Ithaca Energy has signed a deal to purchase the majority of Eni’s UK-based oil and gas producing assets for approximately $938.28 million in stock, as it looks to become one of the biggest independent energy companies in the North Sea.
The transaction entails Ithaca acquiring Eni’s British oil and gas producing assets, excluding specific holdings, such as those in the East Irish Sea and carbon capture and storage ventures in the country.
Accordingly, Ithaca, backed by Tel Aviv-listed Delek Group, will issue new shares to Eni, granting the latter a 38.5% stake in the expanded share capital of Ithaca.
Upon finalization, Delek will hold slightly over 50% of Ithaca, with Eni securing the right to nominate the next CEO of the amalgamated entity. This deal, expected to close in the third quarter, will take effect from June 30 for the purposes of financial reporting.
“The agreement affords the opportunity to build scale, realizing efficient upstream growth and maximizing value under a dedicated and focused management structure,” said Eni CEO Claudio Descalzi.
The transaction is part of Eni’s broader strategy to develop businesses focused on a geographical area or a specific activity and share the investment efforts with a partner.
Meanwhile, Ithaca anticipates that the combined company, with 37 producing assets, would produce between 80,000 and 87,000 barrels of oil equivalent per day (boe/d) in 2024., with future growth potential up to 150,000 boe/d by the early 2030s.
Ithaca Executive Chairman Gilad Myerson said the deal will allow the company to improve shareholder returns by paying special dividends through next year, while leaving it well-placed for organic and inorganic growth in the future.
Fitch Ratings estimated that the deal will give a $400 million boost to the company’s pre-tax earnings between 2025 and 2027, according to Reuters.