Ithaca Energy (LON: ITH) has agreed to combine its UK North Sea assets with Italian oil giant Eni (BIT: ENI) creating a “powerhouse” in the region.
Eni will hand over control of the assets to Ithaca, including the recently-acquired portfolio of Neptune Energy, in exchange for shares in Ithaca Energy worth £754m.
Jefferies, which advised on the deal, said the combined group will have a market capitalisation of around £2 billion.
The combined Ithaca Energy and Eni will have daily production of 100,000 – 110,000 barrels of oil equivalent per day, with ambitions of 150,000 per day by the early 2030s.
Completion of the deal – mooted last month – is expected in the third quarter of this year, making it the second-largest independent operator in the basin based on 2024 production levels.
The move comes hot on the heels of Eni’s $4.9bn takeover of Neptune Energy earlier this year.
Eni and Ithaca said the combination will create the “agility of an independent and capability of a Major, implementing Eni’s regional satellite model”.
Eni will own more than a third of Ithaca business
© Supplied by EniOnce complete, Eni will own 38.5% of the group, with Ithaca Energy controlling the remaining 61.5%.
Ithaca Energy is expected to sell off 3% of the group to ensure a total of 10% of the business is in public hands under minimum listing rules by the Financial Conduct Authority.
The combined firm has the ambition for up to $500 million total dividends each year in 2024 and 2025.
‘Transformational combination’
Gilad Myerson, executive chairman of Ithaca Energy, said: “The transformational combination with Eni UK will further enhance Ithaca Energy’s position as a leading
“UKCS production and growth company, with positions in 6 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.”
Eni CEO Claudio Descalzi said: “The combination with Ithaca represents an exciting opportunity for us to bring together complementary portfolios establishing a material position on the UKCS with significant growth and optimisation opportunities.
“We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK and we see the opportunity for Eni and Ithaca to realise material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply.”
Eni assets – excludes CCUS and East Irish Sea
The portfolio of the Eni UK Business includes operated interests in one producing field: Cygnus (38.75% working interest).
It also covers 10 non-operated stakes in 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 combination excludes Eni UK East Irish Sea assets and CCUS activities.
Aberdeen
Gilad Myerson spoke with Energy Voice last month once the deal was originally mooted on its potential and implications for the Aberdeen operations of the group – read more below:
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