HitecVision and NEO Energy today announce the revised terms of the acquisition of a portfolio of operated and non-operated assets in the UK North Sea from Total Oil UK Ltd and Total E&P North Sea UK Ltd (“Total”), first announced on 10th 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.
HitecVision and NEO have worked closely with Total to restructure the deal. The agreed revisions respond to current market conditions and retains the attractiveness of the transaction for Total and HitecVision. The structure of the consideration and phasing of payments have been modified, including vendor financing and earnout arrangements. We look forward to progressing swiftly to completion and for NEO Energy to take over the operation of this business.
Total and NEO Energy have developed detailed transition plans to deliver smooth handover of operations upon completion to allow NEO to focus on embedding planned operating efficiencies and growth plans as rapidly as possible.
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 boepd and substantial development upside. In addition, the portfolio adds reserves of c. 51 MMboe 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 Q3 2020.