Rosebank firm buys stake in huge North Sea gas field
The deal will leave Israeli-owned Ithaca with an 85% stake in Cygnus, which it described as 'the largest UK Continental Shelf gas field and a key contributor to the UK's energy security.'
READ MORE: SNP Government oil hypocrisy shocking amid Scottish jobs cull
Last year Centrica said Cygnus was expected to produce enough gas per day to meet the needs of around 1.9 million UK households.
Centrica has highlighted the potential for the field to remain in production beyond 2030.
Ithaca Energy's executive chairman, Yaniv Friedman, said the deal would allow the London-listed group to acquire reserves at an attractive valuation and to increase its production in a simple way.
The company noted it is paying less than $7 per barrel of oil equivalent to acquire reserves in Cygnus. Brent crude was selling for around $65.30 per barrel in morning trading.
The deal is the latest in a series of acquisitions that Ithaca has made in the UK North Sea in recent years.
In March Ithaca bought a stake in the giant Seagull oil field from BP in a $193m (£145m) deal.
Ithaca cemented its standing as one of the biggest North Sea producers in April last year when it acquired the bulk of Italian giant Eni's interests in the area for around £750m.
READ MORE: North Sea drilling curb plan looks mad amid Trump trade threats
Israel's Delek Group was left with a 50.4% stake in Ithaca following completion of the deal, with Eni on 38.7%.
Six months later the Labour Government sparked outrage in the industry by increasing the rate of the windfall tax.
Ithaca has made a range of expansion moves in the North Sea since the tax was first imposed in 2022.
The following year the company approved plans to develop the bumper Rosebank field West of Shetland with Equinor of Norway.
The project faces uncertainty after Scotland's Court of Session ruled in January that the former Conservative Government was wrong to approve the development. This was because the assessment process failed to take account of the emissions that would be generated by use of the related output.
The Labour Government is working on a new assessment process.
READ MORE: North Sea oil giant plans $500m investor payouts as it cuts jobs
Ithaca also hopes to develop the huge Cambo field West of Shetland.
Environmental campaigners are bitterly opposed to the plans for Rosebank and Cambo.
Centrica built a big North Sea production business, called Spirit Energy, helped by the £1.3bn acquisition of Aberdeen-based Venture Production in 2009.
The group decided to offload its North Sea exploration and production operations to focus on other markets, including the supply of energy to households.
Centrica plans to develop a huge carbon storage facility in depleted gas reservoirs beneath Morecambe Bay.
The group said the Cygnus deal would generate around £215m benefits in total including the transfer of £99 million of decommissioning liabilities associated with the interest.
Centrica will retain a 15% stake in Cygnus following the deal. Cygnus is in the Southern North Sea 120 miles off Lincolnshire.
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