Ithaca Energy Expands Into Canada With $860M Suncor Offshore Assets Deal

Key Points

• Ithaca Energy agreed to acquire Suncor’s offshore Canadian assets for $860 million, including operatorship of Terra Nova and a non-operated stake in White Rose. The deal marks Ithaca’s first expansion beyond the U.K. Continental Shelf.
• The assets are expected to add average production of about 30,000 barrels of oil equivalent per day from 2027 to 2031, raising Ithaca’s medium-term production target to 140,000–150,000 barrels per day. The portfolio includes 103 million barrels of 2P reserves and roughly 200 million barrels of additional resource potential.
• Ithaca plans to fund the transaction with existing liquidity and new asset-backed debt, without issuing equity. Management expects the deal to be immediately cash-flow and dividend accretive, while leverage would rise to approximately 0.8 times net debt to EBITDAX.

Ithaca Energy LON: ITH said it has agreed to acquire Suncor’s offshore Canada assets in a transaction valued at $860 million, marking the company’s first international expansion beyond the U.K. Continental Shelf.

The acquisition includes operatorship of the Terra Nova field and a non-operated interest in the White Rose area offshore Newfoundland and Labrador. The deal has an effective date of July 1, 2026, and is expected to provide Ithaca with a new operating hub, an approximately 400-person regional team and a platform for additional growth in Canada and North America.

Executive Chairman Yaniv Friedman called the agreement a “transformational” transaction, saying it combines near-term production growth, long-life reserves and further development potential in a basin with operating characteristics similar to the U.K. Continental Shelf.

Production Growth and Resource Base

Ithaca expects the assets to contribute average production of about 30,000 barrels of oil equivalent per day between 2027 and 2031, with output expected to peak at between 35,000 and 40,000 barrels per day in 2029 as the West White Rose development ramps up.

The portfolio includes 103 million barrels of estimated 2P reserves and a 17-year reserve-to-production ratio, according to the company. Ithaca also identified approximately 200 million barrels of additional resource potential, including opportunities at Terra Nova and in the broader White Rose area.

The company said West White Rose is expected to achieve first production at the end of the year. CFO Iain Lewis said Ithaca expects to spend about $100 million annually on West White Rose drilling through 2029 as the project reaches its full well count.

Terra Nova’s floating production, storage and offloading vessel, or FPSO, has recently undergone approximately CAD 900 million of gross refurbishment investment, CEO Luciano Vasques said. White Rose’s FPSO has also benefited from recent investment, the company said.

Lewis said the transaction would raise Ithaca’s medium-term production target to between 140,000 and 150,000 barrels per day, compared with expected base production above 120,000 barrels per day prior to the deal.

Further Development Opportunities

Management highlighted several potential expansion projects, including the Horst development at Terra Nova, Northern White Rose and the Knights Island and Strong Island prospects. COO Odin Estensen said the Horst opportunity could be among the most immediate candidates for acceleration.

The company said the Terra Nova and White Rose opportunities include infill drilling, field extensions, step-out wells and exploration prospects that could potentially be tied back to existing infrastructure.

Lewis said the company expects approximately $350 million of net investment over the next couple of years associated with the Terra Nova well integrity and investment program, referred to as WISE. He said the program is intended to support the long-term condition and productivity of the field’s wells.

Ithaca also expects to assume pre-tax decommissioning liabilities of less than $1 billion at closing. Lewis said decommissioning is largely related to wells and FPSOs, with limited expected decommissioning activity in the next decade. Further investment and tieback developments could extend the assets’ productive lives, he added.

Financing and Returns Framework

The company said it expects to finance the acquisition through existing liquidity and new debt facilities secured against the Canadian assets. Ithaca had $1.9 billion of immediately available liquidity at the end of June, according to Lewis.

Management said it did not intend to issue equity for the transaction, describing the acquisition as within its existing funding capacity. Lewis said the deal would increase leverage from roughly 0.5 times net debt to EBITDAX to approximately 0.8 times on a headline basis, remaining below Ithaca’s stated ceiling of 1.25 times.

The company said the acquisition is expected to be immediately cash flow and dividend accretive. Ithaca’s dividend framework targets distributions of 20% to 35% of post-tax cash flow from operations, although the company said the transaction will not affect 2026 guidance or distributions because it is not expected to close this year.

Ithaca said the transaction exceeds its investment thresholds, including an internal rate of return above 20%, a payback period within four years and a development breakeven around, though marginally above, $50 per barrel on an NPV10 basis.

The $860 million consideration includes a contingent payment mechanism under which Ithaca and Suncor would share 50% of certain oil-price upside above specified thresholds during 2026 through 2028. The contingent payment is capped at $50 million and is calculated after tax and royalties.

Friedman said Ithaca intends to focus on integrating the Canadian business and advancing its identified opportunities, while maintaining its strategy of concentrating on one to three core operating basins rather than pursuing “overly exotic” expansion.

About Ithaca Energy (LON:ITH)

Ithaca Energy is a leading UK independent exploration and production company focused on the UK North Sea with a strong track record of material value creation. In recent years, the Company has been focused on growing its portfolio of assets through both organic investment programmes and acquisitions and has seen a period of significant M&A driven growth centred upon two transformational acquisitions. Today, Ithaca Energy is one of the largest independent oil and gas companies in the United Kingdom Continental Shelf (the “UKCS”), with stakes in six of the ten largest fields in the UKCS and two of UKCS's largest pre-development fields.

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