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Report: Ithaca trying to get trading company financing to complete UK asset buy

Ithaca Energy Ltd. is trying to obtain financing from commodity trading companies to complete its pending purchase of Chevron Corp.'s North Sea oil and natural gas assets for $2 billion, Bloomberg reported Oct. 16, citing people familiar with the matter.

After recently securing a $100 million investment from Trafigura Group Ltd., Ithaca, a subsidiary of Israel's Delek Group Ltd., has asked other commodity trading entities for additional funding for the deal, the article said.

Inquiries to Delek and Ithaca were not immediately returned.

In May, Ithaca said it would buy Chevron North Sea Ltd. The deal will add 10 producing field interests to Ithaca's existing portfolio, making it the second-largest independent oil and gas producer in the U.K. North Sea.

When the deal was announced, Ithaca said it planned to fund the purchase through an upsized $1.65 billion reserve-based lending senior debt facility, a $700 million acquisition debt financing facility, an equity investment by Delek and existing cash.

Ithaca is looking to close the deal sometime this quarter ahead of a listing of its shares on the London Stock Exchange.

Once the deal is completed, Ithaca's asset base would have proved and probable reserves of approximately 225 million barrels of oil equivalent, plus 45 MMboe of proved and probable contingent resources. Ithaca would also own a total of 18 producing field interests, which are expected to yield pro forma 2019 production of about 80,000 boe/d, consisting of 60% liquids, at an operating cost of approximately $17/boe.

In the last year, several other U.S. majors have divested or announced plans to sell aging assets in the North Sea region to focus on other, more prolific production areas. Smaller producers have been moving in, scooping up what these large companies have deemed noncore assets and infrastructure between the U.K. and Scandinavia in hopes of extracting the remaining reserves from older assets.