Ithaca to sell stakes in oil/gas interests to Dyas

Tuesday, Nov 04, 2008

North Sea-focused oil and gas explorer Ithaca Energy Inc said on Friday it would sell a partial interest in all its oil and gas licences to Dyas UK Ltd, and Dyas would provide Ithaca with a convertible loan facility. Ithaca shares nearly doubled in early trade. Ithaca and Dyas, a unit of privately owned Netherlands conglomerate SHV, will acquire a lease for a 100 percent interest in the Beatrice oilfield in the North Sea from Talisman Energy Inc for an initial three years for 10 million pounds ($16 million), to be paid following the start of production from Ithacas nearby Jacky development, the company said.

Dyas will buy 25.25 percent of Ithacas interests in all its assets for 40 million pounds in cash, effective Nov. 1. Dyas will also provide Ithaca with a senior secured loan to redeem a fully drawn Royal Bank of Scotland $60 million predevelopment facility, the AIM- and Canada-listed company said.

Dyas will have the option to convert this loan into consideration for the purchase of an additional 15.15 percent of Ithacas current interest in the same properties. The option is extendable by Dyas in two one-year tranches, depending on oil prices.

If the option is exercised, the total value of the transaction will be about $126.8 million, Ithaca said.

Source: Trading Markets