UK oil and gas companies shed execs, directors amid industry warnings

North Sea upstream companies Deltic Energy and Neo Energy announced high-level executive and board level departures Oct. 15 following recent warnings of growing uncertainty over the outlook for the UK's upstream oil and gas sector.

Privately owned Neo, which has bought stakes in more than a dozen oil and gas fields from the likes of ExxonMobil, Total and JX Nippon in recent years, announced the departure of CEO Paul Harris, chief technical officer Martin Rowe, chair Martin Bachmann and two non-executive directors.

The CEO role goes to former general counsel and head of business services Andy McIntosh, and the new executive chair is John Knight, a partner at Neo's Norwegian private equity owner, HitecVision.

Neo said Sept. 2 it was slowing investment activity due to tax and regulatory changes that heightened uncertainty and made new investment "extremely challenging", including the proposed 100 million Buchan Horst oil project. Neo had bought a 50% stake in the project to redevelop the Buchan oil field and taken over as operator in 2023.

Neo holds minority stakes in a string of fields including TotalEnergies' Elgin-Franklin and Culzean hubs, Shell's Shearwater oil and gas hub, the Shell-operated Penguins oil project, BP's ETAP hub, CNOOC's Golden Eagle field and Harbour Energy's Britannia oil hub, according to the company's website.

The company's equity share of production was just under 76,000 b/d of oil equivalent in 2023, according to its accounts.

Neither Knight nor Neo responded immediately to requests for comment.

Looking overseas

Separately, UK explorer Deltic announced the immediate departure of CEO Graham Swindells, to be succeeded by incumbent chief operating officer Andrew Nunn. The move came after the company failed to find a farm-out partner to proceed with drilling on the Pensacola gas license and pulled out of the license in June.

The company awaits results from another UK exploration drilling project alongside Shell and Dana Petroleum known as Selene. However, it said in September it would pursue "more favorable" opportunities in overseas jurisdictions more supportive of the oil and gas industry.

"Despite the recent challenges presented by the UK's political and fiscal environment, I am proud of what we have achieved in establishing Deltic as one of the UK's leading explorers," Swindells said Oct. 15, adding his successors would seek "to extract the maximum value from the existing UK asset base and rebuild a portfolio focused outside of the UK."

The UK upstream industry has been contending with the threatened withdrawal of tax allowances for investment under the UK's new Labour government and a review of the environmental approvals process due to be completed in spring 2025, following a successful legal challenge to an onshore oil project known as the Finch Ruling.

The government has already announced an increase in the Energy Profits Levy from Nov. 1, expected to lift the headline tax rate to 78%. The government's tax plans are due to be set out Oct. 30 in a budget statement.

Oil prices have not been especially favorable, though UK gas prices remain relatively high. The Platts Dated Brent benchmark was on average 7.4% lower year on year in the third quarter 2024 at $80.34/b.

Platts, part of S&P Global Commodity Insights, last assessed the UK NBP month-ahead gas price at 100.26 pence/therm on Oct. 14.