Berenberg started coverage of Ithaca Energy (ITH.L) with a buy rating and a price target of 2.70 pounds sterling, as it expects the company to sustain delivery of over 120,000 barrels of oil equivalent per day into the 2030s, supporting "attractive" shareholder returns.
"Ithaca delivered pro-forma production growth of 87% between 2023 and 2025, mainly driven by the merger with Eni's (ENI.MI) UK business. In our view, the portfolio can now support production levels of at least 120kboe/d into the 2030s, assuming delivery of the contingent (2C) resources base, notably the Fotla, Tornado and Cambo developments," the research firm said Thursday.
Berenberg expects the North Sea oil and gas operator to deliver an 11% cash dividend yield for 2026 and 2027, with a 7% to 10% yield expected over the medium term. It also sees Ithaca's balance sheet strength covering shareholder distributions and planned capital spending, with an upside expected to its dividend forecasts should the UK's fiscal environment improve in the near term.
"The balance sheet is in good shape and, in our view, the company should be able to comfortably fund medium-term capex and shareholder distributions," analysts said.