Repsol and NEO Energy to Form NEO NEXT Energy

In a move set to reshape the North Sea energy landscape, Spanish energy giant Repsol and UK-based NEO Energy have announced an agreement to merge their North Sea operations.

The new joint venture, named NEO NEXT Energy, is set to become one of the largest independent producers in the region, with NEO holding a 55% stake and Repsol UK retaining the remaining 45%.

The merger, which is expected to finalise in the third quarter of 2025 pending regulatory approvals, comes at a time when many traditional oil majors are increasingly reconfiguring their North Sea portfolios. 

CEO of Repsol E&P, Francisco Gea, commented on the deal, saying: 

“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”.

Chair of NEO Energy, John Knight, also 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”.

With this merger, the newly formed venture is expected to drive operational efficiency and strategic growth on the UK Continental Shelf, heralding a new era for the region’s energy production and market dynamics.

 

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