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Ithaca-Eni deal creates UK North Sea’s second biggest oil and gas firm

Italy's Eni has taken a near 40% stake in Aberdeen-based Ithaca Energy.

Ithaca Energy chairman Gilad Myerson.
Ithaca Energy chairman Gilad Myerson. Image: Ithaca

North Sea oil and gas company Ithaca Energy has confirmed a deal to combine its business with “substantially all” of the UK assets of Italy’s Eni.

Eni is taking a 38.5% stake in Aberdeen-headquartered Ithaca.

The merger deal was mooted at the time of Ithaca’s annual results in March.

It creates the UK’s second largest oil and gas firm after Harbour Energy.

Enlarged North Sea business could be producing 150,000 barrels a day by early next decade

The combination will initially deliver production of 100,000-110,000 barrels of oil equivalent (boe) per day, thanks to stakes in six of the UK’s 10 biggest oil and gas fields.

But it is thought this could soar to 150,000boe per day by the early 2030s.

Ithaca said this would see it leapfrogging Harbour to become the UK’s top producer.

Eni acquired Neptune Energy last year.
Eni acquired Neptune Energy last year. Image: Darrell Benns

Eni acquired its UK North Sea assets through a £3.8 billion-plus takeover of Neptune Energy last year.

They include an operated 38.75% interest in the Cygnus gasfield in the southern North Sea, and non-operated stakes in Elgin Franklin, the J-Area, Seagull and Tommeliten A.

These assets have all been managed from offices on North Esplanade West, Aberdeen.

About 100 staff in Aberdeen, among 200 in the UK, transferred to Eni from Neptune.

Cygnus Alpha platform.
Cygnus Alpha platform.

The deal between Ithaca and Rome-headquartered Eni excludes East Irish Sea assets and UK-based carbon capture, utilisation and storage activities.

Ithaca said it now had the “agility of an independent and capability of a major”.

Gilad Myerson, the firm’s executive chairman, added: “The transformational combination with Eni UK will further enhance Ithaca Energy’s position as a leading UKCS (UK continental shelf) production and growth company.”

‘Solid platform’ for growth

The deal creates a North Sea empire with “substantial scale and longevity” he said.

He continued: “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 combination will create a solid platform which can underpin material shareholder distributions, including an ambition to pay special dividends in 2024 and 2025, as well as future organic and inorganic growth.”

Ithaca was floated on the London Stock Exchange in 2022. Image: Ithaca Energy

In March, London-listed Ithaca reported pre-tax profits of £239.3 million for 2023.

This was down from nearly £1.8bn the year before.

The firm’s 2023 profits performance was hit by write-downs on development and production assets totalling nearly £442m.

Revenue for the latest period came in at £1.84bn, down from £2.06bn previously.

Future output will also be boosted by investment in Ithaca’s enhanced oil recovery project on Captain as well as the firm’s 20% share in production from the new Rosebank development west of Shetland.

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