Ithaca Energy raised its dividend guidance after hitting record quarterly production, as the North Sea oil and gas producer reported strong first-half cash generation.
The company said output reached a record 131,000 barrels of oil equivalent a day in the second quarter, reinforcing confidence in its full-year target of 120,000 to 130,000 boe/d, which it reaffirmed.
Operating costs are trending better than expected, at around $18 a barrel at the mid-point of guidance, while adjusted first-half EBITDAX topped $1.1bn.
The strength of the performance led Ithaca to upgrade its full-year dividend guidance to $500m-$530m and to declare an interim dividend of $255m.
The company ended the period with $1.9bn of available liquidity and low leverage of 0.49 times adjusted EBITDAX.
Ithaca also pointed to development works that should encourage investors. The Rosebank development, west of Shetland, is entering its final execution phase, with the operator narrowing first production to the first half of 2027 and a ramp-up to plateau through that summer.
The company said it had more than 200 million barrels of oil equivalent of resources being advanced towards investment decisions over 2026 and 2027.
Ithaca investors will also be waiting for further developments in the UK government’s plans for the North Sea, with the company set to benefit from any accommodation of expansion plans in the region.
“All eyes are on the fledgling Burnham government to give the project the nod amid considerable pressure in both directions from oil and gas lobbyists and climate groups. For Ithaca, this means waiting for a green light on the biggest project in its production pipeline,” said Duncan Ferris, Analyst, Freetrade.
“In the meantime, shareholders will enjoy the elevated payout. With operational performance looking so healthy and prices so high, Ithaca’s confidence to pump dividend guidance north of half a billion is undoubtedly an encouraging sign. Investors are certainly being handsomely remunerated while they wait for Rosebank to come online.”