The share price of Ithaca Energy PLC (GB:ITH) today gained over 6% after the UK government approved the development of the Rosebank oil and gas field in the North Sea. The company will begin the development at Rosebank in partnership with Norway-based Equinor ASA (NYSE:EQNR). Both companies decided to move forward with a combined investment of £3.8 billion, following approval from the North Sea Transition Authority.
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The Rosebank field, located in the North-West of the Shetland region, is recognized as the largest undeveloped field in the UK. It is estimated that the recoverable resources from both Phase 1 and Phase 2 amount to around 300 million barrels of oil.
Ithaca Energy is a British oil and gas company actively engaged in operations within the North Sea region. The company holds a 20% stake in the Rosebank field, while Equinor possesses the remaining 80%.
The Upside and the Downside
The recent approval from the UK authorities marks a crucial step forward for Ithaca Energy and Equinor, opening the door for the development of this valuable energy asset. It represents a step forward in utilizing domestic energy resources to meet the nation’s needs and underscores the importance of strategic collaborations and regulatory support in advancing critical energy projects.
Ithaca Energy stated that the project is anticipated to generate a total direct investment of £8.1 billion, with approximately 78% expected to be directed towards UK-based businesses. The initial production is anticipated to start in 2026-27 and will sustain up to 1,600 jobs during the construction phase.
On the flip side, the approval will also attract criticism from environmental activists, especially after the country’s Prime Minister Rishi Sunak took a U-turn on the country’s 2050 net-zero targets last week.
Is Ithaca Energy a Good Buy?
According to TipRanks’ analyst consensus, ITH stock has been assigned a Moderate Buy rating. The stock has three Buy and one Sell recommendations. The Ithaca Energy share price forecast is 150.4p, which is almost 14.7% lower than the current price level.
It is important to highlight that these ratings were last updated a month ago, and they may undergo positive adjustments in response to such a significant development for the company.
