UK-based Ithaca Energy has signed a sale and purchase agreement to acquire the complete issued share capital of JAPEX UK (JUK) E&P from Japan Petroleum Exploration.
The transaction, carrying an $193m (£149.5m) enterprise value based on an effective date of 1 January 2024, is set to enhance Ithaca Energy’s working interest in the Seagull oilfield in the UK North Sea from 35% to 50%.
Go deeper with GlobalData
This stake increase will match bp’s interest as the field operator.
The acquisition is subject to regulatory approval and other conditions.
It is expected to add seven million barrels of oil equivalent (mboe) of 2P (proven) reserves as of 1 January 2025 and boost production by approximately 4,000–4,500 barrels of oil equivalent per day in 2025.
The production composition will be around 82% liquids, with the remainder being gas.
According to Ithaca Energy, this deal is in line with its strategy of pursuing value-enhancing mergers and acquisitions, aimed at incorporating “high-quality” assets within its primary UK Continental Shelf (UKCS) market.
The deal consideration is subject to purchase price adjustments, with an estimated payment at completion of around $140m, based on a projected 30 June 2025 closing date.
It also includes JUK’s material tax losses of around $215m in both Ring Fence Corporation Tax and Supplementary Charge Tax, plus approximately $105m of Energy Profit Levy losses as of the effective date of 1 January 2024.
Ithaca Energy executive chairman Yaniv Friedman said: “Today’s announcement regarding the acquisition of JUK shows Ithaca Energy’s growth strategy in action with a highly accretive, easily digestible and synergistic deal that will add incremental production for the Group, in a well-understood, high-value field.”
The Seagull oilfield, situated in the UK central North Sea, is estimated to contain reserves of more than 300mboe.
Claimed to be a high-margin producing field, Seagull is developed as a subsea tie-back to a bp-operated central processing facility at the Eastern Trough Area Project.
Production commenced in November 2023 from the J1 well, with J2 and J3 wells also now online.
The fourth well, J4, is expected to start production in the second half of 2025.
The field is projected to remain operational until the mid-2030s.
