Combining

for success

ITHACA ENERGY PLC

ANNUAL REPORT AND ACCOUNTS 2024

ITHACA ENERGY PLC ANNUAL REPORT AND ACCOUNTS 2024

Introduction

2024 has been a truly transformational

year for Ithaca Energy, with the successful

completion of its Business Combination with

Eni UK creating a dynamic growth player.

We enter 2025 in a position of significant strength

and as a transformed business having made material

progress against our strategic objectives in the year.

The Business Combination with substantially all of

Eni S.p.A’s UK upstream oil and gas assets (Eni UK)

has enhanced Ithaca Energy’s position as a leading

operator in the UK continental Shelf (UKCS) and

highlights the Group’s continued ambition for value-

led organic and inorganic growth.

Our increased scale of operations, enhanced cash

flows and robust capital allocation policy underpins

material sustainable shareholder distributions, with

the Group successfully delivering against its dividend

target of $500 million for 2024.

With significant optionality across the portfolio,

a strong track record in value-accretive M&A and

material financial firepower, our focus for the year

ahead remains on high-grading investment across

our range of growth opportunities to maximise

sustainable shareholder value.

1ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

Sustain and

Optimise

Production

Read more on page 34

You can also read our

Annual Report online:

investors.ithacaenergy.com

Company overview 1 to 11

Strategic report 12 to 109

Executive Chairman’s statement 12

Chief Executive Officer’s statement 16

Performance review 20

Market review 25

Our business model 30

Our strategy 32

Key performance indicators 36

Operations review 38

Senior Independent Director’s Q&A 46

Our stakeholders 48

Environment, Social, and Governance 56

Financial review 92

Risk management 101

Viability statement 109

Corporate Governance report 110 to 165

Governance at a glance 110

Executive Chairman’s introduction 112

Board of Directors 113

Corporate Governance report 116

Audit and Risk Committee report 126

Nomination and Governance Committee report 130

HSE Committee report 134

Remuneration Committee report 136

Directors’ report 162

Statement of Directors’ responsibilities 165

Financial statements 166 to 248

Independent auditor’s report 166

Consolidated statement of profit or loss 180

Consolidated statement of comprehensive income 181

Consolidated statement of financial position 182

Consolidated statement of changes in equity 184

Consolidated statement of cash flows 185

Notes to the consolidated financial statements 187

Company statement of financial position 244

Company statement of changes in equity 245

Notes to the Company financial statements 246

Alternative Performance Measures 249

Our strategy drives our ambition

Financial highlights

1 Non-GAAP measure as set out on pages 249 to 252.

2 Financial results include the contribution of the Eni UK businesses from 3 October 2024. Certain non-financial metrics such as production, emissions

and GHG intensity and certain alternative performance measures, include the Eni UK numbers from the economic effective date of 1 July 2024.

Consolidation in

Core UKCS

Market

Read more on page 35

2 ITHACA ENERGY

At a glance

Triumph.

We are driven to succeed, maximising value

through the safe, efficient and responsible

production of our Group’s assets.

Together.

We can only succeed if we work together,

harnessing the collective expertise and

experience of our people and partners.

Our purpose

Our purpose is to serve today’s needs for domestic energy through

operating sustainably. We achieve this by harnessing our deep

operational expertise and innovative minds to collectively challenge

the norm, continually seeking better ways to meet evolving demands.

Our mission

Our values

Our purpose is underpinned by our four core values. They guide how

we work resiliently, collaboratively, openly and considerately.

Bring strength

We are resilient, agile and committed.

We bring our collective talent, expertise

and determination to bear daily.

Express yourself

We are empowered to question, sharing

the right and responsibility to challenge

and to use our voices in pursuit of ‘best’.

Deliver results

We control our destinies by harnessing

our ambition and pragmatism to deliver

successful outcomes.

Be considered

We genuinely care about making

a positive impact for our people,

shareholders, and communities.

Our vision

Our vision is to be a leading independent

oil and gas company with scale, stability

and strength focused on responsibly

serving energy needs, while growing

value sustainably and efficiently.

Who we are and what we do

For our people, shareholders, partners and

communities, Ithaca Energy is a new kind

of oil and gas operator.

We acknowledge the fundamental

challenge the energy transition poses to

our industry, we remain committed to our

sector’s response. Our decarbonisation

goals reflect our belief in the environmental

benefits of domestically-produced energy

over high-emission imports.

We remain committed to investing in

sustainable, high-value and long-term

oil and gas production that will create

increased value for our stakeholders and

reduce the environmental impact of the

UK’s oil and gas consumption.

As the energy world transitions, Ithaca

Energy is positioned to play a pivotal role

in safeguarding the UK’s domestic energy

supply, recognising that oil and gas will

remain an important part of the long-

term energy mix for decades to come.

We are guided by pragmatism and

balance. Pragmatism, because the UK

continues to need oil and gas. Balance,

because we recognise our responsibilities

to produce these resources while

actively managing the environmental

impact of our operations.

CAMBO

ROSEBANK

MARINER

MARIGOLD

MONARB

CYGNUS

WEST OF SHETLAND

MARINER

MARIGOLD

MO N A R B ,

COOK & K2

GBA & ALBA

GSA (STELLA, HARRIER,

VORLICH AND ABIGAIL)

& OTHER

CAPTAIN

TORNADO

SCHIEHALLION

BRITANNIA

ENOCHDHU

BRODGAR

PIERCE

GSA J AREA

ERSKINE

ELGIN FRANKLIN

SEAGULL

COOK

FOTLA

ALBA

ALDER

CALLANISH

CAPTAIN

LEVERETT

3ANNUAL REPORT AND ACCOUNTS 2024 3ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

Our assets

Delivering long-term production growth

Today, Ithaca Energy stands as a leading

resource holder in the UKCS, boasting

a diverse and high-value portfolio of

production and development assets.

With significant organic growth

potential, we aim to become one of

the largest producers in the UKCS

by early 2030s.

Our Business Combination with

Eni UK, has added material scale

and diversification to our North Sea

portfolio, with 38 producing UKCS

fields delivering pro-forma* average

production of 105.5 kboe/d in 2024.

Maximising the value of our North Sea

assets safely and sustainably remains

one of theGroup’s primary strategic

objectives.We strive to achieve this

through sustaining andoptimising

ourcurrent portfoliowhile

investingto unlock future

organic growth opportunities

to deliver long-term

production growth.

PRODUCING UKCS FIELDS

OPERATED PRODUCING FIELDS

2P RESERVES

AND 2C RESOURCES (MMBOE)

657

STAKES IN 6 OF THE 10 LARGEST

FIELDS IN UKCS

6 of 10

AVERAGE PRO-FORMA PRODUCTION (KBOE/D)

105.5

% OF 2P RESERVES AND 2C RESOURCES

OPERATED BY ITHACA ENERGY

55%

STAKES IN 2 OF THE 3 LARGEST

UNDEVELOPED DISCOVERIES IN UKCS

2 of 3

Our portfolio in numbers

OPERATED ASSETS

NON-OPERATED ASSETS

* pro-forma production includes production from the Eni UK assets from 1 January 2024 to 31 December 2024.

4 ITHACA ENERGY4 ITHACA ENERGY

MARCH 2021

Captain Enhanced Oil Recovery

(EOR) Phase II Final Investment

Decision (FID)

13 mmboe

EOR Phase I recovery to date

Transformational growth

Our transformational growth

2004

Established with production and

development activities

in the UK North Sea

MAY 2017

Delek acquired Ithaca Energy

and delisted the shares from the

Alternative Investment Market

(AIM)

MAY 2018

Acquisition of Greater Stella

Area licences from Dyas UK and

Petrofac Limited

MAY 2019

Established Ithaca Energy

as a leading independent

with scale, operatorship

and technical capabilities

SEP 2021

Acquired Mitsui UK’s interests

in the Alba field

SEP 2021

Acquisition of Marubeni

North Sea Limited

MAY 2019

Acquisition of Chevron

North Sea Limited

5ANNUAL REPORT AND ACCOUNTS 2024 5ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

…leading us into our

Next Era of Growth.

SEP 2023

Announcement of FID in

Rosebank Field, targeting first production

in 2026/27

FEB 2022

Acquisition of issued capital of Sumitomo

in Summit, increasing stake in Elgin

Franklin and accessing K2 opportunity

APR 2022

Acquisition of Siccar Point Energy with

material long-life reserves and flagship

producing and development assets

NOV 2022

Listed on the London Stock Exchange

(LSE)

2024

APR

Announcement of Business

Combination with Eni UK

MAY

New leadership team announced,

including Yaniv Friedman as

Executive Chairman

OCT

Completion of Business

Combination with Eni UK and

appointment of Luciano Vasques

as CEO

Pro-forma 2024 Production

105.5 kboe/d

6 ITHACA ENERGY6 ITHACA ENERGY

Transformational

Business Combination

leading to growth

Our transformational Business Combination with Eni UK has

strengthened Ithaca Energy’s position as a dynamic, leading

UKCS production and growth company focused on accelerating

growth opportunities and future value creation.

With a proven track record for value-accretive M&A and a

significant high-value, long-life resource base, our investment

optionality has the ability to underpin material long-term organic

growth, delivering the oil and gas essential for UK energy security

while supporting the UK’s decarbonisation targets and reducing

the UK’s reliance on high-emission imports.

Transformational growth continued

7ANNUAL REPORT AND ACCOUNTS 2024 7ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

Aligned partnership between Delek and

Eni with a focus on delivering material

growth and value creation.

Long-term supportive and complementary shareholders

As the Group enters its Next Era of growth, it is supported by committed

long-term shareholders and an aligned partnership between Delek and Eni

insupport of Ithaca Energy’s growth strategy.

By combining the agility of an independent with the capabilities of a Major,

theBusiness Combination seeks to replicate the success and proven track record

of material value creation of Delek’s inorganic growth strategy and Eni’s proven

satellite model.

Lead value in the sector via near-field and

infrastructure-led exploration

• Pursue distinctive dual exploration model and

fast track developments to generate value.

Deliver value-accretive growth

• Organic and inorganic growth strategy focused

on portfolio efficiency and value creation.

Successful investments and

long-term shareholders in:

Vår Energi Azule Energy

Focus on E&P and international expansion

• Deploying capital strategically to acquire assets

internationally, bringing Delek’s expertise to

create value.

Development and optimisation of existing assets

• Strategic positions in the East Mediterranean,

continuously developing operational expertise.

Successful investments and

long-term shareholders in:

Ithaca Energy NewMed Energy

Delek Group Eni SpA

8 ITHACA ENERGY8 ITHACA ENERGY

DIVERSIFIED PORTFOLIO

<20%

Single asset contribution

to total production

RESOURCE-TO-PRODUCTION RATIO

17 years

Diverse and high-value portfolio of scale

Post Combination, the enlarged Group is positioned as the largest

resource holder in the UKCS and the second largest independent

operator by production in the basin.

UKCS operations of material scale:

Our enlarged portfolio provides significant scale with 2024 pro forma production

of 105.5 kboe/d (2023: 70.2 kboe/d), placing the Group as the second largest

independent operator in the basin by production. In the final quarter, the Group’s

focus on operational efficiency and the successful start-up of the Talbot field

supported peak production rates of up to 138 kboe/d.

Balanced and diversified portfolio:

By combining highly complimentary portfolios, Ithaca Energy has created a diverse

and high-value portfolio of over 40 fields across the UKCS, including stakes in six

of the ten largest UKCS fields. The enlarged portfolio, with its enhanced production

diversification and no single asset contributing over 20% of total production, offers

much higher resilience and stability while maintaining a balanced mix of oil and

gas production.

Material long-life resource base providing organic growth potential:

We enter 2025 as the largest resource holder in the UKCS with the organic

growth potential to become the largest producer in the UKCS by the early 2030s.

The Group’s material long-life 2P Reserves and 2C Resources of 657 mmboe

(67% of which are liquids) (2023: 544 mmboe) provide signficant growth

optionality and supports an attractive resource-to-production ratio of 17 years.

The Group’s material long-life 2P

Reserves and 2C Resources provide

significant growth optionality and

supports an attractive resource-to-

production ratio.”

Transformational growth continued

9ANNUAL REPORT AND ACCOUNTS 2024 9ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

Read more about our integration activities

on page 81

Q4 AVERAGE PRODUCTION (KBOE/D)

116

Q4 OPEX PER BOE

~$14/boe

Synergistic benefits of Business

Combination immediately realised

Materially transformed business post completion with enhanced

production and well-advanced integration process driving synergies.

Operating performance and reliability:

The Group’s enhanced portfolio strength

and diversification has supported

a materially improved production

performance and reliability. In Q4, our

enlarged portfolio delivered average

production of 116 kboe/d, reaching a peak

of 138 kboe/d, with the strong production

trend continuining into Q1 2025.

The high netback capability of the post

Business Combination portfolio, is

further demonstrated in our Q4 cost per

barrel of $14.0/boe (2024: $22.1/boe).

Immediate near-term organic value creation:

The Group’s increased stakes and

asset additions in the J Area provided

immediate access to near-term value

creation catalysts across the value

life-cyle. This included the immediate

benefit of first production from the

Talbot field in November, which added

high-value barrels to the portfolio and

successful exploration drilling at Jocelyn

South. The discovery offers immediate

upside potential with a short-cycle

return period, with the field tied-back

to existing facilities with first production

achieved in March 2025.

Integration supports operating synergies:

The Group’s significant integration

experience and capabilities have

supported a rapid and well-executed

process, with integration streams well

advanced, including:

• Integration of all main IT systems

and office relocations completed by

January 2025

• Reorganisation and streamlining

of organisation communicated

to workforce and targeted for

completion by 1 July 2025

10 ITHACA ENERGY10 ITHACA ENERGY

Financial firepower to support growth

Our ambitions are underpinned by a proven growth strategy

and increased financial strength and flexibility.

Transformational growth continued

The Group’s transformational Business

Combination has created a dynamic

growth player with an enhanced

strategic platform for value creation

and the financial firepower to deliver

our aspirations.

With significant organic and inorganic

investment optionality, our proven

strategy is centred on targeted

value-led growth. Growth optionality

includes continued investment in our

high-quality resource base, further

deal-based consolidation in the UKCS

and a broadening of our M&A strategy

internationally, all supportive of a

pathway to Investment Grade status.

The Business Combination significantly

enhances the Group’s financial strength

and flexibility, with the immediate

financial synergies evident in the

successful $2.25 billion refinancing

completed shortly after deal close. This

refinancing, along with a higher credit

rating, provides strong foundations to

deliver long-term growth and delivers

immediate benefits including:

Provides material financial firepower:

Balance sheet strengthened by refinancing,

lengthening the Group’s debt maturity

profile to 2029. $2.25bn RBL and Senior

Notes refinanced (including $500m

letters of credit), with further financial

capacity provided by an uncommitted RBL

accordion facility of >$700m, providing

the potential for expansion of the facility

as required through deal execution and

additional unsecured letter of credit facilities

of >$400m offering further capacity for

decommissioning security postings.

Improved credit ratings supporting lower cost

of borrowing:

The Group’s improved credit ratings from

B+/B1 to BB-/Ba, immediately following

completion, has supported a lower cost of

borrowing and progresses us on our pathway

to Investment Grade status.

Low leverage position and significant liquidity:

With a low pro-forma leverage position

of 0.45x, the Group’s balance sheet offers

significant available liquidity of over $1bn

to support investment in growth.*

* Non GAAP measure

CREDIT RATING

BB-/Ba

SENIOR LOAN NOTE REDEMPTION

2029

11ANNUAL REPORT AND ACCOUNTS 2024

Company Overview

Delivering value creation

for all our stakeholders

Through continued investment in our assets, our people

and our communities, we aim to deliver sustainable value

creation for all stakeholders.

Supporting our people and our partners:

We recognise that our people, supply chain and operating partners are critical to our

future success. Our combination has created a scalable business with significant

growth optionality. Realising these opportunities will require close collaboration

with our supply chain and JV partners. For our people, this means new

opportunities and the chance to be part of building something significant.



Responsible operator with ESG and decarbonisation focus:

With a focus on safe, responsible and efficient operations and investment

in low carbon intensity assets, that will fundamentally transition the

Group’s portfolio over the medium to long-term, we strive to be a key

contributor to UK energy security, supporting affordability while cutting

associated emissions.



Delivering attractive and sustainable shareholder returns:

Our increased scale of operations, enhanced cash flows and disciplined

capital allocation policy underpin our ambitions to maximise

shareholder value. Having successfully delivered our 2024 dividend

target, we remain committed to delivering material and sustainable

shareholder returns with a 2025 dividend target of $500 million,

highlighting the strength of our business.

12 ITHACA ENERGY12 ITHACA ENERGY

Executive Chairman’s statement

The Business Combination

is truly transformational on

many levels.

Put simply, it has created a dynamic

growth player with significant organic

and inorganic growth optionality and

an enhanced platform to pursue our

growth ambitions.”

Yaniv Friedman

Executive Chairman

OUR PEOPLE

~800

Onshore and offshore employees

OUR RESOURCES

657

2P Reserves and 2C Resources (mmboe)

13ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

YANIV, A WARM WELCOME TO ITHACA ENERGY

AND YOUR FIRST ANNUAL REPORT. YOU WERE

APPOINTED AS EXECUTIVE CHAIRMAN IN JULY

2024. WHAT ATTRACTED YOU TO JOIN ITHACA

ENERGY? CAN YOU SHARE A LITTLE ABOUT

YOUR AMBITIONS FOR THE GROUP?

When I was approached about the Executive Chairman role at

Ithaca Energy, my decision was straightforward. Yes, absolutely.

I had been following Ithaca Energy and its remarkable growth

story, and having recently announced the Business Combination,

the Group’s future growth story was compelling. Aligning

perfectly with my own aspirations. This is a company where

I can add tangible value. With a strategy focused on both organic

growth and M&A, my background and extensive experience,

particularly in mergers and acquisitions within the energy sector,

made the opportunity a great fit for me, and I believe, the Group.

My ambitions are big. Matching those of our shareholders.

We have an extraordinary platform for growth and a team that

can deliver. I’d like to see our business growing in size in the

coming years and, while maintaining our heritage in the UK

North Sea and growing it, my ambition is to operate in at least

one international basin with the aim of achieving investment

grade status, which will place Ithaca Energy as one of the leading

global independents.

IT HAS BEEN A TRANSFORMATIONAL YEAR FOR

THE GROUP, WITH THE COMPLETION OF THE

BUSINESS COMBINATION WITH ENI UK, CAN

YOU SHARE WHY THIS IS SUCH A SIGNIFICANT

TRANSACTION FOR THE GROUP?

The Business Combination is truly transformational on many

levels. Put simply, it has created a dynamic growth player with

significant organic and inorganic growth optionality and an

enhanced platform to pursue our growth ambitions.

A platform that will benefit from the agility of an independent, the

capabilities of a major and the backing of its majority shareholders.

With the largest resource base in the UKCS, a diverse and

highly cash generative portfolio, track record for value-accretive

M&A, enhanced financial strength and strengthened executive

and operational teams, the Group is well positioned to deliver

material long-term growth and value creation for

its shareholders.

WITH THE COMPLETION OF SUCH A MATERIAL

TRANSACTION, ARE YOU STARTING TO REALISE

TANGIBLE BENEFITS IMMEDIATELY?

Yes, within the week. Just six days after we announced the

completion of the combination, we announced the launch of our

Notes offering. This coincided with credit rating upgrades from the

three major ratings agencies. And within two days of the launch,

we announced the successful pricing of our senior notes offering

and an upscaled RBL facility, representing a $2.25bn refinancing.

The successful refinancing provides us with material firepower

for growth and is real evidence of the financial synergies we knew

were possible when agreeing our combination with Eni UK. With

significant investor demand for the senior notes in the market, and

the notes offering vastly oversubscribed, the refinancing provides

the immediate benefit of lowering our cost of capital, lengthening

our debt maturity profile and increasing our financial flexibility.

A great start to our Business Combination. And a sign, I believe,

of things to come.

THE GROUP HAS DEMONSTRATED SIGNIFICANT

PROGRESS ACROSS ITS STRATEGIC PRIORITIES

IN THE YEAR, CAN YOU TELL US MORE ABOUT

THESE HIGHLIGHTS?

Putting the Business Combination aside, I am delighted with the

Group’s performance against our strategic priorities for the year.

We have been disciplined in our allocation of capital. Investing

across our portfolio in value-enhancing activities that will support

our medium to long-term production outlook.

At Captain, we successfully delivered our Enhanced Oil Recovery

(EOR) Phase II project, on time and within budget. Achieving this

in an inflationary environment is an outstanding accomplishment.

Following injection into the six new subsea polymer injection

wells, we are now seeing the first enhanced oil response, which is

exceeding expectations with water cuts reducing by over 10% in

four producers. The remaining EOR patterns are on track to start

responding through 2025 and 2026, and together with the 13th

drilling campaign, supports a strong medium-term outlook for

the field, with enhanced oil recovery accounting for almost half

of the field’s future remaining production.

Across the field’s portfolio, we continue to advance pre-final

investment decision projects that we believe have the potential

to deliver significant organic value creation, including opportunities

such as Fotla, Tornado, K2 and Cambo.

REFINANCING COMPLETED

$2.25bn

October 2024

CAPTAIN EOR PHASE II

2026

Peak production and polymer response

14 ITHACA ENERGY14 ITHACA ENERGY

Executive Chairman’s statement continued

STRATEGICALLY, 2024 WAS A SIGNIFICANT

YEAR. HOW DID ITHACA ENERGY PERFORM

FROM AN OPERATIONAL AND FINANCIAL

PERSPECTIVE IN THE YEAR?

Operationally, we have had a strong year delivering combined

production at the upper end of our guidance range, a testament to

the Group’s operating capabilities. Our enlarged portfolio delivered

2024 production of 80.2 kboe/d, taking into account production

from the Eni assets only in the second half of the year. On a pro-

forma basis we delivered production of 105.5 kboe/d in 2024.

With operational issues experienced across our non-operated

joint venture (NOJV) portfolio in the earlier half of the year

behind us, we delivered average production of 116 kboe/d in the

final quarter, reaching peak production rates of 138 kboe/d. We

closed the year with first production from the Talbot field and

successful exploration drilling at Jocelyn South prospect, both in

the J Area. These are great examples of the immediate benefits

our combination has realised, offering near-term value creation

opportunities at increased working interests.

From a financial standpoint, we reported adjusted EBITDAX of

$1.4 billion (2023: $1.7 billion), representing a 18% reduction

from 2023 due to the impact of lower realised gas commodity

prices and reduced production in the 1H 2024, profit after tax

for the year of $153.2 million (2023: $292.6 million) and Group

cash flow from operations of $0.9 billion (2023: $1.3 billion).

And I am pleased to share our material cash flow generation has

supported material distributions to our shareholders, delivering

on our 2024 dividend target, declaring dividends of $500 million

for the year.

2024 REPRESENTED ANOTHER YEAR OF MATERIAL

FISCAL AND REGULATORY CHANGE. HOW HAS

THE GROUP NAVIGATED THESE UNCERTAINTIES,

AND WHAT ARE YOUR THOUGHTS ON THE

OUTCOME OF THE FISCAL REVIEW?

Let me begin by saying, I am pleased we now have clarity. Or

at least in the medium-term. This allows us to make investment

decisions with some level of certainty and certainty is critical for

planning, capital allocation etc. For those longer-term production

opportunities, we will continue to engage constructively with

the UK government on the post-2030 regime before making

material decisions. However, I firmly believe we will only see

improvements to the existing regime as energy security and

affordability come back under the spotlight.

While we still believe that the Energy Profits Levy will continue

to have a detrimental impact on investment across the North

Sea, we also believe it will create opportunity. Our aim is to be

a consolidator in the basin, taking an agile response to market

dislocation to deliver value-accretive M&A. This will allow us to

build further scale in high-quality UKCS assets and support our

long-term growth outlook.

WITH AN ENLARGED BUSINESS AND CLARITY

ON THE FISCAL REGIME IN 2024, DO YOU

FORESEE CHANGES TO THE GROUP’S

STRATEGY?

Post Business Combination our strategy has evolved. We

recognise the limitations of operating solely in one country. The

uncertainty around the UKCS fiscal and regulatory regime has

highlighted this and has brought international M&A into the

frame. International expansion also acts as an important catalyst

to achieving our ambition of reaching Investment Grade status

through scale and diversification.

Following our Business Combination, we have a credible platform

to pursue international M&A as an additional avenue for value

creation. Where previously we lacked the scale and capabilities to

make this a viable option, we can now rely on enhanced technical

resources and capabilities and our increased financial strength,

while leveraging the expertise of our shareholders to drive

targeted and meaningful international growth.

THE GROUP CONTINUES TO DELIVER STRONG

ORGANIC GROWTH FROM ITS PORTFOLIO. CAN

YOU PROVIDE AN UPDATE ON THE ROSEBANK

PROJECT AS A MATERIAL CATALYST FOR

MEDIUM-TERM GROWTH?

The Rosebank project continues to make steady progress with

work advancing in line with the multi-year development timeline

towards expected first production in 2026/27. In July, the

development achieved a key milestone, completing the major

subsea campaign ahead of schedule with installation of all nine

subsea structures on the seabed of the Rosebank field.

I was delighted to witness the significant progress being made

on upgrading the Petrojarl Rosebank FPSO, currently docked

in Dubai, during my recent visit to the shipyard in January. We

also took the opportunity during this visit to build on the strong

relationships we have formed with Equinor, as we work closely

together to deliver this material project for the UK.

We continue to see

material opportunity in

our home basin, with

an eye on international

expansion, providing

a range of strategic

options for growth.”

ROSEBANK PROJECT

2026/27

Targeted first production date

2024 DIVIDEND

$500m

Dividends declared for FY 2024

15ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

We welcomed the outcome of the judicial review, that allows

the project to continue in its development phase while the

partnership gets ready to apply for and obtain the new consent

based on the expected new regulatory guidance expected to be

published by the UK Government in Spring 2025.

WHAT IS THE OUTLOOK FOR ITHACA ENERGY

FOR 2025 AND BEYOND? WHAT ARE YOUR TOP

PRIORITIES FOR THE YEAR?

Our outlook for 2025 and beyond is very promising and

ambitious, marking the beginning of our Next Era of growth.

The completion of our Business Combination has created an

enhanced strategic platform for growth. With increased scale

of operations, improved cash flows and available liquidity, and

a disciplined capital allocation policy we have everything that

is required to deliver against our continued growth aspirations

while supporting sustainable shareholder returns. Following our

material distributions to shareholders in 2024, we are again

targeting dividends of $500 million for the financial year,

reaffirming our 2025 dividend ambitions.

As I mentioned earlier, we now have sufficient fiscal certainty

in the UK, in the medium-term, to shape our future strategy

both in the UK and internationally. We continue to see material

opportunity in our home basin, with an eye on international

expansion, providing a range of strategic options for organic and

inorganic growth. Our focus will continue to be on high-grading

investment across our range of growth opportunities, executing

in line with our strategy as a value-led investor, to maximise long-

term sustainable shareholder value.

Yaniv Friedman

Executive Chairman

16 ITHACA ENERGY16 ITHACA ENERGY

Chief Executive Officer’s statement

My ambitions for

the Group are clear

and attainable.

To become the top performer

in the UKCS sector and deliver

material and value-accretive

growth for the benefit of all our

key stakeholders, including our

employees and shareholders.”

Luciano Vasques

Chief Executive Officer

17ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

LUCIANO, YOU WERE WELCOMED TO THE

GROUP FOLLOWING THE COMBINATION WITH

ENI UK. WHAT ATTRACTED YOU TO JOIN

ITHACA ENERGY? CAN YOU SHARE A LITTLE

ABOUT YOUR AMBITIONS FOR THE GROUP AS

INCOMING CEO?

I am excited to have joined Ithaca Energy at what promises

to be an exciting time for the Group as we seek to capitalise

on the Group’s recent Business Combination with Eni UK.

With the coming together of our companies we have created

a business of scale – not only scale in our portfolio, but scale

in our opportunities.

On a personal level, I am thrilled to bring the experience,

knowledge and business insight I was lucky to gain in over three

decades with Eni, to my new role as CEO of an independent

operator. By applying these valuable learnings in the most

efficient and agile manner, we have the chance to create

something truly remarkable as we embark on this exciting

new chapter.

My ambitions for the Group are clear and attainable: to become

the top performer in the UKCS sector and deliver material and

value-accretive growth for the benefit of all our key stakeholders,

including our employees and shareholders.

YOU HAVE RECENT HISTORY WITH THE ENI UK

ASSETS HAVING OVERSEEN THE BUSINESS AS

MANAGING DIRECTOR, WHAT ARE YOUR

THOUGHTS ON THE COMBINED PORTFOLIO?

The combined portfolio is, in my opinion, one of the best in the

UKCS, if not the best. We are blessed with six of the ten largest

and best performing fields in the basin, stakes in the only two

meaningful upcoming greenfield projects in the North Sea,

Rosebank and Cambo, material brownfield opportunities and

promising exploration opportunities that offer potential across

the full asset life-cycle. In fact, our selective and high graded

exploration portfolio has already delivered success since the

Business Combination, with a discovery announced in December

at the Group’s Jocelyn South prospect, located in the J-Area.

Our enlarged portfolio offers significant scale, diversification and

opportunity with pro-forma production of 105.5 kboe/d in 2024,

a medium-term production outlook of above 100kboe/d, and

significant 2P Reserves and 2C Resources of 657 mmboe. Put

simply, if there is a company you want to be part of in terms of

the asset base and resources available – this is it.

THE PORTFOLIO PROVIDES STABLE

PRODUCTION OVER 100 KBOE/D FOR A

NUMBER OF YEARS. CAN YOU SHARE A LITTLE

ABOUT THE KEY CONTRIBUTING ASSETS TO THE

MEDIUM-TERM OUTLOOK?

Diversification is a strong feature of our portfolio, with

production well distributed across 38 producing fields, and no

single asset contributing more than 20% of total production.

This balanced distribution provides stability and supports our

production outlook, acting as a robust safety net composed of

multiple threads.

Across our high-value portfolio, we have been investing for

growth. Our targeted investment in value-accretive, exploration,

long-life field developments and asset extensions provides a

solid foundation for our medium-term production outlook,

highlighting the quality of our portfolio. Projects such as

Rosebank, Captain EOR Phase II, the Captain 13th infill drilling

campaign and near-field developments and infill drilling at

J-Area, Elgin Franklin and Cygnus ensure stable production

above 100 kboe/d for the next five years. Additionally, we have

significant optionality and upside from greenfield and brownfield

projects like Tornado and Fotla, which offer high-return potential.

THE GROUP EXPERIENCED SOME

OPERATIONAL ISSUES WITHIN ITS NOJV

PORTFOLIO AND NOJV INFRASTRUCTURE IN

THE YEAR. ARE THESE ISSUES BEHIND YOU?

Yes, I am pleased to report the issues experienced at Schiehallion,

Pierce, Jade and Erskine’s host facility during H1 have been

resolved and are now behind us.

Reflecting on this period, we can draw several positives. Both

Ithaca Energy and our operated partners responded promptly,

implementing recovery plans swiftly. This responsiveness

is evident in our Q4 production volumes, with an average

production rate of 116 kboe/d and the achievement of a peak

production rate reaching 138 kboe/d.

18 ITHACA ENERGY

Chief Executive Officer’s statement continued

HOW WILL THE COMPANY ADDRESS

PRODUCTION OPTIMISATION ACROSS ITS

OPERATED AND NON-OPERATED ASSETS

IN 2025?

As a sector, I believe we have a great deal of opportunity to

improve. While the UK is a mature operating basin which comes

with its challenges, my international experience suggests that we

should aim for higher efficiency rates in the UKCS than we are

currently achieving.

Throughout my career, I have been intensely focused on

identifying and implementing efficiency opportunities using a

scientific approach, supported by emerging technologies. Today,

we are able to apply the same methodologies, leveraging Eni’s

shared technical expertise and resources to enhance production

efficiency operations. By monitoring and measuring areas with

higher frequencies of downtime, we aim to prioritise predictive

activities and maintenance that minimise both the frequency and

duration of operational disruptions helping to improve our overall

efficiency rates.

Across our non-operated joint venture portfolio, I am a strong

believer in the power of collaboration. When operators recognise

the value of constructive engagement, we have seen the benefits

of offering recommendations, suggestions, and studies as active

participants, often influencing the final outcome to maximise the

value of the assets.

THE ENLARGED BUSINESS HAS WELCOMED

A REFRESHED LEADERSHIP TEAM, TELL ME A

LITTLE ABOUT THE STRENGTHS OF THE TEAM

AND YOUR ASPIRATIONS FOR THEM?

I am thrilled to be working with our newly established Leadership

Team, which brings together high-calibre, accomplished leaders

from Ithaca Energy and Eni UK, and Eni Energy UK to form a

refreshed Leadership Team that will lead us into our next phase

of growth.

By uniting a diverse group of leaders from these organisations,

I am confident that we will capture the best practices and ways

of working from all three, setting us up for success while also

building our own unique culture.

The Executive Leadership Team consists of individuals at the

pinnacle of their careers and the top of their respective fields,

creating a highly capable and experienced team in which I have

full confidence. But perhaps, what sets our team apart is their

collective ambition and enthusiasm for what we can achieve

together. My aspiration for them is to fulfil this natural ambition,

deliver collectively as a team to maximise value, and create

something meaningful.

WHY IS ITHACA ENERGY’S CULTURE

IMPORTANT TO YOU? AND HOW DO YOU

SHAPE THIS IN A POSITIVE MANNER DURING

TIMES OF CHANGE?

Any company’s success is driven by its people, their spirit, and

the culture they collectively create. It’s not just important; it’s

fundamental. Our people and culture are the engine that drives

our targets and results; at Ithaca Energy we are well aware of that

and are able to invest in this power.

That means to listen to everyone’s contributions, embrace

diversity, and ensure everyone feels valued and integral to our

success. This is especially important during times of change. We

continue to prioritise communicating with integrity and openness

to build trust and strengthen relationships as we work towards

achieving our collective vision for the Group.

I believe that when people feel valued, supported, and free to fly,

we can achieve extraordinary results together.

AS PART OF THE NEW COMBINED BUSINESS

YOU’RE LOOKING TO REFRESH THE GROUP’S

VISION AND VALUES. CAN YOU TELL ME A

LITTLE ABOUT THIS?

As we embark on this new era for the Group, I believe that it is

crucial that we all feel part of the same journey and embrace the

values that will guide us to our future success. This makes refreshing

the vision and values, which provide the foundations for our culture

and our way of working, an important next step as we integrate our

businesses. We aim to roll out our refreshed values in July.

Our refreshed values must continue to reflect the agility,

ambition, integrity, and strength of our newly combined business,

with the fundamentals of our current values still at the heart of what

guides us.

MEDIUM-TERM PRODUCTION OUTLOOK

>100

KBOE/D

PEAK PRODUCTION RATE ACHIEVED IN 2024

138

KBOE/D

19ANNUAL REPORT AND ACCOUNTS 2024 19ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

EXECUTIVE BOARD DIRECTORS

LEADERSHIP TEAM

Yaniv Friedman

Executive Chairman

With significant executive, strategic, M&A and

public market experience in the energy sector,

Yaniv’s focus is on delivering the Group’s strategic

priorities and is the driving force behind the

Group’s inorganic growth ambitions to support

long-term growth and value creation.

Luciano Vasques

Chief Executive Officer

Following completion of the Business

Combination, Luciano stepped into the role

of CEO, as Eni’s nominated director. Luciano

brings over 30 years of energy, executive and

operational experience to lead the Group into its

next phase of growth.

Iain Lewis

Chief Financial Officer

Having led the Group as Interim CEO during

most of 2024, Iain steps back into his role as CFO,

ensuring continued financial discipline and focus

on the Group’s capital allocation policy to support

growth and sustainable shareholder returns.

Odin Estensen

Chief Operating Officer

Bringing a wealth of operating experience, Odin is

focused on delivering operational excellence and

rigour across our portfolio while supporting safe

and responsible operations.

Julie McAteer

General Counsel and Co Sec

Offering extensive experience, Julie is responsible

for all legal, compliance and governance matters

while also overseeing People and Culture, guiding

the Group through its integration activities.

Michele Lucifora

EVP Technical

Leading the technical services of Ithaca Energy

including wells, subsurface, projects and supply

chain, Michele offers significant experience in

delivering projects and operations globally for Eni.

Alessandro Barberis

EVP Exploration

Leading our exploration strategy with a focus on

infrastructure-led exploration to unlock future

value potential. Over 30 years of experience.

Simon Taylor

EVP Health, Safety and Environment

Ensuring the delivery of safe and responsible

operations, as the Group’s number one priority.

Leading the Group’s decarbonisation strategy.

Ross Mitchell

EVP Business Development & Commercial

Executing our M&A strategy to deliver material

long-term value creation and growth for our

shareholders.

Any company’s success

is driven by its people,

their spirit and the culture

they collectively create.

It’s not just important,

its fundamental.”

Introducing our

refreshed Leadership Team

Positioning Ithaca Energy with the

leadership and operating capability for its

next phase of transformational growth.

Today, our refreshed Leadership Team, strengthened and augmented following

the Business Combination, embodies the ambition, experience, and operational

rigour necessary to deliver our next phase of transformational growth.

Together, our management and workforce bring a wealth of experience

and a proven track record of safe operations, growth, and value creation.

Their expertise, coupled with a focus on building the most effective and

agile organisation that adopts the best practices from each company, will be

crtitical to our future success.

The Group’s organisational capabilities are further enhanced through the

access to Eni’s deep operational and technical capabilities via its Technical

Services Agreement. As we look to expand our operating footprint beyond

the UK, these capabilities will be invaluable.

New appointees Eni Secondees

20 ITHACA ENERGY

Performance review

2024 – A story of

transformational growth

2024 has been a transformational year for the Group,

having made material progress across our strategic

objectives. The Group’s Business Combination with

substantially all of the upstream assets of Eni SpA in the

UK brings together highly complementary portfolios,

offering significant scale, balance and optionality, creating a

powerful platform to deliver material cash flow generation,

organic and inorganic growth and value creation.

The Combination has established Ithaca Energy as a

dynamic growth player with the single largest resource

base in the UKCS and the underlying un-risked growth

potential to become the largest producer in the basin

by 2030. Through our Combination and the Group’s

ongoing investment in key long-life assets, we have

materially grown our 2P Reserves and 2C Resources

base to 657 mmboe as at 31 December 2024 (2023:

544 mmboe).

A proven strategy and enhanced platform

supports ‘Next Era’ of growth

As we enter our Next Era of growth, we do so with a

proven strategy and an enhanced platform for organic

and inorganic value creation, drawing on the agility of an

independent, the capabilities of a Major and the support

of its committed majority shareholders.

Leveraging our enhanced operational and technical

capabilities, we aim to be the highest-performing

operator in the basin, focused on sustaining production

and optimising performance to support our short to

medium-term production outlook and investing in our

material organic resource base to generate long-term

sustainable growth and value creation.

With a proven track record for value-accretive M&A,

the Group is well positioned to play a pivotal role in

further North Sea consolidation, taking an agile response

to continued market dislocation, while expanding its

inorganic growth strategy internationally. We remain

confident that material opportunity for consolidation

exists in the Group’s core UKCS market, with the

potential for basin exits and portfolio rationalisation as

a result of UK fiscal policy. Capitalising on our agility

and operational robustness, we are in an ideal position to

extract even further value from these opportunities.

By augmenting our proven track record for M&A with

our shareholder’s global credentials and relationships,

Ithaca Energy now has a credible platform to broaden

its M&A strategy internationally, establishing an

additional option for value creation. The Group will take

a disciplined and targeted approach to its international

expansion strategy, focusing on investing in regions that

offer the potential for scale, further M&A opportunities,

and stable fiscal regimes.

With significant organic and inorganic investment

optionality, the Group’s focus remains on being a

disciplined, value-driven investor, targeting growth

opportunities that maximise value creation for our

shareholders.

Material delivery across all strategic pillars in 2024

During the year, the Group has continued to prioritise

targeted investment in high-quality assets across its

diverse UK North Sea portfolio.

SAFETY

ZERO

Serious incident and fatalities frequency (SIF-F)

PRO FORMA 2024 DAILY PRODUCTION

105.5 KBOE/D

across 38 fields

21ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

The Rosebank project, in its first full year of construction

activity, continued to make solid progress against its

multi-year development timeline towards first production

in 2026/27, delivering against the Group’s strategy to

invest in long-life, low carbon intensity assets supporting

long-term production growth. The development achieved

a key milestone in July, completing the first major

subsea campaign ahead of schedule with installation of

all planned structures on the seabed of the field. The

Petrojarl Rosebank FPSO engineering and modification

scopes continue to progress and remain critical to

delivering on the targeted first production date.

The Rosebank JV partnership welcomed the court ruling

in relation to the Rosebank Judicial Review in January

2025. The ruling allows the project to continue in its

development phase while the partnership gets ready

to apply for and obtain the new consent based on the

expected new regulatory guidance. We will continue to

support Equinor (Operator) as we work closely with the

Regulators and Department for Energy Security and

Net Zero (DESNZ) to progress the Rosebank project,

including submitting a downstream end user combustion

emissions (Scope 3) assessment in full compliance with

the Government’s new environmental guidance, which is

targeted to be published in spring 2025.

The Group is progressing its pre-FID projects including

Cambo, Fotla, Tornado and K2 by implementing a

fast-track approach in project maturation and delivery.

Following the Business Combination and the Autumn

review of the UK Government’s fiscal strategy, we

have revitalised the Cambo project, looking to further

enhance the technical and operational features of the

project, leveraging the experience of our shareholders.

In the second half of the year, the Group completed its

development concept selection for Fotla, in support of a

FID for the tie-back opportunity.

Farm-down processes remain live for Cambo and Fotla

with the processes experiencing a temporary pause as

the industry awaited the outcome of the new Labour

Government’s fiscal and regulatory review. The Group

has made representations to the North Sea Transition

Authority (NSTA) to remove the licence milestone in

relation to achieving a farm-down prior to 31 March

2025, to reflect the Group’s enhanced strength following

the Business Combination with Eni UK, and to grant an

extension of the Cambo licence to 30 September 2027

from 31 March 2026. Engagement with the NSTA in

relation to this matter remains ongoing.

The successful completion of the EOR Phase II project,

on schedule and within budget, at the Group’s flagship

Captain field, represented a significant milestone in

2024. The multi-year project builds on the success of the

platform-based EOR Phase I project, with an expansion

to the subsea area of the field. With first polymer

injection in the subsea wells achieved in May 2024,

the field is already experiencing its first enhanced oil

response, which is exceeding expectations with water cuts

reducing by over 10% in four producers and increasing

oil production by over 2,500 kboe/d relative to the

business plan. The phased response of EOR patterns

through 2025 and 2026, together with the 13th drilling

campaign, that extends over a two-year duration and

targets four new production wells, a pilot well and the

workover of two wells, supports Captain’s life extension

and a strong medium-term production outlook.

In parallel, the Captain asset is focused on delivering

stronger levels of uptime performance with a flotel

secured for a six-month period in support of optimisation

projects and backlog reduction with an additional 150

Person on Board (POB) capacity reflecting the scale of

ongoing activity at the field.

Across the Group’s operated portfolio, a successful

well workover reinstated the fifth production well at

the Erskine field and following scheduled turnaround

activity and remediation of compressor issues at the host

Lomond field, the field returned to full production in the

second half of the year.

The benefits of our Business Combination became

immediately evident as the Group’s increased non-

operated stakes and asset additions in the J Area

unlocked near-term value catalysts. In the final quarter,

we commenced first production from the Talbot field,

adding high-value barrels to the portfolio. In addition, the

partnership enjoyed exploration success at Jocelyn South,

offering near-term high-value production potential with

the field tied back to existing facilities with first production

achieved in March 2025, aligning with our strategy to

invest in high-return tie-back opportunities close to

existing infrastructure to maximise reserve recovery.

During the year, the

Group has continued

to prioritise targeted

investment in high-quality

assets across its diverse

UK North Sea portfolio.”

FIRST EOR PHASE II POLYMER INJECTION

(KBOE/D)

2,500

Increased EOR II oil production against business plan

COMBINED EMISSION INTENSITY

23.9

kgCO

e/boe (gross operated emissions intensity)

22 ITHACA ENERGY22 ITHACA ENERGY

Performance review continued

TIER 1 AND TIER 2 PROCESS SAFETY EVENTS

ZERO

Strong operational delivery against 2024 guidance

with improved safety record

The Group is proud to report that it continued to deliver

a positive trend in its safety performance in 2024, with

zero Tier 1 and Tier 2 process safety events recorded in the

year (2023: recorded one Tier 1 event, 2022: recorded

two Tier 2 events) and a 30% improvement in our Total

Recordable Injury Rate, reducing from 3.31 in 2023 to

2.30 per million hours worked in 2024 (2022: 3.38).

In recognition of the need for continued improvement

across major accident prevention we continue to focus on

embedding our process safety fundamentals (supporting

greater visibility of our major accident hazard risks),

process safety KPIs and the use of our barrier model.

The Group recorded strong operational performance

in the final quarter of the year with the enlarged group

achieving average production of 116 kboe/d in Q4,

reaching peak production rates in the period of 138

kboe/d. A strong final quarter, with all operational issues

across our non-operated joint venture (NOJV) portfolio

and non-operated infrastructure substantially resolved,

supported average 2024 production of 80.2 kboe/d

(including six months production from the Eni UK assets

reflecting an economic effective date for the combination

of 1 July 2024). Improved performance in Q4, allowed

the Group to close the year towards the upper end of its

revised production guidance range of 76-81 kboe/d for

the enlarged Group. Production was split 60% liquids and

40% gas with the Group’s operated assets accounting for

43% of total 2024 production. On a full year pro-forma

basis, the enlarged portfolio achieved average 2024

production of 105.5 kboe/d (2023: 70.2 kboe/d).

Adjusted net operating costs in 2024 from the effective

economic date of 1 July 2024 of $649 million (including

six months of ENI UK related operating costs) (2023:

$524 million), representing an adjusted net unit opex

cost from the effective economic date of 1 July 2024 of

$22.1/boe (2023: $20.5/boe), came in marginally below

management guidance of $650 million to $730 million

for the enlarged Group. Our aim is to maintain opex per

boe in the low $20s to deliver high net back production,

that remains resilient in all commodity environments.

Total net producing asset capital expenditure (excluding

decommissioning) of $448 million (including six

months of ENI UK capital costs) (2023: $393

million), came in at the mid-point of the Group’s

management guidance range of $410 million to $480

million. Net capital expenditure on the progression

of the Rosebank development totalled $198 million,

compared to management guidance of $170 million to

$195 million reflecting the material scopes of project

activity completed in the year in line with the multi-year

development timeline.

Group cash tax paid in the year of $351 million was below

the Group’s management guidance range of $390 million

to $410 million due primarily to cash tax payments made

by the acquired Eni UK business prior to the economic

effective date of the Business Combination that will

be offset in the final deal working capital settlement.

The significant majority of tax payments related to the

Energy Profits Levy, including all of the Ithaca Energy

legacy business cash tax payments.

Creating an optimised organisation to drive our

next phase of growth

In the first half of the year, and in preparation for the

Combination, the Group made several changes to its

Board of Directors and Executive Management team to

enhance its leadership and operational capabilities. These

appointments, including a new Executive Chairman,

Chief Executive Officer and Chief Operating Officer,

reflect the Group’s growth ambitions and the operational

expertise and rigour required to deliver its next phase

of growth. Post completion, the Leadership Team was

further augmented by new senior leaders, bringing

together a diverse range of experiences and backgrounds,

reflecting both our agility and strength.

Having completed the Combination in October 2024,

integration activities are now well-advanced, recognising

the significant benefits a swift and well-executed

integration process provides. The respective workforces

of Ithaca Energy and Eni UK have been consolidated

into two main offices, primarily at our Aberdeen

headquarters, with the migration of all main IT systems

completed in early January. The Group has initiated a

restructuring process aimed at creating an optimised

organisation to support its next phase of growth. The

restructuring exercise is expected to impact a small

portion of our workforce, with the intention to complete

this process by 1 July 2025.

Responsible operator

Our commitment to ESG serves as our licence to

operate. We balance the need to supply reliable long-

term hydrocarbons, critical to delivering domestic

energy security and affordability for the end user,

with the necessity to lower our emissions footprint,

The Group is proud to report that it

continued to deliver a positive trend

in its safety performance in 2024,

with zero Tier 1 and Tier 2 process

safety events recorded in the year.”

Performance review

23ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

2024 ADJUSTED EBITDAX

$1.4bn

PRO FORMA LEVERAGE RATIO

0.45x

Adjusted net debt to adjusted EBITDAX

while doing so safely, creating value for our people,

shareholders, partners and communities.

With a clear focus and commitment to value-led

decarbonisation, we have embedded a strong ESG

mindset across our operations. Our ambitions are

supported by a well-defined ESG strategy to acquire

assets that benefit the emissions profile of our portfolio,

invest in low emission intensity assets that have the

ability to materially transition our portfolio in the long-

term, and deliver meaningful optimisation activities

across our current portfolio in the short-term that are

economically viable.

Through the addition of Eni UK assets, we have lowered

the Greenhouse Gas (GHG) emission intensity of our

operated portfolio, bringing our gross operated emissions

intensity to 23.9 kgCO

e/boe from 25.0 kgCO

e/boe in

2023 and an exit rate below 20 kgCO

e/boe reflecting

the full benefit of the Business Combination to our

emissions profile. Whilst our gross operated absolute

Scope 1 and 2 emissions have increased to 448,190

tCO

e in 2024 (2023: 435,792 tCO

e), reflecting

a greater number of contributing assets, the carbon

intensity of our operated portfolio has been reduced.

Since 2020, we have held a target of 25% emissions

reduction by 2025 from our 2019 levels, on a gross

operated basis. This was an industry leading ambition,

set before the NSTD was signed, to drive emissions

reduction and a GHG conscience in the business. This

target has led to a significant reduction from our 2019

baseline and the initiation of several meaningful emission

reduction projects, reducing our Scope 1 operated

emissions by 23% between 2019 and 2023.

The Group has changed significantly since 2020,

including our recent Business Combination with Eni UK

in 2024. As a result of portfolio changes, the target no

longer has the same impact and benefit as it once did

and is not representative of where we are today. The

Group now operates the Cygnus field and considerable

increased non-operated production, therefore it is

more representative for us to track and report on net

equity emissions reduction, in alignment with the UK

government through the NSTD. As we enter 2025,

we have retired our original target and now focus on a

net equity absolute emissions target of 25% reduction

from 2018 levels by 2027, as set out by the NSTD. In

2024, we re-baselined our Scope 1 absolute emissions

and emissions intensity to include the combined business

portfolio as it was in 2018. This allows us to track

progress towards the targets outlined above. In 2024,

our net equity emissions intensity was 20.7 kgCO

boe. From 2025, we will report on percentage change

from the baseline year, 2018.

Our enlarged portfolio benefits from low intensity

assets such as Cygnus and Seagull. As the single

largest producing gas field in the UK, Cygnus is a

key contributor to UK energy security operating as

a low intensity asset, emitting approx. 7 kgCO

boe, meaningfully below the current UK average of

24 kgCO

e/boe and significantly below the average

emission intensity of importing LNG at 79 kgCO

e/boe.

Across our portfolio, we continued to make material

progress with notable emissions reduction projects

completed at FPF-1 (single train operation), Alba (gas

compressor) and Cygnus (TEG system) and ongoing

progress made to deliver flare gas recovery projects at

Captain and Cygnus and pump replacement projects and

export compressor projects at Captain in the year.

Work on the Captain electrification FEED study was

completed in the second half of the year, however

continued fiscal and regulatory uncertainty in the

year meant that the project did not mature to a final

investment decision in 2024. Work continues to be

progressed to support the project, however the project

risks, increasing abatement costs and continued coupling

of the decarbonisation allowance to the Energy Profits

Levy regime creates significant economic uncertainty to

the project. The Board will determine in 2025 if there

is sufficient certainty on the availability of allowances

to determine investment viability, with the project also

competing for capital across our portfolio.

Enhanced financial firepower supports growth

ambitions and material shareholder returns

We remain disciplined in our capital allocation priorities,

investing to sustain our base production, protecting our

financial position through maintaining a low leverage

position, proactively hedging and optimising our tax

positions and delivering material returns to shareholders,

while retaining the financial flexibility to evolve our

business through investing in organic and inorganic

growth opportunities.

Maintaining a robust Balance Sheet, with significant

available liquidity and financial flexibility remains of

critical importance to the Group as we continue to

pursue our growth aspirations. Our recent Business

Combination with Eni UK has strengthened the Group’s

financial position, with increased scale and diversification

and the addition of Eni UK’s unlevered asset creating

additional debt capacity.

The immediate benefits of the Combination were

reflected in the Group’s successful $2.25 billion

refinancing and credit rating upgrades. The refinancing,

including $750 million Senior Notes and $1.5 billion

amended and restated floating rate Reserve Based

Lending (RBL), including $500 million letters of credit

facility, has been further enhanced by a RBL accordion

facility of over $700 million and a new $400 million

unsecured letter of credit facility secured in November.

The successful refinancing has unlocked significant financial

synergies, including lengthening the Group’s debt maturity

profile, reducing the Group’s cost of capital and increasing

the Group’s liquidity position. With a low pro forma 2024

leverage position of 0.45x (2023: 0.33x) and a robust

available liquidity position of over $1 billion at 31 December

2024 (2023: $1 billion), the Group has material financial

firepower and flexibility to support further investment

in growth.

The Group’s net current liability position has

increased from $226 million at 31 December

2023 to $462 million at 31 December

2024, largely as a result of the deferred

consideration payable on the business

combination. The Group expects that

the net current liability position will

be addressed through a combination

of operating cash flows, available

liquidity and the realisation of

out-of-the-money commodity hedges.

24 ITHACA ENERGY

Once again, the importance of our robust hedging policy

has been highlighted in the year, recording $135 million of

hedging gains. The Group’s pro-active approach to hedging

recognises the importance of balancing upside exposure to

commodity prices while managing downside protection of

our cash flows, protecting shareholder returns. The Group

has generated over $400 million of hedging gains in

respect of financial years 2023 and 2024, the equivalent

of our 2023 dividend of $400 million. Following a

material build to our hedge book post completion of our

Business Combination, the Group ended the year with a

hedged position of 21.65 million barrels of oil equivalent

(mmboe) (25% oil) from 2025 into 2026 at an average

price floor of $77/bbl and average ceiling of $85/bbl for

oil and an average price floor of 88p/therm and average

collar ceiling of 102p/therm and average wide cost collar

ceiling of 132p/therm for gas.

The Group’s cash flows continue to be protected by our

tax efficient structure, supplemented by the Business

Combination, with a material ring fence corporate tax

and supplementary charge tax loss position of $5.4 billion

and $4.7 billion respectively at year-end. The current tax

charge for 2024, representing mainly Energy Profits Levy

(EPL) of circa $210 million is payable in October 2025.

In addition, following the further amendments to the EPL

regime in October 2024, that included a rate increase to

38% and the removal of EPL Investment Allowances, the

Group incurred a tax charge of $58 million. Profit after

tax for the year of $153.2 million (2023: $292.6 million),

was further impacted by a $263.0 million (2023: 557.9

million) pre-tax impairment charge, post-tax $102.7

million (2023: $154.0 million), principally in relation to

the Greater Stella Area and Pierce. Profit for the year was

lower than 2023 principally due to a higher tax charge in

2024 due to the enactment of the increase in EPL from

35% to 38% and a reduction in Ring Fenced Expenditure

Supplement due to some Group tax loss positions reaching

their claim limit in 2023.

In 2024, our enlarged portfolio delivered adjusted

EBITDAX of $1.4 billion (2023: $1.7 billion),

representing contributions from Eni UK assets from the

completion date of 3 October onwards. 2024 adjusted

EBITDAX was impacted by lower production volumes

and realised prices in comparison to 2023.

EBITDAX performance of $646.5 million in the final

quarter, reflects the truly transformational nature of our

Combination, when compared to the previous quarter

EBITDAX of $225.5 million. In fact, Q4 2024 represents

the highest quarterly EBITDAX performance since the

Group’s listing in November 2022, during a significantly

more advantageous commodity price environment.

Our robust operating cash flow generation in the year of

$0.9bn (2023: $1.3bn), supported material shareholder

distributions in line with the Group’s capital allocation

policy, returning a total of $433 million to shareholders

during the year, $300 million declared in relation to

Financial Year 2024. The Board has today declared an

interim dividend of $200 million in respect of the 2024

financial year to be paid in April 2025, bringing our total

2024 dividend declared to $500 million. Since our IPO

in November 2022, we have built a strong track record

of delivering material returns to shareholders with $900

million declared dividends and returned to shareholders

in respect of 2023 and 2024 calendar years.

Outlook

We enter 2025 in a position of greater strength,

strategically, operationally and financially. The

transformational Business Combination with Eni UK

has solidified Ithaca Energy’s position as a leading UKCS

operator and highlights our ongoing commitment to

value-driven growth.

With a portfolio of scale, balance and optionality and

material financial firepower, following the Group’s

successful refinancing, the Group has an enhanced

strategic platform to unlock both organic and inorganic

growth through the execution of our strategy. Our

focus remains on high-grading investment in our diverse

range of growth opportunities to maximise sustainable

shareholder value.

Management provides the following guidance for the

year, inclusive of the acquisition of Japex UK E&P

Limited (announced 25 March), assuming a completion

date of the transaction of 30 June 2025, and medium-

term outlook:

Our 2025 production guidance of 105-115 kboe/d

reflects a full year’s contribution from the enlarged

portfolio and increasing production from the Captain

field as we begin to see the early benefits of our Captain

EOR Phase II project. Beyond 2025, the Group

expects to maintain production above 100 kboe/d in the

medium-term from its existing producing asset base and

the start-up of the Rosebank development.

Our operating cost guidance for 2025 of $770-850

million reflects high netback capability of enlarged

portfolio with opex/boe estimated to reduce. We expect

to maintain a relatively flat unit operating cost per barrel

in the low $20/boe range in the short to medium-term,

reflecting our stringent focus on cost control.

Our producing asset capital cost guidance of

$560-620 million (excluding capital investment for projects

awaiting Final Investment Decision and Rosebank), reflects

our continued high levels of activity at Captain, J-Area,

Elgin Franklin and Cygnus in support of sustaining our

medium-term outlook.

Rosebank development to be in the range of

$190-230 million reflecting significant project activity

in line with the multi-year development timeline.

Estimated 2025 cash tax payments of

$235-265 million, primarily related to EPL.

The Group continues to proactively hedge in the first

quarter of the year, securing attractive gas hedge

positions during a period of escalating prices with a

hedged position of 32.1 million barrels of oil equivalent

(mmboe) (29% oil) from 2025 into 2027 at an average

price floor of $75/bbl, and average collar ceiling of $82/

bbl, and average wide cost collar ceiling of $91/bbl for

oil, and an average price floor of 90p/therm and average

collar ceiling of 104p/therm and average wide cost collar

ceiling of 133p/therm for gas as at 20 March 2025.

The Group retains its target for 2025 dividends of $500

million, in line with our capital allocation policy of 15 – 30%

post-tax cash flow from operations (CFFO), and our

commitment to distributing 30% post-tax CFFO in 2025.

Strong cash flow generation over the next five years

(2025 to 2029) with a potential for over $9bn of total

pre-tax cash flow from operations from 2P Reserves at

$80/bbl and 85p/therm.

Performance review continued

25ANNUAL REPORT AND ACCOUNTS 2024 25ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Market review

Stimulating investment in the

UKCS is key to meeting the

UK Government’s energy

security and Net Zero objectives

Ithaca Energy welcomes the certainty on UKCS fiscal

policy in the medium-term and will continue to actively

engage with the UK government in relation to fiscal and

regulatory policy reviews launched in the first quarter

of 2025. We fundamentally believe that investing in

our domestic energy resources provides significant

benefits to the UK, supporting 200,000 highly-skilled

jobs, providing secure and reliable energy, supporting

affordability to consumers across the UK, while delivering

a just transition and supporting the UK economy.

As we navigate the changes in the UK fiscal and

regulatory back drop, we believe that these change will

stimulate further consolidation trends in the North Sea,

creating opportunities for further value-accretive M&A

in our core UKCS basin.

Energy security and decarbonisation

The UK is faced with an energy quadrilemma with pace of investment in alternative

energy sources slowing

Fiscal and regulatory environment

Fiscal certainty in medium-term welcomed with attention moving to the long-term

regime and regulatory environment

M&A trends

A focus on scale continues to drive consolidation plays in the sector, with opportunity

for further consolidation in UKCS

Commodity prices

Continued commodity price volatility with softening in oil prices

26 ITHACA ENERGY

The UK is faced with an energy quadrilemma

Labour’s appointment to government in 2024 has seen a

shift in focus towards creating a ‘Green Economy’. Under

the leadership of Prime Minister Sir Keir Starmer, Labour

introduced a series of policies aimed at changing the UK’s

energy landscape and accelerating the transition to a

low-carbon economy. The appointment of Ed Miliband as

the Secretary of State for Energy Security and Net Zero,

brought a strong focus on climate action and energy

reform supporting Labour’s vision of making the UK a

“clean energy superpower”.

Energy quadrilemma – Security and reliability

Research from industry consultancy, Cornwall Insights,

states that the UK is on track to miss its 2030 clean

power targets. Despite notable wind and solar build

out, the UK still needs to keep a significant amount

of dispatchable firm capacity (e.g. gas) to ensure peak

demand is always met when intermittent generation is

not available. At the beginning of 2025, during a period

of bitterly cold temperatures and lack of wind power

generation, the UK became perilously close to facing

blackouts, highlighting concerns for the reliability of our

energy system.

Energy quadrilemma – Accessibility and affordability

UK energy production reached a record low in the third

quarter of 2024. Consequently, the UK is now importing

over 40% of its energy needs from overseas with £20bn

worth of oil and gas imported in 2023/24 from Norway

alone. This reliance has resulted in UK energy prices being

more than double those in the US and higher than many

European countries.

Energy quadrilemma – Sustainability

The Climate Change Committee’s Balanced Pathway to

Net Zero projects that the UK will use 15 billion barrels of

oil and gas over the next 25 years. However, the North Sea

Transition Authority’s latest forecast suggests that, at the

current rate, the UK will produce less than 4 billion barrels,

covering less than a third of the anticipated demand.

Market review continued

Energy security and decarbonisation

This growing reliance on imports weakens our energy

security, raises costs for consumers, makes us more

vulnerable to supply disruptions and global geopolitical

events and instead of delivering emissions reductions

from domestic production merely outsources the UK’s

emissions. A recent report prepared by Gneiss Energy

on UK Gas Policy highlighted this fact stating “Imported

LNG has an estimated 79kg CO

/boe by the time it

reaches the UK point of consumption. Liquefaction

requires energy, transportation requires energy,

regasification requires energy, and these processes also

have associated waste”. In contrast, the UK average

emissions intensity is 24kg CO

/boe across all assets.

Energy quadrilemma – Economic viability of investment

Investment in alternative energies has slowed in pace

across the sector, with a number of notable strategic

announcements from bp, Equinor and others in recent

months. Following a review of strategic priorities these

companies have opted to increase their investment

in traditional oil and gas while reducing investment

across other energy sources. This move responds to

investors’ calls to ensure the economic viability of these

investments to protect shareholder returns.

Our response:

The UK government continues to support the UK oil

and gas sector, while the world still requires fossil fuels

until a well-managed transition is possible. We continue

to engage constructively with the UK Government,

alongside our industry peers to highlight the significant

issues current energy policies are creating to the

attainment of the UK’s energy security, affordability and

decarbonisation targets.

During 2024, the Offshore Petroleum, Regulators for

Environment and Decommissioning (OPRED) launched

a consultation with industry in relation to the assessment

of Scope 3 emissions following the Finch ruling in

June. Ithaca Energy responded to this consultation and

participated in the industry’s response led by Offshore

Energies UK.

Our response highlighted the Energy quadrilemma, in

particular the impact to the UK’s emission footprint from

replacing domestic production with LNG imports that

emit almost four times that of the UK average.

Ithaca Energy continues to operate and invest in a

responsible manner, delivering critical energy security

while fundamentally transitioning our portfolio over the

medium to long-term through investment in low carbon

intensity assets such as Rosebank with an estimated lifetime

upstream CO

intensity of around 12 kg (no electrification)

with the potential to decrease to approximately 3 kg

/boe on the basis of full electrification.

27ANNUAL REPORT AND ACCOUNTS 2024 27ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Norway

UK: 24 kgCO

/boe

Average LNG

carbon intensity:

79 kgCO

/boe

Russia

Egypt

Nigeria

Qatar

U.S.

Angola

T&T

Algeria

Peru

33%

97%

86%

85%

80%

78%

76%

67%

66%

50%

Energy quadrilemma

Human flourishing

Profit motiveEnergy transition

Accessibility

& affordability

Enabling energy provision to

consumers whilst minimising

cost to support social and

economic development.

Security

& reliability

Ensuring current and future energy

demand is supplied reliably and

responsibly, and is able to robustly

withstand system shocks.

Sustainability

Addressing sustainability concerns

(e.g. GHG emissions) and ensuring

protection and stewardship

of the environment.

Economic viability

of investment

Investment into, and adoption of,

energy solutions characterised by

a sustainable return on investment.

UK VS AVERAGE LNG CARBON INTENSITY

Developing and operating low intensity

fields in UKCS reduces reliance on

highly volatile, high-emission imports.”

Upstream Transport & processing Liquefaction LNG shipping Regasification

Importing in the context of

the UK’s energy quadrilemma

Increasing the UK’s reliance on imports, at the

detriment of domestic production, weakens the UK’s

energy security, raises cost for consumers and increases

emissions intensity. The energy transition will require

significant new investment in alternative energies to

meet growing energy demand and close the import

gap. With pace slowing across investment in these

alternatives, investment in oil and gas has never been

so critical if the UK wishes to reduce its reliance on

high-emissions and politically volatile imports.

28 ITHACA ENERGY

Market review continued

M&A trends highlight a focus on building scale

In 2024, the M&A market within the oil and gas

sector was driven by strategic shifts and the need to

enhance operational efficiencies. The global oil and

gas sector saw significant consolidation, particularly

in regions like the Permian Basin, where larger

companies acquired smaller players to optimise

production and reduce costs. This trend was fuelled

by the ongoing volatility in energy prices and the need

for companies to secure competitive advantages in a

rapidly evolving market.

In the UK North Sea, M&A activity was influenced

by fiscal and regulatory uncertainty. With a looming

general election and growing negative sentiment

from the Labour party towards our sector, the first

half of the year was dominated by uncertainty and,

consequentially, limited M&A activity. Following

Labour’s victory in the election, the industry entered

a period of consultation with the UK Government

with the outcome delivered in the Chancellor’s

Autumn Statement. With much desired fiscal certainty

delivered, M&A markets in the UKCS reopened with

the most notable being the combination of Shell and

Equinor’s UK operations.

Overall, M&A activity in the oil and gas sector in

2024 was characterised by strategic consolidations, a

focus on efficiency, and a drive towards diversification

and scale. These trends are expected to continue as

companies navigate the complexities of the global

energy landscape and seek to position themselves for

long-term success.

M&A

DECLINE IN CAPITAL EXPENDITURE

IN OFFSHORE ENERGY

26%

FORECAST REDUCTIONS IN

OIL & GAS PRODUCTION

6.3% & 9.2%

Fiscal and regulatory framework

UKCS fiscal certainty in the medium-term

In 2024, the UK’s fiscal and regulatory framework

for oil and gas companies operating in the North Sea

underwent significant changes. The Labour government,

led by Chancellor Rachel Reeves, introduced changes

to the EPL aimed at balancing revenue generation and

supporting renewable energy initiatives.

One of the key changes was the increase in the EPL

from 35% to 38%, with its duration extended to 2030.

This brought the headline tax rate on oil and gas activities

to 78%. Additionally, the 29% investment allowance,

previously used to stimulate capital reinvestment into

oil and gas projects, was removed. However, first-year

allowances and a 66% decarbonisation allowance were

retained to provide continued relief for investments, with

a focus on stimulating investment in decarbonisation.

These changes raised concerns across North Sea

operators, who warned that increased taxation, without

sufficient fiscal incentives, could deter investments in the

declining basin. A trend that is highlighted by the Office

for Budget Responsibility (OBR), predicting a 26%

decline in capital expenditure in offshore energy over the

forecast period, with reductions of 6.3% and 9.2% in oil

and gas production, respectively

With much needed certainty delivered on the EPL

regime in the medium-term, the Government changed

its focus to designing a successor regime post 2030.

A consultation process was launched in March 2025,

post period-end, that will see industry and the UK

Government engage to design a regime that adapts to

future potential price shocks.

Our response:

The prolonged fiscal and regulatory uncertainty

in the UKCS has made it challenging to make

investment decisions during 2024. We have

remained disciplined and agile, prioritising

investment opportunities that can create the most

value, while protecting the long-term optionality

across our portfolio.

The Group has chosen to work constructively with

the UK government, highlighting the long-term

consequences of the EPL on UK’s energy security

and decarbonisation objectives. Despite an increase

in the EPL in 2024 and the reduction to cash flows

available for reinvestment, we have demonstrated

our commitment to investing in the UK North Sea,

through our Business Combination with Eni’s UK

assets, significantly expanding our scale in the UK.

We remain committed to maximising the value of

our UK portfolio and staying agile to capitalise on

further consolidation opportunities. However, fiscal

and regulatory uncertainty has highlighted the

limitations of operating in a single basin. To address

this, our business must remain flexible and adapt,

resulting in a broadening of our M&A strategy

globally.

In 2024, the Group made cash tax payments of

$350 million in relation to its 2023 EPL charge and

incurred an EPL charge of $210 million in relation

to FY 2024, payable in October 2025.

1 https://energycouncil.com/articles/budget-2024-impact-on-north-sea-operators-and-investors

Our response:

In 2024, we announced and completed the Group’s

Business Combination with Eni UK. This strategic move

marked a transformational step for the Group, enhancing

its presence in the UKCS and creating a leading

production and growth company in the region with an

enhanced platform to deliver the Group’s future organic

and inorganic growth aspirations.

The transaction combined highly complementary

portfolios, enhancing the Group’s scale and diversification

in the basin, growing our pro-forma production base to

above 100 kboe/d in 2024, while providing the organic

growth potential to grow to 150 kboe/d in the early 2030s.

The Business Combination underscores our commitment

to energy security in the UK, positioning the Group

for long-term growth and value creation in the evolving

energy market.

Our Business Combination

underscores our commitment

to energy security in the UK,

positioning the Group for

long-term growth.”

29ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

M&A

Commodity price fluctuations

In 2024, Brent crude oil prices experienced notable

fluctuations due to a combination of geopolitical

tensions, economic factors, and production changes.

The average price of Brent crude oil was around $80 per

barrel, slightly lower than the previous year. Prices ranged

between $68 and $93 per barrel, marking the narrowest

trading range since 2019.

Early in the year, Brent prices rose due to heightened

geopolitical risks, particularly in the Middle East. Tensions

between Israel and Hamas, along with attacks on vessels

in the Red Sea, caused significant disruptions and pushed

prices higher. The peak price of $93 per barrel was

reached in April amid concerns over potential conflicts

between Iran and Israel.

However, the second half of the year saw a downward

trend in prices. Slowing economic growth, especially in

China, and reduced demand for liquid fuels contributed

to this decline. Furthermore, China’s shift towards

liquefied natural gas (LNG) for transportation and the

increasing adoption of electric vehicles played a role in

limiting the demand for traditional fuels.

OPEC+ production cuts were a significant factor in

stabilising prices. Multiple delays in increasing production

helped prevent prices from falling too low. Despite these

cuts, production growth from non-OPEC+ countries,

including the United States, Guyana, and Canada, offset

the reductions and added downward pressure on prices.

Additionally, natural gas prices saw fluctuations in 2024,

influenced by similar factors. The global demand for

natural gas remained strong, driven by the transition to

cleaner energy sources and the need for reliable power

generation. However, supply disruptions and geopolitical

tensions, particularly in Europe, led to price volatility.

The ongoing conflict in Ukraine and sanctions on Russian

gas exports created supply uncertainties, pushing prices

higher at times.

Our response:

Ithaca Energy takes a disciplined and pro-active approach

to hedging, recognising the importance of balancing

upside exposure to commodity prices while managing

downside protection of our cash flows. With clear

hedging targets and a pro-active approach, the Group

seeks to place hedges at peaks in commodity markets,

supporting an attractive hedge book.

At year-end the Group has 21.65 million barrels of oil

equivalent (mmboe) (25% oil) hedged from 2025 into

2026 at an average price floor of $77/bbl and average

ceiling of $85/bbl for oil and an average price floor of

88p/therm and average collar ceiling of 102p/therm and

average wide cost collar ceiling of 132p/therm for gas.

Following completion of the Business Combination,

the Group began to materially build on its gas hedge

book, reflecting the increase in gas weighting to the

portfolio from asset additions, in order to protect cash

flows and support the Group’s Capital Allocation Policy,

including distribution ambitions. Gas hedges were placed

at attractive prices covering 2025 and 2026 providing

significant protection to cash flows with notable increase

in Wide Zero Cost Collars with ceilings above 120p/

therm until end 2026.

In 2024, we achieved realised gas prices of 85p/therm

before hedging and 103p/therm after hedging.

Commodity Prices

GAS PRICES

85p/therm

before hedging

103p/therm

after hedging

BARRELS HEDGED AT 31 DECEMBER 2024

21.65m

barrels of oil equivalent (mmboe) (25% oil)

30 ITHACA ENERGY30 ITHACA ENERGY

Our business model

Dedicated to

sustainable

growth

Driven by our purpose, vision and

values, we are a company dedicated

to growing sustainably. This means

operating safely and responsibly,

developing our people and sharing

our success.

Exploration

& appraisal

What we do

We operate a targeted approach to

exploration and appraisal drilling,

prioritising prospects in close proximity to

existing infrastructure hubs.

Our responsible approach

We aim to identify and commercialise

tie-back developments using existing

infrastructure reducing the emission

intensity of the hub.

Business Combination benefits

Access to Eni’s globally recognised

exploration and appraisal capabilities

(including supercomputer)*.

Late-life operations

& decommissioning

What we do

We efficiently operate our assets in

ultra-late life, maximising production while

integrating decommissioning activities

into everyday operations to maximise the

value from our assets.

Our responsible approach

We are committed to the responsible

execution of decommissioning

programmes, reducing emissions and

maximising recycling where possible.

Business Combination benefits

Enlarged portfolio offers further

late-life and decommissioning

synergy opportunities.

Inorganic

growth

What we do

We seek to leverage our proven M&A

execution capabilities and integration

expertise to build a portfolio of scale.

Our responsible approach

All M&A opportunities are considered

through an ESG lens.

Business Combination benefits

Creates credible platform for international

M&A, leveraging enhanced technical

capabilities, financial strength and the

expertise of our shareholders.

Production

What we do

To meet continued demand for

hydrocarbons, we aim to maximise

field recovery from our producing assets

by focusing on production efficiency

and optimisation.

Our responsible approach

Our focus is on producing as responsibly as

possible at all times, through the execution

of portfolio-wide decarbonisation

initiatives and the use of pioneering

technology to reduce emission intensity.

Business Combination benefits

Created the second largest independent

operator by 2024 production,

increasing portfolio scale

and diversification.

Development

What we do

With a strong portfolio of brownfield and

greenfield development assets, our focus

is on high-grading investment across our

portfolio to maximise shareholder value.

Our responsible approach

Through investing in low emission

development projects we aim to

fundamentally transition our portfolio

to one of the lowest carbon portfolios in

the UK.

Business Combination benefits

Utilising Eni’s deep project execution

capabilities, we will optimise project

development concepts to maximise

value potential, including a review of the

Cambo development.

Read more on page 38

Operations review

We are dedicated to delivering sustainable

and responsible operations across all our

operated and non-operated assets.

* The Group has access to Eni’s high-performance computing system. The supercomputing system, which is a computing cluster, i.e. a set of computers working together to multiply overall performance

is among the most powerful in the world. Ranked fifth globally and first in Europe in the Top 500 list, the system is designed with state-of-the-art energy efficiency standards.

31ANNUAL REPORT AND ACCOUNTS 2024 31ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

$500 million

Total dividends declared for 2024

$2.25 billion

Refinancing of RBL and Bond

2029

Maturity profile

8.125%

Bond coupon

Outcomes

• Material shareholder distributions in line with

targeted policy of 30% post-tax CFFO, with

dividends declared of $500 million for FY

2024, meeting our 2024 target

• Business Combination immediately

unlocked financing benefits with $2.25bn

refinancing completed providing material

financial firepower

• Improved credit rating supporting lower cost

of borrowing and providing pathway to

Investment Grade status

Outcomes

• Refreshed executive Leadership Team

appointed, reflecting the ambition, experience

and operational rigour required to deliver the

next phase of transformational growth

• Meaningful and transparent engagement

with workforce during Business Combination

completion and transition activities

• Improved engagement score and survey

participation with strong safety culture visible

through score

Outcomes

• Delivering oil and gas essential for energy

security and affordability while cutting

associated emissions

• Significant capital investment across portfolio,

including $198 million of net capital spend on

Rosebank development project in 2024

• Aligned JV partnerships with a focus on

maximising value from our assets in a safe and

responsible manner

Outcomes

• Strategic partnerships offer volunteering

opportunities, supporting employee

engagement

• Employee-led community engagement

scheme providing broad financial support to

wide-ranging community projects

• Investment in science, technology, engineering

and mathematics (STEM) initiatives and

technical apprenticeship programmes

23 kgCO

e/boe

Combined CO

e GHG emission intensity (on a

Scope 1 and 2 net equity basis)

~$650 million

Adjusted net capital investment (inlcuding Eni UK

from effective economic date of 1 July 2024)

~$650 million

Adjusted net operating costs (inlcuding Eni UK

from effective economic date of 1 July 2024)

~230 years

Combined experience of new Leadership Team

post Business Combination

~175

Increase in personnel as a result of

Business Combination

92%

2024 Engagement Pulse Survey –

Our employees responded they felt safe at work

73%

Employee participation in Engagement Pulse Survey

Key charitable partnerships

~1,200

Hours of workforce volunteering

> 40

Financial donations to support employee

nominated community project

Summer intern and graduates employed

Shareholders

and lenders

JV partners, suppliers,

and customers

Our people Communities

Delivering value for all stakeholders

32 ITHACA ENERGY

Focused

International

Expansion

Sustain and

Optimise

Production

Consolidation in

Core UKCS

Market

Unlock Material

Organic Growth

Opportunities

Value

creation and

stakeholder

returns

Our strategy

A strategy for our Next Era

As we enter our Next Era of growth,

we do so with a proven strategy and an

additional avenue for value creation,

supporting a pathway to Investment

Grade status.

We enter our Next Era of growth, following a truly

transformational journey. Our proven strategy and our

clear vision for growth have seen the business execute

two transformational phases of growth.

The Group’s first phase of transformational growth,

driven by value-accretive M&A, built a UKCS

independent of sufficient scale, resource and portfolio

longevity to support the Group’s successful listing on the

London Stock Exchange in 2022.

In 2024, following a period of material fiscal uncertainty,

we delivered our next transformational step with our

Business Combination with Eni UK creating a leading

independent with material scale and opportunity in the

UKCS, that combines the agility of an independent with

the capability of a major, as we embark on the Group’s

Next Era of growth.

Our Next Era will draw on our proven strategy and

our enhanced financial strength, with the potential for

further consolidation in our core UKCS market or an

expansion of our M&A strategy internationally.

With significant organic and inorganic growth potential,

the Group’s strategy will be value-led, focusing on

building further scale, stability and strength, supporting

a pathway to Investment Grade Status and our aim of

maximising value for our shareholders.

With significant investment optionality, our strategy is centred on targeted

value-orientated growth with the aim of maximising value for shareholders.

33ANNUAL REPORT AND ACCOUNTS 2024 33ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Spotlight on M&A

Ithaca Energy has a rich history in delivering value-accretive M&A

and successful integration, having completed nine transactions over

the last six years.

Delivering material M&A begins with our ability to

imagine. With a clear vision of what we want to achieve,

and a deep understanding of different value levers across

our core UKCS basin, we identify the opportunities that

we believe can maximise value creation.

Our agility allows us to move quickly, responding to

opportunities and market dislocation to deliver value-

accretive M&A. Moving into the integration phase, our

experience allows us to efficiently integrate new assets

into our portfolio, realising tangible synergies.

Clear vision for value-led

growth – building scale,

stability and strength on

our pathway to Investment

Grade status

We ‘imagine’

Rigorous screening and

understanding of value

creation levers and catalysts,

helps us target the right

opportunities

We ‘identify’

Strong track record of

delivering material M&A.

Our agile response to

market dislocation supports

value-accretive transactions

We ‘implement’

Efficient and experienced

integrator, monetising

value-creation opportunities

and delivering synergies

We ‘integrate’

Sustain and Optimise Production

Objective

Deploy our enhanced operational and technical

capabilities to maximise field performance and recovery

through implementing efficiencies and investing in

sustaining production, supporting our ambition to be the

highest performing operator in the UKCS.

Unlock Material Organic

Growth Opportunities

Objective

Invest in our organic resources, developing projects

with strong economics and lower carbon intensity to

create a robust long-term sustainable portfolio that

offers longevity, scale and material growth.

1. 2.

34 ITHACA ENERGY

Our strategy continued

Progress in 2024

• Peak production of 138kboe/d achieved in Q4 2024; pro forma 2024

average production of 105.5 kboe/d

• Successful delivery of Captain EOR Phase II project, on time and within

budget, with first EOR II response outperforming expectations

• Initiated 13th drilling campaign at Captain, with two-year well programme

• Completed well workover at Erskine, reinstating the fifth production well

• Captain Electrification feed study completed with technically viable

project. Ongoing discussions with UK Government in relation to decoupling

decarbonisation allowance from EPL regime

FY 2025 priorities

• Execution of 13th drilling campaign at Captain

• Infill drilling campaigns at Cygnus, Elgin Franklin, Schiehallion and J-Area

• Identify assets with higher frequencies of downtime, prioritising predictive

activities and maintenance to improve our overall efficiency rates

• Increase partner influence with higher equity positions

FY 2025 priorities

• Following the outcome of the Rosebank Judicial Review, JV partnership to

submit downstream end-user combustion emissions (‘Scope 3’) assessment

• Leveraging Eni’s technical capabilities to technically review Cambo project

and boost project maturation of our greenfield projects

• Application for Cambo licence milestone amendment and extension to 30

September 2027

• Progress Fotla project to FID, subject to regulatory environment

Progress in 2024

• Rosebank project continuing in line with multi-year development timeline

• First production from Talbot field and successful exploration well at Jocelyn

South in the J-Area

• Fotla development concept completed

• Successful award of licence extension from 31 March 2024 to 31 March

2026 for Cambo field

Focused International Expansion

Objective

Disciplined and targeted international expansion,

leveraging the credentials and relationships of our

shareholders, and focusing on investing in regions that

offer the potential for scale, growth and fiscal stability.

35ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Consolidation in Core UKCS Market

Objective

Leverage our proven M&A execution capabilities

and deep integration expertise to pursue further

consolidation, building scale and adding high-quality,

long-life assets, in the Group’s core UKCS market.

3. 4.

FY 2025 priorities

• Complete integration activities relating to the Business Combination and

realise near-term synergies

• Position the Group as lead consolidator in the UKCS, targeting further

value-accretive consolidation in the basin, adding production and resources

FY 2025 priorities

• Continued screening of opportunities and refining of international

investment guiding principles

• Targeted and disciplined approach to international M&A

• Investment Grade status criteria will guide approach

Progress in 2024

• Transformational Business Combination with Eni UK completed in

October 2024, creating the largest resource holder and the second largest

independent producer in the UKCS, and enhancing the Group’s platform for

further UKCS consolidation

• $2.25bn refinancing completed provides material firepower for growth,

including M&A

• Farm out process for Cambo and Folta ongoing, having experienced a pause

during the Energy Profits Levy and regulatory consultations

Progress in 2024

• Business Combination creates credible platform for international M&A as an

additional route for value creation

• Review of international expansion investment criteria completed with clear

guiding principles for international M&A

36 ITHACA ENERGY

Measuring progress

Our KPIs track and measure

both operational and financial

performance and are used to

manage the business, to provide

an objective comparison to our

peer group and as performance

measures for certain Executive

compensation arrangements.

TOTAL PRODUCTION

80,177 boe/d

71,403

70,239

80,177

FY 2024

FY 2023

FY 2022

Objective

We aim to maximise value from our producing

assets through operational efficiency and to

grow production through our organic and

inorganic growth strategy.

FY 2024 performance

Total production was 14% higher than 2023

principally due to the Business Combination

(with an economic effective date of 1 July 2024)

partly offset by lower production in the first half

of 2024.

RESERVES & RESOURCES

657 mmboe

512

544

657

FY 2024

FY 2023

FY 2022

Objective

We aim to have a stable to growing level of

reserves and resources through our strategy to

unlock material organic growth opportunities as

set out on page 34.

FY 2024 performance

Reserves and resources are 21% higher than

2023 mainly as a result of the Business

Combination partly offset by a full year

of production.

SCOPE 1 AND 2 EMISSIONS

448,190 tCO

483,325

435,792

448,190

FY 2024

FY 2023

FY 2022

Objective

Ithaca Energy aims to proactively manage its

environmental impact and adhere to our plan

to achieve Net Zero by 2040.

FY 2024 performance

Scope 1 and scope 2 emissions from operated

assets were 3% higher than 2023 principally due

to the Business Combination (with an economic

effective date of 1 July 2024) partly offset by our

emission reduction projects which are set out in

the ESG section.

GREEN HOUSE GAS (GHG) INTENSITY

23.9 kgCO

e/boe

23.8

25.0

23.9

FY 2024

FY 2023

FY 2022

Objective

The Group strives to proactively manage its

environmental impact and is committed to the

actions required to achieve Net Zero by 2040.

FY 2024 performance

GHG intensity was 4% lower than 2023 primarily

due to higher production delivery from our lower

intensity assets. The Group achieved an exit rate

of below 20 kgCO

e/boe reflecting the full benefit

of the Business Combination to our emissions

intensity profile.

Safety, production and emissions KPIs

TIER 1 AND 2 PROCESS SAFETY EVENTS

FY 2024

FY 2023

FY 2022

Objective

Ithaca Energy strives to maintain the highest

standards of operational integrity to prevent

any releases of hazardous material from

primary containment.

FY 2024 performance

There were no tier 1 or 2 process safety events

during 2024.

SERIOUS INJURY AND FATALITY FREQUENCY

0/m hrs

FY 2024

FY 2023

FY 2022

Objective

We are committed to continually improve our safety

performance and to take all steps necessary to

ensure that there is no harm to our people.

FY 2024 performance

During 2024 we again had zero events resulting

in serious injury or fatality.

Key performance indicators (KPIs)

How we determine our KPIs

The majority of the Group’s KPIs, as presented,

were identified during the IPO process and included in

the IPO prospectus. These KPIs enable the Board and

the Executive Leadership Team (ELT) to monitor the

Group’s performance. The ELT uses these measures to

evaluate operational and financial performance and to

make informed decisions on operational, financial and

strategic matters.

Non-GAAP measures

Adjusted EBITDAX, unit operating expenditure,

available liquidity, leverage ratio, adjusted net

debt and certain other reported metrics are non-

GAAP measures that are not specifically defined

under International Financial Reporting Standards

or other generally accepted accounting principles.

Further details are set out on pages 249 to 252.

37ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

37ANNUAL REPORT AND ACCOUNTS 2024

ADJUSTED EBITDAX

$1,405.0m

1,916.2

1,722.7

1,405.0

FY 2024

FY 2023

FY 2022

Objective

The Group aims to grow adjusted EBITDAX

through increased production, strict cost control

and our progressive hedging strategy.

FY 2024 performance

Adjusted EBITDAX was 18% lower than 2023 due

to reduced production in the first half of 2024

and lower realised gas commodity prices partly

offset by the Business Combination completed on

3 October.

AVAILABLE LIQUIDITY

$1,015.1m

578.8

1,028.2

1,015.1

FY 2024

FY 2023

FY 2022

Objective

Ithaca Energy aims to maintain a minimum

available liquidity of $50 million by securing and

maintaining appropriately structured facilities with

third-party lenders.

FY 2024 performance

Available liquidity was 1% lower than 2023

reflecting the utilisation of the $150 million project

capital expenditure facility partly offset

by the refinancing.

NET CASH FLOW FROM OPERATING ACTIVITIES

$853.3m

1723.3

1290.8

853.3

FY 2024

FY 2023

FY 2022

Objective

We aim to generate predictable and reliable cash

flows to support investment and shareholder

returns whilst maintaining financial stability and

strength throughout the commodity price cycle.

FY 2024 performance

Net cash flow was 34% lower than 2023 due

to the adjusted EBITDAX outturn and higher

EPL payments partly offset by improved

working capital.

UNIT OPERATING EXPENDITURE

$22.4/boe

19.0

20.5

22.4

FY 2024

FY 2023

FY 2022

Objective

The Group aims to optimise unit operating

expenditure by maintaining the highest levels of

operational efficiency whilst not compromising on

health, safety and environmental matters.

FY 2024 performance

Unit operating expenditure was 9% higher than

2023 principally due to significant fixed costs and

the lower production in the first half of 2024.

PRO-FORMA LEVERAGE RATIO – ADJUSTED

NET DEBT/ADJUSTED EBITDAX

0.45x

0.51

0.33

0.45

FY 2024

FY 2023

FY 2022

Objective

The Group aims to achieve a leverage ratio of 1.5

times or lower throughout the commodity price

cycle whilst pursuing prudent capital investment

and M&A opportunities supported by our active

hedging strategy.

FY 2024 performance

The pro-forma leverage ratio was 36% higher than

2023 principally reflecting higher net debt partly

offset by higher pro-forma EBITDAX.

ADJUSTED NET DEBT

$884.9m

971.2

571.8

884.9

FY 2024

FY 2023

FY 2022

Objective

We aim to pay down debt where it makes sense

to do so within our capital allocation framework.

FY 2024 performance

Adjusted net debt was 55% higher than 2023

principally due to the utilisation of the $150 million

project capital expenditure facility, a $150 million

drawdown on the RBL facility and an increase in

Senior Notes of $125 million partly offset by the

repayment of the $100 million bp loan.

Financial performance KPIs

38 ITHACA ENERGY38 ITHACA ENERGY

Operations review

Our operating review

Diverse and high-quality portfolio of operated and

non-operated assets in the UKCS.

OPERATED ASSETS

NON-OPERATED ASSETS

Our UK North Sea portfolio consists of 38 producing

field interests, which predominently lie in the Northern,

Central and Southern North Sea, Moray Firth and West

of Shetland areas of the UKCS.

Net production split

(Operated and non-operated)

Operated

Non-operated

42.6%

OPERATED

42.6%

57.4%

Net production split

(Liquids and gas)

Liquids

Gas

60.5%

LIQUIDS

60.5%

39.5%

CAMBO

ROSEBANK

WEST OF SHETLAND

TORNADO

SCHIEHALLION

CYGNUS

GSA (STELLA, HARRIER,

VORLICH AND ABIGAIL)

& OTHER

PIERCE

GSA J AREA

ERSKINE

ELGIN FRANKLIN

SEAGULL

MONARB

MO N A R B ,

COOK & K2

COOK

MARINER

MARIGOLD

CAPTAIN

GBA & ALBA

BRITANNIA

ENOCHDHU

BRODGAR

FOTLA

ALBA

ALDER

CALLANISH

LEVERETT

39ANNUAL REPORT AND ACCOUNTS 2024 39ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Case study

Rosebank

Standing as the UK’s largest undeveloped discovery, with over

300 mmboe of recoverable reserves, the Rosebank field will deliver

vital energy security to the UK, producing 7% of UK oil production

from first oil to 2030, while supporting Net Zero targets.

The project is progressing in line with its multi-year development

timeline with first production expected in 2026/27, with material activity

completed in 2024, including the completion of the subsea campaign.

The development is expected to lead to £8.5 billion of

total direct investment, £6.6 billion likely to be invested

in UK-based businesses. To date, the JV partnership

has committed over £2.2bn on developing Rosebank,

awarding vital contracts across the supply chain. The

project is expected to support around 2,000 jobs during

the height of the construction phase of the project, and

it will continue to support approximately 525 UK-based

jobs during the lifetime of the field.

The Rosebank development has been optimised to reduce

carbon emissions, in line with the North Sea Transition

Deal, with the FPSO designed to be electrification

ready when arriving at the field. Material work continues

on the redevelopment of the Knarr FPSO, with the

vessel docked for refurbishment and preparation for

electrification readiness. The Rosebank development has

the potential to produce at approximately 3kgCO

/boe –

a seventh of the UK average.

The Judicial Review ruling allows the JV partnership to

continue progressing the Rosebank project while we await

new consents. We will now engage with the Regulators

and DESNZ to achieve revised consents, including

submitting a downstream end-user combustion emissions

(‘Scope 3’) assessment in full compliance with the UK

Government’s new environmental guidance, which is

targeted to be published in spring 2025.

GROSS PHASE 1 FIELD 2P RESERVES (MMBOE)

ITHACA ENERGY WORKING INTEREST: 20%

243

TARGETED FIRST PRODUCTION DATE

2026/7

The Rosebank field will deliver

vital energy security to the

UK. Producing 7% of UK

oil production from first oil

to 2030.”

40 ITHACA ENERGY40 ITHACA ENERGY

Operations review continued

Case study

Captain

Material ongoing activity at the Group’s flagship Captain asset focused

on optimising and sustaining production from the field.

2024 continued to be a year of high activity across the

Captain field with continued investment in asset life

extension projects focused on optimising and sustaining

field production, supporting our medium-term outlook

and maximising value creation from the field.

During the year, the Group safely completed its

turnaround activity with significant scopes executed,

including successfully commissioning a third water

injection booster pump, providing spare operating

capacity in a critical process area. Towards the end of

the year, the asset achieved improved polymer injection

system uptime due to significant efforts in this area by the

operations and maintenance teams onshore and offshore.

Further highlights include significant Diving Support

Vessel work and change out of the bow thruster on the

FPSO, resolution of various subsea communication issues

at Areas B & C, and the installation and hook-up of a new

power and communications cable between Bridge Linked

Platform (BLP) and Area B.

In H1 2024, the asset completed a five yearly

recertification of the WPPA Rig – a significant scope

that involved the refurbishment of circa 200 tonnes of

equipment across five European countries. This was all

completed safely and in line with schedule requirements.

Following this, Captain commenced drilling activities on

WPPA with the 13th drilling campaign. The C50z work

over has been completed and brought online with C73

handed over to operations for flowline hook-up towards

the end of December. Activities remain on track as part

of this programme.

CAPTAIN FLARE GAS RECOVERY PROJECT

EMISSIONS REDUCTION TARGET

14,700

tCO

e per year

CAPTAIN PUMP REPLACEMENT PROJECT

EMISSIONS REDUCTION TARGET

10,000

tCO

e per year

CAPTAIN REINSTATEMENT OF SECOND

EXPORT COMPRESSOR

EMISSIONS REDUCTION TARGET

21,000

tCO

e per year

In Q3, the Group awarded a six-month contract for

a Flotel at WPPA starting in 2025, representing a

significant undertaking that will be key in supporting the

Captain facilities safely through to end of field life. The

flotel supports the maximisation of allowable persons on

board (POB) on the asset, in support of optimisation

and backlog reduction and reflects the scale of ongoing

activity at the field.

Meaningful value-driven decarbonisation

activity:

The Group continued to progress meaningful

decarbonisation activity at the field.

The Group sanctioned a $6.8 million upgrade of the BLP

power water pumps by improved cartridge installation.

Installation of the new cartriges began in 2024, for

completion in 2026. The benefits of improved reliability

and emissions reduction are already being seen. Once

complete in 2026, the full upgrade will reduce emissions

by 10,000 tCO

e per year.

Detailed engineering work continues on the BLP Flare

Gas Recovery Engineering design, seeking to eliminate

non-routine flaring on the BLP. Construction work

will commence during the flotel campaign with system

tie-ins phased into turnaround activity in 2025, with

emissions savings being seen as soon as the system is

online in late 2026.

The second export gas compressor return to service is

progressing well through engineering and procurement.

The compressor mechanical run test has been

successfully completed in Italy during the last

quarter of the year.

Read more on our Net Zero & Energy Transition

approach and performance on pages 59 to 60.

41ANNUAL REPORT AND ACCOUNTS 2024 41ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

CAPTAIN EOR PHASE II

2026

Est. peak production

and polymer response

CAPTAIN EOR PHASE I

>13 mmboe

EOR Phase I reserve

recovery to date

Case study

Captain EOR Phase II case study

In H1 2024, the Group achieved a major milestone of

successfully completing its EOR Phase II project within

budget and on schedule. The project seeks to build on

the success of the platform-based EOR Phase I project

with an expansion to the subsea area of the Captain field.

The pioneering polymer technology, used in EOR,

enhances reservoir sweep efficiency by injecting a water-

soluble polymer into the reservoir to sweep previously

bypassed and stranded oil, directing it towards adjacent

production wells. By accelerating and maximising field

life recovery, polymer technology provides significant

decarbonisation benefits.

With six new polymer injection wells brought online

safely, first polymer injection in the subsea wells was

achieved in May 2024, with the field experiencing

its first EOR Phase II response from the E2 pattern

production Wells B25 & B32. Initial observations

suggest that the response is exceeding expectations

with water cuts reducing by over 10% in four producers

and increasing oil production by over 2.5 kboe/d relative

to the business plan. The remaining five patterns are

expected to respond over the next 18 months.

Captain EOR Phase II project will be a significant

contributor to the Captain field supporting the Group’s

medium-term production outlook, adding over 30

MMSTB incremental oil and, at its peak, delivering

around half of all Captain production.

2024 continued to be a year

of high activity across the

Captain field with continued

investment in asset life

extension projects.”

42 ITHACA ENERGY

Operations review continued

Includes six months production from Eni UK assets from 1 July economic effective date (legal completion on 3 October 2024)

Operated assets

OPERATED ASSETS NON-OPERATED ASSETS

Erskine

Production efficiency from the Erskine field

averaged 49%, significantly impacted by NOJV

infrastruture issues in the year.

Unplanned but essential repair and replacement work on the Lomond

compression and pipework systems impaired production during the first

half of 2024. The Lomond platform, which provides fluid processing

and an export route for Erskine fluids, then went into an extended

shutdown following which reliability performance greatly improved

and resulted in significantly higher levels of production efficiency

post remedy.

A well intervention from a Heavy Duty Jack Up Drilling Unit was

executed from April to August 2024 and successfully reinstated

production from the W1 well which had been shutdown for several

years due to flow assurance issues. This increased the asset’s production

potential and this fifth well now produces from both the Pentland

and Erskine formations, producing strongly following the Lomond

turnaround.

Captain

Production efficiency from the Captain field

averaged 82% in 2024 (inclusive of planned

turnaround activity) reflecting increased turnaround

scope and duration.

Activity levels remained high throughout the year at the Captain

field achieving significant milestones for the asset, most notably

the successful completion of the Captain EOR Phase II project,

on schedule and within budget, and the rig recertification, in support

of the topside drilling campaign that commenced in the second

half of the year.

The 13th drilling campaign will extend over a two-year duration

targeting four new production wells, a pilot well and the workover

of two wells in support of Captain’s life extension.

In parallel, the Captain asset is focused on delivering improved uptime

performance with a flotel secured for a six-month period in support of

optimisation projects and backlog reduction activities.

Read more on:

Sustaining and optimising activity in our case study on page 40.

Meaningful ongoing decarbonisation activity on page 40.

Successful execution of Captain’s EOR Phase II project and the

benefits of pioneering polymer technology in our case study

on page 41.

Cygnus

Production efficiency from the Cygnus field

averaged 87% in 2024 (inclusive of planned

turnaround activity).

The Cygnus field is the single largest producing gas field in the UK,

making the field’s production a key contributor to UK energy security.

The field was acquired by Ithaca Energy as part of the Business

Combination with Eni UK, and reported net production to Ithaca

Energy of 12 kboe/d

during H2 2024, following the effective date

of 1 July 2024. On a pro forma 2024 basis, the field delivered net

production of ~13 kboe/d1.

The Cygnus field saw very strong process and personal safety

performance across 2024, with zero serious injuries or fatalities, no

recordable injuries, zero Tier 1 and Tier 2 process safety events and zero

high potential incidents.

The field performed well in the year, delivering full year production

ahead of the Asset Business Plan, although the second half of 2024

production was lower, mainly due to the availability of Cygnus

compressors. A 15-day turnaround was successfully undertaken in

August during the planned Bacton Terminal outage, sheltering the asset

from further outages. Maintenance undertaken during the turnaround

included 8,000 hour service on both compressors A and B, with

replacement of the A compressor bundle.

Further infill drilling was approved in 2024 and drilling of the 12th and

13th wells commenced in H1 2025.

ERSKINE

WORKING INTEREST

50.00%

CAPTAIN

WORKING INTEREST

85.00%

CYGNUS

WORKING INTEREST

38.75%

43ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

OPERATED ASSETS NON-OPERATED ASSETS

Cook

Production efficiency from the Cook field

averaged 85% in 2024 (inclusive of planned

turnaround activity).

Production was negatively impacted by a critical subsea Corrosion

Inhibition line being blocked in April and May; an extended TAR in

August; and gas compression constraints in September and October.

Strong performance for the rest of the year resulted in production

efficiency averaging 85%. The field is supported by one water

injection well which provides long-term pressure support for the single

production well, with injection targets met in the year.

Alba

Production efficiency from the Alba field

averaged 67% in 2024 (inclusive of planned

turnaround activity).

Production in the year fell below expectations, reflecting a challenging

year for the asset, mainly due to two independent events. The first of

which was the decision in February 2024 to cancel well B06, as part

of the Group’s infill well programme, in co-operation with our joint

venture partners.

Production in the first quarter of the year continued to be impacted

by the lack of water injection pressure caused by the John Brown

turbine remaining offline until March 2024. During 2023, the John

Brown Turbine required a major repair due to a failed turbine blade.

Water injection was reinstated to the field once the John Brown

Turbine returned to service, helping to increase reservoir pressure

and therefore, increasing production. A scale-squeeze operation was

undertaken on six wells to protect the base production and bring A69

back online.

A successful 10-day compliance outage was undertaken in September

ahead of the longer turnaround scheduled for 2025. The Alba North

Platform drilling rig commenced its five-yearly maintenance ahead of

starting well coiled tubing and plug and abandonment scopes as part

of the decommissioning programme of work. As Alba enters ultra-late

life operations, the Group is maturing its integrated ultra-late life and

decommissioning plan for the asset and has issued a decomissioning

programme and comparative assessment for public consultation.

Greater Stella Area

The Greater Stella Area (GSA), hosted by the

FPF-1 floating production unit, averaged 75%

in 2024 (inclusive of planned turnaround activity).

The Group recorded a strong year of production at GSA, delivering

~700 boe/d higher than business plan, despite facing challenges with

the plant and Vorlich wells, that lowered production efficiency in the

year (2023: 91%).

During 2024, Abigail and Vorlich performed better than expected

supporting a good year at the GSA hub. Following a planned 25-day

turnaround in June, the asset suffered a 21-day unplanned outage in

August as a result of both gas compressors being offline. Vorlich wells

were shut-in during May and October due to liquid loading, however on

both occasions production restarted after an intervention.

Several projects were successfully completed through 2024, including

Stella riser strengthening, mooring tensioning upgrade and mooring line

inspection. The gas processing system was optimised to use only a single

compressor to deliver gas to the mainland. This was a material reduction

of around 34,000 tCO

e per year from Janaury 2024.

Following the decision in 2023 not to proceed with an infill drilling

programme previously planned for Harrier, as a direct result of the

Energy Profits Levy, the GSA field has entered its ultra-late life phase

and planning for decommissioning has commenced.

COOK

WORKING INTEREST

61.35%

ALBA

WORKING INTEREST

36.67%

STELLA, HARRIER, ABIGAIL

WORKING INTEREST

100%

VORLICH

WORKING INTEREST

34.00%

44 ITHACA ENERGY

Operations review continued

OPERATED ASSETS NON-OPERATED ASSETS

Elgin Franklin

Operated by TotalEnergies, the Group holds a

27.95% non-operated working interest.

Ithaca Energy increased its stake by 21.9% in the high-quality, long-life

Elgin Franklin fields as part of the Business Combination with Eni UK,

having previously built a stake of 6.1% through multiple acquisitions.

Elgin Franklin delivered strong production efficiency in 2024, despite

a well failure at the start of the year, resulting in net production from

the economic effective date of 1 July 2024 of 12.5 kboe/d

. Production

in the first half of the year averaged 4.9kboe/d (prior to the Business

Combination) and 20.0 kboe/d in the second half of the year,

reflecting Ithaca Energy’s increased stake from the economic effective

date of 1 July 2024

. On a pro forma full year 2024 basis, the field

delivered net production of ~21 kboe/d

, making the asset a significant

contributor to Group production.

The field’s major decarbonisation flare gas recovery project

(44 ktCO

e/yr) was sanctioned in 2024, and engineering continues

to be ready for construction during 2025.

J Area

Operated by Harbour Energy, the area comprises

of assets: Jade (32.5%), Judy and Joanne (33.0%),

Jasmine (33.0%) and Talbot (33.0%).

Ithaca Energy increased its participation and interests in the J Area as

part of the Business Combination with Eni UK. Ithaca Energy added

interests in the Judy, Joanne, Jasmine and Talbot fields and increased

its interest in the Jade field by 7% to 32.5%.

Net production of kboe/d from the economic effective date of 1 July

2024 of 7.9 kboe/d

. Production in the first half of the year averaged

2.5kboe/d (prior to the Business Combination) and 13.3 kboe/d

in the

second half of the year reflecting Ithaca Energy’s increased stake and

field interests in the area from the effective date of 1 July 2024 and

the production benefit from the start-up of the Talbot development in

November with wells performing as per forecast. On a pro forma full

year 2024 basis, the Area delivered net production of ~12 kboe/d

The Jocelyn South discovery made in December has successfully

been tied into facilities with first production achieved in March 2025,

offering immediate production and a short-cyle return.

Hydraulic fracturing conducted on the K3 development well in

2024 is an example of the current strategy to focus upon improving

hydrocarbon recovery levels from existing producing reservoirs.

On Jade, an intervention restored J13 production which had stopped

due to scale deposition in the well.

Seagull

Operated by bp, Ithaca Energy holds a non-operated

working interest of 35%.

The Group’s 35% stake in the Seagull field was added to our enlarged

portfolio as part of the Group’s Business Combination.

Seagull was developed by Eni Energy UK as a subsea tieback to the

bp-operated central processing facility of the Eastern Trough Area

Project (ETAP) in the central North Sea. With first production

achieved in November 2023, Seagull was the first tieback to the ETAP

hub in 20 years.

2024 was Seagull’s first full year of operations, with 9.2 kboe/d

net production to Ithaca, from the effective date of 1 July 2024.

Production delivery was impacted at the field by unplanned well

outages due to challenges with subsea infrastructure and host platform

uptime. 2024 also saw the start-up of the third development well, J3

which came onstream in September.

Drilling of the fourth development well, J4 continues with first

production expected in H2 2025.

ELGIN FRANKLIN

WORKING INTEREST

27.95%

SEAGULL

WORKING INTEREST

35.00%

J AREA

WORKING INTEREST

32.50% - 33.0%

The Group’s enlarged non-operated asset base consisting of interests in 28 producing fields, representing 57% of pro forma 2024 production.

Non-operated assets

1 Includes six months production from Eni UK assets from 1 July economic effective date (legal completion on 3rd October 2024)

45ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

OPERATED ASSETS NON-OPERATED ASSETS

Greater Britannia Area

Comprising of assets: Britannia (32.38%), Alder

(operated 73.68%), Callanish (16.5%), Brodgar

(6.25%) and Enochdhu (50%).

Production from the Greater Britannia area was reliable in 2024

with net production to Ithaca Energy of 8.0 kboe/d.

Further development of the area progressed with the sixth Callanish

well completed and performing at or above planned levels at year end.

The fifth Brodgar well was approved with drilling progressing during the

first half of 2025, with production scheduled for the summer of 2025.

These wells are a great example of our strategy to sustain and optimise

production, where we seek to invest in brownfield opportunities close to

existing infrastructure with attractive returns.

Montrose Arbroath

Ithaca Energy has a 41.03% equity stake

in the Montrose Arbroath (MonArb) area.

Production from the MonArb area delivered at expectations with net

production to Ithaca Energy of 5.7 kboe/d.

Evaluation of development options in the MonArb area continues with

engineering progressing on the Shaw and Montrose infill projects.

Schiehallion

Ithaca Energy has a 11.75% equity stake

in the Schiehallion field.

Production from the Schiehallion field delivered net production to

Ithaca Energy of 4.8 kboe/d.

Both production and drilling performance disappointed in 2024 due

to the impact of weather related downtime and outages caused by

the Ocean Great White rig being off station, which also impacted

the timing of production wells later in 2024. Operational issues on

the Glen Lyon FPSO during Q2 restricted production capacity for

the majority of the remaining year, with the FPSO returned to full

production capacity in Q4.

Performance from the FPSO facilities and Ocean Great White drilling

unit were improved in the final month of the year. Drilling on the

field will continue in 2025, supporting the completion of the drilling

programme.

GREATER BRITANNIA AREA

WORKING INTEREST

6.25%-73.68%

SCHIEHALLION

WORKING INTEREST

11.754%

MONTROSE ARBROATH

WORKING INTEREST

41.03%

Other non-operated assets

Ithaca Energy owns interests of less than 10% in the

Mariner, Pierce and Columba assets.

• The Mariner field delivered strong reliability in the year with a record ten

rig activities completed in the year from the platform.

• Production from the Pierce field was impacted by an extended period of

the vessel being offstream following mooring issues. These issues have now

been resolved.

• The Columba asset operator has commenced decommissioning activities

in parallel with delivering ultra-late life production.

46 ITHACA ENERGY

Senior Independent Director’s Q&A

Q&A with Zvika Zivlin

Senior Independent Director (SID)

I believe our Board

members complement

each other well, creating

a well-rounded and

balanced Board that

benefits from a greater

diversity of thought.”

ZVIKA, YOU JOINED THE BOARD AS SENIOR

INDEPENDENT DIRECTOR IN MAY, CAN YOU

SHARE YOUR INITIAL REFLECTIONS ON THE

GROUP?

Since joining the Board in May 2024, I have been thoroughly

impressed by the Group’s Board and Leadership Team and the

progress the Group has made against its strategic objectives for

the year, despite a challenging fiscal and regulatory backdrop.

The Business Combination with Eni UK marks a transformational

step in the Group’s growth journey. With integration activities

already well progressed, the Board is confident that the Group

can efficiently realise the full potential of its combination,

building a stronger business to support our future growth

ambitions.

Throughout the year, I have dedicated considerable time in

engaging with leaders from across the Group, gaining a deep

understanding of our opportunities, challenges and the teams

that will help us navigate them. These discussions have clearly

demonstrated a strong desire and commitment to delivering safe

and responsible operations and achieving operational excellence,

as we strive to be the highest performing UKCS operator.

As an industry we continue to face regulatory headwinds, with

increased pressure from climate groups. In contrast, the UK’s

energy security, reliability and affordability stays very much

in the spotlight. In this context, the Board remains confident

of ‘Our Purpose’ and ‘Our Vision’ of serving today’s needs for

domestic energy through operating sustainably, creating value

for our stakeholders.

With a clear purpose and growth strategy, significant optionality

and the long-term support of committed shareholders, I firmly

believe our enhanced platform for growth will continue to

support material value creation for all stakeholders.

47ANNUAL REPORT AND ACCOUNTS 2024 47ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

HOW DID THE BUSINESS COMBINATION WITH

ENI UK FIT WITH THE GROUP’S STRATEGIC

OBJECTIVES?

Ithaca Energy has long been recognised for being a highly

acquisitive company. The Group’s growth strategy has focused

on creating a business of scale and optionality through strategic,

value-accretive M&A over the course of the last six years.

The ambition to deliver a significant Business Combination, that

would position the Group as one of the largest operators in the

basin, has been in the making since the Group’s IPO in 2022.

The Board has exercised M&A discipline, patiently waiting for a

truly compelling opportunity. We believe we have achieved this

by executing a transaction that establishes Ithaca Energy as the

largest UKCS operator by resources creating undeniably strong

foundations for further value-enhancing growth.

Following the Business Combination, the Group has also

completed a significant refinancing on attractive terms,

showcasing the enhanced strength of the enlarged business. This

refinancing equips the Group with the financial strength and

flexibility needed to pursue our future growth plans. See page 10.

AS A RESULT OF THE BUSINESS COMBINATION

THE GROUP NOW HAS TWO MAJOR

SHAREHOLDERS, WHAT GOVERNANCE

CHANGES HAVE BEEN REQUIRED?

Following the issuance of new shares to Eni UK as part of the

Business Combination and the subsequent completion of the

transaction, Delek and Eni now hold 52.2% and 37.2% of the

Group’s issued share capital, respectively. This means both Delek

and Eni are deemed to be controlling shareholders under the

purposes of the Listing Rules.

The Group entered into a Relationship Agreement with Delek

at the time of the Company’s listing in November 2022, with

the principal purpose of ensuring that Ithaca Energy is capable

of carrying out its business independently of its controlling

shareholder. Over the last two years, our controls and processes

regarding the flow of information to Delek have become well

understood and mature in practice. Following our Business

Combination, the Group has also entered into a Relationship

Agreement with Eni, operating under similar principles to the

Delek Relationship Agreement. See pages 163 to 164.

The Board’s primary focus is on maintaining a governance

framework that safeguards the interests of all shareholders.

As Senior Independent Director, I am confident that these

agreements have put in place comprehensive processes that

facilitate sound decision-making, ensuring we always act in the

best interests of all our shareholders.

HOW DO YOU FEEL THE BOARD HAS

PERFORMED IN 2024?

Our new Board is in its relative infancy, with several new

appointments in the year, including my own. During 2024, we

welcomed a new Executive Chairman, Chief Executive Officer

and three additional Non-Executive Directors, resulting in a

larger Board enriched by a broadening of experiences. Given the

changes in Board composition, the Board has decided to perform

an internal Board evaluation this year, followed by an externally

facilitated review of the Board’s performance in 2025.

See page 124.

My initial impressions of our new Board are very positive.

The joining Board members are all highly experienced in their

respective fields, bring significant public market experience and

have contributed valuable insights and increased rigour to our

discussions. Our Independent Non-Executive Directors continue

to perform well, offering their deep knowledge and expertise

to the Board and Committees. I believe our Board members

complement each other well, creating a well-rounded and

balanced Board that benefits from greater diversity of thought.

As the new Executive Chairman, Yaniv has excelled in facilitating

our Board discussions, ensuring all Board members’ views are

heard and encouraging robust debate. His approach enables

the Board to arrive at balanced and well-considered decisions

that benefit all stakeholders. This same approach applies to the

committees I participate in. All committees are well-managed,

utilise top advisors, and ensure members’ views are heard and

debated. Consequently, I believe the recommendations to the

Board are balanced and well-considered. See our s.172 statement

on pages 48 to 55 and principal decisions of the Board on pages

50 to 52.

ARE THERE ANY GOVERNANCE AREAS THAT

YOU WISH TO BUILD ON IN THE COMING YEAR?

The Board remains committed to upholding the highest standards

of corporate governance, ensuring a rigorous governance

framework is in place.

Throughout the year, we have made significant progress in

addressing the key areas of focus identified during the 2023 Board

Evaluation process. These improvements include the introduction

of a refreshed Code of Conduct, and an increased frequency of

Board Meetings along with regular updates on progress against our

strategy. The Board acknowledges that further efforts are needed

to develop succession planning for the Executive Leadership Team

and improve workforce engagement mechanisms following the

Business Combination.

We will continue to identify and address governance areas with

potential for further improvement as part of the informal 2024

Board Evaluation, incorporating feedback from both new and

existing Board members.

AND YOUR THOUGHTS FOR 2025?

For just over a year, we have observed a wave of consolidation

in the oil and gas sector, with UK consolidation now starting

to gain pace. Our Business Combination with Eni UK, paved

the way for others, with the announcement of the merger of

Shell and Equinor’s UK offshore oil and gas assets announced in

December.

As we enter 2025, I anticipate a continuation of this trend,

particularly in the UK, with North Sea participants and private

equity owners looking to rationalise portfolios or exit the basin.

Our Business Combination positions us perfectly to be the lead

consolidator in the North Sea, leveraging our deep operational

and technical capabilities, M&A expertise and enhanced financial

strength to deliver value accretive M&A and build material scale.

Our ambitions for the Group extend beyond the UK, as we strive

towards building a global business of scale and diversification,

aspiring to achieve Investment Grade status. Rest assured, we

will embark on this new chapter with continued M&A discipline,

maintaining a strong focus on value creation for our shareholders.

48 ITHACA ENERGY

Our stakeholders

At Ithaca Energy, we genuinely

care about creating value for all

of our stakeholders.

We regularly map our stakeholders to ensure that the

groups we have identified as key stakeholders remain

appropriate. There have been no changes to the Group’s

business or operations that have merited a change to

our key stakeholders within the year. We will continue

to keep our stakeholder mapping process under review,

adapting our key stakeholders as appropriate.

Section 172 (1) statement

The Board recognises the importance of engaging and

taking into account the views of all stakeholder Groups,

in accordance with our purpose to create value for

all stakeholders in a safe and responsible manner. To

shape our long-term strategy and maximise value for

our stakeholders, we must understand what matters to

them.

Through regular engagement, we gain insight into

the different perspectives of our diverse stakeholders,

ensuring our vision and strategy is understood.

Considering their feedback on our strategy, business

model and performance builds strong, constructive

relationships and enables robust decision-making at

Board-level.

The Directors are required by law to act in a way that

promotes the success of the Group for the benefit of its

shareholders. In accordance with the requirements of

Section 172 (1) of the Companies Act 2006 (s.172), the

Directors consider, that during the financial year ended

31 December 2024, they have acted in a way that they

consider, in good faith, would most likely promote the

success of the Company for the benefit of its members

as a whole, and in doing so, have had regard to the likely

consequences of any decision in the longer term and the

broader interests of other stakeholders.

In order to support the statement above, further

information can be found on our Stakeholder

Engagement on pages 52 to 55, principal Board

decisions on pages 50-51, and key Board activities on

pages 121-122.

How the Board has had regard to s.172 Duties

The table (right) provides where additional information

can be found on how the Directors have had regard for

the matters set out in s.172.

Engaging with our stakeholders

The likely consequences of any decision in the

long-term.

Our business model

Our strategy

Governance framework

Principal risks

Key decisions of the Board

30-31

32-35

117

103

50-51

The interests of our employees. Our people

Inegrating our people case study

Diversity, equity and inclusion

Whistleblowing policy

Purpose, values and culture

52, 84

2,18,116

The need to foster business relationships with our

suppliers, customers and others.

Our stakeholders

Principal risks

Key Board activities

106

121

The impact of our operations on the community

and environment.

Our stakeholders

Environment, Social and Governance

TCFD and CFD Disclosures

HSE Committee report

134

Maintaining a reputation for high standards of

business conduct.

Code of Conduct

Whistleblowing policy

Modern Slavery

Purpose, values and culture

116

Acting fairly between our shareholders. Shareholder engagement

Annual General Meeting

162

s.172 Duties Read more Page

At Ithaca Energy, we aim

to actively engage with all

stakeholders, recognising

and considering the views

of all stakeholders.”

49ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Ithaca Energy non-financial and sustainability information statement

The following information is prepared in accordance with Section 414CA and 414CB(1)

of the Companies Act 2006 and the information is incorporated by cross-reference:

a Environmental matters • ESG Policy (online)

• TCFD and CFD (governance and risk management)

• Environmental, Social and Governance – see pages 56 to 91

• Net Zero and Energy Transition – pages 59 to 62

• Water, spills and waste – page 63

• TCFD and CFD disclosures – pages 64 to 79

b Employees • Code of Conduct

• Diversity, Equity and Inclusion Policy

• Board Diversity, Equity and Inclusion Policy

• s.172 Statement – page 48 to 55

• Environmental, Social and Governance – pages 56 to 91

• Corporate Governance Report –pages 110 to 160

• Nomination and Governance Report – pages 130 to 133

c Social matters • ESG Policy (online) • s.172 Statement – pages 48 to 55

• Social – pages 80 to 87

d Respect for human rights • Modern Slavery Statement (online)

• Modern Slavery and Human Trafficking Policy

• Code of Conduct

• Purpose, mission and values – page 2

• Our people – page 84

e Anti-corruption and anti-bribery • Anti-Bribery and Corruption Policy (online)

• Code of Conduct

• Whistleblowing Policy

• Governance – pages 88 to 91

• Code of Conduct case study – page 89

• Whistblowing Policy – pages 91 and 129

Description of principal risks relating to matters (a-e above) • Risk management – pages 84 and 85

• Principal risks – pages 86 to 90

• TCFD disclosures – pages 52 to 68

Requirement Information related to policies and due diligence processesOur policies and standards

Our business model

can be found on

pages 30 to 31

The details of our

non-financial KPIs

can be found on

page 36

50 ITHACA ENERGY50 ITHACA ENERGY

Our stakeholders continued

Key decisions

in 2024

Business Combination

On 24 April 2024, the Group announced its

proposed Business Combination with substantially

all of Eni’s UK Upstream Oil and Gas Assets,

and the successful completion of this agreement

was announced on 3 October 2024.

Outcome

The transformational Business Combination with Eni UK’s highly

cash-generative UKCS portfolio has created a dynamic growth player

with the largest resource base in the UK North Sea and the organic

growth potential to become the largest producer in the UKCS by early

2030s. With a portfolio of scale, balance and significant optionality and

increased financial strength, the combined business creates a strategic

platform to unlock both organic and inorganic growth through the

execution of the combined Group’s strategy.

With Eni and Delek as significant, long-term and supportive

shareholders, the enlarged group now benefits from increased financial

strength as well as access to Eni’s world-class technical capabilities and

operational support. The Combination has created a solid platform which

can underpin material shareholder distributions, with $500 million of

dividends targeted for 2025, as well as delivering future organic and

inorganic growth.

s.172 considerations

The Board considered the impact of the Business Combination on all of

its stakeholders and in particular:

• Investors: The creation of a UKCS powerhouse, combining the agility

of an independent with the capability of a major would deliver material

cash flow and optionality and unlock potential for growth providing

long-term value creation for the benefit of the Group’s investors,

including material distributions.

• Lenders: The Business Combination added unlevered assets to the

Group’s portfolio and with increased scale and diversification, resulted

in credit rating improvements.

• Employees: The Business Combination provides access to a new, wider

and diverse talent pool that allows for the sharing of best practice

policies and procedures. The Board condidered the impact of future

restructuring plans as part of the optimisation of the organisation.

• Environment: The Business Combination lowered the Group’s

emissions intensity per boe.

• Policy makers and regulators: A larger company gives a greater voice

when discussing issues with these bodies.

2024 Special Dividend

On 21 November 2024, the Company declared

a Special Dividend for 2024 of $200 million,

following its interim dividend of $100 million

declared in August 2024.

Outcome

With enhanced cash flow generation following the Business Combination

with Eni UK, the Group has the potential to offer a significant annual

dividends to its shareholders. On announcement of the Business

Combination, the Group shared its updated distribution policy of 30%

post-tax CFFO in 2024 and 2025, with ambitions to distribute up to

$500 million to shareholders in these years.

Any decision to declare and pay a dividend will be made at the discretion

of the Directors and subject to restrictions in the Company’s operational

performance, commodity prices as well as the combined Group’s

borrowing arrangements and any required refinancing, the availability

of distributable profits and other factors that the Directors deem

significant from time to time.

Having successfully completed a refinancing in October 2024 and

considering all other relevant factors, the Directors were pleased to

declare a special dividend of $200 million in November 2024, which

was paid on 20 December 2024 to shareholders on the share register on

29 November 2024.

The Directors are committed to targeting a minimum annual dividend of

30% post-tax CFFO for 2025 and have an ambition for special dividends

to increase total shareholder distributions up to $500 million in the year.

s.172 considerations

The Board considered all of its stakeholders in the decision to pay a

Special Dividend and in particular:

• Investors: Investors view dividend payments as an important element

of their investment in the Group and the payment of regular dividends

is an expectation. The payment of this Special Dividend signalled

that the Group’s financials were robust and supported both material

distributions to shareholders as well as for reinvestment for growth.

• Lenders: The Group’s capital allocation policy was considered as part

of the dividend announcement, including obligations to lenders.

• Employees: Those employees participating in the Share Incentive

Plan as well as other Company share schemes benefit from dividends

declared.

We cover four of the key

strategic issues considered and

decisions made by the Board

during 2024 together with an

explanation of how the Board

considered the matters in

Section 172(1) (a)–(f) when

taking those decisions.

51ANNUAL REPORT AND ACCOUNTS 2024 51ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Refinancing

On 11 October 2024, the Group announced the

successful pricing of its Senior Notes Offering and

the signing of its Reserve Based Lending Facility.

Outcome

Successful refinancing completed in October enhancing the Group’s

balance sheet strength, including a $750 million Senior Notes Offering at a

rate of 8.125% due 2029 and $1.5 billion amended and restated floating rate

Reserve Based Lending (RBL) facility (including letters of credit facility)

maturing in 2029, with the proceeds used to redeem the Group’s existing

$625 million 9% Senior Notes due 2026, repay amounts drawn under an

existing loan from bp and pay refinancing related fees and expenses.

The timing of the refinancing, shortly after the completion of the Business

Combination, immediately unlocked the financial synergies of the Business

Combination, reflecting the Group’s enhanced financial strength, increased

portfolio scale and diversification and improved credit rating. The refinancing

lengthened the Group’s debt maturity profile, reduced the Group’s cost of

capital and provided incremental liquidity to support future growth.

Strengthening the Board

and Leadership team

In 2024, the Group focused on strengthening the

Board of Directors and Leadership Team, positioning

the Group for its next phase of growth.

Outcome

In May, Zvika Zivlin was appointed as Senior Independent Director,

bringing a wealth of Board experience as well as experience in cross border

transactions across a variety of sectors, including energy and infrastructure.

This was followed by the appointment of Yaniv Friedman as Executive

Chairman in June. Yaniv has significant global executive experience working

in the energy and infrastructure sectors with considerable strategic,

commercial, public company and M&A expertise.

Following the Business Combination with Eni UK, Luciano Vasques,

Francesco Gattei and Guido Brusco were appointed to the Board in

October. Luciano was appointed to the role of Chief Executive Officer

and brings a wealth of energy industry experience with a career spanning

over 30 years covering a range of leadership, technical and operational

roles. Francesco and Guido were appointed as Non-Executive Directors:

Francesco has over 25 years of experience in the oil and gas industry

across various senior roles at Eni S.p.A. Group, while Guido has over

25 years of experience in the energy business for Eni S.p.A Group

across different countries and senior positions.

Tamir Polikar was appointed a Non-Executive Director as nominee of

Delek Group Ltd and brings a deep level of expertise in business, finance

and management.

The Group announced its refreshed Executive Leadership Team post the

Business Combination, bringing together leaders from across the three

organisations to ensure the appropriate leadership composition to deliver

the ambitious growth plans of the combined business was in place.

s.172 considerations

The Board considered all of its stakeholders when appointing additional

Directors and the Executive Leadership Team and in particular:

• Investors: All of the Directors appointed to the Board during 2024 have

considerable experience and will be instrumental in shaping the strategy

of the Group, focusing on long-term organic and inorganic growth and

underpinning material shareholder distributions.

• Employees: The Board considered the impact of employees when

forming its refreshed Leadership Team. The Executive Directors

ensured that organisational changes to the workforce were

communiczated appropriately.

AVAILABLE LIQUIDITY

>$1 billion

s.172 considerations

The Board considered the impact of the refinancing on all of its stakeholders

and in particular:

• Lenders: The Board considered its financing composition and the

Chairman and CFO met with Bond holders, new and existing, to update

them on the Group’s position post Business Combination and future

strategic plans as part of the finance raise providing an opportunity for

Q&A. The Executive Directors considered the composition of its RBL

Syndicate and the terms of the facility.

• Investors: The Board considered the impact on its shareholders

and considered that a refinancing and enhanced balance sheet

would support the Group’s strategy of pursuing organic and

inorganic growth.

52 ITHACA ENERGY

Our stakeholders continued

Focus areas of engagement

• Organisational design

• Vision, values and behaviours

• Diversity, equity and inclusion

• Development and progression

• Reward and recognition

Outcome from engagement

As we navigated the combination of our

businesses, we prioritised addressing any

questions or concerns during the transition

and integration process through open and

regular two-way communication channels

providing a voice to our workforce.

FY 2025 priorities

In 2025, our priority will be on delivering a

seamless integration of our organisations,

bringing together the best working

practices from each company to build

an even stronger business. Integration

and restructuring will be supported by

open and transparent communications

to our workforce.

Focus areas of engagement

• Corporate strategy and progress

• UKCS Fiscal and Regulatory Framework

• Operational and financial performance

• Capital allocation and dividend policy

• Sustainability plans

Outcome from engagement

In an evolving political and fiscal landscape

for the sector, transparent engagement

with our shareholders has been critical in

navigating the uncertainty. The Group’s

Business Combination was aligned with

our strategic objectives to consolidate

and build scale in the UKCS and was well

received by the Group’s shareholders

in light of the changing fiscal backdrop

created by the Energy Profits Levy.

FY 2025 priorities

In 2025, the Group seeks to build upon its

existing relationships with investors through

an Investor Update providing further clarity

on the Group’s strategy, growth aspirations

and dividend ambitions following the

successful completion of its Business

Combination with Eni UK.

Active engagement with our stakeholders is at the heart of our Company values with the overall goal of making a positive difference.

Group 1:

Our people

Why we engage

Our people are central to our success. By nurturing a

culture where they feel valued and listened to, we fulfil

our mission to ‘Triumph. Together’. This year, engaging

with our workforce has been especially important following

the announcement of our Business Combination and the

introduction of a refreshed Leadership Team. Engaging

with employees helps to identify and address their

concerns in an open and transparent manner while building

relationships to support future growth.

How we engage

We recognise that frequent, open and interactive

communication with our workforce is critical, both

onshore and offshore. We achieve this through holding

regular town halls, village halls, informal Q&A sessions

with the Leadership Team, weekly messages from the

CEO, frequent leadership and Board visits offshore and

Board and leadership engagement with the Employee

Consultation Forum. Face-to-face and digital channels

help to support accessibility for our workforce.

Following the announcement of our Business Combination

and reflecting the period of change for our business

operations and colleagues, a dedicated intranet site focused

on delivering useful information about the transaction was

launched. This site provided all staff with the opportunity

to submit questions to the leadership team in relation to

the transaction with all responses published in a central

accessible place. This was supplemented by increased

frequency of our face-to-face communications, including

town halls and ‘LIVE with Leaders’.

Building on the Employee Engagement Survey in 2023,

the Group launched a follow-on pulse survey in the second

half of the year. Both the participation and engagement

score increased, and the survey provided further insight

into continued areas for improvement.

Recognising the importance of building a culture that all

employees can relate to post Business Combination, the

Group launched a review of its vision and values welcoming

feedback from engagement groups and leaders from across

the organisation, with a broad cross section of representation.

Group 2:

Shareholders

Why we engage

With a transformed business post combination with Eni UK

and continued fiscal and regulatory uncertainty, engagement

with our shareholders has been critical to ensure investors

have continued confidence and sufficient clarity in our future

strategy and that we understand their priorities.

By engaging in an open and transparent manner with

our shareholders we aim to build long-term, supportive

relationships with our investors as we continue to pursue

our growth aspirations.

How we engage

We maintain an active investor relations programme, led

by the Group’s Executive Chairman, CEO, CFO and

Head of Investor Relations and External Affairs.

We regularly engage with our shareholders and investors

through one-to-one investor meetings, the quarterly

publication of our financial results, investor webcasts,

investor roadshows and attending industry and investor

conferences.

We actively gather feedback from our investors, both directly

and indirectly, providing valuable insights into their priorities,

ensuring our long-term growth strategy remains aligned.

Following the announcement of our Business

Combination, the Group held a series of meetings with

shareholders to ensure the investment rationale, the

future strategy of the combined business and distribution

policy were well understood. These meetings provided

investors with the opportunity to ask questions directly

relating to the Business Combination and other key

matters affecting the business, including UK fiscal policy.

53ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Focus areas of engagement

• Financial performance

• Risk management

• Compliance with covenant suite

• ESG performance

Outcome from engagement

The Group’s successful refinancing of

its facilities in the year reflected the

benefits of the Business Combination

and the Group’s improved credit ratings

almost immediately post completion. The

refinancing enhanced the Group’s financial

position lengthening the Group’s debt

maturity profile, reducing the Group’s

cost of capital and providing incremental

liquidity to support future growth.

The Group continues to maintain a low

leverage position significantly below its

capital allocation policy leverage ceiling

of 1.5x

FY 2025 priorities

In 2025, we will continue to foster our

relationships with existing lenders, ensuring

they are kept up to date with the Group’s

progress against its strategic objectives

ensuring we have access to the debt

capacity to support our growth ambitions.

Focus areas of engagement

• Safety and environmental performance

• Operational efficiency

• Long-term asset strategy

• Work programmes and budgets

• Emission reduction plans

Outcome from engagement

As our industry has responded to the

challenges faced from fiscal and regulatory

uncertainty, we have collaborated closely

with our JV partners to align on asset

investment decisions while ensuring we

respond to government consultations with

a collective voice. Collaboration across the

industry has been critical to conveying the

damaging impact of a protracted period of

uncertainty to investment, energy security

and decarbonisation.

FY 2025 priorities

Following a number of operational issues

across our non-operated joint venture

portfolio and non-operated infrastructure

in 2024, our focus will be on working

collaboratively with our JV partners to

focus on production efficiency and uptime

across our operated and non-operated

portfolio.

Group 3:

Lenders

Why we engage

Ensuring the Group is well capitalised and maintains the

financial strength and capacity to support the Group’s

long-term growth aspirations is critical to delivering against

our corporate strategy. Building strong relationships with

our lending groups is vital to ensuring access to long-term

debt financing enabling the business to respond to growth

opportunities as they arise.

How we engage

We engage regularly throughout the year with our

syndicate banks and bond holders. Our engagement led

by the Group’s CFO and Head of Corporate Finance, is

not limited to quarterly reporting cycles, recognising the

need to foster strong working relationships to support

our growth plans. We connect via one-to-one meetings,

quarterly scheduled webcasts with bond holders and

attending conferences throughout the year. Feedback

from our bond holders and our syndicate banks throughout

the year ensures that their interests are considered when

making capital allocation decisions that might affect

their interests.

As part of the $750 million Bond refinancing in 2024,

the Group hosted a virtual roadshow providing an update

on operations post the Group’s Business Combination,

a financial overview of the Group including our Capital

Allocation Policy and our strategic plans for the enlarged

business and offering the opportunity to answer questions

from this key stakeholder group.

The Group negotiated a $1.5 billion amended and

restated floating rate RBL facility maturing in 2029 in

October 2024. Redetermination of the Group’s RBL

facility will continue to occur on a bi-annual basis in June

and December. At period end, we maintained a healthy

liquidity position of over $1 billion, with RBL capacity of

$850 million. As at 31 December, the Group’s amended

facility was drawn by $150 million.

Group 4:

Joint venture

partners

Why we engage

With a diverse portfolio of scale and a balanced mix of

operated vs non-operated assets, building and sustaining

strong relationships with our joint venture partners is

essential to our operations. By working together with

our partners, we seek to achieve alignment across key

short-term operational decisions and the broader strategic

direction of our assets. In an evolving fiscal and regulatory

environment, partner alignment and collaboration has

never been so critical.

How we engage

Whether acting as the Operator or as a JV partner, we are

committed to working in a collaborative and transparent

manner to maximise the value of our assets, while putting

safe and responsible operations as our top priority.

We engage on a regular basis with our partners via

scheduled Operating Committee Meetings (OCMs) and

Technical Committee Meetings (TCMs), supplemented

by day-to-day interaction between asset managers. The

timings of OCM and TCM engagements are scheduled

under the terms of the Joint Operating Agreement

(JOA). The JOA provides the parameters for discussions

held during OCMs and TCMs, ensuring an effective

environment for engagement across all subject areas.

The Operating Committee is responsible for agreeing

the overall strategic direction of the asset with key

decisions agreed by vote, governed by the JOA pass mark

requirements. It is the responsibility of the Operating

Committee to agree the associated Work Programme and

Budget in alignment with the overall strategic direction of

the asset.

54 ITHACA ENERGY

Our stakeholders continuedOur stakeholders continued

Focus areas of engagement

• Safety performance

• Project visibility

• Reliability and quality of product

• Payment and contracting terms

Outcome from engagement

In 2024, we worked closely with our

suppliers to review a number of emissions

reduction initiatives and through our

combined focus on safety we completed

the year with no Tier 1 or 2 incidents.

Safety workshops, which many of our

key suppliers participated in, where

we all shared key learnings have been

instrumental in achieving this goal.

FY 2025 priorities

Following completion of the Business

Combination, the Group has a number

of new key suppliers across its asset base

and will seek opportunities to consolidate

its contracts and operations to achieve

efficiencies.

We will continue to work alongside

our supply chain partners to identify

opportunities for optimisation across our

portfolio, including emissions reduction

initiatives as we seek to minimise our

environmental impact.

Focus areas of engagement

• Fiscal policy and future investment

• Environmental Impact Assessment

• Field Development Plans

• Decarbonisation strategy and

performance

• Decommissioning programmes

Outcome from engagement

We have delivered a strong message to

the UK Government that both fiscal and

regulatory uncertainty has stalled and

cancelled investment in the UK basin and

highlighted the negative consequences

of under investment in our basin and the

potential for redeployment of capital out

with the UK as a direct consequence of

further changes to the Energy Profits Levy.

FY 2025 priorities

During the year we aim to be an active

participant in the Government’s review of

the post 2030 successor oil and gas fiscal

regime and continue our engagement

in relation to the assessment of Scope 3

emissions. As part of this further fiscal

review, we aim to advocate for an earlier

introduction of the longer-term fiscal

regime that takes a more progressive

approach to price shocks.

Group 5:

Suppliers

and customers

Why we engage

With a focus on UK energy security, affordability and

decarbonisation, our purpose of delivering domestic

energy in a safe, sustainable and reliable manner to meet

end-user demand continues to be of critical importance.

Our supply chain are critical to our ability to do so

and therefore it is imperative that we maintain strong

relationships across our supply chain to support our

operations.

How we engage

Acknowledging the significance of our key suppliers, the

Group’s contracting strategies emphasise collaboration

and building robust supplier relationships, with a focus on

operational and safety performance. To manage supply

chain risks, the Group has formed and continues to form

and maintain strategic partnerships with key suppliers

when appropriate.

Throughout the year, we maintain regular engagement

with our suppliers through scheduled meetings and

performance reviews with particular focus on our key

strategic partners. This approach allows us to identify

opportunities for improvement and anticipate potential

issues, while consistently reinforcing our health, safety,

and environment (HSE) expectations. Ensuring alignment

on our safety standards is crucial.

We maintain regular dialogue with our customers to

ensure the timely delivery of our product to specific

grades. We deliver our oil and natural gas liquids (NGL)

products via established specialised marketers under

various term offtake and marketing agreements with prices

linked to standard price benchmarks. Our UK terminal

grade products (Forties and Ekofisk) are sold at the UK

oil terminals under minimum annual term deals with

established international buyers. Our natural gas is sold at

various UK terminal entry points under mid to long-term

sales arrangements to established international buyers.

Group 6:

Government

and regulators

Why we engage

The importance of an open dialogue with the UK Government and

opposition parties has never been so critical with operators in the

UKCS facing both fiscal and regulatory changes in the sector. With a

General Election in the year and a change to the elected Government,

the core aim of our engagement has been to highlight the importance

of our sector and continued investment in our domestic assets to

support highly skilled jobs and the attainment of the UK’s energy

security and decarbonisation objectives.

Our ability to operate depends on satisfying licensing and other

regulatory requirements. We continue to maintain strong and

transparent relationships with the regulators to ensure we comply

with regulations, maintain our licence to operate, satisfy consenting

obligations and contribute to the evolving regulatory framework.

How we engage

We constructively engage across our organisation to help shape policies

that will impact our operations in the UK North Sea covering both fiscal

policy and regulatory frameworks.

During the year, the Group has been an active participant in Fiscal

Forums including the consultation process launched post the Labour

party’s election in relation to the Energy Profits Levy. Led by the

Executives and supported by Government Relations and Tax colleagues

the business has attended industry roundtable events, met with key

Treasury and Department of Energy Security and Net Zero (DESNZ)

ministers and their advisors and responded to calls for evidence.

The Group’s fiscal policy response and engagement has been managed

on a standalone basis and as part of an industry-wide response to the

UK Government, fronted primarily by Offshore Energies UK.

The Group complies with all regulatory requirements and actively

engages with the North Sea Transition Authority (NSTA), Offshore

Petroleum, Regulators for Environment and Decommissioning

(OPRED) and the Health & Safety Executive, to ensure we are

compliant with all environmental and safety regulations, in line with our

licence to operate.

During 2024, the Group responded to the consultation launched by

OPRED regarding assessment of Scope 3 emissions following the

Finch ruling and participated in the compilation of an industry-wide

response developed by Offshore Energies UK.

55ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

55ANNUAL REPORT AND ACCOUNTS 2024

Focus areas of engagement

• Energy Security, affordability and

decarbonisation

• Charity and community support

• STEM and apprenticeship initiatives

Outcome from engagement

In 2024, Ithaca Energy was nominated

for the “OEUK Neighbour of the Year”

award and celebrated a member of its

apprenticeship programme winning

“OEUK’s Apprentice of the Year” award,

recognising the Group’s significant

contribution towards its local community.

FY 2025 priorities

With a new cohort of charitable partners

for 2025, we are excited to build new

partnerships supporting a range of child

poverty support, mental health support,

cancer and end-of-life support, and

environmental charities broadening our

support across a number of key social

areas in our community, while providing

continued support to VSA.

Group 7:

Communities

Why we engage

We recognise that we play an important role in supporting

our wider society, not only through providing highly

skilled jobs, vital UK energy security and the delivery of

responsible operations and decarbonisation initiatives

but also in giving back to the local communities in which

we operate. Our commitment to giving back to local

communities is embedded in our Company values and

continues to be a great source of pride for our workforce.

How we engage

Through our Charity Committee, we seek to build

relationships that support community and charity projects

across the North East of Scotland. We regularly engage

with our charitable partners, to understand how we can best

support them and make the most difference, both through

continued financial commitments, fundraising events and

committing our time to support volunteering projects.

As our long-term charity partner we have worked closely

with VSA during the year to support a number of their

ongoing service related projects and fundraising initiatives.

During 2024, our workforce focused their efforts on the

creation of a new sensory garden for Linn Moor School

supporting children and young adults with additional support

needs, a project that VSA had highlighted would make a

tangible difference to their service offering.

In addition, the Charity Committee supported five further

employee-nominated corporate charities providing

support for people living with dementia, disadvantaged

families, children and young people with additional support

needs, cancer care and support centres, and humanitarian

and disaster relief. With social projects sponsored by

employees and an Executive lead in tandem, our community

engagement spans across our organisation. Beyond our

corporate charity partners, we supported a further 40

employee nominated charitable projects during the year.

Ithaca Energy is committed to supporting skilled

jobs in the UK, investing in the development of UK

talent through science, technology, engineering

and mathematics (STEM) initiatives and technical

apprenticeship programmes. The Group’s 2024 intern and

graduate programme employed eight summer interns, two

graduates as part of the Group’s graduate programme and

hired two apprentices for offshore roles.

Details about our work with our charity

partners can be found on pages 86 to 87

56 ITHACA ENERGY56 ITHACA ENERGY

Environmental, Social, and Governance

Doing the right thing,

the right way

Sustainability, the communities in which we operate, and

governance matter deeply to us and are interwoven into

our balanced business strategy. We do the right things in

the right way. We are clear and confident about what ESG

means for us. It regulates our social licence to operate.”

Julie McAteer

General Counsel and Company Secretary

ESG highlights 2024

OPERATIONAL

SCOPE 1 AND 2

GHG EMISSIONS

REDUCTION VS

2018 BASELINE

18%

EMPLOYEE

ENGAGEMENT

SURVEY

PARTICIPATION

73%

INCIDENTS OF

SERIOUS INJURY

AND FATALITIES

ZERO

TIER1 & TIER2

EVENTS

ZERO

Introduction

Ithaca Energy is committed to delivering the highest

level of Environmental, Social and Governance (ESG)

standards throughout our business. We pride ourselves

on doing the right thing, the right way, and achieve

this through our well-integrated and focused emission

reduction plan which is embedded in our business,

ensuring we are always progressing towards our targets.

In 2024, we are proud of our material progress in

meeting our ESG targets, which has meant sustained

growth through the safe and responsible production of

our assets, supporting continued value creation for all

our stakeholders, including employees, shareholders and

our local communities.

We believe in the vast societal benefits of access to

low-cost energy and the need to safeguard the UK’s

domestic energy supply. While the world still needs oil

and gas, as a critical part of the long-term energy mix,

we recognise our responsibility to continue to produce

and develop these resources responsibly, whilst reducing

the environmental impact of our operations.

Our ESG strategy continues to support both the UN

Global Compact and UN Sustainability Goals, ensuring

we safeguard the environment, respect human and

labour rights and act against corruption in all forms.

The role of the Board

The Board of Directors of Ithaca Energy (the Board)

is collectively responsible for the overall leadership,

control and governance of Ithaca Energy, responsible

for providing direction and guidance to help shape the

effective execution of the Group’s strategy. It ensures

that the Company operates in a manner that generates

financial value in a sustainable manner, while protecting

the value of our assets, on behalf of our shareholders.

The role of our Executive Leadership Team

The Executive Leadership Team is comprised of

the most senior leaders within Ithaca Energy, who

hold the ultimate responsibility for driving business

success through building and executing the strategy,

talent management and stakeholder engagement.

These individuals articulate purpose, set a clear and

actionable strategy for achieving that purpose, and

most importantly, motivate and empower everyone in

the organisation to succeed.

This diversified team of senior-level executives provide

various functional expertise, work collaboratively

and shape interaction between teams. The Executive

Leadership Team is the nerve centre and heartbeat

of Ithaca Energy responsible for strategy, execution

and vision while ensuring an inclusive, collaborative

and dynamic workplace with continued learning and

employee engagement.

Reporting and engagement with stakeholders

We set out to genuinely make a positive impact for our

people, shareholders and communities, and proactively

engage with stakeholders to provide full transparency

in a constructive manner. We ensure the views of all

stakeholders are considered during the Board’s decision-

making process.

We regularly map our key stakeholders into groups, and

as of 2024 there have been no changes to the Group’s

business or operations that have merited a change

to our key stakeholders within the year and the key

stakeholders as set out in our Section 172 (1) Statement

(s.172), which remains the same as the prior year. We will

continue to keep our stakeholder mapping process under

review, adapting our key stakeholders as appropriate, our

people, shareholders, lenders, joint ventures, suppliers

and customers, government and regulators, and

communities.

Our s.172 statement, detailing how we actively engage

with all key stakeholders and the outcome of our

stakeholder engagement, is set out on pages 48 to 55.

Simon Taylor

EVP Health, Safety and Environment

1 The business combination was effective from 1st July 2024. For accurate and transparent comparison with our baseline year

emissions, we have included the emissions from assets acquired as part of the combination from the 1st of January 2024.

57ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Sustainable operations

Read more on page

Objectives

• Committed to creating an open, diverse and inclusive organisation where

employees feel engaged and supported

• Clear and credible executive succession planning to ensure all eventualities

are covered and continuity of the business is safeguarded

• Continuing to act with business integrity, high ethical values and

professionalism in all business dealings and relationships

How we performed in the year

We strengthened our leadership with several new appointments across the

Board and ELT and re-launched our Code of Conduct, which serves as a

compass to guide our actions and interactions, ensuring that we conduct our

business responsibly and with respect for all our stakeholders. We had zero

breaches of anti-bribery and corruption.

Ambitions for 2025

• Remain focused on our pledges, respect our differences and be inclusive

in all that we do. DE&I Network to focus on continuing to educate,

advocate, engage and empower our community

• Regular succession planning to continue focused on our next tier of leaders

• Complete annual training for all employees

Long-term goals

• Focused on maintaining high ethical standards, always ensuring our staff

are compliant with anti-bribery and corruption policy

• Continue to monitor and adapt our leadership structure as necessary to

ensure the longevity of our business

Environmental Social Governance

Investing in the future

58 ITHACA ENERGY58 ITHACA ENERGY

Environmental, Social, and Governance continued

Sustainable operations

Our material topics

• Net Zero and energy transition

• Water, spills and waste

Introduction

Whilst the world still needs oil and gas, Ithaca Energy is

committed to producing it responsibly, with the lowest

environmental impact possible. We are committed to

the North Sea Transition Deal (NSTD) and our role

in supporting GHG emissions reduction. We accept

the need for action to address climate change and in

recognition the Group has established a well-defined

emissions reduction action plan meeting or exceeding

NSTD targets. We have an ambitious goal of reaching

the Net Zero carbon emissions target by 2040, on

a Scope 1 and 2 net equity basis. We define our net

equity emissions as the total emissions from all of our

operations, operated and non-operated, calculated

based on our proportional share in each field, project or

operation.

The energy transition is a substantial task facing our

sector. Through value-led investment in emissions

reduction activities we are strategically positioning

ourselves to deliver one of the lowest carbon emissions

portfolios in the UKCS in the long-term. We aim to

achieve this through meaningful action in the short

term, delivering projects to reduce our emissions

associated with current operations, decommissioning

high-intensity assets at the end of their life and

transitioning the portfolio in the medium to long-term

through investment in lower emission intensity assets.

Our own GHG emissions, especially CO

, are strictly

monitored and measured, giving us accurate data as we focus

on reducing our emissions. We recognise our contributions

to the emissions of the UKCS and we are aligned to the

NSTD, a deal backed by the UK Government and Industry

to reach a Net Zero UKCS basin by 2050. The targets

to reduce CO

emissions are the driving force behind

our own Emissions Reduction Action Plans (ERAPs).

In 2024, we made significant progress towards

improving our emissions performance:

• Our operated Scope 1 and 2 emissions have fallen

beyond targets set by the NSTD

• We reduced our gross opertated emissions intensity

from 25 kgCO

e/boe in 2023 to 23.9 kgCO

e/boe

on a Scope 1 and 2 net equity basis

From 2025, we will report our emissions performance

and progression towards targets on a net equity basis,

and we will report our percentage reduction from our

2018 baseline.

We have made progress towards our emissions reduction

activites. We completed efficiency modifications on our

late life assets, Alba North and FPF-1, saving upwards

of 34,000 tCO

e per year. On Captain, we reached

major milestones in our key emissions reduction projects

by completing the detailed design phase of the flare

gas recovery project and sanctioning major upgrades to

the water injection pumps. This sets us up, as planned,

to execute these projects in 2025, and realise 25,000

tCO

e/year savings from 2026 onward. In addition,

the Group concluded its Captain Electrification FEED

Study during the year.

In 2024, we stepped up our efforts on methane, and

became signatories of the United Nations Environment

Programme Oil and Gas Methane Partnership 2.0

memorandum of understanding, and developed

our methane action plan to align with the OGMP

framework, setting out a staged methane mitigation

approach, focusing on each source and their materiality.

We have set 2023 as our benchmark year for reporting,

and have a credible plan to reach Gold Standard status

by 2028.

This year we have matured our emissions reporting by

describing our Scope 3 emissions in line with four of

the categories set out by the GHG Protocol. We have

worked with suppliers and partners to gather emissions-

related data, whilst our teams have been active in

seeking to influence those in our supply chain. We know

that often, Scope 3 emissions represent a large part of a

company’s carbon footprint, so we need to understand,

quantify, measure, and reduce them wherever possible.

Finally, we recognise that climate change and the energy

transition cannot be tackled alone and we need to

work together to be part of the solution. We regularly

engage with industry and regulatory forums, such as

the Net Zero Technology Centre, Offshore Energies

UK, Technology Leadership Board and the NSTA

ESG Taskforce to collaborate on doing things better

and sharing our knowledge, in particular on emissions

reduction and working with our supply chain.

OUR TARGETS/ OBJECTIVES

Reduce our net equity emissions by 50% by 2030, in line with the North Sea

Transition Deal targets

Reach OGMP 2.0 Gold Standard status by 2028

Execute significant emission reduction projects and continually assess

the suitability of our Emissions Reduction Action Plans

Achieve Zero Routine Flaring (ZRF) across our operated assets by 2030

Centralise environmental data collection post Business Combination

Achieved In progress New

LINKED SDGs

Environmental

59ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Net Zero and energy transition

Our approach

The energy transition presents a significant challenge

for the industry, and we are strategically positioning

ourselves to maintain one of the lowest carbon emissions

portfolios in the UK North Sea. We plan to achieve this

through immediate, impactful actions, including projects

aimed at reducing emissions from current operations

and ensuring the efficient decommissioning of high-

intensity assets at the end of their lifecycle. We are also

transitioning our portfolio by investing in lower-emission

intensity assets, such as Cygnus and Rosebank, while

seeking to advance projects such as Cambo.

Our Net Zero strategy is at the heart of our approach

to GHG emissions reduction. It is a clear and simple

approach that takes us to Net Zero by 2040. Our

strategy is comprised of three parts:

• The first part of our strategy is to reduce our

emissions across operated and non-operated assets

as much as reasonably practicable. Our focus today,

and in the near term, is to deliver emissions reduction

projects as set out in our asset ERAPs. On our

operated assets, we continuously identify and assess

emissions reduction opportunities and progress

the projects through our maturation process. On

non-operated assets, we support and collaborate

with the other joint venture participants to deliver

the opportunities in the assets’ ERAPs, contributing

to the reduction of the Group’s net equity emissions

footprint;

• The second part of our strategy is to transition our

portfolio to lower carbon intensity assets. This is

through a variety of ways, including acquiring low

intensity assets, the development of new low intensity

fields, and the efficient decommissioning of high

intensity assets; and

• Whilst the first and second parts of our strategy takes

us from today towards 2040, the final part of our

strategy looks at 2040 and beyond, where the longer-

term approach will be to achieve and sustain Net Zero

through offsetting our hard to abate residual Scope 1 and

2 emissions. By 2040, we believe there will be offset

schemes, leveraging global carbon prices that will provide

trusted ways to fund the best carbon-reduction projects.

On our journey to Net Zero, we are committed to

achieving our emissions reduction targets, which are

aligned to the NSTD, and we are committed to working

with the NSTA on decarbonisation. These are absolute

emissions (Scope 1 and 2) reductions vs. the baseline

year of 2018, delivering 10% reduction by 2025, 25%

by 2027, and 50% by 2030. These targets are on a

net equity, portfolio basis. Further information on our

progress towards these targets is detailed on page 77.

Since 2020, we have had a reduction target for only

operated assets, of a 25% reduction versus our 2019

baseline by 2025. This was an industry leading ambition,

set before the NSTD was signed, to drive emissions

reduction and a GHG conscience in the business. It was

very successful, leading to the formation of a dedicated

Energy Transition team, adoption of CO

metrics and

KPIs throughout the business, brought an inclusion of

emissions impacts into every day decisions and saw many

emission reduction projects being initiated. However,

our business and portfolio has changed significantly

since 2020, with the most recent being the Business

Combination with Eni UK in 2024. As a result of these

portfolio changes the target no longer has the same

impact and benefit as it once did and is not representative

of where we are today.

The Group now operates the Cygnus field, and the

portfolio has considerable non-operated production,

therefore, the attention must be on net equity emissions

reduction, aligned with the UK Government through the

NSTD. As we enter 2025, we have retired our original

target and now focus on the net equity absolute emissions

target as described. Together with this target we continue

to aim to achieve zero routine flaring across our assets

ahead of 2030, and are maturing and implementing

projects to successfully deliver this objective.

Our performance

During 2024, Ithaca Energy announced the completion

of its transformational Business Combination with Eni UK.

Emissions performance data relating to the operated assets,

specifically Cygnus Alpha and Cygnus Bravo, has been

incorporated into the Group performance data reported for

2024, since the effective date of the Business Combination

of 1 July.

In 2024, our gross operated GHG emissions were

447,864 tonnes. The increase versus 2023 is due to the

inclusion of the emissions from the Cygnus asset from

1 July 2024. Our gross operated emissions intensity

reduced to 23.9 kgCO

e/boe (2023: 25.0 kgCO

boe) due to an increase in production, on our lower

intensity assets.

Throughout 2024, the Group has demonstrated strong

emissions performance in line with our approach. Our

emissions performance in 2024, compared to 2023, has

materially changed due to the Business Combination.

Whilst absolute emissions have increased, given the

additional assets, equity and production, the carbon

intensity of our portfolio has improved significantly.

Further breakdown of our emissions performance can be

found with Metrics and Targets (b) of the TCFD section,

on page 77.

Notable emissions reductions achieved in 2024 included:

• Single train operation on FPF1 – The asset optimised

the gas processing system to only use a single

compressor to deliver gas to the mainland. This was

a material reduction of around 34,000 tCO

per year;

• On Alba, the process was modified to allow gas

import to top up the field’s own gas in its compressor

and utilise it in both turbines. This was beneficial

in minimising flaring and diesel usage as the field

recovered from the long-term outage of the John

Brown turbine that occurred in 2023; and

• Cygnus has continued to reduce the stripping gas

rate from its TEG system with the ultimate aim

to reduce it from 12 kg/h to 0 kg/h, equating to a

reduction of 70 te of CO

e per year. The asset is

utilising appropriately sized temporary electrical

generators during shutdowns. This has reduced the

quantity of fuel required which equates to a saving of

approximately 334 tCO

e per year.

GROSS OPERATED SCOPE 1

GREENHOUSE GAS EMISSIONS IN 2024

447,864 tonnes

OPTIMISATION OF THE GAS

PROCESSING SYSTEM ON FPF1

RESULTED IN

34,000 tCO

material reduction per year from 2024

METHANE INTENSITY

0.1%

reduction versus 0.2% in 2023

GROSS OPERATED EMISSIONS

INTENSITY

23.9 kg

e/boe

reduction versus 25.0 kgCO

e in 2023

60 ITHACA ENERGY

Environmental, Social, and Governance continued

The main efforts in 2024 were continuing to progress

the engineering of the significant emissions reduction

projects on the assets. The highlights of these include:

• Sanctioning a $6.8 million pump replacement project

on Captain BLP asset which will right size the large

power water pumps, and cut emissions by 10,000

tCO

e per year;

• Similar to the successfully executed Alba import

gas opportunity, investigations into running the

Captain compressors on import gas were completed.

This would allow the field to minimise flaring during

start up and avoid, on average, 4,000 tCO

e per

year. This opportunity continues to be progressed

through engineering;

• Detailed engineering on multiple projects on Captain.

The flare gas recovery project (14,700 tCO

e/yr) and

reinstating the second export compressor (21,000

tCO

e/yr) both continued through detailed design,

preparing for major construction works in 2025; and

• A technical feasibility study has been completed on

Cygnus looking at the potential of installing a flare

gas recovery unit. If feasible, this project would have

the potential to reduce CO

emission from Cygnus

of around 4,820 tCO

e/yr as well as meeting our

commitment to ZRF.

The Captain electrification project completed Front-

End Engineering and Design (FEED) of the power from

shore option in 2024. An emissions reduction project

of this scale – with the potential to reduce the asset’s

emissions by 110 kt CO₂e/year and emissions intensity

by 60% – requires significant investment, over $250

million over several years of construction. Due to the

General Election and UK budget uncertainty at the time,

the project was not taken to final investment decision in

2024. The impact of the Energy Profits Levy continues

to be felt, with cash flow available for reinvestment being

reduced as a result and projects having to compete for

capital. However, the project continues and work is

being progressed while the Group determine investment

viability of the project.

In 2024, studies were completed looking at alternative

decarbonisation options to electrification. These focus

around displacing power generated with diesel on the

Captain FPSO with power generated from lower carbon

intensity fuels, including gas and HVO. Utilising gas over

Environmental, Social, and Governance continued

We will continue to review our ERAPs and identify and

assess any new potential emissions reduction opportunities

across our assets and prioritise them appropriately.

Furthermore, we will continue to enhance our

knowledge of industry best practices and identify further

ways to improve our performance. One such example

of this is our new membership of the International

Association of Oil & Gas Producers (IOGP), which the

Group joined in December 2024. IOGP membership

supports our goal to enhance our performance in

health and safety, environmental protection, and

operational efficiency, whilst fostering a culture of

continuous learning and improvement. Membership

provides us with access to first-class documentation and

standards, reliable data for performance benchmarking,

and collaboration opportunities with the member

organisations to assist us in driving delivery of further

improvements in our health, safety and environmental

performance.

diesel could reduce emissions from the field by 20,000

tCO

e/year and adoption of HVO could reduce

emissions by over 75,000 tCO

e/year.

In addition, to further demonstrate our commitment

to achieving zero routine flaring by 2030, the Group

signed up to the World Bank ZRF initiative in 2024.

On our non-operated assets, we supported the joint

ventures in the assets’ emissions reduction efforts, with

the most material projects being:

• Sanctioning the flare gas recovery project on

Elgin-Franklin, a significant project in both

investment, $65 million, and emissions reduction of

40,000 tCO

e/year; and

• On Britannia, the ZRF project was approved to enter

FEED Stage, another significant project reducing

emissions by an estimated 36,000 tCO

e/year.

Looking ahead

The outlook of the new portfolio, following the Business

Combination, puts us on track to meet our net equity

absolute Scope 1 and 2 emissions reduction targets, in

2025, 2027 and 2030, as well as having an intensity

lower than the anticipated basin average.

We have projects underway that will ensure we meet our

commitments to zero routine flaring on all our operated

assets, as well as supporting our joint venturers in ensuring

the non-operated assets meet the 2030 target.

Many of the material projects, flare gas recovery, the

second export compressor, and dual fuel on the FPSO

fired heaters on the Captain asset, will undergo material

construction work during 2025 with flotel and shutdown

campaigns planned. This will be a major milestone in

seeing those projects put into operation between the

end of 2025 and first half 2026, based on current plans.

Supporting our efforts on reducing intensity, new

developments will continue to be progressed, particularly

Rosebank and Captain EOR Phase II. Late life assets,

Alba and FPF-1, will continue their decommissioning

journey and will create CO

capacity for further lower

intensity developments in the portfolio.

10% reduction

by 2025

25% reduction

by 2027

50% reduction

by 2030

Net Zero

by 2050

Figure 1 – Group Greenhouse Gas (GHG) emissions targets

NSTD commitments to reducing GHG emissions (versus 2018)

Net equity targets (Scope 1 and 2 basis)

Net Zero by 2040

Reduce emissions from oil and gas

production in line with NSTD commitments

up to 2030

Operated assets targets

Achieve OGMP 2.0 gold

level status by 2028

Zero routine flaring by

2030

Maintain methane

intensity at less than 0.2%

in 2025 and beyond

We aim to exceed or align to the industry targets in the short and long-term

61ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

61ANNUAL REPORT AND ACCOUNTS 2024

Methane

Our approach

In 2023, recognising the importance of methane in

contributing to global climate change, we set out to

include methane intensity and reduction as one of our

core metrics for measuring progression towards our Net

Zero targets. We set a target of maintaining a methane

intensity across our operated assets of less than 0.2%, in

line with the NSTA recommendations.

During 2024, Ithaca Energy signed the United Nations

Environment Programme Oil and Gas Methane

Partnership 2.0 memorandum of understanding. We

further developed our methane action plan to align with

the OGMP framework, setting out a staged methane

mitigation approach, focusing on each source and their

materiality, and set our baseline year for reporting.

Our performance

In 2024, our methane emissions intensity was 0.10

tCH4/t Gas exported, a significant decrease since 2023

levels (0.17 tCH4/t Gas exported). This is due to the

shift in our production weighting between oil and gas,

through the Business Combination and addition of the

Cygnus assets.

Looking ahead

In 2025, learning from the success of Cygnus reaching

level 5 OGMP 2.0 status, we will progress with the

commitments laid out in our methane action plan and

deploy a combination of technology, modelling and

reduction solutions to help us progress toward Gold

Standard status across all of our operated assets. We are

committed to working closely with our non-operated

partners, industry, and stakeholder groups to share

best practices and encourage industry-wide action on

methane emissions reduction.

The Oil and Gas Methane Partnership (OGMP),

launched at the 2014 United Nations (UN) Secretary

General’s Climate Summit, was created by the Climate

and Clean Air Coalition (CCAC) and the United Nations

Environmental Programme (UNEP) as a voluntary

initiative designed to improve the reporting accuracy and

transparency of methane emissions from the oil and gas

sector. Gold Standard status is awarded to companies or

assets that meet the highest reporting standards.

Our Cygnus asset achieved Gold Standard status in

2024 by demonstrating commitment to methane

quantification and reduction through a number of

technical studies and measurement campaigns, involving

the work of many teams – both within the Group and

with some of our partners.

We performed a bottom up source survey, conducted

sample analysis of the turbine and compressor exhausts,

and completed destruction efficiency modelling on our

flare tips. Finally, we performed a survey using remotely

operated drones to reconcile our site level emissions.

The results from these surveys have given us a good

understanding of where and how methane is being

emitted and has confirmed that Cygnus in fact emits low

levels compared to the basin average. We will continue

to improve on our methane reporting in line with our

OGMP commitments and transfer these learnings to our

other operated assets as they commence their journey

on the OGMP pathway.

Case study

Cygnus Methane

Quantification

Ithaca Energy’s Cygnus platform achieved Gold Standard

under the UNEP Oil and Gas Methane Partnership.

62 ITHACA ENERGY62 ITHACA ENERGY

Environmental, Social, and Governance continued

Transparent reporting

Our approach

As we progress on our ESG journey, we strive to

ensure that our ESG reports continue to provide all

stakeholders with a clear and transparent picture of

our performance and our plans going forward. This

report is aligned to multiple internationally recognised

sustainability reporting frameworks and standards,

including the Task Force on Climate-related Financial

Disclosures (TCFD) and is also prepared in accordance

with the 2021 GRI Standards.

Streamlined energy and carbon reporting (SECR)

A comprehensive breakdown of our energy and

carbon reporting is provided on page 77 of our TCFD

disclosures. Ithaca Energy has disclosed all emission

sources under its operational control, in accordance

with the Companies Act 2006 (Strategic Report

and Directors’ Report) Regulations 2013, and The

Companies (Directors’ Report) and Limited Liability

Partnerships (Energy and Carbon Report) Regulations

2018. Ithaca Energy has applied the principles of the

GHG Protocol Corporate Accounting and Reporting

Standard (revised edition) and utilised the collected data

to meet the requirements outlined in the ‘Environmental

Reporting Guidelines: Including Streamlined Energy

and Carbon Reporting Guidance’ (March 2019). All

reported emissions are associated with our operations in

the UK and offshore areas.

Our Environmental Management System (EMS)

Ithaca Energy’s primary focus is to ensure a safe

and healthy working environment for all employees,

contractors, and other personnel working within the

Group, while minimising the environmental impact of

its operations through increasingly sustainable practices.

Environmental management is central to the policies

and procedures that shape the Group’s health, safety,

and environmental management system, as well as its

corporate culture.

Ithaca Energy’s Environmental Management System

(EMS) was re-certified to the ISO 14001:2015 standard

in May 2024, and is fully integrated into the Group

Business Management System. The EMS is designed

to support the implementation of the Group’s Health,

Safety, and Environmental (HSE) policy, including the

management of emissions and overall environmental

impact.

It reflects our commitment to complying with

environmental legislation and upholding the

Group’s standards, processes, and objectives for the

environmental management of hydrocarbon exploration

and production.

Our performance

In 2024, we continued to provide clarity to all

stakeholders in the most efficient manner and

worked diligently to conform with aforementioned

standards and frameworks, including the SECR

and ISO14001. Additionally, we focused on the

integration activities following the completion of the

transformational Business Combination with Eni UK

which was completed in October 2024, ensuring a

streamlined transition is taking place. In the time since

the completion Ithaca Energy have been completing

detailed reviews of systems, tools and processes with

a view to identifying best practice opportunities to

implement which will enhance HSE management and

deliver business efficiencies.

Looking ahead

Whilst we have already made significant progress

towards integration following the completion of

Business Combination, a key activity for 2025 will be

continuing the integration progress activities. We will

integrate activities, designed to deliver performance

improvements across the business via a closely managed

change management programme.

Environmental, Social, and Governance continued

Case study

Tier 3 emergency

response exercise

During 2024, Ithaca Energy successfully undertook a Tier 3

emergency response test overseen by regulatory authorities,

a key test of emergency response preparedness undertaken

every three years.

The exercise was based on a loss of crude from the Captain FPSO, requiring development of

short, medium, and long-term solutions to mitigate a potentially significant pollution event.

The exercise was a significant test of our preparedness, involving the UK’s Secretary of State’s

Representative (SOSREP) for Maritime Salvage and Intervention and numerous regulatory

representatives as well as technical and environmental personnel from Ithaca. Such exercises are

incredibly useful, providing ourselves and key stakeholders with assurance regarding our level of

preparedness and highlighting the importance of our regular emergency response training and

exercising activities.

63ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Our approach

The Ithaca Energy Health, Safety and Environmental Policy

places environment at the heart of everything we do. We

recognise the importance of effectively managing our

activities and their potential impacts on the environment.

Under our ISO14001:2015 certified environmental

management system, we take a proactive approach

to managing environmental aspects by systematically

identifying, monitoring, and reducing environmental

impact. We regularly assess our operations, set

measurable environmental objectives, and engage

employees in environmental awareness and initiatives.

Through this structured approach, Ithaca Energy strives

to minimise waste, reduce emissions, and promote

environmental stewardship while achieving business goals.

Our performance

In 2024, Ithaca Energy complied with permitting

requirements for produced water across all producing

operated assets. Produced water discharged volumes

from across Ithaca Energy’s producing operated assets

are summarised below.

2024 2023

Produced water

metric tonnes* 4,848,551 4,122,960

Average oil in water mg/l 5mg/l 9mg/l

* Cygnus data from Jul-Dec only. All other assets Jan-Dec 2024.

Produced water re-injection is carried out on the Captain

asset. In 2024, 15,424,693 tonnes of produced water

was re-injected compared to 15,142,133 tonnes in 2023.

Waste returned onshore from our operated assets is

shown in the following table.

2024 2023

Waste tonnage 4,774 6,991

* Cygnus data from Jul-Dec only. All other assets Jan-Dec 2024.

Ithaca Energy works with our waste management

contractors to continuously improve waste management

and minimise landfill volumes. In 2024, our production

assets produced a total of 4,774 tonnes of waste. 2,515

tonnes (53%) of this waste was recycled.

Our performance with regard to events reported to the

Regulator as spills (PON1s) is shown in the following table.

Spills reported

2024 2023

Total PON1s 27 24

PON1 hydrocarbon 16 16

PON1 chemical 11 8

The increase in PON1s in 2024 compared to 2023

is due to the transition of additional assets into the

business. However, the Group is committed to continual

improvement in environmental management and will

strive to reduce these figures.

During 2024, several members of the HES Team

attended and completed ISO14001 Lead Auditor

training. This training ensures that there are internal

resources to assess and assure the effectiveness of the

environmental management system.

Water, spills and waste

Looking ahead

We regularly assess and update our environmental

processes to ensure compliance with the latest

regulations and industry standards. By investing in

green technologies, promoting resource efficiency,

and engaging employees in environmental initiatives,

we aim to minimise unplanned events. Our dedication

to transparency and accountability ensures that we

consistently monitor our progress and seek innovative

solutions to enhance our environmental performance.

As we continue through the business integration and

combine the environmental management systems,

there will be focus on environmental training, audit and

assurance, and identifying focused areas of improvement.

The Ithaca Energy

Health, Safety and

Environmental

Policy places the

environment at

the heart of everything

we do.”

64 ITHACA ENERGY

Environmental, Social, and Governance continued

TCFD and CFD

In compliance with UK Listing

Rule 9.8.6R(8), Ithaca Energy

plc is required to describe its

compliance with the Task Force

on Climate-related Financial

Disclosures (TCFD).

Further, Ithaca Energy is in scope of the Companies

(Strategic Report) (Climate-related Financial Disclosure)

Regulations 2022 and, therefore, required to incorporate

Climate-related Financial Disclosures (CFD)-aligned

climate disclosures in its Annual Report and Accounts.

We refer to the recommendations of the TCFD and

CFD, structured across the four thematic areas of the

frameworks in the table below, to support the identification,

assessment and management of climate-related impacts to

the Group.

We have included in the Annual Report and Accounts

climate-related financial disclosures consistent with the

TCFD Recommendations and Recommended Disclosures

and CFD requirements.

Recognising the significance of managing climate-related

risks and opportunities to the success of our business, we

acknowledge the importance of improving our reporting

and communications to further align with the TCFD

recommendations and expectations of the Financial

Reporting Council. As such, the supporting pages include

details of planned steps to improve alignment with TCFD

and further develop the disclosures over the coming years.

Recommendations that are addressed on an Explain basis

are summarised in the TCFD compliance summary table

on the opposite page and further information on the

Group’s Energy Transition strategy can be found earlier

in this ESG section.

TCFD compliance summary

Compliance

status

Section

reference

(a)

Describe the Board’s oversight of climate-related risks and opportunities Comply TCFD section: Governance (a), pages 65 to 66.

(b)

Describe management’s role in assessing and managing climate-related risks and

opportunities

Comply TCFD section: Governance (b), page 67.

Governance

(a)

Describe the climate-related risks and opportunities the organisation has

identified over the short, medium and long-term

Comply TCFD section: Strategy (a), page 68.

(b)

Describe the impact of climate-related risk and opportunities on the

organisation’s businesses, strategy and financial planning

Explain TCFD section: Strategy (b), pages 69 to 72.

(c)

Describe the resilience of the organisation’s strategy, taking into consideration

different climate-related scenarios, including a 2°C or lower scenario

Explain TCFD section: Strategy (c), page 73.

Strategy

(a)

Describe the organisation’s processes for identifying and assessing

climate-related risks

Comply TCFD section: Risk management (a), page 74.

(b)

Describe the organisation’s processes for managing climate-related risks Comply TCFD section: Risk management (b), page 75.

(c)

Describe how processes for identifying, assessing and managing climate-related

risks are integrated into the organisation’s overall risk management

Comply TCFD section: Risk management (c), page 75.

Risk management

(a)

Disclose the metrics used by the organisation to assess climate-related risks

and opportunities in line with its strategy and risk management process

Explain TCFD section: Metrics and targets (a), page 76.

(b)

Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)

emissions, and the related risks

Comply TCFD section: Metrics and targets (b), pages 77

to 78.

(c)

Describe the targets used by the organisation to manage climate-related risks

and opportunities and performance against targets

Explain TCFD section: Metrics and targets (c), page 79.

Metrics and Targets

65ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

(a) Describe the Board’s oversight of climate-related risks and opportunities Comply

The Board has ultimate responsibility and oversight for managing climate-related

risks and opportunities. This includes review of the assessment of climate-related

risks and the appropriateness of mitigating actions.

Two Board sub-committees support it in this regard:

• Audit and Risk Committee: Informed of climate-related issues, risks and

opportunities on a quarterly basis, ensuring climate risks are considered as part

of wider business processes for evaluating and managing risk; and

• Health, Safety, Environment and Security (HSE) Committee: Meeting

quarterly, the Committee hold responsibility for reviewing and assessing

climate-related issues, risks and opportunities, working closely with the HSE

Team, tracking Greenhouse Gas (GHG) emissions vs. corporate targets and

ensuring compliance with regulations and reporting requirements. The HSE

Committee reports to the main Board quarterly, reviewing performance

regarding absolute carbon equivalent emissions and GHG intensity. In 2024,

methane intensity is included in the performance review. In addition, monthly

HSE performance information is shared with Board members. The HSE

Committee also periodically reviews progress towards Net Zero targets and

emissions reduction commitments.

Two Executive Leadership Team members also sit on the Board, ensuring cohesive

discussion and decision making. The Board reviews Ithaca Energy’s Net Zero strategy

periodically and oversees its implementation and delivery. During 2024, the Board

discussed climate-related matters eight times during the monthly Board meetings,

including an assessment of energy transition and achieving Net Zero risks and the

effectiveness of corresponding risk management activities. As part of each meeting

information pack, the Board receives a report from the HSE Committee noting the

HSE monthly performance including information on environmental compliance and

details of the gross operated emissions and emissions intensity.

The Board receives additional updates from the Executive Leadership Team on

energy transition and achieving Net Zero matters, risks and opportunities as part of

the quarterly meetings. Reports on sustainability related issues, including progress

against targets, have been delivered and discussed at Executive Leadership Team

meetings throughout the year.

Principal risks, which include climate risks, are a standing agenda item for the Audit

and Risk Committee. The Audit and Risk Committee plays a key role in supporting

and advising the Board and Executive management in their responsibilities over

climate risk management, including the risks associated with transitioning to a lower-

carbon and more climate-resilient economy. GHG emissions performance versus

targets is included in monthly reports which are provided to the Board to enable

monitoring of progress implementing reductions versus the corporate targets and

strategy. The Board receives copies of all Committee minutes and the respective

Committee Chair can speak to the information provided to the Board if any

clarification or further details are requested. Climate-related risks and opportunities

are further discussed by the Board during its annual strategy discussion.

Climate-related issues are considered by the Board in the organisation’s strategy

development, risk management and financial planning processes, including via

consideration of climate impacts on the assumptions (e.g. commodity and carbon

prices) and underlying decisions made in these areas. Recommendations to the Board

regarding major capital investments or M&A opportunities include consideration

of climate issues and their impact on the Group’s emissions reduction targets and

long-term strategy. Discussion of climate and related risks is an integral part of project

approval processes. Potential projects are assessed on set investment criteria which

focus on Net Zero strategy impacts in the long term. This assessment uses a range of

qualitative and quantitative metrics such as cash flow, NPV and emissions intensity.

The HSE Team has an integrated objectives and improvement plan for 2025 which

outlines key elements for measuring success in progressing towards climate targets,

which is endorsed by the ELT and the board. Key objectives for the short term are

focused on integration of management systems and setting out Net Zero ambitions

and roadmaps after the Business Combination.

Climate performance, including performance against the Company’s Net Zero

targets, is embedded in the corporate scorecard and annual performance KPIs

through the Remuneration Committee. More on our performance against our

climate targets can be found on page 36.

The Board will continue to monitor implementation

and progress towards achieving climate

commitments and the management of energy

transition and achieving Net Zero risks as part of its

corporate decision-making.

The evolution of the Group’s TCFD disclosure

will focus on improvements to further integrate

climate considerations into existing governance

frameworks, for which the Board has ultimate

accountability. Given this year we have focused

our efforts on the combination with the Eni UK

businesses, our priority for 2025 will be to more

closely evaluate and track our progress against

mitigating/realising the identified material climate-

related risks and opportunities.

Disclosure

Governance

Alignment and next steps

66 ITHACA ENERGY66 ITHACA ENERGY

Environmental, Social, and Governance continued

Board

Audit and Risk Committee

Health, Safety, Environment

and Security Committee

Executive Leadership Team (ELT)

Finance

Environment and Energy

Transition

Investment Committee

Enterprise Risk Management

Committee

Chief Executive Officer

Chief Financial Officer VP Heath Safety and Environment

The CEO, with support from the ELT, is

responsible for delivering the Group strategy

including energy transition commitments.

At the asset and investment level, climate-

related risks and opportunities are assessed

as part of the business planning and pre-

investment due diligence stage.

Principal risks are reviewed and managed by

the ERMC. Emerging risks, including those

related to climate change are escalated to

the Committee for discussion and potential

escalation to a principal risk.

The Board has overall authority for the

management and conduct of the Group’s

business, strategy and development,

including the energy transition strategy.

The finance team formally evaluates and updates

the climate scenario analysis model, so that the

Environment and Energy Transition teams may

facilitate the climate risk register review on an

annual basis through meetings and workshops

with the ELT.

The Environment and Energy Transition teams

have responsibility for monitoring climate

performance against targets and for implementing

our climate strategy.

With support from sub-committees , the

Board holds responsibility for reviewing and

assessing climate-related issues, risks and

opportunities, tracking GHG emissions vs.

corporate targets and ensuring compliance

with regulations and reporting requirements.

Governance structure

67ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Disclosure

Governance continued

Alignment and next steps

(b) Describe management’s role in assessing and managing climate-related risks and opportunities Comply

The management of climate-related issues, risks and opportunities are the

responsibility of the VP of HSE and the Chief Operating Officer, who are members

of Ithaca Energy’s Executive Leadership Team.

Reporting to the HSE VP is a dedicated Environment and Energy Transition Team.

The Environment and Energy Transition Team manage climate-related issues, risks

and opportunities, including the long-list climate risk and opportunity register and

manage emissions data and associated regulatory reporting, reporting emissions

performance against targets to asset managers and the ELT regularly, for operated

and non-operated assets. The Environment and Energy Transition Team tracks GHG

emissions KPIs and identifies emissions reduction opportunities, working closely

with our asset teams to manage emissions performance and identify improvement

opportunities.

The ELT holds an annual meeting to review climate-related risks and opportunities.

The ELT, together with the HSE Team, review the current assets’ emissions

performance, the Group’s outlook and how business decisions can impact these,

updates on critical projects, changes or potential changes in regulators’ actions and

regulations, and any other related items that could impact the business. Key actions

are tracked, managed and reviewed at subsequent meetings. The HSE Committee

and Audit and Risk Committee are informed of emissions reduction performance,

major climate-related issues, risks, and opportunities and that these are being

managed appropriately across the wider organisation of functional and asset teams.

Progress on managing key climate-related issues through updates on relevant

metrics and targets (see Metrics and Targets (a) for further information), such as

towards GHG emissions targets are communicated as described above.

The Environment and Energy Transition team, with input from the commercial,

audit and risk and finance teams, formally evaluates and update the Climate Risk

possible should material changes occur. The VP of HSE is responsible for the

management of this process.

Company principal risks are reviewed in alternate months or following any major

business changes, where the VP of HSE facilitates discussions regarding climate-

related risks and opportunities.

This year, the Group reassessed the climate-related risks and opportunities

identified in our 2023 disclosure based on changes within the organisation as

well as wider industry developments and have updated the scenario analysis and

modelling accordingly. Our climate-related risk and opportunity identification and

assessment refresh considered the combination with the Eni UK businesses. From

the outcomes of this year’s work, one additional risk was identified and prioritised

for quantitative climate risk scenario analysis compared to our prior year risks and

opportunities. This risk relates to increased industry scrutiny and regulations on

flaring and methane emissions.

We will further integrate climate-related risks

and opportunities into decision-making at the

management level, ensuring progress in managing

these risks through the development of specific

metrics and targets. Further details of our key

climate risk indicators can be found in Metrics and

Targets (a).

68 ITHACA ENERGY

Environmental, Social, and Governance continued

Disclosure Alignment and next steps

(a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long-term Comply

Our focus this year has been reaffirming and refining the contents of the Climate

Risk Register and set of prioritised material climate risks and opportunities that were

established last year. The work undertaken in 2023 included a risk and opportunities

identification exercise which resulted in a short-list of potentially materially climate-

related risks and opportunities, comprising one physical risk, six transition risks and

one opportunity. These were logged in our Climate Risk Register, and were then taken

forward for financial impact quantification.

As part of this year’s climate risk identification and assessment refresh, we sought

to reaffirm and refine the risks and opportunities identified in 2023. To achieve this,

we have considered major updates to Ithaca Energy’s business (in particular the

combination with the Eni UK businesses that was completed in October 2024) as

well as wider industry developments and trends over the past year. We conducted a

validation workshop to review existing risk definitions, as well as evaluate the shortlist

of prioritised risks and opportunities that would be taken forward for quantitative

scenario analysis again this year. From the outcomes of this exercise, one additional

risk was identified and prioritised for quantitative climate risk scenario analysis.

This risk relates to increased industry scrutiny and regulations on flaring and

methane emissions.

The eight risks and opportunities detailed in Strategy (b) reflect Ithaca Energy’s sectoral

and geographical basis as an upstream oil and gas producer in the UK North Sea, with

dependencies on the global oil and gas market and value chain. For further information

on the risk identification and assessment process, see Risk Management (a).

The physical risk relevant to our business and sector includes more frequent and

severe weather events that may affect assets and operations, such as downtime or

interruptions from damage to infrastructure and service provision, as well as costs

associated with higher insurance premiums to cover weather-related damages.

Considering the location of our assets and operations, such weather events include

increasing frequency of storms impacting safe operations.

The transition risks identified as potentially impactful to our business and sector span

the policy and legal, reputation, market and technology categories, such as changes

to governmental policy and taxes, consumer and investor preferences/sentiment, and

technology readiness. These transition risks could have a direct financial impact on

Ithaca Energy’s, sale projections and debt financing plans.

We also re-evaluated the climate-related opportunities that may be relevant for our

business, such as market growth prospects relative to global competitors resulting

from lower carbon intensity products from the UKCS region in which Ithaca Energy

operates.

In line with the TCFD requirements, we assessed the impact of two climate scenarios

on the identified material climate risks and opportunities under our current business

model and strategy. Further information on these scenarios can be found in Strategy

(c). The impact of these scenarios has been explored over our three defined time

horizons:

• Short-term: to 2030

• Medium-term: to 2040

• Long-term: to 2050

This aligns with the maturity mix of our asset portfolio (late-life, mid-life and long-

life assets), as well as our emissions reduction targets and associated strategy focused

on short-term operational improvements, mid-term portfolio revitalisation and long-

term targeted electrification, as described earlier in the strategic report. As climate-

related issues tend to materialise over a longer-term than other business risks and

usual business-planning cycles, these timeframes allow the ability to consider climate

risks and opportunities, and their uncertainties, over a relevant period, while aligning

with global standards and targets. For example, physical risks tend to materialise in

the medium and longer-term, while transition risks tend to materialise in the shorter

term.

Further detail on these risks and opportunities and the expected magnitude of

impact under the specified scenarios and time horizons is included in Strategy (b)

and Risk management (b) respectively.

Ithaca Energy will continue to monitor and evaluate

existing and future possible climate related risks

and opportunities, updating the Climate Risk

Management (a).

Strategy

69ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Disclosure Alignment and next steps

(b) Describe the impact of climate-related risk and opportunities on the organisation’s businesses, strategy and financial planning Explain

As detailed above, we carried forward our findings from the previous year to inform

this year’s refresh of the climate-related risks and opportunities risk assessment.

A quantitative assessment of the financial impacts of the most material physical

and transitional risks and opportunities to our business was undertaken. The table

on the following page summarises the material physical and transitional risks and

opportunities, their potential financial impact to our business, qualitative discussion

of the relative magnitude of their financial impact under assessed scenarios and time

horizons (drawn from the outputs of the quantitative assessment performed), and the

key activities we undertake to manage these. The analysis covers both operated and

non-operated assets. For further information, see note 3 of the Financial Statements.

We are acutely aware of our role in contributing to the decarbonisation of our value

chain, the oil and gas industry, and to the economy-wide low-carbon transition. Our

emissions reduction plan is centred on our Net Zero by 2040 target, ten years ahead

of the NSTD commitments, and our supporting interim targets. Further information

on our targets, as well as details of our ongoing and planned emissions reduction

activities can be found on pages 59 to 60.

We consider the implications of climate-related risks and opportunities in our

financial planning processes, and the detailed climate risk assessment below has

helped us understand these potential impacts over the climate scenarios and time

horizons which we have assessed. As well as through our emissions reduction plan

and inclusion of climate-related targets in our Executive remuneration (see Metrics

and Targets (a) for further details), we are continually looking to integrate climate

change-related impacts into our strategic and business thinking. Our approach to

governing climate risks and opportunities and maintaining strategic resilience has

been detailed further in the Governance section above. Our intention is to continue

with our work in 2025 by conducting a high-level review of the quantitative scenario

analysis assessment annually, and an in-depth update every three years, or following

any major changes to the business such as divestments or acquisitions. This year’s

refresh of the quantitative climate scenario analysis has included the Business

Combination with Eni UK which was completed in 2024.

We are fully compliant with the qualitative

requirement of the disclosure. Our intention is to

continue to refine the climate scenario analysis and

disclosures on an annual basis.

Additionally, we will review the outputs of the

climate scenario analysis and consider how we

can best integrate the results into our business

decision-making process, ensuring we fully

respond to the resiliency of our business model

and strategy while considering the two contrasting

climate scenarios. The Group is expected to be in a

position to disclose quantitative information on our

climate scenario analysis findings, and become fully

compliant with this section of the recommendation

within the next two years.

Strategy continued

70 ITHACA ENERGY

Environmental, Social, and Governance continued

Scenario analysis output table

The below table qualitatively summarises the outcomes of the scenario analysis performed for the material climate-related risks and opportunities. For further information on the climate scenario analysis process, see Strategy (c). For

definitions of timelines used in the scenario analysis table below, see Strategy (a).

Physical risk – acute

S M L

Increased severity of extreme weather

events: Increased severity of extreme

weather events such as storms causing

direct damage to assets and indirect

impact from disruption, including

potential increases costs from rising

insurance premiums.

Increases in extreme weather, most notably storms

and high winds and waves, could cause disruption

to drilling operations as health and safety concerns

cause a cease in operations, causing subsequent

losses in revenue.

Ithaca Energy’s North Sea offshore platforms are

resilient to extreme weather, but increased damage

repair costs across operated and non-operated

assets may increase under increased frequency of

extreme weather. This may also have an impact on

the Group’s insurance premiums to account for

increased frequency of extreme weather events

and their associated impacts.

Resilience is built into the design of Ithaca Energy’s

assets to withstand the extreme weather conditions of

the North Sea. However, the risk is considered highest

(moderate) in the short-term as, while the frequency

and severity of extreme weather is expected to increase

in the future, potential financial damages and disruption,

including insurance premiums, are expected to be limited

as Ithaca Energy continues to mitigate the risk and as

existing assets mature.

• Continue to assess and embed resilience and

mitigation measures, relating to environmental

hazards and climate change design allowances for

the construction and operation of our offshore

assets.

• Continue to maintain and update our severe

weather policy and business continuity plans,

including asset level severe weather action plans

and emergency response plans.

• We undertake meteorological and oceanographic

studies for all our offshore developments, which

incorporate the latest climate scenarios.

Transition risk –

policy & legal

S M L

Increased cost of carbon through

taxation and other carbon pricing

mechanisms: The cost of emitting GHG

emissions increases due to evolving

regulatory requirements, such as

carbon pricing, more stringent policies,

regulations and punitive measures, and

increased regulations around the use of

carbon offsets.

Increased compliance, operating, capital

expenditure and decarbonising requirements

resulting in direct costs, particularly for our higher-

emitting assets.

Increased exposure to carbon pricing through

increased prices and changes to the free allowance

regime would result in direct cost for Ithaca Energy

in relation to Scope 1 emissions and an indirect cost

in relation to Scope 3 emissions.

Decreased profit margins as a result of absorbing

higher carbon costs associated with Ithaca Energy’s

operations.

For Ithacas non-operated assets and equity share

of the assets emissions and associated costs are

likely to be passed to Ithaca.

Changes in equity share will vary the cost exposure

due to change in equity share of GHG emissions.

The impact of carbon pricing is expected to be more

material (moderately high) under a ‘Net Zero’ scenario in

the medium-term, as carbon prices increase and policy

changes (e.g. reduction in free allocations). Under the

same scenario, this risk is moderate in the short and long-

term. In a ‘Current Policies’ scenario, the risk of carbon

pricing is expected to be moderate as climate regulation

stagnates and carbon prices remain steadier through to

2050.

• Maintain our roadmap for reaching our Net Zero

2040 target, including meeting our 50% scope 1

reduction by 2030 on a net-equity basis.

• Continue to invest in low-carbon activities

available to Ithaca Energy, to lower our emissions

footprint.

• Continue to use internal carbon pricing to inform

capital planning and business decisions and stress

test resilience of Ithaca Energy’s operating model

to market-based carbon price regimes.

• Continually assess our strategy for offsetting our

residual emissions to reach our Net Zero 2040

target.

TCFD taxonomy Climate-related risk/ opportunity Potential financial impact

Relative magnitude of financial impact

from scenario analysis

Mitigation activities

TIME

HORIZON

Short-term Medium-term Long-term

Indicates the time horizon where the risk is evaluated to be most material

71ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Scenario analysis output table continued

Transition risk –

policy & legal

S M L

Increased legal risks from litigation or

non-compliance with climate-related

laws and current regulations: Increased

scrutiny on oil and gas sector resulting

from rising instances of non-compliance

and litigation results in increased direct

legal costs, and reduced revenue from

perceived loss of social licence to operate,

including risk related to the impact of

the NSTA decarbonisation plan if it

were legislated in its current form. The

risk of litigation might be heightened by

increased environmental activism driving

judicial proceedings.

Potential direct and/ or indirect financial impacts

related to climate-related litigation. For example,

instances of class action against Ithaca Energy may

result in increased expenses for legal services and

financial penalties from lost lawsuits.

Non-compliance and fines may be relevant

if Ithaca Energy fails to comply with climate

regulation or related disclosure requirements.

Increased scrutiny following litigation or non-

compliance could also result in a loss of Ithaca

Energy’s social licence to operate and subsequently

a potential loss of future licencing rights, affecting

Ithaca’s ability to generate revenue.

The impact of increased climate litigation is expected

to be more impactful under a ‘Net Zero’ scenario but

remains low under both ‘Net Zero’ and ‘Current Policies’

scenarios. Ithaca Energy’s current legal spend is limited

and we are not expecting this to materially change

in relation to increased litigation for climate-related

matters. Under both scenarios the impact is expected to

remain very low to low over all timeframes considered.

• Closely monitor emerging regulation and

requirements, including through engagement

with external consultants, customers, and trade

associations to understand how they apply to

Ithaca Energy.

• Continue to work towards and transparently

report against our pathway to Net Zero by 2040.

• Clearly communicate any future development

carbon removal/ offset ambitions and strategy.

• Continue to seek independent assurance over

our Scope 1 and 2 emissions, and other KPIs and

reported metrics.

• Continue to work with peers and industry bodies

to provide feedback to the NSTA plan.

Transition risk –

reputation & market

S M L

Increasing cost of capital and/or

reduction in access to capital: Industry

scrutiny resulting in increased cost

of capital and/or reduction in access

to capital as investor preferences

shift away from companies in high-

emitting industries with lower climate

performance.

As financial institutions come under increasing

regulatory and societal pressure to align their

portfolios to a Net Zero world, it may become

harder (reduced or more conditional access)

and more expensive for Ithaca Energy to source

funding if the carbon intensity of the business

does not align with regional, investor and lender

expectations.

Ithaca Energy may face issues with divestment,

securing funding and negotiating attractive debt

agreements for exploration activities and other

opportunities such as capital investments and

mergers and acquisitions.

The impact of increasing cost of capital and/ or reduction

in access to capital is considered low to moderate under

all scenarios. This risk is more material (moderate) under

a ‘Net Zero’ scenario in the short-term, where interest

rates are projected to be higher and investors are more

likely to consider climate performance in investment/

divestment decision-making. This risk of divestment is

anticipated to be less likely under a ‘Current Policies’

scenario, where there will be greater continued reliance

on traditional fossil fuels.

• Continue to clearly and publicly communicate our

commitment to our Net Zero goals.

• Continue to monitor investor and bank lending

appetite and preferences in the context of

decarbonisation and the energy transition.

• Continue to work towards and transparently

report against our pathway to Net Zero by 2040.

• Consider incorporating emissions reductions

targets into any lending debt facility.

Transition risk –

policy & legal

S M L

Increased industry scrutiny and

regulations on flaring and methane

emissions: Failure to effectively measure,

monitor and report on methane emissions

and reduce flared gas in line with industry

standards and/or regulatory requirements

may impact production consents, result

in financial penalties, or reduce available

gas output, resulting in lost revenue.

Increased scrutiny of methane emissions may lead

to a weakened business reputation and result in

decreased demand and, therefore, revenue.

Failure to comply with EU methane regulations on

oil and gas importers may also result in significant

financial penalties for Ithaca Energy’s importers

which may result in indirect impacts on Ithaca

Energy’s revenue streams.

The potential impact of methane regulations is greatest

in the short-term under both scenarios (moderate), as

we are continually maturing our approach to methane

management, which we anticipate will effectively mitigate

this risk over the medium to long-term. The impact is

slightly more material under the ‘Net Zero’ scenario

considering that regulation is likely to be more stringent

and penalties are more likely to be enforced than under a

‘Current Policies’ scenario.

• Strengthen our monitoring, reporting and

verification through continued alignment with

OGMP 2.0 recommendations.

• Progress towards Level 5 and Gold Standard

OGMP status by improving inventory

methodology and conducting reconciliation

programs as per OGMP Guidance

• Progress with ZRF projects as planned on our

operated assets.

TIME

HORIZON

Short-term Medium-term Long-term

TCFD taxonomy Climate-related risk/ opportunity Potential financial impact

Relative magnitude of financial impact

from scenario analysis

Mitigation activities

72 ITHACA ENERGY

TCFD taxonomy Climate-related risk/ opportunity Potential financial impact

Relative magnitude of financial impact

from scenario analysis

Mitigation activities

Scenario analysis output table continued

Transition risk –

technology

S M L

Changes in availability and capital costs

of low emissions technologies, limiting

the ability to meet climate targets: To

meet emissions reductions targets, there

will be a need to invest in emerging low

emissions technologies, which would

result in increased capital expenditure.

As Ithaca Energy invests in technologies to meet

climate commitments around GHG emission

reduction, there is significant capital expenditure

required.

There is some uncertainty around the availability

and marginal abatement cost of certain

technologies which is dependent on scale up to

reduce capex. As a result, investment may be

more or less costly (or delayed) depending on

the maturity curve of these types of technologies

required for Ithaca Energy to reach targets.

The impact of capital costs to implement low emissions

technologies is more material (moderate) in the ‘Current

Policies’ scenario under all time horizons, as the marginal

abatement costs of low emission technologies are likely

to stay relatively high and any reductions in operational

costs from carbon savings are limited due to relatively

lower carbon prices. However, in the ‘Net Zero’ scenario,

investing in low emissions technologies to meet climate

targets is likely to materialise as a low to moderate risk for

Ithaca Energy given cost savings associated with carbon

pricing would likely help mitigate increased expenditure

on low emission technologies.

• Develop a clear roadmap to reaching our Net Zero

2040 target, including a marginal abatement

cost curve (MACC) and capital allocation plan to

set a clear strategy prioritising the most effective

emissions reductions activities in terms of cost and

reduction potential.

• Continue to monitor the global market for

emerging low-carbon technologies, such as CCUS,

and associated government policies affecting

technology development.

• Continue to assess asset portfolio for electrification

options.

Transition risk –

market/policy and

legal

S M L

Reduction in demand for oil and

commodity price volatility driven by

government regulations, fiscal policy

changes and/or changing customer

preference: Contraction in oil and

gas demand and market value due to

changes in government policies, shifting

consumer preferences or reduction in

overall energy demand from energy

efficiency measures, as well as exposure

to commodity price declines and/or

volatility. This includes potential changes

in fiscal policy that may hinder relief from

capital projects.

Changing consumer preferences towards lower

carbon energy sources and demand reductions as

a result of climate policy may reduce demand for

Ithaca Energy’s oil and gas products, resulting in

reduced revenue and/or stranded assets.

Coupling reduced demand with excess supply

could significantly reduce global prices of

hydrocarbons, which both reduces revenue and

increases the risk of stranded assets.

The potential impact of global demand reduction for

hydrocarbons and declining oil and gas prices presents

the greatest climate risk for Ithaca (moderately high),

particularly in the short- to medium-term under the ‘Net

Zero’ scenario.

Over the longer term in both scenarios, demand, and

therefore revenue, is projected to reduce, although at a

much slower rate in the ‘Current Policies’ scenario, which

is initially moderately high in the short-term, decreasing

to a moderate impact over the medium to long-term.

• Continue to conduct reviews of our corporate

strategy and business model in the context of the

energy transition and changing demand/ prices for

oil and gas.

• Continue to explore investment in emissions

reductions to reduce the emissions intensity of

Ithaca Energy’s products.

• Regularly consider business diversification into the

wider energy supply.

• Continually assess Ithaca Energy’s ability to pivot

the business as demand dictates and assess the

Group’s ability to improve/ maintain market share

of hydrocarbon supply should relative carbon

intensity become a differentiating factor.

Opportunity – market

S M L

Increased demand for Ithaca Energy’s

products due to the lower relative carbon

intensity of UKCS O&G and shifting

consumer preferences: The UKCS

low GHG/BOE oil and gas provides a

potential competitive advantage as the

global commodity market transitions

toward lower carbon products which may

increase market share, revenue and debt

appetite.

As the world decarbonises and policy restricts the

use of carbon-intensive fuels, the relative carbon

intensity of hydrocarbons globally is likely to factor

into purchasing decisions for refiners and end

users in relation to downstream processing and

combustion.

The UKCS has a naturally low-carbon intensity

compared to other regions which may increase

demand for UKCS hydrocarbons vs more carbon-

intensive sources.

This relative increase in market share for UKCS may

increase demand for Ithaca Energy’s products and

hence revenue.

In the ‘Net Zero’ scenario, the potential impact of

increasing demand for UKCS oil and gas is expected

to be material to Ithaca Energy (moderately high)

particularly in the short-term as consumers initially move

to lower-carbon intensity hydrocarbons, before moving

to alternative renewable energy sources in the medium to

longer-term.

This opportunity is more pronounced under the ‘Current

Policies’ scenario, becoming most material (high) in

the long-term as demand for oil and gas products grow

steadily, with a continued preference for lower-carbon

intensity hydrocarbons.

• Ongoing implementation of GHG emission

saving projects in-line with climate targets

will reduce Ithaca Energy’s carbon intensity

compared to peers maintaining a strong position

in the UKCS.

• Ongoing horizon scanning on how hydrocarbon

characteristics are pricing into decisions on

hydrocarbon selection (e.g. carbon intensity as

well as API gravity and sulphur content).

• Continue to develop a lower carbon intensity

portfolio.

Environmental, Social, and Governance continued

TIME

HORIZON

Short-term Medium-term Long-term

73ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

TIME

HORIZON

Short-term Medium-term Long-term

(c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario Explain

Ithaca Energy assessed its resilience to the selected material climate risks and

opportunities using a combination of quantitative and qualitative scenario and

sensitivity analysis, as outlined in Strategy (b). Scenario analysis identifies and

assesses the potential implications of plausible future states under conditions of

uncertainty. Scenarios are projections of future macroeconomic and environmental

states based on key trends and inputs like differing macroeconomic drivers and

techno-economic outcomes, not designed to deliver precise outcomes or forecasts.

Instead, they help the Group consider how the future might look if certain trends

continue or conditions are met. With third-party support, we assessed eight

prioritised climate-related risks and opportunities over the short, medium, and long-

term horizons under the following scenarios:

• Optimistic ‘Net Zero’ scenario of 1.5°C global warmin

• g, which closely maps to the (Intergovernmental Panel on Climate Change)

IPCC’s representative concentration pathway RCP2.6; and

• ‘Current policies’ scenario of 3°C+ global warming, which closely maps to the

IPCC’s representative concentration pathway RCP8.5

The scope of our analysis of physical climate risks included all operational assets

across the Group, assessed on a net equity basis.

Transition risks were assessed using predominantly International Energy Agency (IEA)

scenarios or the Network for Greening the Financial System (NGFS) scenarios when

IEA data was not available or appropriate. The models have been updated from the

previous year’s assessment to incorporate the latest available IEA and NGFS datasets,

namely the 2024 World Energy Outlook and version 5.0 NGFS IIASA Scenario

Explorer. Physical risks were assessed using IPCC AR6 models for RCP2.6 and

RCP8.5 scenarios.

The Net Zero scenario assumes all necessary climate policies and related measures are

implemented sufficiently to achieve global Net Zero GHG emissions by 2050 and

limit global warming to 1.5°C. Under this scenario, transition risks—driven by changes

in policy, markets, and consumer behaviour—are expected to have a greater impact

on society and our business than physical risks. Our analysis shows transition risks in

this scenario may negatively impact the Group’s growing portfolio of existing assets

and new investment or M&A opportunities due to increased carbon costs, stricter

regulations on flaring and methane emissions, demand contraction for hydrocarbons,

and lower commodity prices. This would likely result in higher operating costs, lower

revenues, and reduced overall asset valuations.

Therefore, Ithaca Energy continually evaluates the financial exposure of current

assets as well as potential assets over the short, medium and long-term. The Group

has plans to support the energy transition, as described within the ESG section above

(see page 59) which is centred on immediate, impactful actions, including projects

aimed at reducing emissions from our current operations and ensuring the efficient

decommissioning of high-intensity assets at the end of their lifecycle. Additional

measures in place to both support and build resilience to the energy transition include

investing in lower-emission intensity assets, exploring further emissions reduction

activities and initiatives to maximise asset efficiency, industry collaboration on

emissions reduction, and exploring further M&A and investment opportunities.

In contrast to the Net Zero scenario, the ‘Current Policies’ scenario assumes

limited climate policies are implemented, resulting in some global warming. Under

this scenario, we expect physical risks from long-term weather changes to impact

our business more than in the Net Zero scenario. Our analysis suggests that lower

carbon costs and higher commodity prices from a less pronounced transition

mean operational costs, revenues, profit margins, production dates, and Company

valuations are less negatively affected. However, increased physical risks could lead to

asset damage, disruptions to business activities or the supply chain, causing financial

losses, insurance cost increases, and higher contingency planning expenses, reducing

profits and asset valuations.

In a Net Zero scenario, we expect commodity demand and price volatility to pose

the most significant risk, driven by the increased competitiveness of lower-carbon

energy sources. As Ithaca Energy’s strategy focuses on oil and gas, there is a risk

of reduced revenues in this scenario. However, the UK’s lower-carbon-intensity

production versus other regions is likely to be favoured as policies reduce spending

on higher-emission products. Ithaca Energy will continue to enhance resilience using

climate scenario analysis to guide our sustainability strategy and mitigate physical

and transition risks. For example, we will regularly review our GHG emissions

commitment to Net Zero by 2040, including our targets of zero routine flaring, a

50% reduction in operated emissions by 2030, and ongoing investment in energy

efficiency improvements.

We are fully compliant with the qualitative

requirement of the disclosure. Our intention is to

continue to refine the climate scenario analysis and

disclosures on an annual basis.

We continue to mature our transition strategy and

long-term financial planning to effectively consider

the climate-related risks and opportunities. As part

of this, we will prioritise refining our transition plan

and expect to reach comply status with this TCFD

recommendation in the next 12 months. We will

review existing GHG emissions commitments and

interim targets, as well as evaluating our strategic

priorities to effectively build resilience to climate

risks and opportunities. This process will involve

identifying and implementing appropriate activities

that promote climate resilience building.

Disclosure Alignment and next steps

Strategy continued

74 ITHACA ENERGY

Environmental, Social, and Governance continuedEnvironmental, Social, and Governance continued

(a) Describe the organisation’s processes for identifying and assessing climate-related risks Comply

This year, we refreshed our Climate Risk Register with the help of a third-party

organisation as part of the climate-risk and opportunity financial impact assessment

process. Based on the existing Climate Risk Register developed in 2023, a

consideration of existing and emerging regulation, as well as knowledge of Ithaca

Energy and our industry more widely, our long-list of climate-related risks and

opportunities was re-evaluated and updated where appropriate.

Following this, a risk validation workshop was held with senior stakeholders from across

the business. The long-list of climate-related risks and opportunities were reviewed

by these stakeholders, and those determined to be most material to Ithaca Energy in

terms of impact and likelihood were confirmed to be taken forwards for quantification

through the climate scenario analysis described in Strategy (c) (see page 73). This

process involved assessing the potential financial impact of each risk and opportunity

against Ithaca Energy’s Enterprise Risk Management Framework, to ensure alignment

with those risks and opportunities deemed most material to our business.

Ithaca Energy will continue to review and evaluate climate-related risks across the

asset, organisational and investment level on an ongoing basis.

At the organisational level, responsibility for the climate risk register sits with

the HSE and Energy Transition teams. This includes evaluation of the risks and

opportunities to account for additional planned mitigation measures used to calculate

a post-mitigation residual risk level score. The most material climate-related risks

were integrated into the Group’s formal enterprise risk register under the principal

risk ‘Energy Transition and Net Zero Delivery’ and are monitored closely on an

ongoing basis in conjunction with other significant business risks. Responsibilities of

the HSE and Energy Transition teams also extend to the review of the climate risk

of wider annual re-assessment and following any material change to the business.

This process includes a review of the discrete asset and function risk registers as well

as a consideration of any changes to existing and emerging regulatory requirements

and government policies (also considered as part of the ‘UK Government’s Energy

and Fiscal Policies’ Group emerging risk). Company principal risks are reviewed in

alternate months or following any major business changes, where the VP of HSE

facilitates discussions regarding Climate related risks and opportunities.

This informs whether any risks need to be updated or added to the climate risk

any changes are communicated to the Leadership Team as appropriate. In alternate

months or following any major updates, the HSE and Risk teams will consult on

the need to escalate any climate-related risks and opportunities to discrete Group

Principal Risks based on financial materiality and mitigation/risk management

requirements, before being raised for discussion with the ELT.

At the asset and investment level, significant climate-related risks relating to oil

and gas prices, economic lifetime, expected cessation of production and carbon

costs have been integrated into the risk assessment and due diligence process for

each asset, investment, merger or acquisition opportunity. This is used to inform

asset management, investment and strategic decision-making. Additionally, each

asset holds its own risk register which feeds into the organisational level climate risk

registers, the top 10 risks are raised to ELT on a monthly basis, and reviewed by the

Risk function to manage escalation to principal risks where necessary.

We will seek opportunities to further embed and

integrate processes for identifying and assessing

climate-related risks to inform corporate decision-

making and financial planning for existing and

future assets.

Disclosure Alignment and next steps

Risk management

75ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

(b) Describe the organisation’s processes for managing climate-related risks Comply

As a Group principal risk under the ‘Energy Transition and Net Zero delivery’ risk,

climate change is governed and managed in line with the Group’s risk management

framework outlined on pages 101.

As sub-risks within this Group Principal Risk, Ithaca Energy’s Risk function review and

consider each risk identified in the Climate Risk Register described above to identify

possible options to mitigate, transfer, accept or control each risk.

If deemed material, each risk will be assigned an overall risk owner, before current

and additional planned risk mitigation measures are then defined and assigned an

action owner and due date. Decisions to mitigate, transfer, accept or control each

risk are based on the team’s assessment of the most viable or attractive options, such

as cost and value delivered. This process will be repeated for any new climate-related

risks identified and reviewed on an annual basis for existing risks. Further information

on the Group risk governance structure and process can be found in the Risk

management section on pages 101 to 103.

Ithaca Energy will also closely monitor the prioritised climate risks and opportunities

with the aim of reducing risk across climate scenarios and strengthening our long-

term resilience, with current management and mitigation actions for those risks

summarised in Strategy (b) on pages 69 to 72.

As previously described, risks and opportunities identified in Ithaca Energy’s

Climate Risk Register have been assessed against our Enterprise Risk Management

framework and Risk Prioritisation Matrix to consider the financial impact to the

Group, likelihood of occurrence and timing of the risk. This allows the climate-related

risks and opportunities to be categorised according to the following risk level scores:

• Risk Levels 1-4 (High)

• Risk Level 5 (Moderately High)

• Risk Level 6 (Moderate)

• Risk Level 7+ (Low)

High and Moderately High climate-related risks are monitored closely by the

energy transition team, with any material changes and progress communicated to

the Leadership Team. Where appropriate, material climate risks are communicated

to the Health, Safety, Environment and Security Committee and the Audit and Risk

Committee, who will review the likelihood and the impact of risks materialising, and

the management and mitigation which aim to reduce the likelihood of their incidence

or their impact.

Moderate and Low climate-related risks are reviewed and updated annually with the

rest of the Climate Risk Register by the Environment and Energy Transition team.

We will look to further integrate climate-related

risks and opportunities into decision-making at

management level and improve the process of

identifying climate risks through the Climate

Risk Register.

(c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management Comply

At organisational level, material transition and physical climate-related risks from the

Climate Risk Register are embedded into the Group’s Enterprise Risk Management

procedures under the ‘Energy Transition and Net Zero Delivery’ principal risk (see

page105) along with other business risks to be managed appropriately. As such, each

material climate-related risk will be assigned an overall risk owner, mitigation action

owner and due date in line with the process outlined in Risk Management (b) above.

Further information on the Group’s Enterprise Risk Management Function can be

found in the Risk management section (see pages 101 to 109). Climate-related risk

in terms of Energy Transition and Net Zero Delivery risks are included in the Group’s

Principal Risks.

Principal risks are frequently reviewed by the Executive Leadership Team (through

the Enterprise Risk Management Committee), by the Audit and Risk Committee

(ARC) and at the Board meetings. Material climate-related risks are brought

forward periodically by the Energy Transition Team and Chief Financial Officer

(CFO) to the Enterprise Risk Management Committee (ERMC) and the Board to

guide corporate decision-making, business strategy and financial planning. The CFO

reviews Group principal risks and attends the ARC and main Board meetings. In

addition, the CFO will periodically review progress regarding energy transition and

emission performance at monthly energy transition and emissions meetings.

At the asset and investment level, climate-related risks and opportunities are assessed

as part of the business planning and pre-investment due diligence stage.

As the Group’s climate-related risk management

process and Climate Risk Register evolves, the

integration of climate-related risks into the

Enterprise Risk Management process will be

developed further.

Disclosure Alignment and next steps

Risk management continued

76 ITHACA ENERGY

Environmental, Social, and Governance continued

Disclosure Alignment and next steps

(a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process Explain

Ithaca Energy has considered all sector-specific metrics suggested by the TCFD

implementation guidance to select the below set of metrics as appropriate to assess

climate-related risks and opportunities in line with the strategy and risk management

process:

• Scope 1 and 2 GHG emissions: The Group collects and tracks Scope 1 and 2

GHG emissions for each of its operated assets, as well as Scope 1 emissions for

non-operated assets, measured in tonnes of carbon dioxide equivalent (tCO

e).

The breakdown of Scope 1 emissions is tracked by source, including emissions

from flared hydrocarbons, other combustion, vented emissions and fugitive

emissions. Ithaca Energy accounts are verified under the requirements, regulations

and guidance of the 2020 UK GHG Order (UK ETS). Scope 2 emissions are

emissions from our office energy purchase. Since 2023, Scope 1 GHG emissions

have also been reported on a net equity basis, incorporating the proportional

contribution from both operated and non-operated assets, offering a more

comprehensive perspective on the Group’s emissions. It is upon this full portfolio

view that our longer-term emissions reduction targets are based. This aligns

with the North Sea Transition Deal targets, which are basin wide targets and not

specific to any individual asset. For further details see Metrics and Targets (b).

• Scope 3 GHG emissions: In 2024, the Group established processes to collect

and track Scope 3 GHG emissions for categories 1 (purchased goods and services),

4 (upstream transportation and distribution), 6 (business travel) and 11 (use of

sold products). These categories were prioritised for this year’s reporting as a

result of peer analysis, sector-specific materiality considerations and availability of

internal and/or secondary data. A Scope 3 GHG emissions inventory was created

as an outcome of this work, which was developed using guidance from the GHG

Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard

and IPIECA’s Estimating Petroleum Industry Value (Scope 3) Greenhouse Gas

Emissions

. Refer to Metrics and Targets (b) below for further details on the Scope

3 GHG emissions figures and calculation methodology.

• Emissions intensity: The Group tracks the emissions intensity of its portfolio

of operated assets, comparing assets with the industry average. The emissions

intensity metric considers Scope 1 and 2 GHG emissions (as above) and oil and

gas production and is measured in kilogrammes of carbon dioxide equivalent per

barrel of oil equivalent (kgCO

e/boe). Since 2023, we have also tracked and

reported our net equity Scope 1 emissions intensity.

• Energy intensity: The Group tracks the energy intensity of its portfolio

of operated assets to monitor progress and identify further efficiency

opportunities. The energy intensity metric considers energy consumption

from operated assets and Ithaca Energy’s offices, and oil and gas production,

measured in terajoules per barrel of oil equivalent (TJ/boe).

• Emissions abatements and progress towards group emissions targets: Progress

towards targets is tracked against our baseline year, 2018, and against NSTD

targets. Milestones related to emissions reduction project delivery are included

in team objectives for relevant individuals and teams, and are included in the

Group scorecard as a key measure of success. Scorecard performance helps

to determine the annual bonus outcomes for almost all employees, including

Executive Directors and senior management. For further information on the

KPIs included in performance scorecards see page 36.

Ithaca Energy currently holds an internal carbon price assumption of £50/tonne,

£70/tonne and £80/tonne for 2025, 2026 and 2027 respectively, and is inflated

thereafter. The appropriateness of this assumption will be reviewed annually or more

frequently if warranted by changes to our assessment of the outlook.

Our priority this year was to develop a Scope

3 GHG emissions inventory, and continue to

strengthen the accuracy and transparency of our

emissions metrics explained opposite.

Moving forwards, we will evaluate the findings from

this year’s climate-related risks and opportunities

identification and assessment refresh, to help

identify additional metrics to support our climate-

related risk assessment and management processes.

By 2027, we plan to have in place KPIs and

targets associated with each climate-related risk

and opportunity we have identified, allowing us to

track also our exposure to climate risk, in addition

to our emissions performance. For example, we

will consider developing and disclosing specific

KPIs and/or targets related to capital spent on

decarbonisation efforts.

1 GHG Protocol https://ghgprotocol.org/corporate-value-chain-scope-3-standard

2 IPIECA https://www.ipieca.org/resources/estimating-petroleum-industry-value-chain-scope-3-greenhouse-gas-emissions-overview-of-methodologies

Metrics and Targets

77ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

(b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Comply

Net equity operated and non-operated basis 2024

2023

2022

2021

Scope 1 GHG Emissions (tCO

e) 602,650 566,711

Carbon Intensity (kgCO

e/boe) 20.7 19.2

Gross operated asset basis

Scope 1 GHG emissions (tCO

e) 447,864 435,522 482,647 497,362

Scope 2 GHG emissions (tCO

e) (office energy purchased) 326 270 678 567

Total Scope 1 and 2 GHG emissions (tCO

e) 448,190 435,792 483,325 497,929

Amount of Scope 1 emissions from flared hydrocarbons (tCO

e) 67,752 74,696 67,362 82,312

Amount of Scope 1 emissions from other combustion (tCO

e) 353,104 323,655 375,775 391,977

Amount of Scope 1 emissions from process emissions (tCO

e) – – – –

Amount of Scope 1 emissions from vented emissions (tCO

e) 23,348 32,371 39,510 22,215

Amount of Scope 1 emissions from fugitive emissions (tCO

e) 3,660 3,642 949 949

Carbon intensity (kgCO

e/boe) 23.9 25.0 23.8 24.6

Energy intensity (TJ/Mboe) 0.35 0.35 0.33 0.36

Percentage change in Scope 1 and 2 emissions, compared with baseline

-18% -23% -15% -10%

Energy consumption MWh 1,821,011 1,677,419 1,879,541 2,040,278

Scope 3 GHG emissions (tCO

Category 1

394,007 – – –

Category 4

111,958 – – –

Category 6

669 – – –

Category 11

10,441,600 – – –

We will continually assess the suitability of the metrics

we use to measure our progress toward achieving our

Net Zero milestones.

We will also build on the work achieved in 2024, by

seeking further opportunities to refine our calculation

methodology and incorporate additional categories

into our Scope 3 GHG emissions inventory and

reporting where appropriate.

Disclosure

3 The metrics reported under 2023, 2022 and 2021 highlight the business emissions metrics pre-combination. The percentage reduction is against the 2019 baseline, as reported in previous years. Percentage change in 2024 is against the new 2018 combined baseline, assuming for a full year of

Cygnus emissions in 2024 for transparency in the comparison. All other metrics reported under 2024 assume ownership of Cygnus emissions from the date of the business combination on 1 July 2024. See page 59 within the ESG section for more on our re-baselining activities since the 2024

Business Combination.

4 Only current year data is provided given this is the first year Ithaca Energy has calculated and reported Scope 3 GHG emissions. Moving forwards, historical data will be provided to allow for trend analysis (covering 2024 reporting period onwards).

5 Category 1: Purchased Goods and Services has been calculated on an operational basis using a spend-based method. Emissions associated with drilling rig rental and Mobile Offshore Drilling Units (MODUs) have also been included in Category 1 emissions calculations. Ithaca Energy aims to develop

a more tailored and hybrid calculation approach in future years, increasing data collection from suppliers and internal systems.

6 Category 4: Upstream Transport and Distribution has been calculated on an operational basis and includes emissions from the fuel consumption of upstream supply vessels, tankers, dive support vessels, remotely operated vehicle support vessels, walk-to-work vessels, and helicopters.

7 Category 6: Business Travel has been calculated on an operational basis, and includes emissions associated with hotel stays, and the air, rail and road travel of employees for business related activities in vehicles owned or operated by third parties.

8 Category 11: Use of Sold Products has been calculated on an equity share basis, and accounts for emissions associated with the use of oil, natural gas, and natural gas liquids (NGL). Emissions from the production of oil account for the assumed combustion of various energy-use refinery products.

Metrics and Targets continued

78 ITHACA ENERGY

(b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks continued

Since 2023, Scope 1 Greenhouse Gas absolute emissions, and carbon intensity have been reported on a net equity basis, incorporating the proportional contribution from both operated and non-operated assets. All emissions metrics

are calculated in line with the GHG Protocol. Scope 2 emissions are calculated using a market-based method.

In 2024, in order to align with industry and the NSTD, we moved from a 2019 baseline to a 2018 baseline and included the emissions from the portfolio of assets we operate, and have interest in, post the Business Combination with

Eni UK effective 1 July 2024. When comparing our progress towards our emissions targets, we have compared the 2024 data from the 1st of January 2024, in order to get an accurate picture of our portfolio emission performance.

This year we focused on expanding our GHG emissions monitoring and reporting to address Scope 3 GHG emissions, which denotes the indirect emissions that occur within the upstream and downstream activities in our value chain.

For our first year of reporting on Scope 3 GHG emissions, we have calculated and reported against four of the fifteen Scope 3 GHG emissions categories as defined by the GHG Protocol. Scope 3 GHG emissions estimates have

been calculated using guidance from the GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard and IPIECA’s Estimating Petroleum Industry Value (Scope 3) GHG Emissions.

Ithaca Energy’s Scope 3 GHG emissions are significantly greater than its Scope 1 and 2 emissions and account for the majority of our emissions footprint. We have prioritised our data collection, estimation and reporting efforts on

Scope 3 activities that we expect to be most significant or material to the business, as well as taking into consideration data availability given our first-year reporting of Scope 3 GHG emissions. For example, Category 11 (Use of Sold

Products) was prioritised given it is typically a significant Scope 3 activity for all oil and gas companies. By estimating and monitoring our Scope 3 emissions moving forwards, we aim to better understand the broader footprint and

identify areas for emission reduction across the value chain.

In future years, we will continue developing our calculation methodologies to mature our GHG emissions calculations. We will aim to do this through further engagement with our suppliers to gather additional, more granular data, as

well as expand reporting to include additional Scope 3 categories based on relevance to the organisation and data availability. We anticipate some changes to some category emissions in future years as additional data is captured and

assessed by the organisation

. Ithaca Energy intends to explain any material changes in emissions in the future as well as provide clarity on emission calculation approaches to increase transparency around Scope 3 emissions while also

supporting alignment on industry-wide approaches

Disclosure

Environmental, Social, and Governance continued

Metrics and Targets continued

79ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

(c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets Explain

Ithaca Energy has a target of achieving Net Zero operations on a Scope 1 and Scope 2

net-equity basis by 2040, ten years ahead of the NSTD commitments, with several interim

targets.

The Group is targeting an absolute reduction of Scope 1 and 2 emissions of 50% by 2030

on a net-equity basis, which includes emissions from non-operated joint ventures, using the

NSTD-aligned 2018 baseline. As of the end of 2024, the Group is on track to surpass the

NSTD targets of 10% by 2025 and 25% by 2027

All targets are re-baselined following any major changes to the business, including

acquisitions or divestitures. In 2024, following the Business Combination with the Eni UK

businesses, our asset portfolio changed significantly and as a result, we have re-baselined our

2018 emissions levels, on both an operated and net equity basis, to align with the current

portfolio. As we enter 2025, we have retired our original target of 25% reduction in operated

emissions by 2025 versus 2019, and focus on net equity absolute emissions targets versus

2018, in line with the NSTS.

The Group’s Net Zero strategy, and progress towards targets set therein, are described

earlier in the ESG section on pages 58 to 60.

In 2024, building on the methane targets set in 2023, we matured our methane

action plan and maintained our methane intensity under 0.2%. We have set out a

credible and measurable plan to reach Gold Status level with OGMP 2.0, learning

from the success of our newly acquired asset, Cygnus. Further information on this,

and on our 2024 performance can be found on page 58 to 60.

In 2024, we became signatories of the World Bank’s Zero Routine Flaring initiative,

with engineering works to achieve this on our Captain assets getting well underway in

2025.

Further information regarding our climate-related targets can be found in the

environmental content within the ESG section, above.

Following the Business Combination with Eni UK we

have continued to monitor our emissions and climate

performance against internal targets and industry

expectations.

The refresh of the Climate Risk Register and

completion of quantified scenario analysis per strategy

climate-risk exposure, informed by the all-sector and

sector-specific guidance per TCFD tables 1.1 and 1.2.

In 2024, our priority was to effectively manage the

combination of Eni’s UK assets and re-baseline our

existing targets accordingly. Moving forwards, in 2025

our attention will turn towards further refining our

broader strategy and pathway to achieving our Net

Zero goals. Once this process is complete, we expect to

reach comply status with this TCFD recommendation.

The strategy will be regularly reviewed to ensure

ongoing accuracy and suitability to our business.

Disclosure Alignment and next steps

Metrics and Targets continued

80 ITHACA ENERGY80 ITHACA ENERGY

Environmental, Social, and Governance continued

Delivering low-cost

energy and supporting

our society

Our material topics

• Health and safety

• Our people

• Our communities

Introduction

Ithaca Energy believes in the vast societal benefits of

access to low-cost energy and the need to safeguard

the UK’s domestic energy supply. Our operations in the

UK are critical to this. In 2024, our Combined Business

contributed over 7% of UK gas production, with the

addition of the Cygnus field, the single largest producing

gas field in the UK. Read more about the UK’s energy

quadrilemma on page 26.

We remain focused on our social landscape, through our

commitment to the health and safety of our workforce,

embedding a strong culture and giving back to our local

communities, all as key stakeholders of the Group.

We strive to provide a safe and healthy work

environment for all employees, contractors, and

personnel, ensuring that our operations meet the highest

standards, and have established a robust HSE policy

supported by a comprehensive management system,

which includes critical frameworks such as the

Company Major Accident Prevention Policy

(CMAPP), among others.

We continue to hold ourselves accountable for

performance by incorporating challenging safety and

environmental measures into our scorecard, which is

reviewed regularly by our Board. Our management

processes include risk assessments, compliance with

legislation, and proactive participation in key industry

groups such as OEUK and Step Change in Safety.

Our people remain central to our success, with a focus

on talent development, employee engagement, and

fostering a culture of accountability. By embedding

our values through the Group’s ‘Our Way’ behavioural

framework, we create a positive and inclusive work

culture that drives collaboration, strengthens leadership,

and empowers individuals to contribute to our business

objectives and shared success. Our initiatives aim to

bring our visions and values to life and create a sense of

belonging for all of our staff. In 2024, we saw an uplift

in our employee engagement survey participation, and

drew on their feedback to further develop our action

plans, ensuring that our people feel that their voices are

heard and valued.

We continue to show our commitment to our talent

development, allowing the Group to both attract

and retain a skilled, adaptable workforce by providing

ongoing development opportunities for all employees.

In 2024, we expanded our graduate programme and

investment in supervisor training to ensure continued

growth and development of our teams.

Our social commitments extend beyond the workplace,

as we continue to engage with and support the

communities in which we operate. Ithaca Energy

has built strong relationships with charity partners,

contributing to causes related to poverty, mental health,

dementia, cancer, and educational support.

In 2024, we donated approximately £250,000 to

our key corporate charitable partners and approved

40 employee charitable requests providing support

to community projects. Our employees contributed

a total of ~1,200 volunteering hours to various

charitable projects.

Our charitable contributions and volunteering efforts

were recognised, with the Group receiving a nomination

for OEUK’s Neighbour of the Year Award. We are proud

to have shown our support for VSA, Maggie’s Centre,

Living Well Café, AberNecessities, and Camphill School,

making a positive impact on local communities and

enhancing our social licence to operate.

OUR TARGETS / OBJECTIVES

Ensure no Tier 1/Tier 2 process safety events are experienced across our assets

Implement a new harmonised Business Management System across the organisation

To launch and embed our behavioural framework – ‘Our Way’

Integration of our people to form one team, following successful Business Combination

Launch of our new volunteering project with our charity partner, VSA. To build, create

and launch Aberdeen’s first Dementia Village for Crosby House Care Home residents

Achieved In progress New

LINKED SDGs

Social

81ANNUAL REPORT AND ACCOUNTS 2024 81ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Case study

Integrating our people

Following our successful Business Combination with Eni UK in October

2024, Ithaca Energy has prioritised the integration of its current and new

employees ensuring a streamlined integration of all personnel, cultures

and systems. Integration activities have centred around bringing people

together to create new connections and build relationships.

Supporting our people

From day one, taking care of our people has been

our top priority, recognising the need for open and

transparent two-way communications. A dedicated

hub site was created to allow the opportunity for Q&A

and a comprehensive and user-friendly guide was made

available on the hub, featuring essential information on

topics such as safety, IT, HR, time-writing, and expenses

for our new colleagues. In addition, more detailed

resources on changes for colleagues were provided.

HR and IT teams dedicated significant time collaborating

with Eni UK to ensure seamless system connectivity and

alignment. Teams worked hard to ensure understanding

of systems and processes and, most importantly, provide

a warm welcome to the new business.

Bringing people together

The Business Combination was marked with an engaging

town hall event, bringing together approximately 500

staff members at a single location in Aberdeen. This

gathering provided a unique opportunity to connect with

new colleagues, hear the new Leadership Team’s vision

for the future, and participate in high-energy team

challenges.

Our Executive Chairman, Yaniv Friedman, kicked off the

day, with a clear message: This is a new era – together,

we will shape an exciting future for ourselves and our

colleagues.

Fostering connection and engagement

Throughout October, a programme of informal team

visits saw leaders engaging directly with teams across

the business. These visits provided valuable opportunities

to introduce leadership, gather feedback, and reinforce

the rationale behind the Business Combination.

Offsite team-building events further strengthened

team dynamics, with activities ranging from curling to

coasteering, and helping colleagues build connections

both inside and outside the office.

82 ITHACA ENERGY82 ITHACA ENERGY

Our approach

At Ithaca Energy, Health, Safety, and Environmental

(HSE) performance is our highest priority, and we

remain committed to providing a safe and healthy

working environment for all employees, contractors and

other personnel working for us.

To drive effective HSE management we ensure that we:

• Have an effective HSE policy in place, which includes

CMAPP requirements that provides a framework

for all group activities, supported by a Company

management system;

• Include challenging safety and environmental

performance measures in our scorecard designed

to drive performance improvements, tracked at

established meetings and reviewed by the Board;

• Diligently apply robust risk assessment and

management of change processes;

• Manage activities in compliance with legislation and

industry standards, through subscription to legislation

services and proactive participation in groups led by

industry bodies and groups such as OEUK and Step

Change in Safety;

• Ensure regulator accepted safety cases in place for all

offshore facilities which summarise our management

of potential Major Accident Hazards (MAHs) and

safety and environment sections of our Company

management system;

• Undertake detailed Line of Defence (LOD) auditing,

driving focus on prevention of Major Accident

Hazards, with regular progress reporting to the Board

HSE Committee;

• Effectively manage independent assurance of safety

and environmental critical elements (SECE) by an

Independent Competent Person (ICP) as part of our

written scheme of verification;

• Undergo effective independent reviews of well

programmes undertaken via our well examiner;

• Adhere to our framework for technical authorities,

providing independent assurance of work activities;

• Maintain effective crisis management and emergency

response processes, exercised regularly and supported

by specialist agencies as required; and

• Have clear oversight and challenge of activities by the

Board HSE Committee, which is led by experienced

industry leaders.

Recognising that the prevention of process safety events,

and the health, safety and security of those who work

for, with, and alongside Ithaca Energy, are central to

our business success, we work to proactively manage

the potential risks of major incidents and actively drive

improvements in our HSE performance by continuing to:

• Focus on developing a strong leadership culture,

prioritising process safety culture and Stop Work

Authority;

• Emphasise our Group safety leadership expectations,

which were launched in 2024;

• Further develop our process safety culture, with

continued focus on leadership training for senior

leaders;

• Work to understand and effectively manage human

factors within our activities;

• Continue frontline Operator Process Safety training;

and

• Implement the Process Safety Fundamentals across

our operations.

Performance

The Group continues to monitor and manage the

Serious Injury and Fatality Frequency (SIF-F) associated

with its operated assets as a means of evaluating the

health and safety performance of the Group and the

suppliers working on the assets.

In addition, the Group progressively monitors process

safety events, monitoring Tier 1 and Tier 2 events (as

defined by Institute of Oil & Gas Producers IOGP

AP1453) for learning, improving operational and process

safety performance, within an open and transparent

incident reporting culture, as a continual focus of the

business and a combination of targets and specific measures

are implemented with a view to facilitating this goal.

During 2024, Ithaca Energy announced the completion

of its transformational Business Combination with Eni

UK. HSE performance data relating to the operated

assets, specifically Cygnus Alpha, Cygnus Bravo, and

operational MODU from 1 July 2024 onwards, has been

incorporated into the Group performance data reported

for 2024.

Our performance with regard to Serious Injury and

Fatalities, Process Safety Events and Recordable Case

or injury rates are shown in the following table, which

confirms continued improvements versus prior years:

2024 2023 2022

Serious Injury and

Fatalities – – –

Process Safety Events

Tier 1 – 1 –

Process Safety Events

Tier 2 – – 2

Total Recordable Case

Frequency per million

hours 2.30 3.31 3.38

Looking ahead

In 2025, Ithaca Energy will continue to seek

opportunities to deliver improvements in our HSE

performance. Key focus areas include:

• Leadership: Supporting our frontline regarding

our safety leadership expectations and human

performance;

• Controls: Continuing to improve our control of work

processes;

• Assurance: Delivering our Lines of Defence plans for

HSE and Technical Authority Auditing; and

• Process Safety: Continuing to embed improvements,

including immersing Process Safety Fundamentals,

process safety KPIs and the use of the Barrier Model

into our operations.

Environmental, Social, and Governance continued

Health and safety

83ANNUAL REPORT AND ACCOUNTS 2024 83ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

83ANNUAL REPORT AND ACCOUNTS 2024

Case study

Supporting the Next

Generation of Energy

Professionals

Ithaca Energy is proud to be a longstanding supporter of OPITO’s Oil

and Gas Technical Apprenticeship Programme (APTUS). We currently

have nine apprentices working across our assets, gaining invaluable

experience and insights into the energy industry.

OPITO’s apprenticeship programme begins with two

years of college, where apprentices develop foundational

knowledge and complete the academic requirements

for their SVQ Apprenticeship. In their third and fourth

years, apprentices join sponsoring companies to gain two

years of practical offshore experience.

This year, our Process Operator, Dylan Fettes, who

worked on the Group’s operated Captain and Alba

assets, was named OEUK’s Apprentice of the Year.

Reflecting on his experience, Dylan shared:

“The opportunity to work alongside experienced

individuals with years of industry knowledge has been

invaluable. There’s always more to learn from your peers.

My time offshore has provided not only technical skills

but also life lessons. The crews on both installations have

been friendly and supportive, and I’m truly grateful for

their guidance – without them, I wouldn’t be where

I am today.”

APPRENTICES WORKING

ACROSS OUR ASSETS

VOTED OEUK’S APPRENTICE

OF THE YEAR

A key activity in 2025 will be progressing integration

activities following the completion of the Business

Combination with Eni UK in 2024. In the period since

the completion, Ithaca Energy has been completing

detailed reviews of systems, tools and processes with

a view to identifying best practice opportunities to

implement which will enhance HSE management and

deliver business efficiencies. We will integrate activities

designed to deliver performance improvements in 2025

via a closely managed change management programme.

In 2024, our priority was to effectively manage the

combination of Eni’s UK assets and re-baseline our

existing targets accordingly. Moving forwards, in 2025

our attention will turn towards further refining our

broader strategy and pathway to achieving our Net

Zero goals. We will also review existing GHG emissions

commitments and interim targets. Once this process is

completed next year, we expect to reach comply status

with this TCFD recommendation. The strategy will

be regularly reviewed to ensure ongoing accuracy and

suitability to our business.

84 ITHACA ENERGY

Culture

Our approach

At Ithaca Energy a key focus area is to create a company

that we all want to be a part of. 2023 saw the embedding

of our vision and values, and the development of our

behavioural framework ‘Our Way’. The behavioural

framework was developed in partnership with a cross

section of our workforce using employee feedback to

bring our values to life, providing clear expectations for

all. We launched ‘Our Way’ early in 2024 and have been

embedding these behaviours, that support our Company

Values throughout the course of the year.

Our performance

In 2024, we engaged with our workforce through

townhalls, village halls and team sessions to achieve a

high level of understanding of the ‘Our Way’ behavioural

framework. This was supplemented by the support of our

culture ambassador team (CATs). Our CATs are a group

of employees who volunteered to support the leadership

team in embedding our vision, values and behaviours.

The CATs have supported communications, shared and

celebrated examples of our values in action, provided

feedback, and acted as role models.

Looking ahead

We will continue to focus on our values and bring them

to life every day with leadership commitment and

communication and by celebrating and recognising

employees who live the values, making Ithaca Energy a

great place to work.

Following the Group’s Business Combination, aligning

our ways of working and a ‘one team’ focus is critical. We

will use our values and behaviours to guide and support

this process.

Employee engagement

Our approach

Attracting and retaining a skilled, adaptable and diverse

workforce is one of our key goals. Ensuring we have

an engaged workforce is critical to achieving this goal

and our success as an organisation. We engage with our

workforce through a number of well-established forums

such as our employee consultation forum, diversity,

equity & inclusion network, sports & social committee,

culture ambassador team and our team of well-being

champions. In addition, we share key messages through

town halls, interactive ‘LIVE with Leaders’ sessions and

with smaller groups in informal sessions such as our

breakfasts with our Executive Leadership Team.

Listening to employee feedback is important to us.

In addition to face-to-face engagements we conduct

employee surveys to identify opportunities for

improvement, by providing reliable insights into the

areas our employees feel we are doing well and where we

need to improve.

Our performance

In our most recent survey in August 2024, which had

a high 73% response rate, our employees told us that

they felt safe at work, they believed that their health and

safety is a priority and they had a good understanding

of our values and behaviours and thought collaboration

between teams was a strength. Furthermore, they told

us that they want to see greater leadership visibility,

more visible career opportunities and an increased sense

of belonging. As part of this engagement survey we

asked our employees for feedback on our values and 75%

of respondents said that they had a good understanding

of our values and behaviours.

To take steps to improve on our lower scoring areas

leaders met with their teams to listen to their thoughts

on how to improve and created action plans together.

Looking ahead

We are committed to conducting regular employee

surveys to provide employees with a voice where they

can share their feedback confidentially so that we can

shape our culture and improve engagement. We will

continue to use the feedback to measure the impact our

actions have over time and update as needed.

Talent development

Our approach

At Ithaca Energy we recognise that providing employee

development opportunities is a key contributor to our

goal to attract and retain a skilled, adaptable and diverse

workforce. We invest in talent development and took a

number of steps this year to provide opportunities for

employees to learn and progress.

Our early career talent has grown in recent years

through our summer internships and graduate

programme, securing a pipeline of talent for the future.

We provide development opportunities to all of our

workforce, and ran employee sessions throughout the

year on career development planning. Employees are

kept updated on all vacant roles, have access to regular

inhouse learning and external training and education to

support their development.

Our performance

In 2024, we conducted a review of our graduate

programme to ensure it was meeting our graduates’

development needs and that it aligned with the business

needs. This involved gathering feedback from our

graduates, leaders, graduate sponsors and mentors.

We continue to invest in the APTUS apprenticeship

programme and in 2024, we were proud to see one of

our apprentices being awarded Offshore Energy UK’s

apprentice of the year award.

Recognising the importance of the role of our

supervisors and investing in their development, we

engaged a local training specialist to work closely with

us to develop and deliver a bespoke People Leaders

Programme. 64 supervisors have attended so far,

awarding the course an average overall rating of 8.8 out

of 10.

We regularly reviewed our succession plans with our

leaders and our functional talent teams and identified

and implemented development opportunities for our

future leaders and successors of business critical roles.

We improved our recruitment practices by

implementing a clear recruitment policy and process

to provide transparency, improve efficiency and reduce

timelines from advertising to candidate acceptance.

This policy provided a clear commitment to advertising

opportunities internally and we have seen many

employees transferring across departments, as a result

providing development and sharing experience across

the business.

Looking ahead

We will continue to invest in our early career talent

and following the launch of our improved graduate

programme, we will engage with our graduates and

mentors to ensure that it is effective.

We will continue to support training and education

opportunities for all through inhouse and external

training sessions and development opportunities and

review our succession plans to support employee

development and readiness for future roles.

Following the success of our first People Leaders

Programme, we have scheduled more dates for 2025 to

meet demand and provide opportunities to new leaders

following our Business Combination.

Environmental, Social, and Governance continued

Our people

85ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Our communities

Our approach

The communities in which we operate matter deeply to

us. We believe that being a good neighbour is an integral

component of our sustainability strategy; our social

licence to operate.

Over the course of 2024, we were delighted to have

continued working closely with our five charitable

partnerships. We have built strong relationships with

our charity partners and worked closely to support

them, financially and practically, along with developing

employee engagement opportunities and learning

around different social issues; poverty, dementia, mental

health, cancer, and special educational needs as well

as supporting mainstream education from primary to

higher education and community sport.

Since the commencement of our partnerships

in 2023, our employee engagement surveys and

informal employee feedback have been increasingly

positive. Our most recent engagement score for social

connection rose by 43%. The feedback shows that

supporting voluntary or charitable activities has created

a stronger sense of purpose, positively impacting overall

engagement at work as well as bringing our shared

behaviours to life. Whilst our financial support is needed

more than ever, our partners say our volunteers’ time,

including specialist skills, is our most precious gift.

Each year, our staff receive four volunteering days,

as well as the opportunity to take part in learning

lunchtimes and well-being seminars, webinars and

lectures which have included subjects from mental

health, suicide awareness, menopause to personal

experience of dementia and cancer treatment. We

continue to support our employees and contractors

to participate in various activities and volunteering in

support of Aberdeen Cyrenians, AberNecessities Giving

Tree and Winter Appeals, The River Dee Trust, Cancer

Research UK, Alford Railway and Linn Moor School.

With a strong passion for supporting the next generation

of energy sector employees, every year we welcome

interns, graduates and apprentices, as well as building

lasting relationships with universities, schools and

colleges and sponsoring early-stage career participation

at conferences.

Our performance

This year we were honoured to be shortlisted for The

OEUK Neighbour of the Year Award which aims to

recognise companies that have exemplified exceptional

corporate social responsibility and community

engagement. This nomination further endorsed the

contribution of Ithaca Energy to our community, as well

as motivating our highly valued and ambitious team of

volunteers.

Our support is multi-faceted: from financial support

and volunteering, to raising awareness of social issues

facing our community. In the last year, we have matched

charitable donations and supported more than 40

charitable requests from employees, donating over

£75,000 to local charities, groups and clubs in the

North East of Scotland.

We are delighted to have supported community

projects, charities, clubs, funds, raffles, and charitable

balls, with highlights including:

• Supporting positive mental health, onshore and

offshore. From Therapet visits to supporting

the training of our 50 mental health first-aiders

and well-being champions, we provide support

across the organisation and continue to focus on

removing the stigma associated with mental health

problems, supporting local charity Men in Mind and

encouraging teams on and offshore to share the

national campaign, Time to Talk;

• We have worked in partnership with Aberdeen

Inspired over the past two years to bring an

installation to our office – The Umbrella Project,

which helps to raise awareness and understanding of

neurodiversity;

• Proudly supported the River Dee Trust, which was

set up to improve knowledge of the ecology and

associated fish stocks of the River Dee, to ensure that

practical improvements and restoration of the river

and the wildlife it supports can be achieved through

financial donations. In addition, we joined their team

for two volunteering days, helping to remove skunk

cabbage and litter from woodlands and along the river

path;

• Increased our commitment to LGBTQ+ awareness

with fundraising events for local charity Four Pillars;

• Participation in the Aberdeen Sports Village

Corporate Games. With involvement in every event,

from football to rugby, diving and badminton, the

annual event creates a real sense of collaboration

across departments, driving a sense of belonging and

pride; and

• Proudly sponsored the Aberdeen Intercompany

Rowing Regatta, which included sponsorship of a

women’s lightweight boat, encouraging more women

from across the city to take part in a club firmly

rooted in the local community.

We have continued to provide donations to various local

charities, such as Aberdeen Cyrenians, The Gordon

Highlander Museum, Cash For Kids, ESS Christmas

Appeal, Aboyne Canoe Club, Buchan Pipe Band, The All

Play Project, JDRF, Macmillan Cancer Support, Alford

Railway, Dementia UK, The Inform Prize, Bon Accord

Baths, Men In Mind, Hamish Warm Hugs, Friends of

Anchor, PAPYRUS, Archie Foundation, Westdyke

Football Club, Ellon Guides and The Aberdeen

Clydesdale Show.

CHARITABLE PARTNERSHIPS IN 2024

86 ITHACA ENERGY

Our charity partners

VSA

2024 marks two years of our corporate partnership with

VSA. Over the last year, we have continued to build a

close and strong relationship with the team at VSA and

our partnership has flourished.

We have seen significant commitment from our

employees to support our work with VSA and our

pledge to support Linn Moor School, an Aberdeenshire

residential school which provides specialist education for

some of Scotland’s most vulnerable children and young

people living with complex and additional support needs.

This reflects how important this partnership is to our

employees, onshore and offshore, and the impact that

the team at VSA have had on our people over the last

two years.

Our teams volunteered to create the Ithaca ‘Sensory’

Garden, clearing ground, erecting fences and planting

shrubs and trees, designed to stimulate students’

senses – touch, taste, and sound – using different

plants and materials which help the children with their

cognitive, emotional, physical, social and communication

development. It was a proud moment for Ithaca Energy

when the garden opened in spring 2024.

Our contribution has already doubled that of our initial

charitable donation of £150,000; through fundraising

activities and a pledge to participate in a wide variety of

events. When we launched our partnership, we didn’t

appreciate the positive impact it would have on our

business. We have supported initiatives from tea parties

and choirs, endurance events such as rowing challenges,

golf days, the Kilt Walk, the London Marathon, Run

Balmoral and Aberdeenshire Enduro, and social events

such as our Burns’ Supper and two charity balls – side by

side with VSA staff and volunteers.

Aberdeen Maggie’s Centre

Ithaca Energy are a proud partner with Maggie’s Centre

in Aberdeen, working closely with the centre, supporting

their fantastic initiatives, volunteering opportunities

and fundraising events. The charity makes a significant

difference in our local community and across the UK by

providing free emotional, practical and social support to

people with cancer and their family and friends.

We supported the charity with an initial donation of

£20,000 and rolled out various fundraising initiatives,

including Christmas Jumper Day, Wear it Pink Day,

jail or bail, fire walks, Christmas card sales, sponsoring

Maggie’s annual ball and volunteering for their culture

crawl. Our teams enjoyed volunteering at their centre

in Aberdeen, helping with preparations for their second

Charity Ball. We hosted an Ovarian Cancer in the

Workplace session alongside Maggie’s Cancer Support

specialists who offered advice, support and helped our

employees, managers and department leads to learn

more about the impact of cancer in the workplace.

This year we were delighted to sponsor and attend their

Orange Ball, provide a raffle prize and a further end-of-

year donation of £20,000.

Living Well Café

We are delighted to have supported Living Well Café in

2024, a charity that provides a safe and supportive place

for people living with dementia and/or memory problems

as well as respite for their caregivers. With a close

personal connection to one of our valued employees,

we have experienced first-hand what the charity means

to the people who use this valuable service and it is a

privilege to be able to provide support.

As well as our initial donation of £20,000, we organised a

Dementia in the Workplace session to encourage an open

and honest conversation around dementia and Alzheimer’s

and for us all to think about conversations at work. We

further supported the charity in their Silent auction,

helping to raise as much funds as possible for this incredibly

important and much needed café and safe space for those

affected by dementia and memory problems.

AberNecessities

Ithaca Energy are privileged to support AberNecessities,

a children’s charity dedicated to supporting children

from birth to 18 years of age, living in extreme poverty.

Our staff choose to support AberNecessities in different

ways during the year, including collecting and sorting

preloved clothes, donating to their annual Giving Tree,

and packing Christmas Eve boxes at their HQ. Our

Technology and Innovation team offered their time and

valuable expertise to the charity, supporting the charities

IT systems development, as well as providing a donation

of £5,000 towards new IT equipment. With one in five

children living in poverty across Aberdeen city and shire,

it was important for us to support their ‘Believing in

Magic’ Christmas campaign.

The Group donated £28,000 and volunteering support

to help bring magic to many children in our community

this Christmas. Our six volunteering teams worked

extremely hard at their Christmas HQ, from counting

and costing donations, to sorting and organising the gifts

and making up the Christmas Eve boxes. Our volunteers

found the experience heart-warming, thought-

provoking, inspiring and left feeling overwhelmed by the

generosity of our staff and local community.

During the year we also donated to the charity’s Sweet

Dreams campaign, which bought and supplied 115 beds

and ‘snug as a bug’ packs for children and young people

living in the North East of Scotland and contributing to

improved sleep, health and learning outcomes.

Camphill School

Our charity partner, Camphill School, saw an 86%

increase in children and young people with profound

disabilities unnecessarily placed in hospital units due to a

lack of appropriate placements between 2015 and 2021.

Camphill provides support to children and young people,

many with additional support needs to reach their fullest

potential across its campuses in Aberdeen.

Environmental, Social, and Governance continued

OUR CONTRIBUTION TO VSA

£150,000

double our 2023 contribution

87ANNUAL REPORT AND ACCOUNTS 2024 87ANNUAL REPORT AND ACCOUNTS 2024

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Case study

Supporting our local

communities

In 2024, Ithaca Energy were proud to be shortlisted for the OEUK

Neighbour of the Year Award, which aims to recognise companies

that have exemplified exceptional corporate social responsibility

and community engagement.

In 2024, we continued to work closely with our

charitable partnerships: VSA, Aberdeen Maggie’s

Centre, Living Well Café, AberNecessities and Camphill

School, building strong relationships while supporting

them, financially and practically, along with developing

employee engagement opportunities.

Our strong commitment to ethical practices,

sustainability and social impact within the offshore

energy sector and the initiatives and programmes that

we have put in place, demonstrate our prioritisation of

environmental stewardship, community development,

employee welfare, and stakeholder engagement.

This nomination further endorsed the contribution of

Ithaca Energy to our community, as well as motivating

our highly-valued and ambitious team.

In 2023, Ithaca Energy provided an initial donation of

£20,000 which was pivotal in creating Camphill’s new

residential home, which allows them to support young

people and their families in crisis. This contribution also

helped Camphill to establish their first carbon-negative

home, marking a significant milestone in their efforts

towards sustainability.

Our latest donation of £21,000 in 2024 will help to fund

Aberdeen’s first fully inclusive Outdoor Sensory Adventure

and Learning Playground. This innovative project will serve

the 35,000 children with registered additional support

needs in Aberdeen City, providing a free, accessible space

that ensures every child’s right to play.

Looking ahead

We will continue our commitment to support local

charities and have selected our four new charity

partners for 2025, based in and around the North East

of Scotland. Over the course of each partnership, our

aim is to build strong relationships with each charity;

commit our time to volunteering, fundraising, supporting

initiatives and attending charitable events. We will offer

financial support, as well as providing our teams with

rewarding volunteering opportunities.

This year, we continue our three-year charity

partnership with VSA, helping and supporting the

charity to provide the best of care in our community. We

will launch our new volunteering project, and this project

will include financial support and corporate volunteering

at Crosby House Care Home. Our shared vision is to

create a Dementia Village at Crosby House for the

residents to help them to be as independent as possible.

This will be a year long project, and the Dementia

Village will help to evoke memory, which in turn helps

with mobility and cognitive behaviour. Throughout the

year we will update one summer house unit at a time,

into different hospitality or retail concepts, to allow

individuals to relive happy times from their lives.

We are committed to continue our support for

employee requests for charitable funding of up to

£1,000 per request for various local charities and

organisations in and around the North East Scotland.

88 ITHACA ENERGY88 ITHACA ENERGY

Environmental, Social, and Governance continuedEnvironmental, Social, and Governance continued

A strong governance

environment

Our material topics

• Diversity, equity and inclusion

• Executive succession planning

• Anti-bribery and corruption planning

• Whistleblowing

• Data protection

Introduction

At Ithaca Energy, we strive to maintain the highest

standards of corporate governance and our governing

principles are rooted in dealing fairly and openly,

creating a place of work that treats everyone equally.

We also demand the same of every business in our

supply chain.

The Board is collectively responsible for the governance

of Ithaca Energy and provides direction and guidance

to help shape the strategy and ensure that it is being

executed effectively within a structure that is well

controlled, mitigates risk and is compliant with corporate

and social responsibility. It ensures that the Group

operates in a manner that generates financial value in an

environmentally viable way, while protecting the value of

our assets on behalf of our shareholders.

The Board is responsible for the overall leadership and

control of the Group and there is a formal schedule of

matters reserved for decision by it. This includes approval

of strategy, annual budgets, financial statements,

significant capital expenditure, Board appointments and

the Group’s corporate governance arrangements and

systems of internal control.

During the year, a comprehensive Code of Conduct was

put in place and approved by the Board. The refreshed

Code sets out clearly the leadership’s expectations for

behaviour across the business in the areas of integrity,

objectivity, confidentiality, professional behaviour and

professional competence. It helps to ensure employees

are comfortable in their working environment. It sets

out the principles for appropriate behaviour in the

workplace, helping to ensure good relationships between

colleagues as well as those between employees and

employers. Input to the refreshed Code of Conduct was

provided by several departments within the business. See

more on our Code of Conduct on page 89.

In May 2024, the Board approved a Board Diversity,

Equity and Inclusion Policy, which sits alongside the

Company’s general Diversity, Equity and Inclusion

Policy. Further information on the objectives set out in

this Board Policy can be found in the Nomination and

Governance Committee Report on pages 130 to 133.

We fully subscribe to the aim and spirit of the UN’s

Sustainable Development Goals and Ithaca Energy

is a signatory to the UN Global Compact. We are

committed to taking action across the goals that

we believe we have an ability to influence, including

good health and well-being, quality education,

gender equality, affordable and clean energy, decent

work and economic growth, industry innovation

and infrastructure, reduced inequalities, responsible

consumption and production, climate action, life below

water, and peace, justice and strong institutions.

The Board delegates some of its responsibilities to the

following Board Committees:

• Audit and Risk Committee;

• Nomination and Governance Committee;

• Remuneration Committee;

• Health, Safety, Environment and Security

Committee; and

• Disclosure Committee.

Further detailed information on Ithaca Energy’s

governance framework can be found within the

Corporate Governance Report on pages 110 to 125.

OUR TARGETS/ OBJECTIVES

Creation of a new Board Diversity, Equity and Inclusion Policy

Launch of our refreshed Code of Conduct

On-going programme of diversity, equity and inclusion initiatives for all employees

Annual training for all employees and contractors to ensure all policies and procedures

are adhered to

Strengthen our talent pipeline through regular succession planning discussions for all

senior roles

Achieved In progress New

LINKED SDGs

Governance

89ANNUAL REPORT AND ACCOUNTS 2024 89ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Case study

Code of Conduct

Ithaca Energy is committed to excellence, integrity and ethical business

practises and our Code of Conduct is testament to that.

In October 2024, we re-launched our Code of Conduct across

the business, which serves as a compass that guides our actions and

interactions, ensures that we conduct our business responsibly and

with respect for all our stakeholders.

This applies across our Company, its subsidiaries,

directors, officers and employees, including temporary

and contracted employees.

Committed to conducting our business in an honest and

ethical manner, we promote openness and transparency

and encourage our employees to raise concerns no

matter how small. See more on our Whistleblowing

Policy on page 91.

The Code of Conduct is designed to foster a culture of

openness, trust and respect, providing clear guidelines

for what is expected from each of our employees,

covering the following areas:

• People and Community;

• Business Integrity and Reputation; and

• Information and Assets.

The Company’s policies set out our ethical and

behavioural framework which govern our Group’s

activities and form the basis for the internal and external

actions of our people and how we expect our business to

be conducted.

These policies are underpinned by the effective

embedding of our vision, values and behaviours across

everyone who works with us, guiding us how to behave.

See more on our policies on pages 90 to 91 and in the

Non-Financial and Sustainability Information Statement

on page 49.

Committed to conducting

our business in an honest

and ethical manner.”

90 ITHACA ENERGY90 ITHACA ENERGY

Environmental, Social, and Governance continued

Diversity, equity and inclusion

Our approach

Diversity, Equity and Inclusion (DE&I) are fundamental

concepts in creating an open, diverse and inclusive

organisation where employees feel genuinely engaged and

supported. Diversity and inclusion are fundamental to the

well-being of our employees and the success of our business

and our aim is that our workforce is truly representative of

all areas of society and each employee feels respected and

able to give their best. A diverse and inclusive workforce will

support our business capabilities, increase engagement and

enhance our business results, helping to contribute to fairer

and more equitable communities.

Our performance

During 2024, Ithaca Energy once again took part in the

ADHD Foundation’s Neurodiversity Umbrella Project

(the Project), raising awareness and understanding of

neurodiversity. The Group’s DE&I Network, established

in 2022, provided further information and opportunities

to learn more about neurodiversity, opening up the

discussion on neurodiversity and allowing people to

understand both the challenges and positive impact that

neurodiversity can bring to the workplace to aid in the

project’s aim to change the perception of neurodiverse/

neurodivergent people and celebrating all the many

strengths that come from thinking differently. Employees

were provided with more information on topics such as

Dysgraphia, Tourettes Syndrome and Dyspraxia.

The DE&I Network’s events calendar for 2024 included

topics such as International World Autism Awareness;

Disability Pride Month; International Women’s Day;

International Men’s Day and UN International Day

for Cultural Diversity for Dialogue and Development.

In addition, throughout the year there were various

discussions, led by employees with experience in

the area, covering subjects such as dementia and

Alzheimer’s. In May, a separate DE&I policy for the

Board was approved and adopted. More information on

this policy can be found on page 132.

Looking ahead

We are committed to an ongoing programme of equity

and inclusion for all and we want everyone to feel

comfortable to be themselves, feel listened to and be

able to express themselves. We know that we are still

on this journey and are determined to keep challenging

ourselves to do more. During 2025, we will focus on our

pledges, respect our differences and be inclusive in all

that we do. The Group’s DE&I Network will continue to

educate, advocate, engage and empower our community

to create and sustain a culture and environment that is

diverse, equitable and inclusive. Employee feedback is

vital and the annual DE&I engagement survey allows us

to gather data to help inform our actions and track our

progress.

Board, senior management

and employee diversity

As at 31 December 2024, the gender breakdown of our

employees and Directors was as follows:

Executive succession planning

Our approach

Succession planning as well as talent management is

of critical importance and is discussed and reviewed

regularly at both Board and Nomination and

Governance Committee meetings. Having clear

and credible plans in place is vital to ensure that all

eventualities are covered and that the continuity of

the business is safeguarded with disruption minimised

as we pursue our strategic plans for growth.

Our performance

A regular review of the Board and our leadership team

by the Nomination and Governance Committee is a

key part of this process, as it allows us to assess the

effectiveness of our people and identify potential

opportunities that we might need to develop, as well as

mitigate any risks. Proactive planning will help us prepare

for the departure of those in leadership positions,

whether through retirement, promotion or another

form of exit, meaning that we can rely on competent

successors.

During 2024, the composition of the Board was

reviewed in light of the Business Combination with

several changes being made to strengthen the Board

including the appointment of Zvika Zivlin as Senior

Independent Director, Yaniv Friedman as Executive

Chairman and following the appointment of recruitment

consultants and the subsequent completion of the

Business Combination, Luciano Vasques was appointed

as CEO. In addition, the Group further strengthened

its Executive Leadership Team ahead of the Business

Combination with the appointment of Odin Estensen as

Chief Operating Officer and refreshed the composition

of the Executive Leadership Team following the

completion of the Business Combination. See page 19.

Looking ahead

For 2025, the Nomination and Governance Committee

will ensure that regular succession planning discussions

will continue as this enables us to assess and strengthen

our talent pipeline for senior roles and develop

programmes to support career progression across

the business. It strategically supports our leadership

development and builds a pipeline of leaders who are

ready to step in when needed.

The Board

Male 11 Female 2 Total 13

84.6%15.4%

Senior management

Male 5 Female 2 Total 7

71.4%28.6%

Employees

Male 619 Female 180 Total 799

77.5%22.5%

91ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

91ANNUAL REPORT AND ACCOUNTS 2024

Anti-bribery and corruption policy

Our approach

Ithaca Energy is committed to business integrity, high

ethical values and professionalism in all of its business

dealings and relationships, wherever we operate and

to implementing and enforcing effective systems to

counter bribery and corruption.

It has a zero-tolerance approach to bribery and

corruption and the Group’s anti-bribery and corruption

policy specifically prohibits the offering, giving,

solicitation or acceptance of any bribe to or from any

person or company, wherever they are situated and

whether they are a public official or body or private

person or company. Any breach of this policy is regarded

as a serious matter and will result in disciplinary action,

including, where appropriate, summary dismissal.

Our performance

In 2024, all employees and contractors were required

to complete an anti-bribery and corruption course. No

breaches of the anti-bribery and corruption policy were

identified during the year.

Looking ahead

Annual training for all employees and contractors will

continue to be carried out. The Group’s anti-bribery

programme is built around a clear understanding of

how and where bribery risks affect the business and

comprises key controls such as: policies (anti-bribery,

gifts and entertainment, supply chain); procedures

such as conducting due diligence on suppliers; training

colleagues on bribery risks; and ongoing assurance

programmes such as external as well as internal audits

to test that the controls are functioning effectively.

Whistleblowing

Our approach

The Group operates a whistleblowing policy through

which senior managers, officers, Directors, employees,

consultants, contractors and all persons associated with

us, wherever their location, are encouraged to report

any behaviour which they feel is not right, whether this

affects them personally, or a colleague, or the safety or

compliance of the business.

Whistleblowing concerns can relate to actual or

potential breaches of law or Group policy, including

those relating to accounting, risk issues, internal

controls, discrimination, bullying, illegality, suspicion of

criminality, modern slavery and unsafe practices.

The policy is designed to make it easy for concerns to be

raised without any fear of the consequences. For those

wishing to keep their identity anonymous, they may raise

their concerns on a dedicated whistleblower hotline,

which is maintained by an independent external provider

who will take the details of the incident and provide a

report to the Group of the concern raised. This ensures

concerns or issues can be escalated and dealt with

effectively, without fear of victimisation, discrimination

or disadvantage, in the interests of the business,

colleagues, shareholders and other stakeholders.

Our performance

All matters raised will be reported to and investigated by

the Audit and Risk Committee. No matters were raised

or reported during 2024.

Looking ahead

Our whistleblowing policy will continue to form part of

the employee induction process. The benefit of having

a clear whistleblowing policy in place that specifically

targets the reporting of wrongdoing within the

workplace and provides an accessible and easy procedure

to follow, reassures our employees that we take any

wrongdoing very seriously and encourages them to come

forward with any concerns which they may have without

them fearing a consequence.

Data protection

Our approach

We consider data protection a critical concern and

keeping personal data safe represents a fundamental

element of maintaining the trust of our employees,

customers, stakeholders and other individuals who

provide us with their confidential information.

The UK General Data Protection Regulation sets out

strict requirements for collecting, processing and storing

personal data and failure to comply with this can result

in significant legal and financial consequences, including

fines and damage to our reputation.

Protecting data in the workplace helps prevent

fraudulent activities, hacking, phishing and identity theft

and upholds data security and privacy, strengthening

overall business security.

Our performance

In 2024, we continued to take the protection of our

data very seriously, all employees and contractors

were required to complete online training on Data

Protection; Internet Security/Cyber; and Phishing. In

May, Lynne Clow, Independent Non-Executive Director

was appointed as the Board representative who would

lead Board discussions in the event of a cyber attack.

The Board, ELT and Technology and Innovation Team

continued to build upon its cybersecurity strategy and

performed a number of simulated cyber attack exercises

during the year.

Looking ahead

Our data protection training is ongoing and the periodic

email phishing tests will continue to be sent, with those

who fail to spot the tell-tale signs assigned a training

module aimed at reinforcing the skills needed to

help identify future phishing attempts.

92 ITHACA ENERGY92 ITHACA ENERGY

Financial review

2024 has been a

transformational year.

The Business Combination

and corporate refinancing

have reinforced the strong

foundations of the Group.

The value growth journey

continues.”

Iain C S Lewis

Chief Financial Officer

93ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Case study

Refinancing

$2.25bn refinancing package including:

• $1.5bn amended and restated floating Reserves

Based Lending (RBL) facility, maturing 2029

• $750m 8.125% Senior Notes, maturing 2029

Case study

Business Combination

The Business Combination created a dynamic growth

player with the largest resource base in the UKCS providing

significant growth optionality.

The amended and restated RBL facility of $1.5bn (including $0.5bn letters of

credit), further details of which are set out in note 20, was closed with a high

quality syndicate of 14 principally European, North American and Middle

East institutions with material demand above the facility amount.

There was significant global investor demand for the Senior Notes with the

offering vastly oversubscribed and a public offering process of only 2 days.

The Senior Note proceeds were used to redeem the 2026 $625 million

9% Senior Notes in full, repay amounts drawn under a loan facility with

bp and pay certain refinancing related fees and expenses.

The refinancing was supported by marked improvements in credit ratings

with Fitch Ratings, S&P Global Ratings and Moody’s Ratings, following the

completion of the Eni UK Business Combination.

Fees amounted to $17.8 million for the Senior Notes and $32.4 million for

the RBL which are being amortised over the period of the respective terms.

In addition an early repayment charge of $14.1 million on the Senior Notes due

2026 and unamortised fees of $7.9 million related to the previous facilities were

charged to finance costs.

Financing activities for the year closed with additional letters of credit secured

during Q4 with the signing of new facility agreements with relationship banks.

More than $400 million of additional capacity was added, providing the Group

with material optionality for future decommissioning postings.

Total consideration of $1,065.7 million

comprising of the issue of 639.4 million new

shares and $204.5 million of deferred cash

consideration.

The former Eni UK businesses contributed

$290.1 million of revenue, $272.7 million of

adjusted EBITDAX and $195.0 million of

profit before tax in the period from 3 October

2024 to 31 December 2024.

Had the Business Combination completed

1 January 2024, the Eni UK businesses would

have contributed $1,014.0 million of revenue,

$853.0 million of adjusted EBITDAX and

$598.4 million of profit before tax.

Business Combination related costs of

$16.3 million were incurred in the year to

31 December 2024 and are included within

‘administrative expenses’.

AVAILABLE LIQUIDITY

$1.0bn

TOTAL CONSIDERATION

£1.1bn

94 ITHACA ENERGY94 ITHACA ENERGY

Financial review continued

Summary of financial results

Financial key performance indicators (KPIs)

2024 2023

Adjusted EBITDAX

($m) 1,405.0 1,722.7

Statutory profit for the year ($m) 153.2 292.6

Adjusted net income

($m) 323.6 446.5

Basic EPS (cents) 13.2 29.1

Net cash flow from operating activities ($m) 853.3 1,290.8

Available liquidity

($m) 1,015.1 1,028.2

Unit operating expenditure

($/boe) 22.4 20.5

Adjusted net debt

($m) 884.9 571.8

Pro forma adjusted net debt/adjusted EBITDAX

1 2

0.45x 0.33x

Other KPIs

2024 2023

Total production (boe/d) 80,177 70,239

Tier 1 and 2 process safety events 0 1

Serious injury and fatality frequency 0 0

1 Non-GAAP measure.

2 The pro forma leverage ratio includes the results from the Eni UK businesses from 1 January 2024 to 31 December 2024. The results for the year include the contribution

from the Eni UK businesses from the legal completion date of 3 October 2024. The economic benefits of the Business Combination were attributable to the Group from

1 July 2024 and have been adjusted through the deal settlement mechanism.

Details of non-GAAP measures are set out on pages 249 to 252.

Statutory profit for the year was $153.2 million

(2023: $292.6 million) and adjusted net income

was $323.6 million (2023: $446.5 million).

A reconciliation between statutory net income

and adjusted net income is set out on page 97.”

95ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Financial performance: revenue, costs and charges and adjusted EBITDAX

Adjusted EBITDAX is a key measure of operational performance delivery in the business and amounted to $1,405.0 million (2023: $1,722.7 million), mainly reflecting the lower production in the first half of the year and lower realised gas

commodity prices compared with FY 2023 partly offset by the results of the Business Combination assets being included from 3 October 2024.

Average realised oil prices for 2024 were $81/boe before hedging results and $82/boe after hedging results (2023: $85/boe before hedging results and $82/boe after hedging results). Average realised gas prices for 2024 were $64/boe before

hedging results and $78/boe after hedging results (2023: $76/boe before hedging results and $111/boe after hedging results).

Movement on oil and gas inventory was a credit of $84.2 million (2023: $20.6million) representing movements in underlift/overlift entitlements.

During the year, operating costs (excluding over/underlift) including tariff expenses but excluding tanker costs and net of tariff income were $569.6 million (2023: $524.4 million). The increase in unit operating expenditure per boe

compared to 2023 reflects the significant fixed cost nature of operating cost spend coupled with lower production in the first half of 2024.

Administrative expenses, excluding Business Combination costs of $16.3 million, were $41.0 million (2023: $34.3 million) with the increase principally due to the ongoing administrative costs of the former Eni UK businesses.

Adjusted EBITDAX analysis

2024 2023

Production kboe/d mmboe kboe/d mmboe

Oil 41 15 43 16

Gas 25 9 24 9

Condensate 3 1 3 1

Total production 69 25 70 26

Revenues

$/boe $m $/boe $m

Oil revenue 81 1,176 85 1,330

Gas revenue 64 599 76 659

Condensate revenue 48 47 44 49

Oil and gas hedging gains 5 135 10 266

Total 77 1,957 90 2,303

Movement in oil and gas inventory 3 84 1 20

Tanker costs (1) (18) (1) (21)

Stella royalties – (2) – (4)

Total value from production 79 2,021 90 2,299

Costs

Operating costs excluding tanker costs and net of tariff income (22) (570) (20) (524)

Administrative expenses excluding Business Combination costs (2) (41) (2) (34)

Foreign exchange losses/materials inventory provision – (5) (1) (18)

Other operating costs in arriving at adjusted EBITDAX (24) (616) (23) (576)

Adjusted EBITDAX

55 1,405 67 1,723

1 Revenues in the above table exclude principally other income and put premiums on oil and gas derivative instruments.

2 Non-GAAP measure.

96 ITHACA ENERGY

Adjusted EBITDAX to profit before tax

2024

2023

Adjusted EBITDAX 1,405.0 1,722.7

Depletion, depreciation and amortisation (600.2) (740.3)

Impairment charges on development and production assets (263.0) (557.9)

Exploration and evaluation expenses (24.5) (13.6)

Net finance costs (189.4) (184.0)

Oil and gas put premiums (4.9) (15.4)

Change in fair value of contingent consideration 27.3 (8.0)

Remeasurements of decommissioning reimbursement receivables – 5.6

Revaluation of derivative contracts 0.3 42.8

Business combination costs (16.3) –

Historic claim relating to an acquisition – 50.1

Profit before tax 334.3 302.0

Depletion, depreciation and amortisation charges were $600.2 million (2023: $740.3 million). The year-on-year reduction was principally due to the lower production in the first half of 2024 and the effect of the write-down of GSA

and Alba in FY 2023 partly offset by the result of the Business Combination. Depletion, depreciation and amortisation per barrel was $24 (2023: $29).

Impairment charges on development and production assets of $263.0 million (2023: $557.9 million) principally reflects a charge of $117 million for the Greater Stella Area due to a downward revision in reserves, lower gas prices than

previously forecast and EPL changes together with a charge of $32million in respect of Pierce due to lower oil prices than previously forecast and EPL changes (see note 19 for further details). Other impairment charges of $112 million

were recorded during 2024 principally relating to decommissioning estimate changes on assets that have either been fully written off or have ceased production. The charge in 2023 mainly reflected write-downs of the Greater Stella

Area and Alba following changes in commodity prices as well as reductions in planned drilling activities due to EPL.

Exploration and evaluation expenses amounted to $24.5 million (2023: $13.6 million) and principally relate to licence relinquishments during the year.

Net finance costs were $189.4 million (2023: $184.0 million) and include an early repayment charge of $14.1 million on the Senior Notes due 2026 and the write off of unamortised fees of $5.3 million on the refinancing of the RBL and

$2.6 million on the refinancing of the Senior Notes due 2026. Underlying net finance costs were lower year-on-year as there was less drawn on the RBL facility.

Change in fair value of contingent consideration was a credit of $27.3 million (2023: charge of $8.0 million), mainly due to an updated view from management of the likelihood of certain milestones being achieved.

Revaluation of derivative financial instruments was a credit of $0.3 million (2023: $42.8 million) principally reflecting gains on commodity hedges partly offset by losses on forex forward hedges and interest rate swaps. The credit in 2023

was mainly due to gains on commodity hedges.

Transaction costs of $16.3 million (2023: $nil) reflect principally professional fees and other cost directly related to the Eni UK Business Combination.

The settlement of a historic claim in relation to an acquisition was received in Q1 of 2023.

Financial review continued

97ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Financial performance: profit for the year and adjusted net income

2024

2023

Restated

Profit before tax 334.3 302.0

Tax (181.1) (9.5)

Profit for the year 153.2 292.5

Impairment charges

263.0 557.9

Tax credit on impairment charges

(160.3) (403.9)

Business combination costs 16.3 –

One-off finance charges related to refinancing 22.0 –

Tax credit on business combination costs and one-off finance charges (28.7) –

EPL tax impact of rate increase from 35% to 38% 58.1 –

Adjusted net income

323.6 446.5

1 Post-tax impairment charges of $102.7 million comprise $38.5 million for GSA and Pierce and $64.2 million principally in relation to decommissioning cost estimate changes on assets that have either been fully written off or have ceased production.

2 Non-GAAP measure.

3 See note 2.

Taxation

The tax charge for the year was $181.1 million (2023: $9.5 million) with the increase mainly due to the enactment of the increase in the EPL rate from 35% to 38% and a $88.5 million reduction in Ring Fenced Expenditure Supplement

due to some Group tax loss positions reaching their claim limit in FY 2023. The tax charge for the year excludes the impact of the two year extension of EPL to 31 March 2030 which had it been exacted by 31 December 2024 would

have increased the tax charge by $318 million. This extension was substantively enacted on 3 March 2025 and will, therefore, be a charge to the consolidated statement of profit or loss in Q1 of 2025.

Earnings per share (EPS)

Statutory EPS was 13.2 cents (2023: 29.1 cents) and adjusted EPS was 27.8 cents (2023: 44.4 cents). Adjusted EPS is a non-GAAP measure which eliminates items which distort period-on-period comparisons such as impairment

charges, Business Combination costs, one-off finance charges related to refinancing, the tax effect of such items and tax charges due to changes in EPL.

Shares in issue

On completion of the Business Combination, 639.4 million new ordinary shares of £0.01 each were issued. As a result, at 31 December 2024, there were 1,653.7 million (2023: 1,014.3 million) shares in issue. The weighted average

number of shares during the year for EPS calculations, excluding shares held by the Employee Benefit Trust, was 1,164.3 million (2023: 1,006.7 million).

Dividends

Dividends paid during the year amounted to $432.7 million (2023: $266.0 million), reflecting the third interim dividend for 2023 of $133.6 million and the first and second interim dividends for 2024 of $299.1 million. A further interim

dividend for 2024 of $200.0 million will be paid in April 2025.

98 ITHACA ENERGY

Financial position: assets/liabilities/equity

2024

2023

Restated

Total assets 8,275.0 6,323.5

Total liabilities (5,234.6) (3,802.2)

Net assets and shareholders’ equity 3,040.4 2,521.3

1 See note 2.

Assets

At 31 December 2024, total assets amounted to $8,275.0 million (2023: $6,323.5 million), and comprised current assets of $976.2 million (2023: $845.6 million) and non-currents assets of $7,298.8 million (2023: $5,477.9 million). The

increase in total assets was primarily due to the Business Combination (see note 17) partly offset by a reduction in derivative financial assets of $124.3 million due largely to gas collars and swaps with a higher asset valuation at 31 December 2023

which were realised in FY 2024. In addition, goodwill of $345.6 million arose on the Business Combination.

Liabilities

At 31 December 2024, total liabilities amounted to $5,234.6 million (2023: $3,802.2 million) including decommissioning provisions of $2,655.1 million (2023: $1,859.7 million) and gross borrowings of $1,024.9 million

(2023: $748.2 million). The increase in total liabilities during the year was again primarily due to the Business Combination (see note 17) along with an increase of $145 million due to upward revisions to decommissioning cost estimates.

In addition, cash payable for the Business Combination amounted to $204.5 million, borrowings increased by $276.7 million principally due to a $150.0 million drawdown on the RBL, the utilisation of the $150 million project capital

expenditure facility, a $125 million increase in Senior Notes, offset by the $100 million repayment of the bp loan. In addition, derivative financial liabilities increased by $137.0 million due to gas trades moving out of the money with rising

prices. These were all partly offset by a reduction in corporation tax payable of $74.1 million.

Equity and reserves

At 31 December 2024, total equity and reserves amounted to $3,040.4 million (2023: $2,521.3 million). The increase in equity and reserves during the year was primarily due to the fair value of shares issued on the completion of the

Business Combination of $861.3 million and the profit for the year of $153.2 million partly offset by dividend payments of $432.7 million and adverse movements on hedging reserves of $68.8 million.

Financial position: cash

2024

2023

Opening cash 153.2 253.8

Operating cash flows 853.3 1,290.8

Investing cash flows (390.9) (492.4)

Financing cash flows (449.5) (900.7)

Foreign exchange (1.0) 1.7

Net cash flow 11.9 (100.6)

Closing cash 165.1 153.2

Undrawn borrowing facilities 850.0 725.0

Undrawn project capital expenditure facility – 150.0

Available liquidity 1,015.1 1,028.2

Financial review continued

99ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Operating cash flows

Net cash from operating activities amounted to $853.3 million (2023: $1,290.8 million), reflecting adverse working capital movements of $101.7 million (2023: $210.8 million) and tax payments of $351.3 million (2023: $176.3 million).

The reduction in net cash flow from operating activities was largely driven by lower adjusted EBITAX, higher tax payments and the receipt of the historic claim relating to an acquisition in 2023 partly offset by better working capital

management in 2024.

Investing cash flows

Cash flow used in investing activities amounted to $390.9 million (2023: $492.4 million), reflecting capital expenditure of $464.1 million (2023: $478.8 million) driven mainly by Captain EOR Phase II and Rosebank partly set off by

cash acquired through the Business Combination amounting to $107.5 million (2023: $nil).

Financing cash flows

Cash outflow from financing activities of $449.5 million (2023: $900.7 million) with interest costs and charges and lease payments of $122.5 million (2023: $141.7 million), a drawdown of principal debt of $150.0 million (2023:

repayment of $600.0 million), net proceeds of Senior Notes due 2029 of $86.8 million (2023: $nil), fees paid on RBL refinancing of $31.7 million (2023: $nil) , repayment of the bp unsecured loan of $100.0 million (2023: drawdown

of $100.0 million) and dividend payments of $432.7 million (2023: $266.0 million).

Cash balances were $165.1 million (2023: $153.2 million) at 31 December 2024 and available liquidity was $1,015.1 million (2023: $1,028.2 million).

Prior period adjustments

The income tax charge and the profit for the year ended 31 December 2023 have been restated to reduce the former and increase the latter by $76.9 million, in order to correct the deferred EPL tax treatment of impairment charges

recorded in Q4 of 2023. Deferred tax assets and retained earnings as at 31 December 2023 have been increased by the same amount. Further details are set out in note 2.

Derivative financial instruments

Derivative financial instruments are utilised to manage commodity price risk in a substantive financial hedging programme for future oil and gas production volumes. As at 31 December 2024, the following hedges were in place:

2025 2026

Oil

Volume hedged (mmboe) 5.5 –

Weighted average floor hedged price ($/bbl) 77 –

Gas

Volume hedged (mmboe) 11.4 4.75

Weighted average floor hedged price (p/therm) 89 86

Subsequent events

On 29 January 2025, the Group announced a reorganisation and streamlining of the organisational structure for onshore staff with a targeted completion date of 1 July 2025.

On 30 January 2025, the Court of Session ruled that consent had been unlawfully given in relation to the sanctioning of the Rosebank field development and that a new consent application would be required which included Scope 3

emissions. It did, however, permit the project to progress as planned whilst this new consent is sought.

On 25 March 2025, the Group announced the signing of a sale and purchase agreement to acquire the entire issued share capital of JAPEX UK E&P Limited for an enterprise value of $193 million, based on an effective date of 1 January

2024. The acquisition, which is subject to certain conditions including regulatory approval, is subject to customary purchase price adjustments, which, assuming an illustrative completion date of 30 June 2025, equates to an estimated

payment at completion of approximately $140 million.

100 ITHACA ENERGY

Going concern

Management closely monitor the funding position of the Group, including monitoring compliance with covenants and available facilities to ensure sufficient headroom is maintained to fund operations. Management have considered

a number of risks applicable to the Group that may have an impact on the Group’s ability to continue as a going concern. Short-term and long-term cash forecasts are prepared on a weekly and quarterly basis, respectively, along

with any related sensitivity analysis. This allows proactive management of any business risk including liquidity risk.

The Directors consider the preparation of the financial statements on a going concern basis to be appropriate. This is due to the following key factors:

• Continuing robust commodity price backdrop and a well-hedged portfolio over the next 12 months;

• Reserves Based Lending (RBL) liquidity headroom of $850 million ($150 million drawn versus $1,000 million available), plus $383 million of cash as at 14 March 2025; and

• Robust operational performance and a well-diversified portfolio.

Cash flow forecast – base case assumptions 2025 H1 2026

Average oil price $/bbl 71 68

Average gas price p/therm 107 96

Average hedged oil price (including floor price for zero cost collars) $/bbl 75 70

Average hedged gas price (including floor price for zero cost collars) p/therm 91 89

The oil and gas price assumptions used in the going concern and viability assessments represent management’s current best estimates at the date of approval of the Annual Report and Accounts, as supported by data from third-party

analysis, of future commodity prices whereas the commodity prices used in impairment testing (see note 19) are based on market conditions at 31 December 2024.

Owing to the ongoing fluctuations in commodity demand and price volatility, management prepared sensitivity analyses to the forecasts and applied a number of plausible downside scenarios including: decreases in production of 10%,

reduced sales prices of 20% and increases in operating and capital expenditures of 10%. Management aggregated these scenarios to create a reasonable combined worst-case scenario. The sensitivity analysis showed that, without any

consideration of the mitigation strategies within management’s control, there was no reasonably possible scenario that would result in the business being unable to meets its liabilities as they fall due. The analysis demonstrated that the

Group would still continue to comply with financial covenants and have sufficient liquidity throughout the period to 30 June 2026 to continue trading.

In addition, reverse stress tests have been performed reflecting further reductions in commodity prices, prior to any mitigating actions, to determine what levels they would have to reach such that either lending covenants are breached or

there is no liquidity headroom left. This stress test demonstrated that the likelihood of the fall in price required to cause a breach of covenants or liquidity issue, is considered sufficiently remote in the context of the mitigation strategies

available to management. The mitigation strategies within the control of management include the reduction in uncommitted capital expenditure and variable opex savings in the low production scenario.

Based on their assessment of the Group’s financial position over the period to 30 June 2026, the Directors believe that the Group will be able to continue in operational existence for the foreseeable future. Accordingly, they continue to

adopt the going concern basis of accounting in preparing the consolidated financial statements.

Financial review continued

101ANNUAL REPORT AND ACCOUNTS 2024

Risk management

Throughout FY 2024

we have continued to

mature and embed

our risk management

process.

Risk governance structure

To achieve the strategic objectives of the Group,

creating value over the long-term, it is important that

risk is managed in a methodical and effective manner.

To manage the risks the business faces, a robust risk

management framework is in place to identify, assess

and manage risk in a timely manner to ensure ongoing

effective mitigation of risk.

We recognise that risk cannot be fully eliminated or

mitigated, therefore, it is important to maintain one

of four essential relationships with individual risks:

avoid, accept, mitigate or share/insure. It is the role

of the Board and senior management to determine

the organisation’s risk appetite and the levels of risk

that is acceptable, in the drive to achieve the strategic

objectives of the Group.

Identify principal and emerging risks

Direct delivery of strategic actions

in line with risk appetite

Monitor key risk indicators

Consider completeness of identified risks

and adequacy of mitigating action

Consider aggregation of risk exposure

across the business

Report current and emerging risks

Identify, evaluate and mitigate

operational risks

Operational risk management

Assess effectiveness of

risk management system

Report on principal and emerging risks

and uncertainties

Strategic risk management

Review external environment

Robust assessment of principal

and emerging risks

Determine strategic action points

Execute strategic actions

Report on key risk indicators

Ithaca Energy’s risk management framework

Board/

Audit

and Risk

Committee

Enterprise Risk

Management

Committee/

Executive

Leadership

Team

Business

units

Top down Bottom up

102 ITHACA ENERGY

Risk management continued

Risk management in Ithaca Energy

Throughout FY 2024, we have continued to mature and

embed our risk management process, which is based on

ISO 31000.

The Board is ultimately responsible for ensuring that

the Group maintains an effective risk management and

internal control system by appropriately incorporating

the ‘three lines of defence model’ into the governance

structure of the Group. Selected principal risks and

associated mitigations are presented and discussed at

each regular meeting of the Board such that all principal

risks and associated mitigations are reviewed by the

Board on an annual basis.

The ARC, under delegated authority from the Board, is

responsible for overseeing the effectiveness of the risk

management processes. Principal risks and mitigations are

discussed with the ARC on a quarterly basis with revised

principal risks and mitigations being approved by the

ARC as required. It is acknowledged that principal risks

can have interdependencies (such as Energy Transition

and Net Zero delivery impacting workforce recruitment

or government, fiscal and political risk impacting capital

project execution) and, therefore, risks are considered in

combination as well as on a standalone basis.

Senior management is collectively responsible and

accountable for the risk management process across

the organisation with each principal risk assigned and

owned by a member of the ELT. An Enterprise Risk

Management Committee (ERMC) made up of the

Leadership Team and Risk Management function,

meet in alternate months. The principal risks facing the

Group are determined and reviewed by the ERMC

at each meeting. Risk assessments are revisited with

consideration given to the risk velocity (the speed at

which the risk could impact the business) with risks

revised and updated as required. Mitigating actions are

monitored and tracked to closure.

Each operation, project and function is responsible for

the identification, tracking and management of their

specific risks with formal risk registers maintained.

Review of key risks are monitored and challenged in

monthly operational and project meetings with ELT

members. Risks are escalated within the defined

governance structure so they can be used to inform the

principal risks of the Group.

The Internal Audit Plan for 2025 was reviewed and

approved by the ARC in November 2024. The areas

and processes that are included in the approved Internal

Audit Plan all map to a principal risk of the Group. As

risk is dynamic, the Internal Audit Plan will be reviewed

throughout the current year to ensure that it remains

focused on the key areas of the Group and to ensure the

most effective use of resources.

Emerging risks

Our risk profile will continue to evolve as a result of

future events and uncertainties. Horizon scanning is

undertaken at the meetings to help anticipate future

events that may impact existing principal risks or support

identification of emerging risks that may lead to the

requirement for the creation of a new principal risk.

Emerging risks can be defined as risks where the scope,

impact and likelihood are still uncertain but could have

a major effect on the strategic objectives of the Group.

These emerging risks are monitored to understand the

potential impact on our business and the risk velocity,

to allow timely decision-making. Where appropriate

emerging risks are escalated to our ARC as part of our

regular risk reporting processes.

Emerging risks, which are managed as a subset of our

principal risks are:

• UK Government’s Energy and Fiscal Policies –

this remains an area of uncertainty, with changes

introduced following the change of Government

in the UK and the possibility of the introduction of

further onerous regulation and legislation. This risk is

closely monitored with current mitigation, including

engagement with the UK Government, His Majesty’s

opposition and His Majesty’s Treasury. This risk is

managed as a subset of the Government, Regulatory,

Political and Fiscal risk.

• Geopolitical instability – we monitor the impacts

caused by continuing political instability. Events such

as the Russian war against Ukraine, tensions in the

Middle East and attacks on international shipping in

the Red Sea, have an ongoing impact on inflation and

the global supply chain. This emerging risk is managed

and monitored as a subset of the Supply Chain risk.

• Decommissioning environment – the level of

decommissioning activity in the basin will continue to

increase in the medium to long-term. The availability

of vessels, equipment and expertise in the basin, as

well as the stability of the regulatory environment,

particularly the fiscal regime for decommissioning

costs, could have a significant impact on the Group.

This emerging risk is managed as a subset of the

Government, Regulator, Political and Fiscal risks.

We handle climate risk in the same way as we manage

other risks, albeit that time horizons may be longer.

We have continued to develop our climate risk approach

during 2024, more detail on this can be found in our

TCFD disclosures on pages 64 to 79.

The Board confirms that it has carried out a

robust assessment of the Group’s emerging and

principal risks. Following the announcement,

and subsequent completion, of the Business

Combination with Eni UK upstream business,

the Board agreed the addition of a principal

risk concerning the successful integration

of the Eni UK upstream assets. Set

out below is the Board’s view of the

principal risks currently facing the

Group, along with examples of

how they might impact us and an

explanation of how the risks are

managed or mitigated.

103ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Major HSE

Incident

Risk climate

Operations and well activities may face a major accident or process safety event,

resulting in personal injuries, loss of containment, resultant physical asset damage

and/or environmental impact. A major accident event could impact production

and financial performance of the Group. The Group could also be subject to

regulatory actions, including fines and external reputation could be affected.

Board oversight: The Board sets the expectations for compliance with health

and safety policies and training across the Group and regularly seeks assurance

of compliance with health and safety processes by reviewing health and safety

management information.

• Health and Safety is owned and driven by the leadership team who have

a strong leadership culture, prioritising process safety culture and Stop

Work Accountability. Safety and environmental performance measures are

included in our Group scorecard and are regularly reviewed by management

and the Board.

• Robust and comprehensive HSE policies and Company Major Accident

Prevention Policy (CMAPP) in place, which includes requirements

providing a framework for all Group activities.

• Regulator-accepted safety cases for all offshore facilities, summarising

management of potential Major Accident Hazards (MAH).

• Active engagement with key contractors at all levels in the organisation to

ensure alignment on safety expectations.

• Line of Defence auditing framework in place, driving focus on prevention of

MAHs, with regular progress reporting to the Board HSE Committee.

• Independent assurance of Safety and Environmental Critical Elements

(SECE) by an Independent Competent Person (ICP) as part of our

Written Scheme of Verification with a process in place to ensure actions are

managed and implemented appropriately.

• Independent review of well programmes by our well examiner.

• Crisis Management and emergency response processes, exercised regularly.

During 2024 we have:

• updated our HSE policy, endorsed by our Executive chairman and

our CEO.

• established a Process Safety Improvement Plan.

• in-depth regulatory inspection of Process Safety Leadership practices

successfully undertaken during 2024 with implementation of detailed

Process Safety Leadership Plan continuing through 2025.

There has been continued focus on:

• safety leadership, particularly with regard to Process Safety Leadership and

management of MAHs.

• the implementation of the digital Barrier Model, supporting reviews of the

strength of our barriers by our frontline teams and asset leadership. We have

continued to implement IOGP Process Safety Fundamentals.

• improvement of our Control of Work process, including frontline self-

assurance and changes to how we appoint our key Permit to Work roles.

In 2025, we will progress delivery against our Process Safety Improvement Plan

across all of our assets, including those incorporated during 2024 as part of the

Business Combination. This process will include reviewing any ‘best practice’

approaches within the newly incorporated assets.

We are reviewing our process regarding Human Performance Principals, including

focusing on how we learn from events.

In January 2025, Ithaca Energy joined IOGP which provides access to key

resources and publications and opportunities for collaborating and sharing best

practice across the many member organisations. This membership supports

our goal to enhance our performance in safety, environmental protection,

and operation efficiency, while fostering a culture of continuous learning and

improvement.

Cyber

security

breach

Risk climate

Cyber security is an ongoing risk to the Group due to the constantly-evolving and

intensifying threat landscape which has heightened due to the increased Group

profile and media attention around the oil and gas industry.

Malicious attacks may lead to system unavailability, lack of access to systems

and loss of data. Leading to production downtime, financial costs, fines and

reputational damage which would have a significant impact on the Group and

adversely affect the Group’s ability to achieve its strategic objectives.

Board oversight: The Board receives annual updates on the status of cyber

security across the Group and emerging risks and reviews the adequacy of the

Group’s cyber resilience.

• Dedicated Information Risk Management team with appropriate third-

party support to oversee cyber security.

• Best practice security policies, tools and processes implemented to protect

our applications, systems and networks.

• Effective operation of cyber security systems with 24/7 monitoring and

detection by Security Operation Centre.

• Workforce education and ongoing awareness activities.

• Independent testing and assurance of internal controls and systems.

• Regular review and testing of business continuity and disaster recovery plans.

In 2024, the cyber threat landscape has been shaped by geopolitical tensions,

rising environmental awareness, climate-related activism, and increasingly

sophisticated attacks, including ransomware incidents targeting supply chains

within our industry. These challenges underscore the need for a strong and

proactive cybersecurity posture.

Adding to this complexity, we navigated a Business Combination that required

integrating networks, applications, and data, each a high-risk activity from a

cybersecurity perspective. Despite these challenges, the transition was executed

seamlessly, prioritising the protection of our systems and data.

As threats evolve, we remain committed to protecting our systems, data, and

operations by continually assessing and enhancing our monitoring technologies,

policies, processes, and training programmes, maintaining vigilance, and adopting a

proactive cybersecurity stance.

Principal risks

RISK

CLIMATE

DecreasingStableIncreasing

104 ITHACA ENERGY

Risk management continued

Principal risks continued

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Access to

capital

Risk climate

The Group does not have access to sufficient capital to fund the capital

investment required to deliver the core strategy of the Group. ESG and fiscal

regime instability is undermining lending with a number of banks withdrawing from

Reserves Based Lending to oil and gas companies. Increasing decommissioning

security postings exacerbates capital access risk.

Board oversight: The Board monitors the capital arrangements and structure of

the Group on a quarterly basis as part of the financial reporting cycle.

• Board approved capital allocation framework including adjusted net debt/

adjusted EBITDAX cap of 1.5x, which is calculated quarterly, and forms part

of the Protect leg of the capital allocation framework.

• Diversified capital structure, including Reserve Based Lending facility and

Corporate Bonds.

• Actively managed relationships with banks in the RBL facility and bond

holders via quarterly calls.

• Robust hedging programme to manage the impact of commodity price

exposure on leverage ratios.

• Governance structure to provide regular oversight and scrutiny of the

Group’s financial position.

• Annual capital budget preparation is reviewed and approved at Board level.

• Insurance programmes in place with respect to key asset risk areas, including

Captain loss of production risk.

In 2024, the activities of the Group, including the completion of the Eni Business

Combination, enabled positive credit rating changes to be issued by Fitch Ratings,

S&P Global Ratings and Moody’s Ratings. Together with a significant programme

of institutional engagement this enabled the execution of a full corporate

refinancing to be completed in October including:

• an amended and restated Reserves Based Lending (RBL) facility of $1.5bn

with maturity extended to 2029 including $0.5bn of letters of credit;

• issuance of $750m Senior Notes maturing 2029 (concurrent with the

redemption of the $625m Senior Notes due 2026); and

The refinancing was completed with materially over-subscribed interest in both

the RBL and Senior Notes with the issuance process confirming the financial

market support available to the Group. Further financial capacity is provided by

an uncommitted RBL accordion facility of >$700 m. The process has reduced

borrowing costs and provided incremental liquidity to support future growth.

Capital

project

execution

Risk Climate

The Group is currently engaged in a significant level of capital project activity,

some of which require substantial levels of funding and technical expertise.

Consequently, the Group faces significant risks associated with capital project

execution and development.

If a major capital project materially exceeds cost and schedule estimate it could

erode project economics and create liquidity challenges for the Group.

Board oversight: The Board sanctions all new large capital projects and receives

regular reporting on capital project progression throughout the year.

• Ithaca Energy stage gate process provides a roadmap for moving an

opportunity from initial concept through to a delivered project.

• Robust investment appraisal process to enable consistent evaluation of

opportunities.

• Contract placement follows a formal tender Board process ensuring control

and value realisation.

• Project reporting is prepared monthly and presented to all project

stakeholders, internal and external.

• Independent technical and business assurance to provide confidence to

decision-makers.

• Project governance is in place to ensure the project meets the needs of the

organisation and that anticipated benefits are realised.

In 2024, the Group launched a revised stage gate process, providing an enhanced

structured route to deliver projects, adding rigour to the project process and

improving consistency of outputs.

Costs have been actively managed to mitigate inflationary impacts, either through

commercial negotiation or scope optimisation.

Captain EOR Phase II project was completed during the year with milestone

first subsea polymer injection in May 2024. The project was undertaken through

various post-pandemic supply chain issues but was delivered both on time and on

budget.

Rosebank project progressing in line with multi-year development timeline

towards first production in 2026/27.

Commodity

price

volatility

Risk climate

Future commodity prices are difficult to predict but are expected to remain

subject to increased levels of volatility and speed of change. The fluctuations in

supply and demand, and consequent impact on commodity prices, may result in

the Group being unable to deliver the anticipated financial returns to shareholders

and be unable to support all ongoing operations and capital projects. This could

restrict growth opportunities for the Group and limit its ability to meet its

strategic objectives.

Board oversight: The Board approves all changes to the Group’s hedging policy

and receives monthly reporting on the Group’s hedging status.

• Effective oil and gas price hedging framework in place using swaps, puts

and zero-cost collars to protect from price downside risk whilst providing

substantial price upside exposure.

• Capital allocation framework designed to protect liquidity.

• Balance of short and long-cycle capital investments.

• Carbon credits auction participation undertaken in a disciplined manner in

order to reduce exposure to price volatility.

During 2024, the Group has continued to execute its tiered hedging policy

with proactive hedging at commodity price peaks. This resulted in higher volume

hedging of oil in the earlier part of 2024 and higher volume hedging of gas in the

later part of 2024.

GBP hedging has continued to be deployed in tandem with the commodity

price hedging policy. The inclusion of the Eni UK assets has increased the gas

production in the portfolio, thereby increasing the GBP revenue stream and,

therefore, the GBP net exposure of the Group.

105ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Production

delivery

issues

Risk climate

Due to a range of factors, such as early cessation of production of third party

host infrastructure, alignment with JV partners, well performance, ageing

assets and unexpected shutdowns/expenditure, Ithaca may be unable to deliver

forecast production volumes which could then undermine the future growth and

investment strategy.

Board oversight: The Board reviews performance of all assets and key production

metrics throughout the year.

• Continual monitoring of production efficiency with losses identified and

action taken to rectify.

• Key metrics (leading and lagging) agreed with Board and leadership team

that are regularly reviewed at all levels.

• Diversified portfolio containing operated and non-operated assets across

the lifecycle.

• Continuous engagement with JV partners and regulatory bodies directly

involved with North Sea oil and gas production.

The ENI Business Combination diversified the portfolio and brought significant

enhancement activity at J Area.

Operational issues experienced during 2024 across non-operated joint venture

portfolio and non-operated infrastructure have substantially been resolved.

Production peaked in Q4 2024 at over 135 kboe/d.

Turnarounds successfully completed on all operated assets in 2024.

Energy

Transition

& Net Zero

delivery

Risk climate

The Group is aligned with the Government and industry regulator NSTA’s Net

Zero Framework and recognises that our Group needs to evolve to support the

transition as we continue to focus on reducing emissions whilst supporting the

UK’s long-term energy needs.

Transitional risks on the route to Net Zero have been identified, including changes

to supply, demand and pricing for our products as well as potential for changes

to the regulatory landscape which may impact how we operate our Group and

the associated costs of doing so. Changes to investor requirements could also

impact our access to funding and societal expectations could impact our licence to

operate. Longer-term physical risks related to changing meteorological conditions

because of climate change are also considered. Refer to Section Strategy (b) on

pages 69 to 72 of TCFD for more detail.

Board oversight: The Board sets the GHG/emissions targets for the Group and

maintains oversight of the progress of the GHG/emissions reduction strategy.

• GHG/emissions reduction strategy and policies in place including 2040

Net Zero goal, endorsed by the Board.

• Progress versus targets regularly reviewed by CEO and leadership team

monthly, and by Health, Safety, Environment and Security Committee

quarterly.

• Emission reduction activities linked to performance compensation.

• Emissions metrics incorporated into investment decisions.

• Emission forecasts built into annual Group planning processes, including

review of risk and opportunities regarding climate change as part of the

TCFD framework.

• Processes established ensuring compliance with regulatory emissions

reporting requirements, including independent verification by UKAS

appointed verifier as part of UK ETS Order.

Ithaca Energy participated in the NSTA consultation on the draft Oil and

Gas Authority Plan to reduce UKCS GHG emissions, principally through

electrification. We will work to understand how this impacts upon future activities

on a case by case basis, and work with industry peers on requirements.

We responded to the consultation with OPRED regarding assessment of Scope

3 emissions following the Finch ruling, and participating in the compilation of an

industry-wide response developed by OEUK. We will continue to work closely

with OEUK through 2025 to understand developments and help shape industry

guidance which will be incorporated into our future Environmental Statement

submissions.

Ithaca has signed up to Oil and Gas Methane Partnership (OGMP) and World

Bank Zero Routine Flaring commitment. Our Cygnus assets, included as part

of the Business Combination, hold Gold standard status through previous

participation in OGMP and we will work to use experiences from across our entire

asset portfolio.

Progress of emissions reduction scopes, with more details provided in ESG section

(see pages 56 to 91).

Continued focus regarding flaring and venting, with more details provided in ESG

section (see pages 56 to 91). We have dedicated focus to how we will monitor,

review and report Scope 3 emissions, and have included some elements of Scope

3 reporting, as well as methane intensity in our ESG report.

RISK

CLIMATE

DecreasingStableIncreasing

106 ITHACA ENERGY

Risk management continued

Principal risks continued

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Workforce

recruitment

& retention

Risk climate

Ithaca Energy faces a continuous challenge competing with local markets and

competitors for specific skills and disciplines, especially with the general shift

in the workforce dynamic in the UK and our industry, including an ageing and

experienced workforce offshore. This could impact the business’s capabilities and

capacity in delivering the business plan, affecting the achievement of our strategic

objectives and a reduction in shareholder value.

Board oversight: The Board reviews workforce planning status and initiatives,

including succession planning, at least annually to ensure key skills and knowledge

are retained and developed across the Group.

• Succession planning and workforce planning is undertaken on a regular basis

to evaluate our current and future needs, in line with the Group strategy

(to help identify critical gaps and ensure continuity in key and leadership

positions, retaining and developing the knowledge, quality and skills needed).

• Compensation and benefits are benchmarked against the market and our

peers, to ensure we remain fair, equitable and attractive to new and existing

employees.

• DE&I Committee in place with the aim to improve awareness across the

organisation and create a more inclusive environment.

• Employee consultative forum providing direct access for onshore and offshore

employees to senior management.

Employee survey completed in 2023 with a subsequent pulse survey in Q3 2024

showing a small improvement in engagement. Following this our key focus areas

continue to be communication, sense of belonging and career opportunities along

with improved recognition. This is being actioned at a team level with each team

holding an engagement session and committing to action.

Series of DE&I awareness initiatives rolled out during 2024, supporting a sense

of belonging.

A late life steering group was established to develop our offshore resourcing

strategy for facilities nearing end of life. This included a focus on matching career

aspirations to business needs.

We have continued with our commitment to early career programmes with a

number of apprentices, interns and graduates joining us in 2024, along with

improving our development programme for our early career employees.

Following the Business Combination there has been a focus on integrating our

business practices and establishing a one-team approach. This will continue during

2025 where we will work to optimise our organisational structure.

Supply chain

capacity

& capability

Risk climate

Group success and achievement of strategic objectives is dependent on supplier

performance. We recognise that our suppliers are subject to similar risks to

our own that impact on their capacity and capability, e.g. workforce retention

and recruitment and cost escalation, volatile commodity prices and regulatory

compliance.

Supply chain risks could result in delays and/or increased cost to capital projects,

increased unplanned production downtime, increased safety or environmental

incidents, regulatory breaches which may impact achievement of strategic

objectives and shareholder value.

Board oversight: The Board maintains oversight of the supply chain and associated

key risks with a formal review at least annually.

• Formal tendering framework in place to ensure that both technical and

financial hurdles are established and met by potential suppliers prior to

appointment.

• Diversification of suppliers and back-up providers contracted for key

scopes.

• Robust supplier due diligence and qualification process.

• Enhanced liaison, communication and management of key suppliers

throughout capital projects lifecycle.

Market conditions continue to deteriorate with suppliers leaving the market,

decreasing availability and increasing prices.

Improved internal planning and communication with contractors to ensure they

have visibility of our requirements and can plan accordingly.

Supply chain forums held during the year with a focus on safety performance and

expectations.

Engagement with key offshore labour suppliers on approach for late life assets.

107ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Government

regulator,

political &

fiscal

Risk climate

The Group could be adversely impacted by changes to the fiscal, regulatory

and political regime that may undermine its ability to meet its production

commitments and deliver its strategy. Furthermore, the Group is entirely exposed

to the UK jurisdiction and within the UK there is currently a significant level

of political uncertainty that impinges on the UK oil and gas sector. The EPL

was introduced by the UK Government in 2022, increasing the tax burden on

the Group. Changes to the EPL have already been introduced since it was first

announced, including the increase in rate and duration, reduction and removal of

investment allowances, and the introduction of the Energy Security Investment

Mechanism. A consultation process on the post 2030 fiscal regime has

commenced in Q1 2025.

The consequence of fiscal, regulatory or political change could significantly

impinge on the future profitability of the Group and on the economic feasibility,

scale and phasing of the future investment plans.

The Group is also subject to increasing threat of legal challenge, e.g. environmental

challenge. This may result in protracted legal cases/judicial reviews that may delay

the planned completion of future capital project developments.

In 2024, the UK Government, through OPRED, launched a consultation process

on the assessment of Scope 3 emissions, and placed a hold on new Environmental

Statement submissions. This may result in a delay to Development Consents for

new capital projects as the regulator has the potential to face an increased backlog

and new Scope 3 reviewing parameters.

Board oversight: The Board oversees the key regulatory and governance

requirements of the Group through at least annual review of the evolving risk

areas, updates from relevant specialists and the detailed work of Board sub-

Committees on specific operational, HSE and fiscal matters.

• The Group engages in regular and constructive consultations with regulatory

bodies, UK Government departments and industry associations, to ensure

the value of the industry to energy security is understood.

• Active member of the industry trade associate contributing to the strategic

direction and supporting alignment across the industry.

• The Group has considerable experience and robust procedures to manage

legal cases and judicial reviews.

Ithaca Energy has been actively engaging with the UK Government and opposition

parties during the year as part of the Government’s Fiscal Forum and formal

consultation process with the industry to ensure the impact of EPL and the

criticality of capital allowances and investment allowances to ongoing investment

are well understood and appropriately responded to. The Group has highlighted

the consequential impact of reduced investment to the UK’s energy security and

decarbonisation targets.

In response to the UK Government’s regulatory review on Environmental Impact

Assessment, the Group has responded to the consultation with OPRED regarding

assessment of Scope 3 emissions following the Finch ruling and participated in the

compilation of an industry-wide response developed by OEUK.

We will continue to work closely with OEUK throughout 2025 to understand

developments and help shape industry guidance which will be incorporated into

any future Environmental Statements.

RISK

CLIMATE

DecreasingStableIncreasing

108 ITHACA ENERGY

Risk title Risk description Key risk mitigations Activities and impacts in 2024

Major

compliance

breach

Risk climate

A failure to establish and maintain an effective compliance framework may lead

to deficiencies in key processes or controls and to the risk of a major regulatory

compliance breach that results in significant sanctions, reputational damage,

financial loss and potentially a loss of licence to operate or a prohibition notice

resulting in the shutdown of activities.

Board oversight: The Board sets the expectations of compliance with legislative

and regulatory requirements and seeks regular assurance over compliance with

Group policies.

• Established governance Committees with defined roles and responsibilities

for Audit and Risk, HSE, Nomination, Remuneration and Disclosure.

• Board approved documented standards and policies.

• Competence and training, together with necessary safety culture,

embedded across the Group.

• Appropriate joint venture management and support from commercial and

legal with respect to Licences, Joint Operating Agreement/Unitisation and

Unit Operating Agreement compliance.

• Comprehensive system of internal controls over financial reporting with

ongoing work to enhance and develop the robustness of material processes

and controls.

Mandatory Code of Conduct training and independent whistleblowing line in

place.

Increased HSE and Technical Assurance auditing, linking to HSE compliance

requirements.

Integration

of Eni UK

upstream

assets

Risk climate

New risk

Failure to deliver integration of people, systems and processes across Ithaca

Energy and the Eni UK businesses, both leading up to and beyond the completion

date of the combined Group. Failure to effectively integrate carries several diverse

impacts, including poor communication across the organisation, inefficiencies

in planning and execution of work, duplication of effort, failure to comply

consistently with regulatory requirements and ultimately, destruction of value

from the Business Combination.

Board oversight: The Board oversees the integration process and reviews progress

on a quarterly basis.

• Cross functional integration team in place with representatives from each

legacy organisation.

• Internal communications plan in place to ensure employee engagement

through the integration process.

• The ELT are updated monthly on successes and impediments and supports

the prioritisation of integration activities.

Ithaca Energy’s Business Combination with Eni UK completed on 3 October

2024. During 2024 ,integration activities commenced, with leads from each

function appointed to ensure consistency of approach and visibility of activities.

Each function has been reviewing systems, tools and processes across the portfolio

and, from this, will work to identify the most appropriate approach to integration.

In some cases this may mean continuing ‘as is’, whilst in others a process of

harmonisation will be undertaken. Prioritisation of systems integration was

identified as a key enabler of the integration process and full ERP integration was

completed in the first weeks of January 2025.

Integration and Business Management System combination is a key deliverable

and a priority item for 2025.

The Group recognises that business integration is a long-term focus area and

continued focus is needed to ensure that the integration is fully effective.

Risk management continued

Principal risks continued

109ANNUAL REPORT AND ACCOUNTS 2024

Strategic Report

Viability statement

The Directors have assessed the viability of the Group

over a three-year period to 31 December 2027 (the

viability statement period) which was selected for the

following reasons:

• At least annually, the Board considers the Group’s

operating cycles, business plan projections and debt

facility requirements over the coming three-year

period.

• Beyond three years, forecast results may be affected

by changes in government fiscal and other policies

and changes in regulations.

The viability assumptions are consistent with the going

concern assessment for the period to 30 June 2026 as

set out in note 3 of the financial statements with the

following additional assumptions:

H2 2026 2027

Crude oil price ($/bbl) 67 67

UK NBP gas price (p/

therm) 83 77

The oil and gas price assumptions used in the

going concern and viability assessments represent

management’s current best estimates, as at the date

of approval of the Annual Report and Accounts, as

supported by data from third-party analysis, of future

commodity prices whereas the commodity prices used

in impairment testing (see note 19) are based on market

conditions at 31 December 2024. The timeframe of the

cash flow projections used in impairment testing is also

significantly longer than the viability statement period

as it is based on the expected life of each field which can

extend up to 40 years. It is not considered appropriate

to use such a long period for viability or going concern

assessments.

This assessment included the potential financial and

operational impacts, in severe but plausible scenarios,

of the principal risks faced by the Group, relevant

financial forecasts and sensitivities, and the availability of

adequate funding.

Following the October 2024 refinancing, the only debt

facility which starts to fall due within the viability period

is the $150 million project capital expenditure facility.

Repayments under this facility are linked to revenue

generated from a specific field which is currently at the

development stage. Further details of this facility are set

out in note 20.

It should be noted that key assumptions that underpin

the amounts recognised in the consolidated statement

of financial position, such as future oil and gas prices,

discount rates, future costs of decommissioning, and tax

rates, all go well beyond the viability statement period

and take account of climate change and the energy

transition as set out in note 3 and note 19.

Climate change

The Board has also considered how climate risk could

impact the Group’s viability. Further details of the

Group’s assessment of risks and opportunities from

climate change is contained in the strategy (b) section

of our TCFD disclosures on pages 64 to 79.

The section in the TCFD disclosures which outlines

the associated risks over various time horizons, has a

short-term window to 2030. This short-term view most

closely aligns to the three-year period considered in the

viability assessment. As outlined in the TCFD section,

the impact of direct climate-related matters during the

short-term window is expected to be limited to certain

transition risks relating to policy and legal matters as well

as physical, reputational and market related risks.

Sensitivity analysis and reverse stress tests

Sensitivities to the base case have been undertaken

in line with the principal risks of the business that are

considered to have the potential to directly impact the

viability of the Group in the three-year period, namely:

• Reductions in crude oil prices and UK natural gas

prices of 20%;

• Reductions in production levels of 10%; and

• Increases of 10% in both opex and capex were

modelled across the viability statement period.

In addition, management aggregated these scenarios to

create a reasonable combined worst-case scenario. In

this combined downside scenario, after consideration of

mitigation strategies within the control of management,

the Group is forecast to have sufficient financial

headroom and to operate within the requirements of its

financial covenants throughout the viability statement

period. The mitigation strategies within the control of

management include the reduction in uncommitted

capital expenditure and variable opex savings in the low

production scenario.

A reverse stress test has also been performed reflecting

further reductions in commodity prices, prior to any

mitigating actions, to determine what level prices would

have to reach such that there is no liquidity headroom

left. This stress test demonstrated that the likelihood

of the fall in prices required to cause a liquidity issue

is considered sufficiently remote in the context of the

mitigation strategies available to management.

Other principal risks

The sensitivities outlined above have particularly focused

on the following principal risks: production delivery

issues risk, commodity price volatility risk and capital

project execution risk. The other principal and emerging

risks facing the Group as set out on pages 103 to 108

have also been considered over the viability statement

period. On top of the sensitivities run for commodity

prices, production volumes and increased opex and

capex described above, the potential impacts of the

Group’s other principal risks on the viability of the Group

over the viability statement period has been considered.

The Board has reviewed the risk mitigation strategy for

each of these individual risks and believes that either

the risks are likely to manifest outside the three-year

viability window or that the mitigation strategies are

sufficient to reduce the likelihood and impact of these

risks such that either individually or collectively, they

would be unlikely to jeopardise the Group’s viability over

the period to 31 December 2027.

Conclusion

Based on the results of this analysis as set out above,

the Directors confirm that they have a reasonable

expectation that the Group will be able to continue in

operational existence and meet its liabilities as they fall

due over the period to 31 December 2027 and that the

likelihood of extreme scenarios, which would either lead

to a breach of covenants or lack of liquidity, is remote.

The Board confirms that, in making this statement, it

carried out a robust assessment of the principal and

emerging risks facing the Group, including those that

would threaten its business model, future performance,

solvency and liquidity.

This strategic report was approved on behalf of the

Board on 25 March 2025:

Iain C S Lewis

Director

110 ITHACA ENERGY110 ITHACA ENERGY

Corporate Governance report

Governance at a glance

Meeting attendance

Gender diversity

Men Women

As at 31 December 2024

15%

85%

Board composition

Executive Directors, inc. Executive Chairman

Independent Non-Executive Directors

Non-Executive Directors

24%

38%

Scheduled

Ad-Hoc

Executive Chairman

Gilad Myerson

Yaniv Friedman

Executive Directors

Luciano Vasques

Iain Lewis

Non-Executive Directors

Idan Wallace

Itshak Tshuva

Tamir Polikar

Francesco Gattei

Guido Brusco

Independent Non-Executive Directors

John Mogford (SID)

Zvika Zivlin (SID)

Assaf Ginzburg

Dave Blackwood

Deborah Gudgeon

Lynne Clow

Highlights of 2024

• Approved the transformational Business Combination

with Eni UK

• Successful pricing of our Senior Notes offering

and an upscaled RBL facility, representing a

$2.25bn refinancing.

• Approved a new Code of Conduct and a Board

Diversity, Equity and Inclusion Policy.

Ethnic diversity

31%

61%

White

Mixed Multiple Ethnic Groups

Other Ethnic Group

Major shareholders

37.2%

52.2%

Delek Group Limited

Eni S.p.A Limited

1 Gilad Myerson, Executive Chairman, ceased to be a member of the Board with effect from 28 May 2024. Gilad missed one ad-hoc and one scheduled Board meeting

due to a prior engagement that the Board was notified of in advance.

2 Yaniv Friedman was appointed to the Board as Executive Chairman with effect from 28 June 2024.

3 Alan Bruce resigned as CEO with effect from 4 January 2024 and did not attend any Board or Committee meetings.

4 Luciano Vasques, CEO was appointed to the Board with effect from 3 October 2024.

5 Iain Lewis was unable to attend one ad-hoc meeting due to a prior engagement that the Board was notified of in advance.

6 Itshak Tshuva missed several meetings due to prior engagements that the Board were notified of in advance.

7 Tamir Polikar, previously an observer, was appointed to the Board as a Director with effect from 7 October 2024.

8 Francesco Gattei and Guido Brusco were appointed to the Board effective 3 October 2024. Both were unable to attend a scheduled meeting due to a prior engagement,

however, alternates attended on their behalf.

9 John Mogford, Senior Independent Director, ceased to be a member of the Board with effect from 16 May 2024 and was unable to attend three ad-hoc and one

scheduled meeting due to a prior engagement that the Board was notified of in advance.

10 Zvika Zivlin joined the Board as Senior Independent Director with effect from 16 May 2024.

11 Assaf Ginzburgh missed one scheduled meeting and several ad-hoc meetings due to prior engagements that the Board were notified of in advance.

12 Deborah Gudgeon missed one ad-hoc meeting due to a prior engagement that the Board was notified of in advance.

13 Of the 20 Board meetings held in 2024, eight were scheduled as part of the Board calendar and 12 were ad hoc meetings as a result of the Business Combination.

111ANNUAL REPORT AND ACCOUNTS 2024 111ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

During the year Ithaca Energy reported

under the Financial Reporting Council’s

2018 UK Corporate Governance Code

(the Code). The table below, together

with the Directors’ Remuneration

Report, set out on pages 136 to 161

describes in greater detail how the

Company has applied the principles

and complied with the provisions of

the Code.

Code provision Page

1. Board leadership and company purpose

A. Board of Directors 113 to 115

B. Purpose, values and culture 116

C. Resource and control framework 127

D. Stakeholder engagement 48 to 55

E. Workforce policies and practices 119

2. Division of responsibilities

F. Role of the Chair 118

G. Division of responsibilities 118

H. Role of the Non-Executive Directors 118

I. Board policies, processes, information,

time and resources 119 to 120

3. Composition, succession and evaluation

J. Appointments to the Board 123

K. Board skills, experience and knowledge 131

L. Board evaluation 124 to 125

4. Audit, risk and internal control

M. Independence and effectiveness

of internal and external auditors 129

N. Fair, balanced and understandable assessment 163

O. Risk and internal control 127

5. Remuneration

P. Alignment to purpose, values

and long-term success 152

Q. Remuneration policy 152

R. Independent judgement and discretion 156

Compliance with the UK Corporate

Governance Code

Ithaca Energy and its Board of Directors are fully

committed to upholding the highest standards of

corporate governance as these play a vital part in driving

the right behaviour while being crucial to overall business

integrity and performance and to maintaining a sound

framework for the control and management of the Group.

During the year under review and up until the date of

this report, the Company applied the principles and

complied with the provisions of the Code, with the

exception of the provisions set out below. The Code

can be found on the Financial Reporting Council’s

website at www.frc.org.uk.

The Company is aware that the composition of the

Board is impacted by the rights of the significant

shareholders under their respective Relationship

Agreements, see further details on page 120.

Provision 9 recommends that the Chair be independent

upon appointment. The Company has an Executive

Chairman, Yaniv Friedman, and as such, he is not

considered to be independent. Gilad Myerson, who

was Executive Chairman up until 28 May 2024

was not considered to be independent. The Board is

unanimous in its support for Yaniv’s appointment and

considers that the role of an Executive Chairman is

in the best interests of the Group. Yaniv brings to the

Board significant global executive experience working

in the energy and infrastructure sectors and the benefit

of his sound leadership and significant experience

ensures the ongoing commercial success of the Group.

The Directors are of the view that there is sufficient

independent challenge and judgement on the Board

to ensure highly-effective, independent governance.

Further details on the division of responsibilities of the

Board can be found on page 118.

Provision 11 recommends that at least half the Board,

excluding the Chair, should be Non-Executive Directors

whom the Board considers to be independent. Up until

3 October 2024, the Board was compliant with this

provision. Following the Business Combination, there

are 12 Directors on the Board, excluding the Chair, of

which five Non-Executive Directors are considered to

be independent, which falls below the recommended

threshold of the Code. Our Nominated Non-Executive

Directors are diverse and all our Independent Non-

Executive Directors are highly experienced. To continue

to promote effective discussion and decision-making,

the Board continues to progress its search for an

additional Independent Non-Executive Director.

Further details can be found in the Nomination and

Governance Committee report on page 130.

Provision 17 recommends that a majority of members

of the nomination committee should be independent

Non-Executive Directors. Up until 3 October 2024,

the Company was compliant with this provision.

However, following the Business Combination and

in line with the Relationship Agreements (see page

120), Eni are entitled to appoint one nominated Non-

Executive Director to the Nomination and Governance

Committee. Guido Brusco was appointed as a member

of this Committee with effect from 3 October 2024.

The Nomination and Governance Committee consists

of the Executive Chairman, who is not considered

to be independent, two Nominated Non-Executive

Directors and three Independent Non-Executive

Directors. The Directors are of the view that there is

sufficient independent challenge and judgement on the

Committee to ensure highly-effective, independent

governance. Further details on the Nomination and

Governance Committee can be found on page 130.

UK Listing Rules Statement on

Board Diversity Targets

In accordance with UK Listing Rule 6.6.6R (9), the

Company acknowledges that as at 31 December 2024,

the Board has not met the following targets on Board

diversity:

(i) at least 40% of the Board are women; and

(ii) at least one senior Board position (Chair, CEO, CFO

or SID) is a woman.

The Board has met the target of at least one individual

on its Board is from a minority ethnic background, see

page 133 for the Report on Gender Identity.

Further details on the reasons for not meeting these

targets is set out within the Nomination and Governance

Committee report on page 132.

112 ITHACA ENERGY

Executive Chairman’s introduction

Dear Shareholder,

I am pleased to present my first

Corporate Governance report as

Executive Chairman for Ithaca

Energy plc for the year ended

31 December 2024.

Corporate governance

At Ithaca Energy, we strive to maintain the highest

standards of corporate governance and have created a

working culture where honesty, openness and equity

are valued. The Board’s remit is to provide direction to

help shape Ithaca Energy’s strategy and ensure that it is

being executed effectively within a structure that is well

controlled, mitigates risk and is compliant with corporate

and social responsibility.

Good governance comes from an effective Board which

provides strong leadership and engages well with both

management and stakeholders. Our Non-Executive

Directors bring a range of different experiences and

backgrounds and provide constructive challenge to the

Executives, which is vital to create accountability and

drive performance. This in turn creates an environment

that generates and preserves value for stakeholders.

As Directors, we are mindful of our statutory duty to act

in the way each of us considers, in good faith, would be

most likely to promote the success of Ithaca Energy for

the benefit of its members as a whole, as set out in s.172

of the Companies Act 2006, and further details of how

we have achieved this can be found on page 48.

Following the Business Combination, our high calibre Board

and experienced Executive Leadership Team (ELT) have been

further bolstered with the addition of new colleagues, details

of whom can be found below and on pages 113 to 115. The

ELT, with the guidance of the Board, continue to focus on

maximising value for shareholders through the safe, efficient

and responsible production of our assets and the pursuit of

the Group’s strategic objectives. See more on page 19.

Board changes

The Board has seen a number of changes during the

year, including the appointment of a new Executive

Chairman, Chief Executive Officer and Senior

Independent Director.

Following the completion of the Business Combination,

Guido Brusco and Francesco Gattei were appointed as

Eni nominated Non-Executive Directors while Tamir

Polikar, previously a Delek Observer on the Board,

became a nominated Non-Executive Director.

Further details on the changes to the Board can be

found in the Nomination and Governance Committee

report on page 130 and the biographies of each of the

Directors can be found on pages 113 to 115.

Board effectiveness

Under the Code, the Board is required to undertake

a formal and rigorous annual evaluation of its own

performance and that of its Committees and individual

Directors. In December 2024, it was agreed that,

due to the significant number of Board changes

taking place in the latter half of the year, an internally-

facilitated evaluation would be conducted and details

of the process and its outcomes are covered in

the Corporate Governance report on page 124.

An externally-facilitated evaluation is planned for 2025.

Diversity, equity and inclusion

The Board is cognisant of the importance of creating an

open, diverse and inclusive organisation where individual

differences and the contributions of all are recognised

and valued.

The tone for diversity and inclusion across the Group

is set from the top and the Board believes that having

a diverse Leadership Team and an open and inclusive

environment is key. Accordingly, a new Board Diversity,

Equity and Inclusion Policy was adopted during the year,

which sits alongside the Company’s Diversity, Equity

and Inclusion Policy. Further information can be found

in the Nomination and Governance Committee report

on page 132.

Sustainability

Sustainability, the communities in which we operate,

and governance matter deeply to us and are interwoven

into our balanced business strategy and we are clear and

confident about what ESG means for us.

As we move into our industry’s new era, we recognise

that oil and gas will continue to play an important part

of the long-term energy mix to meet the UK’s energy

demands, as we navigate the energy transition. We are

responding to the challenge by harnessing our deep

engineering and environmental expertise to take action.

Our Environmental Stewardship process identifies

and addresses the environmental impact of all aspects

of our operations, driving continuous improvement

in environmental performance and reducing our

environmental impact.

Our aim is not just to meet government carbon emission

targets, but to better them. In the medium term, we

will transition our portfolio to one of the lowest carbon

emission portfolios in the UK North Sea, by investing in

lower-emission intensity assets. We have an ambitious

target of achieving Net Zero ahead of the North Sea

Transition Deal Commitments and further details can be

found on pages 58 to 79.

Relationships with stakeholders

Engaging with our stakeholders in an open, constructive

and transparent manner is essential to understand what

matters most to them and the likely impact of any key

decisions. Our s.172 statement, detailing how we actively

engage with all key stakeholders and the outcome of our

stakeholder engagement, is set out on pages 52 to 55.

Board priorities for 2025

The Group is ideally positioned to create value both in

the UK and through international diversification and our

focus for 2025, to pursue our growth aspirations while

maintaining the trust of our stakeholders and the highest

standards of business ethics, is core to our strategy.

We will continue to focus on ensuring the safety of

our workforce and protecting the environment while

monitoring our Group-wide controls. Finally, I would like

to thank all of our Directors, employees, shareholders,

stakeholders, partners and contractors for their

continued support over the course of the year.

Yaniv Friedman

Executive Chairman

Responsible leadership

ensures the independence of the

Board and the effectiveness of

management is safguarded

Integrity and transparency

ensures clarity, honesty and

reliability in everything we do

Risk management

ensures all risks are identified,

evaluated, mitigated and monitored

Compliance

ensures all laws and regulations

are adhered to

Relationship with stakeholders

ensures there is open and frequent

communication

Corporate governance

ensures a robust system of policies

and practices is maintained

113ANNUAL REPORT AND ACCOUNTS 2024 113ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Board of Directors

The Board’s primary

objective is to

ensure that Ithaca

Energy remains a

successful Company

that generates and

preserves long-

term value for its

stakeholders.”

Yaniv Friedman

Executive Chairman

Luciano Vasques

Chief Executive Officer

Date of appointment: October 2024

Experience and Board contribution:

Luciano joined Ithaca Energy in October

2024 as CEO. He brings a wealth of

executive and energy industry experience

with a career spanning over 30 years

covering a range of leadership, technical

and operational roles. Luciano previously

held the role of Managing Director

of Eni UK Limited and led the recent

acquisition and integration of Eni Energy

UK (formerly Neptune Energy) into Eni

UK’s operations and prior to this he held

the role of Head of Central Asia for Eni

S.p.A, overseeing interests in two giant oil

and gas fields, Kashagan and Karachaganak.

During Luciano’s upstream career, he has

demonstrated a track record of successfully

overseeing and delivering multibillion dollar

developments and operations across Eni

S.p.A.’s global business that will prove

invaluable as the Company embarks on the

development of its high-value greenfield

portfolio. Luciano is a member of the Board

of OEUK.

Iain Lewis

Chief Financial Officer

Date of appointment: October 2022

Experience and Board contribution:

Iain has over 20 years of upstream oil and

gas finance experience in public practice and

the multinational corporate environment.

He is a Chartered Accountant who held

senior positions with EY in the UK and

Canada, leading financial advisory and

assurance engagements for upstream oil

and gas companies ranging from small cap

independents to supermajors. For the past

13 years, Iain has occupied several executive

roles in the Abu Dhabi listed TAQA group,

including Group Deputy CFO and Europe

CFO overseeing the UK and Netherlands

upstream and midstream businesses. He

has also been accountable for large scale

capital programme governance as the

Decommissioning Director for TAQA’s

multibillion-dollar UK decommissioning

programme. In January 2024, Iain was

appointed to fulfil a dual role of Interim

Chief Executive Officer and Chief Financial

Officer, he continued in this role until

October 2024.

Yaniv Friedman

Executive Chairman

Date of appointment: June 2024

Experience and Board contribution:

Yaniv joined Ithaca Energy in July 2024

as Executive Chairman. He has significant

global executive experience working in

the energy and infrastructure sectors and

brings considerable strategic, commercial,

public company and M&A expertise. Yaniv

most recently held the role of CEO of

Modiin Energy LP, an oil and gas partnership

listed on the Tel Aviv Stock Exchange with

operations, including development projects

in the US as well as exploration offshore in

Israel. Prior to this, Yaniv served as Deputy

Chief Executive Officer of NewMed Energy

LP, Israel’s leading energy partnership in

the exploration, development, production

and sale of natural gas. Additionally, Yaniv

has held other senior executive positions in

public and private energy companies.

Committee Key: Committee Chair

Audit and Risk

Nomination and Governance

Remuneration

Health, Safety, Environment and Security

Disclosure

Principal external appointments:

None

Committee membership:

Principal external appointments:

None

Committee membership:

Principal external appointments:

None

Committee membership:

Zvika Zivlin

Senior Independent Director

Date of appointment: May 2024

Experience and Board contribution:

Zvika brings a wealth of board experience,

currently holding the position of non-

executive director of Afcon Holdings Ltd, a

Tel Aviv Stock Exchange listed infrastructure,

technology and construction group, and

having previously held the position of non-

executive director, over a five-year tenure,

for London Stock Exchange listed 888 plc,

including roles as chair of the Remuneration

Committee and member of the Audit,

Nominations and Compliance committees.

Zvika is the Founder and Managing Partner

of Tulip Capital Partners, Wells Fargo’s

former exclusive Israeli partner firm, with

deep experience in cross-border transactions

across a variety of sectors, including energy

and infrastructure. Zvika currently acts as

advisory Board member of Infinidat Limited,

a data storage company. He has previously

served as Senior Advisor to Mediobanca and

Strategic Partner to Alias Tech Investments

(venture capital fund sponsored by JB Capital

Markets of Javier Botin and Jose Miguel

Garcia Venture Capital).

Principal external appointments:

Afcon Holdings Ltd

Committee membership:

114 ITHACA ENERGY114 ITHACA ENERGY

Board of Directors continued

Tamir Polikar

Non-Executive Director

Date of appointment: October 2024

Experience and Board contribution:

Tamir previously served as a Director of

Ithaca Energy from 2020 to 2022 prior

to the Group’s listing on the London Stock

Exchange. Subsequent to the Group’s listing,

he acted as an observer on the Board on

behalf of the Delek Group Ltd. Following

the Group’s Business Combination, Tamir

returned to the Board as a Non-Executive

Director, bringing with him 30 years of

experience in various roles in the business

sector, including as CFO, CEO and director

at public companies in the energy and real

estate sectors.

Tamir was appointed the Principal Chief

Financial Officer of Delek Group Ltd in

August 2020. Alongside this role, he serves

as a director of Delek Group Ltd subsidiaries,

as well as a director and business consultant

of Polikar Holdings Ltd, a company engaged

in real estate development in Israel and

Bulgaria. In the past five years, he has served

as the Deputy CEO of Delek Group Ltd,

and previously held the position of CEO of

the Aspen Group. Tamir is a Certified Public

Accountant and holds an MBA from Heriot-

Watt University in Scotland.

Francesco Gattei

Non-Executive Director

Date of appointment: October 2024

Experience and Board contribution:

Francesco has over 25 years of experience in

the oil and gas industry across various senior

roles at Eni S.p.A. Group. He is currently

Chief Transition & Financial Officer, Chief

Operating Officer and General Manager for

Eni S.p.A. and has previously served as Chief

Financial Officer of Eni, Upstream Director

of the Americas, Head of Investor Relations,

Secretary to Eni’s Advisory Board, Senior

VP of Market Scenarios and Strategic

Options, and Head of Upstream M&A.

Alongside these roles, he was a member

of the board of directors of Saipem from

2014 to 2015. Francesco holds a Masters

in Energy and Environmental Management

from the Scuola Mattei. Furthermore,

he earned a degree in Economics and

Commerce at the University of Bologna

with a thesis on the oil market. Alongside

these roles, he currently holds a position

on the board of directors of Vår Energi, a

company listed on the Oslo Stock Exchange.

Idan Wallace

Non-Executive Director

Date of appointment: October 2022

Experience and Board contribution:

Idan was appointed the CEO of Delek

Group in January 2020, after previously

serving as CEO of Tshuva Group, a group of

private companies owned by Yitzhak Tshuva,

the controlling shareholder of Delek Group

(through Tashluz Investments and Holdings

Ltd.). In addition, since 2010, he has served

as a strategic advisor to the CEO of Delek

Drilling (now called NewMed Energy).

In addition, Idan serves as a director in a

number of leading companies in the energy,

real estate and media sectors. Idan has a

degree in law from Tel Aviv University and is

a Member of the Israel Bar.

Itshak Sharon Tshuva

Non-Executive Director

Date of appointment: March 2023

Experience and Board contribution:

Itshak is an Israeli entrepreneur and

businessman with global business operations.

As the major shareholder of Delek Group,

he is responsible for the discovery of

significant natural gas reserves offshore

Israel, which contributed to its emergence

as an international player. He has been

deeply involved in the development of Ithaca

Energy, helping to position the Company

for its IPO in 2022. In pursuit of Itshak’s

vision, and in partnership with Noble Energy,

since 2000, Delek Group has discovered

substantial offshore natural gas reserves in

Israel and Cyprus, including the Leviathan

field, the world’s largest gas reserve

discovered in deep water in the last decade.

Guido Brusco

Non-Executive Director

Date of appointment: October 2024

Experience and Board contribution:

Guido has over 25 years of experience in the

energy business for Eni S.p.A Group across

different countries and senior positions. He

is currently Chief Operating Officer Global

Natural Resources and General Manager

and has previously served as Upstream

Director, Executive Vice President for the

Sub-Saharan Region and Managing Director

in Angola and Kazakhstan.

Alongside these roles, Guido currently holds

a position on the board of directors of Vår

Energi and Azule Energy Holdings Limited,

an international energy company located

in Angola. In addition, he was appointed as

Chairman of Confindustria Energia, Italy’s

Federation of energy sector associations, in

July 2023. He graduated with Honours in

Mechanical Engineering at “La Sapienza”

University of Rome.

Principal external appointments:

Eni S.p.A

Committee membership:

Principal external appointments:

Delek Group Limited

Committee membership:

None

Principal external appointments:

Delek Group Limited

Committee membership:

Principal external appointments:

Eni S.p.A

Committee membership:

None

Principal external appointments:

Delek Group Limited

Committee membership:

None

115ANNUAL REPORT AND ACCOUNTS 2024 115ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Dave Blackwood

Independent Non-Executive Director

Date of appointment: October 2022

Experience and Board contribution:

Dave has over 49 years’ experience in the

oil and gas sector, including seven years in

the service sector with Schlumberger in

the North Sea and the Middle East, and

27 years in various global roles within bp,

including heading up bp’s upstream business

in the UK and Norway. Since leaving bp in

2009, he has been a Senior Advisor with

Evercore, and has been a non-executive

director with Valiant Petroleum, Expro, and

most recently acting as a non-executive

director at Premier Oil plc for four years,

from 2017 to 2021. Dave has a Bachelor’s

degree in engineering from the University

of Glasgow.

Lynne Clow

Independent Non-Executive Director

Date of appointment: October 2022

Experience and Board contribution:

Lynne is an experienced HR and Operations

Director who has worked extensively in the

UK and abroad, across a variety of sectors.

In December 2024, Lynne was reappointed

as a non-executive director of the Board of

Highlands and Islands Airports Limited for

an additional three-year term and Chairs

its People Committee. Lynne has also been

reappointed for an additional three-year

term to the Board of the Scottish Prison

Service and joined the Board of the Scottish

Children’s Reporter Administration as a

non-executive in October 2024.

Lynne has a wealth of strategic and

commercial experience obtained in KCA

Deutag and throughout her career which,

in addition to her depth of experience in

human resources, enables her to make a

valuable contribution to the Board and as

Chair of the Remuneration Committee.

Assaf Ginzburg

Independent Non-Executive Director

Date of appointment: October 2022

Experience and Board contribution:

Assaf has over 15 years of experience in the

energy industry. He is currently the CFO

of Ormat Technologies, a global operator

and developer of renewable energy projects

which offers geothermal, recovered

energy, energy management and storage

solutions. Until May 2020, Assaf held a

number of senior positions at Delek US

Energy, including EVP and CFO. Prior

to this, he was a member of the boards of

directors for each of Alon USA Energy and

Delek Logistics.

Assaf has a BA in accounting and economics

from Tel Aviv University.

Julie McAteer

General Counsel and Company Secretary

Date of appointment: October 2022

Experience and Board contribution:

Julie joined the Group as Legal and HR

Director (since renamed General Counsel

and Company Secretary) in February 2020

and has over 25 years of experience in the

oil and gas sector. Julie previously held senior

leadership and legal manager/corporate and

commercial roles with major operators and

independents covering matters in the UKCS

and internationally. For the previous eight

years Julie was Legal Manager and on the

leadership team at Premier Oil. Prior to this

Julie occupied legal roles for Dana Petroleum

plc, Elf Exploration and TotalEnergies. Julie

holds a law degree from the University of

Aberdeen and is dual-qualified to practice in

both Scotland and England.

As Company Secretary, Julie is responsible for

advising the Board on all governance matters.

Committee membership:

Deborah Gudgeon

Independent Non-Executive Director

Date of appointment: October 2022

Experience and Board contribution:

Deborah qualified as an ACA at PwC

(Coopers & Lybrand) before spending eight

years as Finance Executive with the Africa-

focused mining and trading group Lonrho

plc. She subsequently held positions with

Deloitte, BDO, Gazelle Corporate Finance

and Penfida Limited. Deborah has significant

experience in acting as an independent non-

executive director having held that position

at Petra Diamonds Limited, Evraz plc,

Highland Gold Mining Limited and Acacia

Mining plc. As well as being an independent

non-executive director, Deborah was also

chair of the audit committee for each of

these entities.

Committee Key: Committee Chair

Audit and Risk

Nomination and Governance

Remuneration

Health, Safety, Environment and Security

Disclosure

Principal external appointments:

Petra Diamonds Limited; Serabi Gold plc

Committee membership:

Principal external appointments:

Evercore Group LLC

Committee membership:

Principal external appointments:

Dundee Airport Limited; Highlands and Islands

Airports Limited; Scottish Prison Service

Committee membership:

Principal external appointments:

Ormat Technologies Inc.

Committee membership:

Board members who stepped down

from the Board in 2024:

• Alan Bruce with effect from

4 January 2024

• John Mogford with effect from

16 May 2024

• Gilad Myerson with effect from

28 May 2024

116 ITHACA ENERGY

How the Board

monitors culture

Corporate Governance report

Our purpose is to serve today’s needs for domestic

energy through operating sustainably. Our purpose is

underpinned by our four core values, below, which guide

how we work resiliently, collaboratively, openly and

considerately. These values align with the organisational

goals that create a differential advantage and emphasise

excellence throughout the business. Our vision is to be

a leading independent oil and gas company with scale,

stability and strength focused on responsibly serving

energy needs, while growing value sustainably and

efficiently. More information can be found on page 2.

Bring strength

Deliver results

Express yourself

Be considered

How the Board monitors culture

The Board plays an important role in monitoring and

assessing the culture of the Group and its alignment with

the Company’s purpose, values and strategy. During

the year, the Board considered a number of areas that

helped it to assess the development of the Group’s

culture. These areas included:

• reviewing the results and feedback from periodic

employee engagement surveys and monitoring how

the areas of employees’ focus are being addressed;

• formally reviewing the Group’s workforce policies and

practices to ensure they remain consistent with the

Company’s purpose and values;

• monitoring any reports that may arise from the

Group’s Whistleblowing Policy;

• monitoring culture on gender and ethnicity pay

through the review, assessment and approval of the

Gender and Ethnicity Pay Gay Report;

• monitoring diversity and inclusion through regular

updates at the Nomination and Governance

Committee; and

• monitoring regular updates on health and safety

initiatives and updates on the Group’s efforts to

reduce lost-time injuries.

The Remuneration Committee receives regular

updates on feedback from shareholder consultations

and engagement, which helps both it and the Board

to monitor the culture on wider workforce pay and

executive and CEO remuneration. In addition, the

Committee reviews and approves the wider workforce

reward framework and relevant policies and ensures that

rewards and incentives align with the culture.

A key focus for the Board, following the Business

Combination, will be to embed a strong sense of culture

in the organisation through the Employee Consultation

Forum led by the Employee Engagement Director,

Lynne Clow, and the Culture Ambassador Team who

are members of the workforce, empowered to provide

insight to the workforce on the adoption of our vision,

values and behaviours.

Purpose, values and culture

117ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Board activities – see pages 121 to 122.

Principal decisions of the Board – see pages 50 to 51.

Director biographies – see pages 113 to 115.

Board of

Directors

Executive Leadership

Team (ELT)

Governance framework

The overall role of the Board is to ensure the long-term sustainable success of the Group, making considered decisions for the enduring benefit of its

shareholders and relevant stakeholders. The Board is chaired by the Executive Chairman and makes decisions in relation to the Group’s business in

accordance with its schedule of matters reserved to the Board.

Chaired by the CEO and meets on a weekly basis. Responsible for the operational management of the Group and for defining and driving the business priorities that will achieve delivery of the

Group’s strategy. The ELT discharges its responsibilities through a number of management committees, including the Investment Committee and the Enterprise Risk Management Committee.

Audit and Risk Committee

See more on pages 126 to 129.

Assists the Board with the discharge of its responsibilities in relation to the integrity of our financial and narrative reporting

and advises the Board on the Group’s overall risk appetite, effectiveness of internal controls, risk management and audit.

Nomination and Governance Committee

See more on pages 130 to 133.

Assists the Board in reviewing the structure, size and composition of the Board and is responsible for reviewing succession

plans for the Directors and ELT.

Remuneration Committee

See more on pages 136 to 161.

Recommends the Group’s policy and framework on Executive remuneration and ensures reward is aligned with the Group’s

strategy and reflects the values of the Company.

Health, Safety, Environment

and Security Committee

See more on pages 134 to 135

Evaluates the effectiveness of the Group’s policies and systems for identifying and managing environmental, health and

safety risks within the Group’s operations.

Disclosure Committee

Responsible for ensuring the timely and accurate disclosure of all information that is required to be disclosed to the market

to meet its legal and regulatory obligations.

The governance framework for the Board is clearly documented in the Ithaca Energy plc Articles of Association, Division of Responsibilities, Schedule of Matter Reserved to the Board and Terms of Reference for each Committee which

are all available on our website.

Board Committees

The terms of reference for

each Committee are reviewed

annually and agreed by the

Board. They can be found

on the Company’s website

at www.ithacaenergy.com/

about-us/governance

118 ITHACA ENERGY

Corporate Governance report continued

The roles of the Executive Chairman and Chief

Executive Officer are held separately, and their

responsibilities are well defined, set out in writing and

are regularly reviewed by the Board. In addition, there

is a clear division of responsibilities, which ensures

accountability and oversight, between the Executive

Directors and the Non-Executive Directors, both

independent and nominated.

Chief Executive Officer

The Chief Executive Officer leads the Executive

Leadership Team and is accountable to the

Board. His role is to develop, in conjunction

with the Executive Chairman, implement and

deliver the agreed strategy. The Chief Executive

Officer oversees the operational and strategic

management of the Company and contributes to

the succession planning and implementation of

the organisational structure of the Group.

Senior Independent Director

The Senior Independent Director provides a

sounding board for the Executive Chairman and

provides a communication conduit between the

Executive Chairman and the Non-Executive

Directors as well as serving as an intermediary

between the other Directors and the shareholders

as and when necessary. The Senior Independent

Director has an important role on the Board in

leading on corporate governance issues and being

available as an additional point of contact for

shareholders and other stakeholders if they have

concerns that are not satisfactorily resolved by

the Executive Chairman. The Senior Independent

Director further ensures an annual performance

evaluation of the Executive Chairman, with the

support of the Non-Executive Directors.

Executive Chairman

The Executive Chairman is accountable for the

leadership of the Board and has responsibility for

ensuring the Board’s overall effectiveness and

governance while promoting a strong culture of

openness and debate. The Executive Chairman is

primarily focused on setting and developing the

Company’s strategy, setting and sustaining the

culture and purpose of the Company and ensures

there is effective communication and messaging

between the Board, the Executive Leadership Team,

shareholders and the Company’s wider stakeholders.

The Executive Chairman works collaboratively with

the Chief Executive Officer in setting the Board

agenda and ensuring that any actions agreed by the

Board are effectively implemented.

General Counsel and Company Secretary

The General Counsel and Company Secretary

supports the Board in ensuing all policies,

processes, information and resources are in order

to ensure the Board can operate effectively and

efficiently. She supports the Executive Chairman

in the provision of accurate and timely information

to the Board, its Committees and between senior

management and the Non-Executive Directors.

The General Counsel and Company Secretary

is responsible for advising the Board on all

governance matters. She assists with the ongoing

training and development of the Board and is

instrumental in facilitating the induction of new

Directors. The appointment and removal of the

Company Secretary is a Board matter. Each

Director has access to the advice and services of

the General Counsel and Company Secretary.

Chief Financial Officer

The Chief Financial Officer provides financial

leadership to the Group and is responsible

for providing accurate and detailed financial

information to the Board on the performance and

developments across the business. Additionally,

he supports the Executive Chairman and the

Chief Executive Officer in providing executive

leadership to the Group and implementing the

Group strategy.

Non-Executive Directors

The Non-Executive Directors, both independent

and nominated, come with their wealth of business

and commercial expertise from many industry

sectors with objective judgement which allows

them to constructively challenge the actions of

the Group’s management and leadership teams.

They provide a crucial role in providing assurance

that the Executive Directors are exercising good

judgement when it comes to decision-making

and their delivery of the Group’s strategy. The

Non-Executive Directors receive regular updates

from the Group’s management and Executive

Leadership Team to allow them to monitor

both the performance of the Group and the

culture within the organisation. See more on the

independence of the Directors on page 123.

Division of responsibilities

119ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

It is responsible for determining business strategy

and the Company’s appetite for risk, for monitoring

management’s performance in delivering against that

strategy and ensuring the risk management frameworks

and internal controls in place are appropriate and

operating effectively. The culture of the business is

considered an important aspect by the Board, as well as

how the business is aligned with Ithaca Energy’s vision

and values.

The Board is cognisant of the Company’s obligations

to its shareholders and other stakeholders, responding

to their needs with transparent reporting and active

engagement.

Our Board is collectively responsible for corporate

governance, determining the Group’s strategic direction,

reviewing management performance, approving

financials, major acquisitions, disposals and capital

expenditure and for providing entrepreneurial leadership

to Ithaca Energy within a framework of prudent and

effective controls that enable risk to be assessed and

managed. It is also responsible for setting the Company’s

values and ethical standards.

The Board is accountable to shareholders for the

efficient and effective management of the Company’s

operations and for the adherence to corporate

governance standards in accordance with the strategy.

Furthermore, the Board is held to account in regard to

the maximisation of shareholder value over the long-

term, within a framework of sound business ethics and

while taking into account all stakeholder groups.

The Board plays a critical role in shaping business performance while

creating and delivering long-term, sustainable returns for shareholders.

Effective board

The Board will meet at such times as are necessary,

but not less than six times a year, including a full day

dedicated to strategy. A significantly higher number

of Board meetings were held during 2024 due to the

Business Combination Agreement. Details of the Board’s

attendance at meetings can be found on page 110.

Board agendas are drawn up by the Company Secretary

in conjunction with the Executive Chairman and Chief

Executive Officer. All Board papers are published via an

online Board portal system which offers a fast, secure

and reliable method of distribution.

When a Director is unable to attend a Board or

Committee meeting, they receive the papers for

consideration at that meeting and have the opportunity

to discuss any issues or make any comments in advance

and thereafter follow up with the Chair of the relevant

meeting.

Stakeholder engagement

Active engagement with our stakeholders is at the heart

of Ithaca Energy’s values and the Board seeks to ensure

there are numerous opportunities throughout the year

to meet and/or speak with our shareholders, lenders,

suppliers and our employees. Further information on

our stakeholder engagement can be found on pages 52

to 55.

Workforce policies and practices

The Board is committed to ensuring that its policies and

procedures remain in line with the Company’s vision and

values. For more information, please see page 49.

INFORM

The agenda for each meeting is discussed and agreed in

advance with the Executive Chairman in conjunction

with the Chief Executive Officer and General Counsel

and Company Secretary, along with the matters arising

from the previous meeting.

Performance reports and presentations on key areas of

the business are prepared for the Board meetings, based

on the annual calendar of business, to inform and make

recommendations for the Board’s consideration.

RECOMMEND AND CONSIDER

To facilitate decision-making, recommendations from

senior leaders, as well as external advisors, are presented

to the Board for consideration.

APPROVE AND ACTION

The Board will consider matters and agree and approve

actions to take forward.

120 ITHACA ENERGY

Skills, experience and knowledge

The Non-Executive Directors’ mix of skills and wide-

ranging business experience is a major contributing

factor towards the proper functioning of the Board

and its Committees, ensuring that matters are debated

thoroughly and that no individual or group dominates

the Board’s decision-making processes. Information

on the Board’s skills and experience can be found on

page 131. Non-Executive Directors have a particular

responsibility for ensuring that the business strategies

proposed are fully discussed and critically reviewed and

their collective experience and broad range of skills

gained from across a variety of sectors means they can

constructively challenge management in relation to the

development of strategy and performance against the

goals set by the Board. For more information on the

Director’s biographies see pages 113 to 115.

Relationship agreements

The Company has two significant controlling shareholders,

Delek Group Limited (Delek) and Eni S.p.A (Eni): Delek,

through its wholly-owned subsidiary DKL Energy Limited,

has a 52.2% shareholding in the Company and Eni

through its wholly-owned subsidiary Eni UK Limited, has a

37.17% shareholding in the Company.

Both companies are deemed to be controlling

shareholders for the purposes of the Listing Rules.

The relationships between the Company and each

of these controlling shareholders are governed by

separate Relationship Agreements. The purpose of the

Relationship Agreements is to ensure that the Company

can carry on its business independently of Delek, Eni

and their associates and for the benefit of shareholders

as a whole.

Each Relationship Agreement provides that the

significant shareholder group is entitled to nominate

Director(s) to the Board.

Further information on each of the Relationship

Agreements, along with the details of the nominated

Directors and observers to the Board are set out in the

Directors’ Report on pages 163 to 164.

Corporate Governance report continued

121ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Key Board activities

Activity Outcome Stakeholders considered

Strategic

Business Combination with Eni UK: Approved the Business Combination

Agreement for the UK assets of Eni SpA

Following the Business Combination, Ithaca Energy has a diversified portfolio of production and development

opportunities, with the ability to underpin material long-term organic growth while supporting the UK’s energy

security and decarbonisation targets.

Business Plan 2025: Approved the 2025 Business Plan The Executive Team is focused on the Company’s strategies for achieving its goals and maximising sustainable

shareholder value.

Strategy Day: Held Board Strategy Day to look at where to focus

for the next stage of growth

Key considerations were discussed and organic and inorganic growth opportunities considered.

Operational

Production deep dive

Looked at production threats and opportunities in terms of the 2024

business plan

Detailed discussion on the production work program, assurance, reliability and forecasts, allowing the Board to

question and debate issues, while providing it with a deeper understanding of the Group’s operated assets.

Late life assets and decommissioning

Discussed strategies for late life assets and decommissioning

Ithaca Energy is committed to maximising economic recovery and late life operations of all our assets, searching for

cost optimisation opportunities by embracing new technologies and collaborative working. Decommissioning will

be planned in a safe, environmentally friendly and efficient manner, working closely with the Regulator, adhering to

legislation and following best industry practices.

Operating asset reviews incl. safety

Analysis of each operating asset and operational safety

The Board continually reviews the management and running of the assets particularly in light of health, safety and the

environmental impact of operations.

Financial

2023 Annual Report and Accounts and AGM

Reviewed and authorised the 2023 Annual Report and Accounts and the

resolutions to be put to shareholders at the AGM

Report approved by shareholders at the AGM and all resolutions were passed.

Special Dividend

Approved payment of a Special Dividend

Special Dividend declared for 2024 of $200 million and paid on 20 December 2024.

Refinancing

The refinancing terms for the debt facilities were approved

The successful refinancing was announced on 11 October 2024.

Appointment of brokers

Appointed Peel Hunt as the Company’s brokers

Peel Hunt were appointed in December 2024.

PEOPLE SHAREHOLDERS LENDERS JV PARTNERS SUPPLIERS & CUSTOMERS GOVERNMENTS & REGULATORS

The key activities that were carried out by the Board during the year, together with an indication of the stakeholders affected and whose interests the Board considered in its discussions and decision-making, are set out below.

122 ITHACA ENERGY

Corporate Governance report continued

Activity Outcome Stakeholders considered

Environmental

TCFD disclosures and emissions discussions

Approved the disclosures for the 2023 Annual Report and Accounts

Demonstration of our commitment to long-term sustainable growth.

Captain electrification

Deep dive on this project that aims to substantially reduce emissions intensity

Ithaca Energy is progressing well towards meeting its target of a 50% reduction in Scope 1 and 2 emissions by 2030.

The Captain electrification project is potentially a further significant emission reduction contributor for Ithaca

Energy. However, delivery is subject to accessing a suitable grid connection or alternative power source in a timely

manner and an appropriately supportive fiscal regime in place to mitigate the high risk and high abatement cost of

the project.

Net Zero plan

Reviewed the plan to ensure Net Zero could be achieved by 2040

Delivery of our Net Zero plans will help achieve a more sustainable future for all.

Risk

Going concern and long-term viability reviews

Assessed the viability statement and going concern for the purposes

of the 2023 accounts

Ensuring the viability and going concern disclosures are high quality and accurate are vital for investors tohelp them

make informed decisions about a company’s liquidity, solvency and longer-term viability.

Principal Risks and risk matrix

At each Board meeting, two Principal Risks were reviewed in depth with all

discussed during the year together with the risk matrix and risk appetite

The Board is aware of the relevance, areas of exposure and materiality of the Principal Risks facing the Company

together with the key mitigations in place.

Delegation of Authority policy

Reviewed and updated the DoA

A crucial aspect of the Company’s financial risk management which outlines the specific responsibilities and levels of

approval required for financial transactions.

Governance

Code of Conduct and various governance policies: Approved an updated and

detailed Company Code of Conduct and other policies

The Code of Conduct and the workplace policies adopted are important in aligning the workforce with the

Company’s purpose, values and principles, creating a positive workplace culture and ensuring smooth operations and

legal compliance.

Board updates and training: Regular updates on Corporate Governance and

key legal developments are provided at each Board meeting, often by external

advisors

Strong compliance and ‘best’ governance practices improve business performance and stability, reduce risk and

support value creation and responsible stewardship.

Board Evaluation and composition: Carried out the annual Board and

Committee evaluation exercise, reviewing the results and considering

composition.

The rigorous and detailed Board evaluation provided a powerful and valuable feedback mechanism forimproving

effectiveness, maximising strengths and highlighting areas for further development.

PEOPLE SHAREHOLDERS LENDERS JV PARTNERS SUPPLIERS & CUSTOMERS GOVERNMENTS & REGULATORS

123ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Board composition, succession and evaluation

Independence of the Board

The Board has identified which Directors are

considered to be independent on page 131 of the

Nomination and Governance Committee report. As

at 31 December 2024, 42% of the Board (excluding

the Chair) are Independent Non-Executive Directors.

The Independent Non-Executive Directors play an

important role in ensuring that no individual or group

dominates the Board’s decision making. The Board

has reconfirmed that the Independent Non-Executive

Directors remain independent from executive

management and free from any business or other

relationship which could materially interfere with the

exercise of their judgement.

While not considered to be independent, the Nomination

and Governance Committee and the Board consider that

the role of an Executive Chairman is in the best interests

of the Group in order to utilise proven leadership

qualities and Yaniv Friedman’s significant experience.

The Executive Chairman works closely with the Senior

Independent Director, Zvika Zivlin, who brings a depth

of experience and calibre and serves as an intermediary

for the Non-Executive Directors and the Executive

Chairman. For more information, please see page 118 .

The Board has five nominated Non-Executive Directors

and whilst they are not considered to be independent,

in accordance with the Code, they bring a wealth of

experience, skills and knowledge to the Board. The

Directors are collectively responsible for the success of

Ithaca Energy. Further information on the Company’s

Relationship Agreements with its major shareholders can be

found on page 120.

Non-Executive Directors’ role and time commitment

The Non-Executives provide a pivotal role for the Board

in exercising objective judgement in respect of Board

decisions, holding the Executive Leadership Team to

account by providing scrutiny and challenge.

The Non-Executive Directors have all committed

sufficient time to Ithaca Energy to meet their duties

in relation to formal meetings of the Board and the

relevant Committees, in addition to committing their

time through the year to meet and discuss issues with

the Executive Leadership Team. For more information

on the Directors attendance at Board and Committee

meetings, please see page 110.

Appointment and succession planning

The Nomination and Governance Committee, and

where appropriate the full Board, regularly reviews the

size, structure and composition of the Board. Moreover,

this Committee is responsible for reviewing the succession

plans for Directors, including the Executive Chairman

and Executive Directors and other senior executives,

and ensuring the development of a diverse pipeline for

succession. In accordance with the Code, all Directors

will retire at the AGM and may offer themselves for

re-election.

124 ITHACA ENERGY

Corporate Governance report continued

Board evaluation 2024

The effective functioning of the Board and its

Committees is key to the success of the Company and

Ithaca Energy recognises that performance evaluation is

extremely valuable in contributing to the effectiveness

of the Board.

Given the significant changes to the Board composition’s

during the year, including a new Executive Chairman,

Chief Executive Officer, Senior Independent Director

and three Nominated Non-Executive Directors, the

Board took the decision that an internal Board evaluation

would be carried out in 2024 and, in accordance with the

Code, that an externally facilitated review of the Board’s

performance would be undertaken in 2025.

The evaluation has been designed to encourage

Directors to optimise their contribution to the success

of the Group and add value, beyond their statutory

requirements, by building on existing strengths, agreeing

on the challenges ahead and preparing for the future. It

further provides an opportunity for the Non-Executive

Directors, through their exposure on other company

boards, to draw on their experience and suggest where

improvements can be made.

The 2024 Board evaluation was an internally facilitated

review conducted using a detailed questionnaire

focused on the seven areas set out below, as well as

the Board’s interactions with each of the Audit and

Risk, Nomination and Governance, Remuneration, and

Health, Safety, Environment and Security Committees:

Feedback was further obtained on the Chairman’s

performance which was then discussed with the Senior

Independent Director.

The Directors completed the questionnaire and

returned it to the Company Secretary who collated

and anonymised the results before providing a detailed

report to the Chairman and Senior Independent

Director. The report covered comments and suggestions

made, together with the rating allocated to each

question by Directors.

The conclusions of the evaluation were very positive,

concluding that following the Business Combination,

even though there had been a large number of changes

to the Board during the year, the Board continues to

be highly effective and there is alignment between the

views of the Non-Executive Directors, independent and

nominated, and Executive Directors. All Committees

had performed effectively, especially in response to the

number of matters which had arisen during the year, and

duties had been discharged well.

Key focus areas for the Board and Committees for 2025

Risks and internal controls Board composition Stakeholders Board process

Nomination and Governance

Committee

Increase Board

focus on

management of

cyber risk.

Ensuring the Board

has the right mix of

skills and expertise.

Improve workforce

engagement

mechanisms

following

the Business

Combination, with a

focus on Company

values and culture.

Following

the Business

Combination,

review the timing

and number of

Board meetings.

Increased focus on

succession planning.

Greater focus on

implementation of

the DE&I strategy.

Improve Board

inductions and

development.

Questionnaire Areas of Focus

• Strategy

• Board discussions during 2024

• Risk and internal controls

• Board composition and succession

• Stakeholders

• Board process

• Leadership

A number of key focus areas for the Board and

Committees were highlighted and these are set out below,

which will be used to inform and build upon the Board and

Committee agendas and discussions for 2025.

Board composition, succession and evaluation continued

125ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

125ANNUAL REPORT AND ACCOUNTS 2024

Board evaluation 2023

The Board evaluation process in 2023 highlighted a

number of areas of focus for the Board and an update on

the progress made during the year in these areas is set

out below.

Board evaluation 2023 area of focus Progress made in 2024

Processes and procedures were in place, several required to be tightened up in order to

improve upon the quality of information presented.

A new Code of Conduct was introduced in 2024 along with a Board Diversity, Equity and

Inclusion Policy.

Further detail can be found on pages 89 to 90.

Greater detail would be provided in papers on risk, health and safety and cyber with

key issues focused upon, plans agreed and regular progress updates given.

The monthly business performance report provides the Board with regular updates on

HSE, risk, operations and production, financial performance and key focus issues for the

month ahead.

Some Directors felt that a greater number of meetings, and more efficient chairing,

was required to ensure a consistent flow of information and that there should be a

more formalised structure.

Additional meetings were added to the Board and Committee schedule and a revised

Board agenda was agreed, setting out precisely what areas would be addressed at each

meeting. The Group’s strategy was revisited in 2024 and regular reports on progress

against the strategy have been established.

Diversity on the Board was agreed to be an issue and was a critical consideration in the

recruitment of a new CEO and additional Non-Executive Directors.

A new Board Diversity, Equity and Inclusion Policy was established and approved by the

Board in May 2024.

Further detail can be found on page 132.

It was felt that succession planning for the Executive Leadership Team was opaque so

this would be reviewed by the Nomination Committee with a proposal prepared for

the Board’s approval in due course.

Following the Business Combination and the number of changes made to the Board and

the ELT during the year, succession planning will be a key focus area of the Nomination

and Governance Committee for 2025.

Workforce engagement at a Board level was still at a very early stage, partly impacted

by a change in HR Director.

During 2024, the Employee Engagement Director met with office-based staff to gather

their views on a number of occasions as part of the Employee Consultation Forum.

Further work on workforce engagement will be carried out in 2025.

Further details on workforce engagement can be found on page 131.

126 ITHACA ENERGY126 ITHACA ENERGY

Audit and Risk Committee report

Dear shareholder,

I am pleased to present the

Audit and Risk Committee

(the Committee) report for the

year ended 31 December 2024.

This report provides an overview of the Committee’s

principal activities and key areas of focus.

The Committee members are considered to possess the

appropriate skills and experience required to monitor

and ensure the integrity of the Group’s financial

reporting, internal audit, internal financial control and

risk management systems and to support the Group’s

governance. I am a qualified accountant with extensive

experience of acting as Audit Committee Chair,

including in extractive industries. Mr Zivlin has extensive

Executive experience, Mr Blackwood has significant

Executive experience within the oil and gas industry and

Mr Ginzburg is the Chief Financial Officer of a global

operator and developer of renewable energy projects.

In addition to the Committee members, the Executive

Chairman, the Chief Executive Officer, the Chief

Financial Officer, the Company Secretary, the Deputy

Company Secretary, the Head of Accounting and

Financial Reporting, the Technical Accounting and

Reporting Manager, the Financial Reporting Manager,

the Head of Internal Audit, Risk and Insurance, the

External Audit Partner and observers from Delek Group

Ltd and Eni S.p.A. routinely attend meetings of the

Committee.

Other senior managers of the business are invited to

attend meetings as required to provide the Committee

with a deeper level of insight on relevant business

matters. Other members of the Board have an open

invitation to attend Committee meetings to facilitate

a deeper understanding of the business and support

their role as Directors of the Company. The Committee

meets periodically without management present and

private meetings are held with internal audit and external

audit without management present.

Role of the Committee

The Committee’s role is to assist the Board with the

discharge of its responsibilities in relation to financial

reporting, including reviewing the Group’s annual, half-

yearly and quarterly financial statements and accounting

policies, internal and external audits and the extent of

the non-audit work undertaken by external auditors.

In addition, it advises on the appointment of external

auditors and reviews the effectiveness of both external

and internal audit, internal controls, whistleblowing

and fraud systems in place within the Group. The

Committee further oversees and advises the Board on

the Group’s overall risk appetite, tolerance and strategy

and reviews the overall risk assessment process that

informs the Board’s decision-making. The Committee,

additionally, considers annually how the Group’s

internal audit requirements will be satisfied and makes

recommendations to the Board accordingly as well as on

any areas that need improvement or action.

Terms of reference

The terms of reference of the Committee, setting out

the key responsibilities of the Committee were

reviewed during the year and recommended to the

Board for approval.

Activities during the year

During the year, the following financial reporting risks

were identified as being significant, based on feedback

from management and external auditors, and were

considered by the Committee in respect of the FY

2024 Annual Report and Accounts:

• Oil and gas reserves;

• Carrying value of oil and gas assets;

• Deferred tax recognition and recoverability;

• Business Combination accounting;

• Adequacy of decommissioning provisions; and

• Going concern.

Further details of these significant risks are set out on

page 128.

The work of the Committee to the date of this report

broadly fell into three main areas and which are

summarised on the next page:

Membership and meeting attendance in 2024

Name Meetings attended

Deborah Gudgeon (Chair)

Zvika Zivlin (SID)

Assaf Ginzburg

Dave Blackwood

Lynne Clow

John Mogford (SID)

1 John Mogford, Senior Independent Director, ceased to be a member of the Board with effect from

16 May 2024 and was unable to attend two meetings due to a prior engagement that the Committee

was notified of in advance.

2 Zvika Zivlin joined the Board as Senior Independent Director with effect from 16 May 2024.

3 Assaf Ginzburgh missed two meetings due to a prior engagement that the Committee was notified of in advance.

4 Dave Blackwood became a member of the Audit and Risk Committee with effect from 13 August 2024.

5 Lynne Clow stepped down as a member of the Audit and Risk Committee with effect from 13 August 2024.

This report sets out the Committee’s work to ensure

the interests of the Group’s stakeholders are protected

through comprehensive systems supporting both

financial reporting and risk management.”

Deborah Gudgeon

Audit and Risk Committee Chair

127ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Financial reporting

• Reviewed and approved the prior period adjustments

in Q1 of 2024 to deferred taxation and retained

earnings, as detailed in note 2;

• Reviewed and approved the quarterly and half-yearly

financial statements and associated trading update

statements;

• Reviewed and approved the Group’s Annual

Report and Accounts and considered the material

accounting policies, principal estimates and

accounting judgements used in their preparation,

the transparency and clarity of the disclosures within

them, and compliance with international financial

reporting standards;

• Reviewed the basis for preparing the Group full-

year financial statements on a going concern basis.

The related disclosures in the Annual Report and

Accounts were, additionally, reviewed;

• Considered and approved management’s assessment

of the Group’s prospects and longer-term viability

contained in the Annual Report and Accounts;

• Considered and approved disclosures on climate-

related matters;

• Received reports from management and external

auditors on accounting, financial reporting and

taxation matters;

• Reviewed and assessed whether the Annual Report

and Accounts, taken as a whole, were fair, balanced

and understandable;

• Reviewed and approved the assumptions such as oil

and gas reserves, future commodity prices, growth

rates, resultant cash flows and discount rates used in

the impairment reviews and related disclosures and

sensitivities, including considerations around climate

change;

• Reviewed and approved the assumptions

underpinning decommissioning liabilities such as

inflation and discount rates and related disclosures

and sensitivities;

• Reviewed and challenged the key assumptions

underpinning the Business Combination accounting;

• Considered the potential impact of the Judicial review

in respect of the Rosebank field: and

• Considered the response to a Financial Reporting

Council enquiry into certain matters relating to the

2023 Annual Report and Accounts.

Internal control, risk management and internal

audit

• Reviewed the structure and effectiveness of the

Group’s system of risk management and internal

control and the related disclosures in the Annual

Report and Accounts;

• Reviewed the risk management activities undertaken

by the Group in order to identify, measure and assess

the Group’s principal and emerging risks and review

the velocity and scale of these;

• Reviewed reports from the internal audit department

relating to control matters and monitored progress

against the internal audit plan;

• Reviewed status and progress of the ongoing work

to mature and develop internal controls for the

forthcoming changes in reporting requirements; and

• Assessed the effectiveness of internal audit by

considering the inputs and outputs of the activities

described above.

External audit

• Considered and approved the scope, audit plan, terms

of engagement and fees for external audit work to be

undertaken in respect of the FY 2024 audit;

• Received reports from the external auditor on their

findings regarding half-year financial statements;

• Received reports from the external auditor on their

findings in relation to the full-year audit;

• Considered the objectivity and independence of the

external auditor and the effectiveness of the external

audit process, taking into account their policies to

safeguard independence, non-audit work undertaken

by the external auditor and compliance with the

Company’s policy on the provision of non-audit

services and applicable regulations;

• Considered and recommended to the Board the re-

appointment of the external auditor; and

• Considered and approved letters of representation to

the external auditor in respect of the half-yearly and

full year financial statements.

The matters the Committee considers to be the

most significant for the FY 2024 Annual Report

and Accounts can be found on page 128.

Internal control, risk management and

internal audit

The Board is responsible for establishing a framework of

prudent and effective controls, which enable risk to be

assessed and managed. The Committee is responsible

for reviewing the effectiveness of the Group’s risk

management and internal control systems, that include:

• Delegation of Authority that sets out clear authority

for specific matters requiring senior management and

Board approval;

• Annual financial budget and operational targets that

are monitored by management and the Board;

• Financial reporting processes and preparation of

financial statements that comply with relevant

regulatory reporting requirements;

• Risk management process to identify principal and

emerging risks and management’s response; and

• Risk-based internal audit programme.

Principal and emerging risks are discussed more fully

on pages 103 to 108 in the risk management section.

There are specific internal controls surrounding the

financial reporting process and the preparation of

financial statements, including clear guidance and

procedures to ensure that the Group’s financial

reporting processes and the preparation of consolidated

financial statements comply with all applicable

regulatory and financial reporting requirements.

These policies are applied consistently by the financial

reporting team and by other areas involved in the

preparation of financial information.

Monthly performance reports and quarterly detailed

management accounts are prepared and are subject to

thorough review by management. These reports detail the

performance of the business and support the preparation

and processes for external financial reporting.

The Committee receives regular updates on the Group’s

system of internal control, including details of the

design and effectiveness of key controls mitigating

financial, operational and compliance risk. Management

intends to continue to focus on further standardisation,

documentation and strengthening of internal controls

to give the Committee greater comfort around the

effectiveness of the control environment.

As a result of the prior period adjustment for deferred

tax in Q1 of 2024, controls surrounding the preparation

of quarterly tax computations have been strengthened,

including having these reviewed by third-party experts.

Overall, the Committee is satisfied that the Group’s

internal control framework was operating satisfactorily

during the year. The Committee will continue to work

with management to identify opportunities to further

enhance the internal control framework.

Corporate Governance changes

During the year, the Audit and Risk Committee received

regular updates on the changes to the Corporate

Governance Code published in January 2024. From

1 January 2026, the Code requirements in respect of

the internal controls framework are being expanded

and enhanced and include the need for a declaration

of effectiveness. An area of focus in 2024 has been

planning for the implementation of these changes.

Ithaca Energy has a comprehensive system of internal

controls over financial reporting and work is ongoing to

identify additional material controls to support the new

requirements. Any new controls identified will be fully

integrated into the internal controls processes ahead of

the 2026 deadline.

Financial Reporting Council (FRC)

During the year, the FRC made enquiries into certain

aspects of the 2023 Annual Report and Accounts.

Although conducted by staff of the FRC who have

an understanding of the relevant legal and accounting

framework, the FRC’s review is based on the annual

report and accounts and does not benefit from detailed

knowledge of the business or an understanding of the

underlying transactions entered into. Accordingly, the

FRC’s review provides no assurance that the annual

report and accounts are correct in all material respects,

and the FRC (which includes its officers, employees and

agents) accepts no liability for reliance on the review

by the company or any third party, including but not

limited to investors and shareholders. The enquiries were

satisfactorily concluded with the Group undertaking to

make a limited number of additional disclosures in the

2024 Annual Report and Accounts.

128 ITHACA ENERGY

Audit and Risk Committee report continued

Oil and gas reserves

The estimation of oil and gas reserves from existing and yet to be commissioned fields

is inherently judgemental. The Group estimates its reserves using standard recognised

evaluation techniques. This estimate is reviewed internally at least annually and is further

reviewed at least annually by independent consultants.

The Committee reviewed the process applied by management to estimate oil and gas reserves, whether they were in line with general industry

practice and were consistent with the methodology applied in prior years.

The Committee reviewed differences between management’s view of reserves and those of a third-party expert, obtained satisfactory explanations

of such differences and noted that management’s estimates of proven and probable oil and gas reserves were materially in line with those prepared by

independent consultants.

The Committee concluded that the methodology adopted for estimating oil and gas reserves, which is used, amongst other things, in impairment

testing, deferred tax recognition calculations and the going concern and viability assessments, was fair and reasonable.

Carrying value of oil and gas assets

Significant judgement is required in determining whether there are indications of

impairment, and conducting an impairment review involving the selection of suitable

assumptions for future commodity prices and discount rate, applying the EPL and

considering the impact of climate change on long-term commodity prices.

In assessing the impairment reviews the Committee:

• Reviewed and challenged management’s key assumptions for the discount rate;

• Reviewed and challenged management’s key assumptions for future commodity prices; and

• Based on available market data, approved management’s long-term assumptions of $75/bbl in 2025, $74/bbl in 2026 and $77/bbl to $83/bbl

thereafter for crude oil and 98p/therm in 2025, 84p/therm in 2026 and 81p/therm to 87p/therm thereafter for UK NBP gas.

The Committee also considered the disclosures on impairment, including sensitivities, and concluded that they were appropriate. The Committee

also considered the critical judgements in respect of the Rosebank and Cambo fields as set out in note 3.

Details of impairment reviews are set out in note 19 to the consolidated financial statements.

Deferred tax recognition and recovery

The calculation of deferred tax is typically complicated in the oil and gas industry requiring

significant estimation on future performance and profitability of assets. This is further

complicated by changes made to the EPL during the year.

The Committee reviewed and challenged management’s projections of UK taxable profits, which were consistent with those utilised in impairment reviews,

and which support the recognition of the net deferred tax asset at 31 December 2024. The Committee was satisfied that these projections were reasonable.

The Committee, additionally, reviewed and challenged management’s assumptions with respect to accessibility of UK corporate tax history for

decommissioning expenditure relief which further supports the recognition of a net deferred tax asset of $1,224.1 million at 31 December 2024.

TheCommittee was satisfied that these assumptions were reasonable.

Further details of the net deferred tax asset are set out in note 28 to the consolidated financial statements.

Business Combination accounting

During the year, the Group made a material Business Combination comprising the former

subsidiaries of Eni in the UK. The accounting for this Business Combination involves a

significant degree of judgement in arriving at the fair values of the assets and liabilities,

including material deferred tax assets and liabilities.

In assessing the accounting for the Business Combination, the Committee reviewed and challenged:

• Management’s key assumptions for valuing the assets, including future crude oil prices and UK NBP gas prices;

• Valuations of exploration and evaluation assets;

• Management’s key assumptions related to the valuation of decommissioning liabilities; and

• The taxation treatment of these items, together with the recognition of tax loss position acquired.

The Committee concluded that these assumptions and valuation techniques were reasonable.

Details of the Business Combination are set out in note 17 to the consolidated financial statements.

Adequacy of decommissioning provisions

Decommissioning cost estimates and assumptions are inherently judgemental with

the key assumptions, including the decommissioning methodology (e.g. type of

vessel or type of work programme), day rates, durations and discount rate.

In assessing the adequacy of decommissioning liabilities, the Committee:

• Reviewed and challenged management’s key assumptions; and

• Questioned and obtained satisfactory answers to significant changes for particular assets from FY 2023.

The Committee concluded that the methodology used was reasonable and the assumptions of supply chain rates and discount rates were appropriate

and supported decommissioning liabilities of $2,655.1 million at 31 December 2024.

Further details of decommissioning liabilities are set out in note 23 to the consolidated financial statements.

Going concern

In preparing the consolidated financial statements, the Directors are required to consider

the appropriateness of the going concern basis of accounting

The Committee reviewed management’s projections and resultant liquidity position. In addition, the Committee challenged the sensitivities modelled

and agreed that they were appropriate. Overall, the Committee concluded that the projections were reasonable and supported a going concern basis

of accounting.

The going concern statement is set out on page 100 of the Annual Report and Accounts.

Significant risks and judgements How the Committee addressed these risks and judgements

129ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

independence of the external auditor is essential to

the provision of an objective opinion of a true and fair

view presented in the financial statements. Deloitte’s

independence is safeguarded through a number of

control measures including:

• Limiting the nature of non-audit services performed

by the external auditor;

• The external auditor’s own internal processes to vet

and approve any requests for any non-audit work to

be performed by the external auditor;

• Monitoring changes in legislation related to auditor

independence and objectivity to assist the Company

to remain compliant;

• The rotation of the lead audit partner after five years;

• Independent reporting lines from the external auditor

to the Committee; and

• An annual review by the Committee of the policy in

place to ensure the objectivity and independence of

the external auditor is maintained.

Assessing the effectiveness of the external audit

process

The Committee, other Board members, senior

management and finance team members evaluated

Deloitte’s performance and the effectiveness of the

external audit process for FY 2024 financial reporting.

The Committee considered the following factors:

• The quality of the interactions between the audit

team and the Committee, other Board members,

management and those involved in the preparation of

the accounts;

• Whether the scope of the audit and the planning

process were appropriate for the delivery of an

effective audit;

• The external auditor’s progress achieved against the

agreed audit plan and communication of any changes

to the plan, including changes in perceived audit risks;

• The robustness and perceptiveness with which the

external auditor handled the key accounting and audit

judgements and communication of the same with

management and the Committee;

• The expertise and resources of the external audit

team conducting the audit; and

• The quality of the auditor’s recommendations for the

financial reporting process and control improvements.

Internal audit

Internal audit provides independent, objective and

timely assurance to senior management and the Board

through the Committee, over the design and operational

effectiveness of key processes and controls that manage

the risks across the organisation.

The Head of Internal Audit, Risk and Insurance reports

functionally to the Chair of the Committee and

administratively to the Chief Financial Officer regarding

internal audit matters. Our internal audit department

operates on a co-sourced model, utilising external

subject matter expertise to supplement the in-house

team. The Head of Internal Audit, Risk and Insurance,

additionally, provides oversight of internal controls

compliance and the enterprise risk management process.

Eight internal audits were carried out during 2024:

• Disaster Recovery and Backup;

• Fraud Risk Assessment;

• HES Functional Assurance Review;

• Inventory Management;

• NOJV Organisation – Governance and Operator

Oversight;

• Succession Planning, Development and DE&I;

• Supply Chain Management; and

• Treasury management.

In addition, the department oversees the annual audit

programme for non-operated joint ventures and

conducts ad hoc audits and investigations on behalf of

the Board and sub-Committees.

During the year, the Committee:

• Reviewed and approved the 2025 internal audit plan,

ensuring it aligned to the Group’s principal risks; and

• Received regular reports from internal audit on

its activities and progress against the Group 2024

internal audit plan, allowing the Committee to

monitor delivery against the plan.

External auditor independence and objectivity

Deloitte were appointed as the Company’s external

auditor during 2021 as a result of Delek Group Limited,

selecting Deloitte as auditor of the Group. The current

external audit partner is David Paterson with the 2024

audit being his third year acting in this capacity. The

Taking the above factors into account and the feedback

from the finance team, management, members of the

Committee and the Board, the Committee concluded

that the external audit process and services provided by

Deloitte were satisfactory. The feedback will be shared

with Deloitte and any opportunities for improvement

will be considered and agreed.

A formal recommendation to reappoint Deloitte as external

auditor will be made at the Annual General Meeting.

Policy on the provision of non-audit services

The Committee’s policy on the use of the external

auditor for non-audit services includes the identification

of non-audit services that may be provided and those

that are prohibited. The policy requires that the external

auditor will only be used for non-audit services where

regulation permits, the Group benefits in a cost-

effective manner and the external auditor maintains the

necessary degree of independence and objectivity.

The policy provides for a cap on fees for non-audit work

of 70% of the average of fees paid to the audit firm over

the previous three years for audit services. It should

be noted that the three-year period commenced on

9 November 2022 concurrent with the IPO.

The Committee receives regular reports on all non-audit

assignments awarded to the external auditor and a

breakdown of non-audit fees incurred. The principal

non-audit fees incurred during the year were in respect

of the half-year review, the external auditor acting as

Reporting Accountants for the Offering Memorandum

in respect of the refinancing and in relation to certain

other refinancing options. In 2023, non-audit fees

principally reflected the review of the half-yearly

financial statements. Given these are audit-related

services, the committee considered the external auditor

the most appropriate firm to perform them. Details of

amounts paid to the external auditor for audit and non-

audit services are set out in note 7 to the consolidated

financial statements.

The Committee is satisfied that the Company complies

with CMA Order 2014 regarding statutory audit services.

Whistleblowing policy

The Group has a formal Whistleblowing policy (see

page 91 for further details) whereby all employees,

contractors, consultants and officers are able to raise

concerns regarding potentially dangerous, unlawful or

unethical activities which may be going on at work or

could be affecting (or risks affecting) them or other

colleagues. Any such reports are thoroughly investigated

by suitably qualified personnel and where necessary

appropriate action is taken.

Effectiveness of risk management and internal

control systems

The Committee has completed its annual review of

the effectiveness of the Group’s risk management and

internal control systems on behalf of the Board in order

to approve the statements on risk management set out

in the Strategic Report on pages 103 to 108.

Fair, balanced and understandable

The Committee has completed its annual review of the

processes in place to prepare the 2024 Annual Report

and Accounts and to ensure that they are fair, balanced

and understandable in order to support the Statement

of Directors’ responsibilities on page 165.

Tax strategy

The Committee believes that we have a responsibility

to manage our tax affairs in a way that sustainably

benefits the customers and communities that we serve.

We further have a responsibility to shareholders to

ensure that we pay the right amount of tax and ensure

compliance with UK tax rules.

Committee evaluation

The Committee’s annual performance evaluation

exercise was carried out in December 2024 and no

concerns were highlighted.

Finally, I would like to express my thanks to both

management and the external auditor.

On behalf of the Audit and Risk Committee:

Deborah Gudgeon

Committee Chair

130 ITHACA ENERGY130 ITHACA ENERGY

Nomination and Governance Committee report

Dear shareholder,

I am pleased to present the

Nomination and Governance

Committee (the Committee)

Report for the year ended

31 December 2024.

This report provides an overview of the Committee’s

principal activities and key areas of focus during the year.

Role of the Committee

The primary objective of the Committee is to ensure that

Ithaca Energy’s Board and Executive Leadership Team are

diverse and qualified, with the skills, experience and ability

to deliver the long-term success of the Company.

The Committee is further charged with evaluating the

performance of the Directors each year, measuring how

they are performing their roles against the objectives and

the goals they have set for themselves. This is a critical

tool for assessing Board effectiveness and efficiency.

Terms of reference

The terms of reference of the Committee, setting out

the key responsibilities of the Committee were reviewed

during the year and recommended to the Board for

approval. They are available on the Company website.

Activities during the year

The Committee has specific responsibilities on behalf of

the Board and these are detailed below:

Board changes

This year, the Committee has overseen a number of

changes to the Board, including my appointment as

Executive Chairman and the appointment of Zvika

Zivlin as Senior Independent Director, replacing John

Mogford. In both cases, consultants Russell Reynolds,

which does not have any connection with the Company

or its Directors, were engaged by the Committee to lead

these searches.

In January 2024, Alan Bruce stepped down from his role

as Chief Executive Officer. Iain Lewis was appointed to

fulfil a dual role of Interim Chief Executive Officer and

Chief Financial Officer, working alongside the Executive

Chairman. In May 2024, the Company reported that

Gilad Myerson, Executive Chairman, would be stepping

down from this role and that Dave Blackwood would

serve as Non-Executive Chairman until his successor,

Yaniv Friedman was formally appointed.

Membership and meeting attendance in 2024

Name Meetings attended

Gilad Myerson (Chair)

Yaniv Friedman (Chair)

Idan Wallace

Guido Brusco

John Mogford (SID)

Zvika Zivlin (SID)

Assaf Ginzburg

Lynne Clow

1 Gilad Myerson, Executive Chairman, ceased to be a member of the Board with effect from

28 May 2024.

2 Yaniv Friedman was appointed to the Board as Executive Chairman with effect from 28 June 2024.

3 Guido Brusco was appointed to the Nomination Committee with effect from 3 October 2024

and was unable to attend a meeting due to a prior engagement that the Committee was notified

of in advance.

4 John Mogford, Senior Independent Director, ceased to be a member of the Board with effect

from 16 May 2024 and was unable to attend a meeting due to a prior engagement that the

Committee was notified of in advance.

5 Zvika Zivlin joined the Board as Senior Independent Director with effect from 16 May 2024.

6 Assaf Ginzburgh missed a meeting due to a prior engagement that the Committee was notified

of in advance.

The Committee’s key objective is to ensure

that the Board and the Executive Leadership

Team is comprised of individuals with the

requisite levels of skills, knowledge, experience

and diversity to deliver the long-term success

of the Group.”

Yaniv Friedman

Committee Chair

131ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

In addition, following the Business Combination

announcement and under the terms of the Relationship

Agreement, Luciano Vasques was appointed Chief

Executive Officer in October 2024. In all cases, the

consultants were asked to ensure that candidates

aligned with the Company’s values and principles and

in conjunction with the Committee in depth skill

assessments were conducted with each potential

candidate to ensure their experiences, skills and

qualifications would contribute significantly to the long-

term well-being of Ithaca Energy.

Following the completion of the transformational

Business Combination with Eni UK, Francesco Gattei

and Guido Brusco were appointed Non-Executive

Directors on 3 October 2024, as nominees of Eni UK

Limited and on 7 October 2024, Tamir Polikar became

a nominated Non-Executive Director as a nominee of

Delek Group Limited, previously serving as an Observer

on the Board. Further information on the Board changes

can be found in the Directors’ Report on page 163.

Induction and training

All Directors who join the Board receive a

comprehensive induction programme, which includes

an induction pack, covering a range of topics including

recent operational performance and strategic direction,

key areas of the business and Directors’ duties and

responsibilities. The induction will also involve meetings

with the members of the Board, together with the

members of the Executive Leadership Team, focusing on

matters within their areas of responsibility. They will also

be offered the opportunity to meet with advisors.

The induction pack provided also includes information

about Board processes and administration including meeting

dates, key Company policies and governance documentation

as well as Ithaca’s share dealing policy. Directors are also

given access to the Board portal containing Board and

Committee papers, minutes and resource materials.

The training needs of Directors are reviewed as part of

the Board’s annual performance review with training

and development being an ongoing process. Training

can include external courses or webinars organised by

professional advisors and internal presentations from the

Executive Leadership Team to ensure that Directors’

knowledge, skills, and familiarity with the Company’s

business is maintained. They are regularly updated, both

at Board meetings and through information provided

between meetings, on the Company’s operations and

any significant factors affecting it.

During the year, updates were provided to the Board

and Committees via the General Counsel and Company

Secretary on mandatory reporting and legal/governance

changes as well as by the Company’s external advisors.

With regard to the latter, teach-ins were provided by

Pinsent Masons and Jefferies prior to the Business

Combination and specifically covered Directors’ Duties

and the UK Market Abuse Regulations.

Workforce engagement

The Board has a variety of means to engage directly with

employees throughout the year, including the Employee

Consultation Forum (ECF) and through the work of

the Company’s Employee Engagement Director. The

Committee recognises the benefits of engaging openly

with people through various forums.

Lynne Clow is Ithaca Energy’s Employee Engagement

Director and Chairs the Employee Engagement Group,

meeting with the ECF for their insights, incorporating

their feedback into the Board’s decision-making and

providing guidance across the Company’s workforce

engagement programme.

Board independence, skills and experience

Independence Oil and Gas Sector

Finance and

Accounting Operational

Health, Safety and

Environment

Mergers and

Acquisitions Strategy People and Reward

Governance and

Regulatory

Executive Chairman

Yaniv Friedman

Gilad Myerson

Executive Directors

Luciano Vasques

Iain Lewis

Non-Executive Directors

Itshak Tshuva

Idan Wallace

Tamir Polikar

Francesco Gattei

Guido Brucso

Deborah Gudgeon

Dave Blackwood

Lynne Clow

Assaf Ginzburg

Zvika Zivlin

John Mogford

132 ITHACA ENERGY

This process is at a relatively early stage due to there

being a change of HR Director during the year, but the

Employee Engagement Director has met with office

based staff several times and will ensure there is more

formal engagement with offshore crews going forward.

The ECF plays an integral role in improving

communication, involving employees in the business

of the Company through information sharing,

communication and engagement. It is a forum through

which management can communicate and discuss

issues which have widespread application, either to all

employees or certain groups of them, providing the

opportunity to consult over business-related issues and

gain commitment to implementing new ideas and new

ways of working to improve the organisation. Employees

can contact the ECF either through the ECF mailbox

or by speaking with a member of the ECF. All questions

submitted are done so in confidence and names are not

passed to management or HR.

The forum met four times during 2024 discussing both

onshore and offshore issues including politics, pay,

working conditions, healthcare as well as the integration

with Eni UK.

The Board discussed the outputs of the ECF with the

Executive Leadership Team throughout the year, to

support the evolution of the Company’s culture by

building on feedback received from employees. Lynne

Clow leads the Board’s efforts to engage with the ECF

to increase engagement levels and build a strong culture

within the organisation.

Diversity, Equity and Inclusion

The Committee understands the strategic importance of

DE&I, both in the boardroom and across

the whole business and more information on how Ithaca

Energy’s DE&I policy helps create an open, diverse and

inclusive organisation where everyone feels engaged

and supported can be found on page 90. Inclusivity

remains a core value and our aim is for everyone to feel

comfortable to be themselves, feel listened to and be

able to express themselves. We are committed to an

ongoing programme of equity and inclusion for all.

The Board supports the principles of gender and

ethnic diversity and pays close attention to the

international nature of its makeup. Members of the

Board and the Executive Leadership Team collectively

possess diversity of gender, national birthplace, social

backgrounds, cognitive and personal strengths, along

with a combination of skills, experience and knowledge

– all of which are vital for the effective operation of

the Board and oversight of the Group. We believe

that Board diversity makes us a better and more

sustainable business, contributing to high performance

and enhanced commercial results. As well as a diverse

Board, we promote an open and inclusive culture in

Board and Committee meetings, where all Directors are

encouraged to share their views and all views are taken

into account without bias or discrimination.

In May 2024, a Board Diversity, Equity and Inclusion

Policy was approved and adopted by the Board, which

sits alongside the Company’s core values as supported

by a set of behaviours, the Company’s general Diversity,

Equity and Inclusion Policy, the Code of Conduct and

associated policies.

While the Board is supportive of the FCA’s UK Listing

Rule on diversity and inclusion, requiring that: (i) at

least 40% of the Board are women; (ii) at least one

senior Board position (Chair, CEO, CFO or SID) is a

woman; and (iii) at least one Board member is from a

minority ethnic background, it acknowledges that as

at 31 December 2024, targets (i) and (ii) have not yet

been met.

The position at the year-end is, unfortunately, reflective

of the wider gender imbalance seen throughout the

energy sector which has historically had fewer women

in senior management roles. Whilst we have yet to

reach the 40% target, the Board continues to put these

targets to the front of mind when searching for new

Board appointments. New Directors with technical and

professional skills to complement the existing mix of

skills and experience on the Board will be sought.

The Committee continues to progress its search for an

additional Independent Non-Executive Director and

recognises the requirements of Principle J of the Code

in relation to appointments promoting the diversity of

gender, social and ethnic backgrounds. A recruitment

process, including the appointment of external advisers

to assist, is well advanced to find a suitable female

candidate to enhance not only the independence of the

Board, but to bring complementary skills and experience

to the Company.

All appointments to the Board are based on merit.

Candidates will be considered against appropriate criteria,

including diversity of social and ethnic backgrounds, as well

as of cognitive and personal strengths, in addition to gender

diversity since the primary consideration is to maintain

and enhance the Board’s overall effectiveness to deliver

strong performance and growth, in line with the Company’s

ongoing strategic objectives.

Nomination and Governance Committee report continued

The Board Diversity, Equity and Inclusion

Policy objectives are:

• Encourage a diverse and inclusive working

environment in the boardroom where

everyone is accepted, valued and receives fair

treatment without discrimination or prejudice;

• Make all appointments to the Board on

merit against objective criteria which

takes into account skills, knowledge and

experience alongside all aspects of diversity,

including but not limited to those described

above;

• Consider candidates for appointment to the

Board from as diverse a pool of applicants

as possible and ensure that the recruitment

and selection process has been reviewed to

mitigate bias; and

• As a minimum, set a target of at least 40%

of Board members who are women, at least

one senior board position (Chair, CEO,

CFO or SID) held by a woman, and at least

one member of the Board is from a minority

ethnic background.

133ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Committee performance evaluation

The Committee’s annual performance evaluation

exercise was carried out in December 2024 and a key

area for the Committee for 2025 will be an increased

focus on succession planning. See page 124.

FCA Diversity Disclosure Table

In accordance with UK Listing Rule 6.6.6R (10), the

Company’s diversity data, as at the reference date of

31 December 2024 is set out opposite. The figures were

calculated based on the data provided by the Board and

Executive management upon appointment.

Focus areas for 2025

For 2025, the Nomination and Governance Committee

will be focused on:

• Succession planning for the Directors and senior

management.

• Company strategy: The Nomination and Governance

Committee will continue to monitor that the

Company’s strategy is aligned with its vision and values.

Yaniv Friedman

Committee Chair

Reporting on gender identity at year-end 2024

(Relevant persons were provided with a copy of UKLR9 Annex 2 which each completed)

Number of Board

members

of the Board

No. of senior

Board positions

No. in executive

management

% of executive

management

Men 11 85% 4 8 80%

Women 2 15% 0 2 20%

Reporting on ethnic background at year-end 2024

(Relevant persons were provided with a copy of UKLR9 Annex 2 which each completed)

Number of Board

members

of the Board

No. of senior

Board positions

No. in executive

management

% of executive

management

White British or other White (including minority-white groups) 4 31% 1 5 50%

Mixed/Multiple Ethnic groups 1 7% 1 – –

Asian/Asian British – – – –

Black/African/Caribbean/Black British – – – – –

Other ethnic Group 8 62% 2 5 50%

Not specified/prefer not to say – – – – –

134 ITHACA ENERGY134 ITHACA ENERGY

Health, Safety, Environment and

Security Committee report

Dear fellow shareholder,

I am pleased to present the

Health, Safety, Environment

and Security Committee (the

Committee) Report for the year

ended 31 December 2024.

This report provides an overview of the Committee’s

principal activities and key areas of focus during the year.

Role of the Committee

The Committee’s role is to assist the Board with the

discharge of its responsibilities in relation to the Group’s

HSE commitments. This includes reviewing and monitoring

the Group’s HSE strategy, assessing the scope and

effectiveness of the HSE management system framework

and investigating, on behalf of the Board, reports from

management concerning all serious incidents and high

potential incidents within the Group.

The Committee will further review principal findings from

Line of Defence 2 and 3 HSE internal audits, which may

be discussed at the Audit and Risk Committee. The Audit

and Risk Committee retains overall responsibility for

monitoring and reviewing the effectiveness of the Group’s

risk management and internal control systems. Where a

detailed review of HSE risks or audit findings is undertaken,

this will be reviewed by the HSE Committee. Similarly,

if the HSE Committee determines that specific HSE

incidents have broader implications, for risk management or

internal control, across the Group these will be referred to

the Audit and Risk Committee. See Figure 1 below.

Terms of reference

The terms of reference of the Committee, setting out

the key responsibilities of the Committee were

reviewed during the year and recommended to the

Board for approval. They are available on the Company’s

website.

Activities during the year

In 2024, the Committee reviewed:

• 2023 HSE performance, including operation safety

performance, environmental compliance, High

Potential Incident and Process Safety event learning.

• Safe operations, including well integrity status,

maintenance management activities, HSE

management system arrangements, competency and

training, and various control of work improvements.

• GHG emission targets, including, emission reduction

projects at various stages of maturity, our approach to

Scope 3 emissions, reporting of net equity emissions

and methane management.

• 2024 OPRED consultation on assessing the effects of

Scope 3 emissions on climate from oil and gas projects.

• 2024 HSE improvement plan progress.

• Management system improvements.

• The status of HSE and Technical Assurance Line of

Defence (LOD) Level 2 and 3 plans and principal audit

insights.

• The status of process safety risks and progress with

implementing improvements regarding management

of process safety, including leadership training, process

safety key performance indicators (KPIs), Process Safe

Barrier Model Tool (Figure 2) and continued roll-out

of the Process Safety Fundamentals to frontline teams

(PSFs, Figure 3).

• Regulatory activity, learning from regulatory

inspections and themes progressed in conjunction with

OEUK HSE forum.

• Occupational health improvements.

Membership and meeting attendance in 2024

Name Meetings attended

Dave Blackwood (Chair)

John Mogford (SID)

Zvika Zivlin (SID)

Assaf Ginzburg

1 John Mogford, Senior Independent Director, ceased to be a member of the Board with effect from

16 May 2024 and was unable to attend a meeting due to a prior engagementthat the Committee

was notified of in advance.

2 Zvika Zivlin joined the Board as Senior Independent Director with effect from 16 May 2024.

3 Assaf Ginzburgh missed several meetings due to prior engagements that the Committee were

notified of in advance.

The Health, Safety, Environment and Security

(HSE) Committee is a key part of our business and

as Committee Chair, I am pleased to report on the

activities of the Board HSE Committee in 2024.”

Dave Blackwood

Committee Chair

HSE Committee

Highlights HSE incidents and other HSE

matters which have risk implications

Audit and Risk Committee

Refers HSE risks, audit findings

or other HSE matters to the Board

and HSE Committee for review

Figure 1: Relationship between the HSE Committee and the Audit and Risk Committee

135ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

MOC

Looking ahead to 2025

For 2025, the Committee has proposed the following

standing agenda items and specific topics of focus:

• HSE performance and status scorecard targets;

• HSE performance leading metrics, including Process

Safety Key Performance Indicators;

• Serious Incidents (significant permanent impairment) or

Fatalities, Process Safety Events (Tier 1 and Tier 2 events)

and High Potential Incidents, reviewing any reports of

events, root causes and any actions being taken;

• Principal findings from LOD and LOD3 regulatory

audits and plan status; and

• Regulatory inspection feedback.

In 2025, the Committee will focus on the following areas:

• Organisational integration, following the Business

Combination with Eni UK in 2024, which will see

harmonisation of many HSE systems and processes

in order to further enhance and improve the

management of HSE across the organisation.

• Improvements to process safety, including progressing

a detailed Process Safety Leadership Plan, developed in

early Q1 to drive performance improvements, further

embedding of the barrier model tool, Operational Risk

Assessment enhancements and further embedding of

the PSFs.

• Safe operations, including improvements regarding

Control of Work, safe deck management,

human factors, drops prevention and contractor

engagement.

• Environmental compliance improvements, with

regard to permit compliance, environmental ‘Must

Wins’ and opportunities through the Business

Combination to harmonise our ISO 14001

certification, and to give consideration towards

expansion of ISO 50001 certification currently in

place on our Cygnus assets.

• Emissions, covering status of Oil and Gas Methane

Partnership (OGP roadmap), progress towards

delivering Zero Routine Flaring commitments,

Emissions Reduction Action Plan status and overall

progress regarding our Group GHG targets and

North Sea Transition Deal commitments.

Dave Blackwood

Committee Chair

Figure 2: Process Safety Barrier Model Tool

Figure 3: IOGP Process Safety Fundamentals

Maintain safe

isolation

Recognise changeWalk the line Respect hazardsApply procedures Stay within

operating limits

Sustain barriers Stop if the

unexpected

occurs

Control ignition

sources

Watch for weak

signals

Cargo Tank Venting

Crane and Lifting

Equipment

Fire and Explosion

Protection

Hull Integrity

Shuttle Tanker Position

Keeping

Stability and Ballast

Station Keeping

Structural Integrity

Hydraulic Containment

(Rotating)

Hydrocarbon

Containment

Pipeline Systems

Pressure Relief

Systems

Open Hazardous

Drains

F&G Detection

Systems

HVAC

Instrument Location

Systems

Shutdown Systems

Verification

MOC

Competency

Alarms

Active Fire Protection

Systems

Hazardous Area

Hardware

Emergency and Escape

Lighting

Emergency Power

Emergency Response

and Rescue Vessel

Escape Routes

Escape Systems

External

Communication

Helicopter Facilities

Internal

Communications

Personal Survival

Equipment

TEMPSC – Lifeboats

Temporary Refuge

Structural and

marine

Process

containment

SafeguardingManagement Active protectionIgnition control

Emergency response

and recover

136 ITHACA ENERGY136 ITHACA ENERGY

Remuneration Committee report

Dear shareholders,

On behalf of the Remuneration

Committee (the ‘Committee’),

I am pleased to present

the Company’s Directors’

Remuneration report (the

‘report’) for the year ended

31 December 2024.

Committee composition

The Committee works hard to ensure alignment

with shareholder interests and that our approach to

remuneration fully supports the Company’s strategy

and growth ambitions. The Committee is comprised

of five Non-Executive Directors (‘NEDs’), with Zvika

Zivlin joining the Board as the Senior Independent

Director and the Committee in May 2024. He

replaced John Mogford who stepped down from the

Board at the Company’s Annual General Meeting

(‘AGM’) in May 2024.

Company performance

In 2024, the Group has made significant progress

across its strategic objectives. The most notable of

which was the announcement in April of the Group’s

transformational Business Combination with Eni UK,

that subsequently completed on 3 October 2024.

This transformational Business Combination along with

significant $2.25 billion refinancing completed in Q4

2024, creates a dynamic growth player with significant

potential for organic and inorganic growth and material

financial firepower to deliver its ambitions. In recognition

of the significant change in the business delivered by

the Business Combination, we adjusted our corporate

scorecard targets in 2024 to reflect the increased

production capability and larger scale of our operations.

We have reported a robust financial performance in

2024, with adjusted EBITDAX of $1.4 billion and

net cash flow from operating activities of $0.9 billion

(reflecting contributions from the Eni UK assets from

the legal completion date of 3 October 2024). With

over $1 billion of available liquidity, we have significant

financial capacity to deliver on our growth plans as we

look to the future. We measure our success not only by

our financial performance and delivery for shareholders,

but in our safety and operating performance. In this, we

have maximised the production and value of our assets in

a safe and responsible manner. In summary:

• The impact of lower realised gas commodity prices,

and reduced production in the 1H 2024, which

resulted in a fall in adjusted EBITDAX of 19% from

2023;

• Our enlarged portfolio delivered a strong final quarter

of production in 2024, supporting an average for

2024 of 80.2 kboe/d, which was at the upper end of

our guidance of 76 to 81 kboe/d;

• Our team demonstrated an improved safety culture

and ensured safe operations during the year. During

2024, our Serious Injury and Fatality Frequency

remained at zero and there were no Tier 1 or Tier

2 process safety events; this is an improvement

from 2023 (2023: recorded one Tier-1 event) and

serves as a continual reminder that we must remain

dedicated to operating a robust and transparent

safety culture;

• Across our portfolio, we have continued to make

material progress with emissions reductions projects

on FPF-1, Alba, Captain and Cygnus;

• Applying a culture of cost management has ensured

the operating expense was lower than our maximum

expectation for the year, despite large project

expenses and the impact of high inflation impacting

spend on materials; and

• Strategically, the Company delivered strong

performance, including completion of the Business

Combination with Eni UK and its successful $2.25

billion refinancing comprising $750 million Senior

Notes and $1.5 billion amended and restated floating

rate Reserve Based Lending (‘RBL’), including $0.5

billion of letters of credit. In addition, more than $400

million of letters of credit were secured in Q4 of 2024.

2024 has further enhanced the Group’s position as

a dynamic, leading UKCS production and growth

company focused on accelerating growth opportunities

and future value creation. The Group is now positioned

as one of the largest resource holders in the UK

North Sea with a diversified portfolio of production

and development opportunities, that has the ability to

underpin material long-term organic growth, delivering

Meeting attendance in 2024

Name Meetings attended

Lynne Clow (Chair)

John Mogford (SID)

1,3

Zvika Zivlin (SID)

2,3

Assaf Ginzburg

3,3

Dave Blackwood

Deborah Gudgeon

1 John Mogford, Senior Independent Director, ceased to be a member of the Board with effect from

16 May 2024 and was unable to attend a meeting due to a prior engagement that the Committee

was notified of in advance.

2 Zvika Zivlin joined the Board as Senior Independent Director with effect from 16 May 2024.

3 Assaf Ginzburg missed several meetings due to prior engagements that the Committee was notified

of in advance.

The Committee believes that the remuneration

outcomes for 2024 fairly reflect performance, and

our focus remains on ensuring reward programmes

incentivise employees to achieve Ithaca’s strategy and

performance goals.”

Lynne Clow

Chair of the Remuneration Committee

137ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

the oil and gas essential for energy security while

supporting the UK’s decarbonisation targets.

Remuneration outcomes for 2024

Annual bonus

The scorecard targets covered a range of objectives that

the Committee regarded as critical. The announcement

on 23 April 2024 of the successful completion of

the transformational Business Combination with

substantially all of Eni UK’s upstream oil and gas assets

did not change the performance metrics for the 2024

annual bonus or weighting published in our 2023

report as appropriate for challenging management to

drive stretch performance while operating in a safe and

sustainable way. It did, however, require the Committee

to undertake an assessment of targets and apply an

appropriate adjustment to reflect the impact of the

Business Combination. The adjustment was effective

from the date of the economic combination of assets on

1 July 2024.

2024 performance resulted in an annual bonus for the

Executive Directors (‘EDs’) of 60.0% of their maximum

opportunity, with half deferred into shares, which will

vest after three years conditional upon continued

employment.

The Committee considered the bonus outcome in

terms of overall business performance, shareholder

and workforce experience. When assessing emission

performance, the Committee considered the feedback

from the HSE Committee and applied downward

adjustment in consideration of operational status and

impact on emissions. The Committee concluded that

there were no grounds for exercising its discretion to

other areas of the scorecard, and that the outcome

reflected the overall position of the business at the

year end. Further details on the bonus outcomes are

on page 140.

Long-Term Incentive Plan (LTIP)

Following the Company’s first LTIP award grant in

December 2022, with a performance period ending

on 31 December 2025, there was a further grant

issued in 2024 (with a performance period ending

31 December 2026). There were no LTIP vesting based

on performance during 2024.

The Remuneration Committee considered Gilad

Myerson’s contribution in guiding the Company through

its acquisition-led growth strategy since 2019 and

determined that it would be appropriate to treat him

as a good leaver under the plan rules for the purpose of

bonus awards and all outstanding long-term incentive

awards. In line with the terms of his executive service

agreement, he was entitled to six months’ payment

in lieu of notice, he further received a termination

payment of £119,315. In addition, Gilad was available

as an advisor to the Company to provide assistance as

required in accordance with the terms of a Consultancy

Agreement that ended on 10 December 2024. He was

paid a retainer of £375,000 under this agreement. Full

details are set out on page 145.

Change of Chief Executive Officer

Following the announcement on 4 January 2024 that

Alan Bruce would step down from his role of Chief

Executive Officer, it was announced that Iain Lewis,

our Chief Financial Officer, would fulfil the role of

interim Chief Executive Officer. On 28 May 2024,

the Company announced that Luciano Vasques was

proposed as the Group’s Chief Executive Officer, with

his appointment taking effect on the completion of

the Business Combination with Eni UK. Luciano joined

the Company on 3 October 2024, having joined the

Group from Eni UK where he held the role of Managing

Director. During Luciano’s upstream career he has

demonstrated a track record of successfully overseeing

and delivering multi-billion dollar developments and

operations across Eni S.p.A.’s global business that

will prove invaluable as the Company embarks on the

development of its high-value greenfield portfolio.

Luciano sits on the steering committee of the North

Sea Transition Deal, led by NSTA. As detailed in

the appointment announcement, Luciano Vasques’

remuneration package comprises:

• Base salary £600,000

• Pension of 15% of salary

• Annual bonus opportunity of up to 150%, subject to

performance and applicable deferrals (pro-rated in

2024 to reflect his joining the Company part way

through the performance year).

• Long-Term Incentive Plan award of share to the

value of 200% of salary. The award for the period

Executive Director appointments in 2024

Over the past year, the Committee has continued to

ensure the appropriateness of the Company’s overall

reward package available for Executive Directors in the

context of the Directors Remuneration Policy (the

‘Policy’), the UK Corporate Governance Code and

market best practice. These core principles were at the

forefront when the Committee set the remuneration

on the appointment of the Executive Chairman,

Yaniv Friedman, and Chief Executive Officer, Luciano

Vasques, during 2024. The structure and quantum

of the remuneration packages set are consistent with

our Director’s Remuneration Policy and fall below the

maximum permitted under those rules.

Change of Executive Chairman

Gilad Myerson stepped down from his role as Executive

Chairman on 28 May 2024. He was succeeded with

the appointment of Yaniv Friedman on 28 June 2024.

Yaniv brings significant global executive experience

working in the energy and infrastructure sectors and

brings considerable strategic, commercial and M&A

experience to the executive leadership team. As detailed

in the appointment announcement, Yaniv Friedman’s

remuneration package comprises:

• Base salary £450,000

• Pension of 15% of salary

• Annual bonus opportunity of up to 150%, subject to

performance and applicable deferrals (pro-rated in

2024 to reflect his joining the Company part way

through the performance year).

• Long-Term Incentive Plan award of share to the value

of 200% of salary. The award for the period 2024

to 2026 was granted on 4 July 2024 as reported

on page 144. The award will vest (subject to meeting

applicable performance conditions) at the end of the

period and is required to be held for an additional two

years.

• In addition, the Committee agreed that appropriate

relocation support would be provided for the first two

years of employment, in line with the terms of the

Director’s Remuneration Policy. Details of support

provided to 31 December 2024 are set out on page

142.

2024 to 2026 was granted on 11 October 2024

as reported on page 144. The award was reduced

pro-rata to reflect his joining in the last quarter of

the first year of the performance period. The award

will vest (subject to meeting applicable performance

conditions) at the end of the period and is required to

be held for an additional two years.

• In addition, the Committee agreed that appropriate

relocation support would be provided for the first

two years of employment, in line with the Director’s

Remuneration Policy. Details of support provided to

31 December 2024 are set out on page 142.

Full details of Alan Bruce’s remuneration on his departure

from the Company were detailed in our 2023 report.

Directors’ Remuneration Policy

Our current Directors’ Remuneration Policy (‘Policy’)

was approved by shareholders at the 2023 AGM with

over 99% support. Our current Policy was designed

around four key principles set out on page 152 and a

traditional plc remuneration structure of base salary,

pension and benefits, annual bonus and LTIP. The

Committee keeps these under regular review and believe

that these remain the right principles to drive delivery

of our strategy and that the structure remains aligned to

these principles, our strategy and market practice.

The period since the 2024 AGM has been one of

significant change for the Directors of the Company

including:

• The transformational Business Combination with Eni

UK;

• The change in the Executive Chairman role, with

Gilad Myerson stepping down from his position and

the appointment of Yaniv Friedman;

• The change in the Chief Executive Officer role,

with Alan Bruce stepping down from the role at the

beginning of 2024 and Iain Lewis, Chief Financial

Officer, taking on the role on a temporary basis, and

Luciano Vasques been appointed in the role from

3 October 2024.

Our existing Policy has appropriately facilitated delivery

of remuneration through this period of significant

change, and the Remuneration Committee determined

that no further revisions are required for 2025.

138 ITHACA ENERGY

Remuneration Committee report continued

We will continue to closely monitor developments in

market practice and shareholder guidance over the life

of the Policy.

Executive Director remuneration for 2025

Base salary

In early 2025, the Company entered into a period

of significant reorganisation following the Business

Combination and as such has decided to defer

decisions on annual salary increases until May 2025.

The Committee agreed that any salary increase for

Executive Directors should be deferred in line with the

policy adopted for the wider workforce. Therefore, no

salary increases have yet been awarded.

Salary

Executive Chair

£450,000

Chief Executive Officer

£600,000

CFO

£400,000

1 Yaniv Friedman was appointed in June 2024. His salary is shown as at

appointment.

2. Luciano Vasques’ salary is shown as effective on his appointment from

3 October 2024.

3. Iain Lewis’ salary was increased to £500,000 in January 2024

to reflect his responsibilities and working on a full-time basis. In

November 2024, he returned to 80% of normal business hours

under the terms of his Executive Service agreement. His 2024 salary

of £500,000 was prorated to reflect the return to his contracted

working arrangements to £400,000.

2025 Annual bonus and LTIP opportunities

Annual Bonus

LTIP

opportunity

Target

opportunity

Maximum

opportunity

Executive Chair 75% 150% 200%

CEO 75% 150% 200%

CFO 75% 150% 200%

1 50% of any bonus earned will be deferred into shares for three years.

The bonus will be assessed against financial, strategic and HSE targets

aligned with the business plan. The metrics and weightings are set out

on page 141.

2. The shareholding requirement for each ED will align with their LTIP

award size.

Our desire for sustainable growth has driven decisions

on the metrics for the 2025 annual bonus and the

Committee considers ongoing inclusion of safety,

emissions, production and operating expenditure

metrics directly support these goals. Performance

against the financial and strategic metrics will be a

measure of the value we deliver for our shareholders. The

Committee remains satisfied that the current Executive

remuneration framework is aligned with delivery of

the Group’s ambitious growth plan and targets and the

creation of long-term shareholder value. Further details

on the 2025 scorecard can be found on page 141.

As disclosed in the 2024 report, a single metric of

Relative TSR metrics adopted for the 2024 LTIP award.

In line with the Policy, the Committee has decided to

delay the grant of the 2025 LTIP award. The award is

likely to be made after the publication of this report.

Further details are set out on page 141.

Conclusion

The Committee looks forward to engaging with

shareholders and stakeholders on an ongoing basis and

welcomes any feedback or comments on this report.

I look forward to seeing shareholders at the upcoming

AGM.

Lynne Clow

Chair of the Remuneration Committee

139ANNUAL REPORT AND ACCOUNTS 2024 139ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

1 Maximum opportunity excludes the LTIP as the first LTIP awards under the Director’s Remuneration Policy has a performance period ending 31 December 2025. Realised remuneration excludes legacy arrangements.

Key highlights – 2024 remuneration outcomes under the remuneration policy

Outcome of performance measures ending in the financial year

This section summarises performance against targets for the annual bonus. Full details on the assessment of the performance conditions can be found on page 143.

Category Metric

Scorecards

Threshold (25%) Target (50%) Stretch (100%)

HSE (25%) Tier 1 and Tier 2 safety events (15%)

Emissions Performance (ktCO

e) (5%)

Progress against emissions reduction plan (5%)

Operations (35%) Production (kboe/d) (17.5%)

Operating expense ($m) (17.5%)

Growth (5%) Reserves maturation (Mmboe) (5%)

Financial (20%) Free cash flow ($m) (20%)

Strategy (15%) Performance against strategic plan (15%)

1 Production and free cash flow outturns are shown for H2 2024 only, full results are shown in the table on page 143 as consolidated 2024 performance . Targets adjusted by the Remuneration Committee for H2 to factor in impact of Business Combination and maintain appropriate stretch in the targets.

2 Emissions performance is shown after discretion applied. Further details are shown on page 143.

2024 annual bonus scorecard outcome

The following table sets out the final outcome for the 2024 annual bonus. A detailed breakdown of performance can be found on pages 143 and 144.

Annual Salary

£000

Maximum bonus

% of salary

Scorecard

Board approved

outcome %

Outcome

% of salary

Annual bonus

value

£000

1 The bonus award for Yaniv Friedman includes a pro-rata reduction to reflect the fact that he joined the Company on

28 June 2024.

2 The bonus award for Luciano Vasques includes a pro-rata reduction to reflect the fact that he joined the Company on

3 October 2024.

3 The bonus award for Iain Lewis reflects an increase from his contracted hours from 80% of normal business hours to 100% for

the period from 1 January 2024 to 31 October 2024. This bonusable salary for 2024 was £483,000.

4 The bonus award for Gilad Myerson includes a pro-rata reduction to reflect the fact that he left the Company on 28 May 2024.

5 Of the total bonus 50% will be deferred into shares for Yaniv Friedman, Luciano Vasques and Iain Lewis, vesting after three

years, in accordance with the rules of the deferred bonus plan.

Yaniv Friedman

450 150% 60.0% 90.0% 207

Luciano Vasques

600 150% 60.0% 90.0% 133

Iain Lewis

500 150% 60.0% 90.0% 435

Gilad Myerson

750 150% 60.0% 90.0% 275

Total remuneration outcomes in 2024

The charts below show the remuneration outcomes for ED in 2024 delivered based on performance compared to the maximum opportunity

Executive Chair (£’000) Chief Executive Officer (£’000) Chief Financial Officer (£’000)

Maximum

Realised

£0 £100 £200 £300 £400 £500 £600 £700

173

104

173

104

230

Fixed Remuneration Bonus (Cash) Bonus (Deferred)

Maximum

Realised

£0 £100 £150 £200 £250 £300 £350 £400

£50

111

148

Fixed Remuneration Bonus (Cash) Bonus (Deferred)

Maximum

Realised

£0 £200 £400 £600 £800 £1,000 £1,200

£1,400

362

217

362

217

483

Fixed Remuneration Bonus (Cash) Bonus (Deferred)

100%

50%

95%

92%

25%

28.8%

33.2%

140 ITHACA ENERGY

Remuneration Committee report continued

Key highlights – current remuneration policy

This section summarises our current remuneration policy. The full remuneration policy can be found on pages 152 to 160.

The policy for Non-Executive Directors remains unchanged and is set out on pages 160 and 161, and is the Implementation Policy for 2025. The NED fees are set out on page 150.

Element of remuneration Key features 2025 position

Base salary

Competitive fixed level of remuneration to attract and retain

Executive Directors of the necessary calibre to execute strategy

and deliver shareholder value

• Normally reviewed annually, taking into account a range of factors. Increases are guided by the general increase for the broader

employee population but on occasion may need to recognise, for example, an increase in the scale, scope or responsibility of the

role, as well as market rates.

Executive Chair – £450,000

Chief Executive Officer – £600,000

CFO – £400,000

Benefits

Provides a suitable but reasonable package of benefits as part

of a competitive remuneration package

• Provided where appropriate in a market-related basis, including but not limited to health insurance, life insurance/death in service.

Appropriate business travel (including the tax cost where appropriate), car allowance and relocation expenses.

No change to quantum

Pension

Provides competitive retirement benefits • Pension set in line with the contribution for the wider workforce (15% of salary) Executive Chair – 15%

Chief Executive Officer – 15%

CFO – 15%

Annual bonus

Rewards the delivery and achievement of financial targets and

key performance indicators which form part of strategy

• Maximum award opportunity 150% of salary.

• Awards based on targets set annually against a combination of financial, strategic and operational KPIs.

• Up to 25% of the maximum bonus is delivered for threshold levels of performance and the full bonus is paid for stretch

performance.

• At least 50% is deferred into Ordinary Shares for three years.

• Awards subject to malus and clawback provisions for up to three years post payment and vesting.

Executive Chair – 150%

Chief Executive Officer – 150%

CFO – 150%

LTIP

Aligns the Executive Directors interests with shareholders

and rewards for achievement of long-term objectives

• Maximum award opportunity 200%.

• Awards are subject to a three-year performance period with a two-year holding-period on the net of tax vested shares.

• Dividend equivalents accrue over the period from grant to the earlier of the end of the holding period and exercise.

• Awards are subject to financial and strategic KPIs. Financial metrics (including TSR) comprise at least half of the LTIP awards.

• Up to 25% of the maximum award vests for threshold levels of performance and the full award vests for stretch performance.

• Awards subject to malus and clawback for six years (from the date of grant).

Executive Chair – 200%

Chief Executive Officer – 200%

CFO – 200%

Shareholding requirements

Aligns the Executive Directors interests with shareholders • Executive Directors are required to build up the required shareholding over five years.

• A shareholding requirement post-cessation of employment applies of 100% of shareholding requirement (or actual holding if

lower) for one year and 50% for the second year.

Executive Chair – 200%

Chief Executive Officer – 200%

CFO – 200%

141ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Performance metrics for the 2025 annual bonus

Category Weighting Metric

Health, safety and environment 25% Safety events (15%), Emissions reduction (10%)

Operations 35% Production (17.5%), Operating expense (17.5%)

Financial 20% Free cash flow (20%)

Strategy 20% Strategic plan (20%)

Due to commercial sensitivity, actual targets and ranges will be disclosed at the end of the performance period. The Remuneration Committee retains an appropriate level of flexibility to apply discretion to ensure that remuneration

outcomes reflect overall performance and values.

Performance metrics for the 2025 long-term incentive plan

The Company expects to make awards under the 2025 long-term incentive plan after the publication of this report. Performance conditions for the 2025 LTIP award will be published on grant.

142 ITHACA ENERGY

Annual report on remuneration

This section of the report sets out how Ithaca Energy has implemented its Policy and legacy arrangements for EDs in 2024. This is in accordance with the requirements of the Large and Medium Sized Companies and Groups (Accounts

and Reports) Regulations 2008 (as amended).

Single total figures of remuneration (audited)

Executive Directors

Base Salary

£’000

Benefits

£’000

Annual bonus

£’000

LTIP

£’000

Pension

£’000

Other

£’000

Total

£’000

Total Fixed Pay

£’000

Total Variable Pay

£’000

Current Executive Directors:

Yaniv Friedman 227 142 207 – 30 1 607 399 208

Yaniv Friedman (2023) – – – – – – – – –

Luciano Vasques 148

154

133 – 17 – 452 319 133

Luciano Vasques (2023) – – – – – – – – –

Iain Lewis 483 11 435 – 65 5 999 559 440

Iain Lewis (2023) 300 9 269 – 40 1 619 349 270

Former Executive Directors:

Gilad Myerson

308 27 275 – 41 159 810 376 434

Gilad Myerson (2023) 500 78 449 – 68 7,268 8,363 646 7,717

Alan Bruce (2024) – – – – – – – – –

Alan Bruce (2023) 400 11 359 – 52 147 969 463 506

1 Figures for 2024 reflect remuneration earned since appointment as a Director of the Company: Yaniv Friedman was appointed on 28 June 2024, Luciano Vasques was appointed on 3 October 2024, and Iain Lewis was a Director for the whole year. Gilad Myerson was appointed from 1 January 2024 to

28 May 2024. Figures for 2023 show remuneration for Gilad Myerson and Iain Lewis, both of whom were Directors for the whole year.

2 Base salary for 2024 reflects the salaries earned from date of appointment for Yaniv Friedman and Luciano Vasques, and 2024 salary increases reported in the 2023 report for Gilad Myerson and Iain Lewis. Iain Lewis’ salary in 2024 reflects an increase from his contracted hours from 80% normal business

hours in 2023 to 100% for the period from 1 January 2024 to 31 October 2024.

3 Benefits includes the cost, where relevant, of private medical insurance, accommodation, travel, relocation support and car allowance. 2024 benefits with a value over £5,000 are shown in the table below:

Executive Directors

Car allowance

£’000

Relocation

assistance

£’000

Taxable travel

£’000

Current Executive Directors

Yaniv Friedman 5 136 –

Luciano Vasques – 150 –

Iain Lewis 9 – –

Former Executive Directors

Gilad Myerson – – 23

1 This represents the gross taxable value of expenses relating to relocation support provided in accordance with the Terms of the Director’s Remuneration Policy.

2 This represents the gross taxable value of expenses relating to accommodation, travel and subsistence incurred whilst travelling on Company business.

4 Pension provision is up to 15% of salary as a payment into a defined contribution pension scheme and/or a cash amount in lieu of a pension contribution. Any cash allowance paid is reduced to take into account additional employer costs.

5 Bonus payable for the financial year; Executive Directors are required to defer half of any bonus award into Ithaca Energy shares.

6 Other comprises the following legacy arrangements:

Yaniv Friedman (2024): the amount of £1,312 representing the value at grant of shares under the Company Share Incentive Plan.

Iain Lewis (2024): the amount of £4,921 representing the value at grant of shares under the Company Share Incentive Plan; (2023): the amount of £1,498 representing the value at grant of shares under the Company share incentive plan.

Gilad Myerson (2024): a cash dividend payment of £136,523 relating to vested but unexercised shares, the amount of £2,424 representing the value at grant of shares under the Company Share Incentive Plan, the amount of £20,192 in lieu of seven days accrued but untaken holidays; (2023): payment

in lieu of all MEP shares transferred back to the Company for nil payment of $8,000,000 (GBP equivalent using an exchange rate at date of payment of GBP 1 = USD 1.2536), success based compensation linked to a successful outcome of a historical claim relating to an acquisition

of $831,600 (GBP equivalent using an exchange rate at date of payment of GBP 1: USD 1.20998), a cash dividend payment of £197,307 relating to vested but unexercised shares, the amount of £2,102 representing the value at grant of shares under the Company share incentive plan.

7 The figures for Gilad Myerson in 2024 exclude payments made for loss of office and payments received after stepping down from the Board. Details of these payments are on page 145.

Remuneration Committee report continued

143ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Directors remuneration in 2024

2024 Annual bonus outcomes

The maximum bonus opportunity for Executive Directors in 2024 was 150% of salary and subject to an assessment of performance against a scorecard of measures.

Half of any bonus earned is payable in cash following the year-end and the other half is deferred into Ithaca Energy shares, which vest after three years.

The following section contains details on the targets and the Remuneration Committee’s assessment of outcomes for the period 1 January 2024–31 December 2024 against each of the metrics in the scorecard.

Performance against scorecard (audited)

Targets Outurn

Category Metric Weighting

Threshold Target Maximum

Actual Result % Outturn

Result %

Weighted Total

25% 50% 100%

HSE Tier 1 and Tier 2 safety events

15.0% 2

Improve

on 2023

0 0 100.0% 15.0%

Progress against emissions reduction plan

1&2

5.0%

H1 239 227 215 204 100.0% (50%)

2.5%

H2 302 287 272 242 100.0% (50%)

Captain Electrification ready for decision on

Sanction (FID) by end Q2 2024 (target)

50% full-year scorecard outcome

5.0% Assessment against plan – 100.0% 5.0%

Operations Production (kboed)

2&3

17.5%

H1 58 60 62 53 0.0%

2.5%

H2 105 109 113 106 14.4%

Operating expense (inc. net G&A) ($m)

17.5%

H1 327 310 293 293 50.0%

16.6%

H2 479 452 427 432 45.0%

Growth Reserves maturation (Mmboe)

50% full-year scorecard outcome

5.0% 2 3 5 2 25.0% 1.3%

Financial Free cash flow ($m)

2&4

20.0%

H1 251 501 1,002 240 0.0%

3.3%

H2 (54) 77 208 (11) 16.6%

Strategy

Performance against strategic plan

50% full-year scorecard outcome

15.0% Assessment against plan – 92.0% 13.8%

Total 100.0% 60.0%

1 Discretion applied to the % outturn by the Remuneration Committee in consideration of operational status and impact on emissions.

2 Targets adjusted by the Remuneration Committee for H2 to factor in impact of Business Combination and maintain appropriate stretch in the targets.

3 Production performance outturn in H1 2024 was 0.0% and in H2 2024 28.8%. Resulting in weighted total for 2024 of 14.4%.

4 Free cash flow performance outturn in H1 2024 was 0.0% and in H2 2024 33.2%. Resulting in weighted total for 2024 of 16.6%.

144 ITHACA ENERGY

Performance against qualitative metrics

Category Metric Highlights from assessment

Result (% of overall

outcome)

HSE Progress against emissions

reduction plan

A target to achieve our objective of minimising the environmental impact of our operations was set for the electrification of the Captain asset in 2024. This focused on

progressing this project to be ready for Financial Investment Decision (FID). This was deemed achieved and the FID is set for 2025.

5.0%

Strategy Performance against

strategic plan

In a year of transformational change, strategic targets have performed strongly against targets in 2024 in consideration of the following:

• Complete a transformational deal in 2024 with shareholder, FCA, LSE and regular approvals. With the transformational Business Combination with Eni UK

businesses this was achieved in Q3 2024.

• Complete refinancing of the Company during 2024

• Delivering a comprehensive integration plan, including completion of asset transfers and Board approval for major organisational realignment during 2025.

13.8%

Discretion

The Committee is conscious of the provisions of the 2018 Code, with Remuneration Committees being encouraged to review incentive outcomes against individual and Company performance, together with any wider circumstances, and

to exercise independent judgement and discretion in relation to remuneration outcomes. Taking into account overall business performance, individual performance and shareholder and workforce context, the Committee was of the view

that the bonus outcome was appropriate and there were no grounds for exercising its discretion to amend the scorecard outcome.

LTIP vesting in respect of a performance period ending in 2024

Not applicable.

Awards granted during 2024 (audited)

Awards granted in 2024 under the LTIP are subject to the terms of the Director’s Remuneration Policy and the LTIP rules approved at the 2023 AGM. Awards were:

Date of award Award type

Basis of award

Face value of

award

Vesting for

threshold

performance

Vesting for

maximum

performance

End of

performance

period

End of holding

period

Yaniv Friedman 04/07/2024 LTIP 200% Salary £900,000 25% 100% 31-Dec-26 31-Dec-28

Luciano Vasques 11/10/2024 LTIP 200% Salary £900,000 25% 100% 31-Dec-26 31-Dec-28

Iain Lewis 04/07/2024 LTIP 200% Salary £1,000,000 25% 100% 31-Dec-26 31-Dec-28

1 LTIP awards granted as nil-cost options, which will vest and become exercisable when the Committee determines whether the performance conditions have been met. The shares from any options exercised cannot be sold until after five years from the grant date, except

to meet any tax liability.

2 Face value of the awards for Yaniv Friedman and Iain Lewis have been calculated using a share price of £1.2372. This was the share price used to calculate shares awarded and is the average share price for the five trading days preceding date of grant. Face value of the award

for Luciano Vasques has been calculated using a share price of £1.0976. The face-value of the award for Luciano Vasques was reduced pro-rata to reflect his joining in the last quarter of the first year of the performance period. This was the share price used to calculate shares

awarded and is the average share price for the five trading days preceding date of grant. The closing share price on 31 December 2024 was £1.1040.

Performance metrics for the 2024 LTIP

Targets for these metrics are for the performance period 1 January 2024 to 31 December 2026.

Category Weighting Metric

Threshold¹

(25% vesting)

Maximum

(100% vesting)

TSR 100% TSR versus comparator group² Median Upper quartile or above

1 Nil vesting below threshold performance, performance between threshold and maximum ranges between 25% and 100% on a straight-line basis.

2 Ithaca Energy’s TSR performance will be assessed against that of: Africa Oil, Capricorn Energy, Diversified Energy, DNO ASA, Energean, EnQuest, Genel Energy, Harbour Energy, Kosmos Energy, Maurel & Prom, Okea ASA, Seplat Energy, Serica, Tullow Oil, Vermillion Energy. The peer group will be

subject to re-evaluation throughout the performance period to adjust for the effects of corporate events such as mergers and acquisitions, with substitutes introduced where necessary to maintain the approximate size and comparability of the Group. Relative TSR will be calculated incorporating a 3-month

average of return index prior to start and at the end of the performance period. The calculation will be on a local currency basis. There is no change to the comparator Group from the 2022 Long-term incentive plan. The comparator Group for awards granted in 2022 published in our 2023 Directors’

Remuneration report incorrectly included Aker BP, Apache Corp, Hibiscus, Marathon Oil, Murphy Oil, Orron Energy & Santos.

Remuneration Committee report continued

145ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Payments to past Directors and payments for loss of office (audited)

Payments made to former Directors that have not been previously reported elsewhere are reported if in excess of £5,000. The Board announced on 28 May 2024 that Gilad Myerson had stepped down as Executive Chairman. The

Company’s policy for payment for loss of office is set out on pages 159 and 160.

All payments to Gilad Myerson in respect of 2024 up to the date his employment ceased on 28 May 2024 are reported in the single figure of remuneration. Until this point he continued to receive his base salary of £750,000 per

annum and all benefits in line with the terms of his Executive service agreement. The Remuneration Committee determined it would be appropriate to treat Gilad Myerson as a ‘Good Leaver’ and as such he remained eligible to receive a

pro-rated bonus for 2024, based on his service until his end date. Full details are reported on pages 142 and 143.

When his employment ceased on 28 May 2024, Gilad was entitled to the following payments:

• £375,000 in lieu of his notice period (six months), paid in instalments and subject to mitigation.

• £119,315 as compensation for termination of employment.

• £20,192 as payment in lieu of seven days’ holiday accrued but not taken.

• £224,250 as payment of the remaining 2023 bonus paid as cash instead of being deferred into shares. This was approved by the Remuneration Committee as part of their determination that he should be granted ‘Good Leaver’ status

and the application of the leaver provisions of the Director’s Remuneration Policy. It remains subject to the provisions and requirements of the Company’s annual plan rules, including provisions relating to malus and clawback.

• £30,000 + VAT towards legal fees in connection with his departure.

• A retainer of £375,000 in total for services under a Consultancy Agreement, paid in six equal instalments monthly in arrears. For a period of six months and terminating on 10 December 2024, Gilad was available as an advisor to the

Company to provide assistance as required in accordance with the terms of the Agreement.

• In the 2023 report, Gilad Myerson was reported as being entitled to receive a LTIP grant in 2024. However, as he stepped left the Company prior to the grant and this award was not made.

Treatment of outstanding incentive awards:

The Remuneration Committee considered Gilad Myerson’s contribution in positioning the Company for Admission and the first year after Admission and determined that it would be appropriate to treat him as a good leaver under the

plan rules for the following outstanding long-term incentive awards:

Option awards

As disclosed in the 2022 report, Gilad Myerson was granted one-off options on 21 July 2021. The full value was reported in 2022 as performance conditions fell away on Admission. As a good leaver, Gilad is entitled

to retain the unexercised balance of the option, being 40% of the option shares. Malus and clawback provisions will apply as detailed in the rules.

Shareholding requirement:

In accordance with the Company’s policy on shareholding requirements, Gilad Myerson is required to hold shares equal to the lesser of his shareholding on cessation of employment and the in-employment requirement for the first year

and half this amount for the second year post-cessation.

Executive remuneration in context

Historical TSR performance

The table below compares the TSR performance of the Company since Admission against the TSR of the FTSE350 Oil and Gas sector. This index was chosen as it is a recognised equity market index of which Ithaca Energy is a member:

102.60

63.25

Ithaca

TSR (rebased to 100)

FTSE 350 Oil & Gas

08/11/2022 30/12/2022 31/12/202429/12/2023

150

146 ITHACA ENERGY

Historical CEO remuneration outcomes

The table below outlines the Group CEO’s single figure for total remuneration, and annual bonus and LTIP outcomes as a percentage of maximum opportunity and will be built up over a period of ten years:

2024 2023 2022

Annual bonus payout (as a % of maximum opportunity) 60% 60% 78%

LTIP vesting (as a % of maximum opportunity) – – –

Group CEO single figure of remuneration (£000)

452 969 6,036

1 Remuneration earned since appointment on 3 October 2024.

Percentage change in remuneration of the Directors

The change in salary, bonus and benefits of each of the Directors and that of the wider workforce is set out below.

2023-24 2022-23

Salary

2,6

Benefits

Bonus

Salary Benefits Bonus

Executive Directors

Yaniv Friedman (Executive Chair)

– – – n/a n/a n/a

Luciano Vasques (CEO)

– – – n/a n/a n/a

Iain Lewis (CFO) 61.1% 20.4% 61.6% 0% 1.3% 61.1%

Non-Executive Directors⁵

David Blackwood 9.5% – – 0% – –

Guido Brusco n/a n/a n/a n/a n/a n/a

Lynne Clow 9.5% – – 0% – –

Francesco Gattei n/a n/a n/a n/a n/a n/a

Assaf Ginzburg 5.3% – – 0% – –

Deborah Gudgeon 9.5% – – 0% – –

John Mogford (54.8%) – – 0% – –

Tamir Polikar – – – – – –

Itshak Sharon Tshuva n/a n/a n/a n/a n/a n/a

Idan Wallace – – – n/a n/a n/a

Zvika Zivlin – – – – – –

Former Executive Directors

Gilad Myerson (former Executive Chair) (38.5%) (65.5%) (38.7%) 0% (0.5%) (47.8%)

All UK-based employees

5.8% 5.6% 6.4% 5.2% 7.0% (0.6%)

1 UK-based employees are shown as this comprises Ithaca Energy’s entire workforce. The same population as at 31 December 2023 and 31 December 2024 has been used to calculate the change in remuneration which is calculated on a full-time equivalent basis.

2 Change in salary for Iain Lewis reflects both the increase in his salary reported in the 2023 report and an increase in his contracted hours from 80% of normal business hours in 2023 to 100% for the period from 1 January 2024 to 31 October 2024. Change in salary for Gilad Myerson reflects a part-year

for 2024, up to the date he stepped down from the Board on 28 May 2024.

3 The change in benefits for Iain Lewis is due to the variation in his working hours between 2023 and 2024 as outlined in note 2. The change in benefits for Gilad Myerson reflects a part-year for 2024, up to the date he stepped down from the Board on 28 May 2024. For this purpose, Benefits does not

include pension contributions.

4 The percentage change in bonus for Iain Lewis reflects the change to his salary in 2024 as well as the increase in his contracted hours for the period. The percentage change in bonus for Gilad Myerson reflects the fact that he received a pro-rata bonus in 2024 up until his date of departure on 28 May 2024.

5 Remuneration for the NEDs in 2024 is disclosed on page 149. Fee increases for 2024 were reported in the 2023 report and include a change to NED fees and an increase to the Senior Independent Director and Committee Chair fees to reflect roles and responsibilities since Admission.

6 The percentage change in fees for NEDs reflects a full-year position for David Blackwood, Lynne Clow and Deborah Gudgeon. The percentage change in fees for John Mogford reflects the fact that he stepped down from the Board on 16 May 2024. Idan Wallace and Itshak Sharon Tshuva did not receive

a fee in 2023. Guido Brusco, Francesco Gattei, Tamir Polikar and Zvika Zivlin were appointed to the Board during 2024.

Remuneration Committee report continued

147ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

How pay was set across the wider workforce in 2024

Our approach for setting pay across the wider workforce aligns with our executives. Base salaries are targeted at an appropriate level to reflect an individual’s role and responsibilities against the relevant market for which the Company

competes for talent. In 2024, all employees were eligible to be considered for a bonus award which rewards for performance at a suitable level for the employee’s role. The Company engages with its employee associations on remuneration

matters. Additionally, the Board has established a programme to connect with and gather feedback from employees, details of which are set out on page 52. This provides opportunities to have direct communication between employees

and NEDs on a range of topics, including remuneration.

CEO Pay ratio reporting

The table below shows the ratio at median, 25th and 75th percentile of the total remuneration received by the Group CEO compared to the total remuneration received by UK employees. Total remuneration reflects all remuneration

received by an individual, and includes salary, benefits, bonus, pension and value from incentive plans. Details on total remuneration for each quartile employee, and the salary component within are shown.

Year Method P25 (lower quartile) P50 (median) P75 (upper quartile)

2024 Option B 13:1 12:1 9:1

2023 Option B 11:1 9:1 6:1

2022 Option B 65:1 57:1 44:1

• The Company has reviewed the methodology to calculate the CEO pay ratio and has used Option B, whereby we have identified employees for comparison using our gender pay gap data set (snapshot data from 5 April 2024) as it uses a

data set which has already been processed and reviewed by the Remuneration Committee and enables timely reporting for disclosure purposes. Employees at P25, P50 and P75 were identified. The total remuneration was calculated on a

full-time basis for these three employees, and for others either side of the quartiles to check for anomalies.

• The single figure for the CEO used to calculate the ratio is based on the earnings for Luciano Vasques from the date of his appointment on 3 October 2024 and Iain Lewis for the period from 1 January 2024 to 2 October 2024 during

which time he was the interim CEO. This represents remuneration for a full year; however, it does not include any LTIP vesting outcomes.

The table below shows the total remuneration figure for each quartile employee and the salary component within this.

Year P25 (lower quartile) P50 (median) P75 (upper quartile)

2024

Salary

£70,750 £81,239 £95,076

Total remuneration £98,017 £103,451 £133,008

1 Given the different fixed pay structures for offshore and onshore employees, applicable offshore allowances have been included in the salary figures.

• In reviewing the employee pay data, the Committee is comfortable that the P25, P50 and P75 individuals identified appropriately reflect the employee pay profile at those quartiles, and that the overall picture presented by the ratios is

consistent with our pay, reward and progression policies for employees.

Relative importance of spend on pay

The table below outlines the Group’s adjusted net income, dividends paid to shareholders and share buybacks, compared to overall spend on pay in total. Adjusted net income is shown, as this is one of the Group’s key measures of performance.

2024

2023

% change between

2023-2024

Adjusted net income 323.6 446.5 (27.5)%

Ordinary dividends paid to shareholders 432.7 266.0 62.7%

Share buybacks – – –

Total staff costs 132.8 130.1 2.1%

148 ITHACA ENERGY

Statement of Directors’ shareholding and share interests

ED share ownership requirements

Under the Policy, EDs are required to build a shareholding in the Company of:

Role % of base salary

All Executive Directors 200%

• EDs are required to retain 50% of the net shares released from Deferred Share Bonus Plan and LTIP awards until the shareholding requirement is met

• The shareholding requirement should normally be built up over a period not exceeding five years

• Unvested share awards that are subject to performance conditions are not taken into account in applying this test

• A post-cessation holding period of two years applies. This is at the same level as the current (within employment) guideline for the first year, reducing to half in the second year. The Committee retains the discretion to waive part or all of

the guideline where considered appropriate, for example in exceptional or compassionate circumstances

ED share ownership requirements (audited)

Shares held Options held

Executive Directors (% of salary) Owned outright

Vested but not

exercised

Unvested and

subj. to continued

employment

Unvested and

subj. to perf.

conditions

Shareholding

requirement

(% of salary)

Shareholding at

31 December 2024

Requirement met

Current Executive Directors

Yaniv Friedman 540 – – 727,449 200% 0% No

Luciano Vasques – – – 819,970 200% 0% No

Iain Lewis 1,478 114,274 142,553 240,000 200% 36% No

Former Executive Directors

Gilad Myerson

1,404,256 1,447,220 0 0 225% 320% Yes

1 Yaniv Friedman and Iain Lewis: amount includes purchased shares under the SIP.

2 Iain Lewis: Two-thirds (80,000) nil cost options of a one-off grant of 120,000 nil cost options in December 2022 vested on 9 November 2023 and 9 November 2024. The amount includes dividend equivalent shares of 34,274.

3 Iain Lewis: One-third (40,000) nil cost options of a one-off grant of 120,000 nil cost options in December 2022 and shares awarded under the Deferred Bonus Share Plan in respect of the 2024 Annual Bonus Award.

4 2022 LTIP awards granted to Iain Lewis in December 2022, and 2024 LTIP Awards granted to Yaniv Friedman, Luciano Vasques and Iain Lewis.

5 Current shareholding calculated using shares held (beneficially or in trust), and options (on a net of tax basis) that are vested or unvested subject to continued employment, using a share price of £1.1040, the closing price on 31 December 2024.

Former Directors:

Gilad Myerson: 1 – amount relates to 1,402,759 shares from vested and exercised one-off options granted on 21 July 2021 and 1,497 purchased shares under the SIP; 2 – Options granted in 2021 which vested on Admission, but have not yet been exercised. The Options are denominated in US$ and

amount to $2,002,755 (shares are calculated using an exchange rate GBP 1 = USD 1.2535 and share price of £1.104, the closing price on 31 December 2024).

6 Shareholding requirements represented as the position until stepping down from the Board on 28 May 2024.

The only changes to EDs interests in Ithaca Energy Shares during the period 1 January 2025 to 23 March 2025 relate to 1,047 shares acquired by Yaniv Friedman and 1,047 shares acquired by Iain Lewis under the Company’s Share

Incentive Plan, in which all employees are eligible to participate.

Remuneration Committee report continued

149ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Dilution

Awards granted under Ithaca Energy employee share plans are primarily satisfied through shares purchased in the market.

The Company monitors the number of shares issued under the Ithaca Energy employee share plans and their impact on dilution limits. The Company’s usage of shares compared to the relevant dilution limits set by the Investment

Association in respect of all share plans (10% in any rolling ten-year period, starting from the date of Admission) and Executive share plans (5% in any rolling ten-year period, starting from the date of Admission) was 0% of the Company’s

total issued share capital on 31 December 2023

1 The 2022 annual report and accounts reported the Company’s usage of shares compared to the relevant dilution limits was 0.94% of the Company’s total issued share capital on 31 December 2022. This should also have been 0%in respect of both all share plans and Executive share plans.

Promoting all-employee share ownership

We believe that share ownership by our employees helps them to understand the interests of the Company’s shareholders. On 31 December 2024 86.1% of our employees were shareholders through participation in the

Ithaca Energy plc Share Incentive Plan. This allows employees to buy Ithaca Energy plc shares directly from their earnings. As at 31 December 2024 a total of 543 employees were making a monthly average contribution of £146.

Remuneration for Non-Executive Directors

Single total figure for remuneration for Non-Executive Directors (audited)

The table below sets out the total remuneration earned by each NED who served during 2024:

Non-Executive Directors

Fees

2024

£’000

Benefits

2024

£’000

Other

2024

£’000

Total

2024

£’000

Fees

2023

£’000

Benefits

2023

£’000

Other

2023

£’000

Total

2023

£’000

David Blackwood 104 – – 104 95 – – 95

Guido Brusco

– – – – n/a n/a n/a n/a

Lynne Clow 104 – – 104 95 – – 95

Francesco Gattei

– – – – n/a n/a n/a n/a

Assaf Ginzburg 79 – – 79 75 – – 75

Deborah Gudgeon 104 – – 104 95 – – 95

John Mogford

48 – – 48 105 – – 105

Itshak Sharon Tshuva

– – – – – – – –

Tamir Polikar

Idan Wallace

78 – – 78 – – –382 382

Zvika Zivlin

72 5 – 77 n/a n/a n/a n/a

1 Francesco Gattei and Guido Brusco were appointed to the Board from 3 October 2024, they receive no additional fee from Eni S.p.A for their Directorship of the Company.

2 John Mogford stepped down from the Board with effect from 16 May 2024; fees and benefits received before this date are shown.

3 Itshak Sharon Tshuva, a Director of Delek, was appointed on 30 March 2023. He receives no additional fee from Delek for his Directorship of the Company.

4 Tamir Polikar was appointed to the Board on 3 October 2024. He was entitled to receive a fee from his date of appointment, however fees for the period 3 October 2024 to 31 December 2024 were not paid until January 2025. In January he received a payment of £10,533 for this period.

5 Idan Wallace received a fee from 2024.

6 Zvika Zivlin was appointed to the Board from 16 May 2024; fees and benefits received since this date are shown.

(All other NEDs were appointed to the Board on 31 October 2022)

150 ITHACA ENERGY

Remuneration Committee report continued

Approach to NED fees for 2024

NED fees were originally set prior to Admission and are reviewed annually.

Role

Fee from

1 January 2025

Fee from

1 January 2024

Board membership fee £85,000 £79,000

Additional fees paid:

Senior Independent Director £45,000 £35,000

Committee Chair

Audit and Risk, Remuneration, HSE

£30,000 £25,000

Committee Members:

Additional Committee member fee where a member of three or more Committees

£8,000 n/a

1 Yaniv Friedman’s base salary is deemed to include any other fees as a Director of the Company or Group; as such a fee for his role as the Chair of the Nomination Committee has not been set.

2 NED fees will increase to reflect change in scope and increase in responsibilities since Admission and the Business Combination.

3 Where a NED is a member of three or more Committees, but not where they are the Committee Chair, and attend more than 75% of meetings, an additional fee is paid.

NED shareholdings (audited)

NEDs

Shares held at

31 Dec 2024

Shareholding

requirement

(% of fees)

Current

shareholding

(% of fees)

Requirement

met

David Blackwood 20,000 100% 28% No

Lynne Clow 24,932 100% 35% No

Assaf Ginsburg 110,000 100% 154% Yes

Deborah Gudgeon 20,000 100% 28% No

John Mogford

70,000 100% 98% No

Tamir Polikar 0 100% 0% No

Idan Wallace 0 100% 0% No

Zvika Zivlin 0 100% 0% No

1 Current shareholding has been calculated using shares held (beneficially or in trust) using a share price of £1.1040, the closing share price on 31 December 2024.

2 Represents the position for John Mogford at the date of stepping down from the Board on 16 May 2024.

There were no changes to NEDs interests in Ithaca Energy Shares during the period 1 January 2025 to 21 March 2025.

151ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

The Remuneration Committee

The full terms of reference for the Committee can be found on the Company‘s website at https://www.ithacaenergy.com/about-us/governance and are further available from the Company’s General Counsel and Company Secretary.

Committee membership

The members of the Committee are shown below.

Member since Meetings in 2024

Lynne Clow (Chair)

31 October 2022 13/13

David Blackwood 20 September 2023 13/13

Assaf Ginzburg 31 October 2022 9/13

Deborah Gudgeon 31 October 2022 13/13

John Mogford

31 October 2022 5/6

Zvika Zivlin

16 May 2024 6/6

1 Committee Chair from 31 October 2022.

2 John Mogford stepped down from the Board effective from the AGM on 24 June 2024.

3 Zvika Zivlin joined the Board and the Committee from 16 May 2024.

The Committee met 13 times during 2024; five meetings were scheduled and seven were additional meetings to consider specific matters.

The Company’s Executive Chair is invited to all Committee meetings and the Group General Counsel and Company Secretary acts as secretary to the Committee. The Chair of the Committee reports to subsequent meetings of the

Board on the Committee’s work and the Board receives a copy of the agenda and the minutes of each Committee meeting.

During the year, the Committee received assistance in considering Executive remuneration from a number of senior managers, who attended certain meetings (or parts thereof) by invitation during the year, including the CEO, the CFO

and the Executive Vice President, People and Culture.

In accordance with the relationship agreement with Delek Group Limited and Eni S.p.A, appointed observers have attended.

No person was present during any discussion relating to their own remuneration.

PricewaterhouseCoopers LLP (‘PwC’) were approved by the Committee and appointed as its advisers in January 2023. A representative from our external adviser attends, by invitation, all Remuneration Committee meetings to provide

information and updates on external developments affecting remuneration as well as specific matters raised by the Remuneration Committee. Outside the meetings, the Remuneration Committee’s Chair seeks advice on remuneration

matters on an ongoing basis. The advice that the Committee receives is independent and objective. PwC have confirmed that there are no conflicts of interest. There are no other connections with the Company or individual Directors.

The Committee notes that PwC is a member of the Remuneration Consultants Group and voluntarily adheres to its Code of Conduct in relation to Executive remuneration consulting in the UK. Pinsent Masons LLP (‘Pinsents’),

appointed by the Company, provided advice on share incentive plan-related matters, including on senior Executive remuneration issues.

Total fees or other charges (based on hourly rate) for the provision of remuneration advice to the Committee in 2024 (save in respect for legal advice) were £155,550 to PwC. Pinsents provided legal advice on specific compliance matters

and share plan related matters to the Committee and total fees in 2024 were £12,471 to Pinsents. Other services provided to the Company by Pinsents include corporate and employment law advice.

The Committee reflects on the quality of the advice provided and whether it properly addresses the issues under consideration as part of its normal deliberations. The Committee is satisfied that the advice received during the year was

objective and independent.

The role of the Remuneration Committee

To consider and make recommendations to the Board in respect of the remuneration policy across the Company including:

• Rewards for the Executive Chair, EDs and senior managers

• The design and targets for the annual bonus plan throughout the Company

• The design and targets for any employee share plans

• Changes to employee benefit structures (including pension)

152 ITHACA ENERGY

Remuneration Committee report continued

The Remuneration Committee’s work in 2024

The key matters discussed/approved were:

January–March • Preparation of the Directors’ remuneration policy and consultation with shareholders

• 2023 Director’s remuneration report

• Approve performance for the 2023 bonus targets

• Set 2024 annual bonus scorecard targets

• Review remuneration outcomes for Executive Directors and senior employees

April–June • Review Director’s remuneration and market best practice

July–September • Mid-year review of targets and performance against target for annual bonus for the EDs

• Review Company-wide remuneration policy updates

October–December • Review forecast year-end outcomes for allocation of bonus

• Update the Remuneration Committee Terms of Reference

At various points throughout the year, the Committee made remuneration decisions for senior employees within the Remuneration Committee’s remit.

Remuneration Committee effectiveness

The Committee reviews its remit and effectiveness each year.

Statement of voting at AGM

The results of the shareholder vote at the Company’s 2024 AGM on 24 June 2024 in respect of the 2024 Directors’ Remuneration report is set out below.

Percentage of votes cast Number of votes cast

For Against For Against Withheld

Directors’ Remuneration report 96.93% 3.07% 907,173,358 28,693,659 2,768,302

Directors’ Remuneration Policy

(result from the Company’s AGM on 24 May 2023 in respect of the Policy presented in the 2022 report) 99.64% 0.36% 957,531,800 3,493,618 925

Directors’ Remuneration Policy

This Policy governs Ithaca Energy’s future remuneration for Executive Directors (‘EDs’) and Non-Executive Directors (‘NEDs’), and is intended to apply for up to three years from the date of the AGM, approved on 24 May 2023.

During 2025, the Committee intends to review the Policy for implementation in 2026. The Committee will ensure a review of the Policy upholds the following key considerations:

• Forward-looking remuneration arrangements should be simple; facilitating greater transparency and alignment with shareholders’ interests over the longer term;

• Alignment with standard market practice and compliance with the UK Corporate Governance Code (the Code);

• The ability to attract, retain and motivate EDs of the right calibre to ensure the continued success of the Company, within a highly competitive environment, whilst ensuring the level and form of remuneration is appropriate; and

• Remuneration should be aligned with the key corporate metrics that drive growth and increase shareholder value with significant emphasis on variable pay.

The role of the Committee and the formulation of the Policy is undertaken in a way that ensures remuneration decisions are undertaken in a manner that prevents and manages any potential conflicts of interest. Should any conflicts arise

these will be alerted to the Committee who will determine appropriate decisions in the best interests of Ithaca Energy’s stakeholders. The Committee is of the view that the Policy is well aligned to the Code’s six principles:

• Clarity: the Policy supports the financial and strategic objectives of the Group and aligns Directors interests with those of shareholders. There is clear disclosure of metrics, weightings and assessment of variable outcomes;

• Risk: The Policy ensures risk is reflected in outcomes through: the Committee’s discretion to adjust formulaic outcomes to properly reflect any risk events; deferral of annual bonus and LTIP (over three and five years respectively),

subject to malus and clawback provisions mitigates against future risk; and the within- and post-employment shareholding requirements align to the successful delivery of the Group’s long-term strategy;

• Simplicity: there is a simple remuneration framework, comprising fixed pay elements, along with short- and long-term variable elements using well understood market standard elements. This provides clear line of sight for both EDs and

shareholders;

• Proportionality: Incentive elements are closely aligned to strategic goals and robustly assessed, with the Committee having full discretion to adjust outcomes to ensure they align with overall Group performance; and

• Predictability: The Policy sets out the possible future value of remuneration which EDs could receive, including the impact of share price appreciation of 50% (the application of the Policy is illustrated on page 158).

The full Policy is detailed on pages 152 to 160.

153ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Remuneration Policy – Executive Directors

The following table sets out each element of remuneration for EDs and how it supports Ithaca Energy’s short and long-term strategic objectives:

Element and how it supports our short and

long-term strategic objectives Operation Maximum opportunity Performance conditions and assessment

Base salary

Provides a competitive fixed level of

remuneration to attract and retain EDs

of the necessary calibre to execute Ithaca

Energy’s strategy and deliver shareholder value.

Base salaries for the EDs will normally be reviewed annually by the Committee.

The following factors are taken into account when determining base salary levels

on appointment:

• Remuneration levels at comparable oil and gas companies;

• The need for salaries to be competitive;

• Experience and responsibilities of the individual ED; and

• The total remuneration available to EDs and the components thereof and

the cost to Ithaca Energy.

Base salaries will normally be reviewed annually, but the Committee reserves the

right to review fees on a discretionary basis if it believes an adjustment is required

to reflect market rates or scope of responsibilities.

There is no prescribed maximum annual increase.

The Committee is guided by the general increase for

the broader employee population but on occasion may

need to recognise, for example, an increase in the scale,

scope or responsibility of the role, as well as market

rates.

Any movement in base salary takes account of the

performance of the individual and the Group.

Benefits

Provides EDs with a suitable but reasonable

package of benefits as part of a competitive

remuneration package.

In line with the wider workforce, benefits may be provided where appropriate

and on a market-related basis, including but not limited to health insurance,

life insurance/death in service, reasonable travel (including the tax cost where

appropriate), car allowance and relocation expenses.

EDs will be able to participate in the Company’s all-employee share plans on the

same basis as other eligible employees.

The Committee determines the appropriate level

taking into account market practice and individual

circumstances.

There is no prescribed maximum.

Maximum contributions under ‘all employee’ share

plans will be set in line with the wider workforce and

within any other relevant operating limits.

None.

Pensions

Provides market-competitive retirement

benefits for EDs.

Pension provision is a payment into a defined contribution pension scheme

and/or a cash amount in lieu of a pension contribution.

Pension payments do not form part of salary for the purposes of determining

the extent of participation in the Company’s incentive arrangements.

The maximum pension provision is 15% of salary, in line

with the wider workforce.

Any cash amount paid may be reduced to take into

account additional employer costs.

None.

154 ITHACA ENERGY

Remuneration Committee report continued

Element and how it supports our short and

long-term strategic objectives Operation Maximum opportunity Performance conditions and assessment

Annual Bonus

Rewards EDs for the delivery and achievement

of financial targets and key performance

indicators which form part of the business

strategy.

Deferral provides alignment with shareholders

interests and aids retention of key personnel.

Awards are based on performance in the year against targets set by the

Committee.

Any bonus is paid annually in cash and shares with at least 50% of any bonus

earned deferred into Ordinary Shares for three years. The deferred shares are not

subject to any further conditions, save for continued employment.

Deferred share awards may include additional shares (or, at the discretion of the

Committee, cash) equivalent to the value of the dividend roll-up, and may assume

dividend reinvestment.

Malus and clawback provisions apply as detailed within the Policy.

The maximum bonus opportunity is 150% Targets are set by the Committee each year that

are appropriately stretching in the context of the

business plan.

They are based on a corporate scorecard that

consists of a combination of financial, strategic

and operational KPIs. The Committee may change

the KPIs within the scorecard, and their weighting,

from year to year to ensure they remain aligned to

Company strategy.

The Committee has the ability to include an

element of bonus based on personal performance,

or to adjust the outcomes of the corporate

scorecard based on personal

performance.

Up to 25% of the maximum bonus is paid for

achieving a threshold level of performance and the

full bonus is paid for delivering stretching levels of

performance.

For performance below threshold, no bonus is

paid.

Long-Term Incentive Plan (LTIP)

Rewards EDs for achievement of the Group’s

longer term objectives.

Aligns the EDs’ interests with those of

shareholders.

Aids retention of key personnel and

encourages focus on sustaining and improving

the long-term financial performance of the

Group.

Awards granted annually under the LTIP will be subject to a three-year

performance period and will be settled in shares.

The Committee sets targets each year so that they are stretching and facilitate

growth for shareholders, while remaining motivational for management.

EDs must retain the net of tax number of vested LTIP awards for a two-year

holding period.

LTIP awards may include additional shares (or, at the discretion of the Committee,

cash) equivalent to the value of the dividend roll-up, and may assume dividend

reinvestment over the period from grant to the earlier of the end of the holding

period and the date of exercise.

Malus and clawback provisions apply as detailed within the Policy.

Maximum award is 225% of base salary. The initial LTIP award will vest based on financial

and strategic performance conditions which are

aligned to KPIs.

Financial metrics (including TSR) will comprise at

least half of LTIP awards.

Up to 25% of the award vests for threshold levels

of performance.

155ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Element and how it supports our short and

long-term strategic objectives Operation Maximum opportunity Performance conditions and assessment

Shareholding requirement

To ensure that EDs’ interests are aligned with

those of shareholders.

EDs are required to build the a shareholding in line with the on-going LTIP award

size. The requirements are:

• Executive Chair: 200% of base salary

• CEO and CFO: 200% of base salary.

The requirement should normally be achieved over a five-year period.

At least half of LTIP and deferred bonus awards should be retained on vesting if

the shareholding requirement is not met.

For two years following cessation of employment, EDs are subject to a post-

employment shareholding requirement. The requirement is equal to the lesser of

the shareholding on cessation and the in-employment requirement for the first

year and half of this amount for the second year post-cessation.

N/A None.

Notes to the Policy table

Explanation of chosen performance measures and target setting

Performance measures will be selected to reflect the key performance indicators which are critical to the realisation of our business strategy and delivery of shareholder returns, which includes Total Shareholder Return (TSR).

The performance targets are reviewed each year to ensure that they are sufficiently challenging. When setting these targets the Committee will take into account a number of different reference points including, for financial targets, the

Group’s business plan and consensus analyst forecasts of Group performance. Full vesting will only occur for what the Committee considers to be excellent performance.

Malus and Clawback

The following table illustrates the time periods during which malus and clawback provisions may apply for each element of variable remuneration:

Remuneration element Malus Clawback

Annual bonus (cash) Up to the date of the cash payment. Up to three years post the date of any cash payment.

Annual bonus (deferred shares) To the end of the three-year vesting period. Up to three years post-vesting.

LTIP To the end of the three-year vesting period. Up to three years post-vesting.

Conditions under which malus and clawback may apply include:

• If it is discovered that there has been a material misstatement of the Group’s financial results for any period;

• If it is discovered that an error of calculation has occurred when assessing the performance conditions or size of award;

• If the participant has committed fraud or misconduct;

• If circumstances where the participant has, by an act or omission, contributed to injury to the reputation of the Group;

• If the behaviour of the participant materially fails to reflect the governance or values of Ithaca Energy or has caused injury to the reputation of the Group; and/or

• If the Company has suffered an instance of material corporate failure.

156 ITHACA ENERGY

Remuneration Committee report continued

Discretions

In exceptional circumstances such that the Committee believes the original measures and/or targets are no longer appropriate e.g. corporate activity, the Committee has discretion to amend performance measures and targets during the year.

The Committee may also, in exceptional circumstances, amend the formulaic annual bonus pay-out and/or amend the LTIP vesting upwards or downwards should the formulaic outcome not, in the view of the Committee, reflect the

overall business performance or individual contribution.

Any such changes would be explained in the subsequent report and, if appropriate, be the subject of consultation with the Company’s major shareholders. Consistent with best practice, the LTIP rules further provide that any such

amendment must not make, in the view of the Committee, the amended condition materially less difficult to satisfy than the original condition was intended to be before such event occurred.

In line with market practice, the Committee retains discretion relating to operating and administering the Annual Bonus and LTIP. This discretion includes:

• Timing of awards and payments;

• Size of awards, within the overall limits disclosed in the Policy table;

• Determination of vesting;

• Ability to override formulaic outcomes;

• Treatment of awards in the case of change of control or restructuring;

• Treatment of leavers within the rules of the plan, and the policy on payments for loss of office; and

• Adjustments needed in certain circumstances, for example, a rights issue, corporate restructuring or special interim dividend.

Approach to recruitment remuneration

In the event that a new ED or NED was to be appointed, remuneration would be determined consistent with the Policy table, paying no more than is considered necessary. The table below sets out the additional elements of remuneration

that would be considered for the appointment of a new ED.

Remuneration element Policy and operation

Buy-out awards • If it were necessary to attract the right candidate, due consideration would be given to making awards necessary to compensate for forfeited awards in a previous employment.

• In making any such award, the Committee will take into account any performance conditions attached to the forfeited awards, the form in which they were granted and the timeframe of the

forfeited awards.

• The value of any such award will be no higher, on recruitment, than the forfeited awards and will not be pensionable nor count for the purposes of calculating bonus and LTIP awards.

• Any such award would be in addition to the normal bonus and LTIP awards set out in the Policy table.

Relocation costs • Where appropriate, the Company will offer reasonable relocation benefits to assist them, and their dependents in moving home and settling into the new location and to help support with the costs

of a relocation or a residence outside a home country.

• Benefits would normally be market-related and time-bound.

One-off recruitment award • The Remuneration Committee retains the ability to grant a one-off share award that ordinarily would be subject to performance conditions of up to 200% of salary in addition to a

normal LTIP award in exceptional recruitment circumstances, where absolutely necessary and in the best interests of shareholders.

157ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Alignment of the Policy with the wider employee population

The Group aims to provide a remuneration package for all employees that is market-competitive and operates the same reward and performance philosophy throughout the business. The table below sets out details on the remuneration

approach for employees, including EDs:

Element of reward Approach

Base salary • Salaries for employees are set in line with market levels, in order to attract and retain employees.

• Employees’ salaries are reviewed annually, with increases for EDs normally being set with reference to increases for employees.

Benefits • All employees, including EDs, are eligible to participate in the Company’s benefits, which include 3.5 times salary death-in-service cover, private medical benefit, dental plan and income

protection. Employees can increase and/or extend cover if they so choose.

• The Company will operate a Share Incentive Plan, which will offer a 2:1 match on shares purchased by employees up to statutory limits. All employees will be eligible to participate in this plan.

Pension • All employees are eligible to participate in a defined contribution pension scheme with a 15% employer contribution. The approach is the same for EDs.

Annual bonus • All employees are eligible to participate in Annual Bonus arrangements, with payouts being based on a combination of corporate and personal performance. The same corporate scorecard is used

for EDs as the employee population.

• Different bonus opportunities reflect the levels of employee seniority, determined by grade, with more senior employees receiving higher bonus opportunities to increase the proportion of their

pay that is performance-based and at risk.

Long-term incentives • Long-term incentive awards are available to senior management with the same performance conditions as those for the EDs.

• In addition, a number of more junior individuals participate in the Restricted Share Plan, under which share awards are granted without performance conditions.

Shareholding requirements • Only EDs have a shareholding requirement.

158 ITHACA ENERGY

Illustrations of the application of the Policy

The charts below illustrate the remuneration that would be paid to the Executive Chair, CEO and CFO assuming four different performance scenarios in the first year of the Policy’s operation and excluding any legacy arrangements. Each of

the bars is broken down to show how the total under each scenario is made up of fixed elements of remuneration and variable remuneration.

The scenarios in the graphs are as follows:

CEO

Minimum On-target Maximum Maximum with

50% Share Price

appreciation

53%

43%

£0.80m

£1.85m

£2.90m

£3.50m

100% 40% 25% 21%

£0.0m

£0.5m

£1.0m

£1.5m

£2.0m

£2.5m

£3.0m

£3.5m

£4.0m

26%32%

34%

26%

CFO

Minimum On-target Maximum Maximum with

50% Share Price

appreciation

53%

32%

£0.47m

£1.17m

£1.87m

£2.27m

100% 40% 25% 21%

£0.0m

£0.5m

£1.0m

£1.5m

£2.0m

£2.5m

£3.0m

£3.5m

£4.0m

26%

43%

26%

34%

Executive Chair

Minimum On-target Maximum Maximum with

50% Share Price

appreciation

51%

41%

£0.63m

£1.42m

£2.20m

£2.65m

100% 44% 28% 24%

£0.0m

£0.5m

£1.0m

£1.5m

£2.0m

£2.5m

£3.0m

£3.5m

£4.0m

25%31%

32%

24%

Key Element Minimum performance On-target performance Maximum performance Maximum performance with 50% share price growth

Fixed remuneration 2025 base salary, benefits and pension 2025 base salary, benefits and pension 2025 base salary, benefits and pension 2025 base salary, benefits and pension

Annual bonus

1, 2

None 50% of maximum opportunity 100% of maximum opportunity 100% of maximum opportunity

Long-Term Incentive Plan

2, 3

None 50% of maximum opportunity 100% of maximum opportunity 100% of maximum opportunity plus 50%

share price growth

1 Maximum bonus opportunity is 150% of base salary.

2 Dividend accrual on deferred remuneration has been excluded from all four scenarios; share price movement has been excluded from the minimum, target and maximum scenarios.

3 Maximum LTIP opportunity is 200% of base salary.

Service contracts for Executive Directors

The period of notice required in the service contracts is six months by the ED and the Company. The service contracts and letters of appointment are available for inspection by shareholders in advance of and at the forthcoming AGM, and

during normal business hours at Ithaca Energy’s registered office address. There are no further obligations which could give rise to a remuneration or loss of office payment other than those set out in the Policy table, the policy on payments

for loss of office and change of control.

Remuneration Committee report continued

159ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Payments for loss of office

When assessing whether payments will be made in respect of loss of office, the Committee will take into account individual circumstances, including the reason for the loss of office, Ithaca Energy and individual performance up to the loss of

office and any contractual obligations of both parties.

Contractual payments

In the event of early termination, the Company may make a payment in lieu of notice up to a maximum of six months’ salary. Any payment is subject to phasing and mitigation requirements.

In the event of gross misconduct, the Company may terminate the service contract of an ED immediately and with no liability to make further payments other than in respect of amounts accrued at the date of termination.

The current ED service contracts permit the Company to put an ED on garden leave for some or all of the duration of the notice period.

Annual bonus and LTIP

The treatment of awards under the Annual bonus and LTIP for leavers will depend on whether or not they are classified as a Good Leaver. This would typically be where an ED left for reasons, including retirement, redundancy, death, ill-

health, injury or disability, the sale of a business outside of the Group or the employing Company ceases to be a member of the Group, or any other circumstances as determined by the Committee.

For ‘other’ leavers, account will be taken of individual circumstances, contractual terms, circumstances of the termination and the commercial interests of the Company to determine whether or not to treat an ED as a Good Leaver.

The table below sets out the leaver treatment for awards under the Annual Bonus and LTIP.

Remuneration element Treatment for Good Leaver Treatment for Other Leaver Remuneration Committee Discretion

Annual bonus • Eligible for a bonus paid, taking into account performance.

• Any bonus paid would normally be subject to pro-rating for time served as an

ED during the year.

• Bonus payments would ordinarily be made at the normal time following the

year end.

• Normally, a portion of any bonus earned would be deferred into shares for three

years, consistent with the treatment in the Policy table.

• No eligibility for bonus. • It is at the discretion of the Committee as to whether departing EDs would be

paid a bonus. In exercising its discretion on determining the amount payable,

and the form and timing of payment, to an ED on termination of employment,

the Board would consider each instance on an individual basis, taking account

of factors such as performance and circumstances of the termination.

• When determining whether a bonus or any other payment should be made to a

departing ED, the Committee will ensure that no ‘reward for failure’ is made.

LTIP • LTIP awards continue to vest at their original vesting date, subject to

satisfaction of the relevant performance conditions.

• In the event of death, LTIP awards will normally vest immediately. The number

of awards vesting will be determined by the Committee taking into account

performance as at the date of cessation.

• The number of awards vesting will normally be reduced to reflect the proportion

of the vesting period that has elapsed at the date of cessation of employment.

• Any vested but unexercised awards can be exercised in the six-month period (or

12-month period in the case of death) following cessation or vesting.

• Unvested LTIP awards lapse on

the date of cessation of employment.

• The Committee may allow LTIP awards to vest as soon as reasonably

practicable on cessation of employment in exceptional circumstances, such as

ill-health.

• The Committee may decide, acting fairly and reasonably, that a lesser

reduction for time may be made.

160 ITHACA ENERGY

Deferred bonus awards

In the event that an ED leaves due to dismissal for cause or resignation, unless the Committee determines otherwise, unvested deferred bonus awards will lapse. Any vested but unexercised awards will cease to be exercisable with effect

from the beginning of the notice period, unless the Committee determines otherwise.

In the event that an ED leaves for any other reason, unvested deferred bonus awards continue to vest at their normal vesting date, unless the Committee determines otherwise. Any vested but unexercised awards can be exercised in the

six-month period (or 12-month period in the case of death) following cessation or vesting.

Payments in the event of a change of control

The treatment of each element of remuneration under a change of control is set out in the table below.

Remuneration element Remuneration Policy and operation

Annual bonus (cash) • An annual bonus may be paid subject to time pro-rating (unless the Committee determines otherwise) and performance to the date of the change of control.

• Any annual bonus awarded would be paid fully in cash.

Annual bonus (deferred shares) • Unless the Committee agrees to exchange outstanding deferred bonus awards into awards in the acquiring Company, any outstanding deferred shares will ordinarily vest in full at the date of

change of control (other than in respect of an internal reorganisation).

LTIP • Unless the Committee agrees to exchange outstanding LTIP awards into awards in the acquiring Company, LTIP awards will vest subject to time pro-rating and performance at the date of change

of control (other than in respect of an internal reorganisation).

• The Committee has discretion to reduce the extent of or disapply time pro-rating.

Remuneration Policy – Non-Executive Directors

The majority of the NEDs entered into letters of appointment with Ithaca Energy dated October 2022 and last for an initial period of three years and are subject to annual re-election. As at 31 December 2024, the unexpired term for

these NEDs is 10 months. Itshak Sharon Tshuva entered into a letter of appointment in March 2023 and is subject to annual re-election. As at 31 December 2024, the unexpired term of his letter of appointment is one year and three

months. Zvika Zivlin entered into a letter of appointment in May 2024, the unexpired term of his letter of appointment is two years five months. Guido Brusco, Francesco Gattei and Tamir Polikar all entered into letters of appointment in

October 2024, as at 31 December 2024 their unexpired term is two years nine months. The letters of appointment are available for viewing at Ithaca Energy’s registered office during normal business hours, and prior to and at the AGM.

The appointment of any non-independent NED is terminable in accordance with the relevant Relationship Agreement. The NEDs will only receive payment until the date their appointment ends and no compensation is payable on termination.

The table below sets out the key elements of the Policy for NEDs:

Element and how it supports our short

and long-term strategic objectives Operation Maximum opportunity

Performance conditions and

assessment

NED fees

Provides a market competitive

level of fees to reflect the time

commitment and contributions

that are expected from the NEDs.

The Board as a whole is responsible for setting the remuneration of the NEDs, other than the

Chair whose remuneration is determined by the Committee.

NEDs are paid a base fee in cash. Additional fees may be paid for additional responsibilities

such as acting as Senior Independent Director or for membership or Chairing sub-Committees

of the Board.

The NEDs do not participate in Ithaca Energy’s incentive arrangements and no pension

contributions are made in respect of them. Reasonable travel and subsistence expenses (including

the tax cost where appropriate and within the Company’s travel and expenses policy) may be paid

or reimbursed by Ithaca Energy.

The fees paid to NEDs will normally be reviewed annually, but the

Committee reserves the right to review fees on a discretionary basis if

it believes an adjustment is required to reflect market rates, scope of

responsibilities or performance.

There is no prescribed maximum increase, but in general the level of

fee increase for the NEDs will be set taking account of any change in

responsibility or time commitment required, and the general rise in

salaries across the UK workforce.

None

Remuneration Committee report continued

161ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Shareholding requirement

To ensure that NEDs’ interests are

aligned with those of shareholders.

NEDs are expected to build and maintain a holding in the Company’s shares of 100% of their base fee.

NEDs have three years from the date of their appointment to the Board to build and maintain

this holding. The Committee may waive this requirement for certain exceptional personal

circumstances.

Statement of employment conditions elsewhere in Ithaca Energy

Remuneration arrangements are determined throughout Ithaca Energy based on the same principle that reward should be achieved for delivery of Ithaca Energy’s business strategy and should be competitive within the market to attract

and retain high calibre talent, without paying more than is necessary.

Senior managers below Board level with a significant ability to influence Ithaca Energy’s results may participate in an annual bonus plan and a long-term incentive which reward both performance and loyalty and are designed to retain and motivate.

While the Committee has not formally consulted with employees in forming this Policy, the Committee considers pay and employment conditions across Ithaca Energy when reviewing the remuneration of the EDs and other senior

employees and is comfortable that the proposed Policy is appropriate and consistent with the approach to remuneration across the Group. The Committee considered the range of base salary increases across Ithaca Energy when

determining increases to award to the EDs. Other considerations include: changes in benefits and bonus, in addition to salary, of UK employees compared with that of Directors; the ratio of CEO pay to that of employees; spend on pay

compared with, for example net income and dividends; and gender pay gaps. The Committee also receives advice on Executive remuneration matters from its appointed advisors, which includes benchmarking of ED remuneration.

Consideration of shareholder views

The Committee takes the views of shareholders seriously and these views are taken into account in shaping remuneration policy and practice. Shareholder views are considered when evaluating and setting remuneration strategy and the

majority shareholder was consulted regarding the proposed remuneration packages for EDs. The Committee welcomes an open dialogue with its shareholders on all aspects of remuneration.

Lynne Clow

Remuneration Committee Chair

162 ITHACA ENERGY162 ITHACA ENERGY

Directors’ report

The Directors present their Annual Report with the

audited Group and Company Accounts for the year

ended 31 December 2024.

The Directors’ report comprises pages 110 to 161

and the sections of the Annual Report incorporated

by reference, as set out below:

Disclosure Page reference

Corporate Governance statement see page 111

Directors’ share interests, including LTIPs see pages 144 and 148

Employee diversity and inclusion see pages 84 and 90

Employee involvement and engagement see pages 84 and 131

Financial Risk management see pages 101 to 108

Future developments and research and development see page 57

Greenhouse gas emissions see pages 59 to 79

Interest capitalisation see Note 3

Internal control and risk management see page 127

Principal risks and uncertainties see pages 103 to 108

Streamlined Energy and Carbon Reporting (SECR) see page 62

Stakeholder engagement including suppliers, customers and others see pages 48 to 55

TCFD reporting see pages 64 to 79

This Annual Report has been prepared for, and only

for, the members of the Company, as a body, and

for no other persons. The Company, its Directors,

employees, agents and advisors, do not accept or

assume responsibility to any other person to whom this

document is shown or into whose hands it may come, and

any such responsibility or liability is expressly disclaimed.

This report sets out the information the Company and

the Group are required to disclose in the Directors’

report in compliance with the Companies Act 2006

(the Act), the Financial Conduct Authority’s Listing

Rules (Listing Rules), the Disclosure Guidance and

Transparency Rules (DTRs), and the UK Corporate

Governance Code 2018 (the Code). This report should

be read in conjunction with the Strategic Report on

pages 1 to 109 and the Corporate Governance Report

on pages 110 to 161. In accordance with Section

414C(11) of the Act, the Company has decided to

include certain matters in its Strategic Report that

would otherwise be required to be disclosed in this

Directors’ Report. Together, the Strategic Report, this

Directors’ Report, and other sections of the Corporate

Governance Report incorporated by reference, when

taken as a whole, form the Management Report as

required under Rule 4.1.5R of the DTRs.

Articles of Association

The Company’s Articles of Association may only be

amended by special resolution at a General Meeting of

shareholders. The Company’s Articles of Association

contain provisions regarding the appointment,

retirement and removal of Directors along with their

powers and duties. A Director may be appointed by an

ordinary resolution of shareholders in a general meeting

following nomination by the Board or a member (or

members) entitled to vote at such a meeting.

Annual General Meeting

The Annual General Meeting 2025 will be held at P&J

Live. East Burn Road, Aberdeen AB21 9FX, Scotland

on Wednesday 14 May 2025 at 9am. Details of how

to participate at the AGM are set out in the Notice of

AGM and on our website.

163ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Dividends

On 22 August 2024, the Company declared an interim

dividend of $100 million. The interim dividend was paid on

27 September 2024 to shareholders on the register on

6 September 2024. In addition, on 21 November 2024,

the Company declared the payment of a special dividend of

$200 million. The special dividend was paid on 20 December

2024 to shareholders who were on the register on

29 November 2024. A third interim dividend for the

year of $200 million will be paid to shareholders on 25 April

2025, following the publication of the full-year results,

delivering a total dividend of $500 million for 2024.

Employment of people with disabilities

The Company is committed on building a diverse

organisation, this includes ensuring that people with

disabilities are treated fairly, supported and encouraged

to apply for employment and to process and receive

training once employed. Every reasonable effort is

made for people with disabilities to be retained in the

employment of the Company by investigating reasonable

adjustments to the role, workplace or equipment.

Fair, balanced and understandable assessment

The Board confirms that, in its view, the Annual Report

and Accounts, taken as a whole, is fair, balanced and

understandable and provides the information necessary

for shareholders to assess the Group’s position and

performance, business model and strategy. For more

information, please see the Audit and Risk Committee

Report on page 129 and the Directors’ Report and

statement of Directors’ responsibilities on page 165.

Political donations

No political donations were made during the financial year.

Share capital

The issued share capital of the Company comprises of

1,653,732,455 Ordinary Shares of £0.01 each, all of which

are fully-paid and freely transferable. The liability of each

shareholder is limited to the amount, if any, unpaid on the

shares held by that shareholder. Since incorporation, the

Company’s share capital has been issued in conformity with

the laws of England and Wales. Details of the Company’s

issued share capital, together with details of any movement

in the issued share capital during the year, are shown in

Note 27 to the Company financial statements.

The Company did not purchase any of its own shares

during 2024 or up to and including 25 March 2025,

being the date of this Directors’ Report.

Significant shareholders

Following the Business Combination, the significant

controlling shareholders of the Company’s are as follows:

• Delek Group Limited (52.2%)

• Eni S.p.A (37.2%)

Significant contracts

Relationship Agreements

The Company has two relationship agreements with our

controlling shareholders, Delek Group and Eni.

Delek Group Limited (Delek), through its wholly-

owned subsidiary DKL Energy Limited, owns a 52.22%

shareholding in the Company and so is deemed a

controlling shareholder for the purposes of the Listing

Rules. A formal relationship agreement between

the Company and Delek (the Delek Relationship

Agreement) is in place which governs relations between

the two companies, to ensure that the Company

is capable at all times of carrying on its business

independently of Delek and its associates.

The Delek Relationship Agreement came into effect

upon the listing of the Company on the Main Market of

the London Stock Exchange (as subsequently amended

and restated on 23 April 2024 and 21 August 2024) and

will continue in force unless and until (i) the shares of

the Company cease to be listed on the premium listing

segment of the Official List and traded on the London

Stock Exchange main market or (ii) Delek cease to own

10% or more of the Ordinary Shares of the Company.

The Relationship Agreement complies with the

independence provisions set out in Listing Rules 6/5/4R

and 9.2.2ADR.

An amendment to the Delek Relationship Agreement

came into effect upon the completion of the Business

Combination with effect from 3 October 2024 and

will continue in force unless and until (i) the shares of

the Company cease to be listed on the premium listing

segment of the Official List and traded on the London

Stock Exchange main market or (ii) Delek cease to own

10% or more of the Ordinary Shares of the Company.

Under the Delek Relationship Agreement:

For so long as Delek hold not less than 30% of the shares

of the Company, and until the latest to occur of either:

• Luciano Vasques, CEO, ceases to hold the position of

Chief Executive Officer on the Board, or

• three years from the date of Completion (i.e

3 October 2024),

Delek will be entitled to appoint a maximum of three

Non-Executive Directors to the Board.

For so long as Delek holds not less than 25% of the

shares of the Company, it is entitled to appoint:

• one observer to attend and observe the committee

meetings of each of the Remuneration Committee

and the Audit and Risk Committee; and are entitled

to appoint one Director, or failing which an observer,

to the Nomination and Governance Committee.

Whilst Delek holds not less than 20% of the shares of the

Company, it is entitled to nominate a maximum of two

Non-Executive Directors to the Board of the Company.

Whilst Delek holds greater than 10% (but not more than

20%) of the shares of the Company, it is entitled to

nominate a maximum of one Non-Executive Director to

the Board of the Company.

Whilst Delek holds greater than 10% (but not more than

20%) of the shares of the Company, it is entitled to

appoint one observer to the Board of the Company.

Itshak Tshuva, Idan Wallace and Tamir Polikar are the

Delek-appointed Non-Executive Directors.

Idan Wallace is the appointed Director for the

Nomination and Governance Committee. Leora Pratt-

Levin and Yair Noiman are the appointed observers for

the Board. Leora is also the appointed observer for the

Remuneration Committee and Udi Erez is the appointed

observer for the Audit and Risk Committee.

Company number

Ithaca Energy plc is registered in England with the

Company number 12263719.

Directors

The Directors’ of the Company during the year were:

Director Appointed Resigned

Dave Blackwood

Alan Bruce 4 January 2024

Guido Brusco 3 October 2024

Lynne Clow

Yaniv Friedman 28 June 2024

Francesco Gattei 3 October 2024

Assaf Ginzburg

Deborah Gudgeon

Iain Lewis

John Mogford 16 May 2024

Gilad Myerson 28 May 2024

Tamir Polikar 7 October 2024

Itshak Tshuva

Luciano Vasques 3 October 2024

Idan Wallace

Zvika Zivlin 16 May 2024

The Directors’ biographies are detailed on pages 113 to

115. In accordance with the UK Code, all Directors will

retire at the AGM being held on 14 May 2025 and may

offer themselves for re-election.

Director indemnities

During the financial year, the Company had in place

an indemnity to each of its Directors under which the

Directors of the Company may be indemnified out

of the assets of the Company against certain costs,

charges, expenses, losses or liabilities which may be

sustained or incurred in or about the execution of their

duties. The indemnity was in force for all Directors who

served during the year.

Directors’ interests

The interests of the Directors in the Ordinary Shares of

the Company as at 31 December 2024 are set out on

pages 148 to 150.

164 ITHACA ENERGY

Under the Delek Relationship Agreement, Delek

undertakes that it shall:

• not take any action that would have the effect of

preventing the Company from complying with the

Listing Rules;

• not propose or procure the proposal of a shareholder

resolution of the Company which is intended or

appears to be intended to circumvent the proper

application of the Listing Rules;

• comply with the Listing Rules, the Disclosure

Guidance and Transparency Rules, the requirements

of the London Stock Exchange, the FSMA, the

Financial Services Act, UK MAR or the City Code

that apply to it in connection with the Company or

take any action that would prevent the Company with

complying with the same regulations;

• not exercise any of its voting rights in the Company in

a way that would be inconsistent with, or breach any

of the provisions of the Relationship Agreement; and

• not, unless approved by the Board, take any action or

omit to take any action which would be likely to result

in the cancellation of admission to the main market of

the London Stock Exchange.

In accordance with the Listing Rules, the Board confirms

that, since the date of listing of the Company:

• The Company has complied with the undertakings in

the Relationship Agreement;

• So far as the Company is aware, Delek and its

associates have complied with the undertakings in the

Relationship Agreement; and

• So far as the Company is aware, Delek has complied

with the obligation included in the Relationship

Agreement to procure the compliance of its associates

with the undertakings in the Relationship Agreement.

Eni S.p.A (Eni), through its wholly-owned subsidiary

Eni UK Limited, owns a 37.17% shareholding in the

Company and so is deemed a controlling shareholder for

the purposes of the Listing Rules. A formal relationship

agreement between the Company and Eni (the Eni

Relationship Agreement) is in place which governs

relations between the two companies, to ensure that

the Company is capable at all times of carrying on its

business independently of Eni and its associates.

The Eni Relationship Agreement came into effect upon

the completion of the Business Combination with effect

from 3 October 2024 and will continue in force unless

and until (i) the shares of the Company cease to be

listed on the premium listing segment of the Official

List and traded on the London Stock Exchange main

market or (ii) Eni cease to own at least 10% or more of

the Ordinary Shares of the Company. The Relationship

Agreement complies with the independence provisions

set out in Listing Rules 6/5/4R and 9.2.2ADR.

As part of the Business Combination, Eni proposed the

appointment of Luciano Vasques as Chief Executive

Officer of the Company. His appointment took effect

from 3 October 2024.

Under the Eni Relationship Agreement:

• For so long as Eni holds greater than 20% of the

shares of the Company, it is entitled to appoint a

maximum of two Non-Executive Directors to the

Board of the Company.

• For so long as Eni holds not less than 25% of the

shares of the Company, it is entitled to appoint one

observer to the Remuneration Committee, one

observer to the Audit and Risk Committee and one

Non-Executive Director or failing which an observer

to the Nomination and Governance Committee.

• For so long as Eni holds not less than 10% (but not

more than 20%) it is entitled to appoint a maximum

of one Non-Executive Director to the Board of the

Company.

• For so long as Eni holds greater than 10% it is

entitled to appoint one observer to the Board of the

Company.

Francesco Gattei and Guido Brusco are the Eni-

appointed Nominated Non-Executive Directors.

Guido Brusco is the appointed Director to the Nomination

and Governance Committee. Filippo Ricchetti is the

appointed observer for the Board and the Audit and Risk

Committee and Fabio Castiglioni is the appointed observer

for the Board and the Remuneration Committee.

Under the Eni Relationship Agreement, Eni undertakes

that it shall:

• not take any action that would have the effect of

preventing the Company from complying with the

Listing Rules;

• not propose or procure the proposal of a shareholder

resolution of the Company which is intended or

appears to be intended to circumvent the proper

application of the Listing Rules;

• comply with the Listing Rules, the Disclosure

Guidance and Transparency Rules, the requirements

of the London Stock Exchange, the FSMA, the

Financial Services Act, UK MAR or the City Code

that apply to it in connection with the Company or

take any action that would prevent the Company with

complying with the same regulations;

• not exercise any of its voting rights in the Company in

a way that would be inconsistent with, or breach any

of the provisions of the Relationship Agreement; and

• not, unless approved by the Board, take any action or

omit to take any action which would be likely to result

in the cancellation of admission to the main market of

the London Stock Exchange.

In accordance with the Listing Rules, the Board confirms

that:

• The Company has complied with the undertakings in

the Relationship Agreement;

• So far as the Company is aware, Eni and its associates

have complied with the undertakings in the

Relationship Agreement; and

• So far as the Company is aware, Eni have complied

with the obligations included in the Relationship

Agreement to procure the compliance of its associates

with the undertakings in the Relationship Agreement.

Significant agreements which would

be affected by a change of control

The following agreements will, in the event of a change

of control of the Company, be affected as follows:

• Under the RBL facility agreement between Ithaca

Energy (UK) Limited, certain affiliate entities and

a syndicate of financial institutions, upon a change

of control (save for certain exceptions), the RBL

and letters of credit facility will be cancelled and all

outstanding loans, accrued interest and certain other

amounts accrued and cash cover under the letters of

credit will be immediately due and payable.

• Upon the occurrence of a ‘Change of Control’, IENS

plc will be required to offer to repurchase the 2029

Notes at a purchase price equal to 101% of their

aggregate principal amount, plus accrued and unpaid

interest (if any) to the date of the purchase.

• The Deeds of Indemnity all provide that, in the event

of a change of control, the surety will be entitled to

make demand for the payment of cash to cover a

deposit in an amount equal to an amount the relevant

surety determines is the amount of the maximum

aggregate liability of the surety in connection with

any outstanding bond or bonds.

Auditor information

Each person who is a Director at the date of approval

of this Annual Report and Accounts confirm that:

• So far as the Director is aware, there is no relevant

audit information of which the Company’s auditor is

unaware; and

• Each Director has taken all steps that they ought to

have taken as Directors to make themselves aware of

any relevant audit information and to establish that

the auditor is aware of that information.

This confirmation is given and should be interpreted

in accordance with the provisions of section 418 of

the Companies Act 2006. Approved by the Board of

Directors and signed on behalf of the Board.

Julie McAteer

Company Secretary

25 March 2025

Directors’ report continued

165ANNUAL REPORT AND ACCOUNTS 2024

Corporate Governance

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual

Report and Accounts in accordance with applicable

United Kingdom laws and regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have prepared the Group financial statements

in accordance with UK-adopted International Accounting

Standards and the Company financial statements in

accordance with United Kingdom Generally Accepted

Accounting Practice (including United Kingdom

Accounting Standard FRS 101 ‘Reduced Disclosure

Framework’) and applicable laws.

Under Company law, Directors must not approve

the financial statements unless they are satisfied that they

give a true and fair view of the state of affairs of

the Group and Company and of the profit or loss of

the Group for that period. In preparing the Group

and Company financial statements, the Directors

are required to:

• Select suitable accounting policies in accordance with

IAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors and then apply them

consistently;

• Make judgements and accounting estimates that

are reasonable and prudent;

• Present information, including accounting policies,

in a manner that provides relevant, reliable,

comparable and understandable information;

• Provide additional disclosures when compliance with

specific requirements in International Accounting

Standards (and in respect of the Company financial

statements, FRS 101) is insufficient to enable users to

understand the impact of particular transactions, other

events and conditions on the Group and Company

financial position and financial performance;

• State whether applicable United Kingdom-adopted

International Accounting Standards have been

followed for the Group financial statements and

United Kingdom Accounting Standards, including

FRS 101 have been followed for the Company

financial statements, subject to any material

departures disclosed and explained in the

financial statements;

• Prepare the financial statements on the going

concern basis unless it is inappropriate to presume

that the Group will continue in business;

• The Directors are responsible for safeguarding

the assets of the Group and Company and hence

for taking reasonable steps for the prevention and

detection of fraud and other irregularities; and

• The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and Company’s

transactions and disclose with reasonable accuracy

at any time the financial position of the Group

and Company and enable them to ensure that the

financial statements comply with the Companies Act

2006.

The Directors are also responsible for preparing the

Strategic Report, the Directors’ Report, the Directors’

Remuneration Report and the Corporate Governance

Report in accordance with the Companies Act 2006 and

applicable regulations, including the requirements of the

Listing Rules and the Disclosure and Transparency Rules.

In accordance with the principles of the UK Corporate

Governance Code, the Directors are responsible for

establishing arrangements to evaluate whether the

information presented in the Annual Report and Accounts

is fair, balanced and understandable and provides the

information necessary for shareholders to assess the

Group’s position and performance, business model and

strategy, and making a statement to that effect.

Each of the Directors, whose names and functions are

set out in Board of Directors on page 163 confirm that

to the best of their knowledge:

• The Group financial statements, which have been

prepared in accordance with United Kingdom-

adopted International Accounting Standards, give

a true and fair view of the assets, liabilities, financial

position and profit of the Group;

• The Company’s financial statements, which have

been prepared in accordance with United Kingdom

Accounting Standards, including FRS 101, give a

true and fair view of the assets, liabilities and financial

position of the Company; and

• The Strategic Report includes a fair review of the

development and performance of the business

and the position of the Group and Company,

together with a description of the principal risks and

uncertainties that it faces.

This responsibility statement was approved by the Board

of Directors on 25 March 2025 and is signed on its

behalf by:

Iain C S Lewis

Chief Financial Officer

166 ITHACA ENERGY166 ITHACA ENERGY

Independent auditor’s report to the members of Ithaca Energy plc

Report on the audit of the financial statements

1. Opinion

In our opinion:

the financial statements of Ithaca Energy Plc (the ‘Company’) and its subsidiaries (the ‘Group’) give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2024 and of the Group’s profit for

the year then ended;

• the Group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards;

• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

• the consolidated statement of profit or loss;

• the consolidated statement of comprehensive income;

• the consolidated statement of financial position;

• the consolidated statement of changes in equity;

• the consolidated statement of cash flows;

• the related notes 1 to 35 to the consolidated financial statements;

• the Company statement of financial position;

• the Company statement of changes in equity; and

• the related notes 1 to 7 to the Company financial statements.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and United Kingdom adopted international accounting standards. The financial reporting framework that has been

applied in the preparation of the Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the

financial statements section of our report.

We are independent of the Group and the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical

Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group for the year are disclosed in note 7 to the

financial statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Financial Statements

167ANNUAL REPORT AND ACCOUNTS 2024

3. Summary of our audit approach

Key audit matters

The key audit matters that we identified in the current year were:

• Acquisition accounting

• Carrying value of goodwill and oil and gas assets

• Decommissioning provision

• Current and deferred tax

Within this report, key audit matters are identified as follows:

Newly identified

Increased level of risk

Similar level of risk

Decreased level of risk

Materiality

The materiality that we used for the Group financial statements was $45 million (2023: $50 million) which represents 3.3% (2023: 2.9%) of Adjusted Earnings Before Interest, Tax, Depreciation,

Amortisation and Exploration (EBITDAX)

and 1.5% (2023: 2%) of net assets.

Scoping

Our scope covered two components of the Group. These components contribute 100% of revenue, 100% of adjusted EBITDAX and 100% of net assets Our audit covered the entire financial

information of the two components.

Significant changes

in our approach

A new key audit matter has been identified in the current year in respect of the acquisition accounting for the Eni UK business combination.

The carrying amount of the exploration and evaluation (‘E&E’) asset relating to the Cambo oil field (‘Cambo’) was identified as a key audit matter in the prior year as the licence was due to expire shortly

after year end. However, in the current year following the licence extension received to 31 March 2026, we consider the level of judgment to be lower than in the prior year, therefore this is no longer

presented as a standalone key audit matter and has instead been included in the key audit matter for carrying value of goodwill and oil and gas assets.

Following the Eni UK business combination, there were two components identified within the Group, being the legacy Ithaca Group (including the non-operated assets acquired from Eni UK) and the

former Neptune subsidiaries of Eni UK (which held the operated asset acquired from Eni UK). All audit procedures were performed by the Group engagement team.

1 Adjusted EBITDAX is a non-GAAP measure comprising earnings before interest, tax, put premiums on oil and gas derivative instruments, revaluation of derivative contracts, depletion, depreciation and amortisation, impairment charges, exploration and evaluation expenditure, remeasurements of

decommissioning reimbursement receivables, fair value gains or losses on contingent consideration, business combination costs and historic claims relating to acquisitions.

4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the Group’s and Company’s ability to continue to adopt the going concern basis of accounting included:

• assessing the Group’s financing facilities including the nature of facilities, repayment terms and covenants;

• considering the linkage of the going concern assessment to the Group’s business model and short and medium term risks;

• challenging the assumptions used in the forecasts, in particular commodity prices, production levels, capital expenditure (including consideration of any discretionary capital expenditure) and debt facilities;

• assessing the amount of headroom in the forecasts (both liquidity and covenants);

• considering the impact of the acquisition announced on 25 March 2025, as disclosed in note 35 for further details, on the going concern basis;

• challenging management’s sensitivity analysis and mitigating actions, with sensitivities run in relation to production, commodity prices, operating and capital expenditure, and consideration of reverse stress tests on commodity prices;

• assessing the sophistication of the model used to prepare the forecasts, testing of clerical accuracy of those forecasts and our assessment of the historical accuracy of forecasts prepared by management; and

• assessing the Group’s going concern related financial statement disclosures.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s and Company’s ability to continue as a

going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the

directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

168 ITHACA ENERGY168 ITHACA ENERGY

5. Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5.1. Acquisition accounting

Key audit matter description The Group recorded goodwill of $346 million during the year as a result of the Eni UK business combination, which completed on 3 October 2024. The fair value of the identifiable assets and liabilities

acquired are disclosed as provisional.

As a result of the size and scale of the business combination, a key audit matter in respect of accounting for the acquisition was identified with specific focus on:

• Valuation of acquired development and production oil and gas assets totalling $1,017 million, with focus on:

• commodity price forecasts adopted in the fair valuation of the assets acquired which are subject to management estimation;

• judgements and estimates made on reserves and resources, which were based on estimates made by management with a risking adjustment then applied, these are compared to the results

of a third-party reserves consultant to understand any differences arising;

• appropriateness of the discount rate utilised in the fair value model; and

• appropriateness of the deferred tax assets and liabilities recognised;

• Valuation of the $651 million decommissioning provision recognised for operated and non-operated assets, with focus on third-party information available and the consistency of assumptions applied

to the newly acquired operated assets with those applied to the Group’s existing operated assets, and the appropriateness of the discount and inflation rates applied thereon;

• Valuation of the $48 million exploration and evaluation assets acquired, with focus on the risking of contingent resources, which require consideration of the likelihood of Final Investment Decisions

(FIDs) and execution of complex development plans to progress the assets to development stage; and

• Valuation of associated deferred tax balances totalling $297 million and other identifiable assets and liabilities, totalling $9 million.

Further details of this matter have been disclosed in the Audit and Risk Committee report on page 128, in the ‘Other areas of estimation’ disclosure in note 3 of the financial statements and in

note 17 of the financial statements.

Independent auditor’s report to the members of Ithaca Energy plc continued

Financial Statements

169ANNUAL REPORT AND ACCOUNTS 2024

How the scope of our audit

responded to the key audit matter

Our procedures comprised the following:

Internal control over valuation of acquired oil and gas assets

• Obtaining an understanding of relevant controls over accounting for acquisitions;

• Evaluating the competence, capabilities and objectivity of management’s third-party reserves consultant;

• Assessing the appropriateness of management’s forecast commodity prices, with input from our valuations specialists, through benchmarking against forward curves, peer information and market data;

• Obtaining input from our valuations specialists to assess management’s discount rate by comparison to an independent range;

• Comparing management’s production profiles against those of their third-party reserves consultant and, with input from our internal reserves specialists, understanding the reasons for and evaluating

the reasonableness of any significant differences;

• Obtaining input from our reserves specialists to challenge and assess the appropriateness of management’s risking levels applied to the reserves and resource estimates;

• Challenging and evaluating the adequacy of the operating and capital cost assumptions within the model by reference to operator data and other third-party documentation;

• Testing the integrity/mechanical accuracy of the fair value cashflow models; and

• Obtaining input from our tax specialists to challenge the appropriateness of the deferred tax asset and liabilities recognised.

Decommissioning provision

• Reconciling cost assumptions for non-operated assets to operator estimates received in the year;

• Assessing the appropriateness of the cost estimates prepared for operated assets, including consideration of available third-party estimates and consistency of assumptions with the legacy Ithaca

Group assets; and

• Comparing management’s risk-free discount rate and inflation assumptions to relevant market data.

Valuation of exploration and evaluation assets

• Obtaining the most recent draft development plans and comparing the cost assumptions and estimates therein to management’s valuation models;

• Gaining an understanding of the status of discussions with the respective joint venture partners in respect of the expected timeline and risks to achieving FID; and

• Obtaining input from our reserves specialists in respect of estimated reserves and resources and associated risking levels.

Procedures on overall acquisition accounting

• Challenging the completeness of the assets and liabilities identified by management through review of the due diligence reports obtained as part of the acquisition process;

• Assessing the reasonableness of management’s judgements and estimates made in the valuation of the share and cash-based consideration, including agreeing to third-party information where

available;

• Testing the working capital balances acquired at completion to supporting documentation;

• Obtaining an understanding of how the risk of climate change has been considered in the valuation of the development and production oil and gas assets and exploration and evaluation assets

recognised, including the risk to future commodity prices;

• Performing a stand-back assessment of the appropriateness of the goodwill recognised, including consideration of the movements in share price, forecast commodity prices and announced tax rates

between the date of the business combination agreement and the date of completion; and

• Assessing the adequacy of disclosures included in the financial statement notes, including whether appropriate disclosures have been made regarding the key sources of estimation uncertainty.

Key observations We are satisfied that the provisional fair values of assets and liabilities acquired in respect of the business combination, the associated goodwill and the financial statement disclosures are reasonable.

170 ITHACA ENERGY170 ITHACA ENERGY

5.2. Carrying value of goodwill and oil and gas assets

Key audit matter description The Group had property, plant and equipment (being primarily oil and gas assets) of $4,188 million (2023: $3,258 million), exploration and evaluation (‘E&E’) assets of $613 million (2023: $548

million) and goodwill of $1,129 million (2023: $784 million) as at 31 December 2024. A key audit matter was identified in respect of determining the recoverability of the Group’s goodwill and oil and

gas assets (including E&E) due to the significance of management’s judgements and estimates relating to their estimated recoverable amounts. There is increased risk associated with the key audit

matter in the year due to a reduction in headroom resulting from changes in commodity prices and an extension of the Energy Profits Levy from 2028 to 2030 and an uplift in the rate from 75% to

78%.

Management performed an impairment assessment for oil and gas assets and goodwill, by reference to IAS 36 Impairment (‘IAS 36’) and E&E assets, by reference to IFRS 6 – Exploration and

Evaluation of Mineral Resources (‘IFRS 6’). In conducting their impairment assessment at year end, management used their internal best estimate of reserves and resources and undertook a process to

compare their estimate to those of a third-party firm of reserves consultants, assessing any differences arising.

The associated risk of impairment is higher in the current year due to lower commodity price assumptions and changes to the Energy Profits Levy (EPL) reducing headroom in significant

Cash Generating Units (‘CGUs’). Given the level of management judgment applied in determining the recoverable value of the Group’s oil and gas assets and goodwill and the importance of

a number of the oil and gas assets to the Group’s continued growth, this has been identified as an area of potential management bias, and therefore gives rise to a potential fraud risk in the period.

Management concluded that a pre-tax impairment charge of $263 million (2023: $558 million) was required to oil and gas assets. The charge principally related to the Pierce ($32 million) and

Greater Stella Area (‘GSA’) CGUs ($117 million) together with decommissioning cost estimate changes on fields which have been fully written off or have ceased production ($100 million).

Management concluded that no impairment was required to goodwill (2023: $nil).

Oil and gas assets and goodwill

They key audit matter is focused on the following:

• Forecast commodity prices;

• Discount rate applied;

• Oil and gas reserve and resource estimates, and management’s risking assumptions thereon, which are compared to the results of a third-party reserves consultant to understand

any differences arising;

In respect of the Rosebank field, which has a carrying value at year-end of $617 million, it was subject to Judicial Review proceedings during the year. Following the Court of Session ruling on

30 January 2025 which found that the development consent for the field had been unlawfully given, as detailed in Note 3, management has concluded that it has no reason to believe that this further

consent will not be forthcoming and therefore no impairment indicator has been identified.

Included within the carrying value of the oil and gas assets which are assessed for impairment are estimated costs relating to the decommissioning of each cash generating unit (‘CGU’). See the

decommissioning provision key audit matter 5.3 below for further details.

Exploration and evaluation assets

The extent to which there are impairment indicators under IFRS 6 in respect of Cambo which has a carrying value at year-end of $391 million. Although the licence for this field does not expire until

31 March 2026, management has submitted a request to the North Sea Transition Authority (‘NSTA’) to remove a milestone commitment that would otherwise require a joint venture partner to be

secured by 31 March 2025, as well as to extend the licence to 30 September 2027.

In respect of Cambo, management believe that the request submitted to the NSTA outlined above will be approved and hence there is no indicator of impairment noting that, with respect to the

31 March 2025 milestone commitment, an additional joint venture partner is no longer considered a commercial pre-requisite for the project to proceed to development following completion of the

Eni UK business combination.

Further details of this matter have been disclosed in the Audit and Risk Committee report on page 128, in the ‘key sources of estimation uncertainty’ and ‘critical accounting judgements’ disclosure in

note 3 of the financial statements and in notes 15, 18 and 19 of the financial statements.

Independent auditor’s report to the members of Ithaca Energy plc continued

Financial Statements

171ANNUAL REPORT AND ACCOUNTS 2024

How the scope of our audit

responded to the key audit matter

Our procedures comprised the following:

Internal controls and overall impairment review

• Obtaining an understanding of relevant controls over management’s process for identifying indicators of impairment and for performing their impairment assessment and related valuations;

• Evaluating the competence, capabilities and objectivity of management’s third-party reserves consultant;

• Assessing management’s forecasting accuracy through a retrospective review of management’s forecasts;

• Assessing whether forecast cash flows were consistent with Board approved forecasts and budgets, and forecasts used elsewhere, including those prepared for going concern and viability purposes and

those assessing the recoverability of the deferred tax asset recognised (see key audit matter 5.4. below);

• Challenging and evaluating the adequacy of the operating and capital cost assumptions within the model by reference to operator data and other third-party documentation;

• Considering the risking that a market participant would apply in the valuation of the Rosebank CGU at 31 December 2024 as it was subject to Judicial Review proceedings at that date;

• Working with our modelling specialists to evaluate the arithmetical accuracy of the impairment and valuation models;

• Assessing the appropriateness of management’s estimate of the impact of tax, including the EPL, on the fair value model, with the assistance of our tax and valuation specialists;

• Obtaining an understanding of how the risk of climate change has been considered in the impairment assessments, including the risk of reduced commodity prices (as discussed further below)

and the extent of additional expenditure management believes is required to meet the Group’s published CO

emissions reductions targets; and

• Evaluating management’s disclosures in relation to impairment, including related sensitivity analysis.

Forecast commodity prices

• Obtaining input from our valuations specialists to assess the appropriateness of management’s forecast commodity prices and develop an independent reasonable range, through benchmarking against

forward curves, peer information and market data;

• Performing additional sensitivity analysis on the pricing assumptions to determine the impact on the impairment conclusion of reasonably possible changes, including in relation to goodwill; and

• Considering the potential impact on headroom by using a range of third-party price curves described as being consistent with a pathway to keep global temperature rises below 1.5°C

(‘Paris consistent’).

Discount rate applied

• Obtaining input from our valuations specialists to assess management’s discount rate by comparison to our assessment of a reasonable range.

Oil and gas reserves and resource estimates

• Comparing management’s estimates of reserves and resources to those of their third-party reserves consultant and, with input from our internal reserves specialists, understanding the reasons

for and evaluating the reasonableness of any significant differences; and

• Obtaining input from our reserves specialists to challenge and assess the risking levels applied by management to their reserve and resource estimates.

Exploration and evaluation assets

• Obtaining the most recent draft field development plans (FDP) for Cambo and comparing the cost assumptions and estimates therein to management’s valuation models;

• Obtaining input from our reserves specialists in respect of estimated reserves and resources and associated risking levels;

• Reading the request submitted to the NSTA outlined above, together with related correspondence, and assessing the basis for management’s judgment that this request will be approved; and

• Obtaining an understanding from management of the status of discussions with the NSTA up to the date of approval of the financial statements.

172 ITHACA ENERGY172 ITHACA ENERGY

Key observations We are satisfied with management’s conclusions in respect of impairment charges required in the year on oil & gas assets of $263 million, and that the associated disclosures are reasonable.

We are also satisfied that no impairment is required in respect of goodwill and that there is no indicator of impairment in respect of the Cambo field as at 31 December 2024.

In reaching this conclusion we observed that:

• Forecast oil and gas prices fall within the reasonable range for all periods;

• The discount rate falls within the reasonable range;

• Oil and gas reserve and resource estimates used in the impairment assessment are reasonable;

• The sensitivity of impairment conclusions to a Paris consistent price curve is disclosed in the ‘Impact of climate change on the financial statements and related notes’ section of note 3 of the financial

statements and the related disclosures in note 19 and indicate that the potential additional post-tax impairment is $63 million; and

• Whilst management’s impairment models in respect of the Group’s oil and gas assets include their best estimate of expenditure required to meet the Group’s CO

emissions reductions targets, the

level of estimation uncertainty is heightened for some of the Group’s longer term development projects, as well as Cambo, due to technology and/or infrastructure constraints, as outlined further in

section 7.3 of this report and note 3 of the financial statements.

5.3. Decommissioning provision

Key audit matter description The decommissioning provision at 31 December 2024 was $2,655 million (2023: $1,860 million). The provision represents the present value of decommissioning costs which are expected to be

incurred over the next 40 years. The liability arises in respect of both the Group’s operated and non-operated assets and includes a significant increase during the year as a result of the Eni UK business

combination, as discussed in section 5.1 above.

Decommissioning provisions are inherently judgmental areas, particularly in relation to cost estimates for operated assets and the assumptions that these are based on, including assumptions regarding

day rates for vessels and rigs, and duration (‘norms’) of decommissioning activities. The key assumptions and judgements underpinning the provision include:

• Rates and norms assumptions for operated assets;

• Cost estimates for non-operated assets;

• Cessation of production (‘COP’) dates;

• Post COP operating costs (‘PCOPO’);

• Risk free discount rate; and

• Long term Inflation rate.

Further details of this matter have been disclosed in the Audit and Risk Committee report on page 128, in the ‘Key sources of estimation uncertainty’ disclosure in note 3 of the financial statements

(which includes details on the sensitivity of the provision to changes in discount rates), and in note 23 of the financial statements.

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Financial Statements

173ANNUAL REPORT AND ACCOUNTS 2024

How the scope of our audit

responded to the key audit matter

Our procedures included the following:

Internal controls and decommissioning model

• Obtaining an understanding of the relevant controls relating to the decommissioning provision, including management’s review controls over the decommissioning cost estimation process;

• Obtaining an understanding of any key changes in underlying assumptions and methodology applied; this included performing inquiries with the Group’s internal specialists responsible for determining

the 2024 decommissioning estimates, scrutiny of the associated models, and assessing their technical competence, capability and objectivity;

• Assessing decommissioning calculations for clerical accuracy and compliance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets;

• Assessing the consistency of the cessation of production dates with those used in management’s impairment models for oil and gas assets, as discussed in section 5.2;

• Working with our modelling specialists to evaluate the arithmetical accuracy of the decommissioning cost estimate model;

• Considering the impact of climate change in the estimation of the decommissioning provision, including the risk that cessation of production dates are brought forward if commodity prices were to fall

within a range of third-party Paris consistent price curves;

• Testing a sample of the actual decommissioning spend incurred during the period for accuracy and performing a retrospective review of management’s forecasting accuracy, including an assessment of

whether actual spend during the year gives rise to contradictory evidence of current forecast rates; and

• Evaluating the appropriateness of management’s disclosures, including the key sources of estimation uncertainty and associated sensitivity of decommissioning assumptions.

Rates, norms and PCOPO for operated assets

• Challenging the Group’s rig and vessel rate assumptions (‘rates’) within the cost estimate by reference to available third-party data and benchmarking to peer and market rates;

• Assessing the duration (‘norms’) assumptions for the plug and abandonment of wells, by comparison to available benchmarking data and potentially contradictory evidence from other duration

assumptions available from active decommissioning projects or operator estimates and assessing the appropriateness of any outliers;

• Assessing the consistency of the duration based assumptions applied in the cost estimate for certain key assets;

• Assessing the appropriateness of the PCOPO for operated assets, by comparison to current actual operating costs and the final year of pre-COP operating costs in the business plan forecast; and

• Assessing the driver(s) of changes in key assumptions on specific assets and differences between actual and forecast expenditure in recent years and considering whether these provide contradictory

evidence of rates and norms assumptions in the year end provision.

Costs estimates for non-operated assets

• Reconciling cost assumptions to operator estimates received in the year; and

• Understanding any differences arising and challenging the reasonableness of any adjustments made.

Other macro-economic assumptions

• Comparing management’s risk-free discount rate to relevant market data, including US and UK government bond yields and peer data; and

• Comparing management’s inflation assumptions to market data, including the Bank of England long term inflation target.

Key observations We are satisfied that the key assumptions outlined above fall within a reasonable range and that the overall provision is fairly stated. We also consider that the associated disclosures are reasonable,

including the impact on the provision if the energy transition causes cessation of production dates to be brought forward.

174 ITHACA ENERGY174 ITHACA ENERGY

5.4. Current and deferred tax

Key audit matter description The Group has a $1,224 million (2023: $705 million restated) net deferred tax asset and $247 million (2023: $321 million) current tax liabilities. The increase in the year includes $297 million in

respect of the Eni UK business combination, as discussed in section 5.1.

A key audit matter was identified in respect of:

• The recoverability of the deferred tax asset, including the recoverability of the deferred tax assets arising from tax losses which are dependent on the availability of future taxable profits and the

feasibility of restructuring plans required to utilise the tax losses;

• The mechanical accuracy of the deferred tax asset and liability models, including consistency with impairment and decommissioning models, following the prior year restatement in respect of EPL

disclosed in note 2; and

• The appropriateness of the ‘true ups in respect of prior years’ of $9.5 million, impacting both current and deferred tax, given there were a significant number of individual adjustments during the year.

and in note 28 of the financial statements.

How the scope of our audit

responded to the key audit matter

Our procedures included the following:

• Obtaining an understanding of the relevant controls relating to the measurement of current and deferred tax, with a particular focus on control enhancements responsive to the prior year adjustment;

• Evaluating, with input from our tax specialists, the methodology applied in calculating the Group’s deferred tax assets and liabilities;

• Assessing the mechanical accuracy of the deferred tax models, including deferred EPL, with input from our analytics and modelling specialists;

• Assessing whether the forecasts that support the recoverability of the Group’s deferred tax assets are consistent with the cash flow forecasts used for the purposes of impairment testing

and going concern;

• Evaluating the completeness and accuracy of ‘true ups in respect of prior years’, with input from our tax specialists, including whether any represent material errors in relation to the prior years; and

• Assessing the adequacy of disclosures made in note 2 and note 28 of annual report, in line with IAS 12 Income Taxes.

Key observations We are satisfied that the current and deferred tax balances recognised in the financial statements and the related disclosures are appropriate.

6. Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in

planning the scope of our audit work and in evaluating the results of our work.

Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:

Group financial statements Company financial statements

Materiality $45 million (2023: $50 million) $30 million (2023: $18 million)

Basis for determining materiality 3.3% of adjusted EBITDAX (2023: 2.9%).

Adjusted EBITDAX is an alternative performance measure and a key performance indicator.

The selected materiality also represents 1.5% of net assets (2023: 2%).

1.5% of net assets (2023: 1.5%)

Rationale for the

benchmark applied

Adjusted EBITDAX was considered to be the most relevant benchmark as it is a key

performance measure used by the business and excludes a number of significant items that

are non-recurring in nature or are adjustments made to normalise the Group’s performance.

The Company acts principally as a holding company and therefore net assets is a key measure for

this business.

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Financial Statements

175ANNUAL REPORT AND ACCOUNTS 2024

6. Our application of materiality continued

6.1. Materiality continued

Group materiality Adjusted EBITDAX

Audit and

Risk Committee

reporting threshold

$2.25m

Group

materiality

$45m

Adjusted EBITDAX

$1,405m

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole.

Group financial statements Company financial statements

Performance materiality 60% (2023: 60%) of Group materiality 60% (2023: 60%) of Company materiality

Basis and rationale for determining

performance materiality

In determining performance materiality, we considered the following factors:

a. The quality of the control environment and conclusions from our testing of Group-wide internal controls;

b. The size, nature and volume of uncorrected and any corrected misstatements identified in our previous audits;

c. The prior year restatement in respect of deferred tax disclosed in note 2; and

d. Macro-economic factors such as commodity price volatility and geo-political instability.

6.3. Error reporting threshold

We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in excess of $2.25 million (2023: $2.5 million), as well as differences below that threshold that, in our view, warranted reporting

on qualitative grounds. We also report to the Audit and Risk Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

7. An overview of the scope of our audit

7.1. Identification and scoping of components

Our audit was scoped by obtaining an understanding of the Group and its environment, including Group wide controls, and assessment of the risks of material misstatement at the Group level. Following the Eni UK business combination,

the Group acquired a number of entities only recently acquired by Eni UK from Neptune E&P UK Limited. In the period post-completion through to year-end, these former Neptune entities, which held a working interest in one

significant operated asset, operated in a separate control environment to the rest of the Group. We identified two components in the current year, being the legacy Ithaca Group (including the non-operated assets acquired from Eni UK)

and the former Neptune entities outlined above. An audit of the entire financial information was performed by the Group engagement team on both components.

The performance materiality applied for the Neptune component was $13.5 million. The performance materiality applied for the legacy Ithaca Group component was $25.7 million.

The legacy Ithaca Group and Neptune components accounted for 100% of the Group’s revenue, 100% of the Group’s adjusted EBITDAX and 100% of the Group’s net assets.

7.2. Our consideration of the control environment

We obtained an understanding of the relevant controls in relation to key business processes as well as the IT systems that were relevant to the audit, being the financial reporting system. This included obtaining an understanding of relevant

controls and IT systems within the Neptune component.

176 ITHACA ENERGY176 ITHACA ENERGY

7.2. Our consideration of the control environment continued

As set out in the Audit & Risk Committee’s report on page 126, progress has been made in addressing a number of the control observations that were identified in the prior year. However, the Group’s control environment continues to

mature and therefore is not yet at a stage that would enable us to place reliance on controls for the purposes of our audit testing. Observations raised in the current year included control recommendations in respect of impairment, tax,

related parties and modelling and we amended the nature, timing and extent of our substantive procedures in these areas accordingly.

7.3. Our consideration of climate-related risks

We performed enquiries of management to understand the impact of climate-related risks and controls relevant to the Group. We evaluated the climate change risk assessment and related documentation prepared by management and

considered the completeness and accuracy of the climate-related risks identified and summarised in the Task Force on Climate-related Financial Disclosures report on page 64. The Group identified in the ‘Impact of climate change on the

financial statements and related notes’ section of note 3 to the financial statements a number of key judgements and estimates with elevated climate-change and energy transition related risks, relating to: impairment of goodwill

and property, plant and equipment; depreciation and useful economic lives of property, plant and equipment, intangible assets (exploration and evaluation assets); and decommissioning provisions.

We considered whether the risks identified by management within their climate change risk assessment and related documentation are consistent with our own analysis and challenged the key climate related assumptions impacting the

financial statements. The key market-related matter which could have a material impact on the carrying value of the items noted above is the future demand for, and pricing of, oil and gas as the energy mix evolves in response to climate

change risk and other matters. In addition, management has set a number of goals to reduce Scope 1 and 2 CO

emissions compared to a 2018 baseline on a net equity basis, including a 10% reduction by 2025, a 25% reduction by

2027 and Net Zero by 2040. These have been reset following the Eni UK business combination. There is a risk that the forecast costs associated with these goals are understated or difficult to estimate reliably due to technology and/or

infrastructure constraints. These constraints include, but are not limited to, the ability to fully electrify a number of the Group’s longer life offshore assets, specifically the Rosebank and Cambo developments and the Captain field. We

also assessed the disclosures within the Annual Report, with the involvement of our climate specialists, and considered whether these were materially consistent with the financial statement disclosures, complete and consistent with our

understanding of the climate-related risks, assumptions and judgements during the year. All of our key audit matters, are considered to be impacted to at least some degree by the impact of the energy transition on future demand for, and

the pricing of, oil and gas, resulting in an impact on both costs and revenues, and in turn a risk of future impairment. Our consideration and response to this is discussed in the key audit matters section above.

8. Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears

to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have

performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the

directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern

basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

10. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Independent auditor’s report to the members of Ithaca Energy plc continued

Financial Statements

177ANNUAL REPORT AND ACCOUNTS 2024

11. Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

11.1. Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

• the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;

• the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that was considered by the Audit and Risk Committee on 4 March 2025;

• results of our enquiries of management both in and out of finance, internal audit, the directors and the Audit and Risk Committee about their own identification and assessment of the risks of irregularities, including those that are specific

to the Group’s sector;

• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:

• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

• detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and

• the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

• the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations, financial instruments, impairment, analytics and modelling, climate, IT, forensic, and reserves specialists, regarding how

and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the key audit matter in relation to the carrying value of

goodwill and oil and gas assets.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in

the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, the Listing Rules of the UK Listing Authority and relevant tax compliance legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty.

These included the Market Abuse Regulation, licence terms for the Group’s oil and gas assets and environmental regulations.

11.2. Audit response to risks identified

As a result of performing the above, we identified management’s assessment of the carrying value of goodwill and oil and gas assets as a key audit matter related to the potential risk of fraud. The key audit matters section of our report

explains this matter in more detail and also describes the specific procedures we performed in response to that key audit matter.

In addition to the above our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management, the Audit and Risk Committee and in-house legal counsel concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• reading minutes of meetings of those charged with governance and reading correspondence with HMRC and the North Sea Transition Authority (‘NSTA’); and

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a

potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and remained alert to any indications of fraud or non-compliance with laws and

regulations throughout the audit.

178 ITHACA ENERGY178 ITHACA ENERGY

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the

directors’ report.

13. Corporate Governance Statement

The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK

Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained

during the audit:

• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 100;

• the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on page 109;

• the directors' statement on fair, balanced and understandable set out on page 163;

• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 102

• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 101 to 108; and

• the section describing the work of the Audit and Risk Committee set out on pages 126 to 129.

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or

• the Company financial statements are not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made or the part of the directors’ remuneration report to be audited is not in agreement with

the accounting records and returns.

We have nothing to report in respect of these matters.

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Financial Statements

179ANNUAL REPORT AND ACCOUNTS 2024

15. Other matters which we are required to address

15.1. Auditor tenure

We were appointed by the Board in November 2022 to audit the Group financial statements for the year ending 31 December 2022 and subsequent financial periods. Prior to the Group’s initial public offering in November 2022,

we were previously appointed in March 2022 to audit the Company financial statements for the year ended 31 December 2021. The period of total uninterrupted engagement including previous renewals and reappointments of the

firm is 4 years, covering the years ending 31 December 2021 to 31 December 2024.

15.2. Consistency of the audit report with the additional report to the Audit and Risk Committee

Our audit opinion is consistent with the additional report to the Audit and Risk Committee we are required to provide in accordance with ISAs (UK).

16. Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members

as a body, for our audit work, for this report, or for the opinions we have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial Report filed on the

National Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with

DTR 4.1.15R – DTR 4.1.18R.

David Paterson ACA (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

25 March 2025

180 ITHACA ENERGY180 ITHACA ENERGY

Consolidated statement of profit or loss

For the year ended 31 December

			2023
		2024	Restated 1
	Note	$’000	$’000
Revenue	5	1,981,859	2,319,811
Cost of sales	6	(1, 139,645)	(1,317,010)
Gross profit		842,214	1, 002,801
Impairment charges on development and production assets	19	(262,984)	(557,936)
Exploration and evaluation expenses	14	(24,557)	(13,634)
Administrative expenses	7	(57,280)	(34,259)
Other gains	8	26,360	89,091
Profit from operations before tax, finance income and finance costs		523,753	486,063
Finance income	9	11, 164	5,688
Finance costs	9	(200,578)	(189,724)
Profit before tax		334,339	302,027
Income tax	28	(181,186)	(9,473)
Profit for the year		153,153	292,554
			2023
		2024	Restated 1
Earnings per share (EPS)	Note	Cents	Cents
Basic	10	13.2	29.1
Diluted	10	13.0	28.7

1 The income tax charge, the profit for the year and EPS for the year ended 31 December 2023 have been restated. Further details are set out in note 2.

The results above are entirely derived from continuing operations.

The year to 31 December 2024 includes the results of the Eni UK Business Combination from 3 October 2024 (see note 17 for further details).

The accompanying notes on pages 187 to 243 are an integral part of the financial statements.

Financial Statements

181ANNUAL REPORT AND ACCOUNTS 2024

			2023
		2024	Restated 1
	Note	$’000	$’000
Profit for the year		153,153	292,554
Items that may be reclassified to profit and loss
Fair value (losses)/gains on cash flow hedges	30	(213,637)	92,484
Fair value (losses)/gains on cost of hedging	30	(50,807)	3,116
Deferred tax credit/(charge) on cash flow hedges and cost of hedging	28	195,642	(71,700)
Other comprehensive (expense)/income		(68,802)	23,901
Total comprehensive income for the year		84,351	316,455

1 The profit for the year and the total comprehensive income for the year to 31 December 2023 has been restated. Further details are set out in note 2.

The accompanying notes on pages 187 to 243 are an integral part of the financial statements.

Consolidated statement of comprehensive income

For the year ended 31 December

182 ITHACA ENERGY

Consolidated statement of financial position

As at 31 December

			2023
		2024	Restated 1
	Note	$’000	$’000
Assets
Current assets
Cash and cash equivalents		165,123	153,215
Other financial assets		11,317	–
Trade and other receivables	11	417,614	334,290
Decommissioning reimbursements	11	23,175	30,417
Prepayments	12	42,210	37,678
Inventories	13	283,839	150,496
Derivative financial instruments	31	32,962	139,497
		976,240	845,593
Non-current assets
Decommissioning reimbursements	11	144,185	165,064
Exploration and evaluation assets	14	612,514	548,354
Property, plant and equipment	15	4, 188,435	3,258,206
Deferred tax assets	28	1,224,136	704,657
Derivative financial instruments	31	–	17,810
Goodwill	18	1,129,476	783, 848
		7,298,7 46	5,477,939
Total assets		8,27 4,986	6,323,532
Liabilities and equity
Current liabilities
Borrowings	20	(13,025)	(29,913)
Trade and other payables	22	(566,471)	(478,60 7)
Current tax payable	28	(247,048)	(321,116)
Decommissioning liabilities	23	(152,709)	(107,026)
Lease liability	25	(19,447)	(19,898)
Contingent and deferred consideration	26	(303,486)	(101,669)
Derivative financial instruments	31	(130,476)	(13,708)
		(1,432,662)	(1,071, 937)

1 Deferred tax assets and retained earnings have been restated at 31 December 2023. Further details are set out in note 2.

Financial Statements

183ANNUAL REPORT AND ACCOUNTS 2024

			2023
		2024	Restated 1
	Note	$’000	$’000
Non-current liabilities
Borrowings	20	(1, 011,923)	(718,238)
Decommissioning liabilities	23	(2,502,372)	(1,752,652)
Lease liability	25	(20,712)	(660)
Other provisions	24	(36,190)	–
Contingent and deferred consideration	26	(209,763)	(258, 700)
Derivative financial instruments	31	(20,987)	–
		(3,801,947)	(2,730,250)
Total liabilities		(5,234,609)	(3,802, 187)
Net assets		3,040,377	2,521,345
Shareholders’ equity
Share capital	27	20,029	11,540
Share premium	27	1, 161,615	308,845
Capital contribution reserve	27	181, 945	181,945
Own shares	27	(9,592)	(12,412)
Share-based payment reserve	27	18,788	15,494
Cash flow hedge reserve	30	(15,784)	39,818
Cost of hedging reserve	30	(9,132)	4,068
Retained earnings		1,692,508	1, 972,047
Total equity		3,040,377	2,521,345

1 Deferred tax assets and retained earnings have been restated at 31 December 2023. Further details are set out in note 2.

The accompanying notes on pages 187 to 243 are an integral part of the financial statements.

Approved on behalf of the Board on 25 March 2025:

Iain C S Lewis

Director

Consolidated statement of financial position continued

As at 31 December

184 ITHACA ENERGY

Consolidated statement of changes in equity

For the year ended 31 December

		Share	Share	Capital contribution		Share-based	Cash flow	Cost of
		capital	premium	reserve	Own shares	payment reserve	hedge reserve	hedging reserve	Retained earnings	Total
	Note	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Balance at 1 January 2023		11,445	293,712	181,945	–	4,920	16,710	3,275	1,945, 465	2,457,472
Dividends paid	34	–	–	–	–	–	–	–	(265,9 72)	(265,972)
Issuance of shares	27	95	15,133	–	(15,228)	–	–	–	–	–
Share-based payments	27	–	–	–	2,816	1 0 ,5 74	–	–	–	13,390
Comprehensive income for the year:
Profit for the year as previously stated (note 2)		–	–	–	–	–	–	–	215,635	215, 635
Prior period adjustment (note 2)		–	–	–	–	–	–	–	76,919	76, 919
Profit for the year as restated (note 2)		–	–	–	–	–	–	–	292,554	292,554
Other comprehensive income		–	–	–	–	–	23, 108	793	–	23,901
Total comprehensive income for the year		–	–	–	–	–	23, 108	793	292,554	316,455
Balance at 31 December 2023 and 1 January 2024 as restated		11,540	308,845	181,945	(12,412)	15,494	39,818	4,068	1,9 72,047	2,521,345
Dividends paid	34	–	–	–	–	–	–	–	(432,692)	(432,692)
Issuance of shares	27	8,489	852,770	–	–	–	–	–	–	861,259
Share-based payments	27	–	–	–	2,820	3,294	–	–	–	6,114
Comprehensive income for the year:
Profit for the year		–	–	–	–	–	–	–	153,153	153, 153
Other comprehensive expense		–	–	–	–	–	(55,602)	(13,200)	–	(68,802)
Total comprehensive income/(expense) for the year		–	–	–	–	–	(55,602)	(13,200)	153,153	84,351
Balance at 31 December 2024		20,029	1, 161,615	181,945	(9,592)	18,788	(15,784)	(9, 132)	1,692,508	3,040,377

Financial Statements

185ANNUAL REPORT AND ACCOUNTS 2024

		2024	2023
	Note	$’000	$’000
Cash provided by/(used in):
Operating activities
Profit before tax		334,339	30 2,027
Adjustments for:
Depletion, depreciation and amortisation	15	600,216	740,300
Exploration and evaluation expenses	14	24,557	13,634
Impairment charges on development and production assets	19	262,984	557,936
(Decrease)/increase in contingent consideration		(27,317)	8,008
Loan fee amortisation	9	13,222	4,508
Fair value gains on derivatives	30	(344)	(43,059)
Accretion on decommissioning liabilities	9	82,908	76,162
Other finance costs	9	104,451	109,054
Interest income	9	(11,164)	(5,688)
Unrealised foreign exchange on cash and cash equivalents		986	(1,725)
Share-based payment expenses	33	6, 114	13,390
Decommissioning expenditure	23	(94,098)	(95,552)
Operating cash flows before movements in working capital		1,296,854	1,678, 995
(Increase)/decrease in inventories		(84,212)	26,386
Decrease in trade and other receivables		113,969	12,540
Decrease in trade and other payables		(131,424)	(249,7 60)
Operating cash flows		1,195, 187	1,468, 161
Taxation paid		(351,267)	(176,305)
Settlement of foreign exchange and commodity derivative financial instruments		(1,801)	(6,739)
Interest received	9	11, 164	5,688
Net cash from operating activities		853,283	1,290,805

Consolidated statement of cash flows

For the year ended 31 December

186 ITHACA ENERGY

		2024	2023
	Note	$’000	$’000
Investing activities
Capital expenditure		(464,0 78)	(478, 838)
Business combinations cash acquired	17	107,475	–
Increase in other financial assets		(11,317)	–
Deferred consideration payments	26	–	(6,367)
Contingent consideration payments	26	(22,994)	(7,200)
Net cash used in investing activities		(390,914)	(492,405)
Financing activities
Dividends paid	34	(432,692)	(265,972)
Payments for lease liabilities (principal)	25	(27,870)	(41,902)
Drawdown/(repayment) of RBL loan		150,000	(600,000)
Fees paid on RBL refinancing	20	(31,671)	–
Proceeds of Senior Notes 2029 net of repayment of Senior Notes 2026 and fees 1	20	86,781	–
(Repayment)/drawdown of bp loan	20	(100,000)	100,000
Interest and charges paid		(94,664)	(99,825)
Interest rate swaps	30	638	6,967
Net cash used in financing activities		(449,477)	(900,732)
Currency translation differences relating to cash		(986)	1,725
Increase/(decrease) in cash and cash equivalents		11,908	(100,607)
Cash and cash equivalents at 1 January		153,215	253,822
Cash and cash equivalents at 31 December		165,123	153,215

1 A net receipt of $86 . 8 million reflects Senior Notes 2029 proceeds of $7 5 0.0 million less repayment of Senior Notes 2026 of $625 .0 million less fees and interest of $38 . 2 million comprising $1 4. 1 million of early repayment charges and $15 .1 million interest on the Senior Notes due 2026 and

$9.0 million of fees in relation to the Senior Notes due 2029.

The accompanying notes on pages 187 to 243 are an integral part of the financial statements.

Consolidated statement of cash flows continued

For the year ended 31 December

Financial Statements

187ANNUAL REPORT AND ACCOUNTS 2024

1. General information

Ithaca Energy plc (the Group or Ithaca Energy), is a public Company limited by shares incorporated and domiciled in the UK and is a Group involved in the development and production of oil and gas in the North Sea.

The Group’s registered office is 33 Cavendish Square, London, W1G 0PP, United Kingdom.

2. Basis of preparation

The consolidated financial statements are prepared in accordance with United Kingdom adopted International Accounting Standards (IAS) and in conformity with the requirements of the Companies Act 2006.

The consolidated financial statements are presented in US Dollars as this is the functional currency of the business. All values are rounded to the nearest thousand ($’000), except when otherwise indicated.

The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the periods presented.

Prior period adjustments

During the preparation of the Q1 2024 condensed consolidated financial statements, management identified an incorrect calculation in the 2023 deferred EPL tax charge related to the impairment charge of $229.5 million recorded in

Q4 of 2023. As a result of this incorrect calculation, the tax charge and the profit for the year to 31 December 2023 were overstated and understated, respectively by $76.9 million, and the net deferred tax asset and retained earnings

were both understated by $76.9 million at 31 December 2023.

Details of amounts as previously stated, prior period adjustments and amounts as restated were:

Statement of financial position as at 31 December 2023: As previously stated

Prior period

adjustment As restated

Deferred tax assets ($’000) 627,738 76,919 704,657

Retained earnings ($’000) 1,895,128 76,919 1,972,047

Net assets ($’000) 2,444,426 76,919 2,521,345

Statement of profit or loss for the year to 31 December 2023: As previously stated

Prior period

adjustment As restated

Income tax charge ($’000) (86,392) 76,919 (9,473)

Profit for the year ($’000) 215,635 76,919 292,554

Basic EPS (cents) 21.4 7.7 29.1

Diluted EPS (cents) 21.2 7.5 28.7

3. Material accounting policies, judgements and estimation uncertainty

Basis of measurement

The consolidated financial statements have been prepared on a going concern basis using the historical cost convention, except for the revaluation of certain financial assets and financial liabilities, under International Financial Reporting

Standards (IFRS), to fair value, including derivative instruments. Historical cost is generally based on the fair value consideration given in exchange for the assets and liabilities.

Going concern

related sensitivity analysis. This allows proactive management of any business risk including, liquidity risk.

Notes to the consolidated financial statements

188 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

The Directors consider the preparation of the financial statements on a going concern basis to be appropriate. This is due to the following key factors:

• Continuing robust commodity price backdrop and a well-hedged portfolio over the next 12 months;

• Reserves Based Lending (RBL) liquidity headroom of $850 million ($150 million drawn versus $1,000 million available), plus $383 million of cash as at 14 March 2025; and

• Robust operational performance and a well-diversified portfolio.

Cash flow forecast – base case assumptions:		2025	H1 2026
Average oil price	$/bbl	71	68
Average gas price	p/th	107	96
Average hedged oil price (including floor price for zero cost collars)	$/bbl	75	70
Average hedged gas price (including floor price for zero cost collars)	p/th	91	89

The oil and gas price assumptions used in the going concern and viability assessments represent management's current best estimates at the date of approval of the Annual Report and Accounts, as supported by data from third-party

analysis, of future commodity prices whereas the commodity prices used in impairment testing (see note 19) are based on market conditions at 31 December 2024.

consideration of the mitigation strategies within management’s control, there was no reasonably possible scenario that would result in the business being unable to meet its liabilities as they fell due. In addition, reverse stress tests have

been performed reflecting further reductions in commodity prices, prior to any mitigating actions, to determine at what levels prices would have to reach such that there is no liquidity headroom left. The stress tests demonstrated that

the likelihood of the fall in prices required to cause a liquidity issue is considered sufficiently remote in the context of the mitigation strategies available to management. The mitigation strategies within the control of management include

a reduction in uncommitted capital expenditure and variable opex savings in the low production scenario. The analysis demonstrated that the Group would still continue to comply with financial covenants and have sufficient liquidity

throughout the period to 30 June 2026 to continue trading.

Based on their assessment of the Group’s financial position in the period to 30 June 2026, the Directors believe that the Group will be able to continue in operational existence for the foreseeable future. Accordingly, they continue to

adopt the going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The consolidated financial statements of the Group includes the financial information of Ithaca Energy plc and all wholly-owned subsidiaries as listed per note 32. All intergroup transactions and balances have been eliminated on consolidation.

Subsidiaries are all entities over which the Group has control. The plc controls an entity when the Group is exposed to or has rights to variable returns from its investments with the entity and has the ability to affect those returns

through its power over the investee. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated on the date that control ceases.

Impact of climate change on the financial statements and related notes

Judgements and estimates made in assessing the impact of climate change and the energy transition

Climate change and the transition to a lower-carbon system were considered in preparing the consolidated financial statements. These may have the potential for significant impacts on the carrying values of the Group’s assets and

liabilities discussed below as well as on assets and liabilities that may be reflected in the future. There is also the potential for significant impact on future cash flows. There is generally a high level of uncertainty about the speed and

magnitude of impacts of climate change which, together with limited historical data, provides significant challenges in the preparation of forecasts and financial plans with a wide range of potential future outcomes.

The Group’s ambition is to have one of the lowest carbon emission portfolios in the UK North Sea and to achieve Net Zero (whereby the amount of CO

added by the Group’s activities is no greater than the amount taken away), on a

net equity basis (by applying the Group’s working interest in each respective asset to the total emissions of that asset), and in respect of Scope 1 and 2 emissions, by 2040, ten years ahead of the North Sea Transition Deal commitment.

This will be achieved by optimising the Group’s current portfolio in the short term and fundamentally transitioning the Group’s portfolio over the medium to long term whilst maintaining forecast levels of production. Initiatives include,

but are not limited to, operational improvements, offshore electrification, acquisition and investment into lower carbon intensity assets and the eventual cessation of production of mature fields which have higher carbon intensity. In

addition, the Eni UK Business Combination has given the Group a portfolio with a relatively lower carbon footprint. Where the Group cannot reduce Scope 1 and Scope 2 emissions, Ithaca Energy will invest in carbon offsets to achieve

the Group’s goal of Net Zero. All new economic investment decisions include estimated costs of the energy transition based on existing technology and estimated costs of carbon and these opportunities are assessed on their climate

impact potential and alignment with Ithaca Energy’s Net Zero target, taking into account both greenhouse gas volumes and emissions intensity.

Financial Statements

189ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

Specific considerations of the potential impacts of climate change on significant judgements and estimates used in the consolidated financial statements are considered below. The items outlined below are likely to manifest themselves

over a number of years and are, therefore, not generally considered to represent 'key sources of estimation uncertainty' as required by IAS 1 (being those which could have a material impact on the Group’s results in the

12 months following the date of the consolidated statement of financial position) which are separately disclosed later in this note.

Impairment of goodwill and property, plant and equipment

The energy transition has the potential to significantly impact future commodity and carbon prices in that as the UK and global energy system decarbonises, reduced demand for oil and gas products in favour of low carbon alternatives

could cause oil and gas prices to fall which would, in turn, affect the recoverable amount of goodwill and property, plant and equipment. In the current period management’s estimate of the long-term commodity price assumptions are,

in nominal terms from 2031, $83/bbl for Brent Crude and 87p/therm for UK NBP gas. Further details of climate change, including a sensitivity in this area are provided in note 19.

Recoverable values used for impairment testing for all cash-generating units (CGUs) include the estimated cost of UK carbon emissions allowances in real terms for CO

e of £50/tonne, £70/tonne and £80/tonne for 2025,2026 and

2027 respectively. The recoverable value of CGU’s may be impacted by future carbon pricing legislation changes, which could increase operating costs through higher emissions allowances or the introduction of other carbon pricing

mechanisms. Electrification of offshore operations for specific assets is planned in line with the Group’s 2040 Net Zero ambitions and where feasible based on existing technology, estimated electrification costs of a market participant

are included within the assessment of the recoverable value of the relevant CGU.

Property, plant and equipment – depreciation and useful economic lives

The energy transition has the potential to reduce the expected useful economic lives of assets and hence accelerate depreciation charges. Although no changes have been identified or recognised to date, as noted in the Strategic Report

on page 60, it is anticipated that certain higher emission-intensity assets such as FPF-1 and Alba will cease production in the medium term and will be replaced by new lower-emission intensity assets. Management does not currently

expect the useful economic lives of the Group’s reported property, plant and equipment to significantly change solely as a result of the energy transition. However, significant capital expenditure is still required for ongoing projects and

therefore, the useful lives of future capital expenditure may be different.

Intangible assets – exploration and evaluation assets

The impacts of climate change and the energy transition may affect the viability of exploration prospects, for example due to the impact on future commodity and carbon prices (as explained above) or due to the increased risk

of regulatory challenge as prospects progress through to development. The recoverability of the existing intangibles was considered during 2024, however, no significant write-offs were identified as a result of climate change

considerations. Viability of these assets will continue to be assessed on a regular basis.

Decommissioning provisions

Most of the Group’s existing decommissioning obligations are estimated to be completed over the course of the next 20 years. The impacts of climate change and the energy transition may bring forward the expected timing

of decommissioning activity, increasing the present value of the associated decommissioning provisions. The potential impact of a reasonably possible acceleration of estimated decommissioning dates, which considers the potential

impact of the energy transition, is considered to be two years. The impact of such an acceleration of cessation of production across the Group’s entire producing portfolio would result in an increase in the decommissioning provision of

approximately $93 million (2023: $69 million). The risk in this area may increase if key assets within the Group’s existing exploration, appraisal and development portfolio proceed to the production stage, as this is likely to significantly

extend the life of the Group’s portfolio, in some cases to 2050 or beyond.

While the pace of the transition to a lower-carbon economy is uncertain, oil and gas demand is expected to remain a key element of the energy mix for many years based on stated policies, commitments and announced pledges to

reduce emissions. Therefore, given the estimated useful lives of the Group’s oil and gas portfolio, a material adverse change is not anticipated to the carrying value of the Group’s assets and liabilities in the short-term as a result of

climate change and the transition to a lower-carbon economy.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of a business combination is measured as the fair value of the consideration given for the assets acquired, equity instruments issued and liabilities incurred

or assumed at the date of completion of the business combination. Transaction costs incurred are expensed and included in administrative expenses. Identifiable assets acquired and liabilities and contingent liabilities assumed in a

business combination are measured initially at their fair values at the date of the business combination. The excess of the cost of the business combination over the fair value of the Group’s share of the identifiable net assets acquired is

recorded as goodwill. If the cost of the business combination is less than the Group’s share of the net assets acquired, the difference is recognised directly in the consolidated statement of profit or loss as a gain on bargain purchase.

190 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

Goodwill

Capitalisation

Goodwill is initially recognised and measured as set out above. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Impairment

Goodwill is tested annually for impairment and also when circumstances indicate that the carrying value may be at risk of being impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU or Group of

CGUs to which the goodwill relates. If the recoverable amount of a CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the unit and then to the other assets of the

unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss is recognised in the consolidated statement of profit or loss. Impairment losses relating to goodwill cannot be reversed in future periods. The CGU for the

purposes of the goodwill test is the North Sea, i.e. the entire Group portfolio of oil and gas assets which is consistent with the operating segment view of the business.

Interest in joint ventures

Under IFRS 11, joint arrangements are those that convey joint control which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint arrangements are

classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor.

The Group’s interest in joint operations (e.g. exploration and production arrangements) are accounted for by recognising its assets (including its proportionate share of assets held jointly), its liabilities (including its proportionate share

of liabilities incurred jointly), its revenue from the sale of its proportionate share of the output arising from the joint operation and its expenses (including its proportionate share of any expenses incurred jointly).

Revenue

The sale of crude oil, gas or condensate represents a single performance obligation, being the sale of barrels equivalent on collection of a cargo or on delivery of commodity into an infrastructure. Revenue is accordingly recognised

for this performance obligation when control over the corresponding commodity is transferred to the customer. Revenue is recognised at a point in time and is measured based on the consideration to which the Group expects to be

entitled in a contract with a customer and excludes amounts collected for third parties. Details of hedging gains and losses presented in revenue are discussed in the hedging accounting policy set out below.

Tariff income is recognised as the underlying commodity is shipped through the pipeline network based on established tariff rates.

Foreign currency translation

Items included in these consolidated financial statements are measured using the currency of the primary economic environment in which the Group and its subsidiaries operate (the functional currency). The consolidated financial

statements are presented in US Dollars, which is the Group’s presentation currency as well as the functional currency of the Parent Company and each of its subsidiaries. In preparing the financial statements of the parent and its

subsidiaries, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and

liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the

date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the

statement of profit or loss.

Exchange differences are recognised in profit or loss in the period in which they arise except for:

• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those

foreign currency borrowings;

• Exchange differences on transactions entered into to hedge certain foreign currency risks (see below under financial instruments/hedge accounting).

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s shareholders. Details of dividends paid and

declared are set out in note 34 .

Financial Statements

191ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

Financial instruments

All financial instruments are initially recognised at fair value on the statement of financial position. Measurement in subsequent periods is dependent on the classification of the respective financial instrument.

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another

entity. The difference between the carrying amount of the financial asset derecognised and the consideration received/receivable is recognised in profit or loss.

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The Group considers whether refinancing arrangements represent settlement of the existing debt and

issuance of a new debt or an exchange or modification of the previous debt. In making this assessment, the Group considers, amongst other factors, pre-existing early redemption options in the original agreement, the group of lenders

to which the new debt is offered and any preferential terms or rights given to the original lenders. Where the new debt is considered to represent an arms-length market offering, the issuance of the new debt is viewed as separate from

the extinguishment of the old debt and is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognised and the consideration

paid/payable (excluding consideration payable for fees incurred on the new liability or accrued interest) is recognised in profit or loss.

IFRS 9 classifications

Cash and cash equivalents are classified at amortised cost which equates to its fair value. Accounts receivable and long-term receivables are classified and carried at amortised cost less expected credit losses. These items have a business

model of held to collect and the terms of the financial instrument meet the classification of solely payments of interest on principle outstanding. Accounts payable, accrued liabilities, certain other long-term liabilities, and borrowings

are classified as other financial liabilities and carried at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, discount or premium. Contingent consideration is measured

at fair value though profit or loss. Although the Group does not intend to trade its derivative financial instruments, they are required to be carried at fair value with the treatment of fair value movements explained further below.

Transaction costs, presentation and cash flows

Transaction costs that are directly attributable to the acquisition or issue of a financial asset or liability (excluding the costs directly attributable to the new loan commitment facilities) have been included in the carrying value of the

related financial asset or liability and are amortised to consolidated net earnings over the life of the financial instrument using the effective interest method.

Directly attributable fees paid on the establishment of new loan commitment facilities are capitalised to the extent that it is probable that some or all of the facility will be drawn down. These costs are recognised on a systematic basis

over the period the Group is able to draw down. Fees that are calculated based on the usage of the facility (including letter of credit fees) are expensed as incurred.

Borrowings are presented as non-current when they are not due to be settled within twelve months after the reporting period or where the Group has the right at the end of the reporting period to defer settlement for at least twelve

months after the reporting period.

Cash flows relating to refinancing are presented in the Statement of Cash Flows on a net basis where that reflects the actual cash flows received by the Group. The refinancing proceeds in the Statement of Cash Flows are stated

after deduction of fees which were deducted from the amount paid to the Group. Other fees paid on refinancing are presented as a separate line item within financing activities or within Interest and charges paid in the Statement

of Cash Flows.

Impairment of financial assets

For trade receivables and accrued income, the Group applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Group does not track changes in credit risk, but instead, recognises any material loss

allowance based on lifetime ECLs at each reporting date. For all other financial assets, the Group measures the loss allowance using 12-month expected credit losses unless there was a significant increase in credit risk since initial

recognition in which case the loss allowance is measured using lifetime expected credit losses.

In making this assessment whether the credit risk increased significantly since initial recognition, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience

and forward-looking information that is available without undue cost or effort. The Group considers that the credit risk increased significantly since initial recognition when the credit rating changes, the debtor has significant financial

difficulty or if there was a breach of contract. For balances that are beyond 30 days overdue it is presumed to be an indicator of a significant increase in credit risk.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates

that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures,

taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

192 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to commodity risks, interest rate and foreign exchange rate risks. These instruments include: commodity swaps, collars and options; foreign

exchange forward contracts and collars; and interest rate swaps. Further details of derivative financial instruments are disclosed in notes 30 and 31.

Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss on remeasurement of derivatives

is recognised in profit or loss immediately unless the derivative is designated in a hedge relationship and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the

hedge relationship.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability. Derivatives are not offset in the financial statements unless the Group has both

a legally enforceable right and intention to offset. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not due to be realised or settled

within 12 months. Other derivatives maturing in less than 12 months and expected to be realised or settled in less than 12 months are presented as current assets or current liabilities.

Hedge accounting

The Group designates certain derivatives as hedging instruments in respect of commodity risks in cash flow hedges.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge

transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item

attributable to the hedged risk.

If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio

of the hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again.

The Group designates only the intrinsic value of option contracts as a hedging instrument, i.e. excluding the time value of the option. The changes in the fair value of the aligned time value of the option are recognised in other

comprehensive income and accumulated in the cost of hedging reserve. If the hedged item is transaction-related, the time value is reclassified to profit or loss when the hedged item affects profit or loss. If the hedged item is time-period

related, then the amount accumulated in the cost of hedging reserve is reclassified to profit or loss on a rational basis – the Group applies straight-line amortisation. Those reclassified amounts are recognised in profit or loss in the same

line as the hedged item. If the Group expects that some or all of the loss accumulated in the cost of hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the

heading of cash flow hedge reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is

included in the 'other gains and losses' line item.

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same revenue line as the recognised hedged

item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognised in other comprehensive income and accumulated in equity are

removed from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability. This transfer does not affect other comprehensive income. Furthermore, if the Group expects that some or all

of the loss accumulated in the cash flow hedge reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.

The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is

sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified

to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified immediately to profit or loss.

If a hedge of a transaction-related item is discontinued part way through the life of the hedge (e.g. due to early termination of the swap, hedging resets), but the hedged item is still expected to occur, the amounts deferred in equity

would remain in equity until the earlier of: (i) the hedged transaction occurring; or (ii) expectation that the amount deferred in equity will not be recovered in the future periods.

Note 30 and note 31 set out details of the fair values of the derivative instruments used for hedging purposes, and movements in the cash flow hedge reserve and cost of hedging reserve in equity are detailed in note 30.

Financial Statements

193ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

Contingent and deferred consideration

Contingent consideration in relation to a business combination or asset acquisition is accounted for as a financial liability and measured at fair value at the date of acquisition with any subsequent remeasurements recognised in profit

or loss in accordance with IFRS 9. These fair values are generally based on risk-adjusted future cash flows discounted using appropriate discount rates. Changes in fair value of the contingent consideration that qualify as measurement

period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period'

(which cannot exceed one year from the date of the business combination) about facts and circumstances that existed at the date of the business combination.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that

is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Other contingent consideration is remeasured to fair value at subsequent reporting dates with changes

in fair value recognised in profit or loss.

Deferred consideration is measured at amortised cost because the amount payable in the future is fixed.

Settlement of contingent consideration is recorded as investing outflows in the cash flow statement to the extent that cumulative amounts paid do not exceed the amount recognised at the date of acquisition, with any excess recorded

as an operating cash outflow. Settlement of deferred consideration is recorded as either an investing or financing outflow in the cash flow statement, depending on the substance of the arrangement at inception. Key considerations

in forming this judgement will include the extent of inferred financing costs included in the overall consideration arrangements at acquisition, the period of time over which the payments are made, the rationale for agreeing to defer

elements of the consideration and the general level of funding resources available to the Group at the time of acquisition.

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents include investments with an original maturity of three months or less. In the statement of financial position, cash and bank balances comprise cash (i.e. cash on

hand and demand deposits) and cash equivalents. Cash equivalents are short-term (generally with original maturity of three months or less), highly-liquid investments that are readily convertible to a known amount of cash and which

are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Inventories – hydrocarbon and materials

Inventories of materials are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their

present location and condition. Cost is determined on the first-in, first-out method. Current hydrocarbon inventories are stated at net realisable value, which is based on estimated selling price less any further costs expected to be

incurred to completion and disposal/sale. Non-current oil and gas inventories are stated at historic cost. Provision is made for obsolete, slow-moving and defective items where appropriate.

Lifting or offtake arrangements

Lifting or offtake arrangements for oil and gas produced in certain of the Group’s oil and gas properties are such that each participant may not receive and sell its precise share of the overall production in each period. The resulting

imbalance between cumulative entitlement and cumulative volume sold is an ‘underlift’ included within inventories, or an ‘overlift’ included within trade and other payables in the statement of financial position. Both are stated at

net realisable value using an observable year-end oil or gas market price. Movements during an accounting period are adjusted through cost of sales in the consolidated statement of profit or loss.

Exploration and evaluation assets

Oil and gas expenditure – exploration and evaluation (E&E) assets

Geological and geophysical costs and costs incurred pre-licence are expensed as incurred. Costs directly associated with an exploration well are initially capitalised as an intangible asset until the drilling of the well is complete and the

results have been evaluated. These costs include employee remuneration, materials and fuel used, freight costs and payments made to contractors. If potentially commercial quantities of hydrocarbons are not found, the exploration

well costs are written off. If hydrocarbons are found and, subject to further appraisal activity, are likely to be capable of commercial development, the costs continue to be carried as an asset. If it is determined that development will

not occur, that is, the efforts are not successful, then the costs are expensed.

Costs directly associated with appraisal activity undertaken to determine the size, characteristics and commercial potential of a reservoir following the initial discovery of hydrocarbons, including the costs of appraisal wells where

hydrocarbons were not found, are initially capitalised as an intangible asset. Upon external approval for development and recognition of proved or sanctioned probable reserves, the relevant expenditure is first assessed for impairment

and, if required, an impairment loss is recognised. The remaining balance is then transferred to development and production (D&P) assets. If development is not approved and no further activity is expected to occur, then the costs

are expensed.

194 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

The determination of whether potentially economic oil and natural gas reserves have been discovered by an exploration well is usually made within one year of well completion, but can take longer, depending on the complexity of the

geological structure. Exploration wells that discover potentially economic quantities of oil and natural gas in areas where major capital expenditure (e.g. an offshore platform or a pipeline) would be required before production could begin

and where the economic viability of that major capital expenditure depends on the successful completion of further exploitation or appraisal work in the area remain capitalised on the balance sheet as long as such work is under way or

firmly planned.

Property, plant and equipment

Oil and gas expenditure – D&P assets

Capitalisation

Costs of bringing a field into production, including the cost of facilities, wells and subsea equipment, direct costs including staff costs together with E&E assets reclassified in accordance with the above policy, are capitalised as a D&P

asset. Normally each individual field development will form an individual D&P asset but there may be cases, such as phased developments, or multiple fields around a single production facility when fields are grouped together to form

a single D&P asset.

Depreciation

All costs relating to a development are accumulated and not depreciated until the commencement of production. Depreciation is calculated on a unit of production basis based on the proved and probable reserves of the asset generally

on a field-by-field basis. Any re-assessment of reserves affects the depreciation rate prospectively. Significant items of plant and equipment will normally be fully depreciated over the life of the field. However, these items are assessed

to consider if their useful lives differ from the expected life of the D&P asset.

Non-oil and natural gas operations

Non-oil and gas assets are initially recorded at cost and depreciated over their estimated useful lives on a straight-line basis as follows:

Buildings 10 years

Computer and office equipment 3 years

Furniture and fittings 5 years

Impairment

For impairment review purposes the Group’s oil and gas assets are aggregated into CGUs typically on a field-by-field basis for development and production assets in accordance with IAS 36, and on a North Sea segment basis for

exploration and evaluation assets in accordance with IFRS 6. A review is carried out at each reporting date for any indicators that the carrying value of the Group’s assets may be impaired. Such reviews are carried out on a field-by-field

basis for both development and production assets and exploration and evaluation assets. For assets where there are such indicators, an impairment test is carried out on the CGU. The impairment test involves comparing the carrying

value with the recoverable value of an asset. The recoverable amount of an asset is determined as the higher of its fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying

amount, the carrying amount of the asset is reduced to the recoverable amount. The resulting impairment losses are written off to the consolidated statement of profit or loss. Previously impaired assets (excluding goodwill) are reviewed

for possible reversal of previous impairment at each reporting date. The maximum possible reversal is capped at the net book value

had the asset not been impaired in the past. Where an exploration and evaluation licence is relinquished, amounts capitalised in respect of the licence are written off to profit or loss in the period in which the licence is relinquished.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those

assets until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are expensed as incurred. Borrowing costs directly attributable to E&E assets are not capitalised and are expensed directly to

profit or loss when incurred.

Financial Statements

195ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

Decommissioning liabilities

The Group records the present value of legal obligations associated with the retirement of long-term tangible assets, such as producing well sites and processing plants, in the period in which they are incurred with a corresponding

increase in the carrying amount of the related long-term asset. Liabilities for decommissioning are recognised when the Group has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and

restore the site on which it is located, and when a reliable estimate can be made. Where the obligation exists for a new facility or well, such as oil and gas production or transportation facilities, the obligation generally arises when the

asset is installed or the ground/environment is disturbed at the field location. In subsequent periods, the asset is adjusted for any changes in the estimated amount or timing of the settlement of the obligations. The amount recognised

is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. Changes in decommissioning cost estimates for assets that have either been fully written off or have ceased

production are expensed as impairment charges in the period the change occurs. The carrying amounts of the associated decommissioning assets are depleted using the unit of production method in accordance with the depreciation

policy for development and production assets. Actual costs to retire tangible assets are deducted from the liability as incurred. The unwinding of discount in the net present value of the total expected cost is treated as an interest

expense. Changes in the estimates are reflected prospectively over the remaining life of the field.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, a reimbursement asset is recognised when, and only when, it is virtually certain that reimbursement will be received if the

entity settles the obligation. The amount recognised for the reimbursement may not exceed the amount of the provision.

Taxation

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively

enacted by the reporting date. Taxable profit differs from net profit, as reported in the consolidated statement of profit or loss, because it excludes items of income or expense that are taxable or deductible in other accounting periods

and it further excludes items of income or expenses that are never taxable or deductible.

Deferred tax

Deferred tax is recognised using the liability method, providing for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is measured at the tax

rates that are expected to be applied to the temporary differences when they are forecast to reverse, based on the laws that have been enacted or substantively enacted at each balance sheet date. Details of changes in EPL and other

tax matters are set out in note 28. Deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill and deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction

other than business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available

against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and all available evidence is considered in evaluating the recoverability of these deferred tax

assets. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities relating to taxes levied by the same taxation authority on either the same taxable entity or different

taxable entities where there is an intention to settle the balances on a net basis.

Deferred Petroleum Revenue Tax (PRT) assets are recognised where PRT relief on future decommissioning costs is probable.

Leases

The Group assesses at contract inception all arrangements to determine whether it is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration. The Group is not a lessor in any transactions, it is only a lessee. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee. The Group

has elected to apply Paragraph 6 of IFRS 16 to short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets (such as tablets and personal computers, small items of office furniture and

telephones). Lease payments associated with these leases are expensed over the relevant lease term.

Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities

recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset is depreciated over the useful life of the asset.

The Group’s right-of-use assets are included in property, plant and equipment (note 15).

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses its

incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is generally not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the

accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future

payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

196 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

The Group has elected to apply the practical expedient under IFRS 16.15 to account for lease and associated non-lease components as a single lease component on a class-of-asset basis.

Maintenance expenditure

Expenditure on major maintenance refits or repairs is capitalised where it enhances the life or performance of an asset above its originally assessed standard of performance, replaces an asset or part of an asset which was separately

depreciated and which is then written off, or restores the economic benefits of an asset which has been fully depreciated. All other maintenance expenditure is charged to the statement of profit or loss as incurred.

Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value is expensed over the vesting term either on a straight-line

basis or as specified in the vesting terms, based on the Group’s estimate of shares that will eventually vest and is adjusted for the effects of non-market-based vesting conditions.

Fair value is measured by using a Black-Scholes or other appropriate valuation model. The expected life used in the model is adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and

behavioural considerations.

Retirement benefit costs

The Group operates a defined contribution pension scheme and payments into this plan are charged as an expense as they fall due. There is no further obligation to pay contributions into the plan once the contributions specified in the

plan rules have been paid.

Short-term employee benefits

A charge or liability is recognised for benefits accruing to employees in respect of salaries, bonuses, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid

for that service. Charges or liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Non-GAAP measures

In measuring the Group’s adjusted operating performance, additional financial measures derived from the reported results have been used by management in order to eliminate factors which distort year-on-year comparisons.

The Group’s adjusted performance is used to explain year-on-year changes when the effect of certain items is significant, including impairment charges or reversals, business combination costs, one-off finance charges related

to refinancing, the tax effect of these items where applicable and non-cash deferred tax charges on the increase in rate of EPL.

Adjusted EBITDAX, adjusted net income, adjusted EPS, unit operating expenditure, leverage ratio, adjusted net debt and certain other reported metrics are non-GAAP measures that are not specifically defined under IFRS or other

generally accepted accounting principles. Further details are set out on pages 249 to 252.

Changes in accounting pronouncements

The Group has adopted all new and amended IFRS Standards effective in the consolidated financial statements for the period 1 January 2023 to 31 December 2024. There was no material impact from these or from any of

the amendments to existing standards and interpretations which were effective from 1 January 2024. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Financial Statements

197ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

New and revised IFRS Standards in issue but not yet effective

As at 31 December 2024 , the Group had not applied the following new Standards or revisions to existing IFRS Standards, that have been issued but are not yet effective.

IFRS S1 General requirements for disclosure of sustainability related financial information

IFRS S2 Climate related disclosures

Amendments to SASB standards Amendments to the SASB standards to enhance their international applicability

Amendments to IAS 21 Lack of exchangeability

Amendments to IFRS 9 and IFRS 7 Amendments to the classification and measurement of financial instruments

Amendments to IFRS 9 and IFRS 7 Contracts referencing nature-dependent electricity

Annual improvements to IFRS Annual improvements to IFRS Accounting Standards – volume 11

IFRS 18 Presentation and disclosures in financial statements

IFRS 19 Subsidiaries without public accountability: disclosures

With the exception of IFRS S1, IFRS S2 and IFRS 18, the Group does not expect that the adoption of the new Standards or amendments to existing Standards, listed above, will have a material impact on the consolidated financial

statements of the Group in future periods. The Group is currently assessing the impact of the sustainability and climate Standards which will apply from 1 January 2026 and the Group is also considering the impact of the adoption

of IFRS 18 which will apply from 1 January 2027 onwards.

Critical judgements and key sources of estimation uncertainties

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

the next financial year, are discussed below.

Estimates in oil and gas reserves and contingent resources

The Group’s estimates of oil and gas reserves and contingent resources, and the associated production forecasts, are used in the impairment testing of property plant and equipment and goodwill, in the measurement of depletion

and decommissioning provisions, the measurement of certain elements of contingent consideration, the going concern assessment, the viability assessment and in the determination of whether deferred tax assets are recoverable.

The business of the Group is to enhance hydrocarbon recovery and extend the useful lives of mature and underdeveloped assets and associated infrastructure in a profitable and responsible manner. Estimates of oil and gas reserves

and contingent resources require significant judgement. Factors such as the availability of geological and engineering data, reservoir performance data, drilling of new wells and estimates of future oil and gas prices all impact on the

determination of the Group’s estimates of its oil and gas reserves, which could result in different future production profiles affecting prospectively the discounted cash flows used in impairment testing.

The Group’s estimates of reserves and resource volumes used for accounting purposes are built up from historically-matched models for operated assets and principally from operators’ estimates for non-operated assets.

A review process is undertaken to compare the results of the Group’s internal estimates to those of an independent consultant to understand any differences in underlying assumptions to ensure there are no significant

unreconciled differences between the estimates.

For the purposes of depletion and decommissioning estimates, the Group uses proved and probable reserves; and for the purposes of the impairment tests performed and deferred tax asset recoverability, the Group considers the same

proved and probable reserves as well as risked resource volumes. These risking adjustments are reflective of management’s assessment of technical and commercial factors that reflect the value considerations of a market participant.

Changes in estimates of oil and gas reserves and resources resulting in different future production profiles will affect the discounted cash flows used in impairment testing, the anticipated date of decommissioning, the depletion charges

in accordance with the unit of production method and the recoverability of deferred tax assets. The sensitivity of the Group’s impairment tests and deferred tax recoverability assessments to key sources of estimation uncertainty,

including reserves and resources, is discussed below.

198 ITHACA ENERGY

Notes to the consolidated financial statements continued

3. Material accounting policies, judgements and estimation uncertainty continued

Estimates in impairment of oil and gas assets and goodwill

Determination of whether the Group’s oil and gas assets (note 15) or goodwill (note 18) have suffered any impairment requires an estimation of the recoverable amount of the CGU to which oil and gas assets and goodwill have been

allocated. Projected future cash flows are used to determine a fair value less cost to sell to establish the recoverable amount. Key assumptions and estimates in the impairment models relate to: commodity prices that are based on an

external view of forward curve prices that are considered to be a best estimate of what a market participant would use; discount rates which reflect management’s estimate of a market participant post-tax weighted average cost of

capital; and oil and gas reserves and resources on a risked basis as described above. Management’s estimates of a market participant’s view of pricing and discount rates are supplied by an independent consultant.

The sensitivity of the Group’s carrying amounts to these assumptions is illustrated by the impairments and reversals disclosed in note 19, and by the sensitivity disclosures in note 19. Sensitivity disclosures include, in particular,

the impact of a 20% reduction in forecast revenues.

Contingent consideration

Liabilities for contingent consideration have been recognised on certain business combinations, which are measured at fair value at acquisition and remeasured at fair value through profit and loss at each reporting date.

The amounts of contingent consideration ultimately payable depend on several factors, including the progress of certain of the oil and gas properties acquired and the achievement of certain production and commodity price thresholds.

Management has estimated the fair value as the aggregate value of each element of the contingent consideration in each case using an appropriate valuation technique, taking into account the likelihood of occurrence of each contingent

event and the net present value of the amount potentially payable. Where applicable, risking assumptions applied in the measurement of contingent consideration were consistent with those applied in the fair valuation of the related oil

and gas properties.

A 20% decrease in the probability of a trigger event occurring and hence a payment being due, with all other assumptions held constant, would result in a decrease in contingent consideration of $84.2 million (2023: $97.1 million).

Whereas a 20% increase in probability of a trigger event occurring, with all other assumptions held constant, would result in an increase in contingent consideration of $80.4 million (2023: $84.1 million).

Decommissioning provision estimates

Amounts used in recording a provision for decommissioning are estimates based on current legal and constructive requirements and current technology and price levels for the removal of facilities and plugging and abandoning of wells.

Due to changes in relation to these items, the future actual cash outflows in relation to decommissioning are likely to differ in practice. To reflect the effects due to changes in legislation, requirements, technology and price levels,

the carrying amounts of decommissioning provisions are reviewed on a regular basis. The effects of changes in estimates do not give rise to prior year adjustments and are dealt with prospectively. For operated assets, cost estimates

are based on management’s assessment of work programmes (including durations) and supply chain conditions including, amongst other factors, applicable vessel and rig rates and durations. For non-operated assets, cost estimates are

arrived at by management’s review of the basis of estimates as provided by the respective operators.

While the Group uses its best estimates and judgement, actual results could differ from these estimates. Expected timing of expenditure can also change, for example in response to changes in laws and regulations or their interpretation,

and/or due to changes in commodity prices. The payment dates are uncertain and depend on the production lives of the respective fields. Management does not expect any reasonable change in the expected timing of decommissioning

to have a material effect on the decommissioning provisions, assuming cash flows remain unchanged. Decommissioning costs are expected to be incurred over the next 40 years. Whereas previously the Group used a uniform nominal

discount rate over all future years, it has now revised its methodology to use a short-to-medium-term nominal discount rate and a long-term nominal discount rate. The Group uses a nominal discount rate of 4.38% for the first five years

and 4.86% thereafter (31 December 2023: 4.60% for all years), based on the average risk-free rate over the second half of 2024, to discount the estimated costs. The inflation rate applied to estimated costs is 2.0% (2023: 2.0%).

Given the long-term nature of the Group’s decommissioning liabilities and the historic compounded inflation rates in the industry, management do not believe that the current short-term inflationary pressures will have a material

impact on the decommissioning liabilities of the Group. A reduction or an increase in this discount rate of 1% would increase or reduce the decommissioning liabilities by approximately $288 million or $247 million, respectively

(2023: $223 million or $188 million, respectively), and is not expected to have a material impact on the corresponding decommissioning reimbursement asset. For further details regarding the estimated value, inputs and assumptions

refer to note 23. Given the large number of variables involved, management consider that it is not practical to provide sensitivities for the various other individual assumptions but the aggregated impact of related changes in the next

12 months could be material .

Financial Statements

199ANNUAL REPORT AND ACCOUNTS 2024

3. Material accounting policies, judgements and estimation uncertainty continued

Taxation estimates

The Group’s operations are subject to a number of specific tax rules which apply to exploration, development and production companies such as the Energy Profits Levy at 35% to 31 October 2024 and 38% thereafter, ring-fenced

Corporation Tax at 30%, the Supplementary Charge of 10% and the application of investment allowances. In addition, the tax provision is prepared before the relevant companies have filed their tax returns with the relevant tax

authorities and, significantly, before these have been agreed. As a result of these factors, the tax provision process necessarily involves the use of a number of judgements and estimates, including those required in calculating the

effective tax rate. The Group recognises deferred tax assets on unused tax losses where it is probable that future taxable profits will be available for utilisation. This requires management to make judgements and assumptions regarding

the likelihood of future taxable profits and the amount of deferred tax that can be recognised. Further details regarding the estimated value and related inputs are set out in note 28.

The Group’s deferred tax assets are recognised to the extent that taxable profits are expected to arise in the future against which tax losses and allowances in the UK can be utilised, including as a result of Group re-organisations and

asset transfers. In accordance with IAS 12 Income Taxes, the Group assesses the recoverability of its deferred tax assets at each period end. Consistent with the impairment sensitivity described above, as at 31 December 2024, a 20%

reduction in future revenues, with all other assumptions held constant, would eliminate current headroom and result in a deferred tax asset derecognition of $284 million (2023: $304 million). It should be noted that mitigating actions

are considered to be available to materially offset this impact. The $284 million (2023: $304 million) derecognition assumes that cash flows are equivalent to taxable profits and that any reorganisation required to utilise certain deferred

tax assets does not result in a displacement of other balances. As disclosed in note 28, there are unrecognised allowances of up to circa $150 million that have no expiry date and could be recognised in future periods if future revenue

from oil and gas activities increases and/or further actions are undertaken.

Other areas of estimation

The key assumptions concerning the future, and other sources of estimation uncertainty at the reporting period, that are not expected to cause a material adjustment to the carrying amounts of assets and liabilities within the next

financial year, are discussed below:

Business combinations

In 2024, the Group has made a material business combination – see note 17 for further details of the provisional purchase price allocation, including the assets and liabilities acquired and the goodwill arising on the transaction. This has

been accounted for as a business combination under IFRS 3. The assets and liabilities identified in the purchase price allocation include oil and gas assets, decommissioning liabilities, deferred tax assets and liabilities, and working capital.

The total consideration payable includes both the market value of new ordinary shares issued at the date of completion and a monetary settlement based on working capital movements, and certain other transactions such as dividend

payments, between the economic effective date of 1 July 2024 and date of completion. The amount payable under this monetary settlement is discussed further in note 17.

The calculation of the fair value of the oil and gas assets acquired requires the Group to estimate the future cash flows expected to arise from the assets of the acquired business using discounted cash flow models. Key assumptions

and estimates include: commodity prices, discount rates and oil and gas reserves estimates. See above estimates in the impairment of oil and gas assets and goodwill section and estimates in oil and gas reserves and contingent resources

section for further details regarding these assumptions. In addition, the Group has considered the value that a market participant would prescribe to prospective resources in determining the fair value of the oil and gas assets acquired.

In determining the value of the deferred tax asset recognised on the Business Combination, the Group has also made assumptions in respect of the amount of tax losses brought forward, which will be available to offset against future

taxable profits of the Group.

200 ITHACA ENERGY

3. Material accounting policies, judgements and estimation uncertainty continued

Critical accounting judgements

The following are the critical judgements, apart from those involving estimation (which are presented separately above), that the Directors have made in applying the Group’s accounting policies and that have the most significant effect

on the amounts recognised in the financial statements.

Cambo and Rosebank carrying values

Management has reviewed the pre-tax carrying value of the Cambo field of $391 million or post tax $234 million (2023: pre-tax $391 million or post-tax $234 million) and has concluded that due to the licence extension to 31 March

2026 and the detailed plans in place for final investment decision (FID), there are currently no indicators of impairment. The Group is actively engaging with potential farm-in partners to secure an aligned joint venture partnership

that would help progress the project towards FID and assist in obtaining additional funding for the project. Management has submitted a request for a further 18 month extension of the licence to 30 September 2027 and to remove

a milestone commitment that would otherwise require a joint venture partner to be secured by 31 March 2025, with the latter no longer considered by management as a commercial pre-requisite for the project to proceed to

development following completion of the Eni UK Business Combination and the consequential increase in the scale and funding capability of the Group. A decision in respect of this request is expected by the North Sea Transition

Authority (NSTA) by the end of the second quarter of 2025. Details of contingent consideration in respect of Cambo are set out in note 26.

Similarly, management has reviewed the pre-tax carrying value of the Rosebank field of $617 million or post-tax $304 million (31 December 2023: pre-tax $413 million or post-tax $237 million). Although the first phase of the

Rosebank development had been sanctioned by the NSTA, it was subject to Judicial Review proceedings. On 30 January 2025, the Court of Session ruled that this consent had been unlawfully given in relation to the sanctioning of

the Rosebank field development and that a new consent application would be required, which included Scope 3 emissions. It did, however, permit the project to progress as planned whilst this new consent is sought from the Regulators

but that no oil could be extracted without this new consent. Whilst the outcome of the Judicial Review could be construed as an indicator of impairment, management has no reason to believe that this further consent will not be

forthcoming, and further management believe that the most likely outcome will be that the further consent will be granted and that the project will continue progressing as planned with first oil anticipated in 2026/27. As a result no

impairment charge is required.

Notes to the consolidated financial statements continued

Financial Statements

201ANNUAL REPORT AND ACCOUNTS 2024

4. Segmental reporting

The Group operates a single class of business being oil and gas exploration, development and production and related activities in a single geographical area, presently being the North Sea. The Group’s segmental reporting structure

remained in place for all periods presented and is consistent with the way in which the Group’s activities are reported to the Board and Chief Decision Making Officer. The Group’s activities are considered to be an individual operating

segment due to the nature of the Group’s operations being consistent, and such operations existing in a single geographical region that is covered by the same regulations.

5. Revenue

	2024	2023
	$’000	$’000
Oil sales	1,176,274	1,329,751
Gas sales	598,962	658,659
Condensate sales	46,437	48,789
Other income	30,000	32,341
Realised gains/(losses) on oil derivative contracts	2,572	(31,676)
Put premiums on oil derivative instruments	(1,696)	(11,850)
Realised gains on gas derivative contracts	132,550	297,387
Put premiums on gas derivative instruments	(3,240)	(3,590)
	1,981,859	2,319,811

The majority of payment terms are on a specified monthly date, as detailed in the initial contract. Otherwise, payment is due within 30 days of the invoice date. No significant judgements have been made in determining the timing of

satisfaction of performance obligations, the transaction prices and the amounts allocated to performance obligations. Other income relates to tariff income receivable in the year.

Revenue from two customers exceeded 10% of the Group’s consolidated revenue arising from hydrocarbon sales for the year ended 31 December 2024, representing $1,284 million and $420 million of revenue, respectively

(2023: two customers representing $1,296 million and $436 million of revenue, respectively). It should be noted that the second largest customer in both 2024 and 2023 is now a related party and further details of related party

transactions are set out in note 32.

Revenue from contracts with customers derives largely from customers within a single geographical region, being the United Kingdom. Revenue from contracts with customers outside of the United Kingdom is immaterial and is,

therefore, not disclosed separately.

6. Cost of sales

	2024	2023
	$’000	$’000
Movement in oil and gas inventory	84,193	20,582
Operating costs of hydrocarbon activities	(617,919)	(576,660)
Materials inventory provision	(3,568)	(16,268)
Royalties	(2,135)	(4,364)
Depreciation on right-of-use assets (note 15)	(26,819)	(42,648)
Depletion, depreciation and amortisation (note 15)	(573,397)	(697,652)
	(1,139,645)	(1,317,010)

Royalty costs represent 3.34% of Stella and Harrier field revenue paid to the original licence holders. Ithaca holds a 100% interest in the Stella and Harrier fields.

202 ITHACA ENERGY

Notes to the consolidated financial statements continued

7. Administrative expenses

	2024	2023
	$’000	$’000
Administrative expenses, excluding transaction costs	(40,977)	(34,259)
Transaction costs	(16,303)	–
	(57,280)	(34,259)

Transactions costs in 2024 relate to the Eni UK Business Combination. Further details of the Business Combination can be found in note 17.

The total employee benefit expenses which are either capitalised or included in cost of sales, pre-licence exploration and evaluation expenses and administrative expenses are noted below.

		2023
	2024	Restated
Employee benefit expenses	$’000	$’000
Wages and salaries	(103,156)	(93,009)
Share-based payment charges (note 33)	(6,114)	(16,369)
Social security costs	(11,561)	(10,770)
Pension costs	(11,936)	(9,997)
	(132,767)	(130,145)

Wages and salaries costs of $104.0 million and social security costs of $12.3 million disclosed in the 2023 Annual Report and Accounts incorrectly included one-off transactions in respect of the MEP (see note 33) and certain other

Executive share options, which had already been included in the share-based payments charge line. Comparatives for 2023 have been restated to exclude these.

Disclosures on Directors’ remuneration, share options, long-term incentive schemes and pension entitlements required by the Companies Act 2006 are contained in the tables and notes within the Remuneration Committee report

on pages 136 to 161. Directors’ emoluments in aggregate were $4.4 million (2023: $13.4 million).

The average number of employees during each year was as follows:

	2024	2023
Onshore and administrative	374	316
Offshore	327	283
	701	599

Notes to the consolidated financial statements continued

Financial Statements

203ANNUAL REPORT AND ACCOUNTS 2024

7. Administrative expenses continued

	2024	2023
Audit fees	$’000	$’000
Fees payable to the Company’s auditor for audit of the Company’s financial statements	2,464	1,286
Audit of the Company’s subsidiaries pursuant to legislation	407	326
Non-audit services provided by the auditors	637	205
	3,508	1,817

Non-audit services provided by the auditors for the year ended 31 December 2024 comprise audit-related assurance services of $175k (2023: $205k), other assurance services of $462k (2023: $nil) relating to work on the Offering

Memorandum in respect of the refinancing and in relation to certain other refinancing options. In addition to the above figures, additional audit fees of $228k were charged during 2024 relating to the finalisation of prior period group

and subsidiary audits.

8. Other gains and losses

	2024	2023
	$’000	$’000
Gain on financial instruments (note 30)	5,167	43,059
Fair value gains/(losses) on contingent consideration and accretion on deferred consideration (note 26)	27,317	(8,008)
Remeasurements of decommissioning reimbursement receivables	–	5,645
Net foreign exchange	(6,124)	(1,673)
Settlement of historic claim relating to an acquisition	–	50,068
	26,360	89,091

On 12 February 2023, the Group reached agreement on the settlement of a historic claim relating to an acquisition. Under the terms of the agreement the Group received $50.1 million.

9. Finance costs and finance income

	2024	2023
	$’000	$’000
Loan interest and charges	(48,036)	(47,494)
Senior notes interest	(54,904)	(58,377)
Loan fee amortisation	(13,222)	(4,508)
Interest on lease liabilities (note 25)	(1,508)	(3,183)
Accretion on decommissioning liabilities less accretion on decommissioning reimbursements	(82,908)	(76,162)
Total finance costs	(200,578)	(189,724)
Finance income	11,164	5,688

Loan interest and charges includes a charge of $14.1 million in respect of the early repayment of the Senior Notes due 2026 and loan fee amortisation contains a charge of $7.9 million in relation to unamortised fees on the refinancing

of the RBL and Senior Notes. See note 20 for further details.

During the year to 31 December 2024, $5.8 million of interest was capitalised into qualifying assets (2023: $nil) at an interest rate of SOFR (subject to a minimum rate of 5%) plus a commercially agreed margin on the entirety of the

borrowings under the project capital expenditure facility (see note 20 for further details).

204 ITHACA ENERGY

Notes to the consolidated financial statements continued

10. Earnings per share

The calculation of basic earnings per share is based on the profit after tax and the weighted average number of ordinary shares in issue during the year. Basic and diluted earnings per share are calculated as follows:

		2023
	2024	Restated 1
	$’000	$’000
Earnings for the year:
Earnings for the purpose of basic and diluted earnings per share	153,153	292,554
Number of shares (million)
Weighted average number of ordinary shares for the purpose of basic earnings per share	1,164.3	1,006.7
Dilutive potential ordinary shares	10.5	12.7
Weighted average number of ordinary shares for the purpose of diluted earnings per share	1,174.8	1,019.4
Earnings per share (cents)
Basic	13.2	29.1
Diluted	13.0	28.7

1 See note 2.

11. Trade and other receivables and decommissioning reimbursements

	2024	2023
Current	$’000	$’000
Trade receivables	18,962	19,968
Other receivables	23,042	24,369
Joint operations receivables	105,999	91,960
Accrued income	269,611	197,993
	417,614	334,290

Materially all trade and other receivables, including receivables from joint operations are not overdue by more than 90 days. The credit risk associated with trade receivables, accrued income and other receivables is considered to be

insignificant. No ECL has been recognised in the current or prior year.

Accrued income mainly comprises amounts due, but not yet invoiced, for the sale of oil and gas.

Financial Statements

205ANNUAL REPORT AND ACCOUNTS 2024

11. Trade and other receivables and decommissioning reimbursements continued

	2024	2023
Non-current	$’000	$’000
Decommissioning reimbursements	144,185	165,064

	2024	2023
Current	$’000	$’000
Decommissioning reimbursements	23,175	30,417

Movements on decommissioning reimbursements were as follows:

	2024	2023
	$’000	$’000
At 1 January	195,481	200,825
Accretion net of tax at 30%	7,370	7,536
Reimbursements received	(22,450)	(22,101)
Change in reimbursement estimates	(13,041)	9,221
At 31 December	167,360	195,481

The decommissioning reimbursements represent the equal and opposite of decommissioning liabilities (note 23), net of tax, associated with the Heather and Strathspey fields and relates to a contractual agreement as part of the

CNSL acquisition. As part of the terms of the acquisition of what is now Ithaca Oil and Gas Limited (IOGL), Chevron have the obligation to provide the security and remain financially responsible for the decommissioning obligations

of IOGL in relation to these interests. The Group pays the liabilities in respect of Heather and Strathspey and then receives full reimbursement from Chevron.

As these payments are virtually certain, they have been accounted for under IAS 37 as a reimbursement asset.

12. Prepayments

	2024	2023
Current	$’000	$’000
Prepayments	40,572	34,355
Decommissioning securities	1,638	3,323
	42,210	37,678

206 ITHACA ENERGY

Notes to the consolidated financial statements continued

13. Inventories

	2024	2023
Current	$’000	$’000
Hydrocarbon underlift	171,795	60,427
Materials inventories	175,514	125,674
Provision for obsolete materials inventory	(63,470)	(35,605)
	283,839	150,496

14. Exploration and evaluation assets

	$’000
At 1 January 2023	775,773
Additions	165,516
Transfers to right-of-use operating assets and development and production assets (note 15)	(379,301)
Write-offs/relinquishments	(13,634)
At 31 December 2023 and 1 January 2024	548,354
Additions	36,327
Change in decommissioning estimates (note 23)	4,390
Business combinations (note 17)	48,000
Write-offs/relinquishments	(24,557)
At 31 December 2024	612,514

Following completion of geotechnical evaluation activity, certain North Sea licences were declared unsuccessful and certain prospects were declared non-commercial. This resulted in the carrying value of these licences being fully

written-off to $nil with $24.6 million being expensed in the year to 31 December 2024 (2023: $13.6 million).

The transfers from exploration and evaluation assets to right-of-use assets and development and production assets in 2023 relates to the Rosebank field.

The principal component of exploration and evaluation assets at 31 December 2024 is the Cambo field with a pre-tax carrying value of $391 million (2023: $391 million).

Financial Statements

207ANNUAL REPORT AND ACCOUNTS 2024

15. Property, plant and equipment

	Right-of-use	Development and	Other
	operating assets	production assets	fixed assets	Total
	$’000	$’000	$’000	$’000
Cost
At 1 January 2023	98,927	7,112,652	45,912	7,257,491
Additions	26,468	358,361	1,728	386,557
Transfers from exploration and evaluation assets (note 14)	30,774	348,527	–	379,301
Change in decommissioning estimates (note 23)	–	157,224	–	157,224
At 31 December 2023 and 1 January 2024	156,169	7,976,764	47,640	8,180,573
Additions	136,264	483,511	545	620,320
Business combinations (note 17)	18,673	997,937	–	1,016,610
Change in decommissioning estimates (note 23)	–	54,581	–	54,581
At 31 December 2024	311,106	9,512,793	48,185	9,872,084
Depletion, depreciation, amortisation and impairment
At 1 January 2023	(42,867)	(3,555,656)	(24,072)	(3,622,595)
Depletion, depreciation and amortisation charge for the year	(42,648)	(693,573)	(4,079)	(740,300)
Impairment charge (note 19)	–	(559,472)	–	(559,472)
At 31 December 2023 and 1 January 2024	(85,515)	(4,808,701)	(28,151)	(4,922,367)
Depletion, depreciation and amortisation charge for the year	(26,819)	(568,139)	(5,258)	(600,216)
Impairment charge (note 19)	–	(161,066)	–	(161,066)
At 31 December 2024	(112,334)	(5,537,906)	(33,409)	(5,683,649)
Net book value at 31 December 2023	70,654	3,168,063	19,489	3,258,206
Net book value at 31 December 2024	198,772	3,974,887	14,776	4,188,435

The transfers from exploration and evaluation assets to right-of-use operating assets and development and production assets in 2023 relates to the Rosebank development following consent being granted for the development by the

North Sea Transition Authority (NSTA) on 27 September 2023. Subsequently, this decision was the subject of a Judicial Review and on 30 January 2025, the Court of Session ruled that consent had been unlawfully given in relation

to the sanctioning of the Rosebank field development and that a new consent application would be required which included Scope 3 emissions. It did, however, permit the project to progress as planned whilst this new approval is sought

(see note 3 for further details). At the point of transfer in 2023, the Rosebank assets were tested for impairment and the recoverable amount exceeded the carrying value of the field.

Additions to right-of-use assets in the year to 31 December 2024 and the year to 31 December 2023 principally relate to modifications to the Rosebank FPSO and will begin to be depreciated on commencement of production.

The related lease will commence on delivery of the FPSO to the joint venture partners at first oil, which is currently anticipated to be 2026/27.

Other fixed assets include buildings, computer equipment, office equipment and furniture and fittings.

208 ITHACA ENERGY

16. Interests in joint operations

The contractual agreement for the licence interests in which the Group has an investment do not typically convey control of the underlying joint arrangement to any one party, even where one party has a greater than 50% equity

ownership of the area of interest.

The Group’s material joint operations as at 31 December are as follows:

				Group net % interest
Block	Licence	Field/discovery name	Operator	2024	2023
9/11c	P.979	Mariner	Equinor UK Limited	8.89%	8.89%
9/11b	P.726	Mariner	Equinor UK Limited	8.89%	8.89%
30/2c	P.672	Jade	Chrysaor Petroleum Company U.K. Limited	32.50%	25.50%
22/30c and 29/5c	P.666	Elgin-Franklin	TotalEnergies E&P UK Limited	27.95%	6.09%
15/29b	P.590	Callanish	Chrysaor Production (U.K.) Limited	20.00%	20.00%
204/25a	P.559	Schiehallion	BP Exploration Operating Company Limited	35.30%	35.30%
204/19b and 204/20b	P.556	Suilven	Ithaca SP E&P Limited	50.00%	50.00%
29/5b	P.362	Elgin-Franklin	TotalEnergies E&P UK Limited	27.95%	6.09%
21/4a	P.347	Callanish	Chrysaor Production (U.K.) Limited	13.70%	13.70%
16/27b	P.345	Britannia	Ithaca MA Limited	35.75%	35.75%
9/11a	P.335	Mariner	Equinor UK Limited	8.89%	8.89%
13/22a	P.324	Captain	Ithaca SP E&P Limited	85.00%	85.00%
22/18a	P.292	Arbroath, Arkwright, Carnoustie, Wood	Repsol Resources UK Limited	41.03%	41.03%
22/17s, 22/22a and 22/23a	P.291	Arbroath, Arkwright, Brechin, Carnoustie, Cayley, Shaw	Repsol Resources UK Limited	41.03%	41.03%
23/26b	P.264	Erskine	Ithaca Energy (UK) Limited	50.00%	50.00%
9/11d and 9/12b	P.2508	Mariner	Equinor UK Limited	8.89%	8.89%
9/11g	P.2151	Mariner	Equinor UK Limited	8.89%	8.89%
16/26a A-ALB	P.213	Alba	Ithaca Oil and Gas Limited	36.67%	36.67%
16/26a B-BRI	P.213	Britannia	Ithaca MA Limited	33.17%	33.17%
16/26a	P.213	N/A	Ithaca Oil and Gas Limited	34.50%	34.50%
3/7a	P.203	Columba E	CNR International (U.K.) Limited	20.00%	20.00%
3/8a and 3/8a	P.199	Columba B/D	CNR International (U.K.) Limited	5.60%	5.60%
22/30b	P.188	Elgin-Franklin	TotalEnergies E&P UK Limited	27.95%	6.09%

Notes to the consolidated financial statements continued

Financial Statements

209ANNUAL REPORT AND ACCOUNTS 2024

				Group net % interest
Block	Licence	Field/discovery name	Operator	2024	2023
15/18b	P.2158	Marigold 1	Ithaca Oil and Gas Limited	100.00%	100.00%
21/20a	P.185	Cook	Ithaca SP E&P Limited	61.35%	61.35%
8/15a	P.1758	Mariner	Equinor UK Limited	8.89%	8.89%
30/7b	P.1589	Jade	Chrysaor Petroleum U.K. Limited	32.50%	25.50%
30/1f	P.1588	Vorlich 2	Ithaca MA Limited	100.00%	100.00%
30/1c	P.363	Vorlich	Ithaca MA Limited	34.00%	34.00%
205/2a	P.1272	Rosebank	Equinor UK Limited	20.00%	20.00%
205/1a	P.1191	Rosebank	Equinor UK Limited	20.00%	20.00%
15/29a	P.119	Alder	Ithaca Energy (UK) Limited	73.68%	73.68%
15/29a	P.119	Britannia	Ithaca MA Limited	75.00%	75.00%
21/3a	P.118	Brodgar	Chrysaor Production (U.K.) Limited	25.00%	25.00%
23/22a	P.111	Pierce	Enterprise Oil Limited	34.01%	34.01%
15/30a	P.103	Britannia	Chrysaor Production (U.K.) Limited	33.03%	33.03%
21/5a	P.103	Enochdhu	Chrysaor Production (U.K.) Limited	50.00%	50.00%
213/26b and 213/27a	P.1026	Rosebank	Equinor UK Limited	20.00%	20.00%
23/26a	P.057	Erskine	Ithaca Energy (UK) Limited	50.00%	50.00%
22/18n	P.020	Montrose	Repsol Resources UK Limited	41.03%	41.03%
22/17n, 22/17s, 22/22a and 22/23a	P.019	Godwin, Montrose	Repsol Resources UK Limited	41.03%	41.03%
30/11a and 30/12d	P.1820	Isabella	Total Energies E&P North Sea UK Limited	72.50%	10.00%
204/8, 204/9c, 204/10c, 204/13, 204/14d	P.2403	Tornado	Ithaca SP E&P Limited	50.00%	50.00%
and 204/15
30/7a and 30/12a	P.032	Judy/Joanne	Chrysaor Petroleum Company U.K. Limited	33.00%	–
30/7c	P.2221	Judy	Chrysaor Petroleum Company U.K. Limited	33.00%	–
30/13d A	P.079	Judy	Chrysaor Petroleum Company U.K. Limited	15.00%	–
30/6a	P.11	Jasmine	Chrysaor Petroleum Company U.K. Limited	33.00%	–
29/4d	P.752	Glenelg	TotalEnergies E&P UK Limited	8.00%	–
22/29b	P.2613	Glenelg Protection	TotalEnergies E&P UK Limited	32.14%	–
30/20a	P.2220	Tommeliten	ConocoPhillips (U.K.) Holdings Limited	0.07%	–
30/13e	P.2456	Talbot	Harbour Energy Limited	33.00%	–

16. Interests in joint operations continued

210 ITHACA ENERGY

16. Interests in joint operations continued

				Group net % interest
Block	Licence	Field/discovery name	Operator	2024	2023
30/7d and 30/8a	P.2399	Judy East	Chrysaor Petroleum Company U.K. Limited	33.00%	–
N/A	Pipeline	GAEL	INEOS FPS Limited	10.23%	–
N/A	Pipeline	SEAL	TotalEnergies E&P UK Limited	21.87%	–
44/11a and 44/12a	P.1055	Cygnus	Ithaca (NE) E&P Limited	38.75%	–
22/29c	P.1622	Seagull	BP Exploration Operating Company Limited	35.00%	–
47/14b	P.614	Juliet	Ithaca (NE) E&P Limited	81.00%	–
44/24a	P.611	Minke	Ithaca (NE) E&P Limited	15.56%	–
44/29b	P.454/P.611	Orca UK	Ithaca (NE) E&P Limited	15.56%	–
44/19b	P.1139	Cameron	Tullow Limited	27.50%	–
N/A	Pipeline	ETS	Kellas North Sea 2 Limited	25.00%	–
36/30a, 42/3a, 42/4 and 42/5a	P.2133	Ossian	Spirit Energy Limited	30.00%	–
42/2b, 42/3b, 42/7a, 42/8b and 42/9b	P.2126	Aurora	Spirit Energy Limited	30.00%	–
44/11b	P.1731	Cepheus	Ithaca (NE) E&P Limited	34.48%	–
43/14a	P.2430	Cavendish North	Spirit Energy Limited	40.00%	–
43/15a, 44/11d and 44/12e	P.2429	Bennett	Ithaca (NE) E&P Limited	40.00%	–

1 Marigold is a joint operation through a Unitisation and Unit Operating Agreement (UUOA) between Ithaca Oil and Gas Limited which owns licence P.2158, and Anasuria Hibiscus UK Limited and Caldera Petroleum (UK) Limited, which jointly own a licence for an adjacent block. Under the terms

of the UUOA, key decisions over the operations require the unanimous consent of Ithaca and certain other parties, such that joint control is present.

2 Vorlich is a joint operation through a UUOA between Ithaca MA Limited and bp, which extends across both Vorlich licences. Under the terms of the UUOA, key decisions effectively require unanimous approval by both parties.

In addition, the Group has the following wholly-owned licences and fields or discoveries which, although not currently joint operations, are presented for completeness:

				Group net % interest
Block	Licence	Field/discovery name	Operator	2024	2023
22/1b	P.2373	F Block (Fotla and Fortriu)	Ithaca Oil and Gas Limited	100.00%	100.00%
29/10b	P.1665	Abigail	Ithaca SP E&P Limited	100.00%	100.00%
204/4a and 204/5a	P.1189	Cambo	Ithaca SP E&P Limited	100.00%	100.00%
204/9a and 204/10a	P.1028	Cambo	Ithaca SP E&P Limited	100.00%	100.00%
30/6a and 29/10a	P.011	Stella/Harrier	Ithaca Energy (UK) Limited	100.00%	100.00%
29/15, 30/11c, 30/16i and 30/6d	P.2622	J-Area West	Chrysaor Petroleum Company U.K. Limited	100.00%	–
16/22b	P.2638	Quad 16	N/A	100.00%	–

Notes to the consolidated financial statements continued

Financial Statements

211ANNUAL REPORT AND ACCOUNTS 2024

17. Business combinations

The Business Combination comprising 100% of each of Eni Elgin/Franklin Limited, Eni UKCS Limited, Eni Energy E&P Limited and Eni Energy E&P UKCS Limited, which established the Group with the largest resource base in

the UKCS, completed on 3 October 2024 with the Group issuing 639,360,174 new ordinary shares of £0.01 each, representing at that time 38.7% of the enlarged Group. On that date, the opening market share price was £1.0146

per share and the US Dollar exchange rate was $1.32768:£1.00. The resulting share issuance consideration of $861 million will be augmented by a transaction cash amount primarily reflecting settlement for working capital balances,

including cash, at the date of completion together with certain other transactions between the economic effective date of 1 July 2024 and completion on 3 October 2024. The acquisition date of 3 October 2024 is the date the

group obtained control for accounting purposes. The amount payable under this mechanism has been agreed at $215.0 million of which $164.0 million is payable within 12 months and $51.0 million is payable in more than 12 months.

These amounts have been discounted at 4.33%. The discounted amount payable is $204.5 million (see note 26) and this is the amount of the cash consideration below.

The provisional fair values of the identifiable assets and liabilities as at the date of completion of the Business Combination were:

	Total
	2024
	$’000
Property, plant and equipment (note 15)	1,016,610
Exploration and evaluation assets (note 14)	48,000
Cash	107,475
Inventory	62,221
Trade and other receivables	178,037
Total assets excluding deferred tax	1,412,343
Trade and other payables	(281,680)
Decommissioning provisions (note 23)	(650,999)
Other provisions (note 24)	(34,865)
Lease liabilities (note 25)	(22,049)
Total liabilities excluding deferred tax	(989,593)
Deferred tax asset (note 28)	846,408
Deferred tax liability (note 28)	(549,062)
Total identifiable net assets at fair value	720,096
Consideration satisfied by the issue of new shares	861,259
Deferred consideration (note 26)	204,465
Total consideration	1,065,724
Goodwill arising on the Business Combination (note 18)	345,628
Net cash flows relating to the Business Combination during 2024, being cash acquired	107,475

From the date of the Business Combination, the Eni UK businesses contributed $290.1 million of revenue and $195.0 million of profit before tax in the year to 31 December 2024. Had the Business Combination completed on

1 January 2024, the Eni UK businesses would have contributed $1,014.0 million of revenue and $598.4 million of profit before tax for the 2024 financial year.

212 ITHACA ENERGY

17. Business combinations continued

Business Combination related costs of $16.3 million (2023: $nil), comprising principally professional fees and other direct costs, were incurred in the year to 31 December 2024 and are included within 'administrative expenses' in note 7.

The fair values of the oil and gas assets and the intangible assets of the Eni UK businesses have been determined using valuation techniques based on discounted cash flows using forward curve commodity prices and estimates of long-

term commodity prices reflective of market conditions at the completion date, a discount rate based on observable market data and cost and production profiles generally consistent with the proved and probable reserves acquired with

each asset. The decommissioning liabilities recognised have been estimated based on internal engineering estimates for operated assets and operator cost estimates for non-operated assets, with reference to observable market data.

The goodwill generated on the Business Combination is largely the result of the IFRS requirement to recognise a deferred tax liability of $549.1 million on the fair value of the property, plant and equipment and exploration and

evaluation assets acquired through the Business Combination, despite these assets being recognised on a post tax basis.

18. Goodwill

	2024	2023
	$’000	$’000
Balance at 1 January	783,848	783,848
Additions (note 17)	345,628	–
Balance at 31 December	1,129,476	783,848

The opening goodwill of $784 million relates to historic business combinations comprising principally Chevron in 2019 and Summit in 2022.

The goodwill on business combinations in the year to 31 December 2024 relates to the Eni UK businesses, as detailed in note 17.

The goodwill is not tax deductible on the Eni UK Business Combination.

Goodwill is monitored, and tested for impairment, at the operating segment level, being the North Sea (the entire Group portfolio of oil and gas assets). This is consistent with the operating segment view of the business, which is

presented to the Board and the Chief Decision Maker. The Group’s activities are considered to be an individual operating segment due to the uniform nature of the Group’s operations within a single geographical area, overseen by

the same management and subject to the same regulations. The fair value estimate is categorised as level 3 in the fair value hierarchy.

Annual impairment tests were performed at both 31 December 2024 and 31 December 2023. These reviews were carried out on a fair value less cost of disposal basis using risk-adjusted cash flow projections from the approved business

plans, including the same commodity prices, life of field cost profiles and production volumes used for impairment of oil and gas assets (see note 19), discounted at a post-tax discount rate of 10.0% (2023: 10.3%). Assumptions and

estimates in the Group impairment models are detailed in note 3. The recoverable amount of the North Sea CGU at 31 December 2024 was $418.8 million higher than its carrying amount, including goodwill, and hence no impairment

was recorded (2023 : $nil). An increase of 1% in the discount rate assumption would not result in a post-tax impairment of goodwill. Details of further sensitivities are provided in note 19.

Notes to the consolidated financial statements continued

Financial Statements

213ANNUAL REPORT AND ACCOUNTS 2024

19. Impairment charges on oil and gas assets

	2024	2023
	$’000	$’000
D&P assets (note 15)	(148,815)	(559,472)
Decommissioning cost estimate changes on assets which have either been fully written off or have ceased production (note 23)	(99,672)	–
Fixed asset additions on assets that have been fully written off (note 15)	(12,251)	–
Other movements	(2,246)	1,536
Total impairment charges on D&P assets	(262,984)	(557,936)

The impairment charge on D&P assets of $148.8 million (2023: $559.5 million) principally reflects a charge for the Greater Stella Area (GSA) of $117 million due to a downward revision of reserves, lower gas prices than previously

forecast and EPL changes together with a charge of $32 million in respect of Pierce due to lower oil prices than previously forecast and EPL changes. The charge in 2023 primarily related to Alba of $141 million and GSA of $373 million.

In addition, decommissioning cost estimate changes on fields which have been fully written off or have ceased production amounted to $99.7 million and fixed asset additions on fields which have been fully written off amounted to

$12.3 million.

Estimated production volumes, supported by third-party analysis, and cash flows used in impairment reviews are considered up to the date of cessation of production on a field-by-field basis, including operating and capital expenditure

and are derived from management approved business plans.

An impairment review was carried out at the end of 2024 on the Group’s producing assets with the main triggers being lower forward oil and gas prices and changes in EPL legislation. The review was carried out on a fair value less

cost of disposal basis using risk adjusted cash flow projections discounted at a post-tax discount rate of 10.0%, and represents level 3 in the fair value hierarchy. The post-tax recoverable amount for GSA and Pierce was $2 million and

$25 million, respectively.

The following assumptions were used at Q4 2024 in developing the cash flow model and applied over the expected life of the respective fields:

	Post-tax				Price assumptions (nominal)
	discount rate
	assumption	2025	2026	2027	2028	2029	2030	20311
Oil	10.0%	$75/bbl	$74/bbl	$77/bbl	$79/bbl	$80/bbl	$82/bbl	$83/bbl
Gas	10.0%	98p/therm	84p/therm	81p/therm	82p/therm	83p/therm	85p/therm	87p/therm

1 Post-2031, an annual 2% increase is applied to the price assumptions.

With all other assumptions held constant, a 20% decrease in the forecast revenues, illustrating a 20% decrease in commodity prices, would result in an additional post-tax impairment of PP&E of $303 million (2023: $22 million)

at 31 December 2024. In addition, under this scenario there would be a goodwill impairment of $929 million. This sensitivity is considered to be consistent with those applied to the going concern and viability assessments in that it

assumes that the 10% reduction in production and the 10% increases in operating and capital expenditures are offset by the mitigation strategies within the control of management as described in note 3.

A 20% increase in forecast revenues would reduce the reported post-tax impairment by $24 million (2023: $26 million). An increase or decrease of 1% in the discount rate assumption would not result in a material additional post-tax

impairment or reversal of impairment of PP&E.

214 ITHACA ENERGY

19. Impairment charge on oil and gas assets continued

The Group has also conducted a sensitivity scenario on the climate-related risk of a reduction in demand for oil and gas commodity prices due to changing consumer preferences and/or government regulations. Utilising the Climate

Scenario average oil price while maintaining all other parameters in line with the base case, would result in an additional post-tax impairment of PP&E of $63 million (2023: nil). To calculate the Climate Scenario average oil and gas

prices, the Group used data from the International Energy Agency (IEA) climate scenarios (NZ, STEPS, APS) price assumptions.

An impairment review was carried out at the end of 2023 on the Group’s producing assets with the main triggers being a reduction in future reserves on Alba, a decrease in short-term forward oil prices against all oil producing CGUs and

a decrease in short-term gas prices for GSA and other predominantly gas-producing CGUs with relatively short remaining useful economic lives. The review was carried out on a fair value less cost of disposal basis using risk adjusted cash

flow projections discounted at a post-tax discount rate of 10.3%, and represents level 3 in the fair value hierarchy. The recoverable amount (post tax) for Alba and GSA was $nil and $29.7 million, respectively.

The following assumptions were used at Q4 2023 in developing the cash flow model and applied over the expected life of the respective fields:

	Post-tax				Price assumptions (nominal)
	discount rate
	assumption	2024	2025	2026	2027	2028	2029	2030 1
Oil	10.3%	$85/bbl	$83/bbl	$87/bbl	$90/bbl	$93/bbl	$96/bbl	$99/bbl
Gas	10.3%	101p/therm	96p/therm	83p/therm	85p/therm	87p/therm	89p/therm	90p/therm

1 Post 2030, an annual 2% is applied to the price assumptions.

Notes to the consolidated financial statements continued

Financial Statements

215ANNUAL REPORT AND ACCOUNTS 2024

20. Borrowings

	2024	2023
	$’000	$’000
Current
Accrued interest costs on borrowings	(23,196)	(34,420)
Unamortised short-term bank fees	6,603	3,036
Unamortised short-term senior notes fees	3,568	1,471
Total current borrowings	(13,025)	(29,913)
Non-current
RBL facility	(150,000)	–
Senior unsecured notes	(750,000)	(625,000)
bp unsecured loan	–	(100,000)
Project capital expenditure facility	(150,000)	–
Unamortised long-term bank fees	24,546	4,555
Unamortised long-term senior notes fees	13,531	2,207
Total non-current borrowings	(1,011,923)	(718,238)

Adjusted net debt, which does not include accrued interest on borrowings, lease liabilities or unamortised fees, is set out in non-GAAP measures on pages 249 to 252.

Reserves Based Lending (RBL) facility

During 2024, the Group completed a refinancing of the RBL facility. The refinancing represented an early exit from and extinguishment of the original RBL facility and replacement with a new RBL facility based on market terms at

the date of the refinancing. There was no net cash receipt or payment for the $150 million principal amount of the RBL on refinancing as the drawdown was re-distributed between syndicate banks to the RBL by the facility agent. The

new RBL facility amount at 31 December 2024 was $1.5 billion, consisting of a loan facility of $1,000 million and a letter of credit facility of $500 million, with a maturity to 2029, and subject to interest at a reference rate of SOFR

plus 4.0% in years one to four and SOFR plus 4.25% thereafter. At 31 December 2024, the total loan availability was $1,000 million (2023: $725 million), of which $150 million (2023: none) was drawn down, leaving an amount of

$850 million (2023: $725 million) being available for drawdown. In addition, under the new RBL facility, there is an accordion facility of up to $1,000 million, of which $265 million was committed at 31 December 2024.

Loan fees of $32.4 million relating to the refinancing of the RBL facility were capitalised and are being amortised over the term of the loan. Of this amount, $31.7 million (2023: $nil) was paid in the year to 31 December 2024 and

$0.7 million (2023: $nil) was accrued at 31 December 2024. As at 31 December 2024, $31.1 million (2023: $6.0 million) remains to be amortised. Unamortised fees of $5.3 million were written off to finance costs on the refinancing

which extinguished the previous RBL facility.

The obligations of the borrower under the RBL facility are secured by the assets of the guarantor members of the Group, such as security including share pledges, floating charges and/or debentures. Total assets pledged as security at

31 December 2024 was $8,275 million (2023: $6,324 million).

Covenants under the RBL are detailed below.

216 ITHACA ENERGY

Notes to the consolidated financial statements continued

20. Borrowings continued

Senior notes

In 2024, the Group completed the refinancing of its senior unsecured notes with the issuance of $750 million 8.125% senior unsecured notes due October 2029 and repayment in full of the $625 million 9.0% 2026 notes issued during

2021. The refinancing of the senior notes represented an early exit from and extinguishment of the original 2026 senior notes and replacement with new senior notes based on market terms at the date of the refinancing. Loan fees

of $17.8 million relating to the new senior notes were capitalised and are being amortised over the life of the loan, $17.1 million (2023: $3.7 million) remains to be amortised as at 31 December 2024.Unamortised fees of $2.6 million

relating to the 2026 notes, together with an associated $14.1 million early repayment fee, were written off to finance costs on the refinancing.

The Group received a net cash inflow of $86.8 million from the refinancing of the Senior Notes, reflecting Senior Notes 2029 proceeds of $750.0 million less repayment of Senior Notes 2026 of $625.0 million less fees and interest

of $38.2 million comprising $14.1 million of early repayment charges and $15.1 million interest on the Senior Notes due 2026 and $9.0 million of fees in relation to the Senior Notes due 2029. Fees of $7.8 million in relation to the new

senior notes were paid separately and $1.0 million was accrued at 31 December 2024.

bp facility

The $100 million facility with bp was repaid in full as part of the refinancing in October 2024.

Project capital expenditure facility

The project capital expenditure facility of up to $150 million relates to a field development. The full amount of this facility was drawn at 31 December 2024 (2023: $nil) and it is repayable by instalment expected to be from 2027.

Under the terms of the arrangement, interest is payable at a rate of SOFR (subject to a minimum of 5%) plus a commercially agreed margin.

Covenants

The Group is subject to covenants related to the RBL facility. Failure to meet the terms of one or more of these covenants may constitute an event of default as defined in the facility agreements, potentially resulting in accelerated

repayment of the debt obligations. The Group was in compliance with all its relevant quarterly financial and operating covenants during all periods shown for the RBL facility. There are no ongoing maintenance or financial covenant tests

associated with the $750 million unsecured notes.

In addition to the below financial covenants, the Group is subject to restrictive covenants under the RBL facility and 2029 notes. These restrictive covenants include restrictions on: making certain payments (including,subject to

certain exceptions, dividends and other distributions); certain activities with respect to outstanding share capital; repaying or redeeming subordinated debt or share capital; creating or incurring certain liens; making certain acquisitions

and investments or loans; selling, leasing or transferring certain assets including shares of any of the Group’s restricted subsidiaries; incurring expenditure on exploration and appraisal activities in excess of approved levels; guaranteeing

certain types of the Group’s other indebtedness; expanding into unrelated businesses; merging or consolidating with other entities; or entering into certain transactions with affiliates.

The key financial covenant and other conditions in the RBL which, if not met, could trigger repayment within 12 months of the reporting date include:

• As at the end of each 12 month period ending 30 June and 31 December, the ratio of adjusted net debt to adjusted EBITDAX shall be less than 3.5:1. 'Adjusted net debt' referred to is not an IFRS measure. The Group uses adjusted

net debt as a measure to assess its financial position. Adjusted net debt comprises amounts outstanding under the Group’s RBL facility, project capital expenditure facility and senior notes, less cash and cash equivalents; and

• On submission of Corporate Cashflow Projections, total projected sources of funds must exceed the total projected uses of funds for the following 12-month period, or if tested prior to first oil from Rosebank, a period of up to

24 months. Corporate Cashflow Projections must be submitted in June and December each year and on the occurrence of certain events (including on refinancing, when an interest in a petroleum asset is acquired or when certain

distributions are made).

• The ratio of the net present value of cash flows secured under the RBL for the economic life of the fields to the amount drawn under the facility must not fall below 1.15:1; and

• The ratio of the net present value of cash flows secured under the RBL for the life of the debt facility to the amount drawn under the facility must not fall below 1.05:1.

Financial Statements

217ANNUAL REPORT AND ACCOUNTS 2024

21. Changes in liabilities arising from financing activities

					Non-cash changes
		Financing cash		Business	Fair value		Other
	1 January 2024	flows (i)	Additions (iii)	combinations	movements	Amortisation	movements (ii)	31 December 2024
	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Borrowings (note 20)	748,150	11,955	150,000	–	–	13,226	101,617	1,024,948
Lease liabilities	20,559	(29,378)	25,422	22,049	–	–	1,507	40,159
Interest rate derivatives (note 30)	(637)	637	–	–	–	–	–	–
Total liabilities from financing activities	768,072	(16,786)	175,422	22,049	–	13,226	103,124	1,065,107

					Non-cash changes
		Financing cash		Business	Fair value		Other
	1 January 2023	flows (i)	Additions	combinations	movements	Amortisation	movements (ii)	31 December 2023
	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Borrowings (note 20)	1,213,731	(596,642)	–	–	–	4,507	126,554	748,150
Lease liabilities	58,858	(45,085)	3,603	–	–	–	3,183	20,559
Interest rate derivatives (note 30)	(7,125)	6,967	–	–	(479)	–	–	(637)
Total liabilities from financing activities	1,265,464	(634,760)	3,603	–	(479)	4,507	129,737	768,072

(i) The cash flows from borrowings, lease liabilities and interest rate derivatives make up the net amount of proceeds from borrowings and repayments of borrowings in the cash flow statement.

(ii) Other movements include interest accruals and new liabilities in the year.

(iii) Additions to borrowings in 2024 reflects the project capital expenditure facility (see note 20 for further details).

22. Trade and other payables

	2024	2023
	$’000	$’000
Trade payables	(21,910)	(34,559)
Hydrocarbon amounts owed to joint operations/overlift	(102,061)	(72,486)
Other payables	(38,069)	(68,034)
Accruals	(394,602)	(254,781)
Deferred income	(9,829)	(48,747)
	(566,471)	(478,607)

The Directors consider the carrying values of trade and other payables to approximate the fair value. Other payables mainly comprise amounts owed due to production adjustments and amounts owed to joint operations partners.

Deferred income represents receipts in advance of deliveries to customers. The prior year deferred income was recognised in revenue in the current year.

218 ITHACA ENERGY

23. Decommissioning liabilities

	2024	2023
	$’000	$’000
Balance at 1 January	(1,859,678)	(1,720,540)
Business combination additions (note 17)	(650,999)	–
Accretion	(93,436)	(74,621)
Additions and revisions to estimates	(145,066)	(160,069)
Decommissioning provision utilised	94,098	95,552
Balance at 31 December	(2,655,081)	(1,859,678)
Current
Balance at 1 January	(107,026)	(146,829)
Balance at 31 December	(152,709)	(107,026)
Non-current
Balance at 1 January	(1,752,652)	(1,573,711)
Balance at 31 December	(2,502,372)	(1,752,652)

The total future decommissioning liability represents the estimated cost to decommission, in situ or by removal, the Group’s net ownership interest in all wells, infrastructure and facilities, based upon forecast timing in future periods.

Whereas previously the Group used a uniform nominal discount rate over all future years, it has now revised its methodology to use a short-to-medium-term nominal discount rate and a long-term nominal discount rate. The Group

uses a nominal discount rate of 4.38% for the first five years and 4.86% thereafter (31 December 2023: 4.60% for all years) and an inflation rate of 2.0% (31 December 2023: 2.0%) over the varying lives of the assets to calculate the

present value of the decommissioning liabilities. The impact of a change in discount rate is considered in note 3. Revisions to estimates in the years ended 31 December 2024 and 2023 were due to changes in both cost estimates and

discount rate assumptions.

The estimated 2025 decommissioning spend of $153 million (2023: estimated 2024 decommissioning spend of $107 million) has been treated as a current liability as at 31 December 2024. Although the Group currently expects to

incur decommissioning costs over the next 40 years, it is estimated that approximately 40% of the decommissioning liability relates to assets which are expected to cease production in the next five years and includes spend for assets

that will be reimbursed (see note 11 for further details).

The principal assets where decommissioning activity was ongoing at 31 December 2024 were Alba, Anglia, Causeway, CMS 111, Elgin Franklin, Heather, Hunter, Juliet, Stathspey and Topaz.

Notes to the consolidated financial statements continued

Financial Statements

219ANNUAL REPORT AND ACCOUNTS 2024

24. Other provisions

	2024	2023
	$’000	$’000
At 1 January	–	–
Business combination additions (note 17)	(34,865)	–
Cost of gas sales during the year	(1,325)	–
At 31 December	(36,190)	–

Other provisions reflect principally estimated liabilities taken on through the Business Combination in respect of certain historic gas sales agreements along with the ongoing cost of such gas sales agreements. It is not anticipated that

any part of this liability will be settled within 12 months of the balance sheet date and, therefore, it has been classified in its entirety as a non-current liability. The Group expects to start settling these liabilities between one and five years.

220 ITHACA ENERGY

25. Lease liabilities

	2024	2023
Current	$’000	$’000
Lease liabilities	(19,447)	(19,898)

	2024	2023
Non-current	$’000	$’000
Lease liabilities	(20,712)	(660)

The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be paid after the reporting date. All lease liabilities are fully payable within five years from 31 December 2024.

	2024	2023
	$’000	$’000
Less than one year	(21,046)	(20,152)
One to five years	(21,876)	(669)
Total undiscounted lease payments	(42,922)	(20,821)
Future finance charges	2,763	263
Lease liabilities in the financial statements	(40,159)	(20,558)

	2024	2023
	$’000	$’000
At 1 January	(20,558)	(58,858)
Additions	(25,422)	(3,603)
Business combination additions (note 17)	(22,049)	–
Interest	(1,508)	(3,183)
Payments	29,378	45,086
At 31 December	(40,159)	(20,558)
Current	(19,447)	(19,898)
Non-current	(20,712)	(660)
	(40,159)	(20,558)

The additions in the year to 31 December 2024 relate to the Skandi Gamma supply vessel.

The additions in the year to 31 December 2023 relate to modifications of the Captain Emergency Response and Rescue Vessel (ERRV) lease.

The leased assets added through the Business Combination comprised principally office accommodation, an ERRV lease and a helicopter lease for Cygnus.

Amounts recognised in profit and loss related to leases are detailed in notes 6 and 9.

Notes to the consolidated financial statements continued

Financial Statements

221ANNUAL REPORT AND ACCOUNTS 2024

26. Contingent and deferred consideration

	2024	2023
Current	$’000	$’000
Contingent consideration	(74,990)	(101,669)
Deferred consideration payable to related party for business combination (note 17)	(160,203)	–
Marubeni deferred consideration	(68,293)	–
	(303,486)	(101,669)

	2024	2023
Non-current	$’000	$’000
Contingent consideration	(165,501)	(194,721)
Deferred consideration payable to related party for business combination (note 17)	(44,262)	–
Marubeni deferred consideration	–	(63,979)
	(209,763)	(258,700)

	2024	2023
	$’000	$’000
Cash flows relating to contingent and deferred considerations	(22,994)	(13,567)

Movement in contingent consideration is as follows:

	2024	2023
	$’000	$’000
At 1 January	(296,390)	(258,896)
Additions	–	(26,872)
Payments made	22,994	7,200
Changes in fair value	32,905	(17,822)
At 31 December	(240,491)	(296,390)

Movement in deferred consideration is as follows:

	2024	2023
	$’000	$’000
At 1 January	(63,979)	(67,904)
Additions	(204,465)	–
Payments made	–	6,367
Accretion	(4,314)	(2,442)
At 31 December	(272,758)	(63,979)

222 ITHACA ENERGY

26. Contingent and deferred consideration continued

Cash outflows in the year ended 31 December 2024 of $23.0 million (2023: $13.6 million) are in relation to the consideration payable on the MOGL, Siccar oil price triggers and an interim payment on Rosebank in the year to

31 December 2024.

Marubeni

The contingent consideration arrangement relating to the 2022 acquisition of MOGL depends on whether various milestones in the Sale and Purchase Agreement (SPA) are met as follows: set gross export production volume

from Montrose Infill Project Phase 1, set cumulative gross export production volume following Arbroath well reinstatements, set gross export production volume from next new well in the Shaw Field and, an amount payable during

the Value Sharing Period (1 January 2022 to 31 December 2024) in relation to sales in excess of a set oil trigger price. The amount payable in relation to sales in excess of a set oil trigger price is capped under the terms of the SPA.

The carrying amount at 31 December 2024, discounted at 6.33%, was $78 million (2023: $111 million using a discount rate of 4.6%). The total undiscounted potential consideration as at 31 December 2024 is $228 million

(2023: $230 million).

The Marubeni deferred consideration of $68.3 million is payable 1 July 2025.

Siccar

During the year ended 31 December 2022, the Group acquired Siccar Point Energy, which included elements of consideration that are payable depending on whether various milestones of the SPA are met as follows: Final Investment

Decision and the associated reserves in respect of the Cambo and Rosebank fields and, an amount paid in relation to sales in excess of a set floor oil price. The amount payable in relation to sales in excess of a set oil trigger price is capped

under the terms of the SPA. The carrying amount at 31 December 2024, discounted at 6.33% was $118 million (2023: $130 million using a discount rate of 4.6%). The total undiscounted potential consideration as at 31 December

2024 is $343 million (2023: $362 million).

Others

During the year ended 31 December 2023, the Group acquired a further 30% equity in the Cambo field from Shell. The acquisition included elements of consideration that are payable upon certain events occurring and contingent

consideration has been recognised to reflect this. The consideration value equates to $1.50 per barrel of oil equivalent of the P50 resource volumes of the field, and is payable on the earlier of receipt of proceeds of any subsequent sale

of a working interest in Cambo by the Group, or first oil. The carrying amount at 31 December 2024, discounted at 6.33%, was $11.7 million (2023: $12.7 million undiscounted).

During the year ended 31 December 2023, the Group acquired 40% equity in the Fotla field from Spirit. The acquisition included elements of consideration that are payable upon certain events occurring and contingent consideration

has been recognised to reflect this. The consideration comprises two capped amounts with approximately two-thirds payable on final investment decision and one-third on first production. The carrying amount at 31 December 2024,

discounted at 6.33%, was $9.0 million (2023: $14.2 million undiscounted).

A further $nil (2023: $3.0 million) relates to Yeoman/Marigold which has been fully risked. The unrisked amount is $11.0 million (2023: $11.0 million) which is contingent on achieving Field Development Plan along with a further

$6.0 million (2023: $6.0 million) unrisked on certain production criteria being met.

During the year ended 31 December 2024, the contingent consideration liability in relation to Strathspey, in accordance with the Sale and Purchase Agreement with Chevron, has reduced by $1.9 million to $23.7 million as a result

of changes in variables in the calculation of the liability.

Revaluation of contingent consideration in the year to 31 December 2024 resulted in a decrease of $32.9 million (2023: increase of $17.8 million).

Notes to the consolidated financial statements continued

Financial Statements

223ANNUAL REPORT AND ACCOUNTS 2024

27. Share capital and reserves

(a) Issued share capital

The issued share capital is as follows:

	Number of	Amount
	common shares	$’000
At 31 December 2023	1,014,372,281	11,540
Shares issued during the year	639,360,174	8,489
At 31 December 2024	1,653,732,455	20,029

On 3 October 2024, 639,360,174 ordinary shares of £0.01 each were issued to Eni UK Limited, an indirect wholly-owned subsidiary of Eni S.p.A., as consideration for the Eni UK business combination (see note 17 for further details).

On 5 October 2023, 7,807,305 ordinary shares of £0.01 each were issued to the Ithaca Energy plc Employee Benefit Trust (EBT) to satisfy the exercise of share options during the year and in future years.

(b) Share premium

	2024	2023
	$’000	$’000
At 1 January	308,845	293,712
Additions	852,770	15,133
At 31 December	1,161,615	308,845

The share premium account represents the cumulative difference between the market share price and the nominal share value on the issuance of new ordinary shares multiplied by the number of shares issued.

Additions during 2024 represent the difference between the nominal value per share of £0.01 and the opening share price on the day of the completion of the Eni business combination multiplied by the number of shares issued.

Additions during 2023 represent the difference between the nominal value per share of £0.01 and the closing share price on the day before the shares were issued to the EBT multiplied by the number of shares issued.

	2024	2023
	$’000	$’000
At 1 January and 31 December	181,945	181,945

(d) Own shares

	2024	2023
	$’000	$’000
At 31 December	(9,592)	(12,412)

Own shares comprise shares held in the Ithaca Energy plc EBT, which are being used to satisfy the exercise of employee share options. During the year to 31 December 2024, 1,860,112 (2023: 1,443,561) ordinary shares were used to

satisfy the exercise of share options. At 31 December 2024, the EBT held 6,325,918 (2023: 8,186,030) ordinary shares of £0.01 each.

(e) Share-based payment reserve (note 33)

	2024	2023
	$’000	$’000
At 31 December	18,788	15,494

The share-based payment reserve represents the cumulative charge for share options, as described in note 33, less the cumulative cost of share option exercises.

224 ITHACA ENERGY

28. Taxation

		2023
	2024	Restated 1
	$’000	$’000
Current tax
Current corporation tax charge	(17,746)	(39,308)
Current EPL tax charge	(221,420)	(333,425)
True-up in respect of prior years	30,573	(17,426)
Total current tax charge	(208,593)	(390,159)
Deferred tax
True-up in respect of prior years	(21,068)	6,370
Group tax (charge)/credit in consolidated statement of profit or loss	(1,905)	304,279
Group tax credit/(charge) in consolidated statement of other comprehensive income	195,642	(71,700)
Total deferred tax credit	172,669	238,949
Deferred Petroleum Revenue Tax
Deferred PRT credit in statement of profit or loss	50,381	70,037
Total tax charge through consolidated statement of profit or loss	(181,186)	(9,473)

1 See note 2.

Notes to the consolidated financial statements continued

Financial Statements

225ANNUAL REPORT AND ACCOUNTS 2024

28. Taxation continued

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the 40% statutory rate of tax applicable for UK ring fence oil and gas activities as follows:

		2023
	2024	Restated 1
	$’000	$’000
Accounting profit before tax	334,339	302,027
At tax rate of 40% (2023: 40%)	(133,735)	(120,811)
Non-deductible expense	8,700	(34,578)
Financing costs not allowed for SCT	(13,581)	(704)
Ring Fence Expenditure Supplement	14,340	102,866
Deferred tax effect of investment allowance	33,219	56,930
True-up in respect of prior years	9,504	(11,673)
Deferred PRT net of corporation tax	30,229	42,022
Deferred tax on EPL	119,102	292,829
Current tax on EPL	(221,420)	(333,425)
Income taxed at different rates	(27,956)	–
Share-based payments	412	1,945
Unrecognised tax losses	–	(4,874)
Total tax charge recorded in the consolidated statement of profit or loss	(181,186)	(9,473)

1 See note 2.

The Company is UK tax resident. The effective rate of tax applicable for UK ring fence oil and gas activities in both 2024 and 2023 was 40% (excluding the Energy Profits Levy), consisting of a Ring Fence Corporation Tax rate of 30% and

the supplementary charge of 10%. Items affecting the tax charge include interest income taxed at non-oil and gas tax rate of 25%, true-ups in respect of prior years resulting from filing of prior year tax returns, a 10% uplift on ring fence

losses, Ring Fence Expenditure Supplement increasing the losses available to offset future profits subject to Ring Fence Corporation Tax and Supplementary Charge. In addition, investment allowance, a 62.5% uplift on capital expenditure,

is available reducing the profits subject to the supplementary charge only. Petroleum Revenue Tax (PRT) is applied at 0% on certain oil and gas fields in the UK, however, adjustments to recognised deferred PRT assets are made to reflect

updated expectations of reversal against profits subject to the 0% PRT rate. The Energy Profits Levy was enacted on 14 July 2022 with further changes announced on 17 November 2022 such that the Levy was increased to 35% from

1 January 2023 until 31 March 2028 increasing the effective UK ring fence oil and gas tax rate to 75%. On 6 March 2024, it was announced that EPL will be extended by one year to 31 March 2029 and on 29 July 2024, it was announced

that there would be a further extension to March 2030 and that the rate would increase from 35% to 38% from 1 November 2024. The impact of this was a charge to the consolidated statement of profit or loss of $58.1 million (2023: $nil)

in the year to 31 December 2024. The extensions to 31 March 2029 and 31 March 2030 had not been substantively enacted at 31 December 2024 and are, therefore, not reflected in the results for the year ended 31 December 2024.

226 ITHACA ENERGY

28. Taxation continued

Deferred tax at 31 December relates to the following:

		2023
	2024	Restated 1
	$’000	$’000
Deferred corporation tax liability	(2,197,590)	(1,868,022)
Deferred corporation tax asset	3,279,585	2,480,921
Deferred PRT asset	142,141	91,758
Net deferred tax asset	1,224,136	704,657

Deferred tax assets primarily relate to decommissioning liabilities, brought forward tax losses and accumulated losses and profits related to derivative contracts. Deferred tax liabilities primarily relate to accelerated capital allowances

on property, plant and equipment and accumulated losses and profits related to derivative contracts. Deferred tax balances are presented net as they arise in the same jurisdiction and the Group has a legally-enforceable right to offset

as well as an intention to settle on a net basis. There are unrecognised allowances of up to circa $150 million that have no expiry date and could be recognised in future periods if future revenue from oil and gas activities increases and/

or further actions are undertaken. Non-oil and gas losses of $217 million (2023: $251 million), of which there is no expiry date, have not been recognised for deferred tax purposes as it is not sufficiently certain that there will be future

non-oil and gas profits to offset these losses.

The net movement on deferred tax in the statement of financial position, including deferred PRT, is as follows:

		2023
	2024	Restated 1
	$’000	$’000
At 1 January	704,657	392,457
Profit or loss credit	27,408	380,686
Other comprehensive income credit/(charge)	195,643	(71,700)
Deferred tax on decommissioning reimbursements (note 11)	(916)	3,214
Business combinations (note 17)	297,344	–
At 31 December	1,224,136	704,657

The net movement on deferred tax through the consolidated statement of profit or loss and consolidated statement of comprehensive income, excluding PRT, relates to the following:

		2023
	2024	Restated 1
	$’000	$’000
Accelerated capital allowances	100,974	515,277
Tax losses	(203,307)	(216,937)
Decommissioning provision	61,685	52,440
Deferred PRT	(20,153)	(28,015)
Hedging 2	201,534	(101,744)
Share schemes	963	3,978
Investment allowances	30,973	13,950
	172,669	238,949

1 See note 2.

2 Hedging relates to deferred tax on derivatives designated in cash flow hedges and used for economic hedges .

Notes to the consolidated financial statements continued

Financial Statements

227ANNUAL REPORT AND ACCOUNTS 2024

28. Taxation continued

		Deferred
		corporation tax on	Accelerated tax
	Hedges	deferred PRT	depreciation	Total
Gross deferred corporation tax liabilities	$’000	$’000	$’000	$’000
At 1 January 2023	–	(8,688)	(2,250,125)	(2,258,813)
Reclassification from deferred corporation tax assets	(8,678)	–	–	(8,678)
True-up in respect of prior years	2,721	–	8,307	11,028
Origination and reversal of temporary differences	(101,744)	(28,015)	441,281	311,522
At 31 December 2023 as previously stated	(107,701)	(36,703)	(1,800,537)	(1,944,941)
Prior period adjustment (note 2)	–	–	76,919	76,919
At 31 December 2023 and 1 January 2024 as restated	(107,701)	(36,703)	(1,723,618)	(1,868,022)
Business combinations (note 17)	–	–	(549,062)	(549,062)
True-up in respect of prior years	–	–	(16,027)	(16,027)
Origination and reversal of temporary differences	201,534	(20,153)	147,973	329,354
Reclassification to deferred corporation tax assets	(93,833)	–	–	(93,833)
At 31 December 2024	–	(56,856)	(2,140,734)	(2,197,590)

		Decommissioning
	Share schemes	provision	Other provisions	Tax losses	Hedges	Total
Gross deferred corporation tax assets	$’000	$’000	$’000	$’000	$’000	$’000
At 1 January 2023	–	666,052	–	1,972,174	(8,678)	2,629,548
True-up in respect of prior years	177	–	–	(4,989)	–	(4,812)
Reclassification to deferred corporation tax liabilities	–	–	–	–	8,678	8,678
Origination and reversal of temporary differences	3,802	55,654	–	(211,949)	–	(152,493)
At 31 December 2023 and 1 January 2024	3,979	721,706	–	1,755,236	–	2,480,921
Business combinations (note 17)	–	257,392	21,350	567,666	–	846,408
True-up in respect of prior years	–	(8)	–	(5,033)	–	(5,041)
Origination and reversal of temporary differences	962	60,776	–	(198,274)	–	(136,536)
Reclassification from deferred corporation tax liabilities	–	–	–	–	93,833	93,833
At 31 December 2024	4,941	1,039,866	21,350	2,119,595	93,833	3,279,585

228 ITHACA ENERGY

28. Taxation continued

	Total
Deferred PRT asset	$’000
At 1 January 2023	21,721
Origination and reversal of temporary differences	70,037
At 31 December 2023 and 1 January 2024	91,758
Origination and reversal of temporary differences	50,381
At 31 December 2024	142,141

The carrying value of the net deferred tax asset (DTA) and the deferred PRT asset at 31 December 2024 of $1,082 million and $142 million, respectively (2023: $613 million and $92 million, respectively) are supported by estimates

of the Group’s future taxable income, based on the same price and cost assumptions as used for impairment testing. The Group has undertaken and will undertake further restructuring exercises to move certain assets between Group

entities. Existing restructuring exercises have now been substantially completed. The recoverability of the deferred corporation tax asset is supported by this restructuring. The DTA relating to losses within the Group are expected to

unwind against taxable profits before the end of 2029.

An EPL (or ‘Levy’) was enacted on 14 July 2022, applying a Levy of 25% to the profits of oil and gas companies until 31 December 2025 or earlier if prices return to normalised levels. On 17 November 2022, the Levy was increased

to 35% and extended to 31 March 2028 regardless of oil and gas prices. The Levy is charged on oil and gas profits calculated on the same basis as Ring Fence Corporation Tax (RFCT), however, excludes relief for decommissioning and

finance costs. RFCT losses and investment allowance are not available to offset the EPL. On 9 June 2023 an Energy Security Investment Mechanism price floor was announced which would remove the EPL if both average oil and gas

prices fall to, or below, $71.40 per barrel for oil and £0.54 per therm for gas, for two consecutive quarters. It is not currently forecast that this price floor will be met for both oil and gas prices and, therefore, there is currently no impact

from this on tax carrying values. On 6 March 2024, an extension of the Levy until 31 March 2029 was announced and on 29 July 2024, it was announced that there would be a further extension to March 2030 and that the rate would

increase from 35% to 38% from 1 November 2024, of which only the rate increase had been enacted at 31 December 2024. Had the two-year extension to 31 March 2030 been enacted at 31 December 2024, this would have reduced

the net deferred tax asset by $318 million. This extension was substantively enacted on 3 March 2025 and will, therefore, be a charge to the consolidated statement of profit or loss in Q1 of 2025.

On 20 June 2023, Finance (No. 2) Act 2023 was substantially enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective

for all accounting periods starting on or after 31 December 2023. The adoption of this has not had a material impact as the prevailing rate of tax in the United Kingdom is in excess of the 15% minimum rate. The Group has applied the

exemption under IAS 12 to recognising and disclosing information about deferred tax assets and liabilities related to top-up income taxes and, therefore, there is no impact on the tax values reported.

29. Commitments and contingencies

	2024	2023
	$’000	$’000
Capital commitments
Capital commitments incurred jointly with other venturers (Group’s share)	399,613	506,959

The Group’s capital expenditure is driven largely by full-phase expenditure on existing producing fields, new development projects and appraisal and development activities. As of 31 December 2024, the Group had commitments

for future capital expenditure amounting to $400 million (2023: $507 million). The key component of this relates to the Rosebank development at both dates. There are also commitments in relation to AFEs (authorisations for

expenditure) signed for activities on Captain enhanced oil extraction at both dates.

Contingencies

The Group enters into letters of credit and surety bonds to provide security for the Group’s obligations under certain field and bi-lateral decommissioning security agreements, or equivalent, Sullom Voe Terminal Tariff Agreements

and deferred payment obligations. The instruments are either held by the Law Debenture Trust Corporation P.L.C. under a trust deed or EnQuest Heather Limited, as SVT Terminal Operator. At 31 December 2024, the Group had

$822 million (31 December 2023: $450 million) in letters of credit and surety bonds outstanding relating to security obligations under certain decommissioning and security agreements.

Notes to the consolidated financial statements continued

Financial Statements

229ANNUAL REPORT AND ACCOUNTS 2024

30. Financial instruments

To estimate the fair value of financial instruments, the Group uses quoted market prices when available, or industry accepted third-party models and valuation methodologies that utilise observable market data. In addition to market

information, the Group incorporates transaction specific details that market participants would utilise in a fair value measurement, including the impact of non-performance risk. The Group characterises inputs used in determining

fair value using a hierarchy that prioritises inputs depending on the degree to which they are observable. However, these fair value estimates may not necessarily be indicative of the amounts that could be realised or settled in a current

market transaction. The three levels of the fair value hierarchy are as follows:

• Level 1 – inputs represent quoted prices in active markets for identical assets or liabilities (for example, exchange-traded commodity derivatives). Active markets are those in which transactions occur in sufficient frequency and

volume to provide pricing information on an ongoing basis.

• Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, as of the reporting date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, market

interest rates and volatility factors, which can be observed or corroborated in the marketplace. The Group obtains information from sources such as the New York Mercantile Exchange and independent price publications.

• Level 3 – inputs that are less observable, unavailable or where the observable data does not support the majority of the instrument’s fair value.

In forming estimates, the Group utilises the most observable inputs available for valuation purposes. If a fair value measurement reflects inputs of different levels within the hierarchy, the measurement is categorised based upon the

lowest level of input that is significant to the fair value measurement. The valuation of over-the-counter financial swaps and collars is based on similar transactions observable in active markets or industry standard models that primarily

rely on market observable inputs. Substantially all of the assumptions for industry standard models are observable in active markets throughout the full term of the instrument. These are categorised as Level 2.

Gains or losses on financial instruments, that are not hedge accounted for, are recorded through the 'other gains' line in the consolidated statement of profit or loss. Credit valuation adjustments (CVA) and debit valuation adjustments

(DVA) are calculated for each trade using two key inputs, being future exposures and credit spreads (incorporating both probability of default and loss given default). Future exposures have been estimated using an expected exposure-

based approach over the lifetime of the trades. For the risk associated with counterparties, the credit spread is calculated using market observable credit default spreads. For the own credit risk, the credit spread is calculated using

reference to a senior unsecured quoted publicly traded bond of the Group using appropriate tenor adjustments, except for out-of-the-money derivatives with counterparties which are in the Group’s RBL. These derivatives rank higher

than those with other counterparties as they are fully secured as part of the RBL agreement. Therefore, for the own risk credit risk adjustment (DVA) it has been estimated that the loss given default is zero and hence there is no DVA

recognised for those derivatives which are with counterparties of the RBL.

All of the Group’s assets are pledged as security against borrowings.

The accounting classification of each category of financial instruments and their carrying amounts as at 31 December 2024 are set out below:

		Mandatorily	Derivatives
		measured at fair	designated
	Measured at	value through profit	in hedge	Total carrying
	amortised cost	or loss	relationships	amount
	$’000	$’000	$’000	$’000
Financial assets
Cash and cash equivalents	165,123	–	–	165,123
Other financial assets	11,317	–	–	11,317
Trade and other receivables – excluding VAT receivable	411,056	–	–	411,056
Derivative financial instruments	–	–	32,962	32,962
Financial liabilities
Borrowings	(1,024,948)	–	–	(1,024,948)
Trade and other payables – excluding deferred income, inventory overlift and bonus/holiday pay accruals	(439,674)	–	–	(439,674)
Lease liability	(40,159)	–	–	(40,159)
Contingent and deferred consideration	(272,758)	(240,491)	–	(513,249)
Derivative financial instruments	–	(7,484)	(143,979)	(151,463)
				(1,549,035)

230 ITHACA ENERGY

30. Financial instruments continued

The accounting classification of each category of financial instruments and their carrying amounts as at 31 December 2023 are set out below:

		Mandatorily	Derivatives
		measured at fair	designated
	Measured at	value through profit	in hedge	Total carrying
	amortised cost	or loss	relationships	amount
	$’000	$’000	$’000	$’000
Financial assets
Cash and cash equivalents	153,215	–	–	153,215
Trade and other receivables – excluding VAT receivable	330,351	–	–	330,351
Derivative financial instruments	–	2,782	154,525	157,307
Financial liabilities
Borrowings	(748,151)	–	–	(748,151)
Trade and other payables – excluding deferred income, inventory overlift and bonus/holiday pay accruals	(343,279)	–	–	(343,279)
Lease liability	(20,559)	–	–	(20,559)
Contingent and deferred consideration	(63,979)	(296,390)	–	(360,369)
Derivative financial instruments		(10,373)	(3,335)	(13,708)
				(845,193)

The following table presents the Group’s material financial instruments measured at fair value for each hierarchy level as at 31 December 2024:

	Level 1	Level 2	Level 3	Total Fair Value
	$’000	$’000	$’000	$’000
Contingent consideration (note 26)	–	(1,165)	(239,326)	(240,491)
Derivative financial instrument asset	–	32,962	–	32,962
Derivative financial instrument liability	–	(151,463)	–	(151,463)

Movements in level 3 financial instruments in the 12 months to 31 December 2024 were as follows:

	$’000
At 1 January 2024	(272,351)
Cash settlements	14,995
Changes in fair value	18,030
At 31 December 2024	(239,326)

Notes to the consolidated financial statements continued

Financial Statements

231ANNUAL REPORT AND ACCOUNTS 2024

30. Financial instruments continued

The following table presents the Group’s material financial instruments measured at fair value for each hierarchy level as at 31 December 2023:

	Level 1	Level 2	Level 3	Total Fair Value
	$’000	$’000	$’000	$’000
Contingent consideration (note 26)	–	(24,039)	(272,351)	(296,390)
Derivative financial instrument asset	–	157,307	–	157,307
Derivative financial instrument liability	–	(13,708)	–	(13,708)

Movements in level 3 financial instruments in the 12 months to 31 December 2023 were as follows:

	$’000
At 1 January 2023	(223,246)
Additions	(26,872)
Accretion	(8,799)
Changes in fair value	(13,434)
At 31 December 2023	(272,351)

Level 3 contingent consideration is valued on a discounted cash flow basis with the key inputs being commodity prices, the probability of certain future events occurring (‘trigger events’) and the discount rate.

The forecast cash flows are discounted at a rate of 6.33% (31 December 2023: 4.6%).

Management has considered alternative scenarios to assess the valuation of the contingent consideration including, but not limited to, the key accounting estimate relating to the oil price. A reduction or increase in the price assumptions

of 20% are considered to be reasonably possible changes. A 20% reduction in the oil price would result in a decrease in contingent consideration of $nil million (31 December 2023: $23.3 million) as the forecast price is already at a level

which is lower than the trigger price. A 20% increase in the oil price would lead to an increase in contingent consideration of $21.7 million (31 December 2023: $41.0 million).

The following table summarises the sensitivity of the Group's profit before tax due to changes in the carrying value of level 3 financial instruments at the reporting date resulting from a 20% change in the probability of a trigger event

occurring, risking of project and conditions being met for payment of contingent consideration, with all other variables held constant. The impact on equity is the same as the impact on profit before tax.

	2024	2023
Change in probability	$’000	$’000
20% decrease in probability	84,245	97,119
20% increase in probability	(77,051)	(84,086)

held constant. The impact on equity is the same as the impact on profit before tax.

	2024	2023
Change in discount rate	$’000	$’000
1% decrease in discount rate	(5,707)	(5,284)

A 1% increase in discount rate would have the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

232 ITHACA ENERGY

Notes to the consolidated financial statements continued

30. Financial instruments continued

Financial instruments of the Group consist mainly of cash and cash equivalents, receivables, payables, loans and financial derivative contracts, all of which are included in the financial statements. At 31 December 2024

and 31 December 2023, financial instruments and the carrying amounts reported on the balance sheet approximates the fair values with the exception of borrowings. The carrying amount of borrowing is at amortised cost

of $1,024.9 million (2023: $748.2 million) and the equivalent fair value is $1,025.5 million (2023: $781.4 million) that was categorised as level 3 in the fair value hierarchy level. Equivalent fair value was calculated using

discounted cash flow method. The unobservable input is adjustment due to credit risk to risk free rates.

The table below presents the gain on financial instruments that has been recognised in the consolidated statement of profit or loss as disclosed in note 8.

	2024	2023
	$’000	$’000
Revaluation of forex forward contracts	(1,310)	7,313
Revaluation of interest rate swaps	(637)	(6,488)
Revaluation of commodity hedges	2,291	42,006
Total revaluation gain on financial instruments	344	42,831
Realised gains/(losses) on forex forward contracts	5,760	(6,282)
Realised gains on interest rate swaps	638	6,967
Realised losses on commodity hedges	(1,575)	(457)
Total gain on financial instruments (note 8)	5,167	43,059

Cash flow hedge reserve

The table below presents the movement in financial instruments that has been recognised through the statement of comprehensive income relating to the cash flow hedge reserve:

	2024	2023
Cash flow hedge reserve	$’000	$’000
At 1 January	39,818	16,710
Change in fair value of derivative instruments	(68,492)	358,141
Amounts recycled to revenue	(135,122)	(265,711)
Amounts recycled to operating costs	(8,738)	–
Amounts recycled to dividends	(1,285)	–
Amount per consolidated statement of comprehensive income	(213,637)	92,430
Deferred tax on movement in year	158,035	(69,322)
Cash flow hedge reserve at 31 December	(15,784)	39,818

Financial Statements

233ANNUAL REPORT AND ACCOUNTS 2024

30. Financial instruments continued

Cost of hedging reserve

The table below presents the movement in financial instruments that has been disclosed through the statement of comprehensive income relating to the cost of hedging reserve:

	2024	2023
Cost of hedging reserve	$’000	$’000
At 1 January	4,068	3,275
Change in fair value of the intrinsic value of derivative instruments	(55,744)	(12,269)
Amounts recycled to revenue – oil put premiums	1,697	11,850
Amounts recycled to revenue – gas put premiums	3,240	3,590
Amount per consolidated statement of comprehensive income	(50,807)	3,170
Deferred tax on movement in year	37,607	(2,378)
Cost of hedging reserve at 31 December	(9,132)	4,068

The Group has identified that it is exposed principally to these areas of market risk.

i) Commodity risk

Commodity price risk related to crude oil prices is the Group’s most significant market risk exposure. Crude oil prices and quality differentials are influenced by worldwide factors such as OPEC actions, political events and supply

and demand fundamentals. The Group is also exposed to natural gas price movements on uncontracted gas sales. Natural gas prices, in addition to the worldwide factors noted above, can also be influenced by local market conditions.

The Group’s expenditures are subject to the effects of inflation and prices received for the product sold are not readily adjustable to cover any increase in expenses from inflation. The Group may periodically use different types of

derivative instruments to manage its exposure to price volatility, thus mitigating fluctuations in commodity-related cash flows.

In all periods presented, the Group has designated certain commodity options as a cash flow hedge of highly probable sales. Because the critical terms (i.e. the quantity, maturity and underlying price) of the commodity option and

their corresponding hedged items are the same, the Group performs a qualitative assessment of effectiveness and it is expected that the intrinsic value of the commodity option and the value of the corresponding hedged items will

systematically change in opposite direction in response to movements in the price of underlying commodity if the price of the commodity increases above the strike price of the derivative. The main source of hedge ineffectiveness in

these hedge relationships is the effect of the counterparty and the Group’s own credit risk on the fair value of the option contracts, which is not reflected in the fair value of the hedged item and if the forecast transaction will happen

earlier or later than originally expected. There was no hedge ineffectiveness in the current or prior year.

The Group’s target is to hedge oil and gas prices up to a maximum of 75% of the next 12 months’ production on a rolling annual basis, up to 50% in the following 12-month period and 25% in the subsequent 12-month period. On a rolling

basis, the Group has minimum and maximum hedging requirements under the RBL. The minimum requirements depend on levels of utilisation with reference to the latest borrowing base amount, as follows:

• If drawn amounts under the loan tranche of the RBL are below 10%, no hedging is required;

• If drawn amounts are above 10% but below 50%, the Group is required to hedge no less than 35% for the first 12 months and no less than 20% for the following 12 month period; and

• If drawn amounts are equal to or greater than 50%, the Group is required to hedge no less than 50% for the first 12 months and no less than 30% for the following 12 month period.

Maximum hedging volumes are set, on a rolling basis, at 85% for year one, 65% for year two, 50% for year three and 30% for year four, and 0% thereafter.

234 ITHACA ENERGY

Notes to the consolidated financial statements continued

30. Financial instruments continued

The table below represents total commodity hedges in place at the 2024 year-end:

Derivative	Term	Volume		Average price
Oil swaps	Jan 25 - Dec 25	3,505,500	bbls	$78/bbl
Oil collars	Jan 25 - Dec 25	1,969,500	bbls	$74/bbl floor - $85/bbl ceiling
Gas swaps	Jan 25 - Dec 26	296,750,000	therms	98p/therm
Gas puts	Jan 25 - Dec 26	217,725,000	therms	81p/therm
Gas collars	Jan 25 - Dec 26	348,555,000	therms	83p/therm floor - 102p/therm ceiling

The table below represents total commodity hedges in place at the 2023 year-end:

Derivative	Term	Volume		Average price
Oil swaps	Jan 24 – Dec 24	1,931,500	bbls	$82/bbl
Oil collars	Jan 24 – Dec 24	2,744,000	bbls	$75/bbl floor – $87/bbl ceiling
Gas swaps	Jan 24 – Dec 24	53,175,000	therms	140p/therm
Gas swaps	Jan 25 – Sep 25	18,225,000	therms	120p/therm
Gas collars	Jan 24 – Dec 24	123,350,000	therms	135p/therm floor – 210p/therm ceiling
Gas collars	Jan 25 – Mar 25	9,000,000	therms	130/therm floor – 185p/therm ceiling

The following table summarises the sensitivity of a 20% decrease in realised commodity prices, with all other variables held constant, of the Group’s profit before tax due to changes in the carrying value of commodity derivatives at the

reporting date. The impact on equity is the same as the impact on profit before tax.

	2024	2023
Change in realised commodity price	$’000	$’000
20% decrease in realised oil price	(235,713)	(177,151)
20% decrease in realised gas price	(119,799)	(146,794)

A 20% increase in realised commodity prices would have the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

ii) Interest risk

The calculation of interest payments for the RBL facility and the optional project capital expenditure facility incorporate SOFR. The Group is, therefore, exposed to interest rate risk to the extent that SOFR may fluctuate. The Group

mitigates the risk of SOFR fluctuations by entering into interest rate swaps on floating rates.

There were no interest rate financial instruments in place at either 31 December 2024 or 31 December 2023.

Financial Statements

235ANNUAL REPORT AND ACCOUNTS 2024

30. Financial instruments continued

The following table summarises the sensitivity of an increase of 250 basis points in SOFR, with all other variables held constant, of the Group’s profit before tax due to changes in the carrying value of monetary liabilities at the reporting date.

	2024	2023
Change in interest rate	$’000	$’000
Increase of 250 basis points	(8,369)	(22,370)

A decrease in 250 basis points in interest rates would have the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

iii) Foreign exchange rate risk

The Group is exposed to foreign exchange risks to the extent it transacts in various currencies, while measuring and reporting its results in US Dollars. Since time passes between the recording of a receivable or payable transaction and its

collection or payment, the Group is exposed to gains or losses on non-US Dollar amounts and on balance sheet translation of monetary accounts denominated in non-US Dollar amounts due to spot rate fluctuations from year-to-year.

As at 31 December 2024, the Group had an average of £21.3 million per quarter hedged at an average forward rate of $1.273:£1 for the period January to December 2025. As at 31 December 2024, the Group had an average

of £49.5 million per quarter hedged at an average collar floor of $1.268:£1 and average collar ceiling of $1.298:£1 for the period January to December 2025.

As at 31 December 2023, the Group had an average of £10.2 million per quarter hedged at an average forward rate of $1.219:£1 for the period January to December 2024. As at 31 December 2023, the Group had an average

of £30.3 million per quarter hedged at an average collar floor of $1.200:£1 and average collar ceiling of $1.230:£1 for the period January to December 2024.

The following table summarises the sensitivity to a reasonably possible change in the US Dollar to Sterling foreign exchange rate, with all other variables held constant, of the Group’s profit before tax due to changes in the carrying

value of monetary assets and liabilities at the reporting date. The impact on equity is the same as the impact on profit before tax. The Group’s exposure to foreign currency changes for all other currencies is less significant.

	2024	2023
Change in Sterling foreign exchange rate	$’000	$’000
10% weakening of Sterling against the US Dollar (2023 revised as explained below)	(6,895)	(6,855)

In the 2023 Annual Report and Accounts, the Group incorrectly included non-monetary items denominated in Sterling to calculate the above sensitivity analysis. The correct impact on profit before tax was a loss of $7 million and not

a loss of $123 million as disclosed previously.

A 10% strengthening of Sterling against the US Dollar would have had the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

The Group's Sterling denominated monetary net assets at 31 December 2024 were £55 million (2023: £53.8 million).

iv) Credit risk

The majority of the Group’s trade and other receivables are with customers in the oil and gas industry and are subject to normal industry credit risks and are unsecured. Customers of the Group are mainly oil and gas majors with good

credit ratings and low credit risk, including bp, Eni and Shell.

The Group assesses partners’ creditworthiness before entering into farm-in or joint venture agreements. In the past, the Group has not experienced credit loss in the collection of accounts receivable. As the Group’s exploration,

drilling and development activities expand with existing and new joint venture partners, the Group will assess and continuously update its management of associated credit risk and related procedures.

The Group regularly monitors all customer receivable balances outstanding in excess of 90 days for ECLs. As at 31 December 2024, substantially all accounts receivables are current, being defined as less than 90 days. The Group has

no allowance for doubtful accounts as at 31 December 2024 (31 December 2023: $nil).

The Group may be exposed to certain losses in the event that counterparties to derivative financial instruments are unable to meet the terms of the contracts. The Group’s exposure is limited to those counterparties holding derivative

contracts with positive fair values at the reporting date and these counterparties represent a very low risk of default. As at 31 December 2024, the Group’s exposure is $nil (31 December 2023: $nil).

236 ITHACA ENERGY

Notes to the consolidated financial statements continued

30. Financial instruments continued

Credit valuation adjustments (CVA) and debit valuation adjustments (DVA) are calculated for each trade using two key inputs, being future exposures and credit spreads (incorporating both probability of default and loss-given default).

Future exposures have been estimated using an expected exposure-based approach over the lifetime of the trades. For the risk associated with counterparties, the credit spread is calculated using market observable credit default

spreads. For the own credit risk, the credit spread is calculated using reference to a senior unsecured quoted publicly traded bond of the Group using appropriate tenor adjustments, except for out-of-the-money derivatives with

counterparties which are in the Group’s RBL. These derivatives rank higher than those with other counterparties as they are fully secured as part of the RBL agreement. Therefore for the own risk credit risk adjustment (DVA) it has

been estimated that the loss given default is zero and hence there is no DVA recognised for those derivatives which are with counterparties of the RBL.

The Group also has credit risk arising from cash and cash equivalents held with banks and financial institutions. The maximum credit exposure associated with financial assets is the carrying values.

v) Liquidity risk

Liquidity risk includes the risk that as a result of its operational liquidity requirements, the Group will not have sufficient funds to settle a transaction on the due date. The Group manages liquidity risk by maintaining adequate

cash reserves, banking facilities, and by considering medium and future requirements by continuously monitoring forecast and actual cash flows. The Group considers the maturity profiles of its financial assets and liabilities.

As at 31 December 2023 and 2024, substantially all accounts payable are current. As borrowings are linked to SOFR, a spot rate at 31 December 2024 was used to calculate future borrowings cash flows.

The following table shows the timing of cash outflows, including future interest, relating to financial liabilities, excluding derivatives, at 31 December 2024:

	Weighted average	Within
	effective interest	1 year	Within 2 to 5 years	More than 5 years	Total	Carrying amount
	rate	$’000	$’000	$’000	$’000	$’000
Trade and other payables	–	(439,674)	–	–	(439,674)	(439,674)
Contingent and deferred consideration	–	(310,132)	(212,908)	(44,536)	(567,576)	(513,249)
Lease liabilities	5.69%	(21,046)	(21,876)	–	(42,922)	(40,159)
Borrowings	8.14%	(85,462)	(1,356,881)	–	(1,442,343)	(1,024,948)
		(856,314)	(1,591,665)	(44,536)	(2,492,515)	(2,018,030)

The following table shows the timing of cash outflows, including future interest, relating to financial liabilities, excluding derivatives, at 31 December 2023:

	Weighted average	Within
	effective interest	1 year	Within 2 to 5 years	More than 5 years	Total	Carrying amount
	rate	$’000	$’000	$’000	$’000	$’000
Trade and other payables	–	(343,279)	–	–	(343,279)	(343,279)
Contingent and deferred consideration	–	(101,669)	(248,388)	(44,508)	(394,565)	(360,369)
Lease liabilities	6.07%	(20,152)	(669)	–	(20,821)	(20,559)
Borrowings	8.85%	(64,190)	(840,085)	–	(904,275)	(748,151)
		(529,290)	(1,089,142)	(44,508)	(1,662,940)	(1,472,358)

Financial Statements

237ANNUAL REPORT AND ACCOUNTS 2024

30. Financial instruments continued

The following tables set out the details of the Group’s liquidity analysis for its derivative financial instruments based on contractual maturities. The tables have been drawn up based on the undiscounted net cash inflows and outflows on

derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been

determined by reference to the projected interest rates as illustrated by the yield curves existing at the reporting date.

	Within	Within
	1 year	2 to 5 years	Total
At 31 December 2024	$’000	$’000	$’000
Net-settled (derivative liabilities):
Commodity options	(74,252)	(10,293)	(84,545)
Gross-settled:
Foreign exchange forwards – gross outflows	(191,464)	–	(191,464)
Foreign exchange collars – gross outflows	(191,074)	–	(191,074)
	(456,790)	(10,293)	(467,083)

	Within	Within
	1 year	2 to 5 years	Total
At 31 December 2023	$’000	$’000	$’000
Net-settled (derivative liabilities):
Commodity options	(2,290)	–	(2,290)
Gross-settled:
Foreign exchange forwards – gross outflows	(113,342)	–	(113,342)
Foreign exchange collars – gross outflows	(155,071)	–	(155,071)
	(270,703)	–	(270,703)

vi) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure

to reduce the cost of capital. The Group regularly monitors the capital requirements of the business over the short, medium and long-term, in order to enable it to foresee when additional capital will be required.

The Group has approval from management to hedge external risks, commodity prices, interest rates and foreign exchange risk. This is designed to reduce the risk of adverse movements in market prices, interest rates and exchange rates

eroding the Group’s financial results.

238 ITHACA ENERGY

31. Derivative financial instruments

The net carrying amount of each category of derivative is set out below:

	2024	2023
	$’000	$’000
Oil swaps – cash flow hedge	19,836	9,913
Oil collars – cash flow hedge	6,536	7,434
Gas swaps – cash flow hedge	(49,522)	47,232
Gas swaps – non-cash flow hedge	–	(2,290)
Gas collars – cash flow hedge	(81,185)	89,944
Interest rate swaps – non-cash flow hedge	–	637
FX forwards – cash flow hedge	214	(3,961)
FX forwards – non-cash flow hedge	(7,484)	–
FX collars – cash flow hedge	(6,896)	(3,335)
FX collars – non-cash flow hedge	–	(1,975)
	(118,501)	143,599

	2024	2023
Maturity analysis of derivative financial instruments	$’000	$’000
Non-current assets	–	17,810
Current assets	32,962	139,497
Non-current liabilities	(20,987)	–
Current liabilities	(130,476)	(13,708)
	(118,501)	143,599

The fair value of commodity derivatives is estimated using a net present value model (commodity swaps) or an appropriate option valuation model (options and collars). These contracts are valued using observable market pricing

data including volatilities. A 20% reduction in future commodity prices, with all other assumptions held constant, would result in a decrease in the fair value of derivatives of $260 million (2023: $113 million). A 20% increase in future

commodity prices, with all other assumptions held constant, would result in an increase in the intrinsic value of option derivative instruments at 31 December 2024 of $113 million (2023: $88 million).

Derivative financial instruments that are with counterparties included within the RBL are subject to Master Netting Agreements, this includes the majority of the Group’s derivative financial instruments as at 31 December 2024 and 2023.

The terms of the Master Netting Arrangements create a legally enforceable right of offset that comes into effect only on the occurrence of a specified event of default or termination event or other events not expected to happen in the

normal course of business. Although the Group has the ability to net settle certain transactions with certain counterparties where an election has been made, this is not considered to be significant at 31 December 2024. Accordingly,

the Group has not offset any derivatives balances in the statement of financial position in any of the periods presented.

Notes to the consolidated financial statements continued

Financial Statements

239ANNUAL REPORT AND ACCOUNTS 2024

31. Derivative financial instruments continued

Financial instruments subject to enforceable master netting agreements and similar agreements at 31 December 2024 are detailed below:

	Amount recognised in the	Related amounts not set off in the
	statement of financial position	statement of financial position	Net amount
	$000	$000	$000
Derivative assets	32,962	(22,962)	10,000
Derivative liabilities	(151,463)	22,962	(128,501)

Financial instruments subject to enforceable master netting agreements and similar agreements at 31 December 2023 are detailed below:

	Amount recognised in the	Related amounts not set off in the
	statement of financial position	statement of financial position	Net amount
	$000	$000	$000
Derivative assets	157,306	(4,436)	152,870
Derivative liabilities	(13,708)	4,436	(9,272)

32. Related-party transactions

The immediate parent undertaking is DKL Energy Limited (incorporated in Jersey) which owns 52.2% of the issued share capital of Ithaca Energy plc. The registered office address of DKL Energy Limited is 47 Esplanade, St Helier,

JE1 0BD, Jersey.

Following the Business Combination, as set out in note 17, Eni UK Limited, an indirect wholly owned subsidiary of Eni S.p.A., owns 37.2% of the issued share capital of Ithaca Energy plc.

Related party transactions with Eni S.p.A. group from 3 October 2024 were as follows:

			Amounts owed by	Amounts owed to
	Sales to related	Purchases from	related parties at	related parties at
	parties	related parties	31 December 2024	31 December 2024 1
	$000	$000	$000	$000
2024	305,634	2,037	111,639	210,910

1 Includes $204.5 million of deferred consideration in respect of the Business Combination (see note 17 and note 26).

The ultimate parent of the Group is Delek Group Limited (incorporated in Israel), an independent E&P Company listed on the Tel Aviv Stock Exchange. The Group and Delek’s ultimate controlling party is Mr Itshak Sharon Tshuva.

There were no related party transactions with Delek Group Limited or Mr Tshuva in either the year ended 31 December 2024 or the year ended 31 December 2023.

240 ITHACA ENERGY

32. Related-party transactions continued

The consolidated financial statements include the financial information of the Group, which comprises the Company and the subsidiaries listed in the following table:

				% equity interest at 31 December
	Registered office	Country of incorporation	2024	2023
Ithaca Energy (E&P) Limited	1	Jersey	100%	100%
Ithaca Energy (UK) Limited	2	Scotland	100%	100%
Ithaca Minerals (North Sea) Limited	2	Scotland	100%	100%
Ithaca Energy (Holdings) Limited	3	Bermuda	100%	100%
Ithaca Energy Holdings (UK) Limited	2	Scotland	100%	100%
Ithaca Energy (North Sea) PLC	2	Scotland	100%	100%
Ithaca Oil and Gas Limited	4	England and Wales	100%	100%
Ithaca Petroleum Ltd	4	England and Wales	100%	100%
Ithaca Causeway Limited	4	England and Wales	100%	100%
Ithaca Gamma Limited	4	England and Wales	100%	100%
Ithaca Alpha (NI) Limited	5	Northern Ireland	100%	100%
Ithaca Epsilon Limited	4	England and Wales	100%	100%
Ithaca Exploration Limited	4	England and Wales	100%	100%
Ithaca Petroleum EHF	6	Iceland	100%	100%
Ithaca Dorset Limited	4	England and Wales	100%	100%
Ithaca SP UK Limited	4	England and Wales	100%	100%
Ithaca GSA Holdings Limited	1	Jersey	100%	100%
Ithaca GSA Limited	1	Jersey	100%	100%
Ithaca Energy Developments UK Limited	4	England and Wales	100%	100%
FPF-1 Limited	7	Jersey	100%	100%
Ithaca MA Limited	4	England and Wales	100%	100%
Ithaca SP Bonds PLC	4	England and Wales	100%	100%
Ithaca SP Finance Limited	4	England and Wales	100%	100%
Ithaca SP (Holdings) Limited	4	England and Wales	100%	100%
Ithaca SP E&P Limited	4	England and Wales	100%	100%
Ithaca SP O&G Limited	4	England and Wales	100%	100%
Ithaca SPE Limited	4	England and Wales	100%	100%
Ithaca Zeta Limited	4	England and Wales	100%	100%
Ithaca EF Limited (formerly Eni Elgin/Franklin Limited)	4	England and Wales	100%	–
Ithaca UKCS (formerly Eni UKCS Limited)	4	England and Wales	100%	–
Ithaca (NE) E&P Limited (formerly Eni Energy E&P UK Limited)	4	England and Wales	100%	–
Ithaca (NE) UKCS Limited (formerly Eni Energy E&P UKCS Limited)	4	England and Wales	100%	–

Notes to the consolidated financial statements continued

Financial Statements

241ANNUAL REPORT AND ACCOUNTS 2024

32. Related party transactions continued

Transactions between subsidiaries are eliminated on consolidation.

Foot notes relating to table on preceding page:

1 47 Esplanade, St Helier, Jersey, JE1 0BD

2 13 Queen’s Road, Aberdeen, Scotland AB15 4YL

3 Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda

4 Pinsent Masons LLP, 1 Park Row, Leeds, England, LS1 5AB

5 Pinsent Masons LLP, The Soloist, 1 Lanyon Place, Belfast, BT1 3LP

6 Borgartúni 26, 105 Reykjavík, Iceland

7 26 New Street, St Helier, Jersey, JE2 3RA

8 All of the above shares represent an ordinary class of shares.

Key management personnel

The following table provides remuneration to key management personnel, being the Executive Directors and members of the Executive Leadership Team, for the periods ended 31 December 2024 and 2023:

	2024	2023
Key management personnel	$’000	$’000
Salaries and short-term employee benefits	5,910	5,741
Payments made in lieu of pension contributions	288	249
Company pension contributions	148	106
Compensation for loss of office	153	–
Share-based payment	1,575	5,863
	8,074	11,959

Further details regarding share-based payments received by key management personnel are set out below.

On 5 January 2024 Alan Bruce stepped down from his role as Chief Executive Officer and on 28 May 2024 Gilad Myerson stepped down from his role as Executive Chairman. Full details of the section 430 (2B) of the Companies

Act 2006 disclosures in respect of Mr Myerson are included in the Remuneration Committee report and full details in respect of Mr Bruce were included in the Directors' remuneration report in the 2023 Annual Report and

Accounts.

33. Share-based payments

The charge for share-based payment transactions in the year to 31 December 2024 was $6.1 million (2023: $16.4 million). Like other elements of compensation, this charge is processed through the time-writing system which allocates

costs, based on time spent by individuals, to various activities within the Ithaca Energy plc Group. Part of this cost is, therefore, capitalised as directly attributable to capital projects and part is charged to the statement of profit or loss as

operating costs of hydrocarbon activities, pre-licence exploration costs or administrative expenses.

242 ITHACA ENERGY

33. Share-based payments continued

Long-Term Incentive Plans (LTIPs), Restricted Stock Units (RSUs) and Deferred Bonus Shares (DBSs)

Outstanding share options under LTIPs and DBS were as follows:

	Heritage awards	At-IPO awards	2022	LTIP awards	2024	LTIP awards	2024	RSU awards	2024	DBS awards	Total
Balance at 1 January 2023	1,687,296	4,908,903		2,836,660		–		–		–	9,432,859
Awarded during the year in lieu of dividend payments	191,401	190,426		–		–		–		–	381,827
Forfeited during the year	(127,880)	(296,966)		(276,123)		–		–		–	(700,969)
Exercised during the year	(921,882)	(521,679)		–		–		–		–	(1,443,561)
Balance at 31 December 2023	828,935	4,280,684		2,560,537		–		–		–	7,670,156
Granted during the year	–	–		–		3,589,590		303,103		239,291	4,131,984
Awarded during the year in lieu of dividend payments	76,000	1,454,497		–		532,474		51,211		40,430	2,154,612
Forfeited during the year	–	(293,867)		(249,919)		–		–		–	(543,786)
Exercised during the year	(885,959)	(974,153)		–		–		–		–	(1,860,112)
Balance at 31 December 2024	18,976	4,467,161		2,310,618		4,122,064		354,314		279,721	11,552,854
Exercisable at 31 December 2024	18,976	2,478,094		–		–		–		–	2,497,070
Share option exercise price	£nil	£nil		£nil		£nil		£nil		£nil	N/A
Weighted average share price on date of exercise	£1.20	£1.15		N/A		N/A		N/A		N/A	N/A
Weighted average remaining life	N/A	0.9 years		1.3 years		2.6 years		2.5 years		2.5 years	N/A

All LTIP, DBS and RSU awards are nil-cost options. There are no performance conditions attaching to the Heritage, At-IPO, 2024 DBS or 2024 RSU awards. Details of the performance conditions of the 2022 LTIP and the 2024

LTIP are set out in the Remuneration Committee report. The fair values of all the LTIP awards were determined based on the share price on date of award. The Heritage awards vested over the period to 14 November 2023, the At-IPO

awards vest in three equal tranches over the period to 14 November 2025, the 2022 LTIP awards vest over the period to 1 April 2026, the 2024 LTIP awards vest over the periods to 4 July 2027 and 11 October 2027, the 2024 DBS

awards vest over the period to 5 July 2027 and the 2024 RSU awards vest in three equal tranches over the period to 4 July 2027. It is anticipated that future exercises of LTIP, DBS and RSU awards will be settled by equity.

The total charge for LTIP share options, DBS awards and RSU awards in the year to 31 December 2024 was $6.1 million (2023: $12.9 million).

IPO-related share options

Under the terms of their termination agreements, both Mr Myerson and Mr Bruce retained an entitlement to $2.0 million worth of share options each. The IPO-related share options were fully expensed in the period up to

31 December 2023 and the charge for the year to 31 December 2024 was $nil (2023: $0.5 million).

Notes to the consolidated financial statements continued

Financial Statements

243ANNUAL REPORT AND ACCOUNTS 2024

33. Share-based payments continued

Management Equity Plan (MEP)

During the year to 31 December 2023, Mr Myerson elected to receive the Aggregate Guaranteed Payment (AGP) and $8.0 million (AGP of $10.0 million less special bonuses of $2.0 million) was paid to him on 1 December 2023.

As a result, the MEP share options, which would otherwise have vested over the period to 30 September 2026, were transferred back to the Company for nil payment.

There were no performance conditions attaching to either the MEP share options or the AGP.

The total share-based payment charge for MEP arrangements in the year to 31 December 2024 was $nil (2023: $3.0 million).

The share-based payment reserve of $18.8 million (2023: $15.5 million) reflects the opening balance of $15.5 million (2023: $4.9 million) plus the charge of $6.1 million (2023: $12.9 million) for LTIPs and DBSs plus the charge of $nil

(2023: $0.5 million) for IPO-related share options less the cost of satisfying exercises during the year of $2.8 million (2023: $2.8 million).

34. Dividends

	2024	2023
	$m	$m
First 2024 interim dividend of $0.0986 (2023: $0.132) per ordinary share announced 22 August 2024 and paid 27 September 2024	99.4	133.0
Second 2024 dividend of $0.1209 (2023: $0.132) per ordinary share announced 21 November 2024 and paid 20 December 2024	199.7	133.0
Total dividends paid relating to the year ended 31 December 1	299.1	266.0
Third 2024 interim dividend of $0.1209 (2023: $0.132) per ordinary share announced 26 March 2025 and payable 25 April 2025 (not accrued in the 2024 results) 1	200.0	133.6
Total dividends paid or payable relating to year ended 31 December	499.1	399.6

1. The third 2023 interim dividend of $133.6 million was paid on 17 April 2024. Total cash payments in the year to 31 December 2024 were $432.7 million.

35. Subsequent events

On 29 January 2025, the Group announced a reorganisation and streamlining of the organisational structure for onshore staff with a targeted completion of 1 July 2025. It is not anticipated that the cost of this reorganisation

will be material.

emissions. It did, however, permit the project to progress as planned whilst this new consent is sought but that no oil could be extracted until consent has been given. Further details are set out in note 3.

1 January 2024. The acquisition, which is subject to certain conditions including regulatory approval, and is subject to customary purchase price adjustments, which, assuming an illustrative completion date of 30 June 2025, equates

to an estimated payment at completion of approximately $140 million.

244 ITHACA ENERGY

Note

2024

$’000

2023

$’000

Assets

Current assets

Cash and cash equivalents 288 140

Prepayments 966 1,165

1,254 1,305

Non-current assets

Investments

3 2,290,383 1,224,659

Total assets 2,291,637 1,225,964

Liabilities and equity

Current liabilities

Deferred consideration

4 (160,203) –

Trade and other payables

4 (37,365) (16,365)

(197,568) (16,365)

Non-current liabilities

Deferred consideration

4 (44,262) –

Total liabilities (241,830) (16,365)

Net assets 2,049,807 1,209,599

Shareholders’ equity

Share capital

5 20,029 11,540

Share premium

5 1,161,615 308,845

Capital contribution reserve

5 181,945 181,945

Own shares

5 (9,592) (12,412)

Share-based payment reserve

5 18,788 15,494

Retained earnings 677,022 704,187

Total equity 2,049,807 1,209,599

Approved on behalf of the Board on 25 March 2025:

Iain C S Lewis

Director

Company number 12263719

Company statement of financial position

As at 31 December

Financial Statements

245ANNUAL REPORT AND ACCOUNTS 2024

capital

$’000

premium

$’000

Capital contribution

reserve

$’000

Own shares

$’000

Share-based

payment reserve

$’000

Retained earnings

$’000

Total

$’000

Balance at 1 January 2023 11,445 293,712 181,945 – 4,920 715,808 1,207,830

Dividends paid – – – – – (265,972) (265,972)

Issuance of shares 95 15,133 – (15,228) – – –

Profit for the year – – – – – 254,351 254,351

Share-based payments – – – 2,816 10,574 – 13,390

Balance at 31 December 2023 and 1 January 2024 11,540 308,845 181,945 (12,412) 15,494 704,187 1,209,599

Dividends paid – – – – – (432,693) (432,693)

Issuance of shares 8,489 852,770 – – – – 861,259

Profit for the year – – – – – 405,528 405,528

Share-based payments – – – 2,820 3,294 – 6,114

Balance at 31 December 2024 20,029 1,161,615 181,945 (9,592) 18,788 677,022 2,049,807

Company statement of changes in equity

Year ended 31 December

246 ITHACA ENERGY

1. Material accounting policies

Basis of preparation

The separate financial statements of the Company are presented as required by the Companies Act 2006. The financial statements have been prepared on a historical cost basis and on a going concern basis as described in the going

concern statement within note 3 of the consolidated financial statements.

The Company meets the definition of a qualifying entity under Financial Reporting Standard 101 (FRS 101) 'Reduced Disclosure Framework' issued by the Financial Reporting Council. These financial statements have, therefore, been

prepared in accordance with FRS 101.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under this standard in relation to share-based payments, financial instruments, capital management, presentation of a cash flow

statement and certain related-party transactions.

Where relevant, equivalent disclosures have been given in the consolidated financial statements. Where applicable, the principal accounting policies adopted are the same as those set out in note 3 to the consolidated financial statements

on pages 187 to 200, except as noted below.

Investments

Investments in subsidiaries are shown at cost less provision for impairment.

Dividend distribution

subsidiaries are recognised only when they are approved by shareholders. Details of dividends paid and declared are set out in note 34 of the consolidated financial statements.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial

statements and the reported amount of expenses during the reporting period. Although these estimates are based on management’s best knowledge, actual results may ultimately differ from those estimates. The estimates and underlying

assumptions are reviewed on a regular and ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods

if the revision affects both current and future periods. In the current and prior year there were no critical accounting judgements or key sources of estimation uncertainty.

2. Profit for the year

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own statement of profit or loss for the year. The Company reported a profit of $405.5 million for the year ended 31 December 2024

(2023: Profit of $254.4 million).

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements are disclosed in note 7 to the consolidated financial statements. The Company had no employees in the current or preceding financial year.

3. Investments in subsidiary undertakings

2024

$’000

2023

$’000

Balance at 1 January 1,224,659 1,224,659

Additions (see note 17 to the consolidated financial statements) 1,065,724 –

Balance at 31 December 2,290,383 1,224,659

The carrying value of investments in subsidiary undertakings is reviewed for indicators of impairment on an annual basis. The recoverable amount is the higher of fair value less cost of disposal or the net present value of future cash

flows which are estimated based on the continued use of the assets in the business. The market capitalisation of the Group at 31 December 2024 was $2.29 billion which is in line with the carrying value of investments in subsidiary

undertakings. Although a reduction in the market share price could represent a potential indicator of impairment, the Directors consider that the market share price is not representative of the full value of the Group due to the limited

nature of the free float representing only circa 10% of the issued share capital. Details of impairment testing are set out in note 19 to the consolidated financial statements.

Notes to the Company financial statements

Financial Statements

247ANNUAL REPORT AND ACCOUNTS 2024

3. Investments in subsidiary undertakings continued

During the year ended 31 December 2024, the Company received $435 million of dividends from subsidiary undertakings (2023: $272 million).

The subsidiaries of Ithaca Energy plc are set out in note 32 of the consolidated financial statements.

4. Trade and other payables

2024

$’000

2023

$’000

Amounts owed to subsidiary undertakings (34,398) (14,452)

Trade and other payables (321) –

Accruals (2,646) (1,913)

(37,365) (16,365)

Amounts owed to subsidiary are repayable on demand and do not bear interest.

Deferred consideration of $204.5 million is payable in relation to the Business Combination and further details are set out in note 17 and note 26 to the consolidated financial statements.

5. Share capital and reserves

(a) Issued share capital

The issued share capital is as follows:

Number of

common shares

Amount

$’000

At 31 December 2023 1,014,372,281 11,540

Shares issued during the year 639,360,174 8,489

At 31 December 2024 1,653,732,455 20,029

On 3 October 2024, 639,360,174 ordinary shares of £0.01 each were issued to Eni UK Limited, an indirect wholly-owned subsidiary of Eni S.p.A., as consideration for the Eni UK Business Combination (see note 17 for further details).

(b) Share premium

2024

$’000

2023

$’000

At 1 January 308,846 293,712

Additions 852,769 15,134

At 31 December 1,161,615 308,846

Additions during 2024 represent the difference between the nominal value per share of £0.01 and the opening share price on the day of the completion of the Eni Business Combination multiplied by the number of shares issued.

248 ITHACA ENERGY

5. Share capital and reserves continued

2024

$’000

2023

$’000

At 1 January and 31 December 181,945 181,945

(d) Own shares

2024

$’000

2023

$’000

At 31 December (9,592) (12,412)

Own shares comprise shares held in the Ithaca Energy plc EBT which are being used to satisfy the exercise of employee share options. During the year to 31 December 2024, 1,860,112 (2023: 1,443,561) ordinary shares were used to

satisfy the exercise of share options. At 31 December 2024, the EBT held 6,325,918 (2023: 8,186,030) ordinary shares of £0.01 each.

(e) Share-based payment reserve

2024

$’000

2023

$’000

At 31 December 18,788 15,494

The share-based payment reserve represents the cumulative charge for share options, as described in note 33, less the cumulative cost of share option exercises.

Details of share-based payments are set out in note 33 of the consolidated financial statements.

The Company has taken advantage of the exemption given by Paragraph 8 of FRS 101, which allows exemption from disclosure of compensation for key management personnel.

6. Related-party transactions

Deferred consideration of $204.5 million per note 4 is a related party transaction with Eni S.p.A. group. Other than this there were no other related party transactions between the Company and Eni S.p.A. during the period 3 October

2024 to 31 December 2024. There were no related party transactions between the Company and Delek Group Limited or Mr Tshuva in either the year ended 31 December 2024 or the year ended 31 December 2023.

7. Ultimate Parent undertaking and controlling party

The immediate Parent undertaking is DKL Energy Limited (incorporated in Jersey) which owns 52.2% of the issued share capital of Ithaca Energy plc. The registered office address of DKL Energy Limited is 47 Esplanade,

St Helier, Jersey, JE1 0BD.

The ultimate Parent Company is Delek Group Limited (incorporated in Israel), an independent E&P Company listed on the Tel Aviv Stock Exchange. The Company and Delek’s ultimate controlling party is Mr Itshak Sharon Tshuva.

The smallest and largest group for which consolidated financial statements are prepared is that of Ithaca Energy plc and Delek Group Limited, respectively. A copy of the Delek Group Limited financial statements can be obtained from

19 Abba Edan Boulevard, POB 2054, Herzilia, 4612001, Israel.

Notes to the Company financial statements continued

249ANNUAL REPORT AND ACCOUNTS 2024

Non-GAAP measures

The Group uses certain performance metrics that are not specifically defined under United Kingdom adopted International Financial Reporting Standards or other generally accepted accounting principles. These measures are

considered to be important as they track both operational and financial performance and are used to manage the business and to provide an objective comparison to Ithaca Energy’s peer group. These non-GAAP measures which

are presented in the Annual Report and Accounts are defined below:

Adjusted EBITDAX: earnings before finance income, finance costs, tax, put premiums on oil and gas derivative instruments, revaluation of derivative contracts, depletion depreciation and amortisation, impairment charges, exploration

and evaluation expenditure, remeasurements of decommissioning reimbursement receivables, fair value gains or losses on contingent consideration, business combination costs and historic claims relating to acquisitions. The Group

believes that adjusted EBITDAX is a useful measure for stakeholders because it is a measure closely tracked by management to evaluate the Group’s operating performance and to make financial, strategic and operating decisions and

because it may help stakeholders to better understand and evaluate, in the same manner as management, the underlying trends in the Group’s operational performance on a comparable basis, period-on-period. Adjusted EBITDAX is

reconciled to profit after tax as follows:

2024

2023

Profit after tax 153.2 292.5

Taxation charge

(note 28) 181.1 9.5

Depletion, depreciation and amortisation (note 15) 600.2 740.3

Impairment charges on development and production assets (note 19) 263.0 557.9

Finance income (note 9) (11.2) (5.7)

Finance costs (note 9) 200.6 189.7

Oil and gas put premiums (note 5) 4.9 15.4

Revaluation of derivative contracts (note 30) (0.3) (42.8)

Business combination costs (note 7) 16.3 –

Exploration and evaluation expenses (note 14) 24.5 13.6

Historic claim relating to an acquisition (note 8) – (50.1)

Remeasurements of decommissioning reimbursement receivables (note 8) – (5.6)

Fair value (gains)/losses on contingent consideration (note 8) (27.3) 8.0

Adjusted EBITDAX 1,405.0 1,722.7

1 The tax charge for the year rounds to $181.2 million, however, profit after tax plus the tax charge rounds to $334.3 million, so the tax charge has been rounded down in the above table to accurately reflect the profit before tax.

Alternative Performance Measures

250 ITHACA ENERGY

Adjusted net income: profit after tax excluding impairment charges or reversals, business combination costs, one-off finance charges related to refinancing and the tax effects of these items where applicable and non-cash deferred tax

charges on changes in EPL. Adjusted net income, which is presented as it eliminates items which distort year-on-year comparisons, is reconciled to profit after tax as follows:

2024

2023

Profit after tax 153.2 292.5

Impairment charges

263.0 557.9

Tax credit on impairment charges

(160.3) (403.9)

Business combination costs 16.3 –

One-off finance charges related to refinancing 22.0 –

Tax credit on business combination costs and one-off finance charges (28.7) –

EPL tax impact of increase in rate from 35% to 38% 58.1 –

Adjusted net income 323.6 446.5

1. Post-tax impairment charges of $102.7 million comprise of $38.5 million in relation to the Greater Stella Area and Pierce and $64.2 million principally in relation to decommissioning cost estimate changes on fields that have either been fully written off or have ceased production.

Adjusted earnings per share (EPS): Adjusted net income divided by average shares for the year of 1,164.3 million (2023: 1,006.7 million)

2024 2023

Adjusted EPS (cents) 27.8 44.4

Adjusted net debt: consists of amounts outstanding under RBL facility, senior unsecured loan notes, bp unsecured loan and project capital expenditure facility less cash and cash equivalents and excludes intragroup debt arrangements or

liabilities represented by letters of credit and surety bonds. Adjusted net debt, which excludes accrued interest on borrowings, lease liabilities and unamortised fees, comprises:

2024

2023

RBL drawn facility (150.0) –

Senior unsecured notes (750.0) (625.0)

bp unsecured loan – (100.0)

Project capital expenditure facility (150.0) –

Cash and cash equivalents 165.1 153.2

Adjusted net debt (884.9) (571.8)

Alternative Performance Measures continued

251ANNUAL REPORT AND ACCOUNTS 2024

Pro forma leverage ratio: adjusted net debt at the end of the year divided by adjusted EBITDAX for the year then ended, including $580.3 million of adjusted EBITDAX generated by the Eni UK businesses from 1 January 2024 to

2 October 2024. The leverage ratio is considered to be an important measure as it is indicative of the borrowing potential of the Group. The calculations are as follows:

2024 2023

Adjusted net debt ($m) 884.9 571.8

Pro forma adjusted EBITDAX ($m) 1,985.3 1,722.7

Pro forma leverage ratio 0.45x 0.33x

Available liquidity: the sum of cash and cash equivalents on the balance sheet and the undrawn amounts available to the Group using existing approved third-party facilities, excluding letters of credit. Available liquidity is regarded as a

key measure as it is indicative of the financial capacity of the Group. Available liquidity comprises:

2024

2023

Cash and cash equivalents 165.1 153.2

Undrawn borrowing facilities 850.0 725.0

Undrawn project capital expenditure facility – 150.0

Available liquidity 1,015.1 1,028.2

Group free cash flow: net cash flow from operating activities less cash used in investing activities, adjusting for cash acquired through business combinations, less bank interest and charges and interest rate swaps. This measure is

considered a useful indicator of the Group’s ability to make strategic investments, repay the Group’s debt and meet other payment obligations. Group free cash flow reconciles to net cash flow from operating activities as follows:

2024

2023

Net cash flow from operating activities 853.3 1,290.8

Net cash used in investing activities, including cash acquired through business combinations (390.9) (492.4)

Cash acquired through business combination (107.5) –

Bank interest and charges (94.7) (99.8)

Interest rate swaps 0.6 7.0

Group free cash flow 260.8 705.6

Unit operating expenditure: operating costs (excluding over/underlift) including tariff expense but excluding tanker costs and net of tariff income, divided by net production for the year. This measure is considered a useful indicator of

ongoing operating costs and is also used to compare performance between assets. Operating costs for this calculation reconcile to note 6 as follows:

2024 2023

Operating costs of hydrocarbon activities per note 6 ($m) 617.9 576.7

Less tanker costs included within operating costs of hydrocarbon activities in note 6 ($m) (18.3) (20.7)

Less tariff income included within other income in note 5 ($m) (30.0) (31.6)

Operating costs used to calculate unit operating expenditure ($m) 569.6 524.4

Production (mmboe) 25.42 25.64

Unit operating expenditure ($/boe) 22.4 20.5

252 ITHACA ENERGY

Adjusted operating costs and adjusted unit operating expenditure: operating costs less tanker costs, net of tariff income including those related to the Eni UK businesses from the effective economic date of the business combination of

1 July 2024 and adjusted unit operating expenditure being adjusted operating costs divided by total production from the effective economic date of 1 July 2024.

2024 2023

Operating costs less tanker costs, net of tariff income as set out above ($m) 569.6 N/A

Eni UK businesses' operating costs less tanker costs, net of tariff income from 1 July 2024 to 2 October 2024 ($m) 79.4 N/A

Adjusted operating costs used to calculate unit operating expenditure ($m) 649.0 N/A

Production (mmboe) 29.34 N/A

Adjusted unit operating expenditure ($/boe) 22.1 N/A

Other key performance indicators

DD&A rate per barrel: depletion, depreciation and amortisation charge for the year divided by net production for the year. D,D&A per barrel was:

2024 2023

Depletion, depreciation and amortisation per note 15 ($m) 600.2 740.3

Production (mmboe) 25.42 25.64

DD&A ($/boe) 23.6 28.8

Production: total hydrocarbons produced related to Ithaca Energy’s equity in operated and non-operated fields divided by the number of days in the year. Production in 2024 was 80,177 boe/d (2023: 70,239 boe/d). This includes the

volumes from the Eni UK businesses from the effective economic date of 1 July 2024. It should be noted that the volumes used in the per barrel calculations above, with the exception of the adjusted rate per barrel, include volumes

from the Eni UK businesses from the date of completion of 3 October 2024 as the associated costs have been recorded from that date.

Tier 1 and 2 process safety events: process safety incidents as defined by API 465 Process Safety-Recommended Practice On Key Performance Indicators. There were no Tier 1 or 2 process safety events recorded in 2024 (2023: 1).

Serious injury and fatality frequency: the number of serious injuries resulting in permanent impairment, as defined by IOGP, per million hours worked. There were no such incidents in 2024 (2023: 0).

Alternative Performance Measures continued

CBP00019082504183028

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Ithaca Energy PLC

Registered office:

33 Cavendish Square

London

W1G 0PP

www.ithacaenergy.com

ITHACA ENERGY PLC ANNUAL REPORT AND ACCOUNTS 2024