First View: ITH off the call - Differentiated Organic Growth Pipeline

研报英文原文证据摘录

First View: ITH off the call - Differentiated Organic Growth Pipeline

EUROPE | Oil & Gas Exploration & Production

Ithaca Energy EquityMayResearch20, 2026

FIRST VIEWFirst View: ITH off the call - Differentiated

RATING BUYOrganic Growth Pipeline

PRICE 285.60p^

Conclusion

ITH highlighted continued momentum in advancing its organic PRICE TARGET | % TO PT 210.00p | -26%

development portfolio, reiterating that its five key projects (>200mmboe 52W HIGH-LOW 291p - 126p

agg. net resources) meet robust investment criteria, with FIDs expected FLOAT (%) | ADV MM (USD) 13.6% | 5.72

within the next 24 months - specifically, Fotla and Tornado in 2026, Cambo MARKET CAP £4.7B | $6.3B

in 2027. Management also emphasised its focus on optimising production TICKER ITH LN

^Prior trading day's closing price unless otherwise

across the portfolio in the current elevated commodity price environment, noted.

whilst also leveraging ongoing market volatility to secure attractive hedges

through to 2028. This strategy is expected to support strong cash

flows, enabling accelerated investment in organic growth projects while

maintaining robust shareholder distributions - a differentiated proposition

within E&Ps, in our view. ITH trades at ~$21/boe EV/2P reserves, but,

assuming c.200mmboe 2C resource converts to 2P, a pro forma EV metric

declines to $13/boe. Its latest 2026 dividend guidance - “expected to be over

$500m” - implies a yield of >8%. (Also see: More Rigs, More Divs)

Detail

Rosebank rig incident delay can be accommodated within the project

schedule, with capital reduction expected, but probably not material,

dependent on when the rig returns to service.

Taking advantage of volatility through hedging with ITH now able to

also hedge at attractive prices into 2028 - including ~$60-$97/bbl zero