Welcome to today's Ithaca Energy 2023 full year financial results call. My name is Jordan, and I'll be coordinating your call today. If you're dialing in and like to register an audio question, you may do so by pressing star one. I'm now gonna hand over to Gilad Myerson, Executive Chairman. Please go ahead.
Thank you very much. Good morning to everyone. We're very happy to be presenting our full year results, and also we have a special announcement. We're essentially gonna have two parts to this presentation. I'll start with presenting the Exclusivity Agreement for a Potential Transformational Combination with Eni, and then we'll move on to present the operational and financial performance of the company in 2023. On slide two, you can see the presenters, myself, Gilad Myerson, Executive Chairman of Ithaca Energy PLC, and we have Iain Lewis on the line, who's acting as Chief Executive Officer, as well as the Chief Financial Officer of Ithaca.
Moving on to slide three, we're very excited to share with the market that we are exploring an opportunity to accelerate growth and create value through a Potential Transformational Combination with Eni's U.K. business. There are very significant advantages to such a combination. Number one, it will add significant scale and diversification to Ithaca Energy's business, growing the pro forma production to above 100,000 barrels a day and creating the second largest independent operator in the U.K. Continental Shelf. Secondly, it really creates a fantastic U.K. portfolio, enhances our status as the largest independent operator by resource, and we have six of the 10 largest fields in the U.K. It unlocks significant future growth for Ithaca. It will be boosting our near-term cash flows and unlock development projects while supporting shareholders' returns.
Really, that additional scale and additional production will provide additional cash to give us that optionality. And then finally, we're very excited about the long-term strategic partnership with Eni that we're contemplating. Eni will become a major shareholder in the enlarged group, supportive of delivery of Ithaca Energy's Buy, Build and Boost strategy. We believe that should this deal go ahead, we will have access to Eni's leading technical expertise to drive the future growth. Eni has done such mergers before. In Norway, they have Vår Energi, which they created a partnership with HitecVision, and Vår Energi has turned into one of the leading companies in Norway, with production of over 300,000 barrels a day.
They've done the same in Angola, and therefore, tapping into Eni's know-how and technical capabilities can be fantastic for Ithaca and our growth journey. Moving on to slide four, an overview of the transaction that we are contemplating. We're talking about a share transaction, and Eni has granted Ithaca exclusivity for a period of four weeks. We believe we'll be able to sign the combination agreement over the next four weeks, and the U.K. business of Eni will essentially come into the joint entity against issuance of new Ithaca shares, and the anticipated shareholding will be between 38%-39% for Eni of the enlarged company. So that is the transaction, and as we progress towards signing, we will share more information.
Eni has a very, very high-quality portfolio in the U.K. If you look at slide five, are we talking about four of the most attractive fields in the U.K., Elgin-Franklin, J-Area, Cygnus, and Seagull. The last two were acquired by Eni through the acquisition of Neptune. These are the two main assets of Neptune U.K.'s assets. There are two key reserves of slightly more than 100 million barrels, and the pro forma production in 2023 was 40,000-45,000 barrels a day. They have a significant gas weighting of 70%, which once again, is very complementary to Ithaca, and they also operate Cygnus, and therefore, the combined entity will have access to world-class fields. On slide six, you can see what the combination could look like. Ultimately, this becomes a U.K. powerhouse.
We would have 34 producing assets, some of the most attractive zip codes in the North Sea, assets like Elgin-Franklin, J-Area, Seagull, combined with Ithaca's assets, Mariner, Schiehallion, Captain, Rosebank, which is being developed, as well as Cambo, for production of over 100,000 barrels a day, reserves of 650 million reserves and resources, and a gas weighting of the combined entity of roughly 50%. That's 50% oil, 50% gas, which provides a lot of balance, a lot of diversity, and this is one of the most attractive portfolios in the U.K. should the deal go ahead.
Slide seven, on the left-hand side of the slide, you can see six of the 10 largest assets in the U.K. North Sea will be in this business combination, and ultimately, the combination and additional cash generation will allow us to unlock growth projects. Rosebank is already under development. As you're all aware, we own 20% working interest in the development. It will also unlock Cambo and Fotla and essentially accelerate some of the development of our assets. So in short, we're very excited about this potential transaction, and we should be able to share more within four weeks as we continue to potentially sign a combination agreement.
I'm sure there'll be questions, and happy to answer questions around the potential combination, towards the end of the presentation. With that, I'd like to move on to the full year 2023 results. As usual, I'll start presenting the results, and then I'll hand over to Iain to walk you through some of the details. On slide nine, just a reminder, U.K. is a leading independent operator on the continental shelf. We have stakes in some of the most attractive fields and two of the largest discoveries in the U.K. We have a significant pipeline of organic growth opportunities, really, without additional acquisitions, should we decide to develop our resources, we'll be able to be producing for decades to come.
We have a track record of transformational M&A, and just the recent announcement this morning demonstrates we continue with the track record. To remind people who aren't familiar with the older, because we started from single-digit production just four or five years ago, and through the acquisitions of Chevron, Mitsui, Marubeni, Summit, Siccar Point, as well as a sanctioning Rosebank, as well as the additional acquisition of 30% of Cambo last year, we have grown into a company which has significant significant production, one of the largest players in the U.K. That growth and stability of cash generation has allowed us, point four on the slide, to distribute last year, $400 million, representing 30% of post-tax cash flow from operations. Skip slide 10.
Moving on to slide 11, I'm very happy to say that we have met our guidance. Our production was 70,000 barrels per day in the midst of our guidance. OpEx was $524 million. Net producing asset CapEx was $392 million. Once again, lower part of our guidance. The Rosebank CapEx has roughly been $100 million, and we provided a dividend of $400 million. Once again, that was a commitment that we made when we IPO'd the business in November 2022, and we're very happy to pay that dividend to our shareholders. On slide 12, I just wanted to remind everyone about our strategy. We buy assets, we build assets, and we boost asset performance. Over the course of 2023, we've demonstrated each of the legs of our strategy.
Buying assets, we acquired the remaining stakes in both Fotla and in Cambo, and now through Cambo, we have full control of the FID timeline and work program. We recently received the license extension for Cambo until March 2026. That's a very important milestone in the business as we continue to grow, and, as just mentioned, earlier, we have now the Potential Transformational Combination with, with Eni. In terms of building assets, we have, we achieved FID last year. The Knarr vessel was already in the yard. I was just in Dubai a couple of weeks ago in the dry docks, viewing the vessel, which is in advanced stages of readiness for the modification that it's gonna be going through.
In terms of Captain EOR, the project is 90% complete, and we are going to start injecting polymer in summer 2024, and that polymer will create significant growth of the Captain field in the near years. Then we also had some exploration drilling on K2 in Leverett. In terms of boosting assets, significant decarbonization activity, we are looking into potentially electrifying Captain. There's a strong push from the government to electrify assets. We've seen it happen in Norway. Captain is one of our flagship assets, and it's relatively close to shore. We are excited about the potential of electrifying, and we've recently got a grid slot that will allow us to electrify the asset.
It is important to make sure we understand the fiscal framework before we progress with the electrification, and we are in discussions with the treasury, as we speak, about how to make sure that such a program could go ahead. In terms of operational efficiency, FPF-1 had production efficiency of above 90% overall. In our portfolio, production efficiency of 84%, it's very high in comparison to many other companies, and we're very proud of the way we operate our assets, both from a health and safety standpoint, environmental standpoint, and operational efficiency. And then finally, we've been doing infill drilling across the operated and non-operated portfolio to continue to increase and lengthen the production timelines of these assets.
So taking a step back, very happy with the production in 2023, with the health and safety and environmental performance in 2023, and overall strategy of buying, building, and boosting assets, which has led us to where we are today, announcing exclusivity on potentially another transformational combination as we grow the company. With that, I'll hand over to Iain.
Thanks, Gilad, and good morning, everyone. So moving on to slide 14 of the presentation, and we'll start to give an overview of the strategic and operational highlights for the year. So Gilad's mentioned production at 70,200 barrels a day for 2023. And as previously flagged to the market, we expected 2024 to be lower, and a number of reasons for that, and we now confirm guidance for 2024 of 56,000-61 ,000 barrels a day. A number of reasons for that. One is the EPL changes from last year. As we mentioned at the time, tax and fiscal regime has direct implications on investment, and we took a number of decisions last year to scale back investment in certain assets.
And that has meant a short-term implication on production, so that's investments in the Harrier field, some Monarch investment, as well as some on Franklin and other smaller investments, including Alba. The guidance for 2024 also reflects the deferral of peak oil from Captain EOR II, which again was discussed in the market during 2023. An additional contribution to the guidance is some non-operated infrastructure issues we've had in Q1, which we're now coming out of the bag of. It's been well recognized that Schiehallion have had an issue in terms of their drilling program with the Ocean GreatWhite and the implications of production there during Q1. The Pierce field operated by Shell is not yet back online.
We were expecting that back in, in December, but that, is expected to come back soon. So with one or two other operational issues, that's led us to a guidance this year that's lower. As you can see on slide 14, however, we see this as a low point in our production profile, with a, a strong trajectory upward in the, in the next few years. The information there is from the CPR, the independent Competent Person's Report that we will publish today. As usual, we produce a, a full CPR with, field-level, details around, production and costs, to enable, a very transparent, view of our business from an independent third party.
The key thing here is the trajectory of the growth and production over the next few years as Captain EOR II and Rosebank particularly come through. So 2024 will be lower, but we're expecting the medium-term increases in the overall production base. Moving to slide 15, and in terms of the changes in resources and reserves in the year, you can see that we're glad to report an increase in the reserves position at the end of 2023. And that's the sanctioning of the Rosebank project, largely, as well as some other infill drilling, and that brings us to 254 million barrels of 2P reserves.
Also glad to be able to add to our resources, and obviously, with Rosebank moving from resources to reserve, and be able to replace that with the additional volumes coming through from Cambo and Fotla. And that leaves us in a very healthy position in terms of optionality for investment, and you can see on the right-hand side, with a total of 544 million barrels of 2P and 2C, largely in our operated hands in terms of Cambo particularly, and looking forward to move that project forward now that we have the license extension. Slide 16 and a note on costs.
So we're guiding this year on operating cost of $540 million-$590 million barrels a day, so with a midpoint of $565 million. Now, in the context of 2023, where we spent a significant amount of effort in the reduction of our cost base, and very successfully, we offset inflation, and we both reduced our guidance twice during the year and came at the bottom end of the guidance, outside the bottom end at $524 million for 2023. The increase in 2024 is relatively modest when you factor in the tariff income reductions that are baked in.
So, reduced tariff income from the Vorlich field means that the underlying guidance increase of $540 at the bottom end, and essentially a small inflationary increase to get to the midpoint. We continue to work on our cost base and continue to keep costs tight, and we'll continue to do that during 2024. It does mean, however, that our cost per barrel will increase during 2024, given the production reduction that we are guiding on and the moderate cost increase. But we expect in the medium term to be back towards the $20 a barrel OpEx per barrel, as we move through the next phase of production. On slide 17, and some guidance around capital expenditure.
So, the CapEx for producing assets on the left-hand side of this slide is guided at $335 million-$385 million, and there's a lot of activity in Captain. There's the conclusion of the EOR II project. There is the polymer injection into Captain as well as topside and facilities upgrades across the asset. And then we have a number of other infill drilling and well intervention activities, including the ERSKINE W1 intervention to increase production there, the Captain 13th drilling campaign that will kick off in the second half of the year from the platform as we conclude EOR II activities, and a number of base drilling CapEx at Schiehallion and Mariner.
So, baseline investment, that is, production, supporting in the, in the short term. On the right-hand side, you have, you have Rosebank, and, you can see the capital for this year we're guiding at $190 million-$230 million. The pace of capital project spend in these kinds of projects is always. It always moves around depending on the, the specific scopes and the milestones. As Gilad mentioned, we're making good progress on the, on the project and, looking to bring that through to first oil at the end of 2026, beginning of 2027. With the CPR guidance there, all more details of which will be in the, in the pack later in the, in the day. Okay, slide 18 gives you a bit more detail on Captain EOR II.
Nearing completion now on a project, which is a very large scale investment for us, is becoming on the back of the EOR phase I success, underneath the platform. Now this is a subsea phase of the project. We are on time and on budget in terms of the delivery, which is very pleasing as a result, and we are completing the drilling operations in the next few weeks. The plan then to start injection of polymer into the subsea reservoirs in the summer across two different phases. Moving to slide 19, shows you something of the impact that EOR II will have. This is the CPR data there in 2025, 2026 and 2027.
So it's an independent view of the volumes that will come through. The key with Captain is the long-term delivery of barrels to the polymer injection that lifts our production over the next couple of years, with the potential to double the 2023 volumes. On to slide 20, and we are on Rosebank, and just a few slides on the significance of this project to the U.K. The single largest undeveloped discovery, over 3 million barrels gross resources, and a project which is environmentally sensitive, reusing the Petrojarl Knarr FPSO, and delivering low-intensity carbon barrels to the U.K. Our working interest is 20%. The net production that we expect at a peak rate at the commencement is 15,000 barrels a day.
Slide 21 gives you a bit of the phasing of the development through 2024, 2025 and 2026. And you can see that we are on that schedule just now, moving through the dry dock work of the FPSO, that Gilad went round with the executive management team in the last couple of weeks. Moving into subsea activity, particularly during late 2024 and into 2025. First production expected late 2026, 2027, and a long-term field life, and this is a cornerstone of our long-term production delivery that we're pleased to say is moving ahead. Final slide on this is slide 22.
Just a couple of pictures of some of the fabrication work that's ongoing, the removal of certain aspects of the vessel at the heli deck as the work to modify the vessel continues. As mentioned in this slide, and it's an important point to make, is that this is a vessel that will be electrification ready when it comes out of the dry dock. Nearly $100 million is being spent on making sure that it's electrification ready, so that, subject infrastructure availability, that is an open option for the Rosebank field, which would even further reduce its emissions impact. Okay, let's move on to slide 24 and go through some of the financials.
Strong delivery in 2023, as has been mentioned already, 70,000 barrels a day, $20.5 a barrel unit operating cost, net cash from operations of $1.3 billion, and over $1.7 billion of EBITDAX, giving an adjusted net income of nearly $370 million. And we closed 2023 with a low leverage ratio of 0.33x net debt to EBITDAX, and only $572 million of adjusted debt. We also had available liquidity at the end of the year of over $1 billion. So a very strong financial position, financial delivery in 2023. Slide 25 gives more detail on the EBITDAX breakout, and worth referencing a couple of points here. Our active hedging policy has been in significant value delivery mode during 2023.
The $10 a barrel, or $266 million of delivery to the bottom line during the year. And that helped us to really maintain our EBITDAX per barrel figure at towards $70, compared with 2022. And given the commodity price change between 2022 and 2023, very pleased with the hedging offsets that have enabled us to maintain a strong EBITDAX delivery in the year. A lot of cost control involved in keeping the inflationary impact low during 2023, and clearly the hedging value helping us to deliver stable results in a volatile commodity market.
Moving to slide 26, and we have a summary again of our capital allocation framework, something which we know is appreciated by investors and the clarity of it. So as we sustain CapEx or sustaining CapEx, first to invest in the business, followed by protecting the balance sheet, maintaining less than 1.5x net debt to EBITDAX, and then returning to shareholders, which we've done during 2023, with the final transfer of dividend announced and payable during April. And then the ability to evolve the business through further investments and growth CapEx, and the potential combination with the Eni portfolio feeds into this evolved category, developing the business and in fact enabling the balance sheet capability of the business if that transaction were to conclude.
Slide 27 then is a bit of an overview of our portfolio position, our debt and leverage management. And you'll see that we've been evolving this, and the strength has been improving over the last couple of years. We're now down at the lowest net debt at the end of 2023 that we've had for several years, down at $572 million, with a base high yield bond note of $650 million, $100 million loan on terms from BP, and then net cash actually in the RBL. So the RBL undrawn and net cash of $153 million at the end of the year. Now, that leads on to our liquidity availability position.
You can see total available facilities of $1.6 billion. That's an RBL at the end of the year with undrawn capacity of over $800 million, of bonds of $65 million, or $100 million of the BP financing. And there's also a capital or CapEx carry agreement in that liquidity facility, which is a project-based CapEx carry of $150 million. We expect to draw during 2024, and that will be repaid, we expect from 2027. It's an 8% cost of carry position as a floor, and we expect that to be fully drawn down to $150 million during 2024.
So we're just adding to our ability to finance our capital program as we move forward into the growth phase of our production in the next couple of years. So closing the leverage ratio for the year at 0.33x with significant capacity beyond. We're now 3 years out from our refinancing in 2021, and we've been doing minor aspects of refinancing through the BP loan and this carry agreement. And we continue to evolve the finance position of the business to support the delivery of capital and production. A couple of slides on hedging, slide 28 and 29. Twenty-eight is a reminder of our target hedge position with the protection of the business from downside risk with upside exposure at 50%.
The implementation of this has been limited to a degree by the pricing of put options, which, given the volatility, have been very high. So the 10% premium limit has meant we're not executing on that element of it. However, we're very pleased with what we've been able to do. You can see on the right-hand side that our policy of hedging at the peaks in the market has continued to deliver for us, and we're active where we like the prices. So you'll see that we didn't do any hedging of note between October and January, early February, when prices were low in terms of oil. And we've started to place significant volumes in the last few weeks as oil's come back to a three-month high.
Gas is obviously on a downward trend over the last few months. We're a very strong gas hedge book in the next 6-9 months. And so we're managing that hedge position based upon the market just now. And the slide 29 shows that we have a substantive hedge book on oil with a high collar floor position and a significant volumes in play right through into 2025. And in gas hedging, you can see that we have less from Q4 2024 onwards, and we'll look to place that in the market as we see prices that we like in the coming months. Okay, just to close out then, slide 31, just to reconfirm the guidance for the year.
56,000-61,000 barrels of oil per day production. Net OpEx of $540 million-$590 million, producing asset CapEx of $335 million-$385 million, Rosebank CapEx in the $190 million-$230 million range. We're guiding now on cash tax payment expectations of $345 million-$355 million. That is substantially all EPL related, and this is 2023 EPL related, and most of that payable in October. Then we have this CapEx carry arrangement, which we are announcing today, which we expect to draw down during 2024, $150 million of CapEx carry. So final slide from me is slide 32, and this is just to close out on the dividend. We said at IPO that we'd deliver a $400 million dividend for 2023.
Given the volatility in oil and gas prices, we weren't sure exactly where that would be in terms of post-tax CFFO. But as we gave the range go forward of 15%-30%, we expected and we're looking for that to come in at around the top end of the range, and glad to say that that's exactly what's happened. The $400 million is 30% post-tax cash from operations. We believe this policy around the dividend is transparent and clear and enables investors with information we give in our guidance and also in the CPR to have a clear view of where the dividend ranges are for the future years.
Announcing today that we are targeting the top end again of our dividend range for 2024, and therefore, the investors can expect us to move towards that as we drive value through 2024, looking to deliver on that target. Okay, I'll hand back to Gilad now for the closing remarks on slide 33.
Brilliant. Thanks, Iain. Yeah, on slide 33, so firstly, I just wanted to thank the employees for obviously delivering a very robust year. The results stand out for themselves, $1.7 billion of adjusted EBITDA and over $1 billion of liquidity at the year-end, and delivering upon the majority of our objectives that we set out at the beginning of the year. Secondly, wanna call out the significant FID of Rosebank. We're very excited about the project. It's gonna be continuing to deliver energy security to the U.K., and the project is progressing very well. Equinor are doing a fantastic job. Thirdly, wanted to call out EOR phase II that is going to continue increasing production.
We're very happy with EOR phase I, continues to deliver more barrels than than FID case, and we are looking forward to start injecting polymer over the course of 2024. Fourthly, calling out the dividend. We made a commitment to $400 million for 2023, and we've met that commitment despite significant fiscal headwinds and other changes that have been happening over the last year. We're very happy to provide shareholders with the return that they expected. And then finally, we're very excited about the exclusivity agreement that we've announced this morning for a Potential Transformational Combination with Eni U.K. It could be very a very attractive combination delivering fantastic returns for shareholders over many years to come.
So yeah, with that, we'll end the formal presentation and more than happy to open up to Q&A.
As a reminder, if you'd like to register an audio question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two, and please ensure you're unmuted when speaking. Our first question comes from Werner Riding of Peel Hunt. Werner, please go ahead.
Thank you. Good morning, guys. First one on the transaction. I mean, personally, I see why you're doing it and understand the benefits you've outlined. I was wondering if you could—if I could put a question to you that I had from an investor this morning. He was pointing out that, you know, you've cut investment in the U.K. because of the EPL, and that's impacted production this year. But then, on the other hand, today's proposal is to carry out a major acquisition to buy more U.K. assets to invest into. So I was just wondering if you could maybe help reconcile that thinking. Thank you.
Yeah, sure. I'm happy to address that. Ultimately, this is a business which has significant scale advantages. If you look at the last six months alone, we've seen a huge amount of deal-making, Chevron, Exxon, Eni, Neptune, Harbour, Richfield there, Oxy, Talos, and many other companies have been in a consolidation wave. When you consolidate, there are significant synergies to be achieved, operating synergies, cash flow synergies, access to cheaper debt, and therefore, we believe the industry will continue to consolidate. In fact, this was the initial thesis of Ithaca many years back, was to focus on consolidating the industry, in the U.K. basin.
And therefore, regardless of the government and the fiscal environment, we believe it's the healthy and the right thing for businesses to continue to consolidate, and we want Ithaca to be the consolidator of choice for other companies to consider when they think about business combinations, and therefore, there's huge value in this deal as we are currently contemplating. In terms of the U.K. as a basin compared to other basins, we have most of our synergies in the U.K. in terms of our operating synergies and capabilities, our relationships with the government, relationships with the regulator, our capabilities in terms of supply chain and procurement. Therefore, we believe that we can still create significant value in the U.K.
However, we are also looking outside of the U.K., given the current fiscal instability, in the basin.
All right. Thanks. Thanks, Gilad. Just you mentioned synergies. Are there any tax synergies? Are there any meaningful losses within Eni U.K.?
Yeah, do you want to take that, Iain?
Sure, Werner. Yes, so as with all U.K. acquisitions, taxes is part of it, Werner. So I would say that there's a natural synergies with a kinda low CapEx, high production portfolio like the ENI business in the U.K., relative to ours, with a higher production CapEx opportunity, given the resources base. There's natural investment opportunity, and there's loss positions that are kinda, I guess, standard in most of these entities in the U.K. So it's part of the portfolio effect, but the key value driver, as Gilad said, is the combination and the scale of high-quality assets that come in an unlevered basis that enable significant more strength and firepower to develop the business.
Okay, got it. And sorry, I don't want to hog the questions, but one more quick one, if that's okay. Probably another one for Gilad. I was wondering, with your various discussions that you've had around progressing Cambo, could you outline how and when that project progresses from here? What the critical elements are to take FID and then get FDP approval? And do you need a farm out, or would you FID it at 100%?
Yeah, I think those are all valid questions. I'll start by saying Cambo is a very significant project. It is the second largest development in the U.K., and we're very excited about the project. That's why we bought. Well, one of the reasons for buying Siccar Point, and that's one of the reasons for buying an additional 30% from Shell. We've said multiple times that we don't see ourselves as a 100% developer of the asset. We like to diversify our development programs and therefore, we would look to form a part of interest over the near term. In terms of the exact timeline, we were looking to sanction Cambo end of 2022.
But then, the first version of EPL came through, then there was another version of EPL, and subsequently, there have been two additional changes to EPL, which has left us in a bit of an unstable environment where we don't want to commit to doing such a project, without having some sort of certainty from the government. The government, this is a conservative government, launched a consultation with the industry, just a few months back, where they promised, stability and predictability. And then obviously, the budget came out just a few weeks back, where they did not provide the predictability that they'd promised.
Therefore, at the moment, we are in advanced discussions with the government in order to understand what their future plans are. But obviously, with the elections coming soon, we'll need to take that into consideration. So that's a relatively long answer. The short of it is, we're considering options given the fiscal environment.
Thanks very much.
Our next question comes from Matt Smith of Bank of America. Matt, please go ahead.
Hey, good morning, guys. Congratulations on the announcement this morning, and thanks for taking my questions. I had a few as well. I suppose the first one, on the Eni transaction, where we're talking about is a potential transaction still today, and I guess you have a four-week exclusivity window. So I just wanted to clarify, you know, what was left to agree between the parties, and I guess if you were able to characterize, you know, your confidence levels in terms of getting this transaction over the line within the next four weeks, and perhaps I'll come back with my second.
Yes, so we've signed the exclusivity, and we have line of sight to signing within the next four weeks, and therefore, it felt appropriate to update the markets, given there have been quite a few transactions around the Eni and Neptune, and we've received a few questions about it, so therefore, we thought it would be the most appropriate to update. We have good line of sight. In the announcement, you can see that we've already agreed to the share values of the combined entities, and therefore, it's really just dotting the I's and crossing the Ts.
Sure, perfect. Well, that's very clear. And then I guess, my second question was a bit of a two-parter, around the sort of fiscal system in the U.K. And the first one, sorry, but I know we've slightly covered this. Just a clarification, would be considering how this transaction is proposed to be structured, would you expect to be able to use sort of the fiscal base, the tax losses, for the acquired assets and the acquired cash flows? So would that perhaps be one synergy there? And then my second part, on the same topic, really. I was just wondering whether you had any clarity really on what the current position of the Labour Party is in terms of what they're proposing.
I think most of us know the headlines are sort of tax rate, 75%-78%, and originally there was talk of removing the investment allowance that exists within the EPL. But I think more recently there's been some confusion whether the conversation is around removing also the capital allowance itself. So I think, you know, it's fair to say there's as much uncertainty as ever, but I just wondered whether you had any clarity, at least on what the proposal is at this stage. Thanks.
So maybe I'll take this one, Gilad. Just in terms of the deal, I mean, this is about making the company stronger, and the potential transaction enables us to face whatever fiscal regime is in place. We have the appropriate flexibility and capacity to deal with that. So I think that's the key point here. It's not really about tax loss utilization, like as a key driver. I think in terms of the fiscal regime, it's clearly unstable. That's well understood. I think the very fact that you've gone through a number of potential options there tells you that we don't really know, and that's not helpful.
But the key thing for us is to have the capability to respond, and that's what we're building a business that's able to respond to whatever the changes are.
Yeah. Thanks, Iain. And one other point I'd mention about the Labour. The Labour keep on referring to Norway as an example. So when they talk about 75%-78% tax, they call out Norway. What's interesting about Norway is Norway has created immense wealth and prosperity through promoting investment in the oil and gas industry. So having specific investment allowances for exploration, for development, and for producing assets, and therefore, if we really consider that type of fiscal environment, it could be very productive for the U.K. At the moment, the U.K. imports 50% of its energy, and therefore, from an energy security perspective, we're at risk.
From a job security perspective, we're at risk, and our tax revenue is in decline from the industry, and ultimately, we are importing barrels at a higher CO2 per barrel versus producing locally. And therefore, we believe in the longer term, the government, whichever government it is, over the next few months, will come to terms with the need for oil and gas in the U.K., and it makes a lot more sense to produce energy yourself rather than import from abroad. And the fiscal environment, we believe, will eventually change to match that understanding that future government will have.
Perfect. Well, thanks very much for your comments. I'm happy to pass it on.
Our next question comes from Mark Wilson of Jefferies. Mark, please go ahead.
Yeah, thank you. I think a lot of questions on the transaction already, so let me just ask about your organic developments and potential there. But starting with Captain, you talk about the peak production being now in 2026, but actually, 2025 shows almost 50% growth at that field with a small then kick up in 2026. So arguably, that ramp in 2025 is more important. Could you talk about how that progresses through the year and any risks to that? Thank you.
Yeah, thanks, Mark. And, yeah, so the slide—you're referring to slide 19, and this is the CPR guidance. And, the key thing here, as you've seen with phase 1 of the polymer enhanced oil recovery, is that the volumes come, but the exact patterns in which they come varies by well structure and varies by field elements. So this is an independent view of production profiles. The exact ramp up through 2025 and 2026, there are a number of views can be taken on it. The key thing is it will increase substantially. We expect it to double the 2023 production in due course, currently expected to be 2026.
But as you can see, you can take a different view on that earlier or later.
Okay, understand on that. And then moving to Greater Stella, quite the write-down and saying you're not continuing now with Harrier and EPL being an impact on that, are there any future tiebacks we should consider post the Harrier decision for Greater Stella? And then outside of that, it would appear to us that Fotla is—we should consider Fotla as being the closest new development in the portfolio that could get sanctioned. Thanks.
Yeah. So, in terms of the Greater Stella Area, that's correct. So the Harrier infill drill program was one of the large production parts of 2024 that we took out, given we didn't proceed with that FID in 2023. The Greater Stella Area actually is an example of success in that the very high production efficiency of the asset has meant that we've been depleting the reserves more quickly than expected, which is good from a cash flow acceleration perspective, but clearly brings the capacity in the future down. So there are no other developments expected at the Greater Stella Area. Continue to have good production from Abigail and Vorlich, but it is declining.
It's gas, gassier assets, which therefore decline quicker. So yeah, no, it's a good story, but a story of the EPL having an impact because all of the Harrier volumes were in the EPL envelope, and therefore, had a much higher tax burden. In terms of Fotla, yes, it's an attractive development. We've taken 100% and expect to farm that down, but it's one of the key asset tiebacks to the Greater Britannia area. It's going through its normal kind of development process, journey and fully expect that to come to FID. It's a high-value tieback to a key hub in the Britannia area.
Thank you for that, Ian. Can I ask a follow-up? Because what you said there about Harrier is quite interesting, that the CapEx being within the EPL window or envelope. Is it the case that because of uncertainty on how long capital allowances may last, or even the timeline of them, that is affecting development decisions on new tiebacks as much as the tax rate itself, it's whether capital allowances will continue?
Yeah, so there are multiple. So, I guess in oil and gas, Mark, we're used to dealing with uncertainty to do with subsurface uncertainties, capital cost uncertainties, hydrocarbon price uncertainties. Fiscal uncertainty has never been such a large part of our capital decision making, but it's just another uncertainty we have to deal with. So yes, we run scenarios like we do on all the other elements of uncertainty. We run scenarios on the fiscal positions, too. And as Gil has mentioned, it's unhelpful. You know, we would long for a stable and supportive tax and fiscal environment like Norway, which is not what's been proposed or in fact, which exists at the moment. But yes, it does impact our decisions.
Okay, thank you. I'll hand it over, and good luck with those negotiations.
Thanks, Mark.
As a reminder, that's star followed by one to register a question. Our next question comes from Chris Wheaton of Stifel. Chris, please go ahead.
Thanks so much. Good morning, guys. Two questions from me, if I may please. Firstly, your 2027 [audio distortion] guidance on slide 14, does that include anything from Marigold or Fotla? And my second transaction proposed today, Chris, we're losing you. So just to repeat my first question, 2027 guidance, does that include anything from Marigold or Fotla? Second question was on the tax uncertainty inherent in acquiring the Eni portfolio. You have significant tax uncertainty here.
I'm wondering how you're accounting for that in the portfolio, because I'm struggling to get to the kind of implied asset valuation that 40% of or 40% of the ownership of an enlarged Ithaca would, you know, would be valued at, given the continuation of the windfall tax beyond 2029, which has to be surely your base case assumption. Let alone what happens in the worst case, if the legal proposals are implemented, including the removal of the investment allowances, which really would destroy U.K. North Sea competitiveness and return on the investment. So I'm just interested how you've thought about that tax risk in this transaction.
Sure. So, let me deal with two of those. So first of all, on slide 14, the production portfolio that's shown there is 2P. So it doesn't include, it doesn't include, resources, contingent resource, volumes like Marigold. So there's no assumption in there for Marigold in those numbers. Rosebank, now converted to reserves is in those, in those, CPR numbers. In terms of the transaction, I think the, the key, the, the key point for us is that this is a relative value transaction. So, we believe that, our own portfolio and, you know, the, the market capitalization of the company doesn't reflect the net asset value that we see.
That's a systemic issue, I think, in the oil and gas industry in the U.K. and the fiscal environment and political uncertainty are clearly weighs on that. So we've looked at this on a relative net asset value perspective, and that's what that proposed and potential share issuance is based upon. That includes assessment of the range of uncertainties on tax, which is part of it. Obviously, we're close to the details, Chris. I'm not sure what you've got in your models, but the relative value is all there. Of course, each portfolio is differentially impacted.
So for example, the capital allowances impact, there's not a substantial capital program linked with the Eni assets in the U.K., and the ex-Neptune assets. So allowances are less impactful, but for us, they are more impactful. So this is about, and it's one of the synergistic aspects of the proposed combination, is the flexibility and the differential impacts of different future scenarios on the two different portfolios are quite compatible when brought together.
Okay, that's really helpful. Thanks so much indeed.
Thanks, Chris.
Our final question comes from Kim Fustier of HSBC. Kim, please go ahead.
Hi, good morning. Thank you for taking my question. Firstly, on the dividend, I think you previously talked about an ambition to raise the dividend from $400 million- $420 million for 2024, and you're now targeting 30% of post-tax CFFO. Could you just clarify whether the previous ambition still stands? Secondly, could you give a bit more detail on how the Eni combination would work in practice? For instance, would you be able to access Eni's technological capabilities, such as, for instance, seismic interpretation, or access their procurement capabilities? Thank you.
I'm gonna deal with the first one, and then pass to Gilad for the second. So on the first one, yeah, so we said at IPO that our ambition was to have a dividend of $400 million for 2023, which we've delivered, and then the ambition was to grow that. Now, what we always said was that it'd be anchored on a 15%-38% post-tax cash from operations. And $420 million was within the potential of the business to deliver in 2024 at that time, before EPL two came along.
So, clearly, the EPL, two raise of the rate, has had a significant impact, and obviously it's taken out some development CapEx, and that's weighing on 2024 production and therefore on the dividend capacity. So I think, you know, we give lots of detail in terms of the CPR and then our guidance, including cash taxes, that, you know, the dividend range, 15%-30%, can be worked out, depending what prices you run. We have a pretty strong view of where prices will go in terms of oil and gas in the next nine months. But, you know, as we see that come through, we're targeting sharing with the top end of our range with our investors.
So that's the aim for this year. Gilad, on the technical access?
Yes, can you repeat the question, please?
Just wondering whether you'd be able to access any of Eni's technology or procurement capabilities?
Yes, absolutely. I think that's one of the most attractive aspects of the deal. Eni have significant technical capabilities through the lifecycle of assets, from exploration to development, to operations to decommissioning of assets. And they are very keen to support the company, support the company's growth. So for instance, if you take Rosebank as an example, having them, they've done quite a few vessel modifications. We're going through the vessel modification. We're gonna be drilling West of Shetland together with Equinor, and having their experience in tough water environments also will be helpful.
Cambo development, if we decide to go ahead with Cambo, I think there's gonna be a significant amount of technical work to get that project over the line and developed, and therefore, we'll be able to tap into their expertise. They've done this before multiple times. So if you take Vår as an example, they are a very influential stakeholder and have been instrumental to the growth of Vår Energi, as they have been in Angola with BP. So that is also why we're so keen about this partnership. Beyond just a traditional business combination, over here, we have that element of technical expertise and depth of experience that we'll be able to work on together as we grow.
One final point is, if you look in the northern side of the continental shelf, there's two distinct examples of fantastic collaboration. One is Aker BP, which is a partnership between Aker and British Petroleum, and the other is Vår Energi, which is Eni HitecVision, and we see a lot of benefits of the agility of a independent and the bench strength of a major, and we're looking to replicate that success in the U.K.
That's great. Thank you very much.
We have no further questions on the line, so I'll hand back to the management team.
Yeah, very good. So, thank you so much for joining the call and all your questions. Based on the questions, you clearly know the business, and we appreciate your interest. As always, we're very proud of what we're doing and very open to questions and ideas. So, feel free to email Kathryn, Iain, or myself directly, and we're more than happy to answer any additional questions and provide insights into our business. Thank you so much for joining.