UK-based Ithaca Energy has announced the start of exclusive negotiations with Eni for the acquisition of substantially all of its North Sea exploration and production assets. This takeover, potentially worth over a billion dollars, could significantly transform Ithaca’s stature in the market. Eni, having previously acquired Neptune Energy for $4.9 billion, is looking to swap its UK business for shares in Ithaca. Eni would then hold between 38% and 39% of Ithaca’s share capital, marking the start of a long-term partnership.
Operational and financial details of the agreement
Under the agreement, Eni will contribute its UK operations in exchange for new shares issued by Ithaca Energy. This transaction would mark a significant increase in Ithaca’s assets and production capacity. Eni’s UK operations, with pro forma production of 40-45 kboe/day and 2P reserves of around 100 mmboe, will add significant scale to the business. This combination of assets represents a value-enhancing opportunity for Ithaca’s shareholders.
Strengthening the portfolio and strategic expansion
The integration of Eni’s assets would transform Ithaca into one of the largest independent operators in the North Sea by production. Ithaca would hold stakes in six of the ten largest fields, strengthening its portfolio in key hubs such as Elgin Franklin, J-Area, Cygnus and Seagull. This improved positioning would enable Ithaca to play a leading role in exploiting the North Sea’s oil and gas resources.
Completion of this significant agreement will require the approval of Ithaca’s shareholders, in line with regulatory requirements for a class 1 transaction. Due to the significant stake Eni will hold in Ithaca, specific measures have been taken to comply with the UK’s Mergers and Acquisitions Code. An exemption from the mandatory offer was granted, allowing the deal to go ahead without the additional approval of Ithaca’s independent shareholders.
