Ithaca to become second largest

Ithaca to become second largest

Ithaca’s acquisition of Chevron North Sea UK, for USD 2 billion, is the peak in their hunt for new assets.

With the new acquisition, Ithaca Energy, a subsidiary of the Tel Aviv based Delek Group, has become the second largest independent oil and gas producer in the UK North Sea.

The transaction will further add ten producing fields to the existing Ithaca portfolio, four of which are operated by the company, translating into a ~150% increase in the 2P reserves and a 300% increase in forecast 2019 production.

In total, Ithaca Energy will manage 18 producing fields, in a prolific area, with unlimited exploration opportunities. It is forecasted a pro-forma 2019 production of approximately 80,000 boe per day at an operating cost of approximately USD 17 per boe.

The deal is expected to complete around the end of Q3 of 2019 following approval of the acquisition by the UK Oil and Gas Authority. All of Chevron’s employees will move to Ithaca.

Ithaca’s producing field interests acquired as part of the transaction. Illustration: Ithaca Energy

The Ithaca-Chevron deal continues the UK trend of smaller companies taking on assets from the majors, which resulted in assets worth over USD 5 billion change hands in the last few months.  

Part of the trend is the ConocoPhillips-Chrysaor deal (USD 2.7 billion); Chrysaor-Spirit Energy buy of Armada, Maria and Seymour fields offshore UK; RockRose purchase agreement to acquire 100% of Marathon Oil U.K. (MOUK) and 100% of Marathon Oil West of Shetland Limited (MOWOS) from subsidiaries of Marathon Oil Corporation. The transaction represented a complete country exit for Marathon Oil.