Israel’s Delek Group Clinches Chevron Energy Corporation's British North Sea Fields

The deal will quadruple Ithaca Energy subsidiary's production to 80,000 barrels of oil equivalent per day

The logo of Chevron Corp is seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan April 4, 2017.
\ Toru Hanai/ REUTERS

Under pressure from a fall in oil prices to near 14-year lows of $26 a barrel in 2016, major oil and gas companies in the North Sea have been forced to sell assets to private equity-backed investors and specialized operators.

Delek said the deal, backdated to January 1 and pending regulatory approval, will quadruple Ithaca’s pro-forma production to 80,000 barrels of oil equivalent per day.

Cash coming in from the field since January 1 will probably bring the price down to around $1.65 billion on completion.

Delek said last month that it had submitted a proposal to buy the assets through Ithaca, financed mainly by reserve-based debt, after Reuters reported it was close to a deal, in another step toward its expected listing.

It leaves Chevron with a heavily reduced North Sea footprint, including its 19.4 stake in the BP-operated Clair field west of Scotland’s Shetlands islands.

“We see exciting growth opportunities in the North Sea,” said Delek Chief Executive Asi Bartfeld.

Norway’s DNO this month said it aims to boost production in the North Sea by making more acquisitions, while ConocoPhillips recently sold its assets in the North Sea to private equity-backed Chrysaor.

Delek lost out to Equinor earlier this month in a $1 billion deal with Royal Dutch Shell for a stake in a field in the Gulf of Mexico.