OSLO: Ithaca Energy Inc.has entered into an agreement to sell its wholly owned subsidiary, Ithaca Petroleum Norge AS (Ithaca Norge), for an initial consideration of US$60 million, to MOL Nordsjon BV, a wholly owned subsidiary of MOL Plc (MOL: BUD).
Ithaca also has the ability to earn additional bonus payments of up to US$30 million dependent on exploration success from the existing license portfolio.
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The transaction has an effective date of Jan. 1, and is expected to complete in the third quarter of 2015.
Upon completion, the transaction will conclude Ithaca’s restructuring and monetization of the Norwegian operations acquired as part of the acquisition of Valiant Petroleum plc in April 2013.
After repayment of Ithaca’s Norwegian exploration financing facility and forecast working capital adjustments, the sale is anticipated to result in an initial net cash receipt of approximately $30 million, which will be used to offset drawings under the company’s existing bank debt facility. The potential future bonus payments depend on discoveries being drilled on Ithaca Norge’s existing license portfolio between 2015 and 2017, with any payments based on a sliding scale depending on discovery size.
The transaction is subject to the approval of the Norwegian Ministry of Petroleum and Energy.
Pareto Securities, the specialist oil and gas investment bank headquartered in Oslo, Norway, acted as sole financial advisor to Ithaca in relation to the transaction.
