Ithaca Energy

Ithaca getting its hands on full ownership of UK gas discovery and three North Sea licences

With the signing of a sale and purchase agreement, Ithaca Energy, a North Sea oil and gas operator and producer, has set the wheels into motion to acquire the remaining stake in a gas discovery and three exploration licenses in the North Sea.

Ithaca Energy

According to Ithaca Energy, this will enable it to get the 40 per cent stake in the Fotla discovery it does not already own and three exploration licences – P.213 Area C, P.345 Area A and P.2536 – from Spirit Energy Resources Limited.

This acquisition, which is subject to the satisfaction of certain conditions precedent including regulatory approval, and with limited near-term cash outflow, will bring the company’s working interest in the gas discovery to 100 per ceny at completion, providing it with full control over pre-final investment decision work and timing. 

Alan Bruce, Chief Executive Officer of Ithaca Energy, commented: “We are pleased to announce the acquisition of the remaining stake in the Fotla discovery and three additional exploration licenses. The acquisition will provide Ithaca Energy with full control over the pre-final investment decision work programme and timing of project sanction as we seek to maximise value from our high-quality investment portfolio.”

The Ithaca-operated Fotla discovery is located in Block 22/1b of the UK North Sea in 431 ft of water, approximately 10 km southwest of the company’s Alba field. The field was discovered in August 2021 with the drilling of the 22/1b-12 well and subsequently appraised by two side tracks.

Development plans are currently being evaluated, with the first production from the Fotla discovery targeted in 2026. The conceptual field development plan consists of a subsea tieback to existing infrastructure.

Ithaca claims that the total transaction consideration comprises two capped contingent payments, which are payable approximately two-thirds on the final investment decision and a third on the first production.

With energy security currently being a key focus of the UK government, the company believes it can utilise its reserves and operational capabilities to play a key role in delivering the security of domestic energy supply from the UKCS, as it has stakes in six of the ten largest fields in the UKCS and two of UKCS’s largest pre-development fields.

Recently, Ithaca inked an agreement with Shell to define a marketing process for its interest in the controversial Cambo offshore development, which the oil major decided to exit after an internal review.