Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) has entered into an agreement with Sumitomo Corp. to acquire interests in three non-operated UK producing oil fields for a total consideration of $170 million.
The transaction involves the acquisition of interests in three producing UK oil fields, through the purchase of Summit Petroleum Ltd., a subsidiary company of Sumitomo Corp., and includes:
- A further 20.000% interest in the Shell-operated Cook field in which Ithaca already has a 41.346% interest
- A 7.480% interest in the Shell-operated Pierce oil field
- A 7.430% interest in the Perenco-operated Wytch Farm oil field.
The effective date of the acquisition is Jan. 1.
Ithaca also announced that it intends to offer $300 million in aggregate principal amount of senior unsecured notes due 2019. The notes, the net proceeds of which will be used to partially repay (without canceling) the company’s senior secured reserves based lending (RBL) facility, will be senior obligations of the company and will rank pari passu with all present and future senior unsecured indebtedness of the company.
Following the notes offering, Ithaca intends to draw amounts under the RBL facility to finance the acquisition of Summit Petroleum Ltd., which is expected to close, subject to regulatory approvals and customary closing conditions, during the third quarter of 2014.