Ithaca Energy announces full year 2024 results

Ithaca Energy, a leading UK independent production and growth company, has announced its audited full year results for the year ended 31 December 2024.  Actuals to 31 December 2024 reflect the completion of the Group's business combination with substantially all of Eni's UK upstream oil and gas assets on 3 October 2024 and include approx. three months contribution from Eni UK's assets. Pro forma 2024 reflects a full year of operations for the enlarged Group.

2024 Highlights:

• Material dividend distributions to shareholders with third interim 2024 dividend of $200 million declared today delivering total 2024 dividends declared of $500 million, in line with our 2024 target
• Reaffirming dividend policy for 2025 targeting dividend of 30% post-tax CFFO, with a dividend target of $500 million for FY 2025
• Completion of transformational Business Combination with Eni UK in October 2024
• Entering 2025 as the largest resource holder in UKCS, with estimated 2P Reserves & 2C Resources of 657 mmboe1 as at 31 December 2024 (2023: 544 mmboe)
• Second largest independent producer in UKCS with pro forma 2024 production of 105.5kboe/d1
• Q4 production of 116.0 kboe/d and opex per boe of $14/boe delivering Q4 Adjusted EBITDAX of $646 million, reflects the transformational nature of the Business Combination
• Continued strong production trend into 2025, with average production from November 2024 to February 2025 of >120 kboe/d
• Improved safety record with zero Tier 1 or 2 incidents in the year
• Rosebank project continues to progress in line with multi-year development timeline, following Judicial Review ruling, towards targeted first production in 2026/27
• Successful $2.25 billion refinancing completed in October 2024, providing material financial firepower with over $1 billion of available liquidity as at December 2024
• Eni UK integration activities well-advanced with main IT systems and office relocations completed in January 2025, and reorganisation and streamlining process to be fully complete by 1 July 2025
• Acquisition of JAPEX UK E&P Limited ('JUK') announced 25 March 2025, increasing the Group's stake in the high-quality Seagull field by 15% to 50%, demonstrates continued execution of Ithaca Energy's consolidation strategy in the UKCS

Yaniv Friedman, Executive Chairman, commented: '2024 was a transformational year for Ithaca Energy, having made material progress across our strategic objectives creating value organically and inorganically. We enter our Next Era of growth, with a proven strategy and a range of strategic options for growth. Yesterday's announcement of our acquisition of JAPEX UK, increasing our stake in the high-quality, long-life Seagull field demonstrates continued execution of our inorganic growth strategy, building further scale in  our core UKCS market. Our focus in 2025 will continue to be on high-grading investment across our range of growth opportunities, executing in line with our strategy as a value-led investor, to maximise long-term sustainable shareholder value through growth and distributions.'

Summary of key financial metrics 

Other KPIs 

 2024 Corporate Highlights

• Material dividend distributions to shareholders with third interim 2024 dividend of $200 million declared today delivering a total 2024 dividend declared of $500 million, in line with our 2024 target
• Completion of transformational Business Combination of Ithaca Energy and Eni UK, creating a dynamic growth player with the largest resource base in the UKCS with 2P Reserves and 2C Resources of 657 mmboe1 providing significant growth optionality and strong foundations for organic and inorganic long-term growth while supporting sustainable shareholder returns
• Strategy to pursue consolidation in core UKCS basin, reflected in acquisition of JUK post period-end (announced on 25 March 2025), adding 4-4.5 kboe/d to the Group's production base in a well understood, high-quality, long-life asset and taking the Group's working interest in the Seagull field to 50%. Estimated completion date of 30 June 2025.

2024 Operational Highlights

Strong Q4 production performance, with positive production trend continuing into 2025

• 2024 full year production of 80.2 kboe/d1,4, delivering production at the upper end of guidance of 76-81 kboe/d for the enlarged group
  • Includes six months production from Eni UK assets from 1 July economic effective date (legal completion on 3rd October 2024)
  • Production split approximately 60% liquids and 40% gas
• Pro-forma 2024 production of 105.5 kboe/d1 placing Ithaca Energy as the second largest independent operator by production in the UKCS (2023: 70.2 kboe/d)
• Strong operational performance in Q4, achieving average production of 116.0 kboe/d1, reaching peak production rates of 138 kboe/d1 in the final quarter with continued strong production trend into 2025, with average production from November to February of >120 kboe/d1

Unlocking material organic growth opportunities

• Rosebank project progressing in line with multi-year development timeline with estimated first production in 2026/27, including successful completion of major subsea campaign with the installation of all nine subsea structures ahead of schedule, in parallel with ongoing FPSO vessel modification scopes
• Following the outcome of the Rosebank Judicial Review, the Rosebank JV partnership will prepare and submit the downstream end user combustion emissions ('scope 3') assessment after the release of government guidelines, expected in Spring 2025
• Successfully awarded licence extension from 31 March 2024 to 31 March 2026 for Cambo field in Q1 2024. Request for further 18-month extension submitted to the North Sea Transition Authority reflecting the fiscal and regulatory uncertainty faced by the sector and the impact of the ongoing Environmental Impact Assessment review
• First production from Talbot field in November with field delivering in line with expectations and successful exploration well at Jocelyn South in the J-Area in December, which has been tied back during Q1 2025 and is now on production, just three months following the field discovery
• Fotla development concept completed, supporting a Final Investment Decision in 2025, subject to regulatory environment

Safe and responsible operator

• Positive trend in safety performance in 2024, with zero Tier 1 and Tier 2 process safety events recorded in the year and significant reduction in total recordable incident frequency
• Business Combination emissions improvement with reduction in gross operated CO2e GHG emissions intensity in 2024 to 23.9 kgCO2e/boe (2023: 25.0 kgCO2e/boe)

Sustaining and optimising production to support medium-term production outlook

• Successfully completed the Captain Enhanced Oil Recovery (EOR) Phase II project, executed on plan and within budget, with first Phase II polymer response outperforming expectations
• Continued high levels of activity at Captain, with commencement of a topside drilling campaign in Q3 with the campaign extending over a two-year duration targeting four new production wells, a pilot well and two well workovers
• Completed W1 well workover at Erskine during July, reinstating the fifth production well at the field
• Infill drilling campaigns progressed at Elgin Franklin, Schiehallion and Captain during the year

2024 Financial Highlights

Strong financial performance against guidance for enlarged group, with materially enhanced Q4 2024 results. Key financial highlights in-line with estimated results provided in FY 2024 Trading Update on 20 February 2025:

• Material dividend distributions to shareholders with the announcement of the Group's third interim 2024 dividend declared today of $200 million payable in April 2025, delivering a total 2024 dividend declared of $500 million, in line with our 2024 target
• Adjusted EBITDAX of $1,405 million (2023: $1,723 million) on revenues of $1,982 million (2023: $2,320 million), representing contributions from Eni UK assets from the completion date of 3 October onwards. Pro forma 2024 Adjusted EBITDAX of $1,985.3 million reflecting a full year contribution of Eni UK assets
• Q4 EBITDAX performance of $646 million, reflects transformational nature of Business Combination
• Net cash flow from operating activities of $853 million representing contributions from Eni UK assets from the completion date of 3 October onwards (2023: $1,291 million)
• Profit after tax for the year of $153.2 million (2023: $292.6 million), inclusive of a post-tax impairment of $103m (2023: $154m)
• Trading performance benefited from the Group's active hedging policy with $135 million of hedge gains in the year due to realised oil prices of $81/bbl before hedging (2023: $85/bbl) and $82/bbl after hedging (2023: $82/bbl) and gas prices of $64/boe before hedging (2023: $76/boe) and $78/boe after hedging (2023: $111/boe)
• 2024 adjusted net operating costs of $649 million, representing a net unit opex cost of $22/boe, below management guidance of $650 million to $730 million for the enlarged Group
  • Includes six months operating costs from Eni UK assets from 1 July economic effective date
• Q4 cost per barrel of $14.0/boe demonstrating the high netback capability of the post deal portfolio
• 2024 net producing asset capital cost of $448 million, at mid-point of management guidance of $410
  • $480 million for the enlarged Group
    • Includes six months capital costs from Eni UK assets from 1 July economic effective date
• 2024 net Rosebank capital spend of $198 million, marginally above management guidance of $170 million to $195 million, reflecting material project activity and progress in 2024 supporting a targeted first oil date of 2026/27
• Tax efficient structure, supplemented by the Business Combination, with a material ring fence corporate tax and supplementary charge tax loss position of $5.4 billion and $4.7 billion respectively at year-end 2024
  • Acquisition of JUK includes material tax losses of approximately US$215 million in both Ring Fence Corporation Tax and Supplementary Charge Tax as well as approximately US$105 million Energy Profit Levy losses as at 1 January 2024, reflecting JUK's material investment in the field
• Successful $2.25 billion refinancing completed in Q4, enhancing balance sheet strength and flexibility with available liquidity of over $1 billion
  • New Senior Notes facility of $750 million with 2029 redemption and coupon of 8.125%, lengthening the maturity period and lowering the cost of capital
• Adjusted net debt of $884.9 million (2023: $571.8 million), representing a Group pro forma leverage position of 0.45x (2023: 0.33x)

Guidance and Outlook 2025

Management guidance is inclusive of the acquisition of JUK (announced 25 March), assuming a completion date of the transaction of 30 June 2025.

• We expect full year 2025 production in range of 105-115 kboe/d1 reflecting a full year of contributions from the Eni UK assets
• FY 2025 net operating cost guidance range of $770-850 million
• FY 2025 net producing asset capital cost guidance range of $560-620 million (excluding pre-FID projects and Rosebank development)
• FY 2025 net Rosebank project capital cost guidance range of $190-230 million
• FY 2025 cash tax guidance of $235-265 million
• Significant gas hedging activity throughout Q1 securing attractive gas hedge positions during a period of escalating prices. Hedged position at 20 March 2025 of 32.1 mmboe (c.71% gas, c.29% oil) from 2025 into 2027 at an average price floor of $75/bbl, and average collar ceiling of $82/bbl, and average wide cost collar ceiling of $91/bbl for oil, and an average price floor of 90p/therm and average collar ceiling of 104p/therm and average wide cost collar ceiling of 133p/therm for gas
•  Reaffirming dividend policy for 2025 targeting dividend of 30% post-tax CFFO, at the top end of our capital allocation policy range of 15 - 30% post-tax CFFO, with a target of $500 million for FY 2025

Medium-Term

• Beyond 2025, the Group expects to sustain production above 100 kboe/d in the medium-term reflecting the full benefit of investment in our Captain EOR Phase II project, first production from the Rosebank development and infill drilling programmes at Cygnus, Elgin Franklin and the J Area with material upside from 2C resources
• Enlarged portfolio supports a reduction in opex per barrel with a medium-term forecast to reset towards $20/boe, reflecting increased production volumes from low opex fields and retirement of mature high-opex assets
• Sustaining capex supports medium-term production outlook with continued focus on high grading organic and inorganic investment optionality across our portfolio while prioritising capital allocation to maximise sustainable shareholder returns
• Strong cash flow generation supports the Group's capital allocation policy with a potential for over $9 billion of total pre-tax cash flow from operations from 2P Reserves over the next five years (2025 to 2029) at $80/bbl and 85p/therm

Analyst and Investor Presentation

In addition to a presentation of its Full Year 2024 results, Ithaca Energy will today provide an investor update outlining its strategy to deliver long-term value creation following the recent Business Combination with Eni UK. The presentation will be hosted in person at 09:00 (GMT) today, 26 March 2025,and will be available via a live webcast, accessible via our website: https://investors.ithacaenergy.com/

A replay will be available on Ithaca Energy's investor relations website following the event.

Notes

1.    Given the increase in gas volumes in Ithaca Energy's portfolio following the Eni UK Business Combination, the gas conversion factor metric to boe for reporting purposes has been recalibrated to more accurately reflect energy equivalence on a combined boe basis using an average calorific value of all gas streams. Fuel gas has been included in production rates in line with the Competent Persons Report produced by NSAI

2.    Non-GAAP measure (see pages 84 to 87)

3.    Contributions from Eni UK assets from the completion date of 3 October 2024

4.    Contributions from Eni UK assets from economic effective date of 1 July 2024

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Source: Ithaca Energy