Ithaca Energy has reached an agreement to acquire Eni's UK upstream oil and gas assets in a deal valued at approximately £754m ($937.7m). 

The deal will see Ithaca issue 635 million shares to Eni, granting the Italian oil and gas company a 38.5% stake in the expanded Ithaca share capital. 

Under the agreement, Ithaca will acquire all of Eni’s upstream assets in the UK, excluding its East Irish Sea assets and carbon capture and storage activities.  

The deal, which follows an exclusivity agreement signed last month, includes interests from Eni's recent acquisition of Neptune Energy.  

Eni’s UK assets encompass a mix of operated and non-operated interests in various producing fields such as the Cygnus field, the Elgin Franklin area, Glenelg, J-Area (including Judy, Joanne, Jasmine and Jade), Seagull and Tommeliten A. 

The merger is expected to create a combined entity with projected production exceeding 100,000 barrels of oil equivalent per day (boepd) in 2024 and the potential to organically grow to 150,000boepd by the early 2030s.  

Following the merger, the combined group will have 2P reserves and 2C resources totaling 658 million barrels of oil equivalent. 

It will have interests in 37 producing assets and stakes in six of the ten largest fields on the UK Continental Shelf (UKCS) including Cambo, Elgin/Franklin, J-Area, Mariner Area, Rosebank and Schiehallion. 

Eni has stated that the merger aims to replicate the success of its previous upstream combinations, which have been structured using its Satellite Model.  

This model has been employed in other regions such as Norway with Vår Energi and Angola with Azule Energy. 

Ithaca Energy executive chairman Gilad Myerson said: “The synergistic combination with Eni’s highly cash-generative UKCS portfolio has the ability to unlock our long-life organic growth opportunities creating a combined entity with substantial scale and longevity.” 

Eni CEO Claudio Descalzi said: “The combination with Ithaca represents an exciting opportunity for us to bring together complementary portfolios establishing a material position on the UKCS with significant growth and optimisation opportunities.” 

Upon completion of the deal, Delek Group, listed in Tel Aviv, will hold just over a 50% ownership in the combined company.  

The merger is subject to regulatory approvals and is expected to be finalised in the third quarter of 2024.