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Transformational combination of substantially all of Eni’s UK upstream operations with Ithaca Energy

Published by , Editorial Assistant
Oilfield Technology,

Eni has announced that it has reached an agreement on the combination of substantially all of its upstream assets in the UK, excluding East Irish Sea assets and CCUS activitieswith Ithaca Energy, marking a strategic move to significantly strengthen its presence on the UK Continental Shelf.

Under the terms of the business combination agreement Eni and Ithaca will combine the Eni UK Business with the existing Ithaca business. The combination is being funded through the issue to Eni UK of such number of new ordinary shares that represents 38.5% of the enlarged issued share capital of Ithaca. The economic effective date for the Combination will be 30 June 2024, with completion expected in Q324, subject to the satisfaction of certain regulatory and other customary conditions precedent. Certain customary cash adjustments will be made for, amongst other things, cash, financial debt and working capital, each as at the economic effective date.

Ithaca is one of the largest independent oil and gas companies on the UKCS, with a substantial resource base and playing a key role in energy supply security in the region, with stakes in six of the ten largest fields and the top two largest development fields on the UKCS.

The combination will immediately create an enlarged and stronger combined group with 2024 production greater than 100 000 boe/d and the underlying potential to organically grow to 150 000 boe/d by the early 2030s. The Combination is aimed at replicating the previous successful execution of upstream combinations that Eni has formed using its distinctive satellite model (including Vår Energi in Norway and Azule Energy in Angola). The satellite model is a strategic response to the challenges and opportunities of energy markets, creating focussed and lean companies able to attract new capital to create value through operating and financial synergies and the acceleration of growth. The Combination will allow Eni to continue pursuing its successful growth on the UKCS, thereby strengthening its commitment to the UK post the Neptune Energy acquisition. Eni will be a fully committed, long-term and supportive shareholder of Ithaca, and will bring its world class technical capabilities and operational support to benefit the Combination.

Commenting on the combination, Eni’s CEO, Claudio Descalzi, said: “This agreement represents a further example of Eni adapting to the demands of the changing energy market and in this case deploying our successful Satellite Model. It affords the opportunity to build scale, realising efficient upstream growth and maximising value under a dedicated and focused management structure supported by Eni resources and expertise. The combination with Ithaca represents an exciting opportunity for us to bring together complementary portfolios establishing a material position on the UKCS with significant growth and optimisation opportunities. We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK and we see the opportunity for Eni and Ithaca to realise material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply. Indeed, establishing a leading position in the UK upstream market will mirror our equally strong position in CCS with our Hynet and Bacton Thames projects which together with 3 other CO2 storage licences gives us around 1Giga Tonn of gross storage capacity and will see us become a key player in the decarbonisation of the UK’s hard-to-abate industries. With our significant investment as a partner in the giant Dogger Bank offshore wind farm, Eni is pleased to be a major player across key activities in the UK’s energy sector.”

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