REG - Ithaca Energy PLC Delek Group - DLEKG - Exclusivity Agreement with Eni S.p.A's UK Business

Eni SpAAnnouncement

27/03/2024 08:15

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RNS Number : 4435I  Ithaca Energy PLC  27 March 2024

FOR IMMEDIATE RELEASE

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT IS
FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY
JURISDICTION.

 

THIS IS AN ANNOUNCEMENT AND NOT A CIRCULAR OR PROSPECTUS OR EQUIVALENT
DOCUMENT AND INVESTORS AND PROSPECTIVE INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION ON THE BASIS OF ITS CONTENTS. A CIRCULAR AND PROSPECTUS IN
RELATION TO THE COMBINATION DESCRIBED IN THIS ANNOUNCEMENT WILL EACH BE
PUBLISHED IN DUE COURSE AS REQUIRED.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

27 March 2024

 

Ithaca Energy plc ("Ithaca Energy" or the "Company")

Exclusivity Agreement for a potential transformational combination with Eni
S.p.A.'s UK Business

 

Ithaca Energy, a leading independent oil and gas operator in the UK North Sea,
today announces that it has entered into an exclusivity agreement (the
"Exclusivity Agreement") in relation to a potential transformational
combination with substantially all of Eni S.p.A.'s ("Eni") UK upstream assets
including the recently acquired Neptune Energy assets, excluding certain
assets including Eni's CCUS and Irish sea assets (the "Potential
Combination").

Pursuant to the Exclusivity Agreement, Eni has granted Ithaca Energy
exclusivity in respect of the assets, the subject of the Potential
Combination, for a period of 4 weeks from the date of this announcement.
Ithaca Energy and Eni have entered into the Exclusivity Agreement to allow
time to separately progress the contractual documentation required in
connection with the Potential Combination.

Key highlights of the Potential Combination

 -          Eni will contribute its UK business in exchange for the issuance of new Ithaca
            Energy shares to Eni, with Eni anticipated to hold between 38% and 39% of the
            enlarged issued share capital of Ithaca Energy following completion
 -          Eni has a well-diversified asset base across 4 key hubs: Elgin Franklin,
            J-Area, Cygnus and Seagull; Ithaca Energy is already a partner in the Elgin
            Franklin and Jade fields
 -          Eni's UK business had 2023 pro forma production of 40-45 kboe/d and 2P
            reserves of c.100 mmboe as at 31 December 2023 1 
 -          The Potential Combination would represent a value-accretive opportunity for
            Ithaca Energy's shareholders, supporting delivery of the Company's Buy, Build
            and Boost strategy
 -          The Potential Combination would:

 

 o    Add significant scale and diversification to Ithaca Energy's business:
      Significantly growing pro forma production to above 100 kboe/d, creating the
      2(nd) largest independent operator in the UKCS by production 2 
 o    Create a leading UKCS portfolio: Enhancing Ithaca Energy's status as the
      largest independent operator by resource, holding stakes in 6 of the 10
      largest fields 3 
 o    Enable material future growth for Ithaca Energy: Boost near term cash flows to
      unlock growth from Ithaca Energy's development projects whilst supporting
      shareholder returns
 o    Create a long-term strategic partnership with Eni: Eni would become a major
      shareholder in the enlarged group supportive of delivery of Ithaca Energy's
      Buy, Build and Boost strategy. It is contemplated that Ithaca Energy would
      have access to Eni's leading technical expertise to drive future growth

 

Ithaca Energy anticipates that the Potential Combination will require
shareholder approval as a Class 1 transaction. Additionally, as Eni will hold
between 38% and 39% of the voting rights of Ithaca Energy at completion of the
Potential Combination, a mandatory offer would normally be required under Rule
9 of the UK Code on Takeovers and Mergers (the "Takeover Code"). However,
given that Delek will still hold shares carrying more than 50% of the voting
rights following completion of the Potential Combination, the UK Panel on
Takeover and Mergers (the "Panel") have granted a dispensation from Rule 9
pursuant to note 5 (b) of Rule 9 under the Takeover Code. Accordingly,
completion of the Potential Combination will not be conditional upon and will
not require approval by Ithaca Energy's independent shareholders in relation
to a Rule 9 waiver.

Although the discussions are at an advanced stage, there can be no certainty
that a Potential Combination will occur, nor as to the final terms or timing
on which a Potential Combination might be concluded.

Further announcements will be made if and when appropriate.

 

 Ithaca Energy
 Kathryn Reid - Head of Investor Relations, Corporate Affairs                       kathryn.reid@ithacaenergy.com
 & Communications

 Jefferies International (Financial Advisor to Ithaca Energy)     +44 (0)207 029 8000
 Paul Wheeler / Sam Barnett / Philip Clausen-Thue / Will Soutar

 Goldman Sachs International (Corporate Broker to Ithaca Energy)  +44 (0)207 774 1000

 Andrew Fry / Jonathan Penkin / Bertie Whitehead / Adam Laikin

 FTI Consulting (PR Advisers to Ithaca Energy)                    +44 (0)203 727 1000
 Ben Brewerton / Nick Hennis / Rosie Corbett                      ithaca@fticonsulting.com

 

 

 

The information contained within this announcement is deemed by Ithaca Energy
to constitute inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014 (as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018). By the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.  The person
responsible for making this announcement on behalf of Ithaca Energy is Julie
McAteer, General Counsel and Company Secretary.

 

Note to editors:

 

About Ithaca Energy plc

 

Ithaca Energy is a leading UK independent exploration and production company
focused on the UK North Sea with a strong track record of material value
creation. In recent years, the Group has been focused on growing its portfolio
of assets through both organic investment programmes and acquisitions and has
seen a period of significant M&A driven growth centred upon two
transformational acquisitions in recent years. Today, Ithaca Energy is one of
the largest independent oil and gas companies in the United Kingdom
Continental Shelf (the "UKCS"), ranking second by resources.

 

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

 

Ithaca Energy serves today's needs for domestic energy through operating
sustainably. The Group achieves this by harnessing Ithaca Energy's deep
operational expertise and innovative minds to collectively challenge the norm,
continually seeking better ways to meet evolving demands.

 

Ithaca Energy's commitment to delivering attractive and sustainable returns is
supported by a well-defined emissions-reduction strategy with a target of
achieving net zero by 2040.

 

Ithaca Energy plc was admitted to trading on the London Stock Exchange (LON:
ITH) on 14 November 2022.

 

IMPORTANT INFORMATION

The information contained in this announcement is for information purposes
only and does not purport to be complete. The information in this announcement
is subject to change.

This announcement has been prepared in accordance with English law, the Market
Abuse Regulation and the Disclosure Guidance and Transparency Rules and
Listing Rules of the FCA and information disclosed may not be the same as that
which would have been prepared in accordance with the laws of jurisdictions
outside England.

No person has been authorised to give any information or make any
representations to shareholders with respect to the Combination other than the
information contained in this announcement and, if given or made, such
information or representations must not be relied upon as having been
authorised by or on behalf of Ithaca Energy, the Ithaca Energy directors, Eni
or the Eni directors, Delek or the Delek directors or any other person
involved in the Combination. None of the above take any responsibility or
liability for, and can provide no assurance as to the reliability of, other
information that you may be given. Subject to the Market Abuse Regulation and
the FCA's Disclosure Guidance and Transparency Rules and Listing Rules, the
delivery of this announcement shall not create any implication that there has
been no change in the affairs of Ithaca Energy, Eni or Delek since the date of
this announcement or that the information in this announcement is correct as
at any time subsequent to its date.

Jefferies International Limited ("Jefferies") is authorised and regulated in
the United Kingdom by the FCA. Jefferies is acting exclusively as Sponsor and
financial adviser for Ithaca Energy and no one else in connection with the
Combination and the matters referred to in this announcement, and will not
regard any other person as a client in relation to the Combination or this
document and will not be responsible to anyone other than Ithaca Energy for
providing the protections afforded to its clients, or for providing advice, in
relation to the Combination or this document or any other Combination,
arrangement or matter referred to in this document. Neither Jefferies nor its
parent nor any of their subsidiaries, branches or affiliates owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not its client in connection with this announcement, any statements contained
herein or otherwise.

Goldman Sachs International ("GSI"), is authorised by the PRA and regulated by
the FCA and the PRA in the United Kingdom. GSI is acting as Corporate Broker
for Ithaca Energy plc and no one else in connection with the Combination and
the matters referred to in this announcement, and will not regard any other
person as a client in relation to the Combination or this document and will
not be responsible to anyone other than Ithaca Energy for providing the
protections afforded to its clients, or for providing advice, in relation to
the Combination or this document or any other Combination, arrangement or
matter referred to in this document. Neither GSI nor its parent nor any of
their subsidiaries, branches or affiliates owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, whether in contract,
in tort, under statute or otherwise) to any person who is not its client in
connection with this announcement, any statements contained herein or
otherwise.

The contents of this announcement are not to be construed as legal, business
or tax advice. Each shareholder should consult its own legal adviser,
financial adviser or tax adviser for legal, financial or tax advice
respectively.

Percentages in tables have been rounded and accordingly may not add up to 100
per cent. Certain financial data have also been rounded. As a result of this
rounding, the totals of data presented in this press release may vary slightly
from the actual arithmetic totals of such data.

Forward-looking statements

Certain statements in this announcement are forward-looking statements. In
some cases, these forward-looking statements can be identified by the use of
forward looking terminology including the terms "believes", "expects",
"estimates", "anticipates", "intends", "may", "will" or "should" or in each
case, their negative, or other variations or comparable terminology. These
forward-looking statements reflect Ithaca Energy's or Eni's current
expectations concerning future events and speak only as of the date of this
announcement. They involve various risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Ithaca
Energy Group, the Eni Group, the Combined Group, third parties or the industry
to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements. Such
risks, uncertainties and other factors include, amongst other things, general
economic and business conditions, industry trends, competition, changes in
regulation, currency and commodity price fluctuations, the Ithaca Energy
Group's, the Eni Group's or the Combined Group's ability to recover its
reserves or develop new reserves and to implement expansion plans and achieve
cost reductions and efficiency measures, changes in business strategy or
development and political and economic uncertainty. There can be no assurance
that the results and events contemplated by these forward-looking statements
will in fact occur.

No statement in this announcement is intended as a profit forecast or estimate
for any period and no statement in this announcement should be interpreted to
mean that earnings, earnings per share or income, cash flow from operations or
free cash flow for the Ithaca Energy Group, the Eni Group or the Combined
Group, as appropriate, for the current or future years would necessarily match
or exceed the amount set out in any forward-looking statement or historical
published earnings, earnings per share or income, cash flow from operations or
free cash flow for the Ithaca Energy Group, the Eni Group or the Combined
Group, as appropriate.

 

 1  Wood Mackenzie

 2  Wood Mackenzie

 3  Wood Mackenzie

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