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Petrofac to exit Greater Stella project with Ithaca transaction

"This disposal marks a further milestone in our journey back to a capital-light business," said chief executive Ayman Asfari
oil and gas operations
Ithaca will pay a total of US$292mln

Petrofac Limited (LON:PFC) has agreed to sell out of the Greater Stella Area development in a deal with Ithaca Energy.

The deal with Ithaca, which de-listed from London in June 2017 as it was acquired by Delek Group, will see Petrofac receive US$292mln for its 24.8% stake in the North Sea project.

Ithaca will pay US$145mln upfront with the further non-contingent US$120mln payment deferred to the period between 2020 to 2023, and another US$28mln contingent consideration will be payable in the future depending upon field performance.

READ: Petrofac downgraded as Jefferies uncertain over contract wins

The deal is expected to complete in the first quarter of 2019, though it is conditional upon Ithaca’s separate transaction to acquire 25% of GSA from fellow partner DYAS UK Limited.

"This disposal marks a further milestone in our journey back to a capital-light business and, along with recently-agreed transactions in Mexico and Tunisia, marks the significant progress we are making on our stated strategy,” said Petrofac chief executive Ayman Asfari.

Petrofac expects to record a post-tax impairment charge of US$55mln as a result of the transaction.

It plans to use the injection of funds to reduce gross debt.

By taking full ownership of the GSA project Ithaca is increasing its production base by around 50%, to 22,000 bopd for 2018, and it also gains total control and flexibility over the continued development of the project.

The transaction is due to complete by 1 January 2019.

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Petrofac Limited Timeline

February 28 2019

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