Ithaca Energy PLC (LSE:ITH) retained a 'buy' rating from Jefferies on Friday as the broker mapped an equity valuation framework spanning three distinct commodity price scenarios.
The shares traded at 267.20p as the investment bank maintained its 350p base price target, with a net asset value of 222p and an EV/EBITDA valuation of 469p.
Under an upside scenario assuming long-term Brent crude at $90 per barrel and UK gas at 89p per therm, Jefferies models a 450p target based on higher asset values.
Conversely, a downside case assuming $60 oil and 59p gas lowers the underlying asset value to 120p, yielding a 165p price target.
Operational delivery supports the central thesis, with a record second-quarter production of 131,000 barrels of oil equivalent per day and a reaffirmed full-year output guidance.
Operating cash flow underpins shareholder returns, with the broker projecting total distributions of more than $500 million for the 2026 financial year, in line with the group's distribution policy.
Cost efficiency also improved after management lowered its full-year net operating cost guidance to a range of $800 million to $840 million.
Available liquidity of $1.9 billion provides the balance sheet capacity to compete for potential asset acquisitions alongside major shareholder Eni.
Looking ahead, potential UK government approval for the Rosebank production start-up is a key catalyst for derisking development across the West of Shetland portfolio.
