Ithaca Energy Announces $200 Million Special Dividend Post-Eni UK Merger

Ithaca Energy, a prominent North Sea oil and gas producer, is set to distribute a special dividend amounting to $200 million.

The London-listed entity confirmed its plans to return a total of $500 million to shareholders during the financial year 2024, having already disbursed a $100 million dividend.

This announcement follows Ithaca’s recent acquisition of a significant portion of Eni’s UK assets, a deal valued at over $930 million, completed in early October. The financial impact of this transaction has been retroactive to July.

Yaniv Friedman, the executive chairman of Ithaca, remarked that the merger has established a solid foundation for future growth, even amid the challenging fiscal landscape in the UK.

He pointed out the possibilities for additional acquisitions both in the North Sea and on an international scale, stating, “We are UK focused and we definitely see us continuing to invest in the UK. We do see opportunities and believe we can be a lead consolidator in this market. We are definitely looking at opportunities internationally, although we will selectively target assets.”

Ithaca reiterated its forecast of distributing a further $500 million in dividends by 2025.

For the first nine months of this year, Ithaca’s operational statistics indicated a production level of 52,501 barrels of oil per day, a decline from 71,048 barrels in 2023. This decrease was notably linked to operational challenges related to the assets and infrastructure in which Ithaca holds interests but does not operate. The net income for this period dropped to $134.7 million, down from $238.5 million.

Friedman noted that the total production within the expanded organization, which now has interests in over 30 producing assets, surpassed 120,000 barrels a day in the fourth quarter.

Luciano Vasques, the chief executive who transitioned from Eni UK, confirmed that progress on the Rosebank project, located to the northwest of Shetland, continues despite an ongoing legal challenge filed at the Court of Session in Edinburgh. He stated, “While we recognize the judicial review is underway, we do not expect a resolution until 2025.”

The Rosebank project, where Equinor is the primary operator and Ithaca holds a minority stake, has the potential to commence oil production in either 2026 or 2027, depending on its development trajectory.

Vasques added that continuous discussions with the UK government and the North Sea Transition Authority regarding the fiscal regime and energy profit levy are ongoing.

Analysts at Peel Hunt emphasized that Ithaca has evolved into a significantly larger and robust entity, equipped with ample financial capacity for future expansion endeavors.

Shares of Ithaca Energy experienced a rise of 9.2 percent, closing at 109p.