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Ithaca Energy Inc.
Q4-2012 Production & 2013 Outlook
10 January 2013
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) reports fourth quarter 2012 ("Q4-2012" or the "quarter") production results and provides guidance on the Company's planned 2013 production and capital expenditure programme.
o Q4-2012 net average export production, including net production from the Cook and MacCulloch field interests being acquired from Noble Energy Inc. (the "Noble Assets"), was 6,631 barrels of oil equivalent per day ("boepd"), within the Company's guidance range for the quarter.
o Net average export production for 2013 is forecast to be in the range of 6,000 to 6,700 boepd, including the net contribution anticipated from the Noble Assets.
o The Company's 2013 capital expenditure programme is focused on execution of the Greater Stella Area ("GSA") development and is anticipated to total US$360 million, which will be funded from existing financial resources.
Total net export production in the quarter, including net production from the Noble Assets, was 610,070 barrels of oil equivalent ("boe"), resulting in an average rate of 6,631 boepd, with approximately 90% being oil production. This represents a 31% increase on production in the third quarter of 2012 (Q3-2012: 5,061 boepd) and is within the Q4-2012 guidance range issued by the Company of 6,300 to 6,900 boepd.
Production in the quarter came from the operated Athena, Beatrice, Jacky and Anglia fields, the non-operated Cook, Broom and Topaz fields and the Noble Assets. The effective date of the Noble Assets acquisition is 1 January 2012, with completion anticipated to occur in Q1-2013.
Production in Q4-2012 benefited from strong performance by the Athena field, which continues to produce "dry" oil at a stable gross daily rate of between 10,000 and 11,000 barrels of oil per day ("bopd"), 2,250 to 2,475 bopd net to Ithaca. Forecast production was achieved from the Beatrice, Jacky, Cook, Broom and MacCulloch Fields.
Both the Anglia and Topaz fields were shut-in for a considerable period during the quarter due to issues on the ConocoPhillips operated Lincolnshire Offshore Gas Gathering System ("LOGGS"), the gas export infrastructure that receives and transports gas from these fields to shore. Both fields came back online at the end of December 2012.
2013 Production and Capital Expenditure Programme Guidance
The Company's 2013 net average export production is anticipated to be in the range of 6,000 to 6,700 boepd, including approximately 1,000 boepd from the Noble Assets; approximately 90% is forecast to be oil production. Approximately 80% of total net production is anticipated to be derived from the Cook, Athena and Beatrice / Jacky fields.
The production guidance range reflects anticipated water breakthrough on the Athena field during 2013 and the impact of planned maintenance shutdowns, most notably including approximately 25 days on the Shell operated Anasuria FPSO, the host facility for the Cook field, and 20 days for the Beatrice Complex. The MacCulloch field is currently shut-in due to suspected damage resulting from the recent period of extreme weather in the North Sea. The field operator, ConocoPhillips, is currently investigating the exact nature of the damage and the schedule associated with reinstating production. The 2013 production guidance range allows for a potential extended shutdown period associated with the resumption of normal operations on the MacCulloch field.
The Company anticipates 2013 net capital expenditure to total approximately US$360 million. This expenditure is almost entirely focused on execution of the GSA development, involving commencement of the development drilling campaign, scheduled for late Q1-2013, performance of the key offshore subsea infrastructure installation works by Technip and the FPF-1 modifications programme by Petrofac at the Remontowa shipyard in Poland.
The Company will fund the 2013 capital expenditure programme from its existing cash balance, anticipated cashflow from its producing asset portfolio and some of its currently undrawn US$430 million debt facility.
Over the course of 2013, the Company intends to issue quarterly operational updates (alongside its usual quarterly production updates) highlighting progress on key GSA development activities. Specific announcements are anticipated to be issued upon the completion of milestones including for example, commencement of the development drilling campaign and completion of each well, execution of the subsea infrastructure installation works and completion of various stages of work on the FPF-1.
An updated corporate presentation is available on the Company's website, www.ithacaenergy.com. The presentation includes a production and cashflow outlook for the years 2013-15. Specific guidance for the years 2014 and 2015 will be provided at the start of each of these years. Shareholders should note that cashflows from operations includes the impact of executed hedges and does not include non-cash items such as depreciation, depletion and amortisation ("DD&A"), revaluation of financial instruments, impairments of fixed assets and movements in goodwill, each of which may have a significant impact on the Company's profit.
The Company intends to publish its full year 2012 accounts and year-end reserves, as evaluated by Sproule International Limited, on 26 March 2013.
Iain McKendrick, CEO email@example.com +44 (0) 1224 650 261
Graham Forbes, CFO firstname.lastname@example.org +44 (0) 1224 652 151
Billy Clegg email@example.com +44 (0) 207 269 7157
Edward Westropp firstname.lastname@example.org +44 (0) 207 269 7230
Georgia Mann email@example.com +44 (0) 207 269 7212
Cenkos Securities plc:
Jon Fitzpatrick firstname.lastname@example.org +44 (0) 207 397 8900
Ken Fleming email@example.com +44 (0) 131 220 6939
RBC Capital Markets:
Tim Chapman firstname.lastname@example.org +44 (0) 207 653 4641
Matthew Coakes email@example.com +44 (0) 207 653 4871
Notes to oil and gas disclosure:
In accordance with AIM Guidelines, John Horsburgh, BSc (Hons) Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and Subsurface Manager at Ithaca is the qualified person that has reviewed the technical information contained in this press release. Mr Horsburgh has over 15 years operating experience in the upstream oil and gas industry.
About Ithaca Energy:
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"),is an oil and gas operator focused on North Sea production, appraisal and development activities. The Company's strategy is centred on building a highly profitable North Sea oil and gas company by maximising production and cashflow from its existing assets, the appraisal and development of existing discoveries on properties held by the Company and the delivery of additional growth via acquisitions and licence round participation.
Not for Distribution to U.S. Newswire Services or for Dissemination in the United States
Some of the statements in this announcement are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of Ithaca Energy Inc. or its officers with respect to various matters. When used in this announcement, the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof., whether used in connection with operational activities, production forecasts, budgetary figures contained in the corporate presentation, potential developments or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks and uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements or information. These forward-looking statements speak only as of the date of this announcement. Ithaca Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.
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