Ithaca Energy Boosts North Sea Presence with Seagull Field Acquisition
Why we think this is good
This acquisition represents a positive strategic move for Ithaca Energy, as it increases the company's working interest in the high-margin Seagull field and adds meaningful production and reserves to its portfolio. The transaction appears to be well-structured, with the transfer of JUK's tax losses providing a financial benefit. While there are some risks around regulatory approval, the overall impact on Ithaca Energy's business is expected to be accretive.
Key Points
- Ithaca Energy to acquire 15% stake in Seagull oil field, increasing its total interest to 50%
- Transaction expected to add 7 mmboe of 2P reserves and 4-4.5 kboe/d of production in 2025
- Seagull field is a 'high margin producing field' with over 300 mmboe in place
- Transaction includes transfer of JUK's material tax losses, providing a financial benefit
Summary
Ithaca Energy has signed an agreement to acquire the entire issued share capital of JAPEX UK E&P Limited, which holds a 15% working interest in the Seagull oil field in the UK North Sea. This transaction will increase Ithaca Energy's working interest in Seagull from 35% to 50%, equalling bp's interest as the field operator. The acquisition is expected to add 7 mmboe of 2P reserves and production of approximately 4 - 4.5 kboe/d in 2025, made up of approximately 82% liquids. The transaction also includes the transfer of JUK's material tax losses, which could provide a financial benefit to Ithaca Energy. The Seagull field is described as a 'high margin producing field' and is expected to remain in production until the mid-2030s.