UK North Sea oil firm Ithaca Energy, of Aberdeen, is making progress with an acquisition, its chief financial officer has said.
David Crawford also said Ithaca was looking at options for refinancing its reserve-based lending (RBL) facility and “doing some work” on a potential IPO.
During Ithaca’s Q1 results webcast yesterday, he said the company was “quite far down the line” with one possible acquisition, which could be agreed within the next two months.
He kept most of the details under wraps, but it’s clear that the transaction would not be a mega-deal.
Mr Crawford said it won’t involve a “big cash outflow”, but stressed that a small deal can sometimes create “more value than a big one”.
The UK North Sea has been one of the “hottest” oil and gas regions for mergers and acquisitions this year.
Neo Energy generated most headlines with its swoop for a package of assets held by ExxonMobil and its takeover of Zennor Petroleum.
Mr Crawford said it was “no secret” that Ithaca wanted to grow its production.
The company, whose parent is Delek Group, of Israel, pumped out 65,000 barrels of oil equivalent per day in the first quarter of 2021, but is keen to top 100,000 as soon as possible.
Mr Crawford said Ithaca had looked at most of the acquisition opportunities that had come up this year, but had decided to keep its powder relatively dry, to date.
He said: “We have looked at M&A this year. It’s no secret we want to grow, but we have internal prospects ourselves, so we do not need to grow externally.”
Mr Crawford, who joined Ithaca from Repsol Sinopec Resources this year, added: “Want to grow production, but not at all costs. “We’re still involved in one process and we’re quite far down the line with that, but it will probably be a month or two (before it is agreed).
“It would not be a big cash outflow and would be easily within our current borrowing facility.”
The CFO said Ithaca was looking at options for a refinancing later this year so that it could include the “full benefit of Captain EOR 2” in its RBL, which would increase availability by £280m.
“We’re working through the options, but it could be weeks or months before we have the detail of what that will look like,” he said.
Earlier this week, parent company Delek Group, of Israel, said it would make every effort to complete an IPO of Ithaca, potentially in London and Tel Aviv, by September 15 2021.
Mr Crawford said it was well-known that Delek may want to IPO Ithaca at some stage.
He said: “There has been no definitive decision on an IPO. We are doing some work on it, but it will come to a conclusion if it is the right thing for Ithaca and Delek.”
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