Key Moments
- TotalEnergies will hold a 47.5% stake in NEO NEXT+, becoming the largest shareholder in the new U.K. oil and gas venture.
- The merged entity is projected to produce about 250,000 barrels of oil equivalent per day in 2026, pending deal completion.
- TotalEnergies plans to retain up to $2.3 billion of decommissioning liabilities tied to its legacy assets as part of the transaction.
Strategic Combination to Create Leading Independent Producer
TotalEnergies SE (EPA:TTEF) has entered into an agreement to combine its United Kingdom operations with those of Repsol (BME:REP) and Hitec, forming NEO NEXT+, which is set to become the largest independent oil and gas producer in the U.K.
Under the terms of the agreement, TotalEnergies will emerge as the dominant shareholder in the new structure, while HitecVision and Repsol will also hold significant stakes. The transaction remains subject to regulatory clearance and is anticipated to be completed in the first half of 2026.
Ownership Structure and Transaction Details
The shareholding breakdown of NEO NEXT+ following completion of the deal is as follows:
| Stakeholder | Ownership in NEO NEXT+ |
|---|---|
| TotalEnergies SE | 47.5% |
| HitecVision | 28.875% |
| Repsol | 23.625% |
With its 47.5% interest, TotalEnergies will become the largest shareholder in the combined vehicle. HitecVision will control 28.875%, while Repsol will hold 23.625% of the newly formed group.
The parties expect the transaction to close in the first half of 2026, subject to the necessary regulatory approvals.
Market Context and Analyst Commentary
RBC analysts framed the announcement within a broader pattern of portfolio reshaping in the U.K. North Sea.
“The announcement reflects a continuation of the trend we’ve seen in recent years from the majors in the UK North Sea, coming on the back of Repsol’s deal in March and Shell and Equinor’s agreement in December 2024 to combine their UK offshore oil and gas assets,” according to RBC analysts.
RBC also highlighted potential fiscal implications from the transaction. The analysts noted that, while the companies involved may pursue greater efficiency and cost reductions, there is a risk that HMRC could receive lower tax revenues because the merged group is expected to pay less tax than the two firms would have done separately.
Production Outlook and Asset Base
The enlarged company is forecast to deliver production of approximately 250,000 barrels of oil equivalent per day in 2026. Its asset portfolio is set to span a range of key U.K. fields and interests, including:
- Penguin
- Mariner
- Shearwater
- Interests in the Elgin/Franklin complex
- Alwyn North
Before this latest agreement with TotalEnergies, Hitec and Repsol had guided that their joint venture’s production would reach around 130,000 barrels of oil equivalent per day in 2025.
Decommissioning Liabilities and Cash Flow Impact
As part of the structure, TotalEnergies will retain up to $2.3 billion of decommissioning liabilities associated with its legacy assets. The company anticipates that its participation in NEO NEXT+ will be immediately accretive to the joint venture’s cash flow once the deal is completed.
This approach echoes the framework used in the earlier merger between NEO Energy and Repsol announced in March. That transaction followed a similar model in which Repsol kept $1.8 billion of funding commitments, equal to 40% of decommissioning liabilities tied to its legacy assets.
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