Ithaca Energy (ITH) H1 2024 earnings summary

Executive summary

• Progressing toward completion of the transformational business combination with Eni UK, expected by early Q4 2024, creating the largest UKCS resource base and doubling production scale, enhancing diversification and growth optionality.

• Strong leadership team in place, with new CEO and EVP of Exploration joining, leveraging Eni's expertise for future growth and international expansion.

• Interim 2024 dividend of $100 million declared, with ambition for up to $500 million in annual dividends for 2024 and 2025, reflecting robust cash generation.

• Achieved key project milestones, including Captain EOR Phase II completion and major progress on Rosebank, supporting long-term production and decarbonisation goals.

Financial highlights

• H1 2024 adjusted EBITDAX/EBITDA of $533 million and statutory net income of $106 million, with strong cash flow and liquidity despite lower production due to short-term non-operated asset issues.

• Net cash flows from operating activities reached $560 million; net debt reduced to $506 million, with over $1 billion in available liquidity.

• H1 2024 production averaged 53.0 kboe/d, with 69% liquids and 31% gas.

• Hedge gains contributed $98 million to EBITDA/EBITDAX, offsetting lower year-on-year oil and gas prices.

• Unit operating cost for H1 2024 was $27.3/boe; cost per barrel normalized at $22/bbl excluding outliers.

Outlook and guidance

• FY 2024 combined group production guidance revised to 76–81 kboe/d; standalone 54–57 kboe/d, with pro forma business targeting over 100,000 boe/d post-ENI deal.

• Dividend policy reaffirmed at 30% of post-tax cash flows, with a target of up to $500 million per year for 2024 and 2025.

• Net operating cost guidance for 2024 is $540–590 million (standalone) and $650–730 million (combined); capex guidance $335–385 million (standalone) and $410–480 million (combined).

• Long-term dividend policy remains at 15%-30% of post-tax cash from operations, with flexibility for special dividends.

• Continued focus on value-accretive M&A in the U.K. and internationally, with no geographic exclusions and a balanced oil/gas portfolio.