Ithaca Energy agreed to buy a portfolio of offshore oil projects from Canada’s Suncor Energy for up to $1.11 billion. The London-listed energy company said Monday it would buy a 48% stake in Terra Nova, a 40% interest in White Rose Existing Lands and 38.6% in White Rose Growth Lands, which are all situated in shallow waters off the east coast of Canada. It will pay $860 million cash upfront, with up to $250 million in potential further payments tied to future oil prices. Ithaca said the deal adds scale and diversification in an offshore operating environment similar to the U.K. Continental Shelf and will materially enhance its medium-term production outlook while supporting cash flow and dividend growth.
"This acquisition marks the next era of growth for Ithaca Energy as we make our inaugural international acquisition in offshore east coast Canada," said Yaniv Friedman, executive chairman of Ithaca Energy.
"The transaction delivers on our clear stated growth strategy as we seek to diversify and grow our production and resource base and replicate our success in the United Kingdom Continental Shelf through disciplined international expansion."
The acquisition provides a platform for further deals, with potential for building further scale across North America, it added.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing