Repsol and NEO Energy to Merge North Sea Operations

Spanish energy giant Repsol and UK-based NEO Energy have reached an agreement to merge their North Sea operations, a move that will create ‘a leading independent producer in the North Sea’. 

The combined business will be jointly owned by NEO (55%) and Repsol UK (45%). The new company will be named NEO NEXT Energy and is expected to become one of the largest producers in the North Sea. 

It is expected that the transaction between the two companies will be completed during the third quarter of 2025 (subject to approvals from the relevant authorities).

Commenting on the deal, Francisco Gea, the CEO of Repsol E&P, said: 

“This combination will create a jointly governed business which will call upon the key strengths of both shareholders. Repsol contributes operational capabilities on production, development, and decommissioning activities which will be combined with NEO Energy expertise on financial and commercial matters. We believe this combined business has many more opportunities for profitable growth in the basin and beyond”.

John Knight, Chair of NEO Energy, commented: 

“This is a great deal for all stakeholders. Our strategy can be summarised as “Resilience, Yield and Growth”: the combined company has much more scale and diversity and opportunities for cost consolidation and portfolio high-grading giving resilience despite the tough conditions in the UK. 

The benefits of synergies from consolidation will create much stronger value creation, profit and cash flow yield for shareholders and more options for capital allocation decisions well into the next decade. 

But this company will also be very well positioned to choose both organic and inorganic growth. We will certainly look to be making more value accretive acquisitions. We have known Repsol E&P for many years and have the highest regard for them as a capable and reliable partner”.

NEO NEXT Energy is expected to have a large and diverse asset portfolio, and is one of many companies to have arisen in recent years as oil majors seek to divest and/or exit the North Sea. 

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