UK-based Ithaca Energy is acquiring the remaining 40% interest in Fotla Discovery along with three exploration licenses from Spirit Energy Resources, Ithaca Energy said in a press release.
The acquisition will bring Ithaca Energy’s working interest in the Fotla Discovery to 100 percent upon completion and will provide the company with full control over the work and pre-final investment decision time. The acquisition is subject to the satisfaction of certain conditions precedent, including regulatory approval, and with a limited cash outflow in the near term, according to the press release.
Financial terms of the deal were not disclosed. The total consideration for the transaction includes two limited contingent payments, approximately two-thirds of which will be paid on the final investment decision and one-third on first production, Ithaca Energy said.
Ithaca Energy will also acquire exploration licenses P.213 Zone C, P.345 Zone A and P.2536 in the North Sea as part of the deal.
The Fotla Discovery, operated by Ithaca Energy, is located in Block 22/1b of the UK North Sea in 431 feet of water, approximately 6.2 miles (10 kilometers) southwest of the Ithaca-operated Alba field Energy. The company said it is currently evaluating its development plans and that first production from the asset is projected in 2026. The conceptual development plan for the field consists of a subsea link to existing infrastructure.
“We are pleased to announce the acquisition of the remaining interest in the Fotla Discovery and three additional exploration licenses,” said Alan Bruce, CEO of Ithaca Energy. “The acquisition will provide Ithaca Energy with full control over the pre-investment decision work program and project sanction timing as we seek to maximize the value of our portfolio of high-quality investments.”
Shell deal for Cambo field
In May, Ithaca Energy signed an agreement to market Shell’s 30% stake in the Cambo field, the UK’s second largest undeveloped oil and gas discovery in the North Sea, located west of the Shetland region, Ithaca Energy said in an earlier press release. .
The development provides Ithaca Energy with long-term production growth at a low expected unit operating cost per barrel. The field is expected to produce at less than half the carbon dioxide intensity of the average UK field, enabled by the floating production storage and offloading design which includes features such as being fully ready for electrification and zero routine flames, according to the press release.
The agreement between Shell and Ithaca Energy provides an option for Shell to sell any remaining unsold stake in Ithaca Energy to a third party, following a six-month commercialization process. Ithaca Energy also has the option to acquire the stake, with each case subject to regulatory approval.
According to the company’s website, Ithaca Energy is one of the largest independent oil and gas companies on the UK Continental Shelf (UKCS), and ranks second by resources. It has holdings in six of the ten largest UKCS fields and two of the largest pre-development fields in the UKCS. The company said that in recent years it has focused on growing its portfolio of assets through both organic investment programs and acquisitions.
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