Ithaca Energy signs £754m all-stock deal to acquire Eni’s UK upstream assets

Ithaca Energy has finalized an agreement to acquire the majority of Eni‘s upstream assets in the United Kingdom in a substantial all-stock transaction valued at approximately £754 million. This deal strategically excludes Eni’s East Irish Sea assets and its carbon capture, utilization, and storage (CCUS) activities in the UK.

Through this acquisition, Ithaca Energy will absorb Eni UK‘s operated and non-operated interests across several prolific fields. This includes a significant 38.75% working interest in the Cygnus field, as well as interests in 10 other producing fields. Notable among these are the Elgin Franklin Area—encompassing Elgin, Franklin, and West Franklin—with a 21.867% interest, and Glenelg with an 8% interest. Additional stakes include substantial interests in the J-Area, featuring Judy, Joanne, Jasmine, and Jade, as well as the Seagull field with a 35% working interest, and a minor stake in the Tommeliten A field.

The merger of Eni’s assets with those of Ithaca Energy is set to create a more substantial and robust entity, with projections for 2024 production to exceed 100,000 barrels of oil equivalent per day (boepd). There is also an anticipated organic growth potential to reach 150,000 boepd by the early 2030s, positioning the combined group for significant expansion and operational optimization.

Eni CEO Claudio Descalzi commented on the merger, stating, “The combination with Ithaca represents an exciting opportunity for us to bring together complementary portfolios establishing a material position on the UK Continental Shelf with significant growth and optimization opportunities.” This deal follows closely after Eni’s acquisition of Neptune Energy, reinforcing its commitment to expanding its footprint on the UKCS.

Ithaca Energy Executive Chairman Gilad Myerson also noted the strategic benefits of the acquisition: “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.”

Following the closure of the deal, which is expected in the third quarter of 2024 pending regulatory approvals, Eni will receive new Ithaca Energy shares representing 38.5% of the total shares of the merged company, with the existing Ithaca shareholders retaining a 61.5% stake. This distribution underlines the transaction’s nature as a partnership designed to leverage mutual strengths and capabilities.

This acquisition is poised to enhance Ithaca Energy’s operational scale and financial robustness, enabling the execution of its “BUY, BUILD, and BOOST” strategy. With Eni’s backing as a significant, long-term shareholder, the expanded group will benefit from greater financial flexibility and access to world-class technical expertise and operational support, enhancing its ability to meet the challenges of security, affordability, and sustainability of energy supply.

The merger between Ithaca Energy and Eni’s UK assets represents a pivotal development in the energy sector, signifying a major shift towards consolidation and enhanced operational efficiency on the UK Continental Shelf. This strategic move is expected to yield significant long-term value for both entities, driving forward their agendas in a competitive and evolving energy market.