FOR IMMEDIATE RELEASE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

THIS IS AN ANNOUNCEMENT AND NOT A CIRCULAR OR PROSPECTUS OR EQUIVALENT DOCUMENT AND INVESTORS AND PROSPECTIVE INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION ON THE BASIS OF ITS CONTENTS. A CIRCULAR AND PROSPECTUS IN RELATION TO THE COMBINATION DESCRIBED IN THIS ANNOUNCEMENT WILL EACH BE PUBLISHED IN DUE COURSE.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

23 April 2024

Ithaca Energy plc ("Ithaca Energy", the "Company" or the "Group")

Transformational Combination of Ithaca Energy and substantially all of Eni S.p.A.'s ("Eni") UK Upstream Oil and Gas Assets,

Accelerating Growth and Value Creation

·    UK Continental Shelf ("UKCS") powerhouse producing 100,000 - 110,000 barrels of oil equivalent per day[1]

·    Agility of an Independent and capability of a Major, implementing Eni's regional satellite model

·    Highly cash-generative combination providing material dividend capacity with ambition for up to $500 million total dividends each year in 2024 and 2025[2]

·    Complementary portfolio unlocks potential for material long-term organic growth

·    Platform for further inorganic growth in the UK and internationally

Gilad Myerson, Executive Chairman, Ithaca Energy, commented:

"The transformational combination with Eni UK will further enhance Ithaca Energy's position as a leading UKCS production and growth company, with positions in 6 of the 10 largest UKCS assets in the basin[3].

The synergistic combination with Eni's highly cash-generative UKCS portfolio has the ability to unlock our long-life organic growth opportunities creating a combined entity with substantial scale and longevity.

With Eni as a significant, long-term and supportive shareholder, the enlarged group will benefit from increased financial strength to support the execution of our BUY, BUILD and BOOST strategy and gain access to Eni's world-class technical capabilities and operational support. The combination will create a solid platform which can underpin material shareholder distributions, including an ambition to pay special dividends in 2024 and 2025, as well as future organic and inorganic growth²."

OVERVIEW OF THE COMBINATION

Ithaca Energy, a leading independent oil and gas operator in the UK North Sea is pleased to announce it has reached an agreement on a proposed combination with Eni in relation to substantially all of the upstream assets of Eni in the UK (the "Eni UK Business") in exchange for the issue of ordinary shares in Ithaca Energy to a subsidiary of Eni, Eni UK Limited ("Eni UK") (the "Combination"), such that at completion of the Combination ("Completion"), Eni UK will be issued ordinary shares representing 38.5% of the enlarged issued share capital of Ithaca Energy.

The Combination is expected to create a strategic platform for long-term growth in the United Kingdom North Sea combining Ithaca Energy's portfolio of development projects and efficient operating model with enhanced production and cash flow from the Eni UK Business and Eni's world-class technical expertise. The combination of Ithaca Energy and the Eni UK Business (together the "Combined Group") has the underlying un-risked potential to organically grow production to 150,000[4] boepd by the early 2030s, whilst supporting ongoing shareholder returns. The Combination is expected to be accretive per share to EBITDAX, CFFO and Profit, providing a platform for enhanced shareholder returns.

The portfolio of the Eni UK Business includes operated interests in 1 producing field: Cygnus (38.75% working interest); and non-operated interests in 10 producing fields: Elgin Franklin Area including Elgin, Franklin, West Franklin (21.867% working interest) and Glenelg (8% working interest), J-Area including Judy, Joanne, Jasmine (33% working interest) and Jade (7% working interest), Seagull (35% working interest) and Tommeliten A (0.07% working interest). The Combination excludes Eni UK East Irish Sea assets and CCUS activities.

In 2023, the Eni UK Business generated $775 million of EBITDA[5].

BACKGROUND TO AND REASONS FOR THE COMBINATION

Combination Highlights

The board of directors of Ithaca Energy (the "Ithaca Energy Board") believes the Combination represents a highly value-accretive opportunity for Ithaca Energy's shareholders, supporting delivery of Ithaca Energy's BUY, BUILD and BOOST strategy. The Combination:

Creates a UKCS powerhouse

-      The 2^nd largest independent operator in the UKCS by 2024 production[6]

-      Stakes in 6 of the 10 largest UKCS fields³

-      Pro-forma 2024 production of 100,000 to 110,000 barrels of oil equivalent per day¹

-      Forecast to be the largest operator in the UKCS by production in 2030[7], on an un-risked basis

-      Material combined long-life 2P reserves and 2C resources base of 658 million barrels of oil equivalent[8]

Combines the agility of an Independent and capability of a Major

-      Eni will be a fully committed, long-term and supportive shareholder in the Combined Group supporting the delivery of Ithaca Energy's BUY, BUILD and BOOST strategy

-      Eni's successful strategic satellite structure will further enhance this UKCS powerhouse

-      Technical services agreement with Eni will provide Ithaca Energy with access to leading technical expertise to drive future growth

Delivers material cash flow and optionality

-      Substantial cost savings to be realised through operational and financial synergies

-      Accretive per share to EBITDAX, CFFO and Profit, providing a platform for enhanced shareholder returns

-      Expected to improve Ithaca Energy's credit rating from B+/B1 towards BB-/Ba, with a pathway towards investment grade

-      Committed 2024 and 2025 dividend of 30% post-tax CFFO with an ambition for special dividends to increase total shareholder distributions to up to $500 million per annum²

Unlocks potential for material long-term growth

-      Reinforces Ithaca Energy's status as the largest UKCS operator by reserves and resources[9]

-      Enhanced cash flows unlock significant growth from Ithaca Energy's development projects, including the second largest undeveloped discovery in the UK North Sea - Cambo

-      Organic growth potential to increase the Combined Group's production to over 150,000 barrels of oil equivalent per day⁴ by the early 2030s on an un-risked basis

Accelerates inorganic growth opportunities in the UK and internationally

-      Increased scale, debt capacity and potential for lower cost of debt provides material firepower for growth

-      Focused on opportunities for further inorganic growth in the UK

-      Option to diversify internationally if the right opportunity is identified, leveraging Eni's global reach and capability

Overview of the Combined Group's Portfolio

-      The Combination will create a UKCS powerhouse with 37 producing assets

-      Provides increased non-operated exposure to the Elgin-Franklin and J-Areas and diversification within the UKCS through the operated Cygnus producing field and recently onstream Seagull field

-      The current producing assets and the sanctioned Rosebank development are expected to sustain production for the Combined Group following Completion at greater than 100,000 barrels of oil equivalent per day until at least 2028[10]

-      Combined 2P Reserve and 2C Resource base of 658 million barrels of oil equivalent⁸ with a resource life of 15 years

-      Based on 2023 proforma production the Combined Group was split 51% liquids / 49% gas[11]

2024 Guidance for the Combination

All guidance below is based on a full year contribution from Ithaca Energy and inclusion of Eni UK from the economic effective date of 30 June 2024[12]:

-      Expected 2024 combined production of 80,000 to 87,000 barrels of oil equivalent per day

-      Net operating cost guidance range of between $650 million and $730 million

-      Net producing asset capital cost guidance range of $410 million to $480 million (excluding pre-FID projects and Rosebank development)

-      Net Rosebank project capital cost guidance range of $190 million to $230 million

-      Cash tax guidance of $435 million to $455 million

-      Ambition for up to $500 million total dividend in 2024²

DETAILS OF THE COMBINATION

Key Transaction Terms

Based on the relative net asset valuations of Ithaca Energy and the Eni UK Business, agreed between Ithaca Energy and Eni, Eni will transfer the Eni UK Business to Ithaca Energy in exchange for the issuance of such number of new Ithaca Energy shares to Eni UK as is equal to 38.5 per cent of the fully diluted issued share capital of Ithaca Energy at Completion, subject to adjustment in respect of certain share option rights (the "Consideration Shares"), with existing Ithaca Energy shareholders owning the remaining 61.5 per cent of the share capital of the Combined Group (the "Merger Ratio").

Using the number of Ithaca Energy shares outstanding as at 23 April 2024, 635,013,542 Consideration Shares would be issued to Eni UK to reflect the Merger Ratio. Based on the closing share price of Ithaca Energy of 118.8p on 23 April 2024, the Consideration Shares are worth c. £754 million, although it should be noted that the Merger Ratio was determined between the parties on a relative net asset value basis rather than with reference to market share price.

The key terms of the Combination are set out in the business combination agreement entered into between Ithaca Energy, Eni UK and Neptune Energy Group Holdings Limited ("Neptune"), both subsidiaries of Eni (the "Business Combination Agreement").

The economic effective date for the Combination will be 30 June 2024, with Completion expected in Q3 2024, subject to the satisfaction of certain regulatory and other customary conditions precedent. Certain customary financial adjustments will be made for, amongst other things, cash, financial debt and working capital, each as at the economic effective date, to maintain the agreed Merger Ratio.

Free Float

As a consequence of the issue of the Consideration Shares to Eni UK, and Ithaca Energy's existing shareholder structure, the Combination would result in the number of ordinary shares in public hands being approximately 7 per cent., and below the minimum 10 per cent. as required by the listing rules issued by the Financial Conduct Authority (the "FCA") (the "Listing Rules"). Therefore, in order to ensure that the number of ordinary shares in public hands remains at or above 10 per cent., Delek has undertaken to use reasonable endeavours to sell down such number of ordinary shares representing approximately 3 per cent. of the enlarged issued share capital of the Company (the "Delek Sell Down"), prior to Completion.

Delek will enter into a call option agreement with Eni UK pursuant to which Delek will have the option to require Eni UK to transfer to Delek such number of Consideration Shares as represents approximately 1 per cent. of the enlarged issued share capital of the Company (the "Call Option"). Once the Delek Sell Down is complete, 10 per cent. of Ithaca Energy's ordinary shares will be held in public hands. Following this and assuming the Call Option is exercised, immediately after admission of the Consideration Shares to the Premium Listing segment, Delek will hold approximately 52.7 per cent. and Eni UK will hold 37.3 per cent. of Ithaca Energy's ordinary shares. 

Rule 9 waiver

As Eni UK will hold between 30 per cent. and 50 per cent. of the voting rights of Ithaca Energy at Completion, a mandatory offer would normally be required under Rule 9 of the UK Code on Takeovers and Mergers (the "Takeover Code"), however, given that Delek will still hold shares carrying more than 50 per cent. of the voting rights following Completion, the UK Panel on Takeover and Mergers (the "Panel") has granted a dispensation from Rule 9 pursuant to note 5 (b) of Rule 9 under the Takeover Code and no such Rule 9 waiver is required.

Class 1

The Combination constitutes a Class 1 transaction for the purposes of the Listing Rules for Ithaca Energy. Ithaca Energy will issue a circular to its shareholders, in due course, in order to convene a general meeting to seek shareholder approval for the Combination and the allotment and issue of the Consideration Shares to Eni UK. In addition, Ithaca Energy will publish and make available a prospectus in connection with the issue of the Consideration Shares.

The Profit Before Tax and Gross Assets the subject of the transaction for the year end 31 December 2023 were £444 million and £2,062 million respectively.

Lock-up

Eni UK's shareholding in Ithaca Energy will be subject to a 180 day lock-up period from admission of the Consideration Shares (subject to customary exceptions).

Relationship Agreements and Corporate Governance

Eni Relationship Agreement

At Completion, Eni will enter into a relationship agreement with Ithaca Energy (the "Eni Relationship Agreement") on substantially similar terms to the Delek Group Limited ("Delek") relationship agreement amended and restated on the date of this announcement with Ithaca Energy (the "Delek Relationship Agreement"). The Eni Relationship Agreement will entitle Eni, for so long as it directly or indirectly holds more than 20% of the Combined Group's issued share capital, the right to appoint two non-executive directors to the Ithaca Energy Board, for so long as it directly or indirectly holds greater than 10% (but not more than 20%) of the Combined Group's issued share capital, the right to appoint one non-executive director to the Ithaca Energy  Board, and for so long as it holds greater than 25% of the Combined Group's issued share capital, to appoint one observer to the Remuneration Committee and the Audit and Risk Committee; and appoint one director, or failing which an observer to the Nomination and Governance Committee.

From Completion, under the Delek Relationship Agreement, Delek will, for so long as it directly or indirectly holds at least 30% of the Combined Group's issued share capital, and until the later of the proposed CEO nominated by Eni ceases to be the CEO and 3 years from Completion, have the right to appoint three non-executive directors.

Eni will be entitled to recommend the nomination of the next proposed CEO of the Combined Group in accordance with the policies and processes of Ithaca Energy's Nomination and Governance Committee, such appointment to take effect from Completion.

The Ithaca Energy Board is committed to robust standards of corporate governance and to maintaining a sound framework for the control and management of the Group. As such, the Company is actively recruiting for additional independent non-executive directors to join the Ithaca Energy Board prior to or from Completion.

Conditions to Closing

Closing of the Combination is subject to, amongst other things:

·    Ithaca Energy shareholder approval at a general meeting convened pursuant to an FCA-approved circular;

·    FCA and London Stock Exchange approval of the admission of the Consideration Shares;

·    satisfaction of certain regulatory approvals in the UK; and

·    completion of certain pre-sale reorganization steps in relation to the Eni UK assets.

Key termination provisions

The Business Combination Agreement can be terminated in a number of limited circumstances. Eni UK and Neptune can terminate the Business Combination Agreement if the Ithaca Energy Board changes or withdraws its recommendation, or if Ithaca Energy shareholders do not approve the Combination, or if Ithaca Energy fails to publish the prospectus or circular once it has been approved by the FCA. All parties have customary termination rights for material breaches of certain interim period covenants and in circumstances where a third-party offer is made under the Takeover Code and is recommended by the Ithaca Energy Board.

Completion of the Combination is expected to occur in Q3 2024.

Ithaca Energy Board Recommendation and Undertakings

The Ithaca Energy Board have determined that the Combination is in the best interests of Ithaca Energy based on a number of factors and intend unanimously to recommend that shareholders vote in favour of the relevant resolutions at the shareholder meeting to be held to approve the Combination and the allotment and issue of the Consideration Shares to Eni UK, amongst other things.

Each of the members of the Ithaca Energy Board holding Ithaca Energy shares, has irrevocably undertaken that they will vote in favour of the relevant resolutions required to implement the Combination at the shareholder meeting in respect of their own beneficial holdings of Ithaca Energy shares, representing approximately 0.2 per cent. of the existing share capital of Ithaca Energy as at 23 April 2024, being the last practicable date prior to publication of this announcement.

Delek has irrevocably undertaken to vote in favour of the relevant resolutions required to implement the Combination at the Ithaca Energy shareholder meeting in respect of its holding of Ithaca Energy shares, representing 88.5 per cent. of the existing share capital of Ithaca Energy as at 23 April 2024, being the last practicable date prior to publication of this announcement.

Glossary of Industry Terms

·    "boe"                                   means barrels of oil equivalent;

·    "boepd"                               means barrels of oil equivalent per day;

·    "contingent resources"                 means quantities of petroleum estimated, as at a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable owing to one or more contingencies;

·    "kboepd"                            means thousand barrels of oil equivalent per day;

·    "mmboe"                            means million barrels of oil equivalent;

·    "probable reserves"       means additional reserves that analysis of geoscience and engineering data indicates are less likely to be recovered than proved reserves but more certain to be recovered than possible reserves It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus probable reserves;

·    "proved reserves"           means those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations;

·    "Pence/therm"                                 means pence per therm, with one therm being the energy equivalent of approximately a hundred cubic feet of natural gas;

·    "UKCS"                 means the UK Continental Shelf;

·    "2P" or "2P reserves"                     means proved reserves plus probable reserves.

·    "2C" or "2C resources"   means the best estimate scenario of contingent resources

Ithaca Energy will host a virtual presentation and Q&A session for investors and analysts at 10:30 BST tomorrow, 24 April 2024, accessible via our website: https://investors.ithacaenergy.com/

Enquiries

The information contained within this announcement is deemed by Ithaca Energy to constitute inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018). By the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for making this announcement on behalf of Ithaca Energy is Julie McAteer, General Counsel and Company Secretary.

Note to editors:

About Ithaca Energy plc

Ithaca Energy is a leading UK independent exploration and production company focused on the UKCS with a strong track record of material value creation. In recent years, the Group 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 in recent years. Today, Ithaca Energy is one of the largest independent oil and gas companies in the UKCS ranking second by resources.

With stakes in six of the ten largest fields in the UKCS and two of UKCS's largest pre-development fields, and with energy security currently being a key focus of the UK Government, the Group believes it can utilise its significant reserves and operational capabilities to play a key role in delivering security of domestic energy supply from the UKCS.

Ithaca Energy serves today's needs for domestic energy through operating sustainably. The Group achieves this by harnessing Ithaca Energy's deep operational expertise and innovative minds to collectively challenge the norm, continually seeking better ways to meet evolving demands.

Ithaca Energy's commitment to delivering attractive and sustainable returns is supported by a well-defined emissions-reduction strategy with a target of achieving net zero by 2040.

Ithaca Energy plc was admitted to trading on the London Stock Exchange (LON: ITH) on 14 November 2022.

IMPORTANT INFORMATION

The information contained in this announcement is for information purposes only and does not purport to be complete. The information in this announcement is subject to change.

This announcement has been prepared in accordance with English law, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and Listing Rules of the FCA and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

No person has been authorised to give any information or make any representations to shareholders with respect to the Combination other than the information contained in this announcement and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of Ithaca Energy, the Ithaca Energy directors, Eni or the Eni directors, Delek or the Delek directors or any other person involved in the Combination. None of the above take any responsibility or liability for, and can provide no assurance as to the reliability of, other information that you may be given. Subject to the Market Abuse Regulation and the FCA's Disclosure Guidance and Transparency Rules and Listing Rules, the delivery of this announcement shall not create any implication that there has been no change in the affairs of Ithaca Energy, Eni or Delek since the date of this announcement or that the information in this announcement is correct as at any time subsequent to its date.

Jefferies International Limited ("Jefferies") is authorised and regulated in the United Kingdom by the FCA. Jefferies is acting exclusively as Sponsor and financial adviser for Ithaca Energy and no one else in connection with the Combination and the matters referred to in this announcement, and will not regard any other person as a client in relation to the Combination or this document and will not be responsible to anyone other than Ithaca Energy for providing the protections afforded to its clients, or for providing advice, in relation to the Combination or this document or any other Combination, arrangement or matter referred to in this document. Neither Jefferies nor its parent nor any of their subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not its client in connection with this announcement, any statements contained herein or otherwise.

Goldman Sachs International ("GSI"), is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom. GSI is acting as Corporate Broker for Ithaca Energy  and no one else in connection with the Combination and the matters referred to in this announcement, and will not regard any other person as a client in relation to the Combination or this document and will not be responsible to anyone other than Ithaca Energy for providing the protections afforded to its clients, or for providing advice, in relation to the Combination or this document or any other Combination, arrangement or matter referred to in this document. Neither GSI nor its parent nor any of their subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not its client in connection with this announcement, any statements contained herein or otherwise.

The contents of this announcement are not to be construed as legal, business or tax advice. Each shareholder should consult its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice respectively.

Percentages in tables have been rounded and accordingly may not add up to 100 per cent. Certain financial data have also been rounded. As a result of this rounding, the totals of data presented in this press release may vary slightly from the actual arithmetic totals of such data.

Forward-looking statements

Certain statements in this announcement are forward-looking statements. In some cases, these forward-looking statements can be identified by the use of forward looking terminology including the terms "believes", "expects", "estimates", "anticipates", "intends", "may", "will" or "should" or in each case, their negative, or other variations or comparable terminology. These forward-looking statements reflect Ithaca Energy's or Eni's current expectations concerning future events and speak only as of the date of this announcement. They involve various risks, uncertainties and other factors which may cause the actual results, performance or achievements of Ithaca Energy, the Eni Group, the Combined Group, third parties or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other factors include, amongst other things, general economic and business conditions, industry trends, competition, changes in regulation, currency and commodity price fluctuations, Ithaca Energy's, the Eni Group's or the Combined Group's ability to recover its reserves or develop new reserves and to implement expansion plans and achieve cost reductions and efficiency measures, changes in business strategy or development and political and economic uncertainty. There can be no assurance that the results and events contemplated by these forward-looking statements will in fact occur.

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for  Ithaca Energy, the Eni Group or the Combined Group, as appropriate, for the current or future years would necessarily match or exceed the amount set out in any forward-looking statement or historical published earnings, earnings per share or income, cash flow from operations or free cash flow for  Ithaca Energy, the Eni Group or the Combined Group, as appropriate.