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Israel’s Ithaca Energy to buy Chevron’s North Sea business for $2 billion

Israel’s Ithaca Energy to buy Chevron’s North Sea business for $2 billion


Aberdeen, May 30 - Neftegaz.RU.
Ithaca is a subsidiary of the Delek Group, Israel’s energy company. The company said that the transaction will add a further 10 producing field interests to the existing Ithaca portfolio, 4 of which relate to assets operated by the company, resulting in an approximately 150% increase in the proven and probable (2P) reserves of the company and a 300% increase in forecast 2019 production.

Pro-forma the transaction, Ithaca’s asset base is estimated to consist of 2P reserves of approximately 225 million barrels of oil equivalent (MMboe) plus a further 45 MMboe of proven and probable contingent (2C) resources associated primarily with additional near-field development and infill drilling opportunities.
 
The enlarged portfolio, encompassing 18 producing field interests in total, is forecast to deliver pro-forma 2019 production of approximately 80,000 barrels of oil equivalent per day (60% liquids) at an operating cost of approximately $17 per barrel of oil equivalent.

As part of the transaction, approximately 500 employees will transfer to the company, of which around 200 work offshore on the operated assets.

According to Ithaca, with the addition of the high quality, long life assets that characterize the Chevron North Sea portfolio, the acquisition delivers upon a number of key strategic objectives of the company and establishes Ithaca as the second largest independent oil and gas producer in the UK North Sea.

The transaction has an effective date of January 1, 2019, and is expected to complete around the end of the third quarter of 2019 following approval of the acquisition by the UK Oil and Gas Authority.

It is worth reminding that Chevron recently tried and failed to acquire U.S. oil company Anadarko. Namely, Occidental Petroleum swooped in with a superior offer prompting Chevron to abandon its pursuit and take a termination fee of $1 billion.