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North Sea pair join Canadian firm for big push

TWO successful North Sea company builders have agreed to lead a big push for growth in the area by ­Canada's Iona Energy, which is thought to have lined up $500m (£300m) debt to fund acquisitions.

Iain McKendrick, a former chief executive of Ithaca Energy, has joined Iona as executive chairman. Tom Reynolds, who used to run Bridge Energy, has become chief executive of Iona.

The Toronto-listed ­independent said the two men had been hired to help create a North Sea production company of scale, which could generate significant amounts of cash.

It said: "The company intends to achieve this strategy, which focuses on "scale, production, yield", mainly through acquisition of existing production companies, acquisition of producing assets and a more effective use of tax loss pools."

The company has stakes in five UK fields that are in the development stage, including two East of ­Shetland. These are managed out of Aberdeen, where most of Iona's 30 employees are based.

The new recruits will bring ideas about suitable acquisition targets and in-depth experience of both cutting deals and the exploration and production cycle.

Mr McKendrick was chief executive of North Sea focused Ithaca Energy from 2008 to 2013, during which time the company made a series of acquisitions including the $325m takeover of Valiant Petroleum. He left the company in October for personal reasons.

Mr Reynolds built Bridge Energy into a company with a range of assets in UK and Norwegian waters. Bridge was sold to Norway's Spike Exploration for £103m in September last year.

Iona's statement of intent underlines the strength of interest in the North Sea among international oil and gas firms and investors.

On Sunday Aberdeen-based Siccar Point Energy revealed it had secured $500m backing for North Sea acquisitions from private-equity firms Blue Water Energy and Blackstone Energy Partners.

Iona's reference to tax loss pools highlights the benefit of the UK tax relief that allows companies to write off losses incurred in exploration and development work in the North Sea against income generated from production in the area. Firms such as Faroe Petroleum have said they are keen to buy producing assets in the UK partly to take advantage of the relief.

Iona said former chief executive Neill Carson has left the company to pursue new business opportunities.

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