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Ithaca Energy, a leading UK independent production and growth company, is pleased to announce it has signed a sale and purchase agreement to acquire an additional 46.25% stake in the Cygnus gas field from Spirit Energy for a purchase price of £116 million (approximately $154 million) (the “Transaction”), based on an effective date of 1 January 2025. The Transaction, which is subject to NSTA consent, will increase Ithaca Energy's operated interest in Cygnus to 85%.
The Transaction is expected to add 23 mmboe of 2P reserves (as at 1 Jan 2025) and pro forma production between 12.5 - 13.5 kboe/d in 2025, enhancing the balanced production mix of our portfolio through additional gas volumes. This Transaction is in line with the Group's strategy to pursue value-accretive M&A, adding high-quality assets in our core UK Continental Shelf market. The Transaction equates to a valuation of less than $7/boe on 2P Reserves, which we believe is good value for equity in a producing field that we know and understand.
Cygnus is the largest UK Continental Shelf gas field and a key contributor to the UK’s energy security. Production started in 2016 with 11 wells currently producing, with three further infill wells approved, with the Valaris Norway on location with the first of the two firm wells to be spud in Q2 2025, and expected onstream during H2 2025 and H1 2026. The field is located in the Southern North Sea in blocks 44/11a, 44/11b and 44/12a in water depths in the range of 15 to 25 metres.
Yaniv Friedman, Executive Chairman, commented: "Today’s transaction with Spirit Energy provides further equity in a high-margin, high-quality producing gas asset that we understand deeply through our operatorship. This deal follows our Japex (Seagull) deal announced just two months ago and further demonstrates our growth strategy in action. By increasing our stake in Cygnus we add incremental reserves and production to our portfolio at attractive valuation metrics that ticks all of our investment criteria, without adding any complexity. We also see significant upside potential through further infill drilling beyond the next three approved wells. This is the type of deals we like.”
Ithaca Energy (UK) Limited
Ithaca Energy is a leading independent oil and gas operator in the North Sea with a strong track record of material value creation. Founded in 2004, Ithaca Energy has been on a rapid growth trajectory in the last five years, following a series of transformational M&A transactions and the Group's recent Business Combination with Eni UK (completed October 2024), creating a dynamic growth player with operations of significant scale and longevity. Today, Ithaca Energy is the largest oil and gas operator in the UKCS by resources and ranks as the second largest independent operator in the UKCS by production. With stakes in six of the ten largest fields in the UK North Sea and two of largest developments, Rosebank and Cambo, we play a pivotal role in meeting the current and future energy needs of the UK. We do not take this responsibility lightly, recognising that oil and gas will continue to play an important part of the long-term energy mix as we navigate the energy transition. We serve today’s needs for domestic energy through operating sustainably. We achieve this by harnessing our deep operational expertise and innovative minds to collectively challenge the norm, continually seeking better ways to meet evolving demands. Our commitment to delivering attractive and sustainable returns is supported by a well-defined emissions-reduction strategy with a target of achieving net zero ahead of targets set out in the North Sea Transition Deal.
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