UK-based Ithaca Energy completed the sale of its Norwegian subsidiary on Thursday to Hungary-listed MOL plc worth up to $90 million.
The initial consideration paid to Ithaca was $60 million, but company can earn future potential bonus payments of up to $30 million dependent on successful discoveries being drilled at Ithaca Norge’s existing licence portfolio between 2015 and 2017.
Following repayment of the company’s Norwegian exploration financing facility and conventional working capital adjustments, the net cash payment received by Ithaca at completion was $30 million.
Those funds have been used to offset drawings under the company’s existing bank debt facilities, Ithaca said.
The sale of Ithaca Norge concludes Ithaca’s restructuring and monetization of the Norwegian operations acquired as part of its 2013 acquisition of Valiant Petroleum.
“The team has done an excellent job in restructuring the Norwegian business following its acquisition as part of the Valiant transaction in 2013. The sale provides Ithaca with the right opportunity to now monetize the value of this non-core part of the Company while retaining upside exposure to the anticipated drilling programme over the next two years,” CEO Les Thomas said when the deal was announced.
The transaction has an effective date of January 1, 2015.