Latest news with #IthacaEnergy
Scotsman
6 days ago
- Politics
- Scotsman
Why Scotland must stop North Sea oil fields, like Rosebank, from being used to exploit Gaza citizens
Humza Yousaf, the former first minister, argues against allowing Ithaca Energy's owners to press ahead with Rosebank in the North Sea. Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... 'We survived.' That is the message we wait for every morning from Sally, my wife Nadia's cousin, who lives in Gaza with her husband and four young children. I say 'live', but in reality, their daily goal is simply to survive the barbaric Israeli onslaught that has so far claimed the lives of over 50,000 Gazans, including around 17,000 children. That is before we are even able to begin counting the bodies trapped under rubble. Advertisement Hide Ad Advertisement Hide Ad Displaced Palestinians flee Khan Younis, Gaza, amid the ongoing Israeli military offensive in the area | AP There are no words left to describe the scale of inhumanity we are witnessing in Gaza. Many seasoned diplomats and humanitarian workers who have been to numerous conflict zones over the decades all, to a man and woman, say the same thing; Gaza is the worst humanitarian catastrophe they have ever seen – and of course it is entirely man-made. The situation is now beyond urgent. Tom Fletcher, UN humanitarian chief last week warned that thousands of babies in Gaza could die if more aid is not allowed in. And he asked the question to world leaders and all of us - are we 'doing all we can' to stop the suffering? We have heard stronger language from the UK government, with the Foreign Secretary calling Israel's actions 'monstrous' and 'intolerable' in a recent Commons statement. However, what we need, and more importantly the people of Gaza need, is to ensure that rhetoric transforms into meaningful action that will hopefully stop the scale of devastation we are witnessing. Advertisement Hide Ad Advertisement Hide Ad The most immediate, and probably effective step the UK government could take is to stop all arms sales to Israel. How on earth can the UK government continue to legally, let alone morally, justify selling arms to a government headed by a man wanted by the ICC for war crimes and crimes against humanity? While responsibility for arms export licenses lies with the UK government, we can also use whatever influence and power we have in Scotland to oppose the onslaught faced by the people of Gaza, at the hands of the Israeli Government. It is easy to feel powerless, but we can start by looking at the role this country – and our resources – are playing in funding the suffering the people of Gaza are facing. Advertisement Hide Ad Advertisement Hide Ad Profits from Scotland's oil and gas reserves are right now flowing to a company linked to human rights violations in Palestine, and hundreds of millions of pounds more could follow in the near future. Few have heard of Ithaca Energy, but it is on track to become the largest North Sea oil and gas producer. It holds stakes in seven out of ten of the basin's largest fields and is part of the two largest, most controversial undeveloped fields in the basin: the Rosebank and Cambo oil fields off the west coast of Shetland. Extinction Rebellion activists campaign against the Cambo oil field development. When I publicly opposed the UK government's approval of the Rosebank oil field as first minister, I did so for environmental reasons and the impact continuing to develop new oil and gas fields will have on our climate. And of course, these concerns remain. However, information about Ithaca Energy's owners, Delek Group, only give further rise to concerns I have. Ithaca is majority-owned by the Israeli fuel conglomerate, Delek Group, which has been flagged by the UN for human rights violations in Palestine. Delek operates in illegal Israeli settlements across the Palestinian West Bank and is known to provide fuel to the Israel Defense Forces, via a subsidiary. Advertisement Hide Ad Advertisement Hide Ad There is near-universal agreement across the world that settlements are illegal under international law. We have, over the past 19 months, seen an increase in settler violence against innocent Palestinians. By their very nature, settlements are a tool used by the Israeli state to occupy more and more Palestinian land. This is why countries like Ireland are now taking steps to ban trade with Israeli businesses in occupied territories. We also know Delek's activities in illegal settlements was one of the reasons Norway's largest pension fund, KLP, divested from Delek Group in 2021 citing an 'unacceptable risk of the company contributing to or being responsible for serious breaches of ethical norms'. A company that is cited by the UN for possible human rights violations, and which has a contract with the IDF who are responsible for the mass slaughter of tens of thousands of children in Gaza, should not be allowed to profit from Scotland's resources. Advertisement Hide Ad Advertisement Hide Ad If the UK government allows the development of the Rosebank oil field, it's estimated it will see more than a quarter of a billion pounds in profit flow to Delek. A map showing the location of the Rosebank and Jackdaw oil fields | Kimberley Mogg/NationalWorld If Ithaca is allowed to continue to expand in the North Sea by developing Rosebank, the answer to the question posed by Tom Fletcher - 'are we doing all we can?' - would be an emphatic no. We cannot allow oil fields signed off in Westminster to be used to bankroll injustice across the world. I am certain that one day those who are responsible for the war crimes we are witnessing in Gaza will be held to account. We must ensure we are in no way complicit; Scotland must not allow our natural resources to become a revenue stream for companies tied to the oppression of the Palestinian people.
Yahoo
25-05-2025
- Business
- Yahoo
Hunting for a second income? These falling energy players offer up to 12% yields
Investors looking to build a second income stream are likely to be attracted towards the substantial dividend yields currently on offer from smaller energy players. Businesses like Ithaca Energy (LSE:ITH) and Harbour Energy (LSE:HBR) have impressive payouts this month, sitting at 12.3% and 11.2% respectively. And should these firms prove capable of maintaining or even growing their dividend in the long run, buying shares today could be immensely lucrative. So what are the chances of that happening? And should investors be considering these under-the-radar stocks for their income portfolios? Around 60% of Harbour Energy's oil & gas production comes from the North Sea, while Ithaca operates entirely within this region. And in terms of production volume, Harbour has the upper hand, averaging 258,000 barrels of oil equivalents per day (Kboepd) versus Ithaca's 80,200. Yet both firms are projecting these quantities to increase by the end of 2025. If everything goes according to plan, Harbour's output will almost double to between 450,000 and 475,000. At the same time, Ithaca is on track to hit 105,000-115,000. In both cases, this growth's being driven by new assets that have recently been acquired. During September 2024, Harbour completed its $11.2bn deal to acquire Wintershall Dea, which is now set to contribute a full year of production. Then, a month later, Ithaca Energy executed its own £754m buyout of Eni UK's oil & gas assets within the North Sea. Obviously, the incoming surge of production volumes bodes well for cash flows and, in turn, dividends. But if that's the case, why haven't more investors been capitalising on the double-digit yields? Despite these businesses seemingly making solid operational progress, some key concerns are dampening investor sentiment. One of the biggest headwinds is the location of their operations. With the UK North Sea making up most, if not all, of their production output, profits are subject to the UK's energy profits levy. And currently, that means these businesses are facing an estimated 78% effective tax rate on earnings – one of the highest in the world. So even though production is on the rise, the benefit for shareholders is expected to be quite limited. Even more so, if oil prices take a tumble. The companies have already had to endure oil prices sliding from around $80 per barrel to $60 over the last 12 months. And should economic conditions worsen in the US, Goldman Sachs has predicted prices could fall further to $50 by December 2026 or even under $40 in the worst-case scenario. Needless to say, market conditions are far from ideal for being a concentrated energy business right now. And with such high levels of external uncertainty, investors are understandably cautious about these businesses, myself included. Both Harbour Energy and Ithaca Energy offer an exciting yield for investors building a second income stream through dividends. But whether that yield can be maintained in the coming years as regulatory and economic pressure mounts looks dubious in my eyes. Therefore, I think income investors may want to look elsewhere for winning opportunities. The post Hunting for a second income? These falling energy players offer up to 12% yields appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
24-05-2025
- Business
- Yahoo
Ithaca Energy First Quarter 2025 Earnings: Misses Expectations
Revenue: US$707.6m (up 47% from 1Q 2024). Net loss: US$258.7m (down from US$42.7m profit in 1Q 2024). US$0.16 loss per share (down from US$0.042 profit in 1Q 2024). We've discovered 2 warning signs about Ithaca Energy. View them for free. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue missed analyst estimates by 12%. Earnings per share (EPS) was also behind analyst expectations. Looking ahead, revenue is forecast to grow 2.7% p.a. on average during the next 3 years, while revenues in the Oil and Gas industry in the United Kingdom are expected to remain flat. Performance of the British Oil and Gas industry. The company's shares are down 8.1% from a week ago. Be aware that Ithaca Energy is showing 2 warning signs in our investment analysis and 1 of those is concerning... Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Ithaca Energy PLC (STU:XE3) Q1 2025 Earnings Call Highlights: Record Production and Strategic ...
Release Date: May 21, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Ithaca Energy PLC (STU:XE3) reported a record quarterly production of 127,400 barrels per day, demonstrating enhanced operating capacity. The company achieved a record quarterly adjusted EBITAX of $653.2 million, supported by a reduction in OpEx per barrel. Ithaca Energy PLC (STU:XE3) has successfully executed strategic acquisitions, including increasing its stake in the Cygnus Bravo project to 85%, which is expected to add significant production capacity. The company maintained a strong safety record with zero incidents reported, emphasizing its focus on safety and environmental performance. Ithaca Energy PLC (STU:XE3) reaffirmed its commitment to shareholder returns, with a third interim dividend paid in April and a target dividend of $500 million for 2025. The company reported a loss for the period due to a one-off non-cash deferred tax charge of $327 million related to the extension of the EPL. There is an increase in the net OpEx range by $10 million and net producing asset CapEx by $20 million, which could impact future profitability. The strengthening of the pound against the dollar has put upward pressure on costs, despite hedging efforts. Ithaca Energy PLC (STU:XE3) faces challenges in the M&A market, with limited opportunities for accretive acquisitions as the company continues to high-grade its portfolio. The company is awaiting clarity on the environmental and tax situation in the North Sea, which could impact future projects like the Cambo development. Warning! GuruFocus has detected 6 Warning Signs with STU:XE3. Q: Can you discuss the current M&A market in the UK, particularly in terms of the quality and quantity of assets available? Would you classify it as a buyer's or seller's market? A: We have seen increased interest in the UKCS since the autumn budget, with several deals and discussions taking place. It's difficult to categorize the market as strictly a buyer's or seller's market. We focus on value and meeting our investment metrics, aiming to add high-quality, accretive assets to our portfolio. We continue to see value in the UKCS and are methodical in our approach to M&A. Q: What are your current production levels for the Captain project, and what are your expectations for year-end and peak production rates? A: In Q1, Captain's production was around 21,000 barrels of oil equivalent per day, which was 15% higher than planned. This was due to the enhanced oil recovery response and production efficiency being 2% ahead of our plan. We are pleased with the performance and expect continued strong results. Q: You've reiterated your dividend target for 30% post-tax cash from operations and a $500 million target for the year. How confident are you in achieving these targets given the current oil price environment? A: We remain committed to distributing 30% of post-tax cash from operations, with a target of $500 million. Strong operational performance and hedging positions support our confidence in achieving these targets. The 15-30% range allows flexibility based on market conditions and capital plans. Q: Can you provide more detail on the allocation of CapEx per asset and the breakdown of cash tax payments between EPL, CT, and SCT? A: While we don't provide a detailed CapEx breakdown by asset, Captain is a significant focus with over $150 million invested, including drilling and upgrades. Regarding cash tax payments, approximately 90% is EPL, with the remainder being CT and SCT. Q: What is your perspective on consolidation in the UK North Sea, and what competition have you faced in recent deals? Also, what is the potential timeline for farming in assets like Cambo? A: We see consolidation as crucial for achieving scale and cost advantages in the UKCS. While there is competition, our track record and ability to move quickly make us a preferred partner. For Cambo, we seek farming partners and await clarity on fiscal and environmental policies before making further decisions. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
21-05-2025
- Business
- Yahoo
Ithaca Energy plc's (LON:ITH) Intrinsic Value Is Potentially 98% Above Its Share Price
The projected fair value for Ithaca Energy is UK£2.54 based on 2 Stage Free Cash Flow to Equity Ithaca Energy is estimated to be 49% undervalued based on current share price of UK£1.29 Analyst price target for ITH is US$1.43 which is 44% below our fair value estimate Does the May share price for Ithaca Energy plc (LON:ITH) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to their present value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example! Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. We've discovered 4 warning signs about Ithaca Energy. View them for free. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$753.4m US$449.9m US$280.8m US$207.7m US$327.2m US$297.5m US$280.6m US$271.5m US$267.1m US$266.0m Growth Rate Estimate Source Analyst x2 Analyst x3 Analyst x2 Analyst x2 Analyst x1 Est @ -9.07% Est @ -5.66% Est @ -3.27% Est @ -1.60% Est @ -0.43% Present Value ($, Millions) Discounted @ 6.9% US$705 US$394 US$230 US$159 US$235 US$200 US$176 US$160 US$147 US$137 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$2.5b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.9%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$266m× (1 + 2.3%) ÷ (6.9%– 2.3%) = US$6.0b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$6.0b÷ ( 1 + 6.9%)10= US$3.1b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$5.6b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of UK£1.3, the company appears quite undervalued at a 49% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Ithaca Energy as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.9%, which is based on a levered beta of 0.890. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Ithaca Energy Strength Debt is not viewed as a risk. Dividend is in the top 25% of dividend payers in the market. Weakness Earnings declined over the past year. Shareholders have been diluted in the past year. Opportunity Annual revenue is forecast to grow faster than the British market. Trading below our estimate of fair value by more than 20%. Threat Dividends are not covered by earnings and cashflows. Annual earnings are forecast to decline for the next 3 years. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For Ithaca Energy, there are three additional aspects you should assess: Risks: We feel that you should assess the 4 warning signs for Ithaca Energy (3 shouldn't be ignored!) we've flagged before making an investment in the company. Future Earnings: How does ITH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
