Ithaca Energy has agreed to acquire a portfolio of conventional offshore oil assets off the East Coast of Newfoundland and Labrador from Suncor Energy for $860m in upfront cash, plus potential contingent consideration of up to $250m tied to Brent crude prices.
The deal marks Ithaca's first international acquisition, taking the North Sea-focused oil and gas producer into offshore Canada for the first time.
The assets comprise a 48% operated working interest in Terra Nova, a producing shallow-water oil field supported by a recently completed floating production storage and offloading (FPSO) life-extension project, alongside non-operated interests in White Rose, including a 40% stake in the existing lands and 38.6% in the growth lands, which include the West White Rose extension.
White Rose is operated by Cenovus Energy and is expected to see substantial near-term production growth once West White Rose reaches first production, targeted for the fourth quarter.
Ithaca said the acquisition adds 2P reserves of 103m barrels of oil equivalent (mmboe) at approximately $8 per barrel, with a reserve life of around 17 years, alongside further resources of around 200 mmboe offering additional development optionality.
The company expects the assets to deliver average 2P production of approximately 30 thousand barrels of oil equivalent per day (kboe/d) between 2027 and 2031, with production peaking at 35-40 kboe/d in 2029 as West White Rose ramps up.
That incremental volume underpins an upgrade to Ithaca's medium-term group production outlook, now set at 140-150 kboe/d, up from current FY2026 guidance of 120-130 kboe/d.
Adjusted EBITDAX attributable to the assets was approximately $235m for the twelve months to 30 June, a figure the company said reflects a period of low production ahead of the West White Rose ramp-up and does not yet fully capture the assets' potential.
The acquisition will be financed through a combination of cash in hand, utilisation of Ithaca's existing borrowing base facility and secured in-country financing, which the company said sits comfortably within its capital allocation leverage ceiling.
Ithaca's balance sheet entered the deal in a strengthened position, with adjusted net debt reduced to $1.0bn and leverage at 0.49x EBITDAX as of the first half, following a further €155m tap on its 2031 senior notes.
The company said the transaction is expected to be immediately accretive to Adjusted EBITDAX, free cash flow and dividend per share from completion, while supporting continued deleveraging.
Executive Chairman Yaniv Friedman said the deal "delivers on our clear stated growth strategy as we seek to diversify and grow our production and resource base and replicate our success in the United Kingdom Continental Shelf through disciplined international expansion".
The acquisition positions Ithaca as the fifth-largest operator in offshore Canada by production, which the company described as a platform for further mergers and acquisitions in North America.
Completion is targeted for the first half of 2027.