(Alliance News) - Eni Spa announced Tuesday that it has reached an agreement to aggregate almost all of its Exploration and Production assets located in the UK, excluding those located in the East Irish Sea and those related to CCUS projects, to the assets of Ithaca Energy PLC, taking a strategic step in significantly strengthening its presence in the UK Continental Shelf.

Under the terms of the business combination agreement, Eni and Ithaca will proceed with the aggregation of Eni UK Business and Ithaca's existing business. Against this aggregation, Eni UK will receive new ordinary shares in Ithaca's share capital so that, upon completion of the transaction, Eni UK will hold a 38.5 percent interest in Ithaca's share capital post-issuance of the new shares.

The transaction will be effective June 30, 2024, with completion expected in the third quarter of 2024, subject to the issuance of the necessary regulatory approvals and other conditions typical for transactions of this nature.

With interests in six of the ten largest fields and two of the largest fields under pre-development in the UKCS, Ithaca now represents one of the largest independent oil & gas groups in the area, with a significant resource base and a key role in securing energy supplies in the region.

The combination will immediately create a larger and more robust aggregate group, with production in 2024 in excess of 100,0001 barrels of oil equivalent per day, and the potential for organic growth in un-risked production to 150,0001 boe/d from the beginning of the next decade.

The deal also aims to replicate the success of previous business combinations carried out by Eni in the upstream sector, applying its distinctive satellite business model, including Var Energi in Norway and Azule Energy in Angola.

The satellite model represents a strategic response to the challenges and opportunities posed by the energy markets and is aimed at creating focused, lean companies capable of attracting new capital, dedicated to creating value through operational and financial synergies, and through accelerating growth.

The combination will enable Eni to continue pursuing its successful growth strategy in the UKCS, strengthening its commitment to the UK following the acquisition of Neptune Energy. Eni will be a strategic and long-term shareholder in Ithaca, and will commit to bring its world-class technical capabilities and operational support to benefit the combination.

Eni CEO Claudio Descalzi commented, "This transaction represents a further example of Eni's response to the evolution of energy markets, and in this case a further step in the success of our satellite model. This aggregation allows us to increase the size of our portfolio and ensure efficient growth in the upstream as well as the maximization of their value also thanks to the support of a dedicated management structure that will be able to rely on Eni's experience and resources."

"The combination with Ithaca is also an excellent opportunity to combine two complementary asset portfolios and thus consolidate our presence in UKCS where we see significant opportunities for growth and optimization. Following the acquisition of Neptune Energy, we have moved quickly to further consolidate our competitive position in the UK, where we believe there is a great opportunity for Eni and Ithaca to create long-term value by helping to address security, affordability and sustainability needs in energy supply."

"Achieving leadership in the UK Upstream market reflects our equally strong positioning in CO2 Capture and Storage activities, with our Hynet and Bacton Thames Net Zero projects, which, together with our three other CO2 storage licenses, ensure that we have approximately 1 GT of gross storage capacity available in the country, positioning us as one of the leading players dedicated to decarbonizing hard-to-abate industrial clusters."

"Considering also our important investment as a partner in the Dogger Bank offshore wind farm, Eni emerges as one of the most relevant players in the energy sector in the UK," Descalzi concluded.

Eni's stock closed Tuesday up 1.2 percent at EUR15.52 per share.

By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter

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