Eni Agrees to Merge UK Upstream Assets with Ithaca Energy

© xmentoys / Adobe Stock
© xmentoys / Adobe Stock

Eni has reached an agreement on the combination of substantially all of its upstream assets in the UK, excluding East Irish Sea assets and CCUS activities, with Ithaca Energy, creating a major independent oil and gas company present on the UK Continental Shelf (UKCS).

Under the terms of the business combination agreement Eni and Ithaca will combine the Eni UK business with the existing Ithaca business.

The combination is being funded through the issue to Eni UK of such number of new ordinary shares that represents 38.5% of the enlarged issued share capital of Ithaca.

The economic effective date for the combination will be June 30, 2024, with completion expected in the third quarter of 2024, subject to the satisfaction of certain regulatory and other customary conditions precedent.

Ithaca is one of the largest independent oil and gas companies on the UKCS, with a substantial resource base and playing a key role in energy supply security in the region, with stakes in six of the ten largest fields and the top two largest development fields on the UKCS, including Rosebank, Cambo, Schiehallion, Mariner Area, Elgin/Franklin and J-Area.

The combination will immediately create an enlarged and stronger Combined Group with 2024 production greater than 100,000 boepd and the underlying potential to organically grow to 150,0001 boepd by the early 2030s.

It is aimed at replicating the previous successful execution of upstream combinations that Eni has formed using its distinctive satellite model (including Vår Energi in Norway and Azule Energy in Angola).

The satellite model is a strategic response to the challenges and opportunities of energy markets, creating focussed and lean companies able to attract new capital to create value through operating and financial synergies and the acceleration of growth.

The combination will allow Eni to continue pursuing its successful growth on the UKCS, thereby strengthening its commitment to the UK post the Neptune Energy acquisition. Eni will be a fully committed, long-term and supportive shareholder of Ithaca, and will bring its world class technical capabilities and operational support to benefit the Combination.

“The combination with Ithaca represents an exciting opportunity for us to bring together complementary portfolios establishing a material position on the UKCS with significant growth and optimization opportunities.

“We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK and we see the opportunity for Eni and Ithaca to realize material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply.

“Indeed, establishing a leading position in the UK upstream market will mirror our equally strong position in CCS with our Hynet and Bacton Thames projects which together with 3 other CO2 storage licenses gives us around 1Giga Tonn of gross storage capacity and will see us become a key player in the decarbonization of the UK’s hard-to-abate industries.

“With our significant investment as a partner in the giant Dogger Bank offshore wind farm, Eni is pleased to be a major player across key activities in the UK’s energy sector,” said Claudio Descalzi, Eni’s CEO.

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