Ithaca Energy to boost operated share of North Sea Cygnus field

Ithaca Energy plc has agreed to acquire an additional stake in Cygnus gas field on the UK Continental Shelf from Spirit Energy. If the deal closes, Ithaca's operated interest in Cygnus would increase to 85%.

Per the sale agreement, subject to The North Sea Transition Authority consent, Ithaca will add 46.25% share in field to its holdings for about $154 million, with an effective date of Jan. 1, 2025.

The deal is expected to add 23 MMboe of 2P reserves and pro forma production of 12,500-13,500 boe/d in 2025.

Cygnus lies in Blocks 44/11a, 44/11b, and 44/12a in the Southern North Sea in 15–24 m of water. It is the largest UK Continental Shelf gas field. Production started in 2016 with 11 wells. Three further infill wells are approved, and the Valaris Norway jackup is on location to spud the first two of these wells in second-quarter 2025. The wells are expected to be onstream during second-half 2025 and first-half 2026.

Yaniv Friedman, Ithaca's executive chairman, said the deal "provides further equity in a high-margin, high-quality producing gas asset that we understand deeply through our operatorship. By increasing our stake in Cygnus we add incremental reserves and production to our portfolio at attractive valuation metrics that ticks all of our investment criteria, without adding any complexity. We also see significant upside potential through further infill drilling beyond the next three approved wells."

Currently, and prior to deal close, Ithaca Energy operates Cygnus through a subsidiary with a current 38.75% share. Spirit Energy holds 61.25%.