Eni SpA E has made a significant move by agreeing to divest the majority of its upstream assets in the U.K. to Ithaca Energy.

The transaction, valued at approximately £754 million, is structured as an all-stock deal. This agreement does not include Eni’s East Irish Sea assets and its carbon capture, utilization and storage activities in the U.K.

Through this acquisition, Ithaca Energy will take over Eni U.K.’s operated and non-operated interests in various producing fields. This includes a substantial 38.75% working interest in the Cygnus field, as well as stakes in 10 other producing fields.

Key fields under this deal include the Elgin Franklin area, which consists of Elgin, Franklin and West Franklin, wherein Ithaca will hold a 21.867% interest. Other fields include Glenelg, with an 8% interest, and the J-Area, comprising Judy, Joanne, Jasmine and Jade. The deal also includes the Seagull field, with a 35% working interest, and a minor 0.07% stake in the Tommeliten A field.

Ithaca Energy, one of the largest independent oil and gas operators on the U.K. Continental Shelf (“UKCS”), will significantly enhance its portfolio through this acquisition. The company is a key player in the region, holding stakes in six of the 10 largest fields and the top two largest development fields on the UKCS, including Rosebank, Cambo, Schiehallion, Mariner Area, Elgin/Franklin and J-Area.

The merger of Eni’s assets with those of Ithaca Energy is expected to create a larger, more robust entity. Projections indicate that the combined group's production could exceed 100,000 barrels of oil equivalent per day (Boe/d) by 2024. Additionally, there is potential for organic growth to reach 150,000 Boe/d by the early 2030s.

Per the deal, Eni will receive new shares in Ithaca Energy, amounting to 38.5% of the total shares post-merger. Consequently, the existing shareholders of Ithaca Energy will retain a 61.5% stake in the enlarged company.

The strategic move allows Eni to continue its expansion efforts on the UKCS and reinforces its commitment to the U.K. market, especially following its acquisition of Neptune Energy. The completion of this deal is contingent on obtaining regulatory approvals, with an anticipated closing in the third quarter of 2024.

Zacks Rank & Key Picks

E currently has a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.



SM Energy Company SM is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of oil and gas in North America.

The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

Hess Corporation HES is a leading oil and natural gas exploration and production company. The exploration and production company’s oil and gas proved reserves increased last year by more than 8% year over year.

The Zacks Consensus Estimate for HES’s 2024 and 2025 EPS is pegged at $8.62 and $11.45, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

YPF Sociedad Anonima YPF is a vertically integrated energy company primarily engaged in the oil and gas sector. The company operates in both upstream and downstream activities, including the exploration, production and refining of crude oil and natural gas.

The Zacks Consensus Estimate for YPF’s 2024 and 2025 EPS is pegged at $6.14 and $7.83, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

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