JX Nippon Selling UK Assets To NEO Energy For $1.7B

UK-based exploration and production company NEO Energy has expanded its portfolio with the acquisition of 100 percent of the share capital of JX Nippon Exploration and Production U.K. (JX UK) for around $1.7 billion.

JX UK holds non-operated interests in multiple producing fields and associated infrastructure in the UK North Sea including a 20 percent interest in the Mariner field and an 18 percent interest in the Culzean field.

However, it is worth noting that the transaction excludes JX Nippon’s interests in the Andrew Area. The transaction is subject to approvals from the relevant authorities and regulatory consents.

JX Nippon said that the purchase price was based on the enterprise value of $1.655 billion as of March 31, 2021, after adjustment for debt, working capital, etc.

The transaction is part of JX Nippon’s ongoing global portfolio management strategy to strengthen its upstream portfolio by selling projects that are no longer critical to the business.

“JX is part of the ENEOS Group and is committed to the Group’s ‘Long Term Vision for 2040’, which includes contributing to the development of a low carbon society,” Hiroshi Hosoi, JX President and CEO, said.

“In line with the company’s long-term vision, we have been investing in various sustainable projects in Vietnam, Malaysia, Australia, and the USA, including the Petra Nova CCUS project, one of the largest carbon capture projects in the USA. This transaction is another step towards the group’s long-term vision as we continue to contribute to the development of a low carbon society,” he added.

NEO Energy, unlike JX Nippon, has been buying UK North Sea assets left and right. This is quite obvious as it acquired assets from TotalEnergies, ExxonMobil, and Zennor Petroleum.

The buy of TotalEnergies’ and Zennor assets are completed but the one with ExxonMobil is still being looked at by the UK’s Oil and Gas Authority.

Last month, the OGA started investigating the proposed sale, which includes ExxonMobil’s 13 producing fields along with Elgin Franklin. The investigation started since the sale to NEO was not progressing as quickly as expected.

It is worth noting that NEO Energy recently achieved the first gas from its Finlaggan field development, a tieback to the Britannia platform in the UK North Sea. The Finlaggan field was acquired through an acquisition of Zennor Petroleum assets.

Read the latest issue of the OGV Energy magazine HERE.