Ithaca acquires Cygnus stake from Spirit for £116m – Daily Business

Ithaca Energy is acquiring an additional 46.25% stake in the Cygnus gas field from Spirit Energy in a £116 million deal that will increase its operated interest to 85%.

The transaction is expected to add 23 million equivalent barrels of reserves and around 13,000 boe per day in 2025 and is in line with the group’s strategy to pursue value-accretive M&A, adding high-quality assets in to the core UK Continental Shelf market.

Cygnus, located in the southern North Sea off the Lincolnshire coast, is the largest UK Continental Shelf gas field and a key contributor to the UK’s energy security.

Production started in 2016 with 11 wells currently producing, with three further infill wells approved, with the Valaris Norway on location with the first of the two firm wells to be spud in Q2 2025, and expected onstream during H2 2025 and H1 2026.

Yaniv Friedman, executive chairman, said: “Today’s transaction with Spirit Energy provides further equity in a high-margin, high-quality producing gas asset that we understand deeply through our operatorship.

“This deal follows our Japex (Seagull) deal announced just two months ago and further demonstrates our growth strategy in action.

“By increasing our stake in Cygnus we add incremental reserves and production to our portfolio at attractive valuation metrics that ticks all of our investment criteria, without adding any complexity. We also see significant upside potential through further infill drilling beyond the next three approved wells. This is the type of deals we like.”

Following completion of the transaction, Spirit Energy will remain focused on the development of the long-term Morecambe Net Zero carbon storage project, its remaining producing assets and safely and efficiently decommissioning its facilities and wells with minimum environmental impact.

Chris O’Shea, group chief executive of Centrica and chairman of Spirit Energy, said: “Our focus is on delivering value for Centrica’s colleagues, customers and shareholders through the energy transition.

“Through this disposal we are taking another step in reducing our exposure to gas production while accelerating the delivery of enhanced value to shareholders, allowing the Spirit team to further focus on delivering the largest carbon storage project in Europe at Morecambe Net Zero.

“This is only one of many exciting opportunities across Centrica, aligned to the energy transition, as we continue to re-position our infrastructure portfolio, and we remain firmly focused on capturing the immense value on offer.”