A string of senior business leaders will be leaving private equity-backed NEO Energy the firm announced on Tuesday.
The North Sea operator confirmed that its chief executive, chairman, chief technical officer, and two non-executive directors are set to leave the business.
Replacing these people are those with a background in law and investment banking, adding to rumours that NEO Energy’s Norwegian owner HitechVision is looking to sell the firm as projects stall due to punitive UK fiscal policies.
However, the decision to “clear out” management ahead of the UK’s Autumn budget came as a “surprise” to Panmure Liberum director and oil and gas research analyst Ashley Kelty, who nonetheless speculated that the firm was pushing ahead with a sale.
Kelty told Energy Voice: “I had heard that Hitech had said to NEO – or certainly internally NEO were told – nothing was going to happen before the end of the year and certainly after the budget.
“So, it certainly does seem a bit of a surprise that they’ve done the clear-out now.”
Time for NEO to ‘shut down’
He suggested that HitechVision may have received some “bad news about what is coming in the budget” leading to the private equity firm to accelerate its plans.
NEO Energy and HitechVision were asked about this and declined to comment.
Kelty said: “It does feel like Hitech has gone ‘You know what? We’re just going to sell this’.
“The problem is that, as with all these private equity-backed vehicles, they’ve all got massive in prices.
“So, unless Hightech want to crystallize a big loss, they’re not going to be able to get a buyer unless they go and sell to some other private equity house and they can get some sort of stitch up around valuation or whatever to make it look like they’ve made money on it.”
The death of the Buchan development?
© Supplied by NEO EnergyNEO Energy recently stalled investment in UK projects amid political and fiscal uncertainty regarding the future of the country’s oil and gas industry.
The firm, yet again, stalled the Buchan redevelopment in light of the government’s announcements regarding the Finch ruling.
NEO shared last month that project “consultation is not expected to conclude until Spring 2025”.
In June, it was announced that first oil from Buchan had been pushed back to 2027 following the call for a UK general election.
Production was originally tipped to kick off in the fourth quarter of 2026 but has since been pushed back to “late 2027”.
NEO Energy, operator of Buchan, owns a 50% stake while Serica claims 30% and Jersey Oil and Gas accounts for the remaining 20%.
With the news of NEO Energy’s management shake-up, the analyst said that “this will probably kill off the GBA development”.
He added: “Certainly in the near term until there’s some clarity about what’s happening with NEO.”
Serica and Jersey Oil and Gas were approached for comment.
‘More departures’ in NEO Energy’s future
© Supplied by DC ThomsonLooking ahead, Kelty claimed there will be “more departures” from NEO Energy as HitechVision looks to sell up.
“This is obviously a bunch of Hightech-approved bodies that have been parachuted into manage this,” he said of the incoming business leaders.
“It certainly does look like they’re trying to sell it and manage a sale, particularly since they all seem to be lawyers, or former investment bank types, rather than oil industry types who would be looking to undertake a development.”
The firm announced that John Knight has been appointed executive chair of the board alongside newly promoted CEO Andy McIntosh
Knight has a background in energy investment banking and previously worked as a barrister.
McIntosh has been with NEO Energy since October 2019, having served as general counsel and director of business services until his recent appointment to the top job.
The new CEO has a legal background, having worked as a senior legal advisor for ConocoPhillips and Maersk Oil.
The analyst claimed that the newly appointed NEO Energy bosses are “definitely a management team that are looking to exit”.
On Tuesday, Neo said chief executive, Paul Harris, chief technical officer Martin Rowe, chairman, Martin Bachmann, and two non-executive directors – David Gair and Fiona Hill – would leave the firm.
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