Corporate highlights

• Successfully listed on the premium segment of the main market of the London Stock Exchange on 14 November 2022, and subsequently joined the FTSE 250 index in March 2023
• Transformational $1.1 billion acquisition of Siccar Point Energy (Holdings) Limited (“Siccar Point Energy”) completed on 30 June 2022, doubling the Group’s recoverable resources
• Acquisitions of Summit Exploration and Production Limited (“Summit”) and Marubeni Oil and Gas UK Limited (“Marubeni”) completed in the first half of the year
• Ithaca Energy now ranks as the second largest UKCS oil and gas independent by reserves and resources, with year-end 2P reserves of 228 mmboe and 2C resources of 284 mmboe
• Payment of interim 2023 dividend of $133 million made in March 2023, with targeted total dividend of $400 million for financial year 2023

Operational highlights

• The Group achieved record production of 71.4 kboe/d in 2022, a 26% increase from the previous year (2021: 56.5 kboe/d), with a balanced split between liquids (66%) and gas (34%)
• Continued cost discipline with unit operating expenditure of $19.0/boe in 2022 (2021: $18.0/boe) despite inflationary headwinds
• Significant development activity at the pioneering Captain Enhanced Oil Recovery (“EOR”) Phase II project, with the execution of a large proportion of the offshore work scope
• First oil achieved from the Abigail subsea tieback to the FPF-1 floating production unit in the Greater Stella Area on 20 October 2022, only ten months after development consent
• Successful drilling campaigns at Jade and Mariner and well work completed at Erskine and Alba
• Ongoing maturation of development projects in preparation for final investment decisions
• Clear focus on decarbonisation with Board endorsed emissions reduction strategy which includes achieving Net Zero by 2040, on a Scope 1 & 2 net equity basis, 10 years ahead of NSTD commitments

2022 Financial highlights

• Strong Q4 2022 financial performance, reporting production rates ahead of expectations and both opex and capex in line with guidance provided at IPO
• Adjusted EBITDAX of $1,916.2 million, an increase of 85.1% (2021: $1,035.4 million), principally driven by revenue growth due to acquisitions made during the year, increased production efficiency and higher realised commodity prices
• Profit before tax of $2,240.5 million (2021: $763.1 million) and adjusted net income after tax of $462.8 million (2021: $415.5 million) after excluding exceptional non-cash bargain purchase credits of $1,335.2 million and exceptional non-cash Energy Profit Levy deferred tax charges of $766.5 million
• Free cash flow of $1,135 million (2021: $550.5 million)
• Net debt of $971.2 million at year-end (2021: 930.2 million), reducing the Group’s leverage position to 0.5x net debt to adjusted EBITDAX (2021: 0.9x) despite material M&A activity in the year

2023 Outlook

• Average production in Q1 2023 of 70–72 kboe/d primarily due to delayed start up of the non- operated Pierce field, deferred volumes on Abigail (highlighted at IPO) and operational issues at Captain (resolved during March)
• Full year 2023 production guidance revised to 68-74 kboe/d, previously 72-80 kboe/d, reflecting lower Q1 volumes, non-operated portfolio delivery and the impact of the Energy Profit Levy to capital programmes
• Reduction in net opex guidance to $560 million - $630 million, previously $590 million - $680 million, reflecting continued cost discipline and lower estimated fuel and diesel costs
• Reduction in net producing asset capex guidance to $400 million - $460 million, from $450 million -$550 million, (excluding capital investment for projects awaiting final investment decision) reflecting deferral of activity to 2024, reduction in scheduled activity following the introduction of the Energy Profit Levy and optimisation of our capital programme
• Revisions in management guidance across production, opex and capex are expected to have limited cash impact at current commodity prices based on mid-point guidance changes
• Material ongoing project activity at Captain EOR phase II including the drilling of further wells, installation of the required flowlines and umbilicals, and completion of the topside construction and commissioning
• Continued focus on emissions reduction initiatives including commencement of FEED activity to explore the potential for electrification at our flagship Captain asset
• Exploration drilling of high potential K2 target scheduled to commence in summer
• Near-term final investment decisions across our greenfield and brownfield development portfolio, with the focus on prioritising the allocation of capital to maximise sustainable shareholder returns
• Payment of interim 2023 dividend of $133 million made in March 2023, with targeted total dividend of $400 million for financial year 2023

Gilad Myerson, Executive Chairman, commented: 
“2022 has been a transformational year for Ithaca Energy, evidenced by material M&A activity, including the landmark acquisition of Siccar Point Energy, adding both scale and longevity to our existing portfolio. We have executed against our strategy, to buy, build, and boost assets, with the year culminating in the Group’s IPO on the London Stock Exchange in November 2022, and subsequent inclusion in the FTSE 250 index in March 2023.

Ithaca Energy has a sizeable portfolio of cash generative assets together with a strong pipeline of development opportunities that support an attractive growth trajectory. Our core focus in 2023, will be on prioritising investment across our current high-value portfolio to maximise sustainable shareholder returns.

The UK oil and gas industry experienced significant fiscal instability with the introduction and subsequent revision of the Energy Profit Levy in 2022. In its revised form, the Energy Profit Levy, and the fiscal uncertainty it has created, brings material and negative unintended consequences for financing capacity, JV partner alignment, and the free cash flow generation required to support continued investment. We continue to look towards the UK government to create an economic environment that encourages investment in the UK North Sea.”

Alan Bruce, Chief Executive Officer, commented:
“I believe we can look back on 2022 with a great deal of satisfaction. It was a year in which we completed three significant transactions while also delivering organic growth, cementing Ithaca Energy’s position as one of the leading independent exploration and production companies operating in the UK North Sea. We continued to demonstrate our ability to deliver projects, safely and responsibly, while defining an emissions reduction roadmap that reflects our ambition to have one of the lowest carbon portfolios in the UK Continental Shelf.

Our people have always been the key to our success, and I’d like to recognise and thank both our offshore and onshore teams for their hard work and tireless dedication. We also welcome our new Board members who bring unrivalled sector knowledge and a valuable blend of complementary skills to the Group.”

KeyFacts Energy: Ithaca Energy UK country profile