REG - Ithaca Energy PLC Delek Group - DLEKG - Half Year Results: Six Months to 30 June 2024

Ithaca EnergyAnnouncement

22/08/2024 07:01

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RNS Number : 3372B  Ithaca Energy PLC  22 August 2024

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 ITHACA ENERGY PLC

("Ithaca Energy", the "Company" or the "Group")

 

First Half Results for the Six Months to 30 June 2024

 

Continued execution of 2024 strategic objectives driving robust cash
generation Transformational Business Combination supports long-term growth

 

Ithaca Energy, a leading UK independent exploration and production company,
today announced its unaudited financial results for the six months ended 30
June 2024.

 

 Financial key performance indicators (KPIs)
                                               H1 2024  H1 2023
 Adjusted EBITDAX(1) ($m)                      533.0    979.7
 Statutory net income ($m)                     105.7    159.6
 Adjusted net income(1) ($m)                   124.7    253.2
 Basic EPS (cents)                             10.5     15.9
 Net cash flow from operating activities ($m)  559.8    691.0
 Available liquidity (1) ($m)                  1,028.0  791.3
 Unit operating expenditure(1) ($/boe)         27.3     19.8
 Adjusted net debt (1) ($m)                    506.0    698.7
 Adjusted net debt/adjusted EBITDAX (1)        0.40x    0.35x
 Other KPIs
 Total production (boe/d)                      53,046   75,755
 Tier 1 and 2 process safety events            0        1

(1) Non-GAAP measure as set out on pages 46 to 48.

 

H1 2024 Strategic Highlights: Continued execution against our strategy
Transformative Business Combination with Eni UK creates dynamic growth player

Transformational business combination of Ithaca Energy and substantially all
of Eni S.p.A's (Eni) UK upstream oil and gas assets announced in April 2024,
creates a dynamic growth player with the largest resource base in the UKCS(2)
and significant growth optionality, creating a platform for organic and
inorganic growth (the "Business Combination" to form the "Combined Group").

 

·    Well positioned to deliver further consolidation in mature UKCS
basin, with a proven track record for value-accretive M&A and an agile
response to market dislocation

·    Credible platform for international M&A as an additional route
for value creation, leveraging the Group's enhanced technical resource and
financial strength and the expertise of its shareholders

·    Establishes a diverse and balanced portfolio of scale with pro-forma
full year 2024 production forecast of 100 to 110 kboe/d(2)

·    Material combined long-life 2P reserve and 2C resource base of 632
mmboe with organic growth potential to become largest producer in the UKCS by
the early 2030s(3)

·    Seeks to replicate success of Eni's proven satellite model and Delek
Group's inorganic growth strategy, combining the agility of an independent
with the capabilities of a Major

·    Enhanced cash flow generation, with a potential $10bn of total
pre-tax cash flow from operations from 2P reserves over the next five years
(2025 to 2029) at $88/bbl, 90p/therm(4)

·    Combined utilisable c. $6.0 billion of RFCT losses and c. $5.0bn of
SCT losses for the Combined Group as at 31 December 2023 to offset against
future profits

·    Highly cash-generative combination supports attractive and
sustainable returns with ambition for up to $500 million total dividends each
year in 2024 and 2025(5)

·    Enhances balance sheet and financial strength providing material
firepower for growth and a potential pathway to investment grade credit rating

·    Enhances Ithaca Energy's GHG emissions intensity with a reduction in
combined pro-forma CO2e GHG emissions intensity to 21 kgCO2e/boe (on a Scope 1
and 2 net equity basis)

·    Strengthened executive and operational teams, including appointment
of Yaniv Friedman as Executive Chairman and Luciano Vasques as Chief Executive
Officer (at completion), reflecting the ambition, experience and rigour
required to deliver the next phase of transformational growth

·    Committed and aligned shareholders in support of long-term growth
strategy and shared ambition to enhance liquidity

·    In line with the previously announced timeline, the Company will
today publish its prospectus, which will be made available on the Company's
website, in support of a targeted completion early Q4 2024

BUILD

·    Rosebank project progressed materially to multi-year development
timeline including successful completion of major subsea campaign with the
installation of all nine subsea structures ahead of schedule, in parallel with
ongoing FPSO vessel modifications scopes where work is progressing to seek to
maintain schedule

·    Captain Electrification technical Front-End Engineering Design (FEED)
study completed with Final Investment Decision (FID) subject to fiscal and
market conditions

·    Successfully awarded licence extension from 31 March 2024 to 31 March
2026 for Cambo field on 19 March, supporting the ongoing live farm-in
processes to enable the future progression of Cambo and Fotla towards FID,
subject to fiscal and market conditions

BOOST

·    Successfully completed the Captain Enhanced Oil Recovery (EOR) Phase
II project, executed on plan and within budget, with first Phase II polymer
injection into the subsea wells commencing in May 2024 supporting an estimated
peak response from the field in 2026

·    Continued high levels of activity at Captain, including rig
recertification, in support of the topside drilling campaign scheduled to
commence in Q3 2024

 

·    Completed W1 well workover at Erskine during July, reinstating the
fifth production well at the field

H1 2024 Operational highlights

·    Average H1 2024 production of 53.0 thousand barrels of oil equivalent
per day (kboe/d)

·    Q1 production of 58.7 kboe/d and Q2 production of 47.4 kboe/d

·    H1 production split 69% liquids and 31% gas

·    Lower H1 production primarily reflects operational issues across our
non-operated joint venture (NOJV) portfolio and non-operated infrastructure
and planned turnaround scopes:

·    As previously reported, non-operated Pierce field production impacted
by the vessel remaining off-stream for the entirety of Q1. Returned to full
production in Q2 and subsequently achieving high levels of uptime

·    Non-operated Schiehallion field production impacted by: 1) previously
reported weather- related downtime and outages caused by the Ocean Great White
rig being off station, which will also have an impact on the timing of
production wells later in 2024; and 2) operational issues on the Glen Lyon
FPSO during Q2 restricting production capacity. The operator is working on a
solution to address the issue with an expected return to full capacity in Q3

·    Previously reported compressor issues at Erskine'shost facility
(Lomond) significantly impacting production in H1, expected to return to
production in H2

·    Turnaround activity at non-operated Jade field during Q2 to address
J13 well productivity issues (ongoing)

·    Increase in unplanned production trips at Captain (operated) with
remedial work ongoing to address backlog and reliability improvements

H1 2024 Financial highlights: Robust cash flow generation

·    Adjusted EBITDAX of $533.0 million (H1 2023: $979.7 million), driven
mainly by reduced production of 53.0 kboe/d (H1 2023: 75.8 kboe/d) and lower
realised gas prices

·    Realised oil and gas prices (respectively) of $87/boe and $57/boe
before hedging results and $86/boe and $92/boe after hedging results (H1 2023:
$85/boe and $82/boe before hedging results and

$83/boe and $125/boe after hedging results)

·    Operating costs, net of tanker costs and tariff income, reduced to
$263.3 million (H1 2023: $272.1 million), reflecting the Group's stringent
focus on cost control in an inflationary environment, with higher unit
operating expenditure reflecting fixed cost nature of operating spend coupled
with lower production volumes in the period

·    Statutory net income of $105.7 million (H1 2023: $159.6 million)
including post-tax decommissioning liability related impairment charges of
$19.0 million (H1 2023: $93.6 million) of post-tax impairment charges
principally related to GSA) and positively by post-tax reduction in contingent
payment liabilities related to updated field development likelihoods of $27.4
million

·    Robust net cash flow from operating activities of $559.8 million (H1
2023: $691.0 million)

·    H1 2024 producing asset capex of $178 million and Rosebank capex of
$90 million reflecting material targeted investment across the Group's
portfolio

·    Robust cash generation during H1 2024 supported the continued
reduction of net debt with adjusted net debt of $506.0 million (H1 2023:
$698.7 million)

·    Group leverage position of 0.40x adjusted net debt to adjusted
EBITDAX (H1 2023: 0.35x)

·    Strong liquidity position of $1,028.0 million reflecting a 30%
increase (H1 2023: $791.3 million)

·    First interim 2024 dividend of $100 million declared and payable in
September. Reaffirming dividend commitment in 2024 and 2025 of 30% post-tax
cash flow from operations (CFFO) with ambition for special dividends to
increase total distributions to up to $500 million per annum(5)

 

FY 2024 Management Guidance

Alongside the publication of the Group's prospectus today, that will contain a
full Competent Persons Report (CPR) prepared for Ithaca Energy plc and Eni UK
by an independent reserves auditor, including field economic outputs,
management provides the following updated FY 2024 guidance ranges for Ithaca
Energy on a Combined Group and standalone basis, based on an effective date of
30 June 2024.

Revisions in management guidance across production, Rosebank capex and cash
tax are expected to have limited cash impact at current commodity prices of
$76/boe based on midpoint guidance ranges with management reaffirming its
dividend commitments for 2024 and 2025 of 30% post-tax CFFO with an ambition
for special dividends to increase total distributions to up to $500 million
per annum(5):

 

Production:

·    FY 2024 Combined Group production of 76-81 kboe/d (revised from 80-87
kboe/d)

·    FY 2024 standalone production of 54-57 kboe/d (revised from 56-61
kboe/d), reflecting lower production volumes in H1

 

Net Operating Costs:

·    FY 2024 Combined Group net operating cost guidance range of $650-730
million reaffirmed

·    FY 2024 standalone net operating cost guidance range of $540-590
million reaffirmed

 

Net Producing Asset Capital Costs (excluding pre-FID projects and Rosebank
development):

·    FY 2024 Combined Group net producing asset capital cost guidance
range of $410-480 million reaffirmed

·    FY 2024 standalone net producing asset capital cost guidance range of
$335-385 million reaffirmed

 

Net Rosebank Project Capital Costs:

·    FY 2024 net Rosebank project capital cost guidance range lowered from
$190-230 million to $170- 195 million due to phasing of FPSO upgrades

Cash Tax:

·    FY 2024 Combined Group cash tax guidance lowered from $435-455
million to $390-410 million

·    FY 2024 standalone cash tax guidance lowered from $345-355 million to
$300-320 million largely due to prior year tax return submission processes
including decommissioning loss carry back

 

Yaniv Friedman, Executive Chairman, commented: "I am delighted to have joined
Ithaca Energy in such a pivotal point in the Group's growth story and look
forward to steering the business as it enters it next phase of
transformational growth. The publication of the prospectus later today, marks
a significant step towards completion of the Group's Business Combination with
Eni UK anticipated in early Q4 2024, creating a dynamic growth player with
significant organic and inorganic investment optionality."

Iain Lewis, Interim Chief Executive Officer and Chief Financial Officer,
commented: "I am pleased to report continued execution against our 2024
strategic priorities in the first half of the year and a strong period of cash
flow generation. With a robust liquidity position at the end of H1 and
increased financial strength from the addition of Eni UK's unlevered assets,
following completion, we have significant financial firepower to support the
delivery of the Group's strategy and returns to shareholders, while supporting
a pathway to investment grade."

 

Ithaca Energy will host an in person and virtual presentation and Q&A
session for investors and analysts at 09:00 (BST) today, 22 August 2024,
accessible via our website: https://investors.ithacaenergy.com/
(https://investors.ithacaenergy.com/)

 

Half-year 2024 performance in review

Delivering against the Group's 2024 strategic priorities

We enter the second half of the year in a position of strength having made
material progress in the first half of the year delivering against our
strategic objectives for 2024, most notably with the announcement of the
Group's transformational Business Combination with substantially all of the
upstream assets of Eni in the UK, creating a dynamic growth player. The
Business Combination, expected to complete in early Q4 2024, enhances Ithaca
Energy's position as a leading UKCS operator and highlights the Group's
continued ambition for value-led organic and inorganic growth and delivering
returns to shareholders.

Across our portfolio our focus remains on maximising the value of our diverse
high-value and long-life assets via targeted investment in value-accretive
organic opportunities in line with the Group's BUILD and BOOST strategy,
delivering reserves growth and supporting our vision for sustainable long-term
growth. Post completion of the Business Combination and through the Group's
continued investment in key long-life assets such as Rosebank and Captain, the
Group will materially grow its 2P reserve base to 342 mmboe(3) from 254 mmboe
at 31 December 2023.

Business Combination creates a dynamic growth player with significant
optionality

In April 2024, Ithaca Energy announced its transformational Business
Combination with Eni UK creating a significant growth player with the single
largest resource base in the UK North Sea and underlying un-risked growth
potential to become the largest producer in the UKCS by 2030(3). The
synergistic Business Combination brings together highly-complementary
portfolios with significant scale, balance and optionality creating a
strategic platform for material long-term organic growth.

With a proven track record for value-accretive M&A, the Combination
creates an enhanced platform for delivery of the Group's inorganic growth
strategy in the North Sea and internationally. Ithaca Energy is well
positioned to play a pivotal role in further North Sea consolidation, taking
an agile response to continued market dislocation, and with access to Eni's
global credentials and the expertise and relationships of its shareholders,
supports the ability to broaden the Group's M&A strategy internationally,
establishing additional options for value creation.

The Group announced a number of changes to its Board of Directors and
Executive Management team in the first half of the year to strengthen its
leadership and operational capabilities. Through the appointment of Yaniv
Friedman as Executive Chairman, Luciano Vasques as Chief Executive Officer (on
completion of the Combination) and Odin Estensen as Chief Operating Officer
alongside Iain Lewis as incumbent Chief Financial Officer, the Group's
strengthened executive team reflects the ambition, experience and operational
rigour required to deliver the next phase of transformational growth. The
Group's leadership and operational teams will be further augmented by senior
leadership appointees and access to Eni's deep operational and technical
capabilities via a Technical Services Agreement on deal completion.

The Business Combination further enhances the Group's balance sheet and
financial strength. With the addition of Eni UK's unlevered assets, the
Combined Group's increased scale, diversification and debt capacity provides
access to more attractive and diverse pools of capital, creating material
firepower to support the delivery of Ithaca Energy's BUY, BUILD and BOOST
strategy while supporting a potential pathway to an investment grade credit
rating.

Ithaca Energy's enhanced cash flow generation, with a potential $10bn of total
pre-tax cash flow from operations from 2P reserves over the next five years
(2025 to 2029) at $88/bbl, 90p/therm(4), together with its disciplined and
capital allocation framework, supports the delivery of attractive sustainable
shareholder distributions with a commitment to distribute 30% of post-tax CFFO
and an ambition for special dividends to increase total shareholder
distributions to up to $500 million per annum in 2024 and 2025(5).

As the Group enters its next phase of growth, it is supported by committed
long-term shareholders and an aligned partnership between Delek and Eni in
support of Ithaca Energy's long-term growth strategy. By combining the agility
of an independent with the capabilities of a Major, the combination seeks to
replicate

 

the success and proven track record of material value creation of Eni's
satellite model in mature basins.

BUILD: Continued progress across our high-value development portfolio

Following a successful final investment decision and sanction of the Rosebank
project in H2 2023, the project continues to progress in 2024 towards first
production in 2026/27, delivering against the Group's strategy to BUILD a
robust long-term portfolio of low carbon intensity assets.

Materially in line with the project's multi-year development timeline, work is
progressing across the core project scopes including the upgrade of the
Petrojarl Rosebank FPSO. In July 2024, the development achieved a key
milestone, completing the major subsea campaign ahead of schedule with
installation of all nine subsea structures on the seabed of the Rosebank
field. In the second half of the year, the project focus will turn to rig
readiness in support of the drilling rig mobilisation in Q1 2025. FPSO
engineering and modification scopes continue to progress and are critical to
delivering on the targeted first production date.

The Group remains committed to developing its pre-FID projects and is
progressing live farm-down processes for its Cambo and Fotla interests. In the
second half of the year, the Group will seek to complete development concept
selection for Fotla, to support a final investment decision for the brownfield
tie-back opportunity in the near-term, with FID subject to fiscal conditions.

BOOST: Successful delivery of Captain EOR Phase II project

In H1 2024, the Group achieved a major milestone at its flagship Captain
field, successfully completing its EOR Phase II project within budget and on
schedule. The project seeks to build on the success of its platform- based EOR
Phase I project expanding to the subsea area of the field with first polymer
injection in the subsea wells achieved in May 2024, ahead of schedule.

Captain EOR phase II aims to significantly BOOST production at the field,
doubling net production as it reaches peak production in 2026, making a
material contribution to the Group's medium-term production growth. The
pioneering polymer technology enhances reservoir sweep efficiency by injecting
a water-soluble polymer into the reservoir to sweep previously bypassed and
stranded oil, directing it toward adjacent production wells. By accelerating
and maximising field life recovery, polymer technology provides significant
decarbonisation benefits, with the potential to reduce carbon intensity by up
to an estimated 40%.

High levels of activity at the Captain field continued throughout H1, with
turnaround scopes executed in May and rig recertification activity ongoing in
support of the topside drilling campaign scheduled for Q3. The campaign, that
extends over a two-year duration, is targeting three new production wells, an
injector well and the workover of two wells.

At the Group's operated Erskine field, a well workover was completed in July
by the Valaris 213 jack-up drilling rig, successfully reinstating the fifth
production well at the field returning the asset to full production
capability. Following scheduled turnaround activity in August and remediation
of compressor issues at the host Lomond field, the Erskine field is expected
to return to full production in H2.

 

H1 operational performance

Our continued focus on personal and process safety, following a rise in
recordable events in 2023, has resulted in a strong safety performance in the
first half of the year. The Group recorded zero Tier 1 and Tier 2 process
safety events or high-potential incidents and its serious incident and
fatality rate remained at zero during the period.

Production averaged 53.0 kboe/d in the first half of 2024, split 58.7 kboe/d
in Q1 and 47.4 kboe/d in Q2 (H1 2023: 75.8 kboe/d). Production in the period
reflects the impact of operational issues experienced across our non-operated
joint ventures and infrastructure together with planned shutdowns across the
Group's operated portfolio. Production in the six-month period was split 69%
oil and 31% gas.

The Group's operated assets accounted for 49% of total H1 2024 production (H1
2023: 54%) with production efficiency across the Group's operated portfolio
recorded of 83% (excluding turnaround activity and downtime associated with
non-operated infrastructure). Operated asset production efficiency has been

 

impacted in the first half of the year by extended shut down periods at the
Captain field and GSA area, the loss of water injection support at Alba that
was rectified in Q2 and ongoing compressor issues at Erskine's host facility
(Lomond) that are expected to be resolved in early H2, supporting a return to
full production of our operated asset base.

Across our NOJV portfolio, production was impacted by a number of previously
reported operational issues including the delayed start-up and curtailed
production of the Pierce field (which has now returned to full production),
productivity issues at the Jade J13 well (currently being remediated) and
ongoing operational issues at Schiehallion. Production from the Schiehallion
field has been restricted as a result of operational issues on the Glen Lyon
FPSO, with the operator working on a solution to address the issue to deliver
an expected return to full capacity in late Q3.

With all operated assets back to full production and the majority of
non-operated joint venture and infrastructure issues in H1 resolved, the Group
is expecting production rates of between 55-61 kboe/d in the second half of
the year on a standalone basis.

Operating costs, net of tanker costs and tariff income, reduced to $263.3
million (H1 2023: $272.1 million), reflecting the Group's stringent focus on
cost control in an inflationary environment, however, due to lower production
volumes in the period and the fixed cost nature of its operating expenditure,
represented an increase to net unit opex cost to $27.3/boe (H1 2023:
$19.8/boe).

The Group expects to materially reduce the average operating cost per barrel
in the short to medium-term through transitioning its portfolio to earlier
life assets with lower operating costs, such as Rosebank, together with the
addition of Eni UK's low operating cost assets following completion of the
Business Combination and the retirement of late-life high-opex assets.

Total net producing asset capital expenditure (excluding decommissioning) in
H1 2024 of $178 million (H1 2023: $188 million) reflects material capital
spend at Captain relating to the completion of the Captain EOR Phase II
project and rig recertification scopes in support of the upcoming topside
drilling campaign, representing over 50% of producing asset capital
expenditure in the period. Net capex of $90 million in support of the Rosebank
development reflects continued high level of activity in the ongoing
modification of the FPSO and subsea campaign, remaining in line with
management expectations.

Decarbonisation focus

Ithaca Energy has made continued strides in the first half of the year towards
delivering against its emissions reduction plan by pursuing operational
optimisation projects that support the Group's short-term emissions reduction
goals. Key decarbonisation initiatives, such as reinstating the second export
gas compressor, power water pumps upgrades and flare gas recovery are
progressing as planned at Captain with a flotel identified to enable work to
progress in the second half of the year.

As the Group continues its decarbonisation journey to achieve its ambition of
a 50% reduction in Scope 1 and 2 CO2e emissions by 2030 (on a net equity
basis), the focus remains on major projects like the potential electrification
of our flagship Captain field. With over 70% of Captain's GHG emissions
originating from power generation, partial electrification could significantly
reduce emissions intensity making the Captain electrification project a
meaningful step in helping Ithaca Energy meet its 2030 emissions reduction
target.

The Group has successfully completed its FEED study, confirming the technical
feasibility of the Captain electrification project and a Final Investment
Decision will be taken once the financial and commercial viability of the
project has been established given the current political and fiscal
environment. We are actively seeking assurances from the UK Government
regarding the protection of the decarbonisation allowance for sanctioned
projects, to enable an investment decision that would deliver substantial
decarbonisation benefits in line with the North Sea Transition Deal.

For the first six months of 2024, the GHG emissions intensity (Scope 1 and 2),
from our operated assets was

33.9 kgCO2e/boe.

 

Robust cash flow generation and increased liquidity

During H1 2024, our diversified, high-quality asset base generated net cash
flow from operating activities of

$559.8 million (H1 2023: $691.0 million). This robust cash generation in the
first half of the year supported the continued reduction in net debt, with the
Group reporting adjusted net debt of $506.0 million (H1 2023:

$698.7 million), representing an adjusted net debt to adjusted EBITDAX ratio
of 0.40x at 30 June 2024 (H1 2023: 0.35x).

The Group successfully completed the semi-annual redetermination of its
Reserves Based Lending facility (RBL) at the end of June securing borrowing
base availability of $659 million (31 December 2023: $725 million), excluding
RBL facilities utilised for letters of credits.

The Group continues to have sufficient available capital to support our
capital allocation policy with a 30% growth in its liquidity position at 30
June 2024 to $1,028.0 million (H1 2023: $791.3 million), reflecting the
reduction in adjusted net debt and availability of a capex carry facility.
Ithaca Energy continues to monitor market conditions and evaluate potential
refinancing options to optimise its capital structure and address upcoming
debt maturities via the public debt capital markets.

Net income recorded in H1 2024 of $105.7 million (H1 2023: $159.6 million),
was impacted negatively by post-tax decommissioning liability related
impairment charges of $19.0 million (H1 2023: $93.6 million of post-tax
impairment charges principally related to GSA) and positively by post-tax
reduction in contingent payment liabilities related to updated field
development likelihoods of $27.4 million.

As we move into the second half of the year, we continue to take a proactive
and disciplined approach to hedging, recognising the importance of balancing
upside exposure to commodity prices while managing downside protection of our
cash flows in line with the PROTECT pillar of our capital allocation policy.
The Group has taken a progressive approach to its hedging policy in H1 with an
evolution of the policy to include 25% hedge availability to wide zero cost
collars to drive access to additional upside value potential. The Group has
continued to build material hedge positions in the first six months of the
year with 10.8 million barrels of oil equivalent (mmboe) hedged from H2 2024
into 2026 (58% oil) at an average price floor of $78/bbl for oil and 96p/therm
for gas. Beyond the period end, further material hedges have been placed with
16.8 mmboe hedged at 19 August 2024 at an average swap price of $81/bbl for
oil and 107p/therm for gas and an average collar price of $75/bbl for oil and
97p/therm for gas.

The importance of the Group's robust hedging policy has again been highlighted
in the first half of the year with hedging gains recorded of $98 million in
the period (H1 2023: $172 million).

In line with our capital allocation policy, we paid the third tranche of our
2023 dividend of $134 million in April 2024, delivering on the Group's 2023
dividend target of $400 million at IPO. The Group today declares the first
interim 2024 dividend of $100 million payable in September 2024. Ithaca Energy
remains committed to its declared dividend policy in 2024 and 2025 of 30%
post-tax CFFO with an ambition for special dividends to increase total
shareholder distributions to up to $500 million per annum(5).

Energy Profits Levy

The UK oil and gas industry has continued to face substantial headwinds in the
first half of 2024 with the UK Government signaling further fiscal changes for
the sector. The new Chancellor's fiscal statement and policy paper, delivered
on 29 July, set out the Government's intention, in line with the Party's
election manifesto, to raise the Energy Profits Levy rate, taking the headline
tax rate for the sector to 78%, its intentions to remove the Energy Profits
Levy's investment allowance and further review Energy Profits Levy capital
allowances, while extending the levy a further year to 31 March 2030. These
changes are expected to become effective 1 November 2024.

The sector has now entered into a period of consultation with His Majesty's
Treasury in relation to the Energy Profits Levy capital relief framework,
ahead of the Chancellor's Autumn Statement. Ithaca Energy continues to
actively and constructively engage with the UK Government, making
representations as part of this formal process, to highlight the ongoing
impact of the Levy to investment and the long-term damage further changes to
the fiscal regime make to the achievability of the UK's energy security and
decarbonisation objectives.

 

 

Notes:

(1) Non-GAAP measure as set out on pages 46 to 48.

(2) 2024 pro forma production - 2024 production guidance from Ithaca Energy,
NSAI Ithaca Energy CPR in relation to Ithaca Energy and NSAI Eni CPR in
relation to the Eni UK Group, each as at 30 June 2024.

(3) WoodMackenzie as at 26 March 2024, NSAI Ithaca Energy CPR in relation to
Ithaca Energy and NSAI Eni CPR in relation to the Eni UK Group, each as at 30
June 2024.

(4) Based on total pre-tax cash flow from operations from 2P reserves
calculated based on the NSAI Ithaca Energy CPR and NSAI Eni CPR, each as at 30
June. Oil and gas prices calculated based upon the price parameters outlined
in the NSAI Ithaca Energy CPR and NSAI Eni CPR, subject to the price
adjustments set out therein.

(5) All dividends are subject to operational performance and commodity prices
as well as Combined Group refinancing and availability of distributable
profits.

Enquiries

 

 Ithaca Energy
 Kathryn Reid - Head of Investor Relations, Corporate Affairs &      kathryn.reid@ithacaenergy.com (mailto:kathryn.reid@ithacaenergy.com)
 Communications
 FTI Consulting (PR Advisers to Ithaca Energy)                       +44 (0)203 727 1000
 Ben Brewerton / Nick Hennis                                         ithaca@fticonsulting.com (mailto:ithaca@fticonsulting.com)

 

IMPORTANT NOTICE

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR
FORM ANY PART OF AN OFFER TO SELL OR ISSUE, OR A SOLICITATION OF AN OFFER TO
BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, ANY SECURITIES IN ANY JURISDICTION.

The securities referred to herein have not been and will not be registered
under the US Securities Act of 1933, as amended (the "Securities Act"), or
under the securities laws of any state or other jurisdiction of the United
States, and may not be offered or sold, directly or indirectly, in or into the
United States except pursuant to an applicable exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and in compliance with any applicable securities laws of any state or
other jurisdiction of the United States.

 

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 Company 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 ahead of targets set out in the North Sea Transition Deal.

 

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

 

-ENDS-

 

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