Through the deal, Ithaca Energy will gain Eni UK’s operated and non-operated interests in several producing fields, including a 38.75% working interest in the Cygnus field, as well as non-operated interests in 10 other producing fields
Eni to transfer almost all of its UK upstream assets to Ithaca Energy. (Credit: QR9iudjz0 on Freeimages.com)
North Sea operator Ithaca Energy has agreed to acquire almost all of the upstream assets of Eni in the UK in an all-stock deal worth around £754m.
The deal excludes the East Irish Sea assets and carbon capture, utilisation, and storage (CCUS) activities of Eni in the UK.
Through the deal, Ithaca Energy will gain Eni UK’s operated and non-operated interests in several producing fields. This includes a 38.75% working interest in the Cygnus field, as well as non-operated interests in 10 other producing fields.
The fields include the Elgin Franklin Area, which encompasses Elgin, Franklin, and West Franklin, with a 21.867% working interest, as well as Glenelg with an 8% working interest.
Additionally, there are interests in the J-Area, comprising Judy, Joanne, Jasmine, and Jade, with a 33% and 7% working interest respectively, as well as the Seagull field with a 35% working interest, and the Tommeliten A field with a 0.07% working interest.
The merger of Eni’s assets with those of Ithaca Energy will establish a larger and stronger combined group with 2024 production exceeding 100,000 barrels of oil equivalent per day (boepd). Moreover, the enlarged entity holds the inherent potential to organically expand to 150,000boepd by the early 2030s.
The deal will allow Eni to sustain its expansion efforts in the UK Continental Shelf (UKCS), thereby reinforcing its commitment to the UK following the acquisition of Neptune Energy.
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.”
As per the terms of the deal, Eni will be issued new Ithaca Energy shares equivalent to 38.5% of the total shares after the merger. Existing Ithaca Energy shareholders will own the remaining 61.5% of the combined company.
Ithaca Energy executive chairman Gilad Myerson said: “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 deal, which is contingent on regulatory approvals and other conditions, is anticipated to close in Q3 2024.