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Press release from Marketwire

Ithaca Energy Inc- Third Quarter Operations Update

Tuesday, October 15, 2013

Ithaca Energy Inc- Third Quarter Operations Update

02:00 EDT Tuesday, October 15, 2013

ABERDEEN, SCOTLAND--(Marketwired - October 14, 2013) -

 (TSX VENTURE: IAE) (LSE: IAE) Not for Distribution to U.S. Newswire Services or for Dissemination in the United States Ithaca Energy Inc. Third Quarter Operations Update 15 October 2013Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")provides an update on third quarter 2013 ("Q3-2013") operationalactivities, including recent key milestones achieved on the GreaterStella Area ("GSA") development and production performance. TheCompany's Q3-2013 financial results are scheduled to be published on 11November 2013.Highlights- The dry dock related marine system works on the "FPF-1" floating production facility have been completed and the vessel has been returned to the water.- The 60km gas export pipeline has now been fully installed and is ready to receive gas upon the start-up of production from the GSA hub. Operations to install the infield flexible flowlines and static umbilicals have commenced.- Drilling operations are on-going and progressing to plan on the Stella "A2" development well.- Net average export production in Q3-2013 was approximately 12,000 barrels of oil equivalent per day ("boepd"), 96% oil, reflecting the impact of the previously advised shutdowns during the quarter.- Production from the Cook field has recently been reinstated following completion of infield flowline inspection works.The planned six week shutdown of the host facility for the Causeway Area fields is forecast to be completed around mid-October 2013, slightly behind the original schedule.A key remaining risk to full year production relates to the timely completion of this shutdown and the follow on platform modifications required to enable start- up of the electrical submersible pump package on the Causeway field.Greater Stella Area Development UpdateFPF-1 Modifications ProgrammePetrofac has recently completed the dry dock related marine systemrefurbishment and hull life extension works on the FPF-1 in theRemontowa shipyard in Gdansk, Poland, and the vessel has now beensuccessfully refloated.This marks a major milestone in execution ofthe FPF-1 modifications programme and will allow the main topsidesprocessing plant construction and installation activities tocommence.Equipment and materials for the topsides continue to flow tothe yard and work is progressing on construction of the pre-assembledunits and racks that are to be installed on the vessel.Three additional sponsons have been added to the pontoons on the FPF-1,involving the construction and installation of approximately 2000tonnes of steelwork blocks, to provide enhanced buoyancy.Fourbuoyancy "blisters" are being fabricated and will be added to thecolumns of the vessel during the next phase of operations, in parallelwith the topsides construction works.These modifications are designedto ensure that the FPF-1 can accommodate the new topsides processingequipment that is to be installed on the main deck and achieve strongoperational uptime performance.Subsea Infrastructure Installation OperationsSince the last GSA operations update provided in September a number ofkey remaining 2013 subsea installation work programme milestones havebeen completed by Technip.The 60km 10-inch gas export pipeline from the FPF-1 to the BP operatedCentral Area Transmission System ("CATS") pipeline has been fullyinstalled following completion of trench backfill, tie-in and as laidsurvey operations.The pipeline is now configured to receive gasexports upon the start-up of production from the Stella field.Nomodifications are required to the onshore Teeside Gas and LiquidsProcessing ("TGLP") terminal to receive and process the rich gas thatwill be exported from the FPF-1 through the CATS pipeline.Operations to install the flexible infield flowlines and staticumbilicals that connect the Stella field drill centre manifolds to theFPF-1 riser bases are on-going.Diving operations to tie-in thesecomponents will be completed immediately following installation of theinfrastructure.Upon completion of the tie-in operations, the 2013subsea infrastructure installation campaign will have been completed.As notified in the September update, the GSA co-venturers are in theprocess of finalising the oil export route for the development takinginto account the additional information gained from the flow testresults of the "A1" well.Details of the selected option are expectedto be provided later in Q4-2013.Drilling ProgrammeFollowing the successful clean-up flow test performed on the Stella A1development well, completion operations on the well, includinginstallation and testing of the xmas tree, were concluded and the ENSCO100 has commenced drilling of the Stella A2 well.This well isanticipated to take approximately 80-90 days to drill and complete.Aclean-up flow test will be performed on the well, the results of whichwill be announced once available.Q3-2013 Production & OperationsTotal net export production in Q3-2013 was approximately 1.1 millionbarrels of oil equivalent, which equates to an average rate over thequarter of approximately 12,000 boepd, with oil production accountingfor 96% of the total.Production during the quarter was reduced as aresult of the previously advised shutdowns.Production during the quarter was derived from the operated Athena,Causeway Area (Causeway and Fionn), Beatrice, Jacky and Anglia fieldsand the non-operated Dons (Don Southwest and West Don), Cook, Broom andTopaz fields.Total production during Q3-2013 was impacted by commencement of themajor planned shutdown of the Taqa-operated North Cormorant platform,which serves as the host facility for the Causeway Area fields.Thisshutdown is forecast to be completed around mid-October 2013, slightlybehind the original schedule.The timely completion of this shutdownand thereafter execution to plan of the remaining platformmodifications required to deliver power to the Causeway electricalsubmersible pump package installed in the well represents a keyremaining risk to full year 2013 production.Production during Q3-2013 was also effected by the previously advisedunplanned shutdown of the Shell operated Cook field in August 2013 forinspection of the infield flowline connecting the field to its hostfacility, the Anasuria floating production, storage and offloadingvessel.The inspection has now been completed, with the resultsenabling the reinstatement of production.The shutdown duration waslonger than initially anticipated by the field Operator, withproduction having just recently been restored.Further to the announcement made in August 2013, diagnostic testing onthe Athena "P4" well has been completed and this has confirmed that theelectrical submersible pumps installed in the well have failed.Thenet production impact of this has been successfully mitigated by theoptimisation of the other wells on the field and the processingfacilities, such that it represents a net production deferment toIthaca of just over 300bopd.The options for reinstating fullproduction from the well, via either a workover or sidetrack, arecurrently under evaluation. - ENDS -Enquiries:Ithaca EnergyGraham Forbes gforbes@ithacaenergy.com +44(0) 1224 652 151Richard Smith rsmith@ithacaenergy.com +44(0) 1224 652 172FTI ConsultingBilly 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 SecuritiesJon Fitzpatrick jfitzpatrick@cenkos.com +44 (0) 207 397 8900Neil McDonald nmcdonald@cenkos.com +44 (0) 131 220 6939RBC CapitalMarketsTim Chapman tim.chapman@rbccm.com +44 (0) 207 653 4641Matthew Coakes matthew.coakes@rbccm.com +44 (0) 207 653 4871Notes Regarding Oil & Gas DisclosureIn accordance with AIM Guidelines, John Horsburgh, BSc (Hons)Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) andSubsurfaceManager 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.The term "boe" may be misleading, particularly if used in isolation. Aboe conversion of 6 Mcf: 1 bbl is based on an energy equivalencyconversion method primarily applicable at the burner tip and does notrepresent a value equivalency at the wellhead. Given the value ratiobased on the current price of crude oil as compared to natural gas issignificantly different from the energy equivalency of 6 Mcf: 1 bbl,utilising a conversion ratio at 6 Mcf: 1 bbl may be misleading as anindication of value.About Ithaca EnergyIthaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil and gasoperator focused on the delivery of lower risk growth through theappraisal and development of UK undeveloped discoveries, theexploitation of its existing UK producing asset portfolio and aNorwegian exploration and appraisal business centred on the generationof discoveries capable of monetisation prior to development. Ithaca'sstrategy is centred on generating sustainable long term shareholdervalue by building a highly profitable 25kboe/d North Sea oil and gascompany. For further information please consult the Company's websitewww.ithacaenergy.com. Not for Distribution to U.S. Newswire Services or for Dissemination in the United StatesForward-looking statementsSome of the statements and information in this press release areforward-looking. Forward-looking statements and forward-lookinginformation (collectively, "forward-looking statements") are based onthe Company's internal expectations, estimates, projections,assumptions and beliefs as at the date of such statements orinformation, including, among other things, assumptions with respect toproduction, drilling, well completion times, future capitalexpenditures, future acquisitions and cash flow. The reader iscautioned that assumptions used in the preparation of such informationmay prove to be incorrect. When used in this press release, thewords"anticipate", "continue", "estimate", "expect", "may","will","project", "plan", "should", "believe", "could", "target" andsimilarexpressions, and the negatives thereof, whether used in connection withoperational activities, production forecasts, budgetary figures,potential developments or otherwise, are intended to identifyforward-looking statements. Such statements are not promises orguarantees, and are subject to known and unknown risks, uncertaintiesand other factors that may cause actual results or events to differmaterially from those anticipated in such forward-looking statements.The Company believes that the expectations reflected in thoseforward-looking statements and are reasonable but no assurance can begiven that these expectations, or the assumptions underlying theseexpectations, will prove to be correct and such forward-lookingstatements and included in this press release should not be undulyrelied upon. These forward-looking statements speak only as of the dateof this press release. Ithaca Energy Inc. expressly disclaims anyobligation or undertaking to release publicly any updates or revisionsto any forward-looking statement contained herein to reflect any changein its expectations with regard thereto or any change in events,conditions or circumstances on which any forward-looking statement isbased except as required by applicable securities laws. This information is provided by RNS The company news service from the London Stock ExchangeEND

FOR FURTHER INFORMATION PLEASE CONTACT:

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