Shell plc’s SHEL U.K. affiliate has decided to farm out a 50% non-working interest in the Tobermory gas discovery to Ithaca Energy, marking another step in strengthening collaboration across the U.K. North Sea. Even with the stake transfer, Shell will retain a 50% position and continue to serve as the license operator, ensuring continuity while enabling Ithaca to expand its footprint in a priority growth area. The move aligns closely with Ithaca’s focus on scaling activity in the West of Shetland, a region central to its long-term development strategy. Shell’s farm-out is signaling its wider move toward the traditional oil and gas sector and a step back from renewables. In a similar move, the company has also withdrawn from the MarramWind and CampionWind offshore projects in Scotland.

Shell’s stake in the Tobermory discovery is set to be included in Adura — the company’s new joint venture with Equinor that was announced in 2024 and slated to be launched later this year. The partnership between Shell and Equinor will merge the two companies’ U.K. offshore oil and gas portfolios into a single integrated entity.

A Growing Portfolio Anchored by Tobermory & Tornado

The licenses P2629 and P2630 are included in the deal, which houses the Tobermory discovery, which now becomes a shared asset between the two companies. This partnership cannot be considered new because Shell and Ithaca are already 50-50 partners in the nearby Tornado field. Ithaca noted that Tornado continues to progress toward a financial investment decision, supported by ongoing tendering and advancement of environmental submissions. Tornado’s resources form a critical pillar of Ithaca’s regional production outlook.

Positioning for Long-Term Basin Growth

Ithaca emphasized that the West of Shetland remains a key basin for the company’s future, driven by notable developments such as Rosebank, Cambo, and the evolving Tornado and Tobermory assets. Ithaca’s continued expansion in the West of Shetland basin also plays a vital role in advancing the U.K.’s energy security goals while sustaining thousands of skilled jobs across the sector. The latest transaction builds on this momentum by enabling Ithaca to diversify its project pipeline while reinforcing Shell’s operational leadership in the basin. As both companies continue driving discoveries toward FID, the West of Shetland is set to remain a central hub of U.K. offshore investment and resource expansion.

SHEL’s Zacks Rank & Key Picks

London-based Shell is one of the primary oil supermajors, a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Story Continues

Investors interested in the energy sector may consider some top-ranked stocks like Canadian Natural Resources Limited CNQ, Oceaneering International, Inc. OII and USA Compression Partners, LP USAC, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Calgary-based Canadian Natural is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2025 revenues indicates 5.7% year-over-year growth.

Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII’s 2025 earnings indicates 76.3% year-over-year growth.

USA Compression is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. The Zacks Consensus Estimate for USAC’s 2025 earnings indicates 29.8% year-over-year growth.

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