Ithaca Energy shares climbed 13 per cent on Thursday after the company revealed its annual output hit the top end of guidance. The North Sea-focused business produced 80,200 barrels of oil equivalent per day (boepd) in 2024, having forecast between 76,000 and 81,000 boepd.
Production totalled 116,000 boepd in the fourth quarter, reaching a peak of 138,000 boepd, following Ithaca's £754million acquisition of nearly all Eni UK's upstream oil and gas assets in early October. Full-year operational costs also came in lower than expected at $649million, compared to management forecasts of $650million to $730million.
As a result, Ithica anticipates reporting adjusted earnings before nasties of $1.4billion and cash from operations of $0.9billion. Shares in Ithaca had topped the FTSE 250 Index by the late afternoon, soaring by 13 per cent to 148.2p, although this is still over 40 per cent below their 250p initial public offering price.
Expansion: Ithaca is looking to grow its presence in the North Sea despite many other energy businesses scaling back operations due to the windfall tax on oil and gas profits. Yaniv Friedman, executive chairman of Ithaca, said: 'We enter 2025 with a stronger, more diverse production and reserves base, significant investment optionality, increased financial strength and an enhanced strategic platform.'.
'We continue to see material opportunity in our home basin, with an eye on international expansion, providing a range of strategic options for growth.'. Ithaca is looking to grow its presence in the North Sea despite many other energy businesses scaling back operations due to the windfall tax on oil and gas profits.
Under the 'Energy Profits Levy,' initially introduced in 2022 by then Chancellor Rishi Sunak, oil and gas producers pay a 38 per cent surcharge on profits from extraction activities in the North Sea. Combined with a 30 per cent corporation tax rate and a 10 per cent supplementary rate, the total tax rate on UK oil and gas output is one of the world's highest at 78 per cent.
Following the Eni deal, Ithaca became the biggest resource holder and the second-largest independent oil and gas company in the UK Continental Shelf in terms of production levels. It also has stakes in six of the ten biggest UK North Sea oil and gas fields, including the Rosebank development, which has estimated recoverable reserves of 300 million barrels.
In late January, the Court of Session in Edinburgh ruled that consent to develop the Rosebank and Jackdaw fields was granted unlawfully. Judge Lord Ericht said the two projects' environmental impact assessments did not consider the carbon emissions that would be released when the oil and gas were eventually burned.
He said work on both fields could carry on whilst a more detailed evaluation went ahead, although no oil and gas could be extracted until the UK Government gave its approval. Luciano Vasques, chief executive of Ithaca, said the firm welcomed the judicial review case, which was brought by campaigning groups Uplift and Greenpeace.
He added that the Rosebank project was 'good for the UK; it supports 2,000 UK jobs in its construction phase, increases UK energy security and contributes significant tax receipts to the Government.'. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
