Israeli energy conglomerate Delek Group said on April 7 its North Sea subsidiary Ithaca has acquired private equity-backed Siccar Point Energy for $1.1 billion.

The acquisition, Delek said, was part of the plan for Ithaca’s IPO later this year, with the aim of increasing Ithaca’s daily production and guaranteeing its long-term reserves.

The deal will seal Ithaca’s position as a major North Sea producer, boosting its output by 8,000 to 9,500 boe/d to a range of about 75,000 to 85,000 boe/d.

Private equity funds Blackstone and Blue Water Energy formed Siccar Point in 2014 with an initial investment of $500 million, one of several private North Sea firms created in recent years that acquired assets from veteran producers such as Shell and BP that sought to reduce their operations in the aging basin.

Siccar Point became a major North Sea player after acquiring OMV’s portfolio for $870 million in January 2017. Its owners have not disclosed how much they have since invested in the company.

Siccar Point’s owners have attempted to sell the company several times in recent years with no success, sources have told Reuters.

The company holds stakes in two large oil fields—Mariner and Schiehallion, as well as stakes in the Rosebank and Cambo discoveries.

Shell, which holds a 70% stake in Cambo, last December said it had scrapped plans to develop the field, which became a lightning rod for climate activists.

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But following Russia’s invasion of Ukraine last month, the British government has urged North Sea companies to ramp up production, breathing new life into the project’s prospects.

“Development of these discoveries is a top priority for the British Government,” Delek said in its statement, adding that it will be the operator of the Cambo Field.

The non-contingent consideration in the deal was $1.1 billion, including $200 million in Siccar Point bonds maturing in March 2026.

The balance, approximately $900 million, will be paid by Ithaca using its existing RBL credit facilities, cash accrued by Siccar Point from Jan. 1, 2022 until the closing date, and cash available to Ithaca.

The transaction is expected to close around the end of the second quarter of 2022.

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