Ithaca Energy closes in on £3bn valuation as London float looms
Ithaca Energy (Ithaca) is closing in on a value above £3bn in what could be London’s largest initial public offering this year.
Shares in the North Sea oil and gas producer are being offered at 250-310p, forecasting a market value of £2.5-3.1bn.
It is seeking to raise as much as £310m, with funds raised from the share sale used to pay down Ithaca’s debt, with Israel-based owner Delek looking to cut its stake while remaining a controlling shareholder.
The company is aiming for a float of 12 per cent, and is looking to make the most of reforms to listing requirements implemented last year by the London Stock Exchange which reduce the amount of shares an issuer is required to have in public hands from 25 per cent to 10 per cent.
Delek announced its intention to float Ithaca last month.
Chief executive Idan Wallace said: “Delek has invested a large amount of capital in Ithaca since we acquired it in 2017, delivering significant value for our shareholders.
“A London listing is the natural next step, allowing Ithaca Energy to flourish as an independent company with its own capital allocation policy and the potential to generate substantial value for all its shareholders.
Bookbuilding will continue until next Tuesday, with the first day of trading the following day on 9 November.
Ithaca’s float enlivens stagnant markets
Ithaca’s float next week in a rare sign of life in Europe for new listings, where activity has dropped like a stone since Russia’s invasion of Ukraine.
The conflict has also driven oil and gas prices to historic highs, powered by a Kremlin-fuelled commodities boom, with Russia squeezing supplies into Europe.
Investors are also focusing on Ithaca’s dividend yield, which news agency Reuters has reported is in the region of 11-14 per cent.
The company produced 66,700 barrels of oil equivalent per day (boed) in the first half of the year, amid renewed interest in the North Sea, with fossil fuel production and exploration. featuring in the UK’s energy security strategy.
Last month, the UK unveiled its first oil and gas exploration licensing round since 2019 in an effort to boost domestic production.
Ithaca’s owners anticipate it will be eligible for inclusion in the FTSE UK indices.
The energy firm’s rivals include Neptune Energy and Harbour Energy alongside giants such as Shell and BP.
These companies have posted monster profits over recent days, with roaring trading powering their earnings over the third quarter, reigniting calls for the windfall tax to be extended and toughened up.
Ithaca is also appealing due to its green ambitions.
Its plans is to have one of the least emitting portfolios in the UK North Sea, and has set a goal of reducing its combined Scope 1 and Scope 2 CO2 emissions from operated assets by 25 per cent, based on 2019 levels, by 2025.
In the long term, Ithaca is also committed to achieving net zero by 2040 – 10 years ahead of NSTD commitments.