Published by Global Banking and Finance Review
Posted on March 26, 2025
By Arunima Kumar
(Reuters) -North Sea oil and gas company Ithaca Energy forecast higher 2025 production on Wednesday, encouraged by its acquisition of the UK assets of Eni.
Shares jumped 7% in early trading, as the company declared an interim dividend of $200 million to be paid in April.
Ithaca also reaffirmed its dividend policy for 2025 with a target of $500 million.
Ithaca bought nearly all of Eni's UK oil and gas producing assets last year in an all-stock deal worth around 754 million pounds ($975.8 million), with an aim to become one of the biggest independent North Sea energy companies.
The company added on Wednesday it would cut a small portion of its workforce, following the deal's completion. It has not disclosed the exact number of jobs that will be affected.
The ENI deal allowed Ithaca to forecast higher production for 2025. The London-listed company expects full-year 2025 output in the range of 105,000-115,000 barrels of oil equivalent per day, above last year's 80,200 boepd.
Its 2024 production was about 14% higher than in the previous year.
On Tuesday, Ithaca also said it would acquire Japan Petroleum Exploration's (Japex) North Sea business for $193 million.
Beyond 2025, the group expects to maintain production above 100,000 boepd in the medium-term from its existing producing asset base and the start-up of the Rosebank development in the North Sea.
"Company is in a strong position and announcement of acquisition of JAPEX UK will further bolster the portfolio and longer-term outlook," said Ashley Kelty, analyst at Panmure Liberum.
Its 2024 profit after tax fell to $153.2 million from $292.6 million a year earlier, largely due to a higher tax burden in 2024.
Last year the UK's Labour government increased the energy profits levy, raising the headline tax rate on oil and gas activities to 78%, one of the highest rates globally.
In 2025 Ithaca expects to make cash tax payments in the range of $235 million to $265 million, primarily driven by the profits levy.
(Editing by Bernadette Baum)
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