DIRECTORS of North Sea-focused Ithaca Energy have reiterated their recommendation of Delek’s takeover offer for the firm after announcing results they said reflected a year of good progress.

However, a significant investor who has objected to the offer said the results provided further evidence the bid by the Israeli firm under-valued Ithaca.

Six weeks after Ithaca announced that Delek had made a bid valuing the firm at around £1 billion including debt the company said its North Sea portfolio had performed well in 2016.

With the company achieving average production of 9,300 barrels oil equivalent daily compared with an expected 9,000 boed, Ithaca generated $147 million cash from operations during the year amid tough trading conditions.

Following the start of production from the giant Stella field last month, Ithaca expects average production to rise to up to 22,000 boed this year,

The average price Ithaca received for its output fell 16 per cent during 2016 but the company reduced operating costs by around 25 per cent per barrel.

Ithaca expects average production costs to fall to $18/bbl (£14.4m) this year from $23/bbl in 2016 following the start of production from Stella, for which it has installed ultra modern facilities.

Brent crude traded at around $51/bbl yesterday.

Describing the start up of Stella as a milestone chief, executive Les Thomas said: ”After weighing up the potential risks and opportunities that lie ahead, the Board considers the takeover offer tabled by Delek as providing full value to shareholders and wholeheartedly recommends its acceptance.”

In a presentation to investors Ithaca said the C$1.95 (119p) per share offer by Delek reflected a full valuation for Ithaca taking its reserves and planned projects into account and would enable shareholders to avoid downside risks.

Ithaca is listed in Toronto and London.

But Paul Mumford of Cavendish Asset Management, said: “I still believe the current market offer of 119p/share would mean Delek buying the company at a discount based on the value of its existing reserves and its strong cashflow.”

He added: “The current cashflow is US$147 million this year and will rise sharply as Stella reaches full production. I believe that150p/share would be a much fairer offer but will still not reflect the full potential.”

Cavendish has a three per cent stake in Ithaca.

Shares in Ithaca closed up 0.75p at 115.75p in London.