Ithaca Energy reaches agreement with Eni for UK assets

Ithaca Energy has reached an agreement on a proposed deal with Italian energy group Eni, in relation to the upstream assets of its UK business.

At completion, Eni UK will be issued ordinary shares representing 38.5% of the enlarged issued share capital of Ithaca Energy, worth around £759m.

Ithaca stated that this will create a UK Continental Shelf (UKCS) “powerhouse“, producing 100,000 to 110,000 barrels of oil equivalent per day.

The deal should also be cash-generative, providing “material dividend capacity“ with the ambition for up to $500m total dividends each year in 2024 and 2025.

The combined group will have a market cap of circa £2bn.

Gilad Myerson, executive chair at Ithaca Energy, commented: “The transformational combination with Eni UK will further enhance Ithaca Energy’s position as a leading UKCS production and growth company, with positions in six of the 10 largest UKCS assets in the basin.

“The synergistic combination with Eni’s highly cash-generative UKCS portfolio has the ability to unlock our long-life organic growth opportunities creating a combined entity with substantial scale and longevity.

“With Eni as a significant, long-term and supportive shareholder, the enlarged group will benefit from increased financial strength to support the execution of our buy, build and boost strategy and gain access to Eni’s world-class technical capabilities and operational support.”

The portfolio of the Eni UK business includes operated interests in one producing field - Cygnus (38.75% working interest) - and non-operated interests in 10 producing fields - Elgin Franklin Area including Elgin, Franklin, West Franklin (21.867% working interest) and Glenelg (8% working interest), J-Area including Judy, Joanne, Jasmine (33% working interest) and Jade (7% working interest), Seagull (35% working interest) and Tommeliten A (0.07% working interest).

The deal excludes Eni UK's East Irish Sea assets and carbon capture and storage activities.

In 2023, the Eni UK Business generated $775m of earnings before tax.

Jefferies acted as financial adviser to Ithaca Energy.

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