Energy firms Repsol and NEO Energy have struck a deal to merge their North Sea oil and gas businesses and create a joint venture.
The new company, NEO NEXT, will comprise of 55% ownership from Spanish firm Repsol and 45% from private equity-backed NEO Energy, Reuters reports.
Repsol says it is targeting financial benefits to the tune of more than £1billion from the merger, boosting cash generation and returns for shareholders.
John Knight, NEO UK chairman, suggested further deals could also be on the horizon.
He said: "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."
It comes after Shell and Equinor announced a similar merger of North Sea oil and gas assets in December.