK-focused producers have been hit hard by the introduction of the Energy Profits Levy in 2022 which raised the tax rate on oil and gas companies to 75%. Last week, UK Chancellor of the Exchequer Jeremy Hunt extended this windfall tax by a year to 2029. Britain’s Labour party has said it will increase the tax by an additional 3% if it forms the country’s next government.
