Ithaca Energy (LON:ITH) reported record quarterly production in the second quarter of 2026 and raised its full-year dividend guidance, citing lower operating costs, strong cash generation and continued production momentum following weather-related disruption earlier in the year.

Executive Chairman Yaniv Friedman said the company's Q2 production averaged 131,000 barrels of oil equivalent per day, while first-half production averaged 128,000 boe/d. He said production had recovered strongly from the turnaround season and was continuing into the third quarter, though the company still expects the planned impact of maintenance activity during Q3.

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The company declared a first interim dividend for 2026 of $255 million and raised its full-year dividend guidance to a range of $500 million to $530 million. Friedman said Ithaca has announced more than $1.65 billion of shareholder distributions over the past three years.

Costs Fall as Cash Flow Remains Strong

Chief Financial Officer Iain Lewis said first-half operating costs were $18 per barrel, down from about $22 per barrel in 2024 and below the company's medium-term aim of maintaining costs around $20 per barrel. Ithaca reduced its full-year operating expenditure guidance, with the midpoint lowered by $20 million.

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For the first half, the company reported EBITDAX of $1.1 billion, free cash flow of nearly $500 million, net cash from operations of nearly $1 billion and profit of $127 million, according to Lewis.

Ithaca ended June with $1.9 billion of available liquidity, including $1.3 billion of undrawn reserve-based lending capacity and $571 million of cash. The company also has an untriggered accordion facility of about $400 million on its reserve-based lending facility. Net debt stood at just over $1 billion, while pro forma leverage was 0.49 times at the end of June.

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During the period, Ithaca completed a private €155 million tap of its euro-denominated bond at a 5.5% rate. Friedman said the transaction would support growth ambitions and balance-sheet optimization.

Lewis said the higher dividend outlook reflected pricing, cost control and some foreign-exchange support, while production guidance remained unchanged. He said the company was substantially hedged on oil for the next two years and had retained some exposure to higher gas prices, including 30% unhedged gas volumes in the fourth quarter of 2026.