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Ithaca Energy has agreed a deal to acquire almost all of Eni’s UK oil and gasfields in a transaction worth about £750mn that will turn the London-listed company into one of the North Sea’s largest producers.
Ithaca is buying the Italian energy major’s interests in 11 fields. It said the deal could boost its production to 150,000 barrels of oil equivalent per day by the early 2030s — more than double its output in 2023.
Eni will receive a 38 per cent stake in the enlarged Ithaca group, worth about £754mn based on its closing share price of 118.8p on Tuesday. The deal is expected to be completed in the third quarter, subject to regulatory approvals.
The two companies revealed last month that they were in talks about the North Sea assets and on Tuesday, confirmed the deal had been agreed.
Last year, Eni paid $4.9bn for London-headquartered oil and gas producer Neptune Energy in what was the largest cash deal in almost a decade for the European energy sector.
The sale to Ithaca — which is majority owned by Israel’s Delek Group — includes British assets that Eni took on with Neptune.
But the transaction does not include Eni’s interests in the Irish Sea or UK projects to capture and store carbon dioxide emissions.
It comes as North Sea producers are seeking scale to help fund investment and decommissioning costs.
Ithaca and others have complained about the impact of UK windfall taxes imposed on the sector in 2022 after Russia’s invasion of Ukraine pushed up energy prices.
Gilad Myerson, executive chair of Ithaca Energy, said the Eni deal was “transformational” and that the Italian company’s presence as a shareholder would boost its financial strength and technical capability.
Claudio Descalzi, chief executive of Eni, said the deal “represents an exciting opportunity for us to bring together complementary portfolios”.
“We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK,” he added.
Ithaca has grown rapidly over the past two years, acquiring North Sea rival Siccar Point in 2022, which gave it stakes in two of the UK’s largest producing fields, Schiehallion and Mariner.
The transaction also gave Ithaca stakes in the undeveloped Cambo and Rosebank fields.
Both of these fields are likely to be test cases for the ease of developing new oil and gas assets in the UK despite pressure to reduce carbon emissions in line with the country’s net zero commitment.
Ithaca and partner Equinor confirmed last year that they planned to develop Rosebank to produce oil from 2026-2027, sparking criticism from environmental campaigners and politicians including Humza Yousaf, Scotland’s first minister and leader of the Scottish National party.
At Ithaca’s latest annual results published in March, the company reported post-tax profit of $215.6mn for 2023, down from $1bn in 2022.
It said its production would fall to 56,000 to 61,000 barrels of oil equivalent per day after cancelling or deferring projects as a result of the higher taxes.