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Shares in oil firm Ithaca take plunge

Shares in oil firm Ithaca  take plunge
Shares in North Sea oil firm Ithaca Energy slumped more than 30% yesterday after it said talks with potential buyers had ended without any deal.

Shares in North Sea oil firm Ithaca Energy slumped more than 30% yesterday after it said talks with potential buyers had ended without any deal.

It added: “The board has concluded that continuing the current process at this time was unlikely to produce a transaction with financial terms that properly reflect the value of the company.”

Chairman Jack Lee said it was not in the interest of Ithaca’s shareholders to continue the talks, adding: “To this end, the decision has been made to end the process and allow the company to focus on delivery of its long-term growth plans.”

Ithaca, which is registered in Canada but has its head office in Aberdeen, also announced it had signed a mandate with banking group BNP Paribas for a fully underwritten £256million debt facility to fund ongoing activities and future acquisitions.

It replaces an undrawn £90million facility and Ithaca said it was on “similar conventional oil and gas industry borrowing base financing terms”.

The firm added the extra available funding, an existing cash balance of £70.8million and projected income from operations meant it had the financial capacity to “continue delivering material growth” from both its existing assets and new additions.

But investors took the overall news badly and the shares slumped nearly 31% to 121.75p, wiping more than £100million off the value of the company.

Ithaca said earlier this month it had set a deadline for bids from potential buyers but did not reveal when that was. That came a day after a Middle East newspaper said the national oil company of Kuwait had walked away from takeover talks with the firm.

Ithaca said in March it had received unsolicited interest from several unnamed parties in a deal estimated to be worth £540million. Speculation about potential buyers at that time focused on oil firms such as EnQuest, Taqa and Dana Petroleum.

Ithaca, which has assets in the inner and outer Moray Firth plus central and southern North Sea, announced the start of oil production from the Athena field on Monday.

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