As part of the deal, Eni will contribute its UK business in exchange for 38–39% of Ithaca’s total shares. Eni’s recently acquired Neptune Energy assets will form part of its offering, while its carbon capture, utilisation and storage (CCUS) assets and its Irish Sea assets will be excluded from the deal. 

It is currently unclear as to when, or if, the deal will be completed; in its press release announcing the deal, Ithaca noted that “although the discussions are at an advanced stage, there can be no certainty that a Potential Combination will occur, nor as to the final terms or timing on which a Potential Combination might be concluded”. 

Ithaca announced the deal on the same day it released its 2023 full-year results, which showed a drop in earnings compared with the previous year. 

Ithaca’s adjusted earnings before interest, taxes, depreciation, amortisation and exploration expenses (EBITDAX) dropped from $1.92bn in 2022 to $1.72bn in 2023, while net cash flow from operating activities fell from $1.72bn to $1.29bn. Although Ithaca’s available liquidity grew substantially, from $578.8m in 2022 to $1.03bn in 2023, the company’s statutory net income plummeted from $1.03bn to $215.6m.  

Ithaca’s total production also fell, from producing 71,403 barrels of oil equivalent per day (boepd) in 2022 to 70,239boepd in 2023. 

Ithaca hopes that a new deal with Eni could provide a boost for the company. When announcing the deal, it noted that a potential merger would “boost near term cash flows to unlock growth from Ithaca Energy’s development projects whilst supporting shareholder returns”. 

Ithaca’s executive chairman Gilad Myerson commented: “We believe this potential combination [of Ithaca and Eni] would be a strong strategic fit with Eni UK’s cash generative portfolio complementing Ithaca Energy’s high-quality, long-life asset base with significant development opportunity.”