Ithaca Energy, the North Sea subsidiary of Israeli energy conglomerate Delek Group, is poised to become a major North Sea player following its $1.1 billion purchase of private equity-backed Siccar Point Energy; a deal that bolsters Ithaca’s plans to raise new capital.
In buying Siccar Point Energy, Ithaca has doubled its recoverable reserves, enabling the Delek subsidiary to potentially produce at a rate of 80,000 to 90,000 BOE/D over the next 10 years, Ithaca said in a 7 April press release.
Siccar Point holds stakes in the Schiehallion and Mariner fields which currently rank among the UK’s top 10 producing fields, as well as the Cambo and Rosebank fields, which Ithaca said are two of the North Sea’s “largest undeveloped and most strategically important discoveries” in the UK sector.
Ithaca expects to close on its acquisition of Siccar near the end of Q2 2022; later this year Ithaca plans an initial public offering, according to Reuters.
In late March, UK regulators agreed to extend Cambo’s development license by 2 years. Siccar Point holds a 70% operator interest in the project which could deliver up to 170 million BOE/D over 25 years, according to Ithaca which said a final investment decision will be made on both fields in 2023.
Shell, a 30% minority partner in Cambo, had decided in December to withdraw from the project because of pushback from environmental groups. It is now reconsidering however, given British government pressure to boost North Sea production to reduce demand for energy imports from Russia, according to British media.
The deal also includes an interest in the producing Jade gas field, where Ithaca is already a partner, Ithaca’s release noted.
Delek Group acquired North Sea operator Ithaca in 2017 as part of a larger strategy to expand its operations beyond the Eastern Mediterranean by seeking out investments in the North Sea and in North America.
Besides being active in Newfoundland, Canada, Delek also holds 15% of Faroe Petroleum, an independent oil and gas company active in exploration, appraisal, and production in Norway and the UK, according to the group’s website.
Private equity funds Blackstone and Blue Water Energy invested $500 million to form Siccar Point Energy in 2014 out of assets shed by major producers downsizing North Sea operations, according to Reuters.
Siccar Point acquired OMV's North Sea portfolio for $870 million in January 2017 to become a major North Sea player.
