North Sea heavyweight Ithaca Energy has underlined how much cash it expects to generate after expanding rapidly in the area as it announced a management shake-up.

Ithaca has parted company with executive chairman Gilad Myerson who led the Israeli-owned company on a growth drive which has involved a series of North Sea acquisitions.

Ithaca said Mr Myerson had stepped down with immediate effect in a move that analysts at Stifel investment bank found surprising. He will be succeeded by Yaniv Friedman, a veteran of Israel’s oil and gas industry, under moves Ithaca said would strengthen its leadership.

News of the changes came as Ithaca underlined the scale of the rewards it expects to reap from the latest deal clinched on Mr Myerson’s watch.

Ithaca is acquiring the North Sea portfolio amassed by Italian giant Eni in a transaction which is expected to make it the biggest producer on the United Kingdom Continental Shelf.

Eni will own 38% of the enlarged business after the all-share deal completes.

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Ithaca said yesterday that it expects the “highly cash-generative combination” to support dividend payouts to investors worth up to $500 million in 2024  and 2025.

Israel’s Delek has a majority stake in Ithaca, whose shares are listed on the London Stock Exchange.

Ithaca indicated it could also use the cash generated in the North Sea to fund further acquisitions in the UK and to invest in organic growth opportunities.

The company made clear it still hopes to proceed with the Cambo development West of Shetland which is opposed bitterly by environmentalists. The company is trying to recruit partners to help fund the development. Shell withdrew from the project in 2021 citing concerns about economic factors and the potential for delays.

Ithaca sanctioned the huge Rosebank development off Shetland with Equinor in September. It said this is progressing as planned.

Ithaca also hopes to boost production from existing assets such as the Captain heavy oil field.

The Herald: Ithaca Energy executive chairman designate Yaniv FriedmanIthaca Energy executive chairman designate Yaniv Friedman (Image: Ithaca Energy)

However, the company noted that investment decisions will depend on market and fiscal conditions.

It made no comment on Labour’s plans to increase the rate of the windfall tax and to cut the related investment allowance. Industry leaders have warned that firms will slash investment in the North Sea if Labour goes ahead with the changes.

The party is drafting the manifesto on which it will campaign ahead of the general election set for July 4.

Analysts at Stifel said of Cambo: “We see significant political and economic risks to the project from potential significantly higher windfall taxes, with reduction in capital allowances acting as a very large disincentive to investment.”

Ithaca continued to invest in North Sea growth initiatives after the windfall tax was introduced in May 2022. The rate of the levy increased six months later.

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Ithaca posted $339 million (£265m) first quarter profit yesterday, compared with $518m in the same period last year.

It was affected by disruption to production on assets operated by other firms. The Pierce field was offline during the quarter pending completion of significant upgrade work by Shell. Pierce returned to production in April.

Challenging weather conditions impacted on activity on the BP-operated Schiehallion field West of Shetland.

Ithaca expects to complete the acquisition of the Eni portfolio in the third quarter. The deal is subject to approval by Ithaca investors.

Luciano Vasques who runs Eni’s North Sea business will become chief executive of Ithaca following completion of the deal.

Former Ithaca chief executive Alan Bruce stepped down in January.

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Mr Myerson became executive chairman in 2019. Under his leadership Ithaca acquired North Sea portfolios from three Japanese corporations and bought the Siccar Point Energy business from US private equity investors.

Mr Myerson will be succeeded on a temporary basis by Ithaca non-executive director Dave Blackwood pending completion of formalities related to Mr Friedman’s appointment. Mr Blackwood used to run BP’s North Sea business.

Analysts at Berenberg said Ithaca had made a solid start to the year “with the company performing in line with guidance, and the balance sheet continuing to strengthen”.

Ithaca Energy shares closed up 3p at 116.8p.