Ithaca Energy (LON:ITH) used its full-year 2025 results call to highlight stronger-than-guided operational performance, a $500 million dividend delivered in cash, and an updated capital allocation framework that raises the expected shareholder return range while keeping leverage limits tighter.
2025 operational performance and portfolio delivery
Executive Chairman Yaniv Friedman said 2025 reflected execution “on all of our pillars,” citing delivery across production, costs, capital spending and shareholder returns. The company reported average production of 119,000 barrels of oil equivalent per day (boe/d) in 2025 and referenced a pro forma production level of 131,000 boe/d. Friedman also pointed to fourth-quarter exit rates of 148,000 boe/d, with peak daily rates above 150,000 boe/d.
Across producing assets, management highlighted:
- Captain: Delivery of the 13th well campaign and a major summer shutdown aimed at backlog reduction and life extension. Three new producers and one injector were delivered, and Vasques said the enhanced oil recovery (EOR) Phase 2 project doubled subsea well production from about 10,000 to about 20,000 barrels per day. The first phase of the 14th campaign (two producers and one injector) was sanctioned and scheduled to start in Q4 2026.
- Cygnus: Vasques called it a top performer, reaching 90% production efficiency. The C-12 well came onstream in December, followed by the C-13 spud. Two additional wells (C-14 and C-15) were sanctioned and planned for Q2 and Q4 2026, alongside a sanctioned compression project intended to extend the plateau.
- J-Area: The company cited strong tie-back activity, including Talbot (online at end-2024, performing strongly in 2025) and Jocelyn South tied back in Q1 2025. Two additional infill wells (Judy and Judy East Flank) came online in December and a stimulation campaign on Juno was executed. Vasques said the area achieved its highest average production in 10 years, above 20,000 boe/d.
- Seagull: Following a July 2025 acquisition that increased Ithaca’s equity from 35% to 50%, the fourth and final planned well was completed and started up in November. Vasques said early performance was strong, and average net production was about 14,000 boe/d.
Rosebank progress and West of Shetland development plans
On Rosebank, Vasques said 2025 included delivery of offshore subsea installation on time and within budget ahead of planned drilling in 2026. He also said the Rosebank FPSO sailed from Dubai after 2.5 years of refurbishment, with remaining completion and commissioning work planned during 2026 ahead of mooring and hook-up. First oil was described as planned for “end 2026 or 2027,” and management said further environmental information was submitted to the regulator in 2025 as the company awaits production consent.
Friedman reiterated a focus on West of Shetland, saying the company has around 300 million boe of net 2P reserves and 2C resources in the area. He said Cambo and Tornado are progressing through regulatory and technical milestones, with Cambo targeted toward FID in 2026-2027 and Tornado moving toward a field development plan submission in Q1 2026 following approval of the development concept in 2025.
Friedman described Cambo as the UK Continental Shelf’s largest pre-FID undeveloped discovery, citing gross recoverable reserves of more than 140 million boe. He said updated field development plan and environmental statement documents were submitted in the prior quarter reflecting optimizations from a technical refresh with support from Eni, alongside tendering activity for major scopes and a renewed push to bring in partners.
Financial results: EBITDA, cash flow, balance sheet and hedging
CFO Iain Lewis reported adjusted EBITDAX of about $2 billion in 2025, with $1.7 billion of net cash from operations and $683 million of free cash flow. Lewis also cited a reported loss for the year of $84 million, which he said was driven by a $328 million Energy Profits Levy (EPL) charge.
Net debt was $1.3 billion at year-end, and management highlighted available liquidity of $1.5 billion. Lewis said the company completed a €450 million bond issuance at 5.5% and increased its reserve-based lending capacity; he also noted the RBL was undrawn at year-end with $1.3 billion available and a further $435 million accordion feature for acquisitions.
Lewis said hedging added $4 per barrel of value in 2025 and that the company ended 2025 with nearly 64 million barrels hedged through the end of 2027. He described the company’s approach as aiming to protect downside while retaining upside exposure through the use of swaps and collars. Lewis also discussed what he called a “dislocation” in gas prices versus oil, saying forward gas prices in parts of 2027 had risen sharply, and that the company used the shift to add gas hedges for 2027 at what he characterized as attractive pricing.
Updated capital allocation framework and 2026 outlook
Lewis announced updates to the company’s capital allocation framework. Key changes included:
- Production maintenance assumption: The company raised its view of sustainable production capacity from above 100,000 boe/d to above 120,000 boe/d.
- Leverage ceiling lowered: The normal-course net debt-to-EBITDA ceiling was reduced from 1.5x to 1.25x.
- Higher shareholder return range: The targeted return range increased to 20%-35% of post-tax cash from operations, from 15%-30% previously.
For 2026, the company guided to production of 120,000-130,000 boe/d and said it expects further cost improvements, with OpEx guidance moving toward $18 per barrel (Lewis referenced an $840 million midpoint and about $18.5 per barrel). Producing asset capex guidance was set at $600 million-$700 million, and Lewis said 2026 is expected to be the last “material year of spend” on Rosebank before capex drops to lower levels as the field moves toward production.
On dividends, management reaffirmed a commitment to pay 30% of post-tax cash from operations in 2026 and provided a dividend target range of $470 million-$520 million. Lewis also said the company is moving to a 50/50 cash dividend split between half-year and full-year payments, from a prior one-third/two-thirds schedule, describing the change as reflecting business maturity and making dividend cash flows easier to model.
Q&A: M&A, Cambo partner process, production assumptions and late-life assets
In response to questions, management said the company remains interested in both UK consolidation opportunities and “disciplined” international expansion, while stressing it would not pursue expansion “at any cost.” Friedman said the company aims to focus on one or two additional geographies where it can add value and work with quality partners.
On Cambo, Friedman said the company is “confident” in its ability to bring in partners but declined to comment on specific ongoing discussions. He cited improved stability around the fiscal regime as supportive for future investment.
COO Odin Estensen addressed 2026 production guidance versus exit-rate capacity, saying guidance reflects P50 assumptions that incorporate decline, the cessation of production for two assets in 2026, planned shutdowns, and startup of new wells. Estensen said the company assumed 83% production efficiency for 2026, matching 2025’s level, and added he would be “professionally disappointed” if the company does not beat that performance.
On decommissioning, Lewis said costs are higher in 2026 because Alba and the Greater Stella Area (GSA) reach cessation of production, with floating units expected to move to decommissioning yards. He said decommissioning benefits from “40% corporate tax relief” as a standard cost relief mechanism. Lewis also said a previously disclosed increase in decommissioning provisions reflected multiple factors including discount rates, non-operated asset cost revisions, and market rates.
Management repeatedly returned to the impact of the fiscal and regulatory environment on investment decisions, with Lewis and Friedman arguing that a supportive framework is important to unlock development and exploration activity in the basin.
About Ithaca Energy (LON:ITH)
Ithaca Energy is a leading UK independent exploration and production company focused on the UK North Sea with a strong track record of material value creation. In recent years, the Company has been focused on growing its portfolio of assets through both organic investment programmes and acquisitions and has seen a period of significant M&A driven growth centred upon two transformational acquisitions.
Today, Ithaca Energy is one of the largest independent oil and gas companies in the United Kingdom Continental Shelf (the “UKCS”), with stakes in six of the ten largest fields in the UKCS and two of UKCS’s largest pre-development fields.
