Delek to consolidate statements with Ithaca Energy after takeover

Israeli energy company Delek said it stands to make a profit after grabbing hold of North Sea player.
By Daniel J. Graeber  |  April 21, 2017 at 8:01 AM
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April 21 (UPI) -- Israeli energy company Delek Group said Friday it was ready to coordinate financial statements with North Sea company Ithaca Energy after taking control.

The Israeli company said its offer of $350 million for 70.3 percent of the common shares in Ithaca has been formally accepted. Delek already had a stake in 19.7 percent of the company before making the take-over offer in February.

"Having taken control of Ithaca, the Group will commence to consolidate its financial statements," Delek said in a statement.

Ithaca's board of directors said they were unanimous in their recommendation of the merger with Delek when it was put forward. Ithaca said in a statement it would "crystallize" the value of their holdings.

In a guidance statement published in January, Ithaca said it expected to produce an average of 20,500 barrels of oil equivalent per day this year. Focused in part on development drilling in the central waters of the North Sea, Ithaca said it envisioned capital spending for 2017 of about $70 million.

In February, Ithaca started production from the Stella field in the North Sea. First discovered in 1979, Ithaca has led in a string of discoveries in the field in the central British waters of the North Sea.

Delek is a major player in natural gas reserves off the coast of Israel and said it stands to gain from the acquisition.

"One of the accounting implications is that the company's investment in Ithaca common shares prior to the offer will be measured at fair value, the difference between the fair value and book value being recognized in the income statement," it stated. "At this point, this profit is estimated at approximately $40 million."

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