North Sea energy firm Ithaca forecasts higher 2026 production on enhanced capacity (updated)
18/03/2026 07:30
Windfall tax extension to 2030 drove $328 million charge Shares fall as investors weigh policy impact, weaker earnings Company forecasts higher 2026 output, seeks clarity on UK taxes Rewrites throughout with windfall tax-related charges, share price, other details and background March 18 (Reuters) - Oil and gas producer Ithaca Energy ITH.L swung to an annual net loss on Wednesday after booking a one-off charge linked to Britain's extended windfall tax, joining North Sea peers hit by tougher fiscal rules. The UK government's 2024 extension of North Sea windfall taxes to March 2030 resulted in a non-cash tax charge of $327.6 million for Ithaca in 2025. Peer Harbour Energy HBR.L also reported a deeper annual loss this month due to a windfall tax-related charge. Shares in Ithaca, a major British producer in the North Sea, were down about 4% in morning trading, after falling as much as 8.8% earlier in the session. STEEP WINDFALL TAXES PRESSURE PRODUCERS North Sea gas and oil producers have been under pressure from steep windfall taxes introduced in 2022, when energy prices soared following Russia's invasion of Ukraine. The Iran conflict has now also hit oil prices, with Brent futures dropping to $103.12 on Wednesday after Iraq resumed crude exports via Turkey. Ithaca swung to a net loss of $84.1 million for 2025, from a profit of $153.1 million a year earlier. Production for 2025 was at 119 kilobarrels of oil equivalent per day (kboed), at the bottom end of its expected range. However, the firm has forecast higher 2026 production of 120-130 kboed, helped by enhanced operating capacity and contribution from the Cygnus and Seagull fields. In November, the UK government eased some rules for energy firms, bringing some respite to Ithaca, although the 38% windfall levy was left unchanged. (Reporting by Prerna Bedi in Bengaluru; Editing by Rashmi Aich and Bernadette Baum) ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))