Delek Group Buys Chevron North Sea

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Oil

The Delek Group announced it has won a bid to purchase the assets of Chevron North Sea Limited. Chevron North Sea operates dozens of oil and gas wells in the North Sea. The purchase price was $2 billion, which after taking into account income earned between now and the closing in September will come to $1.65 billion. The purchase was made using Delek’s subsidiary Ithaca.  According to Delek, the Chevron fields have the potential to produce 60,000 barrels per day, and have reserves of 131 million barrels. There is also the potential of another 45 million barrels. Ithaca will be the operator of the fields. As a result of the purchase, Ithaca’s oil production will grow from 20,000 to 80,000 barrels per day.  

The acquisition will be funded through an upsized $1.65 billion Reserve-Based-Lending (“RBL”) senior debt facility, a $700 million acquisition debt financing facility, an equity investment by Delek, and existing cash resources of the company.  Ithaca’s existing $300 million term loan and associated Delek guarantees will be retired as part of this refinancing.

Les Thomas, Ithaca Energy CEO, commented:

“The acquisition of CNSL is a significant step forward in the long term development of Ithaca Energy and underlines our belief in the North Sea, particular in the UK Central North Sea where the enlarged business will own a range of interests in a number of key producing assets.”

“We are very pleased to be acquiring a high quality portfolio of assets and experienced operational organization that fits well with our existing business. Like our current portfolio, the production and reserves base is heavily weighted towards operated asset positions, which provides us with the ability to actively prioritize and unlock the full potential of the business. We are excited about establishing an enlarged organization with a dynamic and innovative culture based on a continued commitment to safe and efficient operations. We look forward to working with our new colleagues to develop and grow the business and continue engaging with our contractors and the broader supply chain to deliver a successful future.”

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