AFTER months of turmoil in the North Sea an update from an Israeli-owned firm has provided what some might see as a welcome sign that stability is returning in the area, although a recovery may remain distant.

Ithaca Energy has said it may spend a bit more in the North Sea than it expected in April when the crude price fell to an 18-year-low amid the fallout from the coronavirus.

The numbers concerned are small but appear to reflect a notable change of emphasis at a firm whose experience had highlighted the scale of the challenges posed by the fall in commodity prices this year.

READ MORE: Fresh warning on scale of challenge facing North Sea oil industry amid coronavirus crisis

Ithaca is one of a range of companies that have announced that they will slash spending in the North Sea, where the coronavirus has also imposed serious logistical challenges. Social distancing on oil rigs means work has been delayed.

The company had appeared to be set on a path of rapid growth after winning backing for an aggressive expansion drive before the coronavirus changed everything.

Just last year it bought a $2 billion portfolio of North Sea assets from American giant Chevron, which decided there was more money to be made in the shale fields of the US.

The acquisition underlined the scale of the potential that Ithaca’s owner, Delek Group, saw in the North Sea.

READ MORE: Israeli oil firm hails 'exciting growth opportunities' in North Sea after $2bn deal

Delek had acquired Ithaca in a £1bn deal in 2017 planning to use the firm as a platform for international expansion. The company owns stakes in big finds off Israel.

The man who masterminded the Chevron deal for Ithaca, Les Thomas, made clear it felt it could generate huge value from the portfolio. He talked about extending the life of the giant Captain field on the acreage and developing finds nearby.

But amid the turmoil that engulfed the market as the coronavirus spread around the world Ithaca announced in April that it planned to slash capital investment by 50 per cent this year, to around $120m.

The company said it had stopped or deferred a range of activities to help manage the Covid-19 situation and preserve cash in the face of significantly lower commodity prices. These included a drilling campaign on the Alba field that only started at the end of 2019 and preparatory work on the Captain field along with plans to develop the Hurricane find and to drill the Fotla exploration well.

The company also targeted big savings on the costs of running assets.

Seventy members of Ithaca's onshore workforce left under a voluntary redundancy programme. Ithaca has said this will result in an approximately 25 per cent reduction in the number of onshore employees as well as reduced contractor utilisation.

It employed around 500 people offshore and in Aberdeen before making the cuts.

In June Ithaca announced that it had slashed the valuation of its assets by $795 million as a result of the “historic collapse in oil and gas prices” in the first quarter.

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But when Ithaca announced its second-quarter results last week it said measures were being taken to recommence some of the deferred investment programmes. Capital expenditure is now forecast to be in the range of $125 million to $135m.

The company noted: “With the on-going easing of Covid-19 related restrictions across the economy, steps are being taken to commence increasing offshore manning levels in order to prepare for recommencement of some of the previously deferred investment programmes.

“Depending on the speed with which such upmanning can progress over the coming months, it is anticipated that a modest increase in the reduced capital work programme could be delivered in the year.”

The results announcement underlined directors’ confidence that Ithaca still has lots to go for.

It indicated that the company still plans to make the hefty investment required to increase recovery from the flagship Captain field, to develop finds that lie close to infrastructure and to hunt for more discoveries.

Ithaca provided a ray of light in March when it made the promising Isabella find, with French giant Total and Neptune Energy.

READ MORE: 'Encouraging' North Sea find boosts oil and gas industry amid crude price slump

Big changes may be afoot at Ithaca.

The results announcement was made days after the company announced that Mr Thomas had been succeeded as chief executive by North Sea veteran Bill Dunnett.

On Monday Delek told investors that it is in talks about a plan to merge Ithaca with an international firm in a move that could help it recoup some of its investment in the company. Noting that several international investment banks were “accompanying the discussions”, Delek said the plan under consideration was expected to include a cash payment component that would be transferred to the group.

Israel’s Haaretz newspaper described the merger move as a surprise and noted the sale of some of its stake in Ithaca would help Delek to reduce its hefty debts. These were swollen by the Chevron deal.

Against that backdrop it would be no surprise for Delek to want to talk up Ithaca’s prospects.

But Ithaca’s results did show that firms have been managing to make lots of money in the North Sea, where some can produce oil and gas relatively cheaply. The amount of cash generated by Ithaca from operations increased more than six-fold in the second quarter, to $178m.

READ MORE: North Sea oil firm to pay millions in dividends to Israeli owner

The growth reflects the impact of the acquisition of the Chevron portfolio.

But it also follows a notable improvement in price conditions since April.

After falling to $15.98 a barrel that month the price of Brent crude has increased to around $45/bbl. The increase follows record production curbs made by members of the Opec Plus grouping of exporters, which appear to remain unified.The easing of lockdown measures has helped boost demand.

Analysts have warned that a significant flare-up in coronavirus cases could send prices plunging again. There seems to be little prospect of the Brent crude price returning to the level of around $70 seen in January.

However, other North Sea firms have received votes of confidence from market players in recent days.

READ MORE: Leading oil and gas entrepreneur says now may be time to invest in North Sea

Premier Oil said it has won approval for plans to refinance $2.9bn of debt from a significant body of creditors. The refinancing will allow the company to complete the acquisition of stakes in two big North Sea developments from BP, if it wins the required support from shareholders for a related $325m fund-raising.

Having secured a big reduction in the amount of cash it will have to pay BP for the assets, Premier Oil may continue the bargain-hunting policy which allowed it to expand rapidly in the North Sea amid the last downturn.