Ithaca Energy (LON: ITH) is now the sole owner of the Fotla discovery after buying the remaining 40% stake from Spirit Energy.
As part of the sale and purchase agreement the London-listed oil group has also picked up three exploration licences (P.213 Area C, P.345 Area A and P.2536).
The acquisition is subject to the satisfaction of certain conditions precedent including regulatory approval.
Upon approval it will bring Ithaca’s working interest in Fotla to 100%, giving the company full control over pre-final investment decision (FID) work and timing.
Fotla is located in Block 22/1b of the Central North Sea in 431 feet of water, about 6 miles south-west of Ithaca’s Alba field.
The small find was uncovered in August 2021 during drilling in the region, and subsequently appraised by two side-tracks – analysts hailed it as a “ray of light” in an otherwise subdued year.
Development plans for Fotla – estimated to hold mid-case recoverable resources of 21 million barrels of oil equivalent – are currently under evaluation, with first production targeted in 2026, while an FID is expected this year.
The conceptual field development plan consists of a subsea tieback to existing infrastructure, likely the Alba platform.
All in all the total transaction for the interest “comprises two capped contingent payments”, which are payable approximately two thirds on final investment decision and a third on first production.
Alan Bruce, chief executive of Ithaca, said: “We are pleased to announce the acquisition of the remaining stake in the Fotla Discovery and three additional exploration licenses. The acquisition will provide Ithaca Energy with full control over the pre-final investment decision work programme and timing of project sanction as we seek to maximise value from our high-quality investment portfolio.”
Fotla is one of a number of projects, like Cambo, Rosebank, and Marigold, that Ithaca is preparing to splash the cash on in the coming years.
Should they all get the go ahead, the firm is projecting near term capex levels of between $900 million (£754m) and $1.3 billion (£1.1bn), according to figures given at the end of 2022.
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