U.K. oil and gas company Ithaca Energy has signed a sale and purchase agreement with Spirit Energy, increasing its stake for 46.25% in the Cygnus gas field for $154 million.
The transaction, which is subject to NSTA consent, will increase Ithaca Energy's operated interest in Cygnus field to 85%.
Based on an effective date of January 1, 2025, the transaction is expected to add 23 mmboe of 2P reserves and pro forma production between 12.5 - 13.5 kboe/d in 2025, enhancing the balanced production mix of our portfolio through additional gas volumes.
Cygnus is the largest U.K. Continental Shelf gas field and a key contributor to the UK’s energy security.
Production started in 2016 with 11 wells currently producing, with three further infill wells approved, with the Valaris Norway on location with the first of the two firm wells to be spud in the second quarter of 2025.
The wells are expected to come on stream during the second half of 2025 and the first half of 2026.
The field is located in the Southern North Sea in blocks 44/11a, 44/11b and 44/12a in water depths in the range of 15 to 25 meters.
"Today’s transaction with Spirit Energy provides further equity in a high-margin, high-quality producing gas asset that we understand deeply through our operatorship.
“This deal follows our Japex (Seagull) deal announced just two months ago and further demonstrates our growth strategy in action.
“By increasing our stake in Cygnus we add incremental reserves and production to our portfolio at attractive valuation metrics that ticks all of our investment criteria, without adding any complexity. We also see significant upside potential through further infill drilling beyond the next three approved wells. This is the type of deals we like,” said Yaniv Friedman, Executive Chairman.