Neptune Energy has followed a surging private equity push in the North Sea, by making a 280 million US dollar (£221.3 million) splash to take over oil fields from Italy’s Edison E&P.
The deal with Edison’s new owner, Energean Oil & Gas, transfers the equivalent of 30 million barrels of oil to the North Sea driller.
Chief executive Jim House said the takeover makes the company stronger in an area with high-quality oil fields.
It includes a 25% stake in Glengorm, the largest new gas field in the UK North Sea for a decade when it was announced earlier this year.
“The assets are an excellent fit with our North Sea portfolio,” House said.
The company is paying 250 million US dollars in cash, with another 30 million dollars (£23.7 million) by 2025 if Glengorm contains more oil and gas than expected.
The deal is still dependent on Energean completing its up to 850 million US dollar (£671.7 million) takeover of Edison.
It was announced in July, but Mediterranean-focused Energean was expected to sell off its UK business as it refocuses on its core areas.
Energean chief executive Mathios Rigas said: “At the time of announcement, we committed to our shareholders that we would seek to dispose of non-core assets that do not adhere to our strategy. I am delighted to be able to make this announcement today, which demonstrates our commitment and capability to deliver upon our stated goals.”
Founded by Carlyle and CVC Capital Partners, Neptune’s move adds to a series of private equity-backed deals in the North Sea as the oil majors pull out of the dwindling basin.
This year alone, private equity house Hitec Vision and Omani oil group Petrogas paired up to buy French Major Total’s oil fields in the North Sea for 635 million dollars (£501.8 million), and Chrysaor bought fields from Conoco Phillips for 2.7 billion dollars (£2.1 billion).
They are filling a gap left by oil majors pulling out of the North Sea. Alongside smaller and nimble new outfits, the entrants are using new technology to extract the last resources from the basin that do not fit into the business plans of the larger firms.