News Column

Ithaca Energy Inc. - Q2-2014 Financial Results

August 13, 2014

ENP Newswire - 13 August 2014

Release date- 12082014 - Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) announces its quarterly financial results for the three months ended 30 June 2014 and half yearly results for the six months ended 30 June 2014.


H1-2014 cashflow from operations of $101.8 million (H1-2013: $100.5 million), reflecting a Q2-2014 contribution of $58.1 million (Q2-2013: $65.0 million), resulting in H1-2014 cashflow per share of $0.31 (H1-2013: $0.36)

H1-2014 profit after tax of $17.0 million (H1-2013: $57.3 million). Profit after tax during the quarter was $0.7 million (Q2-2013: $53.8 million), after reflecting an unrealised non-cash hedging loss of $6.9 million

Broadening of the producing asset portfolio with the acquisition of interests in three high quality, long-life UK oil fields from Sumitomo Corporation (the 'Summit Assets')

Additional 1.6 million barrels of oil production hedged at approximately $105/barrel to underpin approximately 70% of production associated with the Summit Assets over the next two years

Successful completion of a $300 million senior notes offering, providing diversity in the sources and tenor of funding within the capital structure of the business

Net drawn debt of $499 million at 30 June 2014 (excluding the Norwegian tax rebate facility) out of total debt facilities of $1,010 million, including the senior notes issued on 3 July 2014

Continued progress made on execution and de-risking of the Greater Stella Area ('GSA') development, with a further strong clean-up flow test result achieved on the third Stella development well that was completed during the quarter

Les Thomas, Chief Executive Officer, commented: 'I am pleased with the progress made by the Company over the last quarter, having further strengthened the business in three key areas: the successful third Stella well materially de-risked the on-going field development; the Summit acquisition added high quality assets to the existing producing portfolio and the successful bond offering introduced important funding diversification and flexibility.'

Production & Operations

Average pro-forma production in Q2-2014 was approximately 14,300 barrels of oil equivalent per day ('boepd'), 94% oil, including a contribution of approximately 2,500 boepd from the Summit Assets during the period. Average pro-forma production in H1-2014 was approximately 12,800 boepd including approximately 2,300 boepd from the Summit Assets.

Total 2014 pro-forma production guidance remains unchanged in the range of 13,500 to 15,500 boepd, approximately 95% oil. As previously guided, 2014 production volumes are forecast to be weighted towards the second half of the year, notably from the later part of Q3-2014 post the completion of planned summer maintenance shutdowns, driven by the close out of on-going production enhancement projects.

Greater Stella Area Development Update

During the quarter, drilling of the third Stella development well was completed. The strong results of the clean-up flow test performed on the well, combined with the corresponding results of the first two wells, have served to de-risk the initial annualised production forecast for the GSA hub of approximately 30,000 boepd (100%), 16,000 boepd net to Ithaca. Operations are currently on-going on the fourth well, the Stella Andrew reservoir crestal gas producer, with completion of the well scheduled for early October 2014.

Offshore operations are currently on-going to install the subsea infrastructure associated with the FPF-1 mooring spread. Installation of the mooring piles has recently been completed, with the work now focused on installation of the anchor chains that will be connected to the piles and left ready for pull-in upon arrival of the FPF-1 on location.

On the FPF-1 modification works, construction activities on the main deck of the vessel are advancing. All the main oil and gas processing plant packages have been positioned on the vessel and installation of the associated pipework has commenced. Fit out of the accommodation module is progressing well, with handover for pre-commissioning expected shortly.

Corporate Activities

In July 2014 the Company entered into an agreement with Sumitomo Corporation to acquire non-operated interests in the Cook (20.00%), Pierce (7.48%) and Wytch Farm (7.43%) producing oil fields. The acquisition further broadens the Company's portfolio, adding quality assets with clearly defined upsides, and delivers a further step-up in reserves and acceleration in the monetisation of the existing UK tax allowances pool.

The acquisition was completed on 31 July 2014 for a net consideration of $163 million and the assets will be consolidated into the Company's financial statements from that date.

In July 2014, the Company also successfully completed an offering of $300 million senior unsecured notes due 2019, with a coupon of 8.125%. The diversification in funding sources and tenor that the notes bring into the capital structure compliment the long term production, appraisal and development growth focus of the business.

Further Information

A presentation to accompany the financial results is available on the Company's website at


Ithaca Energy

Les Thomas

Tel: +44 (0)1224 650 261


Graham Forbes

Tel: +44 (0)1224 652 151


Richard Smith

Tel: +44 (0)1224 652 172


FTI Consulting

Edward Westropp

Tel: +44 (0)207 269 7230


Shannon Brushe

Tel: +44 (0)203 727 1077


Cenkos Securities

Neil McDonald

Tel: +44 (0)131 220 6939


Beth McKiernan

Tel: +44 (0)131 220 9778


RBC Capital Markets

Tim Chapman

Tel: +44 (0)207 653 4641



References herein to barrels of oil equivalent ('boe') are derived by converting gas to oil in the ratio of six thousand cubic feet ('Mcf') of gas to one barrel ('bbl') of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilising a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value.

About Ithaca Energy

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil and gas operator focused on the delivery of lower risk growth through the appraisal and development of UK undeveloped discoveries, the exploitation of its existing UK producing asset portfolio and a Norwegian exploration and appraisal business targeting the generation of discoveries capable of monetisation prior to development.

Ithaca's strategy is centred on generating sustainable long term shareholder value by building a highly profitable 25kboe/d North Sea oil and gas company. For further information please consult the Company's website

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Source: ENP Newswire

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