Draft:NEO Energy

NEO Energy, short for New European Offshore, is a UK-based offshore oil and gas company operating on the UK Continental Shelf (UKCS) in the North Sea. It was founded in July 2019 and is backed by the Norwegian private equity firm HitecVision, which merged it with Verus Petroleum, another of its UKCS oil and gas producers, in October that year. NEO Energy produced 80,999 barrels of oil equivalent on average per day in 2022. The company has been described as part of a group of new entrants to the UK offshore industry following the 2014 price crash, with others including Neptune Energy, Harbour Energy’s Chrysaor, Zennor Petroleum, and Ithaca Energy-owned Siccar Point Energy. It was listed by Grant Thornton’s 2024 Scotland Limited report as the highest-earning private company in Scotland in 2024 before interest, tax, depreciation and amortisation (EBITDA), up from 26th the previous year, and the second-highest by turnover. It did not appear in the top five companies by number of employees.

Acquisitions
HitecVision’s North Sea Opportunity Fund reportedly taps US capital for investments in UK and Norwegian offshore operations. Prior to 2021, the private equity firm developed a $2 billion loan facility secured against its undeveloped reserves.

The company acquired some of Total UK’s North Sea assets in August 2020. It completed an acquisition of Zennor Petroleum on 12 July 2021 for up to $625 million. On 9 December 2021, it acquired a portfolio of ExxonMobil assets for more than $1 billion.

On 30 March 2022, it acquired JX Nippon Exploration and Production (U.K.) Limited for $1.66 billion. In October 2022, it acquired a 45 percent stake in the North Sea Isolde prospect from Equinor. In November 2023, it was announced that NEO would acquire the ‘Western Isles’ floating production storage and offloading vessel from Dana Petroleum for an undisclosed amount.

Operations
In 2023, NEO Energy was the sixth-largest oil producer in the North Sea. On 31 January 2024, the UK’s North Sea Transition Authority announced the company would be awarded licenses in the second tranche of the 33rd licensing round. On 3 May 2024, NEO was allocated two blocks in the third tranche of the round.

Controversies
The North Sea Transition Authority fined NEO £100,000 in April 2024 for venting more than four times its permitted quantity of gas for the calendar year 2022. The company was originally granted 1.035 tons of venting per day, equivalent to just under 378 tons per year, for the Donan, Lochranza, and Balloch fields combined. However, when it identified the issue on 1 November on 2022, it had already exceeded the venting consent by approximately 1,200 tons through cold flaring. The NSTA said NEO had incorrectly allocated its permitted quantity of venting, or the controlled release of hydrocarbon-containing gases into the atmosphere, to its consent for flaring.