North Sea portfolio could be cash cow

A ratings agency has highlighted the amount of cash that Israeli-owned Ithaca Energy will generate in the North Sea after it completes the acquisition of a big portfolio of assets in the area from Chevron.

Ithaca put itself on course to become one of the biggest players in the North Sea in May when it clinched a $2billion deal to buy Chevron’s assets in the Central North Sea for $2 billion.

“Ithaca’s portfolio in the North Sea, after the acquisition, will make the company a key player in the region,” said S&P Global Ratings in a note on Ithaca.

The agency added: “We expect Ithaca will be able to generate material cash flows of about $0.5 billion a year that could support further organic growth and some potential distributions to its shareholder.”

Aberdeen-based Ithaca was acquired by Delek Group in 2017 in a deal that valued the firm at £1bn and which reflected the acquiror’s belief in the potential of the North Sea.

Following the announcement of the Chevron deal, Delek chief executive Asi Bartfeld said the firm saw exciting growth opportunities in the North Sea.

The deal continued a shake-up in the North Sea, which has involved American firms selling UK assets to raise funds to invest in the US.

In April America’s Conoco-Phillips agreed to sell its North Sea business to private equity-backed Chrysaor for $2.7bn.

Source: The Herald