Ithaca Energy buys Canadian assets from Suncor for USD1.11 billion

Ithaca Energy PLC on Monday said it has agreed to buy a portfolio of offshore oil assets in Canada from Suncor Energy Inc for up to USD1.11 billion.

The Aberdeen, Scotland-based oil and gas company operating in the North Sea said it will pay an initial USD860 million for the assets, located off the East Coast of Newfoundland and Labrador, plus potential oil price related contingent consideration of up to USD250 million.

The deal, which is expected to be financed through cash, undrawn debt capacity and new Canadian debt finance, is expected to be immediately earnings, cash flow and dividend accretive.

Shares in Ithaca Energy rose 2.4% to 282.00 pence each in London on Monday morning. It was the best performing stock on the FTSE 100 which was flat.

It continues an "active but disciplined" screening of inorganic growth opportunities, with focus on adding premium northern-Organisation for Economic Co-operation & Development barrels, Ithaca said.

The assets, bought from Calgary-based Suncor Energy, comprise a 48% operated working interest in Terra Nova, a 40% non-operated interest in the White Rose Existing Lands, and a 39% non-operated interest in the White Rose Growth Lands, including the West White Rose Extension.

Ithaca said they are long-life assets with 2P reserves life of around 17 years with estimated five-year average 2P production expected to be 30,000 barrels of oil equivalent per day over 2027 to 2031.

In addition, the purchase offers "material" organic growth potential from infill drilling, near-field step-out opportunities and exploration exposure, the firm said.

This supports the upgrade of Ithaca's medium-term production outlook to between 140,000 to 150,000 boe/d, the firm added.

Completion is targeted for the first half of 2027, subject to usual closing conditions, including applicable regulatory and government approvals in Canada.

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