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Delek Group acquires Ithaca Energy for US$516 million


Delek Group acquires Ithaca Energy for US$516 million

Report summary

Delek Group has offered a cash consideration of US$1.50 per share for the remaining 80.3% of Ithaca Energy shares it doesn't own. This is a 12% premium to the closing price on the TSE. The bid ascribes Ithaca a total EV of US$1.24 billion (including net debt of US$598). The deal will give Delek a stake in the flagship Greater Stella Area, due onstream February 2017, plus interest in nine producing assets in the UK North Sea. Our commercial valuation is lower than the bid price, though upside exists in the Hurricane and Austen assets, which we currently hold as sub-commercial. The deal will see Delek's production jump by more than 60% in 2017 and by 50% in 2018. The boost to Delek Group's revenue will be even greater, due to the volume of liquids. The deal will see Delek diversifying from its current position relying solely on gas production from the giant Tamar gas field in Israel. For Ithaca shareholders this deal offers a fair price cash exit after a rollercoaster two years.

What's included?

This report includes 1 file(s)

  • Delek Group acquires Ithaca Energy for US$516 million PDF - 302.24 KB 7 Pages, 6 Tables, 1 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
    • Greater Stella Area
    • Cook
    • Don Area
    • Causeway Area
    • Other assets
    • Ceased fields
  • Deal analysis
  • Upsides and risks
    • Upside potential
    • Downside risks
  • Strategic rationale
    • Delek Group
    • Ithaca
  • Oil & gas pricing and assumptions

In this report there are 7 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Total production for assets included in deal
    • Upstream assets: Table 1
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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