Ithaca Energy has agreed to combine its UK assets with energy giant Eni, creating one of the biggest independent energy companies in the North Sea.
Ithaca is buying all of Eni's oil and gas producing assets in Britain, including those from the Italian firm's recent purchase of Neptune Energy. Eni, in turn, will take a sizable stake in Ithaca.
The combined entity will produce more than 100,000 barrels per day, once the £754million deal completes in the summer.
Ithaca, owned by Tel Aviv-listed Delek Group will issue new shares to Eni, which will hold 38.5% of the enlarged share capital of Ithaca.
Delek will hold just over 50% of Ithaca when the deal closes, but Eni will be entitled to nominate the next CEO of Ithaca. The deal is expected to close in the third quarter, but will take effect from June 30 for the purposes of financial reporting.
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Commenting on the combination, Eni’s CEO, Claudio Descalzi, said: “This agreement represents a further example of Eni adapting to the demands of the changing energy market and in this case deploying our successful Satellite Model.
"It affords the opportunity to build scale, realising efficient upstream growth and maximising value under a dedicated and focused management structure supported by Eni resources and expertise.
"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 optimisation 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 realise material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply."
He added: "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 licences gives us around 1Giga Tonn of gross storage capacity and will see us become a key player in the decarbonisation 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.”
Gilad Myerson, executive chairman of Ithaca Energy, said: “The transformational combination with Eni UK will further enhance Ithaca Energy’s position as a leading
“UKCS production and growth company, with positions in 6 of the 10 largest UKCS assets in the basin.
“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.”