Ithaca Energy intends to create a “new infrastructure company” with an unspecified global investment company, the North Sea oil firm’s owner said yesterday.
The new business would be 40% held by Ithaca and 60% by the “buyer”, reported to be New-York-headquartered corporation BlackRock.
The two companies have signed a “letter of intent”, which is non-binding at this stage, according to Israel-headquartered Delek, which bought Ithaca in 2017.
As part of the agreement, the new infrastructure company would buy part of Ithaca’s portfolio of production facilities.
The deal includes the floating production vessels on the Stella field in the central North Sea and the Captain field in the outer Moray Firth.
Delek said the transaction would be based on an “estimated value” of between £675 million and £810m.
The letter of intent says the infrastructure company would be able to make decisions on “material matters, budgetary issues, expenses, distributions and financial matters”.
Ithaca declined to comment.
It is understood the infrastructure agreement is one of a range of financing options being considered by Delek and Ithaca as they look to grow the North Sea business.
Ithaca received an 85% operated stake in Captain through its £1.6 billion acquisition of most of Chevron’s UK portfolio last year.
Last week, Ithaca said it expected to sanction phase two of an enhanced oil recovery project on Captain in the first half of 2020.
It also plans to develop Hurricane, which is a new field in the Greater Stella Area, and drill the Fotla exploration well near the Alba field.
And Ithaca is exploring options to “optimise its capital structure, including an initial public offering”.
BlackRock has shown its appetite for North Sea deals in recent months. In November, its global energy and power infrastructure funds joined forces with Singapore-based investor GIC to buy pipeline and terminal owner Kellas Midstream from private-equity firm Antin. That deal was expected to close early in 2020.
BlackRock said it didn’t comment on market speculation.
Larry Fink, BlackRock’s chief executive, recently spoke out about the risks presented by climate change and the importance of sustainable investing.