UK-based oil and gas operator Ithaca Energy has signed a farm-in agreement with Shell UK for a 50% working interest in licences P2629 and P2630 containing the Tobermory gas discovery in the West of Shetland basin. 

Upon completion of the farm-in agreement, Shell UK will continue to hold a 50% stake in the Tobermory discovery and serve as the licence operator. 

The company said that the agreement builds on its investment strategy for the West of Shetland basin. 

Ithaca Energy also stated that this move positions the company as a “significant player in a key gas hub in the area” and supports the UK’s energy security. 

Along with its existing 50/50 joint venture with Shell in the Tornado discovery, the new farm-in agreement strengthens its position in the area, added Ithaca Energy. 

Ithaca Energy executive chairman Yaniv Friedman said: “We are delighted to announce the farm-in to the Tobermory discovery and to continue our strategic partnership with Shell UK in the area. 

“The West of Shetland represents a key basin for the Group’s long-term growth, with the ongoing development of the Rosebank field and the continued progression of the Cambo and Tornado discoveries towards final investment decision. 

“Our investment in the West of Shetland basin is critical not only to the UK’s Energy Security strategy but also in supporting thousands of highly skilled jobs and our world-class supply chain and providing significant gross value add to the UK economy.” 

Ithaca Energy claims to be one of the largest independent oil and gas companies operating on the UK Continental Shelf, ranking second-largest by production. 

In March this year, Ithaca Energy signed a sale and purchase agreement to acquire the complete issued shares of JAPEX UK (JUK) E&P from Japan Petroleum Exploration. 

The transaction, carrying an enterprise value of $193m (£149.5m), enhances the company’s interest in the Seagull oilfield in the UK North Sea from 35% to 50%.