The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Ithaca Energy-Q4 2012 Production & 2013 Outlook

Thursday, January 10, 2013

Ithaca Energy-Q4 2012 Production & 2013 Outlook02:00 EST Thursday, January 10, 2013ABERDEEN, SCOTLAND--(Marketwire - January 09, 2013) -Not for Distribution to U.S. Newswire Services or for Dissemination inthe United States Ithaca Energy Inc. Q4-2012 Production & 2013 Outlook 10 January 2013Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) reports fourth quarter 2012("Q4-2012" or the "quarter") production results and provides guidanceon the Company's planned 2013 production and capital expenditureprogramme.Highlightso 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.Q4-2012 ProductionTotal net export production in the quarter, including net productionfrom the Noble Assets, was 610,070 barrels of oil equivalent ("boe"),resulting in an average rate of 6,631boepd, with approximately 90%being oil production. This represents a 31% increase on production inthe third quarter of 2012 (Q3-2012: 5,061boepd) and is within theQ4-2012 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 fieldsand the Noble Assets. The effective date of the Noble Assetsacquisition is 1 January 2012, with completion anticipated to occur inQ1-2013.Production in Q4-2012 benefited from strong performance by the Athenafield, which continues to produce "dry" oil at a stable gross dailyrate 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 achievedfrom the Beatrice, Jacky, Cook, Broom and MacCulloch Fields.Both the Anglia and Topaz fields were shut-in for a considerable periodduring the quarter due to issues on the ConocoPhillips operatedLincolnshire Offshore Gas Gathering System ("LOGGS"), the gas exportinfrastructure that receives and transports gas from these fields toshore. Both fields came back online at the end of December 2012.2013 Production and Capital Expenditure Programme GuidanceThe Company's 2013 net average export production is anticipated to bein the range of 6,000 to 6,700 boepd, including approximately1,000boepd from the Noble Assets; approximately 90%is forecast to beoil production.Approximately 80% of total net production isanticipated to be derived from the Cook, Athena and Beatrice / Jackyfields.The production guidance range reflects anticipated water breakthroughon the Athena field during 2013 and the impact of planned maintenanceshutdowns, most notably including approximately 25 days on the Shelloperated Anasuria FPSO, the host facility for the Cook field, and 20days for the Beatrice Complex.The MacCulloch field is currentlyshut-in due to suspected damage resulting from the recent period ofextreme weather in the North Sea.The field operator, ConocoPhillips,is currently investigating the exact nature of the damage and theschedule associated with reinstating production.The 2013 productionguidance range allows for a potential extended shutdown periodassociated with the resumption of normal operations on the MacCullochfield.The Company anticipates 2013 net capital expenditure to totalapproximately US$360 million. This expenditure is almost entirelyfocused on execution of the GSA development, involving commencement ofthe development drilling campaign, scheduled for late Q1-2013,performance of the key offshore subsea infrastructure installationworks by Technip and the FPF-1 modifications programme by Petrofac atthe Remontowa shipyard in Poland.The Company will fund the 2013 capital expenditure programme from itsexisting cash balance, anticipated cashflow from its producing assetportfolio and some of its currently undrawn US$430 million debtfacility.Over the course of 2013, the Company intends to issue quarterlyoperational updates (alongside its usual quarterly production updates)highlighting progress on key GSA development activities. Specificannouncements are anticipated to be issued upon the completion ofmilestones including for example, commencement of the developmentdrilling campaign and completion of each well, execution of the subseainfrastructure installation works and completion of various stages ofwork on the FPF-1.Additional InformationAn updated corporate presentation is available on the Company'swebsite, www.ithacaenergy.com. The presentation includes a productionand cashflow outlook for the years 2013-15.Specific guidance for theyears 2014 and 2015 will be provided at the start of each of theseyears.Shareholders should note that cashflows from operationsincludes the impact of executed hedges and does not include non-cashitems such as depreciation, depletion and amortisation ("DD&A"),revaluation of financial instruments, impairments of fixed assets andmovements in goodwill, each of which may have a significant impact onthe Company's profit.The Company intends to publish its full year 2012 accounts and year-endreserves, as evaluated by Sproule International Limited, on 26 March2013.Enquiries:Ithaca Energy:Iain McKendrick, CEO imckendrick@ithacaenergy.com +44 (0) 1224 650 261Graham Forbes, CFO gforbes@ithacaenergy.com +44 (0) 1224 652 151FTI Consulting:Billy Clegg billy.clegg@fticonsulting.com +44 (0) 207 269 7157Edward Westropp edward.westropp@fticonsulting.com+44 (0) 207 269 7230Georgia Mann georgia.mann@fticonsulting.com +44 (0) 207 269 7212Cenkos Securities plc:Jon Fitzpatrick jfitzpatrick@cenkos.com +44 (0) 207 397 8900Ken Fleming kfleming@cenkos.com +44 (0) 131 220 6939RBC Capital Markets:Tim Chapman tim.chapman@rbccm.com +44 (0) 207 653 4641Matthew Coakes matthew.coakes@rbccm.com +44 (0) 207 653 4871Notes to oil and gas disclosure:In accordance with AIM Guidelines, John Horsburgh, BSc (Hons)Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and SubsurfaceManager at Ithaca is the qualified person that has reviewed thetechnical information contained in this press release. Mr Horsburghhas over 15 years operating experience in the upstream oil and gasindustry.About Ithaca Energy:Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly ownedsubsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"),is anoil and gas operator focused on North Sea production, appraisal anddevelopment activities. The Company's strategy is centred on buildinga highly profitable North Sea oil and gas company by maximisingproduction and cashflow from its existing assets, the appraisal anddevelopment of existing discoveries on properties held by the Companyand the delivery of additional growth via acquisitions and licenceround participation. Not for Distribution to U.S. Newswire Services or for Dissemination in the United StatesForward-looking statementsSome 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 officerswith respect to various matters.When used in this announcement, thewords "anticipate", "continue", "estimate", "expect", "may","will","project", "plan", "should", "believe", "could", "target" andsimilarexpressions, and the negatives thereof., whether used in connectionwith operational activities, production forecasts, budgetary figurescontained in the corporate presentation, potential developments orotherwise, are intended to identify forward-looking statements. Suchstatements are not promises or guarantees, and are subject to known andunknown risks and uncertainties and other factors that may cause actualresults or events to differ materially from those anticipated in suchforward-looking statements or information.These forward-lookingstatements speak only as of the date of this announcement.IthacaEnergy Inc. expressly disclaims any obligation or undertaking torelease publicly any updates or revisions to any forward-lookingstatement contained herein to reflect any change in its expectationswith regard thereto or any change in events, conditions orcircumstances on which any forward-looking statement is based except asrequired by applicable securities laws. -ENDS- This information is provided by RNS The company news service from the London Stock ExchangeENDFOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: RNSCustomerServices0044-207797-4400rns@londonstockexchange.comhttp://www.rns.com