North Sea operator raising €450M to fund boost in UK gas field and growth opportunities

Ithaca Energy, a North Sea oil and gas operator and producer, has disclosed pricing of its senior notes offering and the extension of its reserves based lending (RBL) facility, which is expected to fuel the firm’s acquisition of an additional stake in a gas field in UK waters and optimize financial flexibility for further expansion and growth.

As Ithaca’s subsidiary, Ithaca Energy UK, has secured commitments to exercise the accordion mechanism provided under its reserves based lending facility, this will increase the aggregate commitments under facility A from $1 billion to $1.3 billion.

The firm’s wholly owned subsidiary, Ithaca Energy North Sea, has priced its offering of an aggregate principal amount of €450 million of 5.5% senior notes due 2031 at par, with interest payable semi-annually.

The oil and gas operator underlines that its subsidiary has entered into a currency swap in connection with the offering of the notes, which will result in an all-in effective interest rate in dollars of approximately 6.7%. The closing of the offering is subject to customary conditions precedent for similar transactions.

These notes will be senior obligations of the company, which will be guaranteed on a senior basis by Ithaca Energy and on a senior subordinated basis by certain of its subsidiaries. The gross proceeds from the notes offering will be used to pay the purchase price of the Cygnus acquisition.

In addition, these proceeds will be utilized for general corporate purposes, including the repayment of certain outstanding amounts under the reserves based lending facility and replenishing cash used for the Japex M&A consideration, as well as to pay estimated transaction fees, expenses, and other payments.

Yaniv Friedman, Executive Chairman of Ithaca Energy, commented: “The significant investor demand and material oversubscription we saw in the market is testament to the strength and agility of our business and validates the group’s growth strategy, as we keep executing across all pillars of our strategy and delivering strong organic performance as well as further growth and returns to our shareholders.

“Importantly, this strategy is underpinned by maintaining financial discipline and flexibility, and this offering diversifies, further strengthens and optimises our financial position by extending our maturity profile and providing additional liquidity to pursue further growth opportunities.“

This comes after Ithaca Energy provided an update on the progress made in developing three oil and gas projects, including Rosebank, Cambo, and Tornado, in the West of Shetland area on the UK Continental Shelf (UKCS).

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