Ithaca Energy is to be swallowed up by Israeli giant Delek Group in a £517.6 million deal.
Shares in the producer took a double digit jump in early trading after Ithaca’s board gave its backing to Delek’s takeover approach.
The move comes as oil is set to flow for the first time from Ithaca’s flagship Greater Stella development in the Central North Sea.
Delek’s offer of £1.20 per share is to buy up all the remaining share capital it does not already own.
It implies a total enterprise value on Ithaca of approximately £1 billion.
Chairman Brad Hurtubise said the offer came at a “favourable point” in Ithaca’s evolution.
“A special committee of independent directors has fully assessed the offer, with input from the company’s financial advisor and an independent valuator, and believes the offer is fair and in the best interest of the company and its shareholders and unanimously recommends that the shareholders tender their shares to the offer.”
Delek is an Israeli listed conglomerate with significant natural gas exploration and production activities in the Eastern Mediterranean and an existing 19.7% shareholder in Ithaca.
Further details regarding the terms and conditions of the offer and the process for tendering shares will be set out in a takeover bid circular, which is to be mailed to shareholders by the end of March.
The tendering process will remain open for a period of at least 35 days.
Last month, Ithaca chief executive Les Thomas said “the company was moving into 2017 in good health.”
Net debt stood at $598m while 2016 daily production averaged at 9,300 barrels per day, a figure that will more than double once Stella comes on stream.
Ithaca recently unveiled its 2017 capital investment programme of $70 million, primarily centred on Greater Stella Area activities, including development drilling on the Harrier field.
Meanwhile, Petrofac’s relationship with BP has deepened after it secured a three-year extension to its existing maintenance contract in the North Sea.
The group retained the $25m contract following a competitive tender process.
Under the agreement, Petrofac will provide campaign maintenance and isolation valve sourcing scopes on BP’s North Sea assets, many of which the company has supported since 2009.
Walter Thain, managing director, Petrofac engineering and production services, West, said: “Over the last seven years we have developed a robust knowledge of BP’s North Sea assets.
“As a result, we’ve forged a strong working relationship which is evolving in line with current industry drivers and BP’s business objectives.
“We are delighted BP has demonstrated continued confidence in our ability to drive value through the integration of services and our holistic asset-led approach to delivery.”