Ithaca Energy Plc (LON:ITH), a leading UK independent production and growth company, has announced 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), 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 meters.
Yaniv Friedman, Ithaca Energy 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.”
