Shares in Ithaca Energy rose 2.5% to 283p to top the FTSE 100, after the North Sea oil and gas producer agreed its first international acquisition.
It is buying a portfolio of offshore oil assets off Newfoundland and Labrador, Canada, from Suncor Energy, the Canadian oil group, for $860 million in cash.
A further $250 million of contingent payments is linked to Brent crude prices over a 27-month period from 1 July 2026.
The package comprises a 48% operated stake in the Terra Nova field and non-operated stakes of 40% and 38.6% in the White Rose area, which Cenovus Energy operates.
Terra Nova is a producing shallow-water field, supported by a recently completed life extension of its floating production vessel.
Reserves and production
The deal adds 2P reserves of 103 million barrels of oil equivalent, meaning proven and probable volumes, at about $8 a barrel.
Those reserves have a life of about 17 years and low rates of decline.
Production is expected to average about 30,000 barrels of oil equivalent a day from 2027 to 2031.
That should peak at 35,000 to 40,000 barrels a day in 2029 as West White Rose ramps up, with first oil expected in the fourth quarter of 2026.
Ithaca will upgrade its medium-term group production outlook to between 140,000 and 150,000 barrels of oil equivalent a day.
Another 200 million barrels of resources offer further growth, and the deal makes Ithaca the fifth largest operator offshore Canada by production.
Financing
Ithaca will fund the deal from cash, its existing borrowing base facility and secured financing in Canada.
The assets have Brent-linked pricing and limited base capital spending after a period of heavy investment.
It expects the deal to add immediately to cash flow, earnings and dividends per share.
Completion is targeted for the first half of 2027, subject to Canadian regulatory approvals.
Yaniv Friedman, Ithaca's executive chairman, said the deal marks "the next era of growth" for the group.
Peel Hunt view
Peel Hunt, which rates the shares 'buy', called it "a very material transaction" that lifts reserves and medium-term production.
The broker said the deal broadens Ithaca's exposure into a stable and supportive region and offers further growth opportunities.
Peel also noted the funding mix keeps leverage comfortably within Ithaca's capital allocation framework.
Panmure Liberum said the deal "should be accretive pretty much straight away".
