Ithaca Energy agreed on April 23 to buy Eni's U.K. upstream oil and gas assets for about 754 million pounds (US$938.28 million), in a move to create one of the biggest independent operators in the North Sea.

The North Sea is an energy-rich region in the Atlantic Ocean that has long been coveted by Europe for its potential with critical undersea cables and pipelines, but aging reserves and security concerns have made developments challenging.

Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.

"The agreement affords the opportunity to build scale, realising efficient upstream growth and maximizing value under a dedicated and focused management structure...," Eni CEO Claudio Descalzi said in a statement.

Eni had in late-March given Ithaca a four-week exclusivity period to make an offer for its U.K. assets.

The combined company, with about 37 producing assets, is expected to produce about 100,000 boe/d to 110,000 boe/d on a pro-form basis in 2024, said Ithaca, which is owned by Tel Aviv-listed Delek Group.

"The combination will create a solid platform which can underpin material shareholder distributions, including an ambition to pay special dividends in 2024 and 2025, as well as future organic and inorganic growth," Ithaca Executive Chairman Gilad Myerson said in a statement.

While the all-stock deal will expand Ithaca's output massively, selling its U.K. assets is part of Eni's broader strategy to develop businesses focused on a geographical area or a specific activity and share investment efforts with a partner.

Eni had acquired nearly all of Neptune Energy's portfolio last year to bolster its presence in the key North Sea region.