Eni Completes Combination of UK Upstream Assets with Ithaca Energy

Eni SPA completed the merger of its upstream oil and gas business in the United Kingdom with Ithaca Energy PLC, creating the biggest resource holder on the UK continental shelf (UKCS), the Italian energy major announced Thursday.

The companies expect the resulting entity to produce over 100,000 barrels of oil equivalent a day (boed), based on the figures of the merger parties as of yearend 2023. The combined assets can grow to more than 150,000 boed in the early 2030s, according to Eni and Ithaca Energy’s announcements of the deal April 23, 2024.

Ithaca Energy, owned by Tel Aviv-listed Delek Group Ltd., survives as the enlarged company with increased proven and probable reserves plus best-estimate contingent resources of 658 million boe, the companies said then.

Eni holds a 38.7 percent stake in the enlarged Ithaca Energy. To satisfy UK law, 10 percent of the share capital of the combined entity is to be issued to the public. Delek is the majority owner.

With the entry of Eni as a shareholder, the number of publicly held ordinary shares in Ithaca Energy would be seven percent. As this was below the minimum 10 percent under the Financial Conduct Authority’s listing rules, Delek sold down about three percent of the enlarged issued share capital of Ithaca Energy, Ithaca Energy confirmed in a separate statement Thursday.

The Ithaca Energy shares to be issued to Eni are valued at about GBP 754 million ($991.4 million), as announced April.

Eni chief transition and financial officer and chief operating officer Francesco Gattei and Eni chief operating officer for global natural resources Guido Brusco join Ithaca Energy’s board as non-executive directors. Luciano Vasques has taken over as the enlarged company’s new chief executive.

“The transaction again highlights the value of Eni’s distinctive satellite model and aligns with the previous successful upstream combinations that Eni has formed, including Var Energi in Norway and Azule Energy in Angola”, Eni said Thursday. “The satellite model addresses the challenges and opportunities of energy markets, by creating focused and lean companies able to attract new capital to create value through operating and financial synergies and the acceleration of growth”.

On January 31 Eni announced the completion of the acquisition of Neptune Energy Group Ltd., taking over the latter’s stakes in the Cygnus, Isabella and Seagull fields in UK waters.

“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”, Eni chief executive Claudio Descalzi said April. “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 [carbon capture and storage] with our Hynet and Bacton Thames projects which together with 3 other CO2 [carbon dioxide] storage licenses give us around 1 Giga Ton 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”.

The combination with Ithaca Energy, however, excludes Eni’s carbon capture and storage activities in the UK, as well as Eni’s assets in the East Irish Sea.

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