NORTH Sea focused NEO Energy has clinched another bumper acquisition in the area as it continues its rapid expansion despite the challenges posed by the coronavirus crisis.
The private equity-backed firm has agreed to buy Zennor Petroleum for up to $625 million (£450m).
The deal will give the firm stakes in a portfolio of fields in the area and allow it to add around 40 million barrels
It has been announced two weeks after NEO cemented its standing as one of the leading independents in the North Sea by agreeing to acquire the bulk of the portfolio amassed by US giant ExxonMobil for around $1bn.
READ MORE: US giant sells bumper North Sea portfolio
NEO’s chief executive, Russ Alton, said the Zennor deal underlined the scale of the company’s ambitions in terms of the UK North Sea.
It will continue the shake-up in the area, which has accelerated amid the fallout from the coronavirus crisis.
This triggered a sharp fall in oil prices last year in response to which some firms decided to reduce exposure to the North Sea.
A range of firms have sold North Sea assets to raise funds to invest in areas in which they see more potential. ExxonMobil is increasing investment in US shale fields and offshore Guyana.
READ MORE: Cut-price exit from North Sea by Scots energy giant bodes ill for area
However, some investors have decided the downturn has created opportunities to acquire assets at attractive prices.
The Brent crude price has rallied in recent months amid the rollout of coronavirus vaccines and moves by major exporters such as Saudi Arabia to limit production to support the market. The price rose above $70 per barrel on Sunday for the first time since the Covid-19 pandemic started. It rose that day following attacks on Saudi facilities.
NEO is backed by Norway’s HitecVision and acquired a big North Sea portfolio from France’s Total last year.
READ MORE: Quarantine hotel scheme threatens oil and gas industry jobs
Zennor won backing from the Kerogen Capital investment business to buy North Sea assets during the last downturn.
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