March 1, 2012 / 1:23 PM / 6 years ago

More interest in Ithaca, bids seen topping C$868 million

(Reuters) - North Sea-focused oil and gas explorer Ithaca Energy Inc IAE.TO IAE.L said it had received unsolicited interest from several parties, which analysts estimate could result in a deal valued at about C$868 million.

The company’s board would hold discussions with the interested parties, Ithaca said in a statement, but added that the discussions were still at a preliminary stage.

In January, Ithaca Energy said that it had received a confidential offer to acquire all of its outstanding shares from an unnamed buyer, without disclosing any financial details.

Analysts expect an offer at or above C$3.35 per share — 18 percent higher than its Wednesday close of C$2.84 on the Toronto Stock Exchange.

An offer of C$3.35 per share would value the company at about C$868.2 million.

Ithaca’s London-listed shares were up 14 percent at 199.75 pence at 1315 GMT on Thursday.

“We believe Ithaca’s appeal to potential acquirers is its strong production growth potential from an operated asset base, supported by existing strong cash flows and a clean balance sheet,” James Hosie of RBC Capital Markets said.

The likely bidders include British oil firm EnQuest (ENQ.L), Abu Dhabi National Energy Co TAQA.AD and privately-owned Dana Petroleum.

“The company has a good line-up of future catalysts as well,” GMP Securities analyst Jamal Orazbayeva told Reuters. “It offers good production growth, has a good management team and a good track record.”

For the nine months ended September 2011, Ithaca’s oil sales volumes were 2,002 barrels of oil per day.

The company declined to comment beyond Thursday morning’s press release.

Oil and gas production in the UK North Sea has passed its peak, as the larger and easier-to-tap deposits have been pumped out. But geologists say there are still billions of barrels left to produce in smaller accumulations.

Investment by energy companies in the North Sea in 2012 is expected to exceed last year’s record of 7.5 billion pounds, and is expected to stay consistently high until at least 2014.

The company — engaged in the exploration, development and production of oil and gas in the North Sea — said it had retained CIBC World Markets as its adviser. (Reporting by Brenton Cordeiro in Bangalore, additional reporting by Eileen Anupa Soreng; Editing by Roshni Menon)

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