Delek's Ithaca clinches Chevron's British North Sea fields

Ithaca chief executive Les Thomas

Ithaca chief executive Les Thomas

A full exit from the United Kingdom is "increasingly likely" for USA major Chevron following the sale of its central North Sea portfolio to Ithaca Energy, an analyst said yesterday.

The "transformational" deal hands Ithaca 10 new oil fields that will quadruple the company's oil production forecasts for this year, making it the North Sea's second largest independent oil producer.

Upon completion, the group's enlarged portfolio will encompass 18 producing fields.

Delek said the deal, backdated to January 1 and pending regulatory approval, will quadruple Ithaca's pro-forma production to 80,000 barrels of oil equivalent a day.

This includes interests in the Captain, Alba, Erskine, Alder and Britannia platforms. Taking into account the interim period cashflows that are forecast to be generated by CNSL from the effective date, it is anticipated that the price payable at completion will be around Dollars 1.65 billion, subject to adjustments for the transfer of working capital.

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Scotland's UK-focused oil and gas producer, Ithaca Energy has announced the acquisition of Chevron North Sea Limited, a United Kingdom explorer, producer, and seller of hydrocarbons from North Sea and West of Shetlands. Its total asset sale proceeds since the beginning of 2018 are $2.3bn.

Greig Aitken, director, corporate analysis, said: "We recently identified the United Kingdom as one of nine countries that we considered peripheral to Chevron, due to lack of scale and growth potential".

It leaves Chevron with a heavily reduced North Sea footprint, including its 19.4 stake in the BP-operated Clair field west of Scotland's Shetlands islands. "This transaction will bring Chevron within a whisker of hitting the low end of its target range over a year early", Tom Ellacott, senior vice president of corporate analysis at consultancy Wood Mackenzie said.

"We are very pleased to be acquiring a high-quality portfolio of assets and experienced operational organization that fits well with our existing business", said Les Thomas, CEO at Ithaca Energy, in a release.

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