Ithaca Buys Interests in 3 UK Fields
North Sea-focused independent oil and gas firm Ithaca Energy reported Monday that it has acquired interests in three producing oilfields on the UK Continental Shelf.
Ithaca said that it paid $170 million for the assets, which further broaden its producing asset base with "high quality, long-life oil assets, delivering a step-up in reserves and accelerating monetization of existing UK tax allowances". The assets were bought through the purchase of Summit Petroleum Limited – a subsidiary company of Sumitomo Corporation.
The assets acquired include: a further 20-percent interest in the Cook field in the central North Sea, bringing Ithaca's stake in Cook to more than 61 percent; a 7.48-percent interest in the Pierce field, also located in the North Sea; and a 7.43-percent interest in the onshore Wytch Farm field in southern England.
The acquisition represents an increase in net proved and probable reserves of approximately 12 million barrels of oil equivalent – improving the company's total 2P reserves by around 20 percent. The acquisition also lifts the company's production by approximately 2,500 barrels of oil equivalent per day.
Ithaca CEO Les Thomas commented in a company statement:
"I am very pleased to announce the acquisition of these three high quality, long-life assets, which represent an excellent addition to the portfolio. The transaction is directly in line with our strategy to further diversify and expand our producing asset portfolio. Moreover, each of the assets has clearly defined upsides that provide the opportunity to generate significant additional value."
Oil sector analysts at London-based investment bank Cenkos Securities commented:
"We see the acquisition of the Sumitomo assets in the UKCS as an appealing deal which further diversifies the Ithaca asset portfolio, and grants a significant uplift in both Ithaca's production and reserves. In our view, this acquisition again demonstrates management's ability to source and complete value accretive transactions."
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