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NEO Energy Upstream UK has agreed to acquire oil and gas company Zennor Petroleum from private-equity firm Kerogen Capital for $625m, including deferred and contingent payments.

Under the agreement, NEO Energy will acquire Zennor Petroleum’s portfolio of assets located in the Central and Northern North Sea.

Zennor has stakes in the Mungo & Monan, Britannia, Bacchus and Cormorant East producing fields, a 100% operated interest in Finlaggan development project in the UK Central North Sea, and interests in several near-field discoveries.

The deal is a part of NEO Energy’s plan to increase the portfolio of operated assets and enhance technical and operating skills and capabilities.

NEO Energy CEO Russ Alton said: “This transaction provides a further immediate uplift to NEO’s production and resource base with several high-quality follow-on development opportunities.”

The latest deal follows the signing of a $1bn agreement last month by NEO and HitecVision, whereby NEO agreed to acquire a major portfolio of non-operated oil and gas assets in the Central and Northern North Sea from ExxonMobil.

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Alton added: “This follows closely on from our agreement with ExxonMobil and is a further demonstration of the scale of our ambition in the UKCS, with a clearly defined target of achieving 120,000boepd in 2023.”

The transaction is expected to add the Zennor portfolio of about 40 million barrels of oil equivalent (MMboe) of reserves and more than 90MMboe of un-risked resource to NEO.

HitecVision senior partner John Knight said: “This deal creates a company with a very distinctive growth profile and a high level of stable and operated production into the mid-2020s.

“This is a unique profile among large oil and gas companies in the UK and it resembles what HitecVision and ENI have achieved in Norway with Vår Energi.

“In HitecVision, we have deliberately invested both via M&A and organic growth through the cycle to create companies like Vår, Sval and NEO.”