North Sea producer hikes full-year payout guidance past half a billion dollars after a record quarter of production and robust cash generation.
Ithaca Energy (LSE: ITH) shares moved higher after the North Sea oil and gas producer raised its full-year dividend guidance on the back of record quarterly production, with the market rewarding a business that is generating far more cash than costs.
The rally followed confirmation that second-quarter output hit a record 131,000 barrels of oil equivalent a day, sitting comfortably within the reaffirmed full-year target range of 120,000 to 130,000 boe/d, while operating costs came in better than expected at around $18 a barrel.
First-half adjusted EBITDAX topped $1.1bn, underpinning Ithaca's decision to lift full-year dividend guidance to a range of $500m-$530m and declare an interim dividend of $255m. The balance sheet also looks solid, with $1.9bn of available liquidity and leverage held at a low 0.49 times adjusted EBITDAX.
Beyond the near-term numbers, investors are watching the Rosebank development west of Shetland, now entering its final execution phase, with first production narrowed to the first half of 2027 and plateau output expected by that summer. Ithaca also flagged more than 200 million barrels of oil equivalent of resources being progressed towards investment decisions over 2026 and 2027.
The next catalyst may come from Westminster rather than the North Sea itself. Freetrade analyst Duncan Ferris noted that Ithaca is awaiting a decision from the new government on North Sea expansion policy, which could determine the fate of Rosebank, the company's largest project in the pipeline, even as shareholders continue to bank a substantially increased dividend in the meantime.
This report is based on Ithaca Energy’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Ben Wicks on Unsplash.
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