Ithaca Energy Aktie

Good morning, everyone. Those of you who are unfortunately not on holiday and joined us and those who are, welcome to our first half 2026 result presentation. My name is Yaniv Friedman. I'm the Executive Chairman of Ithaca Energy. And with me on the call today are Luciano Vasques, our CEO; and Iain Lewis, our CFO.

First slide, as you can see, delivering on our strategy. I think this is a perfect example of a first half of the year that we've been executing on all pillars of our strategy. And what we'll cover today in our agenda, as you can see on Slide 2, is first half 2026 highlights, our strategic and operational review, financial updates, and then we'll open it up for questions and answers.

If you'll please move to Slide 4, at a high level, again, our vision for scale, stability and strength, well demonstrated in our first half 2026. Record quarterly production of 131,000 barrels per day of barrels of oil equivalent with an improved cost outlook that supports our robust cash flow generation. I could say that we had -- as we said last quarter, we saw the trend going into Q2. We're seeing this trending into Q3, which is a heavy TAR quarter for us, but we're recovering very well from the TAR season. We're seeing this strong production trending into the third quarter as well.

Stability, Rosebank nearing final stages of execution, and we're moving our organic portfolio forward with a pipeline of projects to enable us to take final investment decision on through the end of '26 and into 2027. And strength, significant available liquidity. We have $1.9 billion of available liquidity. We also have an accordion that we can expand in our reserve-based lending facility of above $400 million, so significant liquidity. We're also attuned to the market and taking advantage of opportunities. So we've done a private bond tap of our Eurobond, EUR 155 million at 5.5% to further support our growth ambitions and optimize our balance sheet.

And with that, we value distributions. We understand that this is important to our shareholders. And we're announcing today our first interim dividend for 2026 of $255 million, and we're upgrading our management guidance of our dividends to $500 million to $530 million, and Iain will talk through that later as well.

If you look to Slide 5 and what we did on Slide 5, we're focusing on stability, and we wanted to show that this is not a one-off quarter or one or first half of the year. And what you see here is really a snapshot of the last 24 months since the effective date of our business combination. And these are the type of charts that we like, scale, production going up, OpEx going down and stable cash flow production and distribution. I could also say and Luciano will speak to that, that safety is obviously paramount to us, and we're seeing improved metrics there as well. So if you look at the slide, so first half production in 2026 of 128,000 barrels, OpEx going down from $22 a barrel in 2024 to about $18 in the first half of 2026. And as we said, distributions are important for us. And as you can see, we've to date announced over $1.65 billion in the course of the last 3 years and upgrading our dividend guidance range for 2026.

We'll cover strategic and operational review.

I'll hand over to Luciano to talk about safety, production and projects. Luciano, please.

All right. Good morning, everybody. And if we now move to Slide #7. Our performance in the first half is fully consistent with the pillars of our strategy that we presented several times. I'll take you through the first 2, but this morning, extracting value from our versatile portfolio in U.K. progressing discipline in organic flow growth opportunities, which are strengthening our business for the future. The operational momentum from '25 carried strongly into H1 '26, delivering clear progress across safety, environmental performance, production efficiency, as Yaniv said, and cost discipline. And this, of course, reflects our focus on the operational excellence, which we've done through our Perfect Day, safer, stronger reliability and a lower operating cost per barrel.

On the growth side, we've continued selecting investment across the producing portfolio, prioritizing fast cycle value opportunities on Captain, Cygnus and also J and Elgin Franklin, as I'll speak through. And at the same time, our organic growth pipeline is moving forward with purpose with Fotla, Tornado and Cambo progressing towards readiness for FID. Rosebank has also reached a major milestone with the FPSO now on location ahead of the expected first production in H1 2027 and following ramp-up.

If we can now move to Slide 8. And I want to stress that our excellent overall performance in H1 2026 was underpinned, as Yaniv said, by strong health, safety and environmental results. For the tenth quarter on a row, we recorded Tier 1 Tier 2, zero process safety events and sustained again a positive total recordable incident rate trend at 1.2 cases per million man hours in H1 and 1.7 on a 1-year rolling basis, well below the U.K. North Sea basin average of 3.95. This is particularly notable given that 2 operated assets reached cessation of production, and this required greater focus to safely execute nonroutine end-of-life activities. Both the FPF-1 and Alba FSU were removed from their locations, transferred to decommissioning yards as planned without any recordable incident.

The emission performance also remained strong with emission intensity now at 16.4 kilograms CO2 per barrel equivalent, which is substantially below the basin average of around 25 and continuing to trend downwards. And this reflects the increased weighting towards lower emission assets and the retirement, of course, of the higher intensity Alba and GSA fields.

If we move now to Slide #8, sorry, to Slide #9 with production. We achieved, as we said, record production in Q2 '26, averaging 131,000 barrels per day as operations rebounded strongly from the weather-related challenges experienced in Q1. confirming the robustness of our portfolio despite the challenges, both in the operated and the nonoperated assets. This performance supported an average production of 128,000 barrels per day in the first half and production operations continued strong, as we said, beyond Q2, which provides us confidence in our production outlook for the year, still appropriately allowing for the planned impact of the Q3 turnaround season. And the production mix also strengthened with gas now representing 48% of H1 volumes versus 41% in H1 2025, and the shift reflects the strategic portfolio reshaping that we delivered through the M&A activities in 2025, particularly the increased contribution from Cygnus and Seagull gas fields.

If we move to Slide 10 now, at Captain, the deployment of the PBLJ is already demonstrating the value of our industry collaboration model, unlocking near-term production through 3-month redrill program on well B15, which is progressing well and expected to be on stream from early Q4. The wider Captain 13th well campaign remains on schedule. The well C75 was successfully brought on stream in Q2. And following the current ongoing rig maintenance activity, the final well of the campaign, which is an injector will be executed.

Captain continues to deliver fast cycle, high-return opportunities with the 14th campaign planned to follow immediately after the 13th one. And in parallel, sanction of the Captain subsea well campaign, which comprises 2 wells and will leverage again, the PBLJ capacity is expected to be reached in Q4 this year. The first production from the subsea campaign is targeted for '28, adding further depth to Captain's long-term production outlook, which is underpinned by the EOR Stage 1 and Stage 2 initiatives that are delivering in line with their field development plans.

If we now move to Slide 11. We talk about Cygnus, where the infill drilling program continues to make strong operational progress. The C13 well, which was brought on stream in May, is performing ahead of expectations, thanks to a successful completion design and execution of the hydraulic fracturing program. C14 has since been spudded and remains on track to first gas in November. Before then, the campaign progresses to C15. On completion of C16, the rig then is expected to move to the Bravo Area in Q2 2027 for the C16 and C17 2-well campaign, which we expect to sanction in the second half of this year, subject to the required field development plan approvals. C16 is a clear example of production-led exploration, reinforcing our commitment to maximize value from Cygnus. So timely regulatory approval is essential to maintain momentum and support continued delivery of domestic gas from one of the U.K.'s most significant fields.

If we move to Slide 12, now we turn to 2 key assets in our non-operated portfolio. J Area continues to provide a stable, low-cost production contribution, supported by strong performance from Jocelyn South and Talbot, which continue to be ahead of expectation. The operator performance remains high, underpinned by an open and constructive partnership, and the assets offer further upside through well interventions, new infill wells as well as production and infrastructure-led exploration and appraisal opportunities such as Courageous and Peach with the potential to replicate the Jocelyn South success. And at Elgin Franklin, with the new operator NEO NEXT+, we have sanctioned a 2-well program comprising EIJ and EIH, which was an opportunity previously deferred in response to the energy profit levy. And the campaign is scheduled to start in Q4 this year and represents a short cycle, again, high-return investment targeting 4,500 barrels per day of net incremental production in 2028, with EIJ expected onstream in January and EIH in August.

And then if we move to Slide 13, we talk about Rosebank, which continues to move into its final stages of execution with the operator now narrowing first production in first half 2027 and ramp up to plateau from summer next year, subject to regulatory approvals. A major milestone was achieved in June with the FPSO arriving and being moored on location after a short dock phase in Bergen. And at this moment, hookup activities are ongoing, which will be followed by the commissioning prior to first oil. Following the April equipment handling incident, the drilling rig returned to service at the end of July after a period off-hire and has restarted well activities focused now on delivering the minimum well stock required for the planned ramp-up.

2026 capital spend is now expected to be lower than previously guided, reflecting the rephasing of this drilling activity and associated costs into 2027, including the final FPSO commissioning. Rosebank remains attractive as a project with expected post-tax CapEx below $4 per barrel equivalent, reducing to below $3.5 with the anticipated High Value 8 wells and an overall cost performance within project contingency envelope.

And to close, we go in Slide 14, our key organic growth projects, Fotla, Tornado and Cambo have all progressed materially and now are technically assured with front-end engineering design and tendering largely complete. Fotla is moving towards execution, supported by the successful farm-down and rig sharing agreement with Harbour Energy. The key long lead items, including installation vessels and PBLJ drilling rig capacity have been secured, reducing development risk and increasing confidence in reaching FID in 2026.

The West of Shetland remains central to our strategy and an important growth basin. Tornado will be a key gas enabler for future tiebacks and has advanced towards FID following the obtainment of 18 months license extension to March 2028, with critical long lead items and vessels secured alongside our partner, Adura, subject to regulatory approvals. And Cambo, the largest pre-FID undeveloped discovery of the U.K. continental shelf remains a strategically important option for both Ithaca and the U.K. indeed. With front-end engineering and tendering substantially complete, major contracts ready for award, value engineering, retendering, commercial and financial work streams progressing, the project is increasingly derisked as it moves towards sanction and equity farm-down.

With that, I pass the word again to Yaniv.

Thank you, Luciano. And you just spoke about organic growth opportunities. And if you move to Slide 15, it's really a snapshot of kind of the high-quality projects that we have right now and our ability to convert 200 million barrels of resources into production over the course of the next 18 months through FID decisions that we intend to make. I won't run through the projects again, but this gives you a good idea on the growth -- the organic growth potential that we have and the materiality and quality of our pipeline.

If we move to Slide 16. So we've shared a version of the slide in one of our conference call before, and we talked about how we're seeing visibility on a 1 billion barrel license potential. And Luciano alluded to that as well. We're prioritizing infrastructure-led exploration, production-led exploration opportunities as additional avenue for long-term value creation with our 660 million barrels of oil equivalent of 2P, 2C resources. We are seeing kind of unbooked 2C contingent and prospective resources up to 1 billion.

But we also have another tool, which is the transitional energy certificates that are providing a pathway beyond the existing licensed resources for additional value creation. And we're working this and you see this, and we're maturing those, and they will obviously -- through the maturity, we'll convert them to resources and then to projects that we can take final investment decision on. So we're seeing significant value in the U.K. Continental Shelf. And when people talk about no new exploration licenses, what we want to show is that even without new exploration licenses formally, we have where to grow in the U.K. further.

Active but patient pursuit of M&A and what we're doing as well as optimizing our balance sheet to support our growth ambitions and strategy. If we look at the U.K. and kind of consolidation in our core UKCS market, so we just talked about our organic portfolio and obviously, projects or potential acquisitions, apologies in the U.K. needs to compete for capital with growth of our organic projects. And we have a very strong portfolio of organic projects. But at the same time, we are looking at opportunities. And as we always say, we look at this value lens, so they need to meet our investment thresholds.

When we look at international expansions or focused international expansion. So we're maintaining an active but patient pursuit of opportunities. And we have a very clear strategy around this, right? So we want to deliver both growth and yield through these acquisitions and sustainable production and cash flows. It's important for us to keep the strength of our balance sheet agility and flexibility. So we're imposing a ceiling on our leverage position. And we're looking at regions that would not be a one-off that would offer further expansion opportunities to ensure that we can develop our business and continue and ensure sustainability and scale going forward. And at the same time, regions or geographies that are offering a stable fiscal and regulatory regime. So we talked about our available firepower in terms of liquidity, and that's definitely supporting potential M&A activity in the future.

With that, I will hand over to Iain Lewis for our first half financial update. Iain, please.

Thanks, Yaniv. Good morning, all. If we can go to Slide 19, please. And as usual, we call out the key numbers here on the finance side, the green numbers really describing the performance in the half year and then the blue ones are kind of financial position at the close of June. So strong production delivery, 128,000 barrels a day, remembering that we recovered from some difficult weather in January in the production front, supporting strong production delivery. The cost per barrel result of $18 is very pleasing.

Our medium-term plan, of course, has been to maintain the $20 a barrel region, able to push that down to $18 this half year, and that is the aim as you move forward in the year. Able to today announce reduced management guidance on OpEx due to the cost control in the company, and that enables additional free cash flow and EBITDAX. So you can see the $1.1 billion EBITDAX for the half year, free cash flow of nearly $0.5 billion and net cash from ops of nearly $1 billion and a profit of $127 million. So on track, robust and continued good financial delivery.

I suppose in terms of the plans for the future and the optionality that Yaniv and Luciano referred to, we are maintaining a high liquidity and low net debt position, 0.49x pro forma leverage at the end of June with $1.9 billion of liquidity available. That is part of our strategy. It enables us to look at opportunities with clear pathways to deliver the financial capability to land them and as part of our story as we move forward.

Slide 20, if we can move to that summarizes the financial position in a bit more detail. You can see that we are at the end of June in the net debt position sitting on significant net cash, so an undrawn RBL of $1.3 billion and $571 million of cash, taking net debt down to just over $1 billion. And you can see in terms of the liquidity position there that our undrawn RBL of $1.3 billion and the cash balance can be augmented by an open and untriggered accordion facility on the RBL. So material debt capacity in the business and cash position.

Now that was added to in the quarter, the last quarter by the bond tap. And as Yaniv mentioned, this is an opportunistic and highly valuable delivery of additional cash flow, strong demand for our bonds in the market, responding to that and adding to liquidity on the Eurobond was well received and set us up as we move into the next phase of the business. Leverage, you can see, has been very stable in the 0.5x now through -- from December '22 right through to where we are today. So stable management of the balance sheet and significant liquidity capacity at the end of the quarter.

If we move to Slide 21, the hedge book, which continues to be of significant interest, obviously, in a volatile oil and gas market. You can see on the charts here that we've shown the forward curve as at 17th of August. Then the average hedge floor and average hedge ceiling that is in our hedge book, the average ceiling being the combination of swaps, collar floors and also wide collar floors that we put together. I think the key thing to point out to everyone is that we are well hedged in the next 2 years. And we are right now just riding the price curve and taking the upside on the unhedged barrels. You can see that what we've been able to do on the hedge front in oil, particularly is to take the hedge ceiling and floors and move them upwards as we move through the 2028, able to add to the hedge book through '28 in the last few months.

That's really been our focus as has been our characteristic trend here, we look 12, 24, 36 months in advance and seek to establish strong cash flow delivery certainty out ahead in the business, and we see that on the oil side. On gas, you can see there's a significant upside in the market currently on the front end, and we deliberately have left more unhedged on gas at the front end for exactly this kind of eventuality. And in Q4 this year, for example, when prices are currently sitting at GBP 1.50 and above, we're 30% unhedged for gas in Q4 '26. So I think continuing the trend of long-term stability in our cash delivery of the business by hedging well, but leaving upside on the table to benefit from just exactly the kind of environment we're seeing at the moment.

In the Slide 22. And of course, the output of all of the management of the business from an HSE perspective and production and cost management and good investment is the ability to deliver dividends to shareholders. We are very satisfied with the record we have here of delivering returns from '23 at $400 million, increased in '24 and '25 to $500 million and now as per our guidance update today, expecting to be above $500 million for 2026 with a $500 million to $530 million range. representing 30% post-tax cash from operations. Now remember, we moved to a 50-50 payment structure in terms of the dividend this year so that we have a flat dividend across the year. We are, for this half year, delivering a $255 million dividend as the first interim declared today. Obviously, on the market guidance numbers, the $500 million to $530 million tells you that there is some upside in that, but delivering $255 million for the half year. So solid return on the dividend, upgrading, thanks to production prices and cost management.

If we move to Slide 24. This will just reinforce the guidance that we gave at the start of the year and upgrades in a couple of areas. So we are reaffirming all guidance across our suite of metrics here, but we are reducing OpEx, reducing it $20 million at the midpoint. That's at USD 1.35 rate. Of course, a significant amount of our expenditures in pounds and actually the average rate for the first 6 months has been below $1.35. So the FX adjusted reduction would be lower, but good strong cost performance in the half year has led us to be able to forecast a reduction for the full year. You can see Rosebank CapEx down $35 million at the midpoint. That again, is reflective, as Luciano has mentioned, of the Rosebank rig deferral given the 3.5 months of delay on the rig program. But again, as referred to, not impacting first oil and the ramp-up through '27. And all of that flowing through with higher prices into a higher dividend of $500 million to $530 million as outlined.

So handing back to Yaniv for Slide 25 to close this out.

Thanks, Iain. As mentioned, Slide 25, just some closing remarks. So record quarterly production, as mentioned, 131,000 barrels per day production that we've achieved in Q2, trending into Q3 and strengthening confidence in our full year production outlook and management guidance reaffirmed. Disciplined and agile balance sheet management, strong cash flow generation, opportunistic bond tap, as Iain mentioned, that supports increasing our firepower to continue to deliver growth in the business.

We're accelerating organic investment delivery with incremental barrels in a high commodity environment. So immediate deployment of the PBLJ rig to the Captain B15 well. Depth and quality of our organic portfolio with growing momentum towards final investment decision on several projects and focusing on building the next wave of optionality beyond the 1 billion barrels of oil equivalent resource potential that we believe is definitely doable. And at the same time, delivering attractive returns to shareholders, first tranche of 2026 dividend of $255 million declared today and upgrading our dividend guidance for the full year of 2026, as Iain said, with some potential upside.

With that, and before we move to questions and answers, as always, I would like to take the opportunity to thank the entire Ithaca Energy team. Yes, you're seeing and hearing us here, but this is a work of many behind the scenes, and I would like to thank them on behalf of all of us. With that, Drew, I hand over to you, and we'll be happy to take questions.

[Operator Instructions] With that, our first question is from Cian Evans-Cowie from Bank of America.

I just have 2, please, if I may. So firstly, it's nice to see the dividend guidance upgrade today, but given your payout policy, there's also an implicit CFO upgrade in there. And Iain, you spoke a bit about this, but it would be helpful if you could just talk through perhaps in a bit more detail the moving parts in this upgrade, please? I know some of it, as you mentioned, is related to your OpEx guide reduction. But given that your production guide is unchanged, I suppose what are the other components that are in there?

And then just related to that, if you could talk us through again what your assumptions are that you're making for the rest of the year on the macro front to arrive at that guidance, please? And then for my second question, on the production profile side of things, if my memory serves me correctly, your maintenance drop-off should look substantially shallower this year compared to last year. I mean, is this still the working assumption? And then how would you guide us to think about the movement or the quarterly delta for 3Q and 4Q?

Thanks, Cian. I'll maybe take the first one there as requested. So yes, I mean, look, our guidance on dividend upgrade is really driven by pricing, but also by cost control. So as been mentioned, we are stable in our production range and continue to expect to deliver within that. Costs have been well managed, a little bit of FX help as well, but this is largely cost management.

In terms of pricing and price assumptions, obviously, we don't give specific price assumptions. But I'd say our hedge book probably tells you a lot of the story. If you look for the rest of the year, we have this on Slide 21, we're kind of 85% downside protected on oil at $60 for the next 6 months. So you can assume that the bottom end of our dividend is kind of correlated in that kind of region. So I guess that's the kind of downside position. Obviously, that limits the upside, but that's part of the oil price protection that we delivered through the hedge book.

But on gas, as you say, we've got significant downside protection, but also 26% upside exposure in unhedged barrels for the second half of the year with 30% unhedged in Q4. So those are the kind of numbers we're dealing with as we get to our range of dividend position. But of course, as prices move and work through and costs are driven and production managed, we may well be giving guidance later in the year a different dividend. It's not impossible that goes higher, of course, we'll continue to keep the market updated. Yes. On production, we have Odin Estensen with us, the COO, who is very well placed to talk to the turnaround this year compared to last year.

Yes. So thanks for your question. So you're absolutely right. So this year, we actually have approximately half the amount of turnaround days compared to last year, and we are progressing very well. And August and September are the kind of the key turnaround days month for us. And so far, we have completed all our turnarounds, except 2. It's one for Cygnus and it's a slowdown on the J Area. And I'm very pleased to confirm that we have completed those turnarounds on plan or ahead of them. So the last one on Erskine was completed this week, 6 days ahead of plan. So the risk exposure for the production for the remaining year is kind of very much reduced, and we are kind of feeling very much in control of the turnaround exposure for this year.

Our next question comes from Mark Wilson from Jefferies.

Congratulations on results. Again, and therefore, unfortunately, I have to ask regarding a question about things maybe not happening. We're waiting for regulatory approval on Rosebank for production start-up. You also talk to future drilling FIDs on Cygnus that require regulatory approvals to continue investment there. So can we talk about an expected time line to certainly the first of those approvals? And can we talk to what happens if that doesn't come or the variables that could actually be the decision from the government? Are we expecting just a straight Yes, no, on production start-up or could there be variables? And as I say, what happens if that doesn't come?

Yes. So good to hear you, Mark. I'll take that one. In terms of Rosebank. So look, we continue to see this as a regulatory process that's relatively straightforward. This is -- we've been asked for emissions data on Scope 3. We provided it and answers have been given. This is a very straightforward process in lots of ways. And speculation on results of processes that are pretty straightforward is probably not that helpful. So you'll forgive us for not speculating.

I think in terms of other standard processes around approvals for field -- for wells and fields, et cetera, these are all well-worn regulatory paths and nothing has changed on that for, in fact, some time. Nothing has changed on the approval process around production that's either apart from the Scope 3 emissions change that happened last year. So in lots of ways, this is regular business, normal business. We have licenses, as Yaniv has taken us through that are very large and wide-ranging, and we continue to develop under those licenses issued by the government, the oil and gas that is needed for the country.

That's very clear, and you certainly make it look like normal business. So well done about that. My second point is regarding the -- it's definitely clear that the good operations that you're showing do also come from partnerships that are stable and involve motivated partners. You speak to Adura, West of Shetlands, NEO NEXT, Elgin Franklin, even Harbour at J Area and Fotla and you've consolidated Cygnus very much that is going forward. Is that, therefore, an additional angle we should look for regarding potential future M&A? Is the partnership that would be in place following such things to enable good operations?

Mark, I'm not sure I fully understood the question. But if your question was around UKCS consolidation, then we -- I think I've captured that. We're looking at opportunities, but we will do the right acquisitions and not an acquisition, right? So we're focused on value. We have a high-quality portfolio, and I think it's reflected in our results. And our goal is to high grade rather than dilute what we have. I think all the names that you've mentioned are today large players in the UKCS after kind of a wave of consolidations that I believe Ithaca started 2 years ago, and we've seen this developing in the past 2 years. And I think these kind of names will continue to kind of dominate the UKCS. And obviously, there's a lot of optionality for all sorts of cooperation around that. I hope I've answered your question.

I'll maybe just add, Mark, in terms of -- so clearly, the future of the North Sea matters to us and the partnerships are deep and important. Therefore, whatever happens to assets in the U.K. matters. That's a slightly different question from M&A because we've always said it's the right assets at the right price. We like lots of assets that aren't available at the right price. So I think the key thing for us is that the assets in the U.K. are in the hands of people who will invest. Clearly, we're the 100% owners of Cambo, which we believe should move ahead as a project. And therefore, partners in this basin who are committed to capital in this basin and appropriately supportive regulatory regime is all important. So it's partners are critical and they do play into M&A, but it's both M&A and also field level equity support that is required as we move forward as a business in this basin.

Our next question comes from Nash Cui from Barclays.

I have 2, please. The first one is on Cambo. I wonder if you could give us an update on that? And what are the key milestones before the expected FID in 2027? Then my second one is also on M&A. We have seen quite a number of transactions in the wider North Sea area in the last few months. And one of your peers is thinking about farming down their assets in the UKCS. What is your view on that? And do you see the competition on the wider North Sea resources has increased meaningfully? And how will that affect your inorganic growth plan?

Yes. Thanks, Nash. I'll take these. Look, on Cambo, we continue to derisk the projects technically, commercially, financially, environmentally. So all these work streams are progressing. And as we say, with the target of taking final investment decision in 2027. I'm not going to go into specifics, but you know what constitutes projects, and there are a lot of hundreds of line items in the checklist that we need to complete. They're advancing on plan. Obviously, there is a regulatory piece to it, and there is a partner piece to it, and we're progressing all of those on our time line. So we -- our expectation is that this would move forward. Obviously, we need the right regulatory conditions to enable that.

On the M&A, I think what we're seeing in the U.K. is people settling or companies understanding better the regulatory regime we're working under. And with the proposed implementation of the successor EPL and the certainty beyond that, that allows investment going forward, there is definitely movement on the M&A front. We are -- again, as mentioned, we believe in scale. So we think scale helps, and we understand that consolidation is important, and we're seeing this in the market. And as mentioned, I believe we've started that trend. So I think that right now, there are, call it, 4 large players in the UKCS that are controlling most of the productions and most of the future projects. So I expect that this is what it will look like in the future as well.

Our next question comes from Sam Wahab from Peel Hunt.

Congrats again on another very solid set of results. So I've got 3 questions from me. First, Rosebank. So the operator has now narrowed first production to the first half of next year. Could you sort of lay out what are the remaining critical path items we should monitor over the next 6 to 12 months as you reach that plateau production? Second question is around OpEx per boe. We've seen that fall quite materially. So that's all very positive. But what's the core reasons driving that? And can we expect that trend to continue once Rosebank comes on stream? And then finally, I know there's been a few other questions around inorganic opportunities. But how are you seeing the landscape in the U.K. currently in terms of the elevated commodity pricing? And we've seen in the news that BP plan to push on with the divestment. Do you see reports of that 2.6 billion package as being a reasonable value?

Yes. So I think Odin will take the first one on Rosebank, then I'll deal with OpEx and then to Yaniv on M&A, I think.

Yes. So on Rosebank, I think the kind of the key things going forward now is to continue to have good progress on the project, making sure that we are liquidating the remaining hours on the installation efficiently. And then I think the other key performance indicator that we are looking for is the construction of the wells. That has now resumed again and progressing well. So I think those are the kind of the 2 key things that we will be looking for going forward. And at the moment, both are indicating well. We're back on drilling again after the incident that we had. And then we have a full activity out on the installation, which is safely and robustly installed now on the field. So I think those 2 are the 2 key components that will take us efficiently to first production.

Yes. And to answer your question, Sam, on OpEx, look, I mean, I often say this operating cost is -- there are no silver bullets to maintaining operating cost discipline. It's -- as Yaniv mentioned, the work with many -- everyone across the business touches cost in some way or another. So it's around culture and around control, but also around the right supply chain relationships and depth so that we're working well with our partners in the supply chain. The OpEx per barrel number clearly is a combination of production and OpEx. And therefore, if we can keep production high, and OpEx in a good place, we drive that metric down, and that's what we've been able to do.

But specifically in terms of all the effort that goes on, and I are sitting in a tender board yesterday, we approve all contracts. I sign all the contracts. The headcount is here is managed on a day-to-day basis by the VP of HR and Culture and myself in terms of numbers. That's about having the right people in the right doing the right things and partnering with the right people. So sorry, there's no silver bullet answer on OpEx, but that's how you control costs over the long term. I would say one of the things that's not in here is the fact that we've managed to FX control. So we normalized the management guidance at $1.35. We've actually delivered over $10 million I think it's nearly $20 million of FX savings by hedging GBP to U.S. dollar below the market position. So we locked in some hedges when rates were really low.

So it's about discipline in cost management and risk management across the piece, which we're very pleased with the results of today. There's an awful lot of effort goes into one number, which is $18 per barrel.

Yes, I'll just echo that. I think what you're -- Sam, what you're seeing is really around discipline, but also agility and adapting to market changes and our kind of very robust capital allocation framework and our ability to keep flexibility and optionality, both in our portfolio and the way we manage our investments, but also through our balance sheet. On your third question, I'll just say nice try, but I'm not going to comment, obviously, on value. I will say that, obviously, in periods of extreme volatility like we've been experiencing in the past 6 months, it is not easy to price assets and deals. Of course, there are ways of dealing with volatility of all sorts of mechanisms. I won't comment on that, and I think I already answered on the UKCS landscape in terms of M&A and where the market is. So sorry to disappoint on that.

Thank you. That concludes the Q&A portion of today's call. I'll now hand over to Yaniv for closing comments.

Thank you, Drew, and thank you, everyone, for listening and asking questions. We're always here to answer. Thank you, and we'll speak again next quarter. Thank you very much. Have a nice summer.

Thank you all for joining. That concludes today's call. You may now disconnect your lines.

[Audio Gap] plc Q1 2026 Results Investors and Analyst Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions]

I will now hand the floor over to Yaniv Friedman, Executive Chairman, to begin the call. Please go ahead.

Thank you, Seb. Good morning, everyone. Thank you for joining our Q1 2026 results presentation. I'm Yaniv Friedman. I'm the Executive Chairman of Ithaca Energy plc. With me on our call today is Luciano Vasques, our CEO; and Iain Lewis, our CFO. A strong Q1, as the first slide says, delivering on our strategy. And in today's agenda, we'll cover our Q1 2026 highlights, strategic and operational highlights and financial highlights. And as always, we'll close with Q&A.

If you'll move to Q4 -- if you'll move to Slide 4. So our capital allocation policy supports our attractive shareholders' return. So what we wanted to show is how this plays into this quarter. As mentioned, strong production, robust production that is supporting strong cash flow generation, and we're seeing the strong performance trending into Q2 -- in Q1, 126,000 barrels a day of production.

We took a hard look in optimizing and accelerating activity across our portfolio in this elevated commodity price environment. So that's been a focus of the business in the past few months on really how to optimize and look for opportunities in this market. On the profit side, we have a strong hedge book that underpins our shareholders' returns and our investment plans.

We are taking advantage of volatility. So Iain will speak to this later, but we're now able to also hedge at attractive prices into 2028, keeping upside exposure. Full year dividend trending to the upper end of our range, and we expect this to be above $500 million for full year 2026. And with this enhanced cash flow generation, this gives us capital to unlock and accelerate growth opportunities, and we'll speak to that later.

If you move to Slide 6. So I'm always proud to say that we're executing across all of our strategic pillars. So we're optimizing production, as I said, in these elevated commodities prices. We undertook a thorough review of our portfolio and try to identify every upside opportunity that we had this year. Luciano will give an example to that. We're building strong momentum in unlocking organic development opportunities with projects that meet all of our robust and strong investment metrics, and we're pushing them closer to a final investment decision.

We've completed the Tobermory farm-in in Q1 and farm-down a 45% stake in Fotla to Harbour Energy that further supports organic growth opportunities and value creation. And we're continuing to be active but disciplined in pursuit of M&A opportunities, both in the U.K. and internationally. Bottom line, at the same time, delivering attractive shareholders' return. And as mentioned, expected dividend to be at the higher range -- higher end of the range for 2026.

With this, I'll hand over to Luciano on Slide 7 to talk about our safe and robust production.

Thank you, Yaniv, and good morning, everybody. And I'll focus -- yes, can you hear me? And thank you, everybody, for joining. We'll focus on the activities that we have put in, in Q1, has been a very intense quarter, activities spanning in various directions to deliver our strategy.

In particular, we have kept on with a strong operational performance in all key metrics. We have created space for a number of additional key activities in support of our organic growth, such as long-term rig sharing agreement and in a period of elevated commodity prices. We have intensely reviewed options to maximize our output in this period, accelerate investments, defer optimizing the plants, deferring some activities.

So we can go to next slide, which is Slide #8. And of course, this has happened always with a very strong focus on HSE, where we have continued delivering an excellent safety and environmental performance. This meant zero Tier 1 and Tier 2 process safety events, just like our last 2 years and a continued strong personal safety performance, showing a positive trend in our incident frequency. In particular, we are registering a 3-month long run without any recordable incident throughout our activities.

On our emission level, which is measured, as you remember, in intensity of CO2 versus barrel of oil equivalent continues to be substantially lower than the average in the UKCS basin, and we will expect it to improve with the cessation of production of 2 late-life assets in 2026.

We can move to next slide now. and focus on our production, which has been of 126,000 barrels per day in the first quarter, in line with our full year 2026 guidance despite we had extraordinarily challenging conditions with weather of a severity that had never been experienced in decades, which has impaired our ability to operate regularly for several weeks across January and mid-February. And even so after an average of 120,000 barrels per day in January, which were only weather-related, we reached a 2-month average of 129,000 barrel equivalent per day, reflecting a strong recovery that continued into Q2 and allowing us to support our 2026 guidance of 120,000, 130,000 barrels per day.

Moving to next slide. I mentioned earlier about a strategic agreement for a long-term sharing commitment to secure a rig for our operations. And this was with a view of supporting various activities across the spectrum of our strategy. So we have finalized an agreement with Harbour Energy, which foresees the sharing on a 50-50 basis of the use of the semisubmersible rig, PBLJ for a period that spans from 2026 to 2030. And this agreement serves actually several purposes in our strategy, will be utilized on multiple assets.

It will allow to perform infill drilling activities whenever we identify opportunities or wherever there are requirements, but a quick call, so short-term intervention. It supports our organic growth plans, and in particular, it is planned to be utilized for the development of our Fotla project that Yaniv just mentioned, also in partnership with Harbour, and also will allow to deliver in an efficient and flexible way our P&A program as we have committed to and we have shared it with the regulators.

The rig offers efficient commercial condition, of course, thanks to the long-term commitment, flexibility of intervention, sharing of the associated local costs, specific logistically, and added to proven performance record of this rig in the area.

We can go to next slide now. And one of the assets that sees an example of our activities -- intense activities in Q1 is, of course, Captain, where several actions have been ongoing. On one hand, we are having good progress with our drilling campaign. One well has been put in production at the beginning of the year. One is at its final steps right now, expected to come online imminently, and we have one more workover for a third new well expected to come online in summer and further activities towards the end of the year planned then to come on stream early '27.

Coming to the PBLJ that I just mentioned, it is in fact planned to intervene on well B15, one of those cases where the immediate availability of a rig makes it possible to add locked-in production as a response to a favorable commodity price environment, as we mentioned.

And lastly, to reaffirm the strategic and long-term value of the asset, we have successfully completed our maintenance campaign and the flotel Safe Caledonia left the site in February after completing an extensive activity plan to safeguard the environmental and operational performance of the asset in its continued life.

If we go to next slide, Slide #12, to move to our Cygnus asset, where the infill well campaign continued at pace. After the spudding of well C13 in Q4 last year, production started in early May with a quite efficient well operation on a first of its kind well for Ithaca, giving now better performance than we have prognosed. And then we have moved to the next scheduled well, C14 as part of the 3-well program in the year, with C15 planned to spud in Q4 this year in support of an asset that is performing rather well. And we are currently maturing business cases for subsequent infill wells expected to be sanctioned during the summer.

We move to next slide. And this year also sees an increase of our decommissioning activities, in particular, the cessation of production of the Greater Stella area comprising of Stella, Harrier, Vorlich and Abigail fields, bringing the end of the operated hub FPF-1 after 9 years of production, which occurred on the 27th of March and then also the imminent CoP of the Alba field coming in the next weeks. One example of agility and value-driven planning has been, in fact, the Greater Stella area where we managed to modify at a short call the complex schedule and execute a temporary extension to the CoP date by 27 days ahead of the FPF-1 platform sailing to Norway for dismantling and recycling and the benefit of the strong commodity price environment. And this operation alone allowed to gain $7 million additional in cash flow with no impact to the overall plan.

If we go to the next slide with a focus on Rosebank moving to -- Rosebank, the development project has entered its final full year of development activity and is progressing towards first production within the operator stated window of 2026, '27. Rosebank FPSO successfully sailed away from Dubai in Q1, having undertaken major refurbishment works over the past 2.5 years. Remaining scope are planned later this year as part of the program to moor to hook up and commissioned the asset in field ahead of its first production.

The drilling campaign commenced also end of Q1 this year with the campaign due to extend over 18 months, targeting 7 wells. An equipment handling incident has seen the rig come offline in April with the rig operator now estimating a period of 3 to 4 months remediation before returning the rig to hire. As more data becomes available in the coming weeks, this schedule will be refined.

And with that, I hand it over back to Yaniv.

Yes. Thank you, Luciano. And as Luciano mentioned, this is exactly the thing -- the type of things we did this quarter, looking specifically on our existing assets and how we can optimize and maximize -- so the Greater Stella area, as an example, Cygnus infill and Captain infill wells that will provide additional cash flows in this high commodity environment.

If we move on, I'm on Slide 15. So as we've said, strong cash flow generation supporting the advancement of the group's material pipeline of organic growth opportunities. We have high-value infrastructure-led investments. We'll talk in a bit more detail on Fotla and Tornado in the next couple of slides that we've decided to accelerate in this climate, and we look to mature and prioritize infrastructure-led exploration in the Greater Cygnus and West of Shetland Area. I mentioned the farm-out of agreement on the Fotla development that was signed with Harbour Energy. And again, building on the existing infrastructure partnership in the Greater Britannia Area and establishing a commercial framework to move projects towards sanction in 2026.

If we move to Slide 16, and this is a slide that we wanted to focus on, gives you kind of FID corridors for our projects, but more importantly, shows the optionality that we have in our portfolio, the strength of our portfolio. So we have over 200 million barrels of oil equivalent of resources that we're taking towards FID within the next 24 months. So it's a material pipeline of organic growth opportunities that we're advancing. And if we'll focus on the 2 first ones here. There are a lot of colors here, but we'll take it from -- how we assess projects that we select concept, define and prepare for FID and then our FID corridor with execution.

So we're looking here at our Fotla opportunity and the Tornado opportunity. It just gives you a sense of the strength and optionality that we have within our portfolio. So last time, we spoke more about Cambo. This time, we want to focus on the 2 projects that we're pushing towards FID in 2026. And if you look at Fotla, next slide in more detail, so Slide 17, it's really a demonstration of how we work. So it's a strong -- it's a journey of strong conviction and really leading projects into execution and pushing them towards FID. So this with Fotla, it's an interesting story. It's an investment in an exploration well, counter-cyclical, right, through COVID with a rig that was mobilized then and achieved exploration success.

We further bought our partner's interest in 2023 and had 100% in this. Fotla field development and environmental statement was submitted in 2025, including long lead and recontract. So we're moving this project into the execution phase. And the farm-in agreement with Harbour builds on, as we said, existing partnership in the Greater Britannia area and establishing a strong commercial framework to move projects towards final investment decision. So you could say, hey, this is 10 million barrels of oil equivalent, but these are the type of things that build the business. These are high-value opportunities that we're taking towards FID, increasing resources and production.

Tornado, another example of a project that we're accelerating and pushing in 2026, which is part of our West of Shetland strategy, in this case gas strategy, and it's getting momentum -- gaining momentum with a material opportunity set. So progressing through the NSTA regulatory approval thresholds, it will serve as a key enabler for future tiebacks and foundation for additional value creation and other tiebacks and serve as a gas hub and it's catalyst for further infrastructure-led exploration. Spitfire is one example of prospect that's been identified as a leading opportunity, but really supporting upside in a strategically important U.K. gas resource. And yes, this is a larger project in terms of net resources. But again, these are all building blocks of the future of production in our home market, which is the UKCS.

If we move to Slide 19, just to show how we think about these things, right? So all projects are competing for capital within the organization across our portfolio and ranking favorably. So if we look at kind of a snapshot of economics of the projects that we've just mentioned, so you're seeing here that the gross resource, the net capital cost in Fotla and the estimated projected investment rate of return -- rate of return and really ticking the box on all of our investment criteria. Same with Tornado, obviously, a larger project. So capital cost around $450 million, estimated IRR above 50%, but again, ticking the box on all of our investment criteria. And if you're really curious on what that means there in our previous presentations in more detail.

Moving to financial highlights. I'll hand over to Iain Lewis, our CFO. Iain, please.

Many thanks, Yaniv. Good morning, everyone. So Slide 21, please. I'll just call out some of the key numbers for the quarter financially and starting with 126,000 barrels average for production for the quarter and $18 per barrel of OpEx. Again, this is our kind of reset cost per barrel, which we expect through the year and demonstrates a high netback portfolio. And of course, that delivers on EBITDAX at $0.6 billion for the quarter and cash from operations of $0.4 billion, $67 million of profit in the period after tax and $151 million of free cash flow. So the delivery of cash from strong production and low cost per barrel and low taxes as our portfolio delivers and capital invests across the basin.

Now in terms of investment, which Yaniv talked to, adjusted net debt is at $1.1 billion, leaving us with a overall pro forma leverage ratio of 0.54x and $1.6 billion of liquidity. And this speaks to the opportunity the business has to continue to invest and to continue to deliver cash flow and dividends to shareholders.

So moving on to the next slide, Slide 22, which gives us some of the details of EBITDAX. Just a couple of things I would call out here. We talk about stability in terms of production on the top line there. You can see the full year 2025 of 119,000 and you can see the Q1 '26 number of 126,000 and our guidance range for the year of 120,000 to 130,00, stable production across the period, continuing to uplift from the 2025 outturn.

And you go through the next set, which talks about the revenue recognized per barrel, you can see an uplift clearly in Q1 and before hedge adjustments, $85 per barrel average and then $7 per barrel adjustment for hedging losses in the quarter. So still a strong $78 per barrel coming off of the revenue line. Oil and gas stock movements, inventory draws at different prices bringing the numbers overall in terms of production value, but those stable operating costs of $18 per barrel delivers a strong outturn for the quarter. So as prices have escalated in March, we're starting to deliver on higher cash flow and higher EBITDAX, which we expect to come through in the remaining part of the year.

Moving to Slide 23. The financial framework, just restated here, just to confirm the details, the adjusted net debt figure with a low $1.1 billion at the close of the quarter as net debt ticks down with cash generation, continued very high available liquidity with $1.6 billion available to us. And I was calling out again the unused accordion facility, which we have already taken part of our RBL, but still available to us. And that ticked down in net debt to EBITDAX, which is a reflection of the cash generation of the business.

So on to hedging and clearly, a very interesting commodity markets. And what we have been doing in the business is ensuring that we have stable cash delivery for dividend, but upside exposure. And we balance in oil and gas. And as we reflected on in our March year-end result release, we've collared oil in the short-term, but there is upside in the oil rig, but there's also very significant upside in the gas rig. And these 2 things offset each other. We, of course, in the quarter are really 50-50 in terms of oil and gas production. So gas delivery of upside value is very relevant to us.

And what we've been doing in the past couple of months, particularly is focusing on delivering cash flow out into the future and out to '28 as prices evolve in the market, clearly volatile and moving. But you can see on the left-hand side in the oil hedge book in the dark green dotted lines that the upward tick in our collars have been able to be moved through into 2028, including a $60 to nearly $100 oil collar position through 2028. And this, of course, the short-term changes in commodity markets impact us. We are looking for long-term stable cash flows with upside optionality and delivery. And that's what we're seeing in the hedge book as we move forward through '27 and through into '28.

Detail of this is on Slide 25 and 26, which we always give the market being very transparent. Key thing here is really on '25 and '26, if we move to Slide 25, the quite wide collar positions on oil as well as the unhedged positions on oil, giving material upside, but giving base cash flow delivery as we move through the next cycle of commodity prices depending on events in the Middle East and obviously global economic outturn.

Next slide, Slide 26. Again, shows the very significant upside in gas that we've left in the element in the bar chart showing the significant upside on wide collars. For example, in Q2, just now, we're at $124 as well as the unhedged volumes. We're delivering that on a wide collar up at nearly 100p average for everything else. So very high gas price delivery through the hedge book and solid oil delivery.

And that leads us to Page 27 -- Slide 27 on to the dividend. And the scale, the stability and the strength of the business is around longevity and seeing barrels brought through from contingent resources to reserves. It's about developing and value-accretive M&A, but it's about stable delivery of return to shareholders. And this is where this slide has showed the history from '23, '24 and '25 and where we are today, we committed to 30% post-tax cash from operations. That enabled us to share the upside in the commodity market with our shareholders. And the range we gave at the first results release for the year at the year-end was $470 million to $520 million. We can see that now with the higher prices expected to be above $500 million. There's obviously a strong trajectory upwards.

And our long-term distribution range is 20% to 35% post-tax cash from operations. Again, this is about confirming to our investors that we plan and we deliver and we hedge to ensure that we can continue to deliver strong returns to shareholders. And in this environment that is different with upside available on that 30% post-tax cash from operations commitment for the year.

Okay. I'll hand back to Yaniv to close it.

Thank you, Iain. So as you can see, a strong quarter with robust operational performance, as mentioned, trending into Q2 and strong financial performance. We have confidence in our operations. We're seeing strong execution of our strategy and capital to invest for longer-term growth.

A strong focus in the last 3 months on optimizing and accelerating organic investment to deliver incremental barrels during high commodity price environment. So this has been a focus of the business that we expect that will pay off in the future. Material evolution, as mentioned, of our organic operated and non operated portfolio, that's benefiting from this elevated commodity prices with a strong momentum towards FID.

Iain mentioned our dividends. So upper end of the guidance expectation of delivering above $500 million for the full year 2026 on the current trajectory with a very strong balance sheet that also gives us the firepower for more further opportunities.

Before we move to Q&A, sometimes I was told people dropped. So I would like to take the opportunity, first of all, to thank everyone that joined and also thank the great Ithaca team that's been doing all the work behind the scenes. So as I always say, this is a work of many. So thank you for another really strong quarter.

With that, let's move to questions and answers.

[Operator Instructions] And our first question on the line is from Cian Evans-Cowie from Bank of America.

I just have 2, please. I wonder if I can kick off by tackling the high-level U.K. question and ask a bit of a nasty one first. So we're all aware of the uncertainty in the state of domestic politics in the U.K. I wonder if you can tell us how you feel about the level of risk, if any, you see to consents that you're waiting for from the government? And related to that, do you think it's having an impact in the -- on the level of interest in Cambo from potential partners at the moment?

And then secondly, please, you've talked quite a bit about your hedging in there. I wonder if you can tell us where the market dynamics are at the moment in terms of where you're managing to sell your unhedged barrels versus benchmark prices that we're able to track on our screens? And also, it would be very useful if you're able to say how that has changed quarter-to-date.

Thanks, Cian. Yes, so I'll take both of those. So it's Iain here. Yes. So in terms of politics, obviously, we don't comment on politics, and you wouldn't expect us to, Cian. I think in terms of regulatory processes, look, they're clear. they are legal processes and they're being worked through. So we have a clear framework laid out and including the Scope 3 framework laid out as we need to work through now with our developments, which we're doing and they're running their course with public consultation and responses being provided, et cetera, through decision-making.

So I think it's probably a straightforward process answer to be honest, Cian, and we continue to operate under the licenses as provided to us by the government and expect to be able to do so appropriately as we move these projects forward, including [ Brent ].

In terms of hedging, so yes, very volatile markets. And indeed, a lot of has been made of the difference between the Brent futures market and the dated Brent market where we sell our oil. In terms of what we are receiving, generally, it's above the Brent futures. But obviously, we have hedged a lot of oil. The interest in oil continues understandably. I'll just say keep your eye on gas. The NBP prices have been very strong and are not watched in quite the same way. But as I said in my section of the presentation, half of our production is gas. We deliberately moved to that balance last year with the acquisition of additional Cygnus interest and that delivered a lot of upside on the NBP side.

So we're seeing strong pricing, and we're seeing Brent particularly strong. And of course, there's questions about where that goes, but subject to a lot of geopolitical decisions and movements.

Maybe to add to that, I think, what we're trying to do, hopefully successfully is really prepare the business on a forward-looking basis and make sure that we have the stability and predictability in our -- in the ability to invest in our assets and of course, distributions.

And as Iain mentioned, taking advantage of volatility when it's there. So hopefully, you see that as well.

Next question is from Sasikanth Chilukuru from Jefferies.

I have 2, please. First, I just wanted to revert back to Cambo. You highlighted an FID expected next year. Just wondering what else would you require to take FID here and expand on how the project compares on your investment criteria? Or are you just waiting for a farm-in partner? And yes, I think it was asked as well, what's the latest here?

The second was regarding acquisitions. There have been unconfirmed press reports of a major looking to part with all of its assets in the U.K. Just wanted to understand your position whether you have the appetite to do a material acquisition of any U.K. asset portfolio.

Yes. Good to hear from you. On Cambo, we're progressing the project, and we spoke a lot about this last time. We're progressing the project towards FID, ticking the box on everything that we need to do, obviously technically, prepare for it financially, including [ BDO ] financing and at the same time, pushing forward all the regulatory aspects of it. And as you can imagine, we need consent to move the project forward. We expect we'll get them.

This is a robust project. We've shown last time the effect that this has on the U.K. going forward, and we expect the right decisions will be taken and allow us to take this to final investment decision next year. We're progressing this, and we believe that this project will materialize. Economically, it's ranking favorably in our list of projects. You saw the slide I was talking to earlier. So all these projects are projects that meet our very rigorous investment criteria, and our intention is to take a final investment decision on all of them, including, as you mentioned, bringing in a farm-in partner into Cambo.

On the M&A side, I'm not going to comment on anything specific. Again, the point that I want to reiterate is that we're looking at opportunities from a value angle, a value perspective and things need to meet our investment criteria. We would like to do more in our core markets. And as you can see, we're -- I think definitely one of the main players who keep investing in the U.K. So -- but at the same time, we're comparing and looking at other opportunities on how we grow and diversify the business going forward. So do we want to do further consolidation in our core UKCS market? Yes, but it needs to meet our investment criteria and kind of high-grade our portfolio. So it's not just scale for the sake of scale.

Next question on the line is from Nash Cui with Barclays.

I have 2, please. The first one relates to Slide 8, and I'm really impressed by your safety data at zero safety events for 30 days, as you mentioned during the presentation. And I wonder what have you done right to improve this substantially over the last few years?

And my second question is more on macro and your view for the market. So the market increasingly seems to expect oil prices to remain elevated for longer. And I wonder how does that align with your own outlook? And linked to that, how would a sustained higher price environment lead you to adjust your own growth strategy or capital allocation plans?

All right. Thank you. Well, of course, we are very pleased with the results. But what we have done, we've gone back to basics, and we have looked at the root cause of everything. We've looked at all our events. We've looked at all our incidents. We've looked at all our actions that were outstanding to be worked on. We've looked at our culture. We've spent a lot of time in elevating the attention, the way the people communicate, the transparency, the openness and so trying to understand exactly what was happening in all directions.

And so that -- we've worked fundamentally on what you call the leading indicators, the things that make your life better. And then this eventually has delivered on the lagging indicators, which are the one that we measure. So this is fundamentally the action of a long period of attention, and we have elevated that at all levels in the company. We talk about it and we act on it a lot throughout our different assets and departments.

Yes. I'll take the second question, but thank you for the question on safety because people don't often ask about this. And I think that as Luciano said, that's a real focus for us, and thank you for bringing light to this. So I appreciate it.

On commodities prices, we're not speculators. We plan our business. And as mentioned, and Iain could further talk about this on our hedging strategy again, take advantage of volatility. But I think what we're seeing right now, as you said, is a prolonged kind of elevated prices. Now I don't know if that's going to stay at the $100-plus a barrel or settle down somewhere lower than that. But I think what we're doing in the business, this is what I tried to emphasize earlier, is we took a very hard look as this conflict started and through March and everything that we can do to get more out of the business, especially in these elevated prices.

The GSA example that Luciano gave earlier is a perfect one. It's not a huge contribution to our cash flow, but every dollar counts, right? So the ability to extend production even by 10 days or 2 weeks generated more for us in these elevated prices. We're accelerating some projects that we were looking to do potentially in advance later in the year. So we're accelerating this in this environment because we see the potential for higher returns and allocate capital in a disciplined manner in this environment. Iain, do you want to add something on hedging?

Yes. I would just add to that, I mean, as Yaniv said, this is short-term and long-term. Short-term, it's all about maximum delivery of barrels, clearly in a high price environment. It won't always be like this. And we hedge and use the market forward positions to secure cash flow for capital delivery when prices will be lower than this.

And so I think we've always believed in long-term oil and gas demand in the West, particularly in growing globally. You've seen, obviously, in the last 6 months that the world has changed in the view of that within [ IEA ]. But that's just aligned to our view that oil and gas are going to be critical and responsible delivery of that by good operators is going to be very valuable. That's where we see ourselves, that's what we're investing for.

So it's very much a long-term view and we plan the business around that and the cash flow protection around that, but obviously, short-term delivery. And the thing we do -- what we did with our FPF-1 asset, keeping it on for an extra month to deliver extra cash flow is a great example of short-term intervention that delivers value, but it's really the long-term capital.

Next question is from Werner Riding with Peel Hunt.

Apologies if my question has already been answered. I had technical issues. But depending on the day, you're able to produce, I guess, roughly in and around up to about 150,000 BOEs a day from the current portfolio. As you mentioned, Rosebank other FIDs, Fotla, Tornado, potentially Cambo will help you grow and sustain those rates into the 2030s. But can you elaborate a little bit on future expansion beyond the portfolio? And Yaniv, perhaps set out your corporate ambitions in terms of size, scale, how you're going to get there, especially in the context of your potential inclusion in the FTSE 100.

Thanks, Werner. Yes. So we're -- we kind of our pillars of growth right around a organic and the strength and optionality that we have in our portfolio. And when we look at this, and as we said, we're looking to take final investment decision in the next 24 months on over 200 million barrels of oil equivalent, which is significant. And at the same time, keep looking for growth opportunities through acquisitions. I answered that earlier, but we now see the value diversification. So we're -- as we said, we're not shy about this. We're saying that we're looking, but we're being very disciplined and looking at what can high grade our portfolio and where can we focus and replicate the Ithaca success going forward. So that's something that's very important for us in -- especially in this environment.

So I'm not going to talk on in terms of barrels a day of production of growth. We said last time that we're working internally on getting to 1 billion barrels of resources. So that's in our core UKCS market. And ideally, we would like to diversify out of the U.K. and into a basin that we can grow in and start building a similar story to what Ithaca did in the U.K.

Next question is from James Carmichael with Berenberg.

Again, apologies if you've answered some technical issues on my side. Just had 2. Just firstly on Rosebank, you obviously flagged the issue with equipment handling on the rig and how that might be a way of getting fixed. Just wondering if there are any costs associated with that or potential penalties due to you, just the financial implications, I guess, aside from the obvious delay.

And then thinking more broadly on the U.K. and the EPL, obviously, earlier this year, there was thoughts that there was going to be cancellations are going to be brought forward next year. Part of that was the energy security investment mechanism kicking in through '27. I'm just wondering how the tone of conversations with the government has changed given the commodity price view and whether there's still that expectation that EPL cancellation will be brought forward.

Yes, sure. Let me start from the second question. on EPL. And you're right, there's been discussions within the government. I think right now in the current commodities prices, obviously, even the OGPM, this would previously be a tax environment anyway. We believe that longer term, this will need to change, right, to really motivate and create an investment environment going forward and most importantly, certainty. Now we said this in our November conference call in Q3 last year. We think that the OGPM is a sensible solution. Perfect is the enemy of the very good in this case, right? So we think it's a sensible solution that we can operate under.

And we expect that this will be legislated and implemented by the government to allow us, but also other operators to take material final investment decisions in the basin. And in the backdrop of everything that's happening right now globally, geopolitically, especially in our sector, commodities prices and seeing where the U.K. is ranked in terms of production and U.K. energy security going forward and the volatile and unpredictable world that we're in. We think that would be very wise the government to implement the OGPM and provide the certainty that we're looking for.

Iain, do you want to talk about the effect of the Rosebank incident on costs?

Sure. Happy to. So yes, I mean I'll just add in terms of the tax, I think we've been very constructive with the government. We think there's a real opportunity here for the U.K. to deliver on security of supply, but it requires the right environment and credit to the government, they've come up with the right tax environment. It just needs to be implemented earlier.

So Yaniv, in terms of Rosebank, clearly, there's -- with the rig off hire, there's a kind of short-term delay in some of the capital. We haven't amended our guidance yet on that as we reconfirm guidance at the moment. Clearly, a lot of work on Rosebank going on this year. It's not just drilling. So the FPSO hookup and the all the activity that will be ongoing as well as the continued work on the FPSO commissioning, et cetera.

So there will be a reduction in capital, but probably not a hugely material change. But that's to be determined based upon when the rig coming back, obviously. And that's part of the recovery plan as we work through with.

Next question is from Ashley Kelty with Panmure Liberum.

Congrats on a good set of numbers today. Just a question on Rosebank. Just wonder if you could give us an indication of...

Ashley, can you -- can you speak louder, please? You have a bad connection. If you could just raise your voice a little bit so we can hear you better.

Sorry, is that better?

Yes.

It was just a quick question on Rosebank. I was wondering if you can tell us sort of how close the vessel is to coming on location. And if you're able to give us any indication around the hookup and commissioning time line? And also if the delay with the rig going off higher, if that has any impact on the time line to first production?

Good morning. Well, yes, the -- FPSO is at this moment in a yard in Bergen completing. So the move to location is imminent. The schedule is being reviewed with the operator continuously. And so there is always an arbitration of how much work you better do onshore and how much you leave to be carried out offshore.

But definitely, the plan is to have it moved on location in Q2 and then start all the activities, which are already planned with the vessels for all the other hookup and mooring and starting of commissioning. So this is still there in the plan. As Iain said, the FPSO activities are moving on. And as far as the impact of the rig incident is concerned, as we said, the rig operator had indicated a window of when the rig can become available. But at this moment, all the assessments are being completed because, of course, there are several moving parts in a handling incident like that. And so the schedule is being refined.

So we are not, at this moment, in a position of saying anything more specific, but the overall picture is that this can be accommodated within the project schedule as being declared by the operator.

No further questions on the line. So I will hand back to Yaniv to close out the call.

Thank you, everyone, for joining our Q1 2026 numbers and results. Thank you for your questions, and we'll see you again next quarter. Thank you very much. Have a good day.

Hello, everyone, and welcome to today's Ithaca Energy plc Full Year 2025 Financial Results Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions]

I will now hand you over to Yaniv Friedman, Executive Chairman, to begin the call. Please go ahead.

Good morning. Thank you, everyone, for joining our full year 2025 results presentation and conference call. My name is Yaniv Friedman, and I'm the Executive Chairman of Ithaca Energy plc.

With me on the call today are Luciano Vasques, CEO; Iain Lewis, our CFO; and Odin Estensen, our COO.

I'm on the first slide. And as you can see, we've titled this presentation, Delivering on our strategy, and I'm really pleased to say that this has been another year of an excellent set of results and performance. And as you'll see, really executing on all of our pillars.

Today's agenda on the next slide. So we'll talk about our vision in action, our proven strategy for supporting value-driven growth, financial update including our 2026 guidance and closing remarks to be followed by questions and answers.

Vision in Action. So we titled the Scale, Stability and Strength. And if you move to Slide #4, you'll see the strong operational performance in 2025, delivering on an upgraded production outlook. And I'm going to go through this quickly. But as you can see, we've ticked all the boxes on guidance.

So production, net OpEx, CapEx, producing asset CapEx just below the bottom of the range. Same with Rosebank CapEx. Cash tax was again lower than the bottom of the range. And our dividend target of $500 million that was declared and delivered with a $500 million payment cash as well in 2025.

If we'll move to Slide 5. So strong strategic delivery, supporting our vision. If we look at scale, so 119,000 barrels of oil equivalent per day of production, strong production, delivering in line with our upgraded production schedule. Outlook, material 2P reserves and 2C resources base of 658 million barrels supporting our long-term value creation.

Just over $2 billion of adjusted EBITDAX, so enhanced financial performance and cash generation in 2025, supporting our capital allocation flexibility and attractive shareholder returns. As I mentioned, $500 million of full year 2025 dividends that were declared. And the strength of our balance sheet with $1.5 billion of available liquidity. We've completed a successful EUR 450 million, 5.5% bond issuance and upsizing of our reserves-based lending facility this year as well. It's enhancing our financial strength and flexibility. And we have material financial firepower for our continued growth with a low leverage position of 0.56x at EBITDAX.

Our vision for Scale, Stability and Strength in action. So if you look at scale, it's a nice kind of a chart that shows the growth of organic and inorganic production through the years. So if you'll see where we are today, 2025 pro forma production of 131,000 barrels per day reflects organic and inorganic growth.

Strong production diversification with no hub representing more than 20% of our production. Exit rates in Q4 of 148,000 barrels per day. We had peaks of above 150,000 barrels per day. Production, and we have a balanced pro forma production mix of almost 50-50 liquids and gas, right? So 52% oil and 48% gas, but this shows the really nice trajectory of our growth.

The next slide, and I'm on Slide 7, shows the Stability element in action, right? So I like this, and we're showing this quite often in our conference calls. So you can see ability to maintain production above 120,000 barrels per day for the foreseeable future. Our material resource base provides us with portfolio longevity and optionality that underpins our long-term production growth. And we focus on high-grading investment opportunities based on returns. So as you can see, we have material resource base, and we'll talk in more detail about our development projects later on in this presentation.

Moving to Slide 8. Strength, $1.5 billion available liquidity. Iain will talk about hedging a bit later in much more detail, but we have a material financial firepower to support our growth with an undrawn reserve-based lending facility of $1.3 billion. Strong hedge protection for cash flows that provides the ability to invest for the long term and sustaining attractive dividend distributions. And high netback capability of our portfolio that provides resilience across the cycle with continued focus on cost control, and as you can see, under $19 per OpEx per boe, which is a very nice achievement.

If we'll move to our strategy, and I'll ask you to move to Slide 10. So we'll try and cover all the pillars of our strategy. And as I said, we're successfully executing our value-oriented growth strategy, focusing obviously on optimizing our assets, but also looking at our potential developments and inorganic growth as well.

Luciano, why don't you take us through production, safety and Rosebank.

All right. Good morning, everybody. So if we are going now on Slide 11. '25 represented a year of outstanding operational performance, significant improvements delivered across all our operational metrics, most notably marked enhancement on the HSE performance. The key takeaway that I want to highlight here, our focus on safe and operational performance with the introduction of the Perfect Day in 2025, we've talked a lot about it, and it allowed improving all our operational metrics, and we have consistently delivered on all our commitments.

The target investment in '25 increased our production capacity, create a basis for a sustained midterm production of 120,000 barrels per day and then the delivery and progress of our ongoing and planned investments, which provide robustness for our production outlook midterm.

If we can go to the next slide. First, let me focus, as usual, on our commitment to responsible operation and sustainable value creation driven by the disciplined focus on achieving the perfect day, which I remember is defined a day which has no Tier 1 or Tier 2 process safety incidents and without recordable personal safety injury and without a regulatory reportable event. And I'll talk about the production efficiency in the next slide.

This has delivered improvement in safety and environmental performance and the group recorded zero Tier 1 and Tier 2 process safety events, delivered sustained improvement in personal safety performance with a material reduction of over 25% in the total recordable injury rate to 1.7, and it was 2.3 in '24 and 3.3 in '23.

The greenhouse gas intensity was 28% lower than last year, primarily due to the higher production delivery from our low-intensity assets, which is significantly below the latest basin average of approximately 24 kilogram of CO2 per barrel equivalent. And in 2025, as part of our values relaunch, I want to focus, we introduced a new make it safer value which resonated well with all our workforce and making sure that safety is always visible in our culture and the front, at center of everything that we do.

So moving on to Slide 13. 2025, as Yaniv said, has been a year of excellent operational delivery and disciplined strategic execution. The strong production reflects the enhanced operational robustness of our asset base first, supported by continued operational improvements and optimization, but above all, a consistent and reliable delivery.

For a day to be a perfect one, we also have to meet our production target for the day. And with that focus, the production efficiency performance in '25 was 83% exceeded the previous year's 80% in '24 and the average of the basin of 75% including a sustained 4% improvement in the unplanned production efficiency performance across the operated assets.

And now we entered 2026 with an increased installed production capacity having achieved a '25 rate -- exit rate, as we said, of 148,000 barrels per day, with peak daily above 150,000 following the successful delivery of new wells at Cygnus, Seagull and J Area.

And beyond '26, we expect to maintain production above 120,000 barrels per day in the medium term, reflecting investments in our existing producing asset base with -- which is Captain, Elgin Franklin, J Area and Cygnus, and of course, the startup of Rosebank development with material upside from our pre-FID projects.

Now going to assets. If we move to Slide 13, I want to touch on Captain field. I continue to see a very high level of activity in 2025. From the execution of the 13th well campaign to the completion of a significant summer shutdown with material backlog reduction, optimization and life extension activities, which were completed. As part of the 13th well campaign, we delivered three new producers, one injector and the Enhanced Oil Recovery Phase II project, delivered a production for the subsea wells, which was doubled from around 10,000 to about 20,000 barrels per day, which allowed to reach the highest production rate in recent years.

Now the first phase of 14th campaign with two producers and one injector was sanctioned and is scheduled to start in Q4 2026 on a back-to-back basis with a 15th campaign. Also recognizing the importance of Captain as a strategic operated asset, there was a major flotel campaign commenced mid-25 to support the long-term stability and performance of this asset. So ensuring that the facility remains safe and reliable through its long-term life.

Then we decided to extend the Safe Caledonia flotel campaign later in the year, executing further critical scope to safeguard longer-term performance and after more than 300,000 man hours that we liquidated than the flotel left the station in February this year.

If we move to Cygnus in Slide 15. Cygnus, remember, is the UKCS largest producing gas field with low emission production, fits very well with the U.K. need for the domestic and sustainable gas production and fits excellently in our portfolio, offering upside potential. Its performance in the year has been the top across our assets, reaching 90% of production efficiency. At the beginning of the year, while we were working on the acquisition of the additional 46% stake. We've been active mobilizing the Valaris Norway rig and have then the well C12 drilled, which came on stream in December and was followed by the C13 spud in.

Now in the year, last year, we have also sanctioned further two wells, C14 and C15, which are now planned to be spud in Q2 and Q4, respectively, of 2026.

And this goes along further investment potential with further two new infill wells that we intend to sanction in the year and starting execution of the already sanctioned compression project, which will announce the production performance of the field and extend the plateau.

If we move to the next slide, which is the slide on J Area. This is also a good performer of our portfolio, and we benefit there from a rather effective collaboration with the operator Harbor. 2025 has been very active for J Area. First action was Talbot that was indeed put in stream at the very end of '24, but then has delivered very strongly, both in terms of production rates and plateau duration in '25.

Then soon after Talbot, Jocelyn South, a discovery of late '24 was tied back in Q1 '25 and materially supported production. That was followed by two more infill wells in Judy -- in Judy east flank which was brought online in December at the end of the year and then a stimulation campaign on Joanne has been planned and successfully executed in the year.

All these investments initiatives in the area characterized by short time to market, quick payback have allowed the J Area to achieve its highest average production in 10 years, which rates above 20,000 barrels per day.

And if I want to move to Seagull on Slide 17, following the acquisition from JAPEX U.K. in July '25, now our equity in Seagull field increased from 35% to 50%, equaling our partner BP's interest.

At Seagull, the fourth and final plant well was completed, started up in November '25 after an extended well completion operation and the completion of J4 well marked the transition of Ithaca's Energy role as development well operator now to a non-operated owner and BP now is the operator.

The early well performance of J4 has been very strong, in line with expectation and operational efficiency of Seagull wells at the ETAP facility, which is the one that Seagull is connected to, is operated by BP, was also in line with expectation with average net pro forma production at around 14,000 barrels per day.

And moving to Rosebank. Our key project being operated by Adura. Material project activity was executed in 2025, including the successful delivery of offshore subsea installation scope that was delivered on time and within budget ahead of the drilling activities, which is planned for this year.

The FPSO Rosebank recently sailed away from Dubai having undertaken major refurbishment works over the past 2.5 years. And remaining completion and commissioning scopes are now planned during this year as part of the program to moor and hook-up in field ahead of the first oil production plan for end '26, '27. And further environmental information was submitted to the regulator for the development in 2025, and now we await the award of the production consent. And as we enter this full year of development, now we need to maintain disciplined execution, which is going to be critical to deliver the project safely, on schedule and within the project cost window.

With that, I give the line back to Yaniv.

Luciano, thank you. And I think it's really, as I said, excellent set of results and very strong performance, and you can see from the assets, and I'll get to kind of our inorganic growth. It's nice to see how kind of acquisitions pay out through the year. So we've done those two acquisitions of Cygnus and Seagull through the year and they're definitely at the top of our performing assets.

Before that, talking about organic growth opportunities, we are -- Ithaca is a long-term UKCS player. And as shown earlier, we have a lot of 2C resources that we intend to go and develop. So we've kind of unveiled our West of Shetland strategy earlier this year, and we have a significant and growing presence. We have around 300 million barrels of oil equivalent of net 2P reserves and 2C resources.

Luciano mentioned Rosebank with production end of this year, early next year. And we have Cambo and Tornado that are progressing right now through key regulatory milestones and project technical milestones towards FID in '26 and '27.

We're enhancing our position as a strategic infrastructure player in the West of Shetland. We've announced our Tobermory farm-in last quarter and really being a part of the new Northern gas hub and Greater Tornado Area strategy that would unlock future synergies and further exploration potential.

Creating long-term value from hub-based investment approach with Fotla maturing towards final investment decision and resuming infrastructure-led exploration strategy in the Greater Cygnus Area, J Area and in the West of Shetland. So this is a clear focus for us, our kind of development asset arm.

Our long-life reserve base supporting this material organic growth. You can see this here. I won't spend too much time on this. But today, around 660 million barrels of oil equivalent of 2P and 2C resources, of which 55% are operated. And this material reserve base, obviously, part of it is coming through the acquisitions that we've done as well and supporting our reserve replacement ratio, which is a very impressive 130%.

If you move to Slide 21, we wanted to show you some of the works that we're doing internally, and we're seeing what we call unbooked resources that we identify and with a goal of reaching circa 1 billion barrel potential of resources. And part of it is obviously the farm-in into Tornado that is not captured in our year-end reserve audit, which is around 25 million barrels of oil 2C resources.

But we're also advancing the maturing of contingent and prospective resources, focusing on infrastructure-led exploration to maintain and expand our optionality by bringing forward additional projects to create hub synergies.

And when you look at this and our -- and when we look at our internal review on resources captured, we're seeing approximately 1 billion barrels potential. And we said we're seeing ourselves as long-term investors in this basin with a lot of potential.

If we move to Slide 22, it's really a slide that talks, I think, about U.K. energy security and focusing on Cambo. And Cambo is the largest pre-FID undeveloped discovery in the U.K. Continental Shelf and a critical asset to the U.K. energy security. And just to give you a sense of what we're talking about here. So obviously, gross recoverable reserves of more than 140 million barrels of oil equivalent. We estimate a U.K.-based full-time employees over the full life of the field, from FID to decommissioning, of over 700 with peak number of full-time jobs at around 1,400.

Gross value added over the field's life of GBP 14 billion. And if you look at the gross domestic product of Scotland, the gross value add here is 0.7% at peak production in 2031, which is quite remarkable and demonstrates the importance of this development to the U.K. energy security and to the Scottish economy. It will represent about 8% of U.K.'s oil production from first oil to 2035 and would meet 4.5% of U.K. oil demand at its peak and 20% of total U.K. oil production by 2050.

So with all the challenges, we see this as a critical U.K. energy security project and a key element in our West of Shetland strategy.

If we talk a bit more about Cambo on Slide 23. So updated Field Development Plan and the Environmental Statement were submitted this quarter -- last quarter, reflecting project optimization identified during successful technical refresh with a lot of support from Eni. We're completing tenders for EPCC for our FPSO and SURF and entering market for a drilling rig with the objective of consolidating project costs and schedule and derisking the project as we mature it towards FID in '26, '27.

At the same time, we're reinvigorating our farm-in process, and that reflects obviously the project's enhanced maturity and part of the derisking that we're doing towards FID and a bit more stable uncertainty around fiscal and regulatory outlook.

Another energy security slide, if you want, Slide 24, really runs our gas development strategy in the West of Shetland and initiating and maturing prospective and contingent resources towards development. So we're doing a lot of work around this.

What we call the Greater Tornado area with the Tornado development progressing through the regulatory milestones with the NSTA, approval of the development concept in 2025 and submission of the Field Development Plan in Q1 of 2026. It will also -- Tornado will also be a key enabler for future tiebacks as well and unlocking further exploration potential.

And a bit north in the Greater Tobermory Area. So we've announced a 50% farm-in in Tobermory in Q4 with Adura as operator. And this positions Ithaca as part of the Northern gas hub in the West of Shetland and strengthen our position as a strategic infrastructure partner in the basin. And obviously, this partnership will seek to unlock further prospects in the area to maximize value creation. So if you're looking at this and you're looking into the future, obviously, Cambo, but looking at Tornado, Tobermory, and associated potential, exploration and development, this is really a very strong story of further development in the UKCS.

If we move to Slide 25 and shift to our inorganic growth strategy, again, another pillar that we ticked the box on in 2025. So as you said, we've continued execution of our UKCS consolidation strategy, increasing interest in high-quality, well-understood assets that offer upside potential. And we're seeing this right now with a great performance of both Cygnus and Seagull.

We have a very clear framework of working through M&A options and very disciplined and focused. So we're going to keep doing that. And the consolidation activity of acquisitions of Seagull and Cygnus in 2025 met all those investment criteria. And as you can imagine, obviously, with -- in the current commodities landscape, they performed really well for us.

And we're maintaining an active but patient and disciplined pursuit of international M&A opportunities in line with our focused international expansion strategy.

On Slide 26, I spoke about this, and we've shown this slide before, but these are clear investment parameters to support our UKCS consolidation and our focused international expansion. And I think that we really saw in 2025, the contribution of Seagull and Cygnus to our pro forma production and financial performance. So we're very pleased with these acquisitions.

And as I said, we're -- Ithaca grew through M&A and acquisitions, we are focused on looking at this from a value-led point of view, and we hope to do more.

With that, I will hand over to Iain Lewis, our CFO, to talk about financials and guidance for 2026. Iain, please.

Thanks, Yaniv, and good morning, everyone. So let's move on to Slide 28, and let's close out the 2025 performance overview by looking at some of the key financial figures.

So the 119,000 barrels a day production average with a less than $19 per barrel OpEx translates into a $2 billion EBITDAX delivery for the year, $1.7 billion of net cash from operations and $683 million of free cash flow. So in a strong production and operation delivery, we see that translating into cash and financials. So you can see the loss for year of $84 million. That was driven by the EPL charge in the year of $328 million. But underlying performance despite the tax headwinds on net income, very impressive.

The bottom of that slide shows the net debt and liquidity position. You can see that we're $1.3 billion net debt at the end of the year, 0.56x leverage ratio to EBITDAX, maintaining a low leverage position in the business despite the investment delivery that we are continuing to undertake. And we closed the year with $1.5 billion of liquidity, which is enabling us to look with confidence of opportunities, both organic and inorganic as we move forward.

Next slide, Slide 29, gives a bit more detail on EBITDAX for those that want to dig into the numbers. A couple of things I'd just call out here. Obviously, we're in a lower price environment 2025 versus 2024. In fact, the value from production line, with six lines up from the bottom of that chart shows that per barrel, we've moved from $79 a barrel value of production delivered in 2024 to $67 per barrel, so a $12 reduction in the delivery of value from production per barrel.

But you can see at the bottom that the adjusted EBITDAX per barrel is only down $8 a barrel. So that's a $4 per barrel reduction in the cost base as we come through 2025, just underpinning the importance of, first of all, the hedging, which added $4 a barrel of value in 2025. But then cost management, again, reducing $4 a barrel compared with prior year.

So strong delivery through the operations side of the business, supported by strong hedging positions and by good cost management, delivering strong EBITDAX of over $2 billion in the year.

And moving to Slide 30, we'll talk through something of the net debt and liquidity positions. This is an unfolding story that has been consistent through a number of years now where we maintain low net debt, high liquidity and low leverage. And the results at the end of '25 demonstrate that on every front, an undrawn RBL at the end of the year with $1.3 billion available. We also had a technical accordion facility available remaining on our RBL of $435 million through the rolling assets through acquisition and exercise the accordion if that is what we do.

So just capacity everywhere really from a financial perspective. And this kind of firepower enables us to do many things in the market and gives us a lot of credibility with all counterparties we talk to as we look to evolve the business, both organically and inorganically.

On to Slide 31 and a bit of an update for you on the capital allocation framework. So this has remained unchanged since IPO with our key pillars being to take the cash from operations on the left-hand side to invest, protect, return and then evolve the business. Now all of these matter and always have been up rev as part of the enhanced framework we're announcing today.

So in terms of investment, previously, we were looking to maintain over 100,000 barrels a day of production. We now see our ability to maintain over 120,000 barrels a day. That's the quality of our assets, the quality of our investment opportunities and delivery, showing us a path to continue above 120,000 for the foreseeable. And therefore, an up-revved investment base.

Secondly, in terms of protection, we've taken the ceiling down on our normal course leverage ceiling from 1.5x to 1.25x. Clearly, as we are at the moment, 1.56x, we're a long way from that, but we believe there's an appropriate reduction in the ceiling on our net debt-to-EBITDAX position. And of course, our hedging protects this position integrally as we move forward.

And then announcing today an increase in the return range forward for our investors, 20% to 35% post-tax cash from operations, up from 15% to 30% over the past few years since IPO. 30% post-tax cash from ops has been the delivery for the last 3 years now, and we're increasing the range of outturns in our capital allocation framework to reflect that robust delivery and confidence going forward.

And of course, the evolved category maintains. We have actually executed on all three elements of this at different times over the last few years. We've added growth CapEx. We've added M&A extension, and we've added additional distributions, and we'll continue to keep those options open as we move forward in the business. So an enhanced capital allocation framework as we look forward.

Now in this Slide 32, something of what underpins that confidence forward is stability of our cost base. And you can see here that we have delivered a cost reduction through '24 into '25 with cost per barrel now below $19 in 2025. And the guidance for 2026 takes us to a further reduction towards $18 a barrel in our guidance for the year 2026.

Now you can see forward the CPR that's released today and is on our website is an external view of our business, and you can see the reflection of their view of costs being relatively flat as well in the medium term. And that is what we're doing, portfolio managing and cost management and all the hard yards that are involved in that. We've always been aiming to keep our costs in the low 20s, and we are beating that at the moment and aim to continue to drive that kind of performance.

Next slide is on investment. So Slide 33, and we have the guidance range for producing asset CapEx in the year. We have an uplifted guidance of $600 million to $700 million. So a little bit more investment expected this year. And that reflects the confidence in our business and the cash flow that we believe is available to deliver that investment and the high-quality nature of the assets that we have to invest in.

You can see that the next few years in the CPR that the organic producing asset CapEx is maintained in the next couple of years at a relatively high level and then reduces. And of course, project CapEx would be the aim to infill that as we move forward in this production maintenance mode.

Rosebank, on the right-hand side of that chart, of course, is a big year for Rosebank. We have sailed the FPSO, as Luciano mentioned earlier, and we are now moving into the final phase of the project. There is a lot to do this year to get the vessel in field and hooked up and the drilling rig starts soon to drill the wells on the field and therefore, a material year of spend, but essentially the last material year of spend 2026, and then we're very much down to low levels of CapEx going forward as the field comes into production.

Slide 34 on hedging, and there's a few slides on this because clearly, it's an area of deep interest at the moment as prices have moved in the last few weeks. So we have an active policy and program on hedging, which has delivered over $500 million of hedge gains in the last 3 years. We have a very active intervention and proactive hedge policy where we aim to protect downside at 50% -- 75%, sorry, but also produce upside of 50% as we use swaps and collars and wide collars to deliver on our program.

Now oil and gas have behaved differently in the market in the last year or 2 years. And therefore, we've had to work between the two as we've moved this program forward. And we're glad to announce today that as at close of business yesterday, where nearly 64 million barrels hedged through the end of '27 with a robust program of both downside protection, but also upside exposure.

Slide 35. The next slide gives a little bit of information of what's been happening in the market and how we've responded. Clearly, everyone knows that oil prices are higher given the events in the Middle East. However, one of the key things that we've been looking at in the market and working within the hedge book is that the dislocation of gas price has been more substantial than oil. And in fact, particularly 1 year out in 2027, there has been a material change in the gas forward curve relative to the oil forward curve with the oil curve only up around 10%, but some of the forward curves in gas over the last couple of weeks, up more than 50% in the summer '27.

So what we've been doing through this last couple of weeks is specifically focusing on 2027 and augmenting our '26 position. And this uplift in market price curve, we expect to deliver additional value in '26, but has also unlocked significant opportunity in '27, which we now have built into our hedge book.

So the next slide, Slide 36, explains that a little bit more, really focused on gas. Prices in the summer '27 have been systemically low for a long time now, so much so that we didn't like the pricing. And Q2 to Q4 '27, we had no gas hedges as we moved into 2026. We've been able over the last few weeks to materially change that and uplift our gas hedge position for 2027 at very good pricing. And so although we've done some 2026 trades, the opportunity that's been developing in the market on gas hedging, we really have benefited from.

So as we look into the next slide, which is the hedge book for oil and for gas, really important, we land a couple of things here. One is that we have -- given the low position in oil, we have seen this as being a base cash flow delivery to support dividends and capital program. And therefore, we've done a lot of coloring of oil over the past 6 months in the $60 to $70 range. We have some color that take us up to $90 a barrel in the second half of the year. And of course, we have some unhedged volumes, but we have seen the oil hedge book as being a base cash flow delivery engine. And we are now well positioned in '26 and also robustly in '27 to deliver base cash flow support for the business.

We move on to the next slide on gas. And of course, we closed the year nearly at 50-50 in terms of gas and oil production in the business. We have significant upside in gas, which, of course, as I've mentioned in the previous slides, it's actually more dislocated than the recent history than oil is.

And we have unhedged gas over 20% of the volumes through the first three quarters of '26. We also have about 20% of our gas volumes hedged at up to ceilings of GBP 1.30 a therm and then a further 35% hedged at average ceilings of over GBP 1.00 a therm. So as gas has increased and it's in the GBP 1.20 to GBP 1.30 range at the moment, we are benefiting very materially from the gas uplift with the oil price base delivery and the gas upside in our book. So this is an example of the kind of designed and thoughtful intervention in the market that enables us to deliver base cash flow for protection of our dividend and capital program, but upside to our investors through exposure to collars in the market. And we'll see this come through 2026, but we close out our results today with a very robust hedge book with a lot of upside in our gas book, particularly.

On to Slide 39 and a couple of comments on decommissioning. Just to reference, we've got a slightly higher decommissioning cost this year because we bring two of our long-term servant assets, Alba and Greater Stella Area to station of production. And we'll see the floating storage unit on Alba move to decommissioning yard and also the Greater Stella area asset, the FPF-1 vessel, likewise, the floating vessel will go to decommissioning yard.

It's quite a moment for the company. The Greater Stella Area asset was the maker of the company. And in fact, of course, investment in that asset was curtailed by EPL a few years ago, one of the reasons why it's coming to station of production today, but a long-term servant of the business and really the core around which the business was built and a very high-quality asset and delivery performance.

So the focus now is late life -- ultra-late life management of these assets, making sure that we decommission these assets appropriately, environmentally sensitively. And that we run the Alba P&A program over the next several years in an efficient manner. It's an opportunity for us to demonstrate the kind of decommissioning performance that we aspire to, that actually will reflect our high operational performance in our core business.

Moving on to Slide 40 and just a couple of comments on dividend. Clearly, a strong dividend delivery over the last few years and $500 million delivered this year '25 with the closeout of the $200 million payment in April.

Our dividend range for 2026, of course, based around that new uplifted capital allocation framework. 20% to 35% being the range we have committed to 30% post-tax cash from operations in 2026. And we've given a target range around that of $470 million to $520 million, clearly with oil and gas prices in play, particularly gas prices, as I've mentioned, driving a lot of the upside. And we're confident in the delivery of that dividend target range and hence able to bring that to market today.

So a strong dividend history, and we believe a strong '26. And as you've seen from the hedging book, we expect '27 also to be shaping up to be a strong delivery year from a cash flow perspective as well.

Sounds like for me, Slide 41, guidance for the year. Very simply, we are increasing our production versus '25 with a 120 to 130 production range. We are decreasing costs, OpEx down to an $840 midpoint, which is about $18.5 per barrel, down on $18.9 for 2025.

We're able to increase our investment in core assets and also in Rosebank accordingly, delivering on our decommissioning obligations and executing on our program. A slight increase in cash tax being the reference points from '25 coming through and payments made from EPL in the year. And then this uplifted guidance on dividend with a strong outlook and upside based on pricing available for our investors. We've always said we'd share the upside on prices with investors. That's why the post-tax cash from operations dividend range and glad to commit to that today.

Back to Yaniv.

Thank you, Iain. I'll briefly go through closing remarks on Slide 43 and leave time for questions and answers. And as you've seen through this, are really -- our model delivers growth and sustainable shareholders' returns. I think we proved that in '24 and '25. We intend to prove that in 2026 as well with sustaining and optimizing medium-term production above 120,000 barrels per day of production. Significant cash flow generation from a diversified portfolio of scale.

Capital discipline is key to us with a strict high grading of investment opportunity. And we're delivering organic and inorganic growth together with sustainable shareholder returns. So that's the Ithaca model. And I think 2025 is a testament to that.

Last slide, I really run through this briefly just to capture everything, strong operational performance, increased installed production capacity. As Iain said, we're confident in our kind of revised installed base capacity, low OpEx per barrel, a strong hedge position that allows us to protect cash flow with significant upside exposure and supporting our continued investment and securing dividend.

Strong strategic execution, developing our West of Shetland strategy and focusing on high-grading investment to maximize value creation. And of course, at the same time, delivering attractive shareholders' returns, $500 million declared dividend for 2025, looking at total distributions post IPO of $1.4 billion and a refreshed dividend distribution range of 20% to 35% post-tax CFFO.

So with that, after the -- what we feel are pretty excellent and strong results for Ithaca. We'll be happy to open up for questions.

[Operator Instructions] The first question is from Cian Evans-Cowie with Bank of America.

It's Cian Evans-Cowie from Bank of America. So I guess going straight into the payout policy changes you've made today, I wonder if you could, I guess, talk us through your thinking in a bit more detail on why you've upgraded the payout ratio. I know for this year, you've set that 30% target. I wonder if you could tell us how you arrived at the 30%? And what would lead you to aim higher than that, possibly towards that 35% level in the future? And I guess if you could also comment briefly on why you've altered that payment schedule?

And then Secondly, if I may, on M&A and your progress towards that Cambo FID. I noticed that last year on that nice production profile slide that you include, in the footnotes, you said you're in live farm-down processes. And I don't see any such footnote this year unless I'm missing it somewhere. So I guess, could you perhaps give us an update on where you stand there, how things are going? I know you said the process is being reinvigorated, but what exactly does that mean, I guess, the maturity and shifting tone from government that we've seen would be a positive in the process. But of course, any volatility in the commodity markets can't really be ideal for these kinds of discussions.

Iain, why don't you start with dividend? I'll take the Cambo question.

Sure. Yes. Thanks, Cian. Yes. So I mean our capital allocation framework, obviously, we set IPO. And clearly, that's a number of years ago on our development opportunities. Our CapEx program have all evolved since then. And what this range gives us is the opportunity to flex dividend based upon our commitments and expectations of capital deployment because, of course, invest and protect comes before return in our framework. So therefore, it depends the investment required and in fact, the balance sheet position as well determining the range. So we gave ourselves a range for that reason.

30%, we believe every year, we will guide on a position. 30% has been what we've paid the last few years. We see the strength of our business such that we can't see ourselves getting to a place where 15% is what we would pay out. And therefore, we just uplifted the bottom end of the range.

And in fact, in some years, I think we may be able to deliver more. So that's why we changed the range. It's a good point you mentioned on the policy. We decided to flatten the delivery of the dividend from a 1/3 at half year results and 2/3 at full year results. We've moved to a 50-50 cash dividend payment. Again, we think that's just reflective of the kind of balanced nature of our business that we can deliver around that 50-50 basis. And therefore, we've moved to that. It makes calculation of dividend flows a little bit easier for people, and it's a flat policy that's in line with many in the market, and we think appropriate.

Yes. I think just to add to that, it really reflects the, I think, maturity and stability of the business as well, right? I think that's what we're trying to convey here with everything else. Cian, thanks for your Cambo question. First of all, I'm glad someone is reading the footnotes. That's really encouraging.

But we are obviously not going to comment on kind of ongoing discussions. But we said all along that Cambo is a project that we like and that we'd like to do, and we would like to bring in partners. As I said earlier through the presentation, we're seeing the improved, I call it, stability or certainty around fiscal regime as obviously something that's supporting project going forward, and we'll see where that goes. But we're confident in our ability to bring in partners into this project and for future investment in the UKCS.

Our next question is from Werner Riding with Peel Hunt.

Yes, could you please talk a little more about capital allocation in respect to M&A. As you set out, 2026 is already shaping up to be a pretty highly cash generative year. So in addition to the potential for maybe debt reduction and increased shareholder distributions, you're going to have significant liquidity to pursue acquisitions. So can you maybe give a sense of what types of opportunities you're screening in terms of scale, any geographies outside the U.K. that appeal in particular? I noticed you're flagging international expansion more openly now, for example.

Thanks, Werner. I'll take that. So look, we're -- as we said, we have our -- what we call a Consolidation Strategy, in the UKCS. And as you look at our portfolio, and we are -- we have a very high-quality portfolio. Our intention is to high-grade that portfolio, right? So we're being very disciplined in the opportunities that we would take and execute on. But we're definitely still interested in adding high-quality assets to our portfolio in the U.K.

And as you said, we have the balance sheet and the firepower and flexibility to also move quickly on opportunities. The international expansion angle is not new. I think we've been saying that in order to continue to grow the business, we would like to look at opportunities outside of the U.K. that meet our investment criteria, right? So we're kind of value-led.

But at the same time, I want to mention everyone, remind everyone, we have our organic growth arm as well, right? And we're looking at things from a value perspective and where the marginal dollar makes the higher return, and this is how we look at things. So international expansion, yes, not at any cost, and it will be a very disciplined one. And we also say we're not -- we don't intend to expand to nine geographies, but we want to focus on one or two that we can grow the business in an environment that we feel we have an added value, work with quality partners and be able to kind of replicate the Ithaca story in another basin.

Our next question is from Mark Wilson with Jefferies.

First question is, I'd just like to check on the production guidance for 2026. You highlighted how you exited at around 150,000 and guidance for the year at 120,000 to 130,000. So just could you walk us through the moving parts down to that average level and whether there's any planned maintenance that includes that versus decline? That's the first question.

Second, thank you for the answers just then on international opportunities. But in the U.K., first off, are there still opportunities like the Cygnus and Seagull out there? Or do we think a lot of that consolidation has happened? And then secondly, if I look at your West of Shetland, you partnered at Rosebank with Adura, you've got 20%. You partnered with Adura in Tornado, in Tobermory 50-50, and you've got Cambo at 100%. Frankly, an asset swap Rosebank into Cambo carry seems to me the logical conclusion there. Any comment on that?

Okay. I can pick up on the guiding. So first of all, the exit rate that we quoted is kind of demonstrating the capacity of our integrated production system in covering the totality of our portfolio under rather ideal conditions and we basically more or less all our and cylinders firing at the same time, main thing then demonstrating the robustness of our promise for '26.

So when we then come up with the P50 estimates as we have had, that is taking then into consideration decline rates, the fact that we are COP 2 of our assets in 2026, start-up of new wells and like you said, also the planned shutdowns for 2026.

And just as a kind of an illustration, we have, over the last years, been on a continuous improvement journey when it comes to PE. We have gone from 77% PE in '23. We had -- in '24, we had 80%, and we delivered 83% in '25. However, when we then assume the assumption for PE for '26, we had to then take what we assume as kind of the P50, which is now set at 83%. Being more aggressive and bullish on that would not be prudent.

Having said that, from a kind of professional point of view, we are on a continuous improvement journey here. We are chasing the planned production deferment, the unplanned production deferment and they are trying to reduce our locked-in potential and continuously chasing opportunities. So I personally would be professionally disappointed if we are not beating 83% for '26.

Mark, on -- if there are still opportunities in the UKCS, yes, there are. They're becoming scarcer for us, I mean, because of the quality of our portfolio and our wish to high-grade our portfolio, but there are opportunities. You always need kind of a willing seller as well to be there. But we're definitely looking and we would like to do more in assets that we like and know and that could be accretive to our portfolio. And if that will happen or not, time will tell, but we still see opportunities.

On the Cambo farm down, so first of all, thank you for the suggestion. We'll take a look at that. We're -- I'm sure you won't be surprised when I say we're not going to comment on any ongoing potential discussions. I think farm down in Cambo is one of our derisking elements and kind of in route for FID. So we're looking at -- I would just say we're looking at all options. And obviously, we'd like to optimize our portfolio as well. So all options are on the table.

Our next question is from Chris Wheaton with Stifel.

Congratulations on great operational performance in the year, 83% uptime and great safety performance is exactly what shareholders need. So well done.

Two or three questions from me, if I may, please. Firstly, interesting OpEx guidance to me looks down in absolute terms, OpEx looks like you're guiding to lower OpEx in '26 versus '25, and that seems a really impressive achievement given you've got adverse FX and you've got higher production. So I'm interested in the underlying thoughts about how you can actually achieve that.

Secondly, I was interested in Slide 13, that near-term production guidance. What projects are you assuming actually get sanctioned and approved in that 2C and pre-FID project wedge going out to 2030?

And my last question, it wouldn't be a conference call without me asking a question on the EPL. If you believe press reports, there was a quid pro quo offered that if the windfall tax could be modified, then there'd be extra investment from the industry. I'm interested in what -- how much and how fast could you accelerate that enormous sort of 2P contingent resource base that contingent on the economics working and the tax being right instead of being agreed just compensatory ridiculous 78% that's currently in place. How much of that and how quickly could you get into production? And how much would that be -- would that likely to cost?

It seems there's a win-win for everyone. The country wins, the industry wins, the taxpayer wins, everybody wins. How much could you actually come up with in terms of investments and delivery? Those are my questions.

Thanks, Chris. Let me take those and maybe Yaniv overlay on top. I mean I'll take all three of those in terms of -- in order. In terms of OpEx management, and this is around, first of all, the base delivery of OpEx involves a lot of hard yards of close cost scrutiny and careful management of internal and external costs that continues to be a huge focus, also good FX management, which we do very well.

There are two assets, of course, coming to COP this year, which are higher OpEx per barrel fields, so Alba and GSA. So that will play in here as well. But of course, they're not actually that significant in terms of production now towards the end of their life. So it's really about long-term management of the base and getting production into a higher and stable place as we have done over the last few years, really drives that OpEx per barrel kind of number.

In terms of Slide 13, this is all in our CPR, which I know, Chris, you'll read with great interest. But essentially, these are tiebacks like Fotla and MonArb infill. There are new greenfields like Tornado and Suilven, Tobermory and of course, further out beyond 2030, Cambo. These are investments that we plan to make, we look to make, but the link with tax is not lost and in fact, is directly relevant. This is about a tax fiscal and a regulatory regime that needs to support this industry.

We have successfully managed several headwinds across the fiscal and regulatory environment and continue to do so. We've delivered a lot of value and expect to continue to do so. There's no doubt the industry as a whole needs some support from the government and from the regulatory bodies. We need partners in these fields, as has been mentioned. And therefore, our strength as a company doesn't necessarily mean that's the strength of the basin and the fiscal and regulatory environment really matters. So I would say changes needed.

We have said quite publicly that they have come up with the right tax now. This should have been the tax 40 years ago, there was GPM that is now delivered. So credit to the government for that, but it's the wrong time line and they need to put it in earlier. So right tax wrong time is our heading, and it will certainly support this project pipeline if we can get those changes and regulatory support kind of clarified.

But Yaniv, anything to add on top of that?

No. I'll just -- very briefly, I think that the point around energy security is -- cannot be emphasized more right now. We're seeing what's happening in the world. Commodities just being part of it. And I think the United Kingdom cannot afford walking away from the assets that it has. And I think there are willing businesses here to go and invest, and we just need the right framework from the government to go and do that. And I think these kind of shocks right now to geopolitical shocks and global economy shocks are exactly the right opportunity and time to take the decisions.

I would tell us all, that we agree, let's hope some sanity prevails at some point. Let's keep our fingers crossed.

Next question is from Mark Wilson with Jefferies.

The two points. I like the way you reflected back on some of the IPO guidance there and also the Greater Stella Area finally being CLP. So two points. The first one is, could you, for the layman, Iain, explain how the tax effect works for the decommissioning in the next few years? Is there anything that people need to know about that as that goes forward?

The second one is Captain EOR, 17,000 net production to yourselves. Could you explain just how that enhanced oil recovery has worked versus expectations? I think that was expected to get to about 40% when it was originally proposed.

Thank you. Yes, sure. I mean in terms of decommissioning and tax, it's very simple. There is 40% corporate tax relief on decommissioning. These are fields that have paid a lot of corporate tax over the years. And therefore, it's simply a cost relief like any other. So that's standard. It's not a huge part of our cost base. You'll see that the total numbers here in this year are not huge. And in these assets, of course, they're also relatively limited. This year, for example, GSA will largely be work in field to flush and purge the vessels and the lines and then moving the vessel to the decommissioning yard. So there's kind of late life work and possibly OpEx, but it's over a 7-year program, the spend on decommissioning.

On Captain, I'll hand over to Odin, but I think the history of the CPR tells you that the volumes delivered in Captain have been very consistent actually over the years. It's simply the timing of how they come out the ground through the EOR II recovery that's been the question and in fact, has been an unfolding project and analysis.

But yes, Odin?

Yes. I think you're right, Iain. And I think the -- what we are seeing on the EOR is that the behavior from the subsurface is according with the way we predict it. Our biggest challenge over the last years have been to get enough polymer injected into the reservoir. But particularly if you look on the EOR II project, which is the latest one, the response that we are seeing from the reservoir is in accordance with our predictions relative to how much polymer we have been able to inject. And that's why we now are paying so much attention to making sure that not only the uptime for the Captain field when it comes to production is as high as possible, but also the uptime on the volume we are able to inject into the reservoir of polymer.

Our next question is from Nash Cui from Barclays.

I have two questions, please. The first one is on your hedging strategy. I just wonder, given the higher commodity prices forward curve, both oil and gas, how do you think about your future hedging strategy? And also understandably, the volatility is high as well. Are you going to keep it flat? Or are you going to increase your hedging? Just wonder what you think forward?

Then the second question is just to get a bit of understanding on the decommission cost in 2025. I think in your report, you noted that there's a $266 million increase because of revision to cost estimates. I just wonder how much of that revision is driven by cost inflation in the North Sea decommission market versus change in scope?

Sure. Sure, Nash. I think they're both financials, they're both me. On hedging, Yaniv and I work very closely on this and very actively in the market now. I would say that our hedging policy has been very value delivering for shareholders over the years, and we see no reason to change it. In fact, the outlook as we are just now is very positive. We are looking to deliver base protection for a significant dividend and capital program that give upside exposure because our dividend program, of course, is based on post-tax CFFO. So we want to share with our shareholders an upside.

And that's what this whole program is based around. This last iteration in the last 6 months, we've had to move towards oil being more of a base delivery in terms of cash flow with less upside simply because of the very, very flat forward curve on oil even today with a peaky front end, it's extremely flat at the back end.

So what we've done is evolved our policy so that we are looking at gas upside as being upside delivery for the next 12 months. So I think our policy actually organically evolves to deliver the same kind of outturn protection and upside opportunity, but it will move between what we used to do with some puts, for example, we now do wide collars because puts are far too expensive on their own. But it delivers the same outturn in a managed and disciplined fashion. And we're very satisfied with our '26 and '27 hedge book after 3 years of significant hedge gains. We see a lot of protection plus upside in the years ahead.

On decommissioning, yes, sure, the balance sheet management that you're referring to, and it's -- I'm glad someone's been in the details of the financial statements, Nash, since the release this morning. I'm sure many will get there as well afterwards. This is an increase in a number of things. One is discount rate actually, which is obviously a market risk-free rate issue that is driving part of that increase in the book. Part of it is non-operated assets, kind of revised views of costs.

And some of it is related to rates. So rates in the market for assets like rigs. And actually, this is partly linked to the whole tax system, to be honest, Nash, because the lack of investment in new development wells means less rigs attracted to the area, means a little bit of an uptick in rates in the market. We're not actually seeing a lot of that from our perspective in terms of actual delivery from our side, but we benchmark our cost estimates decommissioning on market rates and therefore, market rates do affect the provisioning.

So you're seeing a lot of that going on. I wouldn't say it's one particular issue. It's a number of issues, but costs go up as well as down in these areas. And I think an EPL change actually will change the whole environment for assets and attract investment and therefore, cost reductions in the decommissioning space, too, one of the reasons why the decommissioning sector is advocating for EPL removal.

We have no further questions on the line at this time. So I will hand the floor back to Yaniv for any closing comments.

Thank you. Thank you for joining our conference call. I'll take this opportunity, as always. You're seeing the results and presentation and us, but this is the work of hundreds of people offshore and onshore, and I want to thank them here for their dedication and hard work as we continue the Ithaca journey into 2026. So thank you for joining us, and have a great day.

This concludes today's conference call. Thank you all very much for joining. You may now disconnect.

Good morning all, and thank you for joining us on today's Ithaca Energy Q3 2025 Results. My name is Brewie, and I'll be the operator on the call today. [Operator Instructions]

With that, it's my pleasure to hand over to Yaniv Friedman, Executive Chairman. Please go ahead when you're ready.

Thank you, and good morning, everyone, from a snowy Aberdeen and a very cold London, and welcome to our Q3 2025 results. My name is Yaniv Friedman, and I'm the Executive Chairman of Ithaca Energy. Today with me on the call are my colleagues, Luciano Vasques, our Chief Executive Officer; and Iain Lewis, our Chief Financial Officer.

If you move to Slide 3 on today's agenda, we'll cover highlights for year-to-date and Q3 2025 results, Luciano will speak to our strategic and operational highlights, Iain will give us a financial overview and we'll finish with closing remarks. And of course, as always, open up for questions and answers.

Q3 highlights, if you'd be kind to move to Slide 5. So we had another very good quarter with strong strategic delivery, supporting our vision for scale, stability and strength. Production with 150,000 barrels of oil equivalent a day, average production year-to-date. We've had a material, some would say, unprecedented summer shutdown, and Luciano will talk about this later, and we're on track to deliver full year production guidance supported by an upgraded Q4 exit rate of 145,000 barrels of oil equivalent per day from 140,000 a day.

Adjusted EBITDAX of $1.5 billion for the 9 months ending on September 30, enhanced financial performance, substantial cash generation that's supporting our cash allocation flexibility and attractive shareholders' returns.

We're reaffirming our 2025 dividend target of $500 million and announcing this morning a payment of $133 million of dividend that we accelerated from April 2026 to December 2025.

A strong balance sheet, $1.7 billion of available liquidity. We've had a very successful bond issuance a couple of months ago, EUR 450 million with a 5.5% coupon and we upsized our reserve-based lending facility. This gives us material financial firepower for our next phase of growth, as we'd like to call it, with a low leverage of 0.5x of EBITDAX.

If you move to Slide 6. So we're really delivering on all pillars and on our improved 2025 outlook and continued strategic execution, reaffirming our upgraded management guidance that we've issued in August with production trending to the bottom range of the range primarily due to our informed decision to extend the Captain shutdown period to allow us to do more unplanned investment that will further support longer-term environmental and operational performance. And at the same time, we had a slight start-up -- slight delay to a start-up of 3 production wells -- high production wells that will come online very, very soon.

Cash tax, and I'm sure Iain will mention this as well, trending to the bottom of the range of the $230 million to $270 million that we gave in August. At the same time and also due to these unprecedented TAR season, we're seeing increased installed total production capacity in Q4 and trending into 2026, with an uplift in Ithaca's exit production rates in Q4 from 140,000 barrels a day to 140,000 barrels of oil equivalent per day expected. And we've announced this morning, this is on the strategy section, 50% farm-in into Shell's Tobermory gas field, forming part of our wider West of Shetland strategy and really positioning Ithaca as the strategic partner in the region.

If we'll move to Slide 7, we thought it would be good a year into our business combination with Eni, just to kind of show performance. So we're focused on delivering attractive shareholder returns while continuing to execute on our growth, both organic and inorganic, strong cash flow generation that supports the accelerated dividend payment that we've announced today and our full year dividend target of $500 million. But if you look over the past 3 years from 2023 until today, $1.2 billion of shareholder distribution, $1 billion just in '24 and in '25. And if you look at total return, since there's this combination, dividend adjusted, about 150% return to both the share price and dividends.

I'll hand over to Luciano to talk about strategic and operational highlights. Luciano, please.

Okay. Good morning, everybody. And if we can now switch to Slide 9. We are proud to continue our excellent safety and environmental performance. In particular, we consistently reported zero incidents -- serious incidents, both in process, personal safety as well as in the environmental space. That means that we have 2 full years with no significant demand. And so our metrics, as you can see, continue on a positive trend with 1.6 incident per million man hours versus the 2.9 of the last -- of Q3 of last year, and emissions at 17.3 kilogram of CO2 per barrel equivalent, which is about 25% lower than the average in the basin. This is, of course, the result of the combination of asset quality post the business combination and also the steady operation. And I'd like to say it's a strong indication of good performance as we've just gone, as Yaniv said, to a material TAR season, which inherently is a challenging one, both in terms of safety and environmental space. And so we still maintain our excellent safety records, thanks to our cruise offshore and onshore.

If we can move to Slide #10, and we move to production. We closed the Q3 with a year-to-date production of around 115,000 barrels a day, as we said, and had a Q3 contribution of 97,900 barrels per day, which, of course, reflected our TAR campaign in 2025, which saw an unprecedented level of summer shutdowns, with more than 500 days delivered and 15 assets involved both operated and nonoperated. Of these 15, 12 were delivered on time and budget, which is a remarkable achievement. As I said, the TAR activity has been exceptional and somewhat unavoidable in '25 with the timing of the business combination, which impacted our ability to optimize the activity sequence. This, in fact, has been possible now for 2026, which we'll see a 55% deferment risk reduction in our further planning.

And at Captain, as Yaniv mentioned, the decision was made to extend the shutdown to invest further into safeguarding our longer-term environmental and operational performance. This is a prudent decision because we want to support life extension activity for this asset. And with the successful completion of the TAR season and 3 new high-producing wells, which are coming onstream in December. So now we are entering the new year with an increased installed total production capacity, as we said. So that is the basis of the uplift that Yaniv just talked about, 245,000 barrels expected as an exit rate. So it's going to -- it's been merely a timing issue on new production delivery towards the end of the year.

Moving on to Slide 11. Again, this is just to say that on Captain, we progressed with the delivery of the 13th campaign. So there are now 4 wells -- construction wells, which have been completed, and there are 2 left to go. And we have also matured the planning of the 14th campaign, which we intend to sanction in Q4 '25. On the maintenance campaign, I said already, but of course, this has required an extension of the TAR shutdown period.

If we move now to Slide 12, we go into Seagull. At the end of October, we handed over to the operator of the J4 well, which is the fourth and last well of the Seagull development. You may remember, J4 has experienced technical issues in the first half of the year, which had required dedicated and rather technologically advanced operation to safely finalize the completion of the well. We're pleased to report that J4 has been completed and is currently being cleaned up and flow rates are in line with the predrill expectations. This is 1 of the 3 wells that we -- that I mentioned earlier, which had a start-up expected in December of this year.

If we can now move to the next slide, which is Slide 13. And you may remember that at the end of our half year results, we presented a similar slide highlighting the importance of West of Shetland in our long-term organic growth strategy and, of course, the one of the United Kingdom as a whole. We will share, of course, an update on Rosebank and Cambo in the next slides, but let me touch on 2 further fields in this area.

This morning, as Yaniv said, we announced the signing of a farm-in agreement with Shell for 50% working interest in licenses P2629 and P2630, which are located in the West of Shetland Basin and that contain the Tobermory discovery. The discovery is estimated to bear gross 2C resources of around 60 million, 65 million barrels, which add to the significant reserves and resources that we already hold in the West of Shetland. And following completion of the farm-in, Shell U.K. will continue to hold 50% stake in Tobermory discovery and will be the operator of the licenses. The announcement of this farm-in together with our 50-50 joint venture partnership with Shell in Tornado discovery strengthens, of course, further our position as a strategic partner in the area and provides the ability to unlock synergies between discoveries, which are infrastructure-led.

The Tornado project, by the way, is progressing towards FID, of course, subject to fiscal and regulatory clarity, and tendering is ongoing and we are advanced also -- advancing also the environmental statement and the regulatory steps.

A little more on the West of Shetland, if we can move to the next slide, Slide 13. You can see from the map why this is a strategic basin and it's important for our long-term growth plans. Not only we have, of course, the Rosebank field, which is the development ongoing, and we are continuing progression on the largest pre-FID discovery, Cambo towards a final investment decision, but also this area has the potential to a lot further exploration and further near-field connected tiebacks. And so positions us as a key player in the Northern gas hub with significant prospectivity in terms of resources that can, in fact, benefit from the infrastructure that can be shared and allowed for a relatively quick turnaround connection when new fields and new discoveries are there. So we can achieve -- we believe we can achieve significant synergy with the greater Tornado area. And so our investment in the West of Shetland is critical for us, and it's also critical for the U.K. energy security, also supporting skills, job and our supply chain, which, as you know, is vital for the entire economy.

Moving to the next slide, we go and talk about the Rosebank and we're on Slide 15. Pleased to report that material progress has been achieved in respect to the refreshed consents. The operator with our support, active, has submitted the updated environmental statement in Q3, which included, as you remember, the assessment of the Scope 3 emissions associated with the project came after the guidelines issued by the government in June '25, following last year's consultation. And after the submission, operator advised that there were no objections to proceed with the public consultation process in relation to the amended submission and now this consultation process is in fact at the phase of concluding. And so we expect a revised consent to be issued in early 2026, which is much earlier than what's needed for a targeted first production.

And if we move to the project side of things, to the next slide, Slide 16, the 2025 offshore subsea installation scopes were delivered on time and budget and excellent HSE statistics. The drilling activities are scheduled to commence in Q1 '26 as it was planned. The FPSO refurbishment activity are progressing at pace. The third dry dock has been completed and project progresses with a target to sail away early 2026, so to allow the mooring in the field during 2026. We are supporting the operator in its effort to maintain the FPSO sail away date, which is a critical milestone together with drilling and hook up and commissioning works to achieving the first production target at the end of '26 or beginning of '27.

On costs, the updates from operator indicate that based on the achievement of these key milestones, as I mentioned, which include limited carryover activities for the FPSO sail away, the total project outturn forecasts don't need to be materially updated at this time and will be revisited after the FPSO sail away.

And if we can move to Cambo, that is Slide 17, completing our zoom into the West of Shetland, our project is continuing its maturation towards the final investment decision and potential farm-down, which will require a fiscal and regulatory clarity, an outcome that we expect in the coming weeks. We've put significant efforts into maturing the project in the quarter and throughout the year actually, progress all main tenders for the key project packages. Of course, this is through the FPSO Engineering, but also its Procurement, Construction and Commissioning, but also the tenders for the Subsea, the Umbilicals, Risers and Flowlines. They are all commenced, and they are intended to be completed by mid-2026. So we have a consolidated project cost and schedule, which will be at the basis of a derisked final investment decision.

We've also progressed speedily on the regulatory side, and we've also leveraged, of course, on the experience of Rosebank, and we are now pointing at the submission of an updated Field Development Plan and Environmental Statement before the end of 2025, which will, of course, reflect all our optimizations over the last year in the project.

So that concludes the strategic and operational highlights. I'll hand over to Iain for the financial overview.

Thanks, Luciano, and good morning, everyone. So turn to Slide 19, please. And we'll call out some of the key numbers for the year-to-date Q3. So the top line, some of the operational numbers, 115,000 barrels a day. Split, 58% liquids and 42% gas, obviously from 1 October with the completion of the deal to add Cygnus equity, our gas production will increase, and it will be more balanced towards 50-50 at the end of the year. And that's come through with a $19.1 per barrel year-to-date Q3 OpEx. And again, driving below $19 is the aim for the year, and we can see that coming to pass in the numbers year-to-date Q3.

In the middle of the slide, you see the outturn performance financially, $1.5 billion of EBITDAX and $1.3 billion of net cash from ops. The main difference between those 2, obviously, being the cash tax payments made in Q3, again, very strong performance and a $98.5 million profit in Q3 stand-alone, helping to claw back against the net income charge for EPL extension that was booked in Q1. So we're $119 million negative for the year-to-date Q3 in net income terms.

In terms of debt and liquidity, you can see that we're $1.1 billion of net debt at the end of the quarter at 0.5x leverage ratio, again, maintaining our low leverage position, but very significant liquidity. We end the quarter with, I think, a record liquidity position of $1.7 billion through our facilities.

So moving to Slide 20, a little bit more detail on EBITDAX. Just to call out a couple of numbers here. Clearly, a transformed business Q3 '25 compared with Q3 2024 year-to-date with 115,000 barrels a day compared to 53,000 barrels a day. One thing I would call out is continued hedge gains. You can see that $77 million of hedge gains in the year-to-date 2025, a consistent pattern now over 3 years of head gain positions. And we have, at the end of the quarter, material hedge mark-to-market positive positions as well across both oil, gas and FX hedges continuing to strengthen and protect the business.

I would call out just in terms of the value from production line. Obviously, prices are a bit softer in '25 than they were in '24. You can see that the $83 a barrel year-to-date '24 value from production has moved down to $68 following that market trend. It's a $15 reduction. But because of the operating cost shift that we've seen in the business and being able to drive from $29 a barrel last year to $19 this year, you can see that the EBITDAX per barrel has only dropped from $5 from $53 a barrel to $48. So just showing the resilience of the business has transformed from the merger with the Eni assets and the sustaining EBITDAX per barrel at a very high level.

So moving on to Slide 21 and a bit of a summary of our refinancing that we did in the quarter. You can tell on the right-hand side, in terms of bond performance, the U.S. dollar bond that's been in the market for over a year now has been performing very well, strong credit support in the market and appetite for the bonds. That, together with favorable market conditions in the summer led us to the issuance of an EUR 450 million bond, again, accessing a new market with a lot of appetite for the issuance, able to execute that at 5.5% coupon with an effective translation into U.S. dollars for hedge production at 6.7%, again, just reflecting for our credit rating, a very strong issuance and enabling us to look forward with confidence in terms of the various options that we have financially. We always want to stay with significant liquidity and capacity, and we leave the quarter in that position.

Moving to Slide 22 to see that in a bit more detail. You can see the adjusted net debt position of $1.064 billion at the end of the quarter with significant cash on hand. And you can see that in the middle, the available liquidity has been augmented by not just the issuance of the notes, the euro notes, but also the extension of the reserve-based lending facility. So we added $300 million, adding new institutions to our facility, which gives material upside to the liquidity position. We used the accordion and we still have remaining tranche in the accordion in our RBL as well, again, just making ourselves ready for opportunities. Our flexibility and agility in the market is underpinned by our financial capacity and flexibility, and this continues to position us to be able to move when opportunity arises. And finally, on the right-hand side, you can see 0.5x net debt to EBITDAX at the close of the quarter, maintaining our modest leverage position.

On to Slide 23. And again, we're giving a lot more detail on our hedge book. We have a very strong hedge position at the end of the quarter with nearly 40 million barrels hedged through Q4 '25 and extending out into now 2027. You can see on the left-hand side that we have a strong oil book with swaps and collars put together to show significant hedging through 2026. The floors on those, you can tell on the table at the bottom of the swaps are at about $67 for 2026 all the way through, so above market. And then you can see that the collar floors are in the low 60s with ceilings up to $70 a barrel. So a strong hedge position going into the year '26 on the oil front and a continued very strong gas book. You can see swaps at essentially 100p or just below for several quarters ahead and floor ceilings of 80p with a lot of headroom above. So continuing to deliver protection for the business, protection for EBITDAX and yet leaving us with material upside in the price environment if we were to see some strengthening on the Brent and the NBP pricing.

Okay, I'll hand back to Yaniv for outlook and closing remarks.

Thank you, Iain. I'm on Slide 25. And before closing remarks, it's also snowing in London apparently, so not just in Aberdeen, quite heavily. But back to the performance of the quarter, so strong performance. Again, a very good quarter, 115,000 barrels of oil equivalent production, strong cash generation, EBITDAX of $1.5 billion and we're increasing our production capacity in Q4 with an upgraded exit rate expected of 145,000 barrels per day of production. It's brought at length about our balance sheet. And I would just say we've been very disciplined. You can see this from our hedging strategy. You can see this from our debt management strategy. This $1.7 billion of liquidity gives us a lot of flexibility to go and do things in 2026.

We're focused on growth, organic and inorganic. The announcement this morning on Tobermory demonstrates our view of and position in the West of Shetland and supporting our long-term growth. And at the same time, since the closing of the Eni Business Combination, we've closed on 2 additional acquisitions of JAPEX and Spirit with Cygnus that were completed in July and in October.

We're doing all this, keeping in mind that shareholders' returns are very important. So looking at this through that perspective as well. We've accelerated $133 million of dividend from April until December, reaffirming our $500 million dividend target for 2025. So overall, again, a very solid and a very strong quarter.

Before we move to Q&A, I would just say that this is the work of many. We have a great team in Aberdeen. So thank you, Ithaca team. And we will now open this up for questions.

[Operator Instructions] Our first question comes from Chris Wheaton from Stifel.

Well done on great operational performance. Your team has done extraordinarily well, I think. A couple of questions, 2, maybe 3 questions from me. Firstly, on the dividend. Obviously, oil prices are down substantially versus when the company IPO-ed and also since last year. I'm interested in how much that drop in commodity prices is factoring into your thinking about where dividend goes for 2026 onwards given you've delivered a good operational -- great operational performance so far.

My second question would be on tax, if I may. What do you need to see from the budget next week to start progressing Cambo, Tornado, Tobermory forward with more certainty? If you can talk about anything you need to see from the budget next week, that would be, I think, very interesting.

My last question would be also on -- just finally on Rosebank. What would make that late '26 start-up rather than, say, early '27 in terms of what has to get done to be able to get a sort of late '26 start-up? That's it for me.

Okay, Chris. I'll take the first one. In terms of our dividend policy, it's clearly linked with cash from operations, which is where we've always pinned ourselves since IPO. And part of our hedge protection is indeed to make sure that we're able to deliver material results. I think as we went through there, you can see that our hedge book is well ahead of market. So although prices have softened a little, we believe, first of all, there will be volatility because there has been in recent years. Materially, we will take advantage of that in the hedge market we already have done. And therefore, we expect some strong EBITDAX performance with strong production delivery. That means we will expect a strong dividend, and more to come on that when we give our update at the year-end in early 2026.

In terms of the second, I'll pass maybe to Yaniv on that.

No. And thanks, Chris, for your comments. Look, on budget and EPL work, we continue to engage with the government. I would say it's a constructive engagement about the future of oil and gas and fiscal policy. And I could say that Ithaca has been an active participant in these discussions.

I think more generically, I think what the industry needs and what we need is certainty, right? So we need to understand that there is a path forward that there is certainty, there is stability in the fiscal regime that we can plan ahead and do our capital allocation properly. So without getting into details of what we expect or what do we need, obviously, we think that the current environment is far from being windfall in any way, shape or form and needs to be revisited and reshaped. I think the most important thing for the industry is certainty.

Luciano?

Yes. Well, on Rosebank, the key indicators, if you want, for that are, in fact, the sail away date, the amount of work that might eventually be carried over at the sail away because the scope is -- the objective is to minimize any carryover work and then the efficiency of the hook-up campaign during summer next year and of the commissioning. As you know, in these projects, the last steps are usually the more -- the pretty intense one -- intensive one to do so. So if everything goes, and we'll have a better view of it in Q1 next year, how efficiently this last month in the docs have been and have been executed. And so how quickly can all the commissioning be carried out in the campaign, so to be -- maybe to tell us whether we're going to hit the end of 2026 or into 2027. Although, I mean, the impact on the overall results is limited because there is still a ramp-up, which is pretty smooth in terms of bringing in new wells.

Great. Let's all keep our fingers crossed to some sanity and breaking out for the budget next Wednesday.

Our next question comes from James Carmichael from Berenberg.

Just a couple, please. I guess another one linked to the budget. You've obviously got your -- or you talk about your consolidation strategy on the UKCS. You obviously got quite a bit of financial firepower on the balance sheet now. And from what you're seeing, I guess, the U.K. has been fairly active on the M&A front over the last 12 months or so. But from what you're seeing, assuming some sort of sensible outcome in the budget, do you see sort of lots of M&A there that's waiting to go, I guess, if we get the right result next week?

And then -- and I guess we could include Cambo in that maybe as a follow-up. And then just on Captain, I was wondering if you could provide a bit of color on the increased scope of work that extended that shutdown. And also sort of specifically what you're talking about when you say safeguarding the environmental and operational performance. Were there some sort of issues that you uncovered as you were going through that work? Just some color on that would be great.

Thanks, James. I'll take the first one. Look, on -- again, as I said earlier, we're not going to say much on -- further on EPL. I think we'll all wait and see. And as Chris said, we'll expect some sanity and sensibility coming out of this process. But again, as mentioned, there is engagement. So we're hopeful that this will land on a sensible place.

If this has a direct effect on M&A, I'm looking at the past 12 months or 15 months. And you've seen it's been quite an active M&A scene in the UKCS, right? So from Ithaca and Eni and Shell and Equinor with Adura and NEO and Repsol or NEO NEXT, and our acquisitions and [ Calane ] acquisition.

So there's been -- it's been active. I'm not sure there is a direct effect on M&A. Obviously, I think that if EPL comes in a sensible place, what you'll see is companies planning in the future and, hopefully, CapEx programs to keep investing and growing in the UKCS. We are -- as you know, are active. We're looking -- the way we're looking at this is always through our value lens and our investment criteria, which are very clear to us. So we keep looking at opportunities and to try and high-grade our portfolio, which is -- as your portfolio is more -- is higher quality, it's obviously getting more difficult to high grade, but we're always looking at the best.

Cambo, I think it's the same thing, right? Once we get certainty and we know what the future holds, would enable us to plan accordingly. Again, it's a project that we would like to do under the right circumstances.

Odin, maybe you would like to take -- sorry?

Yes, I was going to say on the Captain points, we've been joined by Odin Estensen, our Chief Operating Officer, for the Q&A just now. So I'll pass over to Odin.

Yes. Hello, everybody. So of course, Captain is a super important asset for us. This was a TAR where this was big from the beginning. And when you do a TAR like this, you are gathering key information, and we have done lots of inspections. So we have learned things underway, which we then took a decision on in order to set Captain up to be the kind of big, reliable machine for the future for us. We saw that it was necessary to invest a little bit further into -- particularly into optimizing our environmental performance and also the operational performance going forward. And that's why we decided to invest further and take the time now setting up Captain for reliable high performance in the years to come.

Our next question comes from Cian Evans-Cowie from Bank of America.

Just 2, please. So the first one, a bit of a clarification question. You've obviously upgraded the exit rate guidance for the year. So just wondering how we should think about this? And if you could clarify, please. Is this -- maybe it's the flow rate you're expecting at the very end of December? Or is it more of a 4Q run rate? Or is it a steady rate that you should be able to hold comfortably by the end of the year? Or perhaps it's more of a peak production rate that you'll hit for maybe a day, but not much longer. So just a bit of clarifying on that, please.

And then you've said in 3Q, you experienced unprecedented levels of summer shutdowns. Now I wonder going into next year and beyond, how should we think about this? Is this now the run rate we should expect for the third quarter going forward?

Yes. Maybe -- it's Yaniv. I'll take the first one on exit rate. Look, it's not a -- it's a number that our installed capacity allows us to produce. We have 3 new wells that are to come in, in December. So it's measuring this on how many number of days is difficult, but we expect this to be our exit rate and trending into 2026. It just shows and demonstrates the quality and efficiency of our assets. And as Odin said earlier, with the additional work that we've done in safeguarding operational and environmental in Captain, which is a critical asset for us, that also adds to this, right? So with the additional 3 wells coming in, we're seeing this peak production. And obviously, we're not at the point right now of guiding to 2026. But I guess you can understand that from this, we'll go into 2026 stronger, we'll come up with guidance in early '26.

Yes. And I think, Odin, for the second question on the TAR for next year in Q3.

Yes. So on the TAR, so as a consequence of the October combination last year, we came into this TAR season with basically no opportunity to optimize the sequence of TARs and that resulted in actually us having TARs on all over 15 nonoperated and operated assets this summer. Going forward, we are able to optimize that. And just as an indication, if you look on the total deferred volumes, we are bringing that down from 3.5 million this year to 1.5 million next year. So it's a reduction in 55% on deferment volumes and also, thereby, a 55% reduction in risk for overruns at the same time achieved. So we are setting ourselves completely up differently going forward.

Our next question comes from Nash Cui from Barclays.

Perhaps 2, please. The first one is just a follow-up on the Q4 '25 exit production rate, please. So I wonder if you can just explain a little bit more on the impact for 2026 production level. Will this change any of your outlook into '26?

Then my second question is on 2026 capital framework. So I understand you have a lot of firing power from our balance sheet, but gearing has gone up a little bit. And I wonder how do you balance, balance sheet together with dividend, together with potential more M&A?

Nash, good to hear from you. Thank you for your questions. I think we've answered the exit rate question. And I don't want to repeat myself. But as I said, we -- it gives a sense of what our capabilities are, and we'll guide appropriately in early 2026.

Iain, do you want to take the capital allocation question?

Sure. Yes, I mean, one of the key things for us is being transparent and consistent in our allocation of capital and our delivery. And the capital allocation framework we've used since IPO has delivered just that. So in terms of what we'll do, gearing, of course, will move depending on timing of cash payments, of dividend payments, et cetera. Policy remains exactly the same. We'll protect the balance sheet. We said 1.5x is our -- as our kind of ceiling, but we don't really expect to be above 1x net debt to EBITDAX. We think that's an appropriate place to be. We're clearly well below that, just now at 0.5x at the end of the quarter. And dividend will continue to be linked with cash from operations. That's our policy, and that's the delivery. And it's enabled us this year as well as in prior years to deliver good returns to shareholders whilst protecting the balance sheet.

So I think the M&A that we've done this year is a good example. It is in the fourth category in the capital allocation framework. It's the additional deployment of capital. We deployed additional returns to shareholders last year with a special dividend. This year, we've done 2 bolt-on growth deals. And we'll continue to use that framework, which we think is prudent book value delivering across our stakeholders.

[Operator Instructions] Our next question comes from the line of Mark Wilson from Jefferies.

I've got one question, if I may. After the Tobermory farm-in here and assuming that we get clarity and everything goes together with the EPL, could you give a vision of what your suite of West of Shetland assets, Rosebank, Cambo, Tobermory, Tornado on a post-2030 basis, what could be the production from those developments if they all go ahead? It looks like there's about 300 million resources net to -- reserves and resources net to Ithaca, maybe 200 million even if you farm down Cambo. So just a vision of what that could be, would be really interesting.

Yes. Thanks, Mark. So you're taking away my next conference call or Capital Markets Day slide. So I'm not going to answer that now. We'll give the vision. And I think it will be -- I think we'll be more certain once we get clarity on the budget and be able to analyze this. But just very briefly, we're seeing ourselves as longer-term players in the UKCS. We've said this all along. We've consolidated everything in Aberdeen. We're, I think, proving ourselves to be a very efficient and reliable operator. So our goal is to keep investing in the UKCS, albeit with the right fiscal framework to allow this and have the regulatory frameworks to support this.

I think with Tobermory and Tornado and Cambo and, obviously, Rosebank, we're a significant player in kind of the future of the West of Shetland. And I'll take you up on that, and we'll speak more about this in our next full year results and guidance call.

Kathryn, write it down so we'll not forget.

It's maybe worth -- I mean, I guess the numbers we went through on the slide do show you, Mark, that our net share of Rosebank resources is about 66 million barrels. Our net share of Tobermory and Tornado together is about the same, and Cambo pre-farm-down is 143 million barrels. So clearly, those 3 assets are going to be large material positions in the West of Shetland. Yes, as Yaniv said, the story on this and the plotting of it, we'll give you more details in due course.

And I guess, it's always also something we're mentioning to the government every time we get a chance is this really plays into the U.K. energy security and U.K. energy future. And when you look at this, it's a significant contributor to the U.K. economy going forward.

I'll now hand back over to Kathryn Reid.

Thank you. We have a question from Werner Riding at Peel Hunt. He's unfortunately been kicked out of the call. His question is, with OpEx per barrel at $19.1, how much more structural cost reduction is achievable? And what is the risk of cost inflation as the portfolio matures, especially in the West of Shetland? And I'll hand that to Iain.

Yes, sure. Thanks, Kathryn. In terms of structural cost reduction, I think we have been prudent and we have been measured and we've been consistent in our approach to costs. So we've not taken knee-jerk reactions to changes in the business or in the environment. We believe in long-term value-driven supply chain relationships. We see ourselves as a fair counterparty, but we clearly understand where costs should be in the value position, and we protected the value, particularly in the U.S. dollar position with our FX hedges as well.

So in oil and gas, we believe that the value is driven by day in, day out small decisions, managing headcount positions and making sure we've got the right resources in the right places, managing our supply chain well, ensuring that we've got the right balance in-house and outsourcing.

So no silver bullet on this. I'm afraid I think we're in a good place, and we continue to try and drive the cost per barrel down. But you can easily lose value by over reducing costs. We've invested a lot in maintenance costs, in improvements to our infrastructure and we'll continue to do so. So yes, long-term measured and consistent as the approach, not step changing costs in any way, and we're quite happy where we are, but always with a value lens.

Thank you. That concludes the Q&A portion of today's call. I'll now hand back over to Yaniv for some closing remarks.

Thank you. And thank you, everyone, as always, for joining our call and for your questions. We will speak soon, and wishing you all a very happy holiday season and a happy new year. Thank you.

Thank you all for joining. That concludes today's call, and you may now disconnect your lines.