Texas-based oil and gas company, ExxonMobil, has recently announced trading off its UK North Sea assets for a valuation of around USD 1 billion to Norwegian private equity-backed NEO Energy. It has been speculated that the transaction deal would double NEO Energy’s UK-based production to 70,000 barrels a day of oil equivalent, with ExxonMobil selling its UK upstream projects and assets excluding the gas field stakes in the SEGAL pipeline infrastructure and southern North Sea.
Reports have it that the latest acquisition deal consists of stakes in 14 fields, that are majorly operated by Shell. In 2019, ExxonMobil’s share of their production was somewhere around 38,000 barrels per day, of which 23,000 barrels per day was remainder gas and oil.
Moreover, the sales deal also includes shares in two projects that are currently under redevelopment by Shell, Condensate hub and shearwater gas and Penguins oil field. These projects are due on stream for this year and 2022.
In fact, both the companies have predicted that the USD 1 billion price-tag could be increased by as much as USD 300 million depending on the way future commodity prices would increase.
Besides, the purchase of ExxonMobil would bring NEO an additional 140 million boe of reserves and is expected to produce up to 70,000 barrels per day in total by the end of 2021, accounting for an overall production of 80,000 barrels of oil equivalent daily by 2024 end.
Speaking on the recent acquisition deal, Senior VP at ExxonMobil- Neil Chapman cited that the company is continuing to improve its portfolio by divesting assets that are deemed to be less strategic for it while laying immense focus on its investments in advantaged projects that are among the best ones in the industry.
While on the other hand, Russ Alton- CEO of NEO mentioned that the latest acquisition builds on the firm’s current North Sea portfolio and also towards its ambition of emerging as a leading producer on the UK continental shelf.
He added that NEO, in alliance with its operating partners, is seeking to extract value from the ExxonMobil acquisition and other opportunities, while simultaneously focusing on enhanced environmental performance.