Delek buys Siccar Point to expand North Sea production
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Delek buys Siccar Point to expand North Sea production

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Delek Group Ltd. (TASE:DLEKG), controlled by Yitzhak Tshuva, has reported that Ithaca Energy, an oil and energy operator in the North Sea, has signed an agreement to purchase Siccar Point Energy. Ithaca is buying all shares in Siccar Point Energy, which owns oil and gas production assets – the Mariner and Schiehallion fields – and a 30% stake in Cambo and Rosebank’s proven commercial discoveries in UK waters of the North Sea.

Ithaca said the acquisition is part of preparations for an IPO in 2022, aimed at increasing offshore production and securing long-term reserves.

Ithaca will pay $1.1 billion for Siccar Point Energy, including the company’s $200 million debt to bondholders, to be repaid in March 2026, although the bondholders will be entitled to immediate repayment if they choose after the transfer of ownership.

Ithaca will fund the remaining $900 million through its existing line of credit from RBL, cash accrued by Siccar Point since early 2022 and its own cash reserves. Ithaca estimates that, based on current production rates and current sales and forecasts for oil and gas prices, it will be able to use the credit provided by RBL to fund the deal within less than 12 months of closing. to repay the acquisition. Under the terms of the deal, Ithaca is entitled to all the money Siccar Point has earned since early 2022.

The deal also includes up to $300 million for the stated discoveries at Rosebank and Cambo, subject to required investment decision and regulatory approvals, for which an additional $60 million is conditional, and which is also contingent on future oil prices.

Delek Group said the deal will increase Ithaca’s daily production capacity from 8,000-9,500 daily barrels of oil to 75,000-85,000.

Delek added that the Cambo and Rosebank discoveries are among the largest offshore oil fields in the North Sea yet to be developed, and their development is now considered key by the UK government as part of its efforts to boost domestic energy resources. and energy independence in the wake of the recent Russian invasion of Ukraine.

Published by Globes, Israel business news – en.globes.co.il – on April 8, 2022.

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