LONDON (Reuters) – Israeli energy conglomerate Delek Group (DLEKG.TA) announced on Thursday that its North Sea subsidiary Ithaca has acquired private equity-backed company Siccar Point Energy for $1.1 billion.
The acquisition, Delek said, is part of Ithaca’s plan for its IPO later this year, with the aim of boosting Ithaca’s daily production and guaranteeing its long-term reserves.
The deal will solidify Ithaca’s position as a major North Sea producer and increase its production by 8,000 to 9,500 barrels of oil equivalent per day (boed) to a range of around 75,000 to 85,000 boed.
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Private equity funds Blackstone (BX.N) and Blue Water Energy founded Siccar Point in 2014 with an initial investment of $500 million, one of several private North Sea companies formed in the last year, with assets from veteran producers such as Shell and BP were acquired, which were looking to scale back their operations in the aging pond.
Siccar Point became a major player in the North Sea after acquiring OMV’s portfolio (OMVV.VI) for US$870 million in January 2017. The owners have not disclosed how much they have since invested in the company.
The owners of Siccar Point have tried unsuccessfully to sell the company several times in recent years, sources told Reuters.
The Company has interests in two major oil fields – Mariner and Schiehallion – and interests in the Rosebank and Cambo discoveries.
Shell, which owns a 70% stake in Cambo, said last December it had abandoned plans to develop the field, which has become a lightning rod for climate activists.
But following Russia’s invasion of Ukraine last month, the UK government has urged North Sea companies to ramp up production to breathe new life into the project’s prospects. Continue reading
“Developing these discoveries is a top priority for the UK government,” Delek said in his statement, adding that she will be the operator of the Cambo field.
The uncontingent consideration in the transaction was $1.1 billion, including $200 million in Siccar Point Notes maturing in March 2026.
The balance of approximately $900 million will be paid by Ithaca using its existing RBL credit facilities, cash accrued by Siccar Point from January 1, 2022 to the Closing Date and cash available to Ithaca.
The transaction is expected to close towards the end of the second quarter of 2022.
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Additional reporting by Ari Rabinovitch; Editing by Susan Fenton and Nick Zieminski
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