Ithaca Energy posted record quarterly production in the second quarter and said the controversial Rosebank field west of Shetland is expected to deliver first oil in the first half of next year, subject to government approval.

The company reported improved operating costs and robust cash flow for the first half and said it enters the second half of 2026 from a position of “significant strength”.

Rosebank, in which it holds a 20% stake, continues to advance towards the final stages of execution, it said. The operator – Adura – has narrowed its expected first production window to the first half of 2027, with production anticipated to ramp up to plateau levels from summer 2027, in line with project delivery expectations and subject to regulatory approvals.

Net capital investment in the Rosebank development totalled $120 million (H1 2025: $130 million) as the project continued to progress through its final stages of execution ahead of first production.

Executive chairman, Yaniv Friedman, commented: “Ithaca Energy delivered another strong quarter and first half performance in 2026, demonstrating the strength of our business.

“Record quarterly production in Q2, continued safe and efficient operations, robust cash generation and disciplined capital allocation have enabled us to reaffirm full year production guidance, reduce operating cost guidance and increase our dividend outlook for the year.

“We have also continued to execute against our strategy, strengthening our balance sheet, extending our hedge position and advancing a material pipeline of organic growth opportunities across our portfolio.

“With Rosebank progressing towards first production, Cambo advancing through key development milestones and continued investment in high-return, short-cycle opportunities across our producing assets, we remain focused on maximising long-term value creation and delivering attractive, sustainable returns for our shareholders.”

The Rosebank field is located approximately 80 miles north-west of the Shetland Islands. The field was discovered in 2004 and has since been appraised with five wells. The field is operated by Adura (80.0%) with Ithaca Energy holding a 20% non-operated interest. Ithaca Energy’s interest was acquired through its acquisition of Siccar Point Energy in June 2022.

Rosebank has recoverable resources estimated at around 300 million barrels of oil from phase 1 and 2, with Phase 1 targeting an estimated 245 million barrels of oil.

The field will be developed with subsea wells tied back to a redeployed Floating Production Storage and Offloading vessel (FPSO), with first production expected in 2026-2027. The Rosebank field will produce in excess of 21 MMSCF of natural gas every day, the equivalent to the daily use of Aberdeen City.

Ithaca recorded profit before tax for the period of $494 million (H1 2025: $513 million). A first interim 2026 dividend of $255 million has been declared representing a dividend per share of $0.1542.

Market reaction

Duncan Ferris, analyst at Freetrade, said: “Ithaca Energy scored record production in Q2, but its extensive hedge book saw the business miss out on some of the bounty offered by elevated energy prices.

“A hedge book protects a business against volatility, but it can also remove some of the upside when oil prices peak. In H1, the effect of this was to cut realised prices from $83 to $69 a barrel, which is why earnings barely moved despite the apparent tag team of stronger production and energy prices. 

“Following BP’s dramatic decision to stick its North Sea assets up for sale, the economics of operating in the region are receiving fresh focus. Ithaca’s credentials look particularly strong here, with unit operating expenditure well below the North Sea average and full year cost guidance cut amid apparent operational improvements. 

“However, reduced cost guidance at Rosebank for this year are due to drilling being rephased to next year. First production here is now anticipated for H1 2027 and regulatory approvals are anticipated before the end of this year. 

“All eyes are on the fledgling Burnham government to give the project the nod amid considerable pressure in both directions from oil and gas lobbyists and climate groups. For Ithaca, this means waiting for a green light on the biggest project in its production pipeline.

“In the meantime, shareholders will enjoy the elevated payout. With operational performance looking so healthy and prices so high, Ithaca’s confidence to pump dividend guidance north of half a billion is undoubtedly an encouraging sign. Investors are certainly being handsomely remunerated while they wait for Rosebank to come online.”

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