Ithaca Energy PLC (LSE:ITH) has pledged to increase shareholder returns as it posted a sharp rise in 2025 operating cash generation, with the UK North Sea producer reporting earnings (adjusted EBITDAX) of $2.03 billion and free cash flow of $683.3 million.
The firm declared a third interim dividend of $200 million, taking total 2025 distributions to $500 million.
It comes as group production continued to ramp up, reaching 119,000 barrels oil equivalent per day, driven by asset acquisitions and as crude oil prices have spiked due to the war in Iran.
"Our acquisitions in Seagull and Cygnus contributed accretive growth, which along with organic investment in the period, achieved an exit rate of 148 kboe/d and allowed us to enter 2026 with significantly increased production capacity," executive chair Yaniv Friedman said.
Ithaca said net cash flow from operations rose to $1.75 billion from $853.3 million a year earlier, while available liquidity increased to $1.47 billion from $1.02 billion.
Earnings were hit by a $327.6 million one-off non-cash deferred tax charge, tied to the extension of the UK government's Energy Profits Levy, leaving Ithaca with a loss for the year of $84.1 million, compared with a profit of $153.1 million in 2024
Operationally, Ithaca exited the year at around 148 kboe/d, with peak daily production above 150 kboe/d, helped by new wells at Cygnus, Seagull and J Area.
Management guided for 2026 production of 120-130 kboe/d and said the business now targets shareholder returns of 20-35% of post-tax CFFO, up from 15-30%, with a 2026 dividend commitment set at 30% and a target range of $470-520 million.
The group also pointed to progress across its West of Shetland growth projects, with Rosebank moving through its final full year of development ahead of expected first production in 2026/27, while Cambo and Tornado continue to advance toward potential final investment decisions.
Ithaca Energy is one of the largest independent oil and gas companies on the UK Continental Shelf.
"We saw material project activity, including at Rosebank, where we are progressing in line with our development timeline towards first production in 2026/27. We also saw significant progress on the maturation of the Cambo and Tornado projects, with all activities supporting a potential FID within 12 months," Friedman said.
He added: "We saw material project activity, including at Rosebank, where we are progressing in line with 2123our development timeline towards first production in 2026/27. We also saw significant progress on the maturation of the Cambo and Tornado projects, with all activities supporting a potential FID within 12 months."