Ithaca Woos Valiant with Oil Investment Deal

Oil firm Ithaca Energy is revving up oil investments in the North Sea region as it proposes a $300 million-plus deal to purchase Valiant Petroleum.  For Ithaca, this potential investment could pave the way for it to operate a lucrative medium-scale energy firm in said region.

Ithaca is primarily into oil evaluation, exploration, and development. On the other hand, one of Valiant’s strengths keeping Ithaca interested lies in having a stable portfolio of oil assets concentrated in Norway and the United Kingdom.

If the deal pushes through, Ithaca’s oil output projection for the year is expected to grow two-fold, or to around 16,000 barrels of oil equivalent per day (boepd).  In the next two years, oil production is estimated to reach close to 27,000 boepd. Oil reserves are also projected to rise significantly.

According to Ithaca, Valiant’s board members find the proposal equitable enough.

After a string of unfavorable oil exploration ventures, Valiant’s shareholders decided to auction the company in third quarter of last year. Sources say Ithaca’s bid is merely a three percent add-on to Valiant’s price per share at the time when the latter opted to sell the company.

Recently, a representative of Valiant Petroleum disclosed that its oil exploration in Timon, which is situated in the North Sea region, has been completed.  However, the company decided to close the well after careful assessment.

Jack Lee, current Chairman of Ithaca said that one of Ithaca’s major plans is to put up a lucrative North Sea energy firm that is fully capable of producing oil volumes of more than 25,000 boepd. Investing in oil assets like those owned and operated by Valiant certainly fits in with the company’s growth plans of adding oil-producing assets to its portfolio, thereby increasing oil production and reserves by 2015.

Meanwhile, Kevin Lyon, Chairman of Valiant, reported that the deal with Ithaca will open new doors for further growth and development.