S&P gives Ithaca Energy B+, notes B

S&P said it assigned a B+ rating to Ithaca Energy and a B rating to its $500 million of senior unsecured notes.

Ithaca used the proceeds and equity from its shareholder Delek Group Ltd. to buy some of Chevron North Sea oil and gas assets.

“Ithaca has published its operating results for the first nine months of 2019. They were broadly in line with our previous expectations. We now estimate 2019 EBITDA at around $1 billion ($1 billion-$1.1 billion under our previous forecast) stemming from lower oil production. At this stage, we maintain our previous projections for 2020, including production of 75,000-80,000 barrels of oil equivalent per day (boepd) and EBITDA of $0.9 billion-$1 billion (under Brent oil price assumption of $60 per barrel). Those should translate into adjusted debt to EBITDA of 2.3x-2.5x in 2020 (or reported net debt to EBITDA of 1.2x-1.4x), which should provide comfortable headroom under the current rating,” said S&P in a press release.

The stable outlook mirrors that of Delek Group.

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